CHEROKEE INC (Form: 10-Q, Received: 09/13/2018 16:39:18)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended August 4, 2018.

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period From to .

Commission file number 0-18640

CHEROKEE INC.

(Exact name of registrant as specified in its charter)

Delaware		95-4182437
(State or other jurisdiction of Incorporation or organization)		(IRS employer identification number)

5990 Sepulveda Boulevard, Sherman Oaks, CA		91411
(Address of principal executive offices)		Zip Code

Registrant’s telephone number, including area code (818) 908-9868

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☒

Non-accelerated filer ☐		Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at September 7, 2018
Common Stock, $.02 par value per share		14,045,368

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CHEROKEE INC.

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements (unaudited) :

Condensed Consolidated Balance Sheets August 4, 2018 and February 3, 2018		3

Condensed Consolidated Statements of Operations Three and six months ended August 4, 2018 and July 29, 2017		4

Condensed Consolidated Statements of Cash Flows Six months ended August 4, 2018 and July 29, 2017		5

Notes to Condensed Consolidated Financial Statements		6

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk		21

ITEM 4. Controls and Procedures		21

PART II. OTHER INFORMATION		22

ITEM 1. Legal Proceedings		22

ITEM 1A. Risk Factors		22

ITEM 6. Exhibits		25

SIGNATURES		27

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PART 1. FINANCI AL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHEROKEE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

	August 4,			February 3,
	2018			2018
Assets
Current assets:
Cash and cash equivalents	$	6,748		$	3,174
Accounts receivable, net		5,419			9,805
Other receivables		559			472
Prepaid expenses and other current assets		792			1,258
Current assets of discontinued operations		—			1,868
Total current assets		13,518			16,577
Property and equipment, net		717			1,090
Intangible assets, net		65,014			69,548
Goodwill		16,252			16,352
Accrued revenue and other assets		1,158			30
Total assets	$	96,659		$	103,597
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,701		$	7,205
Other current liabilities		8,668			7,370
Current portion of long term debt		800			46,105
Deferred revenue—current		1,876			2,229
Current liabilities of discontinued operations		155			1,103
Total current liabilities		19,200			64,012
Long term liabilities:
Long term debt		49,145			—
Deferred income taxes		11,242			10,466
Other liabilities		3,230			5,004
Total liabilities		82,817			79,482
Commitments and Contingencies (Note 9)
Stockholders’ Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized, none issued		—			—
Common stock, $.02 par value, 20,000,000 shares authorized, shares issued 14,045,368 (August 4, 2018) and 13,997,200 (February 3, 2018)		281			280
Additional paid-in capital		75,622			74,377
Accumulated deficit		(62,061	)		(50,542	)
Total stockholders’ equity		13,842			24,115
Total liabilities and stockholders’ equity	$	96,659		$	103,597

See notes to condensed consolidated financial statements.

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CHEROKEE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	August 4,			July 29,			August 4,			July 29,
	2018			2017			2018			2017
Revenues	$	7,073		$	7,868		$	12,475		$	14,685
Operating expenses:
Selling, general and administrative expenses		3,987			6,300			8,343			12,248
Stock-based compensation		125			558			425			1,094
Business acquisition and integration costs		—			1,776			307			3,822
Restructuring charges		5,615			—			5,615			128
Gain on sale of asset		(571	)		—			(571	)		—
Depreciation and amortization		330			346			931			791
Total operating expenses		9,486			8,980			15,050			18,083
Operating loss		(2,413	)		(1,112	)		(2,575	)		(3,398	)
Other income (expense):
Interest expense		(2,360	)		(1,601	)		(4,097	)		(3,123	)
Other income (expense), net		(3,229	)		(51	)		(3,233	)		(232	)
Total other expense, net		(5,589	)		(1,652	)		(7,330	)		(3,355	)
Loss from continuing operations before income taxes		(8,002	)		(2,764	)		(9,905	)		(6,753	)
Provision for income taxes		1,051			2,002			1,889			1,555
Net loss from continuing operations		(9,053	)		(4,766	)		(11,794	)		(8,308	)
Income from discontinued operations, net of income taxes		—			143			—			426
Net loss	$	(9,053	)	$	(4,623	)	$	(11,794	)	$	(7,882	)
Net loss per share:
Basic loss per share from continuing operations	$	(0.65	)	$	(0.37	)	$	(0.84	)	$	(0.64	)
Diluted loss per share from continuing operations	$	(0.65	)	$	(0.37	)	$	(0.84	)	$	(0.64	)
Basic (loss) earnings from discontinued operations per share	$	—		$	0.01		$	—		$	0.03
Diluted (loss) earnings from discontinued operations per share	$	—		$	0.01		$	—		$	0.03
Basic loss per share	$	(0.65	)	$	(0.36	)	$	(0.84	)	$	(0.61	)
Diluted loss per share	$	(0.65	)	$	(0.36	)	$	(0.84	)	$	(0.61	)
Weighted average common shares outstanding:
Basic		14,030			12,986			14,014			12,970
Diluted		14,030			12,986			14,014			12,970

See notes to condensed consolidated financial statements.

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CHEROKEE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended
	August 4,			July 29,
	2018			2017
Cash flows from operating activities:
Net loss from continuing operations	$	(11,794	)	$	(8,308	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		931			791
Bad debt expense		—			193
Restructuring charges		5,615			128
Amortization of deferred financing costs		3,396			527
Deferred income taxes and noncurrent provisions		1,442			1,332
Stock-based compensation and stock warrant charges		469			1,120
Gain on sale of assets		(571	)		—
Changes in operating assets and liabilities, net of effects from business combinations:
Accounts receivable		4,577			809
Other receivables		(87	)		(2,510	)
Prepaid expenses and other current assets		462			1,991
Other assets		(778	)		—
Accounts payable		775			(5,509	)
Other current liabilities		(4,637	)		619
Deferred revenue		(1,823	)		(2,335	)
Net cash used in operating activities		(2,023	)		(11,152	)
Net cash (used in) provided by operating activities from discontinued operations		(1,225	)		5,115
Cash flows from investing activities:
Capital investments		(67	)		(420	)
Proceeds from business disposition and sale of assets		5,668			—
Net cash provided by (used in) investing activities		5,601			(420	)
Cash flows from financing activities:
Proceeds from term loan, subordinated promissory notes and line of credit		42,000			5,000
Payments on term loan and line of credit		(38,000	)		(800	)
Debt issuance costs		(2,780	)
Payments on related party loan		—			(2,500	)
Issuance of common stock		1			47
Net cash provided by financing activities		1,221			1,747
Increase (decrease) in cash and cash equivalents		3,574			(4,710	)
Cash and cash equivalents, beginning of period		3,174			8,378
Cash and cash equivalents, end of period	$	6,748		$	3,668
Cash paid for:
Income taxes	$	536		$	817
Interest	$	3,753		$	2,271
Noncash investing and financing activities:
Conversion of junior participation interests to subordinated promissory notes	$	11,500		$	—

See notes to condensed consolidated financial statements.

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CHEROKEE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statement presentation. These financial statements include the accounts of Cherokee Inc. and its consolidated subsidiaries (the “Company”) and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition and the results of operations for the periods presented. The condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the year ended February 3, 2018 included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of results to be expected for the full year.

Liquidity and Going Concern

The accompanying condensed consolidated financial statements have been prepared on the going concern basis of accounting, which assumes the Company will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The report of the Company’s independent registered public accounting firm included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018 included an explanatory paragraph describing the uncertainty about the Company’s ability to continue as a going concern at that time. The uncertainty about the Company’s ability to continue as a going concern previously arose due to forecasted noncompliance with the Company’s previous credit facility that was repaid on August 3, 2018 and replaced with a new term loan and subordinated promissory notes. (See Note 8.) Under the new term loan agreement, the Company is required to raise $2.0 million of additional liquidity before May 4, 2019; however, this will not be required if the Company’s average working capital exceeds an agreed upon level at the close of the Company’s fiscal year ending February 2, 2019.

The Company’s current forecast indicates that it will need to raise this additional $2.0 million of capital, and because raising additional capital is not certain, there is substantial doubt about the Company’s ability to continue as a going concern. The new term loan agreement provides various ways in which the Company can raise additional capital, including the issuance of additional subordinated debt, the issuance of convertible subordinated debt instruments or the issuance of additional equity, from which 100% of the net proceeds would be retained by the Company. The new term loan agreement also provides that the Company can increase its working capital by the disposition of non-core intangible assets, from which 50% of the net proceeds would be retained by the Company and 50% would be used to repay a portion of the term loan. The Company’s management is planning to increase its working capital through the disposition of non-core assets, or through improved operations to achieve the required working capital threshold at the close of the Company’s fiscal year ending February 2, 2019, which would eliminate the requirement to raise the additional $2.0 million of capital.

2.	New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued a comprehensive new revenue recognition standard (“ASC 606”) that superseded previous existing revenue recognition guidance and was adopted by the Company using the modified retrospective method as of February 4, 2018, the beginning of the first quarter of its fiscal year ending February 2, 2019. The adoption of the new guidance primarily affected the recognition of minimum guaranteed royalties under the Company’s agreements with its licensees that have historically been recognized as earned in accordance with the underlying license agreements. Under this new standard, such royalties will generally be recognized on a straight-line basis over the term of the license agreement. Accordingly, for license agreements with escalating minimum guaranteed royalties, revenues will generally be higher during the early years of the license

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agreement than they would have been under the previous guidance. Royalties are typically earned based on the licensees’ retail or wholesale sales of licensed products, or based on the cost of producing the licensed good s. Revenues from license fees, up-front payments and milestone payments, which are received in connection with other rights and services that represent continuing obligations of the Company, are deferred and recognized in accordance with the license agree ments. The cumulative effect on adoption of ASC 606 totaled $0.3 million, resulting in a charge to accrued revenue and an adjustment to deferred revenue with a corresponding credit to accumulated deficit for all contracts not completed as of the adoption date. In the three and six months ended August 4, 2018 the Company recognized additional revenue of $0.3 million and $0.6 million, respectively, as a result of applying ASC 606. The comparative information for the prior period has not been restated.

The Company recognizes contract liabilities as deferred revenue when licensees prepay royalties, or from license fees, up-front payments and milestone payments that have not yet been earned. Deferred revenue is classified as current or noncurrent depending on when it is anticipated to be recognized. Deferred revenue totaled $2.6 million and $5.1 million at August 4, 2018 and February 3, 2018, respectively. Revenue recognized in the three and six months ended August 4, 2018 that was previously included in deferred revenue was $0.9 million and $1.8 million, respectively. The Company recognizes contract assets as accrued revenue when minimum guaranteed royalties are recognized that have not yet been earned under the license agreements. The Company typically bills and receives payments from customers on a quarterly basis for royalties earned or for minimum guaranteed royalties that have historically been recognized as earned in accordance with the underlying license agreements . Accrued revenue is classified as current or noncurrent depending on when the asset is anticipated to be charged to revenue. Accrued revenue totaled $0.9 million and $0.4 million at August 4, 2018 and February 4, 2018, respectively. Revenue recognized in the three and six months ended August 4, 2018 for minimum guaranteed royalties that had not yet been earned was $0.3 million and $0.6 million, respectively.

The Company’s remaining performance obligation is to maintain the licensed intellectual property. As of August 4, 2018, the Company had a contractual right to receive approximately $64.1 million of aggregate minimum licensing revenue through the remaining terms of the current licenses, excluding any renewals, which is primarily expected to be recognized approximately over the next 10 years.

3.	Earnings (Loss) Per Share

Basic earnings (loss) per share (“EPS”) is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, while diluted EPS additionally includes the dilutive effect of outstanding stock options and warrants as if such securities had been exercised at the beginning of the period. The computation of diluted common shares outstanding excludes outstanding stock options and warrants that are anti‑dilutive.

4.	Discontinued Operations

The Company’s sales and distribution business for its Hi-Tec portfolio of brands, which operates in Latin America, the Middle East, Russia and Asia Pacific was sold to International Brands Group (“IBG”) during the fourth quarter of Fiscal 2018 for $3.1 million. Cash proceeds of $1.3 million were received during the fourth quarter of Fiscal 2018, and $1.8 million of cash proceeds were received by the Company in the three months ended May 5, 2018. The operating assets and liabilities of this business were sold to IBG in conjunction with the execution of a separate license agreement that grants IBG certain sales and distribution rights for Hi-Tec products in those territories. The discontinued sales and distribution business was previously included in the Company’s Hi-Tec reporting segment.

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The net income from discontinued operations in the condensed consolidated statement of operations includes the following:

(In thousands)	Three Months Ended July 29, 2017		Six Months Ended July 29, 2017
Product sales and royalty revenues	$	6,096	$	10,366
Cost of goods sold		4,830		7,820
Selling, general and administrative expenses		1,081		2,036
Depreciation and amortization		42		84
Pretax income from discontinued operations		143		426
Income tax (benefit) provision		—		—
Net income from discontinued operations	$	143	$	426

The carrying amounts of assets and liabilities included in discontinued operations comprise the following:

	August 4,			February 3,
(In thousands)	2018			2018
Accounts receivable and amounts due from sale of business	$	—		$	1,868
Current liabilities of discontinued operations		155			1,103
Net assets of discontinued operations	$	(155	)	$	765

5.	Intangible Assets

Intangible assets consist of the following:

	August 4, 2018							February 3, 2018
(In thousands)	Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Net Book Value
Amortizable trademarks	$	27,823		(19,496	)	$	8,327	$	30,861		(19,029	)	$	11,832
Amortizable franchise agreements		—		—			—		1,300		(271	)		1,029
Indefinite lived trademarks		56,687		—			56,687		56,687		—			56,687
	$	84,510	$	(19,496	)	$	65,014	$	88,848	$	(19,300	)	$	69,548

During the three months ended August 4, 2018, the Company sold its amortizable trademarks, amortizable franchise agreements and other assets related to its Flip Flop Shops franchise business to a third party. A gain of $0.6 million was recognized on the sale. The Hi-Tec Acquisition during Fiscal 2017 resulted in trademarks valued at $52.4 million that are classified as indefinite lived and not subjected to amortization. Other indefinite lived trademarks include certain Cherokee brand trademarks in the school uniforms category that were acquired in historical transactions. The Company has acquired other trademarks that are being amortized over their estimated useful lives, which average 10.0 years with no residual values. Amortization of intangible assets was $0.2 million and $0.2 million for the three months ended August 4, 2018 and July 29, 2017, respectively, and $0.6 million and $0.4 million for the six months ended August 4, 2018 and July 29, 2017, respectively. Goodwill arose from the Hi-Tec Acquisition that occurred during Fiscal 2017.

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6.	Other Current Liabilities

Other current liabilities consists of the following:

	August 4,		February 3,
(In thousands)	2018		2018
Accrued employee compensation and benefits	$	307	$	239
Amounts payable for business acquisitions		993		1,901
Restructuring plan liabilities		6,227		3,532
Income taxes payable		1,060		792
Other liabilities		81		906
	$	8,668	$	7,370

7.	Restructuring Plans

The Company incurred restructuring charges in Fiscal 2018 and Fiscal 2017 related to the Hi-Tec Acquisition and its integration into the Company’s ongoing operations (the “Hi-Tec Plan”), including $0.1 million of severance costs in the three months ended April 29, 2017. Restructuring charges were also incurred in the fourth quarter of Fiscal 2018 as the Company’s staff was realigned to appropriately support its then current business (the “Cherokee Plan”). Furthermore, during the three months ended August 4, 2018, the Company took additional steps designed to improve its organizational efficiencies by eliminating redundant positions and unneeded facilities, and by terminating various consulting and marketing contracts (the “FY 2019 Plan”). The FY 2019 Plan resulted in a $5.6 million charge to earnings in the three months ended August 4, 2018, comprising $3.8 million for terminated contracts and leases, $1.2 million for severance and $0.6 million of professional fees.

Charges and payments against the restructuring plan obligations were as follows:


(In thousands)	Cherokee Plan			Hi-Tec Plan			FY 2019 Plan
Balance, February 3, 2018	$	1,031		$	2,501		$	—
Restructuring charges		—			—			5,615
Payments during the period		(834	)		(1,400	)		(686	)
Balance, August 4, 2018	$	197		$	1,101		$	4,929

Debt

On August 3, 2018, the Company replaced its Cerberus Credit Facility with a combination of a new senior secured credit facility, which provided a $40.0 term loan (the “Term Loan”), and $13.5 million of subordinated promissory notes (the “Junior Notes”). The Term Loan matures in August 2021 and requires quarterly principal payments and monthly interest payments based on LIBOR plus a margin. The Term Loan is secured by substantially all the assets of the Company and is guaranteed by the Company’s subsidiaries. The Junior Notes mature in November 2021, and they are secured by a second priority lien on substantially all of the assets of Company and guaranteed by the Company’s subsidiaries. Interest is payable monthly on the Junior Notes, but no periodic amortization payments are required. The Junior Notes are subordinated in rights of payment and priority to the Term Loan but otherwise have economic terms substantially similar to the Term Loan. The weighted-average interest rate on both the Term Loan and Junior Notes at August 4, 2018 was 11.1%.

The Term Loan is subject to a borrowing base and includes financial covenants and obligations regarding the operation of the Company’s business that are customary in facilities of this type, including limitations on the payment of dividends. Financial covenants include the requirement to maintain specified levels of EBITDA, as defined in the agreement, and maintain a specified level of cash on hand. The Company is required to maintain a borrowing base comprising the value of the Company’s trademarks that exceeds the outstanding balance of the Term Loan. If the borrowing base is less than the outstanding Term Loan at any measurement period, then the Company would be required to repay a portion of the Term Loan to eliminate such shortfall. The Company is also required to raise $2.0 million of

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additional subordinated debt or equity before May 4, 2019; however, this will not be required if the Company’s average working capital exceeds an agreed upon level at the close of the C ompany’s fiscal year ending Febru ary 2, 2019. Events of default include, among other things, the occurrence of a change of control of the Company, and a default under the Term Loan agreement would also trigger a default under the Junior Notes agreements .

The former credit facility included $11.5 million of junior participation interests that were held by a large stockholder, one of the board members and major stockholder, and the chief executive officer who is also one of the board members. These junior participation interests, along with $2.0 million of cash from a major stockholder, were exchanged into $13.5 million of the new Junior Notes referred to above.

In connection with the refinancing on August 3, 2018, the Company issued warrants to purchase 1,192,997 shares of the Company’s common stock to its Term Loan lenders at an exercise price of $0.45 per share and issued warrants to purchase 1,600,000 shares of the Company’s common stock to certain of its Junior Notes lenders at an exercise price of $0.50 per share. Each warrant is exercisable on issuance and has a seven-year life. The fair value of the warrants was $0.8 million on their grant date as determined using a Black Scholes option pricing model and was included as a component of debt issuance costs with an offset to equity. The following table shows the lenders, their relationship to the Company, the loan amounts provided, and the stock warrants issued to such investors, if any:

	Term Loan and
	Junior Note		Stock Warrant
(Dollars in thousands)	Amounts		Shares
Term Loan lenders, unrelated parties	$	40,000	$	1,192,997
Cove Street Capital, LLC, large stockholder		9,000		1,245,000
Jess Ravich, board member and large stockholder		4,400		355,000
Henry Stupp, Chief Executive Officer and board member		100		—
	$	53,500	$	2,792,997

Outstanding borrowings under the Term Loan were $40.0 million at August 4, 2018 with associated unamortized debt issuance costs of $2.9 million. Outstanding Junior Notes were $13.5 million at August 4, 2018 with associated unamortized debt issuance costs of $0.7 million. Outstanding borrowing under the Company’s previous Cerberus Credit Facility were $49.5 million at February 3, 2018 with related unamortized debt issuance costs of $3.4 million. The remaining unamortized debt issuance costs of $3.2 million related to the Cerberus Credit Facility were charged to other expense when the debt was retired on August 3, 2018.

9 .	Commitments and Contingencies

The Company indemnifies certain customers against liability arising from third‑party claims of intellectual property rights infringement related to the Company’s trademarks. These indemnities appear in the licensing agreements with the Company’s customers, are not limited in amount or duration and generally survive the expiration of the contracts. The Company is unable to determine a range of estimated losses that it could incur related to such indemnities since the amount of any potential liabilities cannot be determined until an infringement claim has been made.

The Company is involved from time to time in various claims and other matters incidental to the Company’s business, the resolution of which is not presently expected to have a material adverse effect on the Company’s financial position, results of operations or liquidity. Estimated reserves for contingent liabilities, including threatened or pending litigation, are recorded as liabilities in the financial statements when the outcome of these matters is deemed probable and the liability is reasonably estimable.

10.	Taxes on Income

Each reporting period, the Company evaluates the realizability of its deferred tax assets. As of August 4, 2018, the Company continued to maintain a full valuation allowance against its deferred tax assets in the United States and the foreign subsidiaries acquired in the Hi-Tec Acquisition. These valuation allowances will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that these deferred tax assets will be realized.

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The Tax Cuts and Jobs Act was enacted on December 22, 2017 and reduced U.S. corporate income tax rates to 21.0% as of January 1, 2018. The rate change became effective during the Compa ny’s fiscal year ended February 3, 2018, resulting in a blended statutory tax rate of 32.8% for that year. The income tax effects of the Tax Cuts and Jobs Act are considered provisional, and the Company is continuing to gather additional information to co mplete its accounting for these items. The Company is accumulating data to finalize the underlying calculations and evaluate other aspects of this tax legislation, including its impact on the Company’s foreign subsidiaries, or in certain cases, the U.S. T reasury is expected to issue further guidance on the application of certain provisions of the tax legislation .

As of August 4, 2018, the reserve for uncertain tax positions resulting from unrecognized tax benefits related to the Company’s Hi-Tec subsidiaries was $3.9 million. During the three months ended August 4, 2018, the Company increased its liability for uncertain tax positions by $0.3 million. For the six months ended August 4, 2018, there was no material net change in the liability for uncertain tax positions.

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11 .	Segment Reporting and Geographic Information

The Company identifies its reportable segments based on how management internally evaluates financial information, business activities and management responsibility. Financial information for the Company’s reportable segments is as follows:


(In thousands)	Cherokee			Hi-Tec			Consolidated
For the three months ended August 4, 2018:
Revenues	$	4,076		$	2,997		$	7,073
Selling, general and administrative expenses		3,196			791			3,987
Revenues less selling, general and administrative expenses		880			2,206			3,086
Loss (income) from continuing operations before income taxes		(3,165	)		(4,837	)		(8,002	)
Goodwill		—			16,252			16,252
Total assets	$	23,013		$	73,646		$	96,659

For the three months ended July 29, 2017:
Revenues	$	5,629		$	2,239		$	7,868
Selling, general and administrative expenses		3,948			2,352			6,300
Revenues less selling, general and administrative expenses		1,681			(113	)		1,568
Loss from continuing operations before income taxes		(1,047	)		(1,717	)		(2,764	)
Goodwill		100			15,545			15,645
Total assets	$	64,097		$	87,656		$	151,753


(In thousands)	Cherokee			Hi-Tec			Consolidated
For the six months ended August 4, 2018:
Revenues	$	6,893		$	5,582		$	12,475
Selling, general and administrative expenses		6,148			2,195			8,343
Revenues less selling, general and administrative expenses		745			3,387			4,132
Loss (income) from continuing operations before income taxes		(5,465	)		(4,440	)		(9,905	)
Goodwill		—			16,252			16,252
Total assets	$	23,013		$	73,646		$	96,659

For the six months ended July 29, 2017:
Revenues	$	10,806		$	3,879		$	14,685
Selling, general and administrative expenses		8,136			4,112			12,248
Revenues less selling, general and administrative expenses		2,670			(233	)		2,437
Loss from continuing operations before income taxes		(3,342	)		(3,411	)		(6,753	)
Goodwill		100			15,545			15,645
Total assets	$	64,097		$	87,656		$	151,753

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Revenues by geographic area based upon the licensees’ country of domicile co mprise the following:

	Three Months Ended				Six Months Ended
	August 4,		July 29		August 4,		July 29
(In thousands)	2018		2017		2018		2017
U.S. and Canada	$	1,580	$	3,896	$	3,403	$	7,284
EMEIA ⁽¹⁾		3,531		2,070		5,426		3,800
Asia		814		1,149		1,479		2,253
Latin America		1,037		753		1,834		1,348
All Others		111		—		333		—
Total	$	7,073	$	7,868	$	12,475	$	14,685

⁽¹⁾ EMEIA represents Europe, Middle East, India and Africa

Long‑lived assets located in the United States and outside the United States amount to $0.4 million and $0.3 million, respectively, at August 4, 2018 and $0.6 million and $0.5 million, respectively, at February 3, 2018.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSI S OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this discussion and analysis, “Cherokee”, the “Company”, “we”, “us” and “our” refer to Cherokee Inc. and its consolidated subsidiaries, unless the context indicates or requires otherwise. Additionally, “Fiscal 2019” refers to our fiscal year ending February 2, 2019 and “Fiscal 2018” refers to our fiscal year ended February 3, 2018. The following discussion and analysis should be read together with the unaudited condensed consolidated financial statements and the related notes included in this report. The information contained in this quarterly report on Form 10‑Q is not a complete description of our business or the risks associated with an investment in our securities. For additional context with which to understand our financial condition and results of operations, refer to management’s discussion and analysis of financial condition and results of operations (“MD&A”) contained in our Annual Report on Form 10‑K, for the fiscal year ended February 3, 2018, which was filed with the Securities and Exchange Commission (“SEC”) on April 19, 2018, as well as the consolidated financial statements and notes contained therein (collectively, our “Annual Report”). In preparing this MD&A, we presume that readers have access to and have read the MD&A in our Annual Report pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S‑K. The section entitled “Risk Factors” set forth in Item 1A of our Annual Report and similar disclosures in our other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition.

In addition to historical information, this discussion and analysis contains “forward‑looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical facts that relate to future events or circumstances or our future performance. The words “anticipates”, “believes”, “estimates”, “plans”, “expects”, “objectives”, “goals”, “aims”, “hopes”, “may”, “might”, “will”, “likely”, “should” and similar words or expressions are intended to identify forward‑looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward‑looking statements in this discussion and analysis include statements about, among other things, our future financial and operating performance, our future liquidity and capital resources, our business and growth strategies and anticipated trends in our business and our industry. Forward-looking statements are based on our current views, expectations and assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance, achievements or stock prices to be materially different from any future results, performance, achievements or stock prices expressed or implied by the forward‑looking statements. Such risks, uncertainties and other factors include, among others, those described in Item 1A, “Risk Factors” in this report and in our Annual Report. In addition, we operate in a competitive and rapidly evolving industry in which new risks emerge from time to time, and it is not possible for us to predict all of the risks we may face, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors could cause actual results to differ from our expectations. As a result of these and other potential risks and uncertainties, forward-looking statements should not be relied on or viewed as predictions of future events because some or all of them may turn out to be wrong. Forward-looking statements speak only as of the date they are made and, except as required by law, we undertake no obligation to update any of the forward‑looking statements we make in this discussion and analysis to reflect future events or developments or changes in our expectations or for any other reason.

Overview

Cherokee is a global marketer and manager of a portfolio of fashion and lifestyle brands it owns, including Cherokee, Hi-Tec, Magnum, 50 Peaks, Interceptor, Hawk Signature, Tony Hawk, Liz Lange, Completely Me by Liz Lange, Everyday California, Carole Little, Sideout and others, which are licensed in multiple consumer product categories and sectors. As part of our business strategy, we also regularly evaluate other brands and trademarks for acquisition into our portfolio. We believe the strength of our bra nd portfolio and platform of design, product sourcing and marketing capabilities has made us one of the leading global licensors of style-focused lifestyle brands for apparel, footwear, home products and accessories.

We have licensing relationships with recognizable retail partners in their global locations to provide them with the rights to design, manufacture and sell products bearing our brands. We refer to this strategy as our “Direct to Retail” or “DTR” licensing model. We also have license agreements with manufacturers and distributors for the manufacture and sale of products bearing our brands, which we refer to as “wholesale” licensing. As a brand marketer and manager, we do not directly sell product ourselves. Rather, we earn royalties when our licensees sell licensed products bearing the trademarks that we own.

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For certain of our key legacy brands, including Cherokee, Hawk Signature and Tony Hawk and Liz Lange, we are shifting our strategy for U.S. sales from DTR licensing to wholesale licensing . In addition, we are primarily pursuing a wholesale licensing strategy for global sales of our Hi-Tec, Magnum, Interceptor and 50 Peaks brands. We believe these arrangements signal a significant shift in our business strategy, from our historical focus on DTR licensing for all of our brands to a substantially greater focus on wholesale licensing for many of our key brands. Although we believe these new wholesale licensing arrangements may help to diversify our sources of revenue and licensee or other pa rtner relationships and may provide additional avenues to obtain brand recognition and grow our Company, this shift in our strategy also exposes us to a number of risks, and it has had a negative effect on our results of operations in Fiscal 2018 and Fisca l 2019 to date as we transition to our new licensees. This effect could continue or worsen, particularly in the near-term.

We derive revenues primarily from licensing our trademarks to retailers and wholesalers all over the world, and we are continually pursuing relationships with new retailers, wholesalers and others in order to expand the reach of our existing brands into new geographic and customer markets and new types of stores and other selling mediums. As of August 4, 2018, we had 43 continuing license agreements in approximately 80 countries, 33 of which pertained to brands in our Cherokee reportable segment and 10 of which pertained to our Hi-Tec portfolio of brands, which are included in our Hi-Tec reportable segment. These arrangements include relationships with Walmart, Soriana, Comercial Mexicana, TJ Maxx, Tottus, Pick N Pay, Nishimatsuya, Big 5, Academy, JD Sports, Black’s and Lidl.

The terms of our royalty arrangements vary for each of our licensees. We receive quarterly royalty statements and periodic sales and purchasing information from our licensees. However, our licensees are generally not required to provide, and typically do not provide, information that would enable us to determine the specific reasons for period‑to‑period fluctuations in sales or purchases. As a result, we do not typically have sufficient information to determine the effects on our operations of changes in price, volume or mix of products sold.

Business Developments

During the three months ended August 4, 2018, we initiated a restructuring plan designed to improve our organizational efficiencies by eliminating redundant positions and unneeded facilities, and by terminating various consulting and marketing contracts. The plan resulted in a $5.6 million charge in the three months ended August 4, 2018. We believe that these changes eliminate unnecessary costs and enable us to operate effectively going forward as we leverage one executive structure to manage our business globally.

On June 1, 2018, we completed the sale of Flip Flop Shops, our franchise retail chain, to Bearpaw Holdings, LLC. We used the sale proceeds to reduce our long-term debt and recognized a $0.6 million gain on the sale of Flip Flop Shops assets during the three months ended August 4, 2018.

On August 3, 2018, we replaced our existing credit facility with a combination of a new $40.0 million term loan under a senior secured credit facility and $13.5 million of subordinated promissory notes. We also issued warrants to the lenders to purchase 2.8 million shares of our common stock in connection with this refinancing. The term loan is subject to a borrowing base and requires us to maintain specified levels of EBITDA, as defined in the credit facility, and cash on hand. If the borrowing base is less than the outstanding term loan at any measurement period, then we would be required to repay a portion of the loan to eliminate such shortfall. We are also required to raise $2.0 million of additional subordinated debt or equity before May 4, 2019; however, this will not be required if our average working capital exceeds an agreed upon level at the close of the company’s fiscal year ending February 2, 2019. If we do not comply with these requirements or we are unable to raise the additional capital if required, or if there is a change of control of the Company, it would be an event of default, and, subject to certain cure periods, the lender would have the right to demand immediate repayment of the loans, and/or exercise any other rights or remedies it may have, including foreclosing on our assets that serve as collateral. Furthermore, a default under our term loan agreement would also trigger a default under our subordinated promissory note agreements. While we anticipate compliance with the requirements of our loan agreements, if there were to be an event of default, it would jeopardize our ability to continue as a going concern.

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Revenue Overview

We typically enter into license agreements with retailers, manufacturers and distributors for a certain brand in specific product categories over explicit territories, which can include one country or groups of countries and territories. Our revenues b y geographic territory are as follows:

	Three Months Ended										Six Months Ended
	August 4, 2018					July 29, 2017					August 4, 2018					July 29, 2017
(In thousands,			% of					% of					% of					% of
except percentages)	Revenues		Revenues			Revenues		Revenues			Revenues		Revenues			Revenues		Revenues
United States and Canada	$	1,580		22.0	%	$	3,896		50.0	%	$	3,403		27.0	%	$	7,284		50.0	%
EMEIA		3,531		50.0	%		2,070		26.0	%		5,426		43.0	%		3,800		26.0	%
Asia		814		12.0	%		1,149		15.0	%		1,479		12.0	%		2,253		15.0	%
Latin America		1,037		14.0	%		753		9.0	%		1,834		15.0	%		1,348		9.0	%
All others		111		2.0	%		—		0.0	%		333		3.0	%		—		0.0	%
Revenues	$	7,073		100.0	%	$	7,868		100.0	%	$	12,475		100.0	%	$	14,685		100.0	%

United States. Our largest licensees in the United States have historically been Target and Kohl’s, which together contributed 17% and 18% of our revenues for the three and six months ended July 29, 2017, respectively. Our remaining license agreements with Target, which covered Liz Lange branded products and the school uniforms category for our Cherokee brand, expired at the end of Fiscal 2018, as did our license agreement with Kohl’s, which covered Hawk Signature and Tony Hawk branded products. Accordingly, we earned no revenues from Target and Kohl’s for the three and six months ended August 4, 2018, and we anticipate no revenues from Target and Kohl’s in future quarters.

We are replacing our Target license with various other licensees for the sale of Cherokee branded products in the United States, and we have entered into a master license agreement with a third party for Liz Lange branded maternity products that began in Fiscal 2019. Our ability to generate royalty revenues from other licensees sufficient to replace our historical royalty revenues from Target is yet to be determined, particularly in the near term as our wholesale arrangements intended to replace our license agreement with Target for the Cherokee and Liz Lange brands begin to gain traction with new retailers and their customers.

We have also entered into wholesale agreements with new licensees for the sale of Hawk Signature and Tony Hawk branded products in the United States intended to replace our license agreement with Kohl’s. However, our ability to generate royalty revenues from other licensees sufficient to replace Kohl’s historical royalty payments to us is yet to be determined, particularly in the near term as these new wholesale arrangements begin to gain traction with new retailers and their customers.

EMEIA . Our royalty revenues from our licensees in Europe, Middle East, India and Africa increased 71% to $3.5 million in the three months ended August 4, 2018 from $2.1 million in the three months ended July 29, 2017, and increased 43% to $5.4 million in the six months ended August 4, 2018 from $3.8 million in the six months ended July 29, 2017. These increases are primarily due to an increase in revenues from our new licensee in Germany.

Asia, Latin America and others . Our royalty revenues from Asia and Latin America were primarily generated from licensees in Japan, China, Mexico, Peru and Chile. Royalty revenues in Asia declined but were offset by increases in Latin America and other territories.

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Results of Operations

The table below contains certain information about our continuing operations from our condensed consolidated statements of operations along with other data and percentages. Historical results are not necessarily indicative of results to be expected in future periods.

	Three Months Ended										Six Months Ended
(In thousands, except percentages)	August 4, 2018					July 29, 2017					August 4, 2018					July 29, 2017
Revenues:
Cherokee	$	3,533		50.0	%	$	3,226		41.0	%	$	5,655		45.3	%	$	6,045		41.2	%
Hi-Tec, Magnum, Interceptor and 50 Peaks		2,997		42.4	%		2,239		28.5	%		5,582		44.8	%		3,879		26.4	%
Hawk		145		2.1	%		1,398		17.8	%		326		2.6	%		2,685		18.3	%
Other brands		398		5.5	%		1,005		12.7	%		912		7.3	%		2,076		14.1	%
Total revenues		7,073		100.0	%		7,868		100.0	%		12,475		100.0	%		14,685		100.0	%
Operating expenses:
Selling, general and, administrative expenses		3,987		56.4	%		6,300		80.1	%		8,343		66.9	%		12,248		83.4	%
Stock-based compensation		125		1.8	%		558		7.1	%		425		3.4	%		1,094		7.4	%
Business acquisition and integration costs		—		—			1,776		22.5	%		307		2.4	%		3,822		26.0	%
Restructuring charges		5,615		79.4	%		—		—			5,615		45.0	%		128		0.9	%
Gain on sale of assets		(571	)	-8.1	%		—		—			(571	)	-4.6	%		—		—
Depreciation and amortization		330		4.6	%		346		4.4	%		931		7.5	%		791		5.4	%
Total operating expenses		9,486		134.1	%		8,980		114.1	%		15,050		120.6	%		18,083		123.1	%
Operating loss from continuing operations		(2,413	)	-34.1	%		(1,112	)	-14.1	%		(2,575	)	-20.6	%		(3,398	)	-23.1	%
Interest expense and other income, net		(5,589	)	-79.0	%		(1,652	)	-21.0	%		(7,330	)	-58.8	%		(3,355	)	-22.9	%
Loss from continuing operations before income taxes		(8,002	)	-113.1	%		(2,764	)	-35.1	%		(9,905	)	-79.4	%		(6,753	)	-46.0	%
Provision for income taxes		1,051		14.9	%		2,002		25.5	%		1,889		15.1	%		1,555		10.6	%
Net loss from continuing operations	$	(9,053	)	-128.0	%	$	(4,766	)	-60.6	%	$	(11,794	)	-94.5	%	$	(8,308	)	-56.6	%
Non-GAAP data:
Adjusted EBITDA ⁽¹ ⁾	$	3,086				$	1,568				$	4,132				$	2,437

⁽¹⁾

We define Adjusted EBITDA as net income before (i) interest expense, (ii) Other (income) expense, net, (iii) provision for income taxes, (iv) depreciation and amortization, (v) gain on sale of assets, (vi) intangible asset impairment loss, (vii) restructuring charges, (viii) business acquisition and integration costs and (ix) stock-based compensation and stock warrant charges. Adjusted EBITDA is not defined under generally accepted accounting principles (“GAAP”) and it may not be comparable to similarly titled measures reported by other companies. We use Adjusted EBITDA, along with GAAP measures, as a measure of profitability, because Adjusted EBITDA helps us compare our performance on a consistent basis by removing from our operating results the impact of our capital structure, the effect of operating in different tax jurisdictions, the impact of our asset base, which can differ depending on the book value of assets and the accounting methods used to compute depreciation and amortization, and the cost of acquiring or disposing of businesses and restructuring our operations. We believe it is useful to investors for the same reasons. Adjusted EBITDA has limitations as a profitability measure in that it does not include the interest expense on our long-term debt, non-operating income or expense items, our provision for income taxes, the effect of our expenditures for capital assets and certain intangible assets, or the costs of acquiring or disposing of businesses and restructuring our operations, or our non-cash charges for stock-based compensation and stock warrants. A reconciliation from net loss from continuing operations as reported in our condensed consolidated statement of operations to Adjusted EBITDA is as follows:

	Three Months Ended						Six Months Ended
(In thousands)	August 4, 2018			July 29, 2017			August 4, 2018			July 29, 2017
Net loss from continuing operations	$	(9,053	)	$	(4,766	)	$	(11,794	)	$	(8,308	)
Provision (benefit) for income taxes		1,051			2,002			1,889			1,555
Interest expense		2,360			1,601			4,097			3,123
Other (income) expense, net		3,229			51			3,233			232
Depreciation and amortization		330			346			931			791
Gain on sale of assets		(571	)		—			(571	)		—

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Restructuring charges	5,615	—	5,615	128
Business acquisition and integration costs	—	1,776	307	3,822
Stock-based compensation and stock warrant charges	125	558	425	1,094
Adjusted EBITDA	3,086	1,568	4,132	2,437

Three and Six Months Ended August 4, 2018 Compared to Three and Six Months Ended July 29, 2017

The decrease in royalty revenues in the three and six months ended August 4, 2018 compared to the three and six months ended July 29, 2017 was primarily due to the decreases in Tony Hawk, Cherokee and Liz Lange royalties as we transition from our DTR licenses with Kohl’s and Target to our new wholesale licensing partners for these brands in the United States. Royalty revenues also decreased in these periods as certain other license agreements were terminated in Fiscal 2018 that did not generate revenues in the first six months of Fiscal 2019. Revenues from Flip Flop Shops also decreased in these periods as our Flip Flop Shops assets were sold on June 1, 2018. Combined, these terminated licensees and franchise operations that were sold represented $2.9 million and $5.6 million of royalty revenues in the three and six months ended July 29, 2017, respectively. These decreases were partially offset by increases in Hi-Tec, Magnum, Interceptor and 50 Peaks royalty revenues in the three and six month periods and by royalties from our new Cherokee licensee in Germany in the three months ended August 4, 2018.

Selling, general and administrative expenses, decreased 37% to $4.0 million in the three months ended August 4, 2018 from $6.3 million in the three months ended July 29, 2017, and decreased 32% to $8.3 million in the six months ended August 4, 2018 from $12.2 million in the six months ended July 29, 2017. These expenses include payroll, employee benefits, marketing, sales, legal, rent, information systems and other administrative costs that are part of our ongoing operations. The decreases in selling, general and administrative expenses for the three and six month periods were primarily due to reduced spending for payroll, sales and marketing, lower professional fees, and the elimination of temporary employees used in the prior period after we completed the Hi-Tec Acquisition.

The decreases in selling, general and administrative expenses in the three and six months ended August 4, 2018 reflect the effects of our restructuring plan that we implemented during that period to improve our organizational efficiencies by eliminating redundant positions and unneeded facilities, and by terminating various consulting and marketing contracts. The plan resulted in a $5.6 million charge. We believe that these changes eliminate unnecessary costs and enable us to operate effectively going forward as we leverage one executive structure to manage our business globally.

Stock-based compensation in the three months ended August 4, 2018 was $0.1 million compared to $0.6 million in the three months ended July 29, 2017, and was $0.4 million in the six months ended August 4, 2018 compared to $1.1 million in the six months ended July 29, 2017, and comprises charges related to stock option and restricted stock grants. We did not incur any legal, due diligence and other costs related to business acquisition and integration in the three months ended August 4, 2018 compared to $1.8 million of costs in the three months ended July 29, 2017. We incurred $0.3 million of these costs in the six months ended August 4, 2018 compared to $3.8 million in the six months ended July 29, 2017. We experienced significant costs in Fiscal 2018 related to the Hi-Tec Acquisition as we converted its operations from a sales and distribution model to our brand licensing model.

We own various trademarks that are considered to have indefinite lives, while others are being amortized over their estimated useful lives. We also have furniture, fixtures and other equipment that is being amortized over their useful lives. Depreciation and amortization increased in the six months ended August 4, 2018 compared to the three and six months ended July 29, 2017 primarily because at the end of Fiscal 2018 we began amortizing certain trademarks that had been previously classified as indefinite lived. During the three months ended August 4, 2018, we sold the assets of our Flip Flop Shops business, which resulted in a $0.6 million gain on sale.

Interest expense was $2.4 million in the three months ended August 4, 2018 compared to $1.6 million in the three months ended July 29, 2017, and $4.1 million in the six months ended August 4, 2018 compared to $3.1 million in the six months ended July 29, 2017. In addition to our normal interest expense that is based on LIBOR, we also incurred various charges in the three months ended August 4, 2018 related to our Cerberus credit facility. We paid a repayment premium of $0.5 million when the Cerberus credit facility was replaced, and we incurred approximately $0.3 million of

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penalty interest while our loan was in default. Remaining unamortized debt issuance costs of $3.2 million that were associated with the Cerberus credit facility were charged to other expense as a result of the repaym ent.

The provision for income taxes was $1.1 million in the three months ended August 4, 2018 compared to $2.0 million in the three months ended July 29, 2017, and $1.9 million in the six months ended August 4, 2018 compared to $1.6 million in the six months ended July 29, 2017. Even though we generated operating losses in the three and six months ended August 4, 2018, we reported tax expense because no tax benefits were recognized for tax losses in the United States and certain foreign jurisdictions due to previously established valuation allowances, and we recorded a $0.2 million noncash provision for uncertain tax positions.

The Tax Cuts and Jobs Act was enacted on December 22, 2017 and reduced U.S. corporate income tax rates to 21.0% as of January 1, 2018. The rate change became effective during our fiscal year ended February 3, 2018, resulting in a blended statutory tax rate of 32.8% for that year. The income tax effects of the Tax Cuts and Jobs Act are considered provisional, and we are continuing to gather additional information to complete our accounting for these items. We are accumulating data to finalize the underlying calculations and evaluate other aspects of this tax legislation, including its impact on our foreign subsidiaries, or in certain cases, the U.S. Treasury is expected to issue further guidance on the application of certain provisions of the tax legislation.

Our net loss from continuing operations was $9.1 million in the three months ended August 4, 2018 compared to $4.8 million in the three months ended July 29, 2017, and $11.8 million in the six months ended August 4, 2018 compared to $8.3 million in the six months ended July 29, 2017. Our Adjusted EBITDA increased 97% to $3.1 million in the three months ended August 4, 2018 from $1.6 million in the three months ended July 29, 2017, and increased 70% to $4.1 million in the six months ended August 4, 2018 from $2.4 million in the six months ended July 29, 2017, respectively.

Liquidity and Capital Resources

We generally finance our working capital needs and capital investments with operating cash flows, terms loans, subordinated promissory notes and lines of credit. In December 2016, we entered into a $50.0 million credit facility with Cerberus that replaced our previous credit facility with JPMorgan and was used to partially fund the Hi-Tec Acquisition. On August 3, 2018, we replaced the Cerberus credit facility with a $40.0 million term loan and $13.5 million of subordinated promissory notes.

Cash Flows

We used $2.0 million of cash in our operating activities in the six months ended August 4, 2018, compared to $11.2 million used in the six months ended July 29, 2017. This $9.2 million decrease in cash used in operations resulted primarily from a higher level of cash provided by the decrease in accounts receivable and other receivables in the six months ended August 4, 2018 in comparison to the six months ended July 29, 2017, and from an improvement in cash flow from our loss from continuing operations after adding back noncash expenses.

We generated $5.6 million of cash from our investing activities in the six months ended August 4, 2018 compared to $0.4 million used in the six months ended July 29, 2017. We sold the remaining sales and distribution operations of Hi-Tec to International Brands Group in the fourth quarter of Fiscal 2018, which generated $1.8 million of cash in the six months ended August 4, 2018, and we sold Flip Flop Shops, which generated $3.8 million of cash. We also use cash to continually invest in the maintenance of our trademarks around the world, and we make recurring capital investments in property and equipment.

Our financing activities provided $1.2 million of cash in the six months ended August 4, 2018 compared to $1.7 million of cash in the six months ended July 29, 2017. Our new term loan and incremental cash received from our new subordinated promissory notes generated $39.2 million of cash after deducting debt issuance costs paid in cash. These funds were used to repay the $33.7 million remaining balance on our former credit facility and provided $5.5 million of cash for working capital purposes. We had previously used $4.3 million of cash to repay a portion of our former credit facility with proceeds from the sale of Flip Flop Shops and from operating cash flow.

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Credit Facilities

On August 3, 2018, we replaced our Cerberus credit facility with a combination of a new senior secured credit facility, which provided a $40.0 term loan, and $13.5 million of subordinated promissory notes. The term loan matures in August 2021 and requires quarterly principal payments and monthly interest payments based on LIBOR plus a margin. The term loan is secured by substantially all of our assets and is guaranteed by our subsidiaries. The subordinated promissory notes mature in November 2021, and they are secured by a second priority lien on substantially all of our assets and guaranteed by our subsidiaries. Interest is payable monthly on the subordinated promissory notes, but no periodic amortization payments are required. The subordinated promissory notes are subordinated in rights of payment and priority to the term loan but otherwise have economic terms substantially similar to the term loan. The weighted-average interest rate on both the term loan and subordinated promissory notes at August 4, 2018 was 11.1%. Outstanding borrowings under the term loan were $40.0 million at August 4, 2018, and outstanding subordinated promissory notes were $13.5 million.

The term loan is subject to a borrowing base and includes financial covenants and obligations regarding the operation of our business that are customary in facilities of this type, including limitations on the payment of dividends. Financial covenants include the requirement to maintain specified levels of EBITDA, as defined in the credit agreement, and maintain a specified level of cash on hand. We are required to maintain a borrowing base comprising the value of the Company’s trademarks that exceeds the outstanding balance of the term loan. If the borrowing base is less than the outstanding term loan at any measurement period, then we would be required to repay a portion of the term loan to eliminate such shortfall. We are also required to raise $2.0 million of additional subordinated debt or equity before May 4, 2019; however, this will not be required if our average working capital exceeds an agreed upon level at the close of our fiscal year ending February 2, 2019. If we do not comply with these terms, or if there is a change of control of the Company, it would be an event of default, and, subject to certain cure periods, the lender would have the right to require immediate repayment of the term loan, and/or exercise any other rights or remedies it may have, including foreclosing on our assets that serve as collateral. Furthermore, a default under our term loan agreement would also trigger a default under our subordinated promissory note agreements.

Our former credit facility included $11.5 million of junior participation interests that were held by a large stockholder, one of our board members and major stockholder, and our chief executive officer who is also one of our board members. These junior participation interests, along with $2.0 million of cash from our major stockholder, were exchanged into $13.5 million of the new subordinated promissory notes referred to above.

In connection with the refinancing on August 3, 2018, we issued warrants to purchase 1,192,997 shares of our common stock to our term loan lenders at an exercise price of $0.45 per share, and we issued warrants to purchase 1,600,000 shares of our common stock to certain holders of our subordinated promissory notes at an exercise price of $0.50 per share. Each warrant is exercisable on issuance and has a seven-year life. The fair value of the warrants was $0.8 million on their grant date as determined using a Black Scholes option pricing model and was included as a noncash component of debt issuance costs. These warrants are subject to a registration rights agreement whereby we agreed to register the underlying shares for resale by November 1, 2018. The following table shows the lenders, their relationship to the company, the loan amounts provided and the stock warrants issued to such investors, if any:

	Term Loan and
	Junior Note		Stock Warrant
(Dollars in thousands)	Amounts		Shares
Term Loan lenders, unrelated parties	$	40,000	$	1,192,997
Cove Street Capital, LLC, large stockholder		9,000		1,245,000
Jess Ravich, board member and large stockholder		4,400		355,000
Henry Stupp, Chief Executive Officer and board member		100		—
	$	53,500	$	2,792,997

Critical Accounting Policies and Estimates

This MD&A is based upon our condensed consolidated financial statements, which are included in this report. The preparation of these condensed financial statements requires management to make estimates and assumptions that

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affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Refer to our Annual Report on Form 10-K for a discussion of our critical accounting policies and recen t accounting pronouncements.

Revenue Recognition

We adopted ASC 606 using the modified retrospective method as of February 4, 2018, the beginning of the first quarter of our fiscal year ending February 2, 2019. The adoption of the new guidance primarily affected the recognition of minimum guaranteed royalties in our license agreements that have historically been recognized as earned in accordance with those agreements, while under this new standard, such royalties will generally be recognized on a straight-line basis over the term of the license agreements. Accordingly, for license agreements with escalating minimum guaranteed royalties, revenues will generally be higher during the early years of the license agreement than they would have been under the previous guidance. The cumulative effect on adoption of ASC 606 totaled $0.3 million, which was charged to accrued revenue or deferred revenue with a corresponding credit to accumulated deficit, for all contracts not completed as of adoption date. The comparative information has not been restated. As a result of adoption ASC 606, we recognized $0.3 million and $0.6 million of additional revenue in the three and six months ended August 4, 2018, respectively.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Our market risk generally represents the risk that losses may occur in the values of financial instruments as a result of movements in interest rates and foreign currency exchange rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

Interest

From time to time we invest our excess cash in interest bearing temporary investments of high quality issuers. Due to the short time the investments are outstanding and their general liquidity, these instruments are classified as cash equivalents in our consolidated balance sheets and do not represent a material interest rate risk to us. In relation to our term loan and subordinated promissory notes, a 100 basis point increase in the interest rate would have increased our interest expense in the six months ended August 4, 2018 by approximately $0.3 million.

Foreign Currency

Although we conduct business in various parts of the world, our international royalty revenues are typically denominated in U.S. dollars. However, because our international licensees operate in other currencies, fluctuations in the value of the U.S. dollar relative to these foreign currencies have an impact on our royalty revenues, which could materially affect our results of operations and cash flows. The primary foreign currencies that our licensees operate in are the Euro, the Great British Pound, the Mexican Peso, the South African Rand, the Japanese Yen, the Chinese Yuan, the Indian Rupee and the Canadian Dollar. Our revenues from international licensing activities comprised 79% and 74% of total revenues during the three and six months ended August 4, 2018, respectively. A hypothetical 10% strengthening of the U.S. dollar relative to the foreign currencies of countries where our licensees operate would have theoretically reduced our revenues in the six months ended August 4, 2018 by approximately $0.9 million.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined under Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of August 4 , 2018.

Changes in Internal Control over Financial Reporting

During the most recently completed fiscal quarter, no changes in our internal control over financial reporting materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Procedures and Internal Control Over Financial Reporting

In designing our disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of our controls and procedures must reflect that resource constraints exist, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of these inherent limitations, our disclosure and internal controls may not prevent or detect all instances of fraud, misstatements or other control issues. In addition, projections of any evaluation of the effectiveness of disclosure or internal controls to future periods are subject to risks, including, among others, that controls may become inadequate because of changes in conditions or that compliance with policies or procedures may deteriorate.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of our business. The impact and outcome of litigation, if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that could harm our business. We are not currently aware of any such legal proceedings or claims to which we are a party or to which our property is subject that we believe will have, individually or in the aggregate, a material effect on our business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

The occurrence of any of the risks, uncertainties and other factors described in this report, our Annual Report and the other documents we file with the SEC could have a material adverse effect on our business, financial condition, results of operations and stock price, and could cause our future business, financial condition, results of operations and stock price to differ materially from our historical results and the results contemplated by any forward-looking statements we may make herein, in any other document we file with the SEC or in any press release or other written or oral statement we may make. You should carefully consider all of these risks and the other information in this report and the other documents we file with the SEC before making any investment decision with respect to our securities. The risks described are not the only ones we face. Additional risks we are not presently aware of or that we currently believe are immaterial may also impair our business, financial condition and results of operations or cause our stock price to decline. The following disclosure only describes our material risks that have undergone material changes since the date on which our Annual Report was filed with the SEC. As a result, you should carefully review Item 1A. “Risk Factors” in our Annual Report for descriptions of additional material risks and uncertainties to which our business and our common stock are subject.

We are not currently in compliance with certain Nasdaq listing requirements. If we are not able to regain compliance with these requirements, our common stock may be delisted from trading on the Nasdaq Global Market, which could have a material adverse effect on us and our stockholders.

On June 5, 2018, we received a deficiency letter from the Nasdaq Stock Market (“Nasdaq”) notifying us that, because the bid price of our common stock closed below $1.00 per share for 30 consecutive business days, we are no longer in compliance with Nasdaq’s minimum bid price rule, which is a requirement for continued listing on the Nasdaq

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Glo bal Market. Nasdaq’s rules require that we regain compliance with this rule by December 3, 2018, subject to our potential eligibility for a 180-day extension of this deadline if we apply to transfer our Nasdaq listing to the Nasdaq Capital Market and meet certain other Nasdaq listing standards at that time. We have also experienced periods of noncompliance with other Nasdaq rules during our last completed fiscal year, in connection with our failure to file certain of our periodic reports with the SEC in a t imely manner. If we do not regain compliance with Nasdaq’s minimum bid price rule by the deadline, or if we regain compliance but we again fail to comply with this rule or with any other Nasdaq requirement in the future, then we would receive additional de ficiency letters from Nasdaq and our common stock could be delisted from trading on Nasdaq. Such an event could cause our common stock to be classified as a “penny stock,” among other potentially detrimental consequences, and could severely limit the liqui dity of our common stock and materially adversely affect the price of our common stock, any of which could significantly impact our stockholders’ ability to sell their shares of our common stock or to sell these shares at a price that a stockholder may dee m acceptable.

We have incurred a significant amount of indebtedness, and our level of indebtedness and restrictions under our indebtedness could adversely affect our operations and liquidity.

On August 3, 2018, we entered into a senior secured credit facility that provided a term loan and issued subordinated promissory notes. As of August 4, 2018, $53.5 million in principal was outstanding under these financing arrangements. Principal repayments are required quarterly on the term loan, and any remaining outstanding indebtedness is due in August 2021. The subordinated promissory notes mature in November 2021.

The senior secured credit facility imposes various restrictions and covenants regarding the operation of our business, including covenants that require us to obtain the lender’s consent before we can, among other things and subject to certain limited exceptions: (i) incur additional indebtedness or additional liens on our property; (ii) consummate acquisitions, dispositions, mergers or consolidations; (iii) make any change in the nature of our business; (iv) enter into transactions with our affiliates; or (v) repurchase or redeem any outstanding shares of our common stock or pay dividends or other distributions, other than stock dividends, to our stockholders. The senior secured credit facility also imposes financial covenants that set financial standards we are required to maintain. Further, as collateral for the credit facility, we have granted a first priority security interest in favor of the lender in substantially all of our assets (including trademarks), and our indebtedness is guaranteed by our subsidiaries. We are also required to raise $2.0 million of additional subordinated debt or equity before May 4, 2019; however, this will not be required if our average working capital exceeds an agreed upon level at the close of the company’s fiscal year ending February 2, 2019. If we do not comply with these requirements or we are unable to raise the additional capital if required, or if there is a change of control of the Company, it would be an event of default. If an event of default occurs under the credit facility that is not forborne, cured or waived in accordance with the terms of the credit facility, the lender has the right to terminate its obligations under the credit facility, accelerate the payment on any unpaid balance of the credit facility and exercise any other rights it may have, including foreclosing on our assets that serve as collateral for the loan. Furthermore, a default under our term loan agreement would also trigger a default under our subordinated promissory note agreements, which would give those lenders the right to terminate their obligations under the subordinated promissory note agreements and accelerate the payment of those promissory notes.

We may seek to refinance all or a portion of our outstanding indebtedness in the future. Any such refinancing would depend on the capital markets and the state of our industry, business and financial condition at the time, which could affect our ability to obtain attractive refinance terms if or when desired or at all.

The amount of our outstanding indebtedness, which is substantial, could have an adverse effect on our operations and liquidity, including by, among other things: (i) making it more difficult for us to pay or refinance our debts as they become due during adverse economic and industry conditions, because we may not have sufficient cash flows to make our scheduled debt payments; (ii) causing us to use a larger portion of our cash flows to fund interest and principal payments, thereby reducing the availability of cash to fund working capital, product development, capital expenditures and other business activities; (iii) making it more difficult for us to take advantage of significant business opportunities, such as acquisition opportunities or other strategic transactions, and to react to changes in market or industry conditions; and (iv) limiting our ability to borrow additional monies in the future to fund the activities and expenditures described above and for other general corporate purposes as and when needed, which could force us to suspend, delay or curtail business prospects, strategies or operations.

