Document:

Amended and Restated Securities Purchase Agreement

 EXHIBIT 10.1 
  
 AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT 
  
 AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 13, 2004,
by and among The Wet Seal, Inc., a Delaware corporation, with headquarters located at 26972 Burbank, Foothill Ranch, California 92610 (the ”Company”), and the investors listed on the Schedule of Buyers attached hereto (individually,
a “Buyer” and collectively, the “Buyers”). 
  
 WHEREAS: 
  
 A. The
Company and certain Buyers (the “Original Buyers”) entered into that certain Securities Purchase Agreement (the “Original Agreement”) dated as of November 9, 2004 (the “Original Date”). 

 
 B. The Company and each Original Buyer desires to amend and restate the
terms of the Original Purchase Agreement to reflect the modifications to the terms of thereof. Now, therefore, the Original Agreement is amended and restated in its entirety as follows. 
  
 C. The Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities
registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission
(the “SEC”) under the 1933 Act. 
  
 D. The
Company has authorized a new series of convertible notes of the Company, in substantially the form attached hereto as Exhibit A (as amended or modified from time to time, the “Notes”), which Notes shall be convertible into
the Company’s Class A Common Stock, $0.10 par value per share (the ”Class A Common Stock”), in accordance with the terms of such Notes, and shall be issued pursuant to the provisions of an indenture, dated as of the Closing
Date, by and between the Company and an indenture trustee reasonably acceptable to the Majority Buyers (as defined below), as trustee (the “Indenture”). 
  
 E. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement,
(i) that aggregate principal amount of Notes set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers (which aggregate principal amount for all Buyers shall be Fifty-Six Million Dollars ($56,000,000)) (the shares of Class A
Common Stock into which the Notes are convertible, collectively, the “Conversion Shares”) and (ii) (A) Series B Warrants, in substantially the form attached hereto as Exhibit B-2 (the “Series B Warrants”), to
acquire up to that number of shares of Class A Common Stock set forth opposite such Buyer’s name in column (3) of the Schedule of Warrants attached hereto, (B) Series C Warrants, in substantially the form attached hereto as Exhibit B-3
(the “Series C Warrants”), to acquire up to that number of shares of Class A Common Stock set forth opposite such Buyer’s name in column (4) of the Schedule of Warrants attached hereto, and (C) Series D Warrants, in
substantially the form attached hereto as Exhibit B-4 (the “Series D Warrants”), to acquire up to that number of shares of Class A Common Stock set forth opposite such Buyer’s name in column (5) of the Schedule of
Warrants attached hereto (the Series B Warrants, the Series C Warrants and the Series D Warrants are collectively referred to herein as the “Additional Warrants”) (as exercised, collectively, the ”Additional Warrant
Shares”). 

 F. On the Original Date, the Original Buyers received Series A Warrants, in substantially the form
attached to the Original Agreement as Exhibit C-1 (the “Original Series A Warrants”). On the date hereof, each Original Buyer will deliver its Original Series A Warrants to the Company for cancellation and each Buyer will
receive Series A Warrants, in substantially the form attached hereto as Exhibit B-1 (collectively, the “Series A Warrants” and together with the Additional Warrants, the “Warrants”) to acquire up to that
number of additional shares of Class A Common Stock set forth opposite such Buyer’s name in column (2) of the Schedule of Warrants (as exercised, the “Series A Warrant Shares” and together with the Additional Warrant Shares,
the “Warrant Shares”). 
  
 G. Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering an Amended and Restated Registration Rights Agreement, substantially in the form attached hereto as Exhibit C (as amended or modified from time
to time in accordance with its terms, the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration rights with respect to the Notes, the Warrants, the Conversion Shares and the
Warrant Shares under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws. 
  
 H. On the Original Date, the Company and certain of its subsidiaries entered into temporary financing arrangements with certain of the Original Buyers, as
secured lenders, and as more fully set forth in a credit agreement by and among the Company, The Wet Seal Catalog, Inc., and The Wet Seal Retail, Inc., as borrowers (collectively, the “Bridge Borrowers”), and Wet Seal GC, Inc., as
guarantor (together with the Bridge Borrowers, the “Bridge Loan Parties”), S.A.C. Capital Associates, LLC, as administrative agent and collateral agent (in such capacity the “Bridge Agent”), and certain of the
Original Buyers, as lenders, and certain other security and ancillary documents related thereto, and an intercreditor and lien subordination agreement by and among the Bridge Agent, Fleet Retail Group, Inc., as administrative agent and collateral
agent (the “Senior Agent”) for certain lenders (the “Senior Lenders”), and the Bridge Loan Parties (the “Bridge Facility”), pursuant to which, subject to the satisfaction of certain borrowing
conditions, the Original Buyers made available to the Bridge Borrowers a $10 million secured term loan (the “Bridge Amount”). On the date hereof certain of the Original Buyers and the June 2004 Participants (as defined below) have
entered into an assignment agreement, whereby $2.5 million of the Bridge Amount of such Original Buyers shall be assigned to the June 2004 Participants, as secured lenders under the Bridge Facility. The documents entered into in connection with the
Bridge Facility are referred to herein as the “Bridge Facility Documents”. In connection with this Agreement and the related documents, the Company has obtained the requisite consents from the Senior Lenders. 
  
 I. The Notes, the Conversion Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the “Securities”. 
  
 J. The Notes will be secured by a second lien on substantially all of the personal property assets of the Bridge Loan Parties. The Notes and the liens securing such Notes will be fully subordinated to the debt and
liens in favor of the Senior Agent and the Senior Lenders 
  

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 pursuant to an Amended and Restated Subordination Agreement, to be dated as of the Closing Date, among the Senior
Lenders, the Buyers, the Trustee and the Company and certain other security and ancillary documents related thereto (collectively, the “Security Agreements”). 
  
 NOW, THEREFORE, the Company and each Buyer hereby agree as follows: 
  
 1. PURCHASE AND SALE OF NOTES AND WARRANTS. 
  
 (a) Purchase of Notes and Warrants. 
  
 (i) Series A Warrants. On the Original Date, the Company issued to
the Original Buyers the Original Series A Warrants. Concurrently with the execution of this Agreement, each Original Buyer will deliver to the Company its Original Series A Warrant for cancellation and the Company will simultaneously issue to each
Buyer one or more Series A Warrants to acquire up to that number of Series A Warrant Shares as is set forth opposite such Buyer’s name in column (2) on the Schedule of Warrants. 
  
 (ii) Notes and Additional Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections
6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below), (A) one or more Notes issued pursuant to the Indenture with an
aggregate principal amount as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, (B) one or more Series B Warrants to acquire up to that number of Warrant Shares as is set forth opposite such Buyer’s name in
column (3) on the Schedule of Warrants, (C) one or more Series C Warrants to acquire up to that number of Warrant Shares as is set forth opposite such Buyer’s name in column (4) on the Schedule of Warrants and (D) one or more Series D Warrants
to acquire up to that number of Warrant Shares as is set forth opposite such Buyer’s name in column (5) on the Schedule of Warrants. At no time shall the aggregate principal amount of the Notes (which are referred to as the Securities as
defined in the Indenture) purchased pursuant to this Agreement exceed $56,000,000 without the written consent of the Senior Lenders. 
  
 (iii) Closing. The date and time (the “Closing Date”) of the consummation of the transactions contemplated by Section 1(a)(ii)
above (the “Closing”) shall be five (5) Business Days after notification of satisfaction (or waiver) of the conditions to the Closing set forth in Sections 6 and 7 below (or such other date as is mutually agreed to by the Company
and holders of at least a majority of the principal amount of the Notes issued and, prior to the Closing, issuable hereunder (the “Majority Buyers”)) at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New
York 10022. For purposes of this Agreement, “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed. 
  
 (iv) Purchase Price. 
  
 (1) The aggregate purchase price for the Notes and the
Warrants to be purchased by each Buyer at the Closing (the “Purchase Price”) shall be the amount set forth opposite such Buyer’s name in column (5) of the Schedule of Buyers less (A) such Buyer’s pro rata share of any
outstanding Bridge Amount (including any 
  

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 outstanding principal, accrued and unpaid interest, fees, late charges and other amounts due in respect
thereof) and (B) in the case of S.A.C. Capital Associates, LLC (“SAC”) (a Buyer), a withholding amount with respect to certain expenses in accordance with Section 4(g)(ii). 
  
 (2) The Buyers and the Company agree that the Notes and the
Warrants constitute an “investment unit” for purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the “Code”). Not later than two days before the Closing Date, the Majority Buyers shall notify
the Company of their determination of the allocation of the issue price of such investment unit between the Notes and the Warrants in accordance with Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h), and neither the Buyers
nor the Company shall take any position inconsistent with such allocation in any tax return or in any judicial or administrative proceeding in respect of taxes. 
  

(b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase Price to the Company for the Notes and the Warrants to be issued
and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions and (ii) the Company shall deliver or cause to be delivered to each Buyer (A) the Notes (for the
account of such Buyer as such Buyer shall instruct) which such Buyer is then purchasing and (B) the Warrants such Buyer is purchasing, in each case duly executed on behalf of the Company and registered in the name of such Buyer or its designee.

  
 2. BUYERS’ REPRESENTATIONS AND WARRANTIES.

  
 Each Buyer represents and warrants with respect to only
itself that: 
  
 (a) No Sale or Distribution. Such Buyer
is acquiring the Notes and the Warrants, and upon conversion of the Notes and exercise of the Warrants, will acquire the Conversion Shares issuable upon conversion of the Notes and the Warrant Shares issuable upon exercise of the Warrants, as the
case may be, for its own account, not as nominee or agent, and not with a view towards, or for resale in connection with, the sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act; provided,
however, that by making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant
to a registration statement or an exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with
any Person to distribute any of the Securities. For the purpose of this Agreement, “Person” shall mean any individual, corporation, partnership (general or limited), limited liability company, firm, joint venture, association,
joint-stock company, trust, estate, unincorporated organization or government or any department or agency thereof. 
  
 (b) Accredited Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

  

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 (c) Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold
to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities. 
  
 (d) Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right
to rely on the Company’s representations and warranties contained herein. Such Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its acquisition of the Securities. 
  
 (e) No Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 
  
 (f) Transfer or Resale. Such Buyer understands that except as provided
in the Registration Rights Agreement: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) offered for sale, sold,
assigned or transferred to an affiliate of such Buyer, (B) subsequently registered thereunder, (C) such Buyer shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (D) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule
144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of
Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption thereunder. 
  
 (g) Legends. Such Buyer understands that, until such time as the resale of the Securities have been registered under the 1933 Act as contemplated by the Registration Rights Agreement, the certificates or other
instruments representing the Securities, except as set forth 
  

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 below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in
substantially the following form (and a stop-transfer order may be placed against transfer of such instruments): 
  
 [NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE]
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

  
 The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally acceptable form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable
requirements of the 1933 Act, or (iii) such holder provides the Company with reasonable assurance that the Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A. 
  
 (h) Validity; Enforcement. This Agreement, the Registration Rights
Agreement and the Bridge Facility Documents to which such Buyer is a party have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable
against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. 
  
 (i) No Conflicts. The execution, delivery and performance by such Buyer of this Agreement, the Registration Rights Agreement and the Bridge
Facility Documents to which such Buyer is a party and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, 
  

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 acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder. 
  
 (j) Residency. Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.

  
 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

  
 The Company represents and warrants to each of the Buyers
that: 
  
 (a) Organization and Qualification. 

 
 (i) The Company and its “Subsidiaries” (which for
purposes of this Agreement means any entity in which the Company, directly or indirectly, owns outstanding capital stock or holds an equity or similar interest representing the outstanding equity or similar interest of such entity) are entities duly
organized and validly existing in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. The Company has no Subsidiaries except as set forth on Schedule 3(a). Schedule 3(a) sets forth the nature and
percentage ownership of the Company in each Subsidiary. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, results of operations or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or on the transactions contemplated hereby and in the Transaction Documents (as defined below) or by the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform its obligations under the Transaction Documents. 
  
 (b) Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement, the Notes, the Warrants, the Registration Rights Agreement, the documents relating to the Bridge Facility, the Security Documents, the Indenture, the Warrant Agreement (as defined in Section 4(a)(ii)), the Irrevocable Transfer Agent
Instructions (as defined in Section 5(b)) and any other certificate, instrument or document contemplated hereby or thereby (collectively, the “Transaction Documents”) and to issue the Securities in accordance with the terms hereof
and thereof. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes and the Warrants,
the reservation for issuance and the issuance of the Conversion Shares issuable upon conversion of the Notes and the reservation for issuance and issuance of Warrant Shares issuable upon exercise of the Warrants have been duly authorized by

  

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 the Company’s Board of Directors and, other than the filings specified in Section 3(e) and the Stockholder Approval
(as defined in Section 4(p)), no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement and the other Transaction Documents dated on or prior to the date hereof have been duly
executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. Any other Transaction
Documents dated after the date herewith upon execution shall have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies. 
  
 (c)
Issuance of Securities. The issuance of the Notes and the Warrants and, subject to Stockholder Approval, the issuance of the Conversion Shares and Warrant Shares are duly authorized and are free from all taxes, liens and charges with respect
to the issue thereof. As of the Closing, a number of shares of Class A Common Stock shall have been duly authorized and reserved for issuance which equals or exceeds 130% of the aggregate of the maximum number of shares of Class A Common Stock: (i)
issuable upon conversion of the Notes pursuant to Section 3 of the Notes as of the trading day immediately preceding the Closing Date and (ii) issuable upon exercise of the Warrants as of the trading day immediately preceding the Closing Date. Upon
issuance or conversion in accordance with the Notes or exercise in accordance with the Warrants, as the case may be, the Conversion Shares and the Warrant Shares, respectively, will be validly issued, fully paid and nonassessable and free from all
preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Class A Common Stock. Assuming the accuracy of each of the representations and warranties
set forth in Section 2 of this Agreement, the offer and issuance by the Company of the Notes and Warrants is exempt from registration under the 1933 Act. 
  
 (d) No Conflicts. Subject, as applicable, to obtaining the Stockholder Approval, the execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated thereby (including, without limitation, the issuance of the Notes and the Warrants, and reservation for issuance and issuance of the Conversion Shares and
the Warrant Shares, without regard to the limitation on issuance thereof) will not (i) result in a violation of any certificate of incorporation, certificate of formation, any certificate of designations or other constituent documents of the Company
or any of is Subsidiaries, any capital stock of the Company or any of its Subsidiaries or bylaws of the Company or any of its Subsidiaries or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Nasdaq National Market (the “Principal Market”)) applicable to the Company or any
of its Subsidiaries or by which any 
  

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 property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of (ii) and (iii) to
the extent that such violation, conflict, default or right would not have a Material Adverse Effect. 
  
 (e) Consents. Except as set forth in Schedule 3(e), the Company is not required to obtain any consent, authorization or order of, or make
any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents,
in each case in accordance with the terms thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence shall have been obtained or effected on or prior to the
Closing Date, and the Company and its Subsidiaries are unaware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence. The Company
is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts which would reasonably lead to delisting or suspension of the Class A Common Stock in the foreseeable future. 
  
 (f) Acknowledgment Regarding Buyer’s Purchase of Securities. The
Company acknowledges and agrees that each Buyer is acting individually and solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer is
(i) an officer or director of the Company, (ii) an “affiliate” of the Company (as defined in Rule 144) or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the shares of Class A Common Stock (as
defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives. 
  
 (g) No General Solicitation; Agent’s Fees. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by
any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby. Except for Rothschild, Inc. and the other agents and advisors whose compensation is set forth on Schedule 3(g) hereto, the Company has
not engaged any investment advisor, placement agent or other agent in connection with the sale of the Securities. 
  
 (h) No Integrated Offering. None of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Securities under the 1933 Act or cause this offering of 
  

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 the Securities to be integrated with prior offerings by the Company for purposes of the 1933 Act or, assuming the receipt
of the Stockholder Approval, any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or
designated. None of the Company, its Subsidiaries, their affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of any of the Securities under the 1933 Act
or cause the offering of the Securities to be integrated with other offerings. 
  
 (i) Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares issuable upon conversion of the Notes and the Warrant Shares issuable upon exercise of the Warrants may
increase in certain circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Notes in accordance with this Agreement and the Notes and its obligation to issue the Warrant Shares upon
exercise of the Warrants in accordance with this Agreement, the Warrants and the Warrant Agreement is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company. 
  
 (j) Application of Takeover
Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the jurisdiction of its formation which is or could become applicable to any Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. Except as set forth on Schedule 3(j)(a), the Company has not adopted a stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of Class A Common Stock or a change in control of the Company (each a “Rights Plan”). The Board of Directors of the Company has, prior to the execution of this
Agreement, adopted a resolution exempting the issuance of the Securities from any Rights Plan of the Company and from any control share acquisition statute applicable to the Company, which is attached hereto as Schedule 3(j)(b). 

 
 (k) SEC Documents; Financial Statements. During the two (2) years
prior to the Original Date and the date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing
filed prior to the Original Date and the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). The Company has delivered to the Buyers or their respective representatives true, correct and complete copies of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, or as of the date
of the last amendment thereof, if amended after filing, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. As of their respective dates, the financial 
  

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 statements of the Company included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). 
  
