Document:

Debtor-in-Possession Loan Agreement

 EXHIBIT 10.2 
 DEBTOR-IN-POSSESSION LOAN AGREEMENT 
 by and among 
 REDENVELOPE, INC. 
 as Borrower 
 GRANITE CREEK PARTNERS AGENT, LLC 
 as Agent

 and 
 the other Parties Hereto
from Time to Time 
 as Lenders 
 Dated: April 17, 2008 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE 1 DEFINITIONS, CONSTRUCTION AND RATIFICATION
	  	2
	 1.1
	  	 Terms
	  	2
	 1.2
	  	 Interpretation
	  	13
	 1.3
	  	 Exhibits
	  	14
	 1.4
	  	 UCC
	  	14
	 ARTICLE 2 ADVANCES AND TERMS OF PAYMENT
	  	15
	 2.1
	  	 Advance Commitments; Advances; Advance Limit; Increase to Advance Limit; Use of Proceeds
	  	15
	 2.2
	  	 Authorization to Make Advances
	  	15
	 2.3
	  	 Interest
	  	16
	 2.4
	  	 Principal Repayment
	  	16
	 2.5
	  	 Lender Fees
	  	17
	 2.6
	  	 Agent Fees
	  	18
	 2.7
	  	 Term and Renewal Date
	  	18
	 ARTICLE 3 CONDITIONS TO ADVANCES
	  	18
	 3.1
	  	 Conditions Precedent to Effective Date
	  	18
	 3.2
	  	 Conditions Precedent to Each Advance
	  	20
	 3.3
	  	 Post Closing Deliveries and Actions.
	  	21
	 ARTICLE 4 SUPERPRIORITY NATURE OF OBLIGATIONS, GRANT OF SECURITY INTEREST AND PRIORITY OF LIENS
	  	21
	 4.1
	  	 Grant of Security Interest
	  	21
	 4.2
	  	 Security for Obligations
	  	23
	 4.3
	  	 Superpriority Nature of Obligations; Priming Lien
	  	23
	 4.4
	  	 Financing Statements
	  	24
	 4.5
	  	 Agent Appointed Attorney-in-Fact
	  	24
	 ARTICLE 5 REPRESENTATIONS AND WARRANTIES
	  	25
	 5.1
	  	 Due Incorporation and Qualification
	  	25
	 5.2
	  	 Due Authorization
	  	25
	 5.3
	  	 Location of Inventory and Equipment
	  	25
	 5.4
	  	 Relocation of Chief Executive Office
	  	25
	 5.5
	  	 Permits and Licenses
	  	25
	 5.6
	  	 Due Execution; Binding Obligation
	  	25
	 5.7
	  	 The Orders
	  	26
	 5.8
	  	 Compliance with Articles; Bylaws
	  	26
	 5.9
	  	 Accuracy of Information and No Material Adverse Change in Financial Statements
	  	26
	 5.10
	  	 Use of Proceeds
	  	27
	 5.11
	  	 Defaults and Events of Default
	  	27
	 5.12
	  	 Administrative Expenses and Lien
	  	27
	 5.13
	  	 Reliance by Agent and Lenders; Cumulative
	  	27
	 5.14
	  	 Right to Inspect
	  	27
	 5.15
	  	 Title to Assets; Liens
	  	28
	 5.16
	  	 SBA License Application and Related Requirements
	  	28
	 5.17
	  	 Small Business Administration Documentation
	  	28
	 5.18
	  	 Small Business Concern
	  	29

  

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	 ARTICLE 6 AFFIRMATIVE COVENANTS
	  	29
	 6.1
	  	 Notices and Other Reports
	  	29
	 6.2
	  	 Tax Returns, Receipts
	  	30
	 6.3
	  	 Title to Equipment
	  	30
	 6.4
	  	 Maintenance of Equipment
	  	30
	 6.5
	  	 Taxes
	  	30
	 6.6
	  	 Insurance
	  	30
	 6.7
	  	 Compliance With Law
	  	31
	 6.8
	  	 Compliance with Bankruptcy Court
	  	31
	 6.9
	  	 Cash Management System and Collateral Account
	  	31
	 6.10
	  	 Schedule of Financial Affairs
	  	31
	 6.11
	  	 Use of Cash Collateral
	  	31
	 6.12
	  	 Delivery of Copy of Financing Order
	  	31
	 6.13
	  	 Sale Process
	  	31
	 6.14
	  	 Prior Notice of Filings
	  	31
	 ARTICLE 7 NEGATIVE COVENANTS
	  	32
	 7.1
	  	 Extraordinary Transactions and Disposal of Assets
	  	32
	 7.2
	  	 Guaranty
	  	32
	 7.3
	  	 Restructure
	  	32
	 7.4
	  	 Payments
	  	32
	 7.5
	  	 Investments, Loans and Advances
	  	32
	 7.6
	  	 Capital Expenditures
	  	32
	 7.7
	  	 Accounting Methods
	  	33
	 7.8
	  	 Business Suspension
	  	33
	 7.9
	  	 Bankruptcy Case
	  	33
	 7.10
	  	 Limitation on Issuances of Capital Stock and Dividends
	  	33
	 7.11
	  	 Use of Proceeds
	  	33
	 7.12
	  	 Reclamation Claims
	  	33
	 7.13
	  	 Chapter 11 Claims
	  	34
	 7.14
	  	 Fundamental Changes, Line of Business
	  	34
	 ARTICLE 8 EVENTS OF DEFAULT
	  	34
	 8.1
	  	 Failure to Pay
	  	34
	 8.2
	  	 Failure to Perform
	  	34
	 8.3
	  	 Misrepresentation
	  	34
	 8.4
	  	 Material Adverse Change
	  	34
	 8.5
	  	 Injunction Against Borrower
	  	34
	 8.6
	  	 Bankruptcy Court
	  	35
	 8.7
	  	 Actions
	  	37
	 8.8
	  	 Reorganization Plan
	  	37
	 8.9
	  	 Budget Variances
	  	37
	 8.10
	  	 ERISA Compliance
	  	37
	 8.11
	  	 Unauthorized Payments
	  	38
	 8.12
	  	 Validity of Loan Documents and Superpriority Claims
	  	38
	 8.13
	  	 Failure to Achieve a Sale Milestone
	  	38
	 8.14
	  	 Failure to Deliver a Variation Report
	  	38
	 8.15
	  	 Event of Default Under Other Financing Agreements
	  	38

  

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	 8.16
	  	Failure to Make Post Closing Deliveries	  	38
	 ARTICLE 9 LENDERS’ RIGHTS AND REMEDIES
	  	39
	 9.1
	  	 Rights and Remedies
	  	39
	 9.2
	  	 No Waiver
	  	39
	 ARTICLE 10 PAYMENT OF TAXES AND EXPENSES AND INDEMNIFICATION OF LENDERS
	  	40
	 10.1
	  	 Payment of Expenses
	  	40
	 10.2
	  	 Taxes
	  	41
	 10.3
	  	 Payments by Lenders
	  	42
	 ARTICLE 11 WAIVERS
	  	42
	 ARTICLE 12 NOTICES
	  	43
	 ARTICLE 13 AGENT
	  	44
	 13.1
	  	 Appointment
	  	44
	 13.2
	  	 Nature of Duties
	  	45
	 13.3
	  	 Lack of Reliance on Agent and Resignation
	  	45
	 13.4
	  	 Certain Rights of Agent
	  	46
	 13.5
	  	 Reliance
	  	46
	 13.6
	  	 Notice of Default
	  	46
	 13.7
	  	 Indemnification
	  	47
	 13.8
	  	 Agent in its Individual Capacity
	  	47
	 13.9
	  	 Borrower’s Undertaking to Agent
	  	47
	 13.10
	  	 No Reliance on Agent’s Customer Identification Program
	  	47
	 13.11
	  	 Release of Guaranty and Collateral
	  	47
	 ARTICLE 14 GENERAL PROVISIONS
	  	48
	 14.1
	  	 Effectiveness
	  	48
	 14.2
	  	 Successors and Assigns
	  	48
	 14.3
	  	 Section Headings
	  	48
	 14.4
	  	 Interpretation
	  	48
	 14.5
	  	 Severability of Provisions
	  	48
	 14.6
	  	 Amendments in Writing
	  	48
	 14.7
	  	 Counterparts
	  	48
	 14.8
	  	 Survival of Representations and Warranties
	  	48
	 14.9
	  	 Absence of Prejudice to the Lenders with Respect to Matters Before the Bankruptcy Court
	  	49
	 14.10
	  	 Further Assurances
	  	49
	 14.11
	  	 Surcharge Waiver
	  	49
	 14.12
	  	 Release
	  	49
	 ARTICLE 15 SBIC REGULATORY PROVISIONS
	  	49
	 ARTICLE 16 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
	  	50

  

 -iii- 

 EXHIBITS/SCHEDULES EXHIBITS 
  

			
	 EXHIBITS
	  	 
	 Exhibit A
	  	Approved Budget
	 Exhibit B
	  	Form of Borrowing Request
	 Exhibit C
	  	 Form of Interim Order

	 Exhibit D
	  	Form of Note
		
	 SCHEDULES
	  	 
	 Schedule 1
	  	Lender Advance Commitments
	 Schedule 2.2
	  	Bank Accounts
	 Schedule 3.3
	  	Post Closing Deliveries and Actions
	 Schedule 4.1
	  	Commercial Tort Claims
	 Schedule 5.1
	  	Due Incorporation and Qualification
	 Schedule 5.3
	  	Locations of Inventory and Equipment
	 Schedule 5.15
	  	Liens
	 Schedule 7.1(a) and (b)
	  	Indebtedness/Asset Sales

  

 -iv- 

 DEBTOR-IN-POSSESSION LOAN AGREEMENT 
 This DEBTOR-IN-POSSESSION LOAN AGREEMENT (this “Agreement”) is entered into as of April 17, 2008 between RedEnvelope, Inc., a
Delaware corporation and a debtor and a debtor-in-possession (“Borrower”), Granite Creek Partners Agent, LLC, a Delaware limited liability company, as administrative agent (the “Agent”), and the other parties hereto
from time to time as lenders (the “Lenders”). Capitalized terms utilized herein shall have the meanings ascribed to such terms in Section 1.1 of this Agreement unless otherwise specified herein. 
 RECITALS 
 WHEREAS, on April 17,
2008 (“Petition Date”), the Borrower has filed, or shall file, a petition under the Bankruptcy Code in the Bankruptcy Court, to retain possession of its assets and to be authorized under Bankruptcy Code §§ 1107 and 1108 to
continue the management and operation of its business as a debtor in possession; 
 WHEREAS, as of the Petition Date, the Borrower is a
retail catalogue and mail order miscellaneous consumer goods retailer; 
 WHEREAS, the Borrower plans to sell all or substantially all of the
assets of the Borrower pursuant to the Asset Sale; 
 WHEREAS, the Borrower and Creative Catalogs Corporation, a Delaware corporation
(“CCC”), as stalking horse bidder (the “Stalking Horse Bidder”), have entered into the Asset Purchase Agreement whereby the Borrower plans to sell, and the Stalking Horse Bidder plans to purchase, subject to higher
bidders pursuant to the Bidding Procedures Order, all or substantially all of the assets of the Borrower pursuant to the Asset Sale; 
 WHEREAS, in order to provide liquidity for the Borrower in the Bankruptcy Case and to facilitate the Asset Sale, the Borrower has requested that the Lender provide a debtor-in-possession financing facility to the Borrower to provide ongoing
working capital funds that the Borrower requires, in accordance with the terms of an Approved Budget and the terms herein, principally to (i) pay the Borrower’s ongoing and budgeted operating expenses, (ii) pay the fees and expenses
associated with this Agreement, the Asset Purchase Agreement and the transactions contemplated hereby and thereby, and (iii) pay allowed Administrative Fees and Expenses; 
 WHEREAS, the Lenders have indicated their willingness to extend financing to Borrower upon the terms and conditions set forth in this Agreement upon the
entry of the Interim Order and Bidding Procedures Order acceptable to Lenders in their sole discretion; 
 WHEREAS, the Borrower has agreed
to use its best efforts to provide such other protection, as described in this Agreement and the Financing Order, subject to the approval of the Bankruptcy Court; and 

 WHEREAS, the Borrower shall use its best efforts to have the Bankruptcy Court enter the Interim Order,
Bidding Procedures Order and Financing Order pursuant to which the Lenders shall make post-petition loans, advances and other financial accommodations to the Borrower, subject to any exclusions as set forth in the Financing Order and/or this
Agreement. 
 NOW, THEREFORE, in consideration of these premises and of the mutual undertakings set forth herein, the parties hereto agree to
as follows: 
 ARTICLE 1 
 DEFINITIONS, CONSTRUCTION AND RATIFICATION 
 1.1 Terms. As used in this Agreement, the following terms
shall have the following meanings: 
 “Accounts” means, in addition to the definition of accounts in the UCC, all presently
existing and hereafter arising accounts receivable, contract rights, and all other forms of obligations owing to the Borrower arising out of the sale, lease, license or assignment of goods or other property, or the rendition of services by the
Borrower, whether or not earned by performance, and Borrower’s Books relating to any of the foregoing. 
 “Administrative
Expense” means a claim against the Borrower and/or its estate in the Bankruptcy Case that is an administrative expense claim having priority over unsecured claims pursuant to Section 503(b) of the Bankruptcy Code. 
 “Administrative Fees and Expenses” means any claim, as allowed by the Bankruptcy Court, against the Borrower for fees and/or expenses
pursuant to Bankruptcy Code sections 327, 328 and/or 330. 
 “Advance Commitments” means with respect to each Lender or all
Lenders, as the context requires, the aggregate commitment of such Lender or Lenders to make Advances as set forth under their respective signatures on the signature page to this Agreement or in any assignment or joinder for such Lender and
designated as the “Advance Commitment”. The aggregate Advance Commitment for all Lenders shall be $4,500,000.00 or such lesser amount as is set forth in the Financing Order. 
 “Advances” means all loans, advances and other financial accommodations by the Lenders to or on account of the Borrower under
Section 2.1. 
 “Adverse Claim” means the assertion or joinder in any claim, counter-claim, action, proceeding,
application, motion, objection, defense, or other contested matter, the purpose of which is to seek any order, judgment, determination, or similar relief: (x) invalidating, setting aside, avoiding, subordinating, in whole or in part, the
Obligations, or liens and security interests securing such Obligations; (y) preventing, hindering, or delaying, whether directly or indirectly, the assertion or enforcement by the Agent or Lenders of their liens or realization upon any of their
respective Collateral, other than to 

  

 2 

 
protest in good faith the existence of a Default or Event of Default; or (z) week challenging the liens or claims of, or seeking an affirmative recovery
from the Agent or the Lenders. 
 “Agreement” means this Debtor-In-Possession Loan Agreement, as amended, modified, revised
or restated from time to time. 
 “Approved Budget” means the rolling ten (10) week cash revenue and expense budget
compiled by week and showing the weekly and cumulative expenses, revenues, Cash Shortfall and Advance needs and otherwise in form and substance satisfactory to the Agent and Lenders in their sole discretion and that has been approved in writing
(including by attachment to this document) by the Agent and Lenders. The initial Approved Budget is attached as Exhibit A hereto. The Approved Budget shall be Exhibit A, as modified or revised from time-to-time in accordance with
Section 6.1 or otherwise with the written approval of the Agent and the Lenders. 
 “Assets” means all real and
personal property of the Borrower, whether now owned or existing, or hereafter acquired or arising, and wherever located, and whether owned before or after the Petition Date including all of the following assets, properties and interests in property
of the Borrower: all Accounts; Equipment; General Intangibles; Payment Intangibles; Chattel Paper; Inventory; Negotiable Collateral; Investment Property; Financial Assets; Deposit Accounts; Documents; money or any assets of the Borrower, including
assets which hereafter come into the possession, custody, or control of the Agent or any Lender; all proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the
foregoing, and any and all tangible or intangible property resulting from the sale, lease, license or other disposition of the foregoing, or any portion thereof or interest therein, and all proceeds thereof; and all other property of the
Borrower’s estate in the Bankruptcy Case or otherwise. 
 “Asset Sale” means the sale of substantially all of the
Assets of the Borrower under the terms of the Asset Purchase Agreement. 
 “Asset Purchase Agreement” means that
certain Asset Purchase Agreement by and between the Stalking Horse Bidder and the Borrower dated as of the date hereof, as it may be amended, restated or modified from time to time. 
 “Authorized Officer” means any officer or other representative of the Borrower authorized to transact business with the Agent or the
Lenders. 
 “Available Cash Surplus” at any time, means an amount not less than zero equal to Total Cash minus
Restricted Cash at such time. 
 “Avoidance Action” means all actions for preferences, fraudulent conveyances, and other
avoidance power claims and any recoveries under Section 552(b), Section 506(c) and Sections 542, 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code. 
  

 3 

 “Bankruptcy Case” means the case of the Borrower under Chapter 11 of the Bankruptcy
Code, pending in the Bankruptcy Court as Case No. 08-______. 
 “Bankruptcy Code” means title 11 of the United States Code,
11 U.S.C. §§ 101 et seq. 
 “Bankruptcy Court” means the United States Bankruptcy Court for the Northern District
of California. 
 “Bidding Procedures” shall mean the bidding procedures and other requirements set forth in Exhibit
B to the Bidding Procedures Order. 
 “Bidding Procedures Order” shall mean that certain order approving, among other
things, the Bidding Procedures, including bid protections, approving the form and manner of notice, establishing procedures to determine cure amounts and deadlines for objections for certain contracts and leases to be assumed and assigned by the
debtors, approving the Break-Up Fee and Expense Reimbursement and scheduling a hearing to consider a sale of substantially all of the assets of the Borrower’s business, as well as the identification of CCC as the Stalking Horse Bidder.

 “Borrower’s Books” means all of the Borrower’s books and records including all of the following: ledgers;
records indicating, summarizing, or evidencing the Borrower’s assets or liabilities; all information relating to the Borrower’s business operations or financial condition; and all computer programs, disk or tape files, printouts, runs, or
other computer prepared information, and the facilities containing such information, but specifically excluding the Borrower’s corporate minute books, stock ledgers and the like. 
 “Borrowing Request” means a request by the Borrower in the form of Exhibit B. 
 “Business Day” means any day which is not a Saturday, Sunday, or other day on which banks in the State of New York are authorized or
required to close. 
 “Carve Out” means the payment of professional fees and disbursements incurred by the Borrower and any
statutory committees in the Bankruptcy Case accrued but unpaid in an amount not to exceed the amount set forth in the Approved Budget. 
 “Cash” means money, currency or the available credit balance in dollars in a Deposit Account. 
 “Cash Flow
Sweep Amount” means the Available Cash Surplus as calculated based on the weekly Variance Report and officer’s certificate most recently delivered pursuant to Section 6.1 minus Net Weekly Disbursements as calculated
based on the Approved Budget. 
 “Cash Shortfall” means, for any period, the amount that (x) cash requirements of the
Borrower for the categories of expenses and costs included in the Approved Budget exceed (y) cash collections received by the Borrower that are available for use by the Borrower in the ordinary course of business. 
  

 4 

 “Chapter 7 Carve-Out” means the fees and expenses of administration (including
attorneys’ fees) of a superseding Chapter 7 case. 
 “Chattel Paper” shall have the same meaning ascribed to such term
in the UCC. 
 “Collateral” means collectively all of the Borrower’s Assets securing the Obligations of the Borrower
hereunder as set forth in Section 4.1, including without limitation cash and property of the Borrower in the possession of other parties as deposits or retainers (subject to the interest of the beneficiaries of such funds) and any
proceeds of Collateral. Notwithstanding any other provision of any Financing Agreement to the contrary, the Collateral shall not include the right, title and interest of the Borrower in the Avoidance Actions, other than Avoidance Actions pursuant to
Section 549 of the Bankruptcy Code. 
 “Collateral Account” means an account satisfactory to the Lenders in its sole
discretion and which is in the name of the Agent or over which the Agent has “control” as defined in the UCC. 
 “Committee” means the official committee of unsecured creditors and any other committee formed, appointed, or approved in the Bankruptcy Case and each of such committees shall be referred to herein as a Committee.

 “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise voting power by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. 
 “Daily Balance” means the amount of the Obligations owed at the end of a given day. 
 “Default” means any event or occurrence or set of facts which could constitute an Event of Default with the passage of time or the
giving of notice. 
 “Deposit Account” shall have the meaning ascribed to such term in the UCC. 
 “DIP Facility” means the revolving credit debtor-in-possession facility in the aggregate amount not to exceed $4,500,000. 
 “Documents” shall have the meaning ascribed to such term in the UCC. 
 “Effective Date” shall have the meaning ascribed to such term in Section 2.7. 
 “Equipment” means in addition to the definition of equipment in the UCC all of the Borrower’s present and hereafter acquired
equipment, furniture, furnishings, fixtures, goods (other than consumer goods or farm products) and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any
of the foregoing, wherever located. 
  

 5 

 “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

 “Event of Default” means any event specified in Article 8. 
 “Extraordinary Receipts” shall have the meaning ascribed to such term in Section 2.4(b)(iii). 
 “Final Order” means the order of the Bankruptcy Court entered in the Bankruptcy Cases after a final hearing under Bankruptcy Rule
4001(c)(2) or such other procedures as approved by the Bankruptcy Court which order shall be in form and substance satisfactory to Lenders in the Lenders’ sole discretion, and from which no appeal or motion to reconsider has been timely filed,
or if timely filed, such appeal or motion to reconsider has been dismissed or denied (unless Lender waives such requirement), together with all extensions, modifications and amendments thereto, which, among other matters but not by way of
limitation, authorizes Borrower to obtain credit, incur (or guaranty) indebtedness, and grant superpriority, priming, first priority liens under this Agreement and the other Financing Agreements, as the case may be, and provides for the
super-priority administrative expense status of Lenders’ and Agent’s claims. 
 “Financial Assets” shall have the
meaning ascribed to such term in the UCC. 
 “Financing Agreements” shall mean, collectively, this Agreement, the Financing
Order, and all notes, guarantees, security agreements and other agreements, documents and instruments now or at any time hereafter executed and/or delivered by Borrower in connection with this Agreement, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced. 
 “Financing Order” shall mean, collectively and
individually, the Interim Order, until such time as it is superseded by the Final Order, and such other orders, and related findings of fact and conclusions of law in support thereof, relating thereto or authorizing on or after the Petition Date,
the incurrence of indebtedness by the Borrower, the provision of loans, advances and other financial accommodations by the Lenders to the Borrower, the granting of liens, interests, priority claims and other rights in favor of the Lenders and Agent
pursuant to the Financing Agreements, on an emergency, interim, final or other basis pursuant to Section 364 of the Bankruptcy Code and other applicable sections of the Bankruptcy Code as may be issued or entered in the Bankruptcy Case, each
and all in form and substance acceptable to the Lenders and the Agent in their sole and absolute discretion. 
 “First Day
Orders” shall mean, collectively and individually, each order entered in the Bankruptcy Case as a result of a motion or application filed by the Borrower in the Bankruptcy Case on or about the Petition Date, each in form and substance
acceptable to the Lenders and the Agent in their sole and absolute discretion, that is not subject to any stay or injunction pending any appeal or petition for certiorari, review, rehearing, reconsideration, or otherwise. 
  

 6 

 “General Intangibles” means, in addition to the definition of general intangibles in the
UCC, all of the Borrower’s present and future general intangibles and other personal property (including goodwill, Patents, Patent Applications, Intellectual Property, trade names, trademarks, service marks, blueprints, drawings, purchase
orders, customer lists, infringement claims, computer programs, computer discs, computer tapes, Borrower’s Books, literature, reports, catalogs, insurance premium rebates, tax refunds, and tax refund claims) other than goods and Accounts.

 “Governmental Authority” means any United States federal, state or local or any foreign government, governmental
regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body. 
 “Insolvency
Proceeding” means any proceeding commenced by or against any person or entity under any provision of the Bankruptcy Code, as amended, or under any other state or federal insolvency law, including assignments for the benefit of creditors,
formal or informal moratoria, compositions, or extensions generally with its creditors. 
 “Instruments” shall have the
meaning ascribed to such term in the UCC. 
 “Intellectual Property” means the following property of the Borrower:
(i) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all rights arising under or in connection with all Patents, Patent Applications and Patent disclosures, (ii) all
trademarks, service marks, trade dress, logos, slogans, trade names and corporate names, together with all translations, adaptations, derivations and combinations thereof (including all goodwill associated therewith), and all applications,
registrations and renewals, (iii) all copyrightable works, all copyrights and all applications, registrations and renewals, (iv) all trade secrets and confidential business information (including, without limitation, ideas, research,
know-how, techniques, methods, data, product drawings, training manuals, clinical and regulatory strategies, and business and marketing plans and proposals), (v) all computer software, (vi) all computer generated data and documentation,
(vii) all Third Party License Rights, (viii) all designs, plans and documentation in whatever form related to products under development or products subject to a change in design or composition, (ix) all other proprietary rights, and
(x) all copies and tangible embodiments thereof (in whatever form or medium). 
 “Interim Order” means the order of the
Bankruptcy Court entered in the Bankruptcy Case after an interim hearing (assuming satisfaction of the standards prescribed in Section 364 of the Bankruptcy Code and Bankruptcy Rule 4001 and other applicable law), together with all extensions,
modifications, and amendments thereto, in form and substance satisfactory to Lenders in the Lenders’ sole discretion, which, among other matters, but not by way of limitation, authorizes, on an interim basis, Borrower to execute and perform its
obligations under the terms of this Agreement and the other Loan Documents, substantially in the form of Exhibit C. 
  

 7 

 “Inventory” means, in addition to the definition of inventory in the UCC, all present
and future inventory in which the Borrower has any interest, including goods held for sale or lease or to be furnished under a contract of service, the Borrower’s present and future raw materials, work in process, finished goods, tangible
property, stock in trade, wares, and materials used in or consumed in the Borrower’s business, goods which have been returned to, repossessed by, or stopped in transit by the Borrower, packing and shipping materials, wherever located, any
documents of title representing any of the above, and the Borrower’s Books relating to any of the foregoing. 
 “Investment
Property” means, in addition to the definition of investment property in the UCC, all Equity Interests. 
 “IRC”
means the Internal Revenue Code of 1986, as amended, and the regulations thereunder. 
 “Lender” or
“Lenders” has the meaning ascribed to such term in the caption of this Agreement. 
 “Liens” means all
liens, security interests, encumbrances and claims (including, but not limited to, any “claim” as defined in section 101(5) or “lien” as defined in section 101(37) of the Bankruptcy Code), reclamation claims, mortgages, deeds of
trust, pledges, covenants, restrictions, hypothecations, charges, indentures, loan agreements, instruments, contracts, leases, licenses, options, rights of first refusal, contracts, offsets, recoupment, rights of recovery, judgments, orders and
decrees of any court or foreign or domestic governmental entity, claims for reimbursement, contribution, indemnity or exoneration, assignment, preferences, debts, charges, suits, licenses, options, rights of recovery, interests, products liability,
alter-ego, environmental, successor liability, tax and other liabilities, causes of action and claims, or other encumbrances or restrictions on or conditions to transfer or assignment of any kind (including without limitation to the generality of
the foregoing restrictions or conditions on or to the transfer, assignment, or renewal of licenses, permits, registrations, and authorizations or approvals of or with respect to governmental units and instrumentalities) to the fullest extent of the
law, in each case whether secured or unsecured, choate or inchoate, filed or unfiled, scheduled or unscheduled, noticed or unnoticed, recorded or unrecorded, perfected or unperfected, allowed or disallowed, contingent or non-contingent, liquidated
or unliquidated, matured or unmatured, material or non-material, disputed or undisputed, or known or unknown, whether arising prior to, on, or subsequent to the commencement of the Bankruptcy Case, whether imposed by agreement, understanding, law,
equity or otherwise. 
 “Loan Documents” means, collectively, this Agreement, the Note, the Financing Order, the Approved
Budget, each Borrowing Request, and any other agreements, instruments, amendments, or documents, if any, which create, evidence, create a security interest in or secure the Obligations, and any other agreement, instrument, amendment, or document
entered into among the Borrower, Agent and/or any Lender or in favor of Agent or any Lender relating to or in connection with this Agreement or any other Loan Document or the Obligations if such agreement, instrument, amendment or document states
that it is a “Loan Document”. 
  

