Document:

Intercreditor Agreement entered into by and among the Company

  
 EXHIBIT 10.13

  
 INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT

  
 THIS INTERCREDITOR AND LIEN SUBORDINATION
AGREEMENT is entered into as of November 9, 2004, by and among S.A.C. CAPITAL ASSOCIATES, LLC, a limited liability company organized under the laws of Anguila, as “Administrative Agent” and “Collateral Agent” for all Second
Lien Lenders (as hereinafter defined) party to the Second Lien Credit Agreement described below, THE WET SEAL, INC., a Delaware corporation (the “Lead Borrower”), THE WET SEAL RETAIL, INC., a Delaware corporation (“Wet Seal
Retail”), WET SEAL CATALOG, INC., a Delaware corporation (collectively, with Wet Seal Retail and the Lead Borrower, the “Companies”), WET SEAL GC, INC., a Virginia corporation (the “Facility Guarantor”),
and FLEET RETAIL GROUP, INC., as “Administrative Agent” and “Collateral Agent” for all of the First Lien Lenders (as hereinafter defined) party to the First Lien Credit Agreement described below. 
  
 R E C I T A L S 
  
 A. The Companies, the Facility Guarantor, the First Lien Agent (as
hereinafter defined), Back Bay Capital Funding LLC, as Term Lender and the other First Lien Lenders have entered into an Amended and Restated Credit Agreement, dated as of September 22, 2004 (as the same may be amended, restated, supplemented or
otherwise modified from time to time as permitted hereunder, the “First Lien Credit Agreement”), which amended and restated in its entirety that certain Credit Agreement dated as of May 26, 2004 (the “Existing Credit
Agreement”) and pursuant to which, among other things, First Lien Lenders have agreed, subject to the terms and conditions set forth in the First Lien Credit Agreement, to make certain loans and financial accommodations to the Companies.
All of the Companies’ obligations to First Lien Agent and First Lien Lenders under the First Lien Credit Agreement and the other First Lien Debt Documents (as hereinafter defined) are secured by first priority liens on and security interests in
substantially all of the now existing and hereafter acquired real and personal property of each Company (collectively, the “Company Collateral”). 
  
 B. To induce First Lien Agent and First Lien Lenders to execute and deliver the Existing Credit Agreement, Facility
Guarantor executed and delivered to First Lien Agent a certain Guarantee, dated as of May 26, 2004, pursuant to which Facility Guarantor guaranteed all of the Companies’ obligations to First Lien Agent and First Lien Lenders under the Existing
Credit Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder, the “First Lien Guaranty”). To induce First Lien Agent and First Lien Lenders to execute and
deliver the First Lien Credit Agreement, Facility Guarantor executed and delivered a Confirmation of Ancillary Loan Documents, dated as of September 22, 2004 (the “Confirmation of Ancillary Loan Documents”), which, among other
things, confirmed and ratified Facility Guarantor’s obligations under the First Lien Guaranty and other First Lien Debt Documents (as hereinafter defined) and executed and delivered the First Lien Credit Agreement. All of the obligations of
Facility Guarantor under the First Lien Guaranty and the other First Lien Debt Documents are secured by first priority liens on 

  

 
and security interests in substantially all of the now existing and hereafter acquired real and personal property of Facility Guarantor (the
“Facility Guarantor Collateral”). The Liens and other security interests granted by the Companies in connection with the Existing Credit Agreement have been affirmed under the Confirmation of Ancillary Loan Documents. 
  
 C. The Companies, the Facility Guarantor, the Second Lien Agent (as
hereinafter defined) and the other Second Lien Lenders have entered into that certain Credit Agreement of even date herewith (as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder, the
“Second Lien Credit Agreement”) pursuant to which, among other things, the Second Lien Lenders have agreed, subject to the terms and conditions set forth in the Second Lien Credit Agreement, to make a certain term loan to the
Companies. All of the Companies’ obligations to the Second Lien Agent and Second Lien Lenders under the Second Lien Credit Agreement and the other Second Lien Debt Documents (as hereinafter defined) are secured by second priority liens on and
security interests in the Company Collateral. 
  
 D. To induce the
Second Lien Agent and the Second Lien Lenders to execute and deliver the Second Lien Credit Agreement, Facility Guarantor executed and delivered to Second Lien Agent a certain Guaranty of even date herewith pursuant to which Facility Guarantor
guaranteed all of the Companies’ obligations to the Second Lien Agent and Second Lien Lenders under the Second Lien Credit Agreement and the other Second Lien Debt Documents (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Second Lien Guaranty”). All of the obligations of Facility Guarantor under the Second Lien Guaranty and the other Second Lien Debt Documents are secured by second priority liens on and security
interests in the Facility Guarantor Collateral. 
  
 E. As an
inducement to and as one of the conditions precedent to the agreement of First Lien Agent and First Lien Lenders to consummate the transactions contemplated by the First Amendment to Amended and Restated Credit Agreement, dated of even date herewith
(the “First Amendment”), First Lien Agent and First Lien Lenders have required the execution and delivery of this Agreement by the Second Lien Agent, for and on behalf of the Second Lien Lenders and itself, and the Credit Parties
(as hereinafter defined) in order to set forth the relative rights and priorities of First Lien Agent, First Lien Lenders, Second Lien Agent and the Second Lien Lenders under the First Lien Debt Documents and the Second Lien Debt Documents and in
respect of the Collateral (as hereinafter defined). 
  

 NOW, THEREFORE, in order to induce First Lien Agent and First Lien Lenders to consummate the transactions
contemplated by the First Amendment, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows: 
  
 1. Definitions. The following terms shall have the
following meanings in this Agreement: 
  
 “Additional
Interest” means, at the time of determination, an increase in applicable interest with respect to the First Lien Debt in excess of the rate of interest assessed by the First Lien Agent pursuant to the terms of the First Lien Debt
Documents as of the date hereof plus 200 basis points, except any increases in connection with the imposition of default rate of interest in accordance with the terms of the First Lien Debt Documents and as expressly contemplated by the definitions
of the terms “Prime Rate” and “LIBO Rate”, respectively, in each case as set forth in the First Lien Debt Documents (as in effect on the date hereof). 
  
 “Agreement” means this Intercreditor and Lien Subordination Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time. 
  
 “Aggregate Borrowing Bases” means collectively the Borrowing Base and the Term Loan Borrowing Base. 
  
 “Asset Sale Revolver Reserve” shall have the meaning set forth in Section 2.4 (a) hereof. 
  
 “Back-in-O/A” shall mean First Lien Principal
Obligations exceeding the Maximum First Lien Debt following a recalculation of Maximum First Lien Debt when the Borrowing Base Certificate delivered to the First Lien Agent prior to such recalculation showed that First Lien Principal Obligations
were less than Maximum First Lien Debt. 
  
 “Bankruptcy
Code” shall mean the provisions of Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder or any state insolvency, debtor relief or assignment for
the benefit of creditor law. 
  
 “Borrowing
Base” means the Borrowing Base as defined in the First Lien Credit Agreement. 
  
 “Borrowing Base Certificate” means the Borrowing Base Certificate as defined in the First Lien Credit Agreement (as in effect on the date hereof). 
  
 “Business Day” means any day that is not a Saturday,
Sunday or other day on which commercial banks in Boston, Massachusetts or New York, New York are authorized or required by law to remain closed. 
  
 “Collateral” shall mean, collectively, the Company Collateral, the Facility Guarantor Collateral and any and all additional
property and interests in property that secures all or any portion of the First Lien Debt and/or the Second Lien Debt. 
  
 “Credit Parties” shall mean, collectively, the Companies, Facility Guarantor and any other guarantor of all or any portion of the
First Lien Debt and/or the Second Lien Debt. 
  

 “Discharge of all First Lien Debt” shall mean the occurrence of all of the
following: (i) termination of all commitments to extend credit that would constitute First Lien Debt, (ii) Payment in Full of all First Lien Debt (other than contingent indemnification obligations to the extent no bona fide claim giving rise thereto
has been asserted) and (iii) termination, cancellation or cash collateralization (in each case, in accordance with the terms of this Agreement) of all outstanding Letter of Credit Liabilities that constitute First Lien Debt. 
  
 “Enforcement Action” shall mean (a) to foreclose on,
collect on, take possession of or control of, or sell or otherwise realize upon (judicially or non-judicially) any Collateral or otherwise enforce rights with respect to Collateral under any applicable agreement, document or instrument pertaining
thereto (including, without limitation, by way of setoff, notification of account debtors, notification of depositary banks under deposit account control agreements or exercise of rights under landlord consents), (b) to receive a transfer of
Collateral in satisfaction of any indebtedness secured thereby or (c) to otherwise enforce any security interest or other right or remedy pertaining to the Collateral at law, in equity or pursuant to a First Lien Security Document or Second Lien
Security Document, as applicable (including, without limitation, the commencement of any applicable legal proceedings against or with respect to all or any of the Collateral to facilitate the actions described in the immediately preceding clause
(a) and clause (b), commencing any applicable Proceeding and exercising voting rights in respect of any equity interests comprising Collateral). 
  
 “Excluded First Lien Debt” shall mean, (a) any obligation, liabilities or indebtedness of the Credit Parties relating to Hedging
Agreements (as defined in the First Lien Credit Agreement as of the date hereof), (b) that portion of the First Lien Principal Obligations (including interest due thereon) which when made or incurred caused the First Lien Principal Obligations to
exceed the Maximum First Lien Debt and (c) any Additional Interest. Excluded First Lien Debt shall not include any portion of the First Lien Principal Obligations (and interest due thereon) which, (x) on the date of funding by the First Lien Lenders
in the case of the Revolving Credit Loans or the date of issuance, renewal or amendment in the case of the Letter of Credit Liabilities represented by the outstanding Letters of Credit, did not cause the First Lien Principal Obligations to exceed
the Maximum First Lien Debt as calculated based upon the most recent Borrowing Base Certificate received by the First Lien Agent prior to such funding or issuance, renewal or amendment (even if such Borrowing Base Certificate proved to be inaccurate
based upon, but not limited to, errors, fraud or changes in collateral values) or (y) First Lien Principal Obligations (and interest thereon) to the extent that the Revolving Credit Loans are funded or the Letter of Credit Liabilities are incurred
at a time following a Back-in-O/A so long as such amounts do not exceed an amount equal to the Maximum First Lien Debt as calculated based upon the most recent Borrowing Base Certificate received by the First Lien Agent prior to the occurrence of a
Back-in-O/A minus the amount of the First Lien Principal Obligations outstanding on such date. 
  
 “Existing Credit Agreement” shall have the meaning provided in the Recitals hereto. 
  

 “First Lien Agent” shall mean Fleet Retail Group, Inc., as First Lien Agent for
the First Lien Lenders, or any other Person appointed by the holders of the First Lien Debt as agent for purposes of the First Lien Debt Documents and this Agreement; provided that, after the consummation of any Permitted Refinancing,
the term “First Lien Agent” shall refer to any Person appointed by the holders of the First Lien Debt at such time as agent for themselves for purposes of, among other things, this Agreement. 
  
 “First Lien Debt” shall mean all obligations,
liabilities and indebtedness of every nature of each Credit Party from time to time owed to First Lien Agent or any First Lien Lender under the First Lien Debt Documents, including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest accruing thereon (including, without limitation, interest accruing after the commencement of a Proceeding, without regard to whether or not such interest is an allowed claim) and all fees, costs and
expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, (including, without limitation, all obligations, liabilities and indebtedness arising from or in
connection with any transactions which arise out of cash management, depository, investment, letter of credit or other banking or financial services) whether before or after the filing of a Proceeding under the Bankruptcy Code (including without
limitation a DIP Financing); provided, however, “First Lien Debt” shall not include any Excluded First Lien Debt. 
  
 “First Lien Debt Documents” shall mean the First Lien Credit Agreement and all other agreements, documents and instruments
executed from time to time in connection therewith (including without limitation the First Lien Guaranty and each other First Lien Security Document), as the same may be amended, restated, supplemented or otherwise modified from time to time as
permitted herein. 
  
 “First Lien Default”
shall mean an “Event of Default” that arises pursuant to Section 7.01 of the First Lien Credit Agreement. 
  
 “First Lien Lender Parties” shall mean the First Lien Agent and each of the First Lien Lenders. 
  
 “First Lien Lenders” shall mean the holders of the
First Lien Debt, and shall include, without limitation, the “Lenders”, as such term is defined in the First Lien Credit Agreement. 
  
 “First Lien Principal Obligations” shall mean the (a) outstanding principal amount of the Revolving Credit Loans and the Term Loan
and (b) the Letter of Credit Liabilities. 
  
 “First
Lien Security Documents” means any agreement, document or instrument executed concurrently with the First Lien Credit Agreement or at any time hereafter pursuant to which one or more Credit Parties or any other Person either (i)
guarantees payment or performance of all or any portion of the First Lien Debt (including, without limitation, the First Lien Guaranty) and/or (ii) provides, as security for all or any portion 

  

 
of the First Lien Debt, a Lien on any of its Property in favor of the First Lien Agent (for the benefit of the First Lien Lenders), as any or all of the same
may be amended, supplemented, restated or otherwise modified from time to time. 
  
 “Insurance Reserve” shall have the meaning set forth in Section 7 hereof. 
  
 “Letter of Credit Liabilities” shall mean all “L/C Disbursements”, “Letter of Credit Outstandings”,
“Letter of Credit Fees” (each as defined in the First Lien Credit Agreement) and all other Indebtedness that arises in connection with the issuance, renewal or extension of any “Letter of Credit” pursuant to the terms of the
First Lien Credit Agreement. 
  
 “Lien”
shall mean, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such
asset. 
  