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Our future capital needs may be uncertain and we may need to raise additional funds in the future, but such funds may not be available when needed , on acceptable terms or at all.

Our capital requirements in future periods may be uncertain and could depend on many factors, including, among others: (i) acceptance of, and demand for, our brands; (ii) the extent to which we invest in our existing brand portfolio or any new brands; (iii) the number and timing of our acquisitions and other strategic transactions; (iv) the costs of developing new brands; (v) the costs associated with our efforts to expand our business; and (vi) the costs of litigation and enforcement activities to protect and defend our trademarks. We may need to raise additional funds to meet our capital requirements. However, these or any other necessary funds may not be available when needed, on favorable terms or at all. If we issue equity or convertible debt securities to raise additional funds, as we did with our public offering of our common stock in December 2016 and our private placement equity financing with certain of our board members, officers and large stockholders in August 2017, our existing stockholders would experience dilution and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. If we incur additional debt to raise funds, as we did with senior secured credit facility and subordinated promissory notes in August 2018, we may become over-leveraged and we may become subject to restrictive financial or operating covenants that could limit our ability to operate our business and expose us to significant risks in the event of any compliance failure. Moreover, in light of our current level of indebtedness, which is significant, additional debt or equity capital may not be available on terms we consider advantageous or favorable to us. In addition, we may seek equity and/or debt financing from sources that expose us to additional risks or negative effects, such as, for example, obtaining funding from related parties in transactions that create conflicts of interest between us and the related party, as we did with our private placement in August 2017 mentioned above, our arrangement of purchases by certain of our directors, officers and large stockholders of participation interests in our former credit facility in December 2017 and our exchange of former junior participation interests in our former credit facility into new subordinated promissory notes in August 2018. Further, we may incur substantial costs in pursuing future capital-raising transactions, including investment banking, legal and accounting fees, printing and distribution expenses and other costs. If we cannot raise funds when needed, on acceptable terms or at all, we may not be able to develop or enhance our brand portfolio or marketing initiatives, execute our business plan, take advantage of future opportunities, or respond to competitive pressures or customer requirements. Any of these outcomes may materially harm our business, results of operations and financial condition.

Significant disruptions of information technology systems, breaches of data security, or unauthorized disclosures of sensitive data or personally identifiable information could adversely affect our business, and could subject us to liability or reputational damage.

Our business is increasingly dependent on critical, complex, and interdependent information technology (“IT”) systems, including Internet-based systems, some of which are managed or hosted by third parties, to support business processes as well as internal and external communications. The size and complexity of our IT systems make us potentially vulnerable to IT system breakdowns, malicious intrusion, and computer viruses, which may result in the impairment of our ability to operate our business effectively.

In addition, our systems and the systems of our third-party providers and collaborators are potentially vulnerable to data security breaches which may expose sensitive data to unauthorized persons or to the public. Such data security breaches could lead to the loss of confidential information, trade secrets or other intellectual property, or could lead to the public exposure of personal information (including personally identifiable information) of our employees, customers, business partners, and others. In addition, the increased use of social media by our employees and contractors could result in inadvertent disclosure of sensitive data or personal information, including but not limited to, confidential information, trade secrets and other intellectual property.

Any such disruption or security breach, as well as any action by us or our employees or contractors that might be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable within the United States and elsewhere where we conduct business, could result in enforcement actions by U.S. states, the U.S. Federal government or foreign governments, liability or sanctions under data privacy laws that protect personally identifiable information, regulatory penalties, other legal proceedings such as but not limited to private litigation, the incurrence of significant remediation costs, disruptions to our development programs, business operations and collaborations, diversion of management efforts and damage to our reputation, which could harm our business and operations. Because

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of the rapidly moving nature of technology and the increasing sophistication of cybersecurity threats, our measures to prevent, respond to and minimize s uch risks may be unsuccessful.

In addition, the European Parliament and the Council of the European Union adopted a comprehensive general data privacy regulation (“GDPR”) in 2016 to replace the current European Union Data Protection Directive and related country-specific legislation. The GDPR took effect in May 2018 and governs the collection and use of personal data in the European Union. The GDPR, which is wide-ranging in scope, will impose several requirements relating to the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third party processors in connection with the processing of the personal data. The GDPR also imposes strict rules on the transfer of personal data out of the European Union to the United States, enhances enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the infringer, whichever is greater.

ITEM 6. EXHIBITS

The information required by this Item 6 is set forth on the Exhibit Index that immediately precedes the signature page to this report and is incorporated herein by reference.

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EXHIBIT INDEX

Exhibit Number		Description of Exhibit

4.1*		Registration Rights Agreement, dated August 3, 2018, by and between the Company and Gordon Brothers Finance Company.
4.2*		Form of Common Stock Purchase Warrant.
4.3*		Registration Rights Agreement, dated August 3, 2018, by and between the Company and the purchasers named therein.
4.4*		Form of Junior Common Stock Purchase Warrant.
10.1*		Financing Agreement, dated August 3, 2018, by and between the Company, Gordon Brothers Finance Company and additional parties named therein.
10.2*		Pledge and Security Agreement, dated August 3, 2018, by and between the Company and Gordon Brothers Finance Company.
10.3*		Exchange Agreement, dated August 3, 2018, by and between the Company and the purchasers named therein.
10.4*		Subordinated Exchange Note, dated August 3, 2018, by and between the Company and Cove Street Capital Small Cap Value Fund.
10.5*		Subordinated Exchange Note, dated August 3, 2018, by and between the Company and Henry I. Stupp.
10.6*		Subordinated Exchange Note, dated August 3, 2018, by and between the Company and Ravich Revocable Trust of 1989.
10.7*		Subordinated Exchange Note, dated August 3, 2018, by and between the Company and Square Deal Growth, LLC.
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended August 4, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at August 4, 2018 and February 3, 2018; (ii) Condensed Consolidated Statements of Operations for the three and six months ended August 4, 2018 and July 29, 2017; (iii) Condensed Consolidated Statements of Cash Flows for the six months ended August 4, 2018 and July 29, 2017; and (iv) Notes to Condensed Consolidated Financial Statements.

*	Filed herewith.

**	Furnished herewith.

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SIGNAT URES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: September 13, 2018

		CHEROKEE INC.


		By:	/s/ Henry Stupp

			Henry Stupp
			Chief Executive Officer
			(Principal Executive Officer)


		By:	/s/ Steven L. Brink

			Steven L. Brink
			Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Exhibit 4.1

EXECUTION

CHEROKEE INC.

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made as of August 3, 2018, by and between Cherokee Inc., a Delaware corporation (the “ Company ”) and the investors listed on the signature pages hereto (each, a “ Purchaser ”) and such other Persons, if any, from time to time, that become a party hereto as holders of Registrable Securities (as defined below). Unless otherwise defined herein, capitalized terms used in this Agreement have the meanings ascribed to them in that certain Financing Agreement dated as of August 3, 2018, by and between the Company, certain Subsidiaries of the Company, the Purchasers and the other parties thereto (as may be amended or restated from time to time, the “ Financing Agreement ”).

RECITALS

WHEREAS , pursuant to the Financing Agreement, concurrently with the execution of this Agreement, on the Effective Date, the Purchasers will be issued the Warrants;

WHEREAS , the Warrants are exercisable for shares of Common Stock from time to time in accordance with the terms thereof; and

WHEREAS , in connection with the execution and delivery of the Financing Agreement and the consummation of the transactions contemplated thereby, the Company has agreed to grant the Purchasers certain registration rights as set forth below.

NOW, THEREFORE , in consideration of the mutual promises and covenants herein contained, and other consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
Definitions

1.1 Definitions . As used in this Agreement, the following terms shall have the meanings set forth below:

(a) “ Additional Shares ” means any shares of Common Stock issued to the Purchaser pursuant to a stock split, stock dividend, other distribution or otherwise with respect to, or in exchange or in replacement of, the Shares.

(b) “ Affiliate ” means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by, or is under common control with such specified Person, including, without limitation, any general partner, limited partner, member, officer, director or manager of such Person and any venture capital or private equity fund now or hereafter existing that is controlled by one or more general partners or managing members of, or

shares the same management company with, such Person. For purposes of this definition, the terms “ controls ,” “ controlled by ,” or “ under common control with ” means the possession, direct or indirect, of power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract or otherwise).

(d) “ Common Stock ” means shares of the common stock of the Company, par value $0.02 per share.

(e) “ Entity ” means any corporation (including any non profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

(f) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

(g) “ Governmental Body ” means any domestic or foreign multinational, federal, state, provincial, municipal or local government (or any political subdivision thereof) or any domestic or foreign governmental, regulatory or administrative authority or any department, commission, board, agency, court, tribunal, judicial body or instrumentality thereof, or any other body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature (including any arbitral body).

(h) “ Holder ” means the Purchaser and any transferee permitted under Section 3.1 , in each case, to the extent holding Registrable Securities.

(i) “ Person ” means any individual, Entity, trust, Governmental Body or other organization.

(j) “ register ,” “ registered ” and “ registration ” refer to a registration effected by filing with the SEC a registration statement in compliance with the Securities Act, and the declaration or ordering by the SEC of the effectiveness of such registration statement.

(k) “ Registrable Securities ” means (i) the Shares, and (ii) any Additional Shares; provided, however, that Shares or Additional Shares shall cease to be treated as Registrable Securities on the earliest to occur of, (a) the date such security has been disposed of pursuant to an effective registration statement, (b) the date on which such security is sold pursuant to Rule 144, (c) the date on which such security ceases to be outstanding, and (d) the date on which the Holder thereof, together with its Affiliates, is able to dispose of all of its Registrable Securities without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144 (or any successor rule).

(l) “ Registration Expenses ” means any and all expenses incident to the performance of or compliance with this Agreement, including without limitation: (i) all

registration and filing fees; (ii) all fees and expenses associated with a required listing of the Registrable Securities on any securities exchange; (iii) fees and expenses with respect to filings required to be made with an exchange or any securities industry self-regulatory body; (iv) fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel for the underwriters or holders of securities in connection with blue sky qualifications of the securities and determination of their eligibility for investment under the laws of such jurisdictions); (v) printing, messenger, telephone and delivery expenses of the Company; (vi) fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses of any comfort letters, or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters, if such comfort letter or comfort letters is required by the managing underwriter); (vii) securities acts liability insurance, if the Company so desires; (viii) all internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties); (ix) the expense of any annual audit; and (x) the fees and expenses of any Person, including special experts, retained by the Company; provided, however that “ Registration Expenses ” shall not include underwriting fees, discounts or commissions attributable to the sale of the Registrable Securities or any legal fees and expenses of counsel to the Holder.

(m) “ Rule 144 ” means Rule 144 under the Securities Act.

(n) “ SEC ” means the Securities and Exchange Commission.

(o) “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

(p) “ Shares ” means any and all shares of Common Stock issuable upon exercise of the Warrants.

ARTICLE II
Registration Rights

2.1 Resale Registration Statements . Upon written request of any of the Purchasers at any time after the date that is 90 days following the Closing Date, the Company shall (a) file with the SEC, or (b) have filed with the SEC, a resale registration statement (together with any New Registration Statement (as defined below), the “ Resale Registration Statement ”) pursuant to Rule 415 under the Securities Act pursuant to which all of the Registrable Securities shall be included (on the initial filing or by supplement or amendment thereto) to enable the public resale on a delayed or continuous basis of the Registrable Securities by the Holder. The Company shall file the Resale Registration Statement on such form as the Company may then utilize under the rules of the SEC and use its best efforts to have the Resale Registration Statement declared effective under the Securities Act as soon as practicable, but in no event more than five trading days after the date the Company receives written notification from the SEC that the Resale Registration Statement will not be reviewed. The Company agrees to use its best efforts to maintain the effectiveness of the Resale Registration Statement, including by filing any necessary post-effective amendments and prospectus supplements, or, alternatively, by filing one or more new registration statements (each, a “ New Registration Statement ”) relating to the Registrable Securities as

required by Rule 415 under the Securities Act, continuously until the date that is the earlier of (i) four years following the date of effectiveness of the Resale Registration Statement, and (ii) the date on which the Holder no longer holds any Registrable Securities covered by the Resale Registration Statement.

2.2 Provisions Relating to Registration .

(a) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause (i) the Resale Registration Statement (as of the effective date of the Resale Registration Statement), any amendment thereof (as of the effective date thereof) or supplement thereto (as of its date), (A) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the SEC, and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and (ii) any related prospectus, preliminary prospectus and any amendment thereof or supplement thereto, as of its date, (A) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the SEC, and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, the Company shall have no such obligations or liabilities with respect to any written information pertaining to the Holder and furnished to the Company by or on behalf of the Holder specifically for inclusion therein.

(b) The Company shall notify the Holder: (i) when the Resale Registration Statement or any amendment thereto has been filed with the SEC and when the Resale Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the SEC for amendments or supplements to the Resale Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Resale Registration Statement or the initiation of any proceedings for that purpose and of any other action, event or failure to act that would cause the Resale Registration Statement not to remain effective; and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose.

(c) As promptly as practicable after becoming aware of such event, the Company shall notify the Holder of the happening of any event (a “ Suspension Event ”), of which the Company has knowledge, as a result of which the prospectus included in the Resale Registration Statement as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and use its best efforts promptly to prepare a supplement or amendment to the Resale Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment to the Holder as the Holder may reasonably request; provided, however, that, for not more than 45 consecutive trading days (or a total of not more than 120 trading days in any 12 month period), the Company may delay, to the extent permitted by and in a manner not in violation of applicable securities laws, the disclosure of material non-public information concerning the Company (as well as prospectus or Resale Registration Statement

updating), the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company; provided, further, that, if the Resale Registration Statement was not filed on Form S-3, such number of days shall not include the 15 calendar days following the filing of any Current Report on Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K, or other comparable form, for purposes of filing a post-effective amendment to the Resale Registration Statement.

(d) Upon a Suspension Event, the Company shall give written notice (a “ Suspension Notice ”) to the Holder to suspend sales of the affected Registrable Securities, and such notice shall state that such suspension shall continue only for so long as the Suspension Event or its effect is continuing and the Company is pursuing with reasonable diligence the completion of the matter giving rise to the Suspension Event or otherwise taking all reasonable steps to terminate suspension of the effectiveness or use of the Resale Registration Statement. In no event shall the Company, without the prior written consent of the Holder, disclose to the Holder any of the facts or circumstances giving rise to the Suspension Event. The Holder shall not effect any sales of the Registrable Securities pursuant to the Resale Registration Statement (or such filings), at any time after they have received a Suspension Notice and prior to receipt of an End of Suspension Notice. The Holder may resume effecting sales of the Registrable Securities under the Resale Registration Statement (or such filings), following further notice to such effect (an “ End of Suspension Notice ”) from the Company. This End of Suspension Notice shall be given by the Company to the Holder in the manner described above promptly following the conclusion of any Suspension Event and its effect. For the avoidance of doubt, a Suspension Notice shall not affect or otherwise limit sales of affected Registrable Securities under Rule 144 or otherwise outside of the Resale Registration Statement.

(e) The Company shall bear all Registration Expenses incurred by the Company in connection with the registration of the Registrable Securities pursuant to this Agreement.

(f) Notwithstanding anything to the contrary contained in this Agreement, the Company shall not be required to include Registrable Securities in the Resale Registration Statement unless the Holder owning the Registrable Securities to be registered on the Resale Registration Statement, following reasonable advance written request by the Company, furnishes to the Company, at least 10 Business Days prior to the scheduled filing date of the Resale Registration Statement, an executed stockholder questionnaire in customary form.

2.3 Indemnification .

(a) In the event of the offer and sale of the Registrable Securities held by the Holder under the Securities Act, the Company agrees to indemnify and hold harmless the Holder and its directors, officers, employees, Affiliates and agents and each Person who controls the Holder within the meaning of the Securities Act or the Exchange Act (collectively, the “ Holder Indemnified Parties ”) from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof to which each Holder Indemnified Party may become subject under the Securities Act or the Exchange Act, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Resale Registration Statement or in any amendment thereof, in each

case at the time such became effective under the Securities Act, or in the preliminary prospectus or other information that is deemed, under Rule 159 promulgated under the Securities Act to have been conveyed to purchasers of securities at the time of sale of such securities (“ Disclosure Package ”), in the prospectus or in any amendment thereof or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Disclosure Package or any prospectus, in the light of the circumstances under which they were made) not misleading, and shall reimburse, as incurred, the Holder Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or omission made in the Resale Registration Statement, the Disclosure Package, any prospectus or in any amendment thereof or supplement thereto in reliance upon and in conformity with written information pertaining to the Holder and furnished to the Company by or on behalf of the Holder Indemnified Party specifically for inclusion therein; provided further, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Disclosure Package, where (A) such statement or omission had been eliminated or remedied in any subsequently filed amended prospectus or prospectus supplement (the Disclosure Package, together with such updated documents, the “ Updated Disclosure Package ”), the filing of which the Holder had been notified in accordance with the terms of this Agreement, (B) such Updated Disclosure Package was available at the time the Holder sold Registrable Securities under the Resale Registration Statement, (C) such Updated Disclosure Package was not furnished by the Holder to the Entity asserting the loss, liability, claim, damage or liability, or an underwriter involved in the distribution of such Registrable Securities, at or prior to the time such furnishing is required by the Securities Act, and (D) the Updated Disclosure Package would have cured the defect giving rise to such loss, liability, claim, damage or action; and provided further, however, that this indemnity agreement will be in addition to any liability that the Company may otherwise have to the Holder Indemnified Party. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Holder Indemnified Parties and shall survive the transfer of the Registrable Securities by the Holder.

(b) As a condition to including any Registrable Securities to be offered by the Holder in any registration statement filed pursuant to this Agreement, the Holder agrees to severally and not jointly indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Resale Registration Statement, as well as any officers, employees, Affiliates and agents of the Company, and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (a “ Company Indemnified Party ”) from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which a Company Indemnified Party may become subject under the Securities Act or the Exchange Act, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Resale Registration Statement or in any amendment thereof, in each case at the time such became effective under the Securities Act, or in any Disclosure Package, prospectus or in any amendment thereof or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Disclosure Package or any prospectus, in the light of the circumstances under which they were made) not

misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to the Holder and furnished to the Company by or on behalf of the Holder specifically for inclusion therein; and, subject to the limitation immediately preceding this clause, shall reimburse, as incurred, the Company Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Holder, or any such director, officer, employees, Affiliates and agents and shall survive the transfer of such Registrable Securities by the Holder, and the Holder shall reimburse the Company, and each such director, officer, employees, Affiliates and agents for any legal or other expenses reasonably incurred by them in connection with investigating, defending, or settling and such loss, claim, damage, liability, action, or proceeding; provided, however, that the indemnity amount contained in this Section 2.3(b) shall in no event exceed the gross proceeds from the offering received by the Holder. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer, employees, Affiliates and agents and shall survive the transfer by the Holder of such Registrable Securities.

Indemnified Party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party. If the indemnification provided for in this Section 2.3 is unavailable or insufficient to hold harmless an Indemnified Party under Sections 2.3(a) or 2.3(b) , then each indemnifying party shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in Sections 2.3(a) or 2.3(b) in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and the Indemnified Party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Holder or Holder Indemnified Party, as the case may be, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 2.3 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any action or claim that is the subject of this Section 2.3(c) . The parties agree that it would not be just and equitable if contributions were determined by pro rata allocation (even if the Holder was treated as one Entity for such purpose) or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding any other provision of this Section 2.3(c) , the Holder shall not be required to contribute any amount in excess of the amount by which the net proceeds received by the Holder from the sale of the Registrable Securities pursuant to the Resale Registration Statement exceeds the amount of damages that the Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(d) The agreements contained in this Section 2.3 shall survive the sale of the Registrable Securities pursuant to the Resale Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any Indemnified Party.

ARTICLE III
Transfer Restrictions

3.1 Transfer Restrictions . The Holder acknowledges and agrees that the following legend shall be imprinted on any certificate or book-entry security entitlement evidencing any of the Registrable Securities:

AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

This legend shall be removed by the Company from any certificate or book-entry security entitlement evidencing the Registrable Securities upon delivery by the holder thereof to the Company of a written request to that effect if at the time of such written request (i) a registration statement under the Securities Act is at that time in effect with respect to the legended security, or (ii) the legended security can be transferred in a transaction in compliance with Rule 144 under the Securities Act, and, in the case of (ii), upon the request and in the reasonable discretion of the Company’s transfer agent, the holder of such Registrable Securities executes and delivers a representation letter that includes customary representations regarding the holding requirements and whether such holder is an “affiliate” for purposes of Rule 144 under the Securities Act. The Company represents and warrants to the Purchaser that the Company is not currently a shell company (as defined in Rule 405 promulgated under the Securities Act).

ARTICLE IV
Miscellaneous.

4.1 Further Assurances . Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

4.2 Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by e-mail (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays in the United States) after deposit with an overnight courier service, in each case properly addressed to the party to receive the same.

The addresses and e-mail addresses for such communications shall be:

If to the Company:

Cherokee Inc.

5990 Sepulveda Boulevard, Suite 600

Sherman Oaks, CA 91411

E-mail: henrys@cherokeeglobalbrands.com

Attn: Henry Stupp

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

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

3580 Carmel Mountain Road, Suite 300

San Diego, CA 92130

E-mail: smstanton@mintz.com

Attn: Scott Stanton, Esq.

If to the Purchaser: To the address set forth on the Purchaser’s signature page hereto;

or to such other address and/or e-mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party at least five (5) days prior to the effectiveness of such change.

4.3 Headings . The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

4.4 Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a .pdf or other form of electronic signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a .pdf or other form of electronic signature.

4.5 Governing Law; Arbitration; Venue . This Agreement shall be construed under the laws of the State of Delaware, without regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another jurisdiction. The Company and the Purchaser hereby agree that all actions or proceedings arising directly or indirectly from or in connection with this Agreement shall be litigated only in the applicable state court in the State of Delaware or the United States District Court for the District of Delaware. The Company and the Purchaser consent to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of motion or other application to either of said courts or a judge thereof may be served inside or outside the State of Delaware or the District of Delaware by generally recognized overnight courier or certified or registered mail, return receipt requested, directed to such party at its or his address set forth below (and service so made shall be deemed “personal service”) or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE PURCHASER HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

4.6 Assignment and Successors . This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any transferees of the Warrants.

4.7 Entire Agreement; Amendments . This Agreement supersedes all other prior oral or written agreements between the Purchaser, the Company, their Affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Purchaser make any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended, waived or modified other than by an instrument in writing signed by the Company and the Purchaser. Any such amendment, waiver or modification effected in accordance with this Section 4.7 shall be binding upon the Purchaser and each transferee of the Warrants (or the Shares), each future holder of all such securities and the Company.

4.8 Severability . If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

4.9 Termination . This Agreement shall terminate on the date when there are no longer any remaining Registrable Securities or upon the dissolution, liquidation or winding up of the Company; provided that Section 2.3 of this Agreement shall survive such termination.

4.10 No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

4.11 Language; Currency . This Agreement has been prepared in the English language and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the parties regarding this Agreement, shall be in the English language. All references to “$” contained in this Agreement shall refer to United States Dollars unless otherwise stated.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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

COMPANY:
CHEROKEE INC.

By:	/s/ Henry Stupp
Name:	Henry Stupp
Title:	Chief Executive Officer

[Signature Page to Registration Rights Agreement]

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

PURCHASER:
GORDON BROTHERS FINANCE COMPANY, LLC

By:	/s/ Felicia Galeota
	Name:	Felicia Galeota
	Title:	Vice President

Address:

800 Boylston Street, 27 ^th Floor

Boston, MA 02199

[Signature Page to Registration Rights Agreement]

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

PURCHASER:
GORDON BROTHERS BRANDS, LLC

By:	/s/ Ramez Toubassy
	Name:	Ramez Toubassy
	Title:	President

Address:

800 Boylston Street, 27 ^th Floor

Boston, MA 02199

[Signature Page to Registration Rights Agreement]

Exhibit 4.2

THIS WARRANT AND ANY SECURITIES OBTAINABLE UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE’S SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

CHEROKEE INC.

COMMON STOCK PURCHASE WARRANT

Date of Issuance: [●]

FOR VALUE RECEIVED, Cherokee Inc., a Delaware corporation (the “ Company ”), hereby grants to [●] , or its registered assigns (the “ Registered Holder ”) the right to purchase from the Company, at any time or from time to time during the Exercise Period (as defined in Section 1A below), up to [●] shares (as such number of shares shall be adjusted from time to time in accordance with Section 2 hereof) of the Company’s Common Stock, par value $0.02 per share, at a per share purchase price equal to the “Exercise Price” (as defined in Section 4 below). This Warrant is issued pursuant to the terms of that certain Financing Agreement dated as of August 3, 2018 by and among the Company, the Registered Holder and the other parties thereto (the “ Financing Agreement ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Financing Agreement. The amount and kind of securities obtainable pursuant to the rights granted hereunder and the purchase price to be paid for such securities are subject to adjustment pursuant to the provisions contained in this Warrant.

This Warrant is subject to the following provisions:

Section 1. Exercise of Warrant .

1A. Exercise Period . The Registered Holder may exercise, in whole or part, the purchase rights represented by this Warrant at any time and from time to time after the Date of Issuance hereof and prior to 5:00 p.m. (New York City time) on the seventh anniversary of the Date of Issuance (the “ Exercise Period ”).

1B. Exercise Procedure .

(i) This Warrant shall be deemed to have been exercised when the Company has received all of the following items prior to the expiration of the Exercise Period at its principal office (the “ Exercise Time ”), except as contemplated in connection with automatic exercise pursuant to Section 1D:

(a) a completed Exercise Agreement, as described in Section 1C below, executed by the Person exercising all or any portion of the purchase rights represented by this Warrant (the “ Purchaser ”);

(b) if this Warrant is not registered in the name of the Purchaser, an Assignment or Assignments in the form set forth in Exhibit II hereto evidencing the assignment of this Warrant to the Purchaser, in which case exercise of this Warrant by the Purchaser is subject to and conditioned upon the Registered Holder having complied with the provisions set forth in Section 6 hereof; and

(ii) The Company shall cause its transfer agent to deliver certificates evidencing the Warrant Shares purchased upon exercise of all or any portion of this Warrant to the Purchaser (or to a broker or other person as directed thereby) within five business days after the date of the Exercise Time. Unless this Warrant has expired or all of the purchase rights represented hereby have been exercised, the Company shall prepare a new Warrant, substantially identical hereto, representing the rights formerly represented by this Warrant which have not expired or been exercised and shall, within such five-day period, deliver such new Warrant to the Person designated for delivery in the Exercise Agreement.

(iii) The Warrant Shares issuable upon the exercise of this Warrant shall be deemed to have been issued to the Purchaser at the Exercise Time, and the Purchaser shall be deemed for all purposes to have become the record holder of such Warrant Shares at the Exercise Time.

(iv) The issuance of certificates evidencing Warrant Shares upon exercise of this Warrant shall be made without charge to the Registered Holder or the Purchaser for any issuance tax in respect thereof or other cost incurred by the Company in connection with such exercise and the related issuance of Warrant Shares. Each Warrant Share issuable upon exercise of this Warrant shall be duly authorized, validly issued, fully paid and non-assessable and free from all liens and charges with respect to the issuance thereof (other than transfer restrictions under applicable securities laws).

(v) The Company shall not close its books against the transfer of this Warrant or of any Warrant Share issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this Warrant. The Company shall from time to time take all such action as may be necessary to assure that the par value per share of the unissued Warrant Shares obtainable upon exercise of this Warrant is at all times equal to or less than the Exercise Price then in effect.

(vi) The Company shall assist and cooperate with any Registered Holder or Purchaser required to make any governmental filings or obtain any governmental approvals prior to or in connection with any exercise of this Warrant (including, without limitation, making any filings required to be made by the Company). If and so long as the Common Stock issuable upon the exercise of the rights represented by this Warrant is listed on any national securities exchange or quotation system, the Company will, if permitted by the rules of such exchange or quotation system, use its best efforts to list and keep listed on such exchange or quotation system, upon official notice of issuance, all shares of such capital stock.

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(vii) The Company shall at all times reserve and keep available out of its authorized capital stock the number of shares of its Common Stock issuable upon the exercise of this Warrant solely for the purpose of issuance upon the exercise of this Warrant. The Company shall take all such actions as may be necessary to assure that all such Warrant Shares may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which the Warrant Shares may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance). The Company shall not take any action that would cause the number of authorized but unissued shares of its Common Stock to be less than the number of such shares required to be reserved hereunder for issuance upon exercise of this Warrant.

1C. Exercise Agreement . Upon any exercise of this Warrant, a completed Exercise Agreement substantially in the form of Exhibit I attached hereto, executed by the Purchaser shall be delivered to the Company prior to the expiration of the Exercise Period; provided that if the Warrant Shares are to be issued to a Person other than the Person whose name this Warrant is registered, the Exercise Agreement shall also state the name of the Person to whom the certificates evidencing the Warrant Shares are to be issued; provided further, if the number of Warrant Shares to be issued does not include all the Warrant Shares obtainable hereunder, the Exercise Agreement shall also state the name of the Person to whom a new Warrant for the unexercised portion of the rights hereunder is to be delivered. Such Exercise Agreement shall be dated the actual date of execution thereof. At the option of the holder of this Warrant, payment of the Exercise Price shall be made (w) by wire transfer of funds to an account in a bank located in the United States designated by the Company for such purpose, (x) tender to the Company for cancellation of debt obligations of the Company or its subsidiaries owing to the Registered Holder exercising this Warrant of an amount equal to the then applicable Exercise Price multiplied by the number of Warrant Shares issuable upon such exercise, (y) by application of any Warrants and/or Warrant Shares, as provided below, or (z) by any combination of such methods. Upon exercise of this Warrant in whole or in part, the holder hereof may, at its option, submit to the Company written instructions from such holder to apply any specified portion of any Warrants or any Warrant Shares issuable upon such exercise in payment of the Exercise Price required upon such exercise, in which case the Company will accept such specified portion of Warrants or Warrant Shares (at value per share equal to the then Market Price thereof less, in the case of any Warrant Shares, the Exercise Price then in effect), in lieu of a like amount of such cash payment.

1D. Automatic Exercise on Last Day of Exercise Period . If this Warrant shall not have been exercised in full on or before the expiration of the Exercise Period, then this Warrant shall be automatically exercised, without further action on the part of the holder hereof, in full (and the holder hereof shall be deemed to be a holder of the Warrant Shares issued upon such automatic exercise) on and as of the last day of the Exercise Period, unless at any time on or before such last day of the Exercise Period the holder of this Warrant shall notify the Company in writing that no such automatic exercise is to occur. Payment of the Exercise Price due in connection with any such automatic exercise pursuant to this Section 1D. shall be made by application of Warrants (at a value equal to the then Market Price thereof) equal to the aggregate Exercise Price which is due upon such exercise, unless at any time on or before such last day of the Exercise Period the holder of this Warrant shall notify the Parent in writing that such holder elects one of the other payment options set forth in Section 1C. As promptly as practicable

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following any such automatic exercise, and in any event within ten business days after the day that the holder of this Warrant surrenders this Warrant to the Company for cancellation, the Company shall cause its transfer agent to issue and deliver to the holder hereof a certificate registered in the name of the holder hereof (unless the holder shall specifically instruct the Company otherwise) representing the Warrant Shares issued in connection with such automatic exercise of this Warrant minus the number of Warrant Shares, if any, applied in payment of the Exercise Price.

Section 2. Adjustment of Exercise Price and Number of Shares . In order to prevent dilution of the rights granted under this Warrant, the Exercise Price and the number of Warrant Shares obtainable upon exercise of this Warrant shall each be subject to adjustment from time to time as provided in this Section 2 ; provided, that no adjustment to the Exercise Price shall be made if the adjustment would result in the Exercise Price being below $0.02 per share.

2A. [ Reserved ].

2B. [ Reserved ].

2C. Subdivision or Combination of Stock . If and whenever after the Date of Issuance the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock, then the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares obtainable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by reverse stock split or otherwise) its outstanding shares of Common Stock, then the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares obtainable upon exercise of this Warrant shall be proportionately decreased.

2D. Reorganization, Reclassification, Consolidation, Merger or Sale . Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets or other transaction, which in any case is effected in such a way that the holders of its outstanding shares of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for such Common Stock, is referred to herein as an “ Organic Change .” Prior to the consummation of any Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Registered Holder of this Warrant) to insure that the Registered Holder of this Warrant shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the Warrant Shares immediately theretofore obtainable and receivable upon the exercise of this Warrant, such shares of stock, securities or assets as would have been issued or payable in such Organic Change (if the Registered Holder had exercised this Warrant immediately prior to the Organic Change) with respect to or in exchange for the number of Warrant Shares immediately theretofore acquirable and receivable upon exercise of this Warrant had such Organic Change not taken place. In any such case, the Company shall make appropriate provision (in form and substance satisfactory to the Registered Holder of this Warrant) with respect to the Registered Holder’s rights and interests to insure that the provisions of this Section 2 and Section 3 hereof shall thereafter be applicable to this Warrant and to such

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shares, securities and/or assets to be distributed (including, without limitation, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is other than the Company and in which the value of the Warrant Shares as reflected by the terms of such transaction is less than the Exercise Price in effect immediately prior to such transaction, an immediate adjustment of the Exercise Price and a corresponding immediate adjustment in the number of Warrant Shares obtainable and receivable upon exercise of this Warrant). The Company shall not affect any such consolidation, merger or sale, unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger or the entity purchasing such assets assumes by written instrument (in form and substance satisfactory to the Registered Holder of this Warrant), the obligation to deliver to the Registered Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

2E. Certain Events . If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions, then the Company’s board of directors shall make an appropriate adjustment in the Exercise Price and an appropriate adjustment in the number of Warrant Shares obtainable upon exercise of this Warrant so as to protect the rights of the holders of this Warrant.

2F. Notices .

(i) Immediately upon any adjustment of the Exercise Price or the number of Warrant Shares acquirable upon exercise of this Warrant, the Company shall give written notice thereof to the Registered Holder, setting forth in reasonable detail and certifying the calculation of such adjustment.

(ii) The Company shall give written notice to the Registered Holder at least 10 days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, or (B) for determining rights to vote with respect to any Organic Change, dissolution or liquidation. The Company shall also give written notice to the Registered Holder at least 10 days prior to the date on which any Organic Change, dissolution or liquidation shall take place.

Section 3. Dividends . If and whenever after the Date of Issuance the Company declares or pays a dividend or makes any other distribution upon the Common Stock except for a stock dividend payable in shares of Common Stock covered by Section 2C (a Dividend ”), then the Company shall pay to the Registered Holder of this Warrant at the time of payment thereof an amount equal to the Dividend which would have been paid to the Registered Holder on the Warrant Shares had this Warrant been fully exercised immediately prior to the date on which the record was taken for such Dividend or, if no record was taken, the date as of which the record holders of Common Stock entitled to such dividends are to be determined.

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Section 4. Definitions . The following terms have meanings set forth below:

“ Common Stock ” means the Company’s Common Stock, $0.02 par value per share, as established on the Closing Date and any shares into which such shares shall have been changed or resulting from the reclassification thereof.

“ Exercise Price ” means $0.45 per share.

“ Market Price ” of any security, where such security is not listed on any securities exchange or quoted in the Nasdaq National Market System or the over-the-counter market (a “ Tradeable Security ”), means the fair value thereof determined jointly by the Company and the Registered Holder. If such parties are unable to reach agreement within 15 business days, such fair value shall be determined by an independent appraiser experienced in valuing securities jointly selected by the Company and the Registered Holder. Such determination shall be based on the aggregate equity value of the Company divided by the number of issued and outstanding shares thereof on a fully diluted basis, and there shall be no discount for minority interests in, or a lack of liquidity of securities of, the Company. The determination of such appraiser shall be final and binding upon the parties, and the Company shall pay the fees and expenses of such appraiser. Where such security is a Tradeable Security, “Market Price” shall be the average of the closing prices of such security’s sales on all securities exchanges on which such security may at the time be listed, or, if there has been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the Nasdaq National Market System as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the Nasdaq National Market System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of 31 days consisting of the day as of which “Market Price” is being determined and the 30 consecutive business days prior to such day.

“ Person ” means an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof.

“ Warrant Share ” means any share of Common Stock obtained or obtainable upon the exercise of this Warrant; provided that if there is a change such that the securities issuable upon exercise of this Warrant are issued by an entity other than the Company or there is a change in the type or class of securities so issuable, then the term “Warrant Share” shall mean one share of the security issuable upon exercise of the Warrants if such security is issuable in shares, or shall mean the smallest unit in which such security is issuable if such security is not issuable in shares.

“ Warrant Shares ” means, collectively, each Warrant Share obtained or obtainable upon the exercise of this Warrant.

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Section 5. No Rights as a Stockholder; Limitations of Liability . This Warrant shall not entitle the holder hereof to any voting or consent rights or other rights as a stockholder of the Company, or to otherwise (except as may be required pursuant to Section 3) be deemed to be a holder of any shares of capital stock of the Company. No provision hereof, in the absence of affirmative action by the Registered Holder to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Registered Holder shall give rise to any liability of the Registered Holder for any further payment in respect of the Warrant Shares or as a shareholder of the Company. The Company will transmit to each Registered Holder such information, documents and reports as are generally distributed thereof to the stockholders of the Company; provided, that the filing by the Company of any such materials on the EDGAR system of the Securities and Exchange Commission shall be deemed to satisfy the Company’s obligation to deliver such material to the Registered Holder.

Section 6. Transfer of Warrant . This Warrant and all rights hereunder are subject to the transfer conditions referred to in the legend imprinted hereon. Any permitted transfer of this Warrant shall be effectuated by surrender of this Warrant with a properly executed Assignment (in the form of Exhibit II attached hereto) at the principal office of the Company.

Section 7. Warrant Exchangeable for Different Denominations . This Warrant is exchangeable, upon the surrender hereof by the Registered Holder at the principal office of the Company, for new Warrants of like tenor representing in the aggregate the purchase rights hereunder, and each such new Warrant shall represent such portion of such rights as is designated by the Registered Holder at the time of such surrender. The date the Company initially issues this Warrant shall be deemed to be the “ Date of Issuance ” hereof regardless of the number of times new certificates representing the unexpired and unexercised rights formerly represented by this Warrant shall be issued. All Warrants representing portions of the rights hereunder are referred to herein collectively as the “ Warrant .”

Section 8. Replacement . Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the Registered Holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of this Warrant and/or any certificate evidencing Warrant Shares, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company ( provided that if the holder is a financial institution or other institutional investor, its own agreement providing customary indemnification shall be satisfactory) or, in the case of any such mutilation, upon surrender of this Warrant and/or such certificate (as applicable), the Company shall (at its expense) execute and deliver, in lieu of this Warrant and/or such certificate, a new Warrant and/or certificate of like kind representing the same rights represented by, and dated the date of, such lost, stolen, destroyed or mutilated Warrant and/or certificate (as applicable).

Section 9. Notices . Except as otherwise expressly provided herein, all notices referred to in this Warrant shall be in writing and shall be delivered personally, sent by reputable overnight courier service (charges prepaid) or sent by registered or certified mail, return receipt requested, postage prepaid and shall be deemed to have been given when so delivered (i) to the Company at its principal executive offices and (ii) to the Registered Holder of this Warrant as provided in the Financing Agreement.

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Section 10. Amendment and Waiver . Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the prior written consent of the holder(s) of a majority of the purchase rights represented by this Warrant and the other Warrants issued pursuant to the Financing Agreement; provided that , except as otherwise expressly provided herein, (a) no such amendment or waiver shall decrease the number of Warrant Shares issuable upon the exercise of any Warrant or the manner of exercise or the amount of any payment due upon the exercise without the prior written consent of the holder of such Warrant and (b) no such amendment or waiver shall extend to or affect any obligation not expressly amended or waived or impair any right consequent thereon.

Section 11. Descriptive Headings . The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

Section 12. Governing Law . This Warrant shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Section 13. Nonwaiver . No course of dealing or any delay or failure to exercise any right, power or remedy hereunder on the part of the holder of this Warrant or of any Warrant Shares shall operate as a waiver of or otherwise prejudice such holder’s rights, powers or remedies.

Section 14. Remedies . No remedy conferred in this Warrant on the holder of any Warrant or Warrant Shares is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under any other agreement, document or instrument or now or hereafter existing at law or in equity or by statute or otherwise.

Section 15. Successors and Assigns . This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company, the holder or holders of this Warrant and, as applicable, of any Warrant Shares, to the extent provided herein, and shall be enforceable by such holder or holders.

Section 16. Entire Agreement; Partial Invalidity, etc . This Warrant embodies the entire agreement and understanding between the holder hereof and the Company and supersedes all prior agreements and understandings relating to the subject matter hereof. In case any provision in this Warrant shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 17. Fractional Shares . No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant, but in lieu of such fractional shares, the Company shall make a cash payment therefore equal in amount to the product of the applicable fraction multiplied by the Market Price then in effect.

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Section 18. Recovery of Litigation Costs . If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or p revailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

Section 19. Representations of Registered Holder . In connection with the issuance of this Warrant, the Registered Holder specifically represents to the Company by acceptance of this Warrant as follows:

(a) The Registered Holder is aware of the Company’s business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and knowledgeable decision to acquire this Warrant. The Registered Holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any “distribution” thereof in violation of the Securities Act;

(b) The Registered Holder understands that neither this Warrant nor the Warrant Shares have been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Registered Holder’s investment intent as expressed herein;

(c) The Registered Holder further understands that this Warrant must be held indefinitely unless subsequently registered under the Securities Act and qualified under any applicable state securities laws, or unless exemptions from registration and qualification are otherwise available. The holder is aware of the provisions of Rule 144, promulgated under the Securities Act. The holder understands and agrees that the Company is under no obligation to register this Warrant under the Securities Act; and

(d) The Registered Holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

Section 20. Representations and Warranties of the Company . In connection with the issuance of this Warrant, the Company hereby represents and warrants to the Registered Holder, as of the date of hereof, that:

20A. SEC Reports; Financial Statements . The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), including pursuant to Section 13(a) or 15(d) of the Exchange Act, for the two years preceding the date of this Warrant (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Reports ”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial

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statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Securities Exchange Commission (the “ SEC ”) with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles in the United States applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. As of the date hereof, there are no outstanding or unresolved comments received from the staff of the SEC with respect to the SEC Reports.

20B. Material Changes; Undisclosed Events, Liabilities or Developments . Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (a) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (b) the Company has not incurred any liabilities (contingent or otherwise) other than (i) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, and (ii) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (c) the Company has not altered its method of accounting, (d) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (e) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. Except for the entry into the Loan Documents and the transactions related thereto, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed prior to the date that this representation is made.

20C. Disclosure Controls . The Company maintains systems of internal accounting controls designed to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the SEC Reports, the Company is not aware of any material weakness in its internal control over financial reporting. Since the date of the latest audited financial statements of the Company included within the SEC Reports, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and

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procedures to ensure that material information relating to the Company and the Subsidiaries is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the Annual Report on Form 10-K for the fiscal year most recently ended (such date, the “ Evaluation Date ”). The Company presented in its Annual Report on Form 10-K for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the most recent Evaluation Date. Since the most recent Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s knowledge, in other factors that would significantly adversely affect the Company’s internal controls.

20D. No “Bad Actor” Disqualifying Events . No “Bad Actor” disqualifying event described in Rule 506(d)(1)(i) to (viii) of the Securities Act (a “ Disqualification Event ”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3), is applicable; provided that, for purposes of this representation and warranty, the Company relied exclusively on completed and executed questionnaires delivered to the Company by its directors and executive officers and beneficial owners of twenty percent (20%) or more of the Company’s outstanding voting equity securities.

20E. Sarbanes-Oxley Act . The Company is in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof.

20F. No General Solicitation . None of the Company, any of its Affiliates or any person acting on its or their behalf has conducted any general solicitation (as that term is used in Rule 502(c) of Regulation D) or general advertising with respect to this Warrant, or made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of this Warrant under the Securities Act.

20G. Application of Takeover Protections . The Company and the Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its formation which is or could become applicable to the Purchaser as a result of the transactions contemplated by this Warrant.

20H. Capitalization . As of the date hereof, the Company has 14,045,000 shares of Common Stock issued and outstanding.

* * * *

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer and dated as of the Date of Issuance.

CHEROKEE INC.
By:
Name:		Henry Stupp
Its:		Chief Executive Officer

Exhibit 4.3

CHEROKEE INC.

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made as of A, 2018, by and between Cherokee Inc., a Delaware corporation (the “ Company ”) and the investors listed on the signature pages hereto (each, a “ Purchaser ”) and such other Persons, if any, from time to time, that become a party hereto as holders of Registrable Securities (as defined below). Unless otherwise defined herein, capitalized terms used in this Agreement have the meanings ascribed to them in that certain Exchange Agreement dated as of August 3, 2018, by and between the Company and the Purchasers (as may be amended or restated from time to time, the “ Exchange Agreement ”).

RECITALS

WHEREAS , pursuant to the Exchange Agreement, concurrently with the execution of this Agreement, at the Closing, the Purchasers will purchase from the Company, and the Company will issue and sell to the Purchasers the Notes and the Warrants;

WHEREAS , the Warrants are exercisable for shares of Common Stock from time to time in accordance with the terms thereof; and

WHEREAS , in connection with the execution and delivery of the Exchange Agreement and the consummation of the transactions contemplated thereby, the Company has agreed to grant the Purchasers certain registration rights as set forth below.

ARTICLE I
Definitions

1.1 Definitions . As used in this Agreement, the following terms shall have the meanings set forth below:

(a) “ Additional Shares ” means any shares of Common Stock issued to the Purchaser pursuant to a stock split, stock dividend or other distribution with respect to, or in exchange or in replacement of, the Shares.

terms “ controls ,” “ controlled by ,” or “ under common control with ” means th e possession, direct or indirect, of power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract or otherwise).

(d) “ Common Stock ” means shares of the common stock of the Company, par value $0.02 per share.

(f) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

(h) “ Holder ” means the Purchaser and any transferee permitted under Section 3.1 , in each case, to the extent holding Registrable Securities.

(i) “ Person ” means any individual, Entity, trust, Governmental Body or other organization.

(l) “ Registration Expenses ” means any and all expenses incident to the performance of or compliance with this Agreement, including without limitation: (i) all registration and filing fees; (ii) all fees and expenses associated with a required listing of the

Registrable Securities on any securities exchange; (iii) fees and expenses with respect to filings required to be made with an exchange or any securities industry self-regulatory body; (iv) fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of counsel for the underwriters or holders of securities in connection with blue sky qualifications of the securities and determination of their eligibility for investment under the laws of such jurisdictions); (v) printing, messenger, telephone and delivery expenses of the Company; (vi) fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants r etained by the Company (including the expenses of any comfort letters, or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters, if such comfort letter or comfort letters is required by the ma naging underwriter); (vii) securities acts liability insurance, if the Company so desires; (viii) all internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting du ties); (ix) the expense of any annual audit; and (x) the fees and expenses of any Person, including special experts, retained by the Company; provided, however that “ Registration Expenses ” shall not include underwriting fees, discounts or commissions attri butable to the sale of the Registrable Securities or any legal fees and expenses of counsel to the Holder.

(m) “ Rule 144 ” means Rule 144 under the Securities Act.

(n) “ SEC ” means the Securities and Exchange Commission.

(o) “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

(p) “ Shares ” means any and all shares of Common Stock beneficially owned by a Purchaser, including any and all Shares issuable upon exercise or conversion of a security beneficially owned by a Purchaser.

ARTICLE II
Registration Rights

2.1 Resale Registration Statements . Within 90 days following the Closing Date, the Company shall (a) file with the SEC, or (b) have filed with the SEC, a resale registration statement (together with any New Registration Statement (as defined below), the “ Resale Registration Statement ”) pursuant to Rule 415 under the Securities Act pursuant to which all of the Registrable Securities shall be included (on the initial filing or by supplement or amendment thereto) to enable the public resale on a delayed or continuous basis of the Registrable Securities by the Holder. The Company shall file the Resale Registration Statement on such form as the Company may then utilize under the rules of the SEC and use its best efforts to have the Resale Registration Statement declared effective under the Securities Act as soon as practicable, but in no event more than five trading days after the date the Company receives written notification from the SEC that the Resale Registration Statement will not be reviewed. The Company agrees to use its best efforts to maintain the effectiveness of the Resale Registration Statement, including by filing any necessary post-effective amendments and prospectus supplements, or, alternatively, by filing one or more new registration statements (each, a “ New Registration Statement ”) relating to the Registrable Securities as required by Rule 415 under the Securities Act, continuously until the date on which

the Holder no longer holds any Registrable Securities covered by the Resale Registration Statement.

2.2 Provisions Relating to Registration .

not filed on Form S-3, such number of days shall not inc lude the 15 calendar days following the filing of any Current Report on Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K, or other comparable form, for purposes of filing a post-effective amendment to the Resale Registration Statement.

(e) The Company shall bear all Registration Expenses incurred by the Company in connection with the registration of the Registrable Securities pursuant to this Agreement.

2.3 Indemnification .

been conveyed t o purchasers of securities at the time of sale of such securities (“ Disclosure Package ”), in the prospectus or in any amendment thereof or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated t herein or necessary to make the statements therein (in the case of a Disclosure Package or any prospectus, in the light of the circumstances under which they were made) not misleading, and shall reimburse, as incurred, the Holder Indemnified Parties for an y legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or omission made in the Resale Registration Statement, the Disclosure Package, any prospectus or in any amendment thereof or supplement thereto in reliance upon and in conformity with written information pertaining to the Holder and furnished to the Company by or on behalf of the Holder Indemnified Party specifically for inclusion therein; provided further, however, that the Company shall not be liable in any suc h case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Disclosure Package, where (A) such statement or omission had been el iminated or remedied in any subsequently filed amended prospectus or prospectus supplement (the Disclosure Package, together with such updated documents, the “ Updated Disclosure Package ”), the filing of which the Holder had been notified in accordance with the terms of this Agreement, (B) such Updated Disclosure Package was available at the time the Holder sold Registrable Securities under the Resale Registration Statement, (C) such Updated Disclosure Package was not furnished by the Holder to the Entity as serting the loss, liability, claim, damage or liability, or an underwriter involved in the distribution of such Registrable Securities, at or prior to the time such furnishing is required by the Securities Act, and (D) the Updated Disclosure Package would have cured the defect giving rise to such loss, liability, claim, damage or action; and provided further, however, that this indemnity agreement will be in addition to any liability that the Company may otherwise have to the Holder Indemnified Party. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Holder Indemnified Parties and shall survive the transfer of the Registrable Securities by the Holder.

information pertaining to the Holder and furnished to the Company by or on behalf of the Holder specifically for inclusion therein; provided, however, that the indemnity obligation under this Section 2.3(b) shall in no event exceed the net proceeds (after underwriting fees, commissions or discounts) from the offering actually received by the Holder.

(c) Promptly after receipt by the Holder Indemnified Party or a Company Indemnified Party (each, an “ Indemnified Party ”) of notice of the commencement of any action or proceeding (including a governmental investigation), such Indemnified Party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 2.3 , notify the indemnifying party of the commencement thereof; but the omission to so notify the indemnifying party will not relieve the indemnifying party from liability under Sections 2.3(a) or 2.3(b) unless and to the extent it did not otherwise learn of such action and the indemnifying party has been materially prejudiced by such failure. In case any such action is brought against any Indemnified Party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the indemnifying party), and after notice from the indemnifying party to such Indemnified Party of its election so to assume the defense thereof the indemnifying party will not be liable to such Indemnified Party under this Section 2.3 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such Indemnified Party in connection with the defense thereof; provided, however, if such Indemnified Party shall have been advised by counsel that there are one or more defenses available to it that are in conflict with those available to the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the Indemnified Party), the reasonable fees and expenses of such Indemnified Party’s counsel shall be borne by the indemnifying party. In no event shall the indemnifying party be liable for the fees and expenses of more than one counsel (together with appropriate local counsel) at any time for any Indemnified Party in connection with any one action or separate but substantially similar or related actions arising in the same jurisdiction out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the Indemnified Party (not to be unreasonably withheld or delayed), effect any settlement of any pending or threatened action in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party unless such settlement (i) includes an unconditional release of such Indemnified Party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party. If the indemnification provided for in this Section 2.3 is unavailable or insufficient to hold harmless an Indemnified Party under Sections 2.3(a) or 2.3(b) , then each indemnifying party shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in Sections 2.3(a) or 2.3(b) in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and the Indemnified Party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Holder or Holder

Indemnified Party, as the case may be, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such state ment or omission. The amount paid by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 2.3 shall be deemed to include any legal or other expenses reasonably incurred by such In demnified Party in connection with investigating or defending any action or claim that is the subject of this Section 2.3(c) . The parties agree that it would not be just and equitable if contributions were determined by pro rata allocation (even if the Ho lder was treated as one Entity for such purpose) or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding any other provision of this Section 2.3(c) , the Holder shall not be required to contribute any amount in excess of the amount by which the net proceeds received by the Holder from the sale of the Registrable Securities pursuant to the Resale Registration Statement exceeds the amount of damages tha t the Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be ent itled to contribution from any person who was not guilty of such fraudulent misrepresentation.

ARTICLE III
Transfer Restrictions

3.1 Transfer Restrictions . To the extent legally applicable, the Holder acknowledges and agrees that the following legend shall be imprinted on any certificate or book-entry security entitlement evidencing any of the Registrable Securities:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

statement under the Securities Act is at that time in effect with res pect to the legended security, or (ii) the legended security can be transferred in a transaction in compliance with Rule 144 under the Securities Act, and, in the case of (ii), upon the request and in the reasonable discretion of the Company’s transfer age nt, the holder of such Registrable Securities executes and delivers a representation letter that includes customary representations regarding the holding requirements and whether such holder is an “affiliate” for purposes of Rule 144 under the Securities A ct. The Company represents and warrants to the Purchaser that the Company is not currently a shell company (as defined in Rule 405 promulgated under the Securities Act).

ARTICLE IV
Miscellaneous.

The addresses and e-mail addresses for such communications shall be:

If to the Company:

Cherokee Inc.

5990 Sepulveda Boulevard, Suite 600

Sherman Oaks, CA 91411

E-mail: henrys@cherokeeglobalbrands.com

Attn: Henry Stupp

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

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

3580 Carmel Mountain Road, Suite 300

San Diego, CA 92130

E-mail: smstanton@mintz.com

Attn: Scott Stanton, Esq.

If to the Purchaser: To the address set forth on the Purchaser’s signature page hereto;

4.3 Headings . The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

4.5 Governing Law; Arbitration; Venue . This Agreement shall be construed under the laws of the State of Delaware, without regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another jurisdiction. The Company and the Purchaser hereby agree that all actions or proceedings arising directly or indirectly from or in connection with this Agreement shall be litigated only in the Superior Court of the State of California or the United States District Court for the Southern District of California located in Los Angeles County, California. The Company and the Purchaser consent to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of motion or other application to either of said courts or a judge thereof may be served inside or outside the State of California or the Southern District of California by generally recognized overnight courier or certified or registered mail, return receipt requested, directed to such party at its or his address set forth below (and service so made shall be deemed “personal service”) or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE PURCHASER HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

4.6 Assignment and Successors . This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes.

4.8 Severability . If any provision of this Agreement shall be invalid or unenforceable in any jurisdictio n, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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

COMPANY:

CHEROKEE INC.

By:	/s/ Henry Stupp
Name:	Henry Stupp
Title:	Chief Executive Officer

[Signature Page to Registration Rights Agreement]

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

PURCHASER:

RAVICH REVOCABLE TRUST OF 1989

By:	/s/ Jess M. Ravich
Name:	Jess M. Ravich
Title:	Trustee

[Signature Page to Registration Rights Agreement]

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

PURCHASER:

Cove Street Capital Small Cap Value Fund,

a series of Managed Portfolio Series,

a Delaware statutory trust

By:	Cove Street Capital, LLC
	Its Investment Advisor
By:		/s/ Eugene Robin
Name:		Eugene Robin
Title:		Principal

[Signature Page to Registration Rights Agreement]

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

PURCHASER:

Square Deal Growth, LLC,

an Oklahoma limited liability company

By:	Cove Street Capital, LLC
	Its Investment Advisor
By:		/s/ Eugene Robin
Name:		Eugene Robin
Title:		Principal

[Signature Page to Registration Rights Agreement]

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

PURCHASER:

HENRY I. STUPP

By:	/s/ Henry Stupp
	Name:
	Title:

[Signature Page to Registration Rights Agreement]

Exhibit 4.4

CHEROKEE INC.

COMMON STOCK PURCHASE WARRANT

Date of Issuance: [●]

FOR VALUE RECEIVED, Cherokee Inc., a Delaware corporation (the “ Company ”), hereby grants to [●] , or its registered assigns (the “ Registered Holder ”) the right to purchase from the Company, at any time or from time to time during the Exercise Period (as defined in Section 1A below), up to [●] shares (as such number of shares shall be adjusted from time to time in accordance with Section 2 hereof) of the Company’s Common Stock, par value $0.02 per share, at a per share purchase price equal to the “ Exercise Price ” (as defined in Section 4 below). This Warrant is issued pursuant to the terms of that certain Exchange Agreement dated as of August 3, 2018 , between the Company, the Registered Holder, and the other parties thereto (the “ Exchange Agreement ”). The amount and kind of securities obtainable pursuant to the rights granted hereunder and the purchase price to be paid for such securities are subject to adjustment pursuant to the provisions contained in this Warrant.

This Warrant is subject to the following provisions:

Section 1. Exercise of Warrant .

1B. Exercise Procedure .

(i) This Warrant shall be deemed to have been ex ercised when the Company has received all of the following items prior to the expiration of the Exercise Period at its principal office (the “ Exercise Time ”):

(a) a completed Exercise Agreement, as described in Section 1C below, executed by the Person exercising all or any portion of the purchase rights represented by this Warrant (the “ Purchaser ” );

Section 2. Adjustments .

2A. Subdivision or Combination of Stock . If and whenever after the Date of Issuance the Company at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock, then the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares obtainable upon exercise of this Warrant shall be proportionately increased. If the Company at any time combines (by reverse stock split or otherwise) its outstanding shares of Common Stock, then the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares obtainable upon exercise of this Warrant shall be proportionately decreased.