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 “Material Adverse Change” means a material adverse change in (a) the
Borrower’s ability to pay or perform its Obligations in accordance with the terms of the Loan Documents, or (b) the validity or enforceability of the Financing Order or any of the other Loan Documents, or (c) the rights and remedies
of the Agent or any Lender under the Financing Order and the other Loan Documents. 
 “Maturity Date” means the date that is
the earliest to occur of (i) ninety (90) days from the date of this Agreement; (ii) the confirmation of a plan of reorganization or liquidation; (iii) the conversion of the Bankruptcy Case to a Chapter 7 case; or (iv) the
effective date of a sale of substantially all of Borrower’s Assets pursuant to the provisions of §§ 105, 363(b), 363(f), 363(m), 363(n) and 365 of the Bankruptcy Code. 
 “Negotiable Collateral” means all of the Borrower’s present and future letters of credit, notes, drafts, instruments, documents,
leases and Chattel Paper. 
 “Net Cash Proceeds” means, with respect to any Asset disposition or sale the aggregate cash, or
other payment in kind, goods or services, and any proceeds thereof received by or for the benefit of Borrower from such Asset disposition or sale (including, without limitation, cash received by way of deferred payment pursuant to a note receivable,
conversion of non-cash consideration, cash payments in respect of purchase price adjustments or otherwise, but only as and when such cash is received and excluding any deferred payment pursuant to any non-cash consideration to the extent such
payment represents interest income to Borrower) minus (i) the direct costs and expenses incurred in connection therewith (including in the case of any Asset disposition or sale, the payment of the outstanding principal amount of,
premium, if any, and interest on any Indebtedness (other than hereunder) required to be repaid as a result of such Asset disposition or sale); (ii) any provision for taxes in respect thereof made in accordance with GAAP; provided that
such expenses shall only include taxes to the extent that taxes are payable in cash in the current year or the following year as a result of such Asset disposition or sale; and (iii) any portion of any such proceeds which Borrower determines in
good faith should be reserved for post-closing adjustments (to the extent Borrower delivers to the Agent and each Lender a certificate signed by the senior financial officer of Borrower as to such determination), it being understood and agreed that
on the day that all such post-closing adjustments have been determined (which shall not be later than three months following the date of the respective asset disposition or sale), the amount (if any) by which the reserved amount in respect of such
sale or disposition exceeds the actual post-closing adjustments payable by Borrower shall constitute Net Cash Proceeds on such date received by Borrower. Any proceeds received in a currency other than dollars shall, for purposes of the calculation
of the amount of Net Cash Proceeds, be in an amount equal to the dollar equivalent thereof as of the date of receipt thereof by such Person. 
 “Net Weekly Disbursements” means, for any week, an amount not less than zero equal to the Cash Shortfall for the upcoming week pursuant to the Approved Budget. 
  

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 “Note” means the promissory note, substantially in the form of Exhibit D hereto,
made by the Borrower to the order of any Lender concurrently herewith or at any time hereafter. 
 “Obligations” means all
loans, advances, including, but not limited to Advances, and any overadvances, debts, liabilities, obligations, covenants, and duties owing by the Borrower to any Lender or the Agent of any kind and description in connection with any Loan Documents,
whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including any debt, liability or obligation owing from the Borrower to others which any Lender or the Agent may obtain by assignment or
otherwise, all interest thereon. 
 “Patent” means United States Letters Patent and design patent, including any extension,
registration, confirmation, continuation, division, continuation-in-part, reissue, re-examination or renewal thereof, and also including any foreign equivalents of any of the foregoing. 
 “Patent Application” means an application, including a provisional application, for a Patent. 
 “Payment Intangibles” means all “payment intangibles” as such term is defined in the UCC, now owned or hereinafter acquired by
any Person, including a General Intangible under which an Account debtor’s principal obligation is a monetary obligation. 
 “Permitted Liens” means the Liens described in the first sentence of Section 5.15(b). 
 “Person” means any individual, sole proprietorship, partnership, limited liability partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public
benefit corporation, entity or government (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof) and shall include such Person’s successors and assigns.

 “Petition Date” shall have the meaning ascribed to such term in the above Recitals. 
 “Post-Petition” means the time period beginning immediately after the filing of the Bankruptcy Case. 
 “Pre-Petition” means the time period ending immediately prior to the filing of the Bankruptcy Case. 
 “Pro Rata Share” means as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Lender’s Advance
Commitment and the denominator of which is the aggregate amount of all of the Advance Commitments of the Lenders, as adjusted from time to time in accordance with the provisions of this Agreement. 
  

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 “Regulatory Problem” shall mean any transaction, circumstance or situation whereby
(i) any Person and such Person’s affiliates would own, control or have power over a greater quantity of securities of any kind issued by Borrower than are permitted under any requirement of the SBA or any other Governmental Authority, or
(ii) any Governmental Authority has asserted (or such Person believes that there is a risk of such assertion) that such Person and its affiliates are not entitled to hold, or exercise any significant right with respect to, the common stock of
Borrower held by such Person, including without limitation the existence of any other set of facts or circumstances wherein it has been asserted by any Governmental Authority (or any SBIC Holder reasonably believe that there is a substantial risk of
such assertion) that any SBIC Holder or its affiliates is not entitled to hold, or exercise any significant right with respect to any of Borrower’s securities. 
 “Regulatory Violation” shall mean, with respect to any SBIC Holder providing financing (within the meaning of the SBIC Regulations) under this Agreement, (i) a diversion of the proceeds of such
financing from the reported use thereof on SBA Form 1031 delivered in connection with the closing of the transactions contemplated hereby, if such diversion was effected without obtaining the prior written consent of the SBIC Holders (which may be
withheld in their sole discretion) or (ii) a change in the principal business activity of the Borrower to an ineligible business activity (within the meaning of the SBIC Regulations). 
 “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty
(30) day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043. 
 “Requisite Lenders” means Lenders that have made and funded commitments representing an aggregate of more than 50% of the DIP Facility. 
 “Restricted Cash” at any time, means an amount equal to the book balance amount of outstanding checks written by Borrower plus $200,000. 
 “Sale Milestone” means each of the following: 
 (a) the Asset Purchase Agreement shall be executed on or before the Petition Date; 
 (b) a Bidding
Procedures Order shall be entered on or before April 26, 2008, or such other date as soon as reasonably practical thereafter as the Bankruptcy Court’s schedule permits; 
 (c) all bids shall have been received at least 3 Business Days prior to the Bankruptcy Court hearing on the sale; 
 (d) the auction pursuant to the Bidding Procedures Order shall be conducted at the sale hearing as provided in clause (e) below; 
  

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 (e) a hearing shall be held by the Bankruptcy Court no later than May 30, 2008 regarding the sale of
all or substantially all of the assets of Borrower in accordance with the Bidding Procedures Order, or such other date as soon as reasonably practical thereafter as the Bankruptcy Court’s schedule permits; 
 (f) an order of the Bankruptcy Court, in form and substance acceptable to the Lenders in their reasonable discretion, evidencing the approval described
in the foregoing clause (e) entered on or prior to May 30, 2008, or such other date as soon as reasonably practical thereafter as the Bankruptcy Court’s schedule permits; and 
 (g) the closing of the Asset Sale on or prior to June 10, 2008. 
 “Sale Order” means the order of the Bankruptcy Court entered in the Bankruptcy Case approving a sale of substantially all of the Borrower’s assets pursuant to the provisions of §§ 105,
363(b), 363(f), 363(m), 363(n) and 365 of the Bankruptcy Code. 
 “SBA” shall mean the U.S. Small Business Administration or
any successor agency. 
 “SBIC” shall mean a small business investment company licensed under the SBIC Act. 
 “SBIC Act” shall mean the Small Business Investment Act of 1958, as amended and the regulations promulgated thereunder. 
 “SBIC Holder” shall mean any holder of the Note, which is an SBIC. 
 “SBIC Regulations” shall mean the Small Business Investment Company Act of 1958, as amended, and the regulations issued by the SBA
thereunder, codified as Title 13 of the Code of Federal Regulations, 107 and 121, as amended. 
 “Stalking Horse Bidder”
shall have the meaning ascribed to such term in the recitals. 
 “Term” means the period from the Effective Date through and
including the earlier of (a) the Termination Date and (b) the indefeasible payment and performance in full of the Obligations and termination of the Advance Commitments. 
 “Termination Date” means the earliest of (i) the Maturity Date, (ii) the date of termination in whole of the Advance
Commitments pursuant to the terms of this Agreement, including pursuant to an exercise of remedies pursuant to Section 9.1, (iii) the date of the closing of the Asset Sale pursuant to the Asset Purchase Agreement, (iv) the
earlier or the date, if any, that the Borrower executes a definitive agreement for the sale of all or substantially all of the Borrower’s assets to any party other than the Stalking Horse Bidder or on which a bid other than the Stalking Horse
Bidder’s is selected at any auction for all of the Borrower’s assets unless a sale of assets of the Borrower to the Stalking Horse Bidder has been consummated prior to such date; (v) the effective date of any plan of reorganization;
(vi) immediately upon conversion of the 

  

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Bankruptcy Case to a case under Chapter 7 of the Bankruptcy Code; (vii) immediately upon dismissal of the Bankruptcy Case; (viii) the date of
delivery by Borrower of notice of the termination of the Asset Purchase Agreement by Borrower, except, if such termination shall be attributable to a material breach by the Stalking Horse Bidder, or (ix) on the date that is ten
(10) days after the termination of the Asset Purchase Agreement as a result of a material breach by the Borrower of such agreement. 
 “Third Party License Rights” means all permissions, licenses, covenants not to sue, grants, and other express or implied authorization to make, use, sell, import, create derivative works, publicly display, publicly perform,
rent, or otherwise operate that may be needed in the operation of the Borrower’s business to avoid violating an Intellectual Property right of a third party. 
 “Total Cash” at any time, means the actual amount of Cash, excluding cash in the Collateral Account, held by Borrower. 
 “UCC” means California’s codification of the Uniform Commercial Code. 
 “Variance Report” shall mean a report to be delivered by the Borrower to the Agent and each Lender in form and substance satisfactory to Agent, on a weekly basis (commencing on the second Wednesday after the entry of the
Financing Order) reflecting without limitation, the following: (i) the actual cash receipts and disbursements on a line item basis for the preceding week and (ii) the actual cash receipts and disbursements on a cumulative basis since the
Petition Date, (iii) the Cash Shortfall for the week and on a cumulative basis, (iv) the Cash Flow Sweep Amount for the week, the dollar amount and percentage variance of such amounts from those set forth in the Approved Budget for such
preceding week and (v) containing a narrative analysis of Borrower’s performance for the preceding week and any line-by-line variance from such period in the Approved Budget. 
 “Wages Order” shall mean that certain order authorizing, but not directing, the Borrower to pay certain Pre-Petition wages, compensation
and employee benefits in the ordinary course of business and authorizing, but not directing, the Borrower to continue to honor their practices, programs, and policies with respect to their employees. 
 1.2 Interpretation. 
 a. Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” 
 b. Words denoting any gender shall include all genders. Where a word or phrase is defined herein, each of its other grammatical forms
shall have a corresponding meaning. 
 c. A reference to any party to this Agreement or any other agreement or document shall
include such party’s successors and permitted assigns. 
  

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 d. A reference to any legislation or to any provision of any legislation shall include
any modification or re-enactment thereof, any legislative provision substituted therefor and all regulations and statutory instruments issued thereunder or pursuant thereto. 
 e. All references to “$” and dollars shall be deemed to refer to United States currency. 
 f. All references to any financial or accounting terms shall be defined in accordance with GAAP as applicable in the United States and
consistently applied by the Borrower. 
 g. The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section, Recitals, Schedule and Exhibit references are to this Agreement unless
otherwise specified. 
 h. The meanings given to terms defined herein shall be equally applicable to both singular and plural
forms of such terms. 
 i. The Borrower, the Lenders and the Agent each hereby acknowledge that (i) the Borrower, the
Lenders and the Agent jointly and equally participated in the drafting of this Agreement and all other agreements contemplated hereby, (ii) the Borrower, the Lenders and the Agent have been adequately represented and advised by legal counsel
with respect to this Agreement and the transactions contemplated hereby, and (iii) no presumption shall be made that any provision of this Agreement shall be construed against either party by reason of such role in the drafting of this
Agreement and any other agreement contemplated hereby. 
 j. The headings of the Articles and Sections herein are inserted for
convenience of reference only and are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement. 
 k. References to any document, instrument, mortgage or agreement of any kind shall refer to any permitted amendments, restatements or other modifications thereof. 
 1.3 Exhibits. All of the exhibits, addenda or riders attached to this Agreement shall be deemed incorporated herein by reference.

 1.4 UCC. Any terms used in this Agreement that are defined in the UCC shall be construed and defined as set forth in the UCC,
unless otherwise defined herein. 
  

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 ARTICLE 2 
 ADVANCES AND TERMS OF PAYMENT 
 2.1 Advance Commitments; Advances; Advance Limit; Increase
to Advance Limit; Use of Proceeds. 
 a. Advance Commitments. Subject to the terms and conditions set forth herein,
each Lender severally and jointly agrees to fund its Pro Rata Share of Advances from time to time in accordance with the Approved Budget during the Term in an aggregate principal amount that will not result in the Lenders making aggregate Advances
that exceed the Advance Commitment for the Lenders. 
 b. Advances and Advance Limit. Upon one (1) Business Day
written request of the Borrower in the form of a Borrowing Request, which requests shall not exceed two (2) per calendar week, during the Term and so long as (i) no Default or Event of Default has occurred and is continuing and
(ii) the conditions precedent in Section 3 have been satisfied or waived in writing by the Lenders, the Lenders shall make Advances not to exceed two (2) per week. Subject to the conditions herein, the Borrower may borrow from
time to time between the date of this Agreement and the Termination Date, in an amount not-to-exceed the lesser of (a) an amount equal to (i) the aggregate weekly amounts of Cash Shortfall on a cumulative basis from the Effective Date
through the date of determination minus (ii) the aggregate amount outstanding of all Advances made to the Borrower hereunder from the Effective Date through such date of determination, and (b) the actual weekly amounts of Cash
Shortfall as indicated in the current Variance Report as of the time of any request for an Advance, and, in each case, shall not to exceed at any time the Advance Commitment. Borrowing Requests for Advances shall be for Advances in the minimum
amount of $100,000 and minimum additional increments of $50,000. The date of determination for any Borrowing Request shall be the date on which the Advance subject of such Borrowing Request is to be funded. 
 c. Use of Proceeds. Borrower is authorized to use said Advances to (i) pay the Borrower’s operating and working capital
expenses in the ordinary course of business as ongoing and budgeted operating expenses set forth in the Approved Budget and (ii) pay Administrative Fees and Expenses approved by the Bankruptcy Court, including, but not limited to, freight
forwarding charges and reclamation charges. 
 2.2 Authorization to Make Advances. Each Lender is hereby authorized to make Advances
based upon a written Borrowing Request substantially in the form attached hereto as Exhibit B received by Agent from anyone purporting to be an Authorized Officer. All requests for Advances shall be made pursuant to a Borrowing Request
delivered to Agent specifying the date on which such Advance is to be made (which day shall be a Business Day at least three Business Days after the request of such Advance, other than the initial advance which shall be delivered on the Effective
Date and shall be for an amount not to exceed the amount for such Advance set forth in the Approved Budget) and the amount of such Advance. All Advances made under this 

  

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Agreement shall be conclusively presumed to have been made to, at the request of, and for the benefit of the Borrower when deposited to the credit of the
Borrower or otherwise disbursed in accordance with the instructions of the Borrower or in accordance with the terms and conditions of this Agreement. Unless otherwise requested by the Borrower, all Advances shall be made by a wire transfer to the
deposit account of the Borrower set forth on Schedule 2.2 or otherwise designated by the Borrower from time to time to the Agent in a written notice delivered pursuant to Article 12. 
 2.3 Interest. 
 a.
Except where specified to the contrary in the Loan Documents, the outstanding principal balance of the DIP Facility shall bear interest at the fixed rate of ten percent (10%) per annum. After the occurrence of and during the continuation of a
Default or Event of Default, the Obligations shall accrue interest, at the applicable rate for each Advance outstanding plus five percent (5.00%) (the “Default Rate”). All interest payable under the Loan Documents shall be
computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed on the Daily Balance. Interest as provided for herein shall continue to accrue until the obligations are indefeasibly paid in full or otherwise
settled pursuant to a confirmed plan of reorganization consented to by the Requisite Lenders. 
 b. In no event shall interest
on the DIP Facility exceed the highest lawful rate in effect from time-to-time. It is not the intention of the parties hereto to make an agreement which violates any applicable state or federal usury laws. In no event shall the Borrower pay or any
Lender accept or charge any interest which, together with any other charges upon the principal or any portion thereof, exceeds the maximum lawful rate of interest allowable under any applicable state or federal usury laws. Should any provision of
this Agreement or any existing or future Notes or Loan Documents between the parties be construed to require the payment of interest or any other fees or charges which could be construed as interest which, together with any other charges upon the
principal or any portion thereof and any other fees or charges which could be construed as interest, exceeds the maximum lawful rate of interest, then any such excess shall be applied to the remaining principal balance of the DIP Facility, if any,
and the remainder refunded to the Borrower. 
 2.4 Principal Repayment. Any prepayment in whole or in part shall include
accrued interest and all other sums then due hereunder. No partial prepayment shall affect the obligation of Borrower to make any payment of principal or interest hereunder on the due dates specified. 
 a. Voluntary Payment. The Borrower shall have the right (i) from time-to-time, to prepay all or any part of the outstanding
principal balance without premium or penalty in accordance with the Approved Budget, or (ii) at any time, to indefeasibly pay in full all of the Obligations without premium or penalty concurrent with the termination of this Agreement and the
Advance Commitments. 
  

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 b. Mandatory Pre-payment. 
 (i) Termination Date or Acceleration. The Obligations, if not sooner paid, shall become and be absolutely due and payable by
Borrower to the Agent on behalf of the Lenders upon the Termination Date. 
 (ii) Asset Sales. Except to the extent
expressly set forth in the Approved Budget, to the extent Net Cash Proceeds arise from an Asset sale, the Borrower shall immediately deposit such Net Cash Proceeds in an amount equal to 80% of such Net Cash Proceeds in the Collateral Account.

 (iii) Extraordinary Receipts. Except to the extent expressly set forth in the Approved Budget, to the extent Net
Cash Proceeds are received from the payment of insurance losses or claims, tax refunds, indemnification payments or any other source other than the sale of goods and services in the ordinary course (“Extraordinary Receipts”), the
Borrower shall immediately deposit such Net Cash Proceeds in an amount equal to 80% of such Net Cash Proceeds in the Collateral Account. 
 (iv) Cash Flow Sweeps. Borrower shall on the Effective Date, and on each Monday and Thursday (or the immediately succeeding Business Day if Monday or Thursday is not a Business Day) after the Effective Date,
transfer an amount equal to Cash Flow Sweep Amount to the Collateral Account. 
 c. Application of Payments and Net Cash
Proceeds. 
 (i) Notwithstanding anything to the contrary contained in this Section 2.4, the proceeds of any
of the mandatory payments described above, except to the extent expressly contemplated by and set forth in the Approved Budget, shall be applied first to the fees and expenses of the Agent and the Lenders until paid in full, second to
the accrued but unpaid interest and third to reduce the principal of the Advances then outstanding. 
 (ii) All Net
Cash Proceeds received by the Borrower pursuant to an Asset sale or Extraordinary Receipts shall be deposited in the Collateral Account on the date received. All funds in the Collateral Account shall be first applied to reduce the aggregate amount
of the Advances outstanding and after all Advances have been repaid in full, shall be held as cash collateral for the Obligations. Subject to the satisfaction of the conditions set forth in Section 3.2, the Agent shall release such
excess amounts held in the Collateral Account pursuant to this Section 2.4(c)(ii) to fund expenses set forth in the Approved Budget. 
 2.5 Lender Fees. a. Subject in all cases to the occurrence of the Effective Date, Borrower agrees to pay to Agent, for the benefit of the Lenders for their own accounts, such fees in immediately available funds, a commitment
fee of Four Hundred Thousand Dollars ($400,000), which shall be fully earned, due and payable from the Advances on the Effective Date. 
  

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 The fees paid hereunder shall be paid in dollars, and is separate and in addition to the other fees and
expenses specified in this Agreement. All Fees pursuant to this Section 2.5 or Section 2.6 shall be fully earned and non-refundable for any reason when paid. 
 2.6 Agent Fees. Borrower agrees to pay to the Agent an agent fee in the amount of Fifty Thousand Dollars ($50,000), which shall be payable in
advance upon the Effective Date. Such agent fee shall be in addition to reimbursement of the Agents’ expenses and any indemnification payments made pursuant to this Agreement. 
 The fees paid hereunder shall be paid in dollars, and are separate and in addition to the other fees and expenses specified in the Agreement. 

2.7 Term and Renewal Date. This Agreement shall become effective upon (i) execution by the Lenders, Agent and the Borrower,
(ii) approval by the Bankruptcy Court, (iii) entry of the Interim Order, (iv) entry of the Bidding Procedures Order and (iv) satisfaction of the conditions set forth in Section 3.1 and, if an Advance is made on the
date that the last of the conditions in Section 3.1 is satisfied, Section 3.2 (the “Effective Date”), and thereafter shall continue in full force through the Termination Date. This Agreement may be extended
by mutual written agreement of the Borrower, Agent and the Lenders. In addition, the Agent and the Lenders shall have the right to terminate this Agreement immediately at any time upon the occurrence of an Event of Default. No such termination shall
relieve or discharge the Borrower of its duties, Obligations and covenants hereunder until all Obligations have been indefeasibly paid and performed in full. On the Termination Date of this Agreement, the Obligations shall be immediately due and
payable in full. 
 The Borrower authorizes the Agent and the Lenders to deduct all fees and expenses payable from time-to-time pursuant to
this Agreement from the Advances. The Borrower directs the Agent and the Lenders to deduct all fees payable pursuant to Sections 2.5, 2.6 and 3.1(b) from the initial Advances made on the Effective Date. 
 ARTICLE 3  
 CONDITIONS TO
ADVANCES 
 3.1 Conditions Precedent to Effective Date. The Effective Date of this Agreement and the obligations of the Agent
and Lenders hereunder are subject to the satisfaction in the Lenders’ sole discretion of each of the following conditions precedent: 
 a. Delivery of Certain Documents. The Agent shall have received on or prior to the Effective Date each of the following, each dated the Effective Date unless otherwise indicated or agreed to by the Lenders, in
form and substance satisfactory to Lenders: 
 (i) this Agreement, duly executed and delivered by the Borrower and, for the
account of each Lender requesting the same, a Note of the Borrower in favor of each Lender, in each case, substantially in the form set forth as Exhibit D hereto; 
  

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 (ii) a long form certificate of the Secretary of State of the state of incorporation of
Borrower attesting as of a recent date to the good standing of Borrower in such state; 
 (iii) a copy of the certificate of
incorporation of Borrower, certified as of a recent date by the Secretary of State of the state of organization of Borrower; 
 (iv) a certificate of the Secretary or an Assistant Secretary of Borrower certifying (A) the names and true signatures of each officer that has been authorized to execute and deliver any Loan Document or other document required
hereunder to be executed and delivered by or on behalf of the Borrower, (B) the Borrower’s by-laws as in effect on the date of such certification, (C) the resolutions of Borrower’s Board of Directors approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party and (D) that there have been no changes in the certificate of incorporation, by-laws or resolutions of Borrower from the applicable
documents delivered pursuant to such certificate; 
 (v) a certificate of the president or senior financial officer of the
Borrower stating that (A) the conditions set forth in Sections 3.1 and 3.2 have been satisfied and (B) no Default or Event of Default will exist on the Effective Date both before and after giving effect tot eh execution and
delivery of the Agreement and the other Loan Documents and the borrowing hereunder; 
 (vi) evidence satisfactory to Lenders
that the insurance policies required by the Loan Documents are in full force and effect, together with endorsements naming the Agent, as an additional insured or loss payee under all insurance policies to be maintained with respect to the Borrower;
and 
 (vii) such other certificates, documents, agreements and information respecting Borrower as Agent or Lenders may
reasonably request. 
 (b) Fee and Expenses Paid. There shall have been paid to the Lenders all fees and expenses
(including reasonable fees and expenses of counsel) due and payable on or before the Effective Date (including all such fees described in Sections 2.5 and 2.6). 
 (c) Consents. Borrower shall have received all consents and authorizations required pursuant to any material contractual obligation
with any other person and shall have obtained all permits of, and effected all notices to and filings with, any Governmental Authority, in each case, as may be necessary to allow Borrower lawfully (i) to execute, deliver and perform, in all
material respects, its obligations hereunder and under the other Loan Documents, and (ii) to create and perfect the Liens on the Collateral owned by each of them in the manner and for the purpose contemplated by the Loan Documents. 

 

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 (d) Interim Order. The Interim Order shall have been duly entered by the
Bankruptcy Court and shall be in form and substance satisfactory to the each of the Agent and Lenders in their sole discretion; the Wages Order shall have been duly entered by the Bankruptcy Court and shall be in form and substance reasonably
satisfactory to the each of the Agent and Lenders; and, in each case, the Borrower shall have delivered to Agent and Lenders certified copies of such Interim Order and Wages Order duly entered by the Bankruptcy Court in the Bankruptcy Case.