 “Maximum First Lien Debt” shall
mean on any date of determination thereof, First Lien Debt in an amount equal to (a) the lesser of (i) $50,000,000 and (ii) the result of (A) the greater of the (I) the Borrowing Base and (II) the Term Loan Borrowing Base (as such terms (including
the component definitions thereof) are defined in the First Lien Credit Agreement as of the date hereof) minus (B) the Minimum Required Excess Availability (as such term (including the component definitions thereof) is defined in the First
Lien Credit Agreement as of the date hereof); plus (b) $8,000,000; plus, (c) the Permitted Overadvance Amount, minus (d) all Asset Sale Revolver Reserves, all Insurance Reserves and all Term Loan Permanent Reductions.

  
 “Minimum Required Excess Availability”
shall mean the “Minimum Required Excess Availability” as defined in the First Lien Credit Agreement. 
  
 “New Debt” shall have the meaning provided in Section 2.11 hereof. 
  
 “Paid in Full” or “Payment in
Full” shall mean the payment in full in cash of all First Lien Debt (provided that cash collateral in an amount of 103% of the aggregate undrawn amount of the letters of credit provided under the First Lien Debt Documents may be
furnished in lieu of payment in cash for such related Letter of Credit Liabilities) and termination of all commitments to lend or make other financial accommodations under the First Lien Debt Documents. 
  
 “Permitted Overadvance Amount” shall mean up to
$7,500,000. 
  
 “Permitted Refinancing”
shall mean any refinancing of the First Lien Debt under the First Lien Debt Documents provided that the financing documentation entered into by the Credit Parties in connection with such Permitted Refinancing constitutes Permitted
Refinancing First Lien Debt Documents. 
  
 “Permitted
Refinancing First Lien Debt Documents” shall mean any financing documentation which replaces the First Lien Debt Documents and pursuant to which the 

  

 
First Lien Debt under the First Lien Debt Documents is refinanced, as such financing documentation may be amended, restated, supplemented or otherwise
modified from time to time in compliance with this Agreement, but specifically excluding any such financing documentation to the extent that it contains, either initially or by amendment or other modification, any material terms, conditions,
covenants or defaults other than those which (a) exist at the time of the Permitted Refinancing in the First Lien Debt Documents or (b) could be included in the First Lien Debt Documents by an amendment or other modification that would not be
prohibited by the terms of this Agreement. 
  
 “Person” shall mean any natural person, corporation, general or limited partnership, limited liability company, firm, trust, association, government, governmental agency or other entity, whether acting in an
individual, fiduciary or other capacity. 
  
 “Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian,
receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person. 
  
 “Property” shall mean, with respect to any Person, all assets, property and interests in property of such Person, whether real,
personal or mixed, whether now owned or existing or hereafter acquired or arising and wheresoever located. 
  
 “Revolving Credit Loans” shall mean the “Revolving Credit Loans” as defined in the First Lien Credit Agreement.

  
 “Sale Event” shall mean the date upon
which both (i) a First Lien Default has occurred and is continuing and (ii) First Lien Agent or Second Lien Agent has retained, or has caused or directed a Credit Party to retain, a broker or investment banker or liquidating agent or agent to sell
all or a substantial portion of a Credit Party’s business or operations and/or the Collateral. A Sale Event shall be deemed terminated when First Lien Agent or Second Lien Agent who has commenced such Sale Event has so advised Companies in
writing. 
  
 “Second Lien Actionable
Default” shall mean, collectively to the extent that such events have not been cured or waived, (a) an “Event of Default” that arises pursuant to (i) the incurrence of indebtedness that is pari passu or senior in right of
payment to the Second Lien Debt in contravention of Section 6.01 of the Second Lien Credit Agreement and (ii) Section 7.01(a) of the Second Lien Credit Agreement (as in effect on the date hereof), (b) the First Lien Principal Obligations exceeds the
Maximum First Lien Debt, (c) after the occurrence of a First Lien Default (which shall not have been cured or waived) if at such time the First Lien Agent shall be in breach of any material term or provision of this Agreement and such breach shall
not have been cured within five (5) Business Days of the date of receipt of written notice of such breach from the Second Lien Agent and (d) the Borrowers shall have failed to deliver the Borrowing Base Certificate required pursuant to Section
5.01(f) of the First Lien Credit Agreement (as in effect on the date hereof). 
  

 “Second Lien Agent” shall mean S.A.C. Capital Associates, LLC, as Second Lien
Agent for the Second Lien Lenders, or any other Person appointed by the holders of the Second Lien Debt as agent for purposes of the Second Lien Debt Documents and this Agreement. 
  
 “Second Lien Debt” shall mean all obligations,
liabilities and indebtedness of every nature of each Credit Party from time to time owed to Second Lien Agent or any Second Lien Lender under the Second Lien Debt Documents, including, without limitation, the principal amount of all debts, claims
and indebtedness, accrued and unpaid interest, including capitalized interest, accruing thereon (including, without limitation, interest accruing after the commencement of a Proceeding, without regard to whether or not such interest is an allowed
claim and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding under the
Bankruptcy Code. 
  
 “Second Lien Debt
Documents” shall mean the Second Lien Credit Agreement, the Second Lien Guaranty, any other guaranty with respect to the Second Lien Debt, each other Second Lien Security Document and all other documents, agreements and instruments now
existing or hereinafter entered into evidencing or pertaining to all or any portion of the Second Lien Debt. 
  
 “Second Lien Default Notice” shall mean a written notice from Second Lien Agent to First Lien Agent pursuant to which First Lien
Agent is notified of the occurrence of a Second Lien Actionable Default, which notice incorporates a reasonably detailed description of such Second Lien Actionable Default and states that such notice is a “Second Lien Default Notice” for
purposes of this Agreement. 
  
 “Second Lien
Guaranty” shall have the meaning provided in the Recitals hereto. 
  
 “Second Lien Lender Parties” shall mean the Second Lien Agent and each of the Second Lien Lenders. 
  
 “Second Lien Lenders” shall mean holders of the Second Lien Debt. 
  
 “Second Lien Security Documents” shall mean any agreement, document or instrument executed
concurrently with the Second Lien Credit Agreement or at any time hereafter pursuant to which one or more Credit Parties or any other Person either (i) guarantees payment or performance of all or any portion of the Second Lien Debt (including,
without limitation, the Second Lien Guaranty) and/or (ii) provides, as security for all or any portion of the Second Lien Debt, a Lien on any of its Property in favor of the Second Lien Agent, for the benefit of the Second Lien Lenders and itself,
as any or all of the same may be amended, supplemented, restated or otherwise modified from time to time. 
  
 “Term Loan” shall mean the “Term Loan” as defined in the First Lien Credit Agreement. 
  

 “Term Loan Borrowing Base” shall mean the “Term Loan Borrowing Base” as
such term is defined in the First Lien Credit Agreement. 
  
 “Term Loan Permanent Reductions” shall have the meaning set forth in Section 2.4 (a) hereof. 
  
 2. Lien Subordination. 
  
 2.1. Subordination of Liens Securing Second Lien Debt to Liens Securing First Lien Debt. Each Credit Party, each
First Lien Lender Party and each Second Lien Lender Party hereby acknowledge and agree that, notwithstanding the time, date, manner or order of grant, attachment or perfection of the Liens on all or any part of the Collateral granted to the First
Lien Agent or the Second Lien Agent, as the case may be, (i) all Liens granted on all or any part of the Collateral pursuant to the First Lien Security Documents to the First Lien Agent for the benefit of the First Lien Lender Parties shall be a
“first” prior, senior and continuing Lien on all such Collateral to the extent of the First Lien Debt, and (ii) all Liens granted on all or any part of the Collateral pursuant to the Second Lien Security Documents to the Second Lien Agent,
for the benefit of the Second Lien Lender Parties, regardless of when or how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be in all respects and for all purposes subject to, junior to and subordinate to all
Liens on all or any part of the Collateral in favor of the First Lien Agent to the extent of the First Lien Debt, on the terms and conditions set forth in this Agreement. 
  
 2.2. Liquidation, Dissolution, Bankruptcy. The provisions of this Agreement will be
applicable both before and after any Proceeding involving any Credit Party and all references herein to any Credit Party shall be deemed to apply to the trustee for such Credit Party and such Credit Party as a debtor-in-possession. The relative
rights of the First Lien Agent and the Second Lien Agent as set forth in this Agreement in or to any distributions in respect of the Collateral shall continue after the filing of any Proceeding on the same basis as prior to the date of such filing.
In the event of any Proceeding involving any Credit Party: 
  
 (a) Except as otherwise specifically permitted in this Agreement, until the First Lien Debt shall have been Paid in Full, the Second Lien Agent and each Second Lien Lender shall not assert, without the prior written
consent of the First Lien Agent, any claim, motion, objection or argument in respect of all or any part of the Collateral in connection with such Proceeding which could otherwise be asserted or raised in connection with such Proceeding by such
Second Lien Lender Party as a secured creditor of any Credit Party. Without limiting the generality of the foregoing, the Second Lien Agent, for itself and each Second Lien Lender, agrees that it will (i) not object to or oppose (or support any
other Person in objecting to or opposing) any sale or other disposition of all or any part of the Collateral free and clear of Liens or other claims of the Second Lien Agent and each Second Lien Lender 

  

 
under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code or any other law applicable to such Proceeding if the relevant First
Lien Lender Parties have consented to such sale or disposition, (ii) subject to Section 2.11 hereof, not challenge (or support any other Person in challenging) any use of cash collateral or debtor-in-possession financing consented to or provided by
any First Lien Lender Parties (whether consented to or provided by the First Lien Lender Parties, a “DIP Financing”) it being agreed by each Second Lien Lender Party that such DIP Financing shall be on such terms and conditions and
in such amounts as such First Lien Lender Parties, in their sole discretion, may decide and, in connection therewith, any Credit Party may grant to such participating First Lien Lender Parties (or any agent or representative thereof) Liens upon all
of the Property of such Credit Party, which Liens (A) shall secure payment of all First Lien Debt whether such First Lien Debt arose prior to the commencement of such Proceeding or at any time thereafter and all other financing provided by any First
Lien Lender Parties during the Proceeding (provided that, to the extent that such Liens secure First Lien Debt which arose prior to the commencement of such Proceeding, such Liens shall also secure the Second Lien Debt, subject to the conditions and
terms set forth herein) and (B) shall be superior in priority to the liens and security interests, if any, in favor of Second Lien Agent for the benefit of the Second Lien Lender Parties on the Property of such Credit Party on the same terms and
conditions as provided herein; provided, however that in connection with any such use of cash collateral or DIP Financing, the Second Lien Lender Parties shall have received as adequate protection of their interests a replacement Lien
in post-petition assets of the Credit Parties which shall be junior and subordinate to all Liens granted pursuant to such consent to use cash collateral or DIP Financing with the same priorities afforded the Liens granted to the Second Lien Agent
pursuant to this Agreement; (iii) not to assert (or support any other Person in asserting) any right it may have to “adequate protection” of its interest in any Collateral in any Proceeding, (iv) turn over to the First Lien Agent for the
pro rata benefit of the First Lien Lender Parties any “adequate protection” of their interest in any Collateral that they receive in any Proceeding for application to the First Lien Debt owed to the First Lien Lender Parties, and (v) not
seek to have the automatic stay of Section 362 of the Bankruptcy Code lifted or modified with respect to any Collateral, to appoint a trustee or examiner under Section 1104 of the Bankruptcy Code or to convert or dismiss (or support any other Person
in converting or dismissing) such Proceeding under Section 1112 of the Bankruptcy Code, in each case without the prior written consent of the First Lien Agent; provided, that, in the case of this clause (v), if the First Lien
Lender Parties seek such aforementioned relief, the Second Lien Lender Parties hereby irrevocably consents thereto and shall join in any such motion or application seeking such relief if requested by the First Lien Agent. The Second Lien Agent, for
each 

  

 
Second Lien Lender Party, waives any claim it may now or hereafter have arising out of the election of the First Lien Lender Parties, in any Proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code. The Second Lien Agent shall be permitted to participate on any creditor’s committee; provided, that the Second Lien Agent or any
other Person participating on such creditor’s committee shall not directly or indirectly take any action or vote in any manner that would be in violation of this Agreement or inconsistent with or result in a breach of this Agreement.

  
 (b) Except as otherwise expressly set forth
herein, the First Lien Agent shall have the exclusive right to file proofs of claim and other pleadings and motions with respect to any Collateral in any Proceeding. Subject to the limitations set forth in this Agreement, the First Lien Agent may
(but shall have no obligation or duty to) file appropriate proofs of claim and other pleadings and motions with respect to any Second Lien Debt in any Proceeding if and to the extent a proper proof of claim with respect to such Second Lien Debt has
not been filed by the Second Lien Agent for and on behalf of the Second Lien Lender Parties in the form required in such Proceeding at least ten (10) days prior to the expiration of the time for filing thereof. In furtherance of the foregoing, the
Second Lien Agent, for each Second Lien Lender Party, hereby appoints the First Lien Agent as its attorney-in-fact, with full authority in the place and stead of such Second Lien Lender Party and full power of substitution and in the name of such
Second Lien Lender Party or otherwise, to execute, file and deliver any document or instrument that the First Lien Agent is required or permitted to file or deliver pursuant to this Section 2.2(b), such appointment being coupled with an
interest and irrevocable. 
  
 (c) The Second Lien
Agent shall execute and deliver to the First Lien Agent all such agreements, instruments and other documents confirming the above authorizations and all such proofs of claim, assignments of claim and other instruments and documentation, and shall
take all such other action as may be reasonably requested by the First Lien Agent to enforce such claims and carry out the intent of this Section 2.2. 
  

(d) The First Lien Debt shall continue to be treated as First Lien Debt and the provisions of this Agreement shall continue to govern
the relative rights and priorities of the First Lien Lender Parties and the Second Lien Lender Parties even if all or part of the First Lien Debt or the Liens securing same are subordinated, set aside, avoided, invalidated or disallowed in
connection with any Proceeding. 
  
