Document:

Investment Management Agreement

 Exhibit 10.15 
 EXECUTION COPY 
  

 
 ARCH STREET FUNDING LLC 

as Company 
 and

 FS INVESTMENT CORPORATION 
 as Investment Manager 
 INVESTMENT MANAGEMENT AGREEMENT 

Dated as of March 18, 2011 
  

 

 INVESTMENT MANAGEMENT AGREEMENT, dated as of March 18, 2011 (this
“Agreement”), between ARCH STREET FUNDING LLC, a Delaware limited liability company (the “Company”), and FS INVESTMENT CORPORATION, a Maryland corporation (in such capacity, the “Investment
Manager”). 
 WHEREAS, the Company desires to engage the Investment Manager to provide the services described herein,
and the Investment Manager desires to provide such services; and 
 WHEREAS, capitalized terms used herein that are not
otherwise defined herein shall have the respective meanings ascribed thereto in the ISDA 2002 Master Agreement, dated as of March 18, 2011 (together with the Schedule, Credit Support Annex and Confirmation related thereto, as amended, modified,
extended, supplemented or restated from time to time, collectively, the “Swap Agreement”), between the Company and Citibank, N.A. (“Citibank”). 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein, the parties hereto hereby agree as follows: 

 

	 	1.	Management Services. 

 The
Investment Manager will provide the Company with the following services (in accordance with and subject to the applicable requirements of, and the restrictions and limitations set forth in, the Swap Agreement and the Company’s limited liability
company agreement (the “LLC Agreement”)): 
 (a) selecting the specific Reference Obligations to
be included in the portfolio of obligations subject to the Swap Agreement (the “Portfolio”); 

(b) with respect to any action submitted to a vote of the holders of the applicable Reference Obligations as to which the
Investment Manager and/or the Company is opposed, to the extent Citibank holds such Reference Obligations, requesting on behalf of the Company that Citibank vote against such action (or otherwise withhold its consent); 

(c) with respect to Citibank’s exercise (including but not limited to any waiver) of any rights (including but not
limited to voting rights and rights arising in connection with the bankruptcy or insolvency of an underlying obligor of any Reference Obligation (each, an “Underlying Obligor”) or the consensual or non-judicial restructuring of the
debt or equity of an Underlying Obligor) or remedies in connection with any Reference Obligations held by Citibank and participating in the committees (official or otherwise) or other groups formed by creditors of an Underlying Obligor, requesting
or electing not to request on behalf of the Company that Citibank exercise such rights or remedies; 
 (d) from
time to time on or after the termination of the Swap Agreement, determining the specific debt obligations or other assets to be purchased or sold by the Company; 

 (e) from time to time on or after the termination of the Swap Agreement,
effecting the purchase and sale of debt obligations or other assets to be purchased or sold by the Company; 

(f) monitoring the ratings of the Reference Obligations; 

(g) determining whether each Loan to be included in the Portfolio meets the Obligation Criteria; 

(h) determining whether the Portfolio of Reference Obligations meets the Portfolio Criteria; 

(i) monitoring the Reference Obligations on an ongoing basis; 

(j) causing the Company to deliver Eligible Collateral to Citibank in such amounts and at such times as may be required by
the Swap Agreement; 
 (k) determining whether to terminate one or all of the Transactions; 

(l) notifying Citibank and the Company in writing of an Event of Default or Termination Event under the Swap Agreement
within one (1) Business Day after the Investment Manager has actual knowledge of the occurrence thereof; 

(m) arranging for the sale of any Reference Obligations held by Citibank to the extent provided by Clause 4(A) of the
Confirmation constituting part of the Swap Agreement; 
 (n) delivering notices and instructions to Citibank as
required by the Swap Agreement; and 
 (o) directing the Company to comply with such other duties and
responsibilities as may be expressly required of the Company by the Swap Agreement. 
 The Company agrees for the benefit of the
Investment Manager and Citibank to follow the lawful instructions and directions of the Investment Manager in connection with the Investment Manager’s services hereunder. 
 The Investment Manager shall use reasonable care in rendering its services hereunder, using a degree of skill and attention no less than that which the Investment Manager exercises with respect to
comparable assets that it manages for itself and for others in accordance with its existing practices and procedures which the Investment Manager reasonably believes to be consistent with those followed by institutional managers of national standing
relating to assets of the nature and character of the Reference Obligations, except as expressly provided otherwise in this Agreement or the Swap Agreement. Subject to the immediately preceding sentence, the Investment Manager shall follow its
customary standards, policies, and procedures in performing its duties hereunder and under the Swap Agreement. The Investment Manager shall comply with and perform all the duties and functions that have been specifically delegated to it under this
Agreement and the Swap Agreement. The Investment Manager shall not be bound to follow any 

  
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amendment to the Swap Agreement, however, until it has received a copy of the amendment from the Company or Citibank and, in addition, the Investment Manager shall not be bound by any amendment
to the Swap Agreement which adversely affects in any material respects the obligations of the Investment Manager unless the Investment Manager shall have consented thereto in writing. The Company agrees that it will not permit any amendment to the
Swap Agreement that adversely affects the duties or liabilities of the Investment Manager to become effective unless the Investment Manager has been given prior written notice of such amendment and consented thereto in writing. 

To the extent necessary or appropriate to perform all of the duties to be performed by it hereunder, the Investment Manager shall have
the power to negotiate, execute and deliver all necessary documents and instruments on behalf of the Company with respect to the rights and obligations of the Company under the Swap Agreement. 

The Investment Manager shall have no obligation to perform any duties other than those specified herein or in the Swap Agreement.

  

	 	2.	Brokerage. 

 The
Investment Manager shall use reasonable efforts to obtain the best prices and execution for all sales arranged with respect to any Reference Obligations pursuant to the Swap Agreement, and all assets of the Company, considering all circumstances.
Subject to the objective of obtaining best prices and execution, the Investment Manager may take into consideration research and other brokerage services furnished to the Investment Manager or its Affiliates by brokers and dealers which are not
Affiliates of the Investment Manager. Such services may be used by the Investment Manager or its Affiliates in connection with its other advisory activities or investment operations. The Investment Manager may aggregate sales and purchase orders of
securities placed with respect to the Reference Obligations, and all assets of the Company, with similar orders being made simultaneously for other accounts managed by the Investment Manager or with accounts of the Affiliates of the Investment
Manager, if in the Investment Manager’s sole judgment such aggregation shall result in an overall economic benefit to the Company taking into consideration the selling or purchase price, brokerage commission and other expenses. In accounting
for such aggregated order price, commission and other expenses shall be averaged on a per position basis. 
 The Company
acknowledges that the determination of any such economic benefit by the Investment Manager is subjective and represents the Investment Manager’s evaluation at the time that the Company will be benefited by better purchase or sales prices, lower
commission expenses and beneficial timing of transactions or a combination of these and other factors. When any aggregate sales or purchase orders occur, the objective of the Investment Manager (and any of its Affiliates involved in such
transactions) shall be to allocate the executions among the accounts in an equitable manner. 
 Subject to the Investment
Manager’s execution obligations described herein, the Investment Manager is hereby authorized to effect client cross-transactions where the Investment Manager causes a transaction to be effected between the Company and another account advised
by it or any of its Affiliates; provided that, if and to the extent required by the Advisers Act, such 

  
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authorization is terminable at the Company’s option without penalty, effective upon receipt by the Investment Manager of written notice from the Company. In addition, the Company hereby
consents to, and authorizes the Investment Manager to enter into, agency cross-transactions where it or any of its Affiliates acts as broker for the Company and for the other party to the transaction, to the extent permitted under applicable law;
provided that the Company shall have the right to revoke such consent at any time by written notice to the Investment Manager. 
  

	 	3.	The Representations and Warranties of the Company. 

 The Company represents and warrants to the Investment Manager that: 

(a) the Company has been duly organized and is validly existing under the laws of Delaware, has the full power and
authority to own its assets and the obligations proposed to be owned by it and to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property or the
conduct of its business requires, or the performance of its obligations under this Agreement and the Swap Agreement would require, such qualification, except for failures to be so qualified, authorized or licensed that would not in the aggregate
have a material adverse effect on the business, operations, assets or financial condition of the Company; 
 (b)
the Company has full corporate power and authority to execute, deliver and perform this Agreement, the Swap Agreement and all obligations required hereunder and under the Swap Agreement, and the performance of all obligations imposed upon it
hereunder and thereunder; 
 (c) this Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and binding obligation, enforceable in accordance with its terms except that the enforceability thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other
similar laws now or hereafter in effect relating to creditors’ rights and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law); 

(d) no consent, approval, authorization or order of or declaration or filing with any government, governmental
instrumentality or court or other person is required for the performance by the Company of its duties hereunder, except such as have been duly made or obtained; 
 (e) neither the execution and delivery of this Agreement nor the fulfillment of the terms hereof conflicts with or results in a material breach or violation of any of the material terms or provisions of
or constitutes a material default under (i) the Company’s certificate of formation, operating agreement or other constituent documents, (ii) the terms of any material indenture, contract, lease, mortgage, deed of trust, note,
agreement or other evidence of indebtedness or other material agreement, obligation, condition, covenant or instrument to which the Company is a party or is bound, (iii) any statute applicable to the Company, or (iv) any law, decree,
order, rule or regulation 

  
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applicable to the Company of any court or regulatory, administrative or governmental agency, body or authority or arbitrator having or asserting jurisdiction over the Company or its properties,
and which would have a material adverse effect upon the performance by the Company of its duties under this Agreement; 
 (f) neither the Company nor any of its Affiliates are in violation of any U.S. federal or state securities law or regulation promulgated thereunder and there is no charge, investigation, action, suit or
proceeding before or by any court or regulatory agency pending or, to the best knowledge of the Company, threatened that would have a material adverse effect upon the performance by the Company of its duties under this Agreement; 

(g) the Company has not engaged in any transaction that would result in the violation of, or require registration as an
investment company under, the Investment Company Act; 
 (h) the Company is not required to register as an
“investment company” under the Investment Company Act; and 
 (i) there is no charge, investigation,
action, suit or proceeding before or by any court pending or, to the best knowledge of the Company, threatened that, if determined adversely to the Company, would have a material adverse effect upon the performance by the Company of its duties
under, or on the validity or enforceability of, this Agreement or the provisions of the Swap Agreement applicable to the Company thereunder. 
  

