Document:

Exhibit 10.7

 

		 DENIM.LA, INC. 2013 STOCK PLAN ADOPTED ON JANUARY 30, 2013 

 

     

     

    

 

		TABLE OF CONTENTS Page ESTABLISHMENT AND PURPOSE1 ADMINISTRATION1 Committees of the Board of Directors.1 Authority of the Board of Directors1 ELIGIBILITY.1 General Rule1 Ten-Percent Stockholders1 STOCK SUBJECT TO PLAN2 Basic Limitation2 Additional Shares2 TERMS AND CONDITIONS OF AWARDS OR SALES2 Stock Grant or Purchase Agreement2 Duration of Offers and Nontransferability of Rights2 Purchase Price2 TERMS AND CONDITIONS OF OPTIONS3 Stock Option Agreement3 Number of Shares3 Exercise Price3 Exercisability3 Basic Term3 Termination of Service (Except by Death)3 Leaves of Absence4 Death of Optionee.4 Pre-Exercise Restrictions on Transfer of Options or Shares4 No Rights as a Stockholder5 Modification, Extension and Assumption of Options5 Company’s Right to Cancel Certain Options5 PAYMENT FOR SHARES5 General Rule5 Services Rendered6 Promissory Note6 Surrender of Stock6 Exercise/Sale6 Net Exercise6 Other Forms of Payment6 ADJUSTMENT OF SHARES6 General6 

 

     

     

    

 

		Corporate Transactions7 Reservation of Rights8 PRE-EXERCISE INFORMATION REQUIREMENT8 Application of Requirement8 Scope of Requirement9 MISCELLANEOUS PROVISIONS9 Securities Law Requirements9 No Retention Rights9 Treatment as Compensation9 Governing Law9 Conditions and Restrictions on Shares9 Tax Matters10 DURATION AND AMENDMENTS; STOCKHOLDER APPROVAL10 Term of the Plan10 Right to Amend or Terminate the Plan11 Effect of Amendment or Termination11 Stockholder Approval11 DEFINITIONS11 

 

     

     

    

 

		DENIM.LA, INC. 2013 STOCK PLAN SECTION 1.ESTABLISHMENT AND PURPOSE. The purpose of this Plan is to offer persons selected by the Company an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by acquiring Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may be ISOs intended to qualify under Code Section 422 or Nonstatutory Options which are not intended to so qualify. Capitalized terms are defined in Section 12. SECTION 2.ADMINISTRATION. Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist, as required by applicable law, of one or more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function. Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. Notwithstanding anything to the contrary in the Plan, with respect to the terms and conditions of awards granted to Participants outside the United States, the Board of Directors may vary from the provisions of the Plan to the extent it determines it necessary and appropriate to do so; provided that it may not vary from those Plan terms requiring stockholder approval pursuant to Section 11(d) below. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee. SECTION 3.ELIGIBILITY. General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs. Ten-Percent Stockholders. A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the Date of Grant and (ii) such ISO by its 

 

     

     

    

 

		terms is not exercisable after the expiration of five years from the Date of Grant. For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Code Section 424(d) shall be applied. SECTION 4. STOCK SUBJECT TO PLAN. Basic Limitation. Not more than 1,500,000 Shares may be issued under the Plan, subject to Subsection (b) below and Section 8(a).1 All of these Shares may be issued upon the exercise of ISOs. The number of Shares that are subject to Options or other rights outstanding at any time under the Plan may not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. Additional Shares. In the event that Shares previously issued under the Plan are reacquired by the Company, such Shares shall be added to the number of Shares then available for issuance under the Plan. In the event that Shares that otherwise would have been issuable under the Plan are withheld by the Company in payment of the Purchase Price, Exercise Price or withholding taxes, such Shares shall remain available for issuance under the Plan. In the event that an outstanding Option or other right for any reason expires or is canceled, the Shares allocable to the unexercised portion of such Option or other right shall be added to the number of Shares then available for issuance under the Plan. SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES. Stock Grant or Purchase Agreement. Each award of Shares under the Plan shall be evidenced by a Stock Grant Agreement between the Grantee and the Company. Each sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Grant Agreement or Stock Purchase Agreement. The provisions of the various Stock Grant Agreements and Stock Purchase Agreements entered into under the Plan need not be identical. Duration of Offers and Nontransferability of Rights. Any right to purchase Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days (or such other period as may be specified in the Award Agreement) after the grant of such right was communicated to the Purchaser by the Company. Such right is not transferable and may be exercised only by the Purchaser to whom such right was granted. Purchase Price. The Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole discretion. The Purchase Price shall be payable in a form described in Section 7. 1 Please refer to Exhibit A for a schedule of the initial share reserve and any subsequent increases in the reserve. 

 

     

     

    

 

		SECTION 6.TERMS AND CONDITIONS OF OPTIONS. Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Board of Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option. Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an Option shall not be less than 100% of the Fair Market Value of a Share on the Date of Grant, and in the case of an ISO a higher percentage may be required by Section 3(b). Subject to the preceding sentence, the Exercise Price shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7. This Subsection (c) shall not apply to an Option granted pursuant to an assumption of, or substitution for, another option in a manner that complies with Code Section 424(a) (whether or not the Option is an ISO). Exercisability. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. No Option shall be exercisable unless the Optionee (i) has delivered an executed copy of the Stock Option Agreement to the Company or (ii) otherwise agrees to be bound by the terms of the Stock Option Agreement. The Board of Directors shall determine the exercisability provisions of the Stock Option Agreement at its sole discretion. Basic Term. The Stock Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the Date of Grant, and in the case of an ISO, a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire. Termination of Service (Except by Death). If an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following dates: above; The expiration date determined pursuant to Subsection (e) The date three months after the termination of the Optionee’s Service for any reason other than Disability, or such earlier or later date as the Board of Directors may determine (but in no event earlier than 30 days after the termination of the Optionee’s Service); or 

 

     

     

    

 

		The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine. The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). Leaves of Absence. For purposes of Subsection (f) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). Death of Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates: above; or The expiration date determined pursuant to Subsection (e) The date 12 months after the Optionee’s death, or such earlier or later date as the Board of Directors may determine (but in no event earlier than six months after the Optionee’s death). All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of such Options shall lapse when the Optionee dies. Pre-Exercise Restrictions on Transfer of Options or Shares.An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or the laws of descent and distribution, except as provided in the next sentence. If the applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee. An ISO may be 

 

     

     

    

 

		exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative. In addition, an Option shall comply with all conditions of Rule 12h-1(f)(1) under the Exchange Act until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. Such conditions include, without limitation, the transferability restrictions set forth in Rule 12h-1(f)(1)(iv) and (v) under the Exchange Act, which shall apply to an Option and, prior to exercise, to the Shares to be issued upon exercise of such Option during the period commencing on the Date of Grant and ending on the earlier of (i) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or (ii) the date when the Company makes a determination that it will cease to rely on the exemption afforded by Rule 12h-1(f)(1) under the Exchange Act. During such period, an Option and, prior to exercise, the Shares to be issued upon exercise of such Option shall be restricted as to any pledge, hypothecation or other transfer by the Optionee, including any short position, any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) or any “call equivalent position” (as defined in Rule 16a-1(b) under the Exchange Act). No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. Modification, Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options or a different type of award for the same or a different number of Shares and at the same or a different Exercise Price (if applicable). The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option. Company’s Right to Cancel Certain Options. Any other provision of the Plan or a Stock Option Agreement notwithstanding, the Company shall have the right at any time to cancel an Option that was not granted in compliance with Rule 701 under the Securities Act. Prior to canceling such Option, the Company shall give the Optionee not less than 30 days’ notice in writing. If the Company elects to cancel such Option, it shall deliver to the Optionee consideration with an aggregate Fair Market Value equal to the excess of (i) the Fair Market Value of the Shares subject to such Option as of the time of the cancellation over (ii) the Exercise Price of such Option. The consideration may be delivered in the form of cash or cash equivalents, in the form of Shares, or a combination of both. If the consideration would be a negative amount, such Option may be cancelled without the delivery of any consideration. SECTION 7. PAYMENT FOR SHARES. General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7. In addition, the Board of Directors in its sole discretion may also permit payment through any of the methods described in (b) through (g) below: 

 

     

     

    

 

		Services Rendered. Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award. Promissory Note. All or a portion of the Purchase Price or Exercise Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note. Surrender of Stock. All or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value as of the date when the Option is exercised. Exercise/Sale. If the Stock is publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company. Net Exercise. An Option may permit exercise through a “net exercise” arrangement pursuant to which the Company will reduce the number of Shares issued upon exercise by the largest whole number of Shares having an aggregate Fair Market Value (determined by the Board of Directors as of the exercise date) that does not exceed the aggregate Exercise Price or the sum of the aggregate Exercise Price plus all or a portion of the minimum amount required to be withheld under applicable tax law (with the Company accepting from the Optionee payment of cash or cash equivalents to satisfy any remaining balance of the aggregate Exercise Price and, if applicable, any additional withholding obligation not satisfied through such reduction in Shares); provided that to the extent Shares subject to an Option are withheld in this manner, the number of Shares subject to the Option following the net exercise will be reduced by the sum of the number of Shares withheld and the number of Shares delivered to the Optionee as a result of the exercise. Other Forms of Payment. To the extent that an Award Agreement so provides, the Purchase Price or Exercise Price of Shares issued under the Plan may be paid in any other form permitted by the Delaware General Corporation Law, as amended. SECTION 8.ADJUSTMENT OF SHARES. General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a reclassification, or any other increase or decrease in the number of issued shares of Stock effected without receipt of consideration by the Company, proportionate adjustments shall automatically be made in each of (i) the number and kind of Shares available for future grants under Section 4, (ii) the number and kind of Shares covered by 

 

     

     

    