 (e) To the
extent that any First Lien Lender Party receives payments (whether in cash, Property or securities) on the First Lien Debt or proceeds of Collateral which are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a 

  

 
trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or
proceeds received, the First Lien Debt, or part thereof, intended to be satisfied shall be revived and continue in full force and effect as if such payments or proceeds had not been received by such First Lien Lender Party. 
  
 (f) Notwithstanding any other provision of this Agreement,
but subject to Section 2.2(a), (i) the Second Lien Agent shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Second Lien Agent, including without limitation any claims secured by the Collateral, if any, (ii) the Second Lien Agent shall be entitled to file any pleadings, objections, motions or
agreements which assert rights or interests available to unsecured creditors of the Credit Parties arising under either the Bankruptcy Code or applicable non-bankruptcy law, and (iii) the Second Lien Agent shall be entitled to file any proof of
claim and other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement and necessary to preserve their rights, in accordance with the terms of this Agreement, with respect to the Second Lien
Debt and the Collateral; provided, that notice of intent to take any such action shall be given by the Second Lien Agent to the First Lien Agent not less than the earlier of (x) five (5) Business Days prior to the taking of such action
and (y) five (5) Business Days less than the number of days available by order of any applicable bankruptcy court in which to file any such claim, filing, pleading, objection, motion or agreement, as the case may be. 
  
 2.3. Lien Enforcement Provisions.

  
 The First Lien Lender Parties shall have the exclusive right,
prior to the Discharge of all First Lien Debt, to direct the enforcement by the Second Lien Lender Parties of all of their rights and remedies with respect to all or any part of the Collateral, (i) by judicial proceedings for the enforcement of the
Liens created under the Second Lien Security Documents, (ii) by the sale of the Collateral or any part thereof, (iii) otherwise by the exercise of the power of entry or sale conferred by the Second Lien Debt Documents, or (iv) by taking any other
Enforcement Action against, or exercising any other rights or remedies with respect to, all or any part of the Collateral; provided, that upon the Discharge of all First Lien Debt, the Second Lien Agent may exercise the rights or
remedies specified in this Section 2.3 and in the Second Lien Security Documents. Except as the same pertains to the Collateral or as otherwise expressly prohibited by this Agreement, the Second Lien Agent may exercise any right or power,
enforce any remedy, give any direction, consent or waiver or make any determination, under or in respect of any provision of any Second Lien Debt Document. Notwithstanding the foregoing, subject at all times to the provisions of Section 2.1
and Section 2.9 of this Agreement, if a Second Lien Actionable Default shall have occurred and be continuing, the Second Lien 

  

 
Lender Parties may take any Enforcement Action under the Second Lien Debt Documents, including, without limitation, any Enforcement Action with respect to
all or any part of the Collateral, after the passage of ninety (90) days from the date of delivery of a Second Lien Default Notice to the First Lien Agent (to the extent that such Second Lien Actionable Default described therein shall
not have been cured or waived within such period), provided that no Enforcement Action may be taken by any Second Lien Lender Party at any time if the First Lien Agent is diligently pursuing in good faith an Enforcement Action on a material
portion of the Collateral, provided further, that such ninety (90) day period shall be tolled for any period during which the First Lien Lender Parties and Second Lien Lender Parties are prevented by applicable law from
exercising their default and enforcement rights and remedies against all or any part of the Collateral; and provided, further, that if following the acceleration of the First Lien Debt by any First Lien Lender Party such
acceleration is rescinded (whether or not any other existing “Event of Default” (as such term is defined in the First Lien Credit Agreement) has been cured or waived), then all Enforcement Actions taken by the Second Lien Lender Parties
shall likewise be rescinded if such Enforcement Action is based solely on the acceleration of the First Lien Debt. 
  
 2.4. Release of Liens. In the event that all or any part of the Collateral is sold, transferred or otherwise disposed
of by any Credit Party, acting with the consent of the First Lien Lender Parties, or by the First Lien Lender Parties, in each case pursuant to the terms of the First Lien Debt Documents: 
  
 (a) prior to the commencement of a Proceeding (whether or
not a Default or Event of Default (each as defined in the First Lien Credit Agreement) has occurred), any sale or other disposition of assets so long as the proceeds (net of transaction costs) received by the Credit Parties from any such sale or
other disposition of assets are used to permanently reduce the amount that the Credit Parties are permitted to borrow under the First Lien Credit Agreement, either, as determined by the First Lien Lender Parties, as (A) a prepayment of the Term
Loans (the “Term Loan Permanent Reduction”) and/or (B) the establishment of reserves against the Aggregate Borrowing Bases in an amount equal to the total proceeds (net of transaction costs) received by the Credit Parties minus the
amount by which the Aggregate Borrowing Bases were reduced (if any) in connection with such sale or other disposition (the “Asset Sale Revolver Reserve”). 
  
 (b) following the commencement of a Proceeding, in connection with: 
  
 (i) the entry of an order by a bankruptcy court authorizing
the sale, transfer or other disposition of all or substantially all of the Collateral of any Credit Party; or 
  
 (ii) the taking of any Enforcement Action by the First Lien Lender Parties; 
  

 then, in any such case, concurrently upon the release of any Liens of the First Lien Lender Parties with
respect to such Collateral, the Liens of the Second Lien Lender Parties on such Collateral shall be automatically released and terminated, without any action by or notice to the Second Lien Lender Parties required hereunder, and the First Lien Agent
shall be authorized by the Second Lien Agent on behalf of the Second Lien Lender Parties (and is hereby authorized and directed by the Second Lien Agent on behalf of the Second Lien Lender Parties) to file UCC termination statements or any other
documents or instruments to terminate the Second Lien Agent’s Lien on such Collateral to evidence such automatic release and termination. The Second Lien Agent agrees that no further act or documentation shall be necessary to evidence the
release and termination by the Second Lien Agent of such Lien, provided that, such Second Lien Agent shall promptly execute and deliver to the First Lien Agent such releases and terminations as the First Lien Agent shall reasonably
request to evidence such automatic release and termination of the Liens of Second Lien Agent on such Collateral. In furtherance of the foregoing, the Second Lien Agent, on behalf of the Second Lien Lender Parties, hereby irrevocably appoints First
Lien Agent its attorney-in-fact, with full authority in the place and stead of such Second Lien Lender Party and in the name of such Second Lien Lender Party or otherwise, to execute and deliver any document or instrument which such Second Lien
Lender Party may be required to deliver pursuant to this Section 2.4. 
  
 2.5. First Lien Agent’s Actions with respect to the Collateral. Subject to Section 2.2(f) as the following may relate to a Proceeding, in furtherance and not in limitation of the other terms
and provisions of this Agreement, each of the Second Lien Lender Parties agrees that (i) it will not take any action (or support any other Person in taking any action) that would hinder, delay, limit or prohibit any exercise of rights and remedies
by any of the First Lien Lender Parties under or pursuant to the First Lien Debt Documents to the extent permitted thereunder and hereunder, including, without limitation, any collection, sale, lease, exchange, transfer or other disposition of the
Collateral, whether by foreclosure or otherwise, or that would limit, invalidate, avoid or set aside any Lien or First Lien Security Document or subordinate the priority of the First Lien Debt to the Second Lien Debt or grant the Liens securing the
Second Lien Debt equal ranking to the Liens securing the First Lien Debt and (ii) it hereby waives any and all rights it or the other Second Lien Lender Parties may have as a junior lien creditor or otherwise (whether arising under the Uniform
Commercial Code or under any other law) to object to the manner in which the First Lien Lender Parties seek to enforce or collect the First Lien Debt or the Liens granted in any of the Collateral, regardless of whether any action or failure to act
by or on behalf of the First Lien Lender Parties is adverse to the interests of any Second Lien Lender Party. Furthermore, and without limiting any other provision of any First Lien Debt Document, so long as the Discharge of all First Lien Debt has
not occurred, in no event shall any Second Lien Lender Party (i) contest, protest or object to any Enforcement Action, any Sale Event or other action brought by any First Lien Lender Party or any other exercise by a First Lien Lender Party of any
rights and remedies relating to the Collateral under the 

  

 
First Lien Security Documents or otherwise or (ii) object to the forbearance by the First Lien Lender Parties from bringing or pursuing any Enforcement
Action, any Sale Event or other action or any other exercise of any rights or remedies relating to the Collateral, in each case so long as such action or inaction does not constitute a breach of the obligations of the First Lien Lender Parties under
this Agreement and the respective interests of such Second Lien Lender Party attach to the proceeds thereof subject to the relative priorities set forth in this Agreement. In exercising rights and remedies with respect to the Collateral, the First
Lien Lender Parties may enforce the provisions of the First Lien Debt Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement
shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor
under the Uniform Commercial Code of any applicable jurisdiction or any other applicable law and of a secured creditor under the Bankruptcy Code or any jurisdiction pursuant to which a Proceeding is then being conducted. 
  
 2.6. Turnover Provisions. In the event
that any proceeds of Collateral are received by any Second Lien Lender Party at a time when such payment is not expressly permitted by the terms of this Agreement, any such proceeds shall not be commingled with any of the assets of any Second Lien
Lender Party, shall be received and held in trust for the benefit of the First Lien Lender Parties and shall be promptly paid over to the First Lien Agent, for the benefit of the First Lien Lender Parties, or delivered in the same form as received,
with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, to the extent necessary to make Payment in Full of all First Lien Debt in accordance with its terms. In the event that any Second Lien Lender Party fails
to provide any endorsement, as contemplated by the immediately preceding sentence, the First Lien Agent, or any of its officers or employees, is hereby irrevocably authorized to make the same (which authorization, being coupled with an interest, is
irrevocable). After the Discharge of all First Lien Debt, any remaining proceeds of Collateral shall be delivered to the Second Lien Agent for application to the Second Lien Debt in accordance with the Second Lien Debt Documents, except as otherwise
required pursuant to applicable law. 
  
 2.7.
Agreement Not to Contest. Each of the First Lien Lender Parties and each of the Second Lien Lender Parties hereby agrees not to, directly or indirectly, whether in connection with a Proceeding or otherwise, take any action or vote
in any way that would be in violation of, or inconsistent with, or result in a breach of, this Agreement or challenge or contest (i) the validity, perfection, priority or enforceability of any First Lien Debt or Second Lien Debt or the Lien held by
the First Lien Agent, for the benefit of the First Lien Lender Parties, or the Lien held by the Second Lien Agent, for the benefit of the Second Lien Lender Parties, to secure the payment, performance or observance of all or any part of the First
Lien Debt or the Second Lien Debt, (ii) the rights of the First Lien 

  

 
Lender Parties or the Second Lien Lender Parties set forth in any of the First Lien Debt Documents or Second Lien Debt Documents, respectively, with respect
to any such Lien, or (iii) the validity or enforceability of any of the First Lien Debt Documents or any of the Second Lien Debt Documents; provided that nothing in this Section 2.7 is intended or shall be deemed or construed to
limit in any way the ability of the parties hereto to enforce all of the terms and provisions of this Agreement. 
  
 2.8. Sale, Transfer or other Disposition of Second Lien Debt. 
  
 (a) No First Lien Lender Party or Second Lien Lender Party
shall sell, assign, pledge, dispose of or otherwise transfer all or any portion of the First Lien Debt or any First Lien Debt Document or Second Lien Debt or any Second Lien Debt Document, as the case may be: (i) without giving prior written notice
of such action to the First Lien Agent or the Second Lien Agent, respectively, and (ii) unless, concurrently with the consummation of any such action, the transferee thereof shall agree to be bound by this Agreement. 
  
 (b) Notwithstanding the failure of any transferee to execute
or deliver an agreement substantially identical to this Agreement (or joinder to this to this Agreement), the subordination effected hereby shall survive any sale, assignment, pledge, disposition or other transfer of all or any portion of the Second
Lien Debt, and the terms of this Agreement shall be binding upon the successors and assigns of any Second Lien Lender Party, as provided in Section 13 hereof. 
  
 (c) The Credit Parties shall not refinance the Second Lien Debt, or otherwise prepay the Second Lien Debt in
violation of the terms of the First Lien Credit Agreement, and the Second Lien Lender Parties shall not accept any such prepayment, unless (i) the terms and conditions of such refinancing documentation are acceptable to First Lien Agent and (ii) the
lenders thereunder and the Credit Parties have executed and delivered to First Lien Agent an agreement substantially similar to this Agreement. 
  
 2.9. Application of Proceeds from Sale or other Disposition of the Collateral. 
  
 (a) Prior to a First Lien Default, all proceeds of
dispositions of Collateral, insurance proceeds in connection with a casualty event and condemnation awards with respect to any Collateral shall be applied to the First Lien Debt. 
  
 (b) After the occurrence and during the continuance of a First Lien Default, all proceeds of Collateral
collected by any First Lien Lender Party or any Second Lien Lender Party, shall, in each case, be applied as 

  

 
follows: first, Payment in Full of the First Lien Debt; second, payment in full in cash of the Second Lien Debt; and third, to any
Excluded First Lien Debt. Any balance remaining shall be delivered to the Credit Parties or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. Each Credit Party acknowledges the foregoing
application of proceeds and agrees to same. In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category and (b) each of the Persons
entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto. 
  