	 	4.	Representations and Warranties of the Investment Manager. 

 The Investment Manager represents and warrants to the Company that: 

(a) the Investment Manager is duly organized and validly existing under the laws of Maryland and has the full power and
authority to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where the conduct of its business requires, or the performance of its obligations under this Agreement and the provisions
of the Swap Agreement applicable to the Investment Manager would require, such qualification, except for failures to be so qualified, authorized or licensed which would not in the aggregate have a material adverse effect on the business, operations,
assets or financial condition of the Investment Manager, or on the ability of the Investment Manager to perform its obligations under, or on the validity or enforceability of, this Agreement and the applicable provisions of the Swap Agreement;

 (b) the Investment Manager has full power and authority to execute and deliver this Agreement and to perform
all of its obligations hereunder and under the Swap Agreement; 
 (c) this Agreement has been duly authorized,
executed and delivered by the Investment Manager and constitutes a valid and binding agreement of the 

  
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Investment Manager, enforceable against it in accordance with its terms, except that the enforceability thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors’ rights and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law); 

(d) neither the Investment Manager nor any of its Affiliates is in violation of any federal or state securities law or
regulation promulgated thereunder or any material listing requirements of any exchange on which it is listed and there is no charge, investigation, action, suit or proceeding before or by any court, exchange or regulatory agency pending or, to the
best knowledge of the Investment Manager, threatened, that in either case would have a material adverse effect upon the performance by the Investment Manager of its duties under this Agreement; 

(e) neither the execution and delivery of this Agreement, nor the performance of the terms hereof or the provisions of the
Swap Agreement applicable to the Investment Manager, conflicts with or results in a material breach or violation of any of the material terms or provisions of, or constitutes a material default under, (i) its articles of organization, operating
agreement or other constituent document, (ii) the terms of any material indenture, contract, lease, mortgage, deed of trust, note agreement or other evidence of indebtedness or other material agreement, obligation, condition, covenant or
instrument to which the Investment Manager is a party or is bound, (iii) any statute applicable to the Investment Manager, or (iv) any law, decree, order, rule or regulation applicable to the Investment Manager of any court or regulatory,
administrative or governmental agency, body or authority or arbitrator having or asserting jurisdiction over the Investment Manager or its properties, and which would have, in the case of any of clauses (ii) through (iv) of this paragraph
(e), a material adverse effect upon the performance by the Investment Manager of its duties under this Agreement or the provisions of the Swap Agreement applicable to the Investment Manager; and 

(f) no consent, approval, authorization or order of or declaration or filing with any government, governmental
instrumentality or court or other person is required for the performance by it of its duties hereunder, except such as have been duly made or obtained. 
  

	 	5.	Expenses. 

 The Investment
Manager shall pay all expenses and costs (including salaries, rent and other overhead) incurred by it in connection with its services under this Agreement; provided that the Investment Manager shall not be liable for and the Company shall be
responsible for the payment of (i) expenses and costs of legal advisers (including reasonable expenses and costs associated with the use of internal legal counsel of the Investment Manager), consultants and other professionals retained by the
Company or by the Investment Manager, on behalf of the Company, in connection with the services provided by the Investment Manager pursuant to this Agreement and the Swap Agreement, (ii) the reasonable cost of asset pricing and asset rating
services, and accounting, programming and data entry services that are retained in connection with services of the Investment Manager under this Agreement, (iii) travel expenses (airfare,

  
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meals, lodging and other transportation) incurred by the Investment Manager as is reasonably necessary in connection with the selection of Reference Obligations to be included in the Portfolio
and the negotiation, documentation, default or restructuring of any Reference Obligation held by Citibank, and (iv) any extraordinary costs and expenses incurred by the Investment Manager in the performance of its obligations under this
Agreement and the Swap Agreement. To the extent that such expenses are incurred in connection with obligations that are also held by the Investment Manager, the Investment Manager shall allocate the expenses among the accounts in a fair and
equitable manner. Any amounts payable pursuant to this Section 5 shall be reimbursed by the Company to the extent funds are available therefor. 
  

	 	6.	Fees. 

(a) The Company shall pay to the Investment Manager, for services rendered and performance of its obligations under this
Agreement fees which are payable in arrears on the fifth Business Day following the last day of each Quarterly Period (subject to availability of funds) in an amount equal to 0.35% per annum of the Portfolio Notional Amount measured as of the
last day of the related Quarterly Period immediately preceding such payment date (the “Management Fees”). The Management Fees will be calculated on the basis of a calendar year consisting of 360 days and the actual number of days
elapsed. 
 (b) The Investment Manager may, in its sole discretion, (i) waive all or any portion of the
Management Fees or (ii) defer all or any portion of the Management Fees. Such deferred amounts will become payable on the next Payment Date in the same manner and priority as their original characterization would have required unless deferred
again. 
 (c) If this Agreement is terminated pursuant to Section 11 hereof or otherwise, the Management
Fees calculated as provided in Section 6(a) hereof shall be prorated for any partial periods between Payment Dates during which this Agreement was in effect and shall be due and payable, along with any deferred Management Fees, on the first
Payment Date following the effective date of such termination. 
 (d) The Management Fees will be payable from
the assets of the Company. If on any payment date there are insufficient funds to pay the Management Fees then due in full, the amount not so paid shall be deferred without interest and shall be payable on the next payment date, if any, on which any
funds are available therefor. 
 (e) The Investment Manager hereby agrees not to cause the filing of a petition
in bankruptcy against the Company for any reason whatsoever, including, without limitation, the non-payment of the Management Fees, except in accordance with the provisions of Section 20 hereof. 

 

	 	7.	Non-Exclusivity. 

 The
services of the Investment Manager to the Company are not to be deemed exclusive, and the Investment Manager shall be free to render asset management or management services to other Persons (including Affiliates, other investment companies, and
clients having 

  
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objectives similar to those of the Company). It is understood and agreed that the officers and directors of the Investment Manager may engage in any other business activity or render services to
any other Person or serve as partners, officers or directors of any other firm or corporation. Notwithstanding the foregoing, it is understood and agreed that the Investment Manager will at no time render any services to, or in any way participate
in the organization or operation of, any investment company or other entity if such actions would require the Company to register as an “investment company” under the Investment Company Act. Subject to Section 9 hereof, it is
understood and agreed that information or advice received by the Investment Manager and officers or directors of the Investment Manager hereunder shall be used by such organization or such persons to the extent permitted by applicable law.

  

	 	8.	Conflicts of Interest. 

The Investment Manager may, subject to applicable legal requirements, direct the Company (i) to select any Reference Obligations to
be included in the Portfolio, (ii) to notify Citibank of its election to terminate one or more Transactions, or (iii) to acquire any Reference Obligations from Citibank in connection with the termination of the Swap Agreement to the extent
permitted by Clause 4 of the Confirmation constituting part of the Swap Agreement. 
 Notwithstanding the provisions of the
preceding paragraph, various potential and actual conflicts of interest may arise from the overall investment activity of the Investment Manager and its Affiliates. The Investment Manager, its Affiliates and their respective clients may invest in
obligations that would be appropriate for inclusion in the Portfolio. Such investments may be different from the Reference Obligations selected by the Company under the Swap Agreement. The Investment Manager and its Affiliates may have ongoing
relationships with, and may own equity or debt obligations issued by, companies that are the Underlying Obligors of the Reference Obligations. The Investment Manager and its Affiliates and the clients of the Investment Manager or its Affiliates may
invest in obligations that are senior to, or have interests different from or adverse to, the Reference Obligations. The Investment Manager may serve as Investment Manager for, invest in, or be affiliated with, other entities organized to enter into
total return swap transactions. The Investment Manager may at certain times be simultaneously seeking to purchase or sell investments for other entities for which it serves as Investment Manager, or for its clients and Affiliates, and selecting such
investments as Reference Obligations to be included in the Portfolio. Furthermore, the Investment Manager and/or its Affiliates may make an investment on their behalf or on behalf of any account that they manage or advise without selecting such
investment opportunity as a Reference Obligation to be included in the Portfolio. 
 The Company hereby acknowledges the various
potential and actual conflicts of interest that may exist with respect to the Investment Manager; provided that nothing in this Section 8 shall be construed as altering the duties of the Investment Manager as set forth in this Agreement,
the Swap Agreement or the requirements of any law, rule, or regulation applicable to the Investment Manager. 
  

	 	9.	Records; Confidentiality. 

The Investment Manager shall maintain appropriate books of account and records 

  
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relating to services performed hereunder, and such books of account and records shall be accessible for inspection by a representative of the Company, Citibank, and independent accountants
appointed by the Company at a mutually agreed time during normal business hours and upon not less than three (3) Business Days’ prior notice. 
 At no time will the Investment Manager make a public announcement concerning the Swap Agreement, the Investment Manager’s role hereunder or any other aspect of the transactions contemplated by this
Agreement and the Swap Agreement absent the written consent of the Company. 
 The Investment Manager shall, and shall cause its
Affiliates to, keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to non-affiliated third parties except (i) with the prior written consent of the
Company, (ii) as required by law, regulation, court order or the rules or regulations of any self regulating organization, body or official having jurisdiction over the Investment Manager, (iii) to its professional advisers, (iv) such
information as shall have been publicly disclosed other than in violation of this Agreement, (v) the identification of the Company as a client of the Investment Manager, (vi) information related to the performance of the Investment
Manager, (vii) information furnished in connection with any successor investment manager or assignee, or any agent that has been assigned duties in accordance with this Agreement, or (viii) such information that was or is obtained by the
Investment Manager on a non-confidential basis; provided that the Investment Manager does not know or have reason to know, after due inquiry, of any breach by such source of any confidentiality obligations with respect thereto. For purposes
of this Section 9, Citibank shall in no event be considered a “non-affiliated third party,” and the Investment Manager may disclose any of the aforementioned information to Citibank insofar as such information relates to the
Company’s performance of its obligations under the Swap Agreement. 
  

	 	10.	Term. 

 This Agreement
shall become effective on the date hereof and shall continue unless terminated as hereinafter provided. 
  

