Document:

Form of Series D Warrant issued by the Company

 EXHIBIT 10.7 
  
 FORM OF SERIES D WARRANT 
  
 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 
  
 THE WET SEAL, INC. 
  
 WARRANT TO PURCHASE CLASS A COMMON STOCK 
  
 Warrant No.:
                      
 Number of Shares of
Class A Common Stock:                      
 Date
of Issuance: [                         , 2005]1 (“Issuance Date”) 
  
 The Wet Seal, Inc., a Delaware corporation (the “Company”),
hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [S.A.C. CAPITAL ASSOCIATES, LLC] [OTHER BUYERS], the registered holder hereof or its permitted assigns
(the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Class A Common Stock (including any
Warrants to Purchase Class A Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York Time, on the Expiration Date (as
defined below),                     
(                    )2 fully paid nonassessable shares of Class A Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section
15. This Warrant is one of the Warrants to Purchase Class A Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of November 9, 2004 (the “Subscription
Date”), by and among 
  

	1	WARRANTS WILL BE ISSUED UPON RECEIPT OF STOCKHOLDER APPROVAL (AS DEFINED IN THE SECURITIES PURCHASE AGREEMENT). 

  

	2	INSERT HOLDER’S PORTION OF D WARRANTS SET FORTH IN COLUMN (5) ON THE SCHEDULE OF BUYERS TO THE SECURITIES PURCHASE AGREEMENT: 

  
 SERIES D WARRANTS – EXERCISABLE INTO 3,400,000 SHARES OF COMMON STOCK).

  

 the Company and the investors (the “Buyers”) referred to therein (the “Securities Purchase
Agreement”). 
  
 1. EXERCISE OF WARRANT.

  
 (a) Mechanics of Exercise. Subject to
the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date, in whole or in part, by (i) delivery of a
written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or wire transfer of immediately available funds to an account designated by the Company or (B) by
notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant
Shares. On or before the first Business Day following the date on which the Company has received each of the Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the “Exercise Delivery Documents”),
the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third Business Day
following the date on which the Company has received all of the Exercise Delivery Documents (the “Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Class A Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Class A Common Stock to which the Holder is entitled pursuant to such
exercise. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or notification to the Company of a Cashless Exercise referred to in Section 1(d), the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted
in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company
shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Class A Common Stock are to be issued upon the exercise of this Warrant,
but rather the number of shares of Class A Common Stock to be issued shall be 

  

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rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant. 
  
 (b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means US $2.75, subject to adjustment as provided herein. 
  
 (c) Company’s Failure to Timely Deliver Securities. Subject to Section 1(f), if the Company shall fail for any reason
or for no reason to issue to the Holder within three (3) Business Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of Class A Common Stock to which the Holder is entitled and register such shares of Class A
Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for such number of shares of Class A Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant, then, in
addition to all other remedies available to the Holder, the Company shall pay in cash to the Holder on each day after such third Business Day that the issuance of such shares of Class A Common Stock is not timely effected an amount equal to 1.5% of
the product of (A) the sum of the number of shares of Class A Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of the shares of Class A Common Stock on the Trading Day
immediately preceding the last possible date which the Company could have issued such shares of Class A Common Stock to the Holder without violating Section 1(a). In addition to the foregoing, if within three (3) Trading Days after the
Company’s receipt of the facsimile copy of a Exercise Notice the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Class A Common Stock on the Company’s share register or credit the
Holder’s balance account with DTC for the number of shares of Class A Common Stock to which the Holder is entitled upon such holder’s exercise hereunder, and if on or after such Trading Day the Holder purchases (in an open market
transaction or otherwise) shares of Class A Common Stock to deliver in satisfaction of a sale by the Holder of shares of Class A Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a
“Buy-In”), then the Company shall, within three Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Class A Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Class A Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Class A Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Class A Common Stock, multiplied by (B) the Closing Bid Price on the date of exercise. 
  
 (d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, if a Registration Statement (as defined in
the Registration Rights Agreement) covering the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its
sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net 

  

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Number” of shares of Class A Common Stock determined according to the following formula (a “Cashless Exercise”): 
  

			
	 Net Number =
	 	(A x B) - (A x C)
		
	 	 	 B

  
 For
purposes of the foregoing formula: 
  
 A= the total number of
shares with respect to which this Warrant is then being exercised. 
  
 B= the Closing Sale Price of the shares of Class A Common Stock (as reported by Bloomberg) on the date immediately preceding the date of the Exercise Notice. 
  
 C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise. 
  