 2.10. Legends. Until the termination of this Agreement in accordance with Section
20 hereof, each Second Lien Lender Party will cause to be clearly, conspicuously and prominently inserted in the Second Lien Credit Agreement and any other Second Lien Debt Document that grants a Lien or evidences the Second Lien Debt, as well
as any renewals or replacements thereof, the following legend in substantially the form hereof: 
  
 “The liens and security interests securing the indebtedness and other obligations incurred or arising under or evidenced by this
instrument and the rights and obligations evidenced hereby with respect to such liens are subordinate in the manner and to the extent set forth in that certain Intercreditor and Lien Subordination Agreement (as the same may be amended or otherwise
modified from time to time pursuant to the terms thereof, the “Subordination Agreement”) dated as of November 9, 2004 among S.A.C. CAPITAL ASSOCIATES, LLC, a limited liability company organized under the laws of Anguila
(“Second Lien Agent”), THE WET SEAL, INC., a Delaware corporation, (the “Lead Borrower”), THE WET SEAL RETAIL, INC., a Delaware corporation (“Wet Seal Retail”), WET SEAL CATALOG, INC., a Delaware
corporation (collectively, with Wet Seal Retail and the Lead Borrower, the “Companies”), WET SEAL GC, INC., a Virginia corporation (the “Facility Guarantor”), FLEET RETAIL GROUP, INC., (“First Lien
Agent”), and BACK BAY CAPITAL FUNDING LLC, as Term Lender under the First Lien Credit Agreement hereinafter described to the liens and security interests securing indebtedness (including interest) owed by the Companies pursuant to that
certain Amended and Restated Credit Agreement dated as of September 22, 2004 (the “First Lien Credit Agreement”) among the Companies, First Lien Agent, the lenders from time to time party thereto and Fleet National Bank, as Issuing
Lender, and certain guarantees of the indebtedness evidenced thereby, as such First Lien Credit Agreement and such guarantees have been and hereafter may be amended, restated, supplemented or otherwise modified from time to time as permitted under
the Subordination Agreement and to the liens and security interests securing indebtedness refinancing the indebtedness under such agreements as permitted by the Subordination Agreement; and 

  

 
each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.” 

 
 2.11. Antilayering. The First Lien
Agent, on behalf of the First Lien Lender Parties, hereby agrees not to create any indebtedness under the First Lien Debt Documents or create or consent to any DIP Financing (collectively, “New Debt”) (whether entered into before or
after the commencement of a Proceeding) unless such New Debt constitutes either First Lien Debt or Excluded First Lien Debt. 
  
 3. Modifications. 
  
 3.1. Modifications to First Lien Debt Documents. The First Lien Lender Parties may at any time and from time to time
without the consent of or notice to any Second Lien Lender Party, without incurring liability to any Second Lien Lender Party and without impairing or releasing the obligations of any Second Lien Lender Party under this Agreement, change the manner
or place of payment or extend the time of payment of or renew or alter any of the terms of the First Lien Debt, or amend or otherwise modify in any manner any of the First Lien Debt Documents; provided that the First Lien Lender
Parties shall not (a) increase any applicable interest rate with respect to the First Lien Debt by more than 200 basis points, except in connection with (i) the imposition of a default rate of interest in accordance with the terms of the First Lien
Debt Documents or (ii) as expressly contemplated by the definitions of the terms “Prime Rate” and “LIBO Rate”, respectively, in each case as set forth in the First Lien Debt Documents as in effect on the date hereof; or (b) a
release of any Asset Sale Reserve or Insurance Reserve. 
  
 3.2. Modifications to Second Lien Debt Documents. Until the First Lien Debt has been Paid in Full, and notwithstanding anything to the contrary contained in the Second Lien Debt Documents, the
Second Lien Lender Parties shall not, without the prior written consent of First Lien Agent, agree to any amendment, modification or supplement to the Second Lien Debt Documents the effect of which is to (i) increase the maximum principal amount of
the Second Lien Debt (other than as a result of the capitalization of interest)or rate of interest or paid in kind nature of interest on any of the Second Lien Debt, (ii) change the dates upon which payments of principal or interest on the Second
Lien Debt are due, except in connection with the imposition of the default rate of interest in accordance with the Second Lien Debt Documents as in effect on the date hereof; provided, however that the maturity date of the Second Lien
Debt may be extended through and until April 29, 2005, (iii) change or add any event of default or any covenant with respect to the Second Lien Debt, (iv) change any redemption or prepayment provisions of the Second Lien Debt, (v) subordinate the
Second Lien Debt to any other indebtedness, (vi) take any Liens on any Property of any Credit Party unless the same has been offered in writing to the First Lien Agent for the benefit of the First Lien Lender Parties or (vii) change or amend any
other term of the Second Lien Debt Documents if such change or amendment would 

  

 
result in a First Lien Default, increase the obligations of any Credit Party or confer additional material rights on any Second Lien Lender Party or any
other holder of the Second Lien Debt in a manner adverse in any material respect to any Credit Party or any of the First Lien Lender Parties. 
  
 3.3. Waiver of Events of Default. Until the First Lien Debt has been Paid in Full, and notwithstanding anything to
the contrary contained in the Second Lien Debt Documents, the Second Lien Agent, on behalf of the Second Lien Lender Parties, hereby agrees to waive any “Event of Default” contained or arising under the Second Lien Debt Documents to the
extent that the First Lien Lender Parties shall have waived any counterpart “Event of Default” contained or arising under the First Lien Debt Documents; provided, however that the Second Lien Lender Parties shall not, as a
result of this Section 3.3 (a) be obligated to waive an event of default arising under clauses (a) through (c) of the definition of “Second Lien Actionable Default” or (b) be deemed to have waived the imposition of the default rate
of interest set forth in the Second Lien Debt Documents (as in effect on the date hereof) which would arise but for the foregoing waiver provisions of this Section 3.3. 
  
 4. Waiver of Certain Rights by the Second Lien Lender Parties 
  
 4.1. Acceptance. The Second Lien Agent,
on behalf of the Second Lien Lender Parties, hereby waives all notice of the acceptance by First Lien Lender Parties of the lien subordination and other provisions of this Agreement and all the notices not specifically required pursuant to the terms
of this Agreement or under the Uniform Commercial Code or other applicable law in connection with foreclosure on or sale of all or any portion of the Collateral, and the Second Lien Agent expressly consents to the reliance by the First Lien Lender
Parties upon the subordination and other agreements as herein provided. 
  
 4.2. Marshaling. 
  
 (a) The Second Lien Agent, on behalf of the Second Lien Lender Parties, hereby waives any rights it may have under applicable law to assert the doctrine of marshaling or to otherwise require the First Lien Agent or
any other First Lien Lender Party to marshal any Property of any Credit Party for the benefit of any Second Lien Lender Party. The Second Lien Agent, on behalf of the Second Lien Lender Parties, further waives any right to demand, request, plead or
otherwise assert or otherwise claim the benefit of any appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Collateral or any other similar rights a junior creditor may have under
applicable law. 
  
 (b) The Second Lien Agent, on
behalf of the Second Lien Lender Parties, agrees that no First Lien Lender Party shall have any liability to any Second Lien Lender Party, and such Second Lien Lender 

  

 
Party hereby waives any claims against any First Lien Lender Party, arising out of any and all actions which any First Lien Lender Party may take or permit
or omit to take with respect to (i) the First Lien Debt Documents, (ii) the collection of the First Lien Debt or (iii) the foreclosure upon, or sale, liquidation or other disposition or realization of, any Collateral, in each case, except for gross
negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction. The Second Lien Agent, on behalf of the Second Lien Lender Parties, agrees that no First Lien Lender Party shall have any
duty, express or implied, fiduciary or otherwise, to it in respect of the maintenance or preservation of any Collateral, any Second Lien Debt or otherwise. The First Lien Agent, on behalf of the First Lien Lender Parties, agrees that no Second Lien
Lender Party shall have any duty, express or implied, fiduciary or otherwise, to it in respect of the maintenance or preservation of any Collateral, any First Lien Debt or otherwise. No First Lien Lender Party, no Second Lien Lender Party nor any of
their respective directors, officers, employees or agents will be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so, or will be under any obligation to sell or otherwise dispose of any
Collateral upon the request of a Credit Party, any First Lien Lender Party, any Second Lien Lender Party or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. 
  
 5. Representations and Warranties. 
  
 5.1. Representations and Warranties of Second
Lien Agent. To induce First Lien Agent to execute and deliver this Agreement, the Second Lien Agent hereby represents and warrants to First Lien Agent that as of the date hereof: (a) the Second Lien Agent is an entity duly formed and validly
existing under the laws of Anguila; (b) the Second Lien Agent has the power and authority to enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper and necessary action; (c) the
execution of this Agreement by the Second Lien Agent will not violate or conflict with the organizational documents of the Second Lien Agent, any material agreement binding upon the Second Lien Agent or any law, regulation or order or require any
consent or approval which has not been obtained; (d) this Agreement is the legal, valid and binding obligation of the Second Lien Agent, enforceable against the Second Lien Agent, in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by equitable principles; and (e) the Second Lien Agent is the sole owner, beneficially and of
record, of its portion of the Second Lien Debt Documents and the Second Lien Debt. 
  
 5.2. Representations and Warranties of First Lien Agent. To induce the Second Lien Agent to execute and deliver this
Agreement, First Lien 

  

 
Agent hereby represents and warrants to the Second Lien Agent that as of the date hereof: (a) First Lien Agent is a corporation duly formed and validly
existing under the laws of the State of Delaware; (b) First Lien Agent has the power and authority to enter into, execute, deliver and carry out the terms of this Agreement, all of which have been duly authorized by all proper and necessary action;
(c) the execution of this Agreement by First Lien Agent will not violate or conflict with the organizational documents of First Lien Agent, any material agreement binding upon First Lien Agent or any law, regulation or order or require any consent
or approval which has not been obtained; and (d) this Agreement is the legal, valid and binding obligation of First Lien Agent, enforceable against First Lien Agent in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles. 
  
 6. No New Lien. Each of the First Lien Lender Parties, each of the Second Lien Lender Parties and each
Credit Party hereby agrees that no Credit Party shall, or shall permit its Subsidiaries to, grant or permit any Lien, or take any action to perfect a Lien, on any Property to secure any the First Lien Debt or the Second Lien Debt unless such Lien is
granted to each of the First Lien Agent, for the benefit of the First Lien Lender Parties, and the Second Lien Agent, for the benefit of the Second Lien Lender Parties, respectively; provided that nothing in this Section 6 shall limit the rights of
(i) the First Lien Lender Parties from holding cash collateral pursuant to the terms of the First Lien Debt Documents and exercising their rights and remedies against such cash collateral, or (ii) the First Lien Lender Parties from exercising
customary rights of setoff against accounts maintained with such Person, in each case pursuant to the terms and provisions of the First Lien Debt Documents. In addition, the Second Lien Lender Parties shall not be permitted to restrict, in any
manner, a Credit Party from granting a Lien on any Property for the benefit of the First Lien Lenders. 
  
 7. Insurance Proceeds. Until the Discharge of all First Lien Debt, the First Lien Agent shall have the sole and exclusive right, as
against the Second Lien Lender Parties, to adjust settlement of insurance claims in the event of any covered loss (including, without limitation, any theft or destruction of any or any part of such Collateral) or condemnation awards in the event of
a condemnation or to permit the Credit Parties to reinvest any insurance proceeds in replacement assets; provided, however that following any Enforcement Action, the First Lien Agent shall establish reserves against the Aggregate
Borrowing Base in an amount of such proceeds (the “Insurance Reserve”). At the request of the First Lien Agent, the Second Lien Lender Parties shall cooperate in a reasonable manner in effecting the payment of insurance proceeds and
condemnation awards to the First Lien Lender Parties. In the event the First Lien Lender Parties, in their discretion or pursuant to any agreement with any Credit Party, permit such Credit Party to utilize the proceeds of insurance or condemnation
award to replace Collateral, the consent of the First Lien Lender Parties shall be deemed to include the consent of each Second Lien Lender Party. 
  

 8. Second Lien Lender Party Purchase Option. 
  
 (a) Notwithstanding anything herein to the contrary, (i) at
least two (2) Business Days’ prior to the commencement of any Enforcement Action by any First Lien Lender Party constituting a foreclosure (including a sale under the Uniform Commercial Code) of all or any material portion of the Collateral,
(ii) at least five (5) Business Days prior to a proposed sale or other disposition of Collateral in an amount to exceed $5,800,000 in the aggregate from the date hereof (but excluding any such sales or other disposition of Collateral conducted in
connection with or as a result of store closures permitted under the First Lien Credit Agreement) or (iii) in the event three (3) consecutive Business Days have elapsed during which time First Lien Lenders with a Revolving Loan Credit Commitment (as
defined in the First Lien Credit Agreement) have failed to advance Revolving Credit Loans (as defined in the First Lien Credit Agreement) following the Companies’ request therefor as a result of a failure to satisfy the conditions precedent
thereto, the First Lien Agent shall provide the Second Lien Agent with written notice thereof (a “Purchase Option Notice”) and afford the Second Lien Agent the opportunity to purchase all, but not less than all, of the First Lien
Debt pursuant to this Section 8. The Purchase Option Notice will indicate the aggregate amount of First Lien Debt then outstanding. 
  
 (b) The Second Lien Agent shall have five (5) Business Days after receipt of such Purchase Option Notice to notify the First Lien Agent of
its intention to exercise its option to purchase the First Lien Debt pursuant to this Section 8. If no such notice is received from a Second Lien Agent within such five (5) Business Day period, the option granted pursuant to this Section
8 to the Second Lien Agent to purchase the First Lien Debt shall irrevocably expire and such Second Lien Lender Party shall have no further rights under this Section 8 except if the Sale Event or such Enforcement Action is not commenced
or, if commenced, is permanently terminated, in which event the option contained herein continue until a subsequent Purchase Option Notice is issued by First Lien Agent. 
  
 (c) If a Second Lien Agent delivers notice to the First Lien Agent that it or any Second Lien Lender Party
is exercising its option to purchase the First Lien Debt pursuant to this Section 8, such notice delivered to the First Lien Agent shall be irrevocable and such holder shall be required to purchase the First Lien Debt within two (2) Business
Days after the First Lien Agent’s receipt of such notice. 
  

