Exhibit
        10.2

    

     

    
      

      

    

    


    


    U.S.
      $90,000,000

    


    LOAN
      AND
      SECURITY AGREEMENT

    


    Dated
      as
      of October 31, 2006

    


    Among

    


    MOSSIMO
      HOLDINGS LLC,

    


    as
      the
      Company

    


    and

    


    MOSSIMO
      MANAGEMENT LLC,

    


    as
      the
      Servicer and the Manager

    


    and

    


    MERRILL
      LYNCH MORTGAGE CAPITAL INC.,

    


    as
      a
      Lender

    


    and

    


    MERRILL
      LYNCH MORTGAGE CAPITAL INC.,

    


    as
      the
      Agent

    


    


    


    
      

      

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      TABLE
        OF CONTENTS



    Page


    


    
      	
              ARTICLE
                I.

            	
              DEFINITIONS

            	
              1

            
	
              SECTION
                1.01

            	
              Certain
                Defined Terms

            	
              1

            
	
              SECTION
                1.02

            	
              Computation
                of Time Periods

            	
              1

            
	 	 	 
	
              ARTICLE
                II.

            	
              THE
                LOAN FACILITY

            	
              1

            
	
              SECTION
                2.01

            	
              Borrowing

            	
              1

            
	
              SECTION
                2.02

            	
              Interest
                Rate

            	
              1

            
	
              SECTION
                2.03

            	
              Facility
                Termination Date

            	
              2

            
	
              SECTION
                2.04

            	
              Remittance
                Procedures

            	
              2

            
	
              SECTION
                2.05

            	
              Payments
                and Computations, Etc

            	
              4

            
	
              SECTION
                2.06

            	
              Fees

            	
              4

            
	
              SECTION
                2.07

            	
              Increased
                Costs; Capital Requirements

            	
              4

            
	
              SECTION
                2.08

            	
              Taxes

            	
              5

            
	
              SECTION
                2.09

            	
              Substitution
                of Lenders

            	
              7

            
	
              SECTION
                2.10

            	
              Intentionally
                Omitted.

            	
              8

            
	
              SECTION
                2.11

            	
              Grant
                of a Security Interest

            	
              8

            
	
              SECTION
                2.12

            	
              Evidence
                of Obligations

            	
              9

            
	
              SECTION
                2.13

            	
              Survival
                of Representations and Warranties; Repayment Obligations

            	
              10

            
	
              SECTION
                2.14

            	
              Release
                of Collateral

            	
              10

            
	
              SECTION
                2.15

            	
              Prepayment.

            	
              11

            
	
              SECTION
                2.16

            	
              Right
                Of First Refusal

            	
              11

            
	 	 	 
	
              ARTICLE
                III.

            	
              CONDITIONS
                OF LOANS

            	
              12

            
	
              SECTION
                3.01

            	
              Conditions
                Precedent

            	
              12

            
	 	 	 
	
              ARTICLE
                IV.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              13

            
	
              SECTION
                4.01

            	
              Representations
                and Warranties of the Company

            	
              13

            
	
              SECTION
                4.02

            	
              Representations
                and Warranties of Mossimo Management

            	
              16

            
	
              SECTION
                4.03

            	
              Resale
                of Collateral Upon Breach of Covenant or Representation and Warranty
                by
                the Company

            	
              18

            
	 	 	 
	
              ARTICLE
                V.

            	
              GENERAL
                COVENANTS OF THE COMPANY

            	
              18

            
	
              SECTION
                5.01

            	
              General
                Covenants

            	
              19

            
	 	 	 
	
              ARTICLE
                VI.

            	
              MANAGEMENT
                AND SERVICING; CERTAIN COVENANTS

            	
              23

            
	
              SECTION
                6.01

            	
              General
                Covenants

            	
              23

            
	
              SECTION
                6.02

            	
              Appointment
                and Designation.

            	
              23

            
	
              SECTION
                6.03

            	
              Collateral
                Collections

            	
              26

            
	
              SECTION
                6.04

            	
              Intentionally
                Omitted.

            	
              26

            
	
              SECTION
                6.05

            	
              No
                Rights of Withdrawal

            	
              27

            
	
              SECTION
                6.06

            	
              Permitted
                Investments

            	
              27

            
	
              SECTION
                6.07

            	
              Intentionally
                Omitted

            	
              27

            


    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

       

      
        TABLE
          OF CONTENTS


        Page


      

    

    
      	
              SECTION
                6.08

            	
              Reports
                to the Agent; Account Statements; Servicing Information

            	
              27

            
	
              SECTION
                6.09

            	
              Remittance
                Reports; Statements as to Compliance; Financial Statements

            	
              28

            
	
              SECTION
                6.10

            	
              Access
                to Certain Documentation

            	
              30

            
	
              SECTION
                6.11

            	
              Waiver
                of Defaults

            	
              30

            
	
              SECTION
                6.12

            	
              Servicing
                and Segregation of Collections

            	
              31

            
	
              SECTION
                6.13

            	
              UCC
                Matters; Protection and Perfection of the Collateral

            	
              31

            
	
              SECTION
                6.14

            	
              Servicer
                Advances

            	
              32

            
	
              SECTION
                6.15

            	
              Compliance
                with Applicable Law

            	
              32

            
	 	 	 
	
              ARTICLE
                VII.

            	
              EVENTS
                OF DEFAULT

            	
              33

            
	
              SECTION
                7.01

            	
              Events
                of Default

            	
              33

            
	
              SECTION
                7.02

            	
              Additional
                Remedies of the Agent

            	
              35

            
	 	 	 
	
              ARTICLE
                VIII.

            	
              INDEMNIFICATION

            	
              37

            
	
              SECTION
                8.01

            	
              Indemnities
                by the Company

            	
              37

            
	
              SECTION
                8.02

            	
              Indemnities
                by Servicer

            	
              38

            
	
              SECTION
                8.03

            	
              Indemnities
                by Manager

            	
              40

            
	 	 	 
	
              ARTICLE
                IX.

            	
              THE
                AGENT

            	
              41

            
	
              SECTION
                9.01

            	
              Appointment
                and Duties

            	
              41

            
	
              SECTION
                9.02

            	
              Binding
                Effect

            	
              42

            
	
              SECTION
                9.03

            	
              Use
                of Discretion

            	
              42

            
	
              SECTION
                9.04

            	
              Delegation
                of Rights and Duties

            	
              42

            
	
              SECTION
                9.05

            	
              Reliance
                and Liability

            	
              43

            
	
              SECTION
                9.06

            	
              Agent
                Individually

            	
              44

            
	
              SECTION
                9.07

            	
              Lender
                Credit Decision

            	
              44

            
	
              SECTION
                9.08

            	
              Expenses;
                Indemnities

            	
              44

            
	
              SECTION
                9.09

            	
              Resignation
                of Agent

            	
              45

            
	 	 	 
	
              ARTICLE
                X.

            	
              MISCELLANEOUS

            	
              45

            
	
              SECTION
                10.01

            	
              Amendments
                and Waivers; Modification of Standards

            	
              45

            
	
              SECTION
                10.02

            	
              Notices,
                Etc

            	
              46

            
	
              SECTION
                10.03

            	
              No
                Waiver; Remedies

            	
              46

            
	
              SECTION
                10.04

            	
              Binding
                Effect; Assignability; Multiple Lenders

            	
              46

            
	
              SECTION
                10.05

            	
              Term
                of This Agreement

            	
              47

            
	
              SECTION
                10.06

            	
              GOVERNING
                LAW; JURY WAIVER

            	
              47

            
	
              SECTION
                10.07

            	
              Costs,
                Expenses and Taxes

            	
              48

            
	
              SECTION
                10.08

            	
              No
                Proceedings

            	
              48

            
	
              SECTION
                10.09

            	
              Recourse
                Against Certain Parties

            	
              48

            
	
              SECTION
                10.10

            	
              Execution
                in Counterparts; Severability; Integration

            	
              49

            
	
              SECTION
                10.11

            	
              Tax
                Characterization

            	
              49

            
	
              SECTION
                10.12

            	
              Confidentiality

            	
              49

            


    

    


    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    


    LIST
      OF SCHEDULES AND EXHIBITS

    


    
      	
              SCHEDULES

            	 
	
              SCHEDULE
                I

            	
              Condition
                Precedent Documents

            
	
              SCHEDULE
                II

            	
              Prior
                Names, Tradenames, Fictitious Names and “Doing Business As”
                Names

            
	
              SCHEDULE
                III

            	
              Intentionally
                Omitted 

            
	
              SCHEDULE
                IV

            	
              Deposit
                Accounts and Deposit Account Banks

            
	
              SCHEDULE
                5.01(o)

            	
              Notional
                Amount of Interest Rate Cap

            
	 	 
	
              EXHIBITS

            	 
	
              EXHIBIT
                A

            	
              Form
                of Remittance Report

            
	
              EXHIBIT
                B

            	
              Form
                of Note

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    This
      LOAN
      AND SECURITY AGREEMENT is made as of October 31, 2006, among:

    


    
      	 	
              (1)

            	
              MOSSIMO
                HOLDINGS LLC, a Delaware limited liability company (the “Company”);

            


    

    


    
      	 	
              (2)

            	
              MOSSIMO
                MANAGEMENT LLC, a Delaware limited liability company, as the Servicer
                and
                the Manager (as defined herein);

            


    

    


    
      	 	
              (3)

            	
              MERRILL
                LYNCH MORTGAGE CAPITAL INC. (“MLMCI”),
                as a Lender (as defined herein);

            


    

    


    
      	 	
              (4)

            	
              MERRILL
                LYNCH MORTGAGE CAPITAL INC., as agent for the Lenders (the “Agent”);

            


    

    


    IT
      IS
      AGREED as follows:

    
      


      ARTICLE
        I.

      


      DEFINITIONS

       

      SECTION
        1.01 Certain
        Defined Terms.
        Except
        as otherwise expressly provided herein or unless the context otherwise requires,
        the capitalized terms used in this Agreement shall have the respective meanings
        specified in the Standard Definitions set forth as Appendix A hereto, which
        is
        incorporated herein by this reference. 

       

      SECTION
        1.02 Computation
        of Time Periods.
        Unless
        otherwise stated in this Agreement, in the computation of a period of time
        from
        a specified date to a later specified date, the word “from” means “from and
        including” and the words “to” and “until” each mean “to but
        excluding.”
        Unless
        otherwise specifically referred to as Business Days, each reference to a
        day or
        period of days shall mean calendar day or days, as applicable. 

      


      ARTICLE
        II.

      


      THE
        LOAN FACILITY

       

      SECTION
        2.01 Borrowing.
        On the
        terms and conditions hereinafter set forth, each Lender shall make a term
        loan
        (collectively, the “Loan”)
        to the
        Company on the Closing Date in the amount of the applicable Lender’s Loan
        Commitment. The Loan shall be secured by the Collateral. The obligations
        of each
        Lender hereunder shall be several and not joint. Any amounts of the Loan
        which
        have been repaid may not be reborrowed. 

       

      SECTION
        2.02 Interest
        Rate.
        The
        Loans Outstanding shall bear interest at a rate per annum equal to the Contract
        Rate. So
        long
        as an Event of Default has occurred and is continuing, at the election of
        Agent
        (or upon the written request of Required Lenders) confirmed by written notice
        from Agent to the Company, the interest rates applicable to the Loans
        Outstanding shall be increased by two percentage points (2%) per annum above
        the
        rates of interest otherwise applicable hereunder ("Default
        Rate"),
        and
        all outstanding Obligations shall bear interest at the Default Rate applicable
        to such Obligations. Interest at the Default Rate shall accrue from the initial
        date of such Event of Default until that Event of Default is cured or waived
        and
        shall be payable upon demand.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      SECTION
        2.03 Facility
        Termination Date.
        The
        Loans Outstanding on the Facility Termination Date shall mature on such date.
        On
        the Facility Termination Date, the outstanding principal of all Loans
        Outstanding, if any, and all interest and all Fees accrued thereon and all
        other
        Obligations shall be immediately due and payable (and the Company shall pay
        all
        such amounts on the Facility Termination Date).

       

      SECTION
        2.04 Remittance
        Procedures. (a)
        On each
        Remittance Date, the Servicer, as agent for the Agent and the Lenders, and
        with
        the consent of the Agent, which consent shall be deemed to be granted by
        the
        Agent if the amounts to be remitted by the Servicer are in accordance with
        the
        waterfall provisions set forth in this Section 2.04 and the Agent shall fail
        to
        make any objections to the Remittance Report, shall instruct the Collection
        Account Bank and, if the Servicer fails to do so, the Agent may instruct
        the
        Collection Account Bank, to apply funds on deposit in the Collection Account,
        as
        of the day immediately preceding such Remittance Date, as described in this
        Section 2.04 in the following amounts and priority:

      


      (i) to
        the
        Servicer in an amount equal to the Servicing Fee which is accrued and unpaid
        as
        of the day immediately preceding such Remittance Date, together with any
        Servicing Fee that was not paid on any prior Remittance Date;

      


      (ii) to
        the
        Servicer in an amount equal to any Servicer Advances not previously reimbursed
        to the Servicer;

      


      (iii) to
        the
        Manager in an amount equal to the Management Fee which is accrued and unpaid
        as
        of the day immediately preceding such Remittance Date, together with any
        Management Fee that was not paid on any prior Remittance Date;

      


      (iv) to
        the
        Agent for the account of the Lenders in an amount equal to (and for the pro
        rata
        payment of) (A) the Fees which are due and payable on such Remittance Date
        pursuant to the terms hereof and the terms of the Fee Letter, (B) any increased
        costs or increased capital requirements required to be paid under Section
        2.07
        to the
        extent not already paid by the Company, (C) any Taxes required to be paid
        under
Section
        2.08
        to the
        extent not already paid by the Company, and (D) all interest on the Loan
        which
        are accrued and unpaid as of the day immediately preceding such Remittance
        Date;

      


      (v) to
        the
        Reserve Account in an amount equal to the amount by which the Required Reserve
        Amount exceeds the amount of funds maintained in the Reserve Account as of
        the
        Remittance Date; 

      


      (vi) if
        such
        Remittance Date occurs prior to the Early Amortization Commencement Date,
        to the
        Agent for the account of the Lenders in an amount equal to the amount by
        which
        the aggregate amount of the Loan Outstanding exceeds the Maximum Loan Amount
        after giving effect to required reduction of the Maximum Loan Amount on such
        Remittance Date;

      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (vii) if
        such
        Remittance Date occurs on or after the occurrence of any Early Amortization
        Commencement Date and if the Early Amortization Event that gave rise to such
        Early Amortization Commencement Date is continuing, to the Agent for the
        account
        of the Lenders for the repayment of Loans Outstanding in an amount equal
        to the
        lesser of (A) all remaining funds in the Collection Account and (B) an amount
        necessary to repay the Loans Outstanding in full;

      


      (viii) at
        any
        time after the occurrence of a Servicer Default and the appointment of the
        replacement Servicer as the Servicer hereunder, to the former Servicer in
        an
        amount equal to (if any) the Servicing Fee which had previously accrued but
        was
        unpaid as of the last day of the preceding month; 

      


      (ix) at
        any
        time after the occurrence of a Manager Default and the appointment of the
        replacement Manager as the Manager hereunder, to the former Manager in an
        amount
        equal to (if any) the Manager Fee which had previously accrued but was unpaid
        as
        of the last day of the preceding month; 

      


      (x) to
        the
        Agent for the account of the Lenders for the repayment of all other Obligations
        (other than those set forth in clauses (v), (vi), (vii) and (viii) above)
        then
        due and payable; and

      


      (xi) any
        remaining amounts to the Company or to such other Persons as the Company
        may
        direct so long as such directive does not violate the terms of this Agreement
        or
        any other Transaction Document.

      


      (b) Reserve
        Account.
        In the
        event that there is insufficient funds in the Collection Account to enable
        the
        Company to make any payments required under Sections
        2.04(a)(i), (ii), (iii), (iv) and (vi)
        on any
        Remittance Date, the Servicer, with the consent of the Agent which consent
        shall
        be deemed to have been granted by the Agent if the amounts to be remitted
        by the
        Servicer are in amounts necessary to enable the Company to pay the outstanding
        amounts under Sections 2.04(a)(i),
        (ii), (iii), (iv) and (vi)
        on such
        Remittance Date
        and the
        Agent shall fail to make any objections to the Remittance Report,
        or the
        Agent, if the Servivcer fails to do so, may instruct the Reserve Account
        Bank to
        apply funds in the Reserve Account towards the payment of such outstanding
        amounts; provided, however, that nothing contained herein shall in any way
        diminish the Company’s obligation to make all payment of the Obligations on the
        applicable Remittance Date and the Company’s continuing obligation to maintain
        the Required Reserve Amount in the Reserve Account. 

      


      (c) Instructions
        to the Collection Bank.
        All
        instructions and directions given to the Collection Bank by the Servicer
        or the
        Agent pursuant to this Section
        2.04
        shall be
        in writing (including instructions and directions transmitted to the Collection
        Bank by telecopy), and such written instructions and directions shall be
        delivered with a written certification that such instructions and directions
        are
        in compliance with the provisions of this Section
        2.04.
        The
        Servicer shall immediately transmit to the Agent by telecopy a copy of all
        instructions and directions given to the Collection Bank by the Servicer
        pursuant to this Section
        2.04.
        The
        Agent shall immediately transmit to the Servicer and the Company by telecopy
        a
        copy of all instructions and directions given to the Collection Bank by the
        Agent, pursuant to this Section
        2.04.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      SECTION
        2.05 Payments
        and Computations, Etc. (a)
        All
        amounts to be paid or deposited by the Company or the Servicer hereunder
        shall
        be paid or deposited in accordance with the terms hereof no later than 1:00
        P.M.
        (New York City time) on the day when due in lawful money of the United States
        in
        immediately available funds to an account designated by the Agent. The Company
        shall, to the extent permitted by law, pay to the Agent interest on all amounts
        not paid or deposited when due hereunder (whether owing by the Company or
        the
        Servicer) at the Contract Rate then in effect, payable on demand; provided,
        however, that such interest rate shall not at any time exceed the maximum
        rate
        permitted by Applicable Law. Such interest shall be for the account of, and
        distributed by the Agent to, the Lenders. Any Obligation hereunder shall
        not be
        reduced by any distribution of any portion of Collections if at any time
        such
        distribution is rescinded or returned by the Lenders to the Company or any
        other
        Person for any reason. All computations of interest and other fees hereunder
        (including the Fees, the Servicing Fee and the Management Fee) shall be made
        on
        the basis of a year of three hundred sixty (360) days for the actual number
        of
        days (including the first but excluding the last day) elapsed.

      


      (b) Whenever
        any payment hereunder shall be stated to be due on a day other than a Business
        Day, such payment shall be made on the next succeeding Business Day, and
        such
        extension of time shall in such case be included in the computation of payment
        of interest or any fee payable hereunder, as the case may be.

       

      SECTION
        2.06 Fees. (a)
        The
        Company shall pay the Lenders certain fees (the “Fees”)
        in the
        amounts and on the dates set forth in a fee letter (as amended, modified
        or
        supplemented from time to time, the “Fee
        Letter”),
        dated
        the date hereof, between the Company and the Agent.

      


      (b) Other
        than the Fees payable on the Closing Date, all of the Fees payable pursuant
        to
        this Section
        2.06
        shall be
        payable solely from amounts available for application pursuant to, and subject
        to the priority of payment set forth in, Section
        2.04.

       

      SECTION
        2.07 Increased
        Costs; Capital Requirements. (a) Increased
        Costs.
        If at
        any time any Lender determines that, after the date hereof, the adoption
        of, or
        any change in or in the interpretation, application or administration of,
        or
        compliance with, any Requirement of Law from any Governmental Entity shall
        have
        the effect of (i) increasing the cost to such Lender of participating, or
        agreeing to participate, in extensions of credit or (ii) imposing any other
        cost
        to such Lender with respect to compliance with its obligations under any
        Transaction Document, then, upon demand by such Lender (with copy to the
        Agent),
        the Company shall pay to the Agent for the account of such Lender amounts
        sufficient to compensate such Lender for such increased cost.

       

      (b)
        Increased
        Capital Requirements.
        If at
        any time any Lender determines that, after the date hereof, the adoption
        of, or
        any change in or in the interpretation, application or administration of,
        or
        compliance with, any Requirement of Law from any Governmental Entity regarding
        capital adequacy, reserves, special deposits, compulsory loans, insurance
        charges against property of, deposits with or for the account of, Obligations
        owing to, or other credit extended or participated in by, any Lender or any
        similar requirement shall have the effect of reducing the rate of return
        on the
        capital of such Lenders (or any corporation controlling such Lender) as a
        consequence of its obligations under or with respect to any Transaction Document
        to a level below that which, taking into account the capital adequacy policies
        of such Lender, such Lender could have achieved but for such adoption or
        change,
        then, upon demand from time to time by such Lender (with a copy of such demand
        to the Agent), the Company shall pay to the Agent for the account of such
        Lender
        amounts sufficient to compensate such Lender for such reduction. 

      


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (c)
        Compensation
        Certificate.
        Each
        demand for compensation under this Section 2.07
        shall be
        accompanied by a certificate of the Lender (the “Compensation
        Certificate”)
        claiming such compensation, setting forth the amounts to be paid hereunder,
        which certificate shall be conclusive, binding and final for all purposes,
        absent manifest error. In determining such amount, such Lender may use any
        reasonable averaging and attribution methods.

      


      (d) Mitigation.
        Any
        Lender claiming any compensation pursuant to this Section 2.07
        shall
        use its reasonable efforts (consistent with its internal policies and Applicable
        Law) to change the jurisdiction of its lending office if such a change would
        reduce any such compensation (or any similar amount that may thereafter accrue)
        and would not, in the sole determination of such Lender, be otherwise
        disadvantageous to such Lender.

       

      SECTION
        2.08 Taxes. (a) Payments
        Free and Clear of Taxes.
        Except
        as otherwise provided in this Section 2.08
        (including the provisions of Section 2.08(b),
        each
        payment by the Company under any Transaction Document shall be made free
        and
        clear of all present or future taxes, levies, imposts, deductions, charges
        or
        withholdings of whatever nature imposed by any Applicable Law or Governmental
        Entity and all liabilities directly relating thereto (and without deduction
        for
        any of them) (collectively, but excluding the Excluded Taxes, the “Taxes”).
        

       

      (b) Gross-Up.
        If any
        Taxes shall be required by law to be deducted from or in respect of any amount
        payable under any Transaction Document to any Lender (i) such amount shall
        be
        increased as necessary to ensure that, after all required deductions for
        Taxes
        are made (including deductions applicable to any increases to any amount
        under
        this Section 2.08),
        such
        Lender receives the amount it would have received had no such deductions
        been
        made, (ii) the Company shall make such deductions, (iii) the Company shall
        timely pay the full amount deducted to the relevant taxing authority or other
        authority in accordance with Applicable Law and (iv) within thirty (30)
        days after such payment is made, the Company shall deliver to the Agent an
        original or certified copy of a receipt evidencing such payment (or such
        other
        evidence of payment reasonably satisfactory to Agent); provided,
        however,
        that no
        such increase shall be made with respect to, and the Company shall not be
        required to indemnify any such Lender pursuant to clause
        (d)
        below
        for, withholding taxes to the extent that the obligation to withhold amounts
        existed on the date that such Lender became a Lender under this Agreement
        in the
        capacity under which such Lender makes a claim under this clause
        (b),
        except
        in each case to the extent such Lender is a direct or indirect assignee (other
        than pursuant to Section 2.09
        (Substitution
        of Lenders))
        of any
        other Lender that was entitled, at the time the assignment of such other
        Lender
        became effective, to receive additional amounts under this clause
        (b).

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (c) Other
        Taxes.
        In
        addition, the Company shall pay, and authorizes the Agent to pay in its name,
        any stamp, sales, documentary, excise or property tax, charges or similar
        taxes,
        fees or levies imposed by any Applicable Law or Government Entity and all
        liabilities directly relating thereto (including by reason of any delay in
        payment thereof), in each case arising from the execution, delivery, filing,
        recording or registration of, or otherwise with respect to, any Transaction
        Document or any transaction contemplated therein (collectively, “Other
        Taxes”).
        Within twenty (20) days after the date of any payment of Other Taxes by the
        Company, the Company shall furnish to the Agent the original or a certified
        copy
        of a receipt evidencing payment thereof (or such other evidence of payment
        reasonably satisfactory to Agent).

       

      (d) Indemnification.
        The
        Company shall reimburse and indemnify, within ten (10) days after receipt
        of
        demand therefor (with copy to the Agent), the Agent and each Lender for all
        Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any
        jurisdiction on amounts payable under this Section 2.08)
        paid by
        the Agent or such Lender and any liabilities directly relating thereto, whether
        or not such Taxes or Other Taxes were correctly or legally asserted.
        A
        certificate of the Lender (or of the Agent on behalf of itself or such Lender,
        as the case may be) claiming any compensation under this clause
        (d),
        setting
        forth the amounts to be paid thereunder and delivered to the Company with
        copy
        to the Agent, shall be conclusive, binding and final for all purposes, absent
        manifest error. In determining such amount, the Agent and such Lender may
        use
        any reasonable averaging and attribution methods.

       

      (e) Mitigation.
        Any
        Lender claiming any additional amounts payable pursuant to this Section 2.08
        shall
        use its reasonable efforts (consistent with its internal policies and Applicable
        Law) to change the jurisdiction of its lending office if such a change would
        reduce any such additional amounts (or any similar amount that may thereafter
        accrue) and would not, in the sole determination of such Lender, be otherwise
        disadvantageous to such Lender.