 (l) Absence of Certain Changes. Other
than as set forth in the SEC Documents, since the date of the Company’s most recent SEC Documents prior to the Original Date, there has been no material adverse change and no material adverse development, which constitutes a Material Adverse
Effect as defined in Section 8(e) of this Agreement. Since January 31, 2004, the Company has not (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, in excess of $100,000 outside of the ordinary course of
business or (iii) had capital expenditures, individually or in the aggregate, in excess of $100,000 outside of the ordinary course of business. The Company has not taken any steps to seek protection pursuant to any bankruptcy law nor does the
Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries,
individually and on a consolidated basis, are not as of the Original Date or the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent. For purposes of this Section 3(l),
“Insolvent” means, with respect to any Person, (i) the present fair saleable value of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness (as defined in Section 3(s)) (other than
any future lease liabilities as such exist on the Original Date), (ii) the Person is unable to pay its debts and liabilities (other than any future lease liabilities as such exist on the Original Date), subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts (other than any future lease liabilities as such exist on the Original Date) that would be beyond its ability to pay as such
debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. 
  
 (m) No Undisclosed Events, Liabilities, Developments or Circumstances.
No event, liability, development or circumstance has occurred or exists, or is contemplated to occur with respect to the Company or its Subsidiaries or their respective business, properties, prospects operations or financial condition, that would be
required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Class A Common Stock and which has not been publicly
announced. 
  
 (n) Conduct of Business; Regulatory Permits.
Neither the Company nor its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation or Bylaws or their organizational charter or certificate of incorporation or bylaws, respectively. Neither the Company nor
any of its Subsidiaries is in violation of any judgment, decree or order 
  

 - 11 - 

 or any statute, ordinance, rule or regulation applicable to the Company or its Subsidiaries, and neither the Company nor
any of its Subsidiaries will conduct its business in violation of any of the foregoing, except for possible violations which would not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the
foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances which would reasonably lead to delisting or suspension of the Class A Common Stock
by the Principal Market in the foreseeable future. Since January 31, 2004, (i) the Class A Common Stock has been designated for quotation on the Principal Market, (ii) trading in the Class A Common Stock has not been suspended by the SEC or the
Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Class A Common Stock from the Principal Market. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, as presently operated, except where the failure to possess such certificates, authorizations or
permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit. 
  
 (o) Foreign Corrupt Practices.
Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate
funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee. 
  
 (p)
Sarbanes-Oxley Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that were effective as of the Original Date or are effective as of the date hereof, and any and all applicable rules
and regulations promulgated by the SEC thereunder that were effective as of the Original Date or are effective as of the date hereof, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect.

  
 (q) Transactions With Affiliates. Except as set forth
in the SEC Documents filed at least ten days prior to the Original Date and the date hereof and other than options disclosed on Schedule 3(r), none of the officers, directors or employees of the Company was as of the Original Date or is
presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company, any corporation, partnership, trust or other
entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner. 
  

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 (r) Equity Capitalization. As of the Original Date and the date hereof, the authorized capital
stock of the Company consisted and consists, respectively, of (i) 60,000,000 shares of Class A Common Stock, of which as of the Original Date and the date hereof, 34,660,657 are issued and outstanding and 4,817,619 shares are reserved for issuance
pursuant to the Company’s stock option and purchase plans, (ii) 10,000,000 shares of Class B Common Stock, $0.10 par value (the “Class B Common Stock”), of which as of the Original Date and the date hereof, 1,500,000 are issued
and outstanding and (iii) 2,000,000 shares of preferred stock, $.01 par value per share, of which as of the Original Date and the date hereof none of which is issued and outstanding or reserved for issuance. All of such outstanding shares have been,
or upon issuance will be, validly issued and are fully paid and nonassessable. Except as disclosed in Schedule 3(r): (i) none of the Company’s share capital is subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) other than the Original Series A Warrants and warrants to purchase an aggregate of 2,109,275 shares of Class A Common Stock issued in connection with that Securities Purchase Agreement (the
“June 2004 Purchase Agreement”), dated as of June 29, 2004, by and among the Company and the purchasers signatory thereto (such purchasers, the “June 2004 Participants”), there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any share capital of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional share capital of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any share capital of the Company or any of its Subsidiaries; (iii) there are no outstanding debt securities, notes,
credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness (as defined in Section 3(s)) of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound; (iv) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with the Company; (v) there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement); (vi) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;
(vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) the Company does not have any stock appreciation rights or “phantom stock” plans
or agreements or any similar plan or agreement; and (ix) the Company and its Subsidiaries have no liabilities or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or would not have a Material Adverse Effect. The Company has furnished to the Buyer true, correct and complete
copies of the Company’s Restated Certificate of Incorporation, as amended and as in effect on the Original Date and the date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as amended and as in
effect on the Original Date and the date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for, shares of Class A Common Stock and the material rights of the holders thereof in
respect thereto. 
  

 - 13 - 

 (s) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(s), neither the
Company nor any of its Subsidiaries (i) has any outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract,
agreement or instrument would result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not
result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is
expected to have a Material Adverse Effect. Schedule 3(s) provides a detailed description of the material terms of any such outstanding Indebtedness. For purposes of this Agreement: (x) “Indebtedness” of any Person means,
without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business), (C)
all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets
acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability
will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto. 
  
 (t) Absence of Litigation. Except as set forth in Schedule
3(t), there is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened
against the Company, the Class A Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors. Schedule 3(t) sets forth the details of any such litigation.

  

 - 14 - 

 (u) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. 
  
 (v) Employee Relations. (i) Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member
of a union. Except as set forth on Schedule 3(v), the Company and its Subsidiaries believe that their relations with their employees are good. Except as set forth on Schedule 3(v), no executive officer of the Company (as defined in
Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company or otherwise terminate such officer’s employment with the Company. No executive officer of the Company, to the knowledge of the Company, is, or
is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the
continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters except as would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. 
  
 (ii) The
Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. 
  
 (w) Title. Except as set forth on Schedule 3(w), the Company and its Subsidiaries have good and marketable title to all real property and
good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and material defects except such as do not materially
affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

  
 (x) Intellectual Property Rights. Except as set forth
on Schedule 3(x), the Company and its Subsidiaries own or possess adequate rights or licenses to use (A) patents (and any renewals and extensions thereof), patent rights (and any applications therefor), rights of priority and other rights in
inventions; (B) trademarks, service marks, trade names and trade dress, and all registrations and applications therefor and all legal and common-law equivalents of any of the foregoing; (C) copyrights and rights in mask works (and any applications
or 
  

 - 15 - 

 registrations for the foregoing, and all renewals and extensions thereof), common-law copyrights and rights of authorship
including all rights to exploit any of the foregoing in any media and by any manner and means now known or hereafter devised; (D) industrial design rights, and all registrations and applications therefor; (E) rights in data, collections of data and
databases, and all legal or common-law equivalents thereof; (F) rights in domain names and domain name reservations; (G) rights in trade secrets, proprietary information and know-how (collectively, “Intellectual Property Rights”),
collectively with all licenses and other agreements providing the Company or its Subsidiaries the Intellectual Property Rights material to the operation of their businesses as now conducted and as described in the SEC Documents. Except as set forth
on Schedule 3(x), none of the Company or any of its Subsidiaries has knowledge that any of them has infringed on any of the Intellectual Property Rights of any Person and none of the Company or any of its Subsidiaries is infringing on any of
the Intellectual Property Rights of any Person. Except as set forth on Schedule 3(x), there is no action, suit, hearing, claim, notice of violation, arbitration or other proceeding, hearing or investigation that is pending, or to the
Company’s knowledge, is threatened against, the Company regarding the infringement of any of the Intellectual Property Rights. The Company is not, to its knowledge, making unauthorized use of any confidential information or trade secrets of any
third party, and the Company has not received any notice of any asserted infringement (nor is the Company aware of any reasonable basis for any third party asserting an infringement) by the Company of, any rights of a third party with respect to any
Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights. 
  
 (y) Environmental Laws. Except as set forth on Schedule 3(y),
the Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous
Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder. 

 
 (z) Subsidiary Rights. The Company or one of its Subsidiaries has
the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary. 
  
 (aa) Tax Status. The Company and each of its Subsidiaries (i) has made
or filed all foreign, federal and state income and all other tax returns, reports and declarations 
  

 - 16 - 

 required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim. 
  
 (bb) Internal Accounting
Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference. 
  
 (cc) Ranking of Notes. Except as set forth on Schedule 3(cc), no Indebtedness of the Company is senior to or ranks pari passu with the Notes in right of payment, whether with respect of payment of
redemptions, interest, damages or upon liquidation or dissolution or otherwise. 
  
 (dd) Form S-3 Eligibility. The Company is eligible to register the Notes, Warrants, Conversion Shares and the Warrant Shares for resale by the Buyers using Form S-3 promulgated under the 1933 Act. 

 
 (ee) Manipulation of Price. The Company has not, and to its
knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the
Company. 
  
 (ff) Disclosure. Other than the provision of
certain projections as to the financial situation of the Company and other information provided to certain Buyers that may be deemed to be material, as reasonably determined collectively by the Company and the Majority Buyers, (the
“Disclosed Information”), which Disclosed Information shall be made public prior to or in conjunction with the Final 8-K Filing (as defined below), the Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information. The Company understands and confirms that each of the Buyers will rely on the
foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company, its business and the transactions contemplated hereby, including the Schedules to this Agreement, taken as
a whole, furnished by or on behalf of the Company is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in 
  

 - 17 - 

 order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
Each press release issued by the Company during the twelve (12) months preceding the Original Date did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or
its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

  
 (gg) Independent Accountants. Deloitte & Touche
LLP, who have certified the consolidated financial statements of the Company as of January 31, 2004, are independent public accountants within the meaning of the 1933 Act. 
  
 (hh) Investment Company. Neither the Company nor its Subsidiaries is or, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof, will become an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for an investment company, within the
meaning of the Investment Company Act of 1940, as amended. 
  
 (ii) Existing Right of Participation. The Company gave proper notice to the June 2004 Participants of the rights set forth in Section 3(bb) of the June 2004 Purchase Agreement (the “June 2004 Participation Right”)
and the June 2004 Participants have informed the Company of their respective election to exercise their June 2004 Participation Rights by becoming a party to the Transaction Documents. 
  
 4. COVENANTS. 
  
 (a) Best Efforts; Conversion Cooperation. 
  
 (i) Each party shall use its best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement. 
  
 (ii) Each party agrees that during the period from
and after the Original Date and prior to the Closing Date, if the Majority Buyers so request, the parties shall work in good faith to amend the Transaction Documents to allow for the maximum flexibility with respect to the buying and selling of
Notes and Warrants in markets approved by the Majority Buyers, including, without limitation, the Indenture and the creation of a warrant agreement with respect to the Warrants (the “Warrant Agreement”, and together with the
Indenture, the “Issuance Documents”) and amend this Agreement and the Registration Rights Agreement to reflect any necessary terms of the Issuance Documents. 
  
 (b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under
Regulation D and to provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as is necessary in order to obtain an exemption for or to qualify the Securities for sale to the
Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of any such exemption or 
  

 - 18 - 

 qualification so taken to the Buyers on or prior to the Closing Date. The Company shall make all filings and reports
relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date. 
  
 (c) Reporting Status. Until the date on which the Investors (as defined in the Registration Rights Agreement) shall
have sold all the Securities and none of the Securities is outstanding (the “Reporting Period”), and other than in accordance with the Notes and Warrants, the Company shall timely file all reports required to be filed with the SEC
pursuant to the 1934 Act, and the Company shall continue to timely file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise no longer require such filings. 
  
 (d) Use of Proceeds. The Company will use the proceeds from the sale
of the Securities for general working capital purposes, including payment of trade creditors. The Company will not use the proceeds from the sale of the Securities for the (i) repayment of any outstanding Indebtedness of the Company or any of its
Subsidiaries or (ii) redemption or repurchase of any of its equity securities. 
  
 (e) Financial Information. The Company agrees to send the following to each Investor during the Reporting Period provided that the following does not constitute material, nonpublic information, (i) unless the
following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K or 10-KSB, any interim reports or
any consolidated balance sheets, income statements, stockholders’ equity statements and/or cash flow statements for any fiscal quarter, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed
pursuant to the 1933 Act, and (ii) promptly after the release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries, unless those press releases are timely filed on Form 8-K. 
  
 (f) Listing. The Company shall promptly secure the listing of all of
the Conversion Shares and Warrant Shares upon each national securities exchange and automated quotation system, if any, upon which the Class A Common Stock is then listed (subject to official notice of issuance) and shall maintain such listing of
all Conversion Shares and Warrant Shares from time to time issuable under the terms of the Transaction Documents. The Company shall maintain the Class A Common Stock’s authorization for quotation on the Principal Market. Neither the Company nor
any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Class A Common Stock on the Principal Market. 
  
 (g) Fees. (i) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is
terminated, the Company shall pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, all fees, costs and expenses (A) incident to the preparation, issuance, execution,
authentication and delivery of the Securities, including any expenses of any trustee or warrant agent, (B) incurred in connection with the registration or qualification and determination of eligibility for investment of the Securities, (C) in
connection with the admission for trading of the Notes and Warrants on any securities exchange or inter-dealer quotation system, (D) related 
  

 - 19 - 

 to any filing with the National Association of Securities Dealers, Inc. (“NASD”), (E) the satisfaction
of the conditions set forth in Sections 6 and 7, in each case whether or not the Closing Date occurs or this Agreement is terminated, and (F) otherwise in connection with satisfying its obligations hereunder. The Company shall be responsible for the
payment of any placement agent’s fees, financial advisory fees, or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby, including, without limitation, any
fees or commissions payable to any agents. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out of pocket expenses) arising in connection
with any claim relating to any such payment. 
  
 (ii) Whether or
not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company shall pay or cause to be paid all out-of-pocket costs, fees and expenses (including, without limitation, all fees and other client
charges and expenses of Schulte Roth & Zabel LLP, counsel for SAC) (“Expenses”) incurred by, or on behalf of, SAC in connection with the transactions contemplated by this Agreement, including, but not limited to, in connection
with (i) any accounting, business, environmental, legal, or regulatory due diligence review of the Company and its business and (ii) the revision, negotiation, execution and delivery of all Transaction Documents, the Bridge Facility and any related
documents, up to a maximum reimbursement of $750,000 including any payment made under the Exclusivity Agreement dated November 3, 2004 between the Company and SAC (the “Fee Cap”); provided, however, that such Fee Cap shall be
increased if SAC determines that such amount does not reasonably reflect the actual or reasonably anticipated Expenses and the Board of the Company approves such increase (such approval not to be unreasonably withheld or delayed); provided, however,
the Company shall not be obligated to pay more than $400,000 in Expenses if the Company terminates this agreement pursuant to Section 8(d). Subject to the Fee Cap, the Company shall within ten (10) Business Days of any written request by SAC, pay or
reimburse SAC for the Expenses set forth in such written request, and SAC shall withhold any Expenses not previously reimbursed from its Purchase Price at the Closing. 
  
 (h) Pledge of Securities. The Company acknowledges and agrees that the Securities may be pledged by an Investor (as
defined in the Registration Rights Agreement) in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment
of the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(f) hereof in order to effect a sale, transfer or assignment of Securities to such
pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor. 
  
 (i) Disclosure of Transactions and Other Material Information. On
November 12, 2004, the Company filed a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching the material Transaction Documents (including,
without limitation, the 
  

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 Original Agreement, all documents relating to the Bridge Facility, the form of the Notes, the form of each of the
Warrants and the Registration Rights Agreement dated as of November 9, 2004) as exhibits to such filing, which Form 8-K was in form and substance reasonably acceptable to the Majority Buyers (including all attachments, the “Initial 8-K
Filing”). On or before 5:30 p.m., New York time, on the second Business Day following the date hereof and the date of any material amendment to the terms set forth in this Agreement, the Company shall file a Current Report on Form 8-K
describing the terms of such amendment or modification in the form required by the 1934 Act and attaching any material transaction documents, as entered into, prepared, modified or amended, as exhibits to such filing (including all attachments, an
“Amending 8-K Filing”). On or before 5:30 p.m., New York time, on the second Business Day following the Closing Date, the Company shall file a Current Report on Form 8-K describing the Closing and disclosing any previously
undisclosed Disclosed Information in the form required by the 1934 Act and attaching any material transaction documents not previously filed as exhibits to such filing (including all attachments, the “Final 8-K Filing”, and
collectively with the Initial 8-K Filing and all Amending 8-K Filings, the “8-K Filings”). From and after the filing of the Final 8-K Filing with the SEC, no Buyer shall be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of its respective officers, directors, employees or agents, that is not disclosed in the 8-K Filings. The Company shall not, and shall cause each of its Subsidiaries and its and each of their
respective officers, directors, employees and agents, not to, provide any Buyer with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of the Initial 8-K Filing with the SEC without the
express written consent of such Buyer. Subject to the foregoing, neither the Company nor any Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filings and contemporaneously therewith
and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release and provided
that in any case the Company shall not disclose the identity of any Buyer without such Buyer’s express written consent unless required by applicable law and regulations). 
  