 (d) Upon the date of such purchase and sale, the purchaser or purchasers of the First
Lien Debt shall, 
  
 (i) pay to the First Lien
Agent, for the benefit of the First Lien Lender Parties, as the purchase price therefor the full amount of all First Lien Debt (with all debt purchased at par) outstanding as of the date of such purchase and sale and unpaid (including all documented
principal, interest, fees, costs, charges and expenses, including reasonable attorneys’ fees and legal expenses), 
  
 (ii) furnish cash collateral to the First Lien Agent in such amounts as the First Lien Agent determines is reasonably necessary to secure
the First Lien Lender Parties in connection with (A) any issued and outstanding letters of credit provided by First Lien Agent (or letters of credit that First Lien Agent has arranged to be provided by third parties pursuant to the financing
arrangements of the First Lien Agent with the Credit Parties) for the benefit of any Credit Party entered into by any First Lien Lender Party for the benefit of any Credit Party (provided that such amount shall not exceed 103% of the aggregate
undrawn amount and) and (B) any outstanding Hedging Agreements (as such term is defined in the First Lien Credit Agreement), and 
  
 (iii) provide cash collateral acceptable to the First Lien Lender Parties in respect of bona fide outstanding claims for indemnification;
provided, however that the First Lien Agent shall release any such cash collateral upon the determination, in the First Lien Agent’s sole discretion, that the claim giving rise to such indemnification right shall no longer be
asserted or assertable. 
  
 (e) Such purchase
price and cash collateral shall be remitted, without set-off or counterclaim or otherwise, by wire transfer in federal funds to such bank account of the First Lien Agent, as the First Lien Agent may designate in writing to Second Lien Agent for such
purpose. Interest shall be calculated to but excluding the business day on which such purchase and sale shall occur if the amounts so paid by the purchasers of First Lien Debt to the bank account designated by First Lien Agent are received in such
bank account prior to 1:00 p.m., Boston time and interest shall be calculated to and including such business day if the amounts so paid by such Persons to the bank account designated by First Lien Agent are received in such bank account later than
1:00 p.m., Boston time. 
  
 (f) Each Second Lien
Lender Party will have the right, pursuant to this Section 8, to purchase up to its pro rata share of the First Lien Debt; provided that if any Second Lien Lender elects not to exercise it option to purchase the First Lien Debt, that
holder’s pro rata share may be allocated to any other Second Lien Lender exercising its option under this Section 8. Each notice delivered by a Second Lien Lender to the First Lien Agent pursuant to this Section 8 shall indicate
what portion of the 

  

 
First Lien Debt such holder elects to purchase. First Lien Debt purchased hereunder will be purchased pro rata from each First Lien Lender based on the
amount of First Lien Debt held by Such First Lien Lender. In the event that the amount of First Lien Debt that the Second Lien Lenders elect to purchase pursuant to this Section 8, (a) exceeds the aggregate outstanding amount of First Lien
Debt, each holder of Second Lien Debt electing to purchase the First Lien Debt will be permitted to purchase its pro rata portion of such First Lien Debt based on the amount of First Lien Debt that each such holder elected to purchase, or (b) is
less than all of the First Lien, then the option set forth in this Section 8 (including with respect to options which have been exercised) shall irrevocably expire and this Section 8 shall be of no further force or effect. 

 
 (g) Upon notice to the Credit Parties that the purchase
of First Lien Debt has been consummated by delivery of the purchase price to the First Lien Agent, each Credit Party shall treat the applicable holders of Second Lien Debt as holders of the First Lien Debt purchased pursuant to this Section 8
for all purposes hereunder and under each agreement, document and instrument relating to the First Lien Debt. Any sale will be made without recourse or warranty, other than customary representations by each holder of First Lien Debt as to its
authority to sell its First Lien Debt and its ownership thereof. In connection with any purchase of First Lien Debt pursuant to this Section 8, each holder of First Lien Debt agrees, as the cost of the Credit Parties, to enter into all
agreement, instruments and documents necessary or desirable to evidence the transfer of such First Lien Debt hereunder. 
  
 9. Appraisals/Interest/Expenses. 
  
 (a) Notwithstanding anything to the contrary in the Second Lien Debt Documents, neither the Second Lien Agent nor any Second Lien Lender
Party (whether directly or by virtue of third parties retained by such Second Lien Lender Party) shall conduct any appraisals; provided, however upon request of the Second Lien Agent, the First Lien Agent hereby agrees to provide the
Second Lien Agent with copies of appraisals conducted by the First Lien Agent upon delivery by Second Lien Agent of a release letter in form and substance satisfactory to the First Lien Agent; provided, further, however that (x)
the failure of the First Lien Agent to provide a copy of any such appraisals shall not impair the effectiveness of this Agreement or be deemed a breach hereof and (y) the Second Lien Agent may not in any way use or rely on any information set forth
in such appraisal to challenge the First Lien Agent’s computation and other evaluations of the Aggregate Borrowing Bases. Notwithstanding anything to the contrary in the Second Lien Debt Documents, on or prior to February 28, 2005 (or March 31,
2005 if the Maturity Date (as defined in the Second Lien Credit Agreement) is extended in accordance with the terms of the Second Lien Credit Agreement), neither the Second Lien Agent nor any Second Lien Lender Party (whether directly or by virtue
of third parties retained by such Second Lien 

  

 
Lender Party) shall participate in and/or conduct any physical inventory or any commercial finance examinations or other evaluations of Aggregate Borrowing
Bases regarding any Loan Party (as defined in the Second Lien Credit Agreement) or any Subsidiary (as defined in the Second Lien Credit Agreement) thereof. 
  
 (b) Notwithstanding anything to the contrary in the Second Lien Debt Documents, the Second Lien Agent, on behalf of the Second Lien Lender
Parties, hereby acknowledges and agrees that until the First Lien Debt shall have been Paid in Full, the Credit Parties may not make, and the Second Lien Lender Parties shall not be entitled to receive, (x) any cash interest payments pursuant to the
Second Lien Debt Documents (whether as regularly scheduled payments of interest or as a result of the imposition of a default rate of interest under the Second Lien Debt Documents) and that solely capitalized interest is permitted to accrue under
the Second Lien Debt Documents and (y) any payments in connection with mandatory or optional redemption provisions set forth under the Second Lien Debt Documents. 
  
 (c) Notwithstanding anything to the contrary set forth in the Second Lien Debt Documents, the Second Lien
Agent, on behalf of the Second Lien Lender Parties, hereby acknowledges and agrees that until the First Lien Debt shall have been Paid in Full, the Credit Parties shall not be permitted to make, and the Second Lien Lender Parties shall not be
entitled to receive, any cash reimbursement of expenses (including fees and disbursements of counsel) other than cash reimbursement of the fees and disbursements of counsel to the Second Lien Agent plus fees and disbursements of counsel of no
more than one counsel representing all other Second Lien Lender Parties. Any other expenses and fees and disbursements of counsel to the Second Lien Lender Parties arising under the Second Lien Debt Documents shall be capitalized and added to the
outstanding principal amount of the Second Lien Debt. 
  
 10.
Subrogation. Subject to the Payment in Full of all First Lien Debt, the Second Lien Lender Parties shall be subrogated to the extent of any payments or distributions made by the Second Lien Lender Parties to the First Lien Agent on
behalf of the First Lien Lender Parties, or otherwise applied to payment of such First Lien Debt solely by reason of the provisions of this Agreement, to any rights of the First Lien Lender Parties to receive payments and distribution of cash,
securities and other property applicable to the First Lien Debt, if any, until the Second Lien Debt shall have been paid in full. For purposes of such subrogation, no payments or distributions to the First Lien Lender Parties of any cash, securities
or other property to which the Second Lien Lender Parties would have been entitled, except for the provisions of this Agreement, and no payments pursuant to the provisions of this Agreement to the First Lien Agent on behalf of the First Lien Lender
Parties by any Second Lien Lender Party, shall be deemed to be a payment or distribution by any Credit Party to or on account of the First Lien Debt, it being understood and agreed that the provisions of this Agreement are solely for the purpose of
defining the relative rights of the First Lien Lender Parties on the one hand, and the Second Lien Lender Parties on the other hand. 
  

 11. Modification. Any modification or waiver of any provision of this Agreement, or
any consent to any departure by any party from the terms hereof, shall not be effective in any event unless the same is in writing and signed by each Credit Party, First Lien Agent and the Second Lien Agent and then such modification, waiver or
consent shall be effective only in the specific instance and for the specific purpose given. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to
any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder. 
  
 12. Further Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do
such further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable in order to effect fully the purposes of this Agreement. 
  
 13. Notices. Unless otherwise specifically provided
herein, any notice delivered under this Agreement shall be in writing addressed to the respective party as set forth below and may be personally served, sent by facsimile transmission or sent by overnight courier service or certified or registered
United States mail and shall be deemed to have been given (a) if delivered in person, when delivered; (b) if delivered by facsimile transmission, on the date of transmission if transmitted on a business day before 4:00 p.m. (Boston time) or, if not,
on the next succeeding business day; (c) if delivered by overnight courier, one business day after delivery to such courier properly addressed; or (d) if by United States mail, four business days after deposit in the United States mail, postage
prepaid and properly addressed. 
  
 Notices shall be addressed as
follows: 
  
 If to any Second Lien Lender Party: 
  
 S.A.C. Capital Associates, LLC 
 c/o S.A.C. Capital Advisors, LLC 
 72 Cummings
Point Road 
 Stamford, Connecticut 06902 
 Attention: General Counsel 
 Facsimile No. (203) 890-2393 
  

 With a copy to: 
  

Schulte Roth & Zabel LLP 
 919 Third
Avenue 
 New York, NY 10022 
 Attention: Nancy Finkelstein, Esq. 
 Facsimile: (212) 513-5955 
  
 If to any Credit Party: 
  
 The Wet Seal, Inc. 
 26972 Burbank Street

 Foothill Ranch, California 92610 
 Attention: Chief Financial Officer 
 Facsimile: (858) 206-4977 
  
 With a copy to: 
  
 Akin, Gump, Strauss, Hauer & Feld, LLP 
 590 Madison Avenue 
 New York, NY 10022-2524 
 Attention: Steven H. Scheinman, Esq. 
 Facsimile: (212) 872-1002 
  
 If to any First Lien Lender Party: 
  
 Fleet Retail Group 
 c/o Bank of America Retail Finance Group 
 40
Broad St., 10th Floor 
 Boston, MA 02109 
 Attention: Daniel T. Platt, Director 
 Facsimile: (617) 434-4131 
  
 With a copy to: 
  
 Riemer & Braunstein, LLP 
 Three Center
Plaza 
 Boston, MA 02108 
 Attention: Robert E. Paul, Esq. 
 Facsimile: (617) 880-3456 
  
 And with a copy to: 
  
 Back Bay Capital Funding LLC 
 40 Broad Street

 Boston, MA 02109 
  

 Attention: Michael Pizette, Managing Director 
 Facsimile: (617) 434-4185 
  
 And with a copy to: 
  
 Bingham McCutchen LLP 
 150 Federal Street

 Boston, MA 02110 
 Attention:
Robert A. J. Barry, Esq. 
 Facsimile: (617) 951-8736 
  

or in any case, to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this
Section 12. 
  
 14. Successors and
Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of each First Lien Lender Party, each Second Lien Lender Party and each Credit Party. To the extent permitted under the
First Lien Debt Documents, First Lien Lenders may, from time to time, with notice to any Second Lien Lender Party, assign or transfer any or all of the First Lien Debt or any interest therein to any Person and, notwithstanding any such assignment or
transfer, or any subsequent assignment or transfer, the First Lien Debt shall, subject to the terms hereof, be and remain First Lien Debt for purposes of this Agreement, and every permitted assignee or transferee of any of the First Lien Debt or of
any interest therein shall, to the extent of the interest of such permitted assignee or transferee in the First Lien Debt, be entitled to rely upon and be the third party beneficiary of the lien subordination provided under this Agreement and shall
be entitled to enforce the terms and provisions hereof to the same extent as if such assignee or transferee were initially a party hereto. 
  
 15. Relative Rights; No Third Parties Benefited. 
  
 (a) This Agreement shall define the relative rights of the First Lien Lender Parties and the Second Lien
Lender Parties, respectively. Nothing in this Agreement shall (a) impair, as among the Credit Parties and the First Lien Lender Parties on the one hand, and as between the Credit Parties and the Second Lien Lender Parties, on the other hand, the
obligation of the Credit Parties with respect to the payment of the First Lien Debt and the Second Lien Debt, as the case may be, in accordance with their respective terms or (b) affect the relative rights of the First Lien Lender Parties or the
Second Lien Lender Parties with respect to any other creditors of the Credit Parties. The terms of this Agreement shall govern even if all or any part of the First Lien Debt or the Liens in favor of the First Lien Agent or any other First Lien
Lender Party are avoided, disallowed, unperfected, set aside or otherwise invalidated in any judicial proceeding or otherwise. 
  

 (b) It is not the intention of the parties hereto to confer any third-party beneficiary
rights, and this Agreement shall not be construed so as to confer any such rights upon any other Person or Persons not party hereto. Notwithstanding the foregoing, neither the Companies nor any of their respective subsidiaries nor any other Person
or Persons (other than a party hereto) shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement. 
  