       

      (f) Tax
        Forms.
        i)
        Each
        Non-U.S. Lender Party that, at any of the following times, is entitled to
        an
        exemption from United States withholding tax or, after a change in any
        Requirement of Law, is subject to such withholding tax at a reduced rate
        under
        an applicable tax treaty, shall (w) on or prior to the date such Non-U.S.
        Lender
        Party becomes a “Non-U.S. Lender Party” hereunder, (x) on or prior to the
        date on which any such form or certification expires or becomes obsolete,
        (y)
        after the occurrence of any event requiring a change in the most recent form
        or
        certification previously delivered by it pursuant to this clause (i)
        and (z)
        from time to time if requested by the Company or the Agent, provide the Agent
        and the Company with two completed originals of each of the following, as
        applicable:
        (A)
        Forms W-8ECI (claiming exemption from U.S. withholding tax because the income
        is
        effectively connected with a U.S. trade or business), W-8BEN (claiming exemption
        from, or a reduction of, U.S. withholding tax under an income tax treaty)
        or any
        successor forms,
        (B) in
        the case of a Non-U.S. Lender Party claiming exemption under Sections
        871(h)
        or
        881(c) of the Code, Form W-8BEN (claiming exemption from U.S. withholding
        tax
        under the portfolio interest exemption) or any successor form
        and a
        certificate in form and substance acceptable to the Agent that such Non-U.S.
        Lender Party is not (1) a “bank”
within
        the meaning of Section
        881(c)(3)(A)
        of the
        Code, (2) a “10
        percent shareholder”
of
        the
        Company within the meaning of Section
        881(c)(3)(B)
        of the
        Code or (3) a “controlled
        foreign corporation”
        described in Section
        881(c)(3)(C)
        of the
        Code or (C) any other applicable document prescribed by the IRS certifying
        as to
        the entitlement of such Non-U.S. Lender Party to an exemption from United
        States
        withholding tax or reduced rate with respect to all payments to be made to
        such
        Non-U.S. Lender Party under the Transaction Documents. Unless the Company
        and
        the Agent have received forms or other documents satisfactory to them indicating
        that payments under any Transaction Document to or for a Non-U.S. Lender
        Party
        are not subject to United States withholding tax or are subject to such tax
        at a
        rate reduced by an applicable tax treaty, the Company and the Agent shall
        withhold amounts required to be withheld by Applicable Law from such payments
        at
        the applicable statutory rate.

      


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (ii) Each
        U.S.
        Lender Party shall (A) on or prior to the date such U.S. Lender Party becomes
        a
“U.S. Lender Party” hereunder, (B) on or prior to the date on which any such
        form or certification expires or becomes obsolete, (C) after the occurrence
        of
        any event requiring a change in the most recent form or certification previously
        delivered by it pursuant to this clause
        (f)
        and (D)
        from time to time if requested by the Company or the Agent, provide the Agent
        and the Company with two completed originals of Form W-9 (certifying that
        such
        U.S. Lender Party is entitled to an exemption from U.S. backup withholding
        tax)
        or any successor form. 

      


      (iii) Each
        Lender having sold a participation in any of its Obligations shall collect
        from
        such participant the documents described in this clause
        (f)
        and
        provide them to the Agent and the Company.

      


      (g) If
        any
        Lender determines, in its reasonable discretion, that it has received a refund
        of any Taxes or Other Taxes as to which it has been indemnified by the Company
        or with respect to which the Company has paid additional amounts pursuant
        to
        this Section 2.08, it shall pay over such refund to the Company (but only
        to the
        extent of indemnity payments made, or additional amounts paid, by the Company
        under this Section 2.08 with respect to the Taxes or Other Taxes giving rise
        to
        such refund), net of all out-of-pocket expenses of such Lender and without
        interest (other than any interest paid by the relevant Government Entity
        with
        respect to such refund); provided, that the Company, upon the request of
        such
        Lender, agrees to repay the amount paid over to the Company (plus any penalties,
        interest or other charges imposed by the relevant Governmental Authority)
        to
        such Lender in the event such Lender is required to repay such refund to
        such
        Government Entity. This clause shall not be construed to require any Lender
        to
        make available its tax returns (or any other information which it deems
        confidential) to the Company or any other Person.

       

      SECTION
        2.09 Substitution
        of Lenders. (a) Substitution
        Right.
        In the
        event that any Lender that is not an Affiliate of the Agent (an “Affected
        Lender”),
        (i)
        makes a claim under Section
        2.07(a)
        (Increased
        Costs)
        or
Section
        2.07(b)
        (Increased
        Capital Requirements),
        (ii)
        makes a claim for payment pursuant to Section 2.08(b)
        (Taxes)
        or
        (iii) does not consent to any amendment, waiver or consent to any Transaction
        Document for which the consent of the Required Lenders is obtained but that
        requires the consent of other Lenders, the Company may either (i) with the
        consent of the Agent, pay in full such Affected Lender’s Pro Rata Share of the
        Obligations then outstanding or (ii) substitute for such Affected Lender
        any
        Lender or any Affiliate of any Lender or any other Person acceptable (which
        acceptance shall not be unreasonably withheld or delayed) to the Agent (in
        each
        case, a “Substitute
        Lender”).

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (b) Procedure.
        To
        substitute such Affected Lender or pay in full the Obligations owed to such
        Affected Lender, the Company shall deliver a notice to the Agent and such
        Affected Lender. The effectiveness of such payment or substitution shall
        be
        subject to the delivery to the Agent by the Company (or, as may be applicable
        in
        the case of a substitution, by the Substitute Lender) of (i) payment for
        the
        account of such Affected Lender, of, to the extent accrued through, and
        outstanding on, the effective date for such payment or substitution, all
        Obligations owing to such Affected Lender (including those that will be owed
        because of such payment and all Obligations that would be owed to such Lender
        if
        it was solely a Lender), and (ii) in the case of a substitution, an Assignment
        and Acceptance in form and substance reasonably satisfactory to the Agent
        whereby the Substitute Lender shall, among other things, agree to be bound
        by
        the terms of the Transaction Documents.

      


      (c) Effectiveness.
        Upon
        satisfaction of the conditions set forth in clause
        (b)
        above,
        the Agent shall record such substitution or payment, whereupon in the case
        of
        any substitution, (A) the Affected Lender shall sell and be relieved of,
        and the
        Substitute Lender shall purchase and assume, all rights and claims of such
        Affected Lender under the Transaction Documents, except that the Affected
        Lender
        shall retain such rights expressly providing that they survive the repayment
        of
        the Obligations, (B) the Substitute Lender shall become a “Lender”
        hereunder having a Loan Commitment in the amount of such Affected Lender’s Loan
        Commitment and (C) the Affected Lender shall execute and deliver to the Agent
        an
        Assignment and Acceptance to evidence such substitution and deliver any Note
        in
        its possession to the Agent; provided,
        however,
        that
        the failure of any Affected Lender to execute any such Assignment and Acceptance
        or deliver any such Note shall not render such sale and purchase (or the
        corresponding assignment) invalid.

       

      SECTION
        2.10 Intentionally
        Omitted.
        

      


      SECTION
        2.11 Grant
        of a Security Interest.
        To
        secure the prompt and complete payment when due of the Obligations and the
        performance by the Company of all of the covenants and obligations to be
        performed by it pursuant to this Agreement, the Company hereby (i) collaterally
        assigns and pledges to the Agent, on behalf of the Lenders (and their successors
        and assigns) and (ii) grants a security interest to the Agent, on behalf
        of the
        Lenders (and their successors and assigns), in all of the Company’s right, title
        and interest in, to and under all of the following property whether tangible
        or
        intangible and whether now owned or existing or hereafter arising or acquired
        and wheresoever located (collectively, the “Collateral”):

      


      (a) all
        Assets contributed (or otherwise transferred or pledged or purportedly
        transferred or pledged pursuant to the terms of the Mossimo Contribution
        Agreement) to the Company under the Mossimo Contribution Agreement or obtained
        by the Company after the Closing Date, including all additional Trademarks
        obtained after the Closing Date and all Licenses entered into on or behalf
        of
        the Company after the Closing Date, all Collections and other monies due
        and to
        become due related to the Assets received on or after the date such Assets
        were
        contributed to (or otherwise transferred or pledged or purportedly transferred
        pursuant to the terms of the Mossimo Contribution Agreement) the Company
        under
        the Mossimo Contribution Agreement, including all Collections relating to
        any
        Licenses entered into by or on behalf of the Company after the Closing
        Date;

      


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (b) the
        Mossimo Contribution Agreement and all other agreements, documents and
        instruments evidencing, securing or guarantying any Assets and all other
        agreements, documents and instruments related to any of the foregoing (the
        “Assigned Documents”), including, in each case, all monies due and to become due
        to the Company under or in connection therewith;

      


      (c) the
        Reserve Account, the Collection Account and all other bank and similar accounts
        relating to Collections (whether now existing or hereafter established) and
        all
        funds held therein, and all investments in and all income from the investment
        of
        funds in the Reserve Account, the Collection Account and such other bank
        and
        similar accounts;

      


      (d) the
        Management Agreement;

      


      (e) the
        Records relating to any Collateral and any of the other items or property
        described in clauses (a) through (d) above;

      


      (f) all
        UCC
        financing statements filed by the Company against the Transferor under or
        in
        connection with the Mossimo Contribution Agreement; and

      


      (g) all
        proceeds of the foregoing property described in clauses (a) through (e) above,
        including interest, dividends, cash, instruments and other property from
        time to
        time received, receivable or otherwise distributed in respect of or in exchange
        for or on account of the sale or other disposition of any or all of the then
        existing Collateral.

       

      SECTION
        2.12 Evidence
        of Obligations. (a)
        Each
        Lender shall maintain in accordance with its usual practice accounts evidencing
        Obligations of the Company to such Lender resulting from the Loan of such
        Lender, including the amounts of principal and interest payable and paid
        to such
        Lender from time to time under this Agreement. 

       

      (b) The
        Agent, acting as agent of the Company in the manner required by the Code
        sections and regulation referred to in Section
        2.12(c)
        and
        solely with respect to the actions described in this Section 2.12,
        shall
        establish and maintain (A) a record of ownership (the “Register”)
        in
        which the Agent agrees to register by book entry the interests (including
        any
        rights to receive payment hereunder) of the Agent and each Lender in the
        Loans,
        each of their obligations under this Agreement to participate in each Loan,
        and
        any assignment of any such interest, obligation or right and (B) accounts
        in the Register in accordance with its usual practice in which it shall record
        (1) the names and addresses of the Lenders (and each change thereto pursuant
        to
Section 2.09
        (Substitution
        of Lenders)
        and
Section 10.04
        (Binding
        Effect; Assignability; Multiple Lenders)),
        (2)
        the Loan Commitment of each Lender, (3) the amount of each Loan and each
        funding
        of any participation described in clause
        (A)
        above,
        (4) the amount of any principal or interest due and payable or paid and (5)
        any
        other payment received by the Agent from the Company and its application
        to the
        Obligations.

      


      (c) Notwithstanding
        anything to the contrary contained in this Agreement, the Loans (including
        any
        Notes evidencing such Loans) are registered obligations, the right, title
        and
        interest of the Lenders and their assignees in and to such Loans shall be
        transferable only upon notation of such transfer in the Register and no transfer
        thereof shall be effective until recorded therein. This Section 2.12
        and
Section 10.04
        shall be
        construed so that the Loans are at all times maintained in “registered
        form”
within
        the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any
        related regulations (and any successor provisions).

      


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (d) The
        entries made in the Register and in the accounts maintained pursuant to clauses
        (a) and (b) above shall, to the extent permitted by Applicable Law, be prima
        facie evidence of the existence and amounts of the obligations recorded therein;
        provided, however, that no error in such account and no failure of any Lender
        or
        the Agent to maintain any such account shall affect the obligations of the
        Company to repay the Loans in accordance with their terms. In addition, the
        Company, the Agent and the Lenders shall treat each Person whose name is
        recorded in the Register as a Lender for all purposes of this Agreement.
        Information contained in the Register with respect to any Lender shall be
        available for inspection by the Company, the Agent or such Lender at any
        reasonable time and from time to time upon reasonable prior notice.

       

      (e) Upon
        any
        Lender’s request, the Company shall promptly execute and deliver Notes to such
        Lender evidencing the Loans of such Lender in substantially the form of
Exhibit B.
        Each
        Note, if issued, shall only be issued as means to evidence the right, title
        or
        interest of a Lender or a registered assignee in and to the related Loan,
        as set
        forth in the Register, and in no event shall any Note be considered a bearer
        instrument or obligation.

      


      (f) Each
        Lender (or participant) that grants a participation in the Loans, acting
        solely
        for purposes of Section
        2.12(f)
        as the
        agent of the Company, shall maintain a register in respect of such
        participation, to which contractual terms under such participation corresponding
        to those of Sections
        2.12(b), (c) and (d)
        shall
        apply.

       

      SECTION
        2.13 Survival
        of Representations and Warranties; Repayment Obligations.
        It is
        understood and agreed that the representations and warranties set forth in
        Section
        4.01
        and
Section
        4.02
        are made
        and are true and correct on the date of this Agreement and shall be true
        and
        correct until the Facility Termination Date. 

       

      SECTION
        2.14 Release
        of Collateral. (a)
        In the
        event that the Transferor shall be required to repurchase any Collateral
        in
        accordance with Section
        4.7(c)
        of the
        Mossimo Contribution Agreement, the Company shall notify the Transferor of
        the
        Release Price to be paid for such Collateral on the Business Day on which
        such
        Release Price shall be paid specifying the Collateral to be released and
        the
        Release Price and the Company shall require that the Transferor deposit such
        Release Price into the Collection Account.

      


      (b) Promptly
        after the Loan Repayment Date has occurred, the Lenders and the Agent, in
        accordance with their respective interests, shall re-assign and transfer
        to the
        Company, for no additional consideration but at the sole expense of the Company,
        their respective remaining interests in the Collateral, free and clear of
        any
        Adverse Claim resulting solely from an act by the Lenders or the Agent but
        without any other representation or warranty, express or implied, by or recourse
        against the Lenders or the Agent.

      


      (c) In
        connection with any release or transfer of any Collateral permitted under
        this
Section
        2.14,
        the
        Agent shall at the expense of the Company, execute, acknowledge and deliver
        to,
        or at the direction of, the Company such release forms, instruments, agreements,
        and other documents (including UCC 3 statements or their equivalents in any
        other jurisdiction) as the Company shall reasonably request. The Agent hereby
        authorizes the Company to file such release forms, instruments, agreements,
        and
        other documents (including UCC 3 statements or their equivalents in any other
        jurisdiction) as the Company may deem necessary or appropriate in order to
        release or transfer any Collateral as permitted under this Section
        2.14.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      SECTION
        2.15 Prepayment.
        

      


      (a) The
        Company may, on any Remittance Date, prepay the Loan; provided, however,
        that
        unless the Loan is paid in full in accordance with clause (b) below, such
        prepayment shall not be in an amount in excess of $5,000,000. If the Company
        prepays the Loan in an amount not to exceed $5,000,000 in accordance with
        the
        terms of this Section
        2.15(a),
        no
        prepayment fee shall be payable by the Company. 

      


      (b) The
        Company may prepay the Loan and terminate this Agreement upon (i) at least
        thirty (30) Business Days’ prior irrevocable written notice to the Agent, (ii)
        the payment in full of all Loans Outstanding, together with accrued interest
        thereon on the date set forth in such notice, (iii) the payment of the
        prepayment fee as set forth in the Fee Letter; provided, however, that no
        prepayment fee shall be payable if the Loans are paid in full during the
        six (6)
        month period immediately following the Closing Date and (iv) the payment
        in full
        in cash of all other Obligations together with accrued interest thereon on
        the
        date set forth in such notice.

       

      SECTION
        2.16 Right
        Of First Refusal.
        The
        Company hereby agrees that if at any time while the Loan is outstanding (a)
        the
        Company or any Affiliate of the Company receives a bona fide, written offer,
        proposal or commitment from any third party to provide working capital financing
        to the Company or other type of financing to the Company (“Refinancing
        Offer”),
        (b)
        the terms of the Refinancing Offer are acceptable to the Company or such
        Affiliate, and (c) the Company or such Affiliate desires to accept the
        Refinancing Offer from the offeror (“Offeror”),
        the
        Company will immediately advise Agent in writing of the Refinancing Offer,
        including the identity of the Offeror, the complete terms and conditions
        of the
        Refinancing Offer and a copy of the Refinancing Offer. The Company agrees
        not to
        accept, nor shall it permit any Affiliate to accept, the Refinancing Offer
        from
        the Offeror until at least thirty (30) days after Agent’s receipt of the
        foregoing items (the “Offer
        Matching Period”).
        The
        Company further agrees that in the event Agent delivers a written commitment
        letter which (i) matches the terms set forth in the Refinancing Offer within
        the
        Offer Matching Period, and (ii) agrees to close such refinancing within sixty
        (60) days from the date the Company or such Affiliate signs such commitment
        letter, neither the Company nor the Affiliate will accept the Refinancing
        Offer
        from the Offeror and will accept the Refinancing Offer from Agent. In the
        event
        Agent is not prepared to close such refinancing (and the cause thereof is
        not
        the Company’s refusal to cooperate or provide information or documentation
        reasonably requested by Agent in connection with such refinancing) within
        sixty
        (60) days of after the expiration of the Offer Matching Period, the Company
        may
        close on the Refinancing Offer with the original Offeror within sixty (60)
        days
        after the expiration of the Offer Matching Period (subject to the payment
        of the
        prepayment fee as set forth in the Fee Letter). 

      


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      ARTICLE
        III.

      


      CONDITIONS
        OF LOANS

       

      SECTION
        3.01 Conditions
        Precedent.
        The
        making of the Loan hereunder is subject to the conditions precedent
        that:

      


      (a) all
        fees
        payable on or prior to the Closing Date and pursuant to the terms of the
        Fee
        Letter shall have been paid in full and all other acts and conditions (including
        the obtaining of any necessary regulatory approvals and the making of any
        required filings, recordings or registrations) required to be done and performed
        and to have happened prior to the execution, delivery and performance of
        this
        Agreement and all related documents and to constitute the same legal, valid
        and
        binding obligations, enforceable in accordance with their respective terms,
        shall have been done and performed and shall have happened in compliance
        with
        all applicable laws;

      


      (b) all
        costs
        and expenses required to be paid under Section
        10.07
        hereof
        shall have been paid in full; 

      


      (c) the
        Agent
        shall have received the items listed in Schedule
        I
        hereto,
        each in form and substance satisfactory to the Agent and the
        Lenders;

      


      (d) the
        representations and warranties contained in Section
        4.01
        are true
        and correct in all material respects, before and after giving effect to the
        Loan
        and to the application of proceeds therefrom, on and as of such date as though
        made on and as of such date;

      


      (e) no
        event
        has occurred and is continuing, or would result from the making of the Loan,
        which constitutes an Early Amortization Event, a Default or an Event of Default
        hereunder, or an event that but for notice or lapse of time or both would
        constitute an Early Amortization Event;

      


      (f) all
        terms
        and conditions of the Mossimo Contribution Agreement required to be satisfied
        in
        connection with the assignment of all of the Collateral being Pledged hereunder,
        including the perfection of the Company’s interests therein to the extent
        required herein, shall have been satisfied in full, and all filings (including
        UCC filings) required to be made by any Person and all actions required to
        be
        taken or performed by any Person in any jurisdiction to give the Agent, for
        the
        benefit of the Lenders, a first priority perfected security interest (subject
        only to Permitted Liens) in such Collateral and the proceeds thereof shall
        have
        been made, taken or performed; and 

      


      (g) No
        law or
        regulation shall prohibit, and no order, judgment or decree of any federal,
        state or local court or governmental body, agency or instrumentality shall
        prohibit or enjoin, the making of the Loan by the Lenders in accordance with
        the
        provisions hereof. 

      


      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      ARTICLE
        IV.

      


      REPRESENTATIONS
        AND WARRANTIES

       

      SECTION
        4.01 Representations
        and Warranties of the Company.
        The
        Company hereby represents and warrants to Agent and the Lenders (each of
        which
        representations and warranties shall survive the execution and delivery of
        this
        Agreement), and promises to and agrees with Agent and the Lenders until the
        Facility Termination Date as follows:

      


      (a) The
        Company is a limited liability company duly organized, validly existing and
        in
        good standing under the laws of the jurisdiction of its formation and has
        the
        power and all licenses necessary to own its assets and to transact the business
        in which it is engaged and is duly qualified and in good standing under the
        laws
        of each jurisdiction where the transaction of such business or its ownership
        of
        the Collateral requires such qualification, except, in each case, where the
        failure to do so could not be reasonably expected to have a material adverse
        effect on the rights, interests or remedies of the Agent or any
        Lender.

      


      (b) The
        Company has the power, authority and legal right to make, deliver and perform
        this Agreement and each of the Transaction Documents to which it is a party
        and
        all of the transactions contemplated hereby and thereby, and has taken all
        necessary action to authorize the execution, delivery and performance of
        this
        Agreement and each of the Transaction Documents to which it is a party, and
        to
        grant to the Agent, for the benefit of the Lenders, a security interest in
        the
        Collateral on the terms and conditions of this Agreement which security
        interest, upon the filing of a UCC-1 financing statement with the Delaware
        Secretary of State, shall constitute a first priority perfected security
        interest (subject only to Permitted Liens). This Agreement and each of the
        Transaction Documents to which the Company is a party constitutes the legal,
        valid and binding obligation of the Company, enforceable against it in
        accordance with their respective terms, except as the enforceability hereof
        and
        thereof may be limited by bankruptcy, insolvency, moratorium, reorganization
        and
        other similar laws of general application affecting creditors’ rights generally
        and by general principles of equity (whether such enforceability is considered
        in a proceeding in equity or at law). No consent of any other party and no
        consent, license, approval or authorization of, or registration or declaration
        with, any governmental authority, bureau or agency is required in connection
        with the execution, delivery or performance by the Company of this Agreement
        or
        any Transaction Document to which it is a party or the validity or
        enforceability of this Agreement or any such Transaction Document or the
        Collateral, other than such as have been met or obtained.

      


      (c) The
        execution, delivery and performance of this Agreement and all other agreements
        and instruments executed and delivered or to be executed and delivered pursuant
        hereto or thereto in connection with the Pledge of the Collateral will not
        (i)
        create any Adverse Claim on the Collateral or (ii) violate any provision
        of any
        Applicable Law or the certificate of formation or operating agreement of
        the
        Company or any contract or other agreement to which or the Company is a party
        or
        by which the Company or any property or assets of the Company may be
        bound.

      


      (d) No
        litigation or administrative proceeding of or before any court, tribunal
        or
        governmental body is presently pending or, to the knowledge of the Company,
        threatened against the Company or any of its properties or with respect to
        this
        Agreement, which, if adversely determined, could reasonably be expected to
        have
        a material adverse effect on the business, assets or financial condition
        of the
        Company, individually or taken as a whole, or which would draw into question
        the
        validity of this Agreement, any Transaction Document to which the Company
        is a
        party or any of the other applicable documents forming part of the
        Collateral.

      


      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      (e) i) The
        Company has not suffered any material adverse change to its business, financial
        or other condition or operations since the date of the most recent audited
        annual financial statements of the Parent.

      


      (ii) The
        Company has not suffered (x) a material increase in its liabilities, liquidated
        or contingent, or (y) a material decrease in its assets since the date of
        the
        most recent audited annual financial statements of the Parent.

      


      (f) The
        grant
        of the security interest in the Collateral by the Company to the Agent, for
        the
        benefit of the Lenders, pursuant to this Agreement, is in the ordinary course
        of
        business for the Company and is not subject to the bulk transfer or any similar
        statutory provisions in effect in any applicable jurisdiction. No such
        Collateral has been sold, transferred, assigned or pledged by the Company
        to any
        Person, other than the Pledge of such Collateral to the Agent, for the benefit
        of the Lenders, pursuant to the terms of this Agreement. The Collateral Pledged
        to the Agent for the benefit of the Lenders hereunder, is free and clear
        of any
        Adverse Claim, and the Agent has acquired, for the benefit of the Lenders,
        a
        first priority perfected security interest (subject only to Permitted Liens)
        in
        the Collateral.

      


      (g) The
        Company has no Debt or other indebtedness which, in the aggregate, exceeds
        $50,000, other than Debt incurred under the terms of the Transaction Documents.
        

      


      (h) The
        Company has been formed solely for the purpose of engaging in the transactions
        contemplated by this Agreement and the Mossimo Contribution Agreement, and
        has
        not engaged in any business activity other than the negotiation, execution
        and
        to the extent applicable, performance of this Agreement and the Transaction
        Documents.

       

      (i) No
        injunction, writ, restraining order or other order of any nature adversely
        affects the Company’s performance of its obligations under this Agreement or any
        Transaction Document to which the Company is a party.

      


      (j) The
        Company and each of its Tax Affiliates has filed (on a consolidated basis
        or
        otherwise) on a timely basis all tax returns (including all foreign, federal,
        state, local and other tax returns) required to be filed. The Company is
        not
        liable for taxes payable by any other Person (other than taxes of a Tax
        Affiliate required to be paid by any Applicable Law, provided, that a tax
        sharing arrangement is in place with such Tax Affiliate under which the sharing
        of tax obligations is appropriate and reflects economic realities) and has
        paid
        or made adequate provisions for the payment of all taxes, assessments and
        other
        governmental charges due from the Company and each of its Tax Affiliates
        except
        for those taxes being contested in good faith by appropriate proceedings
        and in
        respect of which it has established proper reserves on its books. No tax
        lien or
        similar adverse claim has been filed, and no claim is being asserted in writing
        (or, to the Company’s knowledge, otherwise), with respect to any such tax,
        assessment or other governmental charge. Any taxes, fees and other governmental
        charges payable by the Company or any of its Tax Affiliates, as applicable,
        in
        connection with the execution and delivery of this Agreement and the other
        Transaction Documents and the transactions contemplated hereby or thereby
        have
        been paid or shall have been paid if and when due.

      


      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      (k) The
        chief
        executive office of the Company is located at 103 Foulk Road, Wilmington,
        Delaware 19803.

      


      (l) The
        Company’s legal name is as set forth in this Agreement; other than as disclosed
        on Schedule
        II
        hereto
        (as such schedule may be updated from time to by the Agent upon receipt of
        a
        notice delivered to the Agent pursuant to Section
        6.15),
        the
        Company has not changed its name since its formation; and the Company does
        not
        have tradenames, fictitious names, assumed names or “doing business as” names
        other than as disclosed on Schedule
        II
        hereto
        (as such schedule may be updated from time to by the Agent upon receipt of
        a
        notice delivered to the Agent pursuant to Section
        6.15).

      


      (m) The
        Company is Solvent and will be Solvent after giving effect to the transactions
        contemplated hereby.

      


      (n) The
        Company has no Subsidiaries.

      


      (o) The
        Company has either (i) received the Assets from the Transferor as a capital
        contribution, or has (ii) given fair consideration and reasonably equivalent
        value in exchange for the sale of the Assets by the Transferor to it in each
        case, pursuant to the Mossimo Contribution Agreement.

      


      (p) No
        proceeds of any Loans will be used by the Company to acquire any security
        in any
        transaction, which is subject to Section 13 or 14 of the Securities Exchange
        Act
        of 1934, as amended; provided,
        however,
        the
        proceeds of the Loan may be distributed to the Transferor in order to consummate
        the transactions contemplated by the Merger Documents. 