 (j) Additional Notes; Variable Securities; Dilutive Issuances. So long as any Buyer beneficially owns any Securities,
the Company will not issue any Notes other than to the Buyers as contemplated hereby and the Company shall not issue any other securities that would cause a breach or default under the Notes. For so long as any Notes or Warrants remain outstanding,
the Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or purchase Class A Common Stock or directly or indirectly convertible into or exchangeable or exercisable for Class A Common Stock at a price which
varies or may vary with the market price of the Class A Common Stock, including by way of one or more reset(s) to any fixed price, unless the conversion, exchange or exercise price of any such security cannot be less than the then applicable
Conversion Price (as defined in the Notes) with respect to the Class A Common Stock into which any Note is convertible and the then applicable Exercise Price (as defined in the Warrants) with respect to the Class A Common Stock into which any
Warrant is exercisable. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into or affect any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the
Company to be required to issue upon conversion of any 
  

 - 21 - 

 Note or exercise of any Warrant any shares of Class A Common Stock in excess of that number of shares of Class A Common
Stock which the Company may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company’s obligations under the rules or regulations of the Principal Market. 
  
 (k) Corporate Existence. So long as any Buyer beneficially owns any
Securities, the Company shall not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants.

  
 (l) Reservation of Shares. The Company shall take all
action necessary to at all times have authorized, and reserved for the purpose of issuance, after the Closing Date, 130% of the aggregate number of shares of Class A Common Stock issuable upon conversion of all of the Notes and issuable upon
exercise of the Warrants. 
  
 (m) Conduct of Business.

  
 (i) Unless the Company shall otherwise agree in writing with
the Majority Buyers (such agreement not to be unreasonably withheld) and except as expressly contemplated by the Transaction Documents, during the period from the Original Date to the Closing Date, (i) the Company shall conduct, and it shall cause
its Subsidiaries to conduct, its or their businesses in the ordinary course and consistent with past practice, and the Company shall, and it shall cause its Subsidiaries to, use its or their reasonable best efforts to preserve intact its business
organization, to keep available the services of its officers and employees and to maintain satisfactory relationships with all Persons with whom it does business and (ii) without limiting the generality of the foregoing, neither the Company nor any
of its Subsidiaries will: 
  
 (1) amend or
propose to amend its Certificate of Incorporation or Bylaws (or comparable governing instruments) in any material respect; 
  
 (2) authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any shares of,
or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, the capital stock or other securities of the Company or any of its Subsidiaries including, but not limited to, any securities convertible
into or exchangeable for shares of stock of any class of capital stock of the Company or any of its Subsidiaries, except for the issuance of shares pursuant to the exercise of either incentive or non-qualified stock options, including management
stock options, outstanding on the Original Date in accordance with their present terms; 
  
 (3) hire any executive officer of the Company; 
  

(4) split, combine or reclassify any shares of its capital stock or declare, pay or set aside any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than dividends or distributions to the Company or a Subsidiary, or directly or indirectly redeem, purchase or otherwise acquire or offer to
acquire any shares of its capital stock or other securities; 
  

 - 22 - 

 (5) (a) create, incur or assume any debt, except refinancings of existing obligations on
terms that are no less favorable to the Company or its Subsidiaries than the existing terms; (b) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for the obligations of
any Person; (c) make any capital expenditures or make any loans, advances or capital contributions to, or investments in, any other Person (other than to a Subsidiary); (d) acquire the stock or assets of, or merge or consolidate with, any other
Person; (e) voluntarily incur any material liability or obligation (absolute, accrued, contingent or otherwise), other than in the ordinary course of business consistent with past practice; or (f) other than in the ordinary course of business
consistent with past practice, sell, transfer, mortgage, pledge or otherwise dispose of, or encumber, or agree to sell, transfer, mortgage, pledge or otherwise dispose of or encumber, any assets or properties, real, personal or mixed material to the
Company and its Subsidiaries taken as a whole other than to secure debt permitted under (a) of this clause (v); 
  
 (6) increase in any manner the compensation of any of its officers or employees or enter into, establish, amend or terminate any
employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity, pension, retirement, vacation, severance, deferred
compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any stockholder, officer, director, other employee, agent, consultant or affiliate other than as required pursuant to the
terms of agreements in effect on the Original Date and such as are in the ordinary course of business consistent with past practice; 
  
 (7) enter into or commit to enter into any material transaction, material monetary commitment or capital expenditure or enter into,
amend, modify or terminate any material agreement (including real estate leases that are material in the aggregate); 
  
 (8) acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the securities of,
or by any other manner, any Person, or otherwise acquire or agree to acquire all or substantially all of the assets of any other Person (other than the purchase of assets from suppliers or vendors in the ordinary course of the business of the
Company); 
  
 (9) settle or compromise any
litigation, proceeding, action or claim that could reasonably be expected to result in payments (to the extent not covered by insurance) that exceed $250,000 in the aggregate; 
  
 (10) fail to use its commercially reasonable efforts to comply in all material respects with any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to it or any of its properties, assets or business and maintain in full force and effect all the Company permits necessary for, or otherwise material to,
such business; and 
  
 (11) agree or commit to
do any of the foregoing. 
  

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 (ii) Notwithstanding the forgoing, to the extent that any of the foregoing shall constitute material,
nonpublic information, before seeking any Buyer’s consent hereunder, the Company shall first confirm with such Buyer that it desires to receive such information (without disclosing the nature of any information that may constitute material,
nonpublic information) and if such Buyer agrees to receive such information, then such information shall constitute Disclosed Information for all purposes hereof. 
  
 (n) Additional Issuances of Securities. 
  
 (i) For purposes of this Section 4(n), the following definitions shall apply. 
  
 (1) “Convertible Securities” means any
stock or securities (other than Options) convertible into or exercisable or exchangeable for shares of Class A Common Stock. 
  
 (2) “Options” means any rights, warrants or options to subscribe for or purchase shares of Class A Common Stock or
Convertible Securities. 
  
 (3) “Class A
Common Stock Equivalents” means, collectively, Options and Convertible Securities. 
  
 (ii) From the Original Date until the date that is 30 Trading Days (as defined in the Notes) following the Effective Date (as defined in the Registration Rights Agreement) (the “Trigger Date”), the
Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or its Subsidiaries’ equity or equity
equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for shares of Class A
Common Stock or Class A Common Stock Equivalents (any such offer, sale, grant, disposition or announcement being referred to as a “Subsequent Placement”). 
  
 (iii) Subject to the satisfaction of June 2004 Participation Rights, from the Trigger Date until the thirty-six (36) month
anniversary of the later of the Original Date (to the extent there is no Closing hereunder) and the Closing Date, the Company will not, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this
Section 4(n)(iii). 
  
 (1) The Company shall
deliver to each Buyer a written notice (the ”Offer Notice”) of any proposed or intended issuance or sale or exchange (the ”Offer”) of the securities being offered (the “Offered Securities”) in a
Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be
issued, sold or exchanged, (y) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers the Offered Securities
allocated among such Buyers (a) based on such Buyer’s pro rata portion of the aggregate principal amount of Notes purchased 
  

 - 24 - 

 hereunder (the “Basic Amount”), and (b) with respect to each Buyer that elects to
purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic
Amounts (the “Undersubscription Amount”). 
  
 (2) To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the tenth (10th) Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of such Buyer’s Basic
Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”). If
the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts
subscribed for (the “Available Undersubscription Amount”), each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount
of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent its deems reasonably necessary. 
  
 (3) The Company shall have five (5) Business Days from the
expiration of the Offer Period above to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the Buyers (the “Refused Securities”), but only to the
offerees described in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to
the Company than those set forth in the Offer Notice. 
  
 (4) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4(n)(iii)(3) above), then each Buyer may, at its sole option and in its sole
discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section
4(n)(iii)(2) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers
pursuant to Section 4(n)(iii)(3) above prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the number or amount of Offered Securities
specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance with Section
4(n)(iii)(1) above. 
  

 - 25 - 

 (5) Upon the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Buyers shall acquire from the Company, and the Company shall issue to the Buyers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4(n)(iii)(3) above if the
Buyers have so elected, upon the terms and conditions specified in the Offer. The purchase by the Buyers of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Buyers of a purchase
agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Buyers and their respective counsel. 
  
 (6) Any Offered Securities not acquired by the Buyers or other Persons in accordance with Section 4(n)(iii)(3) above may not be issued,
sold or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement. 
  
 (iv) The restrictions contained in subsections (ii) and (iii) of this Section 4(n) shall not apply in connection with the issuance of any Excluded
Securities (as defined in the Notes). 
  
 (o) Proxy Statement;
Stockholder Approval. 
  
 (i) The Company has prepared and
filed with the SEC preliminary proxy materials with respect to a special meeting of the stockholders of the Company (the “Stockholder Meeting”), which the Company shall use its reasonable best efforts to hold by no later than
February 20, 2005, and which shall be held not later than March 20, 2005 (the “Stockholder Meeting Deadline”), for the purpose of approving proposals (the “Transaction Proposals”) providing for, among other things,
(A) the Company’s issuance of all of the Securities as described in the Transaction Documents in accordance with applicable law and the rules and regulations of the Principal Market and (B) the increase in the authorized Class A Common Stock
from 60,000,000 shares to 150,000,000 shares (such affirmative approval being referred to herein as the “Stockholder Approval”). The Company shall use its best efforts to prepare and file with the SEC a definitive proxy statement,
substantially in the form that has been previously reviewed and reasonably approved by SAC and Schulte Roth & Zabel LLP, as promptly as practicable after the date hereof, but in no event later than 7 days after the date hereof, reflecting the
terms and conditions of this Agreement. The proxy (or information statement, if applicable) materials shall not contain any information concerning any Buyer without such Buyer’s consent. The proxy (or information statement, if applicable)
materials at the time they were and are filed with the SEC, or as of the date of the last amendment thereof, if amended after filing, shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
  

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 (ii) The Company shall provide each stockholder entitled to vote at the Stockholder Meeting a proxy
statement and the Company shall use its best efforts to solicit the stockholders’ approval of the Transaction Proposals (which best efforts shall include, without limitation, the requirement to hire a reputable proxy solicitor) and to cause the
Board of Directors of the Company to recommend to the stockholders that they approve the Transaction Resolutions. The Company shall be obligated to obtain the Stockholder Approval by the Stockholder Meeting Deadline. 
  
 (iii) If the Company calls a special (or annual) meeting of stockholders
pursuant to this Section 4, neither prior to nor at such meeting shall the Company put forth any matter, other than approving the Transaction Proposals, to the holders of Class A Common Stock or any other voting securities of the Company for their
approval without the prior written consent (such consent not to be unreasonably withheld) of the Majority Buyers, except that the Company may include in any meeting a proposal regarding the election of directors and a proposal regarding the adoption
of an employee stock incentive plan in a form reasonably acceptable to the Majority Buyers. 
  
 (iv) Notwithstanding anything in this Section 4(o) to the contrary, the Company may satisfy its obligations in this Section 4(o) by obtaining the Stockholder Approval of the Transaction Proposals by written consent in
accordance with applicable law and the Company’s governing documents and the filing of an information statement with the SEC, with such consent and information statement substantially in the form that has been previously reviewed by SAC and
Schulte Roth & Zabel LLP. 
  
 (p) General Solicitation.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii)
any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. 
  
 (q) Integration. None of the Company or any of its Subsidiaries will offer, sell or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the 1933 Act) in a manner that would cause the offer and sale of the Securities to fail to be entitled to the exemption from registration afforded by Rule 506 of Regulation D and Section 4(2) of the 1933 Act. 
  
 (r) Notification of Certain Matters. The Company shall give prompt
notice to each Buyer if any of the following occur after the Original Date: (i) receipt of any notice or other communication in writing from any third party alleging that the consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement, provided that such consent would have been required to have been disclosed in this Agreement; (ii) receipt of any material notice or other communication from any Person (including, but not limited to, the
SEC, NASD or any securities exchange) in connection with the transactions contemplated by this Agreement; (iii) the occurrence of an event which would be reasonably likely to have a Material Adverse Effect; or (iv) the commencement or threat of any
litigation 
  

 - 27 - 

 involving or affecting the Company or any of its Subsidiaries, or any of their respective properties or assets, or, to
its knowledge, any employee, agent, director or officer, in his or her capacity as such, of the Company or any of its Subsidiaries which, if pending on the Original Date, would have been required to have been disclosed in this Agreement or which
relates to the consummation of the transactions contemplated by the Transaction Documents; provided, however, that to the extent that any of the foregoing shall constitute material, nonpublic information, the Company shall first
confirm with such Buyer that it desires to receive such information (without disclosing the nature of any information that may constitute material, nonpublic information) and if the Buyer agrees to receive such information, then such information
shall constitute Disclosed Information for all purposes hereof. 
  
 (s) Access and Information. Between the Original Date and the Closing Date, the Company will give, and shall direct its accountants and legal counsel to give, each Buyer and their respective authorized representatives (including,
without limitation, its financial advisors, accountants, consultants and legal counsel), at all reasonable times, access as reasonably requested to all offices and other facilities and to all contracts, agreements, commitments, books and records of
or pertaining to the Company and its Subsidiaries, will permit the foregoing to make such reasonable inspections as they may require and will cause its officers and other employees promptly to furnish such Buyer with (a) such financial and operating
data and other information with respect to the business and properties of the Company and its Subsidiaries as such Buyer may from time to time reasonably request, and (b) a copy of each material report, schedule and other document filed or received
by the Company or any of its Subsidiaries pursuant to the requirements of applicable securities laws or the NASD; provided, however, that to the extent that any of the foregoing shall constitute material, nonpublic information, the
Company shall first confirm with such Buyer that it desires to receive such access or information (without disclosing the nature of any information that may constitute material, nonpublic information) and if the Buyer agrees to receive such
information, then such information shall constitute Disclosed Information for all purposes hereof. 
  
 (t) Consultants. 
  
 (i) The Company shall use its reasonable best efforts to enter into consulting agreements, on terms satisfactory to the Majority Buyers and the Company
Board of Directors, with Michael Gold and Tom Brosig within five (5) Business Days after the Original Date. 
  
 (ii) The Company shall engage a reputable real estate and lease appraisal consultant reasonably acceptable to the Majority Buyers and the Company Board
of Directors, on terms and satisfactory to the Majority Buyers, to perform an evaluation of the store lease obligations of the Company and its Subsidiaries and to make recommendations regarding terminations and modifications to such leases. The
Company shall cause such consultant to complete such review and make such recommendations to the Company within 60 days after the Original Date. The Company shall permit the Buyers access to such consultant and any work product and recommendations
of such consultant; provided, however, that to the extent that any of the foregoing shall constitute material, nonpublic information, the Company shall first confirm with such Buyer that it desires to receive such information (without
disclosing the nature of any information that may constitute material, nonpublic information) and if the Buyer agrees to receive such information, then such information shall be promptly delivered to such Buyer and shall constitute Disclosed
Information for all purposes hereof. 
  

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 (u) Sales by Officers and Directors. Until the later of (i) the Trigger Date and (ii) 180 Trading
Days after the Closing Date, the Company shall not, directly or indirectly, permit any officer or director of the Company or any of its Subsidiaries to sell any Class A Common Stock pursuant to a contract, instruction or plan in accordance with Rule
10b5-1 of the 1934 Act. 
  
 (v) Regulation M. The Company
will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution of the Securities contemplated hereby. 
  
 (w) Qualification Under Trust Indenture Act. Prior to any registration of the Notes or the Conversion Shares pursuant to the Registration Rights
Agreement, or at such earlier time as may be so required, the Company shall qualify the Indenture under the Trust Indenture Act of 1939, as amended, and enter into any necessary supplemental indentures in connection therewith. 
  
 (x) Obligations of the 2004 Participants. Each June 2004 Participant
who elected to exercise its June 2004 Participation Right shall be required to participate in the Bridge Facility on the same terms and in a proportionate amount as the Original Buyers (excluding WLSS Capital Partners, LLC). 
  
 (y) Exclusivity. (i) The Company agrees that, during the period from
the Original Date until the Closing Date, it shall not, and shall cause its directors, officers, agents, representatives, affiliates, stockholders and any other person acting on its behalf (collectively, the “Representatives”) not
to, directly or indirectly, (1) solicit offers, inquiries or proposals for, or entertain any offer, inquiry or proposal to enter into: (A) a merger, consolidation or other business combination involving the Company, (B) an acquisition of 5% or more
of the then-outstanding equity securities of the Company, (C) an acquisition of equity securities, or of debt securities or other securities convertible into or exchangeable for equity securities of the Company, which would, after giving effect to
such conversion or exchange, constitute more than 5% of the outstanding equity securities of the Company, (D) the issuance of debt securities with no equity component or related equity component of, or other borrowing by, the Company in a principal
amount in excess of $10 million, (E) a sale, transfer, conveyance, lease or disposal of all or any significant portion of the assets of the Company in one transaction or a series of related transactions (other than sales of inventory in the ordinary
course of business), (F) a liquidation or dissolution of the Company or the adoption of a plan of liquidation or dissolution by the Company, (G) the occurrence of individuals who at the beginning of such period constituted the Board of Directors or
other governing body of the Company (together with any new directors whose election to such Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of 66 2/3% of the directors then still in office who were either directors at the beginning of such period or whose election
or nomination for election was 
  

 - 29 - 

 previously so approved), ceasing for any reason to constitute a majority of such Board of Directors then in office or (H)
any other transaction in lieu of, or which would impede or prevent, the transactions contemplated by the Transaction Documents (any of the foregoing, a “Competing Transaction”), or (2) conduct any discussions or negotiations, or
provide any information to (or any review information of) any other party, or enter into any agreement, arrangement or understanding, regarding, or in connection with, a Competing Transaction; provided, however, that nothing herein
shall prevent the Company from taking a position contemplated by Rules 14d-9 and 14e-2 promulgated under the 1934 Act with regard to any unsolicited tender offer. 
  