 

		each outstanding Option and any outstanding and unexercised right to purchase Shares that has not yet expired pursuant to Section 5(b), (iii) the Exercise Price under each outstanding Option and the Purchase Price applicable to any unexercised stock purchase right described in clause (ii) above, and (iv) any repurchase price that applies to Shares granted under the Plan pursuant to the terms of a Company repurchase right under the applicable Award Agreement. In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of the items listed in clauses (i) through (iv) above; provided, however, that the Board of Directors shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code. No fractional Shares shall be issued under the Plan as a result of an adjustment under this Section 8(a), although the Board of Directors in its sole discretion may make a cash payment in lieu of fractional Shares. Corporate Transactions. In the event that the Company is a party to a merger or consolidation, or in the event of a sale of all or substantially all of the Company’s stock or assets, all Shares acquired under the Plan and all Options and other Plan awards outstanding on the effective date of the transaction shall be treated in the manner described in the definitive transaction agreement (or, in the event the transaction does not entail a definitive agreement to which the Company is party, in the manner determined by the Board of Directors in its capacity as administrator of the Plan, with such determination having final and binding effect on all parties), which agreement or determination need not treat all Options and awards (or all portions of an Option or an award) in an identical manner. The treatment specified in the transaction agreement may include (without limitation) one or more of the following with respect to each outstanding Option or award: Continuation of the Option or award by the Company (if the Company is the surviving corporation). Assumption of the Option by the surviving corporation or its parent in a manner that complies with Code Section 424(a) (whether or not the Option is an ISO). Substitution by the surviving corporation or its parent of a new option for the Option in a manner that complies with Code Section 424(a) (whether or not the Option is an ISO). Cancellation of the Option and a payment to the Optionee with respect to each Share subject to the portion of the Option that is vested as of the transaction date equal to the excess of (A) the value, as determined by the Board of Directors in its absolute discretion, of the property (including cash) received by the holder of a share of Stock as a result of the transaction, over (B) the per-Share Exercise Price of the Option (such excess, the “Spread”). Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent having a value equal to the Spread. In addition, any escrow, holdback, earn-out or similar provisions in the transaction agreement may apply to such payment to the same extent and in the same manner 

 

     

     

    

 

		as such provisions apply to the holders of Stock. If the Spread applicable to an Option is zero or a negative number, then the Option may be cancelled without making a payment to the Optionee. Cancellation of the Option without the payment of any consideration; provided that the Optionee shall be notified of such treatment and given an opportunity to exercise the Option (to the extent the Option is vested or becomes vested as of the effective date of the transaction) during a period of not less than five (5) business days preceding the effective date of the transaction, unless (A) a shorter period is required to permit a timely closing of the transaction and (B) such shorter period still offers the Optionee a reasonable opportunity to exercise the Option. Any exercise of the Option during such period may be contingent upon the closing of the transaction. Suspension of the Optionee’s right to exercise the Option during a limited period of time preceding the closing of the transaction if such suspension is administratively necessary to permit the closing of the transaction. Termination of any right the Optionee has to exercise the Option prior to vesting in the Shares subject to the Option (i.e., “early exercise”), such that following the closing of the transaction the Option may only be exercised to the extent it is vested. For the avoidance of doubt, the Board of Directors has discretion to accelerate, in whole or part, the vesting and exercisability of an Option or other Plan award in connection with a corporate transaction covered by this Section 8(b). Reservation of Rights. Except as provided in this Section 8, a Participant shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. SECTION 9. PRE-EXERCISE INFORMATION REQUIREMENT. Application of Requirement. This Section 9 shall apply only during a period that (i) commences when the Company begins to rely on the exemption described in Rule 12h-1(f)(1) under the Exchange Act, as determined by the Company in its sole discretion, and (ii) ends on the earlier of (A) the date when the Company ceases to rely on such exemption, as determined by the Company in its sole discretion, or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. In addition, 

 

     

     

    

 

		this Section 9 shall in no event apply to an Optionee after he or she has fully exercised all of his or her Options. Scope of Requirement. The Company shall provide to each Optionee the information described in Rule 701(e)(3), (4) and (5) under the Securities Act. Such information shall be provided at six-month intervals, and the financial statements included in such information shall not be more than 180 days old. The foregoing notwithstanding, the Company shall not be required to provide such information unless the Optionee has agreed in writing, on a form prescribed by the Company, to keep such information confidential. SECTION 10. MISCELLANEOUS PROVISIONS. Securities Law Requirements. Shares shall not be issued under the Plan unless, in the opinion of counsel acceptable to the Board of Directors, the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. The Company shall not be liable for a failure to issue Shares as a result of such requirements. No Retention Rights. Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. Treatment as Compensation. Any compensation that an individual earns or is deemed to earn under this Plan shall not be considered a part of his or her compensation for purposes of calculating contributions, accruals or benefits under any other plan or program that is maintained or funded by the Company, a Parent or a Subsidiary. Governing Law. The Plan and all awards, sales and grants under the Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State. Conditions and Restrictions on Shares. Shares issued under the Plan shall be subject to such forfeiture conditions, rights of repurchase, rights of first refusal, other transfer restrictions and such other terms and conditions as the Board of Directors may determine. Such conditions and restrictions shall be set forth in the applicable Award Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. In addition, Shares issued under the Plan shall be subject to conditions and restrictions imposed either by applicable law or by Company policy, as adopted from time to time, designed to ensure compliance with applicable law or laws with which the Company determines in its sole discretion to comply including in order to maintain any statutory, regulatory or tax advantage. 

 

     

     

    

 

		Tax Matters. As a condition to the award, grant, issuance, vesting, purchase, exercise or transfer of any award, or Shares issued pursuant to any award, granted under this Plan, the Participant shall make such arrangements as the Board of Directors may require or permit for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such event. Unless otherwise expressly set forth in an Award Agreement, it is intended that awards granted under the Plan shall be exempt from Code Section 409A, and any ambiguity in the terms of an Award Agreement and the Plan shall be interpreted consistently with this intent. To the extent an award is not exempt from Code Section 409A (any such award, a “409A Award”), any ambiguity in the terms of such award and the Plan shall be interpreted in a manner that to the maximum extent permissible supports the award’s compliance with the requirements of that statute. Notwithstanding anything to the contrary permitted under the Plan, in no event shall a modification of an Award not already subject to Code Section 409A be given effect if such modification would cause the Award to become subject to Code Section 409A unless the parties explicitly acknowledge and consent to the modification as one having that effect. A 409A Award shall be subject to such additional rules and requirements as specified by the Board of Directors from time to time in order for it to comply with the requirements of Code Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” to an individual who is considered a “specified employee” (as each term is defined under Code Section 409A), then no such payment shall be made prior to the date that is the earlier of six months and one day after the Participant’s separation from service or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent such payment from being subject to Section 409A(a)(1). In addition, if a transaction subject to Section 8(b) constitutes a payment event with respect to any 409A Award, then the transaction with respect to such award must also constitute a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Code Section 409A. (iii) Neither the Company nor any member of the Board of Directors shall have any liability to a Participant in the event an award held by the Participant fails to achieve its intended characterization under applicable tax law. SECTION 11. DURATION AND AMENDMENTS; STOCKHOLDER APPROVAL. Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to approval of the Company’s stockholders under Subsection (d) below. The Plan shall terminate automatically 10 years after the later of (i) the date when the Board of Directors adopted the Plan or (ii) the date when the Board of Directors approved the most recent increase in the number of Shares reserved under 

 

     

     

    

 

		Section 4 that was also approved by the Company’s stockholders. The Plan may be terminated on any earlier date pursuant to Subsection (b) below. Right to Amend or Terminate the Plan. Subject to Subsection (d) below, the Board of Directors may amend, suspend or terminate the Plan at any time and for any reason. Effect of Amendment or Termination. No Shares shall be issued or sold and no Option granted under the Plan after the termination thereof, except upon exercise of an Option (or any other right to purchase Shares) granted under the Plan prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan. Stockholder Approval. To the extent required by applicable law, the Plan will be subject to approval of the Company’s stockholders within 12 months of its adoption date. To the extent required by applicable law, any amendment of the Plan will be subject to the approval of the Company’s stockholders within 12 months of the amendment date if it increases the number of Shares available for issuance under the Plan (except as provided in Section 8), or (ii) materially changes the class of persons who are eligible for the grant of ISOs. In addition, an amendment effecting any other material change to the Plan terms will be subject to approval of the Company’s stockholder only if required by applicable law. Stockholder approval shall not be required for any other amendment of the Plan. SECTION 12. DEFINITIONS. “Award Agreement” means a Stock Grant Agreement, Stock Option Agreement or Stock Purchase Agreement. “Board of Directors” means the Board of Directors of the Company, as constituted from time to time. “Code” means the Internal Revenue Code of 1986, as amended. “Committee” means a committee of the Board of Directors, as described in Section 2(a). “Company” means Denim.LA, Inc., a Delaware corporation. “Consultant” means a person, excluding Employees and Outside Directors, who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor and who qualifies as a consultant or advisor under Rule 701(c)(1) of the Securities Act or under Instruction A.1.(a)(1) of Form S-8 under the Securities Act. “Date of Grant” means the date of grant specified in the applicable Stock Option Agreement, which date shall be the later of (i) the date on which the Board of Directors resolved to grant the Option or (ii) the first day of the Optionee’s Service. 

 

     

     

    

 

		“Disability” means that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. “Employee” means any individual who is a common-law employee of the Company, a Parent or a Subsidiary. “Exchange Act” means the Securities Exchange Act of 1934, as amended. “Exercise Price” means the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement. “Fair Market Value” means the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all persons. “Family Member” means (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee own more than 50% of the voting interests. “Grantee” means a person to whom the Board of Directors has awarded Shares under the Plan. “ISO” means an Option that qualifies as an incentive stock option as described in Code Section 422(b). Notwithstanding its designation as an ISO, an Option that does not qualify as an ISO under applicable law shall be treated for all purposes as a Nonstatutory Option. “Nonstatutory Option” means an Option that does not qualify as an incentive stock option as described in Code Section 422(b) or 423(b). “Option” means an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. “Optionee” means a person who holds an Option. an Employee. “Outside Director” means a member of the Board of Directors who is not “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes 

 

     

     

    

 

		of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. “Participant” means a Grantee, Optionee or Purchaser. “Plan” means this Denim.LA, Inc. 2013 Stock Plan. “Purchase Price” means the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors. “Purchaser” means a person to whom the Board of Directors has offered the right to purchase Shares under the Plan (other than upon exercise of an Option). “Securities Act” means the Securities Act of 1933, as amended. “Service” means service as an Employee, Outside Director or Consultant. (aa)“Share” means one share of Stock, as adjusted in accordance with Section 8 (if applicable). (bb)“Stock” means the Common Stock of the Company. (cc) “Stock Grant Agreement” means the agreement between the Company and a Grantee who is awarded Shares under the Plan that contains the terms, conditions and restrictions pertaining to the award of such Shares. (dd) “Stock Option Agreement” means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to the Optionee’s Option. (ee) “Stock Purchase Agreement” means the agreement between the Company and a Purchaser who purchases Shares under the Plan that contains the terms, conditions and restrictions pertaining to the purchase of such Shares. (ff) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 

 

     

     

    

 

		EXHIBIT A SCHEDULE OF SHARES RESERVED FOR ISSUANCE UNDER THE PLAN Date of Board Approval Date of Stockholder Approval Number of Shares Added Cumulative Number of Shares January 30, 2013January 30, 2013Not Applicable1,500,000Exhibit 10.8

SENIOR CREDIT AGREEMENT

 

This SENIOR CREDIT
AGREEMENT (this “Agreement”), dated as of March 10, 2017 (the “Effective Date”), is by and among
Denim.LA, Inc., a Delaware corporation d/b/a DSTLD (“Borrower”), the stockholders of Borrower signatories below (the
 “Stockholders”), and bocm3- DSTLD-Senior Debt, LLC, a Utah limited liability company (“Lender”).