2B. Reorganization, Reclassification, Consolidation, Merger or Sale . Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets or other transaction, which in any case is effected in such a way that the holders of its outstanding shares of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for such Common Stock, is referred to herein as an “ Organic Change .” Prior to the consummation of any Organic Change, the Company shall make appropriate provision (in form and substance reasonably satisfactory to the Registered Holder of this Warrant) to ensure that the Registered Holder of this Warrant shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the Warrant Shares immediately theretofore obtainable and receivable upon the exercise of this Warrant, such shares of stock, securities or assets as would have been issued or payable in such Organic Change (if the Registered Holder had exercised this Warrant immediately prior to the Organic Change) with respect to or in exchange for the number of Warrant Shares immediately theretofore acquirable and receivable upon exercise of this Warrant had such Organic Change not taken place. In any such case, the Company shall make appropriate provision (in form and substance satisfactory to the Registered Holder of this Warrant) with respect to the Registered Holder’s rights and interests to ensure that the provisions of this Section 2 and Section 3 hereof shall thereafter be applicable to this Warrant and to such shares, securities and/or assets to be distributed. The Company shall not affect any such consolidation, merger or sale, unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger or the entity purchasing such assets assumes by written instrument (in form and substance satisfactory to the Registered Holder of this Warrant), the obligation to deliver to the Registered Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

2C. Certain Events . If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions, then the Company’s board of directors shall make an appropriate adjustment in the Exercise Price and an appropriate adjustment in the number of Warrant Shares obtainable upon exercise of this Warrant so as to protect the rights of the holders of this Warrant.

2D. Notices .

Section 4. Definitions . The following terms have meanings set forth below:

“ Exercise Price ” means $0.50 per share.

of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the Nasdaq National Market System as of 4:00 P.M., New York time, or, if on any day such security is not quoted in the Nasdaq National Market System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of 31 days consisting of the day as of which “ Market Price ” is being determined and the 30 consecutive b usiness days prior to such day.

“ Warrant Shares ” means, collectively, each Warrant Share obtained or obtainable upon the exercise of this Warrant.

Section 10. Amendment and Waiver . Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the prior written consent of the holder(s) of a majority of the purchase rights represented by this Warrant and the other Warrants issued pursuant to the Exchange Agreement; provided that , except as otherwise expressly provided herein, (a) no such amendment or waiver shall decrease the number of Warrant Shares issuable upon the exercise of any Warrant or the manner of exercise or the amount of any payment due upon the exercise without the prior written consent of the holder of such Warrant and (b) no such amendment or waiver shall extend to or affect any obligation not expressly amended or waived or impair any right consequent thereon.

Section 11. Descriptive Headings . The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

Section 18. Recovery of Litigation Costs . If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

(a) The Registered Holder is aware of the Company ’ s business affairs and financial condition, and has acquired information about the Company sufficient to reach an informed and knowledgeable decision to acquire this Warrant. The Registered Holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any “ distribution ” thereof in violation of the Securities Act;

(d) The Registered Holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

Section 20. No Impairment . The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Registered Holder in order to protect the exercise rights of the Registered Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

Section 21. Equitable Relief . Each of the Company and the Registered Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

* * * *

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer and dated as of the Date of Issuance.

CHEROKEE INC.

By:
Its:

[Signature Page to Common Stock Purchase Warrant]

EXECUTION

Exhibit 10.1

FINANCING AGREEMENT

Dated as of August 3, 2018

by and among

Cherokee Inc. ,
as U.S. Borrower,

Irene Acquisition Company B.V. ,
as Dutch Borrower,

AND EACH SUBSIDIARY OF CHEROKEE INC.
LISTED AS A GUARANTOR ON THE SIGNATURE PAGES HERETO,
as Guarantors,

THE LENDERS FROM TIME TO TIME PARTY HERETO,
as Lenders,

GORDON BROTHERS FINANCE COMPANY,
as Collateral Agent,

and

GORDON BROTHERS FINANCE COMPANY,
as Administrative Agent

TABLE OF CONTENTS

Page

ARTICLE I. DEFINITIONS; CERTAIN TERMS

Section 1.01

Definitions1

Section 1.02

Terms Generally47

Section 1.03

Certain Matters of Construction47

Section 1.04

Accounting and Other Terms48

Section 1.05

Time References49

Section 1.06

Obligation to Make Payments in Dollars49

Section 1.07

Dutch Terms49

Section 1.08

Rounding50

Section 1.09

Rates50

ARTICLE II. THE LOANS

Section 2.01

Commitments50

Section 2.02

Making the Loans50

Section 2.03

Repayment of Loans; Evidence of Debt51

Section 2.04

Interest53

Section 2.05

Termination of Commitments; Prepayment of Loans53

Section 2.06

Fees57

Section 2.07

Reserves57

Section 2.08

[Reserved.]57

Section 2.09

Taxes57

Section 2.10

Increased Costs and Reduced Return60

Section 2.11

Impracticability61

Section 2.12

Mitigation Obligations; Replacement of Lenders62

ARTICLE III. [INTENTIONALLY OMITTED]

ARTICLE IV. APPLICATION OF PAYMENTS; JOINT AND SEVERAL LIABILITY OF BORROWERS

Section 4.01

Payments; Computations and Statements63

Section 4.02

Sharing of Payments64

Section 4.03

Apportionment of Payments64

Section 4.04

[Reserved.]65

Section 4.05

Administrative Borrower; Joint and Several Liability65

ARTICLE V. CONDITIONS TO LOANS

Section 5.01

Conditions Precedent to Effectiveness67

Section 5.02

Conditions Subsequent to Effectiveness71

ARTICLE VI. REPRESENTATIONS AND WARRANTIES

Section 6.01

Representations and Warranties73

- i -

ARTICLE VII. COVENANTS OF THE LOAN PARTIES

Section 7.01

Affirmative Covenants82

Section 7.02

Negative Covenants93

Section 7.03

Financial Covenants100

ARTICLE VIII. CASH MANAGEMENT ARRANGEMENTS AND OTHER COLLATERAL MATTERS

101

Section 8.01

Cash Management Arrangements101

ARTICLE IX. EVENTS OF DEFAULT

102

Section 9.01

Events of Default102

Section 9.02

Borrowing Base Cure106

ARTICLE X. AGENTS

106

Section 10.01

Appointment106

Section 10.02

Nature of Duties; Delegation107

Section 10.03

Rights, Exculpation, Etc108

Section 10.04

Reliance108

Section 10.05

Indemnification109

Section 10.06

Agents Individually109

Section 10.07

Successor Agent109

Section 10.08

Collateral Matters110

Section 10.09

Agency for Perfection112

Section 10.10

No Reliance on any Agent’s Customer Identification Program112

Section 10.11

No Third Party Beneficiaries112

Section 10.12

No Fiduciary Relationship112

Section 10.13

Reports; Confidentiality; Disclaimers113

Section 10.14

Collateral Custodian113

Section 10.15

Collateral Agent May File Proofs of Claim114

ARTICLE XI. GUARANTY

114

Section 11.01

Guaranty114

Section 11.02

Guaranty Absolute115

Section 11.03

Waiver116

Section 11.04

Continuing Guaranty; Assignments116

Section 11.05

Subrogation116

Section 11.06

Contribution117

ARTICLE XII. MISCELLANEOUS

118

Section 12.01

Notices, Etc118

Section 12.02

Amendments, Etc119

Section 12.03

No Waiver; Remedies, Etc121

Section 12.04

Expenses; Taxes; Attorneys’ Fees121

Section 12.05

Right of Set-off123

Section 12.06

Severability123

- ii -

Section 12.07

Assignments and Participations 123

Section 12.08

Counterparts127

Section 12.09

GOVERNING LAW127

Section 12.10

CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE127

Section 12.11

WAIVER OF JURY TRIAL, ETC128

Section 12.12

Consent by the Agents and Lenders129

Section 12.13

No Party Deemed Drafter129

Section 12.14

Reinstatement; Certain Payments129

Section 12.15

Indemnification; Limitation of Liability for Certain Damages129

Section 12.16

Records130

Section 12.17

Binding Effect130

Section 12.18

Highest Lawful Rate131

Section 12.19

Confidentiality132

Section 12.20

Public Disclosure132

Section 12.21

Integration133

Section 12.22

USA PATRIOT Act133

Section 12.23

Judgment Currency133

Section 12.24

Waiver of Immunity134

Section 12.25

English Language134

Section 12.26

Foreign Parallel Liability134

Section 12.27

U.S. Parallel Liability135

- iii -

SCHEDULE AND EXHIBITS

Schedule 1.01(A)

Lenders and Lenders’ Commitments

Schedule 1.01(B)

Facilities

Schedule 1.01(C)

Subsidiary Guarantors

Schedule 1.01(D)

Immaterial Subsidiaries

Schedule 5.02(c)

Terminations of Intellectual Property Liens

Schedule 6.01(e)

Capitalization; Subsidiaries

Schedule 6.01(f)

Litigation

Schedule 6.01(i)

ERISA

Schedule 6.01(l)

Nature of Business

Schedule 6.01(q)

Environmental Matters

Schedule 6.01(r)

Insurance

Schedule 6.01(u)

Intellectual Property

Schedule 6.01(v)

Material Contracts

Schedule 7.02 (a)

Existing Liens

Schedule 7.02(b)

Existing Indebtedness

Schedule 7.02(e)

Existing Investments

Schedule 7.02(k)

Limitations on Dividends and Other Payment Restrictions

Schedule 8.01

Cash Management Accounts

Exhibit A Form of Joinder Agreement

Exhibit B Form of Assignment and Acceptance

Exhibit C Form of Solvency Certificate

Exhibit D Form of Borrowing Base Certificate

Exhibit E Form of Compliance Certificate

- iv -

FINANCING AGREEMENT

Financing Agreement, dated as of August 3, 2018, by and among Cherokee Inc., a Delaware corporation (the “ Parent ” and the “ U.S. Borrower ”), Irene Acquisition Company B.V., a private company with limited liability incorporated under the laws of the Netherlands, having its statutory seat ( statutaire zetel ) in Amsterdam, the Netherlands and registered with the Dutch trade register under number 67160921 (the “ Dutch Borrower ” and, together with the U.S. Borrower, each a “ Borrower ” and collectively, the “ Borrowers ”), each subsidiary of the Parent listed as a “ Guarantor ” on the signature pages hereto (together with each other Person that executes a joinder agreement and becomes a “Guarantor” hereunder or otherwise guaranties all or any part of the Obligations (as hereinafter defined), each a “ Guarantor ” and collectively, the “ Guarantors ”), the lenders from time to time party hereto (each a “ Lender ” and collectively, the “ Lenders ”), Gordon Brothers Finance Company, a Delaware corporation (“ GBFC ”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “ Collateral Agent ”), and GBFC, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “ Administrative Agent ” and together with the Collateral Agent, each an “ Agent ” and collectively, the “ Agents ”).

RECITALS

The Borrowers have asked the Lenders to extend credit to the Borrowers consisting of (a) a term loan in the aggregate principal amount of $5,000,000 to the U.S. Borrower and (b) a term loan in the aggregate principal amount of $35,000,000 to the Dutch Borrower. The proceeds of the term loans made on the Effective Date (as defined herein) shall be used to finance a portion of the Transactions (as defined herein) and for working capital and other general corporate purposes of the Borrowers. The Lenders are severally, and not jointly, willing to extend such credit to the Borrowers subject to the terms and conditions hereinafter set forth.

In consideration of the premises and the covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS; CERTAIN TERMS

Section 1.01 Definitions .

As used in this Agreement, the following terms shall have the respective meanings indicated below:

“ Account ” means, (a) “accounts” as defined in the UCC, and (b) any and all rights to a right of payment of a monetary obligation for goods or property sold, licensed, assigned, leased or otherwise disposed of and/or services rendered or to be rendered, including accounts, general intangibles and any and all rights evidenced by chattel paper, instruments or documents, whether due or to become due and whether earned by performance, and whether now or hereafter acquired or arising in the future or any proceedings arising therefrom relating thereto.

“ Account Debtor ” means, with respect to any Person, each debtor, customer or obligor in any way obligated on or in connection with any Account of such Person.

“ Acquired Account ” has the meaning specified therefor in Section 8.01(b).

“ Acquired Cash Management Bank ” has the meaning specified therefor in Section 8.01(d).

“ Acquisition ” means the acquisition (whether by means of a merger, consolidation or otherwise) of all of the Equity Interests of any Person or all or substantially all of the assets of (or any division or business line of) any Person.

“ Action ” has the meaning specified therefor in Section 12.12.

“ Additional Amount ” has the meaning specified therefor in Section 2.09(a).

“ Additional Appraisal Triggering Event ” means at any time that (i) any Material Contract relating to any Trademarks, Patents, and/or Copyrights (in each case, as defined in the Security Agreement) owned by any Loan Party expires or is terminated, (ii) any party to a Material Contract relating to any Trademarks, Patents, and/or Copyrights (in each case, as defined in the Security Agreement) owned by any Loan Party notifies a Loan Party or any Subsidiary that it is terminating or is not renewing a Material Contract; or (iii) as of the end of any fiscal quarter (the “ Test Quarter ”), the consideration paid to any Loan Party under any Material Contract relating to any Trademarks, Patents, and/or Copyrights (in each case, as defined in the Security Agreement) owned by any Loan Party in the prior four fiscal quarters (calculated as of the end of such Test Quarter) decreases by more than 33% from the consideration paid to such Loan Party under such Material Contract as of the end of the fiscal quarter for the corresponding four-quarter period in the previous fiscal year (the “ Comparison Quarter ”); provided that, with respect to clause (iii), if (x) a contract relating to any Trademarks, Patents, and/or Copyrights (in each case, as defined in the Security Agreement) owned by any Loan Party qualifies as a Material Contract pursuant to clause (b) of the definition of “Material Contract” at any time during the Test Quarter or the fiscal quarter-end ending prior to the Test Quarter, and (y) the aggregate consideration payable by or to a Loan Party under such contract in the trailing twelve month period is less than $1,000,000 as of the end of the Test Quarter, such contract shall continue to be a “Material Contract” for purposes of triggering the appraisal rights under clause (iii); provided further that, notwithstanding the foregoing, the license agreement between any Loan Party and Nishi Matsuya in effect on the Effective Date shall not constitute a Material Contract for purposes of determining whether an Additional Appraisal Triggering Event has occurred if such contract expires, terminates by its terms, is not renewed, or the consideration paid thereunder decreases in an amount that would otherwise trigger an appraisal under the preceding clause (iii).

“ Administrative Agent ” has the meaning specified therefor in the preamble hereto.

“ Administrative Agent’s Account ” means an account at a bank designated by the Administrative Agent from time to time as the account into which the Loan Parties shall make all

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payments to the Administrative Agent for the benefit of the Agents and the Lenders under this Agreement and the other Loan Documents.

“ Administrative Borrower ” has the meaning specified therefor in Section 4.05.

“ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the Equity Interests having ordinary voting power for the election of members of the Board of Directors of such Person or (b) direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Notwithstanding anything herein to the contrary, in no event shall any Agent or any Lender be considered an “Affiliate” of any Loan Party.

“ Agent ” has the meaning specified therefor in the preamble hereto.

“ Agreement ” means this Financing Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the Agreement as the same may be in effect at the time such reference becomes operative.

“ Alternative Rate ” means, at any date of determination, a rate per annum equal to the greater of (a) 11.10% and (b) the sum of (i) the Prime Rate plus (ii) 6.10%.

“ Anti-Corruption Laws ” has the meaning specified therefor in Section 6.01(bb).

“ Anti-Money Laundering and Anti-Terrorism Laws ” means any Requirements of Law relating to terrorism, economic sanctions or money laundering, including, without limitation, (a) the Money Laundering Control Act of 1986 ( i.e. , 18 U.S.C. §§ 1956 and 1957), (b) the Bank Secrecy Act of 1970 (31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), and the implementing regulations promulgated thereunder, (c) the USA PATRIOT Act and the implementing regulations promulgated thereunder, (d) the laws, regulations and Executive Orders administered by the United States Department of the Treasury’s Office of Foreign Assets Control (“ OFAC ”), (e) any law prohibiting or directed against terrorist activities or the financing or support of terrorist activities ( e.g. , 18 U.S.C. §§ 2339A and 2339B), and (f) any similar laws enacted in the United States or any other jurisdictions in which the parties to this Agreement operate, as any of the foregoing laws have been, or shall hereafter be, amended, renewed, extended, or replaced and all other present and future legal requirements of any Governmental Authority governing, addressing, relating to, or attempting to eliminate, terrorist acts and acts of war and any regulations promulgated pursuant thereto.

“ Applicable Limitations ” means, with respect to any Foreign Subsidiary (other than a Borrower), limitations on the ability of such Subsidiary to guaranty the Obligations, to grant a Lien on its assets to secure the Obligations or to make a dividend or distribution required to fund a mandatory prepayment required to be made by the Borrowers pursuant to Section 2.05(c), to the extent resulting from financial assistance, corporate benefit, fraudulent transfer, equitable subordination, thin capitalization, capital maintenance or liquidity impairment rules, employee approval requirements, fiduciary and statutory duties of directors of the applicable

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Subsidiary or similar legal principles, in each case, as reasonably determined by the Collateral Agent and the Administrative Borrower.

“ Applicable Margin ” means, as of any date of determination:

(a) From the Effective Date through August 2, 2019, 8.75%.

(b) From August 3, 2019 and thereafter, the relevant Applicable Margin shall be set at the respective level indicated below based upon the Consolidated EBITDA of the Parent and its Subsidiaries for the trailing twelve month period, which ratio shall be calculated as of the end of the most recent fiscal quarter of the Parent and its Subsidiaries for which quarterly financial statements and a certificate of an Authorized Officer of the Parent are received by the Agents and the Lenders in accordance with Section 7.01(a)(ii) and Section 7.01(a)(iv):

Pricing Level	Consolidated EBITDA	Applicable Margin
1	< $10,000,000	8.75%
2	≥ $10,000,000 and < 15,000,000	8.50%
3	≥ $15,000,000	8.25%

(c) Subject to clause (d) below, the adjustment of the Applicable Margin (if any) will occur five (5) Business Days after the date the Administrative Agent receives the quarterly financial statements and a certificate of an Authorized Officer of the Parent in accordance with Section 7.01(a)(ii) and Section 7.01(a)(iv).

(d) Notwithstanding the foregoing:

(i) the Applicable Margin shall be set at Pricing Level 1 in the table above if for any period the Administrative Agent does not receive the financial statements and certificates described in clause (c) above, and for the period commencing on the date such financial statements and certificate were required to be delivered through the date on which such financial statements and certificate, in form and substance reasonably satisfactory to the Administrative Agent, are actually received by the Administrative Agent and the Lenders;

(ii) in the event that any financial statement or certificate described in clause (c) above is inaccurate (regardless of whether this Agreement or any Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any fiscal period, then the Applicable Margin for such fiscal period shall be adjusted retroactively (to the effective date of the determination of the Applicable Margin that was based upon the delivery of such inaccurate financial statement or certificate) to reflect the correct Applicable Margin, and the Borrowers shall promptly make payments to the Agents and the Lenders to reflect such adjustment; and

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(iii) if an Event of Default has occurred and is continuing and the Applicable Margin is being determined pursuant to clause (b) above, the Applicable Margin shall be 8.75%.

“ Applicable Premium ” has the meaning given to such term in the Fee Letter.

“ Appraised Value ” means, with respect to Intellectual Property, the net appraised orderly liquidation value of the Loan Parties’ Intellectual Property as set forth in the most recent appraisal received by the Agents conducted by Gordon Brothers Brands, LLC or another third-party appraiser that is retained by or acceptable to the Agents, which appraisal is in form and substance reasonably satisfactory to the Agents, net of operating expenses, liquidation expenses, commissions and any tax benefit from the amortization of the Loan Parties’ Intellectual Property (in each case, to the extent not already addressed in such appraisal).

“ Assignment and Acceptance ” means an assignment and acceptance entered into by an assigning Lender and an assignee, and accepted by the Collateral Agent (and the Administrative Agent, if applicable), in accordance with Section 12.07 hereof and substantially in the form of Exhibit B hereto or such other form acceptable to the Collateral Agent.

“ Authorized Officer ” means, with respect to any Person, the chief executive officer, chief operating officer, chief financial officer, treasurer or other financial officer performing similar functions, president or executive vice president of such Person or, if not applicable to any such Person, the authorized directors of the Board of Directors of such Person.

“ Bankruptcy Code ” means Title 11 of the United States Code, as amended from time to time and any successor statute or any similar federal or state law for the relief of debtors.

“ Blocked Person ” means any Person:

(a) that (i) is identified on the list of “Specially Designated Nationals and Blocked Persons” published by OFAC, HMT’s Consolidated List of Financial Sanctions Targets or the Investment Ban List; (ii) ordinarily resides, or is organized or chartered in a country or territory that is the subject of a comprehensive OFAC Sanctions Program; or (iii) a Person is prohibited from dealing or engaging in a transaction with under any of the Anti-Money Laundering and Anti-Terrorism Laws; and

(b) that is owned or controlled by, or that owns or controls, or that is acting for or on behalf of, any Person described in clause (a) above where dealings with that Person would be prohibited under applicable Anti-Money Laundering and Anti-Terrorism Laws

“ Board ” means the Board of Governors of the Federal Reserve System of the United States (or any successor).

“ Board Debt ” means Indebtedness in the aggregate original principal amount of $13,500,000 pursuant to those certain Secured Subordinated Promissory Notes, dated as of the date hereof, owed to each of Square Deal Growth, LLC, US Bank FBO Cove Street Capital Small Cap Value Fund, Ravich Revocable Trust of 1989 and Henry I. Stupp.

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“ Board of Directors ” means with respect to (a) any corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (b) a partnership, the board of directors of the general partner of the partnership, (c) a limited liability company, the managing member or members or any controlling committee or board of directors of such company or the sole member or the managing member thereof, and (d) any other Person, the board or committee of such Person serving a similar function.

“ Borrower ” and “ Borrowers ” have the meanings specified therefor in the preamble hereto.

“ Borrowing Base ” means , at any time of calculation:

(a) the Appraised Value of Eligible Intellectual Property of the Loan Parties, multiplied by 63. 40%; minus

(b) the Reserves.

The Administrative Agent may, in its Permitted Discretion, adjust the Reserves or reduce one or more of the other elements used in computing the Borrowing Base, in each case, upon ten (10) Business Days prior written notice to the Administrative Borrower.

“ Borrowing Base Certificate ” means a certificate in substantially the form of Exhibit D, certified as complete and correct in all respects on behalf of the Borrowers by an Authorized Officer of the Administrative Borrower.

“ Business Day ” means (a) for all purposes other than as described in clause (b) below, any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required to close, and (b) with respect to the borrowing or payment, or determination of interest rate on, any Loans, any day that is a Business Day described in clause (a) above and on which dealings in Dollars may be carried on in the interbank eurodollar markets in New York City and London and, with respect to any such borrowing or payment of interest on a Tranche B Term Loan, Amsterdam.

“ Capital Expenditures ” means, with respect to any Person for any period, the sum of (a) the aggregate of all expenditures by such Person and its Subsidiaries during such period that in accordance with GAAP are or should be included in “property, plant and equipment” or in a similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or financed, including all Capitalized Lease Obligations, obligations under synthetic leases and capitalized software costs that are paid or due and payable during such period and (b) to the extent not covered by clause (a) above, the aggregate of all expenditures by such Person and its Subsidiaries during such period to acquire by purchase or otherwise the business or fixed assets of, or the Equity Interests of, any other Person; provided , that the term “Capital Expenditures” shall not include any such expenditures which constitute (i) expenditures financed with the proceeds received from any issuance of Indebtedness or from the sale or issuance of Equity Interests, (ii) expenditures that are accounted for as capital expenditures of such Person and that actually are paid for by a third party (excluding any Loan Party) and for which no Loan Party has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such third party or any other Person (whether before, during or after such period),

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(iii) expenditures made with the proceeds of tenant allowances received by the Parent or any of its Subsidiaries from landlords in the ordinary course of business and subsequently capitalized, and (iv) the purchase price of equipment that is purchased substantially contemporaneously with the trade in of existing equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time.

“ Capitalized Lease ” means, with respect to any Person, any lease of (or other arrangement conveying the right to use) real or personal property by such Person as lessee that is required under GAAP to be capitalized on the balance sheet of such Person.

“ Capitalized Lease Obligations ” means, with respect to any Person, obligations of such Person and its Subsidiaries under Capitalized Leases, and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

“ Cash Equivalents ” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case, maturing within 360 days from the date of acquisition thereof; (b) commercial paper, maturing not more than 270 days after the date of issue rated P‑1 by Moody’s or A‑1 by Standard & Poor’s; (c) certificates of deposit maturing not more than 360 days after the date of issue, issued by commercial banking institutions and money market or demand deposit accounts maintained at commercial banking institutions, each of which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) repurchase agreements having maturities of not more than 90 days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause (c) above and which are secured by readily marketable direct obligations of the United States Government or any agency thereof; (e) money market accounts maintained with mutual funds having assets in excess of $2,500,000,000, which assets are primarily comprised of Cash Equivalents described in another clause of this definition; (f) marketable tax exempt securities rated A or higher by Moody’s or A+ or higher by Standard & Poor’s, in each case, maturing within 270 days from the date of acquisition thereof and (g) in the case of any Foreign Subsidiary, cash and cash equivalents that are substantially equivalent in such jurisdiction to those described in clauses (a) through (f) above in respect of each country that is a member of the Organization for Economic Co-operation and Development.

“ Cash Management Accounts ” means the bank accounts of each Loan Party maintained at one or more Cash Management Banks listed on Schedule 8.01.

“ Cash Management Bank ” has the meaning specified therefor in Section 8.01(a).

“ Cash on Hand ” means, at any date of determination, the aggregate amount of unrestricted cash on the balance sheet of any Person and its Subsidiaries, calculated in a manner reasonably acceptable to the Administrative Agent, that is not subject to any security interest, Lien or other encumbrance other than (x) the Liens of the Collateral Agent and (y) the Liens on the cash on the balance sheet of the U.S. Loan Parties arising under the Subordinated

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Indebtedness Documents with respect to the Board Debt so long as such Liens are subject to the terms of the applicable Subordination Agreement .

“ CFC ” means a controlled foreign corporation (as that term is defined in the Internal Revenue Code).

“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“ Change of Control ” means each occurrence of any of the following:

(a) the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Exchange Act) (other than any holders of the Board Debt to the extent such Persons or any Affiliates thereof own Equity Interests on the date hereof) of beneficial ownership of more than 33% of the aggregate outstanding voting or economic power of the Equity Interests of the Parent;

(b) during any period of 12 consecutive months, a simple majority of the members of the board of directors or other equivalent governing body of the Parent cease to be composed of individuals (i) who were (x) members of that board or equivalent governing body on the first day of such period or (y) nominees, whenever appointed, of the holders of Equity Interests referred to in the second parenthetical in clause (a) above or any Affiliates thereof in each case having the right on the first day of such period to make such nomination, (ii) whose election or nomination to that board or equivalent governing body was approved or initiated by Persons referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or by Persons referred to in clause (i) (y) above, or (iii) whose election or nomination to that board or other equivalent governing body was approved by Persons referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body;

(c) the Parent shall cease to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting or economic power of the Equity Interests of each other Loan Party and each of its Subsidiaries (other than in connection with any transaction permitted pursuant to Section 7.02(c)(i)), free and clear of all Liens (other than Permitted Specified Liens); or

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(d) a “ Change of Control ” (or any comparable term or provision) under or with respect to (i) any of the Equity Interests of the Parent or any of its Subsidiaries , (ii) any Subordinated Indebtedness Document, or (i i i) any Indebtedness of the Parent or any of its Subsidiaries having an aggregate principal amount ou tstanding in excess of $750,000 .

“ Collateral ” means all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or purported to be granted by such Person as security for all or any part of the Obligations.

“ Collateral Agent ” has the meaning specified therefor in the preamble hereto.

“ Collateral Agent Advances ” has the meaning specified therefor in Section 10.08(a).

“ Collections ” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

“ Commitments ” means, with respect to each Lender, such Lender’s Tranche A Term Loan Commitment and/or Tranche B Term Loan Commitment, as the context may require. The aggregate amount of the Commitments of all Lenders on the Effective Date is $40,000,000.

“ Compliance Certificate ” has the meaning assigned to such term in Section 7.01(a)(iv).

“ Consolidated EBITDA ” means, with respect to any Person for any period:

(a) the Consolidated Net Income of such Person for such period,

plus

(b) without duplication, the sum of the following amounts for such period to the extent deducted in the calculation of Consolidated Net Income for such period:

(i) any Tax expense and any provision for Taxes of such Person and its Subsidiaries, including, in each case, federal, state, provincial, foreign, unitary, franchise, excise, property, withholding and similar Taxes,

(ii) Consolidated Net Interest Expense,

(iii) any loss from extraordinary items,

(iv) any depreciation and amortization expense,

(v) any aggregate net loss on the Disposition of property (other than accounts and Inventory) outside the ordinary course of business,

(vi) any other non-cash expenditure, charge or loss for such period (other than any non-cash expenditure, charge or loss relating to write-offs, write-downs or

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reserves with respect to accounts and Inventory), including, without limitation, any stock based compensation paid to any employees or directors of such Person ,

(vii) fees, costs and expenses (including attorneys’ fees and costs) paid or reimbursed to any Agent or Lender in connection with the Loan Documents, including in connection with any amendments, waivers or modifications of the Loan Documents,

(viii) any financing or closing expenses or charges related (as reasonably agreed to by the Agents) to the consummation of the Transactions,

(ix) any net after-tax extraordinary, nonrecurring or unusual gains or losses or income or expense or charges (less all fees and expenses related thereto) related to consolidation costs, restructuring costs, severance and relocation costs, retention, severance and systems establishment costs, not to exceed (1) solely with respect to the second fiscal quarter of 2019, $5,500,000 and (2) otherwise, $750,000 in the aggregate for any such period (excluding any restructuring charges pursuant to subclause (1) above), provided that with respect to each such charge, (A) such charge must have been incurred within 12 months from the related action or event and (B) the Parent shall have delivered to the Administrative Agent a certificate of an Authorized Officer specifying and quantifying such charge,

(x) costs and expenses incurred in such period to the extent actually reimbursed by third parties in such period pursuant to indemnification, contribution or other reimbursement obligations to the extent that such amounts so reimbursed are not otherwise already included in the calculation of Consolidated Net Income,

(xi) charges, costs, fees and expenses paid in connection with any transaction (or any transaction proposed and not consummated) permitted under this Agreement, including (1) the consummation of a Permitted Acquisition (including, without limitation, any Indebtedness or equity issued to finance such acquisition), (2) the issuance or offering of any Equity Interest and (3) the making of any other Permitted Investments, in each case (A) if such transaction is consummated, only to the extent such charges, costs, fees and expenses are included in the use of proceeds in connection with the consummation of such transaction and (B) for all such transactions that are not consummated, the aggregate amount of such charges, costs, fees and expenses shall not exceed $150,000 for any four fiscal quarter period,

(xii) non-cash exchange, translation, or performance losses relating to any hedging transactions or foreign currency fluctuations,

(xiii) to the extent not otherwise included in the determination of Consolidated Net Income for such period, proceeds of business interruption insurance in an amount representing the earnings for the applicable period that such proceeds are intended to replace (whether or not then received so long as the Parent in good faith expects the Parent and its Subsidiaries to receive the same within the next four fiscal quarters (it being understood that to the extent not actually received within such fiscal quarters, such proceeds shall be deducted in calculating Consolidated EBITDA at the end of such four fiscal quarter period)),

minus

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(c) without duplication, the sum of the following amounts for such period to the extent included in the calculation of such Consolidated Net Income for such period:

(i) any Tax credit for Taxes of such Person and its Subsidiaries, including, in each case, federal, state, provincial, foreign, unitary, franchise, excise, property, withholding and similar Taxes,

(ii) any gain from extraordinary items,

(iii) any aggregate net gain from the Disposition of property (other than accounts and Inventory) outside the ordinary course of business,

(iv) any other non-cash gain, including any reversal of a charge referred to in clause (b)(vi) above by reason of a decrease in the value of any Equity Interest, and

(v) non-cash exchange, translation, or performance gains relating to any hedging transactions or foreign currency fluctuations;

in each case, determined on a consolidated basis in accordance with GAAP.

“ Consolidated Net Income ” means, with respect to any Person, for any period, the consolidated net income (or loss) of such Person and its Subsidiaries for such period determined in accordance with GAAP; provided , however , that the following shall be excluded (to the extent otherwise included therein): (a) the net income of any other Person in which such Person or one of its Subsidiaries has a joint interest with a third-party (which interest does not cause the net income of such other Person to be consolidated into the net income of such Person), except to the extent of the amount of dividends or distributions paid to such Person or Subsidiary, (b) the net income of any Subsidiary of such Person that is, on the last day of such period, subject to any restriction or limitation on the payment of dividends or the making of other distributions, to the extent of such restriction or limitation, (c) the net income of any other Person arising prior to such other Person becoming a Subsidiary of such Person or merging or consolidating into such Person or its Subsidiaries, (d) any net income or loss (less all fees and expenses or charges related thereto) attributable to the early extinguishment of Indebtedness, (e) any accruals or reserves incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, pension plan, any stock subscription agreement or any distributor equity plan or agreement, and (f) any (1) good will or other asset impairment charges, write-offs or write-downs or (2) amortization of intangible assets.

“ Consolidated Net Interest Expense ” means, with respect to any Person for any period, (a) gross interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis and in accordance with GAAP (including, without limitation, interest expense paid to Affiliates of such Person), less (b) the sum of (i) interest income for such period and (ii) gains for such period on Hedging Agreements (to the extent not included in interest income above and to the extent not deducted in the calculation of gross interest expense), plus (c) the sum of (i) losses for such period on Hedging Agreements (to the extent not included in gross interest expense), (ii) all commissions, discounts and other fees and charges owed with respect to letters of credit, and (iii) the upfront costs or fees for such period associated with

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Hedging Agreements (to the extent not included in gross interest expense), in each case, determined on a consolidated basis and in accordance with GAAP.

“ Contingent Indemnity Obligations ” means any Obligation constituting a contingent, unliquidated indemnification obligation of any Loan Party, in each case, to the extent (a) such obligation has not accrued and is not yet due and payable and (b) no claim has been made or is reasonably anticipated to be made with respect thereto.

“ Contingent Obligation ” means, with respect to any Person, any obligation of such Person guaranteeing or intending to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (b) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, (c) any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided , however , that the term “Contingent Obligation” shall not include (a) any product warranties extended in the ordinary course of business, (b) endorsements of instruments for deposit or collection in the ordinary course of business, or (c) indemnities incurred in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“ Control Agreement ” means, with respect to any deposit account, any securities account, commodity account, securities entitlement or commodity contract, (a) an agreement, in form and substance satisfactory to the Collateral Agent, among the Collateral Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account, effective to grant “control” (as defined under the applicable UCC) over such account to the Collateral Agent, (b) if administered or held with any financial institution in the Netherlands, a notification of pledge, in form and substance satisfactory to the Collateral Agent, to be sent in connection with the Dutch Security Agreement by any relevant Loan Party to the relevant financial institution and which

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notification of pledge is to be countersigned for consent to and acknowledgement of any such right of pledge on behalf of the relevant financial institution , and (c) if administered or held with any financial institution in any other Specified Jurisdiction , a notification of pledge , control agreement, or other equivalent document, in each case, in form and substance satisfactory to the Collateral Agent, to be sent in connection with , or executed as required under, the applicable Security Documents by any relevant Loan Party to the relevant financial institution .

“ CRR ” means Regulation (EU) no. 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012.

“ Current Value ” has the meaning specified therefor in Section 7.01(m).

“ Debtor Relief Law ” means the Bankruptcy Code and any other liquidation, conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States or other applicable jurisdiction from time to time in effect.

“ Default ” means an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“ Disbursement Letter ” means a disbursement letter, in form and substance reasonably satisfactory to the Collateral Agent, by and among the Borrowers and the Agents, and the related funds flow memorandum describing the sources and uses of all cash payments in connection with the transactions contemplated to occur on the Effective Date.

“ Disposition ” means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells, assigns, transfers, leases, licenses (as licensor) or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person. For purposes of clarification, “Disposition” shall include (a) the sale or other disposition for value of any contracts or (b) the early termination or modification of any contract resulting in the receipt by any Loan Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification).

“ Disqualified Equity Interests ” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations and the termination of the Commitments), (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for the scheduled payments of dividends or distributions in cash, or (d) is convertible into or exchangeable for (i) Indebtedness or (ii) any

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other Equity Interests that would constitute Disqualified Equity Interests, in each case of clauses (a) through (d), prior to the date that is 91 days after the Final Maturity Date.

“ Dollar ,” “ Dollars ” and the symbol “ $ ” each means lawful money of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

“ Dutch Borrower ” has the meaning specified therefor in the preamble hereto.

“ Dutch Deeds of Pledge of Shares ” means, collectively:

(a) the Dutch law deed of pledge of shares of all issued and outstanding shares in the capital of the Dutch Borrower between the Collateral Agent, as pledgee, Cherokee Inc., as pledgor, and the Dutch Borrower as the company;

(b) the Dutch law deed of pledge of shares of all issued and outstanding shares in the capital of Hi-Tec between the Collateral Agent, as pledgee, the Dutch Borrower, as pledgor, and the Hi-Tec as the company;

(c) the Dutch law deed of pledge of shares of all issued and outstanding shares in the capital of Hi-Tec International Holdings B.V. between the Collateral Agent, as pledgee, Hi-Tec Sports PLC, as pledgor, and Hi-Tec International Holdings B.V. as the company; and

(d) the Dutch law deed of pledge of shares of all issued and outstanding shares in the capital of Hi-Tec Nederland B.V. between the Collateral Agent, as pledgee, Hi-Tec Sports PLC, as pledgor, and Hi-Tec Nederland B.V. as the company.

“ Dutch Loan Party ” means a Loan Party incorporated under Netherlands law.

“ Dutch Security Agreement ” means the Dutch law security agreement between, among others, the Collateral Agent, as pledgee, and each of the Dutch Borrower, Hi-Tec, Hi-Tec International Holdings B.V. and Hi-Tec Nederland B.V., as pledgors.

“ Dutch Security Documents ” means, collectively, the Dutch Security Agreement and the Dutch Deeds of Pledge of Shares.

“ Effective Date ” has the meaning specified therefor in Section 5.01.

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“ Eligible Intellectual Property ” means the Intellectual Property and Intellectual Property Contracts which are license agreements, in each case, which satisfy and cont inue to satisfy all of the following condition s , and any other Intellectual Property and Intellectual Property Contracts which are license agreements, in each case, which satisfy all of the following conditions:

(a) A Loan Party owns all right, title and interest in and to such Intellectual Property;

(b) The Agents shall have received evidence that all actions that the Agents may reasonably deem necessary or appropriate in order to create valid first-priority and subsisting Liens (free and clear of all other Liens other than Permitted Liens and, as to priority, subject only to Permitted Liens which have priority over the Lien of the Collateral Agent by operation of law) on such Intellectual Property and Intellectual Property Contracts have been taken or initiated; and

(c) The Administrative Agent shall have received, and shall be reasonably satisfied with, an appraisal of such Intellectual Property and Intellectual Property Contracts in accordance with Section 5.01(f) or 7.01(f).

“ Employee Plan ” means an employee benefit plan (other than a Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was maintained at any time during the 6 calendar years preceding the date of any borrowing hereunder) for employees of any Loan Party or any of its ERISA Affiliates.

“ Environmental Actions ” means any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other written communication from any Person or Governmental Authority involving violations of Environmental Laws or Releases of Hazardous Materials (a) from any assets, properties or businesses owned or operated by any Loan Party or any of its Subsidiaries or any predecessor in interest; (b) from adjoining properties or businesses; or (c) onto any facilities which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries or any predecessor in interest.

“ Environmental Laws ” means the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601, et seq .), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq .), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq .), the Federal Clean Water Act (33 U.S.C. § 1251 et seq .), the Clean Air Act (42 U.S.C. § 7401 et seq .), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq .) and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq .), as such laws may be amended or otherwise modified from time to time, and any other Requirement of Law, permit, license or other binding determination of any Governmental Authority imposing liability or establishing standards of conduct for protection of the environment or the Release, of any Hazardous Materials into the environment.

“ Environmental Liabilities and Costs ” means all liabilities, monetary obligations, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages,

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costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigations and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any Governmental Authority or any third party, and which relate to any environmental condition or a Release of Hazardous Materials from or onto (a) any property presently or formerly owned by any Loan Party or any of its Subsidiaries or (b) any facility which received Hazardous Materials generated by any Loan Party or any of its Subsidiaries.

“ Environmental Lien ” means any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs.

“ Equity Interests ” means (a) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable, but in each case, excluding (a) any debt security that is convertible into or exchangeable for any such shares (or such other equity interests) prior to the conversion or exchange and (b) any stock appreciation rights, interests in phantom equity plans or similar rights or interests.

“ Equity Issuance ” means either (a) the sale or issuance by any Loan Party or any of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by the Parent of any cash capital contributions.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case, as in effect from time to time.

“ ERISA Affiliate ” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a “controlled group” within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.

“ Event of Default ” has the meaning specified therefor in Section 9.01.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Excluded Account ” means (a) any deposit account specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Loan Party’s employees and (b) any Petty Cash Accounts.

“ Excluded Equity Issuances ” means sales and/or issuances by any Loan Party of any Equity Interests for cash consideration in an aggregate amount during the term of this Agreement of up to $6,000,000 less the original aggregate principal amount of any Permitted Junior Notes, so long as the Net Cash Proceeds received from the sale and/or issuance of such

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Equity Interests are applied to support the Loan Parties’ general corporate purposes and working capital.

“ Excluded Subsidiary ” means:

(a) any Immaterial Subsidiary;

(b) any Subsidiary that is prohibited by applicable Requirements of Law or a third party Contractual Obligation (which Contractual Obligation exists on the Effective Date or at the time of acquisition of such Subsidiary and is not entered into in contemplation of the Effective Date or such acquisition) from providing a Guaranty or that would require a governmental (including regulatory) consent, approval, license or authorization in order to provide a Guaranty that has not been obtained or where the provision of such Guaranty would otherwise result in material adverse tax consequences, in each case, as reasonably determined by the Collateral Agent and the Administrative Borrower;

(c) any Subsidiary to the extent it is not within the legal capacity of such Person to provide a Guaranty or the provision of a Guaranty would conflict with the fiduciary duties of such Person’s directors or result in a material risk of personal or criminal liability for any officer or director of such Person, in each case, as reasonably determined by the Collateral Agent and the Administrative Borrower;

(d) with respect to the U.S. Obligations only (without excluding such Subsidiary from any obligations it may otherwise have hereunder or under the other Loan Documents to guarantee and/or pledge stock and assets with respect to the Foreign Obligations), any Subsidiary that is a direct or indirect Subsidiary of a U.S. Loan Party and is a (i) CFC or (ii) a direct or indirect Subsidiary of a CFC; and

(e) any other Subsidiary to the extent that the cost, burden, difficulty or consequence of providing a Guaranty and/or granting or perfecting a security interest in its assets outweighs or is disproportionate to the benefit of the security afforded thereby as reasonably determined by the Administrative Borrower and the Collateral Agent.

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrowers under Section 2.12(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.09, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such

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Recipient ’ s failure to comply with Section 2.09(d) and (d) any U.S. federal withholding Taxes imposed under FATCA .

“ Executive Order No. 13224 ” means the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“ Existing Credit Facilities ” means, collectively, the facilities under that certain Financing Agreement, dated as of December 7, 2016, by and among the U.S. Borrower, the Dutch Borrower, the guarantors party thereto, the lenders party thereto, and Cerberus Business Finance LLC, as Collateral Agent and as Administrative Agent (as amended, supplemented or otherwise modified from time to time), and the related documents, agreements and instruments entered into or delivered in connection therewith.

“ Existing Lenders ” means the lenders and/or any other financial institutions providing credit or other financial accommodations under the Existing Credit Facilities.

“ Extraordinary Receipts ” means any cash received by the Parent or any of its Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.05(c)(i), (ii) or (iii) hereof), including, without limitation, (a) foreign, United States, state or local tax refunds (but excluding any tax credits applied to future years), (b) pension plan reversions, (c) proceeds of insurance, (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action (other than to the extent all or any portion of amounts so received are (i) immediately payable to a Person that is not an Affiliate of the Parent or any of its Subsidiaries or (ii) received by the Parent or any of its Subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person), (e) condemnation awards (and payments in lieu thereof), (f) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not an Affiliate of the Parent or any of its Subsidiaries or (ii) received by the Parent or any of its Subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person) and (g) any purchase price adjustments (other than in respect of estimated third party net debt) received in connection with any Acquisitions.

“ Facility ” means the fee owned real property of the Loan Parties identified on Schedule 1.01(B) and any New Facility hereafter acquired by the Parent or any of its Subsidiaries, including, without limitation, the land on which each such facility is located, all buildings and other improvements thereon, and all fixtures located thereat or used in connection therewith.

“ FASB ASC ” means the Accounting Standards Codification of the Financial Accounting Standards Board.

“ FATCA ” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any applicable intergovernmental agreement

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entered into thereunder, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code and any intergovernmental agreements entered in connection therewith.

“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent, and (c) if any such rate is below zero, then the rate determined pursuant to this definition shall be deemed to be zero.

“ Fee Letter ” means the Fee Letter, dated as of the date hereof, by and between the Borrowers and the Agents.

“ Final Maturity Date ” means August 3, 2021.

“ Financial Statements ” means (a) the audited consolidated balance sheet of the Parent and its Subsidiaries for the Fiscal Years ended January 28, 2017 and February 3, 2018, and the related consolidated statements of income, stockholders’ equity and cash flows for the Fiscal Years then ended, and (b) the unaudited consolidated balance sheet of the Parent and its Subsidiaries as of May 31, 2018 and the related consolidated statements of income for the four months then ended.

“ Fiscal Year ” means the fiscal year of the Parent and its Subsidiaries comprised of a 52- or 53-week period ending on the Saturday nearest to January 31.

“ Foreign Cash Management Account ” means a Cash Management Account maintained by a Foreign Loan Party.

“ Foreign Corresponding Liabilities ” means the Foreign Obligation of a Foreign Loan Party, excluding its Foreign Parallel Liability.

“ Foreign Disbursement Account ” means a Foreign Cash Management Account maintained by a Foreign Loan Party for the purposes of making disbursements.

“ Foreign Loan Party ” means the Dutch Borrower and each Foreign Subsidiary of Parent that is a Subsidiary Guarantor.

“ Foreign Obligations ” means any portion of the Obligations arising under or in connection with the Tranche B Term Loan.

“ Foreign Official ” has the meaning specified therefor in Section 6.01(bb).

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“ Foreign Parallel Liability ” means a Foreign Loan Party ’ undertaking pursuant to Section 12.26 .

“ Foreign Security Documents ” means, collectively, the Dutch Security Documents, the UK Security Documents, and any other documents create or purport to create a Lien under the laws of the relevant foreign jurisdiction outside the United States.

“ Foreign Sovereign Immunities Act ” means the US Foreign Sovereign Immunities Act of 1976 (28 U.S.C. Sections 1602-1611), as amended.

“ Foreign Subsidiary ” means any Subsidiary of Parent that is not a Domestic Subsidiary.

“ GAAP ” means generally accepted accounting principles in effect from time to time in the United States, applied on a consistent basis, provided that for the purpose of Section 7.03 hereof and the definitions used therein, “GAAP” shall mean generally accepted accounting principles in effect on the date hereof and consistent with those used in the preparation of the Financial Statements, provided, further, that if there occurs after the date of this Agreement any change in GAAP that affects in any respect the calculation of any covenant contained in Section 7.03 hereof, the Collateral Agent and the Administrative Borrower shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant with the intent of having the respective positions of the Lenders and the Borrowers after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the covenants in Section 7.03 hereof shall be calculated as if no such change in GAAP has occurred.

“ GBB Warrant ” means the Warrant dated as of the Effective Date and issued by the Parent to Gordon Brothers Brands LLC, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ GBFC ” has the meaning specified therefor in the preamble hereto.

“ GBFC Warrant ” means the Warrant dated as of the Effective Date and issued by the Parent to Gordon Brothers Finance Company, LLC, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Governing Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the operating agreement; (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture, declaration or other applicable agreement or documentation evidencing or otherwise relating to its formation or organization, governance and capitalization; and (d) with respect to any of the entities described above, any other agreement, instrument, filing or notice with respect thereto filed to effectuate its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization.

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“ Governmental Authority ” means any nation or government, any foreign, Federal, state, territory, provincial, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“ Guaranteed Obligations ” has the meaning specified therefor in Section 11.01.

“ Guarantor ” means (a) each Subsidiary of the Parent listed as a “Guarantor” on the signature pages hereto (including any Subsidiary Guarantor), (b) the Parent, with respect to the Foreign Obligations, and (c) each other Person which guarantees, pursuant to Section 7.01(b) or otherwise, all or any part of the Obligations.

“ Guaranty ” means (a) the guaranty of each Guarantor party hereto contained in Article XI hereof and (b) each other guaranty, in form and substance reasonably satisfactory to the Collateral Agent, made by any other Guarantor in favor of the Collateral Agent, for the benefit of the Secured Parties, guaranteeing all or part of the Obligations.

“ Hazardous Material ” means (a) any element, compound or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous substance or chemical, hazardous waste, special waste, or solid waste under Environmental Laws or endangers the environment or risk to human health or safety, including, without limitation, any pollutant, contaminant, hazardous waste or toxic substance which is defined or identified in any Environmental Law and which is present in the environment in such quantity that it violates any Environmental Law; (b) petroleum and its refined products; (c) polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste characteristic, including, without limitation, corrosivity, ignitability, toxicity or reactivity as well as any radioactive or explosive materials; and (e) any asbestos-containing materials.

“ Hedging Agreement ” means any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.

“ Hi-Tec ” means Hi-Tec Sports International Holdings B.V., a private company with limited liability incorporated under the laws of the Netherlands, having its statutory seat ( statutaire zetel ) in Amsterdam, the Netherlands and registered with the Dutch trade register under number 55297587.

“ Highest Lawful Rate ” means, with respect to any Agent or any Lender, the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Obligations under laws applicable to such Agent or such Lender which are currently in effect or, to the extent allowed by law, under

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such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow.

“ Immaterial Subsidiaries ” means, at any time, collectively, Subsidiaries that (i) are not Loan Parties on the Effective Date; and (ii) (x) contributed, in the aggregate for all such Subsidiaries, $250,000 or less of the Consolidated EBITDA of the Parent and its Subsidiaries for the four consecutive fiscal quarter period most recently ended for which financial statements have been delivered or were required to have been delivered, (y) contributed, in the aggregate for all such Subsidiaries, $250,000 or less of the revenues of the Parent and its Subsidiaries for the four consecutive fiscal quarter period most recently ended for which financial statements have been delivered or were required to have been delivered, and (z) had assets, in the aggregate for all such Subsidiaries, representing $250,000 or less on the last day of the four consecutive fiscal quarter period most recently ended for which financial statements have been delivered or were required to have been delivered; provided that no Subsidiary that owns any Intellectual Property or contributes licensing revenue of the Parent and its Subsidiaries shall be an Immaterial Subsidiary for purposes of this Agreement. As of the Effective Date, the Immaterial Subsidiaries are listed on Schedule 1.01(D).

“ Indebtedness ” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables or other accounts payable incurred in the ordinary course of such Person’s business and not outstanding for more than 90 days after the date such payable was created and any earn-out, purchase price adjustment or similar obligation until such obligation appears in the liabilities section of the balance sheet of such Person); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or upon which interest payments are customarily made; (d) all reimbursement, payment or other obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder may be limited to repossession or sale of such property; (e) all Capitalized Lease Obligations of such Person; (f) the undrawn face amount of all obligations and liabilities, contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities; (g) all obligations and liabilities, calculated on a basis reasonably satisfactory to the Collateral Agent and in accordance with accepted practice, of such Person under Hedging Agreements; (h) all monetary obligations under any receivables factoring, receivable sales or similar transactions and all monetary obligations under any synthetic lease, tax ownership/operating lease, off-balance sheet financing or similar financing; (i) all Contingent Obligations; (j) all Disqualified Equity Interests; and (k) all obligations referred to in clauses (a) through (j) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; provided , however , that the amount of Indebtedness in which recourse is limited to an identified asset shall be equal to the lesser of (A) the amount of such obligation and (B) the fair market value of such asset. The Indebtedness of any Person shall include the Indebtedness of any partnership of or joint venture in which such Person is a general partner or a joint venturer, to the extent such Person would be liable therefor under applicable law or any agreement or instrument by virtue of such Person’s ownership interest in or

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relationship with such entity. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date.

“ Indemnified Matters ” has the meaning specified therefor in Section 12.15.

“ Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“ Indemnitees ” has the meaning specified therefor in Section 12.15.

“ Insolvency Proceeding ” means any proceeding commenced by or against any Person under any provision of any Debtor Relief Law.

“ Intellectual Property ” has the meaning specified therefor in the Security Agreement.

“ Intellectual Property Contracts ” means all agreements concerning Intellectual Property, including without limitation license agreements, technology consulting agreements, confidentiality agreements, co-existence agreements, consent agreements and non-assertion agreements.

“ Intercompany Subordination Agreement ” means an Intercompany Subordination Agreement made by the Parent and its Subsidiaries in favor of the Collateral Agent for the benefit of the Secured Parties, in form and substance reasonably satisfactory to the Collateral Agent.

“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended (or any successor statute thereto) and the regulations thereunder.

“ Inventory ” means, with respect to any Person, all goods and merchandise of such Person leased or held for sale or lease by such Person, including, without limitation, all raw materials, work-in-process and finished goods, and all packaging, supplies and materials of every nature used or usable in connection with the shipping, storing, advertising or sale of such goods and merchandise, whether now owned or hereafter acquired, and all such other property the sale or other disposition of which would give rise to an Account or cash.

“ Investment ” means, with respect to any Person, (a) any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances or other extensions of credit (excluding Accounts arising in the ordinary course of business), capital contributions or acquisitions of Indebtedness (including, any bonds, notes, debentures or other debt securities), Equity Interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), (b) the purchase or ownership of any futures contract or liability for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or (c) any investment in any other items that are or would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, less all return of principal and other cash returns thereof.

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“ Joinder Agreement ” means a Joinder Agreement, substantially in the form of Exhibit A, duly executed by a Subsidiary of a Loan Party made a party hereto pursuant to Section 7.01(b) .

“ Lease ” means any lease of real property to which any Loan Party or any of its Subsidiaries is a party as lessor or lessee.

“ Lender ” has the meaning specified therefor in the preamble hereto.

“ LIBOR Rate ” means, the greater of (a) two percent (2.00%), and (b) the offered rate per annum for three-month deposits of Dollars that appears on Reuters Screen Page LIBOR 01 at approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the first day of such month. The LIBOR Rate shall be determined on a monthly basis.

“ Lien ” means any mortgage, deed of trust, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature, including, without limitation, any conditional sale or title retention arrangement, any Capitalized Lease and any assignment, deposit arrangement or financing lease intended as, or having the effect of, security.

“ Loan ” means any loan made by a Lender to the Borrowers pursuant to Article II hereof.

“ Loan Document ” means this Agreement, any Control Agreement, the Disbursement Letter, the Fee Letter, any Guaranty, any Security Document, the Intercompany Subordination Agreement, any Subordination Agreement, any Joinder Agreement, any Mortgage, any UCC Filing Authorization Letter, all Borrowing Base Certificates, any landlord waiver, any collateral access agreement, any Perfection Certificate and any other agreement, instrument, certificate, report and other document required to be executed and delivered pursuant hereto or thereto or otherwise evidencing or securing any Loan or any other Obligation, in each case, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

“ Loan Party ” means any Borrower and any Guarantor.

“ Material Adverse Effect ” means a material adverse effect on any of (a) the operations, assets, liabilities or financial condition of the Loan Parties taken as a whole, (b) the ability of the Loan Parties taken as a whole to perform any of their payment obligations and other material obligations, in each case, under the Loan Documents, (c) the legality, validity or enforceability against a Loan Party of this Agreement or any other Loan Document, (d) the rights and remedies of any Agent or any Lender under any Loan Document (other than as a result of an action or a failure to take an action on the part of any Agent within its reasonable control after having been provided with the information required by the Loan Documents), or (e) the validity, perfection or priority of a Lien in favor of the Collateral Agent, for the benefit of the Secured Parties, on Collateral having a fair market value in excess of $250,000.

“ Material Contract ” means at any time of determination, with respect to any Person, (a) any license or other contract or agreement with a minimum consideration payable by

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or to Parent and/or its Subsidiaries in an amount in excess of $ 1,0 00,000 in the current fiscal year , (b) any license or other contract or agreement which, in the trailing twelve month period , generated aggregate consideration payable by or to Parent and/or its Subsidiaries in an amount in excess of $ 1,0 00,000 , and (c) all other licenses or other contracts or agreements as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect .

“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

“ Mortgage ” means a mortgage, deed of trust or deed to secure debt, in form and substance reasonably satisfactory to the Collateral Agent, made by a Loan Party in favor of the Collateral Agent, for the benefit of the Secured Parties, securing the Obligations and delivered to the Collateral Agent.

“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has contributed, or has been obligated to contribute, to at any time during the preceding 6 years.

“ Net Cash Proceeds ” means, with respect to, any issuance or incurrence of any Indebtedness, any Equity Issuance, any Disposition or the receipt of any Extraordinary Receipts by any Person or any of its Subsidiaries, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Person or such Subsidiary, in connection therewith after deducting therefrom only (a) in the case of any Disposition or the receipt of any Extraordinary Receipts consisting of insurance proceeds or condemnation awards, the amount of any Indebtedness secured by any Permitted Lien on any asset (other than Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection therewith (other than Indebtedness under this Agreement) together with the interest, fees and premiums or penalties related thereto, (b) reasonable expenses related thereto (including fees, indemnity, discounts, commissions and salary and other employee-related expenses) incurred by such Person or such Subsidiary in connection therewith, (c) transfer taxes paid to any taxing authorities by such Person or such Subsidiary in connection therewith, (d) income or gains taxes estimated in good faith to be payable by the seller (or any direct or indirect parent of the seller) as a result of any gain recognized in connection with such Disposition (or income recognized as a result of a dividend or repatriation of the proceeds of such Disposition) during the tax period the sale occurs (after taking into account any applicable tax credits or deductions and any tax sharing arrangements), (e) amounts provided as a reserve, in accordance with GAAP, against (i) any liabilities under any indemnification obligations or purchase price adjustments associated with such Disposition or (ii) any other liabilities retained by the Parent or any of its Subsidiaries associated with the properties sold in such Disposition, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liability and indemnification obligations associated with such Disposition, and (f) any amount funded into an escrow established pursuant to the documents evidencing any such Disposition to secure or otherwise provide for any indemnification obligations or adjustments to the purchase price; provided , that, in any case, upon release of any such reserves or escrow, the amount released shall be considered Net Cash Proceeds, in each case, to the extent, but only to the extent, that the amounts so deducted are (i) actually paid to a Person that, except in the case of

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reasonable out-of-pocket expenses and taxes referred to in clause (d) above, is not an Affiliate of such Person or any of its Subsidiaries and (ii) properly attributable to such transaction or to the asset that is the subject thereof.