      


      (q) There
        are
        no agreements in effect adversely affecting the rights of the Company to
        make,
        or cause to be made, the grant of the security interest in the Collateral
        contemplated by Section
        2.11.

      


      (r) The
        Company is not an “investment company” or a company directly or indirectly
“controlled” by an “investment company” and is not required to register as an
“investment company” as such terms are defined in the Investment Company Act of
        1940, as amended, nor is the Company otherwise subject to regulation
        thereunder.

      


      (s) No
        Default or Event of Default has occurred and is continuing.

      


      (t) The
        Company is in compliance with ERISA and has not incurred and does not expect
        to
        incur any liabilities (except for premium payments arising in the ordinary
        course of business) to the Pension Benefit Guaranty Corporation (or any
        successor thereto) under ERISA.

      


      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      (u) There
        is
        not now, nor will there be at any time in the future, any agreement or
        understanding between the Company and another Person (other than as expressly
        set forth herein), providing for the allocation or sharing of obligations
        to
        make payments or otherwise in respect of any taxes, fees, assessments or
        other
        governmental charges, except (i) as provided under the Transaction Documents,
        and (ii) tax sharing agreements among any or all of the Company, the Transferor
        and any of the Transferor’s Affiliates, under which appropriate and customary
        allocation of tax sharing responsibilities has been made which reflects economic
        realities.

      


      (v) The
        proceeds of the Loans shall be used by the Company solely to consummate the
        transaction contemplated by the Transaction Documents and for the payment
        of
        related transaction costs, fees and expenses.

      


      (w) The
        annual financial statements of the Company shall disclose the effects of
        the
        transactions contemplated by this Agreement as a loan to the extent required
        by
        and in accordance with GAAP, it being understood that the Loan to the Company
        under this Agreement will be treated as debt on the consolidated financial
        statements of the Parent.

      


      (x) Each
        of
        the representations and warranties of the Transferor set forth in the Mossimo
        Contribution Agreement are true and correct and no breach of any provision
        of
        the Mossimo Contribution Agreement has occurred and is continuing.

       

      SECTION
        4.02 Representations
        and Warranties of Mossimo Management.
        Mossimo
        Management (so long as Mossimo Management is the Servicer or the Manager)
        hereby
        represents and warrants to Agent and the Lenders (each of which representations
        and warranties shall survive the execution and delivery of this Agreement),
        and
        promises to and agrees with Agent and the Lenders until the Facility Termination
        Date as follows:

      


      (a) Mossimo
        Management is a limited liability company duly organized, validly existing
        and
        in good standing under the laws of the jurisdiction of its formation and
        has the
        power and all licenses necessary to own its assets and to transact the business
        in which it is engaged (which includes servicing the Collateral) and is duly
        qualified and in good standing under the laws of each jurisdiction where
        its
        servicing or managing of the Collateral requires such qualification except
        in
        each case, where the failure to do so could not have a material adverse effect
        on the ability of Mossimo Management to perform its obligations under this
        Agreement, including those set forth in Section
        6.

      


      (b) Mossimo
        Management has the power, authority and legal right to make, deliver and
        perform
        this Agreement and each of the Transaction Documents to which it is a party
        and
        all of the transactions contemplated hereby and thereby (including the power,
        authority and legal right to service and manage the Collateral as contemplated
        hereunder and thereunder and enforce all rights of the Transferor and/or
        the
        Agent and the Lenders under the related Licenses) and has taken all necessary
        action to authorize the execution, delivery and performance of this Agreement
        and each of the Transaction Documents to which it is a party. This Agreement
        and
        each of the Transaction Documents to which Mossimo Management is a party
        constitutes the legal, valid and binding obligation of Mossimo Management,
        enforceable against it in accordance with their respective terms, except
        as the
        enforceability hereof and thereof may be limited by bankruptcy, insolvency,
        moratorium, reorganization and other similar laws of general application
        affecting creditors’ rights generally and by general principles of equity
        (whether such enforceability is considered in a proceeding in equity or at
        law).
        No consent of any other party and no consent, license, approval or authorization
        of, or registration or declaration with, any governmental authority, bureau
        or
        agency is required in connection with the execution, delivery or performance
        by
        Mossimo Management of this Agreement or any Transaction Document to which
        it is
        a party or the validity or enforceability of this Agreement or any such
        Transaction Document, other than such as have been met or obtained.

      


      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      (c) The
        execution, delivery and performance of this Agreement by Mossimo Management
        and
        all other agreements and instruments executed and delivered or to be executed
        and delivered by Mossimo Management pursuant hereto or thereto will not (i)
        create any Adverse Claim on the Collateral or (ii) violate any provision
        of any
        Applicable Law or the certificate of formation or limited liability company
        agreement of Mossimo Management or any material contract or other agreement
        to
        which Mossimo Management is a party or by which Mossimo Management or any
        of its
        property or assets may be bound.

      


      (d) No
        litigation or administrative proceeding of or before any court, tribunal
        or
        governmental body is presently pending or, to the knowledge of Mossimo
        Management, threatened against Mossimo Management or any properties of Mossimo
        Management or with respect to this Agreement, which, if adversely determined,
        could reasonably be expected to have a material adverse effect on the business,
        assets or financial condition of Mossimo Management or which would draw into
        question the validity of this Agreement or any Transaction Document to which
        Mossimo Management is a party.

      


      (e) No
        injunction, writ, restraining order or other governmental, administrative,
        or
        judicial order of any nature materially adversely affects Mossimo Management’s
        performance of its obligations under this Agreement or any Transaction Document
        to which Mossimo Management is a party.

      


      (f) Mossimo
        Management has filed (on a consolidated basis or otherwise) on a timely basis
        all tax returns (including all foreign, federal, state, local and other tax
        returns) required to be filed, is not liable for taxes payable by any other
        Person (other than pursuant to a tax sharing arrangement with any of its
        Affiliates under which the sharing of tax obligations is appropriate and
        reflects economic realities) and has paid or made adequate provisions for
        the
        payment of all taxes, assessments and other governmental charges due from
        Mossimo Management except for those taxes being contested in good faith by
        appropriate proceedings and in respect of which it has established proper
        reserves on its books. No tax lien or similar adverse claim has been filed,
        and
        no claim is being asserted, with respect to any such tax, assessment or other
        governmental charge. Any taxes, fees and other governmental charges payable
        by
        Mossimo Management in connection with the execution and delivery of this
        Agreement and the other Transaction Documents to which it is a party and
        the
        transactions contemplated hereby or thereby have been paid or shall have
        been
        paid if and when due.

      


      (g) The
        chief
        executive office of Mossimo Management is located at 103 Foulk Road, Wilmington,
        Delaware 19803.

      


      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      (h) Mossimo
        Management is Solvent and will be Solvent after giving effect to the
        transactions contemplated hereby.

      


      (i) Mossimo
        Management is not an “investment company” or a company directly or indirectly
“controlled” by an “investment company” and is not required to register as an
“investment company” as such terms are defined in the Investment Company Act of
        1940, as amended, nor is the Company otherwise subject to regulation
        thereunder.

      


      (j) No
        Servicer Default or Manager Default has occurred and is continuing.

      


      (k) Mossimo
        Management has no Debt or other indebtedness which, in the aggregate, exceeds
        $50,000.

       

      SECTION
        4.03 Resale
        of Collateral Upon Breach of Covenant or Representation and Warranty by the
        Company.
        The
        Company or Mossimo Management, as the case may be, shall inform the other
        parties to this Agreement promptly, in writing, upon the discovery of any
        breach
        of the representations and warranties contained in Section
        4.01
        or
Section
        4.02;
        provided,
        however,
        that
        the failure to provide any such notice shall not diminish, in any manner
        whatsoever, any obligation of the Company under this Section
        4.03
        to sell
        any Collateral. If the Transferor is required to reacquire any Collateral
        in
        accordance with Section 4.7 of the Mossimo Contribution Agreement, the Company
        shall have an obligation to, and the Company shall, resell to the Transferor
        pursuant to the Mossimo Contribution Agreement (and the Agent may enforce
        such
        obligation of the Company to sell) any Collateral required to be reacquired
        pursuant thereto. Mossimo Management shall notify the Agent promptly, in
        writing, of any failure by the Company to so resell any such Collateral.
        In
        connection with the resale of such Collateral, the Company shall remit funds
        in
        an amount equal to the Release Price for such Collateral to the Collection
        Account on the date of such resale. 

      


      ARTICLE
        V.

      


      GENERAL
        COVENANTS OF THE COMPANY

      


      The
        Company covenants and agrees that until payment in full of the Obligations
        hereunder, unless the Company has received the prior written consent of the
        Agent, the Company shall perform all covenants in this Article V.

       

      SECTION
        5.01 General
        Covenants. (a)
        The
        Company will observe all procedures required by its certificate of formation,
        limited liability company agreement and the laws of its jurisdiction of
        formation. The Company will maintain its existence in good standing under
        the
        laws of its jurisdiction of formation and will promptly obtain and thereafter
        maintain qualifications to do business as a foreign limited liability company
        in
        any other state in which it does business and in which it is required to
        so
        qualify under applicable law, except where the failure to do could not have
        a
        material adverse effect on the rights, interests or remedies of the Agent
        or any
        Lender. The Company will maintain all licenses necessary to own its assets
        and
        transact it business. The Company will not relocate its chief executive office
        without giving the Agent at least thirty (30) days prior written
        notice.

      


      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      (b) The
        Company will at all times ensure that (i) its assets are not commingled with
        those of the Transferor or any other Affiliate of the Company, (ii) the members
        of the Company duly authorize all of its company actions, (iii) it maintains
        separate and accurate records and books of account and such books and records
        are kept separate from those of the Transferor and any other Affiliate of
        the
        Company and (iv) it maintains minutes of the meetings and other proceedings
        of
        the members of the Company. Where necessary, the Company will obtain proper
        authorization from its members for company action.

      


      (c) The
        Company will at all times be adequately capitalized to conduct its business,
        and
        shall pay its operating expenses and liabilities from its own
        assets.

      


      (d) The
        Company will not hold itself out, or permit itself to be held out, as having
        agreed to pay or as being liable for the debts of the Transferor or any other
        Affiliate of the Company, and the Company will not engage in business
        transactions with the Transferor, except for the transactions detailed in
        the
        Transaction Documents conducted on an arm’s-length basis. Furthermore, and
        without limiting any other provision of this subsection (d), the Company
        will
        not engage in business transactions (including management agreements, service
        agreements, intercompany loans and other borrowing transactions) with any
        of its
        Affiliates, officers, directors or employees, except the Company may engage
        in
        business transactions with its Affiliates if done on an arm’s-length basis and
        as contemplated hereunder and under the other Transaction Documents. The
        Company
        will not hold the Transferor or any other Person out to third parties as
        other
        than an entity with assets and liabilities distinct from the Company. The
        Company will cause any of its financial statements consolidated with those
        of
        the Transferor to state that the Company is a separate entity with its own
        separate creditors who, in any liquidation of the Company, will be entitled
        to
        be satisfied out of the Company’s assets prior to any value in the Company
        becoming available to the Company’s equity holders. The Company will not create,
        form or otherwise acquire any Subsidiaries. The Company will not act in any
        other manner that could reasonably be foreseen to mislead others with respect
        to
        the Company’s separate identity.

      


      (e) Except
        as
        otherwise provided herein or in any other Transaction Document, the Company
        shall not sell, assign (by operation of law or otherwise) or otherwise dispose
        of, or create or suffer to exist any Adverse Claim upon or with respect to,
        any
        Collateral, any Collections related thereto, or upon or with respect to any
        account to which any Collections are sent, or assign any right to receive
        income
        in respect thereof. Except as otherwise provided herein or in any other
        Transaction Document, the Company shall not create or suffer to exist any
        Adverse Claim upon or with respect to any of the Company’s assets. 

      


      (f) The
        Company will not merge or consolidate with, or convey, transfer, lease or
        otherwise dispose of (whether in one transaction or in a series of
        transactions), any of its assets (whether now owned or hereafter acquired)
        or
        acquire any of the assets or capital stock or other ownership interest of
        any
        Person, except for any transactions contemplated by the Mossimo Contribution
        Agreement. 

      


      (g) The
        Company will not account for or treat (whether in financial statements or
        otherwise) the transactions contemplated by the Mossimo Contribution Agreement
        in any manner other than capital contribution and an irrevocable and absolute
        assignment of the Assets by the Transferor to the Company constituting a
        “true
        conveyance”
for
        bankruptcy purposes, it being understood that the Loan to the Company under
        this
        Agreement will be treated as debt on the consolidated financial statements
        of
        the Parent.

      


      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      (h) The
        Company will not amend, modify, waive or terminate any terms or conditions
        of
        the Mossimo Contribution Agreement without the written consent of the Agent,
        and
        shall perform its obligations thereunder. 

      


      (i) The
        Company will not amend, modify or otherwise make any change to its certificate
        of formation, including its legal name or its state of formation, or operating
        agreement without the consent of the Agent.

      


      (j) The
        Company will not make or allow to be made any amendment to the Target License
        Agreement without the prior written consent of the Agent and shall not make
        any
        amendment to any other License Agreement if such amendment would have a material
        adverse effects on the right, interests, remedies of the Agent or any Lender
        under this Agreement or any Transaction Document or would impair in any material
        manner the ability of the Company to repay the Loans. 

      


      (k) Upon
        receipt of any proceeds of any Collateral, the Company will remit such proceeds
        to the Servicer to be deposited by the Servicer to the appropriate account
        as
        determined in accordance with Section
        6.12
        hereof
        within two (2) Business Days of the Company’s receipt thereof. 

      


      (l) The
        Company shall not establish any depository or other bank account of any kind
        with any financial institution (other than the accounts set forth on
Schedule
        IV)
        without
        Agent’s prior written consent and the Company shall deliver to the Agent copies
        of all documents executed in connection with the opening of any new bank
        account. The Company shall maintain all of its bank accounts with financial
        institutions reasonably acceptable to the Agent. 

      


      (m) The
        Company (upon a Responsible Officer of the Company gaining knowledge thereof)
        shall promptly notify the Agent of the occurrence of any Servicer Default,
        Manager Default, Event of Default, Early Amortization Event or any default
        or
        event of default under the Mossimo Contribution Agreement. In addition, the
        Company confirms and agrees that the Company will, upon receipt of notice
        or
        discovery thereof, send to the Agent a notice of (i) any breach of material
        consequence of any representation, warranty, agreement or covenant under
        any
        Assigned Document or (ii) any event or occurrence that, upon notice, or upon
        the
        passage of time or both, would constitute such a breach, in each case, promptly
        and, in any case, within two (2) Business Days of learning thereof.


      


      (n) On
        the
        first anniversary of the Closing Date, the Company will obtain and thereafter
        at
        all times while Obligations are outstanding maintain one or more interest
        rate
        caps with one or more other financial institutions reasonably acceptable
        to the
        Agent effectively providing for a fixed or maximum rate of interest at all
        times
        prior to and including the Facility Termination Date, (a) on a notional
        amount equal to at least the amounts set forth on Schedule
        5.01(o),
        (b) at
        an interest rate not in excess of seven percent (7.0%) per annum (the
“Strike
        Price”)
        and
        (c) otherwise in form and substance reasonably acceptable to the Agent. The
        Company shall deliver to the Agent for the benefit of the Lenders valid and
        perfected collateral assignments of all interest rate caps required to be
        maintained hereunder with respect to the Loan and shall obtain the
        acknowledgment and agreement of the counterparty or counterparties thereto
        (whether or not such counterparty or counterparties include the Agent or
        all or
        any of the Lenders) to pay any amounts which would otherwise be payable by
        such
        counterparty or counterparties to the Company directly to the Collection
        Account.

      


      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      (o) The
        Company shall not incur, maintain or otherwise suffer to exist any Lien upon
        or
        with respect to any of its property, whether now owned or hereafter acquired,
        or
        assign any right to receive income or profits, except for the Liens created
        pursuant to any Transaction Document and Permitted Liens. 

      


      (p) As
        soon
        as available but no later than forty five (45) days after the end of each
        calendar quarter in each fiscal year of the Parent, the Company shall deliver
        to
        the Agent a copy of:

      


      (i) a
        consolidated balance sheet of the Parent as of the end of such calendar quarter,
        setting forth, if applicable, in comparative form the corresponding figures
        for
        the most recent year end for which an audited balance sheet has been prepared,
        which balance sheet shall be prepared and presented in accordance with, and
        provide all necessary disclosure required by, GAAP (subject to normal year-end
        audit adjustments) and shall be accompanied by a certificate signed by the
        financial vice president, treasurer, chief financial officer or controller
        of
        the Parent stating that such balance sheet presents fairly the financial
        condition of the Parent and has been prepared in accordance with GAAP
        consistently applied (subject to normal year-end audit adjustments);
        and

      


      (ii) consolidated
        statements of income, stockholders’ equity and cash flows of the Parent for such
        calendar quarter setting forth, if applicable, in comparative form the
        corresponding figures for the comparable period one year prior thereto, which
        statements shall be prepared and presented in accordance with, and provide
        all
        necessary disclosure required by, GAAP (subject to normal year-end audit
        adjustments) and shall be accompanied by a certificate signed by the financial
        vice president, treasurer, chief financial officer or controller of the Parent
        stating that such financial statements present fairly the financial condition
        and results of operations of the Parent and its Subsidiaries on a consolidated
        basis and have been prepared in accordance with GAAP consistently applied
        (subject to normal year-end audit adjustments).

      


      (q) As
        soon
        as available but no later than one hundred and twenty (120) days after the
        end
        of each fiscal year of the Parent, the Company shall deliver to the Agent
        a copy
        of:

      


      (i) a
        consolidated balance sheet of the Parent as of the end of the fiscal year,
        setting forth, if applicable, in comparative form the figures for the previous
        fiscal year and accompanied by an opinion of an Independent Accountant stating
        that such balance sheet presents fairly the financial condition of the Parent
        and has been prepared in accordance with GAAP consistently applied (except
        for
        changes in application in which such accountants concur); and

      


      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      (ii) consolidated
        statements of income, stockholders’ equity and cash flows of the Parent for such
        fiscal year, setting forth, if applicable, in comparative form the figures
        for
        the previous fiscal year and accompanied by an opinion of an Independent
        Accountant stating that such financial statements present fairly the financial
        condition of the Parent and its Subsidiaries on a consolidated basis and
        have
        been prepared in accordance with GAAP consistently applied (except for changes
        in application in which such accountants concur).

      


      (r) All
        financial statements of the Parent shall disclose the effects of the
        transactions contemplated by this Agreement as a loan to the extent required
        by
        and in accordance with GAAP.

      


      (s) The
        Company shall pay and discharge or otherwise satisfy, before the same shall
        become delinquent or subject to penalty, all taxes imposed upon it or its
        property which are due, except where the amount or validity thereof is currently
        being contested in good faith by appropriate proceedings, if any, and reserves
        in conformity with GAAP with respect thereto have been provided on the books
        and
        records of the Company or any consolidated group to which the Company is
        a party
        until any Lien resulting therefrom attaches to its property and becomes
        enforceable against other creditors, or the failure to pay and discharge
        or
        otherwise satisfy such taxes could not, individually or in the aggregate,
        reasonably be expected to have a material adverse effect on the rights,
        interests or remedies of the Agent or any Lender.

      


      (t) The
        Company shall maintain at all times funds in the Reserve Account in an amount
        not less than the Required Reserve Amount. 

      


      (u) The
        Company shall not declare, make or set aside distributions except (i) for
        a
        distribution of the net proceeds of the Loan on the Closing Date and (ii)
        for a
        distribution thereafter from funds received in accordance with Section
        2.04(xi).
        

      


      ARTICLE
        VI.

      


      MANAGEMENT
        AND SERVICING; CERTAIN COVENANTS

       

      SECTION
        6.01 General
        Covenants.
        The
        Servicer and the Manager will act in accordance with instructions and
        directions, delivered in accordance with the terms hereof and the Management
        Agreement, from the Company, the Agent and/or the Lenders in connection with
        its
        servicing and managing, as applicable, of the Collateral hereunder and
        thereunder, and will ensure that, at all times when it is dealing with or
        in
        connection with the Collateral in its capacity as Servicer or Manager, as
        applicable, it holds itself out as Servicer or Manager, as applicable, and
        not
        in any other capacity.

       

      
        
          
          

        

        
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      SECTION
        6.02 Appointment
        and Designation.
        

      


      (a) 
        Until
        the Agent gives notice to the Company of a designation of a Person to replace
        the Servicer (the “Successor
        Servicer”)
        upon
        the occurrence and during the continuance of any Servicer Default, or consents
        in writing to the appointment by the Company of a Successor Servicer, Mossimo
        Management has been designated as, and agreed to perform the duties and
        obligations of, the Servicer, pursuant to the terms hereof and in accordance
        with the Management Agreement at all times until the earlier of the Agent’s
        designation of a Successor Servicer (upon the occurrence and during the
        continuance of any Servicer Default) and the delivery by the Agent of its
        written consent to the appointment by the Company of a Successor Servicer
        or the
        Loan Repayment Date. Upon the occurrence and during the continuance of any
        Servicer Default, the Agent may at any time (with the approval of the Lenders)
        designate a Successor Servicer to succeed Mossimo Management or any Successor
        Servicer, on the condition in each case that any such Person so designated
        shall
        agree to perform the duties and obligations of the Servicer pursuant to the
        terms hereof and the Management Agreement. Each of the Company and each Person
        serving in the capacity of a “Servicer” grants to the Agent and any Successor
        Servicer an irrevocable power of attorney to take any and all steps in the
        Company’s, or such Person’s name, as applicable, and on behalf of the Company or
        such Person, necessary, appropriate or desirable, in the determination of
        the
        Agent or such Successor Servicer, to perform any of the Servicing
        Functions.

      


      (b) Until
        the
        Agent gives notice to the Company of a designation of a Person to replace
        the
        Manager (the “Successor Manager”) upon the occurrence and during the continuance
        of any Manager Default, or consents in writing to the appointment by the
        Company
        of a Successor Manager, Mossimo Management has been designated as, and agreed
        to
        perform the duties and obligations of, the Manager, pursuant to the terms
        hereof
        and the Management Agreement at all times until the earlier of the Agent’s
        designation of a Successor Manager (upon the occurrence and during the
        continuance of any Manager Default) and the delivery by the Agent of its
        written
        consent to the appointment by the Company of a Successor Manager or the Loan
        Repayment Date. Upon the occurrence and during the continuance of any Manager
        Default, the Agent may at any time (with the approval of the Lenders) designate
        a Successor Manager to succeed Mossimo Management or any Successor Manager,
        on
        the condition in each case that any such Person so designated shall agree
        to
        perform the duties and obligations of the Manager pursuant to the terms hereof.
        Each of the Company and each Person serving in the capacity of a “Manager”
grants to the Agent and any Successor Manager an irrevocable power of attorney
        to take any and all steps in the Company’s, or such Person’s name, as
        applicable, and on behalf of the Company or such Person, necessary, appropriate
        or desirable, in the determination of the Agent’s or such Successor Manager, to
        perform any of the Servicing Functions.

      


      (c) The
        Servicer’s and Manager’s duties and responsibilities shall include those set
        forth in the Management Agreement (or any replacement management agreement
        entered into by a Successor Servicer or Successor Manager) and all the other
        duties specified herein.

      


      (d) On
        the
        date that a Successor Servicer shall have been appointed, all authority and
        power of the Servicer shall pass to and be vested in the Successor Servicer
        (the
“Service
        Transfer”)
        and
        the Company is hereby authorized and empowered (upon the failure of the Servicer
        to cooperate) to execute and deliver, on behalf of such Servicer, as
        attorney-in-fact or otherwise, all documents and other instruments upon the
        failure of such Servicer to execute or deliver such documents or instruments,
        and to do and accomplish all other acts or things necessary or appropriate
        to
        effect the purposes of such Service Transfer. The Servicer agrees to cooperate
        with the Agent, the Company and such Successor Servicer in effecting the
        termination of its responsibilities and rights to conduct servicing hereunder,
        including, without limitation, the transfer to such Successor Servicer of
        all
        authority of the Servicer to perform the Servicing Functions. Upon a Service
        Transfer, the Servicer shall promptly (x) assemble all of its documents,
        instruments and other records (including credit files, licenses, rights,
        copies
        of all relevant computer programs and any necessary licenses for the use
        thereof, related material, computer tapes, disks, cassettes and data) that
        (i)
        evidence or will evidence or record Collateral and (ii) are otherwise necessary
        or desirable to enable a Successor Servicer to effect its duties hereunder,
        with
        or without the participation of the Servicer and (y) deliver or license the
        use
        of all of the foregoing documents, instruments and other records to the
        Successor Servicer at a place designated by the Successor Servicer. In
        recognition of the Servicer’s need to have access to any such documents,
        instruments and other records which may be transferred to such Successor
        Servicer hereunder, whether as a result of its continuing responsibility
        as a
        servicer of assets which are not sold and assigned to the Company or otherwise,
        such Successor Servicer shall provide to the Servicer reasonable access to
        such
        documents, instruments and other records transferred by the Servicer to it
        in
        connection with any activity arising in the ordinary course of the Servicer’s
        business; provided that the Servicer shall not disrupt or otherwise interfere
        with the Successor Servicer’s use of and access to such documents, instruments
        and other records. 

      


      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      (e) Upon
        its
        appointment, the Successor Servicer shall be the successor in all respects
        to
        the Servicer to which it is successor with respect to the functions of the
        Servicer hereunder (with such changes as are agreed to between such Successor
        Servicer and the Company with the consent of, or at the direction of, the
        Agent)
        and shall be subject to all the responsibilities, duties and liabilities
        relating thereto placed on the Servicer by the terms and provisions hereof,
        and
        all references in any Transaction Document to the Servicer shall be deemed
        to
        refer to the Successor Servicer. The Successor Servicer shall perform its
        duties
        and obligations hereunder with the same standard of care set forth herein
        for
        the performance by the Servicer of its duties and obligations hereunder.
        The
        Successor Servicer shall not be liable for, and the Servicer shall indemnify
        the
        Successor Servicer against costs incurred by the Successor Servicer as a
        result
        of, any acts or omissions of the Servicer in breach of its obligations
        hereunder.