 

WHEREAS Borrower
has requested that Lender lend to Borrower up to $4,000,000.00 to refinance existing debt and to provide working capital to maintain and
expand the operations of Borrower and to pay fees and expenses, and Lender is willing to agree to lend such amount on the terms and conditions
of this Agreement.

 

NOW, THEREFORE,
in consideration of the premises and the agreements, provisions and covenants herein contained, Borrower and Lender agree as follows:

 

ARTICLE 1. DEFINITIONS

 

SECTION 1.1 Certain Defined Terms.

 

The following terms used in
this Agreement shall have the meanings set forth in the introductory paragraphs of this Agreement and the following meanings:

 

“Affiliate”
of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the
terms “controlling,” “controlled by,” and “under common control with”), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies
of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided, that beneficial
ownership of 15% or more of the voting securities (or the equivalents) of a Person shall be deemed to be control.

 

“Bankruptcy Code”
means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

 

“Business Day”
means any day other than a Saturday, Sunday or day on which banking institutions in Salt Lake City, Utah are authorized by law, regulation
or executive order to remain closed.

 

“Capital Lease Obligations”
means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such
time be required to be capitalized on a balance sheet in accordance with GAAP.

 

“Capital Stock”
means common stock, preferred stock and any other interest or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person. 

 

    

     

    

 

“Change of Control”
means any event, transaction or occurrence as a result of which (a) the equity owners of Borrower on the date hereof shall cease to own
and control, directly orindirectly, at least fifty percent (50%) of the economic or voting rights of the outstanding Capital Stock of
Borrower on a fully-diluted basis, (b) any initial public offering in which the aggregate net proceeds received by Borrower is at least
$10,000,000; or (c) Borrower shall have sold, issued, conveyed, transferred, leased, assigned or otherwise disposed to any Person (including
by means of a sale and leaseback transaction or a merger or consolidation), in one transaction or a series of related transactions, any
assets of Borrower other than in the ordinary course of business.

 

“Closing Date”
means each of the Initial Closing Date and Second Closing Date, if any. “Default” means any event that is or with the
passage of time or the giving of notice or

both would be an Event of Default.

 

“Employee Plan”
shall mean any savings, profit sharing, or retirement plan or any deferred compensation contract or other plan maintained for employees
of any Borrower and covered by Title IV of ERISA, including, without limitation, any “multiemployer plan” as defined in ERISA.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute, together with the regulations and
published interpretations thereunder, in each case as in effect from time to time.

 

“GAAP”
means U.S. generally accepted accounting principles consistently applied as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession,
which are in effect from time to time.

 

“Guarantee”
means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect,
in any manner (including, without limitation, by way of pledge of assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.

 

“Holder”
means any holder of a Note.

 

“Indebtedness”
means, with respect to any Person on any date of determination (without duplication), any indebtedness of such Person, whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or bankers’ acceptances or representing Capital Lease Obligations or the balance deferred and unpaid
of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable, if and to the extent
any of the foregoing indebtedness (other than letters of credit) would appear as a liability upon a balance sheet of such Person prepared
in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) and, to the extent not otherwise included, the Guarantee of any Indebtedness of such Person or any other Person.
The amount of any indebtedness outstanding as of any date shall be (a) the accreted value thereof, in the case of any indebtedness issued
with original issue discount, and (b) the principal amount thereof, together with any interest thereon that is more than 30 days past
due, in the case of any other indebtedness.

 

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“Initial Closing
Date” means March 10, 2017.

 

“Interest Payment
Date” means March 31, 2017, and the last day of each calendar month thereafter until the Note Maturity Date, when all amounts
under this Agreement are due.

 

“Law” shall
mean as to any matter or Person, the organizational or governing documents of such Person, and any law (including, without limitation,
any environmental law), ordinance, treaty, rule, regulation, order, decree, determination or other requirement having the force of law
relating to such matter or Person and, where applicable, any interpretation thereof by any government authority.

 

“Lender”
has the meaning assigned to that term in the introduction to this Agreement and shall include any assignees of a Loan or a Note pursuant
to the terms and conditions of Section 8.1 hereof.

 

“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under Law (including any conditional sale or other title retention agreement,
any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

 

“Loan Collateral”
means, collectively, the Collateral (as defined in the Security Agreement) and any other security or collateral provided from time to
time by, or on behalf of, the Borrower or any other Person for the Obligations.

 

“Loan Documents”
shall mean this Agreement, each of the Notes, the Security Documents and all other documents, instruments and agreements executed and/or
delivered in connection therewith, each as amended, supplemented or modified from time to time.

 

“Material Adverse
Effect” means (a) any material adverse effect upon, the operations, business, properties, prospects or condition (financial
or otherwise) of Borrower taken as a whole, (b) a material impairment of the ability of Borrower to perform under any Loan Document, or
(c) a material impairment of the right of Lender to enforce any Loan Document.

 

“Note”
means each Note issued pursuant to the terms and conditions of Section 2.1 hereof, substantially in the form of Exhibit A
hereto.

 

“Note Maturity Date”
means the third anniversary of the Initial Closing Date.

 

“Obligations”meansanyprincipal,interest,penalties,fees,indemnifications,
reimbursements, damages and other liabilities payable under the Loan Documents.

 

“Officer”
means, with respect to any Person, a manager, the Chief Executive Officer, the President, the Chief Operating Officer, or the Chief Financial
Officer of such Person.

 

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“Officers’
Certificate” means a certificate signed on behalf of Borrower by two Officers of Borrower, one of whom must be the principal
executive officer or the principal financial officer of Borrower.

 

“Permitted Liens”
means:

 

(a)    Liens
for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith
and for which Borrower maintains adequate reserves on its financial statements;

 

(b)    Liens
of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long
as such Liens attach only to Borrower’s inventory and which are not delinquent;

 

(c)    Liens
to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred
by Borrower in the ordinary course of business (other than Liens imposed by ERISA);

 

(d)    leases
of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course
of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual
Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such
Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Lender a security interest
therein; and

 

(e)    Liens
in favor of Lender.

 

“Person”
means any individual, corporation, partnership, joint venture, association, trust, unincorporated organization or government or agency
or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets
of any such entity, subdivision or business).

 

“Second Closing Date”
means the date on which Lender provides the proceeds of the Second Loan.

 

“Security Agreement”
means the Security Agreement, between Lender and Borrower, dated of even date herewith.

 

“Security Documents”
means, collectively, the Security Agreement, the Trademark Security Agreement, and all security agreements, pledge agreements, collateral
assignments, mortgages, deeds of trust and other documents executed in connection with this Agreement and granting to Lender or Lender’s
Affiliates Liens on the Loan Collateral to secure the Obligations, together with all financing statements and other documents necessary
to record or perfect the Liens granted by any of the foregoing, and “Security Document” means any one of the Security
Documents, in each case as supplemented, restated, or otherwise changed or modified and any substitute or replacement agreements, instruments,
or documents accepted by Lender or, as applicable, such Affiliate of Lender.

 

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“Subsidiary”
means, with respect to any Person, (i) any corporation, limited liability company, association or other business entity of which more
than 50% of the total voting power of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election
of directors or managers thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries
of such Person (or any combination thereof).

 

“Trademark Security
Agreement” means the Trademark Security Agreement, between Lender and Borrower, dated of even date herewith.

 

“TTM Gross Revenue”
means the grand total of all Borrower sale transactions, before returns and discounts for the prior twelve calendar months.

 

SECTION 1.2 Accounting
Terms. For purposes of this Agreement, unless otherwise specified, all accounting terms used herein or in any other Loan Document
shall be interpreted, all accounting determinations and computations hereunder or thereunder shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared in accordance with GAAP.

 

ARTICLE 2. AMOUNT AND TERMS OF NOTES AND LOANS;
WARRANTS

 

SECTION 2.1 Loans and Notes.

 

(a)    First
and Second Loan. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of
Borrower herein set forth, Lender hereby agrees to lend to Borrower up to $2,000,000.00 (the “Initial Committed Amount”),
with no less than $1,345,000.00 to be loaned on the Initial Closing Date. The dollar amount actually loaned on the Initial Closing Date
shall be referred to herein as the “First Loan”. Concurrent with the delivery by Lender of the First Loan proceeds
to Borrower, Borrower shall execute and deliver to Lender a Note dated as of the date of such funding in the principal amount of the First
Loan. On or before April 7, 2017 (the “Subsequent Initial Funding Date”), Lender hereby agrees, on a best-efforts basis,
to lend Borrower an amount equal to the difference between the Initial Committed Amount and the First Loan (the “Second Loan”).
Concurrent with the delivery by Lender of the Second Loan proceeds to Borrower, Borrower shall execute and deliver to Lender a Note dated
as of the date of such funding in the principal amount of the Second Loan.

 

(b)    Third
Loan. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Borrower herein
set forth, Lender further may loan Borrower an amount such that the First Loan plus the Second Loan plus the additional loan total up
to $4,000,000.00 (the “Third Loan”, and together with the First Loan and the Second Loan, the “Loans”)
at any time after Borrower delivers to Lender a monthly financial statement showing that Borrower’s TTM Gross Sales totaled at least
$5,000,000.00 and upon Borrower providing Lender with at least forty-five (45) days’ prior written notice of Borrower’s request
for the Third Loan, and provided that (i) Lender has funding for the Third Loan which Lender has sought on a best-efforts basis and (ii)
Borrower has received an additional $1,000,000.00 from sales of Borrower equity after the Subsequent Initial Funding Date. Concurrent
with the delivery by Lender of the Second Loan proceeds to Borrower, Borrower shall execute and deliver to Lender a Note dated as of the
date of such funding in the principal amount of the Second Loan.

 

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(c)    Repayment.
The unpaid principal amount of the Loans, plus all accrued and unpaid interest with respect thereto, and all other amounts owed hereunder
with respect thereto shall be paid in full in cash on the Note Maturity Date.

 

SECTION 2.2 Interest on
the Loans.

 

(a)    Rate
of Interest. Except as provided in Section 2.2(b) below, the Loans shall bear interest on the unpaid principal amount thereof
from the applicable Closing Date through maturity (whether by acceleration or otherwise) at a rate equal to 12.50% per annum, compounded
monthly; provided, however, that interest on the First Loan shall be calculated as though the First Loan were made on March 1, 2017.

 

(b)    Post-Default
Interest. Following the occurrence and during the continuance of an Event of Default, to the extent permitted by applicable law, the
Loans shall bear interest at a rate equal to 18.00% per annum, compounded monthly, or the highest rate allowed by Applicable Law,
if lower.