“ New Facility ” has the meaning specified therefor in Section 7.01(m).

“ New Lending Office ” has the meaning specified therefor in Section 2.09(d).

“ Non-Primary Brands ” means the Loan Parties’ and Subsidiaries’ brands in existence on the Effective Date, and the related Intellectual Property and Intellectual Property Contracts, other than the Primary Brands.

“ Non-Public Lender ” means (i) until interpretation of “public” as referred to in the CRR by the relevant authority/ies: an entity that provides repayable funds to a Dutch Loan Party for a minimum initial amount of EUR 100,000 (or its equivalent in another currency) or an entity otherwise qualifying as not forming part of the public; and (ii) following the publication of an interpretation of “public” as referred to in the CRR by the relevant authority/ies; such amount or such criterion as a result of which such entity shall qualify as not forming part of the public.

“ Non-U.S. Lender ” has the meaning specified therefor in Section 2.09(d).

“ Obligations ” means all present and future indebtedness, obligations, and liabilities of each Loan Party to the Agents and the Lenders arising under or in connection with this Agreement or any other Loan Document, whether or not the right of payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 9.01. Without limiting the generality of the foregoing, the Obligations of each Loan Party under the Loan Documents include (a) the obligation (irrespective of whether a claim therefor is allowed in an Insolvency Proceeding) to pay principal, interest, charges, expenses, fees, premiums (including the Applicable Premium, if any), attorneys’ fees and disbursements, indemnities and other amounts payable by such Person under the Loan Documents, and (b) the obligation of such Person to reimburse any amount in respect of any of the foregoing that any Agent or any Lender (in its sole discretion) may elect to pay or advance on behalf of such Person.

“ OFAC Sanctions Programs ” means (a) the Requirements of Law and Executive Orders administered by OFAC, including, without limitation, Executive Order No. 13224, and (b) the list of Specially Designated Nationals and Blocked Persons administered by OFAC, in each case, as renewed, extended, amended, or replaced.

“ Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

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“ Other Taxes ” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document , except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.12).

“ Parent ” has the meaning specified therefor in the preamble hereto.

“ Participant Register ” has the meaning specified therefor in Section 12.07(i).

“ Payment Office ” means the Administrative Agent’s office located at 800 Boylston Street, 27 ^th Floor, Boston, Massachusetts 02199, or at such other office or offices of the Administrative Agent as may be designated in writing from time to time by the Administrative Agent to the Collateral Agent and the Administrative Borrower.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any successor thereto.

“ Perfection Certificate ” means a certificate in form and substance reasonably satisfactory to the Collateral Agent providing information with respect to the property of each Loan Party.

“ Permitted Acquisition ” means any Acquisition by a Loan Party to the extent that each of the following conditions shall have been satisfied:

(a) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition;

(b) the Borrowers shall have furnished to the Agents at least 15 Business Days prior to the consummation of such Acquisition (i) an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of such Acquisition) and, at the request of any Agent, such other information and documents that any Agent may request, including, without limitation, drafts of the material agreements, instruments or other documents pursuant to which such Acquisition is to be consummated, (ii) a pro forma balance sheet and income statement of the Parent and its Subsidiaries after the consummation of such Acquisition as of the most recent fiscal quarter (in the case of such balance sheet) and for the four fiscal quarter period most recently concluded (in the case of such income statement) in the form of the quarterly financial statements delivered or required to have been delivered pursuant to Section 7.01(a)(ii), and (iii) a certificate of the chief financial officer of the Parent, demonstrating on a pro forma basis compliance, as at the end of the most recently ended fiscal quarter for which internally prepared financial statements are available, with all covenants set forth in Section 7.03 hereof after the consummation of such Acquisition;

(c) the agreements, instruments and other documents referred to in paragraph (c) above shall provide that (i) neither the Loan Parties nor any of their Subsidiaries shall, in connection with such Acquisition, assume or remain liable in respect of any Indebtedness of the Seller or Sellers (except for Permitted Indebtedness), and (ii) all property to be so acquired in

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connection with such Acquisition shall be free and clear of any and all Liens, except for Permitted Liens;

(d) such Acquisition shall be effected in such a manner so that the acquired assets or Equity Interests are owned by a Loan Party and, if effected by merger or consolidation, such Loan Party shall be the continuing or surviving Person;

(e) the Borrowers shall have Qualified Cash in an amount equal to or greater than $5,000,000 immediately after giving effect to the consummation of the proposed Acquisition;

(f) the assets being acquired or the Person whose Equity Interests are being acquired did not have negative Consolidated EBITDA during the four fiscal quarter period most recently concluded prior to the date of the proposed Acquisition;

(g) the assets being acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within a Specified Jurisdiction or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within a Specified Jurisdiction;

(h) such Acquisition shall be consensual and shall have been approved by the Board of Directors of the Person whose Equity Interests or assets are proposed to be acquired and shall not have been preceded by an unsolicited tender offer for such Equity Interests by, or proxy contest initiated by, Parent or any of its Subsidiaries or an Affiliate thereof;

(i) any such Subsidiary (and its equityholders) shall execute and deliver the agreements, instruments and other documents required by Section 7.01(b) on or prior to the date of the consummation of such Acquisition;

(j) (x) the Purchase Price payable in any single Acquisition or series of related Acquisitions shall not exceed $12,500,000 in the aggregate; and (y) the Purchase Price payable in respect of all Acquisitions (including the proposed Acquisition) shall not exceed $24,000,000 in the aggregate during the term of this Agreement;

(k) the assets being acquired or the Person whose Equity Interests are being acquired shall be in the same or related business or lines of business in which the Loan Parties and their Subsidiaries are engaged as of the Effective Date; and

(l) concurrently with the consummation of such Acquisition, the Borrowers shall deliver to the Agents a certificate signed by an Authorized Officer of the Administrative Borrower certifying that such Acquisition was made in compliance with the terms and conditions set forth in this definition of “Permitted Acquisition” and attaching true, correct and complete copies of all material executed documents entered into in connection with such Acquisition.

“ Permitted Discretion ” means a determination made by the Administrative Agent and/or Collateral Agent, as applicable, in good faith in the exercise of its or their reasonable, as applicable (from the perspective of a secured asset-based lender), business judgment.

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“ Permitted Disposition ” means:

(a) sale of Inventory in the ordinary course of business;

(b) licensing or sublicensing, on an exclusive or non-exclusive basis, Intellectual Property rights in the ordinary course of business;

(d) (i) the lapse of Registered Intellectual Property of the Parent and its Subsidiaries to the extent, as determined by the Parent and their Subsidiaries their reasonable business judgment, not economically desirable in the conduct of their business or (ii) the abandonment of Intellectual Property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to any such Intellectual Property, such Intellectual Property (i) has not generated revenue greater than $50,000 in the prior 12-month period and (ii) is not reasonably expected to generate revenue greater than $50,000 in the 12-month period following such lapse or abandonment, and (B) such lapse or abandonment is not materially adverse to the interests of the Secured Parties;

(e) any involuntary loss, damage or destruction of property;

(f) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;

(g) so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets (i) from the Parent or any of its Subsidiaries to a Loan Party (other than from a U.S. Borrower or Unrestricted Guarantor to or in the Dutch Borrower or any Restricted Guarantor) and (ii) from any Subsidiary of the Parent that is not a Loan Party to any other Subsidiary of the Parent;

(h) Disposition of obsolete, surplus, uneconomical or worn-out property (other than Intellectual Property) in the ordinary course of business;

(i) use and disposition of cash and Cash Equivalents in the ordinary course of business and in a manner not prohibited by this Agreement;

(j) the making of Permitted Investments and Permitted Restricted Payments and the granting of Permitted Liens and the issuance of Equity Interests (other than Disqualified Equity Interests);

(k) Dispositions (including discounts, cancellation or forgiveness) of Accounts Receivable in connection with the collection or compromise thereof in the ordinary course of business;

(l) Dispositions in connection with the unwinding of any Hedging Agreement pursuant to its terms;

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(m) any surrender, waiver, settlement, compromise, modification or release of contractual rights in the ordinary course of business, or the settlement, release or surrender of tort or other claims of any kind in the ordinary course of business ;

(n) any Disposition related to any transaction permitted by Section 7.02(c)(i);

(o) [reserved];

(p) Disposition of property or assets (other than Intellectual Property) not otherwise permitted in clauses (a) through (o) above for cash in an aggregate amount not less than the fair market value of such property or assets; and

(q) Dispositions of Non-Primary Brands so long as (i) the Loan Parties have provided the Agents with ten (10) Business Days prior written notice of any such Disposition; (ii) such Disposition shall be for no less than the fair market value of such property at the time of such Disposition and shall be solely for cash consideration; and (iii) the proceeds of any such Disposition are applied in accordance with Section 2.05(c)(i);

provided that the Net Cash Proceeds of such Dispositions (including the proposed Disposition) (1) in the case of clauses (h) and (p) above, do not exceed $500,000 in the aggregate in any Fiscal Year and (2) in all cases, are paid to the Administrative Agent, for the benefit of the Secured Parties, pursuant to the terms of Section 2.05(c)(i) or (ii) or applied as provided in Section 2.05(c)(vi); provided further that , any Disposition pursuant to clauses (b), (c), (g), and (p) (except for Dispositions from (x) a Borrower to another Borrower, (y) a Guarantor to a Borrower or another Guarantor, or (z) an Excluded Subsidiary to a Loan Party), shall be for no less than the fair market value of such property at the time of such disposition and shall be solely for cash consideration.

“ Permitted Indebtedness ” means:

(a) any Indebtedness owing to any Agent or any Lender under this Agreement and the other Loan Documents;

(b) any other Indebtedness listed on Schedule 7.02(b), and any Permitted Refinancing Indebtedness in respect of such Indebtedness;

(d) Permitted Intercompany Investments;

(e) Indebtedness incurred in the ordinary course of business under performance, surety, statutory, and appeal bonds or similar obligations or in respect of worker’s compensation claims, and reimbursement obligations in respect of any of the foregoing;

(f) Indebtedness owed to any Person providing property, casualty, liability, or other insurance to the Loan Parties or their Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to

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defer the cost of, such insurance for the period in which such Indebtedness is incurred and such Indebtedness is outstanding only during such period;

(g) the incurrence by any Loan Party or their Subsidiaries of Indebtedness under Hedging Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with such Loan Party’s or their Subsidiaries’ operations and not for speculative purposes; provided that , the aggregate Swap Termination Value thereof shall not exceed $150,000 at any time outstanding;

(h) Indebtedness incurred in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”) or other similar cash management services, in each case, incurred in the ordinary course of business and in an aggregate principal amount not to exceed $250,000 at any time outstanding;

(i) Indebtedness of the Parent or any of its Subsidiaries in respect of letters of credit in the ordinary course of business in an aggregate face amount not exceeding $2,000,000 at any time outstanding; provided that, at or prior to the time such Indebtedness is incurred, the Parent or any of its Subsidiaries shall be the beneficiary of a letter of credit in the face amount in excess of the letter of credit that was issued for the account of the Parent or such Subsidiary;

(j) contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation of any Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions;

(k) Indebtedness of a Person whose assets or Equity Interests are acquired by the Parent or any of its Subsidiaries in a Permitted Acquisition in an aggregate amount not to exceed $500,000 at any one time outstanding; provided , that such Indebtedness (i) is either Permitted Purchase Money Indebtedness or a Capitalized Lease with respect to equipment or mortgage financing with respect to a Facility, (ii) was in existence prior to the date of such Permitted Acquisition, and (iii) was not incurred in connection with, or in contemplation of, such Permitted Acquisition;

(l) (i) the Board Debt in an aggregate principal amount not exceeding, at any time outstanding, $13,500,000 minus any payments of principal made thereon, so long as such Board Debt is subject to the terms of the applicable Subordination Agreement, and any Permitted Refinancing Indebtedness in respect thereof so long as such Indebtedness is subject to a Subordination Agreement; and (ii) other Subordinated Indebtedness in an aggregate amount not exceeding $1,000,000 at any time outstanding;

(m) Indebtedness owed in respect of any overdrafts and related liabilities arising from treasury, depositary and cash management services or in connection with any automated clearinghouse transfers of funds, so long as such Indebtedness is repaid in full within 2 Business Days of the incurrence thereof;

(n) Contingent Obligations in respect of Indebtedness or other Obligations incurred in the ordinary course of business, in each case permitted to be incurred pursuant to this definition;

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(o) [reserved];

(p) unsecured Indebtedness in an aggregate principal amount not exceeding $500,000 at any time outstanding;

(q) Indebtedness consisting of the financing of insurance premiums to the extent non-recourse to the Parent and its Subsidiaries (other than to the insurance premiums);

(r) Any Indebtedness arising under guarantees entered into pursuant to Section 2:403 of the Dutch Civil Code in respect of an Affiliate incorporated in the Netherlands and any residual liability with respect to such guarantees arising under Section 2:404 of the Dutch Civil Code;

(s) Any liability arising as a result of a fiscal unity ( fiscale eenheid ) for Dutch tax purposes or its equivalent in any other relevant jurisdiction of which any Dutch Borrower or any Guarantor is or has been a member; and

(t) Indebtedness arising under Permitted Junior Notes.

“ Permitted Intercompany Investments ” means Investments made by (a) a Loan Party to or in another Loan Party (other than by a U.S. Borrower or Unrestricted Guarantor to or in the Dutch Borrower or any Restricted Guarantor), (b) a Subsidiary that is not a Loan Party to or in another Subsidiary that is not a Loan Party, (c) a Subsidiary that is not a Loan Party to or in a Loan Party, so long as, in the case of a loan or advance, the parties thereto are party to the Intercompany Subordination Agreement, and (d) a Loan Party to or in a Subsidiary that is not a Loan Party or in the Dutch Borrower or a Restricted Guarantor so long as (i) the aggregate amount of all such Investments made by the Loan Parties to or in Subsidiaries that are not Loan Parties or in the Dutch Borrower or a Restricted Guarantor does not exceed $250,000 at any time outstanding, (ii) such Investment is not an Investment of Intellectual Property, (iii) no Default or Event of Default has occurred and is continuing either before or after giving effect to such Investment, and (iv) the Borrowers have Qualified Cash of not less than $5,000,000 after giving effect to such Investment.

“ Permitted Investments ” means:

(a) Investments in cash and Cash Equivalents;

(b) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business;

(d) Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries;

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(e) Investments existing on the date hereof, as set forth on Schedule 7.02(e) hereto, but not any increase in the amount thereof as set forth in such Schedule (unless such increase is otherwise permitted under another clause of this definition) or any other modification of the terms thereof;

(f) Indebtedness constituting an Investment to the extent permitted under Section 7.02(b);

(g) any Foreign Loan Party may capitalize or forgive any Indebtedness owed to them by any other Loan Party;

(h) any Loan Party may hold Investments to the extent such Investments reflect an increase in the value of the Investments;

(i) the Loan Parties and their Subsidiaries (i) may acquire and hold Accounts Receivables owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, or (ii) make lease, utility and other similar deposits or any other deposit in the ordinary course of business;

(j) loans and advances to directors, employees and officers of the Loan Parties and their Subsidiaries (i) for bona fide business purposes, in an aggregate amount not to exceed $250,000 at any time outstanding and (ii) to the extent such loans or advances are non-cash, to purchase Equity Interests of the Parent;

(k) Investments consisting of earnest money required in connection with a Permitted Acquisition or other Permitted Investments;

(l) Permitted Intercompany Investments;

(m) Permitted Acquisitions;

(n) Investments in Hedging Agreements in the ordinary course of business and for non-speculative purposes; provided that , the aggregate Swap Termination Value thereof shall not exceed $150,000 at any time outstanding;

(o) Investments held by a Person that becomes a Loan Party (or is merged, amalgamated or consolidated with or into a Loan Party) pursuant to a Permitted Investment after the Effective Date to the extent that such Investments (i) existed prior to such Person becoming a Loan Party and (ii) were not made in contemplation of or in connection with such acquisition, merger, amalgamation or consolidation;

(p) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims; and

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(q) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $ 2 50,000 at any time outstanding .

“ Permitted Junior Notes ” means the issuance or incurrence by any Loan Party of securities evidencing Indebtedness in an aggregate principal amount during the term of this Agreement of up to $6,000,000 less the amount of any Excluded Equity Issuances, so long as (i) such Indebtedness is unsecured and satisfies the conditions set forth in clause (b) of the definition of Subordinated Indebtedness and (ii) the proceeds received therefrom are applied to support the Loan Parties’ general corporate purposes and working capital.

“ Permitted Liens ” means:

(a) Liens securing the Obligations;

(b) (i) Liens for taxes, assessments and governmental charges the payment of which is not required under Section 7.01(c)(ii) ; and (ii) Liens including any netting or set-off arising as a result of a fiscal unity ( fiscale eenheid ) for Dutch tax purposes or its equivalent in any other relevant jurisdiction of which any Dutch Borrower or any Guarantor is or has been a member;

(c) Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and other similar Liens arising in the ordinary course of business and securing obligations (other than Indebtedness for borrowed money) that are not overdue by more than 30 days or are being contested in good faith and by appropriate proceedings promptly initiated and diligently conducted, and a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor;

(d) Liens described on Schedule 7.02(a), provided that any such Lien shall only secure the Indebtedness that it secures on the Effective Date and any Permitted Refinancing Indebtedness in respect thereof;

(e) purchase money Liens or the interests of lessors under Capitalized Leases on equipment or other fixed or capital assets acquired, constructed, improved or held by any Loan Party or any of its Subsidiaries in the ordinary course of its business to secure Permitted Purchase Money Indebtedness so long as such Lien only (i) attaches to such property and any accessions and/or improvements thereto, and the proceeds thereof, and (ii) secures the Indebtedness that was incurred to acquire such property or any Permitted Refinancing Indebtedness in respect thereof;

(f) deposits and pledges of cash securing (i) obligations incurred in respect of workers’ compensation, unemployment insurance and other general liability insurance obligations, other social security laws and regulations or other forms of governmental insurance or benefits, (ii) the performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory obligations or (iii) obligations on surety bonds, appeal bonds, performance bonds and other obligations of a similar nature but only to the extent such deposits or pledges are made or otherwise arise in the ordinary course of business and secure obligations not past due;

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(g) with respect to any Facility or othe r real property, (i) all Liens, encumbrances and other matters disclosed in the owner’s or mortgagee’s policy of title insurance issued with respect to such Facility, (ii) easements, zoning restrictions and similar encumbrances on real property and minor irregularities in the title thereto that do not (A) secure obligations for the payment of money or (B) materially impair the value of such property or its use by any Loan Party or any of its Subsidiaries in the normal conduct of such Person ’ s business, and (ii i ) such other title and survey exceptions as the Administrative Agent has approved or may approve in writing in the Administrative Agent ’ s reasonable discretion;

(h) Liens of landlords and mortgagees of landlords (i) arising by statute or under any lease or related Contractual Obligation entered into in the ordinary course of business, (ii) on fixtures and movable tangible property (and, if set forth by statute, other property) located on the real property leased or subleased from such landlord, or (iii) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP;

(i) the title and interest of a licensor, sublicensor, lessor or sublessor in and to property licensed, sublicensed, leased or subleased (other than through a Capitalized Lease), in each case extending only to such personal property;

(j) non-exclusive licenses of Intellectual Property rights in the ordinary course of business;

(k) judgment liens (other than for the payment of taxes, assessments or other governmental charges) securing judgments and other proceedings not constituting an Event of Default under Section 9.01(j);

(l) rights of set-off or bankers’ liens or other similar liens upon deposits of cash or Cash Equivalents in favor of banks, other depository institutions or securities intermediaries, solely to the extent incurred in connection with the maintenance of such deposit accounts or securities accounts and related cash management services in the ordinary course of business;

(m) Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness;

(n) Liens on cash securing Indebtedness under letters of credit permitted under clause (i) of the definition of Permitted Indebtedness; provided that, in each case, the aggregate amount of such cash does not exceed 105% of the Indebtedness being secured;

(o) Liens assumed by the Parent and its Subsidiaries in connection with a Permitted Acquisition that secure Indebtedness permitted by clause (k) of the definition of Permitted Indebtedness;

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(p) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business;

(q) Liens attaching solely to cash earnest money deposits made by any Loan Party or escrowed purchase price in connection with Permitted Investments or Permitted Dispositions;

(r) Liens incurred by any Loan Party or their Subsidiaries consisting of non-assignment provisions under service contracts;

(s) Liens consisting of deposits to secure statutory obligations or public utility agreements;

(t) Liens consisting of customary restrictions in agreements for sales of assets pursuant to a Permitted Disposition during an interim period prior to the closing of the sale of such assets pursuant to a Permitted Disposition;

(u) Liens arising by operation of Article 2 of the UCC in favor of a reclaiming seller of goods or buyer of goods;

(v) Liens attaching to collateral of the U.S. Loan Parties arising under the Subordinated Indebtedness Documents with respect to the Board Debt so long as such Liens are subject to the terms of the applicable Subordination Agreement; and

(w) other Liens (excluding Liens on Intellectual Property) which do not secure Indebtedness for borrowed money or letters of credit and as to which the aggregate amount of the obligations secured thereby does not exceed $350,000.

“ Permitted Purchase Money Indebtedness ” means, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred to finance the acquisition of any fixed assets secured by a Lien permitted under clause (e) of the definition of “Permitted Liens”; provided that (a) such Indebtedness is incurred within 30 days after such acquisition, (b) such Indebtedness when incurred shall not exceed the purchase price of the asset financed and (c) the aggregate principal amount of all such Indebtedness shall not exceed $100,000 at any time outstanding.

“ Permitted Refinancing Indebtedness ” means the extension of maturity, refinancing, exchange, replacement, substitution or modification of Indebtedness so long as:

(a) after giving effect to such extension, refinancing, exchange, replacement, substitution or modification, the principal amount of such Indebtedness is not greater than the principal amount of Indebtedness outstanding immediately prior to such transaction (other than by the amount of premiums paid thereon, interest and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto);

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(b) such extension, refinancing, exchange, replacement, substitution or modification does not result in a shortening of the average weighted maturity (measured as of the date of such transaction) of the Indebtedness subject thereto;

(c) such extension, refinancing, exchange, replacement, substitution or modification is pursuant to terms that are not less favorable to the Loan Parties and the Lenders than the terms of the Indebtedness (including, without limitation, terms relating to the collateral (if any) and subordination (if any)) being extended, refinanced or modified; and

(d) the Indebtedness that is extended, refinanced, exchanged, replaced, substituted or modified is not recourse to any Loan Party or any of its Subsidiaries that is liable on account of the obligations other than those Persons which were obligated with respect to the Indebtedness that was extended, refinanced, exchanged, replaced, substituted or modified.

“ Permitted Restricted Payments ” means any of the following Restricted Payments made by:

(a) any Subsidiary of any Borrower to such Borrower;

(b) the Parent, to pay dividends in the form of common Equity Interests;

(c) the Parent, to make (i) distributions to former employees, officers, or directors of the Loan Parties or their Subsidiaries (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Equity Interests of the Parent held by such Persons or (ii) Restricted Payments and repurchases of Equity Interests issued under stock option plans (or other incentive plans or compensation arrangements) approved by the Parent’s Board of Directors, in each case so long as no Default or Event of Default shall have occurred and be continuing; provided, however, that, the aggregate amount of all such redemptions, repurchases or other Restricted Payments made by the Loan Parties and their Subsidiaries (other than any such Restricted Payment made to repurchase Equity Interests issued under stock option plans or other incentive plans or compensation arrangements approved by the Board of Directors on a cashless basis) during the term of this Agreement does not exceed $250,000 per Fiscal Year;

(d) any Loan Party and any Subsidiaries, to make distributions to former employees, officers, or directors of the Loan Parties or their Subsidiaries (or any spouses, ex-spouses, or estates of any of the foregoing), solely in the form of forgiveness of Indebtedness of such Persons owing to the Loan Parties or their Subsidiaries on account of repurchases of the Equity Interests of the Parent held by such Persons so long as such Indebtedness was incurred by such Persons solely to acquire Equity Interests of the Parent; and

(e) (i) any Loan Party, to make Restricted Payments to any other Loan Party (other than a U.S. Loan Party to the Dutch Borrower or a Restricted Guarantor) and (ii) any Subsidiary of any Loan Party (that is not a Loan Party), to make Restricted Payments to any other Subsidiary of any Loan Party or to any Loan Party.

“ Permitted Specified Liens ” means Permitted Liens described in clauses (a), (b) and (c) of the definition of Permitted Liens, and, solely in the case of Section 7.01(b)(i), including clauses (g), (h) and (i) of the definition of Permitted Liens.

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“ Person ” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority.

“ Petty Cash Accounts ” means Cash Management Accounts with deposits at any time in an aggregate amount not in excess of $10,000 for any one account and $50,000 in the aggregate for all such accounts.

“ Plan ” means any Employee Plan or Multiemployer Plan.

“ Post-Default Rate ” means a rate of interest per annum equal to the rate of interest otherwise in effect from time to time pursuant to the terms of this Agreement plus 2.00%, or, if a rate of interest is not otherwise in effect, interest at the highest rate specified herein for any Loan then outstanding prior to an Event of Default plus 2.00%.

“ Primary Brands ” means the Loan Parties’ and Subsidiaries’ Cherokee, Hi-Tec, and Magnum brands, and any related derivatives, sub-brands, Intellectual Property and Intellectual Property Contracts thereof.

“ Prime Rate ” means, for any day, a fluctuating rate per annum equal to the greatest of (a) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the greatest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as reasonably determined by the Agent) or any similar release by the Federal Reserve Board (as reasonably determined by the Agent), (b) the sum of the Federal Funds Rate on such day plus 0.50%, and (c) 2.00%. Any change in the Prime Rate due to a change in any of the rates referred to in the foregoing clauses shall be effective from and including the effective date of such change. The Prime Rate is a reference rate and not necessarily the lowest interest rate at which any Loan Party may make loans or other extensions of credit to other customers.

“ Pro Rata Share ” means, with respect to:

(a) a Lender’s obligation to make the Tranche A Term Loan and the right to receive payments of interest, fees, and principal with respect thereto, the percentage obtained by dividing (i) such Lender’s Tranche A Term Loan Commitment, by (ii) the Total Tranche A Term Loan Commitment, provided that if the Total Tranche A Term Loan Commitment has been reduced to zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s portion of the Tranche A Term Loan and the denominator shall be the aggregate unpaid principal amount of the Tranche A Term Loan,

(b) a Lender’s obligation to make the Tranche B Term Loan and the right to receive payments of interest, fees, and principal with respect thereto, the percentage obtained by dividing (i) such Lender’s Tranche B Term Loan Commitment, by (ii) the Total Tranche B Term Loan Commitment, provided that if the Total Tranche B Term Loan Commitment has been reduced to zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s

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portion of the Tranche B Term Loan and the denominator shall be the aggregate unpaid principal amount of the Tranche B Term Loan, and

(c) all other matters (including, without limitation, the indemnification obligations arising under Section 10.05), the percentage obtained by dividing (i) the sum of the unpaid principal amount of such Lender’s portion of the Loans and Collateral Agent Advances, by (ii) the sum of the aggregate unpaid principal amount of the Loans and Collateral Agent Advances.

“ Process Agent ” has the meaning specified therefor in Section 12.10(b).

“ Projections ” means financial projections of the Parent and its Subsidiaries delivered pursuant to Section 6.01(g)(iii), as updated from time to time pursuant to Section 7.01(a)(vii).

“ Purchase Price ” means, with respect to any Acquisition, an amount equal to the sum of (a) the aggregate consideration, whether cash, property or securities (including, without limitation, the fair market value of any Equity Interests of any Loan Party or any of its Subsidiaries issued in connection with such Acquisition), paid or delivered by a Loan Party or any of its Subsidiaries (whether as initial consideration or through the payment or disposition of deferred consideration, including, without limitation, in the form of seller financing, royalty payments, payments allocated towards non-compete covenants, payments to principals for consulting services or other similar payments) in connection with such Acquisition, plus (b) the aggregate amount of liabilities of the acquired business (net of current assets of the acquired business) that would be reflected on a balance sheet (if such were to be prepared) of the Parent and its Subsidiaries after giving effect to such Acquisition, plus (c) the aggregate amount of all transaction fees, costs and expenses incurred by the Parent or any of its Subsidiaries in connection with such Acquisition.

“ Qualified Cash ” means, as of any date of determination, the aggregate amount of unrestricted cash on-hand of the Loan Parties maintained in deposit accounts in the name of a Loan Party in the United States or the Netherlands as of such date, which deposit accounts are subject to Control Agreements; provided that no such Control Agreements shall be necessary for purposes of determining the amount of Qualified Cash from the Effective Date until the date such Control Agreements are required to be entered into pursuant to Section 5.02 .

“ Qualified Equity Interests ” means, with respect to any Person, all Equity Interests of such Person that are not Disqualified Equity Interests.

“ Real Property Deliverables ” means, in respect of each owned Facility, a Mortgage, mortgagee policy of title insurance in an amount reasonably acceptable to the Agents or title opinion (in respect of owned Facilities only), fixture filings (if applicable), flood insurance certifications and evidence of flood insurance to the extent required by applicable law, environmental reports and assessments (if available), surveys (if available), and such other instruments, documents and certificates as the Collateral Agent may reasonably require, all of which shall be in form and substance reasonably satisfactory to the Collateral Agent.

“ Recipient ” means any Agent or any Lender, as applicable.

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“ Refinancing ” means the repayment, redemption, defeasement, discharge, refinancing or termination of all third party debt of Parent and its Subsidiaries, other than Permitted Indebtedness , and the termination and release of all related commitments to advance funds and guarantees and security interests of such debt, in each case to the reasonable satisfaction of the Agent s , including without limitation, evidence of the payment in full of all Indebtedness under the Existing Credit Facilities, together with (A) a termination and release agreement with respect to the Existing Credit Facilities and all related documents, duly executed by the Loan Parties and the relevant Existing Lenders, (B) a termination of security interest in Intellectual Property for each assignment for security recorded by the Existing Lenders at the United States Patent and Trademark Office or the United States Copyright Office or any applicable recording offices outside of the United States and covering any intellectual property of the Loan Parties, (C) termination statements for all UCC-1 financing statements filed by the Existing Lenders and covering any portion of the Collateral , and (D) all releases, forms and filings required in connection with the discharge of any Liens securing such Existing Credit Facilities.

“ Register ” has the meaning specified therefor in Section 12.07(f).

“ Registered Intellectual Property ” means Intellectual Property that is issued, registered, renewed or the subject of a pending application.

“ Registered Loans ” has the meaning specified therefor in Section 12.07(f).

“ Regulation T ”, “ Regulation U ” and “ Regulation X ” mean, respectively, Regulations T, U and X of the Board or any successor, as the same may be amended or supplemented from time to time.

“ Related Fund ” means, with respect to any Person, an Affiliate of such Person, or a fund or account managed by such Person or an Affiliate of such Person.

“ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through or in the ambient air, soil, surface or ground water, or property.

“ Remedial Action ” means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate or in any other way address Hazardous Materials in the indoor or outdoor environment; (b) prevent or minimize a Release or threatened Release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (c) perform pre-remedial studies and investigations and post-remedial operation and maintenance activities; or (d) perform any other actions authorized by 42 U.S.C. § 9601.

“ Report ” has the meaning specified therefor in Section 10.13(a).

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“ Reportable Event ” means an event described in Section 4043 of ERISA (other than an event not subject to the provision for 30-day notice to the PBGC under the regulations promulgated under such Section).

“ Required Lenders ” means at least two (2) unaffiliated Lenders (provided that there are two unaffiliated Lenders as of such date) whose Pro Rata Shares (calculated in accordance with clause (c) of the definition thereof) aggregate at least 50.1% . For purposes hereof, (i) Gordon Brothers Finance Company LLC and Gordon Brothers Brands, LLC shall be deemed to be unaffiliated and (ii) so long as the unpaid principal amount of the Loans owed to Gordon Brothers Brands, LLC exceeds 13% of the aggregate principal amount of the Loans outstanding at such time, the consent of Gordon Brothers Brands, LLC shall be required for any matter requiring the consent of the Required Lenders.

“ Requirements of Law ” means, with respect to any Person, collectively, the common law and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Reserves ” means, collectively, any and all reserves which the Agents deem necessary, in their Permitted Discretion, to maintain with respect to the Borrowing Base, including, without limitation, (a) to reflect the impediments to the Collateral Agent’s ability to realize upon the Collateral, (b) to reflect claims and liabilities that any Agent determines will need to be satisfied in connection with the realization upon the Collateral, and (c) to reflect criteria, events, conditions, contingencies or risks which adversely affect any component of the Borrowing Base.

“ Resignation Effective Date ” has the meaning specified therefor in Section 10.07(a).

“ Restricted Amount ” has the meaning specified therefor in Section 2.05(h).

“ Restricted Guarantor ” means any Guarantor that, as a result of the Applicable Limitations, is not able to guarantee all of the Obligations and/or to grant a Lien on substantially all of its assets to secure the repayment of all of the Obligations.

“ Restricted Payment ” means (a) the declaration or payment of any dividend or other distribution, direct or indirect, on account of any Equity Interests of any Loan Party or any of its Subsidiaries, now or hereafter outstanding, (b) the making of any repurchase, redemption, retirement, defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of any Loan Party or any direct or indirect parent of any Loan Party, now or hereafter outstanding, (c) the making of any payment to retire, or to obtain the surrender of, any outstanding warrants, options or other rights for the purchase or acquisition of shares of any class of Equity Interests of any Loan Party, now or hereafter outstanding, (d) the

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return of any Equity Interests to any shareholders or other equity holders of any Loan Party or any of its Subsidiaries, or mak ing of any other distribution of property, assets, shares of Equity Interests, warrants, rights, options, obligations or securities thereto as such or (e) the payment of any management, consulting, monitoring or advisory fees or any other fees or expenses (including the reimbursement thereof by any Loan Party or any of its Subsidiaries) pursuant to any management, consulting, monitoring, advisory or other services agreement to any of the shareholders or other equityholders of any Loan Party or any of its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party.

“ Sale and Leaseback Transaction ” means, with respect to the Parent or any of its Subsidiaries, any arrangement, directly or indirectly, with any Person whereby the Parent or any of its Subsidiaries shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

“ SEC ” means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.

“ Secured Party ” means (a) any Agent and any Lender and (b) the successors and, subject to any limitations contained in this Agreement, assigns of each of the foregoing.

“ Securities Act ” means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time.

“ Securitization ” has the meaning specified therefor in Section 12.07(l).

“ Security Agreement ” means a Pledge and Security Agreement, in form and substance reasonably satisfactory to the Collateral Agent, made by a Loan Party in favor of the Collateral Agent, for the benefit of the Secured Parties, securing the Obligations.

“ Security Documents ” means, collectively, the Security Agreement, the Foreign Security Documents, and any other security documents made by a Loan Party in favor of the Collateral Agent, for the benefit of the Secured Parties, and securing the Obligations.

“ Solvent ” means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is not less than the total amount of the liabilities of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its existing debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital.

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“ Specified Jurisdiction ” means the Netherlands, the United Kingdom and the United States of America (or any state thereof or the District of Columbia), and each other jurisdiction identified from time to time by the Collateral Agent to the Administrative Borrower, to the extent that the value of the aggregate assets of the Subsidiaries of the Parent in such jurisdiction exceeds $ 250,000 , or the aggregate revenues or Consolidated EBITDA of the Subsidiaries of the Parent in such jurisdiction exceeds, for the four consecutive fiscal quarter period most recently ended for which financial statements have been delivered or were required to have been delivered, $ 250,000 or $ 25 0,000 , respectively.

“ Standard & Poor’s ” means S&P Global Ratings and any successor thereto.

“ Subordinated Creditor ” means any Person that shall have entered into a Subordination Agreement with the Collateral Agent, on behalf of the Secured Parties.

“ Subordinated Indebtedness ” means (a) the Board Debt and (b) other Indebtedness of any Loan Party, in each case, which has a maturity date that is at least 91 days later than the Final Maturity Date and the terms of which (including, without limitation, payment terms, interest rates, covenants, remedies, defaults and other material terms) are reasonably satisfactory to the Collateral Agent and the Required Lenders and which has been expressly subordinated in right of payment to all Indebtedness of such Loan Party under the Loan Documents (i) by the execution and delivery of a Subordination Agreement, or (ii) otherwise on terms and conditions reasonably satisfactory to the Collateral Agent and the Required Lenders; provided , however , that the term “Subordinated Indebtedness” shall not include any subordinated intercompany Indebtedness among the Loan Parties and/or their Subsidiaries which is permitted to be incurred pursuant to the definition of Permitted Indebtedness and which is made in the form of subordinated intercompany notes issued pursuant to, and subject to the terms and provisions of, the Intercompany Subordination Agreement.

“ Subordinated Indebtedness Documents ” means all documents evidencing Subordinated Indebtedness, including, without limitation, each subordinated promissory note or agreement issued by a Loan Party to a Subordinated Creditor, and each other promissory note, instrument and agreement executed in connection therewith, all on terms and conditions reasonably satisfactory to the Agents and the Required Lenders.

“ Subordination Agreement ” means each subordination agreement by and among the Collateral Agent, the applicable Loan Parties, the applicable Subsidiaries of the Loan Parties and the applicable Subordinated Creditor, each in form and substance satisfactory to the Agents and each evidencing and setting forth the senior priority of the Obligations over such Subordinated Indebtedness and to the extent applicable, Liens, as the same may be amended, restated, amended and restated, supplemented and/or modified from time to time subject to the terms thereof.

“ Subsidiary ” means, with respect to any Person at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity (a) the accounts of which would be consolidated with those of such Person in such Person’s consolidated financial statements if such financial statements were prepared in accordance with GAAP or (b) of which more than 50% of (i) the outstanding Equity

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Interests having (in the absence of contingencies) ordinary voting power to elect a majority of the Board of Directors of such Person, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such Person. References to a Subsidiary shall mean a Subsidiary of the Parent unless the context expressly provides otherwise.

“ Subsidiary Guarantor ” means (a) on the Effective Date, each Subsidiary of Parent (other than any Excluded Subsidiary) that is organized in a Specified Jurisdiction on the Effective Date and (b) thereafter, each Subsidiary of Parent (other than any Excluded Subsidiary) that is required to guarantee (and guarantees) the Obligations pursuant to the terms of this Agreement. The Subsidiary Guarantors on the Effective Date are listed on Schedule 1.01(C).

“ Swap Termination Value ” means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include a Lender or any Affiliate of a Lender).

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Termination Date ” means the first date on which all of the Obligations (other than Contingent Indemnity Obligations) are paid in full in cash and the Commitments of the Lenders have been terminated.

“ Termination Event ” means (a) a Reportable Event with respect to any Employee Plan, (b) any event that causes any Loan Party or any of its ERISA Affiliates to incur material liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Internal Revenue Code, (c) the filing of a notice of intent to terminate an Employee Plan or the treatment of an Employee Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings by the PBGC to terminate an Employee Plan, or (e) any other event or condition that could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Employee Plan.

“ Tranche A Term Loan Lender ” means a Lender with a Tranche A Term Loan.

“ Tranche A Term Loan ” means the loans made by the Tranche A Term Loan Lenders to the U.S. Borrower on the Effective Date pursuant to Section 2.01(a)(i).

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“ Tranche A Term Loan Commitment ” means, with respect to each Tranche A Term Loan Lender, the commitment of such Lender to make the Tranche A Term Loan to the U.S. Borrower in the amount set forth in Schedule 1.01(A) .

“ Tranche A Total Term Loan Commitment ” means the sum of the amounts of the Tranche A Term Loan Lenders’ Tranche A Term Loan Commitments. The amount of the Total Tranche A Term Loan Commitment on the Effective Date is $5,000,000.

“ Tranche B Term Loan ” means the loans made by the Tranche B Term Loan Lenders to the Dutch Borrower on the Effective Date pursuant to Section 2.01(a)(ii).

“ Tranche B Term Loan Lender ” means a Lender with a Tranche B Term Loan Commitment or a Tranche B Term Loan.

“ Tranche B Term Loan Commitment ” means, with respect to each Tranche B Term Loan Lender, the commitment of such Lender to make the Tranche B Term Loan to the Dutch Borrower in the amount set forth in Schedule 1.01(A).

“ Tranche B Total Term Loan Commitment ” means the sum of the amounts of the Tranche B Term Loan Lenders’ Tranche B Term Loan Commitments. The amount of the Total Tranche B Term Loan Commitment on the Effective Date is $35,000,000.

“ Transaction Costs ” means the fees, premiums, expenses and other transaction costs incurred in connection with the Transactions.

“ Transactions ” means, collectively, (a) the Refinancing, (b) the execution and delivery of the Loan Documents and the incurrence of the Loans on the Effective Date under this Agreement and (c) the payment of the Transaction Costs.

“ Transferee ” has the meaning specified therefor in Section 2.09(a).

“ UCC Filing Authorization Letter ” means a letter duly executed by each Loan Party authorizing the Collateral Agent to file appropriate financing statements on Form UCC-1 without the signature of such Loan Party in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by each Security Agreement and each Mortgage.

“ UK Security Documents ” means, collectively:

(a) an English law mortgage of the entire issued share capital of Hi-Tec Sports PLC between the Collateral Agent as mortgagee, and Hi-Tec Sports International Holdings B.V., as mortgagor, in and form and substance satisfactory to the Collateral Agent;

(b) an English law fixed and floating charge security agreement between Hi-Tec Sports PLC and Hi-Tec Sports UK Limited, as chargors, and the Collateral Agent, as chargee, in and form and substance satisfactory to the Collateral Agent; and

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(c) all notices and acknowledgements required to be delivered or received (as the case may be) under the Loan Documents referred to in (a) and (b) above.

“ Uniform Commercial Code ” or “ UCC ” has the meaning specified therefor in Section 1.04.

“ Unrestricted Guarantor ” means each Guarantor that is not a Restricted Guarantor.

“ USA PATRIOT Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (PATRIOT) Act of 2001 (Title III of Pub. L. 107-56, Oct. 26, 2001)) as amended by the USA Patriot Improvement and Reauthorization Act of 2005 (Pub. L. 109-177, March 9, 2006) and as the same may have been or may be further renewed, extended, amended, or replaced.

“ U.S. Borrower ” has the meaning specified therefor in the preamble hereto.

“ U.S. Cash Management Account ” means a Cash Management Account maintained by a U.S. Loan Party.

“ U.S. Corresponding Liabilities ” means the Obligations of a U.S. Loan Party, excluding its U.S. Parallel Liability.

“ U.S. Disbursement Account ” means a U.S. Cash Management Account maintained by a U.S. Loan Party for the purposes of making disbursements.

“ U.S. Loan Party ” means any Loan Party that is organized under the laws of the United States, any state thereof or the District of Columbia.

“ U.S. Obligations ” means any portion of the Obligations arising under or in connection with the Tranche A Term Loan.

“ U.S. Parallel Liability ” means a U.S. Loan Party’s undertaking pursuant to Section 12.27.

“ U.S. Person ” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Internal Revenue Code.

“ WARN ” has the meaning specified therefor in Section 6.01(p).

“ Warrants ” means, collectively, the GBB Warrant and the GBFC Warrant.

“ Withholding Agent ” means any Loan Party and the Administrative Agent.

“ Working Capital ” means, at any date of determination, (a) the sum, for any Person and its Subsidiaries, of (i) Cash On Hand, plus (ii) the unpaid face amount of all Accounts of such Person and its Subsidiaries which are due and payable within thirty (30) days

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after such date of determination, minus (b) the unpaid amount of all accounts payable of such Person and its Subsidiaries a s at such date of determination .

“ Working Capital Average ” means, at date of determination, the average Working Capital measured daily over the immediately trailing forty-five (45) day period ending on such date.

Section 1.02 Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

Section 1.03 Certain Matters of Construction . References in this Agreement to “determination” by any Agent include good faith estimates by such Agent (in the case of quantitative determinations) and good faith beliefs by such Agent (in the case of qualitative determinations). A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default or an Event of Default arising under Section 7.03(c), is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders (or, in the case of an Event of Default arising under Section 7.03(c), is cured within any period of cure expressly provided for in this Agreement). Any Lien referred to in this Agreement or any other Loan Document as having been created in favor of any Agent, any agreement entered into by any Agent pursuant to this Agreement or any other Loan Document, any payment made by or to or funds received by any Agent pursuant to or as contemplated by this Agreement or any other Loan Document, or any act taken or omitted to be taken by any Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of the Secured Parties, Agents and the Lender. Wherever the phrase “to the knowledge of any Loan Party” or words of similar import relating to the knowledge or the awareness of any Loan Party are used in this Agreement or any other Loan Document, such phrase shall mean and refer to the actual knowledge of a senior officer of any Loan Party. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or

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otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.

Section 1.04 Accounting and Other Terms .

(a) Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP. For purposes of determining compliance with any incurrence or expenditure tests set forth in Section 7.01, Section 7.02 and Section 7.03, any amounts so incurred or expended (to the extent incurred or expended in a currency other than Dollars) shall be converted into Dollars on the basis of the exchange rates (as shown on the Bloomberg currency page for such currency or, if the same does not provide such exchange rate, by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Agents or, in the event no such service is selected, on such other basis as is reasonably satisfactory to the Agents) as in effect on the date of such incurrence or expenditure under any provision of any such Section that has an aggregate Dollar limitation provided for therein (and to the extent the respective incurrence or expenditure test regulates the aggregate amount outstanding at any time and it is expressed in terms of Dollars, all outstanding amounts originally incurred or spent in currencies other than Dollars shall be converted into Dollars on the basis of the exchange rates (as shown on the Bloomberg currency page for such currency or, if the same does not provide such exchange rate, by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Agents or, in the event no such service is selected, on such other basis as is reasonably satisfactory to the Agents) as in effect on the date of any new incurrence or expenditures made under any provision of any such Section that regulates the Dollar amount outstanding at any time). Notwithstanding the foregoing, (i) with respect to the accounting for leases as either operating leases or capital leases and the impact of such accounting in accordance with FASB ASC 840 (or any other similar promulgation or methodology under GAAP with respect to the same subject matter as FASB ASC 840) on the definitions and covenants herein, GAAP as in effect on the Effective Date shall be applied and (ii) for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Parent and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

(b) All terms used in this Agreement which are defined in Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “ Uniform Commercial Code ” or the “ UCC ”) and which are not otherwise defined herein shall have the same meanings herein as set forth therein, provided that terms used herein which are defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute except as any Agent may otherwise determine.

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Section 1.05 Time References . Unless otherwise indicated herein, all references to time of day refer to Eastern Standard Time or Eastern daylight saving time, as in effect in New York City on such day. For purposes of the computation of a period of time from a specified date to a later specified date, the word “ from ” means “ from and including ” and the words “ to ” and “ until ” each means “ to but excluding ” ; provided, however, that with respect to a computation of fees or interest payable to any Secured Party, such period shall in any event consist of at least one full day.

Section 1.06 Obligation to Make Payments in Dollars . All payments to be made by any Loan Party of principal, interest, fees and other Obligations under any Loan Document shall be made in Dollars in same day funds, and no obligation of any Loan Party to make any such payment shall be discharged or satisfied by any payment other than payments made in Dollars in same day funds.

Section 1.07 Dutch Terms . In any Loan Document, where it relates to a company incorporated under the Netherlands, a reference to:

(a) a security interest includes any mortgage (hypotheek), pledge (pandrecht), retention-of-title arrangement (recht van retentie), right to reclaim goods (recht van reclame), privilege (voorrecht) and, in general any right in rem (beperkt recht) created for the purpose of granting security (goederenrechtelijk zekerheidsrecht);

(b) a director in relation to a Dutch Loan Party, means a managing director (bestuurder) and board of directors means its managing board (bestuur);

(d) an attachment includes a beslag and attaching or taking possession of (any of those terms) includes beslag leggen;

(e) gross negligence means grove schuld;

(f) indemnify means vrijwaren;

(g) negligence means schuld;

(h) willful misconduct means opzet; and

(i) in relation to any procedure or step taken in the Netherlands, legal proceedings or other procedures shall also mean:

(i) a bankruptcy (faillissement), suspension of payments (surséance van betaling), emergency procedure (noodregeling) or any other procedure having the effect that any relevant entity to which it applies loses the free management or ability to dispose of its property (irrespective of whether that procedure is provisional or final); and

(ii) a dissolution (ontbinding) or any other procedure having the effect that the relevant entity to which it applies ceases to exist.

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Section 1.08 Rounding . Any financial ratios required to be maintained by the Loan Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

Section 1.09 Rates . The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of “LIBOR Rate” or with respect to any comparable or successor rate thereto.

ARTICLE II.

THE LOANS

Section 2.01 Commitments .

(a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth:

(i) each Tranche A Term Lender severally agrees to make its portion of the Tranche A Term Loan to the U.S. Borrower on the Effective Date, in an aggregate principal amount not to exceed the amount of such Lender’s Tranche A Term Loan Commitment; and

(ii) each Tranche B Term Loan Lender severally agrees to make the Tranche B Term Loan to the Dutch Borrower on the Effective Date, in an aggregate principal amount not to exceed the amount of such Lender’s Tranche B Term Loan Commitment.

(b) Notwithstanding the foregoing:

(i) The aggregate principal amount of the Tranche A Term Loan made on the Effective Date shall not exceed the Total Tranche A Term Loan Commitment. Any principal amount of the Tranche A Term Loan Commitment which is repaid or prepaid may not be reborrowed.

(ii) The aggregate principal amount of the Tranche B Term Loan made on the Effective Date shall not exceed the Tranche B Total Term Loan Commitment. Any principal amount of the Tranche B Term Loan which is repaid or prepaid may not be reborrowed.

Section 2.02 Making the Loans . On the Effective Date, all Loans under this Agreement shall be made by the Lenders simultaneously and proportionately to their Pro Rata Shares of the Tranche A Total Term Loan Commitment or the Tranche B Total Term Loan Commitment, as the case may be, it being understood that no Lender shall be responsible for any default by any other Lender in that other Lender’s obligations to make a Loan requested hereunder, nor shall the Commitment of any Lender be increased or decreased as a result of the default by any other Lender in that other Lender’s obligation to make a Loan requested

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hereunder, and each Lender shall be obligated to make the Loans required to be made by it by the terms of this Agreement regardless of the failure by any other Lender.

Section 2.03 Repayment of Loans; Evidence of Debt .

(a) The U.S. Borrower shall repay in full the outstanding unpaid principal amount of the Tranche A Term Loan, and all accrued and unpaid interest thereon, on the earlier of (i) the Final Maturity Date and (ii) the date on which the Tranche A Term Loan is declared due and payable pursuant to the terms of this Agreement. Additionally, the U.S. Borrower shall repay the aggregate principal amount of the Tranche A Term Loans outstanding on the following dates in the respective amounts set forth opposite such dates (which amounts shall be reduced as a result of the application of prepayments in inverse order of maturity):


Date	Amount
November 1, 2018	$12,500
February 1, 2019	$12,500
May 1, 2019	$31,250
August 1, 2019	$43,750
November 1, 2019	$43,750
February 1, 2020	$43,750
May 1, 2020	$43,750
August 1, 2020	$43,750
November 1, 2020	$43,750
February 1, 2021	$43,750
May 1, 2021	$43,750
August 1, 2021	$43,750
Final Maturity Date	The aggregate principal amount of the Tranche A Term Loans outstanding on such date

(b) The Dutch Borrower shall repay in full the outstanding unpaid principal amount of the Tranche B Term Loan, and all accrued and unpaid interest thereon, on the earlier of (i) the Final Maturity Date and (ii) the date on which the Tranche B Term Loan is declared due and payable pursuant to the terms of this Agreement. Additionally, the Dutch Borrower shall repay the aggregate principal amount of the Tranche B Term Loans outstanding on the following dates in the respective amounts set forth opposite such dates (which amounts shall be reduced as a result of the application of prepayments in inverse order of maturity):


Date	Amount
November 1, 2018	$87,500
February 1, 2019	$87,500
May 1, 2019	$218,750
August 1, 2019	$306,250
November 1, 2019	$306,250

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February 1, 2020	$306,250
May 1, 2020	$306,250
August 1, 2020	$306,250
November 1, 2020	$306,250
February 1, 2021	$306,250
May 1, 2021	$306,250
August 1, 2021	$306,250
Final Maturity Date	The aggregate principal amount of the Tranche B Term Loans outstanding on such date

(c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(e) The entries made in the accounts maintained pursuant to Section 2.03(c) or Section 2.03(d) shall be prima facie evidence of the existence and amounts of the obligations recorded therein (absent manifest error); provided that (i) the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement and (ii) in the event of any conflict between the entries made in the accounts maintained pursuant to Section 2.03(c) and the accounts maintained pursuant to Section 2.03(d), the accounts maintained pursuant to Section 2.03(d) shall govern and control.

(f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the applicable Borrower shall execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in a form furnished by the Collateral Agent and reasonably acceptable to the Administrative Borrower. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 12.07) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

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Section 2.04 Interest .

(a) Interest Rate .

(i) Subject to Section 2.11 hereof, the Tranche A Term Loan shall bear interest on the principal amount thereof from time to time outstanding, from the Effective Date until repaid, at a rate per annum equal to the LIBOR Rate plus the Applicable Margin.

(ii) Subject to Section 2.11 hereof, the Tranche B Term Loan shall bear interest on the principal amount thereof from time to time outstanding, from the Effective Date until repaid, at a rate per annum equal to the LIBOR Rate plus the Applicable Margin.

(b) Default Interest . To the extent permitted by law and notwithstanding anything to the contrary in this Section, upon the occurrence and during the continuance of an Event of Default, the principal of, and all accrued and unpaid interest on, all Loans, fees, indemnities or any other Obligations of the Loan Parties under this Agreement and the other Loan Documents, shall bear interest, from the date such Event of Default occurred until the date such Event of Default is cured or waived in writing in accordance herewith, at a rate per annum equal at all times to the Post-Default Rate.

(c) Interest Payment . Interest on each Loan shall be payable monthly, in arrears, on the first day of each month, commencing on the first day of the month following the month in which such Loan is made and at maturity (whether upon demand, by acceleration or otherwise). Interest at the Post-Default Rate shall be payable on demand.

(d) General . All interest shall be computed on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed.

Section 2.05 Termination of Commitments; Prepayment of Loans .

(a) Termination of Commitments .

(i) Tranche A Term Loan Commitment . The Tranche A Total Term Loan Commitment shall terminate upon the funding in full of the Tranche A Term Loans on the Effective Date.

(ii) Tranche B Term Loan Commitment . The Tranche B Total Term Loan Commitment shall terminate upon the funding in full of the Tranche B Term Loans on the Effective Date.

(b) Optional Prepayment .

(i) Loans . Subject to the terms of the Fee Letter, the Borrowers may, at any time and from time to time after May 4, 2019, upon at least 3 Business Days’ prior written notice to the Administrative Agent, prior to 12:00 p.m. (New York City time) (or such shorter period of time as the Administrative Agent may agree to), prepay the principal of the Loans, in whole or in part; provided that such notice may provide that it is conditioned upon the consummation of another financing or the consummation of a sale of Equity Interests, in which

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case, such notice may be revoked or extended by the Administrative Borrower if any such condition is not satisfied prior to the date of termination of this Agreement in such notice. Each prepayment made pursuant to this Section 2.05(b)(i) shall be accompanied by the payment of (A) accrued interest to the date of such payment on the amount prepaid and (B) the Applicable Premium, if any, payable in connection with such prepayment of the Loans. Each such prepayment shall be applied against the remaining installments of principal due on the Loans (on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan) in the inverse order of maturity ; provided that in no event shall the Administrative Borrower be permitted to allocate any such prepayment between the Tranche A Term Loan and the Tranche B Term Loan if the result of such allocation would be that the aggregate then-outstanding principal amount of the Tranche A Term Loans is less than 60% of the aggregate then-outstanding principal amount of the Loans ; provided, however, that such requirement may be waived by the Collateral Agent in its discretion.

(ii) Termination of Agreement . Subject to the terms of the Fee Letter, the Borrowers may, upon at least 5 Business Days’ prior written notice to the Administrative Agent (or such shorter period as the Administrative Agent may agree to) by paying to the Administrative Agent, in cash, the Obligations, in full, plus the Applicable Premium, if any, payable in connection with such termination of this Agreement; provided that such notice may provide that it is conditioned upon the consummation of another financing or the consummation of a sale of Equity Interests, in which case, such notice may be revoked or extended by the Administrative Borrower if any such condition is not satisfied prior to the date of termination of this Agreement in such notice. If the Administrative Borrower has sent a notice of termination pursuant to this Section 2.05(b)(ii), then the Borrowers shall be obligated to repay the Obligations, in full, plus the Applicable Premium, if any, payable in connection with such termination of this Agreement on the date set forth as the date of termination of this Agreement in such notice.

(i) Upon any Disposition of Non-Primary Brands by any Loan Party or its Subsidiaries, the Borrowers shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal amount of the Loans, to be applied in accordance with Section 2.05(d), in an amount equal to 50% of the Net Cash Proceeds received by such Person in connection with such Disposition. Nothing contained in this Section 2.05(c)(i) shall permit any Loan Party or any of its Subsidiaries to make a Disposition of any property other than in accordance with Section 7.02(c)(ii).

(ii) Upon any Disposition (excluding Dispositions which qualify as Permitted Dispositions under clauses (a), (b), (c), (d), (e), (f), (g), (i), (j), (k), (l), (m), (n), or (q) (without limiting clause (i) above) of the definition of Permitted Disposition) by any Loan Party or its Subsidiaries, the Borrowers shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal amount of the Loans, to be applied in accordance with Section 2.05(d), in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such Disposition to the extent that the aggregate amount of Net Cash Proceeds received by all Loan Parties and their Subsidiaries (and not paid to the Administrative Agent as a prepayment of the Loans) shall exceed for all such Dispositions $250,000 in any Fiscal Year.

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Nothing contained in this Section 2.05(c)(ii) shall permit any Loan Party or any of its Subsidiaries to make a Disposition of any property other than in accordance with Section 7.02(c)(ii).