 (e) Disputes. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 12.

  
 (f) Limitations on Exercises.

  
 (i) Beneficial Ownership. The Company
shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such exercise, such Person (together with such Person’s affiliates) would beneficially
own in excess of 9.99% (the “Conversion Limitation”) of the shares of Class A Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Class
A Common Stock beneficially owned by such Person and its affiliates shall include the number of shares of Class A Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall
exclude shares of Class A Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company beneficially owned by such Person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion
or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. For purposes of this Warrant, in determining the number of outstanding shares of Class A Common Stock, the Holder may rely on the number of outstanding shares of Class A Common Stock as reflected in (1) the Company’s most
recent Form 10-K or 10-Q or any Current Report on Form 8-K filed subsequent thereto or other public filing with the Securities and Exchange Commission, (2) a more recent public announcement by the Company or (3) any other notice by the Company or
the Transfer Agent setting forth the number of shares of Class A Common Stock outstanding. For any reason at any 

  

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time, upon the written or oral request of the Holder, the Company shall within three Business Days confirm orally and in writing to the Holder the number of
shares of Class A Common Stock then outstanding. In any case, the number of outstanding shares of Class A Common Stock shall be determined after giving effect to the issuance of the SPA Securities and the conversion or exercise of securities of the
Company, including the SPA Warrants, by the Holder and its affiliates since the date as of which such number of outstanding shares of Class A Common Stock was reported. By written notice to the Company, any Holder may increase or decrease the
Conversion Limitation to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder sending such notice and not to any other holder of SPA Warrants. 
  
 2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time to
time as follows: 
  
 (a) Adjustment upon
Issuance of shares of Class A Common Stock. If and whenever on or after the Subscription Date the Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Class A Common Stock
(including the issuance or sale of shares of Class A Common Stock owned or held by or for the account of the Company, but excluding shares of Class A Common Stock deemed to have been issued by the Company in connection with any Excluded Securities)
for a consideration per share (the “New Securities Issuance Price”) less than a price (the “Applicable Price”) equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale
(the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Securities Issuance Price. For purposes of determining the
adjusted Exercise Price under this Section 2(a), the following shall be applicable: 
  
 (i) Issuance of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of
shares of Class A Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of
shares of Class A Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 2(a)(i), the
“lowest price per share for which one share of shares of Class A Common Stock is issuable upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities” shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with respect to any one share of shares of Class A Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange of
any Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price or number of Warrant Shares shall be made upon the actual issuance of such shares of Class A Common Stock or of such Convertible Securities
upon the exercise of such Options or upon the actual issuance of such shares of Class A Common Stock upon conversion, exercise or exchange of such Convertible Securities. 
  

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 (ii) Issuance of Convertible Securities. If the Company in any manner issues or
sells any Convertible Securities and the lowest price per share for which one share of shares of Class A Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable Price, then such share of shares of Class
A Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii), the
“lowest price per share for which one share of shares of Class A Common Stock is issuable upon the conversion, exercise or exchange” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to one share of shares of Class A Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security. No further adjustment of the Exercise Price or number
of Warrant Shares shall be made upon the actual issuance of such shares of Class A Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise
of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(a), no further adjustment of the Exercise Price or number of Warrant Shares shall be made by reason of such issue or
sale. 
  
 (iii) Change in Option Price or Rate
of Conversion. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are
convertible into or exercisable or exchangeable for shares of Class A Common Stock increases or decreases at any time, the Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the
Exercise Price and the number of Warrant Shares which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased
conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Warrant are
increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Class A Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to
have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect or a decrease in the number of Warrant
Shares. 
  
 (iv) Calculation of Consideration
Received. In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties
thereto, the Options will be deemed to have been issued for a consideration of $0.01. If any shares of Class A Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount received by the Company therefor. If any shares of Class A Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration
received by the Company will be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Closing Sale Price 

  

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of such security on the date of receipt. If any shares of Class A Common Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as
is attributable to such shares of Class A Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Required Holders. If
such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5) Business Days
after the tenth day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest error
and the fees and expenses of such appraiser shall be borne by the Company. 
  
 (v) Record Date. If the Company takes a record of the holders of shares of Class A Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in shares of Class A
Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares of Class A Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of Class
A Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 
  
 (vi) This Warrant Deemed Outstanding. If during the
period beginning on and including the Subscription Date and ending on the date immediately preceding the Issuance Date, the Company entered into, or in accordance with Section 2(a) would have been deemed to have entered into (had this Warrant been
outstanding at such time), any Dilutive Issuance, then solely for purposes of determining any adjustment under this Section 2(a) as a result of such Dilutive Issuance or deemed Dilutive Issuance, this Warrant shall be deemed to have been outstanding
at the time of each such Dilutive Issuance or deemed Dilutive Issuance.] 
  