      


      (f) All
        authority and power granted to the Successor Servicer hereunder shall
        automatically cease and terminate on the Loan Repayment Date, and shall pass
        to
        and be vested in the Company and, without limitation, the Company is hereby
        authorized and empowered to execute and deliver, on behalf of the Successor
        Servicer, as attorney-in-fact or otherwise, all documents and other instruments,
        and to do and accomplish all other acts or things necessary or appropriate
        to
        effect the purposes of such transfer of servicing rights from and after the
        Loan
        Repayment Date. The Successor Servicer agrees to cooperate with the Company
        in
        effecting the termination of the responsibilities and rights of the Successor
        Servicer. To the extent that compliance with this Section 6.02(h) shall require
        the Successor Servicer to disclose to the Company information of any kind
        which
        the Successor Servicer deems to be confidential, the Company shall be required
        to enter into such customary licensing and confidentiality agreements as
        the
        Successor Servicer shall reasonably deem necessary to protect its
        interests.

      


      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      (g) On
        the
        date that a Successor Manager shall have been appointed, all authority and
        power
        of the Manager shall pass to and be vested in the Successor Manager (the
        “Management
        Transfer”)
        and
        the Company is hereby authorized and empowered (upon the failure of the Manager
        to cooperate) to execute and deliver, on behalf of such Manager, as
        attorney-in-fact or otherwise, all documents and other instruments upon the
        failure of such Manager to execute or deliver such documents or instruments,
        and
        to do and accomplish all other acts or things necessary or appropriate to
        effect
        the purposes of such Management Transfer. The Manager agrees to cooperate
        with
        the Agent, the Company and such Successor Manager in effecting the termination
        of its responsibilities and rights to conduct servicing hereunder, including,
        without limitation, the transfer to such Successor Manager of all authority
        of
        the Manager to perform the Management Services. Upon a Management Transfer,
        the
        Manager shall promptly (x) assemble all of its documents, instruments and
        other
        records (including credit files, licenses, rights, copies of all relevant
        computer programs and any necessary licenses for the use thereof, related
        material, computer tapes, disks, cassettes and data) that (i) evidence or
        will
        evidence or record Collateral and (ii) are otherwise necessary or desirable
        to
        enable a Successor Manager to effect its duties hereunder, with or without
        the
        participation of the Manager and (y) deliver or license the use of all of
        the
        foregoing documents, instruments and other records to the Successor Manager
        at a
        place designated by the Successor Manager. In recognition of the Manager’s need
        to have access to any such documents, instruments and other records which
        may be
        transferred to such Successor Manager hereunder, whether as a result of its
        continuing responsibility as a manager of assets which are not sold and assigned
        to the Company or otherwise, such Successor Manager shall provide to the
        Manager
        reasonable access to such documents, instruments and other records transferred
        by the Manager to it in connection with any activity arising in the ordinary
        course of the Manager’s business; provided that the Manager shall not disrupt or
        otherwise interfere with the Successor Manager’s use of and access to such
        documents, instruments and other records. 

      


      (h) Upon
        its
        appointment, the Successor Manager shall be the successor in all respects
        to the
        Manager to which it is successor with respect to the functions of the Manager
        hereunder (with such changes as are agreed to between such Successor Manager
        and
        the Company with the consent of, or at the direction of, the Agent) and shall
        be
        subject to all the responsibilities, duties and liabilities relating thereto
        placed on the Manager by the terms and provisions hereof, and all references
        in
        any Transaction Document to the Manager shall be deemed to refer to the
        Successor Manager. The Successor Manager shall perform its duties and
        obligations hereunder with the same standard of care set forth herein for
        the
        performance by the Manager of its duties and obligations hereunder. The
        Successor Manager shall not be liable for, and the Manager shall indemnify
        the
        Successor Manager against costs incurred by the Successor Manager as a result
        of, any acts or omissions of the Manager in breach of its obligations
        hereunder.

      


      (i) All
        authority and power granted to the Successor Manager hereunder shall
        automatically cease and terminate on the Loan Repayment Date, and shall pass
        to
        and be vested in the Company and, without limitation, the Company is hereby
        authorized and empowered to execute and deliver, on behalf of the Successor
        Manager, as attorney-in-fact or otherwise, all documents and other instruments,
        and to do and accomplish all other acts or things necessary or appropriate
        to
        effect the purposes of such transfer of servicing rights from and after the
        Loan
        Repayment Date. The Successor Manager agrees to cooperate with the Company
        in
        effecting the termination of the responsibilities and rights of the Successor
        Manager. To the extent that compliance with this Section
        6.02(i)
        shall
        require the Successor Manager to disclose to the Company information of any
        kind
        which the Successor Manager deems to be confidential, the Company shall be
        required to enter into such customary licensing and confidentiality agreements
        as the Successor Manager shall reasonably deem necessary to protect its
        interests.

       

      
        
          
          

        

        
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      SECTION
        6.03 Collateral
        Collections.
        j)
        Consistent with and subject to the standards, policies and procedures required
        by this Agreement, the Servicer shall collect all payments called for under
        the
        terms and provisions of the Licenses related to the Collateral (and the terms
        and provisions of any documents related thereto).

      


      (b) The
        Servicer shall remit all payments by or on behalf of the Obligors in accordance
        with Section
        6.12,
        as soon
        as practicable following receipt thereof, but in no event later than the
        end of
        business on the second Business Day immediately following receipt thereof.
        If
        for any reason, the Servicer, or a Person other than the Servicer, in error
        deposits into the Collection Account any funds not constituting Collections
        or
        an amount owing under this Agreement or the Transaction Documents, the Servicer,
        upon becoming aware of such deposit, shall promptly advise the Agent in writing,
        accompanied with evidence of the allegedly incorrect payment and the identity
        of
        the party making the payment, and if available, the identity of the party
        to
        whom the payment should have been made, and upon the Agent’s reasonable
        satisfaction that the payment was made in error, the Servicer shall instruct
        the
        Collection Bank to return the amount paid in error to the intended recipient
        or
        the original payer. The Servicer agrees that, if the Agent is not reasonably
        satisfied with the evidence presented to it hereunder, and the Agent requests
        further additional information, then the Servicer shall use its commercially
        reasonable efforts to obtain that information and provide it promptly to
        the
        Agent.

       

      SECTION
        6.04 Intentionally
        Omitted.
        

      


      SECTION
        6.05 No
        Rights of Withdrawal.
        Until
        the Loan Repayment Date, the Company shall have no rights of direction or
        withdrawal with respect to amounts held in the Collection Account or the
        Reserve
        Accounts, except with respect to funds not related to any Pledged Collateral,
        which were incorrectly deposited into any such account or permitted pursuant
        to
Section
        6.03(b).

       

      SECTION
        6.06 Permitted
        Investments.
        The
        Company shall, pursuant to written instruction, direct the Collection Account
        Bank or the Reserve Account Bank (and if the Company fails to do so, the
        Agent
        may, pursuant to written instruction, direct the Collection Account Bank)
        to
        invest, or cause the investment of, funds on deposit in the Collection Account
        or the Reserve Account, as applicable, in Permitted Investments, from the
        date
        of this Agreement until the Loan Repayment Date. Absent any such written
        instruction, the Collection Account Bank shall invest, or cause the investment
        of, such funds in Permitted Investments described in clause (v) of the
        definition thereof. A Permitted Investment acquired with funds deposited
        in the
        Collection Account or the Reserve Account Bank shall mature not later than
        the
        Business Day immediately preceding any applicable Remittance Date, and shall
        not
        be sold or disposed of prior to its maturity. All income and gain realized
        from
        any such investment, as well as any interest earned on deposits in the
        Collection Account or the Reserve Account, as applicable, shall be distributed
        in accordance with the provisions of Article II hereof. Neither the Collection
        Account Bank, the Reserve Account Bank, the Agent nor any Lender shall be
        liable
        for the amount of any loss incurred, in respect of any investment, or lack
        of
        investment, of funds held in the Collection Account
        or the
        Reserve Account.

      


      
        
          
          

        

        
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      SECTION
        6.07 Intentionally
        Omitted

       

      SECTION
        6.08 Reports
        to the Agent; Account Statements; Servicing Information. (a)
        The
        Servicer will deliver to the Agent, (i) on the Early Amortization Commencement
        Date, a report identifying the Collateral (and any information with respect
        thereto requested by the Agent) on the day immediately preceding the Early
        Amortization Commenced Date and (ii) upon the Agent’s reasonable written request
        and upon reasonable notice, a report identifying the Collateral (and any
        information with respect thereto, reasonably requested by the Agent) as of
        the
        date specified in such request.

      


      (b) By
        no
        later than 2:00 P.M. (New York City time) on each Business Day on which a
        prepayment or release of Collateral hereunder occurs, or on any other Business
        Day at the option of the Company or upon
        the
        Agent’s reasonable written request and upon reasonable notice,
        the
        Servicer shall make available for review by the Agent in an electronic format
        mutually acceptable to the Servicer and the Agent, all information reasonably
        requested by the Agent relating to all Collateral. 

      


      (c) The
        Company shall deliver to the Agent all reports it receives pursuant to the
        Mossimo Contribution Agreement within one (1) Business Day of the receipt
        thereof.

       

      SECTION
        6.09 Remittance
        Reports; Statements as to Compliance; Financial Statements. (a)
        The
        Servicer shall deliver to the Agent, the Company
        and the
        Lenders on or before the respective dates set forth in the Management Agreement,
        each of the certificates and reports required to be delivered by the Servicer
        pursuant to the terms of the Management Agreement including those certificates
        and reports set forth in Sections
        2.2(d), (e) and (f)
        and
        Article VI. 

      


      (b) So
        long
        as the Servicer is not a Subsidiary of the Parent, as soon as available but
        no
        later than forty-five (45) days after the end of each calendar quarter in
        each
        fiscal year of the Servicer, the Servicer shall deliver to the Agent a copy
        of:

      


      (i) a
        balance
        sheet of the Servicer as of the end of such calendar quarter, setting forth,
        if
        applicable, in comparative form the corresponding figures for the most recent
        year end for which an audited balance sheet has been prepared, which balance
        sheet shall be prepared and presented in accordance with, and provide all
        necessary disclosure required by, GAAP (subject to normal year-end audit
        adjustments) and shall be accompanied by a certificate signed by the financial
        vice president, treasurer, chief financial officer or controller of the Servicer
        stating that such balance sheet presents fairly the financial condition of
        the
        Servicer and has been prepared in accordance with GAAP consistently applied
        (subject to normal year-end audit adjustments); and

      


      (ii) statements
        of income, stockholders’ equity and cash flows of the Servicer for such calendar
        quarter setting forth, if applicable, in comparative form the corresponding
        figures for the comparable period one year prior thereto, which statements
        shall
        be prepared and presented in accordance with, and provide all necessary
        disclosure required by, GAAP (subject to normal year-end audit adjustments)
        and
        shall be accompanied by a certificate signed by the financial vice president,
        treasurer, chief financial officer or controller of the Servicer stating
        that
        such financial statements present fairly the financial condition and results
        of
        operations of the Servicer and have been prepared in accordance with GAAP
        consistently applied (subject to normal year-end audit
        adjustments).

      


      
        
          
          

        

        
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      (c) So
        long
        as the Servicer is not a Subsidiary of the Parent, as soon as available but
        no
        later than one hundred twenty (120) days after the end of each fiscal year
        of
        the Servicer, the Servicer shall deliver to the Agent a copy of:

      


      (i) a
        balance
        sheet of the Servicer as of the end of the fiscal year, setting forth, if
        applicable, in comparative form the figures for the previous fiscal year
        and
        accompanied by an opinion of an Independent Accountant stating that such
        balance
        sheet presents fairly the financial condition of the Servicer and has been
        prepared in accordance with GAAP consistently applied (except for changes
        in
        application in which such accountants concur); and

      


      (ii) statements
        of income, stockholders’ equity and cash flows of the Servicer for such fiscal
        year, setting forth, if applicable, in comparative form the figures for the
        previous fiscal year and accompanied by an opinion of an Independent Accountant
        stating that such financial statements present fairly the financial condition
        of
        the Servicer and have been prepared in accordance with GAAP consistently
        applied
        (except for changes in application in which such accountants
        concur).

      


      (d) So
        long
        as the Manager is not a Subsidiary of the Parent, as soon as available but
        no
        later than forty-five (45) days after the end of each calendar quarter in
        each
        fiscal year of the Manager, the Manager shall deliver to the Agent a copy
        of:

      


      (i) a
        balance
        sheet of the Manager as of the end of such calendar quarter, setting forth,
        if
        applicable, in comparative form the corresponding figures for the most recent
        year end for which an audited balance sheet has been prepared, which balance
        sheet shall be prepared and presented in accordance with, and provide all
        necessary disclosure required by, GAAP (subject to normal year-end audit
        adjustments) and shall be accompanied by a certificate signed by the financial
        vice president, treasurer, chief financial officer or controller of the Manager
        stating that such balance sheet presents fairly the financial condition of
        the
        Manager and has been prepared in accordance with GAAP consistently applied
        (subject to normal year-end audit adjustments); and

      


      (ii) statements
        of income, stockholders’ equity and cash flows of the Manager for such calendar
        quarter setting forth, if applicable, in comparative form the corresponding
        figures for the comparable period one year prior thereto, which statements
        shall
        be prepared and presented in accordance with, and provide all necessary
        disclosure required by, GAAP (subject to normal year-end audit adjustments)
        and
        shall be accompanied by a certificate signed by the financial vice president,
        treasurer, chief financial officer or controller of the Manager stating that
        such financial statements present fairly the financial condition and results
        of
        operations of the Manager and have been prepared in accordance with GAAP
        consistently applied (subject to normal year-end audit
        adjustments).

      


      
        
          
          

        

        
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      (e) So
        long
        as the Manager is not a Subsidiary of the Parent, as soon as available but
        no
        later than one hundred twenty (120) days after the end of each fiscal year
        of
        the Manager, the Manager shall deliver to the Agent a copy of:

      


      (i) a
        balance
        sheet of the Manager as of the end of the fiscal year, setting forth, if
        applicable, in comparative form the figures for the previous fiscal year
        and
        accompanied by an opinion of an Independent Accountant stating that such
        balance
        sheet presents fairly the financial condition of the Manager and has been
        prepared in accordance with GAAP consistently applied (except for changes
        in
        application in which such accountants concur); and

      


      (ii) statements
        of income, stockholders’ equity and cash flows of the Manager for such fiscal
        year, setting forth, if applicable, in comparative form the figures for the
        previous fiscal year and accompanied by an opinion of an Independent Accountant
        stating that such financial statements present fairly the financial condition
        of
        the Manager and have been prepared in accordance with GAAP consistently applied
        (except for changes in application in which such accountants
        concur).

       

      SECTION
        6.10 Access
        to Certain Documentation. (a)
        To the
        extent that the Company has been granted such rights under the Mossimo
        Contribution Agreement or in any License, the Company
        and
        Servicer will permit, and the Servicer will permit, the Agent and the Lenders
        to
        conduct any examination, audit, due diligence, Obligor audit or Obligor onsite
        audit visit referred to in this Section
        6.10
        or to
        accompany the Company
        or the
        Transferor on such on-site audits.

      


      (b) The
        Lenders or the Agent (and their respective agents or third party professional
        advisors) shall have the right under this Agreement, at the expense of the
        Company, periodically, upon reasonable prior notice to the Servicer or the
        Manager, as applicable, to examine and audit, during business hours or at
        such
        other times as might be reasonable under applicable circumstances, any and
        all
        of the books, records or other information of the Servicer and/or the Manager
        and/or the Company or held by another for any of them on its behalf, concerning
        this Agreement and/or the Licenses (and in each case, the Obligors thereunder),
        and to accompany the Company or the Manager on any on-site audits at the
        premises of any Obligors; provided,
        however,
        that
        absent the occurrence of an Default or Event of Default, the Lenders or the
        Agent (and their respective agents or third party professional advisors)
        shall
        not perform such audits of the Servicer and/or the Manager and/or the Company
        more than once in any calendar year. The Lenders and the Agent (and their
        respective agents and professional advisors) shall treat as confidential
        any
        information obtained during the aforementioned examinations which is not
        already
        publicly known or available; provided,
        however,
        that
        the Lenders or the Agent may disclose such information if required to do
        so by
        law or by any regulatory authority.

      


      
        
          
          

        

        
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      (c) Upon
        the
        appointment of a Successor Servicer, the Agent (and its respective agents
        or
        professional advisors) shall have the right to contact any number of Obligors
        to
        inform such Obligors of the appointment of such Successor Servicer and of
        the
        fact that such Successor Servicer will be servicing and administering the
        Collateral and taking any other actions required by to be taken by the Servicer
        under the terms of this Agreement. 

      


      (d) Upon
        the
        appointment of a Successor Manager, the Agent (and its respective agents
        or
        professional advisors) shall have the right to contact any number of Obligors
        to
        inform such Obligors of the appointment of such Successor Manager and of
        the
        fact that such Successor Manager will be servicing and administering the
        Collateral and taking any other actions required by to be taken by the Manager
        under the terms of this Agreement. 

      


      (e) Upon
        the
        occurrence of and continuance of an Event of Default, the Agent (and its
        respective agents or professional advisors) shall, at the Company’s expense,
        have the right under this Agreement to contact any Obligor with respect to
        any
        Collateral in order to procure such information related to such Obligor,
        the
        related License and the other Collateral as the Lenders or the Agent deem
        reasonable under the circumstances. The Servicer and the Company hereby agree
        to
        cooperate with the Agent (and its respective agents or professional advisors)
        in
        connection with any attempt thereby to contact any such Obligor and shall
        provide to the Agent such information as is needed in order to facilitate
        such
        contact. 

       

      SECTION
        6.11 Waiver
        of Defaults.
        Upon
        consent of the Lenders, the Agent may waive any default by the Servicer or
        the
        Manager in the performance of its respective obligations hereunder and its
        consequences. Upon any such waiver of a past default, such default shall
        cease
        to exist, and any Event of Default arising therefrom shall be deemed to have
        been remedied for every purpose of this Agreement. No such waiver shall be
        effective unless it shall be in writing and signed by the Agent on the Lenders’
behalf and no such waiver shall extend to any subsequent or other default
        or
        impair any right consequent thereon except to the extent expressly so
        waived.

       

      SECTION
        6.12 Servicing
        and Segregation of Collections.
        (a)
        The
        Company shall cause each Obligor to remit all amounts due with respect to
        the
        Collateral to the Servicer.  

      


      (b) Neither
        the Servicer nor the Manager, as applicable, shall be required to exercise
        any
        remedies or pursue any legal action against any Obligor or any other third
        party
        unless the Servicer or the Manager, as applicable, is directed in writing
        to do
        so by the Agent and has determined in good faith that the requested action
        is
        not illegal or unlawful and will not subject the Servicer or the Manager,
        as
        applicable, to any risk of personal liability. In the enforcement of any
        rights
        of the Company, the Servicer and/or the Manager shall be entitled to sue
        thereon
        (i) in its own name or (ii) if, but only if, the Company consents in writing
        (which consent shall not be unreasonably withheld), as agent for the Company.
        The Servicer or the Manager, as applicable, shall notify the Agent of the
        commencement of any such proceedings. In no event shall the Servicer or the
        Manager be entitled to take any action which would make the Company a party
        to
        any litigation without the express prior written consent of the
        Company.

      


      
        
          
          

        

        
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      (c) Notwithstanding
        anything to the contrary contained herein, neither the Servicer nor the Manager
        shall accept any Prepaid Royalty Amount under, any License without the written
        consent of the Agent.

      


      (d) The
        Servicer shall not, in the performance of any Servicing Functions, enter
        into
        any agreement or arrangement with an Affiliate of the Servicer on terms that
        are
        less favorable to the Company than those that could be obtained at the time
        of
        such agreement or arrangement in arm’s-length dealings with a Person that is not
        an Affiliate of the Servicer.

      


      (e) The
        Manager shall not, in the performance of any Management Services, enter into
        any
        agreement or arrangement with an Affiliate of the Manager on terms that are
        less
        favorable to the Company than those that could be obtained at the time of
        such
        agreement or arrangement in arm’s-length dealings with a Person that is not an
        Affiliate of the Manager.

       

      SECTION
        6.13 UCC
        Matters; Protection and Perfection of the Collateral.
        The
Company
        will not
        (i) change its name as it appears in official filings in the state of its
        formation, (ii) change the type of entity that it is, (iii) change its
        organization identification number, if any, issued by its state of incorporation
        or other organization or (iv) change its state of formation unless, prior
        to the
        effective date of any such change, the Company
        notifies
        the Agent of such change in writing and delivers to the Agent such financing
        statements as the Agent may reasonably request to reflect such change, together
        with such other documents and instruments as the Agent may request in connection
        therewith. The
        Company
        agrees
        that from time to time, at its expense, it will promptly execute and deliver
        all
        further instruments and documents, and take all further action that the Agent
        may reasonably request in order to perfect, protect or more fully evidence
        the
        Lenders’ interest in the Collateral acquired hereunder, or to enable the Lenders
        or the Agent to exercise or enforce any of their respective rights hereunder.
        Without limiting the generality of the foregoing, the Company
        will,
        upon the request of the Agent: (i) execute and file such financing or
        continuation statements, or amendments thereto or assignments thereof, and
        such
        other instruments or notices, as may be necessary or appropriate or as the
        Agent
        may request, and (ii) mark its master data processing records evidencing
        such
        Collateral with a legend acceptable to the Agent, evidencing that the Lenders
        have acquired an interest therein as provided in this Agreement. The
Company
        hereby
        authorizes the Agent to file one or more financing or continuation statements,
        and amendments thereto and assignments thereof, relative to all or any of
        the
        Collateral and the proceeds of the foregoing now existing or hereafter arising,
        without the signature of the Company
        where
        permitted by law. A carbon, photographic or other reproduction of this Agreement
        or any financing statement covering the Collateral, or any part thereof,
        shall
        be sufficient as a financing statement. The Company
        shall,
        upon the request of the Agent at any time after the occurrence of an Event
        of
        Default and at the Company’s
        expense, notify the Obligors obligated to make any payment on account of
        any
        Collateral of the security interest of the Lenders in the Collateral. If
        the
Company
        fails to
        perform any of its agreements or obligations under this Section
        6.14,
        the
        Agent may (but shall not be required to) itself perform, or cause performance
        of, such agreement or obligation, and the expenses of the Agent incurred
        in
        connection therewith shall be payable by the Company
        upon the
        Agent’s demand therefor. For purposes of enabling the Agent to exercise its
        rights described in the preceding sentence and elsewhere in this Article
        VI,
        the
Company
        and the
        Lenders hereby authorize each of the Agent and its successors and assigns
        to
        take any and all steps in the Company’s
        name
        and on behalf of the Company
        and the
        Lenders necessary or desirable, in the determination of the Agent, to collect
        all amounts due under any and all Collateral, including endorsing the
Company’s
        name
        on checks and other instruments representing Collections and enforcing such
        Collateral and the related Licenses and, if any, the related
        guarantees.

       

      
        
          
          

        

        
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      SECTION
        6.14 Servicer
        Advances.
        The
        Servicer may, in its sole discretion, make a Servicer Advance in accordance
        with
        the terms of the Management Agreement. The Servicer shall be entitled to
        reimbursement for such Servicer Advances from monies in the Collection Account
        as provided in Section 2.04 hereof.

       

      SECTION
        6.15 Compliance
        with Applicable Law.
        The
        Servicer, the Manager and the Company
        shall at
        all times comply in all material respects with all requirements of applicable
        federal, state and local laws, and regulations thereunder in the conduct
        of
        their business.

      


      ARTICLE
        VII.

      


      EVENTS
        OF DEFAULT

       

      SECTION
        7.01 Events
        of Default.
        If any
        of the following events (“Events
        of Default”)
        shall
        occur:

      


      (a) the
        occurrence of any Bankruptcy Event with respect to the Company;
        or

      


      (b) (i)
        the
        Company shall fail to pay any interest on the Loans when and as the same
        shall
        become due and payable, whether at the due date thereof or at a date fixed
        for
        prepayment thereof or otherwise or (ii) either the Servicer or the Company
        shall
        fail to make any payment or deposit to be made by it when due hereunder or
        under
        any other Transaction Document and such failure remains unremedied for two
        (2)
        Business Days; or 

      


      (c) any
        representation or warranty made or deemed to be made by the Company,
        the
        Servicer, the Manager or the Transferor (or any of their respective officers)
        under or in connection with this Agreement (or any remittance report or other
        information or report delivered pursuant hereto) or any other Transaction
        Document shall prove to be false or incorrect in any material respect and
        shall
        remain false or incorrect for a period of thirty (30) days; or

      


      (d) the
        Company, the Servicer, the Manager or the Transferor shall fail to perform
        or
        observe any term covenant or agreement applicable to it hereunder or under
        any
        other Transaction Document to which it is a party (other than those described
        in
        any other provision of this Section 7.01) and such failure remains unremedied
        for the lesser of thirty (30) days after (A) the Servicer, the Manager, the
        Company or the Transferor, as applicable, becomes aware or should reasonably
        be
        aware of such failure, or (B) the Servicer, the Manager, the Company or the
        Transferor, as applicable, are notified by the Lender, the Agent or any other
        Person, of such failure; or

      


      (e) (i)
        the
        Company shall incur, or otherwise owe to any Person, any Debt (other than
        Debt
        permitted to be incurred pursuant to the terms of this Agreement) without
        the
        prior written approval of the Agent, or (ii) the Company shall fail to pay
        any
        principal of or premium or interest on any Debt when the same becomes due
        and
        payable (whether by scheduled maturity, required prepayment, acceleration,
        demand or otherwise); or any other default under any agreement or instrument
        relating to any Debt of the Company or any other event, shall occur if the
        effect of such default or event is to accelerate, or to permit the acceleration
        of, the maturity of such Debt; or any such Debt shall be declared to be due
        and
        payable or required to be prepaid (other than by a regularly scheduled required
        prepayment) prior to the stated maturity thereof; or

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      (f) one
        or
        more judgments, orders or decrees (or other similar process) shall be rendered
        against the Company involving an aggregate amount (excluding amounts adequately
        covered by insurance payable to the Company, to the extent the relevant insurer
        has not denied coverage therefor) in excess of $250,000 which judgment, order
        or
        decree shall not have been vacated or discharged for a period of thirty (30)
        consecutive days and there shall not be in effect (by reason of a pending
        appeal
        or otherwise) any stay of enforcement thereof; or

      


      (g) any
        provision of a Transaction Document should cease for any reason to be legal,
        valid or binding on the Company, the Servicer, the Manager, the Parent or
        the
        Transferor, or the Company, the Servicer, the Manager, the Parent or the
        Transferor shall in writing state that any provision of a Transaction Document
        should cease for any reason to be legal, valid or binding; or

      


      (h) (i)
        the
        Agent shall at any time fail to have a valid, perfected, first priority security
        interest (subject only to Permitted Liens) in any of the Collateral to the
        extent required herein or (ii) any contribution into the Company of any Assets
        under the Mossimo Contribution Agreement shall, for any reason, cease to
        create
        in favor of the Company a perfected ownership interest in such Assets with
        respect thereto; or

      


      (i) the
        Company shall have suffered any material adverse change to its financial
        condition, business or operations which would affect the collectibility of
        any
        amounts owing with respect to the Collateral or the Company’s ability to conduct
        its business or fulfill its obligations hereunder or under any other Transaction
        Document, in each case as reasonably determined by the Agent; or

      


      (j) the
        Company’s activities are terminated for any reason, including any termination
        thereof by a regulatory, tax or accounting body; or

      


      (k) the
        occurrence of a Change of Control with respect to the Company; or

      


      (l) the
        Mossimo Contribution Agreement shall cease to be in full force and effect;
        or

      


      (m) the
        auditor’s opinion accompanying the audited annual financial statements of the
        Parent is qualified in any manner; or

      


      (n) the
        Collections, net of all Servicing Fees and Management Fees payable to the
        Servicer or the Successor Servicer, the Manger or the Successor Manager,
        as
        applicable, shall be less than (i) $7,489,681.11 for first three (3) Remittance
        Periods following the Closing Date; and (4) $13,000,000 for first four (4)
        Remittance Periods following the Closing Date and for any rolling four (4)
        Remittance Periods thereafter; or 

      


      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      (o) 
        the
        Servicer resigns and a Successor Servicer is not servicing the Collections
        within sixty (60) days of such resignation or the Manager resigns and a
        Successor Manager is not performing the Management Services within sixty
        (60)
        days of such resignation; or 

      


      (p) the
        Target License Agreement has been terminated or has not been renewed upon
        its
        expiration and, in each case, has not been replaced with a new license agreement
        in form and substance acceptable to Agent and with a licensee acceptable
        to
        Agent, in each case in Agent’s sole discretion; or 

      


      (q) a
        default
        or event of default has occurred under the Target License Agreement and the
        non-breaching party has delivered and notice of default of event of default
        and
        such default or event of default has not been cured within any applicable
        cure
        period; or 

      


      (r) the
        Facility Termination Date shall have occurred. 