(iii) Upon the issuance or incurrence by any Loan Party or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness), or upon an Equity Issuance (other than, so long as no Default or Event of Default has occurred and is continuing, Excluded Equity Issuances), the Borrowers shall promptly (and in any event within two (2) Business Days) prepay the outstanding amount of the Loans, to be applied in accordance with Section 2.05(d), in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection therewith. The provisions of this Section 2.05(c)(iii) shall not be deemed to be implied consent to any such issuance, incurrence or sale otherwise prohibited by the terms and conditions of this Agreement.

(iv) Upon the receipt by any Loan Party or any of its Subsidiaries of any Extraordinary Receipts, the Borrowers shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal of the Loans, to be applied in accordance with Section 2.05(d), in an amount equal to 100% of the Net Cash Proceeds received by such Person.

(v) If the Loan Parties fail to comply with their obligations under (A) Section 5.02(j) within the time period set forth therein (or such later date as the Agents may agree in their sole discretion), the Borrowers shall promptly (and in any event within two (2) Business Days of failing to comply with such covenant) prepay the outstanding principal of the Loans, to be applied in accordance with Section 2.05(d), in an amount equal to $2,760,000; and/or (B) Section 5.02(k) within the time period set forth therein (or such later date as the Agents may agree in their sole discretion), the Borrowers shall promptly (and in any event within two (2) Business Days of failing to comply with such covenant) prepay the outstanding principal of the Loans, to be applied in accordance with Section 2.05(d), in an amount equal to $1,240,000.

(vi) Notwithstanding the foregoing, with respect to Net Cash Proceeds received by any Loan Party or any of its Subsidiaries in connection with a Disposition or the receipt of Extraordinary Receipts consisting of insurance proceeds or condemnation awards that are required to be used to prepay the Obligations pursuant to Section 2.05(c)(ii) or Section 2.05(c)(iv), as the case may be, up to $250,000 in the aggregate in any Fiscal Year of the Net Cash Proceeds from all such Dispositions and Extraordinary Receipts shall not be required to be so used to prepay the Obligations to the extent that such Net Cash Proceeds are used to replace, repair or restore properties or assets (other than current assets) used or useful in such Person’s business, provided that, (A) no Default or Event of Default has occurred and is continuing on the date such Person receives such Net Cash Proceeds, (B) the Administrative Borrower delivers a certificate to the Administrative Agent within 5 days after such Disposition or loss, destruction or taking, as the case may be, stating that such Net Cash Proceeds shall be used to replace, repair or restore properties or assets used or useful in such Person’s business within a period specified in such certificate not to exceed 120 days after the date of receipt of such Net Cash Proceeds (which certificate shall set forth estimates of the Net Cash Proceeds to be so expended), (C) such Net Cash Proceeds are deposited in an account subject to a Control Agreement, and (D) upon the earlier of (1) the expiration of the period specified in the relevant certificate furnished to the

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Administrative Agent pursuant to clause (B) above or (2) the occurrence of a Default or an Event of Default, such Net Cash Proceeds, if not theretofore so used, shall be used to prepay the Obligations in accordance with Section 2.05(c)(ii) or Section 2.05(c)(iv) as applicable.

(d) Application of Payments . Each prepayment pursuant to subsections (c)(i), (c)(ii), (c)(iii) and (c)(iv) above shall be applied, to the Loans, on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan, until paid in full. Each such prepayment of the Loans shall be applied against the remaining installments of principal of the Loans on a pro rata basis between the Tranche A Term Loan and the Tranche B Term Loan in the inverse order of maturity. Notwithstanding the foregoing, (A) payments made by any CFC of a U.S. Loan Party or with the proceeds of Collateral of a CFC of a U.S. Loan Party shall be applied only to the Tranche B Term Loan and the Foreign Obligations related thereto, and (B) after the occurrence and during the continuance of an Event of Default, if the Administrative Agent has elected, or has been directed by the Collateral Agent or the Required Lenders, to apply payments in respect of any Obligations in accordance with Section 4.03(b), prepayments required under Section 2.05(c) shall be applied in the manner set forth in Section 4.03(b).

(e) [ Reserved . ]

(f) Interest and Fees . Any prepayment made pursuant to this Section 2.05 shall be accompanied by (i) accrued interest on the principal amount being prepaid to the date of prepayment, (ii) the Applicable Premium, if any, payable in connection with such prepayment of the Loans to the extent required under the Fee Letter and (iii) if such prepayment would reduce the amount of the outstanding Loans to zero, such prepayment shall be accompanied by the payment of all fees accrued to such date and payable hereunder.

(g) Cumulative Prepayments . Except as otherwise expressly provided in this Section 2.05, payments with respect to any subsection of this Section 2.05 are in addition to payments made or required to be made under any other subsection of this Section 2.05.

(h) Foreign Subsidiary Limitations . Mandatory prepayments required to be made pursuant to Sections 2.05(c)(i), (ii) and (iv) as a result of a Foreign Subsidiary (other than a Borrower) receiving Net Cash Proceeds in respect of Dispositions or Extraordinary Receipts will be subject to permissibility under local law and limited by Applicable Limitations (in each case, as reasonably determined by the Collateral Agent and the Administrative Borrower); provided that the Borrowers shall use commercially reasonable efforts to take all actions required by or available under applicable Requirements of Law to permit such Foreign Subsidiaries to distribute such Net Cash Proceeds to the Borrowers to allow the applicable Borrowers to make such mandatory prepayments. Further, if the Administrative Borrower and the Collateral Agent determine in good faith that, any Foreign Subsidiary would incur a material tax liability (including any withholding tax), if all or a portion of the funds required to make such mandatory prepayments were upstreamed or transferred as a distribution or dividend (a “ Restricted Amount ”), the amount the relevant Borrower will be required to mandatorily prepay shall be reduced by the Restricted Amount until such time as the applicable Foreign Subsidiary may upstream or transfer such Restricted Amount without incurring such tax liability; provided that (x) the provisions set forth above with respect to any such deduction shall not apply if an Event of Default is continuing and (y) if the circumstance giving rise to any Restricted Amount ceases

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to exist, Parent or the relevant Foreign Subsidiary shall promptly distribute such Restricted Amount to the applicable Borrower for mandatory prepayment of the Loans.

Section 2.06 Fees .

(a) Fee Letter . As and when due and payable under the terms of the Fee Letter, the Borrowers shall pay the fees set forth in the Fee Letter.

(b) Appraisal and Collateral Monitoring Fees . The Borrowers acknowledge that pursuant to Section 7.01(f), representatives of the Agents may visit any or all of the Loan Parties and/or conduct inspections, audits, valuations and/or appraisals of any or all of the Loan Parties at any time and from time to time. The Borrowers agree to pay the documented out-of-pocket costs and expenses of all such visits, inspections, audits, valuations and/or appraisals; provided that, so long as no Event of Default shall have occurred and be continuing, no Borrower shall be obligated to reimburse the Agents for more than one (1) appraisal during any calendar year and one (1) field examination during any calendar year; provided further that , at any time that an Additional Appraisal Triggering Event shall have occurred, the Borrower shall be obligated to reimburse the Agents for an additional appraisal. The Agents may undertake up to two (2) additional field examinations per year and up to two (2) additional appraisals per year, which, so long as no Event of Default shall have occurred and be continuing, be at the expense of the Lenders.

(c) All fees due under the Loan Documents shall be paid on the dates due, in immediately available funds, to the applicable Agent for the account of the Agents and Lenders as provided herein and under the other Loan Documents. All fees shall be fully earned as accrued and shall not be refundable when paid under any circumstances.

Section 2.07 Reserves . The Administrative Agent shall have the right from time to time, in its Permitted Discretion, to establish, modify, or eliminate any applicable Reserves against the Borrowing Base, in each case, upon ten (10) Business Days’ prior written notice to the Administrative Borrower .

Section 2.08 [Reserved.]

Section 2.09 Taxes .

(a) Any and all payments by or on account of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any and all Taxes, except as required by applicable law. If any Loan Party shall be required to deduct any Taxes from or in respect of any sum payable hereunder to any Secured Party (or any transferee or assignee thereof, including a participation holder (any such entity, a “ Transferee ”)), (i) the applicable Withholding Agent shall make such deductions, (ii) the applicable Withholding Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law and (iii) if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased by the amount (an “ Additional Amount ”) necessary such that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.09) such Secured Party (or such Transferee) receives the amount equal to the sum it would have received had no such deductions been made. In addition,

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each Loan Party agrees to pay to the relevant Governmental Authority in accordance with applicable law any Other Taxes.

(b) Each Loan Party shall deliver to each Secured Party official receipts, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Secured Party, in each case, in respect of any Taxes payable pursuant to this Section 2.09 as soon as practicable after payment of such Taxes to a Governmental Authority.

(c) The U.S. Loan Parties hereby jointly and severally indemnify and agree to hold each Secured Party harmless from and against the full amount of any Indemnified Taxes (including, without limitation, Indemnified Taxes imposed on any amounts payable under this Section 2.09) paid by such Person, whether or not such Indemnified Taxes were correctly or legally asserted by the relevant Governmental Authority. The Foreign Loan Parties hereby jointly and severally indemnify and agree to hold each Secured Party harmless from and against the full amount of any Indemnified Taxes (including, without limitation, Indemnified Taxes imposed on any amounts payable under this Section 2.09) paid by such Person to the extent such Indemnified Taxes are imposed on such Person with respect to the Foreign Obligations, whether or not such Indemnified Taxes were correctly or legally asserted by the relevant Governmental Authority. Any indemnification payments required to be made pursuant to this Section 2.09(c) shall be paid by the U.S. Loan Parties or the Foreign Loan Parties, as applicable, within 10 days from the date on which any such Person makes written demand therefore specifying in reasonable detail the nature and amount of such Indemnified Taxes.

(d) Each Lender (or Transferee) that is not a U.S. Person (a “ Non-U.S. Lender ”) agrees that it shall, no later than the Effective Date (or, in the case of a Lender which becomes a party hereto pursuant to Section 12.07 hereof after the Effective Date, promptly after the date upon which such Lender becomes a party hereto) deliver to the Agents one properly completed and duly executed copy of either U.S. Internal Revenue Service Form W-8BEN-E, W-8BEN, W-8ECI or W-8IMY or any subsequent versions thereof or successors thereto, in each case claiming complete exemption from, or reduced rate of, U.S. Federal withholding tax on payments of interest hereunder. In addition, in the case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Internal Revenue Code, such Non-U.S. Lender hereby represents to the Agents and the Borrowers that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the Parent and is not a controlled foreign corporation related to the Parent (within the meaning of Section 864(d)(4) of the Internal Revenue Code), and such Non-U.S. Lender agrees that it shall promptly notify the Agents in the event any such representation is no longer accurate. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of a Transferee that is a participation holder, on or before the date such participation holder becomes a Transferee hereunder) and on or before the date, if any, such Non-U.S. Lender changes its applicable lending office by designating a different lending office (a “ New Lending Office ”). In addition, such Lender (or Transferee) or Agent shall deliver such forms within 20 days after receipt of a written request therefor from the Administrative Borrower or any Agent, the assigning Lender or the Lender granting a participation, as applicable. Notwithstanding any other provision of this Section 2.09, a Non-

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U.S. Lender shall not be required to deliver any form pursuant to this Section 2.09(d) that such Non-U.S. Lender is not legally able to deliver.

(e) Any Secured Party (or Transferee) claiming any indemnity payment or additional payment amounts payable pursuant to this Section 2.09 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document reasonably requested in writing by the Administrative Borrower if the Secured Party (or Transferee) determines, in its sole discretion, that the making of such a filing (i) would avoid the need for or reduce the amount of any such indemnity payment or additional amount that may thereafter accrue, (ii) would not require such Secured Party (or Transferee) to disclose any information such Secured Party (or Transferee) deems confidential and (iii) would not be otherwise disadvantageous to such Secured Party (or Transferee).

(f) If any Secured Party (or a Transferee) determines, in its sole discretion, that it is entitled to claim a refund from a Governmental Authority in respect of Taxes or Other Taxes with respect to which any Loan Party has made an indemnity payment or paid additional amounts, pursuant to this Section 2.09, it shall promptly notify the Administrative Borrower of the availability of such refund claim and shall, within 30 days after receipt of a request by the Administrative Borrower, make a claim to such Governmental Authority for such refund at the Loan Parties’ expense. If any Secured Party (or a Transferee) receives a refund (including pursuant to a claim for refund made pursuant to the preceding sentence) in respect of any Taxes or Other Taxes with respect to which any Loan Party has made an Indemnity payment or paid additional amounts pursuant to this Section 2.09, it shall within 30 days from the date of such receipt pay over such refund to the Administrative Borrower, net of all out‑of‑pocket expenses (including Taxes) of such Secured Party (or Transferee) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). The Administrative Borrower and any Loan Party that receives a refund pursuant to the preceding sentence shall, upon the request of such Secured Party (or Transferee), repay to such Secured Party (or Transferee) the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such Secured Party (or Transferee) is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will any Secured Party (or a Transferee) be required to pay any amount to the Administrative Borrower or any Loan Party pursuant to this paragraph (f) the payment of which would place such Secured Party (or Transferee) in a less favorable net after-Tax position than the Secured Party (or Transferee) would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any Secured Party (or a Transferee) to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(g) If a payment made to a Lender (or Transferee) or any Agent under any Loan Document would be subject to U.S. Federal withholding tax imposed by FATCA if such Lender (or Transferee) or Agent were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender (or Transferee) or Agent shall deliver to the

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Administrative Borrower and the Agents at the time or times prescribed by law and at such time or times reasonably requested by the Administrative Borrower or the Agents such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Administrative Borrower or the Agents as may be necessary for the Administrative Borrower and the Agents to comply with their obligations under FATCA and to determine that such Lender (or Transferee) or Agent has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (g) , “ FATCA ” shall include any amendments made to FATCA after the date of this Agreement. Any forms, certifications or other documentation under this clause (g) shall be delivered by each Lender (or Transferee) and each Agent.

(h) The obligations of the Loan Parties under this Section 2.09 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

Section 2.10 Increased Costs and Reduced Return .

(a) If any Secured Party shall have determined that any Change in Law shall, (i) subject such Secured Party, or any Person controlling such Secured Party to any tax, duty or other charge with respect to this Agreement or any Loan made by such Agent or such Lender, or change the basis of taxation of payments to such Secured Party or any Person controlling such Secured Party of any amounts payable hereunder (except, in each case, Indemnified Taxes and Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan or against assets of or held by, or deposits with or for the account of, or credit extended by, such Secured Party or any Person controlling such Secured Party (other than those taken into account in determining the LIBOR Rate) or (iii) impose on such Secured Party or any Person controlling such Secured Party any other condition (other than with respect to Taxes) regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to such Secured Party of making any Loan, or agreeing to make any Loan, or to reduce any amount received or receivable by such Secured Party hereunder, then, upon demand by such Secured Party, the Borrowers shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such increased costs or reductions in amount.

(b) If any Secured Party shall have determined that any Change in Law either (i) affects or would affect the amount of capital required or expected to be maintained by such Secured Party or any Person controlling such Secured Party, and such Secured Party determines that the amount of such capital is increased as a direct or indirect consequence of any Loans made or maintained, such Secured Party’s or such other controlling Person’s other obligations hereunder, or (ii) has or would have the effect of reducing the rate of return on such Secured Party’s or such other controlling Person’s capital to a level below that which such Secured Party or such controlling Person could have achieved but for such circumstances as a consequence of any Loans made or maintained, or any agreement to make Loans, or such Secured Party’s or such other controlling Person’s other obligations hereunder (in each case, taking into

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consideration, such Secured Party ’ s or such other controlling Person ’ s policies with respect to capital adequacy), then, upon demand by such Secured Party, the Borrowers shall pay to such Secured Party from time to time such additional amounts as will compensate such Secured Party for such cost of maintaining such increased capital or such reduction in the rate of return on such Secured Party ’ s or such other controlling Person ’ s capital.

(c) All amounts payable under this Section 2.10 shall bear interest from the date that is 10 days after the date of demand by any Secured Party until payment in full to such Secured Party at a rate per annum equal to the rate then applicable to the Loans. A certificate of such Secured Party claiming compensation under this Section 2.10, specifying the event herein above described and the nature of such event shall be submitted by such Secured Party to the Administrative Borrower, setting forth the additional amount due and an explanation of the calculation thereof, and such Secured Party’s reasons for invoking the provisions of this Section 2.10, and shall be final and conclusive absent manifest error.

(d) Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section 2.10 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section 2.10 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Administrative Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

(e) The obligations of the Loan Parties under this Section 2.10 shall survive the Termination Date.

Section 2.11 Impracticability .

(a) If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) adequate and reasonable means do not exist for ascertaining the LIBOR Rate and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in the preceding clause (i) have not arisen but the supervisor for the administrator of the Reuters Screen Page LIBOR 01, or a successor thereof, or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement conclusively identifying a specific date after which the Reuters Screen Page LIBOR 01, or a successor thereof, shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Administrative Borrower shall endeavor to establish an alternate rate of interest to the LIBOR Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (but for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Margin); provided that, if such alternate rate of interest shall be less than 2.00%, such rate shall be deemed to be 2.00% for the purposes of this Agreement. Notwithstanding anything to the

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contrary in Section 12 .02, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent s hall not have received, within 5 Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment. U ntil an alternate rate of interest shall be determined in accordance with this clause (b), at all times after the LIBOR Rate has actually become unavailable, all Loans shall accrue interest at the Alternative Rate .

(b) The obligations of the Loan Parties under this Section 2.11 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

Section 2.12 Mitigation Obligations; Replacement of Lenders .

(a) If any Lender requires the Borrowers to pay any Additional Amounts under Section 2.09 or requests compensation under Sections 2.10, then such Lender shall (at the request of the Administrative Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to such Section in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender requires the Borrowers to pay any Additional Amounts under Section 2.09 or requests compensation under Section 2.10 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with clause (a) above, then the Administrative Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 12.07), all of its interests, rights and obligations under this Agreement and the other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

(i) the new Lender is a Non-Public Lender;

(ii) the Borrowers shall have paid to the Agents any assignment fees specified in Section 12.07;

(iii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.09) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);

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(iv) in the case of any such assignment resulting from payments required to be made pursuant to Section 2.09 or a claim for compensation under Section 2.10 , such assignment will result in a reduction in such compensation or payments thereafter; and

(v) such assignment does not conflict with applicable law.

Prior to the effective date of such assignment, the assigning Lender shall execute and deliver an Assignment and Acceptance, subject only to the conditions set forth above. If the assigning Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such assignment, the assigning Lender shall be deemed to have executed and delivered such Assignment and Acceptance. Any such assignment shall be made in accordance with the terms of Section 12.07. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Administrative Borrower to require such assignment and delegation cease to apply.

ARTICLE III.

[INTENTIONALLY OMITTED]

ARTICLE IV.

APPLICATION OF PAYMENTS; JOINT AND SEVERAL LIABILITY OF BORROWERS

Section 4.01 Payments; Computations and Statements .

(a) The Borrowers will make each payment under this Agreement not later than 1:00 p.m. (New York City time) on the day when due, in lawful money of the United States of America and in immediately available funds, to the Administrative Agent’s Account. All payments shall be made by the Borrowers without set-off, counterclaim, recoupment, deduction or other defense to the Agents and the Lenders, except as otherwise permitted by Section 2.09. After receipt, the Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal ratably to the Lenders in accordance with their Pro Rata Shares and like funds relating to the payment of any other amount payable to any Lender to such Lender, in each case to be applied in accordance with the terms of this Agreement. Whenever any payment to be made under any such Loan Document shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. All computations of per annum fees shall be made by the Administrative Agent on the basis of a year of 360 days for the actual number of days. Each determination by the Administrative Agent of an interest rate or fees hereunder shall be conclusive and binding for all purposes in the absence of manifest error.

(b) [Reserved.]

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Section 4.02 Sharing of Payments . Except as provided in Section 2.02 hereof, if any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Obligation in excess of its ratable share of payments on account of similar obligations obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in such similar obligations held by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that (a) if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and each Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender ’ s ratable share (according to the proportion of (i) the amount of such Lender ’ s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid by the purchasing Lender in respect of the total amount so recovered and (b) the provisions of this Section shall not be construed to apply to (i) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement, or (ii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans, other than to any Loan Party or any Subsidiary thereof (as to which the provisions of this Section shall apply). The Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all of its rights (including the Lender ’ s right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of such participation.

Section 4.03 Apportionment of Payments .

(a) All payments of principal and interest in respect of outstanding Loans, all payments of fees (other than the fees set forth in Section 2.06 hereof) and all other payments in respect of any other Obligations, shall be allocated by the Administrative Agent among such of the Lenders as are entitled thereto, in proportion to their respective Pro Rata Shares or otherwise as provided herein or, in respect of payments not made on account of Loans, as designated by the Person making payment when the payment is made.

(b) After the occurrence and during the continuance of an Event of Default,

(i) the Administrative Agent may, and upon the direction of the Collateral Agent or the Required Lenders shall, apply all payments by the U.S. Loan Parties, including without limitation, all proceeds of the Collateral of any U.S. Loan Party, subject to the provisions of this Agreement, (i) first , ratably to pay the Obligations in respect of any fees, expense reimbursements, indemnities and other amounts then due and payable to the Agents until paid in full; (ii) second , to pay interest then due and payable in respect of the Collateral Agent Advances until paid in full; (iii) third , to pay principal of the Collateral Agent Advances until paid in full; (iv) fourth , ratably to pay the Obligations in respect of any fees (other than any Applicable Premium), expense reimbursements, indemnities and other amounts then due and payable to the Tranche A Term Loan Lenders until paid in full; (vii) fifth , ratably to pay interest then due and payable in respect of the Tranche A Term Loans until paid in full; (viii) sixth , ratably to pay principal of the Tranche A Term Loans until paid in full; (ix) seventh , ratably to pay the U.S. Obligations in respect of any Applicable Premium then due and payable to the

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Lenders until paid in full; (x) eighth , to the ratable repayment of all other U.S. Obligations then due and payable; and (xi) ninth , as set forth in Section 4.03(b)(ii) below; and

(ii) the Administrative Agent may, and upon the direction of the Collateral Agent or the Required Lenders shall, apply all payments by the Foreign Loan Parties, including without limitation, all proceeds of the Collateral of any Foreign Loan Party, subject to the provisions of this Agreement, (i) first , ratably to pay the Obligations in respect of any fees, expense reimbursements, indemnities and other amounts then due and payable to the Agents until paid in full; (ii) second , to pay interest then due and payable in respect of the Collateral Agent Advances in respect of the Foreign Obligations until paid in full; (iii) third , to pay principal of the Collateral Agent Advances in respect of the Foreign Obligations until paid in full; (iv) fourth , ratably to pay the Obligations in respect of any fees (other than any Applicable Premium), expense reimbursements, indemnities and other amounts then due and payable to the Tranche B Term Loan Lenders until paid in full; (v) fifth , ratably to pay interest then due and payable in respect of the Tranche B Term Loans until paid in full; (vi) sixth , ratably to pay principal of the Tranche B Term Loans until paid in full; (vii) seventh , ratably to pay the Foreign Obligations in respect of any Applicable Premium then due and payable to the Lenders until paid in full; and (viii) eighth , to the ratable payment of all other Foreign Obligations then due and payable.

(c) For purposes of Section 4.03(b), “paid in full” means payment in cash of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not the same would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding, except to the extent that default or overdue interest (but not any other interest) and loan fees, each arising from or related to a default, are disallowed in any Insolvency Proceeding.

(d) In the event of a direct conflict between the priority provisions of this Section 4.03 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that both such priority provisions in such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 4.03 shall control and govern.

Section 4.04 [Reserved.]

Section 4.05 Administrative Borrower; Joint and Several Liability .

(a) Each Borrower hereby irrevocably appoints the Parent as the borrowing agent and attorney-in-fact for the Borrowers (the “ Administrative Borrower ”) which appointment shall remain in full force and effect unless and until the Agents shall have received prior written notice signed by all of the Borrowers that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide to the Agents and receive from the Agents all notices with respect to Loans obtained for the benefit of any Borrower and

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all other notices and instructions under this Agreement and (ii) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Loans and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Collateral of the Borrowers in a combined fashion , as more fully set forth herein, is done solely as an accommodation to the Borrowers in order to utilize the collective borrowing powers of the Borrowers in the most efficient and economical manner and at their request, and that neither the Agents nor the Lenders shall incur liability to the Borrowers as a result hereof. Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.

(b) The U.S. Borrower jointly and severally agrees to pay, and shall be jointly and severally liable under this Agreement for, all Obligations, regardless of the manner or amount in which proceeds of Loans are used, allocated, shared, or disbursed by or among the Borrowers, or the manner in which any Agent and/or any Lender accounts for such Loans or other extensions of credit on its books and records. The U.S. Borrower shall be liable for all amounts due to any Agent and/or any Lender under this Agreement, regardless of which Borrower actually receives Loans or other extensions of credit hereunder or the amount of such Loans and extensions of credit received or the manner in which any Agent and/or such Lender accounts for such Loans or other extensions of credit on its books and records. The U.S. Borrower’s Obligations with respect to Loans and other extensions of credit made to it, and the U.S. Borrower’s Obligations arising as a result of the joint and several liability of the U.S. Borrower hereunder, with respect to Loans made to the other Borrowers hereunder, shall be separate and distinct obligations, but all such Obligations shall be primary obligations of the U.S. Borrower. The U.S. Borrower’s joint and several obligations hereunder shall, to the fullest extent permitted by law, be unconditional irrespective of any circumstances which might constitute a legal or equitable discharge or defense of the U.S. Borrower hereunder with respect to the Loans made to any of the Borrowers hereunder.

(c) The provisions of this Section 4.05 are made for the benefit of the Agents, the Lenders and their successors and assigns, and may be enforced by them from time to time against any or all of the Borrowers as often as occasion therefor may arise and without requirement on the part of the Agents, the Lenders or such successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any of the other Borrowers or to exhaust any remedies available to it or them against any of the other Borrowers or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy. The provisions of this Section 4.05 shall remain in effect until all of the Obligations shall have been paid in full in cash or otherwise fully satisfied.

(d) Each of the Borrowers hereby agrees that it will not enforce any of its rights of contribution or subrogation against the other Borrowers with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to the Agents or the Lenders with respect to any of the Obligations or any Collateral, until such time as all of the Obligations have been paid in full in cash. Any claim which any Borrower may have against any other Borrower with respect to any payments to the Agents or the Lenders hereunder or under any other Loan Documents are hereby expressly made subordinate and junior

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in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations.

ARTICLE V.

CONDITIONS TO LOANS

Section 5.01 Conditions Precedent to Effectiveness . This Agreement shall become effective as of the Business Day (the ”Effective Date”) when each of the following conditions precedent shall have been satisfied in a manner reasonably satisfactory to the Agents:

(a) Payment of Fees, Etc . The Borrowers shall have paid on or before the Effective Date all fees, costs, expenses and taxes then payable pursuant to Section 2.06 and Section 12.04 that have been invoiced.

(b) Representations and Warranties; No Event of Default . The following statements shall be true and correct: (i) the representations and warranties contained in Article VI and in each other Loan Document are true and correct in all material respects (except for those representations and warranties that are conditioned by materiality, which shall be true and correct in all respects) on the Effective Date (except to the extent that any such representation or warranty expressly relates solely to an earlier date, which representation and warranty shall be true and correct on and as of such earlier date), and (ii) at the time of and after giving effect to the making of the Loans and the application of the proceeds thereof on the Effective Date, no Default or Event of Default has occurred and is continuing or would result therefrom.

(c) Legality . The making of the Loans shall not contravene any law, rule or regulation applicable to any Secured Party, including without limitation Regulation T, U or X.

(d) Delivery of Documents . The Collateral Agent shall have received on or before the Effective Date the following, each in form and substance satisfactory to the Collateral Agent and, unless indicated otherwise, dated the Effective Date and, if applicable, duly executed by the Persons party thereto:

(i) this Agreement, duly executed by each of the parties hereto;

(ii) the Security Documents, together with the original stock certificates representing all of the Equity Interests and all promissory notes required to be pledged thereunder, accompanied by undated stock powers executed in blank and other proper instruments of transfer;

(iii) (A) a UCC Filing Authorization Letter, together with evidence reasonably satisfactory to the Collateral Agent of the filing of appropriate financing statements on Form UCC-1 in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by each Security Agreement; and (B) subject to Section 5.02, evidence reasonably satisfactory to the Collateral Agent of all other filings and recordings as may be reasonably necessary or, in the reasonable judgment of the Collateral Agent, desirable to perfect the security interests purported to be created by each other Security Document;

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(iv) the results of searches for any effective UCC financing statements, tax Liens or judgment Liens filed against any Loan Party or its property, which results shall not show any such Liens (other than Permitted Liens), to the extent applicable in the relevant jurisdiction;

(v) a Perfection Certificate;

(vi) the Disbursement Letter;

(vii) the Fee Letter;

(viii) the Intercompany Subordination Agreement;

(ix) a certificate of an Authorized Officer of each Loan Party, certifying (A) as to copies of the Governing Documents of such Loan Party, and with respect to any Loan Party incorporated in the Netherlands an up-to-date excerpt from the Dutch trade register in respect to such Loan Party, together with all amendments thereto (including, without limitation, a true and complete copy of the charter, certificate of formation, certificate of limited partnership or other publicly filed organizational document of each Loan Party certified as of a recent date not more than 30 days prior to the Effective Date by an appropriate official of the jurisdiction of organization of such Loan Party which shall set forth the same complete name of such Loan Party as is set forth herein and the organizational number of such Loan Party, if an organizational number is issued in such jurisdiction), (B) as to a copy of the resolutions or written consents of such Loan Party authorizing (1) the borrowings hereunder and the transactions contemplated by the Loan Documents to which such Loan Party is or will be a party, and (2) the execution, delivery and performance by such Loan Party of each Loan Document to which such Loan Party is or will be a party and the execution and delivery of the other documents to be delivered by such Person in connection herewith and therewith, (C) with respect to any Loan Party incorporated in the Netherlands, as to any request for advice submitted to any works council ( ondernemingsraad ) and any unconditional and positive advice of any such works council, and (D) the names and true signatures of the representatives of such Loan Party authorized to sign each Loan Document (in the case of a Borrower, including, without limitation, Notices of Borrowing and all other notices under this Agreement and the other Loan Documents) to which such Loan Party is or will be a party and the other documents to be executed and delivered by such Loan Party in connection herewith and therewith, together with evidence of the incumbency of such authorized officers;

(x) the Financial Statements and the Projections described in Section 6.01(g) hereof and (ii) a certificate of the chief financial officer of the Parent certifying as to the compliance with the representations and warranties set forth in Section 6.01(g)(i), Section 6.01(g)(ii), and Section 6.01(gg)(ii) and as to the matters set forth in Section 5.01(i) (including calculations demonstrating such compliance, where applicable);

(xi) a certificate of the chief financial officer of Parent, certifying as to the Solvency of the Parent and its Subsidiaries on a consolidated basis (immediately before and after giving effect to the making of the Loans on the Effective Date and the consummation of the other Transactions) substantially in the form of Exhibit C;

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(xii) a Borrowing Base Certificate dated as of the Effective Date, executed by an Authorized Officer of the Administrative Borrower ;

(xiii) a certificate of the appropriate official(s) of the jurisdiction of organization and, except to the extent such failure to be so qualified could not reasonably be expected to have a Material Adverse Effect, each jurisdiction of foreign qualification of each Loan Party certifying as of a recent date not more than 30 days prior to the Effective Date as to the subsistence in good standing of (to the extent such concept is applicable in the relevant jurisdiction), and the payment of taxes by, such Loan Party in such jurisdictions;

(xiv) an opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., U.S. counsel to the Loan Parties, as to such matters as the Administrative Agent and Collateral Agent may reasonably request;

(xv) evidence of the insurance coverage, certificates, and endorsements required by Section 7.01 and the terms of each Security Agreement, together with evidence of the payment of all premiums due in respect thereof for such period as the Collateral Agent may request;

(xvi) evidence of the payment in full of all Indebtedness under the Existing Credit Facilities, together with (A) a termination and release agreement with respect to the Existing Credit Facilities and all related documents, duly executed by or on behalf of the Loan Parties and the Existing Lenders, (B) a termination of security interest in Intellectual Property for each assignment for security recorded by the Existing Lenders at the United States Patent and Trademark Office, the United States Copyright Office, and any applicable recording offices outside of the United States, as applicable, and covering any intellectual property of the Loan Parties, and (C) UCC-3 termination statements for all UCC-1 financing statements filed by the Existing Lenders and covering any portion of the Collateral; and

(xvii) promissory notes executed by the Borrowers in favor of each Lender requesting such promissory notes.

(e) Material Adverse Effect . Since December 31, 2017, no change, event, circumstance, or development shall have occurred which constitutes or could reasonably be expected to have a Material Adverse Effect.

(f) Appraisals and Field Examination . The Agents shall have received, and shall be satisfied with, the results of all Collateral appraisals reasonably requested by the Agents (including, without limitation, an Intellectual Property and Intellectual Property Contracts appraisal) and a field examination of the Loan Parties;

(g) Warrants . Each Lender shall have received the applicable Warrant issued in favor of such Lender from the Parent, such Warrant to be in form and substance reasonably satisfactory to such Lender.

(h) Subordinated Indebtedness Documents; Subordination Agreements . The Agents shall have received (i) a duly executed certificate of an Authorized Officer of the Administrative Borrower attaching true, correct and complete, fully-executed and certified

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copies of each of the Subordinated Indebtedness Documents (including, without limitation , with respect to the Board D ebt), each of which shall be in form and substance, and on terms and conditions, reasonably satisfactory to the Agents ; (ii) substantially concurrently with the Indebtedness hereunder, with respect to the Board Debt refinancing certain of the Indebtedness under the Existing Credit Facilities , the Loan Parties shall incur an additional amount of Indebtedness in the principal amount of $2,000,000 from US Bank FBO Cove Street Capital Small Cap Value Fund ; and (ii i ) a fully executed and delivered copy of each Subordination Agreement in respect of Subordinated Indebtedness (including, without limitation, with respect to the Board Debt), each in form and substance reasonably satisfactory to the Agent s and the Lenders, and such agreements shall be in full force and effect .

(i) Qualified Cash . On a pro forma basis after giving effect to the making of the Loans on the Effective Date and the consummation of the other Transactions, the Borrowers have Qualified Cash of not less than $1,000,000 after giving effect to such Loans and Transactions.

(j) Approvals; Officer’s Certificate . The Agents and the Lenders shall have received a certificate of an Authorized Officer of the Administrative Borrower (i) either (A) attaching copies of all consents, licenses and approvals required in connection with the consummation by each Loan Party of the Transactions, the execution, delivery and performance by each Loan Party and/or the validity against each Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required; and (ii) certifying as to the matters set forth in Section 5.01(b), (e) and (k).

(k) Proceedings . There shall exist no claim, action, suit, investigation, litigation or proceeding, pending or threatened in any court or before any Governmental Authority related to the making of the Loans or the consummation of the other Transactions, or which could reasonably be expected to have a Material Adverse Effect.

(l) KYC . The Agents and the Lenders shall have each received all documentation and other information requested by regulatory authorities with respect to the Loan Parties under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act, the results of which shall be reasonably satisfactory to the Agents and the Lenders.

(m) Legality . The making of such Loan shall not contravene any law, rule or regulation applicable to any Loan Party or Secured Party.

(n) Other Documents and Information . The Agents shall have received such other assurances, certificates, documents, consents or opinions as any Agent or any Lender reasonably may require.

For purposes of determining compliance with the conditions specified in this Section 5.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the

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Administrative Agent shall have received notice from such Lender prior to the proposed Effective Date specifying its objection thereto.

Section 5.02 Conditions Subsequent to Effectiveness . As an accommodation to the Loan Parties, the Agents and the Lenders have agreed to execute this Agreement and to make the Loans on the Effective Date notwithstanding the failure by the Loan Parties to satisfy the conditions set forth below on or before the Effective Date. In consideration of such accommodation, the Loan Parties agree that, in addition to all other terms, conditions and provisions set forth in this Agreement and the other Loan Documents, including, without limitation, those conditions set forth in Section 5.01, the Loan Parties shall satisfy each of the conditions subsequent set forth below on or before the date applicable thereto (it being understood that (i) the failure by the Loan Parties to perform or cause to be performed any such condition subsequent on or before the date applicable thereto shall constitute an Event of Default and (ii) to the extent that the existence of any such condition subsequent would otherwise cause any representation, warranty or covenant in this Agreement or any other Loan Document to be breached, the Required Lenders hereby waive such breach for the period from the Effective Date until the date on which such condition subsequent is required to be fulfilled pursuant to this Section 5.02):

(a) no later than (i) 30 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion) with respect to accounts maintained in the U.S. and (ii) 45 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion) with respect to accounts maintained outside of the U.S., the delivery to the Collateral Agent of all Control Agreements that, in the reasonable judgment of the Agents, are required for the Loan Parties to comply with the Loan Documents as of the Effective Date, each duly executed by, in addition to the applicable Loan Party, the applicable financial institution, with respect to each of the accounts that are set forth on Schedule IV to the Security Agreement or, with respect to accounts administered or held with any financial institution in the Netherlands, as set forth in the applicable Dutch Security Documents;

(b) the Loan Parties shall use commercially reasonable efforts to deliver, no later than 30 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), to the Collateral Agent a landlord waiver, in form and substance reasonably satisfactory to the Collateral Agent and which may be included as a provision contained in the relevant Lease, executed by the landlord with respect to the corporate headquarters of the Parent;

(c) no later than 60 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall obtain and record releases and terminations with the United States Patent and Trademark Office any all other foreign intellectual property offices for all Liens and security interests on all registered Trademarks (including, without limitation, those Trademarks listed on Schedule 5.02(c) hereto) other than (i) the Liens and security interests filed in favor of the Existing Lenders which shall be terminated on the Effective Date; and (ii) the Liens and security interests in favor of the Collateral Agent to be filed in connection with this Agreement;

(d) no later than 45 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall file or cause to be filed a UCC-

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3 termination statement with respect to that certain financing statement (Filing No. 20123420223) filed by JPMorgan Chase Bank, N.A. against Cherokee Inc. ;

(e) no later than 45 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall file or cause to be filed a UCC-3 termination statement with respect to that certain financing statement (Filing No. 20182925689) filed by Komatsu Financial Limited Partnership against Cherokee Inc.;

(f) no later than 5 Business Days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall deliver or cause to be delivered to the Collateral Agent the original stock certificates representing all of the Equity Interests and all promissory notes required to be pledged under Security Documents, accompanied by undated stock powers executed in blank and other proper instruments of transfer;

(g) no later than 15 Business Days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall deliver each of the fully executed Dutch Deeds of Pledge of Shares, in form and substance reasonably satisfactory to the Agents, to the Agents;

(h) no later than 5 Business Days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall deliver fully executed copies of amendments to each of the operating agreements of SPELL C. LLC, Cherokee Brands LLC, Hawk 900 Brands LLC, EDCA LLC, FFS Holdings, LLC, and Flip Flop Shops Franchise Company, LLC, in each case, in form and substance reasonably satisfactory to the Agents and to reflect the equity pledged to the Collateral Agent;

(i) no later than 30 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall deliver to the Agents the insurance endorsements naming the Collateral Agent as additional insured and/or lenders loss payee, as applicable, and the notice of cancellation endorsements, as required by Section 7.01 and the terms of each Security Agreement;

(j) no later than 90 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall deliver to the Agents a fully executed amendment, in form and substance reasonably satisfactory to the Agents, to that certain license agreement with Advanced Manufacturing Group Limited, which amendment shall change the governing law under such license to New York law, California law or the laws of any other state within the United States acceptable to the Agents; provided that, that no Default or Event of Default shall be deemed to have occurred with respect to this clause (j) to the extent the Loan Parties comply with the terms of Section 2.05(c)(v); and

(k) no later than 90 days after the Effective Date (or such later date as the Agents shall agree in their sole discretion), the Loan Parties shall deliver to the Agents a fully executed amendment, in form and substance reasonably satisfactory to the Agents, to that certain license agreement with Martes Sport SP.Zo.o, which amendment shall change the governing law under such license to New York law, California law or the laws of any other state within the

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United States acceptable to the Agents ; provided that, that no Default or Event of Default shall be deemed to have occurred with respect to this clause (k ) to the extent the Loan Parties comply with the terms of Section 2.05(c)(v) .

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

Section 6.01 Representations and Warranties . Each Loan Party hereby represents and warrants to the Secured Parties as follows:

(a) Organization, Good Standing, Etc . Each Loan Party (i) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the laws of the state or jurisdiction of its organization, (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated and, in the case of the Borrowers, to make the borrowings hereunder, and to execute and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated thereby, and (iii) is duly qualified to do business and is in good standing (to the extent such concept is applicable in the relevant jurisdiction) in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and in good standing could not reasonably be expected to have a Material Adverse Effect.

(b) Authorization, Etc . The execution, delivery and performance by each Loan Party of each Loan Document to which it is or will be a party, (i) have been duly authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable material Requirement of Law or (C) any material Contractual Obligation binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties, except (solely for the purposes of subclause (iv)), to the extent where such contravention, default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal could not reasonably be expected to have a Material Adverse Effect.

(c) Governmental Approvals . No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of any Loan Document to which it is or will be a party other than filings and recordings with respect to Collateral to be made, or otherwise delivered to the Collateral Agent for filing or recordation, on the Effective Date.

(d) Enforceability of Loan Documents . This Agreement is, and each other Loan Document to which any Loan Party is or will be a party, when delivered hereunder, will be, a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy,

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insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors ’ rights generally and by general principles of equity.

(e) Capitalization . On the Effective Date, after giving effect to the transactions contemplated hereby to occur on the Effective Date, the authorized Equity Interests of the Parent and each of its Subsidiaries and the issued and outstanding Equity Interests of the Parent and each of its Subsidiaries are as set forth on Schedule 6.01(e). All of the issued and outstanding shares of Equity Interests of the Parent and each of its Subsidiaries have been validly issued and are fully paid and nonassessable, and the holders thereof are not entitled to any preemptive, first refusal or other similar rights. All Equity Interests of such Subsidiaries of the Parent are owned by the Parent free and clear of all Liens (other than Permitted Specified Liens). Except as described on Schedule 6.01(e), there are no outstanding debt or equity securities of the Parent or any of its Subsidiaries and no outstanding obligations of the Parent or any of its Subsidiaries convertible into or exchangeable for, or warrants, options or other rights for the purchase or acquisition from the Parent or any of its Subsidiaries, or other obligations of the Parent or any of its Subsidiaries to issue, directly or indirectly, any shares of Equity Interests of the Parent or any of its Subsidiaries.

(f) Litigation . Except as set forth in Schedule 6.01(f), there is no pending or, to the knowledge of any Loan Party, threatened (in writing) action, suit or proceeding affecting any Loan Party, any of its Subsidiaries, or any of its properties before any court or other Governmental Authority or any arbitrator that (i) if adversely determined, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (ii) relates to this Agreement or any other Loan Document or any transaction contemplated hereby or thereby.

(g) Financial Statements .

(i) The Financial Statements, copies of which have been delivered to each Agent and each Lender, fairly present in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at the respective dates thereof and the consolidated results of operations of the Parent and its Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP (subject, in the case of interim statements, to the absence of year-end footnotes and subject to audit adjustments that are not material). All material indebtedness and other liabilities (including, without limitation, Indebtedness, liabilities for taxes, long-term leases and other unusual forward or long-term commitments), direct or contingent, of the Parent and its Subsidiaries, to the extent required by GAAP to be set forth, are set forth in the Financial Statements. Since December 31, 2017, no event or development has occurred that has had or could reasonably be expected to have a Material Adverse Effect.

(ii) [Reserved].

(iii) The Parent has heretofore furnished to the Agents (A) projected monthly balance sheets, income statements and statements of cash flows of the Parent and its Subsidiaries for the periods from February 2018, through the end of the Fiscal Year ended on or around February 2, 2019, and (B) projected quarterly income statements and statements of cash flows of the Parent and its Subsidiaries for the Fiscal Year ending in 2020 and income statements

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of the Parent and its Subsidiaries for the Fiscal Year ending in 2021 , which projected financial statements shall be updated from time to time pursuant to Section 7.01(a)(vii) .

(h) Compliance with Law, Etc . No Loan Party or any of its Subsidiaries is in violation of (i) any of its Governing Documents, (ii) any material Requirement of Law, or (iii) any Material Contract binding on or otherwise affecting it or any of its properties, except in the cases of this subclause (iii) where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.

(i) ERISA . Except as set forth on Schedule 6.01(i) or as could not reasonably be expected to have a Material Adverse Effect, (i) each Employee Plan is in substantial compliance with ERISA and the Internal Revenue Code, (ii) no Termination Event has occurred nor is reasonably expected to occur with respect to any Employee Plan, (iii) if required to be filed, the most recent annual report (Form 5500 Series) with respect to each Employee Plan, including any required Schedule B (Actuarial Information) thereto, copies of which have been filed with the Internal Revenue Service, is complete and correct and fairly presents the funding status of such Employee Plan, and since the date of such report there has been no material adverse change in such funding status, (iv) copies of each agreement entered into with the PBGC, the U.S. Department of Labor or the Internal Revenue Service with respect to any Employee Plan (if any) have been delivered to the Agents, (v) no Employee Plan had an accumulated or waived funding deficiency or permitted decrease which would create a deficiency in its funding standard account or has applied for an extension of any amortization period within the meaning of Section 412 of the Internal Revenue Code at any time during the previous 60 months, and (vi) no Lien imposed under the Internal Revenue Code or ERISA exists or is likely to arise on account of any Employee Plan within the meaning of Section 412 of the Internal Revenue Code. Except as set forth on Schedule 6.01(i), no Loan Party or any of its ERISA Affiliates has incurred any withdrawal liability under ERISA with respect to any Multiemployer Plan, or is aware of any facts indicating that it or any of its ERISA Affiliates may in the future incur any such withdrawal liability. No Loan Party or any of its ERISA Affiliates has (i) engaged in a nonexempt prohibited transaction described in Sections 406 of ERISA or 4975 of the Internal Revenue Code with respect to an Employee Plan, (ii) failed to pay any required installment or other payment required under Section 412 of the Internal Revenue Code on or before the due date for such required installment or payment, (iii) engaged in a transaction within the meaning of Section 4069 of ERISA or (iv) incurred any liability to the PBGC which remains outstanding other than the payment of premiums, and there are no premium payments which have become due which are unpaid, in each case of clauses (i) through (iv), except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect. There are no pending or, to the knowledge of any Loan Party, threatened claims, actions, proceedings or lawsuits (other than claims for benefits in the normal course) asserted or instituted against (i) any Employee Plan or its assets, or (ii) any Loan Party or any of its ERISA Affiliates with respect to any Employee Plan. Except as required by Section 4980B of the Internal Revenue Code, no Loan Party or any of its ERISA Affiliates maintains an employee welfare benefit plan (as defined in Section 3(1) of ERISA) which provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of any Loan Party or any of its ERISA Affiliates or coverage after a participant’s termination of employment or, if later, the end of a former employee’s severance period, in each case of clauses

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(i) and (ii), except if adversely determined, could reasonably be expected to have a Material Adverse Effect.

(j) Taxes, Etc . All foreign, Federal and material provincial, state and local tax returns and other reports required by applicable Requirements of Law to be filed by any Loan Party have been filed, or extensions have been obtained, and (ii) all taxes, assessments and other governmental charges imposed upon any Loan Party or any property of any Loan Party which have become due and payable on or prior to the date hereof have been paid, except (x) unpaid Taxes in an aggregate amount at any one time not in excess of $250,000, and (y) Taxes contested in good faith by proper proceedings which stay the imposition of any penalty or Lien and with respect to which adequate reserves have been set aside for the payment thereof on the Financial Statements in accordance with GAAP.

(k) Regulations T, U and X . No Loan Party or Subsidiary is or will be engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation T, U or X), and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U and X.

(l) Nature of Business .

(i) No Loan Party or Subsidiary is engaged in any business other than as set forth on Schedule 6.01(l) and business activities reasonably related or incidental thereto.

(ii) Other than as permitted under Section 7.02(d)(ii), the Dutch Borrower does not have any material liabilities (other than liabilities arising under the Loan Documents), own any material assets (other than the Equity Interests of its Subsidiaries) or engage in any operations or business (other than the ownership of its Subsidiaries).

(m) Adverse Agreements, Etc . No Loan Party or any of its Subsidiaries is a party to any Contractual Obligation or subject to any restriction or limitation in any Governing Document or any judgment, order, regulation, ruling or other requirement of a court or other Governmental Authority, which (either individually or in the aggregate) has, or in the future could reasonably be expected (either individually or in the aggregate) to have, a Material Adverse Effect.

(n) Permits, Etc . Each Loan Party has, and is in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations required for such Person lawfully to own, lease, manage or operate, or to acquire, each business and Facility currently owned, leased, managed or operated, or to be acquired, by such Person, except to the extent the failure to have or be in compliance therewith could not reasonably be expected to have a Material Adverse Effect. No condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license, authorization, approval, entitlement or accreditation, and there is no claim that any thereof is not in full force and effect, except to the

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extent that any such condition, event or claim could not reasonably be expected to have a Material Adverse Effect.

(o) Properties . Each Loan Party has good and marketable title to, valid leasehold interests in, or valid licenses to use, all property and assets material to its business, free and clear of all Liens, except Permitted Liens. All such properties and assets are in good working order and condition, ordinary wear and tear and casualty and condemnation excepted.

(p) Employee and Labor Matters . Except as could reasonably be expected to have a Material Adverse Effect, there is no (i) unfair labor practice complaint pending or, to the knowledge of any Loan Party, threatened against any Loan Party before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party which arises out of or under any collective bargaining agreement, (ii) strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened against any Loan Party or (iii) to the knowledge of each Loan Party, union representation question existing with respect to the employees of any Loan Party or union organizing activity taking place with respect to any of the employees of any Loan Party. No Loan Party has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act (" WARN ") or similar state law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of any Loan Party have been in substantial compliance with the Fair Labor Standards Act or any other applicable legal requirements. All material payments due from any Loan Party on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of such Loan Party.

(q) Environmental Matters . Except as set forth on Schedule 6.01(q), (i) the operations of each Loan Party are in compliance in all material respects with all Environmental Laws; (ii) there has been no Release at any of the properties owned or operated by any Loan Party or, to the knowledge of any Loan Party, a predecessor in interest, or at any disposal or treatment facility which received Hazardous Materials generated by any Loan Party or any predecessor in interest which could reasonably be expected to have a Material Adverse Effect; (iii) no Environmental Action has been asserted against any Loan Party or, to the knowledge of any Loan Party, any predecessor in interest nor does any Loan Party have knowledge or notice of any threatened or pending Environmental Action against any Loan Party or any predecessor in interest which could reasonably be expected to have a Material Adverse Effect; (iv) to the knowledge of any Loan Party, no Environmental Actions have been asserted against any facilities that may have received Hazardous Materials generated by any Loan Party or any predecessor in interest which could reasonably be expected to have a Material Adverse Effect; (v) no property now or formerly owned or operated by a Loan Party has been used as a treatment or disposal site for any Hazardous Material for which such Loan Party could reasonably be expected to be liable under Environmental Laws; (vi) no Loan Party has failed to report to the proper Governmental Authority any Release which is required to be so reported by any Environmental Laws which could reasonably be expected to have a Material Adverse Effect; (vii) each Loan Party holds all licenses, permits and approvals required under any Environmental Laws in connection with the operation of the business carried on by it, except for such licenses, permits and approvals as to which a Loan Party's failure to maintain or comply with could not reasonably be expected to have a Material Adverse Effect; and (viii) no Loan Party has received any notification pursuant to any Environmental Laws that (A) any work, repairs, construction or

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Capital Expenditures are required to be made as a condition of continued compliance with any Environmental Laws, or any license, permit or approval issued pursuant thereto or (B) any license, permit or approval referred to above is about to be reviewed, made, subject to limitations or conditions, revoked, withdrawn or terminated, in each case, except as could not reasonably be expected to have a Material Adverse Effect .

(r) Insurance . Each Loan Party maintains the insurance and required services and financial assurance as required by law and as required by Section 7.01(h). Schedule 6.01(r) sets forth a list of all insurance maintained by each Loan Party on the Effective Date.

(s) Use of Proceeds . The proceeds of the Loans shall be used on the Effective Date (a) to consummate the Refinancing, (b) for the payment of the Transaction Costs, and (c) for working capital and other general corporate purposes of the Borrowers.

(t) Solvency . Immediately before and after giving effect to the making of the Loans on the Effective Date and the consummation of the other Transactions, the Parent and its Subsidiaries, on a consolidated basis, are Solvent.

(u) Intellectual Property . Except as set forth on Schedule 6.01(u), each Loan Party owns or licenses or otherwise has the right to use all Intellectual Property rights that are necessary for the operation of its business, without infringement upon, misappropriation, impairment, conflict or violation of the intellectual property rights of any other Person with respect thereto, except for such infringements and conflicts which, individually or in the aggregate, could not reasonably be expected to materially adversely affect any Loan Party’s operation of its business, and no claim, action, proceeding, or litigation regarding any of the Intellectual Property is pending or (to the knowledge of the Loan Parties) threatened, except for such infringements and conflicts which could not reasonably be expected to, individually or in the aggregate, materially adversely affect any Loan Party’s operation of its business. Set forth on Schedule 6.01(u) (as such Schedule may be updated from time to time) is a complete and accurate list as of the Effective Date of (i) each item of Registered Intellectual Property owned by each Loan Party and (ii) each License (as defined in the Security Agreement and applicable to any Loan Party) which is a Material Contract to which any Loan Party is bound (excluding any non-exclusive license of software that is widely commercially available). No trademark or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party infringes upon, misappropriates, impairs, conflicts with or otherwise violates any rights owned by any other Person, and no claim, action, proceeding, or litigation regarding any of the foregoing is pending or threatened, except for such infringements and conflicts which could not reasonably be expected to, individually or in the aggregate, materially adversely affect any Loan Party’s operation of its business. No patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code pertaining to Intellectual Property is pending or proposed, which, individually or in the aggregate, could reasonably be expected to materially adversely affect any Loan Party’s operation of its business. None of the transactions contemplated by the Loan Documents will result in the invalidity, unenforceability or impairment of any material Intellectual Property, or in the default or termination of any material Intellectual Property Contract.

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(v) Material Contracts . Set forth on Schedule 6.01(v) is a complete and accurate list as of the Effective Date of all Material Contracts of each Loan Party, showing the parties thereto and amendments and modifications thereto. Each such Material Contract (i) is in full force and effect and is binding upon and enforceable against each Loan Party that is a party thereto and, to the best knowledge of such Loan Party, all other parties thereto in accordance with its terms, (ii) has not been otherwise amended or modified, and (iii) has no default s thereunder due to the action of any Loan Party or, to the best knowledge of any Loan Party, any other party thereto.

(w) Investment Company Act . None of the Loan Parties, any of their Subsidiaries and any Person controlling any Loan Party, is (i) an “investment company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as amended, or (ii) subject to regulation under any Requirement of Law that limits in any respect its ability to incur Indebtedness or which may otherwise render all or a portion of the Obligations unenforceable.

(x) [ Reserved ].

(y) [ Reserved ].

(z) [ Reserved ].

(aa) Anti-Money Laundering and Anti-Terrorism Laws .

(i) None of the Loan Parties, nor, to the knowledge of the Loan Parties, any Affiliate of any of the Loan Parties, has violated in the past six years or is in violation of any of the Anti-Money Laundering and Anti-Terrorism Laws or has engaged in or conspired to engage in, in the past six years, any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the Anti-Money Laundering and Anti-Terrorism Laws.

(ii) None of the Loan Parties, nor, to the knowledge of the Loan Parties, any Affiliate of any of the Loan Parties, nor any officer or director of any of the Loan Parties, nor any of the Loan Parties’ respective agents acting or benefiting in any capacity in connection with the Loans or other transactions hereunder, is a Blocked Person.

(iii) To the knowledge of the Loan Parties, none of the Loan Parties, nor any of their agents acting in any capacity in connection with the Loans or other transactions hereunder, (A) conducts any business with or for the direct benefit of any Blocked Person or engages in making or receiving any contribution of funds, goods or services to, from or for the direct benefit of any Blocked Person, or (B) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked or subject to blocking pursuant to any OFAC Sanctions Programs, except to the extent authorized under the Anti-Money Laundering and Anti-Terrorism Laws.

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(bb) Anti-Bribery and Anti-Corruption Laws .

(i) Each Loan Party and each of its Subsidiaries is in compliance with the U.S. Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010 and the anti-bribery and anti-corruption laws of those jurisdictions in which they do business (collectively, the “ Anti-Corruption Laws ”), as applicable to such Loan Party and each of its Subsidiaries.

(ii) None of the Loan Parties and none of the Subsidiaries have:

(A) offered, promised, paid, given, or authorized the payment or giving of any money, gift or other thing of value, directly or indirectly, to or for the benefit of any employee, official, representative, or other person acting on behalf of any foreign (i.e., non-U.S.) Governmental Authority thereof, or of any public international organization, or any foreign political party or official thereof, or candidate for foreign political office (collectively, “ Foreign Official ”), for the purpose of: (1) influencing any act or decision of such Foreign Official in his, her, or its official capacity; or (2) inducing such Foreign Official to do, or omit to do, an act in violation of the lawful duty of such Foreign Official, or (3) securing any improper advantage, in order to obtain or retain business for, or with, or to direct business to, any Person; or

(B) acted or attempted to act in any manner which would subject any of the Loan Parties to liability under any Anti-Corruption Law.

(iii) There are, and have been, no allegations, investigations or inquiries by any Governmental Authority with regard to a potential violation of any Anti-Corruption Law by any of the Loan Parties or any Subsidiaries or, to the knowledge of such Loan Parties, any of their respective current or former directors, officers, employees, stockholders or agents, or other persons acting or purporting to act on their behalf.

(iv) The Loan Parties and their Subsidiaries have adopted, implemented and maintain anti-bribery and anti-corruption policies and procedures that are reasonably designed to ensure compliance with the Anti-Corruption Laws.

(cc) Proper Legal Form . The Loan Documents are in proper legal form under the laws of each Specified Jurisdiction to be valid, legal, effective, enforceable or admissible into evidence in the courts of each Specified Jurisdiction, except for any other procedural steps that have been taken or that can be taken at any time without significant expense or delay and without prejudice to any rights or remedies the Secured Parties may have under the Loan Documents.