	 	11.	Termination. 

 (a) This Agreement may be terminated, and the Investment Manager may be removed, without payment to the Investment Manager of any penalty, for cause upon prior written notice by the Company, acting with
the consent of Citibank; provided that such notice may be waived by the Investment Manager. For this purpose, “cause” will mean the occurrence of any of the following events or circumstances: 

(i) the Investment Manager’s breach, in any respect, of any provision of this Agreement or the Swap Agreement
applicable to it (except for any breach that has not had, and could not reasonably be expected to have, a material adverse effect on the Company or Citibank) and the Investment Manager’s failure to cure such breach within 30 days of its
becoming aware of, or receiving notice of, the occurrence of such breach; 

  
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 (ii) the Investment Manager’s intentional breach of (a) any
provision of this Agreement or the Swap Agreement applicable to it relating to the Investment Manager’s or the Company’s obligation to cause the Reference Obligations to comply with the Obligation Criteria and the Portfolio Criteria or
(b) any other material provision of this Agreement or the Swap Agreement applicable to it, and the Investment Manager’s failure to cure such breach within 15 days of the occurrence of such breach; 

(iii) the failure of any representation, warranty, certification or statement made or delivered by the Investment Manager
in or pursuant to this Agreement or the Swap Agreement to be correct in any material respect when made, which failure (a) could reasonably be expected to have a material adverse effect on Citibank and (b) is not corrected by the Investment
Manager within 30 days of its receipt of notice from the Company or Citibank of such failure, unless, if such failure is not capable of being cured in 30 days but is curable within 90 days, the Investment Manager has taken action that the Investment
Manager in good faith believes will remedy, and does in fact remedy, such failure within 90 days after notice of such failure being given to the Investment Manager; 

(iv) the Investment Manager (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger),
(2) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (3) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due, (4) makes a general
assignment, arrangement or composition with or for the benefit of its creditors, (5) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part
of its property or (6) is adjudicated as insolvent or bankrupt, or a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Investment Manager, or appointing a receiver, liquidator, assignee, or
sequestrator (or other similar official) of the Investment Manager or of any substantial part of its property, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; 

(v) the occurrence of an Event of Default or Termination Event under the Swap Agreement that results from any breach by
the Investment Manager of its duties under the Swap Agreement or this Agreement; or 
 (vi) the occurrence of an
act by the Investment Manager that constitutes fraud or criminal activity in the performance of its obligations under this Agreement, or the Investment Manager being indicted for a criminal offense materially related to its business of providing
asset management services. 
 If any such event occurs, the Investment Manager shall give prompt written notice
thereof to the Company and Citibank promptly upon the Investment Manager becoming 

  
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aware of the occurrence of such event. 
 (b) The
Investment Manager shall have the right to terminate this Agreement only upon 90 days prior written notice to the Company and Citibank, and this Agreement shall terminate automatically in the event of its assignment by the Investment Manager which
is not made in accordance with Sections 13 and 17 of this Agreement. 
 (c) This Agreement shall be automatically
terminated in the event that the Company determines in good faith that the Company or the Company’s asset portfolio has become required to be registered under the provisions of the Investment Company Act. 

(d) Within 30 days of the resignation or removal of the Investment Manager, the Company may appoint a successor investment
manager; provided that Citibank may reject such appointment within 15 days of notice of such appointment and, if so rejected, Citibank may appoint a successor investment manager. 

 

	 	12.	Action Upon Termination. 

 (a) Upon the effective termination of this Agreement, the Investment Manager shall as soon as practicable: 
 (i) deliver to the Company all property and documents of the Company or otherwise relating to the Transactions then in the custody of the Investment Manager; and 

(ii) deliver to Citibank an account with respect to the books and records delivered to Citibank or the successor
investment manager appointed pursuant to Section 11(d). 
 Notwithstanding such termination, the Investment
Manager shall remain liable to the extent set forth herein (but subject to Section 13 hereof) for its acts or omissions hereunder arising prior to termination and for any expenses, losses, damages, liabilities, demands, charges and claims
(including reasonable attorney’s fees) in respect of or arising out of a breach of the representations and warranties made by the Investment Manager in Section 4 hereof or from any failure of the Investment Manager to comply with the
provisions of this Section 12. 
 (b) The Investment Manager agrees that, notwithstanding any termination,
it shall reasonably cooperate in any suit, action or proceeding relating to this Agreement (each, a “Proceeding”) arising in connection with this Agreement, the Swap Agreement or any of the Company’s assets (excluding any such
Proceeding in which claims are asserted against the Investment Manager or any Affiliate of the Investment Manager) so long as the Investment Manager shall have been offered reasonable security, indemnity or other provisions against the cost,
expenses and liabilities that might be incurred in connection therewith and a reasonable per diem fee. 

  
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	 	13.	Liability of Investment Manager; Delegation. 

 (a) The Investment Manager assumes no responsibility under this Agreement other than to render the services called for hereunder and under the terms of the Swap Agreement made applicable to it pursuant to
the terms of this Agreement. The Investment Manager shall not be responsible for any action of the Company in declining to follow any advice, recommendation, or direction of the Investment Manager. The Investment Manager shall have no liability to
Citibank or other creditors of the Company, for any error of judgment, mistake of law, or for any loss arising out of any investment, or for any other act or omission in the performance of its obligations to the Company except for liability to which
it would be subject by reason of willful misfeasance, bad faith, gross negligence in performance, or reckless disregard, of its obligations hereunder. The Investment Manager may delegate to an agent selected with reasonable care, which shall include
any Person that is party to a sub-advisory agreement with the Investment Manager or any of its Affiliates as of the date hereof, any or all duties (other than its asset selection or trade execution duties) assigned to the Investment Manager
hereunder; provided that no such delegation by the Investment Manager of any of its duties hereunder shall relieve the Investment Manager of any of its duties hereunder nor relieve the Investment Manager of any liability with respect to the
performance of such duties. For the avoidance of doubt, asset selection duties shall include the services described in Section 1(a) hereof. 
 Notwithstanding the above and Section 17, the Investment Manager shall be permitted to assign any or all of its rights and delegate any or all of its obligations to an Affiliate reasonably acceptable
to Citibank that (i) will professionally and competently perform duties similar to those imposed upon the Investment Manager under this Agreement and (ii) is legally qualified and has the capacity to act as the Investment Manager under
this Agreement. The Investment Manager shall not be liable for any consequential damages hereunder. 
 (b) The
Company shall reimburse, indemnify and hold harmless the Investment Manager, its directors, officers, agents and employees and any of its Affiliates from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature
whatsoever (including reasonable attorneys’ fees and expenses), as are incurred in investigating, preparing, pursuing or defending any claim, action, proceeding or investigation with respect to any pending or threatened litigation caused by, or
arising out of or in connection with, any acts or omissions of the Investment Manager, its directors, officers, stockholders, agents and employees made in good faith and in the performance of the Investment Manager’s duties under this Agreement
or the Swap Agreement except to the extent resulting from such person’s bad faith, willful misfeasance, gross negligence or reckless disregard of its duties hereunder or thereunder. The Investment Manager, its directors, officers, stockholders,
agents and employees may consult with counsel and accountants with respect to the affairs of the Company and shall be fully protected and justified, to the extent allowed by law, in acting, or failing to act, if such action or failure to act is
taken or made in good faith and is in accordance with the advice or opinion of such counsel or accountants. Notwithstanding anything contained 

  
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herein to the contrary, the obligations of the Company under this Section 13(b) shall be payable from the Company’s assets and are subject to the availability of funds. 

(c) The Investment Manager shall reimburse, indemnify and hold harmless the Company, its members, manager, officers,
agents and employees from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees and expenses), as are incurred in investigating, preparing, pursuing or
defending any claim, action, proceeding or investigation with respect o any pending or threatened litigation caused by, or arising out of or in connection with, (i) any acts or omissions of the Investment Manager constituting bad faith, willful
misconduct, gross negligence or reckless disregard of its duties under this Agreement or under the Swap Agreement and (ii) any breach of the representations and warranties made by the Investment Manger in Section 4 hereof. 

 

	 	14.	Obligations of Investment Manager. 

 Unless otherwise required by any provision of the Swap Agreement or this Agreement or by applicable law, the Investment Manager shall not intentionally take any action, which it knows or should know would
(a) materially adversely affect the Company for purposes of United States federal or state law or any other law known to the Investment Manager to be applicable to the Company, (b) require registration of the Company or the Company’s
assets as an “investment company” under the Investment Company Act, (c) not be permitted under the Company’s operating agreement or certificate of formation (including, but not limited to, Section 9 thereof), (d) cause
the Company to violate the terms of the Swap Agreement, (e) subject the Company to federal, state or other income taxation, or (f) adversely affect the interests of Citibank in any material respect (other than as permitted or required
hereunder or under the Swap Agreement, including, without limitation, as may result from the performance of any Reference Obligation), it being understood that in connection with the foregoing the Investment Manager will not be required to make any
independent investigation of any facts or laws not otherwise known to it in connection with its obligations under this Agreement and the Swap Agreement or the conduct of its business generally. The Investment Manager covenants that it shall comply
in all material respects with all laws and regulations applicable to it in connection with the performance of its duties under this Agreement and the Swap Agreement. Notwithstanding anything in this Agreement, the Investment Manager shall not take
any discretionary action that would reasonably be expected to cause an Event of Default or Termination Event under the Swap Agreement. The Investment Manager covenants that it shall not fail to correct any known misunderstandings regarding the
separate identity of the Company and shall not identify itself as a division or department of the Company. 
  

	 	15.	No Partnership or Joint Venture. 

 The Company and the Investment Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as
such on either of them. The Investment Manager’s relation to the Company shall be deemed to be that of an independent contractor. 

  
 13 

	 	16.	Notices. 

 Any notice
under this Agreement shall be in writing and sent by facsimile, confirmed by telephonic communication, or addressed and delivered or mailed postage paid to the other party at such address as such other party may designate for the receipt of such
notice. Until further notice to the other party it is agreed that the address of the Company and Citibank for this purpose shall be as set forth in the Schedule to the Swap Agreement, and the address of the Investment Manager for this purpose shall
be: 
 FS Investment Corporation 

Cira Centre 
 2929 Arch Street, Suite 675 
 Philadelphia, Pennsylvania 19104

 Attention: Gerald F. Stahlecker 

Telephone: (215) 495-1169 
 Facsimile: (215) 222-4649 
 Electronic Mail:
jerry.stahlecker@franklinsquare.com 
 All notices are to be effective in accordance with Section 12 of the Swap Agreement. 

 

	 	17.	Succession/Assignment. 

This Agreement shall inure to the benefit of and be binding upon the successors to the parties hereto. No assignment of this Agreement by
the Investment Manager (including, without limitation, a change in control or management of the Investment Manager which would be deemed an “assignment” under the United States Advisers Act of 1940, as amended) shall be made without the
consent of the Company and Citibank. 
  

	 	18.	Conflicts with the Swap Agreement. 

 Subject to the provisions of Section 1 hereof pertaining to the binding effect of certain amendments to the Swap Agreement on the Investment Manager, in the event that this Agreement requires any
action to be taken with respect to any matter and the Swap Agreement requires that a different action be taken with respect of such matter, and such actions are mutually exclusive, the provisions of the Swap Agreement in respect thereof shall
control. 
  

	 	19.	Miscellaneous. 

 (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles. With respect to any Proceeding, each party
irrevocably (i) submits to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City and (ii) waives any objection which it may have at
any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court
does not have any jurisdiction over such party. Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction, nor will the 

  
 14 

 
bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction. 

(b) THE PARTIES HERETO IRREVOCABLY CONSENT TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR PROCEEDING BY THE
MAILING OR DELIVERY OF COPIES OF SUCH PROCESS TO EACH SUCH PARTY AT THE ADDRESS SPECIFIED IN SECTION 16 HEREOF. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. 
 (c) EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

(d) No failure on the part of either party hereto to exercise and no delay in exercising, and no course of dealing with
respect to, any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 
 (e) The captions in this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect. 

(f) In the event any provision of this Agreement shall be held invalid or unenforceable, by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any other provisions hereof. 
 (g) This
Agreement may not be amended or modified or any provision thereof waived except by an instrument in writing signed by the parties hereto. 
 (h) This Agreement and the Swap Agreement contain the entire understanding and agreement between the parties and supersedes all other prior understandings and agreements, whether written or oral, between
the parties concerning this subject matter. The express terms of this Agreement control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. 