      


      then
        the
        Agent may, by notice to the Company, declare the Early Amortization Commencement
        Date to have occurred; provided,
        that,
        in the case of any event described in Section
        7.01(a)
        above,
        the Early Amortization Commencement Date shall be deemed to have occurred
        automatically upon the occurrence of such event. Upon any such declaration
        or
        automatic occurrence, (i) at the option of the Lenders in their sole discretion,
        the Lenders may declare the Loan made to the Company hereunder and all interest
        and all Fees accrued on such Loan and any other Obligations to be immediately
        due and payable (and the Company shall pay such Loan and all such amounts
        and
        Obligations immediately), and (ii) at the option of the Lenders in their
        sole
        discretion, the Agent, on behalf of the Lenders, may direct the Obligors
        to make
        all payments with respect to the Collateral directly to the Agent, the Lenders
        or any lockbox or account established by any of such parties. In addition,
        upon
        any such declaration or upon any such automatic occurrence, the Agent and
        the
        Lenders shall have, in addition to all other rights and remedies under this
        Agreement or otherwise, all other rights and remedies provided under the
        UCC of
        the applicable jurisdiction and other applicable laws, which rights shall
        be
        cumulative. If any Event of Default shall have occurred, the interest rate
        applicable to the Loans shall be increased in accordance with Section
        2.02,
        effective as of the date of the occurrence of such Event of Default, and
        shall
        remain at such increased rate for so long as such Event of Default is
        continuing.

       

      SECTION
        7.02 Additional
        Remedies of the Agent. (a)
        If, (i)
        upon the Lenders’ declaration that the Loan made to the Company hereunder is
        immediately due and payable pursuant to Section
        7.01,
        or (ii)
        on the Facility Termination Date, the aggregate outstanding principal amount
        of
        the Loan, all accrued Fees and interest and any other Obligations are not
        immediately paid in full, then the Agent, in addition to all other rights
        specified hereunder, shall have the right, in its own name and as agent for
        the
        Lenders, to immediately sell in a commercially reasonable manner, in a
        recognized market (if one exists) at such price or prices as the Agent may
        reasonably deem satisfactory, any or all of the Collateral and apply the
        proceeds thereof to the Obligations.

      


      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      (b) The
        parties recognize that it may not be possible to sell all of the Collateral
        on a
        particular Business Day, or in a transaction with the same purchaser, or
        in the
        same manner because the market for such Collateral may not be liquid.
        Accordingly, the Agent may elect, in its sole discretion, the time and manner
        of
        liquidating any Collateral, and nothing contained herein shall obligate the
        Agent to liquidate any Collateral on the date the Lenders declare the Loans
        made
        to the Company hereunder to be immediately due and payable pursuant to
Section
        7.01
        or to
        liquidate all Collateral in the same manner or on the same Business
        Day.

      


      (c) Any
        amounts received from any sale or liquidation of the Collateral pursuant
        to this
Section
        7.02
        in
        excess of the Obligations will be returned to the Company, its successors
        or
        assigns, or to whosoever may be lawfully entitled to receive the same, or
        as a
        court of competent jurisdiction may otherwise direct.

      


      (d) The
        Agent
        and the Lenders shall have, in addition to all the rights and remedies provided
        herein and provided by applicable federal, state, foreign, and local laws
        (including the rights and remedies of a secured party under the UCC of any
        applicable state, to the extent that the UCC is applicable, and the right
        to
        offset any mutual debt and claim), all rights and remedies available to the
        Lenders at law, in equity or under any other agreement between the Lenders
        and
        the Company. Without limiting the generality of the foregoing, the Agent,
        without demand of performance or other demand, presentment, protest,
        advertisement or notice of any kind (except any notice required by law referred
        to below) to or upon the Company or any other Person (all and each of which
        demands, defenses, advertisements and notices are hereby waived), may in
        such
        circumstances forthwith collect, receive, appropriate and realize upon the
        Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
        give
        options to purchase, or otherwise dispose of and deliver the Collateral or
        any
        part thereof (or contract to do any of the foregoing), in one or more parcels
        at
        public or private sale or sales, at any exchange, broker’s board or office of
        the Agent or any Lender or elsewhere upon such terms and conditions as it
        may
        deem advisable and at such prices as it may deem best, for cash or on credit
        or
        for future delivery with assumption of any credit risk. The Agent or any
        Lender
        shall have the right upon any such public sale or sales, and, to the extent
        permitted by law, upon any such private sale or sales, to purchase the whole
        or
        any part of the Collateral so sold, free of any right or equity of redemption
        in
        the Company, which right or equity is hereby waived and released. To the
        extent
        permitted by applicable law, the Company waives all claims, damages and demands
        it may acquire against the Agent or any Lender arising out of the exercise
        by
        them of any rights hereunder. If any notice of a proposed sale or other
        disposition of Collateral shall be required by law, such notice shall be
        deemed
        reasonable and proper if given at least 10 days before such sale or other
        disposition.

      


      (e) Without
        limiting any obligation of the Servicer or the Manager hereunder or any other
        remedy of the Agent or any Lender, the Company confirms and agrees that the
        Agent (or any designee thereof, including the Servicer or the Manager),
        following an Event of Default or an Early Amortization Event, shall, at its
        option, have the sole right to enforce the Company’s rights and remedies under
        each Assigned Document, but without any obligation on the part of the Agent,
        the
        Lenders or any of their respective Affiliates to perform any of the obligations
        of the Company under any such Assigned Document. 

      


      (f) Except
        as
        otherwise expressly provided in this Agreement, no remedy provided for by
        this
        Agreement shall be exclusive of any other remedy, each and every remedy shall
        be
        cumulative and in addition to any other remedy, and no delay or omission
        to
        exercise any right or remedy shall impair any such right or remedy or shall
        be
        deemed to be a waiver of any Early Amortization Event or Event of
        Default.

      


      
        
          
          

        

        
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      (g) The
        Agent
        shall have the right, in its own name and as agent for the Lenders, to take
        all
        actions now or hereafter existing at law, in equity or by statute to enforce
        its
        rights and remedies and to protect the interests, and enforce the rights
        and
        remedies, of the Lenders (including the institution and prosecution of all
        judicial, administrative and other proceedings and the filings of proofs
        of
        claim and debt in connection therewith). Except as otherwise expressly provided
        in this Agreement, no remedy provided for by this Agreement shall be exclusive
        of any other remedy, each and every remedy shall be cumulative and in addition
        to any other remedy, and no delay or omission to exercise any right or remedy
        shall impair any such right or remedy or shall be deemed to be a waiver of
        any
        Event of Default.

      


      ARTICLE
        VIII.

      


      INDEMNIFICATION

       

      SECTION
        8.01 Indemnities
        by the Company.
        Without
        limiting any other rights which the Agent, the Lenders or any of their
        respective Affiliates may have
        hereunder or under applicable law, the Company hereby agrees to indemnify
        the
        Agent, the Lenders and each of their respective Affiliates (each, an
“Indemnified
        Party”
for
        purposes of this Article
        VIII)
        from and
        against any and all damages, losses, claims, liabilities and related costs
        and
        expenses, including reasonable attorneys’ fees and disbursements awarded against
        or incurred by any of them arising out of or as a result of this Agreement
        or in
        respect of any of the Collateral, excluding, however, any such amount (a)
        to the
        extent resulting solely from gross negligence, bad faith or willful misconduct
        on the part of an Indemnified Party and (b) to the extent comprising Excluded
        Taxes levied on the Indemnified Party (all of the foregoing being collectively
        referred to as “Indemnified
        Amounts”).
        Without limiting the foregoing, the Company shall indemnify each Indemnified
        Party for Indemnified Amounts relating to or resulting from any of the
        following:

      


      (i) reliance
        on any representation or warranty made or deemed made by the Company, Mossimo
        Management (in its capacity as the Servicer or Manager hereunder), any Successor
        Servicer or Successor Manager or any of their officers under or in connection
        with this Agreement or any Transaction Document, which shall have been false
        or
        incorrect in any material respect when made or deemed made or
        delivered;

      


      (ii) the
        failure by the Company, Mossimo Management (in its capacity as the Servicer
        or
        Manager hereunder), any Successor Servicer or Successor Manager to comply
        in all
        material respects with any term, provision or covenant contained in this
        Agreement or any agreement executed in connection with this Agreement, or
        with
        any Applicable Law with respect to any of the Collateral, or the nonconformity
        of any of the Collateral with any such Applicable Law;

      


      (iii) the
        failure to vest and maintain vested in the Agent, for the benefit of the
        Lenders, or to transfer to the Agent, for the benefit of the Lenders, a first
        priority perfected security interest (subject only to Permitted Liens) in
        the
        Collateral together or the Collections related thereto, free and clear of
        any
        Adverse Claim whether existing at the Closing Date or at any time
        thereafter;

      


      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

      (iv) the
        failure to file, or any delay in filing, financing statements or other similar
        instruments or documents under the UCC of any applicable jurisdiction or
        other
        Applicable Laws with respect to any Collateral, whether at the Closing Date
        or
        at any subsequent time;

      


      (v) any
        dispute, claim, offset or defense (other than the discharge in bankruptcy
        of an
        Obligor) with respect to the payment of any amounts owing with respect to
        any
        Collateral (including a defense based on such License relating to such
        Collateral) not being a legal, valid and binding obligation of such Obligor
        enforceable against it in accordance with its terms);

      


      (vi) any
        failure of the Company, Mossimo Management (in its capacity as the Servicer
        or
        Manager hereunder), any Successor Servicer or Successor Manager to perform
        its
        duties or obligations in accordance with the provisions of this
        Agreement;

      


      (vii) the
        failure of the Company to pay when due any taxes payable in connection with
        the
        Collateral;

      


      (viii) any
        repayment by the Agent or the Lenders of any amount previously distributed
        in
        payment of the Loan or payment of interest or Fees or any other amount due
        hereunder, in each case which amount the Agent or the Lenders believes in
        good
        faith is required to be repaid;

      


      (ix) the
        commingling by the Company or the Servicer of Collections at any time with
        other
        funds;

      


      (x) any
        investigation, litigation or proceeding related to this Agreement (or the
        Transaction Documents), or the use of proceeds of the Loan or the Collateral,
        or
        the Company’s, the Servicer’s or the Manager’s administration of the
        Collateral;

      


      (xi) any
        failure by the Company to give reasonably equivalent value to the Transferor
        in
        consideration for the transfer by the Transferor to the Company of any Asset
        or
        any attempt by any Person to void or otherwise avoid any such transfer under
        any
        statutory provision or common law or equitable action, including any provision
        of the Bankruptcy Code; and/or

      


      (xii) any
        failure of the Company or any of its agents or representatives to remit to
        the
        Servicer or the Collection Account, Collections remitted to the Company or
        any
        such agent or representative.

      


      Any
        amounts subject to the indemnification provisions of this Section
        8.01
        shall be
        paid by the Company to the Agent on behalf of the applicable Indemnified
        Party
        within five (5) Business Days following the Agent’s written demand therefor on
        behalf of the applicable Indemnified Party (and the Agent shall pay such
        amounts
        to the applicable Indemnified Party promptly after the receipt by the Agent
        of
        such amounts). The Agent, on behalf of any Indemnified Party making a request
        for indemnification under this Section
        8.01,
        shall
        submit to the Company a certificate setting forth in reasonable detail the
        basis
        for and the computations of the Indemnified Amounts with respect to which
        such
        indemnification is requested, which certificate shall be conclusive absent
        demonstrable error.

      


      
        
          
          

        

        
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      If
        the
        Company has made any payments in respect of Indemnified Amounts to the Agent,
        on
        behalf of an Indemnified Party pursuant to this Section
        8.01
        and such
        Indemnified Party thereafter collects any of such amounts from others, such
        Indemnified Party will promptly repay such amounts collected to the Company,
        without interest.

       

      SECTION
        8.02 Indemnities
        by Servicer.
        (a)
        Without
        limiting any other rights which any Indemnified Party may have hereunder
        or
        under applicable law, the Servicer or any Person to whom the Servicer delegates
        any of its duties or responsibilities pursuant to Section
        6.02(e)
        (the
“Subservicer”)
        hereby
        agrees to indemnify each Indemnified Party from and against any and all damages,
        losses, claims, liabilities and related costs and expenses (including reasonable
        attorneys’ fees and disbursements) (all of the foregoing being collectively
        referred to as “Servicer
        Indemnified Amounts”)
        suffered or sustained by any Indemnified Party as a consequence of any of
        the
        following, excluding, however, Servicer Indemnified Amounts resulting solely
        from any gross negligence, bad faith or willful misconduct of any Indemnified
        Party claiming indemnification hereunder:

      


      (i) reliance
        on any representation or warranty made or deemed made by the Servicer or
        the
        Subservicer or any of its officers under or in connection with this Agreement,
        which shall have been false or incorrect in any material respect when made
        or
        deemed made or delivered;

      


      (ii) the
        failure by the Servicer or the Subservicer to comply in all material respects
        with any term, provision or covenant contained in this Agreement, or any
        agreement executed in connection with this Agreement, or any Applicable Law,
        applicable to it with respect to any of the Collateral;

      


      (iii) any
        action or inaction by the Servicer or the Subservicer that causes the Agent,
        for
        the benefit of the Lenders, not to have a first priority perfected security
        interest (subject only to Permitted Liens) in any of the Collateral, together
        with all Collections related thereto, free and clear of any Adverse Claim
        whether existing at the Closing Date or any time thereafter;

      


      (iv) the
        commingling by the Servicer or the Subservicer of the Collections at any
        time
        with any other funds;

      


      (v) any
        failure of the Servicer or any of its agents or representatives (including
        agents, representatives and employees of the Servicer acting pursuant to
        authority granted under Section
        6.01
        hereof)
        to remit to the Collection Account, Collections remitted to the Servicer
        or any
        such agent or representative;

      


      (vi) the
        failure by the Servicer to perform in all material respects any of its duties
        or
        obligations in accordance with the provisions of this Agreement;
        and/or

      


      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      (vii) any
        of
        the events or facts giving rise to a breach of any of the Servicer’s
        representations, warranties, agreements and/or covenants set forth in
Article
        V
        or
Article
        VI.

      


      (b) Any
        Servicer Indemnified Amounts shall be paid by the Servicer to the Agent,
        for the
        benefit of the applicable Indemnified Party, within five (5) Business Days
        following receipt by the Servicer of the Agent’s written demand therefor (and
        the Agent shall pay such amounts to the applicable Indemnified Party promptly
        after the receipt by the Agent of such amounts). The Agent, on behalf of
        any
        Indemnified Party making a request for indemnification under this Section
        8.02,
        shall submit to the Servicer a certificate setting forth in reasonable detail
        the basis for and the computations of the Indemnified Amounts with respect
        to
        which such indemnification is requested, which certificate shall be conclusive
        absent demonstrable error. 

      


      (c) If
        the
        Servicer has made any indemnity payments to the Agent, on behalf of an
        Indemnified Party, pursuant to this Section
        8.02
        and such
        Indemnified Party thereafter collects any of such amounts from others, such
        Indemnified Party will promptly repay such amounts collected to the Servicer,
        without interest.

      


      SECTION
        8.03 Indemnities
        by Manager. (a)
        Without
        limiting any other rights which any Indemnified Party may have hereunder
        or
        under applicable law, the Manager or any Person to whom the Manager delegates
        any of its duties or responsibilities pursuant to Section
        6.02(d)
        (the
“SubManager”)
        hereby
        agrees to indemnify each Indemnified Party from and against any and all damages,
        losses, claims, liabilities and related costs and expenses (including reasonable
        attorneys’ fees and disbursements) (all of the foregoing being collectively
        referred to as “Manager
        Indemnified Amounts”)
        suffered or sustained by any Indemnified Party as a consequence of any of
        the
        following, excluding, however, Manager Indemnified Amounts resulting solely
        from
        any gross negligence, bad faith or willful misconduct of any Indemnified
        Party
        claiming indemnification hereunder:

      


      (i) reliance
        on any representation or warranty made or deemed made by the Manager or the
        SubManager or any of its officers under or in connection with this Agreement,
        which shall have been false or incorrect in any material respect when made
        or
        deemed made or delivered;

      


      (ii) the
        failure by the Manager or the SubManager to comply in all material respects
        with
        any term, provision or covenant contained in this Agreement, or any agreement
        executed in connection with this Agreement, or any Applicable Law, applicable
        to
        it with respect to any of the Collateral;

      


      (iii) any
        action or inaction by the Manager or the SubManager that causes the Agent,
        for
        the benefit of the Lenders, not to have a first priority perfected security
        interest (subject only to Permitted Liens) in any of the Collateral, together
        with all Collections related thereto, free and clear of any Adverse Claim
        whether existing at the Closing Date or any time thereafter;

      


      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

      (iv) the
        failure by the Manager to perform in all material respects any of its duties
        or
        obligations in accordance with the provisions of this Agreement;
        and/or

      


      (v) any
        of
        the events or facts giving rise to a breach of any of the Manager’s
        representations, warranties, agreements and/or covenants set forth in
Article
        V
        or
Article
        VI.

      


      (b) Any
        Manager Indemnified Amounts shall be paid by the Manager to the Agent, for
        the
        benefit of the applicable Indemnified Party, within five (5) Business Days
        following receipt by the Manager of the Agent’s written demand therefor (and the
        Agent shall pay such amounts to the applicable Indemnified Party promptly
        after
        the receipt by the Agent of such amounts). The Agent, on behalf of any
        Indemnified Party making a request for indemnification under this Section
        8.03,
        shall
        submit to the Manager a certificate setting forth in reasonable detail the
        basis
        for and the computations of the Indemnified Amounts with respect to which
        such
        indemnification is requested, which certificate shall be conclusive absent
        demonstrable error.

      


      (c) If
        the
        Manager has made any indemnity payments to the Agent, on behalf of an
        Indemnified Party, pursuant to this Section
        8.03
        and such
        Indemnified Party thereafter collects any of such amounts from others, such
        Indemnified Party will promptly repay such amounts collected to the Manager,
        without interest.

      


      Each
        applicable Indemnified Party shall deliver to the indemnifying party under
        Section
        8.01,
        Section
        8.02
        and
Section
        8.03,
        within
        a reasonable time after such Indemnified Party’s receipt thereof, copies of all
        notices and documents (including court papers) received by such Indemnified
        Party relating to the claim giving rise to the Indemnified Amounts.

      


      ARTICLE
        IX.

      


      THE
        AGENT

       

      SECTION
        9.01 Appointment
        and Duties. (a) Appointment
        of Agent.
        Each
        Lender hereby appoints MLMCI (together with any successor Agent pursuant
        to
Section 9.9)
        as the
        Agent hereunder and authorizes the Agent to (i) execute and deliver the
        Transaction Documents and accept delivery thereof on its behalf from the
        Company, the Servicer or the Manager, (ii) take such action on its behalf
        and to
        exercise all rights, powers and remedies and perform the duties as are expressly
        delegated to the Agent under such Transaction Documents and (iii) exercise
        such
        powers as are reasonably incidental thereto.

      


      (b)
        Duties
        as Collateral and Disbursing Agent.
        Without
        limiting the generality of clause
        (a)
        above,
        the Agent shall have the sole and exclusive right and authority (to the
        exclusion of the Lenders), and is hereby authorized, to (i) act as the
        disbursing and collecting agent for the Lenders with respect to all payments
        and
        collections arising in connection with the Transaction Documents, and each
        Person making any payment in connection with any Transaction Document to
        any
        Lender is hereby authorized to make such payment to the Agent, (ii) file
        and
        prove claims and file other documents necessary or desirable to allow the
        claims
        of the Lender with respect to any Obligation in any proceeding described
        in
Section 7.01(a)
        or any
        other bankruptcy, insolvency or similar proceeding (but not to vote, consent
        or
        otherwise act on behalf of such Lender), (iii) act as collateral agent for
        each
        Lender for purposes of the perfection of all liens and security interests
        created by such agreements and all other purposes stated therein, (iv) manage,
        supervise and otherwise deal with the Collateral, (v) take such other action
        as
        is reasonably necessary to maintain the perfection and priority of the liens
        created or purported to be created by the Transaction Documents, (vi) except
        as
        may be otherwise specified in any Transaction Document, exercise all remedies
        given to the Agent and the other Lenders with respect to the Collateral,
        whether
        under the Transaction Documents, Applicable Law or otherwise and (vii) execute
        any amendment, consent or waiver under the Transaction Documents on behalf
        of
        any Lender that has consented in writing to such amendment, consent or waiver;
        provided,
        however,
        that
        the Agent hereby appoints, authorizes and directs each Lender to act as
        collateral sub-agent for the Agent and the other Lenders for purposes of
        the
        perfection of all liens with respect to the Collateral that such Lender has
        possession or control of, including any deposit account maintained by the
        Company with or held by, such Lender, and may further authorize and direct
        the
        Lenders to take further actions as collateral sub-agents for purposes of
        enforcing such liens or otherwise to transfer the Collateral subject thereto
        to
        the Agent, and each Lender and hereby agrees to take such further actions
        to the
        extent, and only to the extent, so authorized and directed.

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

      (c)
        Limited
        Duties.
        Under
        the Transaction Documents, the Agent (i) is acting solely on behalf of the
        Lenders, with duties that are entirely administrative in nature, notwithstanding
        the use of the defined term “Agent”,
        and
        similar terms in any Transaction Document to refer to the Agent, which terms
        are
        used for title purposes only, (ii) is not assuming any obligation under any
        Transaction Document other than as expressly set forth therein or any role
        as
        agent, fiduciary or trustee of or for any Lender and (iii) shall have no
        implied
        functions, responsibilities, duties, obligations or other liabilities under
        any
        Transaction Document, and each
        Lender hereby waives and agrees not to assert any claim against the Agent
        based
        on the roles, duties and legal relationships expressly disclaimed in
clauses
        (i)
        through
(iii)
        above.

       

      SECTION
        9.02 Binding
        Effect.
        Each
        Lender agrees that (i) any action taken by the Agent or the Required Lenders
        (or, if expressly required hereby, a greater proportion of the Lenders) in
        accordance with the provisions of the Transaction Documents, (ii) any action
        taken by the Agent in reliance upon the instructions of Required Lenders
        (or,
        where so required, such greater proportion) and (iii) the exercise by the
        Agent
        or the Required Lenders (or, where so required, such greater proportion)
        of the
        powers set forth herein or therein, together with such other powers as are
        reasonably incidental thereto, shall be authorized by and binding upon all
        of
        the Lenders.

       

      SECTION
        9.03 Use
        of
        Discretion. (a) No
        Action without Instructions.
        The
        Agent shall not be required to exercise any discretion or take, or to omit
        to
        take, any action, including with respect to enforcement or collection, except
        any action it is required to take or omit to take (i) under any Transaction
        Document or (ii) pursuant to instructions from the Required Lenders (or,
        where
        expressly required by the terms of this Agreement, a greater proportion of
        the
        Lenders).

      


      (b)Right
        Not to Follow Certain Instructions.
        Notwithstanding clause (a) above, the Agent shall not be required to take,
        or to
        omit to take, any action (i) unless, upon demand, the Agent receives an
        indemnification satisfactory to it from the Lenders against all liabilities
        that, by reason of such action or omission, may be imposed on, incurred by
        or
        asserted against the Agent or any of its Related Persons or (ii) that is,
        in the
        opinion of the Agent or its counsel, contrary to any Transaction Document
        or any
        Applicable Law.

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      SECTION
        9.04 Delegation
        of Rights and Duties.
        The
        Agent may, upon any term or condition it specifies, delegate or exercise
        any of
        its rights, powers and remedies under, and delegate or perform any of its
        duties
        or any other action with respect to, any Transaction Document by or through
        any
        trustee, co-agent, employee, attorney-in-fact and any other Person (including
        any Lender).
        Any such
        Person shall benefit from this Article IX
        to the
        extent provided by the Agent.