(dd) No Recordation . It is not necessary that any Loan Document or any other document (except for the perfection or maintenance of Liens created under the Security Documents) be filed, registered or recorded with, or executed or notarized before, any court, public office or other authority in any Specified Jurisdiction or that any registration charge or stamp or similar tax be paid on or in respect of any Loan Document or any other document in order to ensure the legality, validity, effectiveness, enforceability, priority or admissibility in evidence of such Loan Document.

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(ee) Proceedings to Enforce Agreement . In any proceeding in a Specified Jurisdiction to enforce any Loan Document governed by New York law, the choice of New York law as the governing law of such Loan Document will be recognized and applied, the irrevocable submission of it to the jurisdiction of the courts of the State of New York or of the United States of America for the Southern District of New York will be valid, legal, binding and enforceable, and any judgment obtained in such a court will be recognized and enforceable in each Specified Jurisdiction without reconsideration as to the merits of such judgment.

(ff) Exchange Controls . Each Loan Party has the ability to lawfully pay solely and exclusively in Dollars the total amount which is, or may become, payable by it to the Lenders under the Loan Documents and it has complied with its reporting obligations to the applicable Governmental Authorities in each Specified Jurisdiction.

(gg) Full Disclosure .

(i) All written information and other materials (but excluding the Projections and general economic or industry specific information) concerning the Loan Parties and their respective assets and businesses (collectively, the ” Information ”) which has been, or is hereafter, made available by, or on behalf of the Loan Parties and their respective Subsidiaries is, or when delivered will be, when considered as a whole, complete and correct in all material respects and does not, or will not when furnished, taken as a whole, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statement has been made (giving effect to any supplements and updates provided thereto); and

(ii) with respect to the Projections, such Projections were prepared in good faith on the basis of (A) assumptions, methods and tests stated therein which are believed by the Loan Parties to be reasonable at the time such projections were prepared (it being understood that such projections are as to future events and are not to be viewed as facts, are subject to significant uncertainties and contingencies, many of which are beyond the Loan Parties’ control, that no assurance can be given that any particular Projections will be realized and that actual results during the period or periods covered by any such Projections may differ significantly from the projected results and such differences may be material) and (B) information believed by the Loan Parties to have been accurate based upon the information available to the Loan Parties at the time such Projections were furnished to the Lender.

(hh) Security Interests . Each Security Document creates a legal, valid and enforceable security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral secured thereby. The Perfection Requirements (as defined in the Security Agreement) and/or the taking of the other perfection actions described in the relevant Security Document result in the perfection of such security interests. Subject to Section 5.02 and the satisfaction of the Perfection Requirements and/or other such perfection actions, such security interests are, or in the case of Collateral in which any grantor of such security interests obtains rights after the date hereof, will be, perfected, first priority security interests, subject in priority only to the Permitted Specified Liens, and the recording of such instruments of assignment described above.

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ARTICLE VII.

COVENANTS OF THE LOAN PARTIES

Section 7.01 Affirmative Covenants . Until the Termination Date, unless the Required Lenders shall otherwise consent in writing, each Loan Party will:

(a) Reporting Requirements . Furnish to each Agent and each Lender:

(i) as soon as available, and in any event within 30 days after the end of each fiscal month of the Parent and its Subsidiaries (other than the third month of any fiscal quarter of the Parent and its Subsidiaries) commencing with the first fiscal month of the Parent and its Subsidiaries ending after the Effective Date, internally prepared consolidated and consolidating balance sheets, profit and loss statements (by brand), and for the period commencing at the end of the immediately preceding Fiscal Year and ending with the end of such fiscal month, setting forth in each case in comparative form the figures for the corresponding date or period set forth in (A) the financial statements for the immediately preceding Fiscal Year and (B) the Projections, all in reasonable detail and certified by an Authorized Officer of the Parent as fairly presenting, in all material respects, the financial position of the Parent and its Subsidiaries as at the end of such fiscal month of the Parent and its Subsidiaries for such fiscal month and for such year-to-date period, in accordance with GAAP applied in a manner consistent with that of the most recent audited financial statements furnished to the Agents and the Lenders, subject to the absence of footnotes and normal year-end adjustments.

(ii) as soon as available and in any event within 45 days after the end of each fiscal quarter of the Parent and its Subsidiaries commencing with the first fiscal quarter of the Parent and its Subsidiaries ending after the Effective Date, consolidated and consolidating balance sheets, statements of income, stockholders' equity and cash flows of the Parent and its Subsidiaries as at the end of such quarter, and for the period commencing at the end of the immediately preceding Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the figures for the corresponding date or period set forth in (A) the financial statements for the immediately preceding Fiscal Year and (B) the Projections, all in reasonable detail and certified by an Authorized Officer of the Parent as fairly presenting, in all material respects, the financial position of the Parent and its Subsidiaries as of the end of such quarter and the results of operations and cash flows of the Parent and its Subsidiaries for such quarter and for such year-to-date period, in accordance with GAAP applied in a manner consistent with that of the most recent audited financial statements of the Parent and its Subsidiaries furnished to the Agents and the Lenders, subject to the absence of footnotes and normal year-end adjustments;

(iii) as soon as available (commencing with the Fiscal Year ending on or around February 2, 2019), and in any event within 90 days after the end of each Fiscal Year of the Parent and its Subsidiaries, consolidated and consolidating balance sheets, statements of income, stockholders’ equity and cash flows of the Parent and its Subsidiaries as at the end of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding date or period set forth in (A) the financial statements for the immediately preceding Fiscal Year,

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and (B) the Projections, all in reasonable detail and prepared in accordance with GAAP, and accompanied by a report and an opinion, prepared in accordance with generally accepted auditing standards, of independent certified public accountants of recognized standing selected by the Parent and reasonably satisfactory to the Agents (which opinion shall be without (1) a “ going concern ” or like qualification or exception, (2) any qualification or exception as to the scope of such audit (other than as a result of the upcoming maturity date of Indebtedness under this Agreement occurring within 12 months of the date of such audit), or ( 3 ) any qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 7.03 ) ;

(iv) simultaneously with the delivery of the financial statements of the Parent and its Subsidiaries required by clauses (i), (ii) and (iii) of this Section 7.01(a), a certificate, substantially in the form of Exhibit E, of an Authorized Officer of the Parent (a “ Compliance Certificate ”):

(A) stating that such Authorized Officer has reviewed the provisions of this Agreement and the other Loan Documents and has made or caused to be made under his or her supervision a review of the condition and operations of the Parent and its Subsidiaries during the period covered by such financial statements with a view to determining whether the Parent and its Subsidiaries were in compliance with all of the provisions of this Agreement and such Loan Documents at the times such compliance is required hereby and thereby, and that such review has not disclosed, and such Authorized Officer has no knowledge of, the occurrence and continuance during such period of an Event of Default or Default or, if an Event of Default or Default had occurred and continued or is continuing, describing the nature and period of existence thereof and the action which the Parent and its Subsidiaries propose to take or have taken with respect thereto;

(B) in the case of the delivery of the financial statements of the Parent and its Subsidiaries required by clauses (i), (ii) and (iii) of this Section 7.01(a), (1) attaching a schedule showing the calculation of the financial covenants specified in Section 7.03, as applicable, and (2) in the cases of clauses (ii) and (iii) of this Section 7.01(a) only, including (y) a discussion and analysis of the financial condition and results of operations of the Parent and its Subsidiaries for the portion of the Fiscal Year then elapsed ( provided , that the discussion and analysis of the financial condition and results of operations of the Parent and its Subsidiaries included in any Form 10-Q or Form 10-K filed by the Parent shall be deemed to satisfy the requirements of this clause (y)) and (z) discussing the reasons for any significant variations from the Projections for such period and the figures for the corresponding period in the previous Fiscal Year;

(C) in the case of the delivery of the financial statements of the Parent and its Subsidiaries required by clause (iii) of this Section 7.01(a), attaching (1) a summary of all material insurance coverage maintained as of the date thereof by any Loan Party, together with such other related documents and information as the Administrative Agent may reasonably require, and (2) confirmation that there have been no changes to the information contained in the Perfection Certificate delivered on the Effective Date or the date of the most recently updated Perfection Certificate delivered pursuant to this clause (iv) and/or attaching an

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updated Perfection Certificate identifying any such changes to the information contained therein; and

(D) in the case of the delivery of the financial statements of the Parent and its Subsidiaries required by clause (ii) of this Section 7.01(a), and subject to the terms of Section 6(f)(iv) of the Security Agreement and any similar provision in any other Security Document, an updated list identifying and describing any Intellectual Property and Licenses (as defined in the Security Agreement and applicable to any Loan Party) which are Material Contracts, including an indication of all such Intellectual Property and Licenses which are Material Contracts that have been acquired by the Parent or any of its Subsidiaries since the date of the most recent Compliance Certificate delivered pursuant to this clause (D);

(v) as soon as available and in any event within 45 days after the end of each fiscal quarter of the Parent and its Subsidiaries commencing with the first fiscal quarter of the Parent and its Subsidiaries ending after the Effective Date, reports in form and detail satisfactory to the Agents and certified by an Authorized Officer of the Administrative Borrower as being accurate and complete (A) listing all Accounts of the Loan Parties as of such day, which shall include the amount and age of each such Account, showing separately those which are more than 30, 60, 90 and 120 days old, and (B) listing all accounts payable of the Loan Parties as of each such day which shall include the amount and age of each such account payable, and such other information as any Agent may reasonably request;

(vi) promptly upon request of any Agent or Lender, and in any event within 4 Business Days after the end of each week during which such a request is made, reports in form and detail reasonably satisfactory to the Agents and certified by an Authorized Officer of the Parent as being accurate and complete of cash balances of the Parent and its Subsidiaries by jurisdiction;

(vii) as soon as available and in any event not later than 5 Business Days following the approval of such Projections by the Board of Directors of the Parent (but in any case no later than 45 days after the end of each Fiscal Year), a certificate of an Authorized Officer of the Parent (A) attaching Projections for the Parent and its Subsidiaries, supplementing and superseding the Projections previously required to be delivered pursuant to this Agreement, prepared on a monthly basis and otherwise in form and substance reasonably satisfactory to the Agents, for such Fiscal Year, or if delivered prior to the end of a Fiscal Year, the immediately succeeding Fiscal Year, for the Parent and its Subsidiaries and (B) certifying that the representations and warranties set forth in Section 6.01(gg)(ii) are true and correct with respect to the Projections; provided , however , if the Parent shall not have obtained approval of such Projections from its Board of Directors prior to the last day of any Fiscal Year, then the Parent shall deliver draft Projections to the Agents within 15 days of the last day of such Fiscal Year and then deliver to the Agent such revised Projections within 5 Business Days following the approval by the Board of Directors of the Parent;

(viii) promptly after submission to any Governmental Authority, all material documents and material information furnished to such Governmental Authority in connection with any investigation of any Loan Party involving allegations of wrongdoing against

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any Loan Party (other than routine inquiries by such Governmental Authority), to the extent such disclosure is not prohibited by any Requirement of Law;

(ix) as soon as possible, and in any event within 3 days after the occurrence of an Event of Default or Default or the occurrence of any event or development that could reasonably be expected to have a Material Adverse Effect, the written statement of an Authorized Officer of the Administrative Borrower setting forth the details of such Event of Default or Default or other event or development having a Material Adverse Effect and the action which the affected Loan Party proposes to take with respect thereto;

(x) (A) as soon as possible after any Loan Party or any ERISA Affiliate thereof knows or has reason to know that (1) any Reportable Event with respect to any Employee Plan has occurred, (2) any other Termination Event with respect to any Employee Plan has occurred, or (3) an accumulated funding deficiency has been incurred or an application has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including installment payments) or an extension of any amortization period under Section 412 of the Internal Revenue Code with respect to an Employee Plan, a statement of an Authorized Officer of the Administrative Borrower setting forth the details of such occurrence and the action, if any, which such Loan Party or such ERISA Affiliate proposes to take with respect thereto, (B) promptly after receipt thereof by any Loan Party or any ERISA Affiliate thereof from the PBGC, copies of each notice received by any Loan Party or any ERISA Affiliate thereof of the PBGC’s intention to terminate any Plan or to have a trustee appointed to administer any Plan, (C) promptly after the filing thereof with the Internal Revenue Service if requested by any Agent, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Employee Plan and Multiemployer Plan, (D) promptly after any Loan Party or any ERISA Affiliate thereof knows or has reason to know that a required installment within the meaning of Section 412 of the Internal Revenue Code has not been made when due with respect to an Employee Plan, (E) promptly after receipt thereof by any Loan Party or any ERISA Affiliate thereof from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each notice received by any Loan Party or any ERISA Affiliate thereof concerning the imposition or amount of withdrawal liability under Section 4202 of ERISA or indicating that such Multiemployer Plan may enter reorganization status under Section 4241 of ERISA, and (F) promptly after any Loan Party or any ERISA Affiliate thereof sends notice of a plant closing or mass layoff (as defined in WARN) to employees, copies of each such notice sent by such Loan Party or such ERISA Affiliate thereof;

(xi) promptly after the commencement thereof but in any event not later than 5 days after service of process with respect thereto on, or the obtaining of knowledge thereof by, any Loan Party, notice of each action, suit or proceeding before any court or other Governmental Authority or other regulatory body or any arbitrator which, if adversely determined, could reasonably be expected to have a Material Adverse Effect;

(xii) as soon as practicable, (A) copies of any amendment, waiver or notification that any Loan Party executes or receives in connection with any Material Contract that could reasonably be expected to be adverse to the interests of the Lenders (including, without limitation, any notices of material defaults and notices of cancellation of such Material

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Contract), (B) notice of the termination or expiration of any Material Contract , and (C) notice of any other event which constitutes an Additional Appraisal Triggering Event ;

(xiii) as soon as practicable after receipt or delivery thereof, copies of any material notices that any Loan Party executes or receives in connection with the sale or other Disposition of the Equity Interests of, or all or substantially all of the assets of, any Loan Party;

(xiv) promptly after (A) the sending or filing thereof, copies of all statements, reports and other information any Loan Party sends to any holders of its Indebtedness or its securities or files with the SEC or any national (domestic or foreign) securities exchange and (B) the receipt thereof, a copy of any material notice received from any holder of its Indebtedness;

(xv) promptly upon receipt thereof, copies of all financial reports (including, without limitation, management letters), if any, submitted to any Loan Party by its auditors in connection with any annual or interim audit of the books thereof;

(xvi) promptly upon request, any certification or other evidence requested from time to time by any Lender in its sole discretion, confirming the Borrowers’ compliance with Section 7.02(r);

(xvii) simultaneously with the delivery of the financial statements of the Parent and its Subsidiaries required by clauses (i), (ii) and (iii) of this Section 7.01(a), if, as a result of any change in accounting principles and policies from those used in the preparation of the Financial Statements that is permitted by Section 7.02(q), the consolidated financial statements of the Parent and its Subsidiaries delivered pursuant to clauses (i), (ii) and (iii) of this Section 7.01(a) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance reasonably satisfactory to the Agents;

(xviii) (a) within thirty (30) days after the end of each fiscal month of the Parent and its Subsidiaries, a Borrowing Base Certificate, showing the Borrowing Base as of the close of business on the last day of such fiscal month; and (b) as soon as practicable, and in any event no later than three (3) days after an appraisal being conducted as a result of an Additional Appraisal Triggering Event has been completed, a Borrowing Base Certificate, showing the Borrowing Base as of the close of business on the day such appraisal was completed;

(xix) as soon as practicable, in any event at least five Business Days prior thereto, drafts of any waiver, consent, amendment or permanent prepayment or permanent commitment reduction (and the amount thereof) pursuant to any Subordinated Indebtedness Documents, with final documentation to be provided prior to execution thereof;

(xx) as soon as practicable after receipt thereof, copies of notices of any material “default” or “event of default” under any Subordinated Indebtedness Document;

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(xxi) promptly upon request, such other information (other than information subject to confidentiality obligations with a third party or attorney-client privilege or the sharing of which information is prohibited by applicable law, in which case, to the extent reasonably practical to provide the same, redacted summaries of such information shall be provided) concerning the condition or operations, financial or otherwise, of any Loan Party as any Agent or any Lender may from time to time may reasonably request;

(xxii) within 45 days after the end of the Fiscal Year of the Parent and its Subsidiaries ending on or around February 2, 2019, a calculation of the Parent’s and its Subsidiaries’ Working Capital Average as of February 2, 2019, which calculation shall be in form and detail reasonably acceptable to the Administrative Agent and set forth in a certificate signed by an Authorized Officer of the Parent and delivered to the Administrative Agent; and

(xxiii) within 45 days after the end of each fiscal quarter of the Parent and its Subsidiaries commencing with the first fiscal quarter of the Parent and its Subsidiaries ending after the Effective Date, a report, in form and detail satisfactory to the Agents and certified by an Authorized Officer of the Administrative Borrower as being accurate and complete, of all royalties and revenues paid to any Loan Party in the prior fiscal quarter under any license relating to Intellectual Property on a line item basis by each such license.

(b) Additional Borrowers, Guarantors and Collateral Security . Cause:

(i) each Subsidiary (other than an Excluded Subsidiary) of any Loan Party organized under the laws of any Specified Jurisdiction that is not in existence on the Effective Date, each Subsidiary of any Loan Party which is a non-borrowing Subsidiary on the Effective Date (or upon formation or acquisition) but later ceases to be an Excluded Subsidiary (including any Immaterial Subsidiary ceasing to be an Immaterial Subsidiary pursuant to clause (iv) below), and any Subsidiary organized in a jurisdiction that becomes a Specified Jurisdiction after the Effective Date, to execute and deliver to the Collateral Agent promptly and in any event within 5 Business Days after the formation or change in status of, or on the date of any acquisition of, such Subsidiary, (A) a Joinder Agreement, pursuant to which such Subsidiary shall be made a party to this Agreement as a Guarantor, (B) a supplement to the Security Agreement or other Security Document, together with (1) certificates, if any, evidencing all of the Equity Interests of any Person owned by such Subsidiary required to be pledged under the terms of the Security Agreement or other Security Document, (2) undated stock powers for such Equity Interests executed in blank, and (3) such opinions of counsel as the Collateral Agent may reasonably request, (C) to the extent required under the terms of this Agreement, one or more Mortgages creating on the fee-owned real property of such Subsidiary a perfected, first priority Lien (in terms of priority, subject only to Permitted Specified Liens) on such real property and such other Real Property Deliverables as may be reasonably required by the Collateral Agent with respect to each such real property, and (D) such other agreements, instruments, approvals or other documents reasonably requested by the Collateral Agent in order to create, perfect, establish the first priority of or otherwise protect any Lien purported to be covered by any such Security Document or otherwise to effect the intent that such Subsidiary shall become bound by all of the terms, covenants and agreements contained in the Loan Documents and that substantially all property and assets of such Subsidiary shall become Collateral for the Obligations;

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(ii) each owner (that is a Loan Party) of the Equity Interests of any such Subsidiary to execute and deliver promptly and in any event within 5 Business Days, or such longer date as the Collateral Agent may agree to in its sole discretion, after the formation or acquisition of such Subsidiary a Pledge Amendment (as defined in the Security Agreement) or comparable document pursuant to the applicable Security Document, together with (A) certificates, if any, evidencing all of the Equity Interests of such Subsidiary required to be pledged under the terms of the applicable Security Documents, (B) undated stock powers or other appropriate instruments of assignment for such certificated Equity Interests executed in blank, (C) such opinions of counsel as the Collateral Agent may reasonably request and (D) such other agreements, instruments, approvals or other documents reasonably requested by the Collateral Agent;

(iii) notwithstanding the foregoing, no CFC of a U.S. Loan Party shall be required to become a Guarantor with respect to the U.S. Obligations (and, as such, shall not be required to deliver the documents required by clause (i) above to secure the U.S. Obligations) and no property or assets of any CFC shall be required to be pledged or otherwise subject to a Lien under the Loan Documents to secure the U.S. Obligations; provided , however , that if the Equity Interests of such CFC are owned by a U.S. Loan Party, such U.S. Loan Party shall deliver, all such documents, instruments, agreements (including, without limitation, at the reasonable request of the Collateral Agent, a pledge agreement governed by the laws of the jurisdiction of organization of such CFC, but only to the extent that such CFC is organized under the laws of a Specified Jurisdiction), and certificates, if any, described in clause (ii) above to the Collateral Agent, and take all commercially reasonable actions reasonably requested by the Collateral Agent or otherwise necessary to grant and to perfect a first-priority Lien (subject to Permitted Specified Liens) in favor of the Collateral Agent, for the benefit of the Secured Parties, to secure the U.S. Obligations, in sixty five percent (65%) of the voting Equity Interests of such CFC and one hundred percent (100%) of all non-voting Equity Interests of such CFC owned by such Loan Party. Nothing contained in this clause (iii) shall limit the obligation of such CFC to become a Guarantor with respect to the Obligations that do not constitute U.S. Obligations, including, without limitation, the Foreign Obligations; and

(iv) if at any time and from time to time after the Effective Date, Immaterial Subsidiaries comprise or contribute, as applicable, in the aggregate more than $250,000 of the Consolidated EBITDA of the Parent and its Subsidiaries for the four consecutive fiscal quarter period most recently ended for which financial statements have been delivered or were required to have been delivered, or more than $250,000 of the revenues of the Parent and its Subsidiaries for the four consecutive fiscal quarter period most recently ended for which financial statements have been delivered or were required to have been delivered or more than $250,000 of the consolidated assets of the Parent and its Subsidiaries as of the end of the four consecutive fiscal quarter period most recently ended for which financial statements have been delivered or were required to have been delivered, then the Parent shall, not later than 30 days after the date by which financial statements for such period are required to be delivered, designate in writing to the Administrative Agent that one or more of such Subsidiaries is no longer an Immaterial Subsidiary for purposes of this Agreement to the extent required such that the foregoing condition ceases to be true.

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(i) Comply, and cause each of its Subsidiaries to comply, in all material respects, with all Requirements of Law (including, without limitation, all Environmental Laws), judgments and awards (including any settlement of any claim that, if breached, could give rise to any of the foregoing).

(ii) Pay, and cause each of its Subsidiaries to pay, in full before delinquency or before the expiration of any extension period, all Taxes imposed upon any Loan Party or any of its Subsidiaries or any property of any Loan Party or any of its Subsidiaries except (x) Taxes in an aggregate amount for all such Taxes not exceeding $250,000, at any one time, and (y) Taxes contested in good faith by proper proceedings which stay the imposition of any penalty or Lien and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP.

(d) Preservation of Existence, Etc. Except as otherwise permitted under Section 7.02(c), maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except to the extent that the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.

(e) Keeping of Records and Books of Account . Keep, and cause each of its Subsidiaries to keep, adequate records and books of account, with complete (in all material respects) entries made to permit the preparation of financial statements in accordance with GAAP.

(f) Inspection Rights . Subject to the limitations set forth in Section 2.06(b) (which apply solely with respect to appraisals and field examinations), permit, and cause each of its Subsidiaries to permit, the agents and representatives of any Agent at any time and from time to time during normal business hours, at the expense of the Borrowers, to examine and make copies of and abstracts from its records and books of account, to visit and inspect its properties, to verify materials, leases, notes, accounts receivable, deposit accounts and its other assets, to conduct audits, valuations, appraisals or examinations and to discuss its affairs, finances and accounts with any of its directors, officers, managerial employees, independent accountants or any of its other representatives so long as (unless an Event of Default has occurred and is continuing) the Administrative Borrower has been given a reasonable opportunity to have a representative present at any such meeting (and if the Administrative Borrower so elects to have a representative present at such meeting, then such meeting shall be held at a time and location that is reasonably acceptable to both the Administrative Borrower and the Agents), and such meeting shall be upon reasonable prior notice and during normal business hours. In furtherance of the foregoing, each Loan Party hereby authorizes its independent accountants, and the independent accountants of each of its Subsidiaries, to discuss the affairs, finances and accounts of such Person (independently or together with representatives of such Person) with the agents and representatives of any Agent in accordance with this Section 7.01(f), so long as (unless an Event of Default has occurred and is continuing) the Administrative Borrower has been given a

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reasonable opportunity to have a representative present at any such meeting (and if the Administrative Borrower so elects to have a representative present at such meeting, and such meeting shall be held at a time and location that is reasonably acceptable to both the Administrative Borrower and the Agents). Notwithstanding any provision of this Agreement to the contrary, the Agents shall not seek an appraisal during the nine month period following the Effective Date (other than with respect to an Additional Appraisal Triggering Event).

(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary in the proper conduct of its business in good working order and condition, ordinary wear and tear, and casualty and condemnation excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder, except to the extent the failure to so maintain and preserve or so comply could not reasonably be expected to have a Material Adverse Effect.

(h) Maintenance of Insurance . Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, property, worker’s compensation and business interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts, subject to such deductibles and self-insurance retentions, and covering such risks as is required by any Governmental Authority having jurisdiction with respect thereto and as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and in any event in amount, adequacy and scope reasonably satisfactory to the Collateral Agent. All policies covering the Collateral are to be made payable to the Collateral Agent, for the benefit of the Secured Parties, as its interests may appear, in case of loss, under a standard non‑contributory “lender” or “secured party” clause and are to contain such other provisions as the Collateral Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. All certificates of insurance are to be delivered to the Collateral Agent and the policies are to be premium prepaid, with the loss payable (in the case of liability insurance) endorsement and additional insured and lenders’ loss payee or mortgagee endorsements (in the case of property insurance) in favor of the Collateral Agent and such other Persons as the Collateral Agent may designate from time to time, and shall provide for not less than 30 days’ (10 days’ in the case of non-payment) prior written notice to the Collateral Agent of the exercise of any right of cancellation. If any Loan Party or any of its Subsidiaries fails to maintain such insurance, the Collateral Agent may arrange for such insurance, but at the Borrowers’ expense and without any responsibility on the Collateral Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the sole right, in the name of the Lenders, any Loan Party and its Subsidiaries, to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

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(i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all permits, licenses, authorizations, approvals, entitlements and accreditations that are necessary or useful in the proper conduct of its business, in each case, except to the extent the failure to obtain, maintain, preserve or take such action could not reasonably be expected to have a Material Adverse Effect.

(j) Environmental . (i) Keep any real property either owned or operated by it or any of its Subsidiaries free of any Environmental Liens; (ii) comply, and cause each of its Subsidiaries to comply, with all Environmental Laws in all material respects and provide to the Collateral Agent any non-privileged documentation of such compliance which the Collateral Agent may reasonably request; (iii) provide the Agents written notice within 5 Business Days of any Release of a Hazardous Material in excess of any reportable quantity from or onto property at any time owned or operated by it or any of its Subsidiaries for which any Loan Party could reasonably be expected to be liable under Environmental Law and take any Remedial Actions required to abate said Release; and (iv) provide the Agents with written notice within 10 days of the receipt of any of the following: (A) notice that an Environmental Lien has been filed against any property of any Loan Party or any of its Subsidiaries; (B) commencement of any Environmental Action or notice that an Environmental Action will be filed against any Loan Party or any of its Subsidiaries; and (C) notice of a violation, citation or other administrative order issued pursuant to Environmental Law, in each case, which could reasonably be expected to have a Material Adverse Effect.

(k) Fiscal Year . Cause the Fiscal Year of the Parent and its Subsidiaries to end on or about the Saturday nearest to January 31 of each calendar year unless the Agents consent to a change in such Fiscal Year (and appropriate related changes to this Agreement).

(l) Intellectual Property Defense . Each Loan Party will, at its own expense, take all commercially reasonable actions deemed necessary in its reasonable business judgment to defend any Intellectual Property against claims or challenges, whether threatened or filed in any court or any authority with competent jurisdiction, to the validity, enforceability, use, maintenance, ownership or assignment of, or which may limit the scope of any Loan Party’s rights in, any Intellectual Property which has a material effect on any Loan Party’s business or royalty revenue, including but not limited to, any opposition or cancellation proceedings commenced at the U.S. Trademark Trial and Appeal Board, interferences invoked at the U.S. Board of Patent Appeals and Interferences, any post-grant patent proceedings commenced at the U.S. Patent Trial and Appeal Board, or any proceedings commenced under ICANN’s Uniform Domain-Name Dispute Resolution Policy.

(m) After Acquired Real Property . Upon the acquisition by it or any of its Subsidiaries after the date hereof of any fee interest in any real property (wherever located) (each such interest being a “ New Facility ”) with a Current Value (as defined below) in excess of $250,000, promptly so notify the Collateral Agent within 30 days after such acquisition, setting forth a description of the interest acquired, the location of the real property, any structures or improvements thereon and either an appraisal or such Loan Party’s good-faith estimate of the current value of such real property (for purposes of this Section, the ” Current Value ”). The Collateral Agent shall notify such Loan Party whether it intends to require a Mortgage (and any

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other Real Property Deliverables) with respect to such New Facility, except that Collateral Agent shall not require a Mortgage or any other Real Property Deliverables for any Facility as to which the Collateral Agent shall determine in its reasonable discretion that the costs and burdens of obtaining a security interest are excessive in relation to the value afforded thereby. Upon receipt of such notice requesting a Mortgage (and any other Real Property Deliverables), the Person that has acquired such New Facility shall furnish the same to the Collateral Agent within 60 days (or such longer period as the Collateral Agent may agree to in its sole discretion) after receipt of such request. The Borrowers shall pay all fees and expenses, including, without limitation, reasonable attorneys ’ fees and expenses, and all title insurance charges and premiums, in connection with each Loan Party ’ s obligations under this Section 7.01(m) .

(n) Anti-Bribery and Anti-Corruption Laws . Maintain, and cause each of its Subsidiaries to maintain, anti-bribery and anti-corruption policies and procedures that are reasonably designed to ensure compliance with the Anti-Corruption Laws.

(o) Lender Meetings . Upon the reasonable request of any Agent or the Required Lenders (which request, so long as no Event of Default shall have occurred and be continuing, shall not be made more than once during each Fiscal Year), participate in a meeting with the Agents and the Lenders at the Borrowers’ corporate offices (or at such other location as may be agreed to by the Administrative Borrower and such Agent or the Required Lenders) at such time as may be agreed to by the Administrative Borrower and such Agent or the Required Lenders.

(p) Further Assurances . Take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as any Agent may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to valid and perfected first priority Liens any of the Collateral or any other property of any Loan Party and its Subsidiaries, (iii) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfection and priority of the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer and confirm unto each Secured Party the rights now or hereafter intended to be granted to it under this Agreement or any other Loan Document. In furtherance of the foregoing, to the maximum extent permitted by applicable law, each Loan Party (i) authorizes each Agent to execute any such agreements, instruments or other documents in such Loan Party’s name and to file such agreements, instruments or other documents in any appropriate filing office, (ii) authorizes each Agent to file any financing statement required hereunder or under any other Loan Document, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of such Loan Party, and (iii) ratifies the filing of any financing statement, and any continuation statement or amendment with respect thereto, filed without the signature of such Loan Party prior to the date hereof.

(q) Equity Raise and/or Debt Issuance . If the Working Capital Average of the Loan Parties and its Subsidiaries as set forth in the calculation thereof delivered to the Administrative Agent pursuant to Section 7.01(a)(xxii) is equal to or less than $6,500,000, then after such date and on or before May 4, 2019, the Loan Parties shall have, and shall have

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delivered evidence reasonably satisfactory to the Administrative Agent, that the Loan Parties have received at least $2,000,000 in Net Cash Proceeds from selling or issuing Equity Interests and/or issuing or incurring Subordinated Indebtedness.

Section 7.02 Negative Covenants . Until the Termination Date, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired; file or suffer to exist under the Uniform Commercial Code or any Requirement of Law of any jurisdiction, a financing statement (or the equivalent thereof) that names it or any of its Subsidiaries as debtor (other than an unauthorized financing statement (or the equivalent thereof) that names it or any of its Subsidiaries as debtor so long as such unauthorized financing statement is promptly terminated after the Loan Parties obtain knowledge thereof); sign or suffer to exist any security agreement authorizing any secured party thereunder to file such financing statement (or the equivalent thereof) other than, as to all of the above, Permitted Liens.

(b) Indebtedness . Create, incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with respect to, or permit any of its Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise become or remain liable with respect to, any Indebtedness other than Permitted Indebtedness.

(i) Wind-up, liquidate or dissolve, or merge, consolidate or amalgamate with any Person, or permit any of its Subsidiaries to do (or agree to do) any of the foregoing; provided , however , that

(A) any wholly-owned Subsidiary of any Loan Party (other than a Borrower) may be merged into such Loan Party or another wholly-owned Subsidiary of such Loan Party, or may consolidate or amalgamate with another wholly-owned Subsidiary of such Loan Party, so long as (1) no other provision of this Agreement would be violated thereby, (2) such Loan Party gives the Agents at least 5 days’ prior written notice, if such Subsidiary is a Loan Party, or notifies the Agents within 5 days, if such Subsidiary is not a Loan Party, of such merger, consolidation or amalgamation accompanied by true, correct and complete copies of all material agreements, documents and instruments relating to such merger, consolidation or amalgamation, including, without limitation, the certificate or certificates of merger or amalgamation to be filed with each appropriate Secretary of State (with a copy as filed promptly after such filing), (3) no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such transaction, (4) the Lenders’ rights in any Collateral, including, without limitation, the existence, perfection and priority of any Lien thereon, are not adversely affected by such merger, consolidation or amalgamation and (5) the surviving Subsidiary, if any, if not already a Loan Party, is joined as a Loan Party hereunder pursuant to a Joinder Agreement and is a party to the applicable Security Documents and the Equity Interests of such Subsidiary are the subject of a Security Document, in each case, which is in full force

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and effect on the date of and immediately after giving effect to such merger, consolidation or amalgamation;

(B) any Subsidiary of a Borrower that is not a Loan Party may dissolve or liquidate; provided that if in connection with any such dissolution or liquidation, the dissolving entity transfers its assets to another Person and if in connection with such transaction a Loan Party is a transferor of assets, then to the extent constituting an Investment, such Investment must be a Permitted Investment;

(C) any Subsidiary of a Borrower that is not a Loan Party may merge, amalgamate or consolidate with or dissolve or liquidate into any other Person in order to effect a Permitted Investment;

(D) except in the case of a merger, dissolution, liquidation or consolidation of a Loan Party, any merger, dissolution, liquidation or consolidation, the purpose of which is to effect a Permitted Disposition may be effected;

(E) any Loan Party (other than the Borrowers) may merge, amalgamate or consolidate with or liquidate or dissolve into any other Person so long as an Unrestricted Loan Party is the surviving Person, or, if a Loan Party (other than a Borrower) is a Restricted Guarantor, such Restricted Guarantor may merge, amalgamate or consolidate with or liquidate or dissolve into any other Loan Party which remains as the surviving Person; and

(F) any Subsidiary of a Borrower that is not a Loan Party may merge, amalgamate or consolidate with or liquidate or dissolve into any other Subsidiary of any Borrower.

(ii) Make any Disposition, whether in one transaction or a series of related transactions, of all or any part of its business, property or assets, whether now owned or hereafter acquired (or agree to do any of the foregoing), or permit any of its Subsidiaries to do any of the foregoing; provided , however , that any Loan Party and its Subsidiaries may make Permitted Dispositions.

(d) Change in Nature of Business .

(i) Make, or permit any of its Subsidiaries to make, any change in the nature of its business as described in Section 6.01(l).

(ii) In the case of the Dutch Borrower,

(A) incur any Indebtedness other than (1) Indebtedness under the Loan Documents or otherwise in connection with the Transactions and (2) Contingent Obligations with respect to Permitted Indebtedness;

(B) create, incur, assume or suffer to exist any Liens other than (1) Liens created under the Loan Documents or (2) Permitted Liens consisting of deposits made in the ordinary course of business or arising by operation of any Requirements of Law; or

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(C) engage in any business activity or own any material assets other than (1) holding the Equity Interests of Hi-Tec and, indirectly, any Subsidiary of Hi-Tec (and/or any joint venture of any thereof); (2) performing its obligations under the Loan Documents and other Indebtedness and Liens (including the granting of Liens) described in clauses (A) and (B) above; (3) issuing its own Equity Interests (including, for the avoidance of doubt, the making of any dividend or distribution on account of, or any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value of, any shares of any class of Equity Interests); (4) filing tax reports and paying taxes and other customary obligations in the ordinary course (and contesting any taxes); (5) preparing reports to Governmental Authorities and to its shareholders; (6) holding director and shareholder meetings, preparing organizational records and other organizational activities required to maintain its separate organizational structure or to comply with applicable Requirements of Law; (7) providing indemnification for its officers, directors, members of management, employees and advisors or consultants; (8) the performance of its obligations under any document, agreement and/or Investments consisting of Contingent Obligations in the ordinary course of business; (9) complying with applicable Requirements of Law (including with respect to the maintenance of its existence); and (10) activities incidental to any of the foregoing.

(e) Loans, Advances, Investments, Etc. Make or commit or agree to make, or permit any of its Subsidiaries make or commit or agree to make, any Investment in any other Person except for Permitted Investments.

(f) Sale and Leaseback Transactions . Enter into, or permit any of its Subsidiaries to enter into, any Sale and Leaseback Transaction.

(g) [ Reserved ].

(h) Restricted Payments . Make or permit any of its Subsidiaries to make any Restricted Payment other than Permitted Restricted Payments.

(i) Federal Reserve Regulations . Permit any Loan or the proceeds of any Loan under this Agreement to be used for any purpose that would cause such Loan to be a margin loan under the provisions of Regulation T, U or X of the Board.

(j) Transactions with Affiliates . Enter into, renew, extend or be a party to, or permit any of its Subsidiaries to enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except (i) transactions consummated in the ordinary course of business in a manner and to an extent necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof, and that are fully disclosed to the Agents prior to the consummation thereof, if they involve one or more payments by the Parent or any of its Subsidiaries in excess of $250,000 for any single transaction or series of related transactions, (ii) transactions with another Loan Party, (iii) transactions permitted by Section 7.02(e) and Section 7.02(h), (iv) sales of Qualified Equity Interests of the Parent to Affiliates of the Parent not otherwise prohibited by the Loan Documents and the granting of

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registration and other customary rights in connection therewith, (v) reasonable and customary director and officer compensation (including bonuses and stock option programs), benefits and indemnification arrangements, in each case approved by the Board of Directors (or a committee thereof) of such Loan Party or such Subsidiary, (vi) the Transactions, (vii) transactions between or among the Loan Parties otherwise not prohibited by this Agreement, and (viii) so long as such Indebtedness is subject to the applicable Subordination Agreement, transactions under the S ubordinated Indebtedness D ocuments with respect to the Board Debt and as otherwise expressly permitted by this Agreement.

(k) Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries . Create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to make any other distribution on any shares of Equity Interests of such Subsidiary owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries, (iii) to make loans or advances to any Loan Party or any of its Subsidiaries or (iv) to transfer any of its property or assets to any Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing; provided , however , that nothing in any of clauses (i) through (iv) of this Section 7.02(k) shall prohibit or restrict compliance with:

(A) this Agreement and the other Loan Documents;

(B) any agreement in effect on the date of this Agreement and described on Schedule 7.02(k), or any extension, replacement or continuation of any such agreement; provided , that, any such encumbrance or restriction contained in such extended, replaced or continued agreement is no less favorable to the Agents and the Lenders than the encumbrance or restriction under or pursuant to the agreement so extended, replaced or continued;

(C) any applicable law, rule or regulation (including, without limitation, applicable currency control laws and applicable state corporate statutes restricting the payment of dividends in certain circumstances);

(D) in the case of clause (iv), (1) customary restrictions on the subletting, assignment or transfer of any specified property or asset set forth in a lease, license, asset sale agreement or similar contract for the conveyance of such property or asset and (2) instrument or other document evidencing a Permitted Lien (or the Indebtedness secured thereby) from restricting on customary terms the transfer of any property or assets subject thereto;

(E) Permitted Liens or customary restrictions on dispositions of real property interests in reciprocal easement agreements;

(F) customary restrictions in agreements for the sale of assets on the transfer or encumbrance of such assets during an interim period prior to the closing of the sale of such assets;

(G) customary restrictions in contracts that prohibit the assignment of such contract;

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(H) restrictions set forth in the Subordinated Indebtedness Documents in respect of the Board Debt, as in effect on the date hereof or as otherwise amended after the date hereof as permitted by the applicable Subordination Agreement; or

(I) customary restrictions on (i) the Equity Interests of a joint venture or (ii) the operation of a joint venture, in each case, set forth in an agreement governing a joint venture to which such Loan Party or any of its Subsidiaries is a party.

(l) Limitations on Negative Pledges . Enter into, incur or permit to exist, or permit any Subsidiary to enter into, incur or permit to exist, directly or indirectly, any agreement, instrument, deed, lease or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Loan Party or any Subsidiary of any Loan Party to create, incur or permit to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, or that requires the grant of any security for an obligation if security is granted for another obligation, except the following: (i) this Agreement and the other Loan Documents, (ii) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by Section 7.02(b) of this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (iii) any customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets or of a Subsidiary pending such sale or other disposition; provided that such restrictions and conditions apply only to the assets or Subsidiary to be sold or disposed of and such sale or disposition is permitted hereunder, (iv) customary restrictions in leases, subleases, licenses or asset sale agreements otherwise permitted hereby so long as such restrictions relate to the assets subject thereto, (v) customary provisions regarding confidentiality or restricting assignment, pledges or transfer of any agreement entered into in the ordinary course of business, (vi) customary restrictions with respect to (A) the Equity Interests of a joint venture and (B) the operation of a joint venture, in each case of this clause (vi), set forth in an agreement governing a joint venture to which such Loan Party or any of its Subsidiaries is a party and (vii) restrictions set forth in the Subordinated Indebtedness Documents in respect of the Board Debt, as in effect on the date hereof or as otherwise amended after the date hereof as permitted by the applicable Subordination Agreement.

(m) Modifications of Indebtedness, Organizational Documents and Certain Other Agreements; Etc.

(i) Amend, modify or otherwise change (or permit the amendment, modification or other change in any manner of) any of the provisions of any of its or its Subsidiaries’ Indebtedness or of any instrument or agreement (including, without limitation, any purchase agreement, indenture, loan agreement or security agreement) relating to any such Indebtedness if such amendment, modification or change is prohibited by the terms of any applicable Subordination Agreement, would shorten the final maturity or average life to maturity of, or require any payment to be made earlier than the date originally scheduled on, such Indebtedness, would increase the interest rate applicable to such Indebtedness, would add any covenant or event of default, would change the subordination provision, if any, of such Indebtedness, or would otherwise be adverse to the Lenders or the issuer of such Indebtedness in any respect;

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(ii) except for the Obligations, (A) make any voluntary or optional payment (including, without limitation, any payment of interest in cash that, at the option of the issuer, may be paid in cash or in kind), prepayment, redemption, defeasance, sinking fund payment or other acquisition for value of any of its or its Subsidiaries ’ Indebtedness (including, without limitation, by way of depositing money or securities with the trustee therefor before the date required for the purpose of paying any portion of such Indebtedness when due), (B) refund, refinance, replace or exchange any other Indebtedness for any such Indebtedness (other than with respect to Permitted Refinancing Indebtedness), (C) make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Subordinated Indebtedness in violation of the subordination provisions thereof or any S ubordination A greement with respect thereto, or (D) make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Indebtedness as a result of any asset sale, change of control, issuance and sale of debt or equity securities or similar event, or give any notice with respect to any of the foregoing; provided , that this clause (ii) shall not apply to (1) Permitted Intercompany Investments, (2) Permitted Purchase Money Indebtedness and (3) Permitted Indebtedness under clause (k) of the definition of Permitted Indebtedness;

(iii) amend, modify or otherwise change any of its Governing Documents (including, without limitation, by the filing or modification of any certificate of designation, or any agreement or arrangement entered into by it and including any shareholders’ agreement), or enter into any new agreement with respect to any of its Equity Interests, except any such amendments, modifications or changes or any such new agreements or arrangements pursuant to this clause (iii) in a manner adverse in any material respect to the Agents or the Lenders; or

(iv) (A) agree to any amendment, modification or other change to or waiver of any of its rights under any Material Contract or any Acquisition Document if such amendment, modification, change or waiver would be adverse in any material respect to the Agents and the Lenders or (B) enter into any license agreement with respect to Intellectual Property unless such agreement contains a provision permitting the rights thereunder to be freely assigned, without any further consent, to the Collateral Agent.

(n) Investment Company Act of 1940 . Become, or permit any Subsidiary or any person controlling any Loan Party to become, an “investment company” registered or required to be registered under the Investment Company Act of 1940, as amended.

(o) ERISA .

(i) Engage, or permit any ERISA Affiliate to engage, in any transaction described in Section 4069 of ERISA; (ii) engage, or permit any ERISA Affiliate to engage, in any prohibited transaction described in Section 406 of ERISA or 4975 of the Internal Revenue Code for which a statutory or class exemption is not available or a private exemption has not previously been obtained from the U.S. Department of Labor, except to the extent that the penalty for all prohibited transactions could not reasonably be expected to result in a Material Adverse Effect; (iii) fail to make any contribution or payment to any Multiemployer Plan which it or any ERISA Affiliate may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto, except to the extent that such failure could

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not reasonably be expected to result in a Material Adverse Effect; or (iv) fail, or permit any ERISA Affiliate to fail, to pay any required installment or any other payment required for an Employee Plan under Section 412 of the Internal Revenue Code on or before the due date for such installment or other payment except to the extent that such failure could not reasonably be expected to result in a Material Adverse Effect.

(p) Environmental . Permit the use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials at any property owned or leased by it or any of its Subsidiaries, except to the extent such actions could not reasonably be expected to have a Material Adverse Effect.

(q) Accounting Methods . Modify or change, or permit any of its Subsidiaries to modify or change, its method of accounting or accounting principles from those utilized in the preparation of the Financial Statements (other than as may be required to conform to GAAP).

(r) Anti-Money Laundering and Anti-Terrorism Laws .

(i) None of the Loan Parties, nor (to the knowledge of any Loan Party) any of their Affiliates, shall, except to the extent authorized under the Anti-Money Laundering and Anti-Terrorism Laws:

(A) conduct any business or engage in any transaction or dealing with or for the benefit of any Blocked Person, including the making or receiving of any contribution of funds, goods or services to, from or for the benefit of any Blocked Person;

(B) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked or subject to blocking pursuant to the OFAC Sanctions Programs;

(C) use any of the proceeds of the transactions contemplated by this Agreement to finance, promote or otherwise support in any manner any violation of the Anti-Money Laundering and Anti-Terrorism Laws or any specified unlawful activity as that term is defined in the Money Laundering Control Act of 1986, 18 U.S.C. §§ 1956 and 1957; or

(D) violate, attempt to violate, or engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, any of the Anti-Money Laundering and Anti-Terrorism Laws.

(ii) None of the Loan Parties, nor any Affiliate of any of the Loan Parties, nor any officer, director or principal shareholder or owner of any of the Loan Parties, nor any of the Loan Parties’ respective agents acting or benefiting in any capacity in connection with the Loans or other transactions hereunder, shall be or shall become a Blocked Person.

(s) Anti-Bribery and Anti-Corruption Laws . None of the Loan Parties shall:

(i) offer, promise, pay, give, or authorize the payment or giving of any money, gift or other thing of value, directly or indirectly, to or for the benefit of any Foreign Official for the purpose of: (1) influencing any act or decision of such Foreign Official in his,

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her, or its official capacity; or (2) inducing such Foreign Official to do, or omit to do, an act in violation of the lawful duty of such Foreign Official, or (3) securing any improper advantage, in order to obtain or retain business for, or with, or to direct business to, any Person; or

(ii) act or attempt to act in any manner which would subject any of the Loan Parties to liability under any Anti-Corruption Law.

(t) Centre of Main Interest . No Loan Party whose jurisdiction of incorporation or organization is in a member state of the European Union shall deliberately change its “centre of main interests” (as that term is used in Article 3(1) of the Regulation) in a manner which would reasonably be expected to be materially adverse to the interests of the Lenders.

Section 7.03 Financial Covenants . Until the Termination Date, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:

(a) Qualified Cash . Permit Qualified Cash to be less than $1,000,000 at any time.

(b) Consolidated EBITDA . Permit Consolidated EBITDA of the Parent and its Subsidiaries for any period of four (4) consecutive fiscal quarters of the Parent and its Subsidiaries for which the last quarter ends on or about a date set forth below to be less than the lowest amount in the ranges of amounts set forth opposite such date:


Fiscal Quarter End	Consolidated EBITDA
October 31, 2018	$5,700,000
January 31, 2019	$8,200,000
April 30, 2019	$8,800,000
July 31, 2019	$9,200,000
October 31, 2019	$9,500,000
January 31, 2020 and thereafter	$9,500,000

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ARTICLE VIII.

CASH MANAGEMENT ARRANGEMENTS
AND OTHER COLLATERAL MATTERS

Section 8.01 Cash Management Arrangements .

(a) The Loan Parties shall (i) establish and maintain cash management services of a type and on terms reasonably satisfactory to the Agents at one or more of the banks set forth on Schedule 8.01 (each a “ Cash Management Bank ”) and (ii) except as otherwise provided under Section 8.01(b), deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the date of receipt thereof, all proceeds in respect of any Collateral, all Collections (of a nature susceptible to a deposit in a bank account) and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party) into a Cash Management Account.

(b) Within 30 days after the Effective Date, the Loan Parties shall, with respect to each U.S. Cash Management Account (other than Excluded Accounts), deliver to the Collateral Agent a Control Agreement with respect to such U.S. Cash Management Account and, from and after the date that is 30 days following the Effective Date, the Loan Parties shall not maintain, and shall not permit any of their Subsidiaries to maintain, cash, Cash Equivalents or other amounts in any deposit account or securities account maintained in the U.S., unless the Collateral Agent shall have received a Control Agreement in respect of each such U.S. Cash Management Account (other than Excluded Accounts or newly acquired deposit or securities accounts in connection with Permitted Acquisitions (each, an “ Acquired Account ”), in which case the Loan Parties shall cause such Acquired Account to become subject to a Control Agreement within 30 days following the closing of such Permitted Acquisition (or such longer time as may be agreed to by the Collateral Agent in its sole discretion)). Within 45 days after the Effective Date, the Loan Parties shall, with respect to each Foreign Cash Management Account (other than Excluded Accounts), deliver to the Collateral Agent a Control Agreement with respect to such Foreign Cash Management Account and, from and after the date that is 45 days following the Effective Date, the Loan Parties shall not maintain, and shall not permit any of their Subsidiaries to maintain, cash, Cash Equivalents or other amounts in any deposit account or securities account maintained outside of the U.S., unless the Collateral Agent shall have received a Control Agreement in respect of each such Foreign Cash Management Account (other than Excluded Accounts or Acquired Accounts), in which case the Loan Parties shall cause such Acquired Account to become subject to a Control Agreement within 30 days following the closing of such Permitted Acquisition (or such longer time as may be agreed to by the Collateral Agent in its sole discretion)).

(c) Upon the terms and subject to the conditions set forth in the applicable Control Agreement with respect to an applicable Cash Management Account, all amounts received in such Cash Management Accounts at the Collateral Agent’s discretion be wired each Business Day into the Administrative Agent’s Account, except that, so long as no Event of Default has occurred and is continuing, the Collateral Agent will not direct the Cash Management Bank to transfer funds in such Cash Management Account to the Administrative Agent’s Account.

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(d) So long as no Default or Event of Default has occurred and is continuing, the Borrowers may amend Schedule 8.01 to add or replace a Cash Management Bank or Cash Management Account; provided , however , that (i) except with respect to an Acquired Account (the institution maintaining an Acquired Account, an “ Acquired Cash Management Bank ” ) prior to the time of the opening of such Cash Management Account, each Loan Party and such prospective Cash Management Bank shall have executed and delivered to the Collateral Agent a Control Agreement and (ii) with respect to any Acquired Account and Acquired Cash Management Bank, Schedule 8.01 shall be automatically amended upon the closing of a Permitted Acquisition to reflect such Acquired Account(s) and Acquired Cash Management Bank. Each Loan Party shall close any of its Cash Management Accounts (and establish replacement cash management accounts in accordance with the foregoing sentence) promptly and in any event within 30 days of notice from the Collateral Agent that the creditworthiness of any Cash Management Bank is no longer acceptable in the Collateral Agent ’ s reasonable judgment, or the Collateral Agent ’ s liability under any Control Agreement with such Cash Management Bank, or that the operating performance, funds transfer, or availability of procedures or performance of such Cash Management Bank with respect to Cash Management Accounts, is no longer acceptable in the Collateral Agent ’ s reasonable judgment.

ARTICLE IX.

EVENTS OF DEFAULT

Section 9.01 Events of Default . Each of the following events shall constitute an event of default (each, an “ Event of Default ”):

(a) any Borrower shall fail to pay, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), all or any portion of the principal of the Loans, any Collateral Agent Advance, any interest on any Loan or any fee, indemnity or other amount payable under this Agreement or any other Loan Document;

(b) any representation or warranty made or deemed made by or on behalf of any Loan Party or by any officer of the foregoing under or in connection with any Loan Document or under or in connection with any certificate or other writing delivered to any Secured Party pursuant to any Loan Document shall have been incorrect in any material respect (or in any respect if such representation or warranty is qualified or modified as to materiality or “Material Adverse Effect” in the text thereof) when made or deemed made;

(c) any Loan Party shall fail to perform or comply with any covenant or agreement contained in Section 5.02, Section 7.01(a), Section 7.01(b), Section 7.01(c), Section 7.01(d), Section 7.01(f), Section 7.01(h), Section 7.01(k), Section 7.01(m), Section 7.01(o), 7.01(q), Section 7.02 or Section 7.03 or Article VIII, or any Loan Party shall fail to perform or comply with any covenant or agreement contained in any Security Document to which it is a party or any Mortgage to which it is a party;

(d) any Loan Party shall fail to perform or comply with any other term, covenant or agreement contained in any Loan Document to be performed or observed by it and, except as set forth in subsections (a), (b) and (c) of this Section 9.01, such failure, if capable of

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being remedied, shall remain unremedied for 15 days after the earlier of the date a senior officer of any Loan Party has knowledge of such failure and the date written notice of such default shall have been given by any Agent to such Loan Party;

(e) (i) any Loan Party or any Subsidiary shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of Indebtedness (excluding Indebtedness evidenced by this Agreement) having an aggregate principal amount outstanding in excess of $500,000, and such failure shall continue after the applicable grace or cure period, if any, specified in the agreement or instrument relating to such Indebtedness, or any other default under any agreement or instrument relating to any such Indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case, prior to the stated maturity thereof or (ii) there occurs under any Hedging Agreement an Early Termination Date (as defined in such Hedging Agreement) resulting from (A) any event of default under such Hedging Agreement as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in such Hedging Agreement) or (B) any Termination Event (as so defined) under such Hedging Agreement as to which a Loan Party or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Loan Party or such Subsidiary as a result thereof is greater than $150,000;

(f) any Loan Party or any Subsidiary (i) shall institute any proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such Person or for any substantial part of its property, (ii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, (iii) shall make a general assignment for the benefit of creditors, (iv) incorporated or organized in the Netherlands shall have filed a notice under Section 36 of the Tax Collection Act of the Netherlands ( Invorderingswet 1990 ) or Section 60 of the Social Insurance Financing Act of the Netherlands ( Wet Financiering Sociale Verzekeringen ) in conjunction with Section 36 of the Tax Collection Act of the Netherlands ( Invorderingswet 1990 ) or (v) shall take any action to authorize or effect any of the actions set forth above in this subsection (f);

(g) any proceeding shall be instituted against any Loan Party or any Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such Person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 45 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against any such Person

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or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur;

(h) any material provision of any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against any Loan Party intended to be a party thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by any Loan Party or any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or any Loan Party shall deny in writing that it has any liability or obligation purported to be created under any Loan Document;

(i) any Security Document, any Mortgage or any other security document, after delivery thereof pursuant hereto, shall for any reason (except as a result of an action or failure to act on the part of any Agent within its reasonable control after having been provided with the information required by the Loan Documents) fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien in favor of the Collateral Agent for the benefit of the Secured Parties on any Collateral with a value in excess of $250,000 that is purported to be covered thereby;

(j) one or more judgments, orders or awards (or any settlement of any litigation or other proceeding that, if breached, could result in a judgment, order or award) (x) for the payment of money exceeding $500,000 in the aggregate (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has been notified and has not denied coverage) shall be rendered against any Loan Party and remain unsatisfied or (y) which is non-monetary but which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, and, in any case under clause (x) and (y), (i) enforcement proceedings shall have been commenced by any creditor upon any such judgment, order, award or settlement or (ii) there shall be a period of 10 consecutive days after entry thereof during which (A) a stay of enforcement thereof is not in effect or (B) the same is not vacated, discharged, stayed or bonded pending appeal;

(k) any Loan Party is enjoined, restrained or in any way prevented by the order of any court or any Governmental Authority from conducting, or otherwise ceases to conduct for any reason whatsoever, all or any material part of its business for more than 15 days;

(l) [reserved];

(m) the indictment of any Loan Party under any criminal statute, or commencement of criminal or civil proceedings against any Loan Party, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any material portion of the property of any Loan Party;

(n) any Loan Party or any of its ERISA Affiliates shall have made a complete or partial withdrawal from a Multiemployer Plan, and, as a result of such complete or partial withdrawal, any Loan Party or any of its ERISA Affiliates incurs a withdrawal liability in an annual amount exceeding $500,000; or a Multiemployer Plan enters reorganization status under

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Section 4241 of ERISA, and, as a result thereof any Loan Party ’ s or any of its ERISA Affiliates ’ annual contribution requirements with respect to such Multiemployer Plan increases in an annual amount exceeding $5 0 0,000;

(o) any Termination Event with respect to any Employee Plan shall have occurred, and, 30 days after notice thereof shall have been given to any Loan Party by any Agent, (i) such Termination Event (if correctable) shall not have been corrected, and (ii) the then current value of such Employee Plan’s vested benefits exceeds the then current value of assets allocable to such benefits in such Employee Plan by more than $500,000 (or, in the case of a Termination Event involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Internal Revenue Code, the liability is in excess of such amount);

(p) the subordination provisions of any Subordination Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Loan Party, Subsidiary or other Person party to any Subordination Agreement shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations, for any reason shall not have the priority contemplated by this Agreement or such subordination provisions in any material respect;

(q) (A) there exists any restriction on or inability of Parent to issue any shares issuable upon the exercise of the rights in any Warrant as fully paid and non-assessable shares in accordance with the terms thereof or (B) any material provision of any Warrant shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against any Loan Party intended to be a party thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by any Loan Party or any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or any Loan Party shall deny in writing that it has any liability or obligation purported to be created under any Warrant; or

(r) a Change of Control shall have occurred,

then, and in any such event, the Collateral Agent may, and shall at the request of the Required Lenders, by notice to the Administrative Borrower, (i) declare all or any portion of the Loans then outstanding to be accelerated and due and payable, whereupon all or such portion of the aggregate principal of all Loans, all accrued and unpaid interest thereon, all fees and all other amounts payable under this Agreement and the other Loan Documents shall become due and payable immediately, together with the payment of the Applicable Premium with respect to the Loans so repaid, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party and (ii) exercise any and all of its other rights and remedies under applicable law, hereunder and under the other Loan Documents; provided , however , that upon the occurrence of any Event of Default described in subsection (f) or (g) of this Section 9.01 with respect to any Loan Party, without any notice to any Loan Party or any other Person or any act by any Agent or any Lender, all Loans then outstanding, together with all accrued and unpaid interest thereon, all fees and all other amounts due under this Agreement and the other Loan Documents, including, without limitation, the Applicable Premium, shall be

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accelerated and become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by each Loan Party.