(i) The Investment Manager (i) consents to, and agrees to perform, the provisions of the Swap Agreement applicable to
the Investment Manager, and (ii) agrees 

  
 15 

 
that all of the representations, covenants and agreements made by the Investment Manager in this Agreement are also for the benefit of Citibank. 

(j) This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed an original,
but all such counterparts shall together constitute but one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected
hereon as the signatories. 
 (k) Each representation and warranty made or deemed to be made herein or pursuant
hereto, and each indemnity provided for hereby, shall survive the execution and delivery and any termination or assignment of this Agreement or resignation or removal of the Investment Manager. 

(l) The Company hereby acknowledges and accepts all actions that were taken by the Investment Manager and/or recommended
to the Company by the Investment Manager prior to the Closing Date, including all actions and recommendations that were otherwise consistent with the services to be provided by the Investment Manager to the Company pursuant to Section 1 of this
Agreement prior to the Closing Date, in each case, as if this Agreement had been in effect at the time that such actions were taken or such recommendations were made. 
  

	 	20.	Non-Petition. 

 The
Investment Manager shall continue to serve as Investment Manager under this Agreement notwithstanding that the Investment Manager shall not have received amounts due to it under this Agreement because sufficient funds were not then available to the
Company to pay such amounts, and agrees not to cause the filing of an involuntary petition in bankruptcy against the Company for any reason whatsoever, including, without limitation, the non-payment to the Investment Manager, until the payment in
full of all amounts payable to Citibank or otherwise under the Swap Agreement and the expiration of a period equal to one year and one day (or, if longer, the applicable preference period then in effect) following all such payments; provided
that nothing in this clause shall preclude, or be deemed to estop, the Investment Manager (A) from taking any action prior to the expiration of the aforementioned one year and one day (or, if longer, the applicable preference period then in
effect) period in (x) any case or proceeding voluntarily filed or commenced by the Company or (y) any involuntary insolvency proceeding filed or commenced against the Company, by a Person other than the Investment Manager or its
Affiliates, or (B) from commencing against the Company or any properties of the Company any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding. The provisions of this
Section 20 shall survive the termination of this Agreement for any reason whatsoever. 
  

	 	21.	No Recourse. 

 The
Investment Manager hereby acknowledges and agrees that the Company’s obligations hereunder will be solely the corporate obligations of the Company, and the Investment Manager will not have any recourse to any of the directors, officers,
employees, 

  
 16 

 
holders of the membership interest of Company with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any transactions contemplated hereby.
Recourse in respect of any obligations of the Company hereunder will be limited to the Company’s assets and on the exhaustion thereof all claims against the Company arising from this Agreement or any transactions contemplated hereby shall be
extinguished. The provisions of this Section 21 shall survive the termination of this Agreement for any reason whatsoever. 

[signature page follows] 

  
 17 

 IN WITNESS WHEREOF, the parties hereto have caused this INVESTMENT MANAGEMENT AGREEMENT to
be executed by their respective authorized representatives on the day and year first above written. 
  

			
	ARCH STREET FUNDING LLC
		
	By:	 	 /s/ Gerald F. Stahlecker

	Name:	 	Gerald F. Stahlecker
	Title:	 	EVP
	
	FS INVESTMENT CORPORATION
		
	By:	 	 /s/ Gerald F. Stahlecker

	Name:	 	Gerald F. Stahlecker
	Title:	 	EVPEmployment Agreement

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT (this
“Agreement”) by and between The Wet Seal, Inc., a Delaware corporation (the “Company”), and Ken Seipel (“Executive”) (collectively, the “Parties”) is
entered into as of March 21, 2011. 
 W I T N E S S E T H: 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its stockholders to employ Executive as President and Chief Operating Officer of the Company commencing on the Effective Date, pursuant to the terms of this Agreement; and 

WHEREAS, Executive desires to accept employment as President and Chief Operating Officer of the Company pursuant to the terms of
this Agreement. 
 NOW THEREFORE, the Parties, intending to be legally bound, agree as follows: 

1. EMPLOYMENT; DUTIES 
 The Company hereby agrees to employ Executive as President and Chief Operating Officer of the Company and Executive hereby accepts such employment upon the terms and conditions set forth below.

 2. TERMS AND PLACE OF PERFORMANCE 

(a) Executive’s term as President and Chief Operating Officer of the Company shall begin on March 28, 2011 (the
“Effective Date”), and, unless sooner terminated as provided herein, shall end at 5:00 p.m. (Pacific Time) on the third anniversary of the Effective Date (the “Term”). The Term may be sooner terminated
by either party in accordance with the provisions of Section 5. 
 (b) At least one hundred twenty
(120) days prior to the expiration of the Term, the Board shall provide written notice to Executive of its intention to allow the Term to expire as provided in Section 5.7. The parties explicitly agree that the failure by the Company to
provide Executive within such one hundred twenty (120) day notice shall not constitute Good Reason (as defined below) or otherwise entitle Executive to avail himself of any right to severance set forth under Section 5. 

(c) The principal place of employment of Executive shall be at the Company’s headquarters in Foothill Ranch,
California (or at such other locations within the fifty (50) mile radius of the Company’s current location as it may be relocated); provided, that, Executive shall be required to travel from time to time for the business of the
Company during the Term. 
 3. COMPENSATION 

  
 1 

 3.1 Base Salary. For the services to be rendered by Executive as
President and Chief Operating Officer of the Company during the Term, Executive shall be entitled to receive, commencing as of the Effective Date, salary at the annual rate of Five Hundred Seventy Five Thousand Dollars ($575,000) (the
“Base Salary”), less all applicable tax withholdings by the Company. The Base Salary shall be payable in accordance with the Company’s customary payroll practices. The Compensation Committee of the Board of Directors of
the Company (the “Committee”) shall review the Base Salary annually and may make adjustments to increase but not decrease such Base Salary, in accordance with the compensation practices and guidelines of the Company. The Base
Salary shall not be reduced during the Term without Executive’s express prior written consent. 
 3.2
Annual Bonus. Commencing on the Effective Date, Executive shall participate in the Company’s annual performance based bonus program, as the same may be established from time to time by the Committee for executive officers of the Company
(the “Incentive Plan”). For each fiscal year of the Company during which Executive is employed hereunder during the Term, Executive’s target award under the Incentive Plan shall be seventy-five percent (75%) of the
Base Salary (the “Target Bonus”), the maximum incentive opportunity shall be up to one hundred fifty percent (150%) of the Base Salary and the threshold incentive opportunity, which shall be payable if the minimum
performance thresholds are attained, shall be fifty percent (50%) of the Base Salary. The Committee reserves the right to change the performance metric(s) in consultation with Executive for purposes of measuring any bonus earned under this
Section 3.2 as late as seventy-five (75) days following the beginning of the applicable bonus period and shall change the performance metrics for 2011 in consultation with Executive in order to take into account Executive’s
commencement of employment and related factors. In order to earn this annual bonus, Executive must be employed on the date the Company pays the applicable annual bonus and any annual bonus so earned shall be paid at the same time the Company makes
the applicable bonus payments to other executive officers of the Company but no later than the 15th day of the third month following the end of the fiscal year of the Company for which it is earned and following certification by the Committee of the
achievement of agreed-upon performance measures and the amount of the bonus to be paid by Executive for the applicable fiscal year. If Executive is in good standing with the Company on the date of the expiration of the Term pursuant to
Section 5.7, then the annual bonus payable for the immediately prior fiscal year of Executive’s employment shall be paid to the extent earned based upon the achievement of the applicable performance goals at the same time the Company makes
the related bonus payments to other executive officers of the Company. 
 3.3 Vacation. During the Term,
Executive shall be entitled to paid vacation time of five (5) weeks per year of the Term, with any partial year determined on a pro rata basis. Vacation time shall be accrued and used in accordance with the Company’s policy as it may be
established from time to time. In addition, Executive shall receive other paid time-off in accordance with the Company’s policies for senior executives as such policies may exist from time to time. 

3.4 Welfare, Pension and Incentive Benefit Plans. During the Term, Executive shall be entitled to participate in
such employee benefit plans and insurance programs offered by the Company to its executive officers generally, or which it may adopt from time to 

  
 2 

 
time for its executive officers generally, in accordance with the eligibility requirements for participation therein. 

3.5 Automobile Perquisite. During the Term, the Company shall provide Executive with a monthly allowance of $900
for all of Executive’s automobile expenses, including lease payments, customary insurance coverage and all maintenance costs, such as gasoline, repairs and service for Executive’s automobile. 

3.6 Relocation Expenses. Executive shall relocate Executive’s primary residence to within sixty
(60) miles of the Company’s principal offices in Foothill Ranch, California within one hundred twenty (120) days of the Effective Date. The Company shall reimburse Executive up to $50,000 for reasonable expenses to relocate
Executive’s household to the Foothill Ranch, California area within one hundred twenty (120) days of the Effective Date. In addition, the Company shall reimburse Executive up to $8,000 per month for temporary housing expenses in the
Foothill Ranch, California area for up to one hundred twenty (120) days following the Effective Date. Executive shall be required to submit receipts in accordance with Company policy prior to reimbursement. 

3.7 Equity Award Shares. On the Effective Date with respect to options and as soon as administratively practicable
after the Effective Date (which, in any event, shall be prior to any vesting event) with respect to performance shares and restricted shares, the Company shall grant Executive the following: 

(a) An option (the “Option”) to purchase Four Hundred Thousand (400,000) shares of the
Company’s Class A common stock, $0.10 par value per share (“Common Stock”) with a per share exercise price equal to the closing quoted selling price for Common Stock on the Effective Date. Subject to
Executive’s continuing employment as the President and Chief Operating Officer of the Company on the respective vesting date, the Option shall vest with respect to One Hundred Thousand (100,000) shares of Common Stock on each of the first
two anniversaries of the Effective Date and Two Hundred Thousand (200,000) shares of Common Stock on the third anniversary of the Effective Date. 
 (b) (i) Four Hundred Thousand (400,000) shares of Common Stock, subject to the service-based vesting requirements and attainment (or surpassing) of the “Share Appreciation
Target” set forth in the chart below (the “Performance Shares”): 
  

									
	 Number of Performance Shares within each
Tranche
	  	 Service-Based Vesting Date
	  	 Measurement Period
	  	Share Appreciation
Target to be
Equaled or
Exceeded	 
	 Tranche 1: 133,333
	  	1st anniversary of the Effective Date	  	Effective Date through 3rd anniversary of the Effective Date	  	$	4.60	  
	 Tranche 2: 133,333
	  	2nd anniversary of the Effective Date	  	1st anniversary of the Effective Date through 3rd anniversary of the Effective Date	  	$	5.80	  

  
 3 

									
	 Tranche 3: 133,334
	  	3rd anniversary of the Effective Date	  	2nd Anniversary of the Effective Date through 3rd anniversary of the Effective Date	  	$	7.00	  

 (ii) The Share Appreciation Targets will
be deemed to have been met upon the attainment of the respective Share Appreciation Targets as calculated, in each case, on the thirty (30)-day volume weighted average share price during the respective measurement periods. 