 

(c)    Computation
of Interest. Interest on the Loans shall be computed on the basis of a 360-day year. In computing such interest, the date of the making
of the applicable Loan shall be included and the date of payment shall be excluded.

 

SECTION 2.3 Prepayments
and Payments.

 

(a)           
Prepayments.

 

(i)              Voluntary
Prepayments. Borrower may, upon not less than forty- five (45) days prior written notice to Lender (which notice shall be irrevocable),
at any time and from time to time, prepay the Loans in whole or in part, with a minimum prepayment amount of $250,000.00, and in additional
increments of $50,000 thereafter. Voluntary prepayments permitted hereunder shall be credited against the Loans pursuant to the terms
and conditions of Section 2.3(a)(iii). Amounts of a Loan so prepaid may not be reborrowed. If a prepayment is made on or before the first
anniversary of the applicable Closing Date, such prepayment shall include a prepayment fee equal to the greater of (A) all interest that
would have been paid on such amount prepaid on or prior to the first anniversary of the applicable Closing Date as if such prepayment
had not been made or (B) the principal amount being repaid multiplied by 2.50%. If a prepayment is made after the first anniversary of
a Closing Date but before the second anniversary of such Closing Date, such prepayment shall include a prepayment fee equal to the principal
amount being repaid multiplied by 2.00%.

 

(ii)            Mandatory
Prepayments. Following the occurrence of a Change of Control (the date of such occurrence, the “Change of Control Date”
), Lender shall have the right, but not the obligation, to require Borrower to prepay the Loans in whole. No fewer than thirty (30) days
prior to a Change of Control Date, Borrower shall give a written notice to Lender stating that a Change of Control will occur. Lender
shall, within ten (10) Business Days of receipt of such notice, notify Borrower if it will require a prepayment hereunder. Such prepayment
shall be due on the Change of Control Date.

  

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(iii)           Application
of Prepayments. All prepayments permitted hereunder (whether voluntary or mandatory) shall include payment of accrued interest on the
principal amount of the Loans so prepaid and shall be applied to payment of fees and costs, then interest before application to principal.
All payments permitted or required under Section 2.3(a) shall include any applicable prepayment fee set forth in Section 2.3(a)(i).

 

(b)              
Interest and Reduction Payments. Interest shall be payable with respect to the Loans in arrears on each Interest Payment Date,
commencing on the initial Interest Payment Date, and upon any prepayment of the Loans (to the extent of accrued interest on the principal
amount of the Loans so prepaid) and at maturity of the Loans.

 

(c)               
Manner and Time of Payment. All payments by Borrower under the Loans of principal, interest, and fees shall be made without defense,
set off, or counterclaim, in same day funds and delivered to Lender not later than 2:00 P.M. (Salt Lake City, Utah time) on the date due
by wire transfer as instructed by Lender, or such other place designated in writing by Lender and delivered to Borrower, for the account
of Lender. Funds received by Lender after such time shall be deemed to have been paid by Borrower on the next succeeding Business Day.

 

(d)              
Payments on Non-Business Days. Whenever any payment to be made hereunder or under the Loans shall be stated to be due on a day
which is not a Business Day, the payment shall be made on the next succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the Loans.

 

SECTION 2.4 Fees. Borrower
shall pay to bocm3, LLC a nonrefundable closing fee of 5% of the amount of the First Loan plus all accounting and legal fees arising out
of the Loan and the preparation of this Agreement (the “First Closing Fee”) to offset transaction costs of bocm3, LLC
and its Affiliates; provided, however, that Lender’s accounting and legal fees arising out of the Loan and the preparation of this
Agreement prior to the Effective Date shall not exceed $40,000.00. The First Closing Fee shall be payable on the Initial Closing Date,
and may be withheld from the proceeds of the First Loan. The First Closing Fee, once paid, shall be nonrefundable under all circumstances.
Upon the funding of the Second Loan on the Second Closing Date and the funding of the Third Loan, if any, Borrower shall pay to bocm3,
LLC a nonrefundable closing fee of 5% of the amount of the Second Loan and Third Loan, if any (the “Subsequent Closing Fees”)
to offset transaction costs of bocm3, LLC and its Affiliates. The Subsequent Closing Fees shall be payable on the applicable Closing Date,
and may be withheld from the proceeds of the applicable Loan.

 

SECTION 2.5 Security Interest.
Borrower shall maintain Lender’s security interest in the Loan Collateral in first-priority position until the Loans are satisfied
in full.

  

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SECTION 2.6 Warrants.
Borrower has duly authorized the issuance to Lender of warrants to purchase Borrower’s common stock representing 1% of the Capital
Stock of Borrower on a fully-diluted basis on the Closing Date of the Second Loan (the “First Warrant”) for each $1
million of the principal amount of the Loans on the Closing Date of the Second Loan, which shall be pro rated based on the actual amount
of the Loans, at an exercise price of $0.16 per share. The First Warrant shall be in the form attached hereto as Exhibit B and
shall be issued even in the event the Initial Committed Amount is not loaned to Borrower in full. If the Third Loan is made in full, Borrower
shall authorize the issuance to Lender of warrants to purchase Borrower’s common stock such that Lender shall have warrants to purchase
1% of the Capital Stock of Borrower on a fully-diluted basis on the Closing Date of the Third Loan, if any (the “Second Warrant”)
for each $1 million of the principal amount of the Loans on the Closing Date of the Second Loan, which shall be pro rated based on the
actual amount of the Third Loan, at an exercise price of $0.16 per share. The Second Warrant shall be in the form attached hereto as Exhibit
B.

 

ARTICLE 3. CONDITIONS TO LOANS

 

SECTION 3.1 Conditions
to Loans. The obligation of Lender to make each Loan hereunder is subject to the satisfaction of all of the following conditions as
of the applicable Closing Date:

 

(a)    Organizational
Documents. On or before the Initial Closing Date, Lender shall have received the following items, each of which shall be in form and
substance reasonably satisfactory to Lender and, unless otherwise noted, dated as of the Closing Date:

 

(i)              a correct and complete copy of the certificate of incorporation of Borrower, such copy certified as of the Closing Date by an Officer
of Borrower;

 

(ii)             a copy of the bylaws of Borrower, such copy certified as of the Closing Date by an Officer of Borrower;

 

(iii)            a copy of the Stockholders’ Agreement of Borrower, if any, such copy certified as of the Closing Date by an Officer of Borrower;

 

(iv)            a resolution of the board of directors of Borrower, approving and authorizing the execution, delivery and performance of the Loan Documents
and any other documents, instruments, and certificates required to be executed by each party thereto in connection therewith, certified
as of the Closing Date by an Officer of Borrower as being in full force and effect without modification or amendment; and

 

(v)             executed copies of the Loan Documents and such other documents and information as Lender may reasonably request.

 

(b)    Event
of Default. No event shall have occurred and be continuing or would result from the consummation of the borrowing contemplated hereby
which would constitute an Event of Default.

 

(c)    No
Injunction, etc. No order, judgment, or decree of any court, arbitrator or governmental authority shall enjoin or restrain Lender
from making the Loans.

 

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(d)    Fees
and Expenses. Lender shall have received payment in full for all expenses (including reasonable accountant and attorney’s fees)
incurred in connection with the negotiation and execution of this Agreement and the Loan Documents and the First Closing Fee or Second
Closing Fee, if applicable (which fees and expenses are to be paid out of the proceeds of the applicable Loan).

 

(e)    Due
Diligence. Lender shall have completed its due diligence investigation to its satisfaction with respect to Borrower.

 

(f)    Material
Adverse Change. No change which could reasonably be expected to have a Material Adverse Effect shall have occurred since December
31, 2015.

 

(g)    Access
Agreement. The landlord for each location at which a material portion of Borrower’s inventory or other assets may be located
shall have executed a Landlord Waiver and Consent Agreement with Lender acceptable to Lender in Lender’s sole discretion.

 

(h)    Pledge
Agreement. The Stockholders shall have executed a Pledge Agreement pledging all of their Capital Stock in Borrower in favor of Lender
reasonably acceptable to Lender.

 

ARTICLE 4. REPRESENTATIONS AND WARRANTIES

 

In order to induce Lender
to enter into this Agreement and to make each Loan and subject to the Disclosure Schedules, Borrower represents and warrants to Lender
on each Closing Date, and Stockholders, severally but not jointly based on the percentages set forth by such Stockholder’s signature
to this Agreement, represent and warrant to Lender on each Closing Date, that:

 

SECTION 4.1 Organization
and Good Standing. Borrower is a corporation duly organized and existing in good standing under the laws of Delaware. Borrower has
the necessary power and authority to own its properties and assets and to transact the business in which it is engaged and is duly qualified
as a foreign entity and in good standing in all states in which it is required to be so qualified, except where failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect. Borrower has no Subsidiaries.

 

SECTION 4.2 Authorization
and Power. Borrower has the power and requisite authority, and has taken all action necessary, to execute, deliver and perform its
obligations under the Loan Documents.

 

SECTION 4.3 No Conflicts
or Consents. The execution, delivery, and performance by Borrower of its obligations under the Loan Documents and the consummation
of any of the transactions contemplated thereby (collectively, the “Transactions”), and compliance with the terms and
provisions hereof or thereof will not contravene or conflict with any provision of Law to which any such Person is subject or any judgment,
license, order, or permit, applicable to such Person, or any contractual obligations of such Person, or violate any provision of the charter,
bylaw or other organizational document of such Person. Except as set forth in Schedule 4.3, no consent, approval, authorization, or order
of any governmental authority or other Person is required in connection with the consummation of the Transactions, except for such required
consents, approvals, and authorizations which have been obtained by Borrower or permanently waived in writing.

 

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SECTION 4.4 Enforceable
Obligations. The Loan Documents have been duly executed and delivered by Borrower and are, or will be, the legal and binding obligations
of Borrower, enforceable in accordance with their respective terms, subject to applicable laws of bankruptcy, insolvency, and similar
laws affecting creditors’ rights and the application of general rules at equity.

 

SECTION 4.5 No Event of
Default. No event has occurred and is continuing which constitutes an Event of Default.

 

SECTION 4.6 Use of Proceeds.
The proceeds of the Loans will be used solely (i) to repay indebtedness to MBMJ Capital LLC dba Continental Business Credit, in an amount
not to exceed $500,000 (ii) to fund expenses in connection with this Agreement and (iii) for general working capital purposes.

 

SECTION 4.7 Compliance
with Law. Borrower is and has been in compliance with all applicable laws, including without limitation environmental, tax and employment
laws. No notice has been served on Borrower claiming any violation of laws, asserting liability or demanding payment or contribution for
liability or violation of laws.