 (e) Bidding Procedures Order. The Bidding Procedures Order shall have been duly approved and entered by the
Bankruptcy Court and shall be in form and substance satisfactory to each of the Agent and Lenders in their sole discretion and the Borrower shall have delivered to Agent and Lenders certified copies of such Bidding Procedures Order duly entered by
the Bankruptcy Court in the Bankruptcy Case. 
 (f) Wells Fargo Loan Documents. The Agent and the Lenders shall be
satisfied in their sole discretion that all of the obligations under that certain Loan and Security Agreement dated as of June 26, 2006 between the Borrower and Wells Fargo Retail Finance, LLC have been indefeasibly paid and performed in full
and the liens relating thereto have been released. 
 (g) SBA Forms. The SBIC Holders shall have received the SBA
documentation referred to in Section 5.17. 
 3.2 Conditions Precedent to Each Advance. The obligation of Lenders on any date
(including the Effective Date or the Effective Date) to make any Advance is subject to the satisfaction of each of the following conditions precedent: 
 (a) Borrowing Request. With respect to any Advance, the Agent shall have received a duly executed Borrowing Request. 
 (b) Cash Management Matters and Cash Sweep. Borrower shall have delivered to Agent the Approved Budget or any update thereto then due pursuant to Section 6.1, which has not been previously
delivered, all Variance Reports then due and not previously delivered and the Certificate required pursuant to Section 6.1 and shall have made the payment, if required, to the Collateral Account pursuant to Section 6.9 based
on such certificate. 
 (c) Representations and Warranties; No Defaults. The following statements shall be true on the
date of such Advance, both before and after giving effect thereto and to the application of the proceeds thereof: 
 (i) the
representations and warranties set forth in the Loan Documents shall be true and correct on and as of the Effective Date and shall be true and correct in all respects (unless such representation and warranty is already qualified by materiality, then
such representation and warranty shall be true and correct in all material respects) on and as of any date after the Effective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date; and 
  

 20 

 (ii) no Default or Event of Default shall have occurred and be continuing. 
 (d) No Legal Impediments. The making of the Advance on such date does not violate any applicable law, regulation, administrative
order, order of any court or other Governmental Authority on the date of or immediately following such Advance and is not enjoined, temporarily, preliminarily or permanently. 
 (e) Financing Order. The Financing Order shall be in full force and effect and shall not have been stayed, vacated or subject to
appeal and, if the Final Order has been entered, file stamped copies of such Final Order duly entered by the Bankruptcy Court in the Bankruptcy Case shall have been delivered to the Agent and the Lenders. 
 Each submission by the Borrower to Agent of a Borrowing Request and the acceptance by the Borrower of the proceeds of each Advance requested therein shall be deemed to
constitute a representation and warranty by the Borrower as to the matters specified in this Section 3.2 on the date of the submission of the Borrowing Request and the making by the Lenders of such Advance. 
 3.3 Post Closing Deliveries and Actions. The Borrower shall make or perform to the Lender’s satisfaction the deliveries or actions set forth
on Schedule 3.3 on or before the date set forth for each delivery or action. 
 ARTICLE 4 
 SUPERPRIORITY NATURE OF OBLIGATIONS, 
 GRANT OF SECURITY INTEREST AND PRIORITY OF LIENS 
 4.1 Grant of Security Interest. The Borrower hereby grants
and pledges to the Agent for the ratable benefit of all Lenders, a pledge and security interest in all of Borrower’s right, title and interest in and to all of the Borrower’s Assets, now existing or hereafter acquired, including without
limitation, the Collateral and each of the items of collateral set forth below, which pledge and security interest shall be subject to the priorities set forth in Section 4.3 of this Agreement and the Financing Order: 
 a. all Accounts; 
 b. all Inventory, subject to reclamation rights; 
 c. all Equipment; 
 d. all General Intangibles; 
  

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 e. all Chattel Paper (including tangible paper and electronic chattel paper), all
documents, all instruments, all notes and debt instruments and all payments thereunder and instruments and other property from time to time delivered in respect thereof or in exchange therefor, and all bills of lading, warehouse receipts and other
documents of title and documents, in each instance whether now owned or hereafter acquired by Borrower; 
 f. all property or
interests in real or personal property now or hereafter acquired by Borrower and all rights and interests of the Borrower, now existing or hereafter arising and however and wherever arising, in respect of any and all (i) notes, drafts, letters
of credits, stocks, bonds, and debt and equity securities, whether or not certificated (including, without limitation, all (A) securities, whether certificated or uncertificated, (B) security entitlements, (C) securities and deposit
accounts (including without limitation, the Collateral Account), (D) commodity contracts and (E) commodity accounts), warrants, options, puts and calls and other rights to acquire or otherwise relating to the same; (ii) money
(including all cash and cash equivalents held in the Collateral Account); (iii) proceeds of loans, including, without limitation, Advances made under this Agreement; and (iv) insurance proceeds and books and records relating to any of the
property covered by this Agreement; together, in each instance, with all accessions and additions thereto, substitutions therefor, and replacements, proceeds and products thereof; 
 g. Intellectual Property; 
 h. commercial tort claims (all of which that are in existence as of the date of this Agreement are listed on Schedule 4.1); 
 i. all books, records, ledger cards and other property at any time evidencing or relating to the Collateral; 
 j. all investment property, including without limitation, (i) all of the shares of capital stock owned by Borrower, all of which are listed on Schedule 4.1 hereto, of the issuers listed thereon (individually, an
“Issuer,” and collectively, the “Issuers”) and all shares of capital stock or ownership interests of any Issuer obtained in the future by Borrower and the certificates representing or evidencing all such shares or
ownership interests (the “Pledged Shares”); (ii) all other property which may be delivered to and held by the Agent in respect of the Pledged Shares pursuant to the terms hereof; (iii) all dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed, in respect of, in exchange for or upon the conversion of the securities referred to in clauses (i) and (ii) above; and (iv) all rights and privileges of
Borrower with respect to the securities and other property referred to in clauses (i), (ii) and (iii) (the items referred to in clauses (i) through (iv) being collectively called the “Pledged Collateral”);

 k. all other real property and personal property of Borrower, whether tangible or intangible, and whether now owned or
hereafter acquired; 
  

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 l. all other investment property to the extent not otherwise referred to in this
Section 4.1 in which Borrower has now, or acquires from time to time hereafter, any right, title or interest in any manner, and the certificates or instruments, if any, representing or evidencing such investment property, and all
dividends, distributions, return of capital, interest, distributions, value, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such investment property
and all subscription warrants, rights or options issued thereon or with respect thereto; 
 m. Extraordinary Receipts received
after the Petition Date; and 
 n. all proceeds and products of any of the foregoing, in any form, including, without
limitation, any claims against third parties for loss or damage to or destruction of any or all of the foregoing and to the extent not otherwise included, all (i) payments under insurance (whether or not the Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral and (ii) cash. 
 4.2 Security for Obligations. This Agreement and the Collateral secure the indefeasible payment in full and performance of the Obligations. 
 4.3 Superpriority Nature of Obligations; Priming Lien. 
 a. The Obligations shall be secured by Liens in the Collateral under Sections 364(c)(2) and (c)(3) of the Bankruptcy Code. 
 b. The Obligations shall have the status in the Case of superpriority administrative expenses under Section 364(c)(1) of the
Bankruptcy Code. Such administrative claim shall have priority, subject to the provisions of Section 4.3, over all other claims, costs and expenses of the kinds specified in, or ordered pursuant to, Sections 105, 326, 330, 331, 503(b),
506(c), 507(a), 507(b), 726 or any other provision of the Bankruptcy Code and shall at all times be senior to the rights of the Borrower, the Borrower’s estate, and any successor trustee or estate representative in the Bankruptcy Cases or any
subsequent proceeding or case under the Bankruptcy Code. 
 c. Lenders’ and Agent’s Liens on the Collateral under
Sections 364(c)(2) and (c)(3) of the Bankruptcy Code, for the benefit of Lenders, and the superpriority administrative claim under Section 364(c)(1) of the Bankruptcy Code afforded the Obligations shall be subject only to the Carve-out and the
Chapter 7 Carve-Out; provided that the Carve-out shall not include any such fees and expenses that were incurred in the prosecution of Adverse Claims; provided, however, that any payments actually made to such professionals
under Sections 330, 331 or 503 of the Bankruptcy Code in respect of fees and expenses incurred or accrued shall reduce dollar-for-dollar the Carve-Out; provided, further, that in no event shall any of the Carve-Out be utilized to
prosecute or cause others to prosecute any Adverse Claims. 
 d. Subject to the provisions of the Financing Order and this
Section 4.3, the Borrower shall be permitted to pay as the same may become due and payable (i) administrative expenses of the kind specified in Section 503(b) of the Bankruptcy Code incurred in the ordinary course of their
businesses, (ii) provided that no Event of Default 

  

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has occurred and is continuing, compensation and reimbursement of expenses to professionals allowed by the Bankruptcy Court and payable under Sections 330
and 331 of the Bankruptcy Code, and (iii) any other Pre-Petition or Post-Petition expenses of the Borrower, including adequate protection payments, to the extent approved by the Bankruptcy Court and not otherwise prohibited by the terms of this
Agreement or the other Loan Documents. No costs or expenses of administration shall be imposed against Agent or any Lender or any of the Collateral under Sections 105, 506(c) or 552 of the Bankruptcy Code, or otherwise. 
 4.4 Financing Statements. Borrower hereby authorizes the Agent to file one or more initial financing or continuation statements (including the
description of the Collateral as “all assets” or “all personal property” and “all after acquired property or assets” of the Borrower), and amendments thereto, relative to all or any part of the Collateral without the
signature of the Borrower. 
 4.5 Agent Appointed Attorney-in-Fact. The Borrower hereby irrevocably appoints the Agent, for its
benefit and the benefit of the Lenders, such Borrower’s attorney-in-fact (which appointment shall be irrevocable and deemed coupled with an interest), with full authority in the place and stead of Borrower and in the name of Borrower or
otherwise, from time to time in the Agent’s discretion, upon and during the occurrence and continuation of an Event of Default in accordance with Article 9 of this Agreement and the Financing Order, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation: 
 (i) to obtain and adjust insurance required to be paid to the Agent; 
 (ii) to ask, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral, 
 (iii) to receive, endorse, and collect any drafts or other instruments, documents and Chattel Paper, in connection with clause (i) or
(ii) above, 
 (iv) to receive, endorse and collect all instruments made payable to the Borrower representing any
dividend or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same; and 
 (v) to file any claims or take any action or institute any proceedings which the Agent may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Agent or the Lenders with respect
to any of the Collateral. 
  

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 ARTICLE 5 
 REPRESENTATIONS AND WARRANTIES 
 Borrower represents and warrants, to the best of its
knowledge, to Agent and each Lender on the Effective Date and on the date of each borrowing request and advance made pursuant to Section 2.1, the following and acknowledges: 
 5.1 Due Incorporation and Qualification. The Borrower is a corporation duly organized and existing under the laws of the state of Delaware and is
qualified and licensed to do business and is in good standing in any state in which the conduct of its business or its ownership of assets requires that it be so qualified, except for any failure to be so qualified or licensed as would not
reasonably be expected to have a Material Adverse Effect. Set forth on Schedule 5.1 are the jurisdictions in which the Borrower is organized and qualified to conduct business and the location of the principal offices and chief executive offices.

 5.2 Due Authorization. The Borrower has the right and power and is duly authorized by all appropriate corporate or other required
action to enter into each of the Loan Documents to which it is a party, subject only to the Bankruptcy Court’s entry of the Financing Order. Except for the Financing Order, no authorizations of, or registrations or filing with, any Governmental
Authority, or any applicable securities exchange, or other third party are necessary for the execution, delivery or performance by Borrower of the Loan Documents to which it is a party, or for the legality, validity or enforceability hereof or
thereof. 
 5.3 Location of Inventory and Equipment. The Borrower shall keep the Inventory and Equipment only at the locations set
forth on Schedule 5.3, unless Inventory or Equipment are required to be moved to a different location in the ordinary course of business to enable the Borrower to provide its services, in which case the Borrower shall notify Agent in writing
as set forth in Article 12 of the new location of such Inventory and Equipment prior to making such move. 
 5.4 Relocation of Chief
Executive Office. The chief executive offices of the Borrower is set forth in Article 12 of this Agreement and the Borrower will not, without prior written consent of the Requisite Lenders, relocate such offices. 
 5.5 Permits and Licenses. The Borrower holds all licenses, permits, approvals and consents required for the conduct of its business and the
ownership and operation of its assets, except as would not be reasonably expected to have a Material Adverse Effect. 
 5.6 Due Execution;
Binding Obligation. Upon entry by the Bankruptcy Court of the Financing Order, the execution, delivery and performance by the Borrower of each of the Loan Documents to which it is a party, have been duly executed and delivered by Borrower. This
Agreement is, and each of the other Loan Documents to which Borrower is or will be a party, when delivered hereunder or thereunder, and upon entry and subject to the terms of the Financing Order, will be, a legal, valid and binding obligation of
Borrower enforceable against Borrower in accordance with its terms and the Financing Order. 
  

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 5.7 The Orders. As of the date of the making of any Borrowing Request or Advance hereunder, the
Financing Order has been entered and has not been stayed, amended, vacated, reversed, rescinded or otherwise modified in any respect (except in accordance with the terms hereof). 
 5.8 Compliance with Articles; Bylaws. The execution by the Borrower of the Loan Documents to which it is a party does not constitute a
breach of any provision contained in the Borrower’s certificate of incorporation or its bylaws, nor does it constitute a default or an event of default under any material agreement to which the Borrower is now or may hereafter become a party.

 5.9 Accuracy of Information and No Material Adverse Change in Financial Statements. 
 a. The Borrower has delivered to Agent the Approved Budget. The Budget has been prepared in good faith based upon reasonable assumptions.
The Approved Budget is attached hereto as Exhibit A. To the best of the Borrower’s knowledge, information and belief, no facts exist that (individually or in the aggregate) would result in any material change in any of the assumptions or
information set forth in the Approved Budget. The Approved Budget is based upon reasonable estimates and assumptions, has been prepared on the basis of the assumptions stated therein and reflects the reasonable estimates of the Borrower of the
results and needs of its operations and other information projected therein. The financial statements that have been delivered to the Agent and each Lender both prior to the Effective Date and pursuant to Section 6.1 have been prepared
in accordance with GAAP, subject to year end audit adjustments and the absence of footnotes in the case of interim financial statements, and accurately and fairly present in all material respects the results of operations and financial condition of
the Borrower as of the date of such financial statements. 
 b. Each Loan Document and each report delivered pursuant to any
Loan Document, including any financial statement, Variance Report, notice or other document delivered pursuant hereto or thereto, taken as a whole and in light of the circumstances in which made, contain no untrue statement of a material fact and do
not omit to state a material fact necessary to make such statements not misleading in any case, which have not been, prior to the date hereof, corrected, supplemented, or remedied by subsequent documents furnished or statements made orally or in
writing to the Agent or any Lender or the Bankruptcy Court (as appropriate); and, to the extent that any such written statements constitute projections or other forward-looking statements, such projections or other forward-looking statements were
prepared in good faith on the basis of assumptions, methods, data, tests and information reasonably believed by the Borrower to be valid and accurate in all material respects at the time such projections were furnished to the Agent, any Lender or
the Bankruptcy Court. 
  

 26 

 c. Except as disclosed in writing to the Agent and each Lender prior to the date hereof,
to Borrower’s knowledge after reasonable inquiry and diligence there are no unstayed legal or arbitral proceedings, or any proceedings or investigation by or before any governmental or regulatory authority or agency, pending or threatened in
writing to Borrower, or threatened against Borrower which is reasonably likely to be determined adversely and if so determined would have a Material Adverse Change or that seek to enjoin or delay any of the transactions contemplated hereby.

 5.10 Use of Proceeds. All proceeds provided by Lenders to the Borrower pursuant to any Financing Order, this Agreement or
otherwise, have been and shall be used by the Borrower solely for general operating and working capital purposes in the ordinary course of Borrower’s business in accordance with the Approved Budget and for those purposes set forth in
Sections 2.1 and 4.3(d) of this Agreement. No part of the proceeds of any Advances hereunder have been or will be used for “buying” or “carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board of Governors. 
 5.11 Defaults and Events of Default. No Default or Event of Default has occurred or is existing under any of the Loan Documents.

 5.12 Administrative Expenses and Lien. Upon the entry of the Financing Order, and subject to the Carve Out, the Obligations shall
at all times constitute an Administrative Expense for which the Lenders shall at all times maintain and have a superpriority claim pursuant to Section 364(c) of the Bankruptcy Code and shall maintain and have a lien on the Collateral pursuant
to Section 364(d) of the Bankruptcy Code and no other party has or shall have a lien or claim that is pari passu or superior to the claim of the Lenders, other than Permitted Liens. 
 5.13 Reliance by Agent and Lenders; Cumulative. Each warranty, representation and agreement contained in this Agreement shall be automatically be
deemed repeated and made by the Borrower on the date of each request for an Advance by the Borrower and on each date on which any Lender makes such Advance and on each date on each date on which an Variance Report is delivered and shall be
conclusively presumed to have been relied on by such Lender regardless of any investigation made or information possessed by the Agent or any Lender. The warranties, representations and agreements set forth herein shall be cumulative and in addition
to any and all other warranties, representations and agreements which the Borrower shall now or hereafter give, or cause to be given, to the Lender. 
 5.14 Right to Inspect. Agent, each Lender or Persons designated by Agent (including without limitation examiners or other representatives of the SBA) shall have the right, as reasonable, at any time or times
hereafter during the Borrower’s usual business hours (or at any time after the occurrence and during the continuation of a Default), or, as applicable, to the extent that the Borrower has the contractual ability to grant Agent and each Lender
such rights, during the usual business hours of any third party having control over the Borrower’s Books to inspect the Borrower’s Books, 

  

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facilities and operations in order to verify the amount or condition of, or any other matter relating to, the Loan Documents, Obligations or the
Borrower’s financial condition. Borrower shall pay to Agent or any Lender all customary fees and all reasonable costs and out-of-pocket expenses incurred by Agent or such Lender in the exercise of its rights hereunder, and all of such fees,
costs and expenses shall constitute liabilities hereunder, shall be payable on demand and, until paid, shall bear interest at the highest rate then applicable to the Note. 
 5.15 Title to Assets; Liens. 
 a. As of December 30, 2007, Borrower had good and marketable title to the properties shown to be owned by the Borrower on the Borrower’s balance sheet as of December 30, 2007. Since December 30, 2007, Borrower has not
disposed of any property except in the ordinary course of business except as disclosed on Schedule 5.15. Borrower owns and has on the date hereof good and marketable title, subject to reclamation rights with respect to inventory, or subsisting
leasehold interests subject to Liens permitted hereunder to, and enjoys on the date hereof peaceful and undisturbed possession of, all such material properties that are necessary for the operation and conduct of its businesses. 
 b. There are no Liens of any nature whatsoever on any Assets of the Borrower other than: (i) Liens granted pursuant to the Financing
Order and this Agreement; (ii) other Liens in existence on the Petition Date as reflected on Schedule 5.15. The aggregate indebtedness or other obligations secured (or that may be secured) by each such Lien is correctly described in Schedule
7.1 and Borrower has no other indebtedness for borrowed money. Borrower is not party to any contract, agreement, lease or instrument entered into on or after the Petition Date the performance of which, either unconditionally or upon the happening of
an event, will result in or require the creation of a Lien on any assets of Borrower in violation of this Agreement. 
 5.16 SBA License
Application and Related Requirements. Borrower hereby acknowledges that Granite Creek Flex Cap I, L.P. (“GCFC”), in its capacity as a Lender, is an SBIC pursuant to the SBIC Act. Borrower acknowledges that compliance by Borrower
with the terms of this Agreement and the representations, warranties and covenants contained herein are necessary for GCFC to be in compliance under the SBIC Act and Borrower agrees to comply with the terms of this Agreement for such purpose.

 5.17 Small Business Administration Documentation. Borrower acknowledges that it completed, executed and delivered to Agent the SBA
Forms 480, 652 and 1031 (Parts A and B) together with a business plan showing financial projections (including balance sheets and income and cash flows statements) for the period described therein and a written statement (whether included in the
purchase agreement or pursuant to a separate statement) from Borrower regarding their use of proceeds from the DIP Facility (the “Use of Proceeds Statement”). Borrower represents and warrants to Agent that the information regarding
Borrower set forth in the SBA Form 480, Form 652, Form 1031 and the Use of Proceeds Statement is accurate and complete. 
  

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 5.18 Small Business Concern. Borrower represents and warrants to Agent that as of the date of this
Agreement Borrower’s net assets are less than $18 million and that its average after-tax income (exclusive of loss carry-forwards) for the 2 fiscal years most recently ended is less than $6 million. 
 ARTICLE 6 
 AFFIRMATIVE
COVENANTS 
 The Borrower covenants and acknowledges that until the Obligations are indefeasibly paid in full and performed, unless
the Borrower has obtained the prior written consent of Requisite Lenders, the Borrower shall comply with all of the following: 
 6.1
Notices and Other Reports. The Borrower shall provide to the Agent and each Lender, with a copy to the counsel for the Committee the following: 
 a. written notice of the occurrence of any Default or Event of Default pursuant to any Loan Document; 
 b. prior written notice of any motion, order or other information or document filed by the Borrower with the Bankruptcy Court or distributed or made available to the Committee; 
 c. as soon as available and in any event no later than thirty (30) days after the end of each month, copies of monthly financial
statements; 
 d. as soon as available and in any event no later than three (3) Business Days after the end of each
weekly period, a Variance Report accompanied by a certificate of the chief executive officer or the senior financial officer, in form and substance satisfactory to Lenders, as of the last day of the preceding weekly period, setting forth the
following information for the Borrower for the preceding weekly period on both a weekly and cumulative basis from the Effective Date to such date, on a cash basis: (i) total disbursements, (ii) total cash receipts, (iii) comparative
numbers from the Approved Budget, (iv) the weekly Cash Shortfall, the cumulative Cash Shortfall, and (v) the Cash Flow Sweep Amount (with associated calculations); 
 e. at the end of each four (4) week period, an update to the Approved Budget (extending such budget by four (4) weeks to show
the rolling ten (10) week period) in form and substance satisfactory to the Agent and Requisite Lenders in all respects; upon the written approval of the Agent and Requisite Lenders, such updated budget shall become the Approved Budget for all
purposes hereunder from the date of approval; 
 f. concurrent with the Borrower’s filing thereof with the Bankruptcy
Court, all reports required by the Office of the United States Trustee; and 
  

 29 

 g. any other information reasonably requested by Agent or any Lender. 
 6.2 Tax Returns, Receipts. The Borrower shall deliver to the agent and each Lender copies of each of its future federal or state income or
franchise tax returns, and any amendments thereto, within fifteen (15) days of the filing thereof. The Borrower further shall promptly deliver to the Lender, upon request, satisfactory evidence of the Borrower’s payment of any and all
withholding taxes required to be paid by it. 
 6.3 Title to Equipment. Upon the Agent’s reasonable request, the Borrower shall
deliver to the Agent any and all evidences of ownership of, certificates of title, or applications for title to any items of Equipment. 
 6.4 Maintenance of Equipment. The Borrower shall keep and maintain its real property, the Inventory and Equipment and other assets in good operating condition and repair, ordinary wear and tear excepted, and shall make all necessary
repairs or replacements thereto so as to maintain and preserve the same as necessary in the conduct of the Borrower’s business. 
 6.5 Taxes. All Federal, state and local assessments and taxes, whether real, personal or otherwise, due or payable by, or imposed, levied or assessed against the Borrower or any of their assets or in connection with the
Borrower’s business shall hereafter be paid before they become delinquent or before the expiration of any extension period except for those taxes, assessments and the like being contested by the Borrower in good faith and by appropriate
proceedings and as to which the Borrower has established appropriate reserves in accordance with GAAP, provided, that no Lien is placed on any assets of the Borrower during any such contest as a consequence of the failure to pay such tax,
assessment or the like. The Borrower shall make due and timely payment or deposit of all federal, state and local taxes, assessments or contributions required of it by law. 
 6.6 Insurance. The Borrower shall keep and maintain the Assets insured against all risk of loss or damage from fire, theft, vandalism, and all
other hazards and risks of physical damage included within the meaning of the term “extended coverage” in such amounts as are ordinarily insured against by similar businesses and, in each case, in such amounts and scope of coverage as is
otherwise satisfactory to the Lenders. The Borrower shall also keep and maintain general liability insurance and property damage insurance, and insurance against loss from business interruption, insuring against all risks relating to or arising from
the Borrower’s ownership and use of the Assets and the operation of its business. The Borrower shall not be required to maintain earthquake insurance. The Borrower shall deliver to the Agent prior to the Effective Date a standard ACCORD
Evidence of Insurance Certificate evidencing insurance policies maintained by the Borrower and naming the Agent as additional insured for all liability policies and as loss payee for all property damage and business interruption insurance.

  

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 6.7 Compliance With Law. The Borrower shall comply, in all material respects, with the
requirements of all applicable laws, rules, regulations and orders of governmental authorities relating to the Borrower and the conduct of its business. 
 6.8 Compliance with Bankruptcy Court. The Borrower shall comply with the notice and other requirements of the Bankruptcy Code and all other applicable rules in a manner acceptable to Lenders and its
counsel. 
 6.9 Cash Management System and Collateral Account. The Borrower shall at all times maintain a system of deposit
accounts and cash management systems satisfactory to the Lenders and consistent with the guidelines of the Office of the United States Trustee, including the Collateral Account. Borrower shall on the Effective Date, and on each Monday (or the
immediately succeeding Business Day if Monday is not a Business Day) after the Effective Date, transfer an amount equal to Cash Flow Sweep Amount to the Collateral Account. Upon the request of the Agent or any Lender, the Borrower shall promptly,
and in any event within five (5) Business Days, cause control agreements satisfactory to Lenders to be executed by each deposit bank where any deposit account is maintained and cause cash management systems satisfactory to the Lenders in their
sole discretion to be established. 
 6.10 Schedule of Financial Affairs. The Borrower shall file with the Bankruptcy Court
completed statements of financial affairs and schedules of assets and liabilities as required by the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable local rules or as otherwise extended by order of the Court. 
 6.11 Use of Cash Collateral. Until the Obligations are indefeasibly paid in full and the Advance Commitments have been terminated, the
Borrower shall use any Cash Collateral permitted to be used by the Borrower pursuant to the Financing Order solely in accordance with the Approved Budget notwithstanding the timing of receipt of cash or levels of cash balances. 
 6.12 Delivery of Copy of Financing Order. Within one (1) Business Day of the entry of any Financing Order, the Borrower shall deliver to the
Agent a true and correct copy of such Financing Order. 
 6.13 Sale Process. The Borrower shall pursue, on a schedule in accordance
with the Sale Milestones, authorization and approval of the sale of substantially all of its assets under the Asset Purchase Agreement and the consummation thereof, subject to any higher or better offers that may be received in accordance with the
Bidding Procedures. 
 6.14 Prior Notice of Filings. The Borrower shall deliver to the Agent, at least one (1) day prior to such
filing or distribution, copies of all pleadings, motions, applications, judicial information, financial information and other documents to be filed by or on behalf of the Borrower with the Bankruptcy Court in the Bankruptcy Case, or to be
distributed by or on behalf of the Borrower to the Committee (other than emergency pleadings, motions or other filings where, despite the Borrower’s commercially reasonable efforts, such one-day notice is impracticable) 
  

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 ARTICLE 7 
 NEGATIVE COVENANTS 
 The Borrower covenants and acknowledges that until the Obligations are
indefeasibly paid in full and performed that it shall not undertake any of the following without the prior written consent of the Requisite Lenders: 
 7.1 Extraordinary Transactions and Disposal of Assets. Enter into any acquisition, merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or form any subsidiaries, or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets or make any material change in its present method of conducting business or enter
into any transaction not in the ordinary and usual course of its business, including but not limited to the sale, lease, disposal, movement, relocation or transfer, whether by sale or otherwise, of, or grant any Lien on, any its Assets, other than
the sale of Inventory in the ordinary course of business or as otherwise expressly permitted by this Agreement and set forth in the Approved Budget or any approved Asset sale listed on Schedule 7.1(a); incur any indebtedness for borrowed money
or any other indebtedness (other than trade payables in the ordinary course of business and Pre-Petition indebtedness existing on the date hereof and set forth on Schedule 7.1(b)) except as expressly approved by the Bankruptcy Court and the Lenders;
or sell or transfer any property or assets to, or otherwise engage in any other transactions with, any of its stockholders. 
 7.2
Guaranty. Guaranty or otherwise become in any way liable with respect to the obligations of any third party, except by endorsement of instruments or items of payment for deposit to the accounts of the Borrower for negotiation and delivery to
the Lender. 
 7.3 Restructure. Make any material change in their financial structures or business operations, except as
otherwise authorized or approved by the Bankruptcy Court and the Lender. 
 7.4 Payments. Pay any Post Petition indebtedness
owing to any third party, other than expenses in the Approved Budget; or pay any Pre-Petition indebtedness or settle any claim relating thereto, or as otherwise ordered by the Court (e.g., allowed reclamation claims, pre-petition wages,
shipper’s or warehouse lien claims, if any, etc.). 
 7.5 Investments, Loans and Advances. Make any loans, advances or
extensions of credit; or make any capital contribution or other investment, excluding travel advances and similar transactions with employees or directors of the Borrower in the conduct of the business of the Borrower. 
 7.6 Capital Expenditures. Make any capital expenditure, or any commitment therefor, or purchase or lease any real or personal assets or
replacement Equipment except as set forth in the Approved Budget. 
  

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 7.7 Accounting Methods. Modify or change its methods of accounting or enter into, modify or
terminate or allow to exist any agreement presently existing or at any time hereafter entered into with any third party for the preparation or storage of the Borrower’s records of Accounts and financial condition without said parties agreeing
to provide the Lender with information regarding the Assets and/or the Borrower’s financial condition. 
 7.8 Business
Suspension. Suspend or go out of business or convert the Bankruptcy Case to a liquidation. 
 7.9 Bankruptcy Case. Seek,
consent or suffer to exist: (a) any modification, stay, vacation or amendment to any Financing Order, unless the Requisite Lenders have consented to such modification, stay, vacation or amendment in writing, or (b) a priority claim for any
administrative expense or unsecured claim against the Borrower, (now existing or hereafter arising of the kind specified in Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) superior to the superpriority claim of the Lenders in respect
of the Obligations, other than any allowed claim for Administrative Fees and Expenses. 
 7.10 Limitation on Issuances of Capital Stock
and Dividends. Declare or pay, directly or indirectly, any dividends or make any other distribution or payment, whether in cash, property, securities or a combination thereof, with respect to (whether by reduction of capital or otherwise) any
shares of capital stock, or set apart any sum for the aforesaid purposes. 
 7.11 Use of Proceeds. No part of the proceeds of any
Advances hereunder, will be used for purposes other than those set forth in Section 2.1. No part of the proceeds of any Advances hereunder will be used for “buying” or “carrying” any “margin stock” within
the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board of Governors. If requested by agent or any
Lender, the Borrower will furnish to Agent or such Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U. No proceeds of Advances shall be used for
any purpose not set forth in the Approved Budget or to directly or indirectly or indirectly support an Adverse Claim. 
 7.12 Reclamation
Claims. The Borrower shall not enter into any agreement to return any of its Inventory to any of its creditors for application against any Pre-Petition trade payables or other Pre-Petition claims under Section 546(h) of the Bankruptcy Code
or allow any creditor to take any setoff or recoupment against any of its Pre-Petition trade payables or other Pre-Petition claims based upon any such return pursuant to Section 553(b)(1) of the Bankruptcy Code or otherwise if, after giving
effect to any such agreement, setoff or recoupment, the aggregate amount of Pre-Petition indebtedness, Pre-Petition trade payables and other Pre-Petition claims subject to all such agreements, setoffs and recoupments since the Petition Date would
exceed $500,000. 
  