 (b) Adjustment upon Subdivision or Combination of shares of Class A Common Stock. If the Company at any time on or after the
Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Class A Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) one or more
classes of its outstanding shares of Class A Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination becomes effective. 
  
 (c) Other Events. If any event occurs of the type contemplated by the provisions of this Section
2 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with 

  

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equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares so as
to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

  
 3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company
shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Class A Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash,
stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this
Warrant, then, in each such case: 
  
 (a) any
Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Class A Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of
business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid Price of the shares of Class A Common Stock on the Trading Day immediately preceding such record
date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of shares of Class A Common Stock, and (ii) the denominator shall be the Closing Bid Price of the shares of Class
A Common Stock on the Trading Day immediately preceding such record date; and 
  
 (b) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Class A Common Stock obtainable immediately prior to the close of business on the record date fixed for the
determination of holders of shares of Class A Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in the event that the Distribution is of
shares of Class A Common Stock (or common stock) (“Other Shares of Class A Common Stock”) of a company whose common shares are traded on a national securities exchange or a national automated quotation system, then the Holder may
elect to receive a warrant to purchase Other Shares of Class A Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into
the number of shares of Other Shares of Class A Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price
equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the number of Warrant Shares calculated in accordance
with the first part of this paragraph (b). 
  
 4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS. 
  
 (a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro
rata to the record holders of any class of shares of Class A Common Stock (the “Purchase Rights”), then the 

  

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Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the number of shares of Class A Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Class A Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. 
  
 (b) Fundamental Transactions. The Company shall not
enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
(4)(b) pursuant to written agreements in form and substance satisfactory to the Required Holders and approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each holder of Warrants in exchange
for such Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for the shares of Class
A Common Stock reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares of Class A Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and satisfactory to the Required Holders and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose
common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise
of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of the Class A Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such
Fundamental Transaction had this Warrant been converted immediately prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to
the consummation of any Fundamental Transaction pursuant to which holders of shares of Class A Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Class A Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the Fundamental Transaction but prior to the
Expiration Date, in lieu of the shares of the Class A Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive 

  

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upon the happening of such Fundamental Transaction had the Warrant been exercised immediately prior to such Fundamental Transaction. Provision made pursuant
to the preceding sentence shall be in a form and substance reasonably satisfactory to the Required Holders. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and Corporate Events. Provision made
pursuant to the preceding sentence shall be in a form and substance satisfactory to the Required Holders. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be
applied without regard to any limitations on the exercise of this Warrant. 
  
 5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, By-laws or through any reorganization, transfer of assets,
consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith
carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Class A
Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Class A Common Stock upon the exercise of this Warrant. The Company shall, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares
of Class A Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, 100% of the number of shares of Class A Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding
(without regard to any limitations on exercise). 
  
 6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or
any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding
this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders. 
  
 7. REISSUANCE OF WARRANTS. 
  
 (a) Transfer of Warrant. If this Warrant is to be
transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith 

  

 - 10 - 

 
issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the
right to purchase the number of Warrant Shares being transferred by the Holder and, if less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the
Holder representing the right to purchase the number of Warrant Shares not being transferred. 
  
 (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of
this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant. 
  
 (c) Exchangeable for Multiple Warrants. This Warrant
is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares
of Class A Common Stock shall be given. 
  
 (d)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new
Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the
number of shares of Class A Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the
face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant. 
  
 8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such
adjustment and (ii) at least fifteen days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Class A Common Stock, (B) with respect to any grants, issuances
or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Class A Common Stock or (C) for determining rights to vote with respect to any Fundamental 

  

 - 11 - 

 
Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such
notice being provided to the Holder. 
  
 9. AMENDMENT AND
WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders; provided that no such action may increase the exercise price of any SPA Warrant or decrease the number of shares or class of stock obtainable upon exercise of any SPA Warrant without the written consent
of the Holder. No such amendment shall be effective to the extent that it applies to less than all of the holders of the SPA Warrants then outstanding. 
  
 10. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. 
  
 11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Buyers and shall not be construed against
any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. 
  
 12. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the
Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted to the
Holder, then the Company shall, within two Business Days thereafter submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation,
as the case may be, shall be binding upon all parties absent demonstrable error. 
  