 (ii) The Company will promptly notify each Buyer if the Company (or any of its Representatives) receives any such offer,
inquiry or proposal and the details thereof, and keep each Buyer informed with respect to each such offer, inquiry or proposal. The Company will provide each Buyer with copies of all such offers, inquiries or proposals which are in writing.

  
 (iii) The Company acknowledges that each Buyer will be
entitled to obtain a court order in any court of competent jurisdiction against acts of non-compliance with this Section 4(y), without the posting of bond or other security, in addition to, and not in lieu of, other remedies it may have. 

 
 5. REGISTER; TRANSFER AGENT INSTRUCTIONS. 
  
 (a) Register. The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Warrants, in which the Company shall record the name and address of the Person in whose name the Warrants have
been issued (including the name and address of each transferee) and Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and available at all times during business hours for inspection
of any Buyer or its legal representatives. 
  
 (b) Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company
(“DTC”), registered in the name of each Buyer or its respective nominee(s) or transferee, for the Securities issued at the Closing or upon exercise of the Warrants or transfer of the Warrants in such amounts as specified from time
to time by each Buyer to the Company upon exercise or transfer of the Warrants in the form of Exhibit D attached hereto (the “Irrevocable Transfer Agent Instructions”). The Company warrants that no instruction other than the
Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent, and that the Securities shall otherwise be freely
transferable on the books and records of the Company as and to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(f), the
Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect
such sale, transfer or assignment. In the 
  

 - 30 - 

 event that such sale, assignment or transfer involves Securities sold, assigned or transferred pursuant to an effective
registration statement or pursuant to Rule 144, the transfer agent shall issue such Securities to the Buyer, assignee or transferee, as the case may be, without any restrictive legend. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the
necessity of showing economic loss and without any bond or other security being required. 
  
 6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. 
  
 (a) Closing Date. The obligation of the Company hereunder to issue and sell the Notes and the Additional Warrants to each Buyer at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof: 
  
 (i) Such Buyer
shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company. 
  
 (ii) Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of SAC, the amounts withheld pursuant to
Section 4(g)) for the Notes and the Warrants being purchased by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company. 
  
 (iii) The representations and warranties of such Buyer shall be true and
correct in all material respects as of the Original Date, as of the date hereof and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and such Buyer shall have performed,
satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date. 
  
 (iv) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request. 
  
 7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE. 
  
 (a) Closing Date. The obligation of each Buyer hereunder to purchase the Notes and Additional Warrants at the Closing
is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by providing
the Company with prior written notice thereof: 
  
 (i) The
Company and, to the extent it is a party thereto, each of its Subsidiaries, shall have executed and delivered to such Buyer (i) each of the Transaction Documents (including the Issuance Documents, if any), (ii) the Notes (in such principal amounts
as such Buyer shall request) being purchased by such Buyer at the Closing pursuant to this Agreement and (iii) the Warrants (in such amounts as such Buyer shall request) being purchased by such Buyer at the Closing pursuant to this Agreement.

  

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 (ii) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent
Instructions, in the form of Exhibit D attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent. 
  
 (iii) Each Buyer shall have received the opinion of Willkie Farr & Gallagher LLP and Akin Gump Strauss Hauer & Feld
LLP, the Company’s outside counsel, dated as of the Closing Date, substantially covering the matters set forth in Exhibit E attached hereto. 
  
 (iv) The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries
in such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction, as of a date within 10 days of the Closing Date. 
  
 (v) The Company shall have delivered to such Buyer a certificate evidencing the Company’s and each Subsidiary’s
qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company and each Subsidiary conducts business, as of a date within 10 days of the Closing Date.

  
 (vi) The Company shall have delivered to such Buyer a
certified copy of the Certificate of Incorporation as certified by the Secretary of State of the State of Delaware within ten (10) days of the Closing Date, which shall reflect the increase in the authorized capital stock of the Company as provided
in the Transaction Proposals. 
  
 (vii) The Company shall have
delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s Board of Directors in a form reasonably
acceptable to such Buyer, (ii) the Certificate of Incorporation, as amended and (iii) the Bylaws, each as in effect at the Closing, in the form attached hereto as Exhibit F. 
  
 (viii) The representations and warranties of the Company shall be true and correct in all material respects (other than
representations and warranties that are already qualified by materiality which shall be true and correct in all respects) as of the Original Date, as of the date hereof and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, 
  

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 executed by a duly authorized executive officer of the Company, dated as of the Closing Date, to the foregoing effect,
certifying as to the fulfillment of the conditions specified in Section 7 of this Agreement and as to such other matters as may be reasonably requested by such Buyer in the form attached hereto as Exhibit G. 
  
 (ix) No event, circumstances or fact shall have occurred which has resulted
in, would result in or could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect; provided, however, that for purposes of this condition, Material Adverse Effect does not include any event,
circumstance or fact that does not or would not reasonably be expected to result in an Event of Default (as defined in either (A) the Amended and Restated Credit Agreement, dated as of September 22, 2004, by and among the Senior Lenders, the Company
and certain of its Subsidiaries, as amended as of the Original Date and without regard to any future waiver or amendment thereof (other than such waiver or amendment wherein the Senior Lenders agree to extend, in the aggregate, no more than $3
million in additional loans to the Company or increase the borrowing availability that would otherwise be available as of the Original Date and as of the date hereof to the Company), the “Senior Credit Agreement” or (B) the Bridge
Facility (other than such Events of Default, which are cured or waived by a waiver or amendment to the Senior Credit Agreement wherein the Senior Lenders agree to extend, in the aggregate, no more than $3 million in additional loans to the Company
or increase the borrowing availability that would otherwise be available as of the Original Date and as of the date hereof to the Company)). 
  
 (x) Stockholder Approval shall have been obtained and each Buyer shall have been provided with evidence reasonably satisfactory thereof. 
  
 (xi) The size of the Board of Directors of the Company shall have been
reduced from 11 to no more than 9 members and the Majority Buyers shall be satisfied as of the Closing Date with the identity of (1) at least a number of directors equal to one less than the minimum number of directors that would constitute a
majority of the Board of Directors of the Company and (2) the Chairman of the Board of Directors of the Company. 
  
 (xii) Peter Whitford shall have resigned as Chief Executive Officer of the Company and shall have resigned as a member of the Board of Directors.

  
 (xiii) The Company shall have delivered to such Buyer a
letter from the Company’s transfer agent certifying the number of shares of Class A Common Stock outstanding as of a date within five days of the Closing Date. 
  
 (xiv) The Class A Common Stock (i) shall be designated for quotation or listed on the Principal Market and (ii) shall not
have been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the
SEC or the Principal Market or (B) by falling below the minimum listing maintenance requirements of the Principal Market. 
  
 (xv) The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary to be obtained for the sale of
the Securities. 
  

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 (xvi) The Notes and the Warrants shall be listed for trading on a securities market or exchange.

  
 (xvii) The actions contemplated by Section 4(a)(ii) shall
have been completed to the Majority Buyer’s reasonable satisfaction. 
  
 (xviii) Any Person purchasing Securities hereunder pursuant to the exercise of the June 2004 Participation Right shall have funded its Purchase Price in full. 
  
 (xix) The Company shall have delivered to each Buyer a schedule setting
forth the details of any insurance coverage with respect to the matters set forth on Schedule 3(t), and such details shall not be materially different than as disclosed to the Majority Buyers prior to the Original Date. 
  
 (xx) The Company shall have delivered to such Buyer such other documents
relating to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request. 
  
 8. TERMINATION. 
  
 This Agreement may be terminated at any time prior to the Closing: 
  
 (a) by mutual written agreement of the Company and the Majority Buyers; 
  
 (b) by the Majority Buyers, if the Company executes an agreement, letter of
intent, memorandum of understanding or otherwise accepts a proposal or offer from any Person (other than the Majority Buyers) regarding any Competing Transaction; 
  
 (c) by either the Company or the Majority Buyers if any Person shall have issued an order, decree, or ruling that
permanently restrains, enjoins, or otherwise prohibits consummation of the transactions contemplated hereby; 
  
 (d) by the Company, (A) upon a material breach of any covenant or agreement on the part of the Majority Buyers set forth in this Agreement or if any
representation or warranty of the Majority Buyers set forth in this Agreement shall not be true and correct, except to the extent that such breach of a covenant or agreement or untrue or incorrect representation or warranty does not constitute a
material adverse effect on the Majority Buyers, in either case such that the conditions set forth in Section 7 would not be satisfied or the representations and warranties of the Majority Buyers shall not have been true and correct in all material
respects on the Original Date and the date hereof (a “Terminating Buyer Breach”); provided, that such Terminating Buyer Breach shall not have been waived by the Company or, to the extent curable, cured within the earlier of 30 days
after written notice of such Terminating Buyer Breach is given to such breaching Buyers by the Company or the Drop Dead Date (as defined below); or (B) if any condition to the Company’s obligations to close at the Closing set forth in Section 6
is or becomes impossible to fulfill (other than because of the failure of the Company to comply with its obligations under this Agreement or any Transaction Document), and the Company has not waived such condition; 
  

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 (e) by the Majority Buyers, (A) upon a material breach of any covenant or agreement on the part of the
Company set forth in this Agreement or if any representation or warranty of the Company set forth in this Agreement shall not be true and correct, except to the extent that such breach of a covenant or agreement or untrue or incorrect representation
or warranty does not constitute a Material Adverse Effect (provided, however, that for purposes of the foregoing, Material Adverse Effect does not include any event, circumstance or fact that does not or would not reasonably be
expected to result in an Event of Default (as defined in either (A) the Senior Credit Agreement or (B) the Bridge Facility (other than such Events of Default, which are cured or waived by a waiver or amendment to the Senior Credit Agreement wherein
the Senior Lenders agree to extend, in the aggregate, no more than $3 million in additional loans to the Company or increase the borrowing availability that would otherwise be available as of the Original Date and as of the date hereof to the
Company)), in either case such that the conditions set forth in Section 7 would not be satisfied or the representations and warranties of the Company shall not have been true and correct in all material respects on the Original Date and as of the
date hereof (a “Terminating Company Breach”); provided, that such Terminating Company Breach shall not have been waived by the Majority Buyers or, to the extent curable, cured within the earlier of 30 days after written notice of
such Terminating Company Breach is given to the Company by the Majority Buyers or the Drop Dead Date; or (B) if any condition to the Majority Buyers’ obligations to close at the Closing set forth in Section 7 is or becomes impossible to fulfill
(other than because of the failure of any such Buyer to comply with its obligations under this Agreement or any Transaction Document), and the Majority Buyers have not waived such condition; 
  
 (f) by the Majority Buyers, upon any Voluntary Bankruptcy or Involuntary
Bankruptcy of the Company or its Subsidiaries or any action in furtherance of any Voluntary Bankruptcy or Involuntary Bankruptcy. For the purpose of this Agreement: 
  
 (i) “Voluntary Bankruptcy” shall mean, with respect to any Person, (a) an admission in
writing by such Person of its inability to pay its debts generally or a general assignment by such Person for the benefit of creditors, (b) the filing of any petition or answer by such Person seeking to adjudicate it bankrupt or insolvent or seeking
for itself any liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of such Person or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking,
consenting to or acquiescing in the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property, or (c) corporate action taken by such Person
to authorize any of the actions set forth above; and 
  
 (ii) “Involuntary Bankruptcy” shall mean, with respect to any Person, without the consent or acquiescence of such Person, the entering of an order for relief or approving a petition for relief or reorganization or any other
petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or other similar relief under any present or future bankruptcy, insolvency or similar statute, law or regulation or the filing of any such petition
against such Person which order or petition shall not be dismissed within 30 days or, without the consent or acquiescence of such Person, the entering of an order appointing a trustee, custodian, receiver or liquidator of such Person or of all or
any substantial part of the property of such Person which order shall not be dismissed within 30 days; and 
  

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 (g) by either the Company or the Majority Buyers, if the Closing Date has not occurred by March 31, 2005
(the “Drop Dead Date”). 
  
 9. Effect of
Termination. If this Agreement is terminated by any party pursuant to Section 8 and the transactions contemplated hereby are not consummated, this Agreement shall become null and void and of no further force and effect and there shall be no
liability on the part of any party hereto (or any shareholder, director, officer, partner, employee, agent, consultant or representative of such party), except as set forth in this Section 9; provided, however, this if this Agreement
is terminated pursuant to Section 8, the Company shall remain obligated to reimburse SAC for the expenses described in Section 4(g)(ii) above; and provided, further, that any termination of this Agreement shall not relieve any party
hereto from any liability for any breach of any provisions of this Agreement. This Section 9 shall survive termination of this Agreement in accordance with its terms. If this Agreement is terminated by the Company pursuant to a Terminating Buyer
Breach, then the Series A Warrants for all Buyers shall be cancelled by the Company and shall be null and void. 
  
 10. MISCELLANEOUS. 
  
 (a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
  
 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile signature. 
  

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 (c) Headings. The headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement. 
  
 (d)
Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. 
  
 (e) Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyers, the Company, their
affiliates and Persons acting on their behalf with respect to the matters discussed herein, including the Original Agreement, the Exclusivity Agreement, by and between S.A.C. Capital Management, LLC and the Company, dated as November 3, 2004, and
including the Confidentiality Agreement, by and between S.A.C. Capital Management, LLC and the Company, dated as of October 1, 2004, as amended on October 4, 2004, (other than the standstill provisions contained therein which shall only be
superseded as of the Closing Date), and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the
Majority Buyers, and any amendment to this Agreement made in conformity with the provisions of this Section 10(e) shall be binding on all Buyers and holders of Securities, as applicable. No provision hereof may be waived other than by an instrument
in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the applicable Securities then outstanding. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, holders of Notes or holders of
the Warrants, as the case may be. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the
Transaction Documents. 
  
 (f) Notices. Any notices,
consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the
party to receive the same. With respect to any action taken by the Majority Buyers, the Company shall give three business days prior written notice of such action to any Buyers not participating in such action. The addresses and facsimile numbers
for such communications shall be: 
  
 If to the Company:

  
 The Wet Seal, Inc. 
 26972 Burbank 
 Foothill Ranch, California 92610 
 Telephone:        (800) 735-7325

 Facsimile:          (949) 699-4825 
 Attention:          Chief Financial Officer 
  

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 With a copy (for informational purposes only) to: 
  
 Willkie Farr & Gallagher LLP 
 787 Seventh Avenue 
 New York, New York 10019 
 Telephone:        (212) 728-8288 
 Facsimile:          (212) 728-8111 
 Attention:          Christopher E. Manno, Esq. 
  
 and 
  
 Akin Gump Strauss Hauer & Feld LLP 
 590 Madison Avenue 
 New York, New York 10022 
 Telephone:        (212) 872-1000 
 Facsimile:          (212) 872-1002 
 Attention:          Alan Siegel, Esq. 
  
 If to the Transfer Agent: 
  
 American Stock Transfer and Trust Company 
 40 Wall Street 
 New York, New York 
 Telephone:        (718) 921-8208 
 Facsimile:          (718) 921-8335 
 Attention:          Geraldine Zarbo 
  
 If to a Buyer, to its address and facsimile number set forth on the Schedule
of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, 
  
 With a copy (for informational purposes only) to: 
  
 Schulte Roth & Zabel LLP 
 919 Third Avenue 
 New York, New York 10022 
 Telephone:        (212) 756-2000 
 Facsimile:          (212) 593-5955 
 Attention:          Eleazer N. Klein, Esq. 
  

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 or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. 
  
 (g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Majority Buyers, including by way of a Fundamental Transaction (unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants). A Buyer may assign some or all of its rights hereunder without the consent of the Company in connection with a transfer by such Buyer of any of the
Securities in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights. In addition to the foregoing, the Company acknowledges that any of the Buyers may assign and transfer some of the rights and
obligations in connection with the purchase of the Securities prior to Closing to other Buyers, which Buyers shall become party hereto by execution of a signature to this Agreement and by updating of the Schedule of Buyers hereto in which case such
assignee shall be deemed a Buyer for all purposes hereunder as if such assignee executed this Agreement on the date hereof. In the event that any Original Buyer fails to provide its Purchase Price at the Closing, SAC shall have the right to purchase
such Original Buyer’s Securities hereunder. 
  
 (h) No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

  
 (i) Purchase Price Failure; June 2004 Participants. In
the event that any June 2004 Participant fails to provide its Purchase Price at the Closing (a “Breaching June 2004 Participant”), SAC may, at its option, purchase all or part of the Securities of such Breaching June 2004
Participant. For purposes of clarity, SAC shall not be required to purchase the Securities of any of the June 2004 Participants hereunder. In the event that any Original Buyer fails to provide its Purchase Price at the Closing (a “Breaching
Original Buyer”), SAC shall be required to purchase such Original Buyer’s Securities hereunder and SAC shall be entitled to pursue damages, to the same extent as the Company (and SAC shall be deemed a third party beneficiary of the
Company’s rights in respect thereof), caused by such Breaching Original Buyer. In addition to the foregoing, any Breaching Original Buyer shall be required to assign its participation for the Bridge Facility to SAC and any Breaching June 2004
Participant shall be required to sell its participation for the Bridge Facility to SAC at a price equal to the initial amount paid by such Breaching June 2004 Participant for acquiring such participation. 
  
 (j) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and 10 shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder. 
  

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 (k) Further Assurances. Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement
and the consummation of the transactions contemplated hereby. 
  