 16. Contractual Representative for Purposes of Perfection. Each Second Lien Lender Party hereby
appoints the First Lien Agent as such Person’s contractual representative solely for purposes of perfecting such Person’s Liens on any of the Collateral in the possession or under the “control” (as such term is defined in the
Uniform Commercial Code) of the First Lien Agent, and the First Lien Agent hereby acknowledges that it holds possession of or otherwise controls any such Collateral as the contractual representative of the Second Lien Lender Parties for such
purposes; provided, that, the First Lien Agent shall not have any duty or liability to protect or preserve any rights pertaining to any of the Collateral and, except for gross negligence or willful misconduct as determined pursuant to a final
non-appealable order of a court of competent jurisdiction, each Second Lien Lender Party hereby waives and releases the First Lien Agent and each of the other First Lien Lender Parties from, and hereby indemnifies and agrees to hold harmless the
First Lien Agent and each of the other First Lien Lender Parties against, all claims and liabilities arising as a result of or in connection with the First Lien Agent’s role as contractual representative agent with respect to the Collateral. At
the expense of the Credit Parties, promptly upon the Discharge of all First Lien Debt, the First Lien Agent shall deliver the remainder of the Collateral, if any, in its possession to the Second Lien Agent and, to the extent practicable, transfer
control of the remainder of the Collateral, if any, under its control to the Second Lien Agent, in each case, except as may otherwise be required by applicable law or court order (it being understood that prior to the Discharge of all First Lien
Debt, the provisions of this Agreement shall apply to all such documents and each other document relating to all or any part of the Collateral, including, without limitation, the provisions restricting the Second Lien Agent from taking action to
enforce rights in and to the Collateral pursuant to such documents) (including, without limitation, cooperate with the Second Lien Agent in assigning or transferring any rights of the First Lien Agent under landlord agreements, bailee agreements,
cash management control agreements or any other similar agreements to the extend that such rights are assignable). 
  
 17. Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or
condition of any of the First Lien Debt Documents or any of the Second Lien Debt Documents, the provisions of this Agreement shall control and govern. 
  
 18. Headings. The paragraph headings used in this Agreement are for convenience only and shall not affect the interpretation of any
of the provisions hereof. 
  

 19. Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of photocopies of the signature pages to this Agreement by facsimile shall be effective as delivery of a manually executed
counterpart hereof. 
  
 20. Severability. In
the event that any provision of this Agreement is deemed to be invalid, illegal or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of
this Agreement. 
  
 21. Continuation of
Subordination; Termination of Agreement. This Agreement shall remain in full force and effect until Payment in Full of the First Lien Debt, after which this Agreement shall terminate without further action on the part of the parties hereto.

  
 22. GOVERNING LAW; SUBMISSION TO
JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. EACH PARTY HERETO HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED THEREIN AND IRREVOCABLY AGREES THAT, SUBJECT TO FIRST LIEN AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH
PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH PARTY, AS THE CASE MAY BE, AT SUCH PERSON’S ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER
THE SAME HAS BEEN POSTED. 
  
 23. WAIVER OF JURY
TRIAL. EACH SECOND LIEN LENDER PARTY, EACH CREDIT PARTY AND FIRST LIEN AGENT (FOR ITSELF AND FOR AND ON BEHALF OF EACH FIRST LIEN LENDER) HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH SECOND LIEN LENDER PARTY, EACH CREDIT PARTY AND FIRST LIEN AGENT (FOR ITSELF AND FOR AND ON BEHALF OF THE
FIRST LIEN 

  

 
LENDERS) ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO
THIS AGREEMENT, THE SECOND LIEN DEBT DOCUMENTS AND THE FIRST LIEN DEBT DOCUMENTS, AS THE CASE MAY BE, AND THAT SUCH PERSONS WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RESPECTIVE RELATED FUTURE DEALINGS. EACH OF EACH SECOND LIEN LENDER PARTY, EACH
CREDIT PARTY AND FIRST LIEN AGENT (FOR ITSELF AND FOR AND ON BEHALF OF EACH FIRST LIEN LENDER) WARRANTS AND REPRESENTS THAT SUCH PERSON HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT SUCH PERSON KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS. 
  
 [REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK] 
  

 IN WITNESS WHEREOF, the Second Lien Agent, the Credit Parties and the First Lien Agent have caused
this Agreement to be executed as of the date first above written. 
  

					
	 THE SECOND LIEN AGENT:
  
 S.A.C. CAPITAL ASSOCIATES, LLC, as Administrative Agent and Collateral Agent

		
	By:	 	/s/    Peter Nussbaum
	 	 	 Name:
	 	Peter Nussbaum
	 	 	 Title:
	 	General Counsel
	
	 THE COMPANIES:
  
 THE WET SEAL, INC.

		
	By:	 	/s/    Douglas C. Felderman
	 	 	 Name:
	 	Douglas C. Felderman
	 	 	 Title:
	 	EVP-CFO
	
	THE WET SEAL RETAIL, INC.
		
	By:	 	/s/    Douglas C. Felderman
	 	 	 Name:
	 	Douglas C. Felderman
	 	 	 Title:
	 	Secretary
	
	WET SEAL CATALOG, INC.
		
	By:	 	/s/    Douglas C. Felderman
	 	 	 Name:
	 	Douglas C. Felderman
	 	 	 Title:
	 	Secretary
	
	 THE FACILITY GUARANTOR:
  
 WET SEAL GC, INC.

		
	By:	 	/s/    Douglas C. Felderman
	 	 	 Name:
	 	Douglas C. Felderman
	 	 	 Title:
	 	Secretary

  

					
	 THE FIRST LIEN AGENT:
  
 FLEET RETAIL GROUP, INC.

		
	By:	 	 /s/    Daniel T. Platt

	 	 	 Name:
	 	 Daniel T. Platt

	 	 	 Title:
	 	 DirectorSubordination Agreement entered into by and among the Company

  
 EXHIBIT 10.14

  
 SUBORDINATION AGREEMENT 
  
 SUBORDINATION AGREEMENT (this “Agreement”), dated as
of November 9, 2004, between FLEET RETAIL GROUP, INC., a Delaware corporation having its office at 40 Broad Street, Boston, Massachusetts 02109, in its capacity as agent (the “Agent”) for the Lenders (as hereinafter defined), S.A.C.
CAPITAL ASSOCIATES, LLC, a limited liability company organized under the laws of Anguila, acting in its capacity as collateral agent (“SAC”) for the other investors from time to time designated as “Buyers” (collectively
with SAC, the “Subordinating Creditors”) on the signature pages to the Subordinated Agreement (as hereinafter defined), and THE WET SEAL, INC., a Delaware corporation having its office at 26972 Burbank, Foothill Ranch, California
92610 (the “Borrower”). 
  
 WHEREAS,
pursuant to an Amended and Restated Credit Agreement dated as of September 22, 2004 (as amended and in effect from time to time, including any replacement agreement therefor, the “Credit Agreement”), among the financial institutions
party thereto (the “Lenders”), the Agent, the Borrower, The Wet Seal Retail, Inc. (“Wet Seal Retail”), Wet Seal Catalog, Inc. (“Wet Seal Catalog”), and Wet Seal GC, Inc. (“Facility
Guarantor” and, collectively with Borrower, Wet Seal Retail and Wet Seal Catalog, the “Companies” and, each individually, a “Company”), the Lenders have agreed, upon the terms and subject to the conditions
contained therein, to make loans and otherwise to extend credit to the Companies; and 
  
 WHEREAS, the Subordinating Creditors have agreed to make loans to the Borrower pursuant to a Securities Purchase Agreement dated as of November 9, 2004 (the “Securities Purchase Agreement”) and
the related Convertible Notes issued thereunder (substantially in the form attached as Exhibit A-1 to the Securities Purchase Agreement as in effect on the date hereof, collectively, the “Notes”, as such Notes may be amended with
the consent of the Agent as provided herein and in effect from time to time, and together with the Initial Notes, the Additional Series A Notes and the Additional Series B Notes (each as defined in the Securities Purchase Agreement as in effect on
the date hereof) collectively, the “Subordinated Agreement”), among the Subordinating Creditors and the Borrower; and 
  
 WHEREAS, it is a condition precedent to the Lenders’ willingness to make loans and otherwise to extend credit to the Companies pursuant to the
Credit Agreement that the Borrower and SAC on behalf other Subordinating Creditors enter into this Agreement with the Agent; and 
  
 WHEREAS, in order to induce the Lenders to make loans and otherwise extend credit to the Companies pursuant to the Credit Agreement, the Borrower
and SAC, for and on behalf of the Subordinating Creditors, have agreed to enter into this Agreement with the Agent; 
  

 NOW, THEREFORE, in consideration of the foregoing, the mutual agreements herein contained and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 
  
 1. Definitions. Terms not otherwise defined herein have the same respective meanings given to them in the
Credit Agreement. In addition, the following terms shall have the following meanings: 
  
 Bankruptcy Code. The provisions of Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder or any state insolvency, debtor
relief or assignment for the benefit of creditor law. 
  
 Lien. With respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, or any other type of preferential arrangement that has the practical effect of creating a security interest, in
respect of such asset. 
  
 Person. Any natural person,
corporation, general or limited partnership, limited liability company, firm, trust, association, government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity. 
  
 Proceeding. Any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation,
dissolution or other winding up of a Person. 
  
 Senior
Debt. All principal, interest, fees, charges, costs, damages, enforcement expenses (including legal fees and disbursements), collateral protection expenses, redemption conversion payments and other reimbursement or indemnity obligations created
or evidenced by the Credit Agreement or any of the other Loan Documents or any prior, concurrent, or subsequent notes, instruments or agreements of indebtedness, liabilities or obligations of any type or form whatsoever relating thereto in favor of
the Agent or any of the Lenders. Senior Debt shall expressly include any and all interest accruing or out of pocket costs or expenses incurred after the date of any filing by or against the Borrower or any other Company of any petition under the
federal Bankruptcy Code or any other bankruptcy, insolvency or reorganization act regardless of whether the Agent’s or any Lender’s claim therefor is allowed or allowable in the case or proceeding relating thereto. 
  
 Subordinated Debt. All principal, interest, fees, costs, enforcement
expenses (including legal fees and disbursements), collateral protection expenses and other reimbursement and indemnity obligations created or evidenced by the Subordinated Agreement or any prior, concurrent or subsequent notes, instruments or
agreements of indebtedness, liabilities or obligations of any type or form whatsoever relating thereto in favor of the Subordinating Creditor. 
  

 -2- 

 Subordinated Debt Actionable Default. Collectively, means: 
  
 (i) the failure of the applicable Registration Statement (as defined in the
Registration Rights Agreement as in effect on the date hereof) required to be filed pursuant to the Registration Rights Agreement (as defined in the Subordinated Agreement as in effect on the date hereof)(hereinafter, the “Registration
Rights Agreement”) to be declared effective by the SEC on or prior to the date that is 60 days after the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement), or, while the applicable Registration Statement is
required to be maintained effective pursuant to the terms of the Registration Rights Agreement, the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop order) or is
unavailable to any holder of the Notes for sale of all of such holder’s Registrable Securities (as defined in the Registration Rights Agreement) in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability
continues for a period of 10 consecutive days or for more than an aggregate of 30 days in any 365-day period (other than days during an Allowable Grace Period (as defined in the Registration Rights Agreement); 
  
 (ii) the suspension from trading or failure of the Common Stock (as defined
in each of the Notes) to be listed on an Eligible Market (as defined in each of the Notes) for a period of five (5) consecutive days or for more than an aggregate of ten (10) days in any 365-day period; 
  
 (iii) the Company’s (A) failure to cure a Conversion Failure (as defined
in each of the Notes) by delivery of the required number of shares of Common Stock (as defined in each of the Notes) within ten (10) Business Days (as defined in each of the Notes) after the applicable Conversion Date (as defined in each of the
Notes) or (B) notice, written or oral, to any holder of the Notes, including by way of public announcement or through any of its agents, at any time, of its intention not to comply with a request for conversion of any Notes into shares of Common
Stock (as defined in each of the Notes) that is tendered in accordance with the provisions of the Notes; 
  
 (iv) at any time following the tenth consecutive Business Day (as defined in each of the Notes) that the Holder’s Authorized Share Allocation (as
defined in each of the Notes) is less than the number of shares of Common Stock (as defined in each of the Notes) that the Holder (as defined in each of the Notes) would be entitled to receive upon a conversion of the full Conversion Amount (as
defined in each of the Notes) of this Note (without regard to any limitations on conversion set forth in Section 3(d) of each of the Notes or otherwise); and 
  
 (v) the Company’s failure to pay, on or before November 9, 2011, principal and interest on the Subordinated Debt in full in cash. 
  
 Subordinated Documents. Collectively, the Subordinated Agreement, the
Additional Series A Investment Right Warrants, the Additional Series B Investment Rights Warrants, the Warrants (each as defined in the Securities Purchase Agreement as 

  

 -3- 

 
in effect on the date hereof), any promissory notes executed in connection therewith, any warrants or registration of rights agreements executed in
connection therewith, any other Transaction Documents (as defined in the Subordinated Agreement) and any and all guaranties and security interests, mortgages and other liens directly or indirectly guarantying or securing any of the Subordinated
Debt, and any and all other documents or instruments evidencing or further guarantying or securing directly or indirectly any of the Subordinated Debt, whether now existing or hereafter created. 
  
 Subordinated Debt Fees. Collectively, (i) reasonable and documented
fees and expenses of Schulte Roth & Zabel LLP, counsel to SAC, in connection with its representation of SAC in connection with the Subordinated Documents, except for fees and expenses of any consultants hired by Schulte Roth & Zabel LLP,
(ii) reasonable and documented fees and expenses of consultants engaged by SAC in connection with its duties as agent under the Subordinated Documents in an amount not to exceed $100,000 in the aggregate in any calendar year, (iii) reasonable and
documented fees and expenses of SAC in connection with the execution of the Subordinated Agreement in an amount not to exceed $250,000, (iv) reasonable and documented fees and expenses of SAC in connection with the closing of the Subordinated
Agreement, which together with amounts expended pursuant to clause (iii) above shall not to exceed $500,000 in the aggregate, and (v) any Registration Delay Payments (as defined in the Registration Rights Agreement as in effect on the date
hereof) required to be paid pursuant to Section 2(f) of the Registration Rights Agreement as in effect as of the date hereof plus any amounts required to be paid as a result of a Conversion Failure (as defined in each Note as in effect on the date
hereof) pursuant to Section 3(c)(ii) of each Note as in effect as of the date hereof in an amount not to exceed $250,000 in the aggregate in any calendar year. 
  