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 7.13 Chapter 11 Claims. The Borrower shall not incur, create, assume, suffer to exist or
permit any other super-priority administrative expense claim which is pari passu with or senior to the claims of Lender against the Borrower. 
 7.14 Fundamental Changes, Line of Business. Borrower shall not amend its organizational documents or change its name or jurisdiction of organization or change its fiscal year or enter into a new line of
business (other than pursuant to the Bankruptcy Case) materially different from Borrower’s current business without the consent of Agent. Without limiting the generality of the foregoing, Borrower will not change it business activities to a
business activity which a licensee under the SBIC Act is prohibited from funding by the SBIC Act. 
 ARTICLE 8 
 EVENTS OF DEFAULT 
 The
occurrence of any one or more of the following events shall constitute an Event of Default by the Borrower hereunder: 
 8.1
Failure to Pay. The Borrower’s failure to pay when due and payable, including when declared due and payable, or within one (1) Business Day after receipt of written notice from the Agent of such failure, any amounts or any portion
of the Obligations (whether principal, interest, taxes, or otherwise); 
 8.2 Failure to Perform. The failure of the Borrower to
perform, keep or observe any term, provision, condition, representation, warranty, covenant or agreement contained in this Agreement, in any of the other Loan Documents, including the Financing Order, or the Asset Purchase Agreement, the Bidding
Procedure Order, or in any other present or future agreement among the Borrower, the Agent and/or Lender or any other order of the Bankruptcy Court and such failure shall continue for ten (10) Business Days after written notice of such failure
from the Agent to the Borrower; 
 8.3 Misrepresentation. Any warranty, representation, statement or report made in this Agreement, in
any of the other Loan Documents, including the Financing Order, or in the Asset Purchase Agreement or the Sale Order, or in any other present or future agreement among the Borrower, the Agent and/or Lender or any other order of the Bankruptcy Court
or to the Bankruptcy Court with respect to the Sale Order, Financing Order or the Loan Documents, the Bidding Procedures Order, the Asset Purchase Agreement or, in each case, any of the transactions contemplated thereby, or to the Agent or any
Lender by the Borrower or any officer, employee, or agent of the Borrower, contains a material misstatement or material misrepresentation on the date such warranty, representation, statement or report is given or made; 
 8.4 Material Adverse Change. There is a Material Adverse Change; 
 8.5 Injunction Against Borrower. The Borrower is enjoined, restrained or in any way prevented by court order from continuing to conduct all
or any material part of its business; 
  

 34 

 8.6 Bankruptcy Court. The occurrence of any of the following in the Bankruptcy Case:

 a. The Borrower shall bring a motion or take any action or file any plan of reorganization or liquidation, or disclosure
statement attendant thereto: (A) to obtain additional financing not otherwise permitted pursuant to this Agreement; (B) to grant any lien upon or affecting any Collateral; (C) except as provided in the Financing Order, to use cash
collateral of the Lenders under Section 363(c) of the Bankruptcy Code without the prior written consent of the Requisite Lenders; or (D) any other action or actions directly adverse to the Lenders or their rights and remedies hereunder or
its interest in the Collateral; or 
 b. An order is entered confirming a plan of reorganization or a sale of all or
substantially all of the assets or capital stock of the Borrower that does not contain a provision for termination of the Advance Commitments and repayment in full in cash of all of the Obligations under this Agreement on or before the effective
date of such plan; or 
 c. An order is entered amending, supplementing, staying, vacating or otherwise modifying the
Financing Agreements or the Financing Order without the written consent of the Requisite Lenders; or 
 d. The Final Order is
not entered immediately following the expiration of the Interim Order and, in any event, within twenty (20) days of the entry of the Interim Order; provided that if the Bankruptcy Court is not available to issue such Final Order within
such 20-day period, then such date shall be extended by a reasonable period of time to accommodate the Bankruptcy Court’s schedule, not to exceed 14 days; or 
 e. Other than payments permitted pursuant to this Agreement or the Financing Order, the Borrower shall make any payment (whether by way of
adequate protection or otherwise) of principal or interest or otherwise on account of any Pre-Petition indebtedness for borrowed money; or 
 f. The payment is made of, or application for authority to pay, any Pre-Petition claim without the prior written consent of the Requisite Lenders or pursuant to an order of the Bankruptcy Court after notice and
hearing unless otherwise permitted under this Agreement; or 
 g. Any claim or claims are allowed under Section 506(c)
during the period in which the Debtor is authorized to borrow funds or use cash collateral of the Bankruptcy Code against or with respect to any of the Collateral or Pre-Petition Collateral, other than for the Carve Out; or 
 h. The Borrower shall file, support or fail to oppose a motion seeking, or the Bankruptcy Court shall enter, an order appointing
(x) a trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code, (y) a responsible officer or (z) an examiner, in each case with enlarged powers relating to the operation of the business (powers beyond those set forth in sub
clauses (3) and (4) of Section 1106(a) of the Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code; or 
  

 35 

 i. Except as provided in the Bidding Procedures Order, absent the written consent of
Requisite Lenders, the Bankruptcy Court shall enter an order under Section 363 or 365 of the Bankruptcy Code authorizing or approving the sale or assignment of a material portion of any of the Borrower’s assets, or procedures in respect
thereof, or the Borrower shall seek, support, or fail to contest in good faith, the entry of such an order; or 
 j. A Chapter
11 plan of reorganization or liquidation, or disclosure statement attendant thereto, with respect to the Borrower is filed and (i) the treatment of the claims of the Lenders in such plan is not approved by the Requisite Lenders or
(ii) such plan does not provide for the payment in full in cash of the Obligations on or prior to the date of consummation thereof; or 
 k. The Bankruptcy Case shall be dismissed or converted from one under Chapter 11 to one under Chapter 7 of the Bankruptcy Code or the Borrower shall file a motion or other pleading seeking the dismissal of the
Bankruptcy Case under Section 1112 of the Bankruptcy Code or otherwise; or 
 l. The Bankruptcy Court shall enter an
order granting relief from the automatic stay to any creditor or party in interest (i) to permit foreclosure (or the granting of a deed in lieu of foreclosure or the like) on any assets of the Borrower which have an aggregate value in excess of
$100,000.00 or (ii) to permit other actions that would have a Material Adverse Change; or 
 m. The Borrower shall
commence or join with or actively support the Committee or any other party in interest in the Bankruptcy Case in a suit, action or contested matter against the Agent or the Lenders or affecting the Collateral, or shall join or actively support a
suit, action or contested matter against the Lender or the Agent or affecting the Collateral, that sets forth (a) a claim in excess of $100,000.00, (b) any claim or legal or equitable remedy which seeks reduction, setoff, subordination or
any recharacterization of the claim or lien of the Lender; or (c) a claim that would otherwise have a material adverse effect on the rights and remedies of the Lender under any Financing Agreement and related documents or the collectability of
all or any portion of the Obligations; or 
 n. An order shall be entered avoiding or requiring repayment of any portion of
the payments made on account of the Obligations owing under this Agreement; or 
 o. (i) The Borrower shall fail to comply
with the terms of the Financing Order in any material respect, (ii) the Borrower shall file a motion for reconsideration with respect to the Financing Order, or (iii) the right of the Borrower to borrow under this Agreement is terminated
by an order entered by the Bankruptcy Court; or 
  

 36 

 p. The Borrower shall file, support or fail to oppose a motion seeking, or the Bankruptcy
Court shall enter, an order (i) approving additional financing under Section 364(c) or (d) of the Bankruptcy Code not otherwise permitted pursuant to this Agreement, (ii) granting any lien upon or affecting any Collateral which
are pari passu or senior to the liens on the Collateral in favor of the Agent for the benefit of the Agent the Lenders, (iii) granting any claim priority senior to or pari passu with the claims of the Lenders under the Loan Documents or any
other claim having priority over any or all administrative expenses of the kind specified in Section 503(b) or Section 507(b) of the Bankruptcy Code, or (iv) granting any other relief that is adverse to the Lenders’ interests
under any Financing Agreement or its rights and remedies hereunder or their interest in the Collateral; 
 8.7 Actions. One or
more actions shall be commenced which could result in, or judgments or decrees required to be satisfied as an administrative expense claim are entered after the Petition Date against Borrower involving in the aggregate a liability (to the extent not
paid or fully covered by insurance) of $100,000 or more and all such actions, judgments or decrees shall not have been vacated, stayed or bonded pending appeal within the time required by the terms of such judgment or applicable law; or (ii) an
action shall be commenced or there shall be rendered against Borrower a non-monetary judgment with respect to a post-Petition Date event which causes or would reasonably be expected to cause a Material Adverse Change or a suit or action against the
Agent or any Lender is commenced by the Borrower, any federal, state environmental protection or health and safety agency, any suit or action which asserts any claim or legal or equitable remedy contemplating subordination of any claim of the Agent
or any Lender or its affiliates, and shall remain undismissed or unstayed for thirty (30) days after its commencement without any preliminary relief of the nature sought having been granted, or it shall be determined (whether by the Bankruptcy
Court or by any other judicial or administrative forum) that Borrower is liable for the payment of claims arising out of any failure to comply (or to have complied) with applicable environmental, health or safety laws or regulations; 
 8.8 Reorganization Plan. The Borrower files a plan of reorganization in the Case or a motion for the sale of a material portion of its
Assets pursuant to Section 363 of the Bankruptcy Code which does not provide for indefeasible payment of the Obligations on the effective date thereof, or as otherwise agreed by the Lenders in writing, and to which the Requisite Lenders do not
consent; 
 8.9 Budget Variances. If, as of any date that occurs four (4) weeks or more after the Effective Date, in each
case, cumulative expenses and costs exceed the amounts set forth in the Approved Budget by an amount in excess of 5%, or cumulative revenue is less than the amounts set forth in the Approved Budget by an amount in excess of 10%. 
 8.10 ERISA Compliance. Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any plan; (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a
Plan shall arise on the assets of Borrower or any commonly controlled 

  

 37 

 
entity; (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any single employer plan, which Reportable Event or commencement of proceedings or appointment of a trustee is likely to result in the termination of such plan for purposes of Title IV of ERISA;
(iv) any single employer plan shall terminate for purposes of Title IV of ERISA; (v) Borrower or any commonly controlled entity shall, or in the reasonable opinion of the Lenders is likely to, incur any liability in connection with a
withdrawal from, or the insolvency or ERISA reorganization of, a multiemployer plan or (vi) any other event or condition shall occur or exist with respect to a plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Change. 
 8.11 Unauthorized Payments. Borrower shall make any payments (including any adequate protection payments) relating to Borrower’s Pre-Petition obligations or interests, other than (i) as permitted under the Financing
Order; (ii) in respect of accrued payroll and related expenses and employee benefits as of the Petition Date; (iii) in accordance with, and to the extent authorized by, orders reasonably satisfactory to the Requisite Lenders; (iv) as
otherwise permitted under this Agreement and set forth in the Approved Budget. 
 8.12 Validity of Loan Documents and Superpriority
Claims. Any material provision of this Agreement or any other Loan Document shall cease to be valid and binding on the Borrower or cease to be in full force and effect, or Borrower or its affiliates shall so assert in any pleading filed in any
court; or any proceeding shall be commenced by Borrower or its affiliates seeking, or otherwise consenting to, the invalidation, subordination or challenging in any respect the superpriority claims and liens granted to secure the Obligations, or
granting any claim or lien that is senior or pari passu with those of the Agent or the Lenders. 
 8.13 Failure to Achieve a
Sale Milestone. The Borrower shall fail to achieve any Sale Milestone within ten (10) Business Days of the date specified in the definition of Sale Milestone; unless such delay shall be attributable solely to scheduling constraints of the
Bankruptcy Court to the extent permitted in the definition of Sale Milestone. 
 8.14 Failure to Deliver a Variation Report.
The Borrower shall fail to deliver a Variation Report not later than three (3) Business Days after the due date thereof. 
 8.15
Event of Default Under Other Financing Agreements. There shall be an event of default under any of the other Financing Agreements. 
 8.16 Failure to Make Post Closing Deliveries. The Borrower shall fail to make any post closing delivery set forth on Schedule 3.3 when due or within ten (10) Business Days after written notice of such failure
is given by the Agent to the Borrower. 
  

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 ARTICLE 9 
 LENDERS’ RIGHTS AND REMEDIES 
 9.1 Rights and Remedies. 
 a. Upon the occurrence and during the continuance of an Event of Default, Agent, may and at the direction of the Requisite Lenders shall,
do any one or more of the following: 
 (i) Declare all Obligations, whether evidenced by the Loan Documents or otherwise,
immediately due and payable in full; 
 (ii) Cease advancing money or extending credit to or for the benefit of the Borrower
under the Loan Documents or under any other agreement among the Borrower, the Agent and/or any Lender; 
 (iii) Terminate this
Agreement as to any future liability or obligation of the Agent or any Lender, but without affecting the Agent’s or any Lender’s rights and without affecting the Obligations; 
 (iv) Deliver to the Debtor and the Committee an enforcement notice, stating that Lenders will exercise their rights and remedies against
the Collateral and upon delivery of such enforcement notice, may file a motion to terminate the automatic stay provided in section 362 of the Bankruptcy Code in order to enforce all of the Liens and security interests in the Collateral, enter onto
any premises of Borrower in connection with an orderly liquidation of the Collateral, and exercise such other lawful rights and remedies as they deem necessary or advisable, including without limitation credit bidding for the Collateral in any sale.

 (b) The rights, remedies, powers and privileges of the Agent and Lenders provided in this Article 9 are cumulative and not
exclusive of any other rights, remedies, powers and privileges provided by law or equity. In addition to the foregoing, the Agent and Lenders shall have all rights and remedies provided by law or equity and any rights and remedies contained in any
of the Loan Documents and all such rights and remedies shall be cumulative. 
 9.2 No Waiver. No delay on the part of the Agent
or any Lender in exercising any right, power or privilege under any Loan Document shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege under such Loan Documents or otherwise, preclude other or further
exercise of any such right, power or privilege. 
  

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 ARTICLE 10 
 PAYMENT OF TAXES AND EXPENSES AND INDEMNIFICATION OF LENDERS 
 10.1 Payment of
Expenses. The Borrower agrees (a) to pay or reimburse Agent for all its costs and expenses incurred in connection with the development, preparation and execution of the Loan Documents, including any amendment, supplement or
modification to, and the enforcement or preservation of any rights under, this Agreement, the Notes, the other Loan Documents, the Financing Order, the Asset Purchase Agreement and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby and thereby, and the reasonable fees and disbursements of counsel to Agent and professionals engaged by Agent, (b) to pay or reimburse Agent and each Lender for all
its costs and expenses reasonably incurred in connection with the enforcement or preservation of any rights under this Agreement, the Notes, the other Loan Documents, the Financing Order, the Asset Purchase Agreement and any such other documents
following the occurrence and during the continuance of an Event of Default, including without limitation, the reasonable fees and disbursements of counsel to Lender and professionals engaged by Agent and each Lender, (c) to pay, and indemnify
and hold harmless Agent and each Lender from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement,
the Notes, the other Loan Documents, the Financing Order, the Asset Purchase Agreement and any such other documents, (d) to pay all the expenses of Agent related to this Agreement, the other Loan Documents, the Financing Order, or the Advances
in connection with the Cases (including without limitation, the on-going monitoring by Agent of the Cases, including attendance by Agent and counsel at hearings or other proceedings and the on-going review of documents filed with the Bankruptcy
Court) and (e) to pay, and indemnify and hold harmless Agent and each Lender (and their respective directors, officers, employees and agents) from and against any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance, preservation of rights and administration of this Agreement, the Notes, the other Loan Documents,
the Financing Order, the Asset Purchase Agreement any other document or agreement prepared in connection herewith or therewith or the use of the proceeds of the Advances, including without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Borrower or any of its properties (all the foregoing in this clause (e), collectively, the “indemnified liabilities”),
provided that the Borrower shall have no obligation hereunder to Agent and any Lender with respect to indemnified liabilities determined by the final non-appealable judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct on the part of such Agent or such Lender or their respective directors, officers, employees and agents; provided, further, that the Borrower shall in no event be responsible for punitive damages
pursuant to this Section 10.1. The agreements in this subsection shall survive repayment of the Advances and all other Obligations payable or to be performed hereunder. 
  

 40 

 10.2 Taxes. 
 a. All payments made by the Borrower under this Agreement and the other Loan Documents shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes, gross receipt taxes (imposed in lieu of net income taxes) and franchise taxes (imposed in lieu of net income taxes) imposed on the Agent or any Lender as a result of a present or former connection
between Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from Agent or such Lenders having executed,
delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or other taxes are required to be withheld from any amounts payable to Agent or any Lender hereunder, the amounts so payable to Agent or such Lender shall be increased to the extent necessary to yield to Lender (after payment of all
Non-Excluded Taxes and other taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such
amounts payable to Agent or any Lender with respect to any Non-Excluded Taxes (i) that are attributable to Agent or such Lender’s failure to comply with the requirements of paragraph (d) or (e) of this Section or (ii) that
are United States withholding taxes imposed on amounts payable to Agent or such Lender at the time Agent or such Lenders becomes a party to this Agreement, except to the extent that Agent or such Lender’s assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph. 
 b. In addition, the Borrower shall pay any other taxes to the relevant Governmental Authority in accordance with applicable law. 
 c. Whenever any Non-Excluded Taxes or other taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send
to the Agent a certified copy of an original official receipt received, if any, by the Borrower or other documentary evidence showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or other taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other required documentary evidence, the Borrower shall indemnify Agent and Lenders for any such taxes and for any incremental taxes, interest or penalties that may become
payable by Agent or such Lenders as a result of any such failure. 
  

 41 

 d. If Agent or any Lender determines, in its sole discretion, that it has received a
refund of any Non-Excluded Taxes or other taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 10.3, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 10.3 with respect to the Non-Excluded Taxes or other taxes giving rise to such refund), net of all out-of-pocket
expenses of Lenders and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of Agent or Lenders, as applicable, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to Agent or to Lenders in the event the Agent or the Lenders are required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require the Lenders to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person. 
 e. The agreements in this Section 10.3 shall survive the termination of this Agreement and the payment of the Advances and the
other Obligations and all other amounts payable hereunder. 
 10.3 Payments by Lenders. If Borrower fails to pay any monies
(whether taxes, assessments, insurance premiums or otherwise) due to third persons or entities, or fails to make any deposits or furnish any required proof of payment or deposit, or fails to perform any of Borrower’s other covenants under any
of the Loan Documents, then in the Agent’s or any Lender’s discretion and upon three (3) Business Days’ prior notice to the Borrower, the Agent or such Lender may do any or all of the following: (a) make any payment which
the Borrower failed to pay or any part thereof; (b) set up or require the Agent to set up such reserves in Borrower’s loan account as the Agent or such Lender, in its reasonable discretion, deems necessary to protect the Lenders from the
exposure created by such failure; (c) obtain and maintain insurance policies of the type described in Section 6.6 and take any action with respect to such policies as the Agent and Lenders deem prudent; or (d) take any other
action, in its reasonable discretion, deemed necessary to preserve and protect Agent’s and Lenders’ interests and rights under the Loan Documents. Any payments made by the Agent or any Lender shall not constitute: (a) an agreement by
Agent or any Lender to make similar payments in the future or (b) a waiver by Agent or Lender of any Default or Event of Default. The Agent and Lenders need not inquire as to, or contest the validity of, any such expense, tax, security
interest, encumbrance or Lien and the receipt of notice for the payment thereof shall be conclusive evidence that the same was validly due and owing. 
 ARTICLE 11 
 WAIVERS 
 Except as otherwise provided in the Financing Order, the Borrower waives demand, protest, notice of protest, notice of payment and nonpayment, and notice
of nonpayment at maturity. The Borrower hereby consents to any extensions of time of payment or partial payment at, before or after the Termination Date. 
  

 42 

 ARTICLE 12 
 NOTICES 
 Unless otherwise provided herein, all consents, waivers, notices or demands by any
party relating to the Loan Documents shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be telecopied, personally delivered or sent by registered
or certified mail, postage prepaid, return receipt requested, or by receipted overnight delivery service to the Borrower, the Agent or to the Lenders, as the case may be, at their addresses set forth below: 
  

			
	If to the Borrower:	  	RedEnvelope Inc.
		  	149 New Montgomery Street
		  	San Francisco, California 94105
		  	Attn: Board of Directors
		  	Fax No. (415) 371-1857
	
	With a copy (which shall not constitute notice) to:
		
		  	Morrison & Foerster LLP
		  	12531 High Bluff Drive
		  	San Diego, California 92130-2040
		  	Attn: Christopher M. Forrester
		  	Fax No: (858) 720-5125
		
	If to the Agent:	  	Granite Creek Partners Agent, LLC
		  	222 West Adams Street, Suite 1980
		  	Chicago, Illinois 60606
		  	Attn: Mark Radzik
		  	Fax No. (312) 895-4509
		
	If to CCC:	  	Creative Catalogs Corporation
		  	19W661 101st Street
		  	Lemont, Illinois 60439
		  	Attn: John Semmelhack
		  	Fax No. (630) 276-6512
	
	With a copy (which shall not constitute notice) to:
		
		  	Pedersen & Houpt
		  	161 N. Clark Street, Suite 3100
		  	Chicago, Illinois 60601
		  	Attn: John H. Muehlstein
		  	Fax No. (312) 261-1112

  

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 Any party may change the address at which it is to receive notices hereunder by notice in writing in the
foregoing manner given to the other parties. All notices or demands sent in accordance with this Article 12 shall be deemed received on the earlier of the date of actual receipt or five (5) calendar days after the deposit thereof in the
mail or on the date telecommunicated if telecopied. 
 ARTICLE 13 
 AGENT 
 13.1 Appointment. Each Lender hereby
designates Granite Creek Partners Agent, LLC to act as the Agent for such Lender under this Agreement and the Loan Documents. Each Lender hereby irrevocably authorizes the Agent to take such action on its behalf under the provisions of this
Agreement and the Loan Documents and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto and the Agent shall hold all Collateral, payments of principal and interest, fees, charges and collections (without giving effect to any collection days) received by the Agent pursuant to this Agreement, for the ratable benefit of
the Lenders. The Agent may perform any of its duties hereunder by or through its agents or employees. As to any matters not expressly provided for by this Agreement (including without limitation, collection of the Note) the Agent shall not be
required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Lenders, and such instructions shall be
binding; provided, however, that the Agent shall not be required to take any action which exposes the Agent to liability or which is contrary to this Agreement or the Loan Documents or applicable law unless the Agent is furnished with
an indemnification reasonably satisfactory to the Agent with respect thereto. 
  

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 13.2 Nature of Duties. The Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Loan Documents. Neither the Agent nor any of its officers, directors, employees or agents shall be (i) liable for any action taken or omitted by them as such hereunder or in connection
herewith, unless caused by their gross (not mere) negligence or willful misconduct, or (ii) responsible in any manner for any recitals, statements, representations or warranties made by Borrower or any officer thereof contained in this
Agreement, or in any of the Loan Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any of the Loan Documents, as the case may
be, or for the value, validity, effectiveness, genuineness, due execution, enforceability or sufficiency of this Agreement, or any of the Loan Documents or for any failure of Borrower to perform its obligations hereunder. The Agent shall not be
under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any of the Loan Documents, or to inspect the properties, books or records of
Borrower. The duties of the Agent as respects the Advances to the Borrower shall be mechanical and administrative in nature; the Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to impose upon the Agent any obligations in respect of this Agreement except as expressly set forth herein. 
 13.3 Lack of Reliance on Agent and Resignation. Independently and without reliance upon the Agent or any other Lender, each
Lender has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of Borrower in connection with the making and the continuance of the Advances hereunder and the taking or not taking of any
action in connection herewith, and (ii) its own appraisal of the creditworthiness of Borrower. The Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before making of the Advances or at any time or times thereafter except as shall be provided by Borrower pursuant to the terms hereof. The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in any agreement, document, certificate or a statement delivered in connection with or for the execution, effectiveness, genuineness, validity, enforceability, collectibility
or sufficiency of this Agreement or any Loan Document, or of the financial condition of Borrower, or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement, the
Note, the Loan Documents or the financial condition of Borrower, or the existence of any Event of Default or any Default. 
 The Agent may
resign on written notice to the Lenders and the Borrower and upon such resignation, the Lenders will promptly designate in the Lenders’ sole discretion a successor of the Agent and such designation shall not require the consent of the Borrower
or the Bankruptcy Court. 
  

 45 

 Any such successor of the Agent shall succeed to the rights, powers and duties of the Agent, and the term
“Agent” shall mean such successor agent effective upon its appointment, and the former Agent’s rights, powers and duties as the Agent shall be terminated, without any other or further act or deed on the part of such former Agent.
After the Agent’s resignation as the Agent, the provisions of this Article 13 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under this Agreement. 
 13.4 Certain Rights of Agent. If the Agent shall request instructions from the Lenders with respect to any act or action (including failure
to act) in connection with this Agreement or any Loan Document, the Agent shall be entitled to refrain from such act or taking such action unless and until the Agent shall have received instructions from the Lenders; and the Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the foregoing, the Lenders shall not have any right of action whatsoever against the Agent as a result of its acting or refraining from acting hereunder in accordance with the
instructions of the Lenders. 
 13.5 Reliance. The Agent shall be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, order or other document or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the
proper person or entity, and, with respect to all legal matters pertaining to this Agreement and the Loan Documents and its duties hereunder, upon advice of counsel selected by it. The Agent may employ agents and attorneys-in-fact and shall not be
liable for the default or misconduct of any such agents or attorneys-in-fact selected by the Agent with reasonable care. 
 13.6 Notice of
Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder or under the Loan Documents, unless the Agent has received notice from a Lender or Borrower referring to
this Agreement or the Loan Documents, describing such Default or Event of Default and stating that such notice is a “notice of default.” In the event that the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Lenders; provided, that, unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 
  

 46 

 13.7 Indemnification. To the extent the Agent is not reimbursed and indemnified by the Borrower,
each Lender will reimburse and indemnify the Agent in proportion to its respective portion of the Advances (or, if no Advances are outstanding, according to its advance commitment percentage), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent in performing its duties hereunder, or in any way relating to
or arising out of this Agreement or any Loan Document; provided that, the Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent’s gross (not mere) negligence or willful misconduct. 
 13.8 Agent in its Individual
Capacity. With respect to the obligation of the Agent to lend under this Agreement, the Advances made by it shall have the same rights and powers hereunder as any other Lender and as if it were not performing the duties as the Agent specified
herein; and the term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include the Agent in its individual capacity as a Lender. The Agent may engage in business with Borrower as if it were not performing
the duties specified herein, and may accept fees and other consideration from Borrower for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 
 13.9 Borrower’s Undertaking to Agent. Without prejudice to their respective obligations to the Lenders under the other provisions of this
Agreement, Borrower hereby undertakes with the Agent to pay to the Agent from time to time on demand all amounts from time to time due and payable by it for the account of the Agent or the Lenders or any of them pursuant to this Agreement to the
extent not already paid. Any payment made pursuant to any such demand shall pro tanto satisfy Borrower’s obligations to make payments for the account of the Lenders or the relevant one or more of them pursuant to this Agreement. 
 13.10 No Reliance on Agent’s Customer Identification Program. Each of the Lenders acknowledges and agrees that neither such Lender nor
any of its Affiliates, participants or assignees, may rely on the Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or
pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with the Borrower, its Affiliates or their agents, this Agreement, the Loan Documents or the transactions hereunder or contemplated hereby: (1) any identity verification
procedures, (2) any record keeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or such other laws. 
 13.11 Release of Guaranty and Collateral. Each Lender hereby irrevocably authorizes Agent, on behalf of and for the benefit of Lenders,
without further written consent or authorization from Requisite Lenders, to execute any documents or instruments necessary to release any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of assets permitted
hereby or to which Requisite Lenders have otherwise consented. 
  

 47 

 ARTICLE 14 
 GENERAL PROVISIONS 
 14.1 Effectiveness. This Agreement shall be binding and
deemed effective on the Effective Date. 
 14.2 Successors and Assigns. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, however, that the Borrower may not assign this Agreement or any rights hereunder and any prohibited assignment shall be absolutely void. Agent and each Lender
reserves the right to and may from time to time and at any time without the consent of the Borrower sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in the Agent and each Lender’s rights and
benefits hereunder. In connection therewith, Lender may disclose all documents and information which each Lender now or hereafter may have relating to the Borrower or Borrower’s business. 
 14.3 Section Headings. Headings and numbers have been set forth herein for convenience only. 
 14.4 Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any Lender,
Agent or the Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each party and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of the parties hereto. 
 14.5 Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of such provision. 
 14.6 Amendments in Writing. This Agreement cannot be changed or terminated orally. This Agreement is the entire agreement between the parties with respect to the matters contained herein. This Agreement
supersedes all prior agreements, understandings and negotiations, if any, all of which are merged into this Agreement. 
 14.7
Counterparts. This Agreement may be executed in any number of counterparts each of which, when executed and delivered, shall be deemed to be an original and all of which, when taken together, shall constitute but one and the same Agreement.