 13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other
Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder right to pursue actual damages for any failure by the Company to comply
with the terms of this Warrant. The Company acknowledges that a 

  

 - 12 - 

 
breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being required. 
  
 14. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be required by Section 2(f) of the Securities Purchase Agreement. 
  
 15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings: 
  
 (a)
“Approved Stock Plan” means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer or director for services
provided to the Company. 
  
 (b)
“Bloomberg” means Bloomberg Financial Markets. 
  
 (c) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
  
 (d) “Class A Common Stock” means (i) the
Company’s shares of Class A Common Stock, par value $0.10 per share, and (ii) any share capital into which such Class A Common Stock shall have been changed or any share capital resulting from a reclassification of such Class A Common Stock.

  
 (e) “Closing Bid Price” and
“Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market
begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York
Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the 

  

 - 13 - 

 
Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12. All such
determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period. 
  
 (f) “Convertible Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Class A Common Stock. 
  
 (g) “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., the American Stock Exchange or The
Nasdaq SmallCap Market. 
  
 (h)
“Expiration Date” means [                    ]3 or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the
next date that is not a Holiday. 
  
 (i)
“Excluded Securities” means any shares of Class A Common Stock issued or issuable: (i) in connection with any Approved Stock Plan; (ii) upon exercise of the SPA Warrants; (iii) upon conversion of the SPA Securities; (iv) pursuant to
a bona fide firm commitment underwritten public offering with a nationally recognized underwriter which generates gross proceeds to the Company in excess of $35,000,000 (other than an “at-the-market offering” as defined in Rule 415(a)(4)
under the 1933 Act and “equity lines”); and (v) upon conversion of any Options or Convertible Securities which are outstanding on the day immediately preceding the Subscription Date, provided that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the Subscription Date. 
  
 (j) “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions,
(i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to
another Person, or (iii) allow another Person to make a purchase offer, tender offer or exchange offer that is accepted by the holders of more than the 50% of the Company’s outstanding voting securities (but excluding any voting securities held
by the Person or Persons making or party to, or any Person(s) associated or affiliated with such Person or Persons making or party to, such purchase offer, tender offer or exchange offer), or (iv) enter into a stock purchase agreement or other
agreement to effect any other business combination (including, without limitation, a reorganization, recapitalization or spin-off) with another Person or Persons, whereby more than 50% of the Company’s outstanding voting securities are acquired
by such Person or Persons (excluding any voting securities of the Company held by such Person or Persons making or party to, or any Person(s) associated or affiliated with such Person or Persons making or party to, such stock purchase agreement or
other agreement to effect such other business combination), or (v) changed the members constituting its Board of Directors such that the individuals who constituted the Board of Directors on the Subscription Date or other governing body of the
Company (together with any new directors whose election to such Board of Directors or whose nomination for election by the stockholders of the Company was approved 
  

	3	FOR SERIES D WARRANTS, INSERT DATE THAT IS 5 YEARS FROM ISSUANCE DATE. 

  

 - 14 - 

 by a vote of 662/3% of the directors then still in office who were either directors
on the Subscription Date or whose election or nomination for election was previously so approved), cease for any reason to constitute a majority of such Board of Directors then in office, or (vi) reorganize, recapitalize or reclassify its Common
Stock. 
  
 (k) “Options” means
any rights, warrants or options to subscribe for or purchase shares of Class A Common Stock or Convertible Securities. 
  
 (l) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of
consummation of the Fundamental Transaction. 
  
 (m) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

  
 (n) “Principal Market” means
the Nasdaq National Market. 
  
 (o)
“Registration Rights Agreement” means that certain registration rights agreement by and among the Company and the Buyers. 
  
 (p) “Required Holders” means the holders of the SPA Warrants representing at least a majority of shares of Class A Common
Stock underlying the SPA Warrants then outstanding. 
  
 (q) “SPA Securities” means the Notes issued pursuant to the Securities Purchase Agreement. 
  
 (r) “Successor Entity” means the Person (or, if so elected by the Required Holders, the Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction shall have been entered into. 
  
 (s) “Trading Day” means any day on which
the Class A Common Stock are traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock are then
traded; provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final
hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time). 
  
 [Signature Page Follows] 
  

 - 15 - 

 IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Class A Common Stock to be
duly executed as of the Issuance Date set out above. 
  

			
	THE WET SEAL, INC.
		