2. General. The Subordinated Debt and any and all Subordinated Documents shall be and hereby are subordinated and the payment thereof is
deferred until the full and final payment in cash of the Senior Debt, whether now or hereafter incurred or owed by the Companies. The Borrower shall not be permitted to pay, and the Subordinating Creditors shall not be permitted to receive, any cash
payment in respect of the Subordinated Debt until the Senior Debt has been finally paid in full in cash (other than the Subordinated Debt Fees). 
  
 3. Enforcement.  
  
 (a) No Subordinating Creditor will take or omit to take any action or assert any claim with respect to the Subordinated Debt or otherwise which is
inconsistent with the provisions of this Agreement. Without limiting the foregoing and except to the extent (but only to such extent) that the commencement of a legal action may be required to toll the running of any applicable statute of
limitation, until the Senior Debt has been finally paid in full in cash, no Subordinating Creditor will assert, collect or enforce the Subordinated Debt or any part thereof or take any action to foreclose or realize upon the Subordinated Debt or any
part thereof or enforce any of the Subordinated Documents until the earlier to occur of the following: 
  
 (i) the commencement of an enforcement action with respect to a material portion of the Collateral securing the Senior Debt; or

  

 -4- 

 (ii) the passage of 180 days from the delivery of written notice from the Subordinating
Creditors to the Agent pursuant to which the Subordinating Creditors notify the Agent, in reasonable detail, of the occurrence of a Subordinated Debt Actionable Default to the extent that the default or occurrence described therein shall not have
been cured or waived within such 180 day period, provided that such Subordinating Creditor shall have given at least 10 days written notice to the Agent of such Subordinating Creditor’s intention to take such enforcement action (which notice
may be given during such 180 day period). 
  
 (b) In addition,
until the Senior Debt has been finally paid in full in cash, no Subordinating Creditor shall have any right of subrogation, reimbursement, restitution, contribution or indemnity whatsoever from any assets of the Borrower or any other Company or any
guarantor of or provider of collateral security for the Senior Debt. Each Subordinating Creditor further waives any and all rights with respect to marshalling. 
  

(c) Notwithstanding Section 3(a) above, the right of any Subordinating Creditor, to receive any Subordinated Debt Fees due and owing to such
Subordinated Creditor, on or after the respective due dates for payment from the Company, or to institute suit against the Company for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected by
Section 3(a); provided, that such Subordinated Creditor shall not have the right to institute any such suit against the Company for the enforcement of payment if and to the extent that the surrender or prosecution thereof or the entry
of judgment therein would, under applicable law, result in the surrender, impairment, waiver or loss of the Lien of the Agent and the Lenders upon any property subject to such Lien or enforce any judgment in respect thereof against any Collateral.

  
 4. Payments Held in Trust. Each Subordinating
Creditor will hold in trust and immediately pay over to the Agent for the account of the Lenders and the Agent, in the same form of payment received, with appropriate endorsements, for application to the Senior Debt any cash amount that any Company
pays to such Subordinating Creditor with respect to the Subordinated Debt, or as collateral for the Senior Debt any other assets of the Borrower or any other Company that such Subordinating Creditor may receive with respect to the Subordinated Debt.

  
 5. Defense to Enforcement. If any
Subordinating Creditor, in contravention of the terms of this Agreement, shall commence, prosecute or participate in any suit, action or proceeding against the Borrower, then the Borrower may interpose as a defense or plea the making of this
Agreement, and the Agent or any Lender may intervene and interpose such defense or plea in its name or in the name of the Borrower. If any Subordinating Creditor, in contravention of the terms of this Agreement, shall attempt to collect any of the
Subordinated Debt or enforce any of the Subordinated Documents, then the Agent, any Lender or the Borrower may, by virtue of this Agreement, restrain the enforcement 

  

 -5- 

 
thereof in the name of the Agent or such Lender or in the name of the Borrower. If any Subordinating Creditor, in contravention of the terms of this
Agreement, obtains any cash or other assets of the Borrower or any Company as a result of any administrative, legal or equitable actions, or otherwise, such Subordinating Creditor agrees forthwith to pay, deliver and assign to the Agent, for the
account of the Lenders and the Agent, with appropriate endorsements, any such cash for application to the Senior Debt and any such other assets as collateral for the Senior Debt. 
  
 6. Bankruptcy, etc. 
  

6.1. Payments relating to Subordinated Debt. At any meeting of creditors of the Borrower or in the event of any case or
proceeding, voluntary or involuntary, for the distribution, division or application of all or part of the assets of the Borrower or the proceeds thereof, whether such case or proceeding be for the liquidation, dissolution or winding up of the
Borrower or its business, a receivership, insolvency or bankruptcy case or proceeding, an assignment for the benefit of creditors or a proceeding by or against the Borrower for relief under the federal Bankruptcy Code or any other bankruptcy,
reorganization or insolvency law or any other law relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangement, composition or extension or marshalling of assets or otherwise, the Agent is hereby irrevocably
authorized at any such meeting or in any such proceeding to receive or collect for the benefit of the Lenders and the Agent any cash or other assets of the Borrower distributed, divided or applied by way of dividend or payment, or any securities
issued on account of any Subordinated Debt, and apply such cash to or to hold such other assets or securities as collateral for the Senior Debt, and to apply to the Senior Debt any cash proceeds of any realization upon such other assets or
securities that the Agent in its discretion elects to effect, until all of the Senior Debt shall have been paid in full in cash, rendering to the Subordinating Creditors any surplus to which the Subordinating Creditors are then entitled. 

 
 6.2. Securities by Plan of Reorganization or
Readjustment.  
  
 Notwithstanding the
foregoing provisions of §6.1, the Subordinating Creditors shall be entitled to receive and retain any securities of the Borrower or any other corporation or other entity provided for by a plan of reorganization or readjustment (i) the payment
of which securities is subordinate, at least to the extent provided in this Agreement with respect to Subordinated Debt, to the payment of all Senior Debt under any such plan of reorganization or readjustment and (ii) all other terms of which are
acceptable to the Lenders and the Agent. 
  
 6.3. Subordinated Debt Voting Rights. At any such meeting of creditors or in the event of any such case or proceeding, the Subordinating Creditors shall retain the right to vote and otherwise act with respect to the
Subordinated Debt (including, without limitation, the right to vote to accept or reject any plan of partial or complete liquidation, reorganization, arrangement, 

  

 -6- 

 
composition or extension), provided that none of the Subordinating Creditors shall vote with respect to any such plan or take any other action in any
way so as to contest (i) the validity of any Senior Debt or any collateral therefor or guaranties thereof, (ii) the relative rights and duties of any holders of any Senior Debt established in any instruments or agreements creating or evidencing any
of the Senior Debt with respect to any of such collateral or guaranties or (iii) the Subordinating Creditors’ obligations and agreements set forth in this Agreement. 
  
 6.4. Liquidation, Dissolution, Bankruptcy. Except as otherwise specifically permitted in this
Agreement, until the Senior Debt shall have been finally paid in full in cash, the Subordinating Creditors shall not assert, without the prior written consent of the Agent, any claim, motion, objection or argument in respect of all or any part of
the Senior Debt or the Collateral securing such Senior Debt in such case or proceeding which could otherwise be asserted or raised in connection with such case or proceeding by such Subordinating Creditors as a secured creditor of the Borrower.
Without limiting the generality of the foregoing, SAC, for itself and each Subordinating Creditor, agrees that it will (i) not object to or oppose (or support any other Person in objecting to or opposing) any sale or other disposition of all or any
part of the Collateral free and clear of Liens or other claims of SAC or the Subordinating Creditors and each Subordinating Creditor under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code or any other law applicable
to such case or proceeding if the relevant Lenders have consented to such sale or disposition, (ii) not challenge (or support any other Person in challenging) any use of cash collateral or debtor-in-possession financing consented to or provided by
any Lender (it being agreed by each Subordinating Creditor that such debtor-in-possession financing shall be on such terms and conditions and in such amounts as such Lenders, in their sole discretion, may decide and, in connection therewith, any
Company may grant to such participating Lenders (or any agent or representative thereof) Liens upon all of the Collateral of such Company, which Liens (A) shall secure payment of all Senior Debt whether such Senior Debt arose prior to the
commencement of such case or proceeding or at any time thereafter and all other financing provided by any Lender during such case or proceeding (provided that, to the extent that such Liens secure Senior Debt which arose prior to the commencement of
such Proceeding, such Liens shall also secure the Subordinated Debt, subject to the conditions and terms set forth herein) and (B) shall be superior in priority to the liens and security interests, if any, in favor of SAC for the benefit of the
Subordinating Creditors on the Collateral of the Borrower on the same terms and conditions as provided herein); provided, however that in connection with any such use of cash collateral or debtor-in-possession financing, the
Subordinating Creditors shall have received as adequate protection of their interests a replacement Lien in post-petition assets of the Borrower which shall be junior and subordinate to all Liens granted pursuant to such consent to use cash
collateral or debtor-in-possession financing with the same priorities afforded the Liens granted to the Subordinating Creditor pursuant to this Agreement; (iii) not to assert (or support any other Person in asserting) any 

  

 -7- 

 
right it may have to “adequate protection” of its interest in any Collateral in any case or proceeding, (iv) turn over to the Agent for the pro
rata benefit of the Lenders any “adequate protection” of their interest in any Collateral that they receive in any case or Proceeding for application to the Senior Debt owed to the Lenders, and (v) not seek to have the automatic stay of
Section 362 of the Bankruptcy Code lifted or modified with respect to any Collateral, to appoint a trustee or examiner under Section 1104 of the Bankruptcy Code or to convert or dismiss (or support any other Person in converting or dismissing) such
case or proceeding under Section 1112 of the Bankruptcy Code, in each case without the prior written consent of the Agent; provided, that, in the case of this clause (v), if the Lenders seek such aforementioned relief, the
Subordinating Creditors hereby irrevocably consent thereto and shall join in any such motion or application seeking such relief if requested by the Agent. SAC, for each Subordinating Creditor, waives any claim it may now or hereafter have arising
out of the election of the Lenders, in any case or proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code. The Subordinating Creditors shall be permitted to participate on any creditor’s
committee; provided, that the Subordinating Creditors or any other Person participating on such creditor’s committee shall not directly or indirectly take any action or vote in any manner that would be in violation of this
Agreement or inconsistent with or result in a breach of this Agreement. Other than as explicitly set forth above, SAC shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding
or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of SAC including without limitation any claims secured by the Collateral, if any. In addition, SAC shall be entitled to file any pleadings,
objections, motions or agreements which assert rights or interests available to unsecured creditors of the Borrower arising under either the Bankruptcy Code or applicable non-bankruptcy law. 
  
 7. Lien Subordination. The Senior Debt, the Credit Agreement
and the other Loan Documents (as defined in the Credit Agreement) and any and all other documents and instruments evidencing or creating the Senior Debt and all guaranties, mortgages, security agreements, pledges and other collateral guarantying or
securing the Senior Debt or any part thereof shall be senior to the Subordinated Debt and all of the Subordinated Documents irrespective of the time of the execution, delivery or issuance of any thereof or the filing or recording for perfection of
any thereof or the filing of any financing statement or continuation statement relating to any thereof. 
  
 7.1. Further Assurances. Each Subordinating Creditor hereby agrees, upon request of the Agent at any time and from time to
time, to execute such other documents or instruments as may be requested by the Agent further to evidence of public record or otherwise the senior priority of the Senior Debt as contemplated hereby. 
  

 -8- 

 7.2. Books and Records. Each Subordinating Creditor further agrees
to maintain on its books and records such notations as the Agent may reasonably request to reflect the subordination contemplated hereby and to perfect or preserve the rights of the Agent hereunder. A copy of this Agreement may be filed as a
financing statement in any Uniform Commercial Code recording office. 
  
 7.3. Legend. Until the termination of this Agreement in accordance with Section 11 hereof, each Subordinating Creditor will cause to be clearly, conspicuously and prominently inserted on the face
of each Subordinated Document, any guaranty of any Subordinated Debt and any other negotiable Subordinated Debt Document (if any), as well as any renews or replacements thereof, the following legend in substantially the form hereof: 
  
 “This instrument and the rights and obligations
evidenced hereby, the liens and security interests securing the indebtedness and other obligations incurred or arising under or evidenced by this instrument and the rights and obligations evidenced hereby with respect to such liens are subordinate
in the manner and to the extent set forth in that certain Subordination Agreement (as the same may be amended or otherwise modified from time to time pursuant to the terms thereof, the “Subordination Agreement”) dated as of November 9,
2004 among S.A.C. CAPITAL ASSOCIATES, LLC, a limited liability company organized under the laws of Anguila, acting as agent (“SAC”) to certain holders of indebtedness (collectively, the “Lenders”), THE WET SEAL, INC., a Delaware
corporation, (the “Lead Borrower”), THE WET SEAL RETAIL, INC., a Delaware corporation (“Wet Seal Retail”), WET SEAL CATALOG, INC., a Delaware corporation (collectively, with Wet Seal Retail and the Lead Borrower, the
“Companies”), WET SEAL GC, INC., a Virginia corporation (the “Facility Guarantor”), and FLEET RETAIL GROUP, INC. (“Agent”), to the indebtedness and the liens and security interests securing indebtedness (including
interest) owed by the Companies pursuant to that certain Amended and Restated Credit Agreement dated as of September 22, 2004 (the “First Lien Credit Agreement”) among the Companies, Facility Guarantor, Agent, Back Bay Capital Funding,
LLC, as Term Lender, the lenders from time to time party thereto and Fleet National Bank, as Issuing Lender, and certain guarantees of the indebtedness evidenced thereby, as such First Lien Credit Agreement and such guarantees have been and
hereafter may be amended, restated, supplemented or otherwise modified from time to time as permitted under the Subordination Agreement and to the liens and security interests securing indebtedness refinancing the indebtedness under such agreements
as permitted by the Subordination Agreement; and each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement applicable to the “Subordinated Creditors” (as such
term is defined in the 

  

 -9- 

 
Subordination Agreement), as if such holder were a Subordinated Creditor for all purposes of the Subordination Agreement.” 
  