 14.8 Survival of Representations and Warranties. All representations and warranties made herein or in any other Loan
Document and in any document, certificate or statement delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery of this Agreement and the Note. 
  

 48 

 14.9 Absence of Prejudice to the Lenders with Respect to Matters Before the Bankruptcy Court.
Borrower acknowledges that the Bankruptcy Code and Federal Rules of Bankruptcy Procedure require it to seek Bankruptcy Court authorization for certain matters that may also be addressed in this Agreement. Borrower will not without the express
consent of Requisite Lenders (a) mention in any pleading or argument before the Bankruptcy Court in support of, or in any way relating to, a position that Bankruptcy Court authorization should be granted on the ground that such authorization is
permitted by this Agreement (unless a Person opposing any such pleading or argument relies on this Agreement to assert or question the propriety of such) or (b) in any way attempt to support a position before the Bankruptcy Court based on the
provisions of this Agreement. Lenders shall be free to bring, oppose or support any matter before the Bankruptcy Court no matter how treated in this Agreement. For the avoidance of doubt, the Borrower agrees that the Agent and Lenders may credit bid
in the Asset Sale. 
 14.10 Further Assurances. Borrower, at the cost and expense of the Borrower, shall execute and file all
such further agreements, documents and instruments, and perform such other acts, as the Agent or Lenders may determine is necessary or advisable with respect to the Liens granted to the Agent on behalf of the Lenders and the enforcement of the
Obligations in connection with this Agreement, the other Loan Documents and the Financing Order and with respect to the priority of such Liens purported to be granted pursuant to this Agreement and the Financing Order. 
 14.11 Surcharge Waiver. In accordance with and to the extent permitted by the Financing Order, the Borrower hereby waives any claims
to surcharge the Collateral under Section 506(c) of the Bankruptcy Code during the period in which the Borrower is authorized to use cash collateral or borrow funds. 
 14.12 Release. At such time as Borrower has repaid all of the Liabilities and this Agreement has terminated, Borrower shall deliver to each Lender a release, in form and substance satisfactory to Agent, of all
obligations and liabilities of each Lender and its officers, directors, employees, agents, parents, subsidiaries and affiliates to such Borrower. 
 ARTICLE 15 
 SBIC REGULATORY PROVISIONS 
 At the same time Borrower delivers its financial statements to Agent pursuant to Section 6.1, and at such other times as Agent reasonably
requests, Borrower shall deliver to GCFC, in its capacity as a SBIC Holder, a written statement certified by an Authorized Signator of Borrower describing in reasonable detail the use of the proceeds of the Advances. In addition to any other rights
granted hereunder, the Borrower shall grant GCFC and the SBA access to the Borrower’s books and records for the purpose of verifying the use of such proceeds and verifying the certifications made in SBA Forms 480 and 652 and for the purpose of
determining whether the principal business activity of Borrower continues to constitute an eligible business activity (within the meaning of the SBIC Regulations). 
  

 49 

 Upon the occurrence of a Regulatory Violation or in the event that any SBIC Holder determines in its sole
discretion that a Regulatory Violation has occurred, in addition to any other rights and remedies to which it may be entitled as a Lender (whether under this Agreement or otherwise), such SBIC Holder shall have the right, to the extent required
under the SBIC Regulations, to demand the immediate repayment of the Obligations owed to such SBIC Holder at a price equal to the purchase price paid for the Note, plus all accrued interest thereon, minus any amounts previously repaid to such SBIC
Holder, by delivering written notice of such demand to Borrower. Borrower shall pay the purchase price for the Note by a cashier’s or certified check or by wire transfer of immediately available funds to each such SBIC Holder demanding
repurchase within thirty (30) days after Borrower’s receipt of the demand notice, and upon such payment, each such SBIC Holder shall deliver the Note repurchased duly endorsed for transfer or accompanied by duly executed forms of
assignment. 
 ARTICLE 16 
 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER 
 THE VALIDITY OF THE LOAN DOCUMENTS, THEIR CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THE LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE BANKRUPTCY COURT, AND/OR THE FEDERAL COURTS WHOSE VENUE INCLUDES THE STATE OF CALIFORNIA, NORTHERN DISTRICT. THE BORROWER AND EACH
LENDER EACH WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING UNDER THE LOAN DOCUMENTS OR RELATING TO THE DEALINGS OF THE BORROWER, THE AGENT AND EACH LENDER AND ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF “FORUM NON CONVENIENS” OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS ARTICLE 15. THE BORROWER, THE AGENT AND EACH LENDER EACH AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO SUCH PARTY, AS THE CASE MAY BE AT ITS ADDRESS SET FORTH IN ARTICLE 12 OR AT SUCH OTHER
ADDRESS OF WHICH THE PARTY SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. 
 [SIGNATURE PAGE FOLLOWS] 
  

 50 

 IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have executed this Agreement as of the date
first above written. 
  

									
	BORROWER:	 		 	REDENVELOPE INC.
					
		 		 		 	By:	 	/s/ Philip Neri
		 		 		 	Name:	 	Philip Neri
		 		 		 	Title:	 	Chief Financial Officer

  

									
	AGENT:	 		 	GRANITE CREEK PARTNERS AGENT, LLC
					
		 		 		 	By:	 	/s/ Mark Radzik
		 		 		 	Name:	 	Mark Radzik
		 		 		 	Title:	 	Managing Partner

  

									
	LENDERS:	 		 	CREATIVE CATALOGS CORPORATION
					
		 		 		 	By:	 	/s/ John Semmelhack
		 		 		 	Name:	 	John Semmelhack
		 		 		 	Title:	 	Chief Executive Officer
		 		 		 	Advance Commitment: $3,500,000

  

											
		 		 	GRANITE CREEK FLEXCAP I, L.P.
				
		 		 	By:	 	Granite Creek GP FlexCap I, L.L.C.
		 		 	Its:	 	General Partner
						
		 		 		 		 	By:	 	/s/ Mark Radzik
		 		 		 		 	Name:	 	Mark Radzik
		 		 		 		 	Title:	 	Managing Partner
				
		 		 		 	Advance Commitment: $1,000,000

  

 51Asset Purchase Agreement

 Exhibit 10.42 
 EXECUTION VERSION 
 ASSET PURCHASE AGREEMENT 
 by and between 
 LIZ CLAIBORNE, INC. 

 and 
 PERRY ELLIS
INTERNATIONAL, INC. 
 Dated as of January 7, 2008 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	SECTION 1	  	DEFINITIONS	  	1
	1.1.	  	Definitions	  	1
	1.2.	  	Additional Defined Terms	  	6
			
	SECTION 2	  	PURCHASE AND SALE	  	7
	2.1.	  	Assets to be Purchased and Sold	  	7
	2.2.	  	Excluded Assets	  	9
	2.3.	  	Assumed Liabilities	  	9
	2.4.	  	Excluded Liabilities	  	9
			
	SECTION 3	  	CLOSING AND CLOSING DOCUMENTS	  	10
	3.1.	  	Time of Closing and Closing Date	  	10
	3.2.	  	Items to be Delivered at the Closing by Seller	  	10
	3.3.	  	Items to be Delivered at the Closing by Buyer	  	11
			
	SECTION 4	  	PURCHASE PRICE	  	12
	4.1.	  	Purchase Price	  	12
	4.2.	  	Absence of Consents	  	12
	4.3.	  	Allocation of Purchase Price	  	12
	4.4.	  	Purchase Price Adjustment	  	13
			
	SECTION 5	  	CERTAIN ASSETS AND LIABILITIES OF SELLER	  	14
	5.1.	  	Non-Assumption of Liabilities	  	14
	5.2.	  	Bulk Sales	  	14
	5.3.	  	Product Liability	  	14
	5.4.	  	Chargebacks and Returns	  	14
	5.5.	  	Consents, etc	  	16
			
	SECTION 6	  	PRORATION; CERTAIN OTHER MATTERS	  	16
	6.1.	  	Expenses	  	16
	6.2.	  	Attorneys Fees; Expenses; Taxes	  	16
	6.3.	  	Brokers	  	16
	6.4.	  	Schedule Updates	  	17
	6.5.	  	Further Assurances	  	17
			
	SECTION 7	  	TRANSFER OF INTELLECTUAL PROPERTY	  	17
	7.1.	  	Use after Closing	  	17
	7.2.	  	IP Renewals	  	17
			
	SECTION 8	  	REPRESENTATIONS AND WARRANTIES	  	18
	8.1.	  	Representations and Warranties of Seller	  	18
	8.2.	  	Buyer’s Representations and Warranties	  	25
	8.3.	  	Survival of Representations, Warranties, Covenants and Agreements	  	25

  

 - i - 

					
	SECTION 9	  	INVESTIGATION BY BUYER	  	26
	9.1.  	  	Availability of Information	  	26
			
	SECTION 10	  	COVENANTS OF SELLER	  	26
	10.1.  	  	Ordinary Course	  	26
	10.2.  	  	Buyer Confidential Information	  	27
	10.3.  	  	Certain Filings	  	27
	10.4.  	  	Efforts to Satisfy Conditions	  	27
	10.5.  	  	Notification of Certain Matters	  	27
	10.6.  	  	Delivery of Books and Records	  	28
	10.7.  	  	Change of Use of Name	  	28
	10.8.  	  	Access to Premises and Cooperation	  	29
	10.9.  	  	Notices Regarding Suppliers	  	29
	10.10.	  	Retention Payment with Respect to Hired Employees	  	29
			
	SECTION 11	  	COVENANTS OF BUYER	  	29
	11.1.  	  	Seller Confidential Information	  	29
	11.2.  	  	Certain Filings	  	29
	11.3.  	  	Efforts to Satisfy Conditions	  	30
	11.4.  	  	Notification of Certain Matters	  	30
	11.5.  	  	Shelli Segal	  	30
	11.6.  	  	Service Credit to Hired Employees	  	30
	11.7.  	  	Remza/MAF	  	30
			
	SECTION 12	  	CONDITIONS OF CLOSING	  	31
	12.1.  	  	Conditions to Buyer's Performance	  	31
	12.2.  	  	Conditions to Seller's Performance	  	32
	12.3.  	  	Termination	  	32
			
	SECTION 13	  	INDEMNIFICATION	  	33
	13.1.  	  	Indemnification by Seller	  	33
	13.2.  	  	Indemnification by Buyer	  	34
	13.3.  	  	Assumption of Defense	  	35
	13.4.  	  	Non-Assumption of Defense	  	35
	13.5.  	  	Indemnified Party's Cooperation as to Proceedings	  	36
	13.6.  	  	Threshold	  	36
	13.7.  	  	Cap	  	36
	13.8.  	  	Exclusive Remedy	  	36
	13.9.  	  	No Consequential Damages	  	36
			
	SECTION 14	  	MISCELLANEOUS	  	37
	14.1.  	  	Entirety of Agreement	  	37
	14.2.  	  	Notices	  	37
	14.3.  	  	Amendment	  	37
	14.4.  	  	Waiver	  	37
	14.5.  	  	Counterparts; Facsimile	  	37
	14.6.  	  	Assignment; Binding Nature; No Beneficiaries	  	38

  

 - ii - 

					
	14.7.  	  	Headings	  	38
	14.8.  	  	Governing Law; Jurisdiction	  	38
	14.9.  	  	Construction	  	38
	14.10.	  	Negotiated Agreement	  	38
	14.11.	  	Public Announcements	  	39
	14.12.	  	Remedies Cumulative; Specific Performance	  	39
	14.13.	  	Severability	  	39
	14.14.	  	WAIVER OF JURY TRIAL	  	39

  

 - iii - 

 ASSET PURCHASE AGREEMENT 
 THIS AGREEMENT, made this 7th day of January, 2008 (the “Execution Date”), by and between LIZ CLAIBORNE, INC., a Delaware corporation
(“Seller”), and PERRY ELLIS INTERNATIONAL, INC., a Florida corporation (`Buyer”). 
 WITNESSETH: 
 WHEREAS, in connection with the disposition of several of its brands, businesses and related assets, Seller desires to sell, transfer and assign to
Buyer, and Buyer desires to acquire and assume from Seller, substantially all of the assets owned, leased or licensed by Seller and used in connection with the Purchased Business (as hereinafter defined) and assume liabilities as more specifically
described herein; and 
 WHEREAS, in connection with such acquisition and assumption, Buyer has undertaken its own due diligence review of
the Purchased Business (as hereinafter defined), the past performance of the Purchased Business, the industries in which the Purchased Business is operated and the trends of such industries. 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants, promises and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 
 SECTION 1

 DEFINITIONS 
 1.1. Definitions. Whenever used in this Agreement, unless the context otherwise requires, the following words and phrases shall have the respective meanings ascribed to them as follows: 
 (a) “Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by or is under common
control with such Person. For purposes of this definition “control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person,
whether through ownership of voting securities, by contract or otherwise. 
 (b) “Agreement” means this Asset Purchase Agreement, as
it may be amended in accordance with the provisions hereof. 
 (c) “Applicable Employees” is defined in Section 8.1(o).

 (d) “Assumed Liabilities” means only (i) all liabilities and obligations related to the Buyer Chargebacks and the Buyer
Returns, (ii) those obligations and liabilities accruing on or after the Closing Date and in respect of the period following the Closing Date with respect to the Purchased Assets (other than the Excluded Liabilities) listed on Schedule
1.1(d) in accordance with their respective terms (which shall be updated on the Closing Date solely to reflect, and such updates shall be limited to, changes in the Order Book and purchase orders from suppliers pursuant to ordinary course
transactions consistent with the past practices of the 

 
Purchased Business which occur between the Execution Date and the Closing Date), (iii) 50% of all retention payments arising under the Hired Employee
Talent Retention Agreements, and (iv) 100% of all severance payments arising under the Hired Employee Talent Retention Agreements. 
 (e} “Bill of Sale, Assignment and Assumption Agreement” is defined in Section 3.2(a). 
 (f) “Business Day”
means a day other than (i) a Saturday, Sunday or (ii) any other day on which the principal national banks located at the City of New York are not open for business during normal banking hours. 
 (g) “Buyer” is defined in the preamble. 
 (h) “Buyer Confidential Information” is defined in Section 10.2. 
 (i) “Buyer Indemnified Parties” is
defined in Section 13.1. 
 (j) “Buyer’s Indemnified Liabilities” is defined in Section 13.1. 
 (k) “Chinese Laundry Complaint” means the complaint filed on May 21, 2007 in the matter of Robert Goldman & Cels Enterprises,
Inc. v. Liz Claiborne Inc. 
 (1) “Closing” means the completion of the sale to and purchase by Buyer as contemplated hereby.

 (m) “Closing Date” means the day of the Closing, which shall be February 4, 2008, or such other date as mutually agreed by
the parties (and which, unless otherwise agreed by the parties, shall be on a Monday). 
 (n) “Code” means the U.S. Internal
Revenue Code of 1986, as amended. 
 (o) “Confidentiality Agreement” means the confidentiality agreement, dated August 3,
2007, by and between Seller and Buyer. 
 (p) “Dispute Resolution Period” is defined in Section 5.4(d). 
 (q) “Environmental Laws” means the applicable Laws relating to pollution or protection of the environment, including Laws relating to the
emission of waste into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of hazardous materials or waste including, without limitation, the Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act and CERCLA, as amended, and their
state and local counterparts. 
 (r) “Disputed Matters” is defined in Section 5.4(d). 
  

 - 2 - 

 (s) “Execution Date” is defined in the preamble, 
 (t) “Excluded Fixed Assets” means the machinery, vehicles, computer hardware, furniture, fixtures, equipment and other tangible property set
forth in Schedule 1.1(t). 
 (u) “Facility Leases” is defined in Section 8.1(g). 
 (v) “Finished Goods” means items of apparel using the Transferred Intellectual Property that are complete and packaged or ready to be packaged
and ready to be shipped to the customer. 
 (w) “Financial Statements” means (i) the unaudited balance sheets and income
statements of the Purchased Business for the fiscal year ended December 30, 2006, and (ii) the unaudited balance sheets and income statements of the Purchased Business as of and for the nine-month period ended September 29, 2007, in
each case including the related notes and schedules thereto (as applicable). 
 (x) “Fixed Assets” means the machinery, vehicles,
computer hardware, furniture, fixtures, equipment and other tangible property used primarily in the Purchased Business, other than the Excluded Fixed Assets. 
 (y) “Governmental Entity” means any court, administrative agency or commission or any federal, state or local governmental entity, municipality or subdivision thereof. 
 (z) “Intellectual Property” means all the following in any jurisdiction worldwide, registered and unregistered: (i) trademarks, service
marks, trade names, logos, designs and symbols, corporate names, certification marks, collective marks, d/b/a’s, Internet domain names and websites, business symbols, brand names and other indicia of origin, all applications and registration
for the foregoing and all goodwill associated therewith and symbolized thereby, including all renewals of same; (ii) confidential information, trade secrets and know-how, including processes, schematics, business methods, formulae, drawings,
prototypes, models, designs, customer and supplier lists and other industry information; (iii) published and unpublished works of authorship, whether copyrightable or not (including without limitation data bases and other compilations of
information), copyrights therein and thereto, and registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof; and (iv) other intellectual property and proprietary rights. 
 (aa) “Inventory” means all inventory of Seller relating to the Purchased Business including all unfinished and finished goods, work-in-process,
raw materials, fabrics, trim, supplies, and other inventories of every nature which contribute to the Finished Goods. 
 (bb)
“knowledge” with respect to Seller means the actual knowledge of Mike Scarpa, Roberta Karp, Nicholas Rubino, Mark Walsh, Stephen Cox (only to the extent related to the C&C California business) and Susan Jones (only to the extent
related to the Laundry business), after reasonable inquiry and investigation. 
  

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 (cc) “Liens” means, with respect to any asset of any Person, all liens, charges and
encumbrances on such asset. 
 (dd) “Law” means any statute, law, rule, regulation, order, decree or ordinance. 
 (ee) “Material Adverse Change” means any event, change, violation, inaccuracy, circumstance, occurrence, state of facts, condition or effect
that, individually or when taken together with all other such events, changes, violations, inaccuracies, circumstances, occurrences, state of facts, conditions or effects, has had (i) a material adverse effect on the business, assets,
properties, results of operations, or condition (financial or otherwise) of the Purchased Business, taken as a whole, (ii) a material adverse diminution in the value of, or the rights associated with, the Purchased Assets or (iii) a
material adverse effect on the ability of the Seller or its Affiliates to consummate the transactions contemplated by this Agreement or perform their obligations under this Agreement; provided, however, that in determining whether a Material Adverse
Change has occurred or exists, there shall be excluded any adverse change or effect that is the result of (A) any war, riot, acts of terrorism, revolution, civil commotion, acts of public enemies or embargo involving the United States or the
military forces of the Unites States, (B) general declines in the economy or financial markets of the United States, but only to the extent that the change or effect thereof on the Purchased Business is not disproportionately more adverse than
the change or effect thereof on comparable companies or businesses in the industry in which the Purchased Business competes, (C) any conditions generally affecting the industry in which the Purchased Business competes, but only to the extent
that the change or effect thereof on the Purchased Business is not disproportionately more adverse than the change or effect thereof on comparable companies or businesses in the industry in which the Purchased Business competes, (D) actions
that the Seller takes with the express written consent of the Buyer between the Execution Date and the Closing Date, or (E) any public announcement of this Agreement or the transactions contemplated hereby. 
 (ff) “Non-Hired Employees” means all employees of Seller that are primarily involved in the Purchased Business (or individuals who are deemed
to be current or former employees of Seller primarily involved in the Purchased Business) other than the Hired Employees. 
 (gg)
“Non-Hired Employee Talent Retention Agreements” means all employment or retention agreements or arrangements set forth on Schedule 1.1(pp) relating to any Non-Hired Employees. 
 (hh) “Non-Purchased Inventory” means Inventory not included within the Purchased Assets. 
 (ii) “Order Book” means all bona fide orders for shipment of goods bearing the Transferred Intellectual Property set forth on Schedule
1.1(ii) (which shall be updated on the Closing Date solely to reflect, and such updates shall be limited to, ordinary course transactions consistent with the past practices of the Purchased Business which occur between the Execution Date and the
Closing Date). 
 (jj) “Permits” is defined in Section 8.1(s). 
  

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 (kk) “Person” means any individual, corporation, partnership, limited liability company,
trustee or trust or unincorporated association or other entity or such person’s heirs, executors, administrators or assigns, as the case may be. 
 (11) “Premises” means the premises leased under the Facility Leases set out in Schedule 8.1(g). 
 (mm) “Purchase Price” is defined in Section 4.1. 
 (nn) “Purchased Assets” has the meaning set forth in
Section 2.1. 
 (oo) “Purchased Business” means the business conducted by Seller or Affiliate thereof relating to the
designing, manufacturing, importing, processing, marketing, promoting, selling, distributing, licensing and managing goods and services using exclusively the Transferred Intellectual Property. 
 (pp) “Purchased Contracts” means, collectively, (i) the contracts, leases, Facility Leases, together with all of Seller’s rights in
the leasehold improvements relating thereto to the extent the same are transferable pursuant to the respective Facility Leases, licenses, customer contracts, purchase orders from customers, other instruments or other agreements relating to the
Purchased Business set forth on Schedule 1.1(pp), but excluding all Non-Assigned Contracts, (ii) all employment or retention agreements or arrangements set forth on Schedule 1.1(pp) relating to any Hired Employees (the “Hired
Employee Talent Retention Agreements”), and (iii) all other unfilled orders from customers and unfilled purchase orders to suppliers relating to the Purchased Business. 
 (qq) “Purchased Inventory” means all Inventory set forth on Schedule 1.1(qq) (which shall be updated on the Closing Date solely to
reflect, and such updates shall be limited to, ordinary course transactions consistent with the past practices of the Purchased Business which occur between the Execution Date and the Closing Date), including, without limitation, Finished Goods in
retail and outlet stores (if any), in warehouses, in transit and on purchase order as set forth in Schedule 1.1(qq). 
 (rr)
“Remza Matter” means any matter relating to (i) that certain letter, dated December 5, 2007, from Remza Investment Co. WLL (“Remza”) and (ii) the termination of the arrangements between Seller or its Affiliates and
each of Remza and MAF Fashions LLC that relate to the Purchased Business (the “Remza/MAF Arrangements”). 
 (ss) “Required
Consents” means all consents (if any) required under the Purchased Contracts for the assignment and transfer to Buyer of the Purchased Contracts and all consents (if any) of any other Person required for the assignment and transfer to Buyer of
the Purchased Assets and the consummation of the transactions contemplated hereby. 
 (tt) “Schedules” means the schedules to this
Agreement which are incorporated herein and made a part hereof. 
 (uu) “Seller” is defined in the preamble. 
  

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 (vv) “Seller Benefit Plans” means all “employee pension benefit plans” (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), maintained or contributed to by Seller or any of its Affiliates for the benefit of any Applicable Employee (“Seller Pension Plans”)
and all “employee welfare benefit plans” (as defined in Section 3(1) of ERISA), bonus, stock option, stock purchase, deferred compensation plans, agreements or arrangements and other employee fringe benefit plans maintained, or
contributed to, by Seller or any of its Affiliates for the benefit of any Applicable Employee. 
 (ww) “Seller’s Indemnified
Liabilities” is defined in Section 13.2. 
 (xx) “Seller IP” is defined in Section 8.1(j)(iii). 
 (yy) “Tax” or “Taxes” means taxes, fees, levies, custom duties, tariffs, imposts and governmental impositions or charges of any kind
in the nature of (or similar to) taxes, payable to any Federal, state, local or foreign taxing authority, including (a) income, franchise, profits, gross receipts, ad valorem, net worth, value added, sales, use, service, real or personal
property, special assessments, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums, windfall profits,
transfer and gains taxes, and (b) interest, penalties, additional taxes and additions to tax imposed with respect thereto. 
 (zz)
“Trademark Assignment” is defined in Section 3.2(b). 
 (aaa) “Transferred Intellectual Property” means all
Intellectual Property owned by Seller, relating to, used in or held for use exclusively in connection with the Purchased Business including, but not limited to, items set forth on Schedule 1.1(aaa). 
 (bbb) “Transition Services Agreement” is defined in Section 3.2(c). 
 (ccc) “Threshold” is defined in Section 13.6. 
 1.2. Additional Defined Terms. In addition to the terms defined above, the following terms are defined in the section of this Agreement so designated: 
  

			
	 Term
	  	Section Where Defined
	 Acceptance Notice
	  	5.4(b)
	 Book Inventory Schedule
	  	4.4(b)(i)
	 Buyer Chargebacks
	  	5.4(a)
	 Buyer Returns
	  	5.4(b)
	 Cap
	  	13.7
	 Closing Inventory
	  	4.4(a)(i)
	 Closing Inventory Schedule
	  	4.4(c)
	 Excluded Assets
	  	2.2
	 Excluded Inventory
	  	4.4(b)(i)
	 Excluded Liabilities
	  	2.4

  

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	Final Inventory Overage Amount	  	4.4(c)
	Final Inventory Shortfall Amount	  	4.4(c)
	Hired Employees	  	3.3(g)
	Inventory Location	  	4.4(b)(i)
	Inventory Report	  	4.4(b)(ii)
	Inventory Valuation	  	4.4(a)(ii)
	Losses	  	13.1
	Lease Assignment Agreement	  	3.2(f)
	Leased Assets	  	8.1(f)
	Non-Assigned Contracts	  	4.2
	Outside Date	  	12.3(b)
	Overage Amount	  	4.4(c)
	Physical Inventory	  	4.4(b)(i)
	Remza	  	1.1(rr)
	RemzalMAF Arrangements	  	1.1(rr)
	Return Notice	  	5.4(b)
	Returned Goods	  	5.4(b)
	Right of First Refusal	  	5.4(b)
	ROFR Notice Period	  	5.4(b)
	Seller Chargebacks	  	5.4(a)
	Seller Confidential Information	  	11.1
	Seller Indemnified Parties	  	13.2
	Seller Returns	  	5.4(b)
	Shortage Amount	  	4.4(c)
	Specified Words	  	10.7
	Territory	  	11.7
	Third Party Price	  	5.4(b)
	Total Book Inventory	  	4.4(a)(iii)
	Total Closing Inventory	  	4.4(a)(iv)

 SECTION 2 
 PURCHASE AND SALE 
 2.1. Assets to be Purchased and
Sold. Subject to the terms and conditions hereof, at the Closing, Buyer shall purchase from Seller or its Affiliates and Seller shall, or shall cause its Affiliates to, sell, assign, transfer, and deliver to Buyer, free and clear of all Liens,
all right, title and interest to and under all of the assets, properties and rights of Seller (and its Affiliates) of every kind and description whatsoever, wherever located, real, personal or mixed tangible or intangible, other than the Excluded
Assets, whether owned, leased 

  

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or licensed by Seller or its Affiliates and used by Seller or its Affiliate exclusively in connection with the operation of the Purchased Business,
including, without limitation, as set forth below (the “Purchased Assets”): 
 (a) Purchased Inventory; 
 (b) Transferred Intellectual Property; 
 (c)
Purchased Contracts and all rights and benefits thereunder, including all rights and benefits thereunder with respect to all cash and other property of third parties under Seller’s dominion or control to the extent such rights and benefits are
transferable; 
 (d) Order Book; 
 (e) Fixed Assets; 
 (f) the full benefit of all representations, warranties, guarantees, indemnities, undertakings, certificates,
covenants, agreements and the like to the extent assignable by Seller and relating to the Purchased Contracts or which apply to the Purchased Assets; 
 (g) all books, records and files relating to the Purchased Assets (the “Books and Records”) including, without limitation, current customer lists and databases, sales records, current price lists and
catalogues, current sales literature, current advertising material, current marketing materials, current manufacturing data, production records, current employee manuals, current personnel records, current supply records, inventory records, and
correspondence files related thereto (together with, in the case of any such information that is stored electronically, the media on which the same is stored) except that where Seller is required by Law to retain a particular book, record or file,
it shall retain such book, record or file and deliver to Buyer a copy thereof unless prohibited from transferring such information by applicable Law; 
 (h) all the right, title, benefit and interest of Seller in respect to prepaid insurance, prepaid royalties and advertising/marketing fees and other prepaid expenses, deposits and all advances to suppliers and other
deposits of cash and cash equivalents made by Seller with respect to the Purchased Assets; 
 (i) all current and past patterns, samples,
prototypes archived files, artwork, development and design work, graphics and designs for products to the extent the same are owned and held by Seller exclusively for use in the operation of the Purchased Business; 
 (j) all UPC codes set forth on Schedule 2.1(j); 
 (k) all goodwill associated with the Purchased Assets and the Purchased Business; and 
 (1) all other
material tangible and intangible assets of any kind and description, wherever located, that are owned and used by Seller exclusively in connection with the operation of the Purchased Business, other than the Excluded Assets and to the extent the
same are transferable. 
  