       

      SECTION
        9.05 Reliance
        and Liability. (a)
        The
        Agent may, without incurring any liability hereunder, (i) treat any Lender
        as a
        Lender until its commitment to make Loans has been assigned in accordance
        with
        the terms of this Agreement (ii) consult with any of its Related Persons
        and,
        whether or not selected by it, any other advisors, accountants and other
        experts
        (including advisors to, and accountants and experts engaged by, the Company,
        the
        Transferor, the Servicer or the Manager) and (iii) rely and act upon any
        document and information and any telephone message or conversation, in each
        case
        believed by it to be genuine and transmitted, signed or otherwise authenticated
        by the appropriate parties.

      


      (b)
        None
        of
        the Agent and its Related Persons shall be liable for any action taken or
        omitted to be taken by any of them under or in connection with any Transaction
        Document, and each Lender and the Company hereby waive and shall not assert
        any
        right, claim or cause of action based thereon, except to the extent of
        liabilities resulting primarily from the gross negligence or willful misconduct
        of the Agent or, as the case may be, such Related Person (each as determined
        in
        a final, non-appealable judgment by a court of competent jurisdiction) in
        connection with the duties expressly set forth herein. Without limiting the
        foregoing, the Agent:

       

      (i) shall
        not
        be responsible or otherwise incur liability for any action or omission taken
        in
        reliance upon the instructions of the Required Lenders (or, if expressly
        required hereby, a greater percentage of the Lenders) or for the actions
        or
        omissions of any of its Related Persons selected with reasonable
        care;

      


      (ii) shall
        not
        be responsible to any Lender for the due execution, legality, validity,
        enforceability, effectiveness, genuineness, sufficiency or value of, or the
        attachment, perfection or priority of any lien created or purported to be
        created under or in connection with, any Transaction Document;

      


      (iii) makes
        no
        warranty or representation, and shall not be responsible, to any Lender for
        any
        statement, document, information, representation or warranty made or furnished
        by or on behalf of any Related Person, in or in connection with any Transaction
        Document or any transaction contemplated therein, whether or not transmitted
        by
        the Agent, including as to completeness, accuracy, scope or adequacy thereof,
        or
        for the scope, nature or results of any due diligence performed by the Agent
        in
        connection with the Transaction Documents; and

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

      (iv) shall
        not
        have any duty to ascertain or to inquire as to the performance or observance
        of
        any provision of any Transaction Document, whether any condition set forth
        in
        any Transaction Document is satisfied or waived, as to the financial condition
        of the Company, the Servicer, the Manager or the Transferor or as to the
        existence or continuation or possible occurrence or continuation of any Default
        or Event of Default and shall not be deemed to have notice or knowledge of
        such
        occurrence or continuation unless it has received a notice from the Company
        or
        any Lender describing such Default or Event of Default clearly labeled “notice
        of default” (in which case the Agent shall promptly give notice of such receipt
        to all Lenders);

      


      and,
        for
        each of the items set forth in clauses
        (i)
        through
(iv)
        above,
        each Lender and the Company hereby waives and agrees not to assert any right,
        claim or cause of action it might have against the Agent based
        thereon.

       

      SECTION
        9.06 Agent
        Individually.
        The
        Agent and its Affiliates may make loans and other extensions of credit to,
        acquire capital stock of, engage in any kind of business with, the Company,
        the
        Transferor, the Servicer, the Manager or any Affiliate thereof as though
        it were
        not acting the Agent and may receive separate fees and other payments therefor.
        To the extent the Agent or any of its Affiliates makes any Loan or otherwise
        becomes a Lender hereunder, it shall have and may exercise the same rights
        and
        powers hereunder and shall be subject to the same obligations and liabilities
        as
        any other Lender and the terms “Lender” and “Required Lender” and any similar
        terms shall, except where otherwise expressly provided in any Transaction
        Document, include the Agent or such Affiliate, as the case may be, in its
        individual capacity as Lender or as one of the Required Lenders,
        respectively.

       

      SECTION
        9.07 Lender
        Credit Decision.
        Each
        Lender acknowledges that it shall, independently and without reliance upon
        the
        Agent, any Lender or any of their Related Persons or upon any document solely
        or
        in part because such document was transmitted by the Agent or any of its
        Related
        Persons, conduct its own independent investigation of the financial condition
        and affairs of the Company and make and continue to make its own credit
        decisions in connection with entering into, and taking or not taking any
        action
        under, any Transaction Document or with respect to any transaction contemplated
        in any Transaction Document, in each case based on such documents and
        information as it shall deem appropriate.

       

      SECTION
        9.08 Expenses;
        Indemnities. (a)
        Each
        Lender agrees to reimburse the Agent and each of its Related Persons (to
        the
        extent not reimbursed by the Company, the Servicer or the Manager) promptly
        upon
        demand for such Lender’s Pro Rata Share with respect to the Loan of any costs
        and expenses (including fees, charges and disbursements of financial, legal
        and
        other advisors and Other Taxes paid in the name of, or on behalf of, the
        Company, the Servicer or the Manager) that may be incurred by the Agent or
        any
        of its Related Persons in connection with the preparation, syndication,
        execution, delivery, administration, modification, consent, waiver or
        enforcement (whether through negotiations, through any work-out, bankruptcy,
        restructuring or other legal or other proceeding or otherwise) of, or legal
        advice in respect of its rights or responsibilities under, any Transaction
        Document.

      


      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      (b)
        Each
        Lender further agrees to indemnify the Agent and each of its Related Persons
        (to
        the extent not reimbursed by any the Company, the Servicer or the Manager),
        from
        and against such Lender’s aggregate Pro Rata Share of the Obligations (including
        taxes, interests and penalties imposed for not properly withholding or backup
        withholding on payments made to on or for the account of any Lender) that
        may be
        imposed on, incurred by or asserted against the Agent or any of its Related
        Persons in any matter relating to or arising out of, in connection with or
        as a
        result of any Transaction Document or any other act, event or transaction
        related, contemplated in or attendant to any such document, or, in each case,
        any action taken or omitted to be taken by the Agent or any of its Related
        Persons under or with respect to any of the foregoing; provided,
        however,
        that no
        Lender shall be liable to the Agent or any of its Related Persons to the
        extent
        such liability has resulted primarily from the gross negligence or willful
        misconduct of the Agent or, as the case may be, such Related Person, as
        determined by a court of competent jurisdiction in a final non-appealable
        judgment or order.

       

      SECTION
        9.09 Resignation
        of Agent. (a)
        The
        Agent may resign at any time by delivering notice of such resignation to
        the
        Lenders and the Company, effective on the date that is thirty (30) days after
        receipt by the Company of such notice or such later date as set forth in
        such
        notice. If the Agent delivers any such notice, the Required Lenders shall
        have
        the right to appoint a successor Agent. If, within thirty (30) days after
        the
        retiring Agent having given notice of resignation, no successor Agent has
        been
        appointed by the Required Lenders that has accepted such appointment, then
        the
        retiring Agent may, on behalf of the Lenders, appoint a successor Agent from
        among the Lenders. Each appointment under this clause
        (a)
        shall be
        subject to the prior consent of the Company, which may not be unreasonably
        withheld but shall not be required during the continuance of an Event of
        Default.

      


      (b)
        Effective
        immediately upon its resignation, (i) the retiring Agent shall be discharged
        from its duties and obligations under the Transaction Documents, (ii) the
        Lenders shall assume and perform all of the duties of the Agent until a
        successor Agent shall have accepted a valid appointment hereunder, (iii)
        the
        retiring Agent and its Related Persons shall no longer have the benefit of
        any
        provision of any Transaction Document other than with respect to any actions
        taken or omitted to be taken while such retiring Agent was, or because such
        Agent had been, validly acting as Agent under the Transaction Documents and
        (iv)
        subject to its rights under Section 9.3,
        the
        retiring Agent shall take such action as may be reasonably necessary to assign
        to the successor Agent its rights as Agent under the Transaction Documents.
        Effective immediately upon its acceptance of a valid appointment as Agent,
        a
        successor Agent shall succeed to, and become vested with, all the rights,
        powers, privileges and duties of the retiring Agent under the Transaction
        Documents.

      


      ARTICLE
        X.

      


      MISCELLANEOUS

       

      SECTION
        10.01 Amendments
        and Waivers; Modification of Standards. (a)
        Except
        as provided in Section
        10.01(b),
        no
        amendment or modification of any provision of this Agreement shall be effective
        without the written agreement of the Company, the Servicer, the Manager,
        the
        Agent and the Required Lenders, and no termination or waiver of any provision
        of
        this Agreement or consent to any departure therefrom by the Company, the
        Servicer or the Manager shall be effective without the written concurrence
        of
        the Agent and the Lenders. Any waiver or consent shall be effective only
        in the
        specific instance and for the specific purpose for which given.

      


      
        
          
          

        

        
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      (b) Notwithstanding
        the provisions of Section
        10.01(a),
        in the
        event that there is more than one Lender, the written consent of each Lender
        shall be required for any amendment, modification or waiver (i) reducing
        any
        Loans Outstandings, or the interest thereon, (ii) postponing any date for
        any
        payment of the Loan, or the interest thereon or (iii) modifying the provisions
        of this Section
        10.01.

       

      SECTION
        10.02 Notices,
        Etc.
        All
        notices and other communications provided for hereunder shall, unless otherwise
        stated herein, be in writing (including telex communication, communication
        by
        facsimile copy or electronic mail) and mailed, telexed, transmitted or
        delivered, as to each party hereto, at its address set forth under its name
        on
        the signature pages hereof or specified in such party’s Assignment and
        Acceptance or at such other address (including an electronic mail address)
        as
        shall be designated by such party in a written notice to the other parties
        hereto. All such notices and communications shall be effective, upon receipt,
        or
        in the case of (i) notice by mail, five (5) days after being deposited in
        the
        United States mails, first class postage prepaid, (ii) notice by telex, when
        telexed against receipt of answerback, or (iii) notice by facsimile copy
        or
        electronic mail, when verbal communication of receipt is obtained, except
        that
        notices and communications pursuant to Article II shall not be effective
        until
        received.

       

      SECTION
        10.03 No
        Waiver; Remedies.
        No
        failure on the part of the Agent or the Lenders to exercise, and no delay
        in
        exercising, any right hereunder shall operate as a waiver thereof; nor shall
        any
        single or partial exercise of any right hereunder preclude any other or further
        exercise thereof or the exercise of any other right. The remedies herein
        provided are cumulative and not exclusive of any remedies provided by
        law.

       

      SECTION
        10.04 Binding
        Effect; Assignability; Multiple Lenders.
        (a)
        This
        Agreement shall be binding upon and inure to the benefit of the Company,
        the
        Servicer, the Manager, the Agent, the Lenders and their respective successors
        and permitted assigns. This Agreement and the Lenders’ rights and obligations
        hereunder and interest herein shall be assignable in whole or in part (including
        by way of the sale of participation interests therein) by the Lenders and
        their
        successors and assigns; provided,
        however,
        (i)
        MLMCI shall remain the Agent hereunder after any such assignment, and (ii)
        such
        assignment is to an Affiliate of MLMCI or, with the consent of the Company
        (which consent shall not be unreasonably withheld and shall not be required
        at
        any time an Event of Default shall have occurred) to any other Person that
        is
        not an Affiliate of MLMCI. Neither the Company, the Servicer nor the Manager
        may
        assign any of its rights and obligations hereunder or any interest herein
        without the prior written consent of the Lenders and the Agent. The parties
        to
        each assignment or participation made pursuant to this Section
        10.04
        shall
        execute and deliver to the Agent, for its acceptance and recording in its
        books
        and records, an assignment and acceptance agreement (an “Assignment
        and Acceptance”)
        or a
        participation agreement or other transfer instrument reasonably satisfactory
        in
        form and substance to the Agent and the Company. Each such assignment or
        participation shall be effective as of the date specified in the applicable
        Assignment and Acceptance or other agreement or instrument only after the
        execution, delivery, acceptance and recording thereof as described in the
        preceding sentence. The Agent shall notify the Company of any assignment
        or
        participation thereof made pursuant to this Section
        10.04.
        The
        Lenders may, in connection with any assignment or participation or any proposed
        assignment or participation pursuant to this Section
        10.04,
        disclose to the assignee or participant or proposed assignee or participant
        any
        information relating to the Company and the Collateral furnished to the Lenders
        by or on behalf of the Company, the Servicer or the Manager; provided,
        however,
        that no
        Lender shall disclose any such information until it has obtained an agreement
        from such assignee or participant or proposed assignee or participant that
        it
        shall treat as confidential (under terms mutually satisfactory to the Agent
        and
        such assignee or participant or proposed assignee or participant) any
        information obtained which is not already publicly known or
        available.

      


      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

      (b) Whenever
        the term “Lender” or “Lenders” is used herein, it shall mean MLMCI and/or any
        other Person which shall have executed an Assignment and Acceptance;
provided,
        however,
        that
        each such party shall have a pro rata share of the rights and obligations
        of the
        Lenders hereunder in such percentage equal to the Loan Commitment of such
        party.
        Unless otherwise specified herein, any right at any time of the Lenders to
        enforce any remedy, or to consent to any waiver, amendment or other modification
        hereunder or under any other Transaction Document, shall be exercised by
        the
        Agent only upon direction by such parties that hold a majority of the Loan
        Commitments at such time.

      


      (c) Subject
        to Section
        10.04(a),
        each of
        the parties hereto hereby agrees to execute any amendment to this Agreement
        that
        is required in order to facilitate the addition of any new Lender hereunder
        as
        contemplated by this Section
        10.04.

       

      SECTION
        10.05 Term
        of This Agreement.
        This
        Agreement, including the Company’s obligation to observe its covenants set forth
        in Articles
        V
        and
VI
        and the
        Servicer’s and the Manager’s obligation to observe their covenants set forth in
Articles
        V
        and
VI,
        shall
        remain in full force and effect until the Loan Repayment Date; provided,
        however,
        that
        the rights and remedies with respect to any breach of any representation
        and
        warranty made or deemed made by the Company, the Servicer or the Manager
        pursuant to Articles
        III
        and
IV
        and the
        indemnification and payment provisions of Article
        VIII
        and
Article
        X
        and the
        provisions of Section
        10.08
        and
Section
        10.09
        shall be
        continuing and shall survive any termination of this Agreement.

       

      SECTION
        10.06 GOVERNING
        LAW; JURY WAIVER.
        THIS
        AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS
        LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW
        YORK,
        WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD CALL
        FOR
        THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT
        THAT
        THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS OF THE AGENT IN THE
        COLLATERAL, OR REMEDIES HEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE
        LAWS
        OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO
        WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO
        A TRIAL
        BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF,
        UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS
        CONTEMPLATED HEREUNDER.

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

      SECTION
        10.07 Costs,
        Expenses and Taxes.
        In
        addition to the rights of indemnification granted to the Agent, the Lenders
        and
        their Affiliates under Section
        8.01
        hereof,
        the Company agrees to pay on demand all reasonable (and reasonably documented)
        costs and expenses of the Lenders and the Agent and their Affiliates incurred
        in
        connection with the preparation, execution, delivery or administration of,
        or
        any waiver or consent issued or amendment prepared in connection with, this
        Agreement, the other Transaction Documents and the other documents to be
        delivered hereunder or in connection herewith or therewith or incurred in
        connection with any amendment, waiver or modification of this Agreement,
        any
        other Transaction Document, and any other documents to be delivered hereunder
        or
        thereunder or in connection herewith or therewith that is necessary or requested
        by any of the Company, the Servicer, the Manager or the Lenders or made
        necessary or desirable as a result of the actions of any regulatory, tax
        or
        accounting body affecting the Lenders and its Affiliates, or which is related
        to
        an Event of Default, including the reasonable fees and out of pocket expenses
        of
        counsel for the Agent and the Lenders with respect thereto and with respect
        to
        advising the Agent and the Lenders as to their respective rights and remedies
        under this Agreement and the other documents to be delivered hereunder or
        in
        connection herewith, and all costs and expenses, if any (including reasonable
        counsel fees and expenses), incurred by the Agent or the Lenders in connection
        with the enforcement of this Agreement and the other documents to be delivered
        hereunder or in connection herewith.

       

      SECTION
        10.08 No
        Proceedings.
        The
        Servicer and the Manager hereby agree that they will not institute against,
        or
        join any other Person in instituting against, the Company any proceedings
        of the
        type referred to in the definition of Bankruptcy Event if there shall not
        have
        elapsed at least one year and one day since the Loan Repayment
        Date.

       

      SECTION
        10.09 Recourse
        Against Certain Parties.
        No
        recourse under or with respect to any obligation, covenant or agreement
        (including the payment of any fees or any other obligations) of the Lenders
        or
        the Agent as contained in this Agreement or any other agreement, instrument
        or
        document entered into by the Lenders or the Agent pursuant hereto or in
        connection herewith shall be had against any administrator of the Lenders
        or the
        Agent or any incorporator, affiliate, stockholder, officer, employee or director
        of the Lenders or the Agent or of any such administrator, as such, by the
        enforcement of any assessment or by any legal or equitable proceeding, by
        virtue
        of any statute or otherwise; it being expressly agreed and understood that
        the
        agreements of each party hereto contained in this Agreement and all of the
        other
        agreements, instruments and documents entered into by the Lenders or the
        Agent
        pursuant hereto or in connection herewith are, in each case, solely the
        corporate obligations of such party (and nothing in this Section
        10.09
        shall be
        construed to diminish in any way such corporate obligations of such party),
        and
        that no personal liability whatsoever shall attach to or be incurred by any
        administrator of the Lenders or the Agent or any incorporator, stockholder,
        affiliate, officer, employee or director of the Lenders or the Agent or of
        any
        such administrator, as such, or any of them, under or by reason of any of
        the
        obligations, covenants or agreements of the Lenders or the Agent contained
        in
        this Agreement or in any other such instruments, documents or agreements,
        or
        which are implied therefrom, and that any and all personal liability of every
        such administrator of the Lenders or the Agent and each incorporator,
        stockholder, affiliate, officer, employee or director of the Lenders or the
        Agent or of any such administrator, or any of them, for breaches by the Lenders
        or the Agent of any such obligations, covenants or agreements, which liability
        may arise either at common law or in equity, by statute or constitution,
        or
        otherwise, is hereby expressly waived as a condition of and in consideration
        for
        the execution of this Agreement. The provisions of this Section
        10.09
        shall
        survive the termination of this Agreement.

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

      SECTION
        10.10 Execution
        in Counterparts; Severability; Integration.
        This
        Agreement may be executed in any number of counterparts and by different
        parties
        hereto in separate counterparts, each of which when so executed shall be
        deemed
        to be an original and all of which when taken together shall constitute one
        and
        the same agreement. Delivery of an executed counterpart of a signature page
        to
        this Agreement by facsimile shall be effective as delivery of a manually
        executed counterpart of this Agreement. In the event that any provision in
        or
        obligation under this Agreement shall be invalid, illegal or unenforceable
        in
        any jurisdiction, the validity, legality and enforceability of the remaining
        provisions or obligations, or of such provision or obligation in any other
        jurisdiction, shall not in any way be affected or impaired thereby. This
        Agreement contains the final and complete integration of all prior expressions
        by the parties hereto with respect to the subject matter hereof and shall
        constitute the entire agreement among the parties hereto with respect to
        the
        subject matter hereof, superseding all prior oral or written understandings
        other than the Fee Letter.

       

      SECTION
        10.11 Tax
        Characterization.
        Notwithstanding any provision of this Agreement, the parties hereto intend
        that
        the Loans advanced hereunder shall constitute indebtedness of the Company
        for
        federal income tax purposes.

       

      SECTION
        10.12 Confidentiality.
        Each of
        the Agent and the Lenders agrees to maintain the confidentiality of the
        Information (as defined below), except that Information may be disclosed
        (a) to
        the extent requested by any regulatory authority, (b) to the extent required
        by
        Applicable Laws, (c) to any other party to this Agreement, (d) to the
        extent required by a court of competent jurisdiction in connection with the
        exercise of any remedies hereunder or any suit, action or proceeding relating
        to
        this Agreement or the enforcement of rights hereunder, (e) subject to an
        agreement containing provisions substantially the same as those of this
Section
        10.12,
        (i) to
        any assignee of or participant in, or any prospective assignee of or participant
        in, any rights or obligations under this Agreement or (ii) to any actual
        or
        prospective counterparty (or its advisors) to any swap or derivative transaction
        relating to the Company and its obligations, (f) with the consent of the
        Company
        or (g) to the extent such Information (1) becomes publicly available other
        than
        as a result of a breach of this Section
        10.12
        or (2)
        becomes available to the Agent or any Lender on a non-confidential basis
        from a
        source other than the Company provided that such source has not made such
        information available in contravention of any confidentiality agreement.
        For the
        purposes of this Section
        10.12,
        “Information” means all information received from or on behalf of the Company,
        the Transferor, the Parent or Mossimo Management, LLC relating to the Company,
        the Transferor, the Parent or Mossimo Management, LLC or its respective
        business, other than any such information that is available to the Agent
        or any
        Lender on a non-confidential basis prior to disclosure by the Company, the
        Transferor, the Parent or Mossimo Management, LLC. 

      


      [Signature
        page to follow.]

      


      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the parties have caused this Agreement to be executed by
        their
        respective officers thereunto duly authorized, as of the date first above
        written.

       

       

      
        	
                THE
                  COMPANY:

              	
                MOSSIMO
                  HOLDINGS LLC

                 

                By:
                  Mossimo, Inc. 

              
	 	
                 

                By:
                  /s/
                  Neil
                  Cole                                              
                  

                Title:
                  President

                 

                 

                103
                  Foulk Road, Suite 116

                Wilmington,
                  DE 19803

                Attention:
                  

                Facsimile
                  No.: 

              
	 	 
	 	 
	
                THE
                  SERVICER AND MANAGER:

              	
                MOSSIMO
                  MANAGEMENT LLC

              
	 	
                 

                By:
                  /s/
                  Deborah Sorell
                  Stehr                            
                  

                Title:
                  President

                 

                103
                  Foulk Road, Suite 116

                Wilmington,
                  DE 19803

                Attention:
                  Michael Morgan

                Facsimile
                  No.: (203) 658-4269

              
	 	 
	 	 
	
                THE
                  AGENT:

              	
                MERRILL
                  LYNCH MORTGAGE CAPITAL INC.

              
	 	
                 

                By:
                  /s/
                  Joseph
                  Magnus                                   
                  

                Title:
                  Vice President

                 

                Four
                  World Financial Center, 10th
                  Floor

                New
                  York, NY 10080

                Attention:
                  Joseph Magnus / Demetrios Tsipras

                Facsimile
                  No.: (212) 449-9486

              


      

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

      


      
        	
                LENDER:

              	
                MERRILL
                  LYNCH MORTGAGE CAPITAL INC.

              
	 	
                 

                By:
                  /s/
                  Joseph Magnus        
                                          
                  

                Title:
                  Vice President

                 

                Four
                  World Financial Center, 10th
                  Floor

                New
                  York, NY 10080

                Attention:
                  Joseph Magnus / Demetrios Tsipras

                Facsimile
                  No.: (212) 449-9486

              


      

    

     

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    LIST
      OF OMITTED SCHEDULES AND EXHIBITS

     

    
      	SCHEDULES	DESCRIPTION
	
              SCHEDULE I

            	
              Condition Precedent
                Documents

            
	
              SCHEDULE II

            	Prior Names, Tradenames,
              Fictitious Names and "Doing Business As" Names
	
              SCHEDULE III

            	Intentionally Omitted
	
              SCHEDULE IV

            	Deposit Accounts and Deposit
              Account Banks
	
              SCHEDULE 5.01(o)

            	Notional Amount of Interest
              Rate
              Cap
	 	 
	
              EXHIBITS

            	 
	
              EXHIBIT A

            	Form of Remittance
              Report
	
              EXHIBIT B

            	Form of
              Note


    

     

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    


    APPENDIX
      A

    


    STANDARD
      DEFINITIONS

    


    Accounting
      terms used and not otherwise defined herein or in the Transaction Documents
      shall be interpreted in accordance with GAAP in effect in the United States
      from
      time to time. All terms used in Article 9 of the UCC in the State of New York,
      and not specifically defined herein, are used herein as defined in such Article
      9. 

    


    The
      specific terms defined herein include the plural as well as the singular. Words
      herein importing a gender include the other gender. References herein to
“writing” include printing, typing, lithography, and other means of reproducing
      words in visible form. References to agreements and other contractual
      instruments include all subsequent amendments, supplements or modifications
      thereto or changes therein entered into in accordance with their respective
      terms and not prohibited by the Loan Agreement. References to all Applicable
      Law
      include all subsequent amendments, supplements or modifications thereto or
      changes therein. References herein to Persons include their successors and
      assigns permitted under the Loan Agreement. The terms “include” or “including”
mean “include without limitation” or “including without limitation”.


    


    “Adverse
      Claim”
means
      a
      lien, security interest, charge, encumbrance or other right or claim of any
      Person other than (i) any lien, security interest, charge, encumbrance or other
      right or claim in favor of the Lenders (or the Agent on behalf of the Lenders)
      or (ii) a Permitted Lien. 

    


    “Affected
      Lender”
has
      the
      meaning assigned to that term in Section
      2.09
      of the
      Loan Agreement.

    


    “Affiliate”
when
      used with respect to a Person, means any other Person controlling, controlled
      by
      or under common control with such Person. For the purposes of this definition,
      “control,”
when
      used with respect to any specified Person, means the power to direct the
      management and policies of such Person, directly or indirectly, whether through
      the ownership of voting securities, by contract or otherwise; and the terms
      “controlling”
and
      “controlled”
have
      meanings correlative to the foregoing.

    


    “Agent”
has
      the
      meaning assigned to that term in the preamble to the Loan
      Agreement.

    


    “Applicable
      Law”
means,
      with respect to any Person, collectively, the common law and all federal, state,
      local, foreign, multinational or international laws, statutes, codes, treaties,
      standards, rules and regulations, guidelines, ordinances, orders, judgments,
      writs, injunctions, decrees (including administrative or judicial precedents
      or
      authorities) and the interpretation or administration thereof by, and other
      determinations, directives, requirements or requests of, any Government Entity,
      in each case whether or not having the force of law and that are applicable
      to
      or binding upon such Person or any of its property or to which such Person
      or
      any of its property is subject.

    


    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    “Assets”
means
      all of the following:

    


    
      	
            	(i)	
              all
                Trademarks set forth on Exhibit A-1 to the Mossimo Contribution Agreement
                for use in connection with any products or applications whatsoever,
                together with the goodwill of the business connected with such use
                of the
                Trademarks or represented thereby;

            


    

    


    
      	
            	(ii)	
              all
                Licenses;

            


    

    


    
      	
            	(iii)	
              all
                Contracts;

            


    

    


    
      	
            	(iv)	
              all
                Other Intellectual Property;

            


    

    


    
      	
            	(v)	
              all
                Related Rights; 

            


    

    


    
      	
            	(vi)	
              all
                rights of the Transferor under the Merger Documents; and
                

            


    

    


    
      	
            	(vii)	
              any
                of the foregoing acquired by the Company after the Closing
                Date.