Section 9.02 Borrowing Base Cure . The Borrowers may cure an Event of Default arising out of a breach of the covenant set forth in Section 7.03(c) solely to the extent that: (i) the Borrowers promptly (and in any event within five (5) Business Days of such Event of Default) prepay the Obligations in an aggregate amount equal to the excess amount by which the Obligations exceed the Borrowing Base; (ii) such Event of Default arises after completion of an ordinary course appraisal (and not, for the avoidance of, from an appraisal being conducted as a result of an Additional Appraisal Triggering Event); and (iii) under such appraisal, the Appraised Value of the Intellectual Property decreased as a result of the nonrenewal, expiration, termination, or notice thereof of any contract (other than any Material Contract relating to any Trademarks, Patents, and/or Copyrights (in each case, as defined in the Security Agreement) owned by any Loan Party) of the Loan Party or any Subsidiary. Notwithstanding any provision of this Agreement to the contrary, the Borrowers’ rights under this Section 9.02 may be exercised no more than four (4) times during the term of this Agreement. Any prepayment pursuant to this Section 9.02 shall be applied in the same manner as set forth in Section 2.05(d).

ARTICLE X.

AGENTS

Section 10.01 Appointment . Each Lender hereby irrevocably appoints, authorizes and empowers the Administrative Agent and the Collateral Agent to perform the duties of each such Agent as set forth in this Agreement and the other Loan Documents, together with such actions and powers as are reasonably incidental thereto, including: (i) to receive on behalf of each Lender any payment of principal of or interest on the Loans outstanding hereunder and all other amounts accrued hereunder for the account of the Lenders and paid to such Agent, and, to distribute promptly to each Lender its Pro Rata Share of all payments so received; (ii) to distribute to each Lender copies of all material notices and agreements received by such Agent and not required to be delivered to each Lender pursuant to the terms of this Agreement, provided that the Agents shall not have any liability to the Lenders for any Agent’s inadvertent failure to distribute any such notices or agreements to the Lenders; (iii) to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Loans, and related matters and to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and related matters; (iv) to execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to this Agreement or any other Loan Document; (v) to make the Loans and Collateral Agent Advances, for such Agent or on behalf of the applicable Lenders as provided in this Agreement or any other Loan Document; (vi) to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to the Loan Parties, the Obligations, or otherwise related to any of same to the extent reasonably incidental to the exercise by such Agent of the rights and remedies specifically authorized to be exercised by such Agent by the terms of this Agreement or any other Loan Document; (vii) to incur and pay such fees necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to this Agreement or any other Loan Document; (viii) subject to Section 10.03, to take

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such action as such Agent deems appropriate on its behalf to administer the Loans and the Loan Documents and to exercise such other powers delegated to such Agent by the terms hereof or the other Loan Documents (including, without limitation, the power to give or to refuse to give notices, waivers, consents, approvals and instructions and the power to make or to refuse to make determinations and calculations); and (ix) to act with respect to all Collateral under the Loan Documents, including for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including, without limitation, enforcement or collection of the Loans), the Agents shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), and such instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents) shall be binding upon all Lenders and all makers of Loans; provided, however, the Agents shall not be required to take any action which, in the reasonable opinion of any Agent, exposes such Agent to liability or which is contrary to this Agreement or any other Loan Document or applicable law.

Section 10.02 Nature of Duties; Delegation .

(a) The Agents shall have no duties or responsibilities except those expressly set forth in this Agreement or in the other Loan Documents. The duties of the Agents shall be mechanical and administrative in nature. The Agents shall not have by reason of this Agreement or any other Loan Document a fiduciary relationship in respect of any Lender. Nothing in this Agreement or any other Loan Document, express or implied, is intended to or shall be construed to impose upon the Agents any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein. Each Lender shall make its own independent investigation of the financial condition and affairs of the Loan Parties in connection with the making and the continuance of the Loans hereunder and shall make its own appraisal of the creditworthiness of the Loan Parties and the value of the Collateral, and the Agents shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into their possession before the Loan hereunder or at any time or times thereafter, provided that, upon the reasonable request of a Lender, each Agent shall provide to such Lender any documents or reports delivered to such Agent by the Loan Parties pursuant to the terms of this Agreement or any other Loan Document. If any Agent seeks the consent or approval of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents) to the taking or refraining from taking any action hereunder, such Agent shall send notice thereof to each Lender. Each Agent shall promptly notify each Lender any time that the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents) have instructed such Agent to act or refrain from acting pursuant hereto.

(b) Each Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any trustee, co-agent,

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employee, attorney-in-fact and any other Person (including any Lender). Any such Person shall benefit from this Article X to the extent provided by the applicable Agent.

Section 10.03 Rights, Exculpation, Etc . The Agents and their directors, officers, agents or employees shall not be liable for any action taken or omitted to be taken by them under or in connection with this Agreement or the other Loan Documents, except for their own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. Without limiting the generality of the foregoing, the Agents (i) may treat the payee of any Loan as the owner thereof until the Collateral Agent receives written notice of the assignment or transfer thereof, pursuant to Section 12.07 hereof, signed by such payee and in form reasonably satisfactory to the Collateral Agent; (ii) may consult with legal counsel (including, without limitation, counsel to any Agent or counsel to the Loan Parties), independent public accountants, and other experts selected by any of them and shall not be liable for any action taken or omitted to be taken in good faith by any of them in accordance with the advice of such counsel or experts; (iii) make no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, certificates, warranties or representations made in or in connection with this Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of any Person, the existence or possible existence of any Default or Event of Default, or to inspect the Collateral or other property (including, without limitation, the books and records) of any Person; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; and (vi) shall not be deemed to have made any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Agents be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral. The Agents shall not be liable for any apportionment or distribution of payments made in good faith pursuant to Section 4.03, and if any such apportionment or distribution is subsequently determined to have been made in error, and the sole recourse of any Lender to whom payment was due but not made shall be to recover from other Lenders any payment in excess of the amount which they are determined to be entitled. The Agents may at any time request instructions from the Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the other Loan Documents the Agents are permitted or required to take or to grant, and if such instructions are promptly requested, the Agents shall be absolutely entitled to refrain from taking any action or to withhold any approval under any of the Loan Documents until they shall have received such instructions from the Required Lenders. Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents).

Section 10.04 Reliance . Each Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper

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Person, and with respect to all matters pertaining to this Agreement or any of the other Loan Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.

Section 10.05 Indemnification . To the extent that any Agent is not reimbursed and indemnified by any Loan Party, and whether or not such Agent has made demand on any Loan Party for the same, each Lender agrees to, within five days of written demand by such Agent, reimburse such Agent for and indemnify such Agent from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, client charges and expenses of counsel or any other advisor to such Agent), advances or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of this Agreement or any of the other Loan Documents or any action taken or omitted by such Agent under this Agreement or any of the other Loan Documents, in proportion to each Lender’s Pro Rata Share, including, without limitation, advances and disbursements made pursuant to Section 10.08; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements for which there has been a final non-appealable judicial determination by a court of competent jurisdiction that such liability resulted from such Agent’s gross negligence or willful misconduct. The obligations of the Lenders under this Section 10.05 shall survive the payment in full of the Loans and all other amounts payable hereunder and the termination of this Agreement.

Section 10.06 Agents Individually . With respect to the Loans made by it as a Lender, each Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or maker of a Loan. The terms “Lenders” or “Required Lenders” or any similar terms shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity as a Lender or one of the Required Lenders. Each Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with any Borrower as if it were not acting as an Agent pursuant hereto without any duty to account to the other Lenders.

Section 10.07 Successor Agent .

(a) Any Agent may at any time give at least 30 days prior written notice of its resignation to the Lenders and the Administrative Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Administrative Borrower, to appoint a successor Agent. If no such successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “ Resignation Effective Date ”), then the retiring Agent may (but shall not be obligated to), on behalf of the Lenders appoint a successor Agent with, so long as no Event of Default has occurred and is continuing, the consent of the Administrative Borrower (such consent not to be unreasonably withheld, delayed or conditioned). Whether or not a successor Agent has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

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(b) With effect from the Resignation Effective Date, (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (other than its obligations under Section 12.19 hereof and except that in the case of any Collateral held by such Agent on behalf of the Lenders under any of the Loan Documents, the retiring Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through such retiring Agent shall instead be made by or to each Lender directly, until such time, if any, as a successor Agent shall have been appointed as provided for above. Upon the acceptance of a successor Agent ’ s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (other than its obligations under Section 12.19 hereof). After the retiring Agent ’ s resignation hereunder and under the other Loan Documents, the provisions of this Article, Section 12.04 and Section 12.15 shall continue in effect for the benefit of such retiring Agent in respect of any actions taken or omitted to be taken by it while the retiring Agent was acting as Agent.

Section 10.08 Collateral Matters .

(a) The Collateral Agent may from time to time make such disbursements and advances up to an aggregate principal amount not to exceed at any time $1,000,000 (“ Collateral Agent Advances ”) which the Collateral Agent, in its reasonable discretion, deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Borrowers of the Loans and other Obligations or to pay any other amount chargeable to the Borrowers pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in Section 12.04. The Collateral Agent Advances shall be repayable immediately on demand and be secured by the Collateral and shall bear interest at a rate per annum equal to the rate then applicable to the Loans. The Collateral Agent Advances shall constitute Obligations hereunder. The Collateral Agent shall notify each Lender and the Administrative Borrower in writing of each such Collateral Agent Advance, which notice shall include a description of the purpose of such Collateral Agent Advance. Without limitation to its obligations pursuant to Section 10.05, each Lender agrees that it shall make available to the Collateral Agent, upon the Collateral Agent’s demand, in Dollars in immediately available funds, the amount equal to such Lender’s Pro Rata Share of each such Collateral Agent Advance. If such funds are not made available to the Collateral Agent by such Lender, the Collateral Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to the Collateral Agent, at the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation.

(b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by the Collateral Agent upon any Collateral upon payment and satisfaction of all Loans and all other Obligations (other than Contingent Indemnity Obligations) in accordance with the terms hereof; or constituting property being sold or disposed of in in compliance with the terms of this Agreement and the other Loan Documents; or constituting property in which the Loan Parties owned no interest at the time the

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Lien was granted or at any time thereafter; or if approved, authorized or ratified in writing by the Lenders in accordance with Section 12.02 . Upon request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral Agent ’ s authority to release particular types or items of Collateral pursuant to this Section 10.08(b) .

(c) Without in any manner limiting the Collateral Agent’s authority to act without any specific or further authorization or consent by the Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon request by the Collateral Agent, the authority to release Collateral conferred upon the Collateral Agent under Section 10.08(b). Upon receipt by the Collateral Agent of confirmation from the Lenders of its authority to release any particular item or types of Collateral, and upon prior written request by any Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent, for the benefit of the Secured Parties, upon such Collateral; provided , however , that (i) the Collateral Agent shall not be required to execute any such document on terms which, in the Collateral Agent’s reasonable opinion, would expose the Collateral Agent to liability or create any obligations or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Lien upon (or obligations of any Loan Party in respect of) all interests in the Collateral retained by any Loan Party.

(d) Anything contained in any of the Loan Documents to the contrary notwithstanding, the Loan Parties, each Agent and each Lender hereby agree that (i) no Lender shall have any right individually to realize upon any of the Collateral under any Loan Document or to enforce any Guaranty, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Collateral Agent for the benefit of the Lenders in accordance with the terms thereof, (ii) in the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale, the Administrative Agent, the Collateral Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and (iii) the Collateral Agent, as agent for and representative of the Agents and the Lenders (but not any other Agent or any Lender or Lenders in its or their respective individual capacities unless the Required Lenders shall otherwise agree in writing) shall be entitled (either directly or through one or more acquisition vehicles) for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral to be sold (A) at any public or private sale, (B) at any sale conducted by the Collateral Agent under the provisions of the Uniform Commercial Code (including pursuant to Sections 9-610 or 9-620 of the Uniform Commercial Code), (C) at any sale or foreclosure conducted by the Collateral Agent (whether by judicial action or otherwise) in accordance with applicable law or (D) any sale conducted pursuant to the provisions of any Debtor Relief Law (including Section 363 of the Bankruptcy Code), to use and apply all or any of the Obligations as a credit on account of the purchase price for any Collateral payable by the Collateral Agent at such sale.

(e) The Collateral Agent shall have no obligation whatsoever to any Lender to assure that the Collateral exists or is owned by the Loan Parties or is cared for, protected or insured or has been encumbered or that the Lien granted to the Collateral Agent pursuant to this Agreement or any other Loan Document has been properly or sufficiently or lawfully created, perfected, protected or enforced or is entitled to any particular priority, or to exercise at all or in

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any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.08 or in any other Loan Document, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent ’ s own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to any other Lender, except as otherwise provided herein.

Section 10.09 Agency for Perfection . Each Agent and each Lender hereby appoints each other Agent and each other Lender as agent and bailee for the purpose of perfecting the security interests in and liens upon the Collateral in assets which, in accordance with Article 9 of the Uniform Commercial Code, can be perfected only by possession or control (or where the security interest of a secured party with possession or control has priority over the security interest of another secured party) and each Agent and each Lender hereby acknowledges that it holds possession of or otherwise controls any such Collateral for the benefit of the Agents and the Lenders as secured party. Should the Administrative Agent or any Lender obtain possession or control of any such Collateral, the Administrative Agent or such Lender shall notify the Collateral Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver such Collateral to the Collateral Agent or in accordance with the Collateral Agent’s instructions. In addition, the Collateral Agent shall also have the power and authority hereunder to appoint such other sub-agents as may be necessary or required under applicable state law or otherwise to perform its duties and enforce its rights with respect to the Collateral and under the Loan Documents. Each Loan Party by its execution and delivery of this Agreement hereby consents to the foregoing.

Section 10.10 No Reliance on any Agent’s Customer Identification Program . Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on any Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other requirements imposed by the USA PATRIOT Act or the regulations issued thereunder, including the regulations set forth in 31 C.F.R. §§ 1010.100(yy), (iii), 1020.100, and 1020.220 (formerly 31 C.F.R. § 103.121), as hereafter amended or replaced (“CIP Regulations”), or any other Anti-Terrorism Laws, including any programs involving any of the following items relating to or in connection with any of the Loan Parties, their Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any recordkeeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or other regulations issued under the USA PATRIOT Act. Each Lender, Affiliate, participant or assignee subject to Section 326 of the USA PATRIOT Act will perform the measures necessary to satisfy its own responsibilities under the CIP Regulations.

Section 10.11 No Third Party Beneficiaries . Other than Sections 10.07 and 10.08, the provisions of this Article are solely for the benefit of the Secured Parties, and no Loan Party shall have rights as a third-party beneficiary of any of such provisions.

Section 10.12 No Fiduciary Relationship . It is understood and agreed that the use of the term “agent” herein or in any other Loan Document (or any other similar term) with reference to any Agent is not intended to connote any fiduciary or other implied (or express)

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obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

Section 10.13 Reports; Confidentiality; Disclaimers . By becoming a party to this Agreement, each Lender:

(a) is deemed to have requested that each Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report with respect to the Parent or any of its Subsidiaries (each, a “ Report ”) prepared by or at the request of such Agent, and each Agent shall so furnish each Lender with each such Report,

(b) expressly agrees and acknowledges that the Agents (i) do not make any representation or warranty as to the accuracy of any Reports, and (ii) shall not be liable for any information contained in any Reports,

(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that any Agent or other party performing any audit or examination will inspect only specific information regarding the Parent and its Subsidiaries and will rely significantly upon the Parent’s and its Subsidiaries’ books and records, as well as on representations of their personnel,

(d) agrees to keep all Reports and other material, non-public information regarding the Parent and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 12.19, and

(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold any Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to the Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of the Borrowers, and (ii) to pay and protect, and indemnify, defend and hold any Agent and any other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys’ fees and costs) incurred by any such Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

Section 10.14 Collateral Custodian . Upon the occurrence and during the continuance of any Default or Event of Default, the Collateral Agent or its designee may at any time and from time to time employ and maintain on the premises of any Loan Party a custodian selected by the Collateral Agent or its designee who shall have full authority to do all acts necessary to protect the Agents’ and the Lenders’ interests. Each Loan Party hereby agrees to, and to cause its Subsidiaries to, cooperate with any such custodian and to do whatever the Collateral Agent or its designee may reasonably request to preserve the Collateral. All costs and

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expenses incurred by the Collateral Agent or its designee by reason of the employment of the custodian shall be the responsibility of the Borrowers and constitute Obligations hereunder.

Section 10.15 Collateral Agent May File Proofs of Claim . In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Collateral Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether any Agent shall have made any demand on the Borrowers) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Secured Parties (including any claim for the compensation, expenses, disbursements and advances of the Secured Parties and their respective agents and counsel and all other amounts due the Secured Parties hereunder and under the other Loan Documents) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, examiner, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Secured Party to make such payments to the Collateral Agent and, in the event that the Collateral Agent shall consent to the making of such payments directly to the Secured Parties, to pay to the Collateral Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Collateral Agent and its agents and counsel, and any other amounts due the Collateral Agent hereunder and under the other Loan Documents.

ARTICLE XI.

GUARANTY

Section 11.01 Guaranty . Each Guarantor hereby jointly and severally and unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of (A) in the case of each Guarantor that is a U.S. Loan Party, all Obligations and (B) in the case of each Guarantor that is a Foreign Loan Party, the Foreign Obligations now or hereafter existing under any Loan Document, in each case, whether for principal, interest (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of any Borrower, whether or not a claim for post-filing interest is allowed in such Insolvency Proceeding), fees, commissions, expense reimbursements, indemnifications or otherwise (such obligations, to the extent not paid by the Borrowers, being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Secured Parties in enforcing any rights under the guaranty set forth in this Article XI. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Borrowers to the Secured Parties under any

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Loan Document but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Borrower. In no event shall the obligation of any Guarantor hereunder exceed the maximum amount such Guarantor could guarantee under any Debtor Relief Law.

Section 11.02 Guaranty Absolute . Each Guarantor jointly and severally guarantees that the Guaranteed Obligations for which it is responsible pursuant to Section 11.01 will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Secured Parties with respect thereto. Each Guarantor agrees that this Article XI constitutes a guaranty of payment when due and not of collection and waives any right to require that any resort be made by any Agent or any Lender to any Collateral. The obligations of each Guarantor under this Article XI are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce such obligations, irrespective of whether any action is brought against any Loan Party or whether any Loan Party is joined in any such action or actions. The liability of each Guarantor under this Article XI shall be, until the Termination Date, irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;

(d) the existence of any claim, set-off, defense or other right that any Guarantor may have at any time against any Person, including, without limitation, any Secured Party;

(e) any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Loan Party; or

(f) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Secured Parties that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety.

This Article XI shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by

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Secured Parties or any other Person upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all as though such payment had not been made.

Section 11.03 Waiver . Each Guarantor hereby waives (i) promptness and diligence, (ii) notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Article XI and any requirement that the Secured Parties exhaust any right or take any action against any Loan Party or any other Person or any Collateral, (iii) any right to compel or direct any Secured Party to seek payment or recovery of any amounts owed under this Article XI from any one particular fund or source or to exhaust any right or take any action against any other Loan Party, any other Person or any Collateral, (iv) any requirement that any Secured Party protect, secure, perfect or insure any security interest or Lien on any property subject thereto or exhaust any right to take any action against any Loan Party, any other Person or any Collateral, and (v) any other defense available to any Guarantor. Each Guarantor agrees that the Secured Parties shall have no obligation to marshal any assets in favor of any Guarantor or against, or in payment of, any or all of the Obligations. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 11.03 is knowingly made in contemplation of such benefits. Each Guarantor hereby waives any right to revoke this Article XI, and acknowledges that this Article XI is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

Section 11.04 Continuing Guaranty; Assignments . This Article XI is a continuing guaranty and shall (a) remain in full force and effect until the later of the cash payment in full of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI and the Final Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Secured Parties and their successors, pledgees, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may pledge, assign or otherwise transfer all or any portion of its rights and obligations under this Agreement (including, without limitation, all or any portion of Loans owing to it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted such Lender herein or otherwise, in each case as provided in Section 12.07.

Section 11.05 Subrogation . No Guarantor will exercise any rights that it may now or hereafter acquire against any Loan Party or any other guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under this Article XI, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Secured Parties against any Loan Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI shall have been paid in full in cash and the Final Maturity Date shall have occurred. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed

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Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI and the Final Maturity Date, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Article XI , whether matured or unmatured, in accordance with the terms of this Agreement, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Article XI thereafter arising. If (i) any Guarantor shall make payment to the Secured Parties of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Article XI shall be paid in full in cash and (iii) the Final Maturity Date shall have occurred, the Secured Parties will, at such Guarantor ’ s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.

Section 11.06 Contribution . All Guarantors desire to allocate among themselves, in a fair and equitable manner, their obligations arising under this Guaranty. Accordingly, in the event any payment or distribution is made on any date by a Guarantor under this Guaranty such that its Aggregate Payments exceeds its Fair Share as of such date, such Guarantor shall be entitled to a contribution from each of the other Guarantors in an amount sufficient to cause each Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with respect to any Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Guarantor, to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Guarantors multiplied by, (b) the aggregate amount paid or distributed on or before such date by all Guarantors under this Guaranty in respect of the obligations Guaranteed. “Fair Share Contribution Amount” means, with respect to any Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Guarantor under this Guaranty that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of state law; provided, solely for purposes of calculating the “Fair Share Contribution Amount” with respect to any Guarantor for purposes of this Section 11.06, any assets or liabilities of such Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Guarantor. “Aggregate Payments” means, with respect to any Guarantor as of any date of determination, an amount equal to (A) the aggregate amount of all payments and distributions made on or before such date by such Guarantor in respect of this Guaranty (including, without limitation, in respect of this Section 11.06), minus (B) the aggregate amount of all payments received on or before such date by such Guarantor from the other Guarantors as contributions under this Section 11.06. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Guarantor. The allocation among Guarantors of their obligations as set forth in this Section 11.06 shall not be construed in any way to limit the liability of any Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 11.06.

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ARTICLE XII.

MISCELLANEOUS

Section 12.01 Notices, Etc.

(a) Notices Generally . All notices and other communications provided for hereunder shall be in writing and shall be delivered by hand, sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, telecopier or, subject to clause (b) below, by electronic communication. In the case of notices or other communications to any Loan Party, Administrative Agent or the Collateral Agent, as the case may be, they shall be sent to the respective address set forth below (or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties complying as to delivery with the terms of this Section 12.01):

Cherokee Inc.

5990 Sepulveda Boulevard

Van Nuys, CA 91411

Attention: Steve Brink

Telephone: 818-908-9868

Email: steveb@cherokeeglobalbrands.com

with a copy to:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
3580 Carmel Mountain Road

San Diego, CA 92130

Attention: Scott M. Stanton
Telephone: (858) 314.1880

Email: SMStanton@mintz.com

if to the Administrative Agent or the Collateral Agent, to it at the following addresses:

Gordon Brothers Finance Company
800 Boylston Street, 27th Floor

Boston, MA 02199
Attention: Lisa Galeota, Managing Director

Telephone: (617) 588-3313
Email: LGaleota@gbfinco.com

in each case, with a copy to:

Choate, Hall & Stewart LLP

Two International Place

Boston, MA 02110
Attention: Kevin Simard, Esq.

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Telep hone:  (617) 248-4086
Telecopier:   (617) 248 -40 00
Email:  ksimard@choate.com

All notices or other communications sent in accordance with this Section 12.01, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided , that (i) notices sent by overnight courier service shall be deemed to have been given when received, (ii) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (iii) notices by electronic communication shall be deemed to have been given as set forth in clause (b)(ii) below, provided , further that notices to any Agent pursuant to Article II shall not be effective until received by such Agent.

(b) Electronic Communications .

(i) Each Agent and the Administrative Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e‑mail and Internet or intranet websites) pursuant to procedures approved by the Agents, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Agents that it is incapable of receiving notices under such Article by electronic communication.

(ii) Unless the Administrative Agent otherwise prescribes, (A) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (B) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (A), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (A) and (B) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.

Section 12.02 Amendments, Etc.

(a) No amendment or waiver of any provision of this Agreement or any other Loan Document (excluding the Fee Letter, which may be amended with the written consent of the parties thereto), and no consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed (x) in the case of an amendment, consent or waiver to cure any ambiguity, omission, defect or inconsistency or granting a new Lien for the benefit of the Secured Parties or extending an existing Lien over additional property, by the Agents, the Borrowers (or by the Administrative Borrower on behalf

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of the Borrowers and any other applicable Loan Parties ), (y) in the case of any other waiver or consent, by the Required Lenders (or by the Collateral Agent with the consent of the Required Lenders) and (z) in the case of any other amendment, by the Required Lenders (or by the Collateral Agent with the consent of the Required Lenders) , the Borrowers (or by the Administrative Borrower on behalf of the Borrowers and any other applicable Loan Parties ), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no amendment, waiver or consent shall:

(i) reduce the principal of, or interest on, the Loans payable to any Lender, reduce the amount of any fee payable for the account of any Lender, or postpone or extend any scheduled date fixed for any payment of principal of, or interest or fees on, the Loans payable to any Lender, in each case, without the prior written consent of such Lender; provided that, only the consent of the Required Lenders shall be necessary to amend the definition of “Post-Default Rate” or waive any obligation of the Borrowers to pay interest at the Post-Default Rate;

(ii) increase or reinstate the Commitments without the written prior consent of each Lender;

(iii) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans that is required for the Lenders or any of them to take any action hereunder without the prior written consent of each Lender;

(iv) amend the definition of “Required Lenders” or “Pro Rata Share” without the prior written consent of each Lender;

(v) release all or a substantial portion of the Collateral (except as otherwise provided in this Agreement and the other Loan Documents), subordinate any Lien granted in favor of the Collateral Agent, for the benefit of the Secured Parties, or release any Borrower or any Guarantor (except in connection with a Disposition of the Equity Interests thereof permitted by Section 7.02(c)(ii)), in each case, without the prior written consent of each Lender;

(vi) change the definition of the term “Borrowing Base” or any component definition of any such term (including the applicable advance rates) without the prior written consent of each Lender; provided , however , that the foregoing shall not limit the discretion of the Administrative Agent to change, establish or eliminate any Reserves;

(vii) modify the definition of Collateral Agent Advance so as to increase the amount thereof without the prior written consent of each Lender; or

(viii) amend, modify or waive Section 4.02, Section 4.03 or this Section 12.02 of this Agreement without the prior written consent of each Lender.

Notwithstanding the foregoing, (A) no amendment, waiver or consent shall, unless in writing and signed by an Agent, affect the rights or duties of such Agent (but not in its capacity as a Lender) under this Agreement or the other Loan Documents, (B) any amendment, waiver or consent to any provision of this Agreement (including Sections 4.01 and 4.02) that

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permits any Loan Party, or any of their respective Affiliates to purchase Loans on a non-pro rata basis, become an eligible assignee pursuant to Section 12.07 and/or make offers to make optional prepayments on a non-pro rata basis shall require the prior written consent of the Required Lenders rather than the prior written consent of each Lender directly affected thereby and (C) the consent of the Borrowers shall not be required to change any order of priority set forth in Section 2.05(d) and Section 4.03 . Notwithstanding anything to the contrary herein, no Loan Party, equity holder of the Parent or any of their respective Affiliates that is a Lender shall have any right to approve or disapprove any amendment, waiver or consent under the Loan Documents and any Loans held by such Person for purposes hereof shall be automatically deemed to be voted pro rata according to the Loans of all other Lenders in the aggregate (other than such Loan Party, equity holder of the Parent or Affiliate).

(b) [Reserved.]

Section 12.03 No Waiver; Remedies, Etc . No failure on the part of any Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Agents and the Lenders provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Agents and the Lenders under any Loan Document against any party thereto are not conditional or contingent on any attempt by the Agents and the Lenders to exercise any of their rights under any other Loan Document against such party or against any other Person.

Section 12.04 Expenses; Taxes; Attorneys’ Fees . The Borrowers agree to pay, without duplication, (1) on the Effective Date and (2) after the Effective Date, within 3 Business Days after receipt of an invoice that sets forth such costs and expenses in reasonable detail, all reasonable and documented out-of-pocket costs and expenses incurred by or on behalf of each Agent (and, in the case of clauses (b) through (n) below, each Lender), regardless of whether the transactions contemplated hereby are consummated, including, without limitation, reasonable and documented fees, out-of-pocket costs, client charges and expenses of counsel for each Agent (and, in the case of clauses (b) through (n) below, each Lender) (but limited in each case of this Section 12.04, for the Agents and the Lenders taken as a whole, to (w) one primary counsel for each Agent and one primary counsel for the Lenders (taken as a whole), (x) one regulatory counsel, (y) one local counsel in each relevant jurisdiction or a single special counsel acting in multiple jurisdictions, and (z) one intellectual property counsel for the Agents and the Lenders (taken as a whole), in each case unless a conflict arises, in which case the reasonable and documented fees and out-of-pocket expenses of one conflicts counsel shall also be reimbursed by the Borrowers, and for the Agents and the Lenders taken as a whole, to all other types of professionals or advisors other than counsel (such as financial advisors, investment bankers, accountants, etc.) to one firm of each such type of advisors to the Agents and the Lenders, taken as a whole), accounting, due diligence, periodic field audits, physical counts, valuations, investigations, searches and filings, monitoring of assets, appraisals of Collateral, the rating of the Loans, reasonable title searches and reviewing environmental assessments, miscellaneous disbursements, examination, travel, lodging and meals, arising from or relating to (but subject to any limitations set forth in Section 2.06(b)): (a) the negotiation, preparation, execution, delivery,

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performance and administration of this Agreement and the other Loan Documents (including, without limitation, the preparation of any additional Loan Documents pursuant to Section 7.01(b) or the review of any of the agreements, instruments and documents referred to in Section 7.01(f) ), (b) any requested amendments, waivers or consents to this Agreement or the other Loan Documents whether or not such documents become effective or are given, (c) the enforcement of any rights under this Agreement and the other Loan Documents and the preservation and protection of the Agents ’ or any of the Lenders ’ rights under this Agreement or the other Loan Documents, (d) the defense of any claim or action asserted or brought against any Agent or any Lender by any Person that arises from or relates to this Agreement, any other Loan Document, the Agents ’ or the Lenders ’ claims against any Loan Party, or any and all matters in connection therewith, (e) the commencement or defense of, or intervention in, any court proceeding arising from or related to this Agreement or any other Loan Document, (f) the filing of any petition, complaint, answer, motion or other pleading by any Agent or any Lender, or the taking of any action in respect of the Collateral or other security, in connection with this Agreement or any other Loan Document, except in each case under clauses (d), (e) and (f), no reimbursement shall be required to the extent any such costs and expenses are the result of the gross negligence, willful misconduct of or breach of a funding obligation under a Loan Document by such Person claiming reimbursement, as determined by a final, non-appealable judgment of a court of competent jurisdiction, (g) the protection, collection, lease, sale, taking possession of or liquidation of, any Collateral or other security in accordance with this Agreement or any other Loan Document, (h) any attempt to enforce any Lien or security interest in any Collateral or other security in accordance with this Agreement or any other Loan Document, (i) any attempt to collect from any Loan Party in accordance with this Agreement or any other Loan Document, (j) all liabilities and costs arising from or in connection with the past, present or future operations of any Loan Party involving any damage to real or personal property or natural resources or harm or injury alleged to have resulted from any Release of Hazardous Materials on, upon or into such property, (k) any Environmental Liabilities and Costs incurred in connection with the investigation, removal, cleanup and/or remediation of any Hazardous Materials present or arising out of the operations of any Facility of any Loan Party, (l) any Environmental Liabilities and Costs incurred in connection with any Environmental Lien, (m) the rating of the Loans by one or more rating agencies in connection with any Lender ’ s Securitization, or (n) the receipt by any Agent or any Lender of any advice from professionals with respect to any of the foregoing. Without limitation of the foregoing or any other provision of any Loan Document: (x) the Borrowers agree to pay all stamp, document, transfer, recording filing or similar fees or Taxes required to be paid under applicable law in connection with this Agreement or any other Loan Document, and the Borrowers agree to save each Agent and each Lender harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission by the Borrowers to timely pay any such fees or Taxes, (y) the Borrowers agree to pay all broker fees that may become due in connection with the transactions contemplated by this Agreement and the other Loan Documents, and (z) if the Borrowers fail to perform any covenant or agreement contained herein or in any other Loan Document, any Agent may itself perform or cause performance of such covenant or agreement, and the expenses of such Agent incurred in connection therewith shall be reimbursed on demand by the Borrowers. The obligations of the Borrowers under this Section 12.04 shall survive the repayment of the Obligations and discharge of any Liens granted under the Loan Documents.

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Section 12.05 Right of Set-off . Upon the occurrence and during the continuance of any Event of Default, and subject to Section 4.02 any Agent or any Lender may, and is hereby authorized to, at any time and from time to time, without notice to any Loan Party (any such notice being expressly waived by the Loan Parties) and to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Agent or such Lender or any of their respective Affiliates to or for the credit or the account of any Loan Party against any and all obligations of the Loan Parties either now or hereafter existing under any Loan Document, irrespective of whether or not such Agent or such Lender shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured. Each Agent and each Lender agrees to notify such Loan Party promptly after any such set-off and application made by such Agent or such Lender or any of their respective Affiliates provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Agents and the Lenders under this Section 12.05 are in addition to the other rights and remedies (including other rights of set-off) which the Agents and the Lenders may have under this Agreement or any other Loan Documents of law or otherwise.

Section 12.06 Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 12.07 Assignments and Participations .

(a) This Agreement and the other Loan Documents shall be binding upon and inure to the benefit of each Loan Party and each Agent and each Lender and their respective successors and assigns; provided , however , that none of the Loan Parties may assign or transfer any of its rights hereunder or under the other Loan Documents without the prior written consent of each Lender and any such assignment without the Lenders’ prior written consent shall be null and void.

(b) Subject to the conditions set forth in clause (c) below, each Lender may assign to one or more other lenders or other entities all or a portion of its rights and obligations under this Agreement with respect to any Loan made by it with the written consent of the Collateral Agent and the Administrative Agent, provided , however , that no written consent of the Collateral Agent or the Administrative Agent shall be required if such assignment is in connection with any merger, consolidation, sale, transfer, or other disposition of all or any substantial portion of the business or loan portfolio of such Lender or if such assignment is to another Lender, an Affiliate of a Lender or a Related Fund with respect to a Lender.

(i) each such assignment shall be in an amount which is at least $1,000,000 or a multiple of $1,000,000 in excess thereof (except such minimum amount shall not apply to an assignment by a Lender to (A) a Lender, an Affiliate of such Lender or a Related Fund of such Lender or (B) a group of new Lenders, each of whom is an Affiliate or Related

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Fund of each other to the extent the aggregate amount to be assigned to all such new Lenders is at least $1,000,000 or a multiple of $1,000,000 in excess thereof);

(ii) the parties to each such assignment shall execute and deliver to the Collateral Agent and the Administrative Agent, for its acceptance, an Assignment and Acceptance, together with any promissory note subject to such assignment and such parties shall deliver to the Collateral Agent, for the benefit of the Collateral Agent, a processing and recordation fee of $3,500 (except the payment of such fee shall not be required in connection with an assignment by a Lender to a Lender, an Affiliate of such Lender or a Related Fund of such Lender);

(iii) no such assignment shall be made to any Loan Party, equity holder of the Parent or any of their respective Affiliates; and

(iv) unless an Event of Default shall have occurred and be continuing, the Administrative Borrower shall have provided its written consent (which shall not be unreasonably withheld or delayed and which consent shall be deemed to have been given if not delivered within five (5) days upon request thereof) to any assignment, provided that such consent will not be required if (A) the assignment is to an existing Lender or an Affiliate or Related Fund of an existing Lender or (B) such assignment is in connection with any merger, consolidation, sale, transfer, or other disposition of all or any substantial portion of the business or loan portfolio of such Lender.

(d) Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance and recordation on the Register, which effective date shall be at least 3 Business Days after the delivery thereof to the Collateral Agent (or such shorter period as shall be agreed to by the Collateral Agent and the parties to such assignment), (A) the assignee thereunder shall become a “Lender” hereunder and, in addition to the rights and obligations hereunder held by it immediately prior to such effective date, have the rights and obligations hereunder that have been assigned to it pursuant to such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, other than obligations which survive under Section 12.19, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

(e) By executing and delivering an Assignment and Acceptance, the assigning Lender and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto; (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or any of its Subsidiaries or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other

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Loan Document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement and the other Loan Documents, together with such other documents and information it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the assigning Lender, any Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents; (v) such assignee appoints and authorizes the Agents to take such action as agents on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Agents by the terms hereof and thereof, together with such powers as are reasonably incidental hereto and thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Lender.

(f) The Administrative Agent shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain, or cause to be maintained, a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the “ Register ”) for the recordation of the names and addresses of the Lenders and the principal amount of the Loans (and stated interest thereon) (the “ Registered Loans ”) owing to each Lender from time to time. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Agents and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Administrative Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(g) Upon receipt by the Administrative Agent of a completed Assignment and Acceptance, and subject to any consent required from the Administrative Agent or the Collateral Agent pursuant to Section 12.07(b) (which consent of the applicable Agent must be evidenced by such Agent’s execution of an acceptance to such Assignment and Acceptance), the Administrative Agent shall accept such assignment, record the information contained therein in the Register (as adjusted to reflect any principal payments on or amounts capitalized and added to the principal balance of the Loans made subsequent to the effective date of the applicable assignment, as confirmed in writing by the corresponding assignor and assignee in conjunction with delivery of the assignment to the Administrative Agent) and provide to the Collateral Agent a copy of the fully executed Assignment and Acceptance.

(h) A Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide). Any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any, evidencing the same), the Agents shall treat the Person in

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whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered on the Register as the owner thereof for the purpose of receiving all payments thereon, notwithstanding notice to the contrary.

(i) In the event that any Lender sells participations in a Registered Loan, such Lender shall, acting for this purpose as a non-fiduciary agent on behalf of the Borrowers, maintain, or cause to be maintained, a register, on which it enters the name of all participants in the Registered Loans held by it and the principal amount (and stated interest thereon) of the portion of the Registered Loan that is the subject of the participation (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in the Registered Loans) to any Person except to the extent that such disclosure is necessary to establish that such Registered Loan is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. For the avoidance of doubt, the Administrative Agent (it its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(j) Any Non-U.S. Lender who purchases or is assigned or participates in any portion of such Registered Loan shall comply with Section 2.09(d).

(k) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of the Loans made by it); provided, that (i) such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and the Borrowers, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents; and (iii) a participant shall not be entitled to require such Lender to take or omit to take any action hereunder except (A) actions directly effecting an extension of the maturity dates or decrease in the principal amount of the Loans, (B) actions directly effecting an extension of the due dates or a decrease in the rate of interest payable on the Loans or the fees payable under this Agreement, or (C) actions directly effecting a release of all or a substantial portion of the Collateral or any Loan Party (except as set forth in Section 10.08 of this Agreement or any other Loan Document). The Loan Parties agree that each participant shall be entitled to the benefits of Section 2.09 and Section 2.10 of this Agreement with respect to its participation in any portion of the Loans as if it was a Lender.

(l) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or loans made to such

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Lender pursuant to securitization or similar credit facility (a “ Securitization ” ); provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. The Loan Parties shall cooperate with such Lender and its Affiliates to effect the Securitization including, without limitation, by providing such information as may be reasonably requested by such Lender in connection with the rating of its Loans or the Securitization.

Section 12.08 Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by telecopier or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telecopier or electronic mail also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis .

Section 12.09 GOVERNING LAW . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE .

(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY ANY MEANS PERMITTED BY APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE LOAN PARTIES 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. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY

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OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

(b) Each Foreign Loan Party hereby irrevocably appoints the Parent (the “ Process Agent ”), with an office on the date hereof as set forth in Section 12.01 as its agent to receive on behalf of each Foreign Loan Party service of the summons and complaint and any other process which may be served in any action or proceeding described above. Such service may be made by mailing or delivering a copy of such process to each Foreign Loan Party, in care of the Process Agent at the address specified above for such Process Agent, and such Foreign Loan Party hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. Each Foreign Loan Party covenants and agrees that, for so long as it shall be bound under this Agreement or any other Loan Document, it shall maintain a duly appointed agent for the service of summons and other legal process in New York, New York, United States of America, for the purposes of any legal action, suit or proceeding brought by any party in respect of this Agreement or such other Loan Document and shall keep the Agents advised of the identity and location of such agent. If for any reason there is no authorized agent for service of process in New York, each Foreign Loan Party irrevocably consents to the service of process out of the said courts by mailing copies thereof by registered United States air mail postage prepaid to it at its address specified in Section 12.01. Nothing in this Section 12.10 shall affect the right of any Secured Party to (i) commence legal proceedings or otherwise sue any Foreign Loan Party in the country in which it is domiciled or in any other court having jurisdiction over such Foreign Loan Party or (ii) serve process upon any Foreign Loan Party in any manner authorized by the laws of any such jurisdiction.

Section 12.11 WAIVER OF JURY TRIAL, ETC . EACH LOAN PARTY, EACH AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY

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LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT.

Section 12.12 Consent by the Agents and Lenders . Except as otherwise expressly set forth herein to the contrary or in any other Loan Document, if the consent, approval, satisfaction, determination, judgment, acceptance or similar action (an “Action”) of any Agent or any Lender shall be permitted or required pursuant to any provision hereof or any provision of any other agreement to which any Loan Party is a party and to which any Agent or any Lender has succeeded thereto, such Action shall be required to be in writing and may be withheld or denied by such Agent or such Lender, in its sole discretion, with or without any reason, and without being subject to question or challenge on the grounds that such Action was not taken in good faith.

Section 12.13 No Party Deemed Drafter . Each of the parties hereto agrees that no party hereto shall be deemed to be the drafter of this Agreement.

Section 12.14 Reinstatement; Certain Payments . If any claim is ever made upon any Secured Party for repayment or recovery of any amount or amounts received by such Secured Party in payment or on account of any of the Obligations, such Secured Party shall give prompt notice of such claim to each other Agent and Lender and the Administrative Borrower, and if such Secured Party repays all or part of such amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such Secured Party or any of its property, or (ii) any good faith settlement or compromise of any such claim effected by such Secured Party with any such claimant, then and in such event each Loan Party agrees that (A) any such judgment, decree, order, settlement or compromise shall be binding upon it notwithstanding the cancellation of any Indebtedness hereunder or under the other Loan Documents or the termination of this Agreement or the other Loan Documents, and (B) it shall be and remain liable to such Secured Party hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by such Secured Party.

Section 12.15 Indemnification; Limitation of Liability for Certain Damages .

(a) In addition to each Loan Party’s other Obligations under this Agreement, each U.S. Loan Party agrees (with respect to all Obligations) and each Foreign Loan Party agrees (with respect to the Foreign Obligations) to, jointly and severally, defend, protect, indemnify and hold harmless each Secured Party and all of their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively called the “ Indemnitees ”) from and against any and all losses, damages, liabilities, obligations, penalties, fees, reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Indemnitees, whether prior to or from and after the Effective Date, whether direct, indirect or consequential, as a result of or arising from or relating to or in connection with any of the following: (i) the negotiation, preparation, execution or performance or enforcement of this Agreement, any other Loan Document or of any other document executed

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in connection with the transactions contemplated by this Agreement, (ii) any Agent ’ s or any Lender ’ s furnishing of funds to the Borrowers under this Agreement or the other Loan Documents, including, without limitation, the management of any such Loans or the Borrowers ’ use of the proceeds thereof, (iii) the Agents and the Lenders relying on any instructions of the Administrative Borrower or the handling of the Collateral of the Borrowers as herein provided, (iv) any matter relating to the financing transactions contemplated by this Agreement or the other Loan Documents or by any document executed in connection with the transactions contemplated by this Agreement or the other Loan Documents, or (v) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (collectively, the “ Indemnified Matters ” ); provided , however , that the U.S. Loan Parties and the Foreign Loan Parties, as applicable, shall not have any obligation to any Indemnitee under this subsection (a) for any Indemnified Matter caused by the gross negligence or willful misconduct of such Indemnitee, as determined by a final non-appealable judgment of a court of competent jurisdiction.

(b) To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 12.15 may be unenforceable because it is violative of any law or public policy, each Loan Party shall, jointly and severally, contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.

(c) No Loan Party shall assert, and each Loan Party hereby waives, any claim against the Indemnitees, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each Loan Party hereby waives, releases and agrees not to sue upon any such claim or seek any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

(d) The indemnities and waivers set forth in this Section 12.15 shall survive the Termination Date.

Section 12.16 Records . The unpaid principal of and interest on the Loans, the interest rate or rates applicable to such unpaid principal and interest, the duration of such applicability, the Commitments, and the accrued and unpaid fees payable pursuant to Section 2.06 hereof, shall at all times be ascertained from the records of the Agents, which shall be conclusive and binding absent manifest error.

Section 12.17 Binding Effect . This Agreement shall become effective when it shall have been executed by each Loan Party, each Agent and each Lender and when the conditions precedent set forth in Section 5.01 hereof have been satisfied or waived in writing by the Agents, and thereafter shall be binding upon and inure to the benefit of each Loan Party, each Agent and each Lender, and their respective successors and assigns, except that the Loan Parties shall not have the right to assign their rights hereunder or any interest herein without the prior

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written consent of each Agent and each Lender, and any assignment by any Lender shall be governed by Section 12.07 hereof.

Section 12.18 Highest Lawful Rate . It is the intention of the parties hereto that each Agent and each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby or by any other Loan Document would be usurious as to any Agent or any Lender under laws applicable to it (including the laws of the United States of America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Agent or such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in this Agreement or any other Loan Document or any agreement entered into in connection with or as security for the Obligations, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under law applicable to any Agent or any Lender that is contracted for, taken, reserved, charged or received by such Agent or such Lender under this Agreement or any other Loan Document or agreements or otherwise in connection with the Obligations shall under no circumstances exceed the maximum amount allowed by such applicable law, any excess shall be canceled automatically and if theretofore paid shall be credited by such Agent or such Lender on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by such Agent or such Lender, as applicable, to the Borrowers); and (ii) in the event that the maturity of the Obligations is accelerated by reason of any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Agent or any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall, subject to the last sentence of this Section 12.18, be canceled automatically by such Agent or such Lender, as applicable, as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Agent or such Lender, as applicable, on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by such Agent or such Lender to the Borrowers). All sums paid or agreed to be paid to any Agent or any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Agent or such Lender, be amortized, prorated, allocated and spread throughout the full term of the Loans until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (x) the amount of interest payable to any Agent or any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Agent or such Lender pursuant to this Section 12.18 and (y) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Agent or such Lender would be less than the amount of interest payable to such Agent or such Lender computed at the Highest Lawful Rate applicable to such Agent or such Lender, then the amount of interest payable to such Agent or such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Agent or such Lender until the total amount of interest payable to such Agent or such Lender shall equal the total amount of interest which would have been payable to such Agent or such Lender if the total amount of interest had been computed without giving effect to this Section 12.18.

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For purposes of this Section 12.18 , the term “ applicable law ” shall mean that law in effect from time to time and applicable to the loan transaction between the Borrowers, on the one hand, and the Agents and the Lenders, on the other, that lawfully permits the charging and collection of the highest permissible, lawful non-usurious rate of interest on such loan transaction and this Agreement, including laws of the State of New York and, to the extent controlling, laws of the United States of America and the laws of the Netherlands.

The right to accelerate the maturity of the Obligations does not include the right to accelerate any interest that has not accrued as of the date of acceleration.

Section 12.19 Confidentiality . Each Agent and each Lender agrees (on behalf of itself and each of its affiliates, directors, officers, employees and representatives) to keep confidential, in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound practices of comparable commercial finance companies, any non-public information supplied to it by the Loan Parties pursuant to this Agreement or the other Loan Documents which is identified in writing by the Loan Parties as being confidential at the time the same is delivered to such Person (and which at the time is not, and does not thereafter become, publicly available or available to such Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information), provided that nothing herein shall limit the disclosure by any Agent or any Lender of any such information (i) to its Affiliates and to its and its Affiliates’ respective equityholders (including, without limitation, partners), directors, officers, employees, agents, trustees, counsel, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential in accordance with this Section 12.19); (ii) to any other party hereto; (iii) to any assignee or participant (or prospective assignee or participant) or any party to a Securitization so long as such assignee or participant (or prospective assignee or participant) or party to a Securitization first agrees, in writing, to be bound by confidentiality provisions similar in substance to this Section 12.19; (iv) to the extent required by any Requirement of Law or judicial process or as otherwise requested by any Governmental Authority having jurisdiction over such Person (including any self-regulatory authority, such as the National Association of Insurance Commissioners or any similar organization, any examiner, auditor or accountant or any nationally recognized rating agency) or otherwise to the extent consisting of general portfolio information that does not identify Loan Parties provided, unless specifically prohibited by applicable law or court order, each Agent and each Lender shall make reasonable efforts to notify the Borrower of any request by any Governmental Authority or representative thereof; (v) in connection with any litigation to which any Agent or any Lender is a party that arises from or relates to being a party to this Agreement or any other Loan Document; (vi) as is reasonably necessary in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; or (vii) with the consent of the Administrative Borrower.

Section 12.20 Public Disclosure . Each Loan Party agrees that neither it nor any of its Affiliates will now or in the future issue any press release or other public disclosure using the name of an Agent, any Lender or any of their respective Affiliates or referring to this Agreement or any other Loan Document without the prior written consent of such Agent or such

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Lender, except to the extent that such Loan Party or such Affiliate is required or it is advisable in the opinion of counsel to do so under applicable law (in which event, such Loan Party or such Affiliate will (a) except as provided in clause (b) below, consult with such Agent or such Lender before issuing such press release or other public disclosure or (b) solely in the event the issuance of any press release or other public disclosure is required under 17 C.F.R. § 243.100, use reasonable efforts to consult with such Agent or such Lender before issuing such press release or other public disclosure); provided, that the prior written consent of such Agent or such Lender shall be required only if such disclosure uses the name of such Agent, such Lender or any Affiliate thereof. Each Loan Party hereby authorizes each Agent and each Lender, after consultation with the Borrowers, to advertise the closing of the transactions contemplated by this Agreement, and to make appropriate announcements of the financial arrangements entered into among the parties hereto, as such Agent or such Lender shall deem appropriate, including, without limitation, on a home page or similar place for dissemination of information on the Internet or worldwide web, or in announcements commonly known as tombstones, in such trade publications, business journals, newspapers of general circulation and to such selected parties as such Agent or such Lender shall deem appropriate.

Section 12.21 Integration . This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.

Section 12.22 USA PATRIOT Act . Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies the Borrowers and the Guarantors that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the entities composing the Borrowers and the Guarantors, which information includes the name and address of each such entity and other information that will allow such Lender to identify the entities composing the Borrowers and the Guarantors in accordance with the USA PATRIOT Act. Each Loan Party agrees to take such action and execute, acknowledge and deliver at its sole cost and expense, such instruments and documents as any Lender may reasonably require from time to time in order to enable such Lender to comply with the USA PATRIOT Act.

Section 12.23 Judgment Currency . This is an international financial transaction in which the specification of a currency and payment in Boston, Massachusetts is of the essence. Dollars shall be the currency of account in the case of all payments pursuant to or arising under this Agreement or under any other Loan Document, and all such payments shall be made to the Administrative Agent’s Account in Boston, Massachusetts in immediately available funds. To the fullest extent permitted by applicable law, the obligations of each Loan Party to the Secured Parties under this Agreement and under the other Loan Documents shall not be discharged by any amount paid in any other currency or in a place other than to the Administrative Agent’s Account in Boston, Massachusetts to the extent that the amount so paid after conversion under this Agreement and transfer to Boston, Massachusetts does not yield the amount of Dollars in Boston, Massachusetts due under this Agreement and under the other Loan Documents. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder in Dollars into another currency (the “Other Currency”), to the fullest extent permitted by applicable law, the rate of exchange used shall be that at which the Administrative Agent could,

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in accordance with normal procedures, purchase Dollars with the Other Currency on the Business Day preceding that on which final judgment is given. The obligation of each Loan Party in respect of any such sum due from it to the Secured Parties hereunder shall, notwithstanding any judgment in such Other Currency, be discharged only to the extent that, on the Business Day immediately following the date on which the Administrative Agent receives any sum adjudged to be so due in the Other Currency, the Administrative Agent may, in accordance with normal banking procedures, purchase Dollars with the Other Currency. If the Dollars so purchased are less than the sum originally due to the Secured Parties in Dollars, each Loan Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Secured Parties against such loss, and if the Dollars so purchased exceed the sum originally due to the Secured Parties in Dollars, the Secured Parties agrees to remit to the Loan Parties such excess.

Section 12.24 Waiver of Immunity . To the extent that any Loan Party has or hereafter may acquire (or may be attributed, whether or not claimed) any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service of process or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, such Loan Party hereby irrevocably waives and agrees not to plead or claim, to the fullest extent permitted by law, such immunity in respect of (a) its obligations under the Loan Documents, (b) any legal proceedings to enforce such obligations and (c) any legal proceedings to enforce any judgment rendered in any proceedings to enforce such obligations. Each Loan Party hereby agrees that the waivers set forth in this Section 12.24 shall be to the fullest extent permitted under the Foreign Sovereign Immunities Act and are intended to be irrevocable for purposes of the Foreign Sovereign Immunities Act.

Section 12.25 English Language . This Agreement and each other Loan Document have been negotiated and executed in English. All certificates, reports, notices and other documents and communications given or delivered by any party hereto pursuant to this Agreement or any other Loan Document shall be in English or, if not in English, accompanied by a certified English translation thereof. The English version of any such document shall control the meaning of the matters set forth herein.

Section 12.26 Foreign Parallel Liability .

(a) Each Foreign Loan Party irrevocably and unconditionally undertakes to pay to the Collateral Agent an amount equal to the aggregate amount of its Foreign Corresponding Liabilities (as these may exist from time to time).

(b) The parties to this Agreement agree that:

(i) a Foreign Loan Party’s Foreign Parallel Liability is due and payable at the same time as, for the same amount of and in the same currency as its Foreign Corresponding Liabilities;

(ii) a Foreign Loan Party’s Foreign Parallel Liability is decreased to the extent that its Foreign Corresponding Liabilities have been irrevocably paid or discharged

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and its Foreign Corresponding Liabilities are decreased to the extent that its Foreign Parallel Liability has been irrevocably paid or discharged;

(iii) a Foreign Loan Party’s Foreign Parallel Liability is independent and separate from, and without prejudice to, its Foreign Corresponding Liabilities, and constitutes a single obligation of that Foreign Loan Party to the Collateral Agent (even though that Foreign Loan Party may owe more than one Foreign Corresponding Liability to the Secured Parties under the Loan Documents) and an independent and separate claim of the Collateral Agent to receive payment of that Foreign Parallel Liability (in its capacity as the independent and separate creditor of that Foreign Parallel Liability and not as a co-creditor in respect of the Foreign Corresponding Liabilities); and

(iv) for purposes of this Section 12.26, the Collateral Agent acts in its own name and not as agent, representative or trustee of the Secured Parties and accordingly holds neither its claim resulting from a Foreign Parallel Liability nor any Lien securing a Foreign Parallel Liability in trust.

Section 12.27 U.S. Parallel Liability .

(a) Each U.S. Loan Party irrevocably and unconditionally undertakes to pay to the Collateral Agent an amount equal to the aggregate amount of its U.S. Corresponding Liabilities (as these may exist from time to time).

(b) The parties to this Agreement agree that:

(i) a U.S. Loan Party’s U.S. Parallel Liability is due and payable at the same time as, for the same amount of and in the same currency as its U.S. Corresponding Liabilities;

(ii) a U.S. Loan Party’s U.S. Parallel Liability is decreased to the extent that its U.S. Corresponding Liabilities have been irrevocably paid or discharged and its U.S. Corresponding Liabilities are decreased to the extent that its U.S. Parallel Liability has been irrevocably paid or discharged;

(iii) a U.S. Loan Party’s U.S. Parallel Liability is independent and separate from, and without prejudice to, its U.S. Corresponding Liabilities, and constitutes a single obligation of that U.S. Loan Party to the Collateral Agent (even though that U.S. Loan Party may owe more than one U.S. Corresponding Liability to the Secured Parties under the Loan Documents) and an independent and separate claim of the Collateral Agent to receive payment of that U.S. Parallel Liability (in its capacity as the independent and separate creditor of that U.S. Parallel Liability and not as a co-creditor in respect of the U.S. Corresponding Liabilities); and

(iv) for purposes of this Section 12.27, the Collateral Agent acts in its own name and not as agent, representative or trustee of the Secured Parties and accordingly holds neither its claim resulting from a U.S. Parallel Liability nor any Lien securing a U.S. Parallel Liability in trust.

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[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

[Signature Page to Financing Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.


	BORROWERS :
	CHEROKEE INC. , as U.S. Borrower

	By:	/s/ Henry Stupp
		Name: Henry Stupp
		Title: Chief Executive Officer
	IRENE ACQUISITION COMPANY B.V. , as Dutch Borrower
	By: /s/ Henry Stupp ____________________
	Name: Henry Stupp
	Title: Director A
	By: /s/ Kimberly Doyle __________________
	Name: Kimberly Doyle
	Title: Director B

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GUARANTORS :

SPELL C. LLC

By: Cherokee Inc. , its sole member

By: /s/ Henry Stupp

Name: Henry Stupp

Title: Chief Executive Officer

CHEROKEE BRANDS LLC

By: Cherokee Inc. , is sole member

By: /s/ Henry Stupp

Name: Henry Stupp

Title: Chief Executive Officer

HAWK 900 BRANDS LLC

By: Cherokee Inc. , its sole member

By: /s/ Henry Stupp

Name: Henry Stupp

Title: Chief Executive Officer

EDCA LLC

By: Cherokee Inc. , its sole member

By: /s/ Henry Stupp

Name: Henry Stupp

Title: Chief Executive Officer

[Signature Page to Financing Agreement]

FFS HOLDINGS, LLC

By: Cherokee Inc. , its sole member

By: /s/ Henry Stupp

Name: Henry Stupp

Title: Chief Executive Officer

FLIP FLOP SHOES FRANCHISE COMPANY, LLC

By: FFS Holdings, LLC , its sole member

By: Cherokee Inc. , its sole member

By: /s/ Henry Stupp

Name: Henry Stupp

Title: Chief Executive Officer

HI-TEC SPORTS INTERNATIONAL HOLDINGS B.V.