	By:	 	 

			
	 Name:
	 	 
	 Title:
	 	 

  

  
 EXHIBIT A 

 
 EXERCISE NOTICE 
  
 TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS 
 WARRANT TO PURCHASE CLASS A COMMON STOCK 
  
 THE WET SEAL, INC. 
  
 The undersigned holder hereby exercises the right to purchase
                     of the shares of Class A Common Stock (“Warrant Shares”) of The Wet Seal, Inc., a Delaware corporation
(the “Company”), evidenced by the attached Warrant to Purchase Class A Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the
Warrant. 
  
 1. Form of Exercise Price. The Holder intends that
payment of the Exercise Price shall be made as: 
  
                      a “Cash Exercise” with respect to
                                 Warrant Shares; and/or 
  
                      a “Cashless Exercise” with respect to
                             Warrant Shares. 
  
 2. Payment of Exercise Price. In the event that the holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$                     to the Company in accordance with the terms of the Warrant. 
  
 3. Delivery of Warrant Shares. The Company shall deliver to the holder
                     Warrant Shares in accordance with the terms of the Warrant. 
  
 Date:                     
    ,          
  

	
	
	  
	 Name of Registered Holder

  

			
		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

  

  
 ACKNOWLEDGMENT

  
 The Company hereby acknowledges this Exercise Notice and
hereby directs Wells Fargo Bank, N.A. to issue the above indicated number of shares of Class A Common Stock in accordance with the Transfer Agent Instructions dated November     , 2004 from the Company and acknowledged and
agreed to by Wells Fargo Bank, N.A. 
  

			
	THE WET SEAL, INC.
		
	 By:
	 	 
	 	 	 Name:

	 	 	 Title:Form of Series A AIR Warrant issued by the Company

 EXHIBIT 10.8 
  
 FORM OF SERIES A ADDITIONAL INVESTMENT RIGHT WARRANT 
  
 NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 
  
 THE WET SEAL, INC. 
  
 SERIES A ADDITIONAL INVESTMENT RIGHT WARRANT 
  
 Series A Additional Investment Right Warrant –No.:
                     
 Principal Amount of
Additional Notes:                      
 Date of
Issuance:         , 2005 (“Issuance Date”) 
  
 The Wet Seal, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, the receipt and sufficiency of which are hereby acknowledged, [S.A.C. CAPITAL ASSOCIATES,
LLC][OTHER BUYERS], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below to purchase from the Company, at the Exercise Price (as defined below) then in effect, at
any time or times on or after the date hereof, but not after 11:59 P.M., New York Time, on the Expiration Date (as defined below), up to a total of $            1, in principal amount of Additional Series A Notes (as defined in the Securities Purchase Agreement (as defined below)). Except
as otherwise defined herein, capitalized terms in this Additional Investment Right Warrant shall have the meanings set forth in Section 12 or in that certain Securities Purchase Agreement, dated as of November 9, 2004, by and among the Company and
the buyers referred to therein, including the Holder (the “Securities Purchase Agreement”). This Series A Additional Investment Right Warrant (including all Series A Additional Investment Right Warrants issued in exchange, transfer
or replacement hereof, each an “AIR” and collectively, the “AIRs”) is one of the Additional Investment Right Warrants (as defined in the Securities Purchase Agreement) issued pursuant to Section 1 of the Securities
Purchase Agreement. 
  

	1	Insert an amount up to the amount set forth opposite such Buyer's name in column 4 of the
Schedule of Buyers set forth in the Securities Purchase Agreement. 