 (l) Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder of the Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or (c) any cause of action,
suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement
of the Transaction Documents, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities or (iii) the status of such Buyer or holder of the Securities as an
investor in the Company pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 10(l) shall
be the same as those set forth in Section 6 of the Registration Rights Agreement. 
  
 (m) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied
against any party. 
  
 (n) Remedies. Each Buyer and each
holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in
the event 
  

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 that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy
at law may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without
posting a bond or other security. 
  
 (o) Payment Set
Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments
or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 (p) Independent Nature of Buyers’ Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Buyer confirms that it has independently participated
in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer, other than SAC, acknowledges that (i) Schulte Roth & Zabel LLP solely represented SAC in connection with the transaction
contemplated hereby and (ii) SAC did not provide any advice in connection herewith and such Buyer’s determination to participate herein was based solely on its own evaluation of the risks and merits of the investment contemplated hereby. Each
Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose. 
  
 [Signature Page Follows] 
  

 - 41 - 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	COMPANY:
	
	THE WET SEAL, INC.
		
	 By:
	 	 /s/    JOSEPH DECKOP

	 Name:
	 	 Joseph Deckop

	 Title:
	 	 Interim CEO

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	S.A.C. CAPITAL ASSOCIATES, LLC
		
	By:	 	S.A.C. Capital Advisors, LLC
		
	By:	 	 /s/    PETER NUSSBAUM

	Name:	 	Peter Nussbaum
	Title:	 	General Counsel

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 GMM CAPITAL, LLC

		
	 By:
	 	 /s/    ISAAC DUBAH

	 Name:
	 	Isaac Dubah
	 Title:
	 	 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 GOLDFARB CAPITAL PARTNERS LLC

		
	 By:
	 	 /s/    MORRIS GOLDFARB

	 Name:
	 	Morris Goldfarb
	 Title
	 	Member

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

	
	
	 /s/    CHARLES PHILLIPS

	Mr. Charles Phillips

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
		
	 	 	 /s/    ELI WACHTEL

	 	 	Mr. Eli Wachtel

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 WLSS CAPITAL PARTNERS, LLC

		
	 By:
	 	 /s/    WAYNE S. MILLER

	 Name:
	 	Wayne S. Miller
	 Title:
	 	Authorized signatory

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 SMITHFIELD FIDUCIARY, LLC

		
	 By:
	 	 /s/    ADAM J. CHILL

	 Name:
	 	Adam J. Chill
	 Title:
	 	Authorized signatory

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 D.B. ZWIRN SPECIAL
 OPPORTUNITIES FUND, L.P.

		
	By:	 	 D.B. ZWIRN PARTNERS LLC,
     its general partner

		
	By:	 	 /s/    PERRY A. GRUSS

	Name:	 	Perry A. Gruss
	 Title:
	 	Chief Financial Officer
	
	 D.B. ZWIRN SPECIAL
 OPPORTUNITIES FUND, LTD.

		
	By:	 	 D.B. ZWIRN & CO., L.P.,
     its trading Manager

		
	By:	 	 /s/    PERRY A. GRUSS

	Name:	 	Perry A. Gruss
	Title:	 	Chief Financial Officer

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Amended and Restated Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	 RIVERVIEW GROUP, LLC

		
	 By:
	 	 /s/  TERRY FEENEY

	 Name:
	 	Terry Feeney
	 Title:
	 	Chief Operating Officer

 SCHEDULE OF BUYERS 
  

													
	(1)	  	(2)	  	(3)	  	 	  	(4)	  	(5)	  	(6)
	 Buyer

	  	 Address and Fax Number

	  	Aggregate
Principal
Amount of
Initial Notes

	  	Number of
Series A
Warrant
Shares

	  	Aggregate
Number of
Additional
Warrant
Shares

	  	Purchase
Price

	  	 Legal Representative’s
 Address
 and Fax Number

	S.A.C. Capital Associates, LLC	  	 c/o S.A.C. Capital Advisors, LLC
 72 Cummings
Point Road
 Stamford, Connecticut 06902
 Attention: General
Counsel
 Fax: (203) 890-2393
 Residence: Anguila
	  	$27,500,000	  	1,129,464	  	6,187,500	  	$26,900,000	  	 Schulte Roth & Zabel LLP
 919 Third Avenue

New York, New York 10022
 Attention: Eleazer Klein, Esq.
 Fax: (212) 593-5955
 Telephone: (212) 756-2376

							
	GMM Capital, LLC	  	 111 West 40th
Street
 20th
Floor
 New York, NY 10018
	  	$7,000,000	  	287,500	  	1,575,000	  	$7,000,000	  	 Skadden, Arps, Slate, Meagher & Flom LLP
 Four Times
Square
 New York, NY 10036
 Attention: Thomas W. Greenberg,
Esq.
 Fax: (917) 777-7886
 Telephone: (212)
735-7886

							
	Goldfarb Capital Partners LLC	  	 21 Fairway Drive
 Mamaroneck, NY 10543
	  	$4,500,000	  	184,822	  	1,012,500	  	$4,500,000	  	 Fulbright and Jaworski
 666 Fifth Avenue
 New York, N.Y. 10103
 Attention. Neil Gold, Esq.
 Fax: (212) 318 3400
 Telephone: (212) 318 3022

							
	Mr. Charles Phillips	  	 777 Park Avenue
 New York, NY 10021
	  	$2,000,000	  	82,143	  	450,000	  	$2,000,000	  	N/A
							
	Mr. Eli Wachtel	  	 7 Shaw Road
 Scarsdale, NY 10583
	  	$900,000	  	36,964	  	202,500	  	$900,000	  	N/A
							
	WLSS Capital Partners, LLC	  	 c/o Wayne Miller
 1365 York Avenue
 Apt. 26B
 New York, NY 10021
	  	$100,000	  	4,107	  	22,500	  	$100,000	  	 Fulbright and Jaworski
 666 Fifth Avenue
 New York, N.Y. 10103
 Attention. Neil Gold, Esq.
 Fax: (212) 318 3400
 Telephone: (212) 318 3022

															
	Smithfield Fiduciary LLC	  	 c/o Highbridge Capital Management, LLC
 9 West 57th
Street
 27th Floor New York,
 NY 10019
 Attention: Ari J. Storch
     Adam J. Chill
 Fax: (212) 751-0755
 Telephone: (212) 287-4720
 Residence: Cayman Islands
	  	$5,921,123	  	243,189	  	1,332,253	  	$5,921,123	  	N/A
							
	D.B. Zwirn Special
Opportunities Fund, L.P	  	 c/o D.B. Zwirn & Co., L.P.
 745 Fifth
Avenue,
 18th Floor New York,
 New York 10151
 Phone: (646) 720-9100
 Fax: (646) 720-9000
 Attention: Daniel B. Zwirn
     Perry A. Gruss
 Residence: Cayman Islands
	  	$1,706,105	  	70,072	  	383,873	  	$1,706,105	  	N/A
							
	D.B. Zwirn Special
Opportunities Fund, Ltd.	  	 c/o D.B. Zwirn & Co., L.P.
 745 Fifth
Avenue,
 18th Floor New York,
 New York 10151
 Phone: (646) 720-9100
 Fax: (646) 720-9000
 Attention: Daniel B. Zwirn Perry
     A. Gruss
 Residence: Cayman Islands
	  	$1,706,105	  	70,072	  	383,874	  	$1,706,105	  	N/A
							
	Riverview Group, LLC	  	 666 Fifth Avenue, 8th floor
 New York, New York 10103
 Attention:
Daniel Cardella
 Fax: (212) 977-1667
 Telephone: (212)
841-4100
 Residence: Delaware
	  	$4,666,667	  	191,667	  	1,050,000	  	$4,666,667	  	N/A
							
	TOTAL	  	 	  	$	56,000,000	  	2,300,000	  	12,600,000	  	$	55,400,000	  	 
	 	  	 	  	
	
	  	
	  	
	  	
	
	  	 

 SCHEDULE OF WARRANTS 
  

													
	(1)	  	(2)	  	(3)	  	(4)	  	(5)	  	(6)	  	 
	 Buyer

	  	Number of
Series A
Warrant Shares

	  	Number of
Series B
Warrant Shares

	  	Number of
Series C
Warrant Shares

	  	Number of
Series D
Warrant Shares

	  	Aggregate
Number of
Additional
Warrant Shares

	  	Aggregate
Number of
Warrant Shares

							
	 S.A.C. Capital Associates, LLC
	  	1,129,464	  	1,669,643	  	2,209,821	  	2,308,036	  	6,187,500	  	7,316,964
							
	 GMM Capital, LLC
	  	287,500	  	425,000	  	562,500	  	587,500	  	1,575,000	  	1,862,500
							
	 Goldfarb Capital Partners LLC
	  	184,822	  	273,214	  	361,607	  	377,679	  	1,012,500	  	1,197,322
							
	 Mr. Charles Phillips
	  	82,143	  	121,429	  	160,714	  	167,857	  	450,000	  	532,143
							
	 Mr. Eli Wachtel
	  	36,964	  	54,643	  	72,321	  	75,536	  	202,500	  	239,464
							
	 WLSS Capital Partners, LLC
	  	4,107	  	6,071	  	8,036	  	8,393	  	22,500	  	26,607
							
	 Smithfield Fiduciary LLC
	  	243,189	  	359,497	  	475,805	  	496,951	  	1,332,253	  	1,575,442
							
	 D.B. Zwirn Special Opportunities Fund, L.P
	  	70,072	  	103,585	  	137,098	  	143,190	  	383,873	  	453,945
							
	 D.B. Zwirn Special Opportunities Fund, Ltd.
	  	70,072	  	103,585	  	137,098	  	143,191	  	383,874	  	453,946
							
	 Riverview Group, LLC
	  	191,667	  	283,333	  	375,000	  	391,667	  	1,050,000	  	1,241,667
							
	 TOTAL
	  	2,300,000	  	3,400,000	  	4,500,000	  	4,700,000	  	12,600,000	  	14,900,000
	 	  	
	  	
	  	
	  	
	  	
	  	

 EXHIBITS 
  

			
	Exhibit A	  	Form of Secured Convertible Note
	Exhibit B-1	  	Form of Series A Warrants
	Exhibit B-2	  	Form of Series B Warrants
	Exhibit B-3	  	Form of Series C Warrants
	Exhibit B-4	  	Form of Series D Warrants
	Exhibit C	  	Registration Rights Agreement
	Exhibit D	  	Irrevocable Transfer Agent Instructions
	Exhibit E	  	Form of Outside Company Counsel Opinion
	Exhibit F	  	Form of Secretary’s Certificate
	Exhibit G	  	Form of Officer’s Certificate

  

 - i -Amended and Restated Registration Rights Agreement

 EXHIBIT 10.2 
  
 AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT 
  
 THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is entered into as of
December 13, 2004, by and among The Wet Seal, Inc., a Delaware corporation (the “Company”) and the buyers listed on the Schedule of Buyers attached hereto as Exhibit A (each, a “Buyer” and, collectively, the
“Buyers”). 
  
 THE PARTIES TO THIS
AGREEMENT enter into this agreement on the basis of the following facts, intentions and understanding: 
  
 A. The Company and certain Buyers (the “Original Buyers”) entered into that certain Registration Rights Agreement (the “Original
Agreement”) dated as of November 9, 2004 (the “Original Date”). 
  
 B. The Company and each Original Buyer desires to amend and restate the terms of the Original Agreement to reflect the modifications to the terms of thereof. Now, therefore, the Original Agreement is amended and
restated in its entirety as follows. 
  
 C. The Company and the
Buyers have entered into that certain Amended and Restated Securities Purchase Agreement of even date herewith (the “Securities Purchase Agreement”), and, upon the terms and subject to the conditions of the Securities Purchase
Agreement, the Company has agreed to issue and sell to the Buyers an aggregate of (i) Fifty-Six Million Dollars ($56,000,000) of the Company’s Convertible Notes due seven years after the date of issuance (as the same may be amended, modified or
supplemented from time to time, the “Notes”), which shall be convertible into shares of Class A common stock, $0.10 par value per share (the “Common Stock”) of the Company (as converted, the “Initial
Conversion Shares”), and shall be issued pursuant to and by the provisions of an Indenture dated as of the Closing Date (as the same may be amended, modified or supplemented from time to time, the “Indenture”), by and among
the Company, as issuer, and The Bank of New York, as trustee (the “Trustee”) and (ii) multiple tranches of Warrants (such Warrants, as the same may be amended, modified or supplemented from time to time in accordance with the terms
thereof, the “Warrants”) to purchase up to fourteen million nine hundred thousand (14,900,000) shares of Common Stock (as exercised collectively, the “Warrant Shares”). 
  
 D. One of the tranches of Warrants are being issued at the time of execution
of this Agreement (the “Series A Warrants” and as exercised, the “Series A Warrant Shares”), concurrently with the cancellation of the Series A Warrants issued to the Original Buyers on November 9, 2004. 

 
 E. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights to the Buyers under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933
Act”), and applicable state securities laws. 

 NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows: 
  
 Section 1. Definitions. As used in this Agreement, the following terms shall have the following meanings: 

 
 “Business Day” means any day other than Saturday, Sunday
or any other day on which commercial banks in The City of New York are required by law to remain closed. 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Effective Date” means the date the Registration Statement is declared effective by the SEC. 
  
 “Investor” means a Person who is a holder or beneficial
owner of any Registrable Securities; provided, however, that so long as the Warrants are not issued pursuant to a Warrant Agreement, each Person who is a holder of Warrants or Warrants Shares shall only be an Investor if such Person is a Buyer or
agrees to become bound by the provisions of this Agreement in accordance with Section 9 of this Agreement; provided further, that, unless otherwise expressly stated herein, only Registrable Securities held by Investors shall be counted for purposes
of calculating any proportion of holders entitled to take any action or give notice pursuant to this Agreement. 
  
 “Notice and Questionnaire” means a Selling Securityholder Notice and Questionnaire substantially in the form of Exhibit C attached
hereto. 
  
 “Notice Investor” means any Investor
of Registrable Securities that has delivered a properly completed and signed Notice and Questionnaire to the Company in accordance with Section 2(b) hereof. 
  
 “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated
organization or association and governmental or any department or agency thereof. 
  
 “register,” “registered,” and “registration” means a registration effected by preparing and filing one or more Registration Statements (as defined below) in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis (“Rule 415”), and the declaration or ordering of effectiveness of such
Registration Statements by the Commission. 
  
 “Registrable Securities” means (x) in the event of the termination of the Securities Purchase Agreement (other than a termination pursuant to a Terminating Buyer Breach), the Series A Warrants and the Series A Warrant
Shares and (y) from and after the Closing Date, (i) the Notes, (ii) the Warrants, (iii) the Conversion Shares issued or issuable upon conversion of the Notes, (iv) the Warrant Shares issued or issuable upon exercise of the Warrants, (v) any shares
of capital stock issued or issuable with respect to securities referenced in this clause (y) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions
of the Notes or 
  

 - 2 - 

 exercise of the Warrants, and (vi) any shares of capital stock of any entity issued in respect of the capital stock
referenced in the immediately preceding clauses as a result of a merger, consolidation, sale of assets, sale or exchange of capital stock or other similar transaction; provided, that any Registrable Securities that have been sold pursuant to a
Registration Statement or Rule 144 promulgated under the 1933 Act shall no longer be Registrable Securities; provided, further, that any Series A Warrants cancelled in accordance with Section 9 of the Securities Purchase Agreement also shall no
longer be Registrable Securities. 
  
 “Registration
Statement” means a registration statement or registration statements of the Company filed under the 1933 Act and covering all of the Registrable Securities. 
  
 Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the
Securities Purchase Agreement. 
  
 Section 2. Registration.

  
 (a) Mandatory Registration. The Company shall use its
best efforts to prepare and, as soon as practicable but in no event later than 30 calendar days after (x) the Closing Date or (y) the date of the termination of the Securities Purchase Agreement (the “Termination Date”, and together
with the Closing Date, the “Filing Deadline”), file with the Commission a Registration Statement on Form S-3 covering the resale of all of the Registrable Securities. In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a registration, subject to the provisions of Section 2(e) of this Agreement. The Registration Statement prepared pursuant hereto shall register the Registrable Securities
for resale, including the Notes, the Warrants and at least 130% of the number of shares of Common Stock issuable upon conversion of the Notes, exercise of the Warrants by the Investors from time to time in accordance with the methods of distribution
elected by such Investors or such other amount as required by Section 4(e) of the Securities Purchase Agreement. The Registration Statement shall contain (except if otherwise directed by the holders of at least a majority of the Registrable
Securities) the “Selling Securityholders” and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall use reasonable efforts to have the Registration Statement declared
effective by the Commission as soon as practicable, but not later than 90 calendar days (or in the event the Commission reviews the Registration Statement and requires the Company to make modifications thereto, 120 calendar days) after the Closing
Date or the Termination Date, as applicable (the “Effectiveness Deadline”). 
  