(c) Two Hundred Fifty Thousand (250,000) shares of Common Stock subject to the following time based vesting
restrictions (the “Restricted Shares”). Subject to Executive’s continuing employment as the President and Chief Operating Officer of the Company on a vesting date, the Restricted Shares shall vest with respect to Fifty
Thousand (50,000) shares of Common Stock on each of the first two anniversaries of the Effective Date and with respect to One Hundred Fifty Thousand (150,000) shares of Common Stock on the third anniversary of the Effective Date.

 (d) All equity award grants to Executive being made pursuant to this Section 3.7 shall be subject to the
terms and conditions set forth in The Wet Seal, Inc. Amended and Restated 2005 Stock Incentive Plan, or such other plan as determined by the Board or Committee, and the applicable award agreements entered into on the Effective Date. 

(e) If Executive is in good standing with the Company on the date of the expiration of the Term pursuant to
Section 5.7, then any equity awards subject to vesting based upon performance for the immediately prior fiscal year of Executive’s employment shall vest to the extent the applicable performance goals are met at the same time as equity
awards held by other executive officers of the Company that vest based upon such prior fiscal year’s performance. 
 3.8 Expenses. While Executive is employed by the Company hereunder, the Company shall reimburse Executive for all reasonable and necessary out-of-pocket business, travel and entertainment expenses
incurred by Executive in the performance of his duties and responsibilities hereunder, subject to the Company’s normal policies and procedures for expense verification and documentation. 

4. POSITION AND DUTIES 
 4.1 Position and Duties. During the Term, Executive shall serve as President and Chief Operating Officer of the Company and shall report to the Chief Executive Officer of the Company. Executive
shall perform duties consistent with his title and position and any other reasonable duties determined by the Chief Executive Officer of the Company. Executive’s position is considered a 16(b) officer of the Company and subject to all insider
trading, blackout periods and fiduciary responsibilities associated with such. 

  
 4 

 4.2 Devotion of Time and Effort. Executive shall use Executive’s
good faith best efforts and judgment (a) in performing Executive’s duties required hereunder and (b) to act in the best interests of the Company. Executive shall devote such time, attention and energies to the business of the Company
as are reasonably necessary to satisfy Executive’s required responsibilities and duties hereunder. Executive shall perform the duties assigned to him to the best of Executive’s ability and in the best interests of the Company. 

5. TERMINATION; TERMINATION BENEFITS 
 5.1 Due to Death or Disability. 
 (a) If Executive dies
during the Term, Executive’s employment and this Agreement shall terminate on the date of his death. The Company may terminate Executive’s employment if he becomes “Disabled,” as defined below, upon delivery of a Notice of
Termination (as defined below) to Executive. 
 (b) Upon termination of Executive’s employment due to
Executive’s death or by the Company due to Executive’s Disability, Executive shall be entitled to: 

(i) compensation and payment for any unreimbursed expenses incurred, accrued but unpaid then current Base Salary and
other accrued but unpaid employee benefits as provided in this Agreement, in each case through the Date of Termination (as defined below); 
 (ii) Executive’s Target Bonus for the fiscal year in which the Date of Termination occurs (the “Termination Fiscal Year”), which shall be pro rated for the number of full
calendar quarters Executive was employed by the Company during the Termination Fiscal Year; 
 (iii) subject to
Section 5.8, if Executive’s employment is terminated due to Disability and Executive makes a timely election to continue his medical coverage under The Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”), the
Company shall pay for coverage under COBRA for one (1) year following the Date of Termination; 
 (iv) (A)
the vesting in full of his then unvested Restricted Shares and Option Shares that would have vested on the next vesting date immediately following the Date of Termination and (B) the vesting of fifty percent (50%) of his remaining unvested
Restricted Shares; and 
 (v) (A) the vesting in full of his then unvested Performance Shares that would have
vested on the Service-Based Vesting Date immediately following the Date of Termination; provided, that the Share Appreciation Target for such measurement period is achieved prior to the Date of Termination and (B) the vesting of
fifty percent (50%) of his remaining unvested Performance Shares; provided, that the respective Share Appreciation Target is achieved prior to the Date of Termination, calculated in each case pursuant to Section 3.7(b)(ii).

  
 5 

 (c) For purposes of this Agreement, the term
“Disabled” or “Disability” shall mean a medically determined physical or mental incapacity as a result of which Executive becomes unable to continue the proper performance of Executive’s duties
hereunder for one hundred twenty (120) consecutive days or one hundred eighty (180) non-consecutive days in any three hundred sixty-five (365)-day period, or, if this provision is inconsistent with any applicable law, for such period or
periods as permitted by law. 
 5.2 By the Company Without “Cause”. 

(a) The Company may terminate Executive’s employment without “Cause” (as defined below) at any time
following the Effective Date upon delivery of a Notice of Termination to Executive. 
 (b) Upon termination of
Executive’s employment by the Company without Cause, Executive shall be entitled to (contingent on Executive delivering to the Company, and not revoking, an executed release, substantially in the form attached hereto as Exhibit A (a
“Release”), within thirty-five (35) days (the “35 Day Period”) following the Date of Termination of Executive’s employment, provided that the Company has delivered to Executive the Release
for execution within three (3) business days following the Date of Termination): 
 (i) the greater of
(A) Executive’s aggregate then current Base Salary for the remainder of the Term and (B) two (2) times Executive’s then current Base Salary, which payment under this Section 5.2(b)(i) shall be made in twelve
(12) equal monthly installments (each such installment shall be treated as a separate payment under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)); 

(ii) subject to Section 5.8, if Executive makes a timely election to continue his medical coverage under COBRA, the
Company shall pay for coverage under COBRA for one (1) year following the Date of Termination; 
 (iii) (A)
the vesting in full of his then unvested Restricted Shares and Option Shares that would have vested on the next vesting date immediately following the Date of Termination and (B) the vesting of fifty percent (50%) of his remaining unvested
Restricted Shares; and 
 (iv) (A) the vesting in full of his then unvested Performance Shares that would have
vested on the Service-Based Vesting Date immediately following the Date of Termination; provided, that the Share Appreciation Target for such measurement period is achieved prior to the Date of Termination and (B) the vesting of
fifty percent (50%) of his remaining unvested Performance Shares; provided, that the respective Share Appreciation Target is achieved prior to the Date of Termination, calculated in each case pursuant to Section 3.7(b)(ii).

 Notwithstanding anything herein to the contrary, any payments contingent upon a Release that are payable during the 35 Day Period shall be
accumulated and paid on the first payroll period following the completion of such 35 Day Period. 
 5.3 By the
Company For Cause. 

  
 6 

 (a) The Company may terminate Executive’s employment for Cause at any
time, upon an affirmative vote of a majority of the non-employee members of the Board, by providing Executive a Notice of Termination, which shall set forth in reasonable detail the Company’s basis for such termination. 

(b) Upon termination of Executive’s employment by the Company for Cause, Executive shall be entitled to receive
compensation and payment for any unreimbursed expenses incurred, accrued but unpaid Base Salary and other accrued but unpaid employee benefits as provided in this Agreement, in each case through the Date of Termination. 

(c) For purposes of this Agreement, “Cause” shall mean: 

(i) any act of material misconduct or material dishonesty by Executive in the performance of his duties; 

(ii) any willful failure, neglect or refusal by Executive to perform his duties under this Agreement or to follow the
lawful instructions of the Board; 
 (iii) any breach by Executive of his fiduciary duties to the Company or
Executive’s commission of any fraud or embezzlement against the Company (whether or not a misdemeanor); 

(iv) any material breach of any covenant of this Agreement, which breach has not been cured by Executive (if curable)
within thirty (30) days after written notice thereof to Executive by the Company; 
 (v) Executive’s
being convicted of (or pleading guilty or nolo contendere to) any felony or misdemeanor involving theft, embezzlement, dishonesty or moral turpitude; and/or 

(vi) Executive’s failure to comply with the policies of the Company in effect from time to time relating to
conflicts of interest, ethics, codes of conduct, insider trading, or discrimination and harassment, or other breach of Executive’s fiduciary duties to the Company, which failure or breach is materially injurious to the business or reputation of
the Company. 
 If the Board has reasonable belief that Executive has committed any of such acts, it may suspend Executive (with pay and all
benefits set forth under this Agreement) while it investigates whether it has or could have Cause to terminate Executive and such suspension shall not give Executive “Good Reason” (as defined below) to terminate his employment. 

5.4 By Executive For Good Reason. 

(a) Executive may terminate his employment for Good Reason by providing a Notice of Termination to the Board within sixty
(60) days following the occurrence of the circumstances giving rise to such Good Reason (or, solely with respect to Section 5.4(c)(iv) below, within sixty (60) days following Executive’s knowledge of such occurrence). The
foregoing notice shall describe the claimed event or circumstance and set forth Executive’s 

  
 7 

 
intention to terminate his employment with the Company; provided, that, the Company has not substantially cured such event within thirty (30) days after receiving such notice.

 (b) Upon termination by Executive of his employment for Good Reason, Executive shall be entitled to
(contingent on Executive delivering to the Company, and not revoking, an executed Release within the 35 Day Period; provided, that the Company has delivered to Executive for execution the Release within three (3) business days
following the Date of Termination): 
 (i) the greater of (A) Executive’s aggregate then current Base
Salary for the remainder of the Term and (B) two (2) times Executive’s then current Base Salary, which payment under this Section 5.4(b)(i) shall be made in twelve (12) equal monthly installments (each such installment shall
be treated as a separate payment under Section 409A of the Code); 
 (ii) subject to Section 5.8, if
Executive intends to continue his medical coverage under COBRA, the Company shall pay for coverage under COBRA for one (1) year following the Date of Termination; 

(iii) (A) the vesting in full of his then unvested Restricted Shares and Option Shares that would have vested on the next
vesting date immediately following the Date of Termination and (B) the vesting of fifty percent (50%) of his remaining unvested Restricted Shares; and 

(iv) (A) the vesting in full of his then unvested Performance Shares that would have vested on the Service-Based Vesting
Date immediately following the Date of Termination; provided, that the Share Appreciation Target for such measurement period is achieved prior to the Date of Termination and (B) the vesting of fifty percent (50%) of his
remaining unvested Performance Shares; provided, that the respective Share Appreciation Target is achieved prior to the Date of Termination, calculated in each case pursuant to Section 3.7(b)(ii). 

(c) For purposes of this Agreement, “Good Reason” shall mean: 

(i) The Company (or its successor) relocates Executive’s primary work location by more than fifty (50) miles
from the Company’s current headquarters; 
 (ii) The assignment to Executive of any duties inconsistent in
any material respect with Executive’s position with the Company as set forth in Section 4.1, or any action by the Company which results in a material diminution in such position, authority, duties or responsibilities; 

(iii) A material reduction of Executive’s Base Salary (other than with the prior written consent of Executive);
and/or 
 (iv) The Company (or its successor) breaches a material term or condition of this Agreement, other
than the Company’s representations and warranties set forth in Section 18.2. 