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 2.2. Excluded Assets. Buyer is not acquiring, and Seller is not selling, any other assets of
Seller, including the Non-Purchased Inventory, all accounts receivable due to Seller in connection with the Purchased Business, all of Seller’s cash and cash equivalents in respect of the Purchased Business, the Excluded Fixed Assets and the
assets set forth on Schedule 2.2 (collectively, the “Excluded Assets”). 
 2.3. Assumed Liabilities. Effective upon
the Closing, subject to the terms hereof and pursuant to the Bill of Sale, Assignment and Assumption Agreement, Buyer will assume all of the Assumed Liabilities. 
 2.4. Excluded Liabilities. Notwithstanding anything else contained herein to the contrary, Buyer shall not assume and shall have no obligation to pay, satisfy, perform, discharge or fulfill any liabilities or
obligations of Seller or its Affiliates (whether known or unknown, liquidated or unliquidated, contingent or fixed) other than the Assumed Liabilities (collectively, the “Excluded Liabilities”). The Excluded Liabilities shall remain the
liabilities and obligations of Seller or its Affiliates and shall not be assumed by Buyer pursuant hereto (regardless of whether any such liabilities or obligations are disclosed in this Agreement). Without limiting the generality of the foregoing,
Excluded Liabilities shall include the following: 
 (a) all liabilities and obligations related to the Excluded Assets; 
 (b) all liabilities and obligations for any of Seller’s income or capital taxes owed by Seller, and any liability or obligation for any sales, use,
excise, or other taxes (including, without limitation, income taxes, withholding taxes and employment and payroll taxes) arising prior to or in connection with the consummation of the transactions contemplated by this Agreement; 
 (c) except as otherwise expressly provided for herein, all liabilities and obligations of Seller for costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby; 
 (d) all liabilities and obligations related to the Seller Chargebacks and the Seller
Returns (in each case subject in all respects to the provisions of Section 5.4); 
 (e) all payment obligations of Seller to any bank,
insurance company, finance company, or other institutionalized lender of other person for money borrowed; 
 (f) all liabilities and
obligations of Seller relating to the guaranty by Seller of any third party obligations; 
 (g) all inter-company liabilities payable to
Seller or its Affiliates; 
 (h) all liabilities related to applicable bulk sales or fraudulent conveyance Laws; 
 (i) all liabilities, including claims made for defective material and failure to comply with specifications, in respect of any occurrence, defect,
deterioration or incident related to any (A) Purchased Inventory or (B) products using the Transferred Intellectual Property sold by Seller or any of its Affiliates, in each case whether asserted before, on or after the Closing Date;

  

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 (j) all liabilities and obligations in respect of any and all litigations, actions, suits, mediations,
arbitrations, disputes, oppositions or other proceedings or governmental investigations with respect to or involving the Purchased Assets, the Purchased Business, the Applicable Employees or the Assumed Liabilities (including the Chinese Laundry
Complaint and the Remza Matter), which are pending on, or threatened in writing on or before, the Closing Date; 
 (k) all liabilities
relating to Non-Assigned Contracts; 
 (1) all liabilities in respect of the Purchased Assets or the Purchased Business relating to
Environmental Laws that are attributable to the ownership of the Purchased Assets or the operation of the Purchased Business prior to the Closing Date; 
 (m) all liabilities and obligations relating to all union contracts and collective bargaining agreements of Seller or its Affiliates; and 
 (n) (i) all liabilities and obligations arising prior to the Closing Date (or relating to periods prior to the Closing Date) relating to or with respect to any current or former employees of Seller (including but not
limited to Hired Employees) or individuals who are deemed to be current or former employees of Seller, including under all Seller Benefit Plans, (ii) all liabilities and obligations arising on or after the Closing Date relating to or with
respect to any Non-Hired Employees (including those arising under all Non-Hired Employee Talent Retention Agreements and all Seller Benefit Plans), (iii) all liabilities and obligations arising under all written or oral contracts, agreements or
arrangements (other than the Hired Employee Talent Agreements, which are subject to clauses (iv) and (v) hereof) between Seller and any Hired Employees, (iv) 50% of all retention payments arising under the Hired Employee Talent
Retention Agreements, and (v) 100% of all liabilities and obligations arising under the Hired Employee Talent Retention Agreements other than retention payments (which are subject to clause (iv) hereof) and severance payments. 

SECTION 3 
 CLOSING AND
CLOSING DOCUMENTS 
 3.1. Time of Closing and Closing Date. The transactions contemplated by this Agreement shall be closed at
10:00 a.m. on the Closing Date at the offices of Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY 10036, or such other place as may be agreed upon by the parties. 
 3.2. Items to be Delivered at the Closing by Seller. At the Closing, Seller shall deliver to Buyer: 
 (a) An executed Assignment, Bill of Sale, Assignment and Assumption Agreement in the form annexed hereto as Exhibit A (the “Bill of Sale,
Assignment and Assumption Agreement”) and such other assignments, notices, documentation and other instruments of transfers and conveyance, in form and substance reasonably satisfactory to Buyer, necessary to sell, transfer and assign 

  

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the Purchased Assets to Buyer; provided that the terms of such other assignments, notices, documents and instruments of transfer and conveyance are
consistent with terms of this Agreement. 
 (b) An executed Trademark Assignment in the form annexed hereto as Exhibit B (the
“Trademark Assignment”). 
 (c) An executed Transition Services Agreement substantially in the form previously provided by Seller
to Buyer with such changes as mutually agreed by the parties (the “Transition Services Agreement”). 
 (d) A certificate of the
corporate secretary of Seller attaching thereto a true, correct and complete copy of resolutions of the board of directors of Seller authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby. 
 (e) A certificate of an officer of Seller certifying as to the matters set forth in Section 12.1(a). 

(f) A lease assignment agreement executed by Seller, substantially in the form of Exhibit D (the “Lease Assignment Agreement”), in
respect of the Facility Lease set forth on Schedule 3.2(f) containing, or together with, any applicable Required Consent to the assignment, if obtained prior to the Closing Date. 
 (g) All Books and Records including financial records. 
 (h) The Financial Statements. 
 3.3. Items to be Delivered at the Closing by Buyer. At the Closing,
Buyer shall deliver to Seller: 
 (a) The Purchase Price as set forth in Section 4.1. 
 (b) The executed Bill of Sale, Assignment and Assumption Agreement. 
 (c) The executed Transition Services Agreement. 
 (d) The executed Trademark Assignment. 
 (e) A certificate of the corporate secretary of Buyer attaching thereto a true, correct and complete copy of resolutions of the board of directors of
Buyer authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby. 
 (f) A certificate of an officer of Buyer certifying as to the matters set forth in Section 12.2(a). 
  

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 (g) A schedule setting forth all employees of Seller that will be hired by Buyer or its Affiliates in
connection with the consummation of the transactions contemplated hereby (the “Hired Employees”). 
 SECTION 4

 PURCHASE PRICE 
 4.1. Purchase Price. In consideration of the sale, transfer and assignment of the Purchased Assets and Purchased Contracts, Buyer shall pay to Seller an amount, in cash, equal to $37,158,930 (the “Purchase Price”), subject
to adjustment pursuant to Section 4.4. Payment of the Purchase Price shall be made in immediately available funds by wire transfer to an account or accounts specified by Seller at least two (2) Business Days prior to the Closing Date.

 4.2. Absence of Consents. Notwithstanding any other provision of this Agreement to the contrary, if any Purchased Contract, other
than those Purchased Contracts which are set forth on or referred to (including by reference to the Required Consents relating thereto) in Schedule 12.1(d) (with respect to which the provisions of this Section 4.2 shall not be
applicable), is not assignable or transferable either by virtue of the provisions thereof or under applicable Law without obtaining a Required Consent, and any Required Consents with respect to any such Purchased Contracts are not obtained by Seller
at or before the Closing, nothing in this Agreement and the related instruments of transfer shall be construed as an assignment or transfer of such Purchased Contracts (the “Non-Assigned Contracts”). Instead, Seller shall (i) at the
request and under the direction of Buyer, and at Seller’s expense, continue to hold such Non-Assigned Contracts in trust for the benefit of Buyer and promptly pay over to Buyer all monies collected by or paid to Seller in respect of every such
Non-Assigned Contracts; and (ii) use its commercially reasonable efforts to obtain all such Required Consents not previously obtained as soon as reasonably practicable after the Closing or otherwise obtain for Buyer the practical benefit of
such Non-Assigned Contracts. There shall be no adjustment to the Purchase Price in the event that Seller is either unable to obtain any Required Consent or is unable to assign or transfer any Non-Assigned Contracts to, or obtain the practical
benefit of any Non-Assigned Contracts for, Buyer. Notwithstanding anything in this Agreement to the contrary, nothing contained in this Section 4.2 shall in any way change, modify, limit or affect the condition set forth in Section 12.1(d)
of this Agreement. 
 4.3. Allocation of Purchase Price. The Purchase Price shall be allocated among the Purchased Assets in the
manner agreed upon by Buyer and Seller in good faith as promptly as practicable following the Closing. Buyer and Seller shall each file all tax returns (including amended returns and claims for refund) and information reports in a manner consistent
with such allocation. Neither Buyer nor Seller shall take any position with respect to Taxes that is inconsistent with the agreed upon allocation, including in any audit or examination by any governmental body. Buyer and Seller shall prepare and
timely file such reports and information returns as may be required under Section 1060 of the Code to report the allocation of the Purchase Price among the Purchased Assets as agreed pursuant to this Section 4.3. 
  

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 4.4. Purchase Price Adjustment. 
 (a) Definitions. For purposes hereof, the following terms shall have the following meanings: 
 (i) “Closing Inventory” shall mean the amount of Purchased Inventory according to the results of the Physical Inventory, valued in accordance
with the Inventory Valuation. 
 (ii) “Inventory Valuation” shall mean the manner in which inventory is to be valued as set forth
on Schedule 4.4(a). 
 (iii) “Total Book Inventory” shall mean the amount of Purchased Inventory set forth on Schedule
4.4(a), valued in accordance with the Inventory Valuation. 
 (iv) “Total Closing Inventory shall mean the total amount of all
Purchased Inventory at all Inventory Locations according to the results of the Physical Inventory. 
 (b) Physical Inventory.

 (i) Schedule 4.4(a) sets forth the Total Book Inventory (the “Book Inventory Schedule”). Over the two (2) calendar
days prior to the Closing Date, Seller shall (or shall cause its Affiliates or its representatives to) conduct a physical count of all Purchased Inventory (the “Physical Inventory”) located (i) at any location (including the Premises)
where the total value of Purchased Inventory exceeds $75,000 and (ii) at all locations (including the Premises) where the total aggregate value of Purchased Inventory at such locations exceeds $250,000, notwithstanding that on an individual
location basis, the total value of Purchased Inventory at any such location does not exceed $75,000 (each such location described in clause (i) and clause (ii) above, an “Inventory Location”). At least seven (7) calendar
days prior to the Physical Count, Seller shall notify Buyer of the address of each Inventory Location and the date(s) and time(s) when the Physical Inventory is scheduled at each such Inventory Location. Buyer and its Affiliates shall have the right
to monitor (or to send its representatives to monitor) the Physical Inventory as well to have access at such reasonable times and to all such Inventory Locations as Buyer may reasonably request to conduct an inspection of all Purchased Inventory
located at such Inventory Locations. Seller shall engage an audit firm that is mutually agreeable to the parties to audit the Physical Inventory, and each of Seller and Buyer shall pay half of the cost of such auditing firm. Any damaged or obsolete,
as applicable, Purchased Inventory will be included in the count and identified as damaged or obsolete, as applicable. Seller shall identify all Purchased Inventory that is not of quality useable and saleable in the ordinary course of the Purchased
Business (the “Excluded Inventory”) and such Excluded Inventory shall not be included in the Physical Inventory. 
 (ii) The
Physical Count at all Inventory Locations shall be completed by 8:00 AM (New York City time) on the Closing Date. Upon the completion of the Physical Count at each Inventory Location, Seller (or its Affiliates or representatives, as the case may be)
shall prepare a report setting forth the results of the Physical Count at such Inventory Location, which report shall be approved by the audit firm and shall be final, binding and conclusive, absent manifest error (each, an “Inventory
Report”). A copy of each Inventory Report shall be delivered to Buyer (or its Affiliates or representatives, as the case may be). 
  

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 (c) Closing Date Adjustment. As early as practicable on the Closing Date (and in no event later
than 9:30 a.m., New York City time, on such date), Seller shall deliver to Buyer a schedule (the “Closing Inventory Schedule”) setting forth: (i) the Total Book Inventory (which shall be identical to the Total Book Inventory set forth
on the Book Inventory Schedule); (ii) the Closing Inventory at each Inventory Location (which shall be based on the Inventory Report for each such Inventory Location); (iii) the Total Closing Inventory (which shall be based on all of the
Inventory Reports); and (iv) the amount by which the Total Closing Inventory exceeds the Total Book Inventory (the “Final Inventory Overage Amount”) or the amount by which the Total Book Inventory exceeds the Total Closing Inventory
(the “Final Inventory Shortfall Amount”), as applicable. If the Closing Inventory Schedule indicates a Final Inventory Shortfall Amount, then the Purchase Price payable at the Closing shall be reduced, on a dollar-for-dollar basis, by the
Final Inventory Shortfall Amount. If the Final Inventory Schedule indicates a Final Inventory Overage Amount, then the Purchase Price payable at the Closing shall be increased, on a dollar-for-dollar basis, by the Final Inventory Overage Amount.

 SECTION 5 
 CERTAIN ASSETS AND LIABILITIES OF SELLER 
 5.1. Non-Assumption of Liabilities. Except for the Assumed
Liabilities, which Buyer shall assume and discharge when properly due and payable, Buyer does not assume or take any responsibility for paying, performing or discharging when due any liability or obligation of any type of Seller or any of its
Affiliates, whether secured or unsecured, known or unknown, accrued or contingent, and whether or not related to the Purchased Assets, the Purchased Business or the Hired Employees. 
 5.2. Bulk Sales. Seller will indemnify and hold harmless Buyer with respect to all costs, expenses, damages and losses which Buyer may incur or
suffer as a result from Seller’s non-compliance with any applicable bulk sales or bulk transfers act. 
 5.3. Product Liability.
Seller shall be responsible for and shall indemnify Buyer from any and all claims, actions, loss, liability, judgments, disbursements, expenses and costs (including costs of defense), including claims made for defective material and failure to
comply with specifications, in respect of any occurrence, defect, deterioration, or incident to or related to any (i) Purchased Inventory or (ii) products using the Transferred Intellectual Property sold by Seller or any of its Affiliates,
in each case whether asserted before, on or after the Closing Date. 
 5.4. Chargebacks and Returns. 
 (a) Chargebacks. Seller shall be responsible for and shall indemnify Buyer with respect to any and all (i) chargebacks in respect of Finished
Goods identifiable to shipments by Seller or its Affiliates prior to the Closing Date, and (ii) chargebacks in respect of Finished Goods that are not identifiable or linkable to shipments by Seller or its Affiliates prior to the Closing Date to
the extent they arise within 90 calendar days following the Closing Date (the chargebacks referenced in clause (ii), the “Unidentifiable Chargebacks” and the chargebacks referenced in clauses (i) and (ii) collectively, the
“Seller Chargebacks”); provided, however, that 

  

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Seller shall have the exclusive right to negotiate, authorize and approve each Seller Chargeback (consistent with its past practices). Buyer shall be
responsible for and shall indemnify Seller with respect to any and all (i) chargebacks in respect of Finished Goods identifiable to shipments by Buyer or its Affiliates on or after the Closing Date, and (ii) chargebacks in respect of
Finished Goods that are not identifiable or linkable to any shipments to the extent they arise on or after the 91st calendar day following the
Closing Date (collectively, the “Buyer Chargebacks”); provided, however, that Buyer shall have the exclusive right to negotiate, authorize and approve each Buyer Chargeback (consistent with its past practices). 
 (b) Returns. Seller shall be responsible for and shall indemnify Buyer with respect to any
and all returns in respect of (i) Finished Goods sold by Seller or its Affiliates prior to the Closing Date and (ii) Finished Goods that are not identifiable as sold by, or that have not been authorized by, either Seller or Buyer or their
respective Affiliates and that are physically returned within 90 calendar days following the Closing Date (the returns referenced in clause (ii), the “Unidentifiable Returns” and the returns referenced in clauses (i) and
(ii) collectively, the “Seller Returns”); provided, however, that Seller shall have the exclusive right to negotiate, authorize and approve each Seller Return (consistent with its past practices). Buyer shall be
responsible for and shall indemnify Seller with respect to any and all returns in respect of (i) Finished Goods sold by Buyer or its Affiliates on or after the Closing Date and (ii) Finished Goods not identifiable as sold by, or that have
not been authorized by, either Seller or Buyer or their respective Affiliates and that are physically returned on or after the 91st calendar day
following the Closing Date (“Buyer Returns”); provided, however, that Buyer shall have the exclusive right to negotiate, authorize and approve each Buyer Return (consistent with its past practices). Following the Closing
Date, Seller and its Affiliates shall have the right, at its option, to either (i) sell off any Finished Goods relating to Seller Returns (“Returned Goods”) to Buyer at a purchase price calculated in accordance with the Inventory
Valuation or otherwise agreed upon between the parties, or (ii) negotiate with third parties to sell such Returned Goods at a negotiated price; provided that Buyer shall have a right of first refusal on any sale of Returned Goods as expressly
described in the following four sentences (a “Right of First Refusal”). Prior to agreeing to sell any Returned Goods to any third party, Seller shall send a written notice to Buyer (a “Return Notice”) setting forth a description
of the Returned Goods in question and the purchase price offered by the third party (the “Third Party Price”). Buyer shall have five (5) Business Days (the “ROFR Notice Period”) to notify Seller in writing pursuant to which
it agrees to purchase such Returned Goods from Seller at the Third Party Price (an “Acceptance Notice”). If within ROFR Notice Period, Seller receives an Acceptance Notice from Buyer, Seller shall be obligated to sell such Returned Goods
to Buyer at the Third Party Price. If Buyer does not exercise its Right of First Refusal (either by providing notice to Seller of its intention not to exercise its Right of First Refusal or by allowing the ROFR Notice Period to lapse), Seller shall
have the right to sell such Returned Goods to a third party at the Third Party Price. 
 (c) Limitation on Unidentifiable
ChargebackslReturns. Notwithstanding the foregoing, in no event shall Seller be responsible for Unidentifiable Chargebacks and Unidentifiable Returns in excess of $500,000 in the aggregate. 
 (d) Disputes. Seller and Buyer shall cooperate with each other to resolve any issues relating to or arising under this Section 5.4. If a
party provides a dispute notice to the other party, the representatives of Seller and Buyer shall, within thirty (30) days following the date of receipt of the dispute notice (the “Dispute Resolution Period”), attempt in good faith to
resolve their differences 

  

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and any resolution by them that is agreed to in writing shall be final, binding and conclusive. If at the conclusion of the Dispute Resolution Period there
is any matter still remaining in dispute (“Disputed Matters”), then all Disputed Matters shall be submitted for resolution to an independent registered public accounting firm or third-party factoring company that is mutually agreeable to
the parties (the “Special Accountants”). The parties will cause the Special Accountants to use commercially reasonable efforts to resolve all Disputed Matters within 10 days of submission to the Special Accountants. In making such
resolution, the Special Accountants will review only those items and amounts specifically set forth and objected to in writing and will resolve the dispute with respect to each such item and amount. The determination of the Special Accountants shall
be conclusive, nonappealable and binding upon the parties for all purposes. Buyer and the Seller agree that (x) the procedures established by this Section 5.4(d) shall be the exclusive procedures for resolving disputes or disagreements
arising under this Section 5.4, and (y) that all of the time periods provided for in this Section 5.4 may be extended by mutual written agreement by Buyer and Seller. The fees, expenses and disbursements of the Special Accountants
shall be borne by Buyer, on the one hand, and Seller, on the other hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested. 
 5.5. Consents, etc. Seller shall use its reasonable best efforts to obtain prior to the Closing, the Required Consents. Except as otherwise
provided herein, Seller shall be responsible for any consent fee, transfer fee, penalty or other cost relating to any such consent or approval, or arising by reason of the transactions contemplated hereby. 
 SECTION 6 
 PRORATION;
CERTAIN OTHER MATTERS 
 6.1. Expenses. Seller shall be responsible for all expenses, liabilities and obligations arising out
of or relating to the Purchased Assets or the use, possession, ownership or operation thereof accruing prior to the Closing Date and Buyer shall be responsible for all such expenses, liabilities and obligations on or after the Closing Date.

 6.2. Attorneys Fees; Expenses; Taxes. Except as otherwise provided in this Section 6.2, each party shall be responsible for the
payment of its own attorneys’ and other fees and expenses (including, without limitation, any investment advisor, finder or similar fees) in connection with the transactions contemplated hereby. Buyer and Seller shall each be liable for and
shall pay one half of all applicable Taxes properly payable on and in connection with the conveyance and transfer of the Purchased Assets. Buyer shall be responsible for all fees and expenses in connection with the conveyance and transfer of the
Transferred Intellectual Property. 
 6.3. Brokers. Buyer represents and warrants to Seller that it has not employed any investment
adviser, agent, broker or finder in connection with the transaction contemplated by this Agreement. Buyer hereby indemnifies Seller against and agrees to hold Seller harmless from any and all claims, losses, demands, expenses, suits and liabilities
arising from or in any way connected with any claim for a commission or similar fee brought or made by any Person who may have been hired in such capacity by Buyer. Seller represents and warrants to Buyer that it has not employed any investment
adviser, agent, broker or finder in connection with the transactions 

  

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contemplated by this Agreement, other than Centerview Partners LLC. Seller hereby indemnifies Buyer against and agrees to hold Buyer harmless from any and
all claims, losses, demands, expenses, suits and liabilities arising from or in any way connected with any claim for a commission or similar fee brought or made by any Person who may have been hired in such capacity by Seller, including but not
limited to Centerview Partners LLC. 
 6.4. Schedule Updates. Seller shall update Schedule 1.1(d), (only to the extent related
to changes in the Order Book or to purchase orders from suppliers), Schedule 1.1(ii) and Schedule 1.1(qq), in each case solely to reflect (and such updates shall, for purposes of this Section 6.4 and each of Sections 1.1(d),
1.1(ii) and 1.1(qq), be limited to) ordinary course transactions consistent with the past practices of the Purchased Business which occur between the Execution Date and the Closing Date, and shall deliver such updated Schedules to Buyer on the
Closing Date. 
 6.5. Further Assurances. All Excluded Assets that are received or deemed to be received by Buyer after the Closing
will be received by Buyer as agent, in trust for and on behalf of Seller, and Buyer will pay or deliver promptly all of such Excluded Assets to Seller and will provide to Seller any written information received concerning such Excluded Assets,
including any related invoice. All Purchased Assets that are received or deemed to be received by Seller after the Closing will be received by Seller as agent, in trust for and on behalf of Buyer, and Seller will pay or deliver promptly all of such
Purchased Assets to Buyer and will provide to Buyer any written information received concerning such Purchased Assets, including any related invoice. From and after the Closing Date, as and when reasonably requested by any party, each party will
execute and deliver, or cause to be executed and delivered, all such documents and instruments and will take, or cause to be taken, at the requesting party’s expense, all such further or other actions as such other party may reasonably deem
necessary or desirable to consummate the transactions contemplated by this Agreement. 
 SECTION 7 
 TRANSFER OF INTELLECTUAL PROPERTY 
 7.1. Use after Closing. From and after the Closing Date, Seller and its Affiliates shall discontinue all use of the Transferred Intellectual Property purchased by Buyer under this Agreement and neither Seller nor its Affiliates shall
use any trademark, tradename or other Intellectual Property which infringes the Transferred Intellectual Property; provided, however, that Seller shall have the limited and nonexclusive right and license to use such trademarks and
tradenames, to the least extent reasonably necessary, for the purpose of selling any Non-Purchased Inventory or, in accordance with Section 5.4(b), any Returned Goods. 
 7.2. IP Renewals. Seller shall (or shall cause its Affiliates to) effect all renewals of all Transferred Intellectual Property that are scheduled
to or may expire between the Execution Date and the date that is 30 days following the Closing Date. Seller shall be responsible for all fees and expenses in connection with all such renewals, and Buyer shall reasonably assist Seller in connection
therewith, including executing and delivering, or causing to be executed and delivered, all such documents and instruments as Seller may reasonably deem necessary to effect such renewals. 
  

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 SECTION 8 
 REPRESENTATIONS AND WARRANTIES 
 8.1. Representations and Warranties of Seller. Seller
hereby represents and warrants to Buyer as follows: 
 (a) Title to Assets. Seller has, and at Closing will transfer to Buyer, good and
marketable title to the Purchased Assets, free of any and all Liens. Seller directly or indirectly and exclusively owns the Purchased Assets. Except as set forth on Schedule 8.1(a), the Purchased Assets include substantially all of the assets
(other than the Excluded Assets) sufficient to conduct the Purchased Business substantially in accordance with past practices. 
 (b)
Organization; Authority; Binding Obligation. Seller is a corporation duly and validly organized and existing under the Laws of the State of Delaware and has the corporate power to own or lease its assets and property, to carry on the
Purchased Business as now being conducted by it and Seller is duly qualified as a corporation to do business in each jurisdiction in which the nature of Purchased Business or the Purchased Assets makes such qualification necessary except where such
failure to qualify would not constitute a Material Adverse Change. The execution and performance of this Agreement and all acts which may be necessary or appropriate to consummate the transactions contemplated hereunder have been authorized by all
corporate actions necessary to be taken for the approval of this Agreement and the transactions contemplated hereunder. This Agreement has been properly executed by Seller and it is legally valid and binding upon Seller, is enforceable against
Seller according to its terms except as such enforceability may be limited by principles of public policy and applicable bankruptcy, insolvency, moratorium or other Laws affecting the rights of creditors generally and by general principles of
equity. 
 (c) No Conflict. Except as disclosed on Schedule 8.1(c), the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder do not conflict with, or result in any violation of any term or condition of, result in a breach or termination of, constitute a default under or result in the creation of any Lien upon any of
the Purchased Assets, the Purchased Business or the Assumed Liabilities, pursuant to (i) the organizational documents of Seller or its Affiliates, (ii) any Purchased Contract or (iii) any requirement of Law or of any Governmental
Entity. Without limiting the foregoing, Schedule 8.1(c) expressly sets forth each Purchased Contract that requires the consent, approval, authorization or waiver of or from, or notice to, a third Person in connection with the execution and
delivery by the Seller of this Agreement and the consummation by the Seller of the transactions contemplated hereby. 
 (d) Consents and
Approvals. There is no requirement to make any filing with, give any notice to or obtain any material license, permit, certificate, registration, authorization, consent or approval of, any governmental or regulatory authority as a condition to
the lawful consummation of the transactions contemplated by this Agreement, except for the filings, notifications, licenses, permits, certificates, registrations, consents and approvals described in Schedule 8.1(d) or that relate solely to
the identity of Seller or the nature of any business carried on by Seller. 
  