 1. EXERCISE OF AIR. 
  
 (a) Mechanics of Exercise. Subject to the terms and conditions hereof, this AIR may be exercised by
the Holder hereof in amounts equal to at least 10% of the Principal Amount of Additional Notes set forth in the heading hereto (or the entire remaining, unexercised portion of this AIR if less) on any day beginning after the date hereof and ending
on and including the date which is _____ 2 (the “Expiration Date”), in whole or in part, by (i)
delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of such Holder’s election to exercise this AIR and (ii) payment to the Company of an amount equal to $1.00 for each $1.00 of
principal amount of Additional Series A Notes as to which this AIR is being exercised (the “Exercise Price”) in cash or wire transfer of immediately available funds. The date the Exercise Notice and the Exercise Price are delivered
to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder of this AIR shall not be required to deliver the original AIR in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice with respect to less than all of the Additional Series A Notes shall have the same effect as cancellation of the original AIR and issuance of a new AIR evidencing the right to purchase the remaining principal amount
of Additional Series A Notes. On or before the first Business Day following the Exercise Date, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice and the Exercise Price to the Holder hereof.
On or before the third Business Day following the Exercise Date, the Company shall issue and deliver to the address as specified in the Exercise Notice an Additional Series A Note, for the account of such Buyer as such Buyer shall instruct, in the
principal amount as to which the Holder of this AIR is entitled pursuant to such exercise. On the Exercise Date, the Holder of this AIR shall be deemed for all corporate purposes to have become the Holder of record of the Additional Series A Note
with respect to which this AIR has been exercised, irrespective of the date of delivery of such Additional Note. Upon surrender of this AIR to the Company following one or more partial exercises, the Company shall as soon as practicable and in no
event later than three Business Days after receipt of the AIR and at its own expense, issue a new AIR (in accordance with Section 4(d)) representing the right to purchase the principal amount of Additional Series [A][B] Notes purchasable immediately
prior to such exercise under this AIR, less the principal amount of Additional Series A Notes with respect to which this AIR is exercised. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of
Additional Series A Notes upon exercise of this AIR. 
  
 (b) Company’s Failure to Timely Deliver Additional Notes. If the Company shall fail for any reason or for no reason to issue or cause to be issued to the Holder within three (3) Business Days of the Exercise Date, Additional
Notes, the Company shall pay as additional damages in cash to such Holder on each day after such third Business Day that the issuance of such Additional Notes is not timely effected an amount equal to 1.5% of the principal amount of the Additional
Notes into which this AIR is exercisable. 
  
 (c)
Absolute and Unconditional Obligation. The Company’s obligations to issue and deliver Additional Notes in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce
the same, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the 
  

	2	Insert for Series A Additional Investment Right Warrants five years from Issuance Date.

  

 - 2 - 

 Holder or any other Person of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver Additional Notes upon exercise of the AIR as required pursuant to the terms hereof. 
  
 (d) Forced Exercise By Company. 
  
 (i) Notwithstanding the foregoing, if at any time from and after the
            3 and prior to the thirty-six month
anniversary of the Issuance Date, the Conditions to Forced Exercise (as defined below) shall have been satisfied on each day during the period commencing on the Forced Exercise Notice Date and ending on the Forced Exercise Date (each, as defined
below), the Company shall have the right to require the Holder to exercise all or a portion of this AIR as designated in the Forced Exercise Notice (as defined below) into Series A Additional Notes in accordance with Section 1(a) hereof at the
Forced Exercise Price (as defined below) as of the Forced Exercise Date (as defined below) (a “Forced Exercise”). The Company may exercise its right to require exercise under this Section 1(d) by delivering within not more
than two (2) Trading Days following the end of the applicable Measuring Period (as defined below) a written notice thereof by facsimile and overnight courier to all, but not less than all, of the holders of AIRs and the Transfer Agent (the
“Forced Exercise Notice” and the date all of the holders received such notice by facsimile is referred to as the “Forced Exercise Notice Date”). The Forced Exercise Notice shall be irrevocable. The Company shall
make a public announcement with respect to the Forced Exercise Notice on the Forced Exercise Notice Date. The Forced Exercise Notice shall state (i) the Business Day selected for the Forced Exercise, which Business Day shall be at least twenty (20)
Business Days but not more than forty (40) Business Days following the Forced Exercise Notice Date (the “Forced Exercise Date”), and (ii) the amount of Additional Series A Notes for which such Forced Exercise shall be applicable.
Upon a Forced Exercise, the Holder shall be deemed to have delivered an Exercise Notice pursuant to Section 1(a) and the Holder shall be deemed to have delivered the Exercise Delivery Documents as provided in Section 1(a) on the Forced Exercise
Notice Date. 
  
 (ii) If the Company elects to
cause a Forced Exercise of any portion of this AIR pursuant to Section 1(d)(i), then it must simultaneously take the same action in the same proportion with respect to the other Series A Additional Investment Rights Warrants which provide for
the Company’s right to a Forced Exercise. If the Company has elected a Forced Exercise, the mechanics of exercise set forth in Section 1(a) shall apply, to the extent applicable, as if the Company had received from the Holder on the
Forced Exercise Date the Exercise Delivery Documents. 
  