 

SECTION 4.8 Capital Structure.
As of the Closing Date, all outstanding Capital Stock of Borrower is held as set forth on Schedule 4.8(a). All outstanding shares
of Capital Stock were duly authorized and validly issued, and are fully paid and nonassessable. As of the Closing Date, except as set
forth on Schedule 4.8(a), there are no outstanding securities, options, warrants, rights, or other agreements of any nature that
require Borrower to issue any additional Capital Stock.

 

SECTION 4.9 Financial Condition.
Immediately after the consummation of the Transactions to occur on the Closing Date, (a) the fair value of the assets of Borrower at fair
valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property
of Borrower will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) Borrower will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) Borrower will not
have 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 following the Closing Date.

 

SECTION 4.10Disclosure.
Borrower has provided Lender with all material information relating to Borrower. No Loan Document nor any other agreement, document, certificate,
or statement furnished to Lender and prepared by or on behalf of Borrower in connection with the transactions contemplated by the Loan
Documents, nor any representation or warranty made by Borrower in any Loan Document, contains any untrue statement of material fact or
omits to state any fact necessary to make the factual statements therein taken as a whole not materially misleading in light of the circumstances
under which it was furnished. There is no fact known to Borrower which has not been disclosed to Lender in writing that could constitute
or is likely to give rise to a Material Adverse Effect.

 

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SECTION 4.11Litigation.
There is no suit, action, proceeding, including, without limitation, any bankruptcy proceeding or governmental investigation pending or,
to Borrower’s knowledge, threatened against Borrower, or any judgment, decree, injunction, rule, or order of any court, government,
department, commission, agency, instrumentality or arbitrator outstanding against Borrower, nor is Borrower in violation of any applicable
law, regulation, ordinance, order, injunction, decree or requirement of any governmental body or court which could in any of the foregoing
events reasonably be expected to have a Material Adverse Effect.

 

SECTION 4.12Good Title;
No Liens. Borrower has good and valid title (or, in the case of real property, if any, good and marketable title) to all assets owned
by it, including, without limitation, all assets listed on the financial statements of Borrower, and Borrower has a valid leasehold or
interest as a lessee or a licensee in all of its leased real property. There are no Liens on and no financing statements on file with
respect to any of the assets owned by Borrower.

 

SECTION 4.13No Defaults.
Borrower is not in default under or with respect to any Material Contract to which is a party or by which it or any of its property is
bound.

 

SECTION 4.14Patents,
Copyrights, Tradenames, etc. Borrower possesses all patents, copyrights, domain names, trademarks, trade names, copyrights, trade
styles, trade secrets, know-how, technology, process, licenses and permits, and rights in respect of the foregoing (“Intellectual
Property”), adequate for the conduct of its business as now conducted and as currently proposed to be conducted without conflict
with any rights of others. All registered Intellectual Property of Borrower or used in its business is listed on Schedule 4.14.

 

SECTION 4.15Security
Interests. Lender has a legal, valid, perfected, first priority security interest in the Loan Collateral and the Loan Collateral is
and at all times shall be free and clear of all other Liens, other than Permitted Liens.

 

SECTION 4.16Financial
Statements. Borrower’s audited financial statements for year ended periods of December 31, 2014 and December 31, 2015, its unaudited
financial statements for the year ended period of December 31, 2016, and the unaudited financial statements prepared by Borrower for the
one month period ended January 31, 2017 are true and correct, were prepared in accordance with GAAP (except that the unaudited and interim
financial statements are subject to normal year-end adjustments and the inclusion of financial statement notes) consistently applied throughout
the applicable periods, and present fairly, in all material respects, the financial condition of Borrower as of such dates and the results
of its operations and cash flows for the periods then ended. The financial forecasts furnished to Lender by Borrower have been prepared
based upon information and assumptions prepared in good faith by Borrower; all material assumptions reflected in such forecasts are clearly
set forth therein; the information and assumptions set forth therein are materially accurate and reasonable as of the date thereof and
represent a reasonable range of possible results in light of Borrower’s present and foreseeable conditions and the intentions of
Borrower’s management; and, Borrower has no knowledge that any such assumptions are materially inaccurate or that the results reflected
in the forecasts are not reasonably attainable.

  

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SECTION 4.17No Undisclosed
Liabilities. Except for (a) the liabilities reflected on, and to the extent adequately accrued or reserved against in, its balance
sheets and (b) the liabilities set forth in Schedule 4.17, Borrower has no liabilities or obligations of any nature (whether accrued,
absolute, contingent, known, unknown or otherwise, and whether or not of a nature required to be disclosed or reserved against in a balance
sheet prepared in accordance with GAAP or Borrower’s historic accounting practices).

 

SECTION 4.18Governmental
Authority. Borrower has received all licenses, permits, and approvals of all federal, state, and local governmental authorities, if
any, necessary to conduct its business. No investigation or proceeding against or with respect to Borrower which, if adversely determined,
could reasonably be expected to result in revocation or denial of any license, permit or approval of Borrower is pending or, to the knowledge
of Borrower, threatened.

 

SECTION 4.19Affiliate
Transactions. Except as set forth on Schedule 4.19, Borrower is not a party to any contracts or agreements with any of its
Affiliates, and each such contract or agreement is on terms and conditions which are no less favorable to Borrower than would be usual
and customary in similar contracts or agreements between Persons not affiliated with each other. Except as set forth on Schedule 4.19,
no current or former director, officer, employee or stockholder of Borrower (or any member of their immediate family or any of their Affiliates)
is currently, or within the past year has been, a party to any transaction with Borrower (including but not limited to any contract, agreement
or other arrangement providing for the furnishing of services by or rental of real or personal property from or otherwise requiring payments
to any such manager, director, officer, employee or member), except for employment arrangements for the payment of cash compensation in
the ordinary course of the business. No current manager, director, officer, employee or owner of Borrower is the direct or indirect owner
of any interest in any corporation, firm, association or Person that is a competitor of Borrower.

 

SECTION 4.20ERISA.
Borrower is in compliance with the applicable provisions of ERISA and: (a) no “prohibited transaction” as defined in Section
406 of ERISA or Section 4975 of the Code has occurred; (b) no “reportable event” as defined in Section 4043 of ERISA has occurred;
(c) no “accumulated funding deficiency” as defined in Section 302 of ERISA (whether or not waived) has occurred; (d)
there are no unfunded vested liabilities of any Employee Plan administered by Borrower; and (e) Borrower or the plan sponsor has timely
filed all returns and reports required to be filed for each Employee Plan.

 

SECTION 4.21Taxes.
Borrower has filed all federal, state, foreign and local tax returns which were required to be filed, except those returns for which the
due date has been validly extended. Borrower has paid or made provisions for the payment of all taxes, assessments, fees and other governmental
charges owed, and no tax deficiencies have been proposed, threatened or assessed against Borrower.

  

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SECTION 4.22Brokerage.
If any broker, agent or finder acted on behalf of Borrower, the fees and expenses of such broker, agent or finder are the responsibility
of and will be paid by Borrower.

 

SECTION 4.23Employees.
(a) Borrower is not subject to any collective bargaining agreement, (b) to Borrower’s knowledge, no petition for certification or
union election is pending with respect to the employees of Borrower and no union or collective bargaining unit has sought such certification
or recognition with respect to the employees of Borrower and (c) there are no strikes, slowdowns, work stoppages or controversies pending
or threatened between Borrower and its employees. Except as set forth on Schedule 4.23, Borrower is not party to an employment
contract other than employee confidentiality agreements, invention agreements, non-competition agreements and offer letters in the ordinary
course of business. The compensation paid to each Borrower employee in 2016 and the expected compensation for each Borrower employee in
2017 are set forth on Schedule 4.23.

 

SECTION 4.24Insurance.
Schedule 4.24 accurately summarizes all of the insurance policies or programs of Borrower. All such policies are in full force
and effect, underwritten by financially sound and reputable insurers and, to Borrower’s knowledge, sufficient for all applicable
requirements of law.

 

SECTION 4.25Material
Contracts. Borrower has provided to Lender accurate and complete copies of all of the following agreements or documents to which it
is subject as of each Closing Date (and each such agreement or document is listed in Schedule 4.25): (i) supply agreements and
purchase agreements not terminable by Borrower within thirty (30) days following written notice issued by Borrower and involving transactions
in excess of $50,000 per annum and with a remaining term of one year or longer; (ii) leases of equipment having a remaining term of one
year or longer and requiring aggregate rental and other payments in excess of $50,000 per annum; and (iii) instruments and documents evidencing
any Indebtedness with a remaining principal balance of $50,000 or more following the Closing Date; and (iv) instruments and agreements
evidencing an obligation to issue any equity securities, warrants, rights or options to purchase equity securities of Borrower (collectively,
the “Material Contracts”). Each of the Material Contracts is in full force and effect and Borrower is not in violation
of or in default under any Material Contract to which it is a party or by which its assets are subject or bound, and, to Borrower’s
knowledge, the counter-party to each Material Contract is not in violation or in default under any Material Contract.

 

SECTION 4.26Deposit
Accounts. Schedule 4.26 hereto lists all banks, other financial institutions at which Borrower maintains deposit accounts or
securities accounts as of the Closing Date, and identifies the name, address and telephone number of each such financial institution or
securities intermediary, the name in which the account is held, a description of the purpose of the account, and the complete account
number therefor.

 

SECTION 4.27Locations.
As of the Closing Date, Borrower has places of business or maintains its assets at the locations (including third party locations) set
forth on Schedule 4.27, and Borrower’s chief executive office is set forth on Schedule 4.27. As of the Closing Date,
Schedule 4.27 correctly identifies the name and address of each third party location where assets of the Borrower is located.

 

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SECTION 4.28Inventory.
Except for inventories which have been reserved or written off on Borrower’s books in the ordinary course of business and consistent
with past practice, Borrower’s inventories of raw materials, work-in-process and finished goods are in saleable condition (and with
respect only to finished goods, conform with Borrower’s applicable specifications and warranties), are not obsolete or slow moving,
and are usable or saleable without markdown or discount in the ordinary course of business. All finished goods inventory has been produced
in compliance with Borrower’s and its customers’ quality control and safety requirements and procedures. Except as set forth
in Schedule 4.28, Borrower has no liability or obligation, except for liabilities and obligations arising from Borrower’s
warranty obligations, with respect to the return of inventory in the possession of any third parties. Except as set forth in Schedule
4.28, none of the inventory of Borrower is held by any Person other than Borrower or held on consignment or consigned to or from any
third party.