 (b) The Company shall name each Investor that delivers a properly completed and signed Notice and Questionnaire to the Company as a selling securityholder in the Registration Statement. An Investor (other than the
Buyers) of Registrable Securities may include such securities in the Registration Statement only if the Investor sends by first-class registered mail or by courier with delivery confirmation (or, at the option of the Company, by facsimile), a
properly completed Notice and Questionnaire to the Company. The Company shall deliver the Notice and Questionnaire to the Buyers within five (5) Business Days after the Closing Date. In order to be included in the Registration Statement at the time
of its effectiveness, the Notice and Questionnaire must be sent to the Company (x) by the Buyers on or prior to 9:00 a.m., New York time, on the fifth Business Day prior to initial effectiveness of the Registration Statement, (y) by the Investors
(other than the Buyers and transferees of Registrable Securities) on or 
  

 - 3 - 

 prior to the 10th Business Day after the date the Notice and Questionnaire is deemed to have been given in accordance
with Section 11(b) hereof or, (z) in the case of a Investor that is a transferee of Registrable Securities, on or prior to the earlier of (I) the 20th Business Day after the completion of the transfer of Registrable Securities to the transferee and
(II) 9:00 a.m., New York time, on the fifth Business Day prior to initial effectiveness of the Registration Statement (in any case, subject to extension at the discretion of the Company, the “Questionnaire Deadline”). The Company
agrees and undertakes that it shall distribute a Notice and Questionnaire (A) no later than 30 Business Days prior to the expected effectiveness of the Registration Statement to each Investor in accordance with Section 11(b) hereof, and (B) in the
case of a Investor that is a transferee of Registrable Securities, upon the request of such transferee Investor given in accordance with Section 11(b) hereof, to such Investor at the address set forth in such request. 
  
 (1) Following the effectiveness of the Registration
Statement, upon receipt of a completed Notice and Questionnaire from a Investor, the Company will, as promptly as practicable, but in any event within ten (10) Business Days after its receipt thereof, file any supplements to the related Prospectus
or file any post-effective amendment to the Registration Statement that is required by applicable law to cause a Investor to be named as a selling securityholder in the Registration Statement and permit such Investor to deliver the Prospectus to
purchasers of Registrable Securities (a “Post-Effective Amendment”); provided, however, that (i) if a supplement to the related Prospectus is required to permit the Investor (or other Investors not included in the Registration
Statement upon effectiveness) to deliver the Prospectus to purchasers of Registrable Securities, the Company shall not be required to file more than one (1) such supplement during any twenty (20) day period and (ii) if a post-effective amendment to
the Registration Statement is required to permit the Investor (or other Investors not included in the Registration Statement upon effectiveness) to deliver the Prospectus to purchasers of Registrable Securities, the Company shall not be required to
file more than one (1) post-effective amendment to the Registration Statement in any sixty (60) day period. The Company shall use its reasonable best efforts to cause any such post-effective amendment to become effective under the 1933 Act as
promptly as is practicable. 
  
 (2) Each Investor
as to which the Registration Statement is being effected shall furnish promptly to the Company (x) such other information as the Company may reasonably request for use in connection with the Registration Statement or Prospectus or in any application
to be filed with or under state securities laws and (y) all information required to be disclosed in order to make the information previously furnished to the Company by such Investor not misleading. 
  
 (c) Allocation of Conversion Shares and Warrant Shares. The initial
number of Conversion Shares and Warrant Shares included in any Registration Statement and each increase in the number thereof included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each
Investor at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the Commission. In the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee shall be allocated the portion of the then remaining number of the applicable Registrable Securities included in such Registration 
  

 - 4 - 

 Statement allocable to the transferor. In no event shall the Company include any securities other than Registrable
Securities on any Registration Statement without the prior written consent of the Investors holding at least a majority in interest of the applicable Registrable Securities, determined as if all of the Notes held by Investors then outstanding had
been converted into Conversion Shares and all Warrants then outstanding had been exercised for Warrant Shares without regard to any limitations on conversion of the Notes or exercise of the Warrants (the “Required Holders”).

  
 (d) Legal Counsel. Subject to Section 5 of this
Agreement, the Required Holders in interest of the Registrable Securities shall have the right to select one legal counsel to review and comment upon any registration pursuant to this Agreement (the “Legal Counsel”), which the
Investors agree shall be Schulte Roth & Zabel LLP or such other counsel as thereafter designated in writing by the Required Holders. Schulte Roth & Zabel LLP, or any other counsel designated in writing by the Required Holders, shall not
review any provisions of any such registration relating to any Investor that sends such counsel written notice that such Investor does not wish such counsel to review such registration in connection with the matters discussed in this Section 2(d).
The Investors, other than any Investor that delivers the notice discussed in the preceding sentence, hereby waive any conflict of interest or potential conflict of interest that may arise as a result of the review of any provisions relating to such
Investors by Schulte Roth & Zabel LLP in connection with the subject matter of this Agreement. This provision will not prohibit any other counsel to an Investor from reviewing and commenting on any registration filed pursuant to this Agreement
at no cost to the Company. 
  
 (e) Ineligibility for Form
S-3. If Form S-3 is not available for the registration of the resale of the Registrable Securities hereunder or the Company is not permitted by the 1933 Act or the Commission to use Form S-3, then the Company shall (i) register the resale of the
Registrable Securities on another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available; provided, however, that the Company shall
maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering all of the Registrable Securities has been declared effective by the Commission or, if earlier, until the end of
the Registration Period (as defined in Section 3(a)). 
  
 (f)
Sufficient Number of Shares Registered. In the event the number of shares registered under a Registration Statement filed pursuant to Section 2(a) of this Agreement is insufficient to cover all of the Conversion Shares and Warrant Shares or
all of an Investor’s allocated portion of the Conversion Shares and Warrant Shares pursuant to Section 2(c) of this Agreement, the Company shall amend the Registration Statement, or file a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover at least one hundred fifty percent (150%) of the number of such Conversion Shares and Warrant Shares as of the trading day immediately preceding the date of the filing of such amendment and/or new
Registration Statement, in each case, as soon as practicable, but in no event later than fifteen (15) days after the necessity therefor arises. The Company shall use its reasonable efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof but in no event later than sixty (60) days after the filing thereof. The calculation of the number of shares sufficient to cover all of the Conversion Shares and Warrant Shares
shall be made without regard to any limitations on the conversion of the Notes or the exercise of the Warrants, and such calculation shall assume that all of the Notes are then 
  

 - 5 - 

 convertible into, and all of the Warrants are then exercisable for, shares of Common Stock at the then prevailing
Conversion Rate (as defined in the Notes) or Warrant Exercise Price (as defined in the Warrants), as applicable. 
  
 (g) Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement. Subject to any elections made pursuant to Section
4(b), if (i) a Registration Statement covering all the Registrable Securities is not filed with the Commission on or before the Filing Deadline or is not declared effective by the Commission on or before the Effectiveness Deadline, (ii) a
Registration Statement covering all of the Registrable Securities required to be covered thereby, as described in Section 2(f) of this Agreement, is not filed with the Commission on or before the deadline described in Section 2(f) of this Agreement
or is not declared effective by the Commission on or before the deadline described in Section 2(f) of this Agreement, (iii) on any day after any such Registration Statement has been declared effective by the Commission, sales of all of the
Registrable Securities required to be included on such Registration Statement cannot be made as a matter of law (other than during an Allowable Grace Period (as defined in Section 3(n) of this Agreement) pursuant to such Registration Statement
(including, without limitation, because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to such Registration Statement or to register a sufficient number of
shares of Common Stock but excluding failures caused solely by a breach of the applicable Investor’s obligations hereunder), or (iv) a Grace Period (as defined in Section 3(n) of this Agreement) exceeds the length of an Allowable Grace Period
(each of the items described in clauses (i), (ii), (iii) and (iv) above shall be referred to as a “Registration Delay”), then, as partial relief for the damages to any holder by reason of any such delay in or reduction of its
ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity) the Company shall pay on the occurrence of each Registration Delay and every thirtieth day (pro rated for
periods totaling less than thirty days) thereafter until such Registration Delay is cured, (1) to each holder of the Notes or Conversion Shares an amount in cash equal to the product of (i) the initial principal amount at which the Notes held by
such holder were issued or the initial conversion price paid for the related Conversion Shares multiplied by (ii) two percent (2%) and (2) to each holder of the Warrants or Warrant Shares an amount in cash equal to the product of (i) the Exercise
Price for such Warrant or the related Warrant Shares multiplied by (ii) two percent (2%). The payments to which a holder shall be entitled pursuant to this Section 2(g) are referred to herein as “Registration Delay Payments.” The
Registration Delay Payments shall be paid in cash on the earlier of (A) the last day of the calendar month during which such Registration Delay Payments are incurred and (B) the third Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of one and two-tenths percent (1.2%) per month (prorated
for partial months) until paid in full. 
  
 (h) Immediately
following the occurrence of a Registration Delay, the Company shall give the Trustee, so long as the Notes remain outstanding and the warrant agent, if any, so long as any Warrants remain outstanding, notice of such commencement or termination of
the obligation to pay Registration Delay Payments with regard to the Notes or Warrants, as applicable, and the amount thereof and of the nature of the delay giving rise to such commencement or the event giving rise to such termination, as the case
may be (such notice to 
  

 - 6 - 

 be contained in an Officer’s Certificate (as such term is defined in the Indenture)), and prior to receipt of such
Officer’s Certificate the Trustee and, if applicable, the warrant agent and the transfer and paying agent shall be entitled to assume that no such commencement or termination has occurred, as the case may be. 
  
 Section 3. Related Obligations. At such time as the Company is
obligated to file a Registration Statement with the Commission pursuant to Section 2(a), 2(e) or 2(f) of this Agreement, the Company will use reasonable efforts to effect the registration of all of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations: 
  
 (a) The Company shall promptly prepare and file with the Commission a Registration Statement with respect to all of the Registrable Securities (but in no
event later than the applicable Filing Deadline) and use reasonable efforts to cause such Registration Statement relating to all of the Registrable Securities required to be covered thereby to become effective as soon as practicable after such
filing (but in no event later than the applicable Effectiveness Deadline). The Company shall submit to the SEC, within two (2) Business Days after the Company learns that no review of a particular Registration Statement will be made by the staff of
the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission
of such request. The Company shall, subject to the terms of this Agreement, keep each Registration Statement effective pursuant to Rule 415 at all times during the period from the date it is initially declared effective until the earliest of (i) the
second anniversary of the date such Registration Statement is filed, (ii) the date as of which all of the Investors (other than any Investors who are “affiliates” of the Company as such term is used in Rule 144(k) promulgated under the
1933 Act) may sell all of the Registrable Securities without restriction pursuant to Rule 144(k) (or the successor rule thereto) promulgated under the 1933 Act or (iii) the date on which all of the Investors shall have sold all of the Registrable
Securities (the “Registration Period”), which Registration Statement, as of its filing and effective dates and each day thereafter (including all amendments or supplements thereto, as of their respective filing and effective dates
and each day thereafter), shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, not misleading, and the prospectus contained in such
Registration Statement, as of its filing date and each day thereafter (including all amendments and supplements thereto, as of their respective filing dates and each day thereafter), shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated thereon, or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading. 
  
 (b) Subject to Section 3(n) of this Agreement, the Company shall prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 (or any successor rule thereto)
promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act. In the case of amendments and
supplements to a Registration Statement and the prospectus used in connection with such Registration Statement 
  

 - 7 - 

 which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the
Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any similar successor statute (the “1934 Act”),
the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement such Registration Statement and prospectus. 
  
 (c) The Company shall permit Legal Counsel, or if no Legal Counsel shall have been chosen by the Investors, the Investors, to review and provide written comment upon each Registration Statement, prospectus and all
amendments and supplements thereto at least three (3) Business Days prior to their filing with the Commission. The Company shall furnish to the Investors and Legal Counsel, without charge, (i) promptly after receipt of such correspondence, copies of
all correspondence from the Commission or the staff of the Commission to the Company or its representatives relating to each Registration Statement, prospectus and all amendments and supplements thereto, (ii) promptly after the same is prepared and
filed with the Commission, one (1) copy of each Registration Statement, prospectus and all amendments and supplements thereto, including all exhibits and financial statements related thereto, and (iii) promptly upon the effectiveness of each
Registration Statement and each amendment and supplement thereto, one (1) copy of the prospectus included in each such Registration Statement and all amendments and supplements thereto. The Company agrees that it will, and it will cause its counsel
to, consider in good faith any comments or objections from Legal Counsel, or if no Legal Counsel shall have been selected, the Investors, as to the form or content of each Registration Statement, prospectus and all amendments or supplements thereto
or any request for acceleration of the effectiveness of each Registration Statement, prospectus and all amendments or supplements thereto. 
  
 (d) The Company hereby agrees to take all appropriate actions to cause the Registrable Securities, from and after the Effective Date, to be promptly
exchangeable for book-entry securities held by The Depository Trust Company (“DTC”), which actions shall include, without limitation: 
  
 (1) preparing and delivering such forms to DTC to ensure that the Registrable Securities will be properly deposited with DTC from and
after the Effective Date; 
  
 (2) obtaining CUSIP
numbers for such Registrable Securities; 
  
 (3)
delivering a single, permanent global Note in definitive, fully-registered form without interest coupons to DTC; and 
  
 (4) if the Warrants are issued pursuant to a Warrant Agreement, delivering a single, permanent global Warrant for each series of Warrants
in definitive, fully-registered form to DTC. 
  

 - 8 - 

 (e) Subject to Section 3(n) of this Agreement, and excluding any Registrable Shares held by Investors
electing to exclude their Registrable Shares from the Registration Statement under Section 4(b), the Company shall use reasonable efforts to (i) promptly register and qualify, unless an exemption from registration and qualification applies, the
resale of the Registrable Securities under such other securities or “blue sky” laws of all applicable jurisdictions in the United States as any holder of Registrable Shares reasonably requests in writing, (ii) promptly prepare and file in
those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) promptly take such
other actions as may be reasonably necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) promptly take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to file a general consent to service of process in any such jurisdiction, except in
such jurisdictions where the Company is subject to service of process. The Company shall promptly notify each Investor who holds Registrable Securities and Legal Counsel of the receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of notice of the initiation or threatening of any
proceeding for such purpose. 
  
 (f) Notwithstanding anything to
the contrary set forth herein, as promptly as practicable after becoming aware of such event, the Company shall notify each Investor and Legal Counsel in writing of the happening of any event as a result of which (i) the Registration Statement or
any amendment or supplement thereto, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) the
prospectus related to such Registration Statement or any amendment or supplement thereto includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and, subject to Section 3(n) of this Agreement, promptly prepare a supplement or amendment to such Registration Statement and prospectus to correct such untrue statement or
omission, and deliver such number of copies of such supplement or amendment to each Investor and Legal Counsel as such Investor or Legal Counsel may reasonably request. The Company shall also promptly notify each Investor and Legal Counsel in
writing (i) when a prospectus and each prospectus supplement or amendment thereto has been filed, and when a Registration Statement and each amendment (including post-effective amendments) and supplement thereto has been declared effective by the
Commission (notification of such effectiveness shall be delivered to each Investor and Legal Counsel by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the Commission for amendments or supplements to a
Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that an amendment (including any post-effective amendment) or supplement to a Registration Statement or prospectus would be
appropriate (subject to Section 3(n) hereof). 
  
 (g) Subject to
Section 3(n) of this Agreement, the Company shall use reasonable efforts to (i) prevent the issuance of any stop order or other suspension of 
  

 - 9 - 

 effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction, (ii) if such an order or suspension is issued, obtain the withdrawal of such order or suspension at the earliest practicable moment and notify each holder of Registrable Securities and Legal Counsel of the issuance of
such order and the resolution thereof or its receipt of notice of the initiation or threat of any proceeding for such purpose. 
  
 (h) The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with United States federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, prospectus or any
amendment or supplement thereto, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, unless ordered or requested by the Commission or other governmental authority not to do so, give prompt written notice to such Investor and allow such Investor, at the
Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information. 
  
 (i) The Company shall use reasonable efforts to cause all the Conversion Shares and Warrant Shares to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed, if any, if the listing of such Conversion Shares and Warrant Shares is then permitted under the rules of such exchange. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(i). 
  
 (j) In connection with any sale or transfer of Registrable Securities pursuant to a Registration Statement, the Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable,
facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and, registered in such names as the Investors may request. 
  
 (k) If requested by an Investor, the Company shall (i) as soon as practicable, incorporate in each prospectus supplement or post-effective amendment to
the Registration Statement such information as an Investor provides in writing and reasonably requests to be included therein relating to the sale and distribution of the Registrable Securities, and (ii) as soon as practicable, make all required
filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment. 
  
 (l) The Company shall comply with all applicable rules and regulations of the Commission in connection with any registration
hereunder. 
  

 - 10 - 

 (m) Within two (2) Business Days after a Registration Statement is ordered effective by the Commission
the Company will so notify the transfer agent for the Registrable Securities and the Investors whose Registrable Securities are included in the Registration Statement. 
  
 (n) Notwithstanding anything to the contrary herein, at any time after a Registration Statement has been declared effective
by the Commission, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Board of Directors of the Company relying
upon the opinion of counsel, in the best interests of the Company (a “Grace Period”); provided, however, that the Company shall promptly (i) notify the Investors in writing of the existence of material non-public information giving
rise to a Grace Period (provided that the Company shall not disclose the content of such material non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on
which the Grace Period ends; provided further, that no single Grace Period shall exceed fifteen (15) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all of the Grace Periods shall not exceed an aggregate
of thirty (30) days and the first day of any Grace Period must be at least five (5) trading days after the last day of any prior Grace Period (each Grace Period complying with this provision being an “Allowable Grace Period”). For
purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on and include the date the Investors receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) above and the date referred to in such notice; provided, however, that no Grace Period shall be longer than an Allowable Grace Period. The provisions of Section 3(g) of this Agreement shall not be
applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) of this Agreement. 
  