 7.4. Release of Guaranties and Collateral.
Without limiting any of the rights of the Agent or any Lender under the Credit Agreement, the other Loan Documents (as defined in the Credit Agreement) or applicable law, in the event that the Agent releases or discharges any guaranties of the
Senior Debt given by guarantors which have also guarantied the Subordinated Debt or any security interests in, or mortgages or liens upon, any collateral securing the Senior Debt and also securing the Subordinated Debt, such guarantors or (as the
case may be) such collateral shall thereupon be deemed to have been released from all such guaranties or security interests, mortgages or liens in favor of the Subordinating Creditors. SAC, for and on behalf of each Subordinating Creditor, agrees
that, concurrently with the release of any lien of the Agent, SAC will execute, deliver and file any and all such termination statements, mortgage discharges, lien releases and other agreements and instruments as the Agent reasonably deems necessary
or appropriate in order to give effect to the preceding sentence. SAC and each Subordinating Creditor hereby irrevocably appoints the Agent, and its successors and assigns, and their respective officers, with full power of substitution, the true and
lawful attorney(s) of SAC and such Subordinating Creditor for the purpose of effecting any such executions, deliveries and filings if and to the extent that SAC or such Subordinating Creditor shall have failed to perform such obligations pursuant to
the foregoing provisions of this §7.4 within such ten (10) day period. 
  
 8. Lenders’ Freedom of Dealing. SAC and each Subordinating Creditor agrees, with respect to the Senior Debt and any and all collateral therefor or guaranties thereof, that the Companies and the
Lenders may agree to increase the amount of the Senior Debt or otherwise modify the terms of any of the Senior Debt, and the Lenders may grant extensions of the time of payment or performance to and make compromises, including releases of collateral
or guaranties, and settlements with the Companies and all other persons, in each case without the consent of SAC and any of the Subordinating Creditors or the Companies and without affecting the agreements of SAC and the Subordinating Creditors or
the Borrower contained in this Agreement; provided, however, that nothing contained in this §8 shall constitute a waiver of the right of the Borrower itself to agree or consent to a settlement or compromise of a claim which the
Agent or any Lender may have against the Borrower. 
  
 9.
Modification or Sale of the Subordinated Debt. Neither SAC nor any Subordinating Creditor will, at any time while this Agreement is in effect, modify any of the terms of any of the Subordinated Debt or any of the Subordinated Documents;
nor will SAC and any Subordinating Creditor sell, transfer, pledge, assign, hypothecate or otherwise dispose of any or all of the Subordinated Debt to any person other than a person who agrees in a writing, satisfactory in form and substance to the
Agent, to become a party hereto and to succeed to the rights and to bound by all of the obligations of SAC or such Subordinating Creditor hereunder. In the case of any such disposition by 

  

 -10- 

 
SAC or a Subordinating Creditor, SAC will notify the Agent at least 10 days prior to the date of any of such intended disposition. 
  
 10. Borrower’s Obligations Absolute. Nothing
contained in this Agreement shall impair, as between the Borrower SAC and the Subordinating Creditors, the obligation of the Borrower to pay to SAC, for and on behalf of the Subordinating Creditors, all amounts payable in respect of the Subordinated
Debt as and when the same shall become due and payable in accordance with the terms thereof, or prevent the Subordinating Creditors (except as expressly otherwise provided in §3 or §6) from exercising all rights, powers and remedies
otherwise permitted by Subordinated Documents and by applicable law upon a default in the payment of the Subordinated Debt or under any Subordinated Document, all, however, subject to the rights of the Agent and the Lenders as set forth in this
Agreement. 
  
 11. Termination of
Subordination. This Agreement shall continue in full force and effect, and the obligations and agreements of the Subordinating Creditors and the Borrower hereunder shall continue to be fully operative, until all of the Senior Debt
shall have been paid and satisfied in full in cash and such full payment and satisfaction shall be final and not avoidable. To the extent that any Company or any guarantor of or provider of collateral for the Senior Debt makes any payment on the
Senior Debt that is subsequently invalidated, declared to be fraudulent or preferential or set aside or is required to be repaid to a trustee, receiver or any other party under any bankruptcy, insolvency or reorganization act, state or federal law,
common law or equitable cause (such payment being hereinafter referred to as a “Voided Payment”), then to the extent of such Voided Payment, that portion of the Senior Debt that had been previously satisfied by such Voided Payment
shall be revived and continue in full force and effect as if such Voided Payment had never been made. In the event that a Voided Payment is recovered from the Agent or any Lender, an Event of Default shall be deemed to have existed and to be
continuing under the Credit Agreement from the date of the Agent’s or such Lender’s initial receipt of such Voided Payment until the full amount of such Voided Payment is restored to the Agent or such Lender. During any continuance of any
such Event of Default, this Agreement shall be in full force and effect with respect to the Subordinated Debt. To the extent that SAC or any Subordinating Creditor has received any payments with respect to the Subordinated Debt subsequent to the
date of the Agent’s or any Lender’s initial receipt of such Voided Payment and such payments have not been invalidated, declared to be fraudulent or preferential or set aside or are required to be repaid to a trustee, receiver, or any
other party under any bankruptcy act, state or federal law, common law or equitable cause, SAC or such Subordinating Creditor shall be obligated and hereby agrees that any such payment so made or received shall be deemed to have been received in
trust for the benefit of the Agent or such Lender, and SAC and each Subordinating Creditor hereby agrees to pay to the Agent for the benefit of the Agent or (as the case may be) such Lender, upon demand, the full amount so received by SAC or such
Subordinating Creditor during such period of time to the extent necessary fully to restore to the Agent or such Lender the amount of such Voided Payment. Upon the payment and satisfaction in full in cash of all of the Senior Debt, which payment
shall 

  

 -11- 

 
be final and not avoidable, this Agreement will automatically terminate without any additional action by any party hereto. 
  
 12. Notices. All notices and other communications which
are required and may be given pursuant to the terms of this Agreement shall be in writing and shall be sufficient and effective in all respects if given in writing or telecopied, delivered or mailed by registered or certified mail, postage prepaid,
as follows: 
  

			
	If to the Agent:	  	Fleet Retail Group, Inc.
	 	  	c/o Bank of America Retail Finance Group
	 	  	40 Broad St., 10th Floor
	 	  	Boston, MA 02109
	 	  	Attention: Daniel T. Platt, Director
	 	  	Facsimile: (617) 434-4131
		
	With a copy to:	  	Riemer & Braunstein, LLP
	 	  	Three Center Plaza
	 	  	Boston, MA 02108
	 	  	Attention: Robert E. Paul, Esq.
	 	  	Facsimile: (617) 880-3456
		
	And with a copy to:	  	Back Bay Capital Funding LLC
	 	  	40 Broad Street
	 	  	Boston, MA 02109
	 	  	Attention: Michael Pizette, Managing Director
	 	  	Facsimile: (617) 434-4185
		
	And with a copy to:	  	Bingham McCutchen LLP
	 	  	150 Federal Street
	 	  	Boston, MA 02110
	 	  	Attention: Robert A. J. Barry, Esq.
	 	  	Facsimile: (617) 951-8736
		
	 If to SAC or any
 Subordinating
Creditor:
	  	S.A.C. Capital Associates, LLC, as Collateral Agent
	 	  	c/o S.A.C. Capital Advisors, LLC
	 	  	72 Cummings Point Road
	 	  	Stamford, Connecticut 06902
	 	  	Attention: General Counsel
	 	  	Facsimile No. (203) 890-2393
		
	With a copy to:	  	Schulte Roth & Zabel LLP
	 	  	919 Third Avenue
	 	  	New York, NY 10022
	 	  	Attention: Nancy Finkelstein, Esq.
	 	  	Facsimile: (212) 513-5955

  

 -12- 

			
	If to the Borrower:	  	The Wet Seal, Inc.
	 	  	26972 Burbank Street
	 	  	Foothill Ranch, California 92610
	 	  	Attention: Chief Financial Officer
	 	  	Facsimile: (858) 206-4977
		
	With a copy to:	  	Akin, Gump, Strauss, Hauer & Feld, LLP
	 	  	590 Madison Avenue
	 	  	New York, NY 10022-2524
	 	  	Attention: Alan Siegel, Esq.
	 	  	Facsimile: (212) 872-1002

  
 or such other address
or addresses as any party hereto shall have designated by written notice to the other parties hereto. Notices shall be deemed given and effective upon the earlier to occur of (i) the third day following deposit thereof in the U.S. mail or (ii)
receipt by the party to whom such notice is directed. 
  
 13.
Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL BE A SEALED INSTRUMENT UNDER SUCH LAWS. 
  
 14. Waiver of Jury Trial. EACH OF SAC AND EACH SUBORDINATING
CREDITOR AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH OF SAC AND EACH SUBORDINATING CREDITOR AND THE BORROWER HEREBY WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH OF SAC, EACH SUBORDINATING CREDITOR AND THE BORROWER HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE AGENT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN. 
  

 -13- 

 15. Contractual Representative for Purposes of Perfection.  
  
 SAC and each Secured Creditor hereby appoints the Agent as such Person’s
contractual representative solely for purposes of perfecting such Person’s Liens on any of the Collateral in the possession or under the “control” (as such term is defined in the Uniform Commercial Code) of the Agent, and the Agent
hereby acknowledges that it holds possession of or otherwise controls any such Collateral as the contractual representative of SAC, for and on behalf of the Secured Creditors, for such purposes; provided, that, the Agent shall not have any duty or
liability to protect or preserve any rights pertaining to any of the Collateral and, except for gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction, SAC and each Secured
Creditor hereby waives and releases the Agent and each of the other Lenders from, and hereby indemnifies and agrees to hold harmless the Agent and each of the other Lenders against, all claims and liabilities arising as a result of or in connection
with the Agent’s role as contractual representative agent with respect to the Collateral. At the expense of the Borrower, promptly upon the full and final payment in cash of the Senior Debt, the Agent shall deliver the remainder of the
Collateral, if any, in its possession to S.A.C. Capital Associations, LLC and, to the extent practicable, transfer control of the remainder of the Collateral, if any, under its control to the S.A.C. Capital Associations, LLC, in each case, except as
may otherwise be required by applicable law or court order (it being understood that prior to the full and final payment in cash of the Senior Debt, the provisions of this Agreement shall apply to all such documents and each other document relating
to all or any part of the Collateral, including, without limitation, the provisions restricting SAC from taking action to enforce rights in and to the Collateral pursuant to such documents). 
  
 16. Miscellaneous. This Agreement may be executed in
several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. In proving this Agreement, it shall not be necessary to
produce or account for more than one such counterpart signed by the party against which enforcement is sought. The Agent, acting upon the instructions of the requisite Lenders, may, in their sole and absolute discretion, waive any provisions of this
Agreement benefiting the Agent and the Lenders; provided, however, that such waiver shall be effective only if in writing and signed by the Agent and shall be limited to the specific provision or provisions expressly so waived. This
Agreement shall be binding upon the successors and assigns of SAC and each Subordinating Creditor and the Borrower and shall inure to the benefit of the Agent and the Lenders, the Agent’s and the Lenders’ respective successors and assigns,
any lender or lenders refunding or refinancing any of the Senior Debt and their respective successors and assigns, but shall not otherwise create any rights or benefits for any third party. In the event that any lender or lenders refund or refinance
any of the Senior Debt, the terms “Credit Agreement”, “Loan Documents”, “Event of Default” and the like shall refer mutatis mutandis to the agreements and instruments in favor of such lender or lenders and
to the related definitions contained therein. 
  
 [Remainder of
page intentionally left blank] 
  

 -14- 

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

			
	FLEET RETAIL GROUP, INC., as Agent
		
	By:	 	/s/    Daniel T. Platt
	 	 	 Name: Daniel T. Platt

	 	 	 Title: Director

	
	 S.A.C. CAPITAL ASSOCIATES, LLC, as
 collateral agent for the Subordinating Creditors

		
	By:	 	/s/    Peter Nussbaum
	 	 	 Name: Peter Nussbaum

	 	 	 Title: General Counsel

	
	THE WET SEAL, INC., as Borrower
		
	By:	 	/s/    Douglas C. Felderman
	 	 	 Name: Douglas C. Felderman

	 	 	 Title: EVP-CFO

  

  
 CERTIFICATE OF ACKNOWLEDGMENT

  
 COMMONWEALTH OR STATE OF
                     ) 
                                        
                                        
    ) ss. 
 COUNTY OF
                                        
                   ) 
  
 On this      day of November, 2004, before me, the undersigned notary public, personally appeared
                    , proved to me through satisfactory evidence of identification, which were
                                , to be the person whose name is signed on the
preceding or attached document, and acknowledged to me that (he)(she) signed it voluntarily for its stated purpose (as                     
for                     , a
                    ). 
  

	
	
	 
	 (official signature and seal of notary)

	
	 My commission expires:

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