 

SECTION 4.29Customer
Warranties. Except as set forth on Schedule 4.29, Borrower has not given to any Person any product warranty, right of return,
or other indemnity relating to the products manufactured, sold, leased, licensed, or delivered by Borrower. Except as set forth on Schedule
4.29, Borrower has not incurred any loss in excess of $25,000, as a result of any defect or other deficiency (whether of design, materials,
workmanship, labeling, instructions, or otherwise) with respect to any product designed, manufactured, sold, or delivered by Borrower,
whether such loss is incurred by reason of any express or implied warranty, any doctrine of common law (tort, contract, or other), any
law, or otherwise. Borrower has not received notice that a governmental authority has alleged that any product designed, manufactured,
sold, or delivered by Borrower is defective or unsafe or fails to meet any product warranty or any standards promulgated by any such governmental
authority.

 

SECTION 4.30Real Property.
Borrower owns no real property. Schedule 4.30 is a true and complete list of all real property leased by Borrower, including each
lease entered into with respect to such real property. All such leases are valid, binding and enforceable in accordance with their respective
terms, and there does not exist under any such lease any default by Borrower, or any event that, with notice or lapse of time or both,
would constitute a default.

 

SECTION 4.31Limitations
on Competition. Borrower is not a party to any written or oral contract which limits its right to freely engage in any line of business
related or similar to its business, or to freely compete with any person anywhere in the world. Borrower has entered into written agreements
with all of its senior executives prohibiting competition with Borrower, in forms provided to Lender.

 

SECTION 4.32Accounts
Receivable. All of Borrower’s accounts receivable, notes and notes receivable, including all rights of Borrower to payment for
goods supplied to customers, are (a) for sales actually made or services actually performed, and (b) reflected on Borrower’s books
and records in accordance with Borrower’s standard practices in the ordinary course of business. There is no contest, claim or right
of set-of, other than returns in the ordinary course of business, under any contract with any account debtor of an account receivable
relating to the amount or validity of such account receivable. All sales made by Borrower has been made in the ordinary course of business.

 

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SECTION 4.33Reliance
on Representations. All representations and warranties contained in this Agreement and any financial statements, instruments, certificates,
schedules or other documents delivered in connection herewith, shall survive the execution and delivery of this Agreement, regardless
of any investigation made by Lender or on Lender’s behalf.

 

ARTICLE 5. AFFIRMATIVE COVENANTS

 

Borrower covenants and agrees
that, until the Loans and all other amounts due under this Agreement have been paid in full, unless Lender shall otherwise give prior
written consent, Borrower shall perform all covenants contained in this Article 5:

 

SECTION 5.1 Financial Statements
and Other Reports. Borrower shall furnish to Lender:

 

(a)    as soon
as available, and in any event no later than 25 days after the last day of each calendar month, a copy of the balance sheet of Borrower
as of the last day of such month and the statements of income, retained earnings, cash flows and written management description (in reasonable
detail) on Borrower for the month and for the fiscal year to date period then ended, each in reasonable detail, prepared by Borrower in
accordance with GAAP (subject to the absence of footnote disclosures and normal year end adjustments) and certified to by its chief financial
officer or another officer of Borrower acceptable to Lender (collectively, the “Monthly Financial Statements”);

 

(b)    as soon
as available, and in any event no later than 90 days after the last day of each fiscal year of Borrower, a copy of the audited balance
sheet of Borrower as of the last day of the fiscal year then ended and the audited statement of income, statement of retained earnings,
and cash flows for the fiscal year then ended, and accompanying notes thereto, showing in comparative form the figures for the previous
fiscal year, accompanied in the case of the financial statements by an unqualified opinion of an independent public accountant firm of
recognized standing, selected by Borrower and reasonably satisfactory to Lender, to the effect that such financial statements have been
prepared in accordance with GAAP and present fairly in all material respects in accordance with GAAP the financial condition of Borrower
as of the close of such fiscal year and the results of their operations and cash flows for the fiscal year then ended and that an examination
of such accounts in connection with such financial statements has been made in accordance with generally accepted auditing standards;

 

(c)    within
the period provided in subsection (b) above, the written statement of the accountants who certified the audit report thereby required
that in the course of their audit they have obtained no knowledge of any Default or Event of Default, or, if such accountants have obtained
knowledge of any such Default or Event of Default, they shall disclose in such statement the nature and period of the existence thereof
and all reports rendered by such accountants to Borrower’s management, and such accountants shall be available for discussions with
officers of Lender;

 

(d)    promptly
after receipt thereof, a copy of each audit made by any regulatory agency of the books and records of Borrower or of notice of any material
noncompliance with any applicable law, regulation or guideline relating to Borrower, or its business;

 

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(e)    as soon
as available, and in any event no later than 30 days prior to the end of each fiscal year of Borrower, a copy of Borrower’s operating
and financial budgets for the following fiscal year, such operating and financial budgets to show Borrower’s projected balance sheet
and statements of income, retained earnings and cash flows, each on a monthly basis, such business plan to be in reasonable detail prepared
by Borrower and in form reasonably satisfactory to Lender (which shall include, without limitation, a summary of all material assumptions
made in preparing such business plan); and

 

(f)    as soon
as available, and in any event no later than 25 days after the last day of each calendar month, a written certificate (“Compliance
Certificate”) signed by the chief financial officer of Borrower or another officer of Borrower acceptable to Lender to the effect
that (i) to the best of such officer’s knowledge and belief no Default or Event of Default has occurred during such period or, if
any such Default or Event of Default has occurred during such period, setting forth a description of such Default or Event of Default
and specifying the action, if any, taken by Borrower to remedy the same; (ii) a review of the activities of Borrower during the preceding
fiscal quarter has been made under the supervision of the signing Officers with a view to determining whether Borrower has kept, observed,
performed and fulfilled its obligations under this Agreement, (iii) to the best of his or her knowledge Borrower has kept, observed, performed
and fulfilled each and every covenant contained in this Agreement and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Agreement.

 

SECTION 5.2 Existence.
Borrower shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its existence, in accordance
with its organizational documents (as the same may be amended from time to time) and (ii) the rights (charter and statutory), licenses
and franchises of Borrower: provided, however, that Borrower shall not be required to preserve any such right, license
or franchise, if Borrower shall determine that the preservation thereof is no longer desirable in the conduct of the business of Borrower,
taken as a whole, and that the loss thereof is not adverse in any material respect to Lender.

 

SECTION 5.3 Payment of
Obligations. Borrower shall pay, discharge or otherwise satisfy, at or before maturity or before they become delinquent, as the case
may be, all of its obligations of whatever nature, including without limitation all assessments, governmental charges and taxes, claims
for labor, supplies, rent or other obligations, except where the amount or validity thereof is currently being appropriately contested
in good faith and reserves in conformity with GAAP with respect thereto have been provided on the books of Borrower.

 

SECTION 5.4 Compliance
with Laws, Etc.

 

(a)    Borrower
shall comply in all respects with the requirements of all federal, state and local laws, rules, regulations, ordinances and orders applicable
to Borrower. 

 

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(b)    So long
as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 5.1 above shall be accompanied by a written statement of Borrower’ independent public
accountants that in making the examination necessary of such financial statements, nothing has come to their attention that would lead
them to believe that Borrower has violated any provisions of Article 5, 6 or 7, hereof or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any
Person for any failure to obtain knowledge of any such violation.

 

(c)    Borrower
shall, so long as any portion of a Loan is outstanding, deliver to Lender, forthwith upon any Officer becoming aware of any Event of Default,
an Officers’ Certificate specifying such Event of Default and what action Borrower is taking or proposes to take with respect thereto.

 

SECTION 5.5 Maintenance
of Accurate Records, Etc. Borrower shall maintain books of records and accounts consistent with past practices, in which complete
and correct entries consistently applied shall be made of all financial transactions and matters involving the assets and business of
Borrower.

 

SECTION 5.6 Lender Meeting;
Observer. Borrower will participate in a meeting with Lender not less than once during each month to be held at a location and a time
selected by Borrower and reasonably acceptable to Lender, which shall be attended by the Chief Executive Officer of Borrower; provided,
however, that during the first three calendar months following the Initial Closing Date, Borrower will participate in up to two meetings
per calendar month. Lender will be permitted to send one representative to all meetings of the board of directors of Borrower and Borrower
shall pay the reasonable out-of-pocket expenses incurred in connection with attending such meetings. Borrower shall provide Lender a schedule
of at least four meetings of the board of directors of Borrower during each calendar year.

 

SECTION 5.7 Inspection.
Borrower shall permit representatives of Lender, from time to time, as often as may be reasonably requested, during normal business hours,
to visit and inspect the properties and assets of Borrower, inspect and make extracts from its books and records, and discuss with its
Officers, its employees and its accountants, Borrower’s business, assets, liabilities, financial condition, business prospects and
results of operations.

 

SECTION 5.8 Notice.
Borrower shall promptly give written notice to Lender of: (a) the occurrence of any Default or Event of Default of which Borrower has
knowledge; (b) the occurrence of any event which Borrower believes could reasonably be expected to have a Material Adverse Effect, promptly
after concluding that such event could reasonably be expected to have such a Material Adverse Effect; and (c) any default or event of
default by Borrower under any Indebtedness, concurrently with delivery or promptly after receipt (as the case may be) of any notice of
default or event of default under the applicable document, as the case may be.

 

SECTION 5.9 Further Assurances.
Borrower shall promptly execute and deliver or cause to be executed and delivered to Lender within a reasonable time following Lender’s
request, and at the expense of Borrower, such other documents or instruments as Lender may reasonably require to effectuate more fully
the purposes of this Agreement or the other Loan Documents.

  

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SECTION 5.10Monitoring
Fee. Borrower shall pay to bocm3, LLC an annual monitoring fee of $50,000.00 (the “Monitoring Fee”) so long as
any portion of a Loan is outstanding; provided, however, that if the Initial Committed Amount is not loaned in full, the annual Monitoring
Fee shall be equal to the product of the following: (a) the aggregate principal amount of the Loans, multiplied by (b) $50,000.00, divided
by (c) the Initial Committed Amount. The Monitoring Fee shall be payable monthly, with the first installment due on April 1, 2017, and
continuing on the first day of each calendar month thereafter in equal installments of

$4,166.67.

 

SECTION 5.11Insurance.
Borrower shall keep insured, with good and responsible insurance companies, all insurable property owned by it which is of a character
usually insured by Persons similarly situated and operating like properties against loss or damage from such hazards and risks, and in
such amounts, as are insured by persons similarly situated and operating like properties; and insure, such other hazards and risks (including,
without limitation, business interruption, employers’ and public liability risks) with good and responsible insurance companies
as and to the extent usually insured by Persons similarly situated and conducting similar businesses. Borrower shall cause Lender to be
named as “additional insured” or “lender’s loss payee”, as applicable, on each of its liability and property
insurance policies, and shall provide Lender with certificates in a manner acceptable to Lender.