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 (e) Financial Condition. Annexed hereto as Schedule 8.1(e) are copies of the Financial
Statements. Except as set forth in Schedule 8.1(e), the Financial Statements (i) have been prepared in accordance with generally accepted accounting practices (“GAAP”), subject, in the case of any interim Financial Statements,
to the absence of footnote disclosure and normal year-end adjustments, and (ii) present in all material respects the financial position, results of operations and cash flows of the Purchased Business as at the dates and for the periods
indicated. Except as set forth in Schedule 8.1(e), the Financial Statements contain and reflect all necessary adjustments and accruals for a fair presentation of the financial condition of the Purchased Business as of their respective dates
in all material respects, subject, in the case of any interim Financial Statements, to the absence of footnote disclosure and normal year-end adjustments. 
 (f) Personal Property; Fixed Assets. Schedule 8.1(f) identifies, as of the date of this Agreement, all of the material leased tangible personal property used by Seller in the operation of the Purchased
Business (collectively, the “Leased Assets”). As of the Execution Date, Seller has the right to use all of the Leased Assets in connection with the operation of the Purchased Business pursuant to valid lease arrangements and Seller has
provided to Buyer a true and complete copy of each such written lease arrangement and all amendments, variations and extensions thereto. All of the material Fixed Assets are in good repair and operating condition, having a regard to their use and
age (normal wear and tear excepted), 
 (g) Real Property. 
 (i) Seller does not own and has not agreed to acquire any fee simple interest in any real property that is exclusively used or to be used in the
operation of the Purchased Business. 
 (ii) Schedule 8.1(g) lists (A) all leases, agreements to lease or other forms of tenancy
agreement (and any amendments, extensions or renewals thereto) relating to real property used, or to be used, by Seller exclusively in the operation of the Purchased Business (the “Facility Leases”), (B) the parties thereto,
(C) their expiry dates, (D) any options to renew, (E) the address of the leased premises and (F) the rates of minimum or fixed rent payable thereunder. Schedule 8.1(g) also lists all of the locations in respect of which
Seller has made an offer to lease to the owner, which offer to lease if accepted will constitute an agreement to lease on the terms set out therein. 
 (iii) Seller’s interest in the leasehold estate of all the Premises is not subject to any Lien, and subject to any limitations contained in any Facility Lease relating to the Premises, Seller has the exclusive
right to possess, use and occupy the Premises free from any easement or other restriction of any kind. Except as set forth on Schedule 8.1(g), each Facility Lease is in good standing and is valid, in full force and effect and contains the
entire agreement between each party and Seller has neither given nor received any written notice of default, termination, or partial termination under any Facility Lease, which notice is currently outstanding, and there is no existing or continuing
breach or default by Seller or, to the knowledge of Seller, any other party in the performance or payment of any obligation under any Facility Lease and Seller has complied in all material respects with the provisions of each Facility Lease.

  

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 (iv) Seller has not assigned, subleased or granted any right in rem of occupation or otherwise in
respect of any portion of the Premises to any person or entity. 
 (v) Subject to the terms of the Facility Leases, none of the Premises are
subject to any easement, right of way, license, grant, building or use restriction, exception, reservation, limitation or other impediment which adversely interferes with or impairs the present and continued use thereof in the operation of the
Purchased Business in a manner consistent with past practices, and Seller enjoys peaceful and undistributed possession of all of the Premises. 
 (vi) Seller has provided to Buyer access to its files to review a true and complete copy of each Facility Lease and all amendments, variations and extensions thereof. 
 (vii) There are no unresolved disputes of a material nature between Seller and any party to a Facility Lease. 
 (h) No Bankruptcy. Seller is solvent and is not in the hands of a receiver. There is no application for receivership pending and no proceedings
are pending or threatened by or against Seller for bankruptcy or reorganization in any court or other administrative body. 
 (i) Legal
Proceedings. Except as disclosed on Schedule 8.1(i), no action or proceeding has been instituted or, to the best of Seller’s knowledge, threatened before any court or governmental agency to restrain or prohibit, or to obtain damages
in respect of, or which is related to or arises out of, this Agreement or the transactions contemplated herein, and there is no pending or, to Seller’s knowledge of, threatened litigation, action, suit, mediation, arbitration, dispute,
opposition or other proceeding or governmental investigation with respect to, the Purchased Assets, the Purchased Business or the Assumed Liabilities. Except as set forth on Schedule 8.1(i), no judgment, award, order or decree has been
(i) rendered against Seller with respect to the Purchased Business, Purchased Assets or Assumed Liabilities and is still outstanding or (ii) to Seller’s knowledge, threatened against or involving Seller, the Purchased Business, the
Purchased Assets or the Assumed Liabilities. 
 (j) Intellectual Property; Non-Infringement. 
 (i) Schedule 1.1(aaa) contains a correct and complete list as of November 30, 2007 of all registered Transferred Intellectual Property owned
or licensed and used by Seller in connection with the operation of the Purchased Business and indicates whether such Intellectual Property is owned by or licensed to Seller. Except as referred to on Schedule 8.1(j), Seller owns all rights to
use, or holds a valid license to use, all such Transferred Intellectual Property. To the knowledge of Seller and except as specifically referred to on Schedule 8.1(j), Seller has not violated or infringed any patent, copyright, trade secret,
trademark, service mark or other intellectual property rights of any other person or entity, and there are no claims pending or to the knowledge of Seller, threatened against Seller asserting that the use of any Intellectual Property by Seller
infringes the rights of any other person or entity. Seller has no pending claims of violation or infringement of any Intellectual Property against any other person or entity, and Seller is not aware of any such violation or infringement. 

 

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 (ii) Schedule 8.1(j) separately sets forth a list of all licenses, sublicenses, and other
agreements of Seller relating to Transferred Intellectual Property, other than licenses for commercial off-the-shelf software with a value of less than $10,000, and true and complete copies thereof have previously been delivered to Buyer. All such
licenses are valid, enforceable, subsisting, in full force and effect, and binding upon the parties thereto, and to Seller’s knowledge each party thereto is and has been in full compliance with all applicable material terms and requirements
thereof, including without limitation any payments of royalties thereunder, and there has occurred no event which, with notice or the passage of time or otherwise, would constitute a default thereunder or grounds for termination or modification
thereof or the imposition of any charge or penalty thereunder. 
 (iii) Seller and Buyer each acknowledge that certain of the trademarks
comprising the Transferred Intellectual Property have been and/or are being used in conjunction with, and certain aspects of the Purchased Business have been conducted using, the words “Liz Claiborne,” “a Liz Claiborne Company”
and similar terms (collectively, the “Seller IP” ). The Seller IP as listed on Schedule 8.1(j) is and will remain the property of Seller, and nothing in this Agreement shall be deemed to transfer to Buyer any trademark rights in the
Seller IP or any goodwill associated therewith, or grant to Buyer any right to use the Seller IP. 
 (k) Finished Goods. All Finished
Goods as of the Closing consist of items of merchantable quality for sale in the ordinary course of business. 
 (l) Promotions and
Allowances. Schedule 8.1(1) sets forth the material terms in effect as of the Execution Date of all return, markdown, promotion, co-op advertising and other similar programs or allowances currently offered generally by Seller to any
customer with respect to the Purchased Business. 
 (m) Purchased Contracts. Schedule 8.1(m) contains a list of all contracts
and agreements primarily involving the Purchased Assets, Purchased Business or Assumed Liabilities involving payment to or by Seller in excess of $75,000 to which Seller is a party or by which Seller or any of the Purchased Assets are bound. Seller
is not in material default under, and Seller has neither given nor received any written notice of any material default or termination with respect to, any of the Purchased Contracts, except for notices of defaults that have since been cured. Seller
has complied in all material respects with the provision of each Purchased Contract. In addition, except as set forth on Schedule 8.1(m), the Purchased Business is not bound by any non-competition or similar restrictive covenant. Copies of all
written Purchased Contracts have been made available to Buyer or its counsel. 
 (n) Customers. Schedule 8.1(n) sets forth
information showing the twenty (20) largest customers of the Purchased Business during each of the preceding three (3) calendar years, the volume of orders and any open orders from each such customer. 
 (o) Employees. Except as disclosed on Schedule 8.1(o), Seller is not party to any written or oral employment, retention, severance,
stay-put, change-in-control, service or consulting agreement relating to any one or more of its employees that are primarily involved in the Purchased Business or any other person that is deemed to be an employee of Seller that is primarily involved
in the Purchased Business (each such employee, an “Applicable Employee” and all such employees collectively, the “Applicable 

  

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Employees”). Schedule 8.1(o) contains a true and complete list as of the Execution Date of the names, titles, and salaries or hourly rates, date
of hire, bonus arrangements and commissions of each Applicable Employee, and all other payments and benefits to which such Applicable Employee may be entitled from Seller or any of its Affiliates or pursuant to or in connection with the transactions
contemplated by this Agreement. Except as disclosed on Schedule 8.1(o), there is no Applicable Employee who cannot be dismissed on such period of notice as is required by Law in respect of a contract of hire for an indefinite term. Except as
disclosed on Schedule 8.1(o), neither Seller nor any of its Affiliates is a party to any written or oral collective bargaining agreement or arrangement relating to any Applicable Employee and, to Seller’s knowledge, there are no
organizational efforts by any union with respect to any Applicable Employee. Schedule 8.1(o)-A sets forth Seller’s calculation of the maximum amount of potential retention payments and potential severance payments, in the aggregate,
pursuant to all Talent Retention Agreements set forth on Schedule 8.1(0). 
 (p) Insurance. Except as disclosed on Schedule
8.1(p), all general and product liability insurance policies presently maintained by Seller with respect to the Purchased Assets and the Purchased Business are with reputable insurance carriers, provide coverage consistent with industry standard
in character and amount customary for the Purchased Business. Each such insurance policy is in full force and effect and all premiums due and payable in respect thereof have been paid. Seller has provided Buyer with a complete list of all claims
made within the last three (3) years and all pending claims with respect to the Purchased Assets under any policies of property and casualty insurance and bonds maintained by Seller with respect to the Purchased Assets. To Seller’s
knowledge, no state of facts exists with respect to which Seller would file any insurance claim with respect to the Purchased Business or the Purchased Assets other than any insurance claim which would be made in the ordinary course of the Purchased
Business consistent with past practices. 
 (q) Ordinary Course of Business. Except as set forth on Schedule 8.1(q), since
September 29, 2007, Seller has operated the Purchased Business in the ordinary course of business consistent with past practices and there has not been a Material Adverse Change. Without limiting the generality of the foregoing, and except as
set forth on Schedule 8.1 (q), since September 29, 2007: 
 (i) there has been no material destruction or loss of or to any of
the Purchased Assets; 
 (ii) there has been no sale, transfer or other disposition of any material asset of used in the Purchased Business,
other than in the ordinary course of business consistent with past practices; 
 (iii) the Books and Records of the Purchased Business have
been maintained in the usual, regular and ordinary manner on a basis consistent with prior years; 
 (iv) there has been no labor dispute,
unfair labor practice charge or employment discrimination charge, nor institution or, to the knowledge of the Seller, threatened institution of any effort, complaint or other proceeding in connection therewith, materially adversely affecting the
operation of the Purchased Business; 
  

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 (v) there has been no amendment, termination or waiver of any right by Seller or its Affiliates under
any Purchased Contract or Permit, other than in the ordinary course of business consistent with past practices or terminations in accordance with the terms of any such Purchased Contract or Permit; 
 (vi) there has been no: (i) increase in the compensation or in the rate of compensation or commissions payable or to become payable by Seller to
any director, officer, employee, salesman, independent contractor or agent in respect of his or her direct involvement in the Purchased Business, other than in the ordinary course of the Purchased Business consistent with past practices; or
(ii) increase in any payment of or commitment to pay any bonus, profit sharing or other extraordinary compensation to any officer, director, salesman, agent, independent contractor or employee in respect of his or her direct involvement in the
Purchased Business, other than in the ordinary course of business consistent with past practices; 
 (vii) there has been no Lien created on
or in any of the Purchased Assets or assumed by Seller with respect to any of the Purchased Assets or the Purchased Business, other than in the ordinary course of business consistent with past practices; 
 (viii) there has been no creation of, amendment to or contribution, grant, payment or accrual for or to the credit of any employee primarily involved in
the Purchased Business with respect to any bonus, incentive compensation, deferred compensation, profit sharing, retirement, pension, group insurance or other benefit plan, or any union, employment or consulting agreement or arrangement, other than
in the ordinary course of business consistent with past practices; 
 (ix) in the operation of the Purchased Business, there has not been
any forward purchase commitments in excess of the requirements of the Purchased Business for normal operating inventories or at prices higher than the current market prices; 
 (x) in the operation of the Purchased Business, there has not been any forward sales commitments or any failure to satisfy any accepted order for goods
or services other than in the ordinary course of business consistent with past practices; 
 (xi) there has not been any change in the
accounting or tax practices followed used in the operation of the Purchased Business; 
 (xii) there has not been any change adopted in the
depreciation or amortization policies or rates; or any change in the credit terms offered to customers of, or by suppliers to, the Purchased Business; and 
 (xiii) with respect to the Purchased Business or any Purchased Asset, Seller has not incurred any indebtedness for any liabilities or paid for or prepaid any liabilities incurred other than in the ordinary course of
business consistent with past practices. 
  

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 (r) Compliance with Laws. Seller is in material compliance with all Laws applicable to it with
respect to the Purchased Assets, the operation of the Purchased Business and the transactions contemplated hereby. 
 (s) Permits.
Seller holds all material permits, licenses, registrations, approvals and authorizations from all Governmental Entities which are necessary to conduct the Purchased Business in a manner consistent with its past practices (the “Permits”)
and all of the Permits are listed on Schedule 8.1(s). Each Permit is valid, subsisting and in good standing and Seller is not in material default or breach of any Permit, and no proceeding is pending or, to the knowledge of Seller, threatened
to revoke or limit any Permit. 
 (t) Accelerated Payments. Except as set forth in Schedule 8.1(t), none of the Purchased
Contracts contain any obligation to make a “change of control” payment to employees or consultants of Seller (including without limitation, severance, so-called “parachute” payments, bonuses or otherwise) or any provision that
results in the acceleration of time of payment or vesting of any benefits under any Purchased Contract, gives rise to any right of termination or acceleration of indebtedness under any Purchased Contract, or gives rise to any restriction or
limitation under any Purchased Contract. 
 (u) Suppliers. Prior to the Closing Date, Seller shall provide Buyer with Seller’s
accounts payable master file and register in respect of the Purchased Business as of December 31, 2007. As of the Execution Date, neither Seller nor any of its Affiliates has received any written notice to the effect that the benefits of any
relationship with any of the major suppliers of the Purchased Business will not continue after the Closing Date in substantially the same manner as before the Execution Date. 
 (v) Environmental Matters. During Seller’s (or any of its Affiliates’) occupancy of the Premises pursuant to each Facility Lease set
forth on Schedule 3.2(f), Seller, its Affiliates and those for whom in Law it is responsible have complied in all material respects with Environmental Laws as they affect such Premises. Seller has obtained all material licenses, permits,
approvals, consents, certificates, regulations and other authorizations (`Environmental Permits”) under Environmental Laws required for the operation of the Purchased Business at the Premises subject to each Facility Lease set forth on
Schedule 3.2(f) and all such Environmental Permits are valid and subsisting. To the knowledge of Seller, Seller is not in material default or breach of any such Environmental Permits. No proceeding is pending or, to the Seller’s
knowledge, threatened to revoke or limit such Environmental Permits. 
 (w) Taxes. Seller or one of its Affiliates has (i) timely
filed all Tax returns in respect of the Purchased Business and the Purchased Assets with respect to all periods of time prior to the Closing Date, except for Tax returns not yet due to be filed or for which Seller or one of its Affiliates has filed
an extension of time that has not yet come due, and (ii) timely paid all applicable Taxes in respect of the Purchased Business and the Purchased Assets with respect to any period of time prior to the Closing Date, except for Taxes accrued but
not yet due and payable, contested in good faith or subject to extensions. No written notice of assessment or reassessment and no notice of any pending action, proceeding or claim relating to Taxes payable or collectable in respect of the Purchased
Business or Purchased Assets has been received by Seller or any of its Affiliates. For purposes of this Section 8.1(w), “Tax” and “Taxes” shall include any taxes, fees levies, duties, charges, premiums, contributions or
similar assessments (including 
 interest, penalties and additions) imposed by or payable to any governmental or other taxing authority, whether foreign,
federal, state, provincial, local or otherwise. 
  

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 8.2. Buyer’s Representations and Warranties. Buyer hereby represents and warrants to Seller
as follows: 
 (a) Organization; Authority; Binding Obligation. Buyer is a corporation duly and validly organized and existing under
the Laws of Florida. The execution and performance of this Agreement and all acts which may be necessary or appropriate to consummate the transactions contemplated hereunder have been authorized by company actions necessary to be taken for the
approval of this Agreement and the transactions contemplated hereunder. This Agreement has been properly executed by Seller and it is legally valid and binding upon Seller, is enforceable against Seller according to its terms except as such
enforceability may be limited by principles of public policy and applicable bankruptcy, insolvency, moratorium or other Laws affecting the rights of creditors generally and by general principles of equity. 
 (b) No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder do not conflict with
or result in any violation of any term or condition of, or constitute a default under, (i) the organizational documents of Buyer, (ii) any agreement or other instrument to which Buyer is a party or by which Buyer is bound or affected, or
(iii) any requirement of Law or of any Governmental Entity. 
 (c) No Bankruptcy. Buyer is solvent and is not in the hands of a
receiver, there is no application for receivership pending and no proceedings are pending or threatened by or against Buyer for Bankruptcy or reorganization in any federal or state court. 
 (d) Legal Proceedings. No action or proceeding has been instituted or, to the best of Buyer’s knowledge, threatened before any court or
governmental agency to restrain or prohibit, or to obtain damages in respect of, or which is related to or arises out of, this Agreement or the transactions contemplated herein. 
 (e) Compliance with Laws. Buyer is in material compliance with all Laws applicable to it with respect to the transactions contemplated hereby.

 8.3. Survival of Representations, Warranties, Covenants and Agreements. All representations and warranties herein shall be
operative and in full force and effect, and the parties hereto shall be entitled to rely thereon, regardless of any investigation made by or for them. All such representations and warranties shall, except as specifically limited by
Section 12.3, survive the execution and delivery of this Agreement, the Closing and the consummation of the transactions provided for herein for a period of eighteen (18) months following the Closing Date, except that the representations
and warranties set out in Sections 8.1(a), (b), (h), (o), (t), (v) and (w) and in Sections 8.2(a) and (c) shall survive until ten (10) days following the expiration of the applicable statutory period of limitations with respect
to the matter to which the claim relates. No representations and warranties shall be merged or extinguished by reason of the execution of the transactions herein. Any claim for indemnification under Sections 13.1(a) or 13.2(a) relating to a 

  

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breach of any of the representations or warranties contained herein may be made at any time during the 18-month period following the Closing Date, except
that any claim for indemnification under Sections 13.1(a) or 13.2(a) relating to a breach of any of the representations and warranties set out in Sections 8.1(a), (b), (h), (o), (t), (v) and (w) or in Sections 8.2(a) and (c) may be
made at any time on or prior to the 10th day following the expiration of the applicable statutory period of limitations with respect to the matter to which the claim relates. Any claims for indemnification under Sections I3.1(b), (c), (d), (e), (f),
(g), (h), (i) or (j) or Sections 13.2(b), (c), (d) or (e) may be made at any time following the Closing Date, subject only to applicable limitation periods imposed by Law. Any contract or tort claim involving fraud, actions taken
in bad faith, intentional misrepresentation or intentional breach may be made at any time, subject only to applicable limitation periods imposed by Law. 
 SECTION 9 
 INVESTIGATION BY BUYER 
 9.1. Availability of Information. For the period beginning on the date of this Agreement and ending on the Closing Date, Seller shall make
available to Buyer and its representatives, agents, counsel and accounts for inspection, examination and audit such of its assets, liabilities facilities, records and personnel as Buyer may reasonably request to conduct its due diligence
investigation regarding Seller and the Purchased Assets and prepare for the Closing. Any inspections, examinations, and audits shall be conducted during normal business hours by Buyer’s employees or agents upon reasonable advance notice and
shall not unduly interfere with Seller’s normal operations. In connection with the foregoing, Seller shall make available its employees to answer reasonable questions by Buyer and Buyer’s employees and agents. 
 SECTION 10 
 COVENANTS OF
SELLER 
 10.1. Ordinary Course. Except as set forth in Schedule 10.1, from the Execution Date until the Closing Date,
Seller shall (i) maintain its company existence in good standing; (ii) maintain in effect all of its presently existing product liability and insurance coverage; (iii) make commercially reasonable efforts to preserve its present
business relationships with its material suppliers and customers; (iv) conduct the Purchased Business in the usual and ordinary manner consistent with past practice, without a substantial change in current operational policies, and perform in
all material respects all agreements with or other obligations to banks, customers, suppliers, employees and others; (v) not sell, mortgage, pledge, lease or otherwise transfer or dispose of any of the Purchased Assets or enter into any
agreement with respect to the foregoing, other than in the ordinary course of business consistent with past practices; (vi) use commercially reasonable efforts to protect all confidential information and trade secrets of the Purchased Business;
(vii) use commercially reasonable efforts in the ordinary course of business and consistent with past practices to protect the Transferred Intellectual Property; and (viii) not enter into any lease, offer to lease or commitment in respect
of real property exclusively relating to the Purchased Business or any amendment, modification, renewal or variation of any Facility Lease, other than renewals or terminations in accordance with the terms of any such Facility Leases. 
  

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 10.2. Buyer Confidential Information. Seller shall, and shall cause its Affiliates to, keep in
confidence and shall not use, and shall cause its Affiliates not to use, for its or their own benefit or for the benefit of any third parties, or divulge to any third parties, any confidential information, knowledge, data or plans of Buyer or its
Affiliates, including without limitation any confidential information, knowledge, data or plans relating to the Purchased Business (collectively, the “Buyer Confidential Information”). Buyer Confidential Information shall be considered and
kept as the private, proprietary and confidential information of Buyer or such Affiliate, as the case may be, and may not be divulged without the express written authorization of Buyer. 
 10.3. Certain Filings. Seiler agrees to make or cause to be made all filings with Governmental Entities that are required to be made by Seller or
its Affiliates to carry out the transactions contemplated by this Agreement, including as required under any applicable anticompetition Law. Seller agrees to provide reasonable good faith assistance to Buyer in making all such filings, applications
and notices as may be necessary or desirable in order to obtain the authorization, approval or consent of any Governmental Entity which may be reasonably required or which Buyer may reasonably request in connection with the consummation of the
transactions contemplated hereby, including as required under any applicable anti-competition Law. 
 10.4. Efforts to Satisfy
Conditions. Seiler agrees to use reasonable best efforts to satisfy the conditions set forth in Section 12.1 hereof that are within its control. 
 10.5. Notification of Certain Matters. 
 (a) From the Execution Date until the Closing Date, promptly
after obtaining knowledge thereof, Seller shall notify Buyer in writing of (a) the occurrence or non-occurrence of any fact or event which causes or would be reasonably likely to cause (i) any representation or warranty of Seller contained in
this Agreement to be untrue or inaccurate in any material respect or (ii) any covenant, condition or agreement of Seller in this Agreement not to be complied with or satisfied in any material respect and (b) any failure of Seller to comply
with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder in any material respect; provided, however, that no such notification shall modify the Schedules or affect the representations,
warranties, covenants and agreements of Seller or Buyer’s right to rely thereon and Buyer’s remedies with respect thereto (including any rights to indemnification pursuant to Section 13 and any contract or tort claims with respect to
fraud, actions taken in bad faith, intentional misrepresentation or intentional breach), or the conditions to the obligations of Buyer, except with respect to certain written updates to Schedule(s) to the extent and as expressly provided in
Section 6.4 and Section 10.5(b). 
 (b) Without limiting Seller’s rights pursuant to Section 6.4, at any time prior to
one Business Day prior to the Closing Date, in the event that Seller determines, by reason of a change in circumstances or an event which was not known or reasonably foreseeable by Seller prior to or as of the Execution Date, that an update to any
Schedule relating solely to any of the representations and warranties of Seller contained in Section S is required in order to make any of such representations and warranties of Seller contained herein true and correct as of the Execution Date and
as of the Closing Date, Seller shall have the right to update, revise or 

  

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supplement any such Schedule in writing with language describing specifically and in reasonable detail the matter requiring such update, revision or
supplement and referencing each specific representation and warranty contained in Section 8, including any subsection thereof, if applicable, to which such disclosure relates; provided, however, that no such update, revision or
supplement of any Schedule shall affect the representations or warranties of Seller or Buyer’s right to rely thereon and Buyer’s remedies with respect thereto (including any rights to indemnification pursuant to Section 13 and any
contract or tort claims with respect to fraud, actions taken in bad faith, intentional misrepresentation or intentional breach), or the conditions to the obligations of Buyer, except as expressly provided in the immediately following two sentences.
Subject to the next following sentence, if Seller delivers any written updated Schedule(s) relating to any of the representations and warranties of Seller contained in Section 8 to Buyer in a timely manner pursuant to and in accordance with the
first sentence of this clause (b), and Buyer does not give written notice of any dispute or disagreement in connection therewith to Seller after delivery of such updated Schedule(s) and prior to the Closing, and if the transactions contemplated by
this Agreement are thereafter consummated, then Buyer shall have no claim against Seller for a breach of such representation or warranty to the extent based on the information contained in such updated Schedule(s) and the provisions of
Section 13 shall not apply with respect to any such matter (except in the case of fraud, actions taken in bad faith, intentional misrepresentation or intentional breach). If Seller delivers any written updated Schedule(s) relating to any of the
representations and warranties of Seller contained in Section 8 to Buyer pursuant to and in accordance with the first sentence of this clause (b), and Buyer gives written notice of any dispute or disagreement in connection therewith to Seller
after delivery of such updated Schedule(s) and prior to the Closing, then (i) Buyer and Seller shall use their reasonable best efforts to resolve any such dispute or disagreement prior to the Closing (and, if necessary, may mutually agree to
extend the Closing Date to a date not later than the Outside Date, during which time Buyer and Seller shall use their reasonable best efforts to resolve any such dispute or disagreement prior to such extended Closing Date), and, if the parties are
able to resolve such dispute or disagreement prior to the Closing (as it may be extended) and the transactions contemplated by this Agreement are thereafter consummated, Buyer shall have no claim against Seller for a breach of such representation or
warranty to the extent based on the information contained in such updated Schedule(s) and the provisions of Section 13 shall not apply with respect to any such matter (except in the case of fraud, actions taken in bad faith, intentional
misrepresentation or intentional breach), or (ii) at Buyer’s election, Buyer may terminate this Agreement by written notice to Seller pursuant to Section 12.3(e). 
 (c) Seller shall give prompt notice in writing to Buyer of any notice or other communication from any third party alleging that the consent of such third
party is or may be required to be obtained by Seller in connection with the transactions contemplated by this Agreement. 
 10.6. Delivery
of Books and Records. At the Closing, there shall be delivered to Buyer by Seller all the Books and Records described in Section 2.1(g) that are included in the Purchased Assets. 
 10.7. Change of Use of Name. Seller agrees that promptly after the Closing it shall change the names of any of its Affiliates that include the
words “C&C” or “Laundry” (the “Specified Words”) to a name that does not include the Specified Words or any part thereof or any similar words. Seller agrees that from and after the Closing Date neither Seller nor
any of its Affiliates will use the Specified Words or any part thereof or any similar words. 
  

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 10.8. Access to Premises and Cooperation. Seller will afford to the authorized representatives of
Buyer access, as may be reasonably requested by Buyer and with prior written notice to Seller, to Seller’s or any of its Affiliates’ Premises, properties, books, records, employees and representatives during normal business hours (or at
other times if Seller shall consent to or request such other times) prior to the Closing Date. Seller acknowledges that Buyer may request such access in connection with obtaining information related to the conduct of the Purchased Business and the
ownership of the Purchased Assets, and shall use its reasonable best efforts to facilitate such access and information to Buyer prior to the Closing Date. Buyer acknowledges and agrees that it will coordinate and consolidate all requests for
information and access by Buyer and its authorized representatives so that they are reasonable in nature and are coordinated through those representatives of Seller as may be designated by Seller. 
 10.9. Notices Regarding Suppliers. From the Execution Date until the Closing Date, Seller shall notify Buyer promptly after receiving written
notice from any major supplier of the Purchased Business to the effect that the benefits of the relationship with such major supplier will not continue after the Closing Date in substantially the same manner as before the Execution Date. 

10.10. Retention Payment with Respect to Hired Employees. Seller shall pay 50% of all retention payments pursuant to the Hired Employee Talent
Retention Agreements to the extent that any such retention payments become due and payable. 
 SECTION 11 
 COVENANTS OF BUYER 
 11.1.
Seller Confidential Information. Buyer shall, and shall cause its Affiliates to, keep in confidence and shall not use, and shall cause its Affiliates not to use, for its or their own benefit or for the benefit of any third parties, or divulge
to any third parties, any confidential information, knowledge, data or plans of Seller or its Affiliates, including without limitation any confidential information, knowledge, date or plans relating to the Purchased Business other than in connection
with the operation of the Purchased Business as contemplated by this Agreement (collectively, the “Seller Confidential Information”). Seller Confidential Information shall be considered and kept as the private, proprietary and confidential
information of Seller or such Affiliate, as the case may be, and may not be divulged without the express written authorization of Seller. 
 11.2. Certain Filings. Buyer agrees to make or cause to be made all filings with governmental bodies that are required to be made by Buyer to carry out the transactions contemplated by this Agreement, including as required under any
applicable anti-competition Law. Buyer agrees to provide reasonable good faith assistance to Seller in making all such filings, applications and notices as may be necessary or desirable in order to obtain the authorization, approval or consent of
any Governmental Entity which may be reasonably required or which Seller may reasonably request in connection with the consummation of the transactions contemplated hereby, including as required under any applicable anti-competition Law. 