 (iii) For purposes of this Section 1(d), the following definitions shall apply: 
  
 (A) “Conditions to Forced Exercise” means that each of the following conditions have been met: (i) on each day during
the period beginning three (3) 
  

	3	Insert for Series A Additional Investment Right Warrants six months from Issuance Date. 

  

 - 3 - 

 months prior to the applicable Forced Exercise Date (such period, the “Measuring
Period”), either (x) the Registration Statement filed pursuant to the Registration Rights Agreement shall be effective and available for the resale of all remaining Registrable Securities in accordance with the terms of the Registration
Rights Agreement and there shall not have been any Grace Periods (each as defined in the Registration Rights Agreement) or (y) all shares of Common Stock issuable upon conversion of the Series A Additional Notes shall be eligible for sale under Rule
144(k); (ii) on each day during the Measuring Period, the Class A Common Stock is designated for quotation on the Principal Market and shall not have been suspended from trading on such exchange or market (other than suspensions of not more than one
(1) day and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by such exchange or market been threatened or pending either (A) in writing by such exchange or
market or (B) by falling below the minimum listing maintenance requirements of such exchange or market; (iii) during the Measuring Period, the Company shall not have failed to timely make any payments within five (5) Business Days of when such
payment is due pursuant to any Notes and any other Transaction Documents; (iv) during the Measuring Period, there shall not have occurred either (A) the public announcement of a pending, proposed or intended Fundamental Transaction (as defined in
the Notes) which has not been abandoned, terminated or consummated or (B) an Event of Default under the Notes or an event that with the passage of time or giving of notice would constitute an Event of Default under the SPA Securities; (v) the
Company shall have no knowledge of any fact that would cause any one of the following: (vi) the Registration Statements required pursuant to the Registration Rights Agreement not to be effective and available for the resale of all remaining
Registrable Securities in accordance with the terms of the Registration Rights Agreement or (y) any shares of Class A Common Stock issuable upon conversion of the SPA Securities not to be eligible for sale without restriction pursuant to Rule 144(k)
and any applicable state securities laws; and (vii) the Company otherwise shall have been in material compliance with and shall not have materially breached any provision, covenant, representation or warranty of any Transaction Document. 

 
 2. NONCIRCUMVENTION. The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or through any Fundamental Transaction, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of
this AIR, and will at all times in good faith carry out all the provisions of this AIR and take all action as may be required to protect the rights of the Holder of this AIR. 
  
 3. REISSUANCE OF AIRS. 
  
 (a) Transfer of AIR. If this AIR is to be transferred, the Holder shall surrender this AIR to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder of this AIR a new AIR (in accordance with Section 3(d)), registered as the Holder of this AIR may request, representing the right to purchase the principal amount of Additional Notes
being transferred by the Holder and, if less then the total number of Additional Notes then underlying this AIR is being transferred, a new AIR (in accordance with Section 3(d)) to the Holder of this AIR representing the right to purchase the
principal amount of Additional Notes not being transferred. 
  

 - 4 - 

 (b) Lost, Stolen or Mutilated AIR. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this AIR, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder of this AIR to the Company in customary form and, in
the case of mutilation, upon surrender and cancellation of this AIR, the Company shall execute and deliver to the Holder a new AIR (in accordance with Section 3(d)) representing the right to purchase the principal amount of Additional Notes then
underlying this AIR. 
  
 (c) AIR Exchangeable
for Multiple AIRs. This AIR is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new AIR or AIR (in accordance with Section 3(d)) representing in the aggregate the right to purchase the principal
amount of Additional Notes then underlying this AIR, and each such new AIR will represent the right to purchase such principal amount of such Additional Notes as is designated by the Holder of this AIR at the time of such surrender. 
  
 (d) Issuance of New AIR. Whenever the Company is
required to issue a new AIR pursuant to the terms of this AIR, such new AIR (i) shall be of like tenor with this AIR, (ii) shall represent, as indicated on the face of such new AIR, the right to purchase the principal amount of Additional Notes then
underlying this AIR (or in the case of a new AIR being issued pursuant to Section 4(a) or Section 4(c), the principal amount of Additional Notes designated by the Holder of this AIR which, when added to the principal amount of Additional Notes
underlying the other new AIR issued in connection with such issuance, does not exceed the principal amount of Additional Notes then underlying this AIR), (iii) shall have an issuance date, as indicated on the face of such new AIR which is the same
as the Issuance Date, and (iv) shall have the same rights and conditions as this AIR. 
  
 4. COVENANTS. Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York Time, on the second Business Day following each Exercise Date, the Company shall file a Current
Report on Form 8-K describing the terms of the transactions contemplated by the exercise of this AIR in the form required by the 1934 Act. On the Exercise Date, the Company shall inform any exercising Holder whether or not the representations and
warranties of the Company set forth in the Securities Purchase Agreement are true and correct as of such Exercise Date as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall
have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents (as defined in the Securities Purchase Agreement) to be performed, satisfied or complied with by the Company
at or prior to such Exercise Date. 
  