 

SECTION 5.12Cash Balance.
Borrower shall maintain a cash balance at all times of (a) at least 12% of the amount of all Loans made to Borrower or (b) if the aggregate
amount of all Loans is $2.5 million, at least $300,000, provided that, if the aggregate amount of all Loans made to Borrower is more than
$2.5 million, then such cash balance shall equal at least 10% of of such loaned balances.

 

SECTION 5.13Minimum
Current Ratio. Borrower shall not permit the ratio of total current assets of Borrower as of the last day of each calendar month to
total current liabilities of Borrower as of the last day of such calendar month, to be less than 1.25 to 1.0.

 

SECTION 5.14Stockholder
Place of Residence. At all times prior to the repayment in full of the Loans, each Stockholder’s principal residence shall be
located within twenty-five (25) miles of Borrower’s headquarters.

 

SECTION 5.15Head Designer.
In the event that Conrad Steenberg is no longer employed by Borrower on a full-time basis (a “Departure Event”), Borrower
shall retain a replacement acceptable to Lender in Lender’s reasonable discretion within three (3) months of such Departure Event.

 

ARTICLE 6. NEGATIVE COVENANTS

 

Borrower covenants and agrees
that until the Loans and the Notes and all amounts due under this Agreement at the time of such termination or payment have been paid
in full, unless Lender shall otherwise give prior written consent, Borrower shall perform all covenants in this Article 6:

 

SECTION 6.1 Indebtedness.
Borrower shall not, directly or indirectly, create, incur, assume, or otherwise become directly or indirectly liable with respect to,
any Indebtedness other than (i) Indebtedness under this Agreement, or (ii) Indebtedness incurred after the date hereof in the ordinary
course of Borrower’s operations, consistent with past practice, in an aggregate amount less than $25,000.

 

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SECTION 6.2 Transactions
with Affiliates. Borrower shall not, directly or indirectly, enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any service) with, or make loans or advances to any holder or
holders of any of the stockholders of Borrower, or with any Affiliate of Borrower, on terms that are less favorable to Borrower, than
those that might be obtained in an arm’s length transaction at the time from Persons who are not such a holder or Affiliate.

 

SECTION 6.3 Restricted
Payments. Borrower shall not: (i) declare or make, or agree to pay or make, directly or indirectly, any distribution (by reduction
of capital or otherwise), whether in cash, property, securities or a combination thereof, to any owner of a beneficial or other interest
in Borrower, (ii) redeem, purchase, retire or otherwise acquire for value any such beneficial or other interest in Borrower or other Person
or (iii) set aside or otherwise segregate any amounts for any such purpose.

 

SECTION 6.4 Merger, Consolidation,
or Sale of Assets. Borrower shall not enter into any merger or consolidation or convey, sell, lease, assign, transfer or otherwise
dispose of any of its property, business or assets (including, without limitation, Capital Stock, receivables and leasehold interests),
whether now owned or hereafter acquired or liquidate, wind up or dissolve, except:

 

(a)              
inventory leased or sold in the ordinary course of business;

 

(b)            
obsolete, damaged, uneconomic or worn out machinery, parts, property or equipment, or property or equipment no longer used or useful in
the conduct of Borrower’s business; and

 

(c)              
the sale or disposition of securities and other cash equivalents in the ordinary course of business.

 

SECTION 6.5 Successor Entity
Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of Borrower in accordance with the provisions hereof, the successor entity formed by such consolidation
or into or with which Borrower is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition,
the provisions of this Agreement referring to “Borrower” shall refer instead to the successor entity and not to Borrower),
and may exercise every right and power of Borrower under this Agreement with the same effect as if such successor Person had been named
as Borrower herein: provided, however, that the predecessor company shall not be relieved from the obligation to
pay the principal of and interest on the Loans.

 

    19

     

    

 

SECTION 6.6 Changes of
Control. Borrower shall not consummate a Change of Control.

 

SECTION 6.7 Limitation
on Compensation. On or before March 31, 2017, the Borrower intends to compensate its officers as set forth on Schedule 6.7. Borrower
shall not, directly or indirectly, raise the salaries, bonuses, benefits or other compensation of any of its officers by more than 10%
per annum or other employees by more than 25% per annum.

 

SECTION 6.8 Limitation
on Liens. Borrower shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien securing Indebtedness or trade
payables on any asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income
therefrom, other than Permitted Liens.

 

SECTION 6.9 Amendments
of Certain Documents. Borrower shall not amend Borrower’s Certificate of Incorporation, bylaws or Stockholders’ Agreement,
if any, all of which are attached as Exhibit C.

 

SECTION 6.10Restrictions
on Additional Indebtedness. Borrower will not create or suffer to exist any Indebtedness which is senior in right of payment to or
pari passu with the Loans.

 

ARTICLE 7. EVENTS OF DEFAULT

 

If any of the following conditions
or events (“Events of Default”) shall occur and be continuing:

 

SECTION 7.1 Failure to
Make Payments When Due. (i) Failure to pay any principal of the Loans when due, whether at the Note Maturity Date, by acceleration,
by notice of prepayment, by operation of Section 2.3 or otherwise; or (ii) failure to pay any interest on the Loans or any other
amount due under this Agreement, and such default continues for a period of five (5) days; or

 

SECTION 7.2 Default in
Other Agreements. Failure of Borrower to pay when due any principal of or interest on any Indebtedness in excess of $5,000 in principal
outstanding and the expiration of any applicable grace periods or waivers; or

 

SECTION 7.3 Breach of Certain
Covenants and Agreements. Failure of Borrower to perform or comply with (a) any term or condition contained in Section 2.3(a),
or Article 6, or (b) in any material respect with any other term contained in this Agreement, and (1) in the case of clause (a),
such failure shall not have been remedied or waived within fifteen (15) days after receipt of written notice from Lender of such default
(other than any occurrence described in the other provisions of this Article 7 for which a different grace or cure period is specified
or which constitutes an immediate Event of Default), and (2) in the case of clause (b), such failure shall not have been remedied or waived
within thirty (30) days after receipt of written notice from Lender of such default (other than any occurrence described in the other
provisions of this Article 7 for which a different grace or cure period is specified or which constitutes an immediate Event of
Default), or the failure to deliver Monthly Financial Statements within 30 days following the end of any calendar month; or

 

    20

     

    

 

SECTION 7.4 Breach of
Warranty. Any representation or warranty made by Borrower in any Loan Document or in any statement or certificate at any time
given by Borrower in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material
respect on the date as of when made; or

 

SECTION 7.5 Involuntary
Bankruptcy; Appointment of Receiver, Etc. (a) A court having jurisdiction shall enter a decree or order for relief in respect of Borrower
in an involuntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
which decree or order is not stayed: or any other similar relief shall be granted and remain unstayed under any applicable federal or
state law; or (b) an involuntary case is commenced against Borrower under any applicable bankruptcy, insolvency, or other similar law
now or hereafter in effect, or a decree or order of a court having, jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over Borrower or over all or a substantial part of any of its
property, shall have been entered, or an interim receiver, trustee or other custodian of Borrower or all or a substantial part of its
property is involuntarily appointed, or a warrant of attachment, execution or similar process is issued against any substantial part of
the property of Borrower and the continuance of any such events in this clause (b) for sixty (60) days unless dismissed, bonded, stayed,
vacated, or discharged; or

 

SECTION 7.6 Voluntary Bankruptcy;
Appointment of Receiver, Etc. Borrower shall have an order for relief entered with respect to it or commence a voluntary case under
the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the
entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of
its property: the making by Borrower of any assignment for the benefit of creditors the admission by Borrower in writing of its inability
to pay its debts as such debts become due; or Borrower (or any committee thereof) adopts any resolution or otherwise authorizes action
to approve any of the foregoing; or

 

SECTION 7.7 Judgments and
Attachments. Any money judgment, writ or warrant of attachment, or similar process involving in any individual case or in the aggregate
at any time an amount in excess of $50,000 (not covered by insurance) shall be entered or filed against Borrower or any of its assets
by a final, nonappealable order of a court of competent jurisdiction, shall remain outstanding, undischarged, unvacated, unbonded or unstayed
for a period of sixty

(60) days following such entry or filing;
or

 

SECTION 7.8 Agreements.
Any material provision of any Loan Document shall cease to be a valid and binding obligation against Borrower or Borrower shall so state
in writing.

 

THEN (i) upon the occurrence
of any Event of Default described in the foregoing Section 7.5 or 7.6 but expressly excluding the other Events of Default
in this Article VII), the unpaid principal amount of and accrued interest on the Loans shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Borrower,
and the obligations of Lender hereunder shall, thereupon terminate, and (ii) upon the occurrence of any other Event of Default, Lender
may, by written notice to Borrower, declare the Loans to be, and the same shall forthwith become, due and payable, as specified below,
together with accrued interest thereon.

 

    21

     

    

 

ARTICLE 8. MISCELLANEOUS

 

SECTION 8.1 Participations
in Loans and Notes.

 

(a)    Lender
shall have the right at any time, to sell, assign, transfer, or negotiate all or any part of the Loans or Notes to one or more other Persons.
In the case of any sale, assignment, transfer, or negotiation of all or part of the Loans or Notes as authorized under this Section
8.1(a), the assignee, transferee, or recipient shall have, to the extent of such sale, assignment, transfer, or negotiation, the same
rights, benefits, and obligations as it would if it were a Lender with respect to the Loans or Notes, provided that no such participant
shall have observer rights of the type set forth in Section 5.6 unless all Notes are transferred thereto.

 

(b)    Subject
to Section 8.1(a) above, Lender may grant participations in all or any part of a Loan or Note to one or more Persons.

 

(c)    In connection
with any sales, assignments, or transfers of a Loan or Note referred to in Section 8.1(a), Lender shall give notice to Borrower
of the identity of such parties and obtain agreements from the purchasers, assignees and transferees, as the case may be (the “Assignees”),
that all information given to such parties will be held in strict confidence pursuant to a confidentiality agreement reasonably satisfactory
to Borrower. Borrower shall maintain a register on which it will record the name and address of Lender and all Assignees and shall be
entitled to treat the holder or holders of record as Lender for all purposes hereunder.

 

(d)    In the
event of an assignment by Lender, or any subsequent assignment, the term “Lender” herein shall be deemed to refer to each
such Lender, the term “Note” shall be deemed to refer to each “Note”, and any action requiring the consent of
Lender shall be deemed to require the consent of Persons holding in excess of 50% of the outstanding principal amount of the applicable
Note.