 (o) If reasonably requested in writing in connection with any disposition of Registrable Securities pursuant to a
Registration Statement, make reasonably available for inspection during normal business hours by a representative for the Investors of such Registrable Securities and any broker-dealers, attorneys and accountants retained by such Investors, all
relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the appropriate executive officers, directors and designated employees of the Company and its subsidiaries to make
reasonably available for inspection during normal business hours all relevant information reasonably requested by such representative for the Investors or any such broker-dealers, attorneys or accountants in connection with such disposition, in each
case as is customary for similar “due diligence” examinations; provided, however, that any information that is designated by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential
by such Persons, unless disclosure thereof is made in connection with a court, administrative or regulatory proceeding or required by law, or such information has become available to the public generally through the Company or through a third party
without an accompanying obligation of confidentiality. 
  
 (p) The
Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, 
  

 - 11 - 

 an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933
Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the effective date of a Registration Statement. 
  
 Section 4. Obligations of The Investors. 
  
 (a) It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request. Each Investor shall promptly notify the Company of any material change with respect to such information previously provided to the Company by such Investor. 
  
 (b) Each Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement,
in which case, such Investor does not need to cooperate with the Company until it notifies the Company of its desire to include one or more shares of the Registrable Securities in such Registration Statement. 
  
 (c) Each Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(g) or 3(n) of this Agreement or the first sentence of Section 3(f) of this Agreement, such Investor will immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statements covering such Registrable Securities until such Investor’s receipt of the copies of the amended or supplemented prospectus contemplated by Section 3(g) of this Agreement or the first sentence of Section 3(f) of this
Agreement or receipt of notice that no amendment or supplement is required and, if so directed by the Company, such Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies of the prospectus covering such Registrable Securities current at the time of receipt of such notice (other than a single file copy, which such Investor may keep) in such Investor’s possession. 
  

 - 12 - 

 Section 5. Expenses of Registration. All expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3 of this Agreement, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees,
transfer agent fees and fees and disbursements of counsel for the Company, shall be paid by the Company. The Company shall pay all of the Investors’ reasonable costs (including reasonable fees and disbursements of Legal Counsel) incurred by the
Company on behalf of the Investors in connection with the registration, filing or qualification pursuant to this Agreement. 
  
 Section 6. Indemnification. In the event any Registrable Securities are included in a Registration Statement under this Agreement: 
  
 (a) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act or the 1934 Act (each,
an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively,
“Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory
agency, body or the Commission, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any amendment (including post-effective
amendments) or supplement thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which the Registrable Securities are offered (“Blue
Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if authorized for use by the Company prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if any) or the omission or alleged omission to
state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement, or (iv) any material violation
of this Agreement by the Company (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c) of this Agreement, the Company shall reimburse the Indemnified Persons, promptly as
such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person or its Legal Counsel expressly for use in connection with the 
  

 - 13 - 

 preparation of the Registration Statement or any such amendment thereof or supplement thereto; (ii) shall not be
available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely
made available by the Company pursuant to Section 3(d) of this Agreement; and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not
be unreasonably withheld, conditioned or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9 of this Agreement. 
  
 (b) In
connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a)
of this Agreement, the Company, each of its directors, each of its officers who signs the Registration Statement, its agents and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an
“Indemnified Party”), against any Claims or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claims or Indemnified Damages arise out of or are based upon any
Violation (including for purposes of this paragraph, a material violation of this Agreement by the Investor), in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor or its Legal Counsel expressly for use in connection with such Registration Statement and, subject to Section 6(c) of this Agreement, such Investor will reimburse any legal or other expenses reasonably
incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnification agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7
of this Agreement shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, that the
Investor shall be liable under this Section 6(b) for only that amount of the Claims and Indemnified Damages as does not exceed the net proceeds to such Investors as a result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnification agreement shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9 of this Agreement. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. 
  
 (c) Promptly after an Indemnified Person or Indemnified Party under this Section 6 has knowledge of any Claim as to which such Indemnified Person or
Indemnified Party reasonably believes indemnity may be sought or promptly after such Indemnified Person or Indemnified Party receives notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of such Claim, and 
  

 - 14 - 

 the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding; provided,
further, that the indemnifying party shall not be responsible for the reasonable fees and expense of more than one (1) separate legal counsel for such Indemnified Person or Indemnified Party. In the case of an Indemnified Person, the legal counsel
referred to in the immediately preceding sentence shall be selected by the Required Holders. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or
Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of
a full release from all liability in respect to such Claim and action and proceeding. After indemnification as provided for under this Agreement, the rights of the indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party as provided in this Agreement shall not
relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. 
  
 (d) No Person involved in the sale of Registrable Securities who is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to indemnification from any Person involved in such sale of Registrable Securities who is not guilty of fraudulent
misrepresentation. 
  
 (e) The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred. 
  
 (f) The indemnification agreements contained herein shall be in addition to (i) any cause of action or similar right of the
Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. 
  

 - 15 - 

 Section 7. Contribution. To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 of this Agreement to the fullest extent permitted by law; provided, however, that:

  
 (i) no contribution shall be made under circumstances where
the maker would not have been liable for indemnification under the fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities who is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who is not guilty of fraudulent misrepresentation, and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement. The provisions of this Section 7 shall remain in
full force and effect, regardless of the investigation made by or on behalf of the beneficiaries of this Section 7 and shall survive the transfer of Registrable Securities by the Investors pursuant to Section 9 of this Agreement. 
  
 Section 8. Reporting. 
  
 (a) Reports Under The 1934 Act. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the Commission that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule
144”), the Company shall use reasonable efforts to: 
  
 (1) make and keep public information available, as those terms are understood and defined in Rule 144; 
  
 (2) file with the Commission in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934
Act; and 
  
 (3) furnish to each Investor, so
long as such Investor owns Registrable Securities, promptly upon request, (A) a written statement by the Company, if true, that it has complied with the applicable reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (B) a copy of the
most recent annual or quarterly report of the Company and copies of such other reports and documents so filed by the Company, and (C) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration. 
  
 (b) Rule 144A Information. The
Company shall, upon request of any Investor, make available to such Investor the information required by Rule 144A(d)(4) (or any successor rule) under the 1933 Act. 
  
 Section 9. Assignment of Registration Rights . This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company thereto, subsequent Investors, subject to the condition that such transfer shall have been conducted in accordance
with all applicable federal and state securities laws; provided, however, that if the Warrants are 
  

 - 16 - 

 not issued pursuant to a Warrant Agreement, the assignment of rights hereunder to the holders of such Warrants and
Warrant Shares shall only be automatically assignable by such Investor to any transferee of all or any portion of such Investor’s Registrable Securities if: (i) such Investor agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to which such rights are being transferred or assigned; (iii) immediately following such transfer or assignment, the further disposition of such securities by the transferee
or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the
Company to be bound by all of the obligations of an Investor under this Agreement; (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement and the Warrants; and (vi) such transfer
shall have been conducted in accordance with all applicable federal and state securities laws. The Company hereby shall extend the benefits of this Agreement to any Investor and any such Investor may specifically enforce the provisions of this
Agreement as if an original party hereto. In the event that any other Person shall succeed to the Company under the Indenture or any Warrant Agreement, then such successor shall enter into an agreement, in form and substance reasonably satisfactory
to the Required Holders, whereby such successor shall assume all of the Company’s obligations under this Agreement. 
  
 Section 10. Amendment of Registration Rights. Any provision of this Agreement may be amended and the observance of any provision of this Agreement
may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver effected in accordance with this Section 10 shall
be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement. 
  
 Section 11. Miscellaneous. 
  

(a) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner of
such Registrable Securities. 
  
 (b) Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement (except as otherwise set forth herein) must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (evidenced by mechanically or electronically generated receipt by the sender’s facsimile machine); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 
  
 If to the Company: 
  
 The Wet Seal, Inc. 
 26972 Burbank

 Foothill Ranch, California 92610 
 Telephone:        (800) 735-7325 
 Facsimile:          (949) 699-4825 
 Attention:          Chief Financial Officer 
  

 - 17 - 

 with a copy to: 
  
 Willkie Farr & Gallagher LLP 
 787 Seventh Avenue 
 New York, New York 10019 
 Telephone:        (212) 728-8288 
 Facsimile:          (212) 728-8111 
 Attention:          Christopher E. Manno, Esq. 
  
 and 
  
 Akin Gump Strauss Hauer & Feld LLP 
 590
Madison Avenue 
 New York, New York 10022 
 Telephone:        (212) 872-1000 
 Facsimile:          (212) 872-1002 
 Attention:          Alan Siegel, Esq. 
  
 If to Legal Counsel: 
  
 Schulte Roth & Zabel LLP 
 919 Third
Avenue 
 New York, New York 10022 
 Telephone:        (212) 756-2000 
 Facsimile:          (212) 593-5955 
 Attention:          Eleazer Klein, Esq. 
  
 If to a Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached hereto as Exhibit A, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, if
to any other Investor, at the most current address of such Investor maintained by the Trustee under the Indenture, the registrar of a warrant agent, if any, with respect to the Warrants or the Company with respect to the Common Stock and Warrants
(if there shall be no warrant 
  

 - 18 - 

 agent), or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party; provided that while the Notes are in book-entry form, notice to the Trustee shall serve as notice to the Investors holding Notes and if the Warrants are in book-entry form, notice to
the applicable warrant agent, if any, shall serve as notice to the Investors holding Warrants). 
  
 (c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall
not operate as a waiver thereof. 
  
 (d) All questions concerning
the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting
the City of New York, borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of
this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY. 
  
 (e) This
Agreement, the Securities Purchase Agreement, the Notes, the Warrants and the documents referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the Securities Purchase Agreement, the Notes and the Warrants supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and thereof. 
  
 (f) Subject to the requirements of Section 9 of this Agreement, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto. 
  

 - 19 - 

 (g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. 
  
 (h) This Agreement may be executed
in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission of a
copy of this Agreement bearing the signature of the party so delivering this Agreement. 
  
 (i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 
  
 (j) All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made,
unless otherwise specified in this Agreement, by the Required Holders. 
  
 (k) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
  
 (l) The obligations of each Buyer under any Transaction Document are several
and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way
acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated hereby with
the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. 
  

 - 20 - 

 IN WITNESS WHEREOF, the parties have caused this Amended and Restated Registration Rights
Agreement to be duly executed as of day and year first above written. 
  

			
	 COMPANY

	
	 THE WET SEAL, INC.

		
	 By:
	 	 /s/    JOSEPH DECKOP

	 Name:
	 	 Joseph Deckop

	 Title:
	 	 Interim CEO

  
 [Signatures of
Buyers on Following Page] 

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
	 BUYER

	
	 S.A.C. CAPITAL ASSOCIATES, LLC

	
	 By: S.A.C. Capital Advisors, LLC

		
	 By:
	 	 /s/    PETER NUSSBAUM

	 Name:
	 	Peter Nussbaum
	 Title:
	 	General Counsel

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
	 BUYER

	
	 GMM CAPITAL, LLC

		
	 By:
	 	 /s/    ISAAC DUBAH

	 Name:
	 	Isaac Dubah
	 Title:
	 	 

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
	 GOLDFARB CAPITAL PARTNERS LLC

		
	 By:
	 	 /s/    MORRIS GOLDFARB

	 Name:
	 	 Morris Goldfarb

	 Title:
	 	 Member

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

	
	 /S/    CHARLES PHILLIPS

	Mr. Charles Phillips

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
		
	 	 	 /s/    ELI WACHTEL

	 	 	Mr. Eli Wachtel

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
	WLSS CAPITAL PARTNERS, LLC
		
	By:	 	 /s/    WAYNE S. MILLER

	Name:	 	Wayne S. Miller
	Title:	 	Authorized signatory

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
	SMITHFIELD FIDUCIARY, LLC
		
	By:	 	 /s/    ADAM J. CHILL

	Name:	 	Adam J. Chill
	Title:	 	Authorized Signatory

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
	 D.B. ZWIRN SPECIAL
 OPPORTUNITIES FUND, L.P.

		
	 By:
	 	 D.B. ZWIRN PARTNERS LLC,
       its general partner

		
	 By:
	 	 /s/    PERRY A. GRUSS

	 Name:
	 	 Perry A. Gruss

	 Title:
	 	 Chief Financial Officer

	
	 D.B. ZWIRN SPECIAL
 OPPORTUNITIES FUND, LTD.

		
	By:	 	 D.B. ZWIRN & CO., L.P.,
       its trading Manager

		
	 By:
	 	 /s/    PERRY A. GRUSS

	 Name:
	 	 Perry A. Gruss

	 Title:
	 	 Chief Financial Officer

 [SIGNATURE PAGE TO AMENDED 
 AND RESTATED REGISTRATION RIGHTS AGREEMENT] 
  

			
	 RIVERVIEW GROUP, LLC

		
	 By:
	 	 /s/    TERRY FEENEY

	 Name:
	 	 Terry Feeney

	 Title:
	 	 Chief Operating Officer

 EXHIBIT A TO REGISTRATION RIGHTS AGREEMENT 
 SCHEDULE OF BUYERS 
  

						
	 NAME OF BUYERS

	  	PRINCIPAL AMOUNT
OF NOTES

	  	NUMBER OF
WARRANTS

	 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:  (203) 890-2393
 Residence: Anguila
	  	$	27,500,000.00	  	7,316,964
			
	 GMM Capital, LLC
 111 West 40th Street
 20th Floor
 New York, NY 10018
	  	$	7,000,000.00	  	1,862,500
			
	 Goldfarb Capital Partners LLC
 21 Fairway Drive
 Mamaroneck, NY 10543
	  	$	4,500,000.00	  	1,197,322
			
	 Mr. Charles Phillips
 777 Park Avenue
 New York, NY 10021
	  	$	2,000,000.00	  	532,143
			
	 Mr. Eli Wachtel
 7 Shaw Road
 Scarsdale, NY 10583
	  	$	900,000	  	239,464
			
	 WLSS Capital Partners, LLC
 c/o Wayne Miller
 1365 York Avenue
 Apt. 26B
 New York, NY 10021
	  	$	100,000.00	  	26,607
			
	 Smithfield Fiduciary LLC
 c/o Highbridge Capital Management, LLC
 9 West 57th Street
 27th Floor
 New York, NY 10019
 Attention:   Ari J. Storch
       Adam J. Chill
 Facsimile:   (212) 751-0755
 Telephone: (212) 287-4720
 Residence:  Cayman Islands
	  	$	5,921,123.00	  	1,575,442
			
	 D.B. Zwirn Special Opportunities Fund, L.P
 c/o D.B. Zwirn & Co., L.P.
 745 Fifth Avenue, 18th Floor New York,
 New York 10151 Phone: (646) 720-9100
 Fax: (646) 720-9000
 Attention:   Daniel B. Zwirn
       Perry A.
Gruss
 Residence:  Cayman Islands
	  	$	1,706,105.00	  	453,946

  

 - i - 

						
	 D.B. Zwirn Special Opportunities Fund, Ltd.
 c/o D.B. Zwirn & Co., L.P.
 745 Fifth Avenue, 18th Floor New York,
 New York 10151 Phone: (646) 720-9100
 Fax: (646) 720-9000
 Attention:  Daniel B. Zwirn
      Perry A.
Gruss
 Residence: Cayman Islands
	  	$	1,706,105.00	  	453,946
			
	 Riverview Group, LLC
 666 Fifth Avenue, 8th floor
 New York, New York 10103
 Attention: Daniel Cardella Facsimile: (212)
 977-1667 Telephone: (212) 841-4100
 Residence: Delaware
	  	$	4,666,667.00	  	1,241,667

  

 - ii - 

 EXHIBIT B 
  

SELLING SECURITYHOLDERS 
  
 The convertible notes and warrants were originally issued by us in transactions exempt from the registration requirements of the 1933 Act to persons
reasonably believed to be “accredited investors” as defined in Regulation D under the 1933 Act. The shares of class A common stock being offered by the selling securityholders are issuable upon conversion of the convertible notes, upon
exercise of the warrants and as interest on the convertible notes. For additional information regarding the convertible notes and warrants, see “Private Placement of Convertible Notes and Warrants” above. We are registering the convertible
notes and warrants and shares of class A common stock in order to permit the selling securityholders to offer the convertible notes, warrants and shares for resale from time to time. Except for the ownership of the convertible notes and the warrants
and the purchase of securities from the Company on November     , 2004, the selling stockholders have not had any material relationship with us within the past three years. 
  
 The table below lists the selling securityholders and other information
regarding the beneficial ownership of the convertible notes, warrants and shares of class A common stock by each of the selling securityholders. The second column lists the principal amount of convertible notes beneficially owned by each selling
securityholder, as of                     , 200  . The third column lists the number of warrants beneficially owned by each
selling securityholder, as of                     , 200  . The fourth column lists the number of shares of class A common
stock beneficially owned by each selling stockholder, based on its ownership of the convertible notes and the warrants, as of
                    , 200  , assuming conversion of all convertible notes or exercise of the warrants held by the selling
securityholders on that date, without regard to any limitations on conversions or exercise. 
  
 The fifth column lists the shares of class A common stock being offered by this prospectus by the selling securityholders. 
  