 5. NOTICES. Whenever
notice is required to be given under this AIR, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder of this AIR with prompt written
notice of all actions taken pursuant to this AIR, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder of this AIR
at least fifteen days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grants, issues or sales of any Options (as defined in the
Additional Notes), Convertible Securities (as defined in the 

  

 - 5 - 

 
Additional Notes) or rights to purchase stock, warrants, securities or other property to Holders of Common Stock or (C) for determining rights to vote with
respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to such Holder. 
  
 6. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this AIR may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Required Holders; provided
that no such action may increase the exercise price of any AIRs or decrease the principal amount of Additional Notes obtainable upon exercise of any AIRs without the written consent of the Holder of this AIR. No such amendment shall be effective to
the extent that it applies to less than all of the Holders of the AIRs then outstanding. 
  
 7. GOVERNING LAW. This AIR shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this AIR shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. 
  
 8. CONSTRUCTION;
HEADINGS. This AIR shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof. The headings of this AIR are for convenience of reference and shall not form part of, or
affect the interpretation of, this AIR. 
  
 9. REMEDIES, OTHER
OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this AIR shall be cumulative and in addition to all other remedies available under this AIR, the Securities Purchase Agreement and the other Transaction Documents (as defined
in the Securities Purchase Agreement), at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder of this AIR to pursue actual damages for any failure by
the Company to comply with the terms of this AIR. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder of this AIR and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened breach, the Holder of this AIR shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being required. 
  
 10. TRANSFER. This AIR may be offered for sale, sold, transferred or assigned without the consent of the Company. 
  

 - 6 - 

 11. CERTAIN DEFINITIONS. For purposes of this AIR, the following terms shall have the following
meanings: 
  
 (a) “Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
  
 (b) “Common Stock” means (i) the Company’s common stock, par value $0.10 per share, and (ii) any capital stock into
which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. 
  
 (c) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any department or agency thereof. 
  
 (d) “Registration Rights Agreement” means that certain registration rights agreement dated as of the Closing Date (as
defined in the Securities Purchase Agreement) by and among the Company and the Purchasers. 
  
 [Signature Page Follows] 
  

 - 7 - 

 IN WITNESS WHEREOF, the Company has caused this AIR to be duly executed as of the Issuance Date
set out above. 
  

			
	THE WET SEAL, INC.
		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

  
 EXHIBIT A 

 
 EXERCISE NOTICE 
  
 TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS 
 ADDITIONAL INVESTMENT RIGHT WARRANTY 
  
 THE WET SEAL, INC. 
  

	To:	Wet Seal 

  
 The undersigned is the holder of Series A Additional Investment Right Warrant No.              (the “AIR”) issued by The Wet Seal,
Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the AIR. 
  
 1. The AIR is currently exercisable to purchase a total of
$             principal amount of Additional Series A Notes. 
  
 2. The undersigned holder hereby exercises its right to purchase $            
principal amount of Additional Series A Notes pursuant to the AIR. 
  
 3. The holder shall pay the sum of $                                 to
the Company in accordance with the terms of the AIR. 
  
 4.
Pursuant to this exercise, the Company shall deliver to the holder $             principal amount of Additional Series A Notes in accordance with the terms of the AIR. 
  
 5. Following this exercise, the AIR shall be exercisable to purchase a total
of $             principal amount of Additional Series A Notes. 
  
 Please issue the Additional Series A Notes in the following name and to the following address: 
  

			
	 Issue to:
	  	 
		
	 	  	 
		
	 	  	 

			
	 Date:
                         ,
            

	
	 
	 	 	 Name of Registered Holder

		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

  
 FORM OF ASSIGNMENT

  
 [To be completed and signed only upon transfer of AIR]

  
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto                                  the right represented by the
within AIR to purchase $             principal amount of Additional Series A Notes of The Wet Seal, Inc. to which the within AIR relates and appoints
                                 attorney to transfer said right on the books of
The Wet Seal, Inc. with full power of substitution in the premises. 
  
 Dated:
                            ,          
  

	
	
	 
	(Signature must conform in all respects to name of holder as specified on the face of the AIR)
	
	 
	Address of Transferee
	
	 
	
	 

  

	
	In the presence of:

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