  
 8 

 5.5 By Executive Without Good Reason. 

(a) Executive may terminate his employment without Good Reason by providing a Notice of Termination to the Company at
least ninety (90) days prior to the Date of Termination. 
 (b) Upon termination by Executive of his
employment without Good Reason, Executive shall be entitled to receive compensation and payment for any unreimbursed expenses incurred, accrued but unpaid Base Salary and other accrued but unpaid employee benefits as provided in this Agreement, in
each case through the Date of Termination (contingent on Executive delivering, and not revoking, an executed Release within the 35 Day Period, provided that the Company has delivered to Executive the Release for execution within three
(3) business days following the Date of Termination). 
 5.6 Change of Control. 

(a) In the event there is a Change of Control (as defined below), to the extent the consideration per share payable to the
Company’s stockholders at the closing of the Change of Control transaction equals or exceeds one hundred twenty percent (120%) of the Share Appreciation Target of any tranche or tranches of Performance Shares, Executive shall be entitled
to the vesting in full of such tranche or tranches of Performances Shares simultaneously with the closing of the Change of Control transaction. For the avoidance of doubt, in the event that the consideration per share payable to the Company’s
stockholders at the closing of the Change of Control transaction is less than one hundred twenty percent (120%) of the Share Appreciation Target of any tranche or tranches of Performance Shares, Executive shall no longer be entitled to the
accelerated vesting of such tranche or tranches of Performance Shares under this Section 5.6(a). Notwithstanding the foregoing, Executive shall continue to be entitled to the accelerated vesting rights with respect to the Performance Shares set
forth in Sections 5.1, 5.2 and 5.4. 
 (b) In the event there is a Change of Control and, within one
hundred eighty (180) days after the Change of Control, Executive either terminates his employment for Good Reason or the Company (or its successor) terminates Executive’s employment without Cause, Executive shall be entitled to (contingent
on Executive signing and not revoking the Release within the 35 Day Period, provided, that the Company has delivered to Executive the Release for execution within three (3) business days following the Date of Termination):

 (i) a payment equal to two (2) times the sum of (A) Executive’s then current Base Salary and
(B) Executive’s Target Bonus for the fiscal year in which the Date of Termination occurs (pro rated for the number of full calendar quarters Executive was employed by the Company during the Termination Fiscal Year); all payments under this
Section 5.6(a)(i) shall be payable in twelve (12) equal monthly installments (each such installment shall be treated as a separate payment under Section 409A of the Code); 

(ii) subject to Section 5.8, if Executive makes a timely election to continue his medical coverage under COBRA, the
Company will pay for coverage under COBRA for one (1) year following the Date of Termination; 

  
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 (iii) (A) the vesting in full of his then unvested Restricted Shares that
would have vested on the next vesting date immediately following the Date of Termination and (B) the vesting of fifty percent (50%) of his remaining unvested Restricted Shares, provided, however, that if the consideration per
share payable to the Company’s stockholders at the closing of the Change of Control transaction equals or exceeds $5.50, Executive shall be entitled to the vesting in full of his then unvested Restricted Shares; and 

(iv) the greater of (A) the vesting in full of his then unvested Option Shares that would have vested on the vesting
date immediately following the Date of Termination, and (B) (I) if the consideration per share payable to the Company’s stockholders at the closing of the Change of Control transaction equals or exceeds $5.52, the vesting of
thirty-three and one-third percent (33 1/3%) of all the remaining unvested Option Shares, (II) if the consideration per share payable to the Company’s stockholders at the closing of the Change of Control transaction equals or exceeds $6.96, the
vesting of sixty-six and two-thirds percent (66 2/3%) of all the remaining unvested Option Shares; (III) if the consideration per share payable to the Company’s stockholders at the closing of the Change of Control transaction equals or exceeds
$8.40, the vesting of all the remaining unvested Option Shares. 
 (c) For purposes of this Agreement,
“Change of Control” shall mean either (i) or (ii) below. 
 (i) any
“person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes,
after the Effective Date, a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that an event described in this paragraph (i) shall not be
deemed to be a Change in Control if any of following becomes such a beneficial owner: (A) the Company or any majority-owned subsidiary (provided, that this exclusion applies solely to the ownership levels of the Company or the
majority-owned subsidiary), (B) any tax-qualified, broad-based employee benefit plan sponsored or maintained by the Company or any majority-owned subsidiary, (C) any underwriter temporarily holding securities pursuant to an offering of
such securities, or (D) any person pursuant to a Non-Qualifying Transaction (as defined in paragraph (ii)); or 
 (ii) the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its subsidiaries that requires the approval of the
Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (A) more than fifty percent
(50%) of the total voting power of (x) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (y) if applicable, the ultimate parent corporation that directly or indirectly
has beneficial ownership of one hundred (100%) of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by Company Voting Securities that were
outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting 

  
 10 

 
Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company
Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation),
is or becomes the beneficial owner, directly or indirectly, of more than fifty percent (50%) of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the members of the board of directors of the Parent Corporation (or if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business
Combination were members of the Board as of the date hereof at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”). 
 5.7 Expiration of the Term. Executive’s employment and this Agreement shall automatically terminate upon expiration of the Term unless the Parties agree to extend the Term or continue the
employment relationship “at will.” 
 5.8 Set–Off Agreements. The obligation to make COBRA
payments under this Section 5 shall be reduced upon Executive becoming eligible for medical benefits from any subsequent employer. The Company’s obligation to make any severance payments provided in this Agreement shall be subject to
set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates under this Agreement or otherwise, pursuant to a final non-appealable court order or arbitration award, provided that the foregoing complies with the
provisions of Section 409 of the Code. 
 5.9 Nonqualified Deferred Compensation. Notwithstanding any
provision of Sections 5.2. 5.4 and 5.6 to the contrary, if all or any portion of the severance payments due under Section 5 are determined to be “nonqualified deferred compensation” subject to Section 409A of the Code, and the
Company determines that Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of the Code and the regulations and other guidance issued thereunder, then such severance payments (or portion thereof) shall commence
no earlier than the first day of the seventh month following the month in which Executive’s termination of employment occurs (with the first such payment being a lump sum equal to the aggregate severance payments Executive would have received
during such six (6)-month period if no such payment delay had been imposed), or earlier upon Executive’s death. 
 5.10 Notice of Termination. Any termination of employment pursuant to Sections 5.1 through 5.5 shall be communicated by a Notice of Termination to the other party hereto given in accordance with
Section 20.2. 
 (a) For purposes of this Agreement, a “Notice of Termination” means
a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated and (iii) if the Date of Termination is other than the date of receipt of such notice, 

  
 11 

 
specifies the termination date. The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company, as the case may be, hereunder or preclude Executive or the Company, as the case may be, from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights
hereunder. 
 (b) For purposes of this Agreement, “Date of Termination” means (i) if
Executive’s employment is terminated pursuant to Section 5.1 through 5.5, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided, that such Date of Termination is
in accordance with Section 5.4 or 5.5, as the case may be), (ii) if Executive’s employment is terminated by reason of death, the date of death, and (iii) the expiration of the Term. 

5.11 Exclusive Remedy. Except as provided in Section 5, from and after the Date of Termination, Executive
shall not be entitled to any other payments under this Agreement and/or the termination hereof, and shall have no further right to receive compensation or other consideration from the Company or have any other remedy whatsoever against the Company
as a result of the termination of this Agreement, the Term or the termination of Executive’s employment, provided, however, that the foregoing shall not affect any accrued rights Executive may have under any other employee benefit
plans, programs or arrangements or his indemnification right. 
 6. NON-SOLICITATION 

Executive acknowledges that by virtue of Executive’s position as President and Chief Operating Officer of the
Company, and Executive’s employment hereunder, he will have advantageous familiarity with, and knowledge about, the Company and will be instrumental in establishing and maintaining goodwill between the Company and its customers, which goodwill
is the property of the Company. Therefore, Executive agrees during the Term and for a twelve (12) month period commencing from the Date of Termination that Executive shall not on behalf of himself, or any other person or entity, solicit, take
away, hire, employ or endeavor to employ any of the employees of the Company. 
 7. NON-COMPETITION 

Executive acknowledges and recognizes the highly competitive nature of the business of the Company and its affiliates and
accordingly agrees as follows: During his employment, Executive will not, directly or indirectly, (a) engage in any business for Executive’s own account that competes with the business of the Company or its affiliates (including, without
limitation, businesses which the Company or its affiliates have specific plans to conduct in the future and as to which Executive is aware of such planning), (b) enter the employ of, or render any services to, any person engaged in any business
that competes with the business of the Company or its affiliates, (c) acquire a financial interest in any person engaged in any business that competes with the business of the Company or its affiliates, directly or indirectly, as an individual,
partner, stockholder, officer, director, principal, agent, trustee or consultant, or (d) interfere with business relationships (whether formed before or after the date of this Agreement) between the Company or any of its affiliates and
customers, suppliers, partners, members or 

  
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investors of the Company or its affiliates. Without limiting the generality of the foregoing, Executive agrees that any designer, manufacturer, wholesaler or retailer which designs, manufactures,
markets or sells specialty apparel, clothing or accessories to primarily the age groups between fourteen (14) and thirty-five (35) and where such designer, manufacturer, wholesaler or retailer operates a retail store within seventy-five
(75) miles of any location of the Company or any subsidiary or affiliate, would be “in competition with the business of the Company” or its subsidiaries or affiliates. Notwithstanding anything to the contrary in this Agreement,
Executive may, directly or indirectly, own, solely as an investment, securities of any person engaged in the business of the Company or its affiliates which are publicly traded on a national or regional stock exchange or on an over-the-counter
market if Executive (i) is not a controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own five percent (5%) or more of any class of securities of such person. 