 

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 11.3. Efforts to Satisfy Conditions. Buyer agrees to use its reasonable best efforts to satisfy
the conditions set forth in Section 12.2 that are within its control. 
 11.4. Notification of Certain Matters. From the
Execution Date until the Closing Date, promptly after obtaining knowledge thereof, Buyer shall notify Seller in writing of (a) the occurrence or non-occurrence of any fact or event which causes or would be reasonably likely to cause
(i) any representation or warranty of Buyer contained in this Agreement to be untrue or inaccurate in any material respect or (ii) any covenant, condition or agreement of Buyer in this Agreement not to be complied with or satisfied in any
material respect and (b) any failure of Buyer to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder in any material respect; provided, however, that no such notification
shall affect the representations, warranties, covenants and agreements of Buyer or Seller’s right to rely thereon and Seller’s remedies with respect thereto (including any rights to indemnification pursuant to Section 13 and any
contract or tort claims with respect to fraud, actions taken in bad faith, intentional misrepresentation or intentional breach), or the conditions to the obligations of Seller. Buyer shall give prompt notice in writing to Seller of any notice or
other communication from any third party alleging that the consent of such third party is or may be required to be obtained by Seller or the Company in connection with the transactions contemplated by this Agreement. 
 11.5. Shelli Segal. Prior to the Closing Date, Buyer shall notify Seller as to whether it has determined to purchase from Buyer each of the
trademarks and tradenames set forth on Schedule 1.1(aaa) that contain the name “Shelli Segal” (the “Shelli Segal Marks”). If Buyer notifies Seller that it will purchase the Shelli Segal Marks from Buyer, then (a) the
Shelli Segal Marks shall be included in the Transferred Intellectual Property, (b) all written agreements between Seller or its Affiliates and Shelli Segal (the “Shelli Segal Agreement”) shall be included in the Purchased Contracts,
and (c) all liabilities and obligations relating to the Shelli Segal Marks and the Shelli Segal Agreement shall be included in the Assumed Liabilities. If Buyer notifies Seller that it will not purchase the Shelli Segal Marks from Buyer or
fails to notify Seller of its determination with respect to this matter, then (a) the Shelli Segal Marks shall not be included in the Transferred Intellectual Property, (b) the Shelli Segal Agreement shall not be included in the Purchased
Contracts, and (c) all liabilities and obligations relating to the Shelli Segal Marks and the Shelli Segal Contracts shall be included in the Excluded Liabilities. For the avoidance of doubt, there shall be no adjustment to the Purchase Price
due to Buyer’s determination in accordance with this Section 11.5. 
 11.6. Service Credit to Hired Employees. Buyer shall
give each Hired Employee credit for time worked at Seller or its Affiliates in respect of all of Buyer’s applicable policies and procedures. 
 11.7. Remza/MAF. From the Closing Date until the final resolution of the Remza Matter (or the termination of the respective Remza/MAF Agreements in accordance with their terms), Buyer shall not take any action with respect to the
Purchased Business or operate the Purchased Business in any manner (including without limitation designing, manufacturing, importing, processing, 

  

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marketing, promoting, selling, distributing, licensing and managing goods and services using the Transferred Intellectual Property) in any of the following
territories: Bahrain, Kingdom of Saudi Arabia, Kuwait, Oman, Qatar, United Arab Emirates, Yemen, Cyprus, Egypt, Libya, Algeria, Jordan, Lebanon, Morocco, Tunisia, Turkey or Pakistan (collectively, the “Territory”); provided,
however, that Seller shall have full and complete control over the conduct of any proceedings, discussions or negotiations relating to the Remza Matter; and provided further, however, that Buyer shall have a reasonable
approval right with respect to any settlement that restricts or otherwise limits Buyer’s ability to operate the Purchased Business anywhere in the Territory (such approval not to be unreasonably withheld). 
 SECTION 12 
 CONDITIONS OF
CLOSING 
 12.1. Conditions to Buyer’s Performance. The obligations of Buyer under this Agreement are subject to the
satisfaction, at or prior to the Closing Date, of each of the following conditions; provided, however, that Buyer may at its option waive in writing prior to or at Closing the performance of any of the conditions imposed hereunder:

 (a) (i) Each and every representation and warranty of Seller contained in this Agreement, and any Schedule or any certificate delivered
pursuant hereto, shall have been true and correct when made and shall be repeated at the Closing and (A) if qualified by materiality (or any variation of such term), shall be true and correct as of the Closing Date (taking into account such
materiality), except that any such representation or warranty that is made as of a specified date shall only be required to be true and correct as of that date, and (B) if not qualified by materiality (or any variation of such term), shall be
true and correct in all material respects as of the Closing Date, except that any such representation or warranty that is made as of a specified date shall only be required to be true and correct in all material respects as of that date, and
(ii) Seller shall have performed and observed in all material respects all covenants and agreements required to be performed or observed by Seller under this Agreement at or before the Closing. 
 (b) No action or proceeding shall have been instituted or threatened before any Governmental Entity to restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of, this Agreement or the consummation of transactions provided for herein. 
 (c) Seller
shall have delivered to Buyer at or prior to Closing all of the items set forth in Section 3.2. 
 (d) All Required Consents set forth
on Schedule 12.1(d) shall have been obtained and be in full force and effect, and Buyer shall have been furnished with appropriate evidence thereof reasonably satisfactory to Buyer in form and substance. 
 (e) All government approvals shall have been obtained. 
 (f) Seller shall have operated the Purchased Business in the ordinary course consistent with past practices since the Execution Date. 
  

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 (g) There shall not have occurred any Material Adverse Change since the Execution Date. 
 12.2. Conditions to Seller’s Performance. The obligations of Seller under this Agreement shall be subject to the satisfaction, at or prior to
the Closing Date, of each of the following conditions; provided, however, that Seller may at its option waive in writing prior to or at Closing the performance of any conditions imposed hereunder: 
 (a) (i) Each and every representation and warranty of Buyer contained in this Agreement, and any Schedule or any certificate delivered pursuant hereto,
shall have been true and correct when made and shall be repeated at the Closing and (A) if qualified by materiality (or any variation of such term), shall be true and correct as of the Closing Date (taking into account such materiality), except
that any such representation or warranty that is made as of a specified date shall only be required to be true and correct as of that date, and (B) if not qualified by materiality (or any variation of such term), shall be true and correct in
all material respects as of the Closing Date, except that any such representation or warranty that is made as of a specified date shall only be required to be true and correct in all material respects as of that date, and (ii) Buyer shall have
performed and observed in all material respects all covenants and agreements to be performed or observed by it under this Agreement at or before the Closing. 
 (b) No action or proceeding shall have been instituted or threatened before any Governmental Entity to restrain or prohibit, or to obtain damages in respect of, or which is related to or arises out of, this Agreement
or the consummation of transactions provided for herein. 
 (c) Buyer shall have delivered to Seller at or prior to Closing all of the items
set forth in Section 3.3. 
 (d) All government approvals shall have been obtained. 
 12.3. Termination. This Agreement may be terminated before Closing: 
 (a) by mutual written consent of Seller and Buyer; 
 (b) by either Seller or Buyer by written notice to
the other if the Closing has not been consummated on or before March 7, 2008 after the Execution Date (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 12.3(b)
shall not be available to any party whose breach of any representation, warranty, covenant, or agreement under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; 
 (c) by Seller, if there has been a material breach of any representation, warranty, covenant, or agreement on the part of Buyer contained in this
Agreement and such breach has not been cured within twenty (20) days after written notice to Buyer of such breach; 
 (d) by Buyer, if
there has been a material breach of any representation, warranty, covenant, or agreement on the part of Seller contained in this Agreement and such breach has not been cured within twenty (20) days after written notice to Seller of such breach;

  

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 (e) by Buyer pursuant to and in accordance with the provisions of Section 10.5(b); 
 (f) by either Seller or Buyer if any Governmental Entity has issued an injunction, order or judgment restraining or prohibiting the consummation of the
transactions provided for in this Agreement, and such injunction, order or judgment shall have become final and nonappealable; or 
 (g) by
Buyer if there shall have occurred a Material Adverse Change since the Execution Date. 
 Upon the termination of this Agreement for any
reason, neither party shall have any liability or further obligations arising out of this Agreement, except for any liability resulting from any fraud, actions taken in bad faith, intentional misrepresentation or intentional breach prior to
termination. Furthermore, the provisions of Sections 13 and 14 shall survive any termination of this Agreement. 
 SECTION 13 

 INDEMNIFICATION 
 13.1. Indemnification by Seller. Seller agrees to indemnify and hold harmless Buyer and its officers, directors, stockholders, employees, independent contractors, agents and representatives, in their capacities as such, and the
successors, heirs or personal representatives of any of them (collectively, “Buyer Indemnified Parties”) against and in respect of any and all losses, claims, damages, liabilities and reasonable expenses, including any reasonable legal or
other reasonable out-of-pocket expenses incurred in connection with investigating, responding to or defending any of the foregoing (“Losses”), arising from or in connection with the following matters (the “Buyer’s
Indemnified Liabilities”), but net of the amount of any insurance proceeds realized by such Buyer Indemnified Party with respect to such matters, without duplication: 
 (a) any breach or inaccuracy of any representation or warranty by Seller contained in this Agreement, subject to the Threshold and Cap (each, as defined below); 
 (b) any breach, violation or non-performance of any covenant or obligation of Seller contained in this Agreement or in any other transaction document
executed and delivered in connection with this Agreement; 
 (c) non-compliance with any applicable legislation relating to bulk sales;

 (d) any claim in respect of any occurrence, defect, deterioration, or incident (including any claim made for defective material and
failure to comply with specifications) relating to any (i) Purchased Inventory or (ii) products using the Transferred Intellectual Property sold by Seller or any of its Affiliates, in each case whether asserted before, on or after the
Closing Date; 
 (e) the Seller Chargebacks and the Seller Returns; 
  

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 (f) any claim for a commission or similar fee brought or made by any Person who may have been hired by
Seller as an investment adviser, agent, broker or finder in connection with the transactions contemplated by this Agreement, including but not limited to Centerview Partners LLC; 
 (g) the failure of Seller to pay or discharge in due course any and all Excluded Liabilities; 
 (h) the ownership of the Purchased Assets on or before the Closing Date or the operation of the Purchased Business before the Closing Date; 

(i) all fees, disbursements, expenses or settlement amounts payable in connection with the dispute or settlement of the Chinese Laundry Complaint;
provided, however, that Seller shall have full and complete control over the conduct of any proceedings, discussions or negotiations relating to the Chinese Laundry Complaint matter and shall, in reasonable consultation with Buyer,
have the right to decide all matters of procedure, strategy, substance and settlement relating to such matter; and provided further, however, that Buyer shall have a reasonable approval right with respect to any settlement that
impacts or limits Buyer’s use of the Transferred Intellectual Property (such approval not to be unreasonably withheld); or 
 (j) all
fees, disbursements, expenses or settlement amounts payable in connection with the Remza Matter; provided, however, that Seller shall have full and complete control over the conduct of any proceedings, discussions or negotiations
relating to the Remza Matter and shall have the right to decide all matters of procedure, strategy, substance and settlement relating to such matter. 
 13.2. Indemnification by Buyer. Buyer agrees to indemnify and hold harmless Seller and its officers, directors, stockholders, employees, independent contractors, agents and representatives, in their capacities
as such, and the successors, heirs or personal representatives of any of them (collectively, “Seller Indemnified Parties”) against and in respect of any Losses arising from or in connection with the following matters (the
“Seller’s Indemnified Liabilities”), without duplication: 
 (a) any breach or inaccuracy of any representation or warranty by
Buyer contained in this Agreement, subject to the Threshold and Cap (each, as defined below); 
 (b) any breach, violation or non-performance
of any representation, warranty, covenant or obligation of Buyer contained in this Agreement; 
 (c) any claim for a commission or similar
fee brought or made by any Person who may have been hired by Buyer as an investment adviser, agent, broker or finder in connection with the transactions contemplated by this Agreement; 
 (d) the failure of Buyer to pay or discharge in due course any Assumed Liability; or 
 (e) the ownership by Buyer of the Purchased Assets after the Closing Date. 
  

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 13.3. Assumption of Defense. An indemnified party shall promptly give written notice (which notice
shall describe in reasonable detail the claim, the provisions of this Agreement upon which such claim is based and the total monetary damages sought) to each indemnifying party after obtaining knowledge of any matter as to which recovery may be
sought against such indemnifying parry because of the indemnity set forth in this Section 13, and, if such indemnity shall arise from the claim of a third party, shall permit such indemnifying party to assume the defense of any such claim or
any proceeding resulting from such claim; provided, however, that failure to give any such notice promptly shall not affect the indemnification provided under this Section 13, except to the extent such indemnifying party shall
have been actually and materially prejudiced as a result of such failure. Notwithstanding the foregoing, an indemnifying party may not assume the defense of any such third-party claim if it does not demonstrate to the reasonable satisfaction of the
indemnified party that it has adequate financial resources to defend such claim and pay any and all Seller Indemnified Liabilities or Buyer Indemnified Liabilities, as applicable, that may result therefrom, or if the claim (i) is reasonably
likely to result in imprisonment of the indemnified party, or (ii) names both the indemnifying party and the indemnified party (including impleaded parties) and representation of both parties by the same counsel would create a conflict. If an
indemnifying party assumes the defense of such third party claim, such indemnifying party shall agree prior thereto, in writing, that it is liable under this Section 13 to indemnify the indemnified party in accordance with the terms contained
herein in respect of such claim, shall conduct such defense diligently, shall have full and complete control over the conduct of such proceeding on behalf of the indemnified party and shall, subject to the provisions of this Section 13, have
the right to decide all matters of procedure, strategy, substance and settlement relating to such proceeding; provided, however, that any counsel chosen by such indemnifying party to conduct such defense shall be reasonably
satisfactory to the indemnified party, and the indemnifying party will not without the written consent of the indemnified party consent to the entry of any judgment or enter into any settlement with respect to the matter which does not include a
provision whereby the plaintiff or the claimant in the matter releases the indemnified party from all liability with respect thereto, or which may reasonably be expected to have an adverse effect on the indemnified party. The indemnified party may
participate in, but may not control, such proceeding and retain separate co-counsel at its sole cost and expense. Failure by an indemnifying party to notify the indemnified party of its election to defend any such claim or proceeding by a third
party within thirty (30) days after notice thereof shall be deemed a waiver by such indemnifying party of its right to defend such claim or action. 
 13.4. Non-Assumption of Defense. If no indemnifying party is permitted or elects to assume the defense of any such claim by a third party or proceeding resulting therefrom, the indemnified party shall
diligently defend against such claim or litigation in such manner as it may deem appropriate and, in such event, the indemnifying party or parties shall promptly reimburse the indemnified party for all reasonable out-of-pocket costs and expenses,
legal or otherwise, incurred by the indemnified party and its affiliates in connection with the defense against such claim or proceeding, as such costs and expenses are incurred. Any counsel chosen by such indemnified party to conduct such defense
must be reasonably satisfactory to the indemnifying party or parties, and only one counsel shall be retained to represent all indemnified parties in an action (except that if litigation is pending in more than one jurisdiction with respect to an
action, one such counsel may be retained in each jurisdiction in which such litigation is pending). The indemnified party shall not settle or compromise any such claim without the written consent of the indemnifying party, which consent shall not be
unreasonably withheld. 
  

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 13.5. Indemnified Party’s Cooperation as to Proceedings. The indemnified party will cooperate
in all reasonable respects with any indemnifying party in the conduct of any proceeding as to which such indemnifying party assumes the defense. For the cooperation of the indemnified party pursuant to this Section 13, the indemnifying party or
parties shall promptly reimburse the indemnified party for all reasonable out-of-pocket costs and expenses, legal or otherwise, incurred by the indemnified party or its affiliates in connection therewith, as such costs and expenses are incurred.

 13.6. Threshold. Any Buyer’s Indemnified Liability or Liabilities under Section 13.1(a) and any Seller’s Indemnified
Liability or Liabilities under Section 13.2(a) shall be paid by Seller or Buyer, as the case may be, once such Indemnified Liabilities exceed in the aggregate $100,000 (the “Threshold”), disregarding any “materiality” or
“Material Adverse Change” qualification contained in any representation or warranty solely for purposes of determining whether the amount of any such Indemnified Liabilities is applied toward the Threshold; provided that, once the
aggregate of the Buyer’s Indemnified Liabilities, on the one hand, or the aggregate of the Seller’s Indemnified Liabilities, on the other hand, exceed the Threshold, Seller or Buyer, as the case may be, shall be obligated to indemnify and
reimburse Buyer or Seller, as the case may be, for the total amount of all such Indemnified Liabilities (including the Threshold amount), subject to the Cap as provided in Section 13.7; and provided further that such Threshold
shall not apply to any Loss as a result of, arising from or in connection with (i) any fraud, actions taken in bad faith, intentional misrepresentation or intentional breach by Buyer or Seller, (ii) any breach by Seller of any
representation or warranty contained in Sections 8.1(a), (b), (h), (o), (t), (v) or (w), (iii) any breach by Buyer of any representation or warranty contained in Sections 8.2(a) or (c) or (iv) any item which is accounted for
pursuant to the adjustment provided for in Section 4.4. 
 13.7. Cap. In no event shall Seller’s, on the one hand, and
Buyer’s, on the other hand, aggregate liability pursuant to a claim under Section 13.1(a) or 13.2(a), as applicable, exceed $5,000,000 (the “Cap”); provided, however, that such Cap shall not apply to any Loss as a
result of, resulting from or in connection with (i) any fraud, actions taken in bad faith, intentional misrepresentation or intentional breach by Buyer or Seller, (ii) any breach by Seller of any representation or warranty contained in
Sections 8.1(a), (b), (h), (o), (t), (v) or (w), (iii) any breach by Buyer of any representation or warranty contained in Sections 8.2(a) or (c) or (iv) any item which is accounted for pursuant to the adjustment provided for in
Section 4.4. 
 13.8. Exclusive Remedy. The parties hereto acknowledge and agree that the foregoing indemnification provisions of
this Section 13 shall be the exclusive monetary remedy and causes of action with respect to any matter arising out of or in connection with this Agreement, or any Schedule or Exhibit hereto or any certificate delivered in connection herewith,
except with respect to contract or tort claims based on fraud, actions taken in bad faith, intentional misrepresentation or intentional breach. 
 13.9. No Consequential Damages. The obligations of Seller or Buyer with respect to a claim for indemnification under this Section 13 shall not include any special, exemplary or consequential damages, including, without
limitation, business interruption, or any punitive damages. 
  

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 SECTION 14 
 MISCELLANEOUS 
 14.1. Entirety of Agreement. This Agreement (including the Schedules
and Exhibits hereto), together with all certificates and other transaction documents and instruments delivered hereunder, state the entire agreement of the parties with respect to the subject matter hereof and supersede any prior proposals, letters,
discussions or agreements between the parties hereto concerning the subject matter hereof and thereof. Notwithstanding anything to the contrary in this Section 14.1, the Confidentiality Agreement shall continue in full force and effect.

 14.2. Notices. All notices, demands and communications of any kind which any party hereto may be required or desire to serve upon
another party under the terms of this Agreement shall be in writing and shall be given by: (a) personal service upon such other party; (b) mailing a copy thereof by certified or registered mail, postage prepaid, with return receipt
requested; (c) sending a copy thereof by Federal Express or equivalent courier service; or (d) sending a copy thereof by facsimile, in each case to the parties at the respective addresses and facsimile numbers set forth on the signature
pages hereto. 
 In case of service by Federal Express or equivalent courier service or by facsimile or by personal service, such service
shall be deemed complete upon delivery or transmission, as applicable. In the case of service by mail, such service shall be deemed complete on the fifth Business Day after mailing. The addresses and facsimile numbers to which, and persons to whose
attention, notices and demands shall be delivered or sent may be changed from time to time by notice served as hereinabove provided by any party upon any other party. 
 14.3. Amendment. This Agreement may be modified or amended only by an instrument in writing, duly executed by all of the parties hereto. 
 14.4. Waiver. No waiver by any party of any term, provision, condition, covenant, agreement, representation or warranty contained in this
Agreement (or any breach thereof) shall be effective unless it is in writing executed by the party against which such waiver is to be enforced. No waiver shall be deemed or construed as a further or continuing waiver of any such term, provision,
condition, covenant, agreement, representation or warranty (or breach thereof) on any other occasion or as a waiver of any other term, provision, condition, covenant, agreement, representation or warranty (or of the breach of any other term,
provision, condition, covenant, agreement, representation or warranty) contained in this Agreement on the same or any other occasion. 
 14.5. Counterparts; Facsimile. For the convenience of the parties, any number of counterparts hereof may be executed, each such executed counterpart shall be deemed an original and all such counterparts together shall constitute one
and the same instrument. Facsimile transmission of any signed original counterpart and/or retransmission of any signed facsimile transmission shall be deemed the same as the delivery of an original. 
  

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 14.6. Assignment; Binding Nature; No Beneficiaries. This Agreement and the obligations hereunder
shall not be assignable by Seller in whole or in part without the prior consent of Buyer. Likewise, this Agreement and the obligations hereunder shall not be assignable by Buyer in whole or in part without the prior written consent of Seller;
provided, however, that Buyer may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (ii) designate one or more of its Affiliates to perform its obligations hereunder, in each
case, so long as Buyer is not relieved of any liability hereunder. No such assignment, if permitted, shall relieve the assignee of any of their obligations or duties hereunder. Subject to the forgoing, this Agreement shall be binding upon, inure to
the benefit of, and be enforceable by the parties hereto and their respective heirs, personal representatives, legatees, successors and permitted assigns. Except as otherwise expressly provided in Section 13, this Agreement shall not confer any
rights or remedies upon any person other than the parties hereto and their respective heirs, personal representatives, legatees, successors and permitted assigns. 
 14.7. Headings. The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof. 
 14.8. Governing Law; Jurisdiction. This Agreement shall be governed by, and construed and enforced in accordance with, the Laws of the State of New York including, without limitation, Section 5-1401 of the
New York General Obligations Law and New York Civil Practice Laws and Rules 327. In the event of any controversy or claim arising out of or relating to this Agreement or the breach or alleged breach hereof, each of the parties hereto irrevocably
(a) submits to the non-exclusive jurisdiction of any New York state court sitting in the County of New York or any federal court sitting in U.S. District Court for the Southern District of the State of New York, (b) waives any objection
which it may have at any time to the laying of venue of any action or proceeding brought in any such court, (c) waives any claim that such action or proceeding has been brought in an inconvenient forum, and (d) agrees that service of
process or of any other papers upon such party by registered mail at the address to which notices are required to be sent to such party under Section 14.2 shall be deemed good, proper and effective service upon such party. 
 14.9. Construction. In this Agreement (i) words denoting the singular include the plural and vice versa, (ii) “it” or
“its” or words denoting any gender include all genders, (iii) the word “including” shall mean “including without limitation,” whether or not expressed, (iv) any reference to a statute shall mean the statute
and any regulations thereunder in force as of the date of this Agreement or the Closing Date, as applicable, unless otherwise expressly provided, (v) any reference herein to a Section, Article, Schedule or Exhibit refers to a Section or Article
of or a Schedule or Exhibit to this Agreement, unless otherwise stated, (vi) ; “hereof’, “hereto” and “hereunder” and similar expressions refer to this Agreement and not to a particular Section, and (vii) when
calculating the period of time within or following which any act is to be done or steps taken, the date which is the reference day in calculating such period shall be excluded and if the last day of such period is not a Business Day, then the period
shall end on the next day which is a Business Day. 
 14.10. Negotiated Agreement. Buyer and Seller acknowledge that they have been
advised and represented by counsel in the negotiation, execution and delivery of this Agreement and accordingly agree that if an ambiguity exists with respect to any provision of this Agreement, such provision shall not be construed against any
party because such party or its representatives drafted such provision. 
  

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 14.11. Public Announcements. Neither Buyer nor Seller shall issue any press release or make any
other public announcement concerning the Purchased Business, this Agreement or the transactions contemplated hereby (including, without limitation, any announcements relating to the direction of or Buyer’s plans for the Purchased Business)
without the prior written approval of the other party, provided, however, that if a party or its Affiliates may, upon written notice to the other party, describe this Agreement and the transactions contemplated hereby in any press
release or filing with the SEC or other governmental body it is required to make under applicable Law and, if required, file this Agreement with the Securities and Exchange Commission. 
 14.12. Remedies Cumulative; Specific Performance. The remedies provided for or permitted by this Agreement shall be cumulative and the exercise by
any party of any remedy provided for herein shall not preclude the assertion or exercise by such party of any other right or remedy provided for herein or at law or equity. The parties acknowledge that, irrespective of the provisions contained in
Section 13.8, irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and the parties acknowledge and agree that the aggrieved party shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or equity. 
 14.13. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. 
 14.14. WAIVER OF
JURY TRIAL. BUYER AND SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
 [REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK] 
  

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 IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date
first set forth above. 
  

									
		 		 		 	LIZ CLAIBORNE, INC.
	Address:	 		 		 	
	1441 Broadway	 		 		 	
	New York, New York 10018	 		 	By:	 	 /s/ Roberta Karp

	United States of America	 		 	Name:	 	Roberta Karp
	Attention:	 	Chief Financial Officer	 		 	Title:	 	Senior Vice President, Business
	Facsimile:	 	(212) 626-1888	 		 		 	Development and Legal/Corporate Affairs
				
	With copies to:	 		 		 	
				
	Liz Claiborne, Inc.	 		 		 	
	One Claiborne Avenue	 		 		 	
	North Bergen, New Jersey 07047	 		 		 	
	United States of America	 		 		 	
	Attention:	 	General Counsel	 		 		 	
	Facsimile:	 	(201) 295-7851	 		 		 	
					
	and:	 		 		 		 	
				
	Kramer Levin Naftalis & Frankel LLP	 		 		 	
	1177 Avenue of the Americas	 		 		 	
	New York, New York 10036	 		 		 	
	United States of America	 		 		 	
	Attention.	 	James A. Grayer, Esq.	 		 		 	
	Facsimile:	 	(212) 715-8000	 		 		 	

 [Signature page to Asset Purchase Agreement] 

									
		 		 		 	PERRY ELLIS INTERNATIONAL, INC.
	Address:	 		 		 	
	3000 NW 107 Avenue	 		 		 	
	Miami, Florida 33172	 		 	By:	 	 /s/ George Feldenkreis

	Attention:	 	General Counsel	 		 	Name:	 	George Feldenkreis
	Facsimile:	 	(305) 406-0513	 		 	Title:	 	Chairman and Chief Executive Officer
				
	with copies to:	 		 		 	
	Greenberg Traurig, LLP	 		 		 	
	The MetLife Building	 		 		 	
	200 Park Avenue	 		 		 	
	New York, New York 10166	 		 		 	
	Attention:	 	Clifford E. Neimeth, Esq.	 		 		 	
		 	Anthony J. Marsico, Esq.	 		 		 	
	Facsimile:	 	(212) 801-6400	 		 		 	

 [Signature page to Asset Purchase Agreement] 

 EXHIBIT A 
 FORM OF BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT 

 EXHIBIT B 
 FORM OF TRADEMARK ASSIGNMENTS 

 SCHEDULE A - PATENTS 
  

									
	 Country
	  	 Application No.
	  	 Patent No.
	  	 Filing Date
	  	 Issue Date

  

 3 

 SCHEDULE B - COPYRIGHTS 
  

											
	 Country
	  	 Title
	  	 App. No.
	  	 Reg. No.
	  	 Filing Date
	  	 Issue Date

  

 4 

 SCHEDULE C - TRADEMARKS 
  

 5 

 SCHEDULE D - DOMAIN NAMES 
  

			
	 Domain Name
	  	 Registering Authority

  

 6 

 SCHEDULE A - PATENTS 
  

									
	 Country
	  	 Application No.
	  	 Patent No.
	  	 Filing Date
	  	 Issue Date

  

 4 

 SCHEDULE B - COPYRIGHTS 
  

 5 

 SCHEDULE C - TRADEMARKS 
  

 6 

 SCHEDULE D - DOMAIN NAMES 
  

			
	 Domain Name
	  	 Registering Authority

  

 7 

 EXHIBIT C 
 FORM OF LEASE ASSIGNMENT AGREEMENT

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