 

SECTION 8.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated, Borrower agrees to pay promptly: (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents, and of Borrower’s performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied with; (ii) the reasonable fees, expenses, and disbursements of counsel,
accountants and other third-party consultants to Lender in connection with the negotiation, preparation, execution, and administration
of the Loan Documents, and the Loans hereunder, and any amendments and waivers hereto or thereto (other than assignments of, or sales
of participants in, a Note pursuant to Section 8.1) and Lender’s fees incurred in connection with qualifying to do business
in California; and (iii) after the occurrence of an Event of Default, all costs and expenses (including reasonable attorneys’ fees)
incurred by Lender in enforcing any Obligations of or in collecting any payments due from Borrower hereunder or under a Note by reason
of such Event of Default or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement
in the nature of a workout, or any insolvency or bankruptcy proceedings. In all circumstances, none of the expenses described in this
Section 8.2 incurred by Lender in connection with the initial preparation of the Loan Documents, including without limitation, all documents
relating to the First Loan, Second Loan and Third Loan as of the making of such Loans shall not, in the aggregate, exceed $40,000.00;
provided, however, that such limitation shall not apply if an Event of Default, or an event that would become an Event of Default upon
the giving of notice or the passage of time, has occurred.

 

    22

     

    

  

SECTION 8.3 Indemnity.
In addition to the payment of expenses pursuant to the terms and conditions of Section 8.2 hereof, whether or not the transactions contemplated
hereby shall be consummated, Borrower (an “Indemnitor”) agrees to indemnify, pay, and hold Lender and any holder of
a Note, and the officers, directors, employees, agents, and Affiliates of Lender and such holders (collectively, the “Indemnitees”)
harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses and disbursements of any kind or nature whatsoever (including, without limitation the reasonable fees and disbursements of one
counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated a party thereto), which may be imposed on, incurred by, or asserted against that Indemnitee,
in any manner relating to or arising out of this Agreement, the other Loan Documents, Lender’s agreement to make the Loans or the
use or intended use of the proceeds of the Loans hereunder (the “Indemnified Liabilities”), except to the extent that
any such Indemnified Liabilities arose at the result of Lender’s or any other Indemnitee’s gross negligence or willful misconduct.
Each Indemnitee shall give the Indemnitor prompt written notice of any claim that might give rise to Indemnified Liabilities setting forth
a description of those elements of such claim of which such Indemnitee has knowledge: provided, that any failure to give such notice shall
not affect the obligations of the Indemnitor unless (and then solely to the extent) the Indemnitor is prejudiced, The Indemnitor shall
have the right at any time during which such claim is pending to select counsel to defend and control the defense thereof and settle any
claims for which it is responsible for indemnification hereunder (provided that the Indemnitor will not settle any such claim without
(i) the appropriate Indemnitee’s prior written consent which consent shall not be unreasonably withheld or (ii) obtaining an unconditional
release of the appropriate Indemnitee from all claims arising out of or in any way relating to the circumstances involving such claim)
so long as in any such event, the Indemnitor shall have stated in a writing delivered to the Indemnitee that, as between the Indemnitor
and the Indemnitee, the Indemnitor is responsible to the Indemnitee with respect to such claim to the extent and subject to the limitations
set forth herein provided, that the Indemnitor shall not be entitled to control the defense of any claim in the event that in the reasonable
opinion of counsel for the Indemnitee there arc one or more material defenses available to the Indemnitee which are not available to the
Indemnitor. To the extent that the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any Law or public policy, Borrower shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment, and satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any of them.

  

    23

     

    

 

 

SECTION 8.4 Amendments
and Waivers. No amendment, modification, termination or waiver of any provision of this Agreement or of a Note, or consent to any
departure by Borrower therefrom, shall in any event be effective without the written concurrence of the Borrower and holders of Persons
holding in excess of 50% of the outstanding principal amount of the applicable Loan; provided that no amendment, modification,
waiver, or consent shall, unless in writing and signed by Lender, any of the following: (a) increase or subject Lender to any additional
obligations; (b) reduce the principal of, or interest on a Note or any fees, premiums, or other amounts payable hereunder; (c) postpone
any date fixed for any payment of principal of, or premium or interest on, a Note or any fees or other amounts payable hereunder; or (d)
amend this Section 8.4. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on Borrower in any case shall entitle Borrower to, any further notice or demand in similar
or other circumstances. Any amendment, modification, termination, waiver, or consent effected in accordance with this Section 8.4
shall be binding upon each holder of a Note at the time outstanding and each future holder of a Note. To the fullest extent permitted
by applicable Law, Borrower shall not assert, and Borrower hereby waives, and acknowledges that no other Person shall have, any claim
against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

 

SECTION 8.5 Independence
of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted
by, any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitation of, another covenant
shall not avoid the occurrence of an Event of Default if such action is taken or condition exists.

 

SECTION 8.6 Notices.
All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be
in writing and delivered personally, mailed by certified or registered mail, return receipt requested and postage prepaid, sent via a
nationally recognized overnight courier, or via electronic mail. Such notices, demands and other communications will be sent to the address
indicated below:

 

To Borrower:

 

Denim.LA, Inc.

8899 Beverly Blvd., Suite 100B

West Hollywood, CA 90048

Attn: Mark Lynn

Email: mtl@mtl.la

 

With a copy (which shall not constitute
notice to Borrower) to:

 

Timothy F. Silvestre

Strategic Law Partners, LLP

500 South Grand Avenue, #2050

Los Angeles, CA 90071

Email: tsilvestre@strategiclaw.com

 

    24

     

    

 

To Lender:

 

bocm3-DSTLD-Senior Debt, LLC

c/o bocm3, LLC

175 South Main Street, Suite 1030

Salt Lake City, Utah 84111 

Attention: Gregory D. Seare Email: greg@blackoakcp.com

 

With a copy (which shall not constitute
notice to Lender) to:

 

Michael Best & Friedrich LLP

6995 Union Park Center, Suite 100

Salt Lake City, Utah 84047

Attention: Stuart Fredman

Email: safredman@michaelbest.com

 

or such other address or to the attention of such
other Person as the recipient party shall have specified by prior written notice to the sending party; provided, that the
failure to deliver copies of notices as indicated above shall not affect the validity of any notice. Any such communication shall be deemed
to have been received (i) when delivered, if personally delivered, or sent by nationally recognized overnight courier or sent via facsimile
or (ii) on the third Business Day following the date on which the piece of mail containing such communication is posted if sent by certified
or registered mail.

 

SECTION 8.7 Survival of Representations and Warranties
and Certain Agreements.

 

(a)    All agreements,
representations and warranties made herein shall survive the execution and delivery of this Agreement, the making of the Loans hereunder
and the execution and delivery of each Note and shall continue (but, with respect to representations and warranties, such representations
and warranties are made only as of the date when made pursuant to Section 4) until repayment of the Notes and the Obligations in full;
provided, that if all or any part of such payment is set aside, the representations and warranties in the Loan Documents
shall continue as if no such payment had been made.

 

(b)    Notwithstanding
anything in this Agreement or implied by law to the contrary, the agreements of Borrower set forth in Sections 8.2 and 8.3 shall survive
the payment of each Loan and Note and the termination of this Agreement.

 

SECTION 8.8 Failure or
Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of any Lender or any holder of a Note in the exercise
of any power, right or privilege hereunder or under a Note shall impair such power, right or privilege or be construed to be a waiver
of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All rights and remedies existing under this Agreement or a Note
are cumulative to and not exclusive of, any rights or remedies otherwise available.

 

SECTION 8.9 Severability.
In case any provision in or obligation under this Agreement or a Note shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

    25

     

    

 

SECTION 8.10 Headings.
Section and subsection headings in this Agreement are included herein far convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any substantive effect.

 

SECTION 8.11 Applicable
Law. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF UTAH WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. BORROWER AND LENDER HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF. Each party hereto hereby irrevocably submits and consents
to the exclusive venue and jurisdiction of the state and federal courts located in the County of Salt Lake, State of Utah and waives any
objection it may now or hereafter have to venue or to convenience of forum with respect to any matter arising out of this Agreement, the
Notes or the Loans. Any final judgment rendered against a party in any action or proceeding shall be conclusive as to the subject of such
final judgment and may be enforced in other jurisdictions.

 

SECTION 8.12 Successors
and Assigns; Subsequent Holders of a Note. This Agreement shall be binding upon the parties hereto and their respective successors
and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lender. The terms and provisions of
this Agreement and all other certificates delivered pursuant to Section 3 shall inure to the benefit of any assignee or transferee
of a Note pursuant to Section 8.1(a), and in the event of such transfer or assignment, the rights and privileges herein conferred
upon Lender shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof.
Borrower’s rights or any interest therein hereunder may not be assigned without the written consent of Lender.

 

SECTION 8.13 Counterparts;
Effectiveness. This Agreement and any amendments, consents, or supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This Agreement shall become effective upon the execution of a counterpart hereof
by each of the parties hereto, and written or electronic notification of such execution and authorization of delivery thereof has been
received by Borrower and Lender.

 

SECTION 8.14 Entire
Agreement. This Agreement and the other Loan Documents embody the entire agreement between the parties and supersede all prior agreements
and understandings, if any, relating to the subject matter hereof and thereof.

 

SECTION 8.15 Attorneys’
Fees. In any action brought to enforce any provision(s) of this Agreement, in addition to any other relief granted, the substantially
prevailing party shall recover its costs of enforcement, including without limitation costs and actual attorneys’ fees incurred
therein.

 

[Signature page follows]

 

    26

     

    

 

IN WITNESS WHEREOF the due
execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

 

	 	DENIM.LA, INC.
	 	 	 
	 	By:	
	 	Name: 	Mark Lynn
	 	Title:	Co-CEO

 

	 	BOCM3-DSTLD-SENIOR DEBT, LLC
	 	 	 
	 	By:	                             
	 	Name:	 
	 	Title:	 

 

	 	STOCKHOLDERS	 	 
	 	 	 	 
	 		 	 
	 	Mark Lynn 	Several Liability Percentage:	49
	 	 	 	 
	 		 	 
	 	Corey Epstein	Several Liability Percentage:	51

 

[Signature page to Senior Credit Agreement of
Denim.LA, Inc.]

 

    

     

    

 

IN WITNESS WHEREOF the due
execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

  

	 	DENIM.LA, INC.
	 	 	 
	 	By:	                   
	 	Name: 	 
	 	Title:	 

 

	 	BOCM3-DSTLD-SENIOR DEPT, LLC
	 	 
	 	Name:	
	 	Title:	  

 

	 	STOCKHOLDERS
	 	 
	 	 
	 	Mark Lynn
	 	 
	 	 
	 	Kevin Morris
	 	 
	 	 
	 	Corey Epstein

 

[Signature page to Senior Credit Agreement
of Denim. LA, Inc.]

 

    

     

    

 

EXHIBIT A

 

FORM OF NOTE

 

    

     

    

 

EXHIBIT B

 

FORM OF WARRANT

 

    

     

    

 

EXHIBIT C

 

BORROWER FORMATION DOCUMENTS

 

    

     

    

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

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