8. CONFIDENTIALITY/TRADE SECRETS 
 Executive specifically agrees that Executive will not at any time, whether during or subsequent to the Term, in any fashion, form or manner, except in furtherance of Executive’s duties at the Company
or with the specific written consent of the Company, either directly or indirectly use, divulge, disclose or communicate to any person in any manner whatsoever, any confidential information or trade secrets of any kind, nature or description
concerning any matters affecting or relating to the business of the Company (the “Proprietary Information”), including (a) all information, design or software programs (including object codes and source codes),
techniques, drawings, plans, experimental and research work, inventions, patterns, processes and know-how, whether or not patentable, and whether or not at a commercial stage related to the Company or any subsidiary thereof, (b) buying habits
or practices of any of its customers or vendors, (c) the Company’s marketing methods, sales activities, promotion, credit and financial data and related information, (d) the Company’s costs or sources of materials, (e) the
prices it obtains or has obtained or at which it sells or has sold its products or services, (f) lists or other written records used in the Company’s business, (g) compensation paid to employees and other terms of employment, or
(h) any other confidential information of, about or concerning the business of the Company, its manner of operation, or other confidential data of any kind, nature, or description (excluding any information that is or becomes publicly known or
available for use through no fault of Executive or as directed by court order). The Parties hereto stipulate that as between them, Proprietary Information constitutes trade secrets that derive independent economic value, actual or potential, from
not being generally known to the public or to other persons who can obtain economic value or cause economic harm to the Company from its disclosure or use and that Proprietary Information is the subject of efforts which are reasonable under the
circumstances to maintain its secrecy and of which this Section 8 is an example, and that any breach of this Section 8 shall be a material breach of this Agreement. All Proprietary Information shall be and remain the Company’s sole
property. 
 9. INVENTIONS 
 9.1 Executive agrees to disclose promptly to the Company any and all concepts, designs, inventions, discoveries and improvements related to the Company’s business that Executive may conceive,
discover or make from the beginning of Executive’s employment with the Company until the termination thereof; whether such is made solely or jointly with 

  
 13 

 
others, whether or not patentable, of which the conception or making involves the use of the Company’s time, facilities, equipment, personnel, supplies or trade secret information
(collectively, “Inventions”). 
 9.2 Executive agrees to assign, and does hereby assign,
to the Company (or its nominee) Executive’s right, title and interest in and to any and all Inventions that Executive may conceive, discover or make, either solely or jointly with others, whether or not patentable, from the beginning of
Executive’s employment with the Company until the termination thereof of which the conception or making involves the use of the Company’s time, facilities, equipment, personnel, supplies or trade secret information. 

9.3 Executive agrees to sign at the request of the Company any instrument necessary for the filing and prosecution of
patent applications in the United States and elsewhere, including divisional, continuation, revival, renewal or reissue applications, covering any Inventions and all instruments necessary to vest title to such Inventions in the Company (or its
nominee). Executive further agrees to cooperate and assist the Company in preparing, filing and prosecuting any and all such patent applications and in pursuing or defending any litigation upon Inventions covered hereby. The Company shall bear all
expenses involved in the prosecution of such patent applications it desires to have filed. Executive agrees to sign at the request of the Company any and all instruments necessary to vest title in the Company (or its nominee) to any specific patent
application prepared by the Company and covering Inventions which Executive has agreed to assign to the Company (or its nominee) pursuant to Section 9.2 above. 

9.4 The provisions of Sections 9.2, 9.3 and 10 do not apply to any invention which qualifies fully under the provisions of
Section 2870 of the California Labor Code, which provides in substance that provisions in an employment agreement providing that an employee shall assign or offer to assign rights in an invention to his or her employer do not apply to an
invention for which no equipment, supplies, facilities, or trade secret information of the employer was used and which was developed entirely in the employee’s own time, except for those inventions that either (a) relate, at the time of
conception or reduction to practice of the invention: (i) to the business of the employer or (ii) to the employer’s actual or demonstrably anticipated research or development, or (b) result from any work performed by the employee
for the employer. 
 10. SHOP RIGHTS 

The Company shall also have a perpetual, royalty-free, non-exclusive right to use in its business, and to make, use,
license and sell products, processes and/or services derived from any inventions, discoveries, designs, improvements, concepts, ideas, works of authorship, whether or not patentable, including processes, methods, formulae, techniques or know-how
related thereto, that are not within the scope of “Inventions” as defined above, but which are conceived or made by Executive during regular working hours or with the Company’s facilities, equipment, personnel, supplies or trade
secret information. 
 11. INJUNCTIVE RELIEF 

  
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 Executive acknowledges that any violation of any provision of Sections 6
through 10 and Sections 13 through 15 by Executive will cause irreparable damage to the Company, that such damages will be incapable of precise measurement and that, as a result, the Company will not have an adequate remedy at law to redress the
harm which such violations will cause. Therefore, in the event of any violation or threatened violation of any provision of Sections 6 through 10 and Sections 13 through 15 by Executive, in addition to any other rights at law or in equity, Executive
agrees that the Company will be entitled to seek injunctive relief including, but not limited to, temporary and/or permanent restraining orders to restrain any violation or threatened violation of such Sections by Executive. 

12. BLUE PENCIL 
 It is the desire and intent of the Parties that the provisions of Section 6 through 10 shall be enforced to the fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any portion of Sections 6 through 10 shall be adjudicated to be invalid or unenforceable, such provision shall be deemed amended either to conform to such restrictions as the court or
arbitrator may allow, or to delete therefrom or reform the portion thus adjudicated to be invalid and unenforceable, such deletion or reformation to apply only with respect to the operation of such Section in the particular jurisdiction in which
such adjudication is made. It is expressly agreed that any court or arbitrator shall have the authority to modify any provision of Sections 6 through 10 if necessary to render it enforceable, in such manner as to preserve as much as possible the
Parties’ original intentions, as expressed therein, with respect to the scope thereof. 
 13. COPYRIGHT 

Executive agrees that any work prepared by Executive for the Company that is eligible for copyright protection under any
U.S. or foreign law shall be a work made for hire and ownership of all copyrights (including all renewals and extensions therein) shall vest in the Company. In the event any such work prepared by Executive for the Company is deemed not to be a work
made for hire for any reason, Executive hereby irrevocably grants, transfers and assigns all right, title and interest in such work and all copyrights in such work and all renewals and extensions thereof to the Company, and agrees to provide all
assistance reasonably requested by the Company in the establishment, preservation and enforcement of its copyright in such work, such assistance to be provided at the Company’s expense, but without any additional compensation to Executive.
Executive agrees to and does hereby irrevocably waive all moral rights with respect to the work developed or produced hereunder, including any and all rights of identification of authorship and any and all rights of approval, restriction or
limitation on use or subsequent modifications. 
 14. COMPANY’S AND EXECUTIVE’S DUTIES ON TERMINATION

 In the event of termination of Executive’s employment pursuant to Section 5, Executive agrees to
deliver promptly to the Company all Proprietary Information which is or has been in Executive’s possession or under Executive’s control. Upon termination of Executive’s employment by the Company for any reason whatsoever and at any
earlier time the Company so requests, Executive will deliver to the custody of the person designated by the Company all 

  
 15 

 
originals and copies of such documents and other property of the Company in Executive’s possession, under Executive’s control or to which Executive may have access. 

15. NON-DISPARAGEMENT 
 During the Term and following Executive’s termination, for any reason, neither Executive nor his agents, on the one hand, nor the Company, or its senior executives or the Board, on the other hand,
shall directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates or disparages the other (including, in the case of communications by Executive or his agents, any of the
Company’s officers, directors or employees). The foregoing shall not be violated by truthful responses to legal process or governmental inquiry or by private statements to any of the Company’s officers, directors or employees;
provided, that, in the case of Executive, such statements are made in the course of carrying out his duties pursuant to this Agreement. 
 16. SEVERANCE PAYMENTS 
 In addition to the foregoing, and
not in any way in limitation of any right or remedy otherwise available to the Company, if Executive violates in any material respect any of Sections 6 through 10, or Sections 13 through 15, any severance payments then or thereafter due from the
Company to Executive shall be terminated immediately and the Company’s obligation to pay, and Executive’s right to receive, such severance payments shall terminate and be of no further force or effect. 

17. INDEMNIFICATION 
 The Company shall indemnify, defend and hold Executive harmless from and against any and all causes of action, claims, demands, liabilities, damages, costs and expenses of any nature whatsoever directly
or indirectly arising out of or related to Executive’s discharging Executive’s duties hereunder on behalf of the Company and/or its respective subsidiaries and affiliates to the fullest extent permitted by applicable corporate law and the
By-Laws of the Company. 
 18. REPRESENTATIONS AND WARRANTIES 

18.1 Executive hereby represents and warrants to the Company, and Executive acknowledges, that the Company has relied on
such representations and warranties in employing Executive and entering into this Agreement, as follows: 
 (a)
Executive has the legal capacity and right to execute and deliver this Agreement and to perform his obligations contemplated hereby, and this Agreement has been duly executed by Executive; 

(b) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice
or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject; 

  
 16 

 (c) Executive has forwarded to the Company a copy of all prior agreements
with Pamida, Inc., Gap Inc. and each of their affiliates to which he is or was a party (collectively, the “Prior Employment Agreements”). Other than the Prior Employment Agreements, he is not subject to any employment,
confidentiality, trade secret or similar agreement which reasonably could interfere with the performance of Executive’s duties under this Agreement; 
 (d) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other
person other than the Prior Employment Agreements; 
 (e) upon the execution and delivery of this Agreement by
the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms; 
 (f) Executive understands that the Company will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and

 (g) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including
having committed any acts that would form the basis for a Cause termination under Section 5.3 if such act had occurred after the Effective Date. 
 18.2 The Company hereby represents and warrants to Executive, and the Company acknowledges that Executive has relied on such representations and warranties in entering into this Agreement, as follows:

 (a) the Company has all requisite power and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and this Agreement has been duly executed by the Company; 
 (b) the execution, delivery
and performance of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or
any judgment, order or decree to which the Company is subject; 
 (c) upon the execution and delivery of this
Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms; and 

(d) the Company understands that Executive will rely upon the accuracy and truth of the representations and warranties of
the Company set forth herein and the Company consents to such reliance. 
 18.3 If it is determined that
Executive is in breach or has breached any of the representations and warranties set forth herein, the Company shall have the right to terminate Executive’s employment for Cause under Section 5.3. 

  
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 19. ARBITRATION 

Any controversy arising out of or relating to this Agreement, its enforcement or interpretation, or because of an alleged
breach, default, or misrepresentation in connection with any of its provisions, or any other controversy arising out of Executive’s employment with the Company or the termination of Executive’s employment with the Company, including, but
not limited to, any state or federal statutory claims, shall be submitted to arbitration in Orange County, California, before a sole arbitrator selected from Judicial Arbitration and Mediation Services, Inc., Orange County, California, or its
successor (“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected from the American Arbitration Association, and shall be conducted in accordance with the provisions of California
Code of Civil Procedure §§ 1280 et seq. as the exclusive forum for the resolution of such dispute; provided, however, that provisional injunctive relief may, but need not, be sought by either party to this Agreement in a
court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the arbitrator. Final resolution of any dispute through arbitration
may include any remedy or relief which the arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal statutes. The Company shall bear all administrative costs of any arbitration initiated under this
Section 19, including any filing fees and arbitrator fees. 
 At the conclusion of the arbitration, the
arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator’s award or decision is based. Any award or relief granted by the arbitrator hereunder shall be final and binding on the
Parties hereto and may be enforced by any court of competent jurisdiction. The Parties acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the Parties against
the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement. The arbitrator shall award reasonable attorney’s fees (including reasonable disbursements) to the party that the arbitrator has
determined to be the prevailing party in such arbitration. Except as may be necessary to enter judgment upon the award or to the extent required by applicable law, all claims, defenses and proceedings (including, without limiting the generality of
the foregoing, the existence of the controversy and the fact that there is an arbitration proceeding) shall be treated in a confidential manner by the arbitrator, the Parties and their counsel, and each of their agents, employees and all others
acting on behalf of or in concert with them. Without limiting the generality of the foregoing, no one shall divulge to any third party or person not directly involved in the arbitration the contents of the pleadings, papers, orders, hearings,
trials, or awards in the arbitration, except as may be necessary to enter judgment upon an award as required by applicable law. Any court proceedings relating to the arbitration hereunder, including, without limiting the generality of the foregoing,
to prevent or compel arbitration or to confirm, correct, vacate or otherwise enforce an arbitration award, shall be filed under seal with the court, to the extent permitted by law. 