 In accordance with the terms of registration rights agreements with the holders of the convertible notes and the warrants, this prospectus generally
covers the resale of (i) the convertible notes and warrants, (ii) 130% of the maximum number of shares of class A common stock issuable upon conversion of the convertible notes (without taking into account any limitations on the conversion of the
convertible notes set forth in the convertible notes) and (iii) 130% of the maximum number of shares of class A common stock issuable upon exercise of the warrants (without taking into account any limitations on the exercise of the warrants set
forth in the warrants), in each case as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Because the conversion price of the convertible notes, the exercise price of the warrants and the
interest payable on the convertible notes may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The sixth column assumes the sale of all of the securities
offered by the selling securityholders pursuant to this prospectus. 
  
 Under the terms of the convertible notes and the warrants, a selling securityholder may not convert the convertible notes or exercise the warrants, to the extent such conversion or 
  

 - 1 - 

 exercise would cause such selling securityholder, together with its affiliates, to beneficially own a number of shares of
class A common stock which would exceed 9.99% of our then outstanding shares of class A common stock following such conversion or exercise, excluding for purposes of such determination shares of class A common stock issuable upon conversion of the
convertible notes and upon exercise of the warrants which have not been exercised. The numbers in the fourth column do not reflect this limitation. The selling securityholders may sell all, some or none of their shares in this offering. See
“Plan of Distribution.” 
  
 The inclusion of any
securities in the following table does not constitute an admission of beneficial ownership by the persons named below. 
  

 - 2 - 

												
	 Name of Selling Securityholder

	  	Principal Amount
of Convertible
Notes Beneficially
Owned and that
may be Offered
Hereby

	  	Number of
Warrants
Beneficially Owned
and that may be
Offered Hereby

	  	Shares of Class A
Common Stock
Owned Before the
Offering

	  	Shares of Class A
Common Stock
Offered Hereby

	  	Shares of Class A
Common Stock
Owned After the
Offering (1)

						
	 S.A.C. Capital Associates, LLC (2)
	  	$	27,500,000	  	7,316,964	  	21,444,019	  	 	  	 
						
	 GMM Capital, LLC
	  	$	7,000,000	  	1,862,500	  	5,458,478	  	 	  	 
						
	 Goldfarb Capital Partners LLC
	  	$	4,500,000	  	1,197,322	  	3,509,022	  	 	  	 
						
	 Mr. Charles Phillips
	  	$	2,000,000	  	532,143	  	1,559,565	  	 	  	 
						
	 Mr. Eli Wachtel
	  	$	900,000	  	239,464	  	701,804	  	 	  	 
						
	 WLSS Capital Partners, LLC
	  	$	100,000	  	26,607	  	77,978	  	 	  	 
						
	 Smithfield Fiduciary LLC (3)
	  	$	5,921,123	  	1,575,442	  	4,617,187	  	 	  	 
						
	 D.B. Zwirn Special Opportunities Fund, L.P (4)
	  	$	1,706,105	  	453,945	  	1,330,390	  	 	  	 
						
	 D.B. Zwirn Special Opportunities Fund, Ltd. (4)
	  	$	1,706,105	  	453,946	  	1,330,390	  	 	  	 
						
	 Riverview Group, LLC (5)
	  	$	4,666,667	  	1,241,667	  	3,638,985	  	 	  	 

	(1)	Assumes that all of the shares offered hereby are sold. 

	(2)	Pursuant to investment agreements, each of S.A.C. Capital Advisors, LLC, a Delaware limited liability company which we refer to in this prospectus as SAC Capital Advisors, and
S.A.C. Capital Management, LLC, a Delaware limited liability company which we refer to in this prospectus as SAC Capital Management, share all investment and voting power with respect to the securities held by S.A.C. Capital Associates, LLC. Mr.
Steven A. Cohen controls both SAC Capital Advisors and SAC Capital Management. Each of SAC Capital Advisors, SAC Capital Management and Mr. Cohen disclaim beneficial ownership of these securities. 

	(3)	Highbridge Capital Management, LLC (“Highbridge”), is the trading manager of Smithfield Fiduciary LLC (“Smithfield”) and consequently has voting control and
investment discretion over the shares of Common Stock held by Smithfield. Glenn Dubin and Henry Swieca control Highbridge. Each of Highbridge and Messrs. Dubin and Swieca disclaims beneficial ownership of the shares held by Smithfield.

  

 - 1 - 

	(4)	D. B. Zwirn & Co., L.P. is the trading manager of each of Zwirn Special Opportunities Fund, Ltd. and Zwirn Special Opportunities Fund, L.P. and consequently has voting control
and investment discretion over securities held by each of these entities. Daniel B. Zwirn controls Zwirn Holdings, LLC, which in turn is the managing member of, and thereby controls, DBZ GP, LLC, which in turn is the general partner of, and thereby
controls, D. B. Zwirn & Co., L.P. Each of Daniel B. Zwirn, Zwirn Holdings, LLC, DBZ GP, LLC and D. B. Zwirn & Co., L.P. disclaims beneficial ownership of securities held by each of Zwirn Special Opportunities Fund, Ltd. and Zwirn Special
Opportunities Fund, L.P. 

	(5)	The sole member of Riverview is Millennium Holding Group, L.P., a Delaware limited partnership (“Holding”). Millennium Management, LLC, a Delaware limited liability
company (“Millennium Management”), is the general partner of Holding and consequently has voting control and investment discretion over securities owned by Holding and by Riverview. Israel A. Englander (“Mr. Englander”) is the
sole managing member of Millennium Management. As a result, Mr. Englander may be considered the beneficial owner of any shares deemed to be beneficially owned by Millennium Management. The foregoing should not be construed in and of itself as an
admission by any of Holding, Millennium Management or Mr. Englander as to beneficial ownership of the shares owned by Riverview. 

  

 - 2 - 

 PLAN OF DISTRIBUTION 
  
 We are registering the convertible notes, warrants and shares of class A common stock issuable upon conversion of the
convertible notes, including any interest thereon, and to permit the resale of these convertible notes, warrants and shares of class A common stock by the holders from time to time after the date of this prospectus. We will not receive any of the
proceeds from the sale by the selling securityholders of the securities. We will bear all fees and expenses incident to our obligation to register the convertible notes, warrants and shares of class A common stock. 
  
 The selling securityholders may sell all or a portion of the securities
beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the securities are sold through underwriters or broker-dealers, the selling securityholders will be
responsible for underwriting discounts or commissions or agent’s commissions. The securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time
of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, 
  

	•	on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; 

  

	•	in the over-the-counter market; 

  

	•	in transactions otherwise than on these exchanges or systems or in the over-the-counter market; 

  

	•	through the writing of options, whether such options are listed on an options exchange or otherwise; 

  

	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	•	block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

  

	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	•	privately negotiated transactions; 

  

	•	short sales; 

  

	•	pursuant to Rule 144 under the Securities Act; 

  

	•	broker-dealers may agree with the selling securityholders to sell a specified number of such securities at a stipulated price per security; 

  

 - 1 - 

	•	a combination of any such methods of sale; and 

  

	•	any other method permitted pursuant to applicable law. 

  
 If the selling securityholders effect such transactions by selling convertible notes, warrants or shares of class A common stock to or through
underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling securityholders or commissions from purchasers of the convertible
notes, warrants or shares of class A common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of any securities or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the securities
in the course of hedging in positions they assume. The selling securityholders may also sell securities short and deliver securities covered by this prospectus to close out short positions. The selling securityholders may also loan or pledge
securities to broker-dealers that in turn may sell such securities. 
  
 The selling securityholders may pledge or grant a security interest in some or all of the convertible notes, warrants or shares of class A common stock owned by them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the convertible notes, warrants or shares of class A common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of
the Securities Act of 1933, as amended, amending, if necessary, the list of selling securityholders to include the pledgee, transferee or other successors in interest as selling securityholders under this prospectus. The selling securityholders also
may transfer and donate the convertible notes, warrants or shares of class A common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of
this prospectus. 
  
 The selling securityholders and any
broker-dealer participating in the distribution of the convertible notes, warrants or shares of class A common stock may be deemed to be “underwriters” within the meaning of the 1933 Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the 1933 Act. At the time a particular offering of the securities is made, a prospectus supplement, if required, will be distributed which
will set forth the aggregate amount of securities being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling
securityholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers. 
  
 Under the securities laws of some states, the securities may be sold in such states only through registered or licensed brokers or dealers. In addition,
in some states the convertible notes, warrants and shares of class A common stock may not be sold unless such convertible notes, warrants or shares have been registered or qualified for sale in such state or an exemption from registration or
qualification is available and is complied with. 
  

 - 2 - 

 There can be no assurance that any selling securityholder will sell any or all of the convertible notes,
warrants or shares of class A common stock registered pursuant to the shelf registration statement, of which this prospectus forms a part. 
  
 The selling securityholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the 1934 Act, which may limit the timing of purchases and sales of any of the shares of class A common stock by the selling
securityholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of class A common stock to engage in market-making activities with respect to the shares of class
A common stock. All of the foregoing may affect the marketability of the shares of class A common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of class A common stock. 
  
 We will pay all expenses of the registration of the convertible notes,
warrants and shares of class A common stock pursuant to the registration rights agreement, estimated to be $[                     ] in total,
including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling securityholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling securityholders against liabilities, including some liabilities under the 1933 Act, in accordance with the registration rights agreements, or the selling securityholders will be entitled to
contribution. We may be indemnified by the selling securityholders against civil liabilities, including liabilities under the 1933 Act, that may arise from any written information furnished to us by the selling securityholder specifically for use in
this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution. 
  
 Once sold under the shelf registration statement, of which this prospectus forms a part, the convertible notes, warrants and shares of class A common
stock will be freely tradable in the hands of persons other than our affiliates. 
  

 - 3 - 

 QUESTIONNAIRE 
  

					
	1.	 	(a)	 	Full Legal Name of Selling Securityholder:
	 	 	 	 	  

	 	 	(b)	 	Full Legal Name of Investor (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:
	 	 	 	 	  

	 	 	(c)	 	Full Legal Name of DTC participant (if applicable and if not the same as (b) above) through which Registrable Securities listed in Item 3 below are held:
	 	 	 	 	  

	2.	 	Address for Notices to Selling Securityholder:
	
	  

	
	  

	
	  

		
	 Telephone:
	 	  

		
	 Fax:
	 	  

		
	 Contact Person:
	 	  

		
	 3.
	 	Beneficial Ownership of Registrable Securities:
			
	 	 	(a)	 	Type and Principal Amount or number of Registrable Securities beneficially owned:
			
	 	 	 	 	  

			
	 	 	 	 	  

			
	 	 	(b)	 	CUSIP No(s). of such Registrable Securities beneficially owned:
			
	 	 	 	 	  

			
	 	 	 	 	  

  

 - 1 - 

	4.	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder. 

  
 Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of
the Company other than the Registrable Securities listed above in Item 3. 
  

	 	(a)	Type and Amount of Other Securities beneficially owned by the Selling Securityholder: 

  

	 	

  

	 	

  

	 	(b)	CUSIP No(s). of such Other Securities beneficially owned: 

  

	 	

  

	 	

  

	5.	Relationships with the Company: 

  
 Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of more than 5%
of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. 
  
 State any exceptions here: 
  

	6.	Broker-Dealers and their Affiliates 

  

	 	(a)	Is the Selling Securityholder a broker-dealer or an affiliate of a broker-dealer: 

  
 Yes         
                No          
  
 If so, please answer the remaining question in this section. 
  

	 	(i)	Please advise whether the notes were received by the Selling Securityholder as compensation for investment banking services or as investment shares, and if so please describe the
circumstances. 

  
 Note that in general we may be
required to identify any registered broker-dealer as an underwriter in the prospectus. 
  

 - 2 - 

 (ii) Except as set forth below, if the Selling Securityholder is a registered broker- dealer, the Selling
Securityholder does not plan to make a market in the Registrable Securities. If the Selling Securityholder plans to make a market in the Registrable Securities, please indicate whether the Selling Securityholder plans to use the prospectus relating
to the Registrable Securities as a market-making prospectus. 
  

	 	(b)	Affiliation with Broker-Dealers 

  
 Is the Selling Securityholder an affiliate1 of a registered broker-dealer? 
  
 Yes                         No         

  
 If so, please answer the remaining question in this section.

  

	 	(i)	Please describe the affiliation between the Selling Securityholder and any registered broker-dealer. 

  

	 	(ii)	If the Registrable Securities were purchased by the Selling Securityholder other than in the ordinary course of business, please describe the circumstances.

  

	 	(iii)	Please advise whether the Registrable Securities were received by the Selling Securityholder as compensation for investment banking services or as investment shares, and if so
please describe the circumstances. 

  

	 	(iv)	If the Selling Securityholder, at the time of its purchase of Registrable Securities, had any agreements or understandings, directly or indirectly, with any person to distribute the
Registrable Securities, please describe such agreements or undertakings. 

  
 Note that if the Selling Securityholder is an affiliate of a broker-dealer and did not purchase its Registrable Securities in the ordinary course of business or at the time of the purchase had any agreements or
understandings, directly or indirectly, to distribute the securities, we may be required to identify the Selling Securityholder as an underwriter in the prospectus. 
  

	 	(c)	Beneficial Ownership by Natural Persons: 

  
 If the Selling Securityholder is an entity, does any natural person having voting or investing power over the Registrable Securities held by the Selling
Securityholder?2 

 1 An "affiliate" of a specified
person or entity means a person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person or entity specified. For purposes of this definition,
"control”, refers to the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of a person, whether through the ownership of voting securities or otherwise. 
  

 - 3 - 

 If so, please state the person’s or persons’ name(s): 
  

	7.	Beneficial Ownership by Natural Persons or by a Board or Committee 

  
 Is the Selling Securityholder a reporting entity with the Securities and Exchange Commission? 
  
 If the Selling Securityholder is a majority owned subsidiary of a reporting
entity, identify the majority stockholder that is a reporting entity. 
  
 Yes         No       
  
 If No, please answer the remaining questions in this section. 
  

	 	(i)	Please name the natural person or person(s) having voting and/or investment control over the Selling Securityholder.3 

  

	 	(ii)	If the voting and/or investment control over the Selling Securityholder is held by board or committee, please state the name of the natural person or person(s) on such board or
committee. 

  

	8.	Plan of Distribution: 

  
 Except as set forth below, the undersigned (including its donees or pledgees) intends to distribute the Registrable Securities listed above in Item 3
pursuant to the Registration Statement only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned or, alternatively, through underwriters, broker-dealers or agents. If the Registrable
Securities are sold through underwriters, broker-dealers or agents, the Selling Securityholder will be responsible for underwriting discounts or commissions or agents’ commissions. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block
transactions: 

	2	Please answer "Yes" if any natural person, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (a)
voting power which includes the power to vote, or to direct the voting of, such security; and/or, (b) investment power which includes the power to dispose, or to direct the disposition of, the Registrable Securities held by the Selling
Securityholder. 

	3	Please include any natural person that, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (a)
voting power which includes the power to vote, or to direct the voting of, such security; and/or, (b) investment power which includes the power to dispose, or to direct the disposition of, the Registrable Securities held by the Selling
Securityholder. 

  

 - 4 - 

	 	•	on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale; 

  

	 	•	in the over-the-counter market; 

  

	 	•	in transactions otherwise than on these exchanges or systems or in the over-the-counter market; 

  

	 	•	through the writing of options, whether such options are listed on an options exchange or otherwise; 

  

	 	•	in ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	in block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

  

	 	•	in purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	in an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	in privately negotiated transactions; 

  

	 	•	in short sales; 

  

	 	•	in sales pursuant to Rule 144; 

  

	 	•	in which broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	in a combination of any such methods of sale; and 

  

	 	•	in any other method permitted pursuant to applicable law. 

  
 State any exceptions here: 
  

	 	

  

	 	

  
 Note: In no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior written agreement of the Company. 
  
 The undersigned acknowledges its obligation to comply with the provisions of the Securities
Exchange Act of 1934, as amended and the rules thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor rules or regulations), in connection with any offering 
  

 - 5 - 

 of Registrable Securities pursuant to the Registration Statement. The undersigned agrees that neither it nor any person
acting on its behalf will engage in any transaction in violation of such provisions. 
  
 The Selling Securityholder hereby acknowledges its obligations under the Registration Rights Agreement to indemnify and hold harmless certain persons as set forth therein. 
  
 Pursuant to the Registration Rights Agreement, the Company has agreed under certain circumstances to indemnify the Selling Securityholder
against certain liabilities. 
  
 In accordance with the undersigned’s
obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Registration Statement, the undersigned shall promptly notify the Company of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective. 
  
 All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing by hand delivery, first class mail or air courier guaranteeing overnight
delivery to the address set forth below. 
  
 By signing below, the undersigned
consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus. The undersigned understands that such information will
be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus. 
  
 Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives and assigns of the Company and the Selling Securityholder with
respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above. This Agreement shall be governed in all respects by the laws of the State of New York. 
  
 IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly authorized agent. 
  

							
	 Dated:
	  	  

	 	 Beneficial Owner:

	 	  	 	 	 By:
	 	  

	 	  	 	 	 Name:
	 	  

	 	  	 	 	 Title:
	 	  

  

 - 6 - 

 PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND 
 QUESTIONNAIRE TO THE WET SEAL, INC. 
  
 The Wet Seal, Inc. 
 26972 Burbank

 Foothill Ranch, California 92610 
 Telephone: (800) 735-7325 
 Facsimile: (949) 699-4825 
 Attention: Chief Financial Officer 
  

 - 7 -

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