            


    

    


    “Assigned
      Documents”
has
      the
      meaning assigned to that term in Section
      2.11
      of the
      Loan Agreement.

    


    “Assignment
      and Acceptance”
has
      the
      meaning assigned to that term in Section
      10.04
      of the
      Loan Agreement. 

    


    “Bankruptcy
      Code”
means
      Title 11, United States Code, 11 U.S.C. §§ 101 et seq.

    


    “Bankruptcy
      Event”
shall
      be deemed to have occurred with respect to a Person if either:

    


    
      	
            	(i)	
              a
                case or other proceeding shall be commenced, without the application
                or
                consent of such Person, in any court, seeking the liquidation,
                reorganization, debt arrangement, dissolution, winding up, or composition
                or readjustment of debts of such Person, the appointment of a trustee,
                receiver, custodian, liquidator, assignee, sequestrator or the like
                for
                such Person or all or substantially all of its assets, or any similar
                action with respect to such Person under any law relating to bankruptcy,
                insolvency, reorganization, winding up or composition or adjustment
                of
                debts, and such case or proceeding shall continue undismissed, or
                unstayed
                and in effect, for a period of sixty (60) consecutive days; or an
                order
                for relief in respect of such Person shall be entered in an involuntary
                case under the federal bankruptcy laws or other similar laws now
                or
                hereafter in effect; or

            


    

    


    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    
      	
            	(ii)	
              such
                Person shall commence a voluntary case or other proceeding under
                any
                applicable bankruptcy, insolvency, reorganization, debt arrangement,
                dissolution or other similar law now or hereafter in effect, or shall
                consent to the appointment of or taking possession by a receiver,
                liquidator, assignee, trustee, custodian, sequestrator (or other
                similar
                official) for such Person or for any substantial part of its property,
                or
                shall make any general assignment for the benefit of creditors, or
                shall
                fail to, or admit in writing its inability to, pay its debts generally
                as
                they become due, or, if a corporation or similar entity, its board
                of
                directors or members shall vote to implement any of the
                foregoing.

            


    

    


    “Benefit
      Plan”
means
      a
“pension
      plan,”
as
      such
      term is defined in section 3(2) of ERISA, which is subject to title IV of ERISA
      (other than any “multiemployer
      plan”
as
      such
      term is defined in section 4001(a)(3) of ERISA), and to which the Transferor
      or
      any ERISA Affiliate may have any liability, including any liability by reason
      of
      having been a substantial employer within the meaning of section 4063 of ERISA
      at any time during the preceding five years, or by reason of being deemed to
      be
      a contributing sponsor under section 4069 of ERISA.

    


    “Benefit
      Plan Event”
means
      (a) a Reportable Event with respect to a Benefit Plan; (b) a withdrawal by
      the
      Transferor or any ERISA Affiliate from a Benefit Plan subject to Section 4063
      of
      ERISA during a plan year in which it was a substantial employer (as defined
      in
      Section 4001(a)(2) of ERISA) or a cessation of operations which is treated
      as
      such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
      withdrawal by the Transferor or any ERISA Affiliate from a Multiemployer Plan
      or
      notification that a Multiemployer Plan is in reorganization; (d) the filing
      of a
      notice of intent to terminate, the treatment of a plan amendment as a
      termination under Section 4041 or 4041A of ERISA, or the commencement of
      proceedings by the PBGC to terminate a Benefit Plan or Multiemployer Plan;
      (e)
      an event or condition which might reasonably be expected to constitute grounds
      under Section 4042 of ERISA for the termination of, or the appointment of a
      trustee to administer, any Benefit Plan or Multiemployer Plan; or (f) the
      imposition of any liability under Title IV of ERISA, other than PBGC premiums
      due but not delinquent under Section 4007 of ERISA, upon the Transferor or
      any
      ERISA Affiliate.

    


    “Board
      of Directors”
means
      the board of directors or board of managers or other governing body of a Person
      or any duly authorized committee of that Board.

    


    “Business
      Day”
means
      a
      day of the year other than a Saturday or a Sunday or any other day on which
      banks are authorized or required to close in New York City, New York or Los
      Angeles, California.

    


    “Capital
      Lease”
means
      any lease of property by a Person which, in accordance with GAAP, should be
      reflected as a capital lease on the balance sheet of such Person.

    


    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    “Change
      of Control”
means
      any of the following transactions shall occur with respect to any Entity: (i)
      if
      any person (as such term is used in section 13(d) and section 14(d)(2) of the
      Exchange Act as in effect on the Closing Date) or related persons constituting
      a
      group (as such term is used in Rule 13d-5 under the Exchange Act), become the
      “beneficial owners” (as such term is used in Rule 13d-3 under the Exchange Act
      as in effect on the Closing Date), directly or indirectly, of more than 25%
      of
      the total voting power of all classes then outstanding of the voting stock
      or
      other equity interests of such Entity; (ii) the acquisition after the Closing
      Date by any person (as such term is used in section 13(d) and section 14(d)(2)
      of the Exchange Act as in effect on the Closing Date) or related persons
      constituting a group (as such term is used in Rule 13d-5 under the Exchange
      Act as in effect on the Closing Date) of (a) the power to elect, appoint or
      cause the election or appointment of at least a majority of the members of
      the
      board of directors of such Entity, through beneficial ownership of the capital
      stock, or other equity interests, of such Entity or otherwise, or (b) all or
      substantially all of the properties and assets of such entity; or (iii) the
      Entity consolidates with, or merges with or into, another person (as such term
      is used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect
      on the Closing Date) or any person, or any Person consolidates with, or merges
      with or into, the Entity, in any such event pursuant to a transaction in which
      the total voting power of all classes then outstanding of the Entity’s voting
      stock, or other equity interests, is converted into or exchanged for cash,
      securities, equity interests or other property and immediately after such
      transaction the Persons who were the beneficial owners of the outstanding voting
      stock, or other equity interests, immediately prior to such transaction are
      not
      the beneficial owners, directly or indirectly, of more than 50% of the total
      voting equity of the surviving or transferee Person;
      provided,
      that it
      shall not be a Change of Control if the Transferor, the Manager or the Servicer
      is consolidated with or merged with or into the Parent or a Subsidiary of the
      Parent.

     

    “Closing
      Date”
means
      October 31, 2006. 

    


    “Code”
means
      the Internal Revenue Code of 1986, amended

    


    “Collateral”
has
      the
      meaning assigned to that term in Section
      2.11
      of the
      Loan Agreement. 

    


    “Collections”
means,
      without duplication, all amounts paid to or for the benefit of the Company
      pursuant to the terms of the Mossimo Contribution Agreement and all other
      payments received by or on behalf of the Company with respect to, or in
      connection with, such Collateral.

    


    “Collection
      Account”
means
      a
      deposit account at a financial institution acceptable to the Agent in the name
      of the Company and under the sole dominion and control of the Agent for the
      benefit of the Lenders which account shall contain funds all Collections which
      may be distributed in accordance with Section
      2.04
      of the
      Loan Agreement; provided, that the funds deposited therein (including any
      interest and earnings thereon) from time to time shall constitute the property
      of the Company and the Company shall be solely liable for any taxes payable
      with
      respect to the Collection Account.

    


    “Collection
      Account Agreement”
means
      a
      Control Agreement with respect to the Collection Account by and among the
      Collection Account Bank, the Company, the Servicer and the Agent.

    


    “Collection
      Account Bank”
means
      the financial institution at which the Collection Account is maintained.


    


    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    “Company”
has
      the
      meaning assigned to that term in the preamble to the Loan
      Agreement.

    


    “Compensation
      Certificate”
has
      the
      meaning assigned to that term in Section
      2.07(c)
      of the
      Loan Agreement. 

    


    “Contracts”
means
      all documents, instruments or agreements relating to the Trademarks other than
      the Licenses. 

    


    “Contract
      Rate”
shall
      mean sum of (i) the Index Rate plus (ii) five and one-eighths percent (5.125%).
      

    


    “Contractual
      Obligation”
means,
      with respect to any Person, any obligation, agreement, covenant or undertaking
      contained in any document, instrument or agreement (other than a Transaction
      Document) to which such Person is a party or by which it or any of its property
      is bound or to which any of its property is subject.

    


    “Control
      Agreement”
means,
      with respect to any deposit account, trust account, securities account,
      commodity account, securities entitlement or commodity contract, an agreement,
      in form and substance reasonably satisfactory to the Agent, among the Agent,
      the
      financial institution or other Person at which such account is maintained or
      with which such entitlement or contract is carried, the Company and the
      Servicer, effective to grant “control”
(as
      defined under the applicable UCC) over such account to the Agent.

    


    “Debt”
of
      any
      Person means, without duplication, any of the following, whether or not matured:
      (a) all indebtedness for borrowed money, (b) all other obligations evidenced
      by
      notes, bonds, debentures or similar instruments, (c) all reimbursement and
      all
      other obligations with respect to (i) letters of credit, financial institution
      guarantees or bankers’ acceptances or (ii) surety, customs, reclamation or
      performance bonds (in each case not related to judgments or litigation), other
      than those entered into in the ordinary course of business, (d) all obligations
      to pay the deferred purchase price of property or services, other than trade
      payables incurred in the ordinary course of business, (e) all obligations
      created or arising under any conditional sale or other title retention
      agreement, regardless of whether the rights and remedies of the seller or lender
      under such agreement in the event of default are limited to repossession or
      sale
      of such property and (f) all capitalized lease obligations. 

    


    “Default”
means
      any occurrence which is, or with notice or the lapse of time or both would
      become, an Event of Default.

    


    “Defaulted
      Contract Asset”
means,
      as of any date of determination, a License as to which any of the following
      shall have occurred: (i) the periodic required payments have become over 60
      days
      delinquent, or (ii) a default has occurred thereunder and any applicable cure
      period has expired without a cure having been effected, or (iii) any party
      or
      Affiliate of a party to such License is insolvent or there has commenced with
      respect to such Person, either voluntarily or involuntarily, a proceeding under
      the Bankruptcy Code.

    


    “Domestic
      Person”
means
      any “United
      States person”
under
      and as defined in Section 770l(a)(30)
      of the
      Code.

    


    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    “Early
      Amortization Commencement Date”
means
      the earliest of (i) the date of occurrence of any event described in
Section
      7.01(a)
      of the
      Loan Agreement, (ii) the date of the declaration of the Early Amortization
      Commencement Date pursuant to any other subsection of Section
      7.01
      of the
      Loan Agreement and (iii) the date of the declaration of the Early Amortization
      Commencement Date by, and at the option of, the Agent, in its sole and absolute
      discretion, upon the occurrence of an Early Amortization Event.

    


    “Early
      Amortization Event”
means
      the occurrence of any of the following events:

    


    
      	
            	(i)	
              an
                Event of Default has occurred and is continuing;
                or

            


    

    


    
      	
            	(ii)	
              a
                Servicer Default or Manager Default has occurred and is continuing;
                or
                

            


    

    


    
      	
            	(iii)	
              the
                Collections, net of all Servicing Fees payable to the Servicer or
                Successor Servicer and Management Fees payable to the Manager or
                Successor
                Manager, shall be less than (i) $10,739,681.11 for first three (3)
                Remittance Periods following the Closing Date; and (ii) $16,250,000
                for
                first four (4) Remittance Periods following the Closing Date and
                for any
                rolling four (4) Remittance Periods thereafter; or
                

            


    

    


    
      	
            	(iv)	
              the
                occurrence of (1) an event described in Section 11 of the Target
                License
                Agreement and as a result Target Brands, Inc. has delivered to the
                Company
                a written notice of its intention to terminate the Target License
                Agreement and such notice is not withdrawn within thirty (30) days
                of
                delivery of such termination notice or (2) an event of default under
                the
                Target License Agreement with respect to which the non-breaching
                party has
                delivered a default notice and such event of default has not been
                cured
                within any applicable cure period; or


            


    

    


    
      	
            	(v)	
              the
                death or permanent disability of Mossimo Giannulli, provided, that
                an
                Early Amortization Event shall be deemed not to have occurred if
                the
                Company provides, in writing, to the Agent reasonable evidence that
                such
                death or disability will not have a material adverse effect on the
                fees
                payable by Target Brands, Inc. under the Target License Agreement;
                or
                

            


    

    


    
      	
            	(vi)	
              a
                Change of Control shall have occurred with respect to the Parent.
                

            


    

    


    “Entity”
means
      any Person other than a natural person or a governmental agency. 

    


    “ERISA”
means
      the United States Employee Retirement Income Security Act of 1974. 

    


    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

    “ERISA
      Affiliate”
means
      a
      corporation, trade or business that is, along with the Transferor, a member
      of a
      controlled group of corporations or a controlled group of trades or businesses,
      as described in section 414 of the Code or section 4001 of ERISA.

    


    “Event
      of Default”
has
      the
      meaning assigned to that term in Section
      7.01
      of the
      Loan Agreement. 

    


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

    


    “Excluded
      Taxes”
means,
      (i) taxes measured by net income (including branch profits taxes) and franchise
      taxes imposed in lieu of net income taxes, in each case imposed on any Lender
      (or any corporation controlling such Lender) as a result of a present or former
      connection between such Lender and the jurisdiction of the Governmental Entity
      imposing such tax or any political subdivision or taxing authority thereof
      or
      therein (other than such connection arising solely from any Lender having
      executed, delivered or performed its obligations or received a payment under,
      or
      enforced, any Transaction Document) or (ii) taxes that are directly attributable
      to the failure (other than as a result of a change in any Requirement of Law)
      by
      any Lender to deliver the documentation described in clause 2.08(f) of the
      Loan
      Agreement (including, in the case of a Non-US Lender, the documents described
      in
      Section 2.08(f)(i)(A), (B) and (C) of the Loan Agreement).

    


    “Facility
      Amount”
means,
      at any time, the sum of the aggregate Loans Outstanding under the Loan
      Agreement.

    


    “Facility
      Termination Date”
means
      December 18, 2008 or (ii) the date the Loan Agreement is terminated by the
      Company pursuant to Section
      2.15(b)
      thereof. 

    


    "Fair
      Market Value”
shall
      mean the price at which a willing seller would sell and a willing buyer would
      buy the Assets having full knowledge of the facts, in an arm’s-length auction
      transaction without time constraints, and without being under any compulsion
      to
      buy or sell.

    


    “FDIC”
means
      the Federal Deposit Insurance Corporation, or any successor thereof.


    


    “Federal
      Funds Rate”
means,
      for any day, the rate of interest per annum (rounded upwards, if necessary,
      to
      the nearest whole multiple of 1/100 of 1%) equal to the weighted average of
      the
      rates on overnight Federal funds transactions with members of the Federal
      Reserve System arranged by Federal funds brokers on such day, as published
      by
      the Federal Reserve Bank of New York on the Business Day next succeeding such
      day, provided that (i) if such day is not a Business Day, the Federal Funds
      Rate
      for such day shall be such rate on such transactions on the next preceding
      Business Day and (ii) if no such rate is so published on such next preceding
      Business Day, the Federal Funds Rate for such day shall be the average rate
      quoted to Agent on such day on such transactions as determined by
      Agent.

    


    “Fee
      Letter”
has
      the
      meaning assigned to that term in Section
      2.06(a)
      of the
      Loan Agreement. 

    


    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    “Fees”
has
      the
      meaning assigned to that term in Section
      2.06(a)
      of the
      Loan Agreement. 

    


    “Fitch”
means
      Fitch, Inc. (or its successors in interest).

    


    “GAAP”
means
      generally accepted accounting principles as in effect from time to time in
      the
      United States.

    


    “Government
      Entity”
means
      the United States, any State, any political subdivision of a State and any
      agency or instrumentality of the United States or any State or political
      subdivision thereof and any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to
      government.

    


    “Government
      Securities”
means
      the securities described in clause (i) of the definition of the term
“Eligible
      Investments”.

    


    “Indemnified
      Amounts”
has
      the
      meaning assigned to that term in Section
      8.01
      of the
      Loan Agreement. 

    


    “Independent
      Accountants”
has
      the
      meaning assigned to that term in Section
      6.10(b)
      of the
      Loan Agreement. 

    


    “Index
      Rate”
means,
      with respect to any Remittance Period, the rate per annum equal to the three
      month British Bankers Association Rate for dollar deposits as reported on the
      display designated as “BBAM” on Bloomberg (or such other display as may replace
“BBAM” on Bloomberg), as of 8 a.m., New York City time, on the date two Business
      Days prior to the commencement of such Remittance Period or, in the case of
      the
      initial Remittance Period, prior to the Closing Date, and if such rate shall
      not
      be quoted, or if the related Remittance Period shall be less than three months,
      the interest rate published in the “Money Rates” section of The
      Wall Street Journal
      as the
      three-month London Interbank Offered Rate on the date two Business Days prior
      to
      the commencement of such Remittance Period or, in the case of the initial
      Remittance Period, prior to the Closing Date, and if such rate shall not be
      published, the Federal Funds Rate on the date two Business Days prior to the
      commencement of such Remittance Period or, in the case of the initial Remittance
      Period, prior to the Closing Date. 

    


    “Instruments
      of Transfer”
means
      such duly executed assignments and other instruments of conveyance and transfer,
      each in form and substance reasonably satisfactory to the Company and its
      counsel, as are necessary, appropriate or desirable to vest in the Company
      all
      right, title and interest in and to the Trademarks, the Licenses and the other
      Assets. 

    


    “Lenders”
means,
      collectively, MLMCI and/or any other Person that is an Affiliate of MLMCI and/or
      any other Person that is not an Affiliate of MLMCI that agrees, pursuant to
      the
      pertinent Assignment and Acceptance, to make Loans secured by Collateral
      pursuant to Article
      II
      of the
      Loan Agreement.

    


    “Letter
      of Direction”
means
      the Letter of Direction delivered to each Obligor, substantially in the form
      attached as Exhibit E to the Mossimo Contribution Agreement.

    


    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    “License
      Income”
means
      any and all forms of income, proceeds or compensation, whether cash or other
      property, paid on account of or in respect of any of the Licenses.

    


    “Licenses”
means
      at any time and from time to time, the licenses identified on Exhibit A-2 to
      the
      Mossimo Contribution Agreement and any other licenses of trademarks to which
      the
      Company shall be a party as licensor, together with any extension, modification,
      renewal or replacement of any such license.

    


    “Lien”
means
      any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit
      arrangement, encumbrance, easement, lien (statutory or other), security interest
      or other security arrangement and any other preference, priority or preferential
      arrangement of any kind or nature whatsoever, including any conditional sale
      contract or other title retention agreement, the interest of a lessor under
      a
      Capital Lease and any synthetic or other financing lease having substantially
      the same economic effect as any of the foregoing.

    


    “Loan”
means
      the loan advanced by the Lenders to the Company pursuant to Article
      II
      of the
      Loan Agreement. 

    


    “Loan
      Agreement”
means
      the Loan and Security Agreement dated as of the Closing Date among the Company,
      Mossimo Management LLC, the Agent and the Lenders, as the same may from time
      to
      time be amended, supplemented, restated or otherwise modified.

    


    "Loan
      Commitment"
      means
      (i) as to any Lender, the commitment of such Lender to make its Pro Rata Share
      of the Loan as set forth on Annex J
      to the
      Loan Agreement or in the most recent Assignment and Acceptance executed by
      such
      Lender, and (ii) as to all Lenders, the aggregate commitment of all Lenders
      to
      make the Loan, which aggregate commitment shall be Ninety Million Dollars
      ($90,000,000). After advancing the Loan, each reference to a Lender's Loan
      Commitment shall refer to that Lender’s Pro Rata Share of the Loans
      Outstanding.

    


    “Loan
      Repayment Date”
means
      the date on which the aggregate outstanding principal amount of the Loans have
      been repaid in full and all interest and Fees and all other Obligations have
      been paid in full.

    


    “Loans
      Outstanding”
means
      the aggregate principal amounts of the Loan advanced to the Company, reduced
      from time to time by Collections received and distributed as repayment of
      principal amounts of the Loan outstanding pursuant to Section
      2.04
      of the
      Loan Agreement and any other amounts received by the Lenders to repay the
      principal amounts of the Loan outstanding; provided,
      however,
      that
      the principal amounts of Loans Outstanding shall be increased by the amount
      of
      any Collections or other amounts that are rescinded or must be returned for
      any
      reason.

    


    “Management
      Agreement”
means
      that certain Management and Servicing Agreement dated the Closing Date between
      the Company and Mossimo Management LLC.

    


    “Management
      Fee”
means,
      with respect to each Remittance Period, an amount equal to the product of (x)
      the average outstanding principal balance of the Loans during the applicable
      Remittance Period multiplied by (y) the product of (1) one-quarter of one
      percent (0.25%) multiplied by (2) a fraction the numerator of which is the
      number of days in such Remittance Period and the denominator of which is three
      hundred and sixty (360). Notwithstanding the foregoing, in the event that
      Mossimo Management is replaced with a Successor Manager, the Management Fee
      shall be market rate charged by manager of assets of the nature managed by
      the
      Manager.

    


    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

    “Manager”
means,
      at any time, the Person then authorized, pursuant to Section
      6.01
      of the
      Loan Agreement to perform the Manager Services as described in the Management
      Agreement.

    


    “Manager
      Default”
means
      the occurrence of any of the following events:

    


    
      	
            	(i)	
              any
                provision of any Transaction Document ceases to be legal, valid or
                binding
                on the Manager or the Manager shall in writing state that any provision
                of
                any Transaction Document to which the Manager is a party should cease
                for
                any reason to be legal, valid or binding;
                or

            


    

    


    
      	
            	(ii)	
              the
                Manager, or any Person to which the Manager shall have delegated
                any of
                its servicing responsibilities, shall have suffered any material
                adverse
                change to its financial condition, business or operations which would
                affect the Manager’s ability to conduct its business or fulfill its
                obligations under the Loan Agreement or under any other Transaction
                Document, in each case as reasonably determined by the Agent;
                or

            


    

    


    
      	
            	(iii)	
              the
                failure of the Manager to observe or perform any term (other than
                those
                set forth in clause (v) below), covenant or agreement of the Loan
                Agreement or under any other Transaction Document and such failure
                (x) has
                a material and adverse effect upon the rights and interests of the
                Agent
                and/or the Lenders hereunder and (y) shall remain unremedied for
                the
                lesser of thirty (30) days after (A) the Manager becomes aware or
                reasonably should have become aware of such failure or (B) the Manager
                is
                notified in writing by the Lenders, the Agent or any other Person,
                of such
                failure;

            


    

    


    
      	
            	(iv)	
              the
                Manager assigns any of its duties or obligations of the Loan Agreement
                other than as otherwise permitted pursuant to Section
                6.02(d)
                of
                the Loan Agreement

            


    

    


    
      	
            	(v)	
              any
                representation, warranty or statement of the Manager made in the
                Loan
                Agreement or in any other Transaction Document shall prove to be
                incorrect
                in any material respect, and, solely if such incorrect representation,
                warranty or statement can be remedied, such representation, warranty
                or
                statement remains unremedied for the lesser of thirty (30) days after
                (A)
                the Manager becomes aware or reasonably should have become aware
                of such
                failure or (B) the Manager is notified in writing by the Lenders,
                the
                Agent or any other Person of such
                failure;

            


    

    


    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

    
      	
            	(vi)	
              the
                occurrence of an Event of Default;

            


    

    


    
      	
            	(vii)	
              (x)
                the occurrence of any litigation, investigation or proceeding before
                any
                Government Entity, against the Manager, or any Person to which the
                Manager
                shall have delegated any of its servicing responsibilities, seeking
                damages or claiming an amount, which is reasonably likely to materially
                impair the ability of the Manager to perform its obligations under
                the
                Loan Agreement or under the other Transaction Documents, or (y) the
                entry
                of one or more judgments or decrees against the Manager involving,
                in the
                aggregate, a liability of greater than $100,000, and the same shall
                remain
                undischarged for a period of sixty (60) consecutive days during which
                execution shall not be effectively stayed, nor shall any action be
                legally
                taken by a judgment creditor to attach or levy upon any assets of
                the
                Manager to enforce any such judgment (whether insured or
                uninsured);

            


    

    


    
      	
            	(viii)	
              the
                occurrence of a Change of Control with respect to the Manager;
                

            


    

    


    
      	
            	(ix)	
              the
                Manager is not Solvent; or 

            


    

    


    
      	
            	(x)	
              the
                occurrence of any Bankruptcy Event in respect of the Manager
                

            


    

    


    “Maximum
      Loan Amount”
means
      ninety million dollars ($90,000,000); provided,
      however,
      that
      such amount shall be automatically reduced on the dates set forth below to
      the
      respective amounts set forth opposite such dates: 

    


    
      	
              Date

            	
              Maximum
                Loan Amount

            
	
              December
                18, 2006

            	
              $87,500,000

            
	
              March
                18, 2007

            	
              $86,750,000

            
	
              June
                18, 2007

            	
              $80,750,000

            
	
              September
                18, 2007

            	
              $79,500,000

            
	
              December
                18, 2007

            	
              $78,250,000

            
	
              March
                18, 2008

            	
              $77,250,000

            
	
              June
                18, 2008

            	
              $70,750,000

            
	
              September
                18, 2008

            	
              $68,750,000

            


    

    


    “Merger
      Documents”
shall
      mean the Agreement and Plan of Merger dated as of March 31, 2006 (the “Merger”)
      among the Transferor, MI, Parent and Mossimo Giannulli and all other documents,
      instruments or agreements executed in connection therewith. 

    


    “MLMCI”
has
      the
      meaning assigned to that term in the preamble to the Loan Agreement.


    


    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

    “MI”
means
      Mossimo, Inc., a Delaware corporation, predecessor-in-interest to
      Transferor.

    


    “Moody’s”
means
      Moody’s Investors Service, Inc. (or its successors in interest).

    


    “Mossimo
      Contribution Agreement”
means
      that certain Capital Contribution Agreement, dated October 31, 2006, by and
      between the Transferor and the Company pursuant to which the Company will
      acquire certain Assets from the Transferor related to the name “Mossimo”.
      

    


    “Mossimo
      Management”
means
      Mossimo Management LLC, a Delaware limited liability company. 