20. GENERAL PROVISIONS 
 20.1 Assignment, Binding Effect. Neither the Company nor Executive may assign, delegate or otherwise transfer this Agreement or any of their respective rights or

  
 18 

 
obligations hereunder without the prior written consent of the other party, except that the Company may assign this Agreement to its successors (including any purchaser of its assets), and
affiliates, parent or subsidiary corporations. This Agreement shall be binding upon and inure to the benefit of any permitted successors or assigns of the Parties and the heirs, executors, administrators and/or personal representatives of Executive.

 20.2 Notices. 
 (a) All notices, requests, demands or other communications that are required or may be given under this Agreement shall be in writing and shall be given by personal delivery, by certified or registered
United States mail (postage prepaid, return receipt requested), by a nationally recognized overnight delivery service for next day delivery, or by facsimile transmission, as follows (or to such other address as any party may give in a notice given
in accordance with the provisions hereof): 
 If to the Company, 

Vice President, Human Resources 
 The Wet Seal, Inc. 
 26972 Burbank 

Foothill Ranch, CA 92610 
 Facsimile No.: (949) 699-4722 
 If to Executive, at the most recent address
listed in the Company’s records. 
 with a copy to: 

Mr. Laurence O. Masson 
 Law Office of Laurence O. Masson 
 2625 Alcatraz Ave. #206 

Berkeley, CA 94705 
 (b) All notices, requests or other communications will be effective and deemed given only as follows: (i) if given by personal delivery, upon such personal delivery, (ii) if sent by certified or
registered mail, on the fifth business day after being deposited in the United States mail, (iii) if sent for next day delivery by overnight delivery service, on the date of delivery as confirmed by written confirmation of delivery,
(iv) if sent by facsimile, upon the transmitter’s confirmation of receipt of such facsimile transmission, except that if such confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a business day, or is received on
a day that is not a business day, then such notice, request or communication will not be deemed effective or given until the next succeeding business day. Notices, requests and other communications sent in any other manner, including by electronic
mail, will not be effective. 
 20.3 Governing Law. This Agreement is governed by, and is to be construed
and enforced in accordance with, the laws of California without regard to principles of conflicts of laws. 

  
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 20.4 Amendment. No provisions of this Agreement may be amended,
modified or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer selected at such time by the Board, and such waiver is set forth in writing and signed by the party to be charged.

 20.5 Entire Agreement. This Agreement (and the Exhibits attached hereto) and the award agreements
contemplated hereby sets forth the entire agreement of the Parties hereto in respect of the subject matter contained herein and shall supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and canceled
as of the date hereof. 
 20.6 Withholding. All payments hereunder shall be subject to any required
withholding of federal, state and local taxes pursuant to any applicable law or regulation. 
 20.7
Severability. The paragraphs and provisions of this Agreement are severable. If any paragraph or provision is found to be unenforceable, the remaining paragraphs and provisions will remain in full force and effect. 

20.8 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same instrument. 
 20.9 Section 409A. The Parties
intend that any amounts payable under this Agreement, and the Company’s and Executive’s exercise of authority or discretion hereunder, be exempt from or comply with the provisions of Section 409A of the Code, along with the rules,
regulations and guidance promulgated thereunder by the Department of the Treasury or the Internal Revenue Service (collectively, “Section 409A”) so as not to subject Executive to the payment of the additional tax, interest
and any tax penalty which may be imposed under Section 409A. The Company will administer this Agreement to be exempt from or in compliance with Section 409A. In furtherance thereof, to the extent that any provision of this Agreement would
result in Executive being subject to payment of the additional tax, interest and tax penalty under Section 409A, the Parties agree to amend this Agreement if permitted under Section 409A in a manner which does not impose any additional
taxes, interest or penalties on Executive in order to bring this Agreement into compliance with or within an exception from Section 409A, without materially changing the economic value of the arrangements under this Agreement to any Party, and
thereafter the Parties will interpret its provisions in a manner that complies with Section 409A. Notwithstanding the foregoing, no particular tax result for Executive with respect to any income recognized by Executive in connection with this
Agreement is guaranteed, and Executive will be responsible for any taxes, interest and penalties imposed on him under or as a result of Section 409A in connection with this Agreement. 

With respect to any amount of expenses eligible for reimbursement or the provision of any in-kind benefits under this Agreement, to the
extent such payment or benefit would be considered deferred compensation under Section 409A or is required to be included in Executive’s gross income for federal income tax purposes, such expenses (including, without

  
 20 

 
limitation, expenses associated with in-kind benefits) will be reimbursed by the Company no later than December 31st of the year following the year in which Executive incurs the related expenses. In no event will the reimbursements or
in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor will Executive’s right to reimbursement or in-kind benefits be subject to
liquidation or exchange for another benefit. 
 A termination of employment will not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” (within the
meaning of Section 409A), and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place will be the termination date. 

(signature page follows) 

  
 21 

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

			
	THE WET SEAL, INC.
		
	By:	 	/s/ Steven H. Benrubi
		 	Name: Steven H. Benrubi
		 	Title: Executive Vice President and Chief Financial Officer

	
	
	/s/ Ken Seipel
	Ken Seipel

  
 (Signature
Page to Employment Agreement) 

 Exhibit A 

Form of Release 
 1. Termination of Employment. Ken Seipel (“Executive”) acknowledges that his last day of employment with The Wet Seal, Inc. and any of its affiliates (the
“Company”) is                      (the “Termination Date”). 

2. Full Release. For the consideration set forth in the Employment Agreement, by and between the Company and Executive, dated as
of March [    ], 2011 (the “Employment Agreement”) and for other fair and valuable consideration therefor, Executive, for himself, his heirs, executors, administrators, successors and assigns
(hereinafter collectively referred to as the “Releasors”), hereby fully releases and discharges the Company, its parents, subsidiaries, affiliates, insurers, successors, and assigns, and their respective officers, directors,
employees, and agents (all such persons, firms, corporations and entities being deemed beneficiaries hereof and are referred to herein as the “Company Entities”) from any and all actions, causes of action, claims,
obligations, costs, losses, liabilities, damages and demands of whatsoever character, whether or not known, suspected or claimed, which the Releasors have, from the beginning of time through the date of this Release, against the Company Entities
arising out of or in any way related to Executive’s employment or termination of his employment; provided, however, that this shall not be a release with respect to any amounts and benefits owed to Executive pursuant to the
Employment Agreement upon termination of employment, employee benefit plans of the Company, or Executive’s right to indemnification as provided in Section 17 of the Employment Agreement. 

3. Waiver of Rights Under Other Statutes. Executive understands that this Release waives all claims and rights Executive may have
under certain federal, state and local statutory and regulatory laws, as each may be amended from time to time, including but not limited to, the Age Discrimination in Employment Act (including the Older Workers Benefit Protection Act)
(“ADEA”), Title VII of the Civil Rights Act; the Employee Retirement Income Security Act of 1974; the Equal Pay Act; the Rehabilitation Act of 1973; the Americans with Disabilities Act; the Worker Adjustment and Retraining
Notification Act; the California Fair Employment and Housing Act, the California Family Rights Act, California law regarding Relocations, Terminations, and Mass Layoffs, the California Labor Code; and all other statutes, regulations, common law, and
other laws in any and all jurisdictions (including, but not limited to, California) that in any way relate to Executive’s employment or the termination of his employment. 
 4. Informed and Voluntary Signature. No promise or inducement has been made other than those set forth in this Release. This Release is executed by Executive without reliance on any representation
by Company or any of its agents. Executive states that he is fully competent to manage his business affairs and understands that he may be waiving legal rights by signing this Release. Executive hereby acknowledges that he has carefully read this
Release and has had the opportunity to thoroughly discuss the terms of this Release with legal counsel of his choosing. Executive hereby acknowledges that he fully understands the terms of this Release and its final and binding effect and that he
affixes his signature hereto voluntarily and of his own free will. 

  
 A-1

 5. Waiver of Rights Under the Age Discrimination Act. Executive understands that this
Release waives all of his claims and rights under the ADEA. The waiver of Executive’s rights under the ADEA does not extend to claims or rights that might arise after the date this Release is executed. The monies to be paid to Executive are in
addition to any sums to which Executive would be entitled without signing this Release. For a period of seven (7) days following execution of this Release, Executive may revoke the terms of this Release by a written document received by the
Chief Financial Officer of the Company no later than 11:59 p.m. of the seventh day following Executive’s execution of this Release. The Release will not be effective until said revocation period has expired. Executive acknowledges that he has
been given up to twenty-one (21) days to decide whether to sign this Release. Executive has been advised to consult with an attorney prior to executing this Release and has been given a full and fair opportunity to do so. 

6. Waiver Of Civil Code Section 1542. It is the intention of the parties in signing this Release that it should be effective
as a bar to each and every claim, demand and cause of action stated above. In furtherance of this intention, Executive hereby expressly waives any and all rights and benefits conferred upon Executive by the provisions of SECTION 1542 OF THE
CALIFORNIA CIVIL CODE and expressly consents that this Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims, demands and causes of
action, if any, as well as those relating to any other claims, demands and causes of action referred to above. SECTION 1542 provides: 
 “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 
 7. Miscellaneous. 

(a) This Release shall be governed in all respects by the laws of the State of California without regard to the principles
of conflict of law. 
 (b) In the event that any one or more of the provisions of this Release is held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Release is held to be
excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. 

(c) This Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. 

  
 A-2

 (d) The paragraph headings used in this Release are included solely for
convenience and shall not affect or be used in connection with the interpretation of this Release. 
 (e) This
Release and the Employment Agreement represent the entire agreement between the parties with respect to the subject matter hereto and may not be amended except in a writing signed by the Company and Executive. If any dispute should arise under this
Release, it shall be settled in accordance with the terms of Section 19 of the Employment Agreement. 
 (f)
This Release shall be binding on the executors, heirs, administrators, successors and assigns of Executive and the successors and assigns of Company and shall inure to the benefit of the respective executors, heirs, administrators, successors and
assigns of the Company Entities and the Releasors. 
 IN WITNESS WHEREOF, the parties hereto have executed
this Release on                     , 20    . 

 

			
	THE WET SEAL, INC.
		
	By:	 	 
		 	Name:
		 	Title:

	
	
	  
	Ken Seipel

  
 A-3

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