    


    “Multiemployer
      Plan”
means
      a
“multiemployer
      plan”,
      within
      the meaning of Section 4001(a)(3) of ERISA, to which the Transferor or any
      ERISA
      Affiliate makes, is making, or is obligated to make contributions or, during
      the
      preceding three calendar years, has made, or been obligated to make,
      contributions.

    


    “Non-U.S.
      Lender Party”
means
      each Lender and each participant, in each case that is not a Domestic
      Person.

    


    “Note”
means
      a
      promissory note of the Company, in substantially the form of Exhibit B
      to the
      Loan Agreement, payable to the order of a Lender in a principal amount equal
      to
      the amount of such Lender’s Loan Commitment.

    


    “Obligations”
means
      all present and future indebtedness and other liabilities and obligations
      (howsoever created, arising or evidenced, whether direct or indirect, absolute
      or contingent, or due or to become due) of the Company to the Lenders or the
      Agent arising under the Loan Agreement and/or any other Transaction Document
      and
      shall include all liability for principal of and interest on the Loans,
      indemnifications and other amounts due or to become due by the Company to the
      Lenders or the Agent under the Loan Agreement and/or any other Transaction
      Document, including interest, fees and other obligations that accrue after
      the
      commencement of an insolvency proceeding (in each case whether or not allowed
      as
      a claim in such insolvency proceeding).

    


    “Obligor”
means
      a
      Person obligated to pay a Receivable.

    


    “Officer’s
      Certificate”
means
      a
      certificate signed by a Responsible Officer of the Servicer or the Manager,
      as
      applicable.

    


    “Organizational
      Documents”
means,
      with respect to any Person, as applicable, such Person’s certificate of
      incorporation, articles of incorporation, by-laws, certificate of formation,
      articles of organization, limited liability company agreement, management
      agreement, operating agreement, shareholder agreement, partnership agreement,
      trust agreement or similar document or agreement governing such Person’s
      existence, organization or management or concerning disposition of ownership
      or
      equity interests of such Person or voting rights among such Person’s
      owners.

    


    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

    “Other
      Intellectual Property”
means
      the following property:

    


    
      	
            	(i)	
              The
                trade secrets, inventions, methodology, processes, technology, technical
                information and know-how and other proprietary intellectual property
                rights and information (collectively, the “Technology”)
                related to the manufacture, marketing, distribution or sale by the
                Transferor of any products in connection with which the Transferor
                has or
                may subsequently obtain the right to use the
                Trademarks;

            


    

    


    
      	
            	(ii)	
              design
                patents and registrations, trade dress and product configuration,
                advertising, photographs, layouts, promotional materials and manuals
                that
                are used in connection with or of any products or applications,
                whatsoever; and

            


    

    


    
      	
            	(iii)	
              the
                domain name registrations to <mossimo.com>
                .

            


    

    


    “Parent”
means
      Iconix Brand Group, Inc., a Delaware corporation.

    


    “Parent
      Guaranty”
means
      that certain Guaranty dated as of the Closing Date made by the Parent in favor
      of the Agent, for the benefit of the Lenders. 

    


    “Permitted
      Investments”
means
      any one or more of the following:

    


    
      	
            	(i)	
              direct
                obligations of, or obligations fully guaranteed as to principal and
                interest by, the United States or any agency or instrumentality thereof,
                provided such obligations are backed by the full faith and credit
                of the
                United States;

            


    

    


    
      	
            	(ii)	
              repurchase
                obligations (the collateral for which is held by a third party),
                with
                respect to any security described in clause (i) above, provided that
                the
                long term unsecured obligations of the party agreeing to repurchase
                such
                obligations are at the time rated by Moody’s and S&P in one of their
                two highest long term rating categories and if rated by Fitch, in
                one of
                its two highest long term rating
                categories;

            


    

    


    
      	
            	(iii)	
              certificates
                of deposit, time deposits, demand deposits and bankers’ acceptances of any
                bank or trust company incorporated under the laws of the United States
                or
                any State thereof or the District of Columbia, provided that the
                short
                term commercial paper of such bank or trust company (or, in the case
                of
                the principal depository institution in a depository institution
                holding
                company, the long term unsecured debt obligations of the depository
                institution holding company) at the date of acquisition thereof has
                been
                rated by Moody’s and S&P in their highest short term rating category,
                and if rated by Fitch, in its highest short term rating
                category;

            


    

    


    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

    
      	
            	(iv)	
              commercial
                paper (having original maturities of not more than two hundred seventy
                (270) days) of any corporation incorporated under the laws of the
                United
                States or any State thereof or the District of Columbia, having a
                rating,
                on the date of acquisition thereof, of no less than P-1 by Moody’s, A-1 by
                S&P and F-1 if rated by Fitch;
                and

            


    

    


    
      	
            	(v)	
              money
                market mutual funds registered under the Investment Company Act of
                1940,
                as amended (including any such fund that is managed by the Agent’s Bank or
                an Affiliate thereof) having a rating, at the time of such investment,
                of
                no less than Aaa by Moody’s, AAA by S&P and AAA if rated by
                Fitch;

            


    

    


    provided,
      that no
      such instrument shall be a Permitted Investment if such instrument evidences
      the
      right to receive either (a) interest only payments with respect to the
      obligations underlying such instrument or (b) both principal and interest
      payments derived from obligations underlying such instrument, where the
      principal and interest payments with respect to such instrument provide a yield
      to maturity exceeding 120% of the yield to maturity at par of such underlying
      obligation. Each Permitted Investment may be purchased by the Collection Bank
      or
      through an Affiliate of the Collection Bank.

    


    “Permitted
      Liens”
means,
      with respect to any Person, any of the following:

    


    
      	
            	(i)	
              Liens
                (a) with respect to the payment of taxes, assessments or other
                governmental charges or (b) of suppliers, carriers, materialmen,
                warehousemen, workmen or mechanics and other similar Liens, in each
                case
                imposed by Applicable Law and arising in the ordinary course of business,
                and, for each of the Liens in clauses
                (a)
                and (b)
                above for amounts that are not yet due or that are being contested
                in good
                faith by appropriate proceedings diligently conducted and with respect
                to
                which adequate reserves or other appropriate provisions are maintained
                on
                the books of such Person in accordance with
                GAAP;

            


    

    


    
      	
            	(ii)	
              Liens
                of a collection bank on items in the course of collection arising
                under
                Section 4-208 of the UCC as in effect in the State of New York or
                any
                similar section under any applicable UCC or any similar Requirement
                of Law
                of any foreign jurisdiction;

            


    

    


    
      	
            	(iii)	
              pledges
                or cash deposits made in the ordinary course of business (a) in connection
                with workers’ compensation, unemployment insurance or other types of
                social security benefits (other than any Lien imposed by ERISA),
                (b) to
                secure the performance of bids, tenders, leases (other than Capital
                Leases) sales or other trade contracts (other than for the repayment
                of
                borrowed money) or (c) made in lieu of, or to secure the performance
                of,
                surety, customs, reclamation or performance bonds (in each case not
                related to judgments or
                litigation);

            


    

    


    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

    
      	
            	(iv)	
              judgment
                liens (other than for the payment of taxes, assessments or other
                governmental charges) securing judgments and other proceedings not
                constituting an Event of Default under Section 7.01(f)
                of
                the Loan Agreement and pledges or cash deposits made in lieu of,
                or to
                secure the performance of, judgment or appeal bonds in respect of
                such
                judgments and proceedings;

            


    

    


    
      	
            	(v)	
              Liens
                (a) arising by reason of zoning restrictions, easements, licenses,
                reservations, restrictions, covenants, rights-of-way, encroachments,
                minor
                defects or irregularities in title (including leasehold title) and
                other
                similar encumbrances on the use of real property or (b) consisting
                of
                leases, licenses or subleases granted by a lessor, licensor or sublessor
                on its property (in each case other than Capital Leases) otherwise
                permitted under the Loan Agreement that, for each of the Liens in
                clauses
                (a)
                and (b)
                above, do not, in the aggregate, materially (1) impair the value
                or
                marketability of such real property or (2) interfere with the ordinary
                conduct of the business conducted and proposed to be conducted at
                such
                real property;

            


    

    


    
      	
            	(vi)	
              Liens
                of landlords and mortgagees of landlords (a) arising by statute or
                under
                any lease or related Contractual Obligation entered into in the ordinary
                course of business, (b) on fixtures and movable tangible property
                located
                on the real property leased or subleased from such landlord, (c)
                for
                amounts not yet due or that are being contested in good faith by
                appropriate proceedings diligently conducted and (d) for which adequate
                reserves or other appropriate provisions are maintained on the books
                of
                such Person in accordance with GAAP;
                and

            


    

    


    
      	
            	(vii)	
              the
                title and interest of a lessor or sublessor in and to personal property
                leased or subleased (other than through a Capital Lease), in each
                case
                extending only to such personal
                property.

            


    

    


    “Person”
means
      an individual, partnership, corporation (including a business trust), limited
      liability company, joint stock company, trust, unincorporated association,
      joint
      venture, government (or any agency or political subdivision thereof) or other
      entity.

    


    “Pledge”
means
      the pledge of any Collateral pursuant to Article
      II
      of the
      Loan Agreement. 

    


    “Prepaid
      Royalty Amount”
means
      an amount equal to any royalties received by the Company from a licensee
      pursuant to a License in advance of their contractual due date (including,
      without limitation, prepaid royalties, early termination payments and liquidated
      damage payments) or which would otherwise relate to the use of a trademark
      for a
      period in excess of six months.

    


    
      
        
        

      

      
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    “Primary
      Marks”
means
      the name “Mossimo”
both
      in
      stylized signature form and all other manner of representation for use in the
      Territory in connection with any products or applications (including all
      registrations for and applications for registration of either of the foregoing
      in the Territory).

    


    “Proceeds”
means
      all proceeds of, and all other profits, rentals or receipts, in whatever form,
      arising from the collection, sale, lease, exchange, assignment, licensing or
      other disposition of, or realization upon, Collateral, including all claims
      of
      the Company against third parties for loss of, damage to, or destruction of,
      or
      for proceeds payable under, or unearned premiums with respect to, policies
      of
      insurance in respect of, any Collateral, and any condemnation or requisition
      payments with respect to any Collateral, in each case whether now existing
      or
      hereafter arising.

    


    “Pro
      Rata Share”
means,
      with respect to any Lender, the percentage obtained by dividing (i) the sum
      of
      the commitment to make Loans of such Lender then in effect by (ii) the sum
      of
      the commitment to make Loans of all Lenders then in effect, as any such
      percentages may be adjusted by assignments permitted pursuant to Section
      10.04
      of the
      Loan Agreement.

    


    “Rate
      Management Transaction”
means,
      with respect to any Person, any transaction (including an agreement with respect
      thereto) now existing or hereafter entered into between such Person and any
      counterparty which is a rate swap, basis swap, forward rate transaction,
      commodity swap, commodity option, equity or equity index swap, equity or equity
      index option, bond option, interest rate option, foreign exchange transaction,
      cap transaction, floor transaction, collar transaction, forward transaction,
      currency swap transaction, cross-currency rate swap transaction, currency option
      or any other similar transaction (including any option with respect to any
      of
      these transactions) or any combination thereof, whether linked to one or more
      interest rates, foreign currencies, commodity prices, equity prices or other
      financial measures.

    


    “Receivables”
means
      amounts payable under or in respect of any of the Assets.

    


    “Records”
means
      all documents, books, records and other information (including tapes, disks
      and
      related property and rights) maintained with respect to Commission Payment
      Rights or Television Packaging Agreements and the related Obligors which the
      Borrower has itself generated, in which the Borrower has acquired an interest
      pursuant to the Purchase and Contribution Agreement or in which the Borrower
      has
      otherwise obtained an interest. 

    


    “Register”
has
      the
      meaning specified in Section 2.12(b)
      of the
      Loan Agreement. 

    


    “Related
      Person”
means,
      with respect to any Person, each Affiliate of such Person and each director,
      officer, employee, agent, trustee, representative, attorney, accountant and
      each
      insurance, environmental, legal, financial and other advisor and other
      consultants and agents of or to such Person or any of its Affiliates, together
      with, if such Person is the Agent, each other Person or individual designated,
      nominated or otherwise mandated by or helping the Agent pursuant to and in
      accordance with Section
      9.04
      of the
      Loan Agreement or any comparable provision of any Transaction
      Document.

    


    
      
        
        

      

      
        67

        
          

        

      

      
        
        

      

    

    “Related
      Rights”
means
      each of the following: 

    


    
      	
            	(i)	
              From
                and after the Closing Date, the sole and exclusive right to receive
                and
                collect any and all License Income regardless of when earned and
                payable
                and accruing under the Licenses before or after the Closing Date,
                that are
                paid on or after the Closing Date;

            


    

    


    
      	
            	(ii)	
              The
                sole and exclusive right to possess, retain and exploit, in perpetuity,
                in
                any manner or media, the Trademarks and Other Intellectual Property
                and
                any and all other rights (including merchandising rights) now or
                hereafter
                existing in any other Asset;

            


    

    


    
      	
            	(iii)	
              The
                sole and exclusive right to prosecute and defend all claims or causes
                of
                action arising out of or related to past, present or future infringement
                or misappropriation of any Asset;

            


    

    


    
      	
            	(iv)	
              The
                sole and exclusive right to amend, modify, extend, renew, terminate,
                replace or sell any other Assets in the Company’s own name;
                and

            


    

    


    
      	
            	(v)	
              All
                proceeds of the foregoing. 

            


    

    


    “Release
      Price”
means
      (i) $90,000,000 with respect to the Target License Agreement, (ii) $2,000,000
      with respect to the License Agreement between the Transferor and Lunada Bay
      Corporation dated as of December 1, 1987, (iii) $1,000,000 with respect to
      the
      License Agreement between the Transferor and Globe International Limited and
      (iv) $500,000 with respect to each other license agreement between the
      Transferor and a licensee. 

    


    “Relevant
      Products”
means
      all products of any kind or description in connection with which the Trademarks
      have been used by the Transferors before the Closing Date or thereafter may
      be
      used by the Company.

    


    “Remittance
      Date”
means
      the 18th
      day of
      March, June, September and December of each year, with the initial Remittance
      Date being December 18, 2006 or, if such day is not a Business Date, the next
      succeeding Business Day.

    


    “Remittance
      Period”
means,
      (i) as to the initial Remittance Period, the period beginning on, and including,
      the Closing Date and ending on, and including, the day immediately preceding
      the
      initial Remittance Date and (ii) as to any subsequent Remittance Period, the
      period beginning on, and including, a Remittance Date and ending on the day
      immediately preceding the subsequent Remittance Date; provided,
      further,
      that
      the final Remittance Period shall begin on, and include, the Remittance Date
      immediately preceding the Loan Repayment Date and shall end on the Loan
      Repayment Date.

    


    
      
        
        

      

      
        68

        
          

        

      

      
        
        

      

    

    “Remittance
      Report”
means
      a
      report, in substantially the form of Exhibit
      A
      to the
      Loan Agreement furnished by the Servicer to the Agent for the Lenders pursuant
      to Section
      6.09(a)
      of the
      Loan Agreement. 

    


    “Required
      Reserve Amount”
shall
      mean an amount equal to $1,500,000 of which $750,000 shall be required to be
      funded on the first Remittance Date following the Closing Date and $750,000
      shall be required to be funded on the second Remittance Date following the
      Closing Date. 

    


    “Required
      Lenders”
means,
      at any time, Lenders having at such time in excess of 50% of the aggregate
      Facility Amount.

    


    “Reserve
      Account”
means
      a
      deposit account at a financial institution acceptable to the Agent in the name
      of the Company and under the sole dominion and control of the Agent for the
      benefit of the Lenders which account shall contain funds in an amount equal
      to
      the Required Reserve Amount which may be applied by Agent to the Obligations
      in
      accordance with Section
      2.04(d)
      of the
      Loan Agreement; provided, that the funds deposited therein (including any
      interest and earnings thereon) from time to time shall constitute the property
      of the Company and the Company shall be solely liable for any taxes payable
      with
      respect to the Reserve Account. 

    


    “Reserve
      Account Agreement”
means
      a
      Control Agreement, in a form and substance reasonably acceptable to the Agent,
      with respect to the Reserve Account by and among the Reserve Account Bank,
      the
      Company and the Agent.

    


    “Reserve
      Account Bank”
means
      the financial institution at which the Reserve Account is maintained.


    


    “Responsible
      Officer”
means
      (i) with respect to the Company, the Manager or the Servicer (if an Affiliate
      of
      the Company), the Chief Executive Officer, Chief Financial Officer, a Senior
      Vice President, or the Controller of the Company, the Manager or the Servicer,
      as applicable, and (ii) with respect to the Manager or the Servicer (if not
      an
      Affiliate of the Company), any officer of the Manager or the Servicer which
      has
      direct responsibility for the administration of the Loan Agreement.

    


    “S&P”
means
      Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
      Inc. (or its successors in interest).

    


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

    


    “Servicer”
means,
      at any time, the Person then authorized, pursuant to Section
      6.01
      of the
      Loan Agreement to perform the Servicing Functions as described in the Management
      Agreement.

    


    “Servicer
      Advance”
has
      the
      meaning assigned to that term in Section
      2.2(g)
      of the
      Management Agreement.

    


    
      
        
        

      

      
        69

        
          

        

      

      
        
        

      

    

    “Servicer
      Default”
means
      the occurrence of any of the following events:

    


    
      	
            	(i)	
              any
                provision of any Transaction Document ceases to be legal, valid or
                binding
                on the Servicer or the Servicer shall in writing state that any provision
                of any Transaction Document to which the Servicer is a party should
                cease
                for any reason to be legal, valid or binding;
                or

            


    

    


    
      	
            	(ii)	
              the
                Servicer, or any Person to which the Servicer shall have delegated
                any of
                its servicing responsibilities, shall have suffered any material
                adverse
                change to its financial condition, business or operations which would
                affect the Servicer’s ability to conduct its business or fulfill its
                obligations under the Loan Agreement or under any other Transaction
                Document, in each case as reasonably determined by the Agent;
                or

            


    

    


    
      	
            	(iii)	
              the
                failure of the Servicer to deliver any payments, collections or proceeds
                which it is obligated to deliver under the terms of the Loan Agreement
                or
                of any other Transaction Document at the times it is obligated to
                make
                such deliveries under the terms of the Loan Agreement or of any other
                Transaction Document and such failure shall remain unremedied for
                two (2)
                Business Days;

            


    

    


    
      	
            	(iv)	
              the
                failure of the Servicer to (x) deliver any reports which it is obligated
                to deliver under the terms of the Loan Agreement or of any other
                Transaction Document at the times it is obligated to deliver such
                reports
                under the terms hereof or thereof or (y) satisfy any of its other
                reporting, certification, notification or documentation requirements
                under
                the terms of the Loan Agreement or of any other Transaction Document
                and,
                (A) in the case of the delivery of a Remittance Report, such failure
                shall
                remain unremedied for three (3) Business Days from the date due,
                and (B)
                in the case of the delivery of any other report, certification or
                notice,
                such failure shall remain unremedied for five (5) Business Days from
                the
                date due; 

            


    

    


    
      	
            	(v)	
              the
                failure of the Servicer to observe or perform any term (other than
                those
                set forth in clause (iii) above and (vii) below), covenant or agreement
                of
                the Loan Agreement or under any other Transaction Document (other
                than
                those described in clause (iii) or (iv) above) and such failure (x)
                has a
                material and adverse effect upon the rights and interests of the
                Agent
                and/or the Lenders hereunder and (y) shall remain unremedied for
                the
                lesser of thirty (30) days after (A) the Servicer becomes aware or
                reasonably should have become aware of such failure or (B) the Servicer
                is
                notified in writing by the Lenders, the Agent or any other Person,
                of such
                failure;

            


    

    


    
      
        
        

      

      
        70

        
          

        

      

      
        
        

      

    

    
      	
            	(vi)	
              the
                Servicer assigns any of its duties or obligations of the Loan Agreement
                other than as otherwise permitted pursuant to Section
                6.02(d)
                of
                the Loan Agreement

            


    

    


    
      	
            	(vii)	
              any
                representation, warranty or statement of the Servicer made in the
                Loan
                Agreement or in any other Transaction Document shall prove to be
                incorrect
                in any material respect, and, solely if such incorrect representation,
                warranty or statement can be remedied, such representation, warranty
                or
                statement remains unremedied for the lesser of thirty (30) days after
                (A)
                the Servicer becomes aware or reasonably should have become aware
                of such
                failure or (B) the Servicer is notified in writing by the Lenders,
                the
                Agent or any other Person of such
                failure;

            


    

    


    
      	
            	(viii)	
              the
                occurrence of an Event of Default;

            


    

    


    
      	
            	(ix)	
              (x)
                the occurrence of any litigation, investigation or proceeding before
                any
                Government Entity, against the Servicer, or any Person to which the
                Servicer shall have delegated any of its servicing responsibilities,
                seeking damages or claiming an amount, which is reasonably likely
                to
                materially impair the ability of the Servicer to perform its obligations
                under the Loan Agreement or under the other Transaction Documents,
                or (y)
                the entry of one or more judgments or decrees against the Servicer
                involving, in the aggregate, a liability of greater than $100,000,
                and the
                same shall remain undischarged for a period of sixty (60) consecutive
                days
                during which execution shall not be effectively stayed, nor shall
                any
                action be legally taken by a judgment creditor to attach or levy
                upon any
                assets of the Servicer to enforce any such judgment (whether insured
                or
                uninsured);

            


    

    


    
      	
            	(x)	
              the
                occurrence of a Change of Control with respect to the Servicer;
                

            


    

    


    
      	
            	(xi)	
              the
                Servicer is not Solvent; or 

            


    

    


    
      	
            	(xii)	
              the
                occurrence of any Bankruptcy Event in respect of the Servicer.
                

            


    

    


    “Servicing
      Fee”
means,
      with respect to each Remittance Period, an amount equal to the product of (x)
      the average outstanding principal balance of the Loans during the applicable
      Remittance Period multiplied by (y) the product of (1) one-quarter of one
      percent (0.25%) multiplied by (2) a fraction the numerator of which is the
      number of days in such Remittance Period and the denominator of which is three
      hundred and sixty (360). Notwithstanding the foregoing, in the event that the
      Servicer is replaced with a Successor Servicer, the Servicing Fee shall be
      an
      amount equal a market rate charged by servicers of assets of the nature serviced
      by the Servicer. 

    


    
      
        
        

      

      
        71

        
          

        

      

      
        
        

      

    

    “Solvency
      Certificate”
means
      a
      certificate of a Responsible Officer of the Company to the effect that Company
      will be Solvent after giving effect to the transactions contemplated by the
      Transaction Documents.

    


    “Solvent”
means,
      with respect to any Person, as of any date of determination, that, as of such
      date, (i) the value of the assets of such Person (both at fair value and present
      fair saleable value) is greater than the total amount of liabilities (including
      contingent and unliquidated liabilities) of such Person, (ii) after giving
      effect to the transactions contemplated by the Loan Agreement and the other
      Transaction Documents, such Person is not engaged in a business or a
      transaction, and does not propose to engage in a business or a transaction,
      for
      which its assets and properties would constitute unreasonably small capital
      and
      (iii) after giving effect to the transactions contemplated by the Loan Agreement
      and the other Transaction Documents, such Person is able to realize upon its
      assets and pay its debts and other liabilities as they mature in the normal
      course of business. In computing the amount of contingent or unliquidated
      liabilities at any time, such liabilities shall be computed at the amount that,
      in light of all the facts and circumstances existing at such time, represents
      the amount that can reasonably be expected to become an actual or matured
      liability.

    


    “State”
means
      one of the fifty states of the United States or the District of
      Columbia.

    


    “Strike
      Price”
has
      the
      meaning assigned to that term in Section
      5.01(o)
      of the
      Loan Agreement. 

    


    “Subsidiary”
means,
      with respect to any Person, any corporation, partnership, joint venture, limited
      liability company, association or other entity, the management of which is,
      directly or indirectly, controlled by, or of which an aggregate of more than
      50%
      of the outstanding voting stock is, at the time, owned or controlled directly
      or
      indirectly by, such Person or one or more Subsidiaries of such Person.


    


    “Successor
      Servicer”
has
      the
      meaning assigned to that term in Section
      6.02(a)
      of the
      Loan Agreement. 

    


    “Target
      License Agreement”
means
      that certain Mossimo Restated License Agreement dated as of March 31, 2006
      by
      and between Mossimo, Inc., predecessor interest to the Transferor, and Target
      Brands, Inc., a subsidiary of the Target Corporation. 

    


    “Tax
      Affiliate”
means
      (i) the Company and (ii) any Affiliate of the Company with which the Company
      files or is eligible to file consolidated, combined or unitary tax returns
      or
      for the taxes or for the taxes of which the Company otherwise is
      liable.

    


    “Territory”
means
      the entire world.

    


    “Trademarks”
means
      (i) the names, marks and/or designations, and all applications and registrations
      therefor including the Primary Marks, that are set forth on Exhibit A-1 to
      the
      Mossimo Contribution Agreement; (ii) all logos, designs and product
      configuration, packaging or other distinctive configurations used in connection
      therewith; and (iii) all other rights, whether now known or created in the
      future, relating to the Primary Marks comprising or including any of the
      foregoing.

    


    
      
        
        

      

      
        72

        
          

        

      

      
        
        

      

    

    “Transferor”
means
      Mossimo, Inc, a Delaware corporation, successor-in-interest to Moss Acquisition
      Corp., a Delaware corporation. 

    


    “Transaction
      Documents”
means
      each document, instrument or agreement executed by the Company, the Servicer,
      the Manager or the Parent in connection with the transactions contemplated
      by
      the Loan Agreement including the Loan Agreement, the Mossimo Contribution
      Agreement, the Management Agreement, the Collection Account Agreement, the
      Reserve Account Agreement, the Fee Letter and the Parent Guaranty.

    


    “UCC”
means
      the Uniform Commercial Code as in effect from time to time in the State of
      New
      York; provided, that if by reason of mandatory provisions of law, the perfection
      or the effect of non-perfection of the Liens on any Collateral is governed
      by
      the Uniform Commercial Code as in effect in a jurisdiction other than New York,
      “UCC”
means
      the Uniform Commercial Code as in effect in such other jurisdiction for purposes
      of the provisions hereof relating to such perfection or effect of perfection
      or
      non-perfection. 

    


    “United
      States”
means
      the United States of America.

    


    “U.S.
      Lender Party”
means
      each of the Agent, each Lender and each participant, in each case that is a
      Domestic Person.

    


    
      
        
        

      

      
        73