By:

/s/ Henry Stupp
Name: Henry Stupp

Title: Managing Director

HI-TEC SPORTS PUBLIC LIMITED COMPANY

B y:

/s/ Henry Stupp
Name: Henry Stupp
Title: Director

HI-TEC SPORTS UK LIMITED

By:

/s/ Henry Stupp
Name: Henry Stupp
Title: Director

[Signature Page to Financing Agreement]

HI-TEC INTERNATIONAL HOLDINGS B.V.

By:   /s/ Henry Stupp
Name:  Henry Stupp
Title:    Managing Director

HI-TEC NEDERLAND B.V.

By:   /s/ Henry Stupp
Name:  Henry Stupp
Title:    Managing Director

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	COLLATERAL AGENT AND ADMINISTRATIVE AGENT :

	GORDON BROTHERS FINANCE COMPANY
	By:	/s/ Felicia Galeota
		Name: Felicia Galeota
		Title: Vice President


	LENDER :
	GORDON BROTHERS FINANCE COMPANY, LLC

	By:	/s/ Felicia Galeota
		Name: Felicia Galeota
		Title: Vice President


LENDER :
GORDON BROTHERS BRANDS, LLC

By:	/s/ Ramez Toubassy
	Name: Ramez Toubassy
	Title: President

[Signature Page to Financing Agreement]

Exhibit 10.2

PLEDGE AND SECURITY AGREEMENT

PLEDGE AND SECURITY AGREEMENT (this “ Agreement ”), dated as of August 3, 2018, made by each of the Grantors referred to below, in favor of Gordon Brothers Finance Company, a Delaware corporation, in its capacity as collateral agent for the Secured Parties referred to below (in such capacity, together with its successors and assigns in such capacity, if any, the “ Collateral Agent ”).

RECITALS:

WHEREAS, Cherokee Inc., a Delaware corporation (the “ Parent ”), as the U.S. borrower, Irene Acquisition Company B.V., a company incorporated under the laws of the Netherlands (the “ Dutch Borrower ” and together with the Parent, the “ Borrowers ”), as the Dutch borrower, the subsidiaries of the Parent from time to time party thereto, the lenders from time to time party thereto (each a “ Lender ” and collectively, the “ Lenders ”), and the Collateral Agent are parties to a Financing Agreement, dated as of the date hereof (such agreement, as amended, restated, supplemented, modified or otherwise changed from time to time, including any replacement agreement therefor, being hereinafter referred to as the “ Financing Agreement ”);

WHEREAS, certain of the subsidiaries of Parent that are organized in the United States (including the Parent, each a “ Grantor ” and collectively, the “ Grantors ”) are guaranteeing the Borrowers’ Obligations under the Financing Agreement and are, together with the Parent, providing the Lenders with a security interest in certain assets;

WHEREAS, pursuant to the Financing Agreement, the Lenders have agreed to make certain term loans (each a “ Loan ” and collectively, the “ Loans ”), to the Borrowers;

WHEREAS, it is a condition precedent to the Lenders making any Loan and providing any other financial accommodation to the Borrowers pursuant to the Financing Agreement that each Grantor shall have executed and delivered this Agreement to the Collateral Agent for the benefit of the Secured Parties; and

WHEREAS, each Grantor has determined that the execution, delivery and performance of this Agreement directly benefit, and are in the best interest of, such Grantor.

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Collateral Agent and the Lenders to make and maintain the Loans and to provide other financial accommodations to the Borrowers pursuant to the Financing Agreement, the Grantors hereby jointly and severally agree with the Collateral Agent, for the benefit of the Secured Parties, as follows:

SECTION 1. Definitions .

(a) Reference is hereby made to the Financing Agreement for a statement of the terms thereof. All capitalized terms used in this Agreement that are defined in the Financing Agreement and which are not otherwise defined herein shall have the same meanings herein as set forth therein.

(b) The following terms shall have the respective meanings provided for in Article 8 or Article 9, as applicable, of the Code: “Accounts”, “Account Debtor”, “Cash Proceeds”, “Certificate of Title”, “Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”, “Commodity Contracts”, “Deposit Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixtures”, “General

Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment Intangibles”, “Proceeds”, “Promissory Notes”, “Record”, “Security Account”, “Software”, “Supporting Obligations” and “Tangible Chattel Paper” .

(c) As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

“ Additional Collateral ” has the meaning specified therefor in Section 4.

“ Additional Grantor ” has the meaning specified therefor in Section 13(f).

“ Code ” means the Uniform Commercial Code as in effect from time to time in the State of New York.

“ Collateral ” has the meaning specified therefor in Section 2.

“ Collateral Agent ” has the meaning specified therefor in the preamble.

“ Copyright Licenses ” means, with respect to any Person, all written agreements pursuant to which such Person grants or obtains any right with respect to any Copyright (including those agreements listed on Schedule II), including, without limitation, the rights to print, publish, copy, distribute, create derivative works, or otherwise exploit and sell copyrighted materials or materials derived from any Copyright, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such agreements or Copyrights, together with any and all (i) amendments, modifications, renewals, extensions, and supplements thereof, (ii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including, without limitation, damages and payments for past, present and future infringements, misappropriations, breaches or other violations with respect thereto and (iii) rights to sue for past, present and future infringements, misappropriations, breaches or violations thereof.

“ Copyright Security Agreement ” means each agreement substantially in the form of Exhibit B-1 .

“ Copyrights ” means, collectively, with respect to any Person, all copyrights (whether statutory or common law, whether registered or unregistered in the United States or any other country or any political subdivision thereof and whether published or unpublished) and all mask works (as such term is defined in 17 U.S.C. Section 901, et seq.), and all copyright registrations and applications made by any Person, in each case, whether now owned or hereafter created or acquired by or assigned to any Grantor, including, without limitation, each registration and application identified on Schedule II, together with any and all (i) registrations and applications therefor, (ii) rights and privileges arising under applicable law with respect to such copyrights, (iii) renewals and extensions thereof and amendments thereto, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto, including, without limitation, damages, claims and payments for past, present and future infringements, dilutions, misappropriations, or other violations thereof, (v) rights to sue or otherwise recover for past, present and future infringements, misappropriations, dilutions or other violations thereof and (vi) rights corresponding thereto throughout the world.

“ Financing Agreement ” has the meaning specified therefor in the Recitals.

“ Grantors ” has the meaning specified in the Recitals.

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“ Intellectual Property ” means all Copyrights, Patents, Trademarks and Other Intellectual Property.

“ Lenders ” has the meaning specified therefor in the Recitals.

“ Licenses ” means the Copyright Licenses, the Patent Licenses and the Trademark Licenses.

“ Loans ” has the meaning specified therefor in the Recitals.

“ Other Intellectual Property ” means (i) all trade secrets, confidential information, know-how and processes, designs, inventions, invention disclosures, engineering or other technical data, financial data, procedures, designs personal information, supplier lists, customer lists, business, production or marketing plans, formulae, methods (whether or not patentable), processes, compositions, schematics, ideas, techniques, analyses, proposals, technology, and compilations, data, databases, and computer programs (whether in source code, object code, or other form) and all documentation (including, without limitation, user manuals and training materials) related thereto, and proprietary methodologies, algorithms, and information, and any other intangible rights, to the extent not covered by the definitions of Patents, Trademarks and Copyrights, whether registered or unregistered in the United States or any other country or any political subdivision thereof, together with any and all registrations and applications for the foregoing, (ii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including, without limitation, damages, claims and payments for past, present and future infringements, misappropriations, and other violations thereof, (iii) rights to sue or otherwise recover for past, present and future infringements, misappropriations, and other violations thereof and (iv) rights corresponding thereto throughout the world.

“ Patent License ” means, with respect to any Person, all written agreements pursuant to which such Person grants or obtains any right to any Patent (including those agreements listed on Schedule II), including, without limitation, the right to manufacture, use, import, export, distribute, offer for sale or sell any invention covered in whole or in part by a Patent, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such agreements or Patents, together with any and all (i) amendments, modifications, renewals, extensions, and supplements thereof, (ii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including, without limitation, damages and payments for past, present and future infringements, misappropriations, breaches or other violations with respect thereto and (iii) rights to sue for past, present and future infringements, misappropriations, breaches or violations thereof.

“ Patent Security Agreement ” means each agreement substantially in the form of Exhibit B-2 .

“ Patents ” means, collectively, with respect to any Person, all patents, patent applications, certificates of inventions, industrial designs (whether registered or unregistered in the United States or any other country or any political subdivision thereof), including, without limitation, each issued patent and patent application identified on Schedule II, together with any and all (i) inventions and improvements described and claimed therein, (ii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto, including, without limitation, damages, claims and payments for past, present and future infringements, dilutions, misappropriations, or other violations thereof, (iv) rights to sue or otherwise recover for past, present and future infringements, misappropriations, dilutions or other violations thereof and (v) rights corresponding thereto throughout the world.

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“ Perfection Requirements ” has the meaning spec ified therefor in Section 5(j).

“ Pledge Amendment ” has the meaning specified therefor in Section 4(a)(ii).

“ Pledged Debt ” means the indebtedness described in Schedule VII hereto and all indebtedness from time to time owned or acquired by a Grantor, the Promissory Notes and other Instruments evidencing any or all of such indebtedness, and all interest, cash, Instruments, Investment Property, financial assets, securities, Equity Interests, stock options and Commodity Contracts, notes, debentures, bonds, Promissory Notes or other evidences of indebtedness and all other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such indebtedness.

“ Pledged Interests ” means, collectively, (a) the Pledged Debt, (b) the Pledged Shares and (c) all security entitlements in any and all of the foregoing.

“ Pledged Issuers ” means, collectively, (a) the issuers of the shares of Equity Interests described in Schedule VIII hereto and (b) any other issuer of Equity Interests at any time and from time to time owned or acquired by a Grantor whose shares of Equity Interests are required to be pledged as Collateral under this Agreement.

“ Pledged Partnership/LLC Agreement ” has the meaning specified therefor in Section 6(k)(ii).

“ Pledged Shares ” means (a) the shares of Equity Interests of the Pledged Issuers, whether or not evidenced or represented by any stock certificate, certificated security or other Instrument, (b) certificates representing such shares of Equity Interests, all options and other rights, contractual or otherwise, in respect thereof and all dividends, distributions, cash, Instruments, Investment Property, financial assets, securities, Equity Interests, stock options and Commodity Contracts, notes, debentures, bonds, Promissory Notes or other evidences of indebtedness and all other property (including, without limitation, any stock dividend and any distribution in connection with a stock split) from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Equity Interests and (c) without affecting the obligations of any Grantor under any provision prohibiting such action under this Agreement, the Financing Agreement or any other Loan Document, in the event of any consolidation or merger involving any Pledged Issuer and in which such Pledged Issuer is not the surviving entity, all Equity Interests of the successor entity formed by or resulting from such consolidation or merger.

“ Secured Obligations ” has the meaning specified therefor in Section 3.

“ Security Agreement Supplement ” has the meaning specified therefor in Section 13(f).

“ Titled Collateral ” means all Collateral for which the title to such Collateral is governed by a Certificate of Title or certificate of ownership, including, without limitation, all motor vehicles (including, without limitation, all trucks, trailers, tractors, service vehicles, automobiles and other mobile equipment) for which the title to such motor vehicles is governed by a Certificate of Title or certificate of ownership.

“ Trademark License ” means, with respect to any Person, any written agreement pursuant to which such Person grants or obtains any right to use any Trademark (including those agreements listed on Schedule II), and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such agreements or Trademarks, together with all (i) amendments, modifications, renewals, extensions, and supplements thereof, (ii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including, without limitation, damages

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and payments for past, present and future infringements, misappropriations, breaches or other violations with respect thereto and (iii) rights to sue for past, present and future infringements, misappropriations, breaches or violations thereof.

“ Trademark Security Agreement ” means each agreement substantially in the form of Exhibit B-3 .

“ Trademarks ” means, collectively, with respect to any Person, all trademarks, service marks, certification marks, trade names, corporate names, company names, business names, fictitious business names, slogans, logos, trade styles, trade dress, Internet domain names, and other source or business identifiers, whether registered or unregistered in the United States or any other country or any political subdivision thereof, including, without limitation, each registration and application identified on Schedule II, together with any and all (i) registrations and applications for any of the foregoing, (ii) goodwill connected with the use thereof and symbolized thereby, (iii) rights and privileges arising under applicable law with respect to the use of any of the foregoing, (iv) reissues, continuations, extensions and renewals thereof and amendments thereto, (v) income, fees, royalties, damages and payments now or hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present and future infringements, dilutions, misappropriations, or other violations thereof, (vi) rights to sue or otherwise recover for past, present and future infringements, misappropriations, dilutions or other violations thereof and (vii) rights corresponding thereto throughout the world.

SECTION 2. Grant of Security Interest . As collateral security for the payment, performance and observance of all of the Secured Obligations, each Grantor hereby pledges and assigns to the Collateral Agent (and its agents and designees), and grants to the Collateral Agent (and its agents and designees), for the benefit of the Secured Parties, a continuing security interest in, all personal property and Fixtures of such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind and description, tangible or intangible, including, without limitation, the following (all being collectively referred to herein as the “ Collateral ”):

(a) all Accounts;

(b) all Chattel Paper (whether tangible or electronic);

(c) all Commercial Tort Claims, including, without limitation, the Commercial Tort Claims described in Schedule VI hereto;

(d) all Deposit Accounts, all cash, and all other property from time to time deposited therein or otherwise credited thereto and the monies and property in the possession or under the control of the Collateral Agent or any Lender or any affiliate, representative, agent or participant of the Collateral Agent or any Lender;

(e) all Documents;

(f) all General Intangibles (including, without limitation, all Payment Intangibles, Intellectual Property and Licenses);

(g) all Goods, including, without limitation, all Equipment, Fixtures and Inventory;

(h) all Instruments (including, without limitation, Promissory Notes);

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(i) all Investment Property;

(j) all Letter-of-Credit Rights;

(k) all Pledged Interests;

(l) all Supporting Obligations;

(m) all Additional Collateral;

(n) all other tangible and intangible personal property and Fixtures of such Grantor (whether or not subject to the Code), including, without limitation, all bank and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements of and to any of the property of such Grantor described in the preceding clauses of this Section 2 (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by such Grantor in respect of any of the items listed above), and all books, correspondence, files and other Records, including, without limitation, all tapes, disks, cards, Software, data and computer programs in the possession or under the control of such Grantor or any other Person from time to time acting for such Grantor that at any time evidence or contain information relating to any of the property described in the preceding clauses of this Section 2 or are otherwise necessary or helpful in the collection or realization thereof; and

(o) all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;

in each case, howsoever such Grantor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).

Notwithstanding anything herein to the contrary, the term “Collateral” shall not include, and no Grantor is pledging, nor granting a security interest hereunder, in (i) those assets as to which the Collateral Agent and the Administrative Borrower reasonably agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the value afforded thereby, (ii) any fee-owned real property with a Current Value of less than $250,000 and all real property leasehold interests, (iii) any of such Grantor’s right, title or interest in any lease, permit, license, contract or agreement to which such Grantor is a party or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would, under the terms of such lease, permit, license, contract or agreement result in a breach of the terms of, or constitute a default under, such lease, permit, license, contract or agreement (other than to the extent that any such term (1) has lapsed or terminated or has been waived or (2) has been rendered ineffective pursuant to Sections 9-406, 9-407, 9-408, 9-409 of the Code or other applicable provisions of the Uniform Commercial Code of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided , that (A) immediately upon the ineffectiveness, lapse, termination or waiver of any such provision, the Collateral shall include, and such Grantor shall be deemed to have granted a security interest in, all such right, title and interest as if such provision had never been in effect and (B) the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Collateral Agent’s unconditional continuing security interest in and liens upon any rights or interests of a Grantor in or to the proceeds of, or any monies due or to become due under, any such license, contract or agreement, (iv) any intent-to-use United States trademark applications for which an amendment to allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office; provided that, upon such filing and acceptance, such intent-to-use applications shall be included in the definition of Collateral, (v) any property

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to the extent that such grant of a security interest is prohibited by any Requirement of Law of any Governmental Authority or requires a consent not obtained, after using commercially reasonable efforts, of any Governmental Authority pursuant to such Requirements of Law, until such prohibition is removed or such consent is obtained; provided that the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect the Collateral Agent’s unconditional continuing security interest in and liens upon any rights or interests of a Grantor in or to the proceeds of such property, or any monies due or to become due under any such license, contract or agreement with respect to such property, (vi) the voting stock of any CFC in excess of 65% of such voting stock or the assets owned by such CFC, in each case to secure the Obligations and only to the extent any such pledge under this clause (vi) would result in material adverse tax consequences to such Grantor (and without limiting such pledge in respect of non-voting stock of such CFC to secure the U.S. Obligations or in connection with the pledge and grant of a security interest in any stock or assets of such CFC to secure the Foreign Obligations), or (vii) any Margin Stock.

No Grantor shall be required to take any action with respect to perfection of any security interest in (i) Letter-of-Credit Rights to the extent a security interest therein may not be perfected by the filing of a financing statement under the Uniform Commercial Code, (ii) Commercial Tort Claims asserting damages of less than $250,000 or (iii) Titled Collateral to the extent that a security interest therein may not be perfected by the filing of a financing statement under the Uniform Commercial Code.

The Grantors agree that the pledge of the shares of Equity Interests of any Pledged Issuer who is a Foreign Subsidiary may be supplemented by one or more separate pledge agreements, deeds of pledge, share charges, or other similar agreements or instruments, executed and delivered by the relevant Grantors in favor of the Collateral Agent, which pledge agreements will provide for the pledge of such shares of Equity Interests in accordance with the laws of the applicable foreign jurisdiction. With respect to such shares of Equity Interests, the Collateral Agent may, at any time and from time to time, in its sole discretion, take actions in such foreign jurisdictions that will result in the perfection of the Lien created in such shares of Equity Interests.

SECTION 3. Security for Secured Obligations . The security interest created hereby in the Collateral constitutes continuing collateral security for all of the following obligations, whether now existing or hereafter incurred (collectively, the “ Secured Obligations ”):

(a) the prompt payment by each Grantor, as and when due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all amounts from time to time owing by the Borrowers in respect of the Financing Agreement and/or the other Loan Documents, including, without limitation, (i) all Obligations, (ii) in the case of a Guarantor, all amounts from time to time owing by such Grantor in respect of its guaranty made pursuant to Article XI of the Financing Agreement and (iii) all interest, fees, commissions, charges, expense reimbursements, indemnifications and all other amounts due or to become due under any Loan Document (including, without limitation, all interest, fees, commissions, charges, expense reimbursements, indemnifications and other amounts that accrue after the commencement of any Insolvency Proceeding of any Loan Party, whether or not the payment of such interest, fees, commissions, charges, expense reimbursements, indemnifications and other amounts are unenforceable or are not allowable, in whole or in part, due to the existence of such Insolvency Proceeding); and

(b) the prompt payment and due performance and observance by each Grantor of all of its other obligations from time to time existing in respect of this Agreement and any other Loan Document.

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SECTION 4. Delivery of the Pledged Interests .

(a) All Promissory Notes currently evidencing the Pledged Debt and all certificates currently representing the Pledged Shares shall be delivered to the Collateral Agent on or prior to the Effective Date (or such later date as may be determined by the Collateral Agent in its sole discretion). All other Promissory Notes, certificates and Instruments constituting Pledged Interests from time to time required to be pledged to the Collateral Agent pursuant to the terms of this Agreement or the Financing Agreement (the “ Additional Collateral ”) shall be delivered to the Collateral Agent promptly upon, but in any event within 10 Business Days of, receipt thereof by or on behalf of any of the Grantors. All such Promissory Notes, certificates and Instruments shall be (A) held by or on behalf of the Collateral Agent pursuant hereto, and (B) delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment executed in blank, all in form and substance reasonably satisfactory to the Collateral Agent. If any Pledged Interests consist of uncertificated securities such Grantor shall cause each issuer of such securities to agree that upon the occurrence and during the continuance of an Event of Default it will comply with instructions originated by the Collateral Agent with respect to such securities without further consent by such Grantor. If any Pledged Interests consist of security entitlements, such Grantor shall cause the applicable securities intermediary to agree that upon the occurrence and during the continuance of an Event of Default it will comply with entitlement orders by the Collateral Agent without further consent by such Grantor.

(b) Within 5 Business Days of the receipt by a Grantor of any Additional Collateral, a pledge amendment duly executed by such Grantor, in substantially the form of Exhibit A (a “ Pledge Amendment ”), shall be delivered to the Collateral Agent, in respect of the Additional Collateral that must be pledged pursuant to this Agreement or the Financing Agreement. The Pledge Amendment shall from and after delivery thereof constitute part of Schedules VII and VIII hereto. Each Grantor hereby authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement and agrees that all Promissory Notes, certificates or Instruments listed on any Pledge Amendment delivered to the Collateral Agent shall for all purposes hereunder constitute Pledged Interests and such Grantor shall be deemed upon delivery thereof to have made the representations and warranties set forth in Section 5 hereof with respect to such Additional Collateral.

SECTION 5. Representations and Warranties . Each Grantor represents and warrants as follows:

(a) Schedule I hereto sets forth a complete and accurate list as of the date hereof of (i) the exact legal name of each Grantor, (ii) the jurisdiction of organization of each Grantor, (iii) the type of organization of each Grantor and (iv) the organizational identification number of each Grantor (or states that no such organizational identification number exists).

(b) All Equipment, Fixtures, Inventory and other Goods now existing are, and all Equipment, Fixtures, Inventory and other Goods hereafter existing will be, located at the addresses specified therefor in Schedule III hereto (as amended, supplemented or otherwise modified from time to time in accordance with Section 6(b)). Each Grantor’s chief place of business and chief executive office, the place where such Grantor keeps its Records concerning Accounts and all originals of all Chattel Paper are located at the addresses specified therefor in Schedule III hereto (as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof). As of the date hereof, none of the Accounts is evidenced by Promissory Notes or other Instruments. Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of each Deposit Account, Securities Account and Commodities Account of each Grantor, together with the name and address of each institution at which each such Account is maintained, the account number for each such Account and a description of the purpose of each such Account. Set forth in Schedule II hereto is (i) a complete and correct list of each trade

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name used by each Grantor and (ii) the name of, and each trade name used by, each Person from which such Grantor has acquired any substantial part of the Collateral within five years of the date hereof .

(c) Each Grantor has delivered to the Collateral Agent true, complete and correct copies of each License described in Schedule II hereto, including all schedules and exhibits thereto, which represents all of the Licenses that are Material Contracts existing on the date of this Agreement. Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter thereof, and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or the rights of any Grantor or any of its Affiliates in respect thereof. Each License now existing is the legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally. No written notice of default under any License by any such party has been received which default has not been cured. No third party to any License has given any Grantor written notice of its intention to cancel or terminate any License.

(d) Schedule II hereto sets forth a complete and accurate list of all Registered Intellectual Property owned or used by each Grantor that are reasonably necessary for the operation of their respective businesses. In all material respects, all such Registered Intellectual Property is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and has not been abandoned in whole or in part. To each Grantor’s knowledge, no Intellectual Property owned or used by such Grantor conflicts with the rights of others to any such Intellectual Property and no Grantor has received written notice that it is now infringing or in conflict with any such rights of others, and to the knowledge of each Grantor, no other Person is now infringing or in conflict with any such properties, assets and rights owned or used by any Grantor, except for infringements and conflicts that could not reasonably be expected to materially adversely affect, individually or in the aggregate, such Grantor’s operation of its business. No Grantor has received any written notice that it is violating or has violated the Intellectual Property rights of any third party.

(e) None of the Other Intellectual Property of any Grantor has been used, divulged, disclosed or appropriated to the detriment of such Grantor for the benefit of any other Person other than such Grantor in any material respect; no employee, independent contractor or agent of any Grantor has misappropriated any Other Intellectual Property of any other Person in the course of the performance of his or her duties as an employee, independent contractor or agent of such Grantor in any material respect; and no employee, independent contractor or agent of any Grantor is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of inventions agreement or similar agreement, or contract relating in any way to the protection, ownership, development, use or transfer of such Grantor’s Intellectual Property in any material respect.

(f) The Pledged Issuers set forth in Schedule VIII are the only Subsidiaries of each Grantor listed thereon. The Pledged Shares have been duly authorized and validly issued and are fully paid and nonassessable and the holders thereof are not entitled to any preemptive, first refusal or other similar rights. Except as noted in Schedule VIII hereto, the Pledged Shares constitute 100% of the issued shares of Equity Interests of the Pledged Issuers as of the date hereof. All other shares of Equity Interests constituting Pledged Interests are duly authorized and validly issued, fully paid and nonassessable.

(g) The Promissory Notes evidencing the Pledged Debt have been duly authorized, executed and delivered by the respective makers thereof, and all such Promissory Notes are or will be, as the case may be, legal, valid and binding obligations of such makers, enforceable against such makers in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally.

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(h) Each Grantor (i) has good and marketable title to, or otherwise has and will have adequate rights in, the Collateral free and clear of any and all Liens or claims of others except for the Permitted Liens , (ii) is the sole record and ben eficial owner of the Collateral, and (iii) has full power and authority to grant to the Collateral Agent the security interests in the Collateral pursuant hereto, ( i v ) has good and valid rights in or the power to transfer each item of Collateral in which a security interest is granted by it hereunder. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office except such as may have been filed to perfect or protect any Permitted Lien .

(i) The exercise by the Collateral Agent of any of its rights and remedies hereunder will not result in a violation of (i) the Governing Documents of any Grantor, (ii) any applicable material Requirement of Law, or (iii) any Material Contract binding on or otherwise affecting any Grantor or any of its properties, except in the case of this subclause (iii) where the failure to so comply could not reasonably be expected to materially adversely affect such Grantor’s operation of its business.

(j) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or any other Person, is required for (i) the due execution, delivery and performance by any Grantor of this Agreement, (ii) the grant by any Grantor of the security interest purported to be created hereby in the Collateral or (iii) the exercise by the Collateral Agent of any of its rights and remedies hereunder, except, in the case of this clause (iii), as may be required in connection with any sale of any Pledged Interests by laws affecting the offering and sale of securities generally. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or any other Person, is required for the perfection of the security interest purported to be created hereby in the Collateral, except (A) for the filing under the Uniform Commercial Code as in effect in the applicable jurisdiction of the financing statements described in Schedule V hereto, all of which financing statements have been duly filed and are in full force and effect, (B) with respect to the perfection of the security interest created hereby in the United States Intellectual Property and Licenses, for the recording of the appropriate Assignment for Security, substantially in the form of Exhibit B hereto in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, (C) with respect to the perfection of the security interest created hereby in foreign Intellectual Property and Licenses, for registrations and filings in jurisdictions located outside of the United States and covering rights in such jurisdictions relating to such foreign Intellectual Property and Licenses, (D) with respect to the perfection of the security interest created in Letter-of-Credit Rights or Titled Collateral, the filing of financing statements under the Uniform Commercial Code (which shall be the sole requirement for the perfection of such security interests hereunder), (E) with respect to any action that may be necessary to obtain control of Collateral constituting Deposit Accounts, Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights, the taking of such actions, and (F) the Collateral Agent’s having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral (subclauses (A) -- (F), each a “ Perfection Requirement ” and collectively, the “ Perfection Requirements ”).

(k) This Agreement creates a legal, valid and enforceable security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral, as security for the Secured Obligations. Subject to Section 5.02 of the Financing Agreement and the satisfaction of the Perfection Requirements, such security interests are, or in the case of Collateral in which any Grantor obtains rights after the date hereof, will be, perfected, first priority security interests, subject in priority only to the Permitted Liens, and the recording of such instruments of assignment described above.

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(l) As of the date hereof, Schedule VI lists all Commercial Tort Claims held by any Grantor.

(m) Each Grantor and any of its Subsidiaries that is a partnership or a limited liability company with certificated Equity Interests, has irrevocably opted into (and has caused each of its Subsidiaries that is a partnership or a limited liability company with certificated Equity Interests, and a Pledged Issuer to opt into) Article 8 of the relevant Uniform Commercial Code (collectively, the “ Certificated Entities ”). Such interests are securities for purposes of Article 8 of the relevant Uniform Commercial Code. With respect to each Grantor and its Subsidiaries that is a partnership or a limited liability company and is not a Certificated Entity, the partnership interests or membership interests of each such Person are not (i) dealt in or traded on securities exchanges or in securities markets, (ii) securities for purposes of Article 8 of any relevant Uniform Commercial Code, (iii) investment company securities within the meaning of Section 8-103 of any relevant Uniform Commercial Code or (iv) evidenced by a certificate.

SECTION 6. Covenants as to the Collateral . During the period from the Effective Date until the Termination Date, unless the Collateral Agent shall otherwise consent in writing:

(a) Further Assurances . Each Grantor will take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as the Collateral Agent may reasonably require from time to time in order (i) to perfect and protect, or maintain the perfection of, the security interest and Lien purported to be created hereby; (ii) to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Collateral; or (iii) otherwise to effect the purposes of this Agreement, including, without limitation: (A) at the request of the Collateral Agent, marking conspicuously all Chattel Paper, Instruments, Licenses and all of its Records pertaining to the Collateral with a legend, in form and substance satisfactory to the Collateral Agent, indicating that such Chattel Paper, Instrument, License or Records is subject to the security interest created hereby, (B) if any Account shall be evidenced by a Promissory Note or other Instrument or Chattel Paper, delivering and pledging to the Collateral Agent such Promissory Note, other Instrument or Chattel Paper, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance satisfactory to the Collateral Agent, (C) executing and filing (to the extent, if any, that such Grantor’s signature is required thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto, (D) if at any time after the date hereof, any Grantor acquires any Intellectual Property not covered by an appropriate security interest grant, notifying the Collateral Agent in writing in accordance with Section 6(f)(iv) herein, and with respect to such Intellectual Property hereafter existing, the executing and recording in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, appropriate instruments granting a security interest, as may be necessary or desirable or that the Collateral Agent may request in order to perfect and preserve the security interest purported to be created hereby, (E) if at any time after the date hereof, any Grantor acquires or holds any Commercial Tort Claim, promptly notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim and, to the extent required hereunder, granting to the Collateral Agent a security interest therein and in the proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form and substance satisfactory to the Collateral Agent, and (F) taking all actions required by law in any relevant Uniform Commercial Code jurisdiction, or by other law as applicable in any foreign jurisdiction. No Grantor shall take or fail to take any action which could in any manner materially impair the validity or enforceability of the Collateral Agent’s security interest in and Lien on any Collateral.

(b) Location of Equipment and Inventory . Each Grantor will keep the Equipment and Inventory at the locations specified in Schedule III hereto or, upon not less than 10 days’ prior written notice to the Collateral Agent accompanied by a new Schedule III hereto indicating each new location of the Equipment and Inventory, at such other locations in the continental United States as the Grantors may elect;

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provided that all action has been taken in accordance herewith to grant to the Collateral Agent a perfected, first priority security interest in such Equipment and Inventory (subject only to Permitted Liens) in favor of the Collateral Agent, for the benefit of the Secured Parties.

(c) Condition of Equipment . Each Grantor will promptly furnish to the Collateral Agent a statement describing in reasonable detail any loss or damage in excess of $250,000 to any Equipment.

(d) Provisions Concerning the Accounts and the Licenses .

(i) Each Grantor will, except as otherwise provided in this subsection (d), continue to collect, at its own expense, all amounts due or to become due under the Accounts. In connection with such collections, each Grantor may (and, at the Collateral Agent’s direction during the occurrence and continuation of an Event of Default, will) take such action as such Grantor (or, if applicable, the Collateral Agent) may deem necessary or advisable to enforce collection or performance of the Accounts; provided , however , that the Collateral Agent shall have the right upon the occurrence and during the continuance of an Event of Default, to notify the Account Debtors or obligors under any Accounts of the assignment of such Accounts to the Collateral Agent and to direct such Account Debtors or obligors to make payment of all amounts due or to become due to such Grantor thereunder directly to the Collateral Agent or its designated agent and, upon such notification and at the expense of such Grantor and to the extent permitted by law, to enforce collection of any such Accounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done. After receipt by any Grantor of a notice from the Collateral Agent during the occurrence and continuance of an Event of Default that the Collateral Agent has notified, intends to notify, or has enforced or intends to enforce a Grantor’s rights against the Account Debtors or obligors under any Accounts as referred to in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including Instruments) received by such Grantor in respect of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Agent or its designated agent in the same form as so received (with any necessary endorsement) to be held as cash collateral and either credited to the Loan Account or applied as otherwise specified in the Financing Agreement, and (B) such Grantor will not adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account Debtor or obligor thereof or allow any credit or discount thereon. Any such securities, cash, investments and other items so received by the Collateral Agent or its designated agent shall (in the sole and absolute discretion of the Collateral Agent) be held as additional Collateral for the Secured Obligations or distributed in accordance with Section 9 hereof.

(ii) Upon the occurrence and during the continuance of any material breach or default under any material License by any party thereto other than a Grantor, the relevant Grantor will, as soon as practicable after obtaining knowledge thereof, give the Collateral Agent written notice of the nature and duration thereof, specifying what action, if any, it has taken and proposes to take with respect thereto.

(iii) Each Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each written notice or other written communication received by it by which any other party to any License (A) declares a material breach or default by a Grantor of any material term thereunder, (B) terminates such License (other than the expiration of such License in accordance with the terms thereof) or (C) purports to exercise any of its rights or affect any of its obligations thereunder, together with a copy of any reply by such Grantor thereto.

(iv) Each Grantor will duly perform and observe in all respects all of its obligations under each License and will take all commercially reasonable action necessary to maintain the

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Licenses in full force and effect . During the occurrence and continuance of an Event of Default, no Grantor will, without the prior written consent of the Collateral Agent, cancel, terminate, amend or otherwise modify in any respect, or waive any material provision of, any material License .

(e) Notices and Communications; Defense of Title; Amendments; Equity Issuances . Each Grantor will defend the Collateral Agent’s right, title and security interest in and to the Pledged Interests against the claims of any Person, keep the Pledged Interests free from all Liens (except Permitted Liens), and not sell, exchange, transfer, assign, lease or otherwise dispose of the Pledged Interests or any interest therein, except as permitted under the Financing Agreement and the other Loan Documents;

(i) not make or consent to any amendment or other modification or waiver with respect to any Pledged Interests or enter into any agreement or permit to exist any restriction with respect to any Pledged Interests other than as expressly permitted under the Financing Agreement; and

(ii) not permit the issuance of (A) any additional shares of any class of Equity Interests of any Pledged Issuer, (B) any securities convertible voluntarily by the holder thereof or automatically upon the occurrence or non-occurrence of any event or condition into, or exchangeable for, any such shares of Equity Interests or (C) any warrants, options, contracts or other commitments entitling any Person to purchase or otherwise acquire any such shares of Equity Interests, in each case, other than as permitted under the Financing Agreement.

(f) Intellectual Property .

(i) If applicable, each Grantor has duly executed and delivered the applicable Assignment for Security in the form attached hereto as Exhibit B. Except as provided in subsection (ii) below, each Grantor (either itself or through licensees) will, and will cause each licensee thereof to, take all action reasonably necessary to maintain all of the Intellectual Property material to or necessary for the operation of each Grantor’s business in full force and effect, including, without limitation, using the proper statutory notices and markings and using the Trademarks on each applicable trademark class of goods in order to so maintain the Trademarks in full force, free from any valid claim of abandonment for non-use, and no Grantor will (nor permit any licensee thereof to) knowingly do any act or knowingly omit to do any act whereby any Intellectual Property necessary for the operation of any Grantor’s business may become invalidated.

(ii) Notwithstanding the foregoing and subject to the terms of the Financing Agreement, so long as no Event of Default has occurred and is continuing, no Grantor shall have an obligation to use or to maintain any Intellectual Property (A) that relates solely to any product or work, that has been, or is in the process of being, discontinued, abandoned or terminated, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual Property that may be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property is subject to the Lien created by this Agreement, (C) that is substantially the same as any other Intellectual Property that is in full force, so long as the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such other Intellectual Property is subject to the Lien and security interest created by this Agreement or (D) that is not material to or necessary for the operation of any Grantor’s business.

(iii) Each Grantor will cause to be taken all reasonably necessary steps in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or political subdivision thereof to maintain each

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registration of Intellectual Property material to the operation of any Grantor’s business (other than the Intellectual Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and payment of maintenance fees, filing fees, taxes or other governmental fees . If any Intellectual Property owned by any Grantor is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the Grantors shall (A) upon obtaining knowledge of such infringement, misappropriation, dilution or other violation, promptly notify the Collateral Agent in writing setting forth a brief description of such infringement, misappropriation, dilution or other violation and (B) to the extent the Grantors shall deem reasonable and appropriate under the circumstances, sue for infringement, misappropriation, dilution or other violation, seek injunctive relief where appropriate and recover any and all damages for such infringement, misappropriation, dilution or other violation, or take such other actions as the Grantors shall deem appropriate under the circumstances to protect such Intellectual Property .

(iv) Concurrently with the delivery of financial information required by Section 7.01(a)(ii) of the Financing Agreement, the Grantors shall furnish to the Collateral Agent a schedule identifying and describing any Intellectual Property and Licenses which are Material Contracts that have been acquired by any of the Grantors since the date of the last such delivery; provided that within 10 Business Days of such acquisition the Grantors shall furnish to the Collateral Agent a schedule identifying and describing any such Intellectual Property and Licenses which are Material Contracts that have been acquired during any fiscal quarter of the Parent and its Subsidiaries in which such Intellectual Property and Licenses which are Material Contracts with an aggregate value of $250,000 or more have been acquired. The Grantors agree to execute and authenticate a Copyright Security Agreement, Patent Security Agreement or Trademark Security Agreement, as applicable, and do take all other actions reasonably requested by the Collateral Agent to subject such Intellectual Property and Licenses to the Lien and security interest created by this Agreement.

(v) Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may abandon or otherwise permit any Intellectual Property to become invalid without the prior written consent of the Collateral Agent (which shall not be unreasonably withheld, delayed or conditioned), and if any Intellectual Property owned by any Grantor is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, each of the Grantors will take such action as the Collateral Agent shall reasonably deem appropriate under the circumstances to protect such Intellectual Property.

(vi) In the event that any Grantor shall (A) obtain rights to any new Trademarks, or any reissue, renewal or extension of any existing Trademark necessary for the operation of its business, (B) obtain rights to or develop any new patentable inventions, or become entitled to the benefit of any Patent, or any reissue, division, continuation, renewal, extension or continuation-in-part of any existing Patent or any improvement thereof (whether pursuant to any license or otherwise), (C) obtain rights to or develop any new works protectable by Copyright, or become entitled to the benefit of any rights with respect to any Copyright or any registration or application therefor, or any renewal or extension of any existing Copyright or any registration or application therefor, or (D) obtain rights to or develop new Other Intellectual Property, the provisions of Section 2 hereof shall automatically apply thereto and, with respect to each such item of Registered Intellectual Property, such Grantor shall give to the Collateral Agent notice thereof in accordance with clause (iv), above.

(vii) Each Grantor shall execute, authenticate and deliver any and all assignments, agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s security interest hereunder in such Intellectual Property and the General Intangibles of such Grantor relating thereto or represented thereby, and each Grantor hereby

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appoints the Collateral Agent as its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable until the Termination Date .

(g) Deposit, Commodities and Securities Accounts . In accordance with and subject to Section 5.02 and Article VIII of the Financing Agreement, each Grantor shall cause each bank and other financial institution with an account referred to in Schedule IV hereto to execute and deliver to the Collateral Agent (or its designee) a Control Agreement, in form and substance reasonably satisfactory to the Collateral Agent, duly executed by such Grantor and such bank or financial institution, or enter into other arrangements in form and substance reasonably satisfactory to the Collateral Agent, pursuant to which such institution shall irrevocably agree (unless otherwise agreed to by the Collateral Agent), among other things, that (i) it will comply at any time with the instructions originated by the Collateral Agent (or its designee) to such bank or financial institution directing the disposition of cash, Commodity Contracts, securities, Investment Property and other items from time to time credited to such account, without further consent of such Grantor, which instructions the Collateral Agent (or its designee) shall not give to such bank or other financial institution in the absence of a continuing Event of Default, (ii) all cash, Commodity Contracts, securities, Investment Property and other items of such Grantor deposited with such institution shall be subject to a perfected, first priority security interest in favor of the Collateral Agent (or its designee), and (iii) any right of set off, banker’s Lien or other similar Lien, security interest or encumbrance shall be fully waived as against the Collateral Agent (or its designee). The provisions of this Section 6(g) shall not apply to any Excluded Accounts.

(h) [ Reserved ].

(i) Control . Each Grantor hereby agrees to take any or all action that is reasonably necessary or reasonably requested by the Collateral Agent in order for the Collateral Agent to obtain control in accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the Code with respect to the following Collateral: (i) Deposit Accounts, (ii) Securities Accounts, Electronic Chattel Paper, (iv) Investment Property and (v) Letter-of-Credit Rights. Each Grantor hereby acknowledges and agrees that any agent or designee of the Collateral Agent shall be deemed to be a “secured party” with respect to the Collateral under the control of such agent or designee for all purposes.

(j) Records; Inspection and Reporting .

(i) Each Grantor shall keep adequate records concerning the Accounts, Chattel Paper and Pledged Interests.

(ii) Except as otherwise expressly permitted by Section 6(b), if any Grantor shall, upon 5 days’ prior written notice to the Collateral Agent (or such shorter period agreed to by the Collateral Agent), amend, modify or otherwise change (A) its name, organizational identification number or FEIN, (B) its jurisdiction of organization as set forth in Schedule I hereto or (C) its chief executive office as set forth in Schedule III hereto. Each Grantor shall promptly notify the Collateral Agent upon obtaining an organizational identification number, if on the date hereof, such Grantor did not have such identification number.

(k) Partnership and Limited Liability Company Interests .

(i) Except with respect to partnership interests and limited liability company interests evidenced by a certificate, which certificate has been pledged and delivered to the Collateral Agent pursuant to Section 4 hereof, no Grantor that is a partnership or a limited liability company shall, nor shall

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any Grantor with any Subsidiary that is a partnership or a limited liability company, permit such Subsidiary’s partnership interests or membership interests to (A) be dealt in or traded on securities exchanges or in securities markets, (B) become a security for purposes of Article 8 of any relevant Uniform Commercial Code, (C) become an investment company security within the meaning of Section 8-103 of any relevant Uniform Commercial Code or (D) be evidenced by a certificate . Each Grantor agrees that such partnership interests or membership interests shall constitute General Intangibles .

(ii) Each Grantor covenants and agrees that it shall amend any limited liability agreement, operating agreement, membership agreement, partnership agreement or similar agreement to which a Grantor is a party and relating to any Pledged Interests (as amended, restated, supplemented or otherwise modified from time to time, each a “ Pledged Partnership/LLC Agreement ”) as follows: (A) to permit each member, manager and partner that is a Grantor (1) to pledge all of the Pledged Interests in which such Grantor has rights, (2) to grant to the Collateral Agent, for the benefit of each Secured Party, a lien on and security interest in such Pledged Interests and (3) to, upon any foreclosure by the Collateral Agent on such Pledged Interests (or any other sale or transfer of such Pledged Interests in lieu of such foreclosure), transfer to the Collateral Agent (or to the purchaser or other transferee of such Pledged Interests in lieu of such foreclosure) its rights and powers to manage and control the affairs of the applicable Pledged Issuer, in each case, without any further consent, approval or action by any other party, including, without limitation, any other party to any Pledged Partnership/LLC Agreement or otherwise and (B) to provide that (1) the bankruptcy or insolvency of such Grantor shall not cause such Grantor to cease to be a holder of such Pledged Interests, (2) upon the occurrence of such an event, the applicable Pledged Issuer shall continue without dissolution and (3) such Grantor waives any right it might have to agree in writing to dissolve the applicable Pledged Issuer upon the bankruptcy or insolvency of such Grantor, or the occurrence of an event that causes such Grantor to cease to be a be a holder of such Pledged Interests.

(iii) Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent or its designee shall have the right (but not the obligation) to be substituted for the applicable Grantor as a member, manager or partner under the applicable limited liability agreement, operating agreement, membership agreement, partnership agreement or similar agreement to which a Grantor is a party (each a “ Pledged Partnership/LLC Agreement ”), and the Collateral Agent or its designee shall have all rights, powers and benefits of such Grantor as a member, manager or partner, as applicable, under such Pledged Partnership/LLC Agreement in accordance with the terms of this Section 6(k). For avoidance of doubt, such rights, powers and benefits of a substituted member, manager or partner shall include all voting and other rights and not merely the rights of an economic interest holder.

(iv) During the period from the Effective Date until the Termination Date, no further consent, approval or action by any other party, including, without limitation, any other party to the applicable Pledged Partnership/LLC Agreement or otherwise shall be necessary to permit the Collateral Agent or its designee to be substituted as a member, manager or partner pursuant to this Section 6(k). The rights, powers and benefits granted pursuant to this paragraph shall inure to the benefit of the Collateral Agent, on its own behalf and on behalf of each other Secured Party, and each of their respective successors, assigns and designees, as intended third party beneficiaries.

(v) Each Grantor and each applicable Pledged Issuer agrees that during the period from the Effective Date until the Termination Date, no Pledged Partnership/LLC Agreement shall be amended to be inconsistent with the provisions of this Section 6(k) without the prior written consent of the Collateral Agent.

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SECTION 7. Voting Rights, Dividends, Etc. in Respect of the Pledged Interests .

(a) So long as no Event of Default shall have occurred and be continuing:

(i) each Grantor may exercise any and all voting and other consensual rights pertaining to any Pledged Interests for any purpose not inconsistent with the terms of this Agreement, the Financing Agreement or the other Loan Documents; and

(ii) each Grantor may receive and retain any and all dividends, interest or other distributions paid in respect of the Pledged Interests to the extent permitted by the Financing Agreement.

(b) Upon the occurrence and during the continuance of an Event of Default:

(i) all rights of each Grantor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 7(a)(i) hereof, and to receive the dividends, distributions, interest and other payments that it would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii) hereof, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to exercise such voting and other consensual rights and to receive and hold as Pledged Interests such dividends, distributions and interest payments, and the Collateral Agent (personally or through an agent) shall thereupon be solely authorized and empowered to transfer and register in the Collateral Agent’s name, or in the name of the Collateral Agent’s nominee, the whole or any part of the Pledged Interests, it being acknowledged by each Grantor that such transfer and registration may be effected by the Collateral Agent through its irrevocable appointment as attorney-in-fact pursuant to Section 8 hereof;

(ii) the Collateral Agent is authorized to notify each debtor with respect to the Pledged Debt to make payment directly to the Collateral Agent (or its designee) and may collect any and all moneys due or to become due to any Grantor in respect of the Pledged Debt, and each of the Grantors hereby authorizes each such debtor to make such payment directly to the Collateral Agent (or its designee) without any duty of inquiry;

(iii) without limiting the generality of the foregoing, the Collateral Agent may, at its option, exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Interests as if it were the absolute owner thereof, including, without limitation, the right to exchange, in its discretion, any and all of the Pledged Interests upon the merger, consolidation, reorganization, recapitalization or other adjustment of any Pledged Issuer, or upon the exercise by any Pledged Issuer of any right, privilege or option pertaining to any Pledged Interests, and, in connection therewith, to deposit and deliver any and all of the Pledged Interests with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as it may determine; and

(iv) all dividends, distributions, interest and other payments that are received by any of the Grantors contrary to the provisions of Section 7(b)(i) hereof shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds of the Grantors, and shall be forthwith paid over to the Collateral Agent as Pledged Interests in the exact form received with any necessary indorsement and/or appropriate instruments of transfer or assignment or undated Equity Interest powers duly executed in blank, to be held by the Collateral Agent as Pledged Interests and as further collateral security for the Secured Obligations.

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SECTION 8. Additional Provisions Concerning the Collateral .

(a) To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent to execute any such agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments or other documents in such Grantor’s name and in any appropriate filing office, (ii) at any time and from time to time to file, one or more financing or continuation statements and amendments thereto, relating to the Collateral (including, without limitation, any such financing statements that (A) describe the Collateral as “all assets” or “all personal property” (or words of similar effect) or that describe or identify the Collateral by type or in any other manner as the Collateral Agent may determine, regardless of whether any particular asset of such Grantor falls within the scope of Article 9 of the Uniform Commercial Code or whether any particular asset of such Grantor constitutes part of the Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including, without limitation, whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor) and (iii) ratifies such authorization to the extent that the Collateral Agent has filed any such financing statements, continuation statements, or amendments thereto, prior to the date hereof. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

(b) Each Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral Agent’s discretion, if an Event of Default has occurred and is continuing, to take any action and to execute any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement in accordance with the terms hereof, including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant to the Financing Agreement, (ii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse, and collect any drafts or other Instruments, Documents and Chattel Paper in connection with clause (i) or (ii) above, (iv) to receive, indorse and collect all Instruments made payable to such Grantor representing any dividend, interest payment or other distribution in respect of any Pledged Interests and to give full discharge for the same, (v) to file any claims or take any action or institute any proceedings which the Collateral Agent may deem necessary or desirable for the collection of any Collateral or otherwise to enforce the rights of each Secured Party with respect to any Collateral, (vi) to execute assignments, licenses and other documents to enforce the rights of each Secured Party with respect to any Collateral, (vii) to pay or discharge taxes or Liens levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the Collateral Agent (in its sole discretion), and such payments made by the Collateral Agent shall constitute additional Secured Obligations of such Grantor to the Collateral Agent, be due and payable immediately without demand, and shall bear interest from the date payment of said amounts is demanded at the Post-Default Rate, and (viii) to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, assignments, verifications and notices in connection with Accounts, Chattel Paper and other documents relating to the Collateral. This power is coupled with an interest and is irrevocable until the Termination Date.

(c) For the purpose of enabling the Collateral Agent, upon the occurrence and during the continuance of an Event of Default, to exercise rights and remedies hereunder, at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby (i) grants to the Collateral Agent an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, assign, license or sublicense any

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Intellectual Property now or hereafter owned by any Grantor, wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof; and (ii) assigns to the Collateral Agent, to the extent assignable, all of its rights to any Intellectual Property now or hereafter licensed or used by any Grantor . Each Grantor hereby releases the Collateral Agent from, and indemnifies the Collateral Agent against, any claims, causes of action and demands at any time arising out of or with respect to any actions taken or omitted to be taken by the Collateral Agent under the powers of attorney, proxy or license, granted herein other than actions taken or omitted to be taken through the Collateral Agent’s gross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction .

(d) If any Grantor fails to perform any agreement or obligation contained herein, the Collateral Agent may itself perform, or cause performance of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the fees and expenses of the Collateral Agent incurred in connection therewith shall be jointly and severally payable by the Grantors pursuant to Section 10 hereof constitute additional Secured Obligations of the Grantor to the Collateral Agent, be due and payable immediately without demand and bear interest from the date payment of said amounts is demanded at the Post-Default Rate.

(e) The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Other than the exercise of reasonable care to assure the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against other parties or any other rights pertaining to any Collateral and shall be relieved of all further responsibility for any Collateral in its possession upon surrendering it or tendering surrender of it to any of the Grantors (or whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct). The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property.

(f) Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise in respect of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights hereunder shall not release any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or otherwise in respect of the Collateral, nor shall the Collateral Agent be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

(g) The Collateral Agent may at any time in its discretion (i) if an Event of Default has occurred and is continuing, without notice to any Grantor, transfer or register in the name of the Collateral Agent or any of its nominees any or all of the Pledged Interests, subject only to the revocable rights of such Grantor under Section 7(a) hereof, and (ii) exchange certificates or Instruments constituting Pledged Interests for certificates or Instruments of smaller or larger denominations.

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SECTION 9. Remedies Upon Default . If any Event of Default shall have occurred and be continuing:

(a) The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code, and also may (i) take absolute control of the Collateral, including, without limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the benefit of each Secured Party, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon reasonable request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by any Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent’s rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation, and (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Collateral Agent’s offices, at any exchange or broker’s board or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and/or (B) lease, license or otherwise dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition of the Collateral shall be required by law, at least 10 days’ prior notice to the applicable Grantor of the time and place of any public sale or the time after which any private sale or other disposition of the Collateral is to be made shall constitute reasonable notification. If the Collateral Agent sells any of the Collateral upon credit, the Grantors will be credited only with payments actually received by the Collateral Agent from the purchaser thereof, and if such purchaser fails to pay for the Collateral, the Collateral may resell the Collateral and the Grantors shall be credited with proceeds of the sale. The Collateral Agent shall not be obligated to make any sale or other disposition of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against each Secured Party arising by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Secured Obligations, even if the Collateral Agent accepts the first offer received and does not offer the Collateral to more than one offeree, and waives all rights that such Grantor may have to require that all or any part of the Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby waives any claims against each Secured Party arising by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Secured Obligations, even if the Collateral Agent accepts the first offer received and does not offer the Collateral to more than one offeree, and waives all rights that such Grantor may have to require that all or any part of the Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that (A) any such sale of the Collateral by the Collateral Agent shall be made without warranty, (B) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, (C) the Collateral Agent may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness), if permitted by law, for the purchase, lease, license or other disposition of the Collateral or any portion thereof for the account of the Collateral Agent (on behalf of itself and each Secured Party) and (D) such actions set forth in clauses (A), (B) and (C) above shall not adversely affect the commercial reasonableness of any such sale of the Collateral. In addition to the foregoing, (1) upon written notice to any Grantor from the

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Collateral Agent (which notice shall be deemed to have been given immediately upon the occurrence of an Event of Default under Sections 9.01(f) or (g) of the Financing Agreement), each Grantor shall cease any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose described in such notice; (2) the Collateral Agent may, at any time and from time to time, upon 5 days’ prior notice to any Grantor (which notice shall be deemed to have been given immediately upon the occurrence of an Event of Default under Sections 9.01(f) or (g) of the Financing Agreement), license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property owned by such Grantor , throughout the universe for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (3) the Collateral Agent may, at any time, execute and deliver on behalf of a Grantor, one or more instruments of assignment of the Intellectual Property owned by such Grantor (or any application or registration thereof), in form suitable for filing, recording or registration in any country.

(b) In the event that the Collateral Agent determines to exercise its right to sell all or any part of the Pledged Interests pursuant to Section 9(a) hereof, each Grantor will, at such Grantor’s expense and upon request by the Collateral Agent: (i) execute and deliver, and cause each issuer of such Pledged Interests and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of the Collateral Agent, advisable to register such Pledged Interests under the provisions of the Securities Act, and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of the Collateral Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto, (ii) cause each issuer of such Pledged Interests to qualify such Pledged Interests under the state securities or “Blue Sky” laws of each jurisdiction, and to obtain all necessary governmental approvals for the sale of the Pledged Interests, as requested by the Collateral Agent, (iii) cause each Pledged Issuer to make available to its security holders, as soon as practicable, an earnings statement which will satisfy the provisions of Section 11(a) of the Securities Act, and (iv) do or cause to be done all such other acts and things as may be necessary to make such sale of such Pledged Interests valid and binding and in compliance with applicable law. Each Grantor acknowledges the impossibility of ascertaining the amount of damages which would be suffered by the Collateral Agent by reason of the failure by any Grantor to perform any of the covenants contained in this Section 9(b) and, consequently, agrees that, if any Grantor fails to perform any of such covenants, it shall pay, as liquidated damages and not as a penalty, an amount equal to the value of the Pledged Interests on the date the Collateral Agent demands compliance with this Section 9(b); provided , however , that the payment of such amount shall not release any Grantor from any of its obligations under any of the other Loan Documents.

(c) Notwithstanding the provisions of Section 9(b) hereof, each Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and applicable state securities laws, Collateral Agent may be compelled, with respect to any sale of all or any part of the Pledged Interests, to limit purchasers to those who will agree, among other things, to acquire the Pledged Interests for their own account, for investment and not with a view to the distribution or resale thereof. Each of the Grantors acknowledge that any such private sales may be at prices and on terms less favorable to Collateral Agent than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances, agree that any such private sale shall be deemed to have been made in a commercially reasonable manner and that Collateral Agent shall have no obligation to engage in public sales and no obligation to delay the sale of any Pledged Interests for the period of time necessary to permit the issuer thereof to register it for public sale.

(d) Any cash held by the Collateral Agent (or its agent or designee) as Collateral and all Cash Proceeds received by the Collateral Agent (or its agent or designee) in respect of any sale of or

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collection from, or other realization upon, all or any part of the Collateral, the Collateral Agent may, in the discretion of the Collateral Agent, be held by the Collateral Agent (or its agent or designee) as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Collateral Agent pursuant to Section 10 hereof) in whole or in part by the Collateral Agent against, all or any part of the Secured Obligations in such order as the Collateral Agent shall elect, consistent with the provisions of the Financing Agreement . Any surplus of such cash or Cash Proceeds held by the Collateral Agent (or its agent or designee) and remaining after the Termination Date shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct .

(e) In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which each Secured Party is legally entitled, the Grantors shall be jointly and severally liable for the deficiency, together with interest thereon at the highest rate specified in the Financing Agreement for interest on overdue principal thereof or such other rate as shall be fixed by applicable law, together with the costs of collection and the reasonable and documented fees, costs, expenses and other client charges of any attorneys employed by the Collateral Agent to collect such deficiency (but limited to one primary counsel and one local counsel in each relevant jurisdiction).

(f) Each Grantor hereby acknowledges that if the Collateral Agent complies with any applicable requirements of law in connection with a disposition of the Collateral, such compliance will not adversely affect the commercial reasonableness of any sale or other disposition of the Collateral.

(g) To the extent that any Grantor lawfully may, such Grantor hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s rights under this Agreement or under any other instrument creating or evidencing any of the Secured Obligations or under which any of the Secured Obligations is outstanding or by which any of the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

SECTION 10. Indemnity and Expenses .

(a) Each Grantor jointly and severally agrees to defend, protect, indemnify and hold harmless the Collateral Agent and each other Indemnitee in accordance with Section 12.15 of the Financing Agreement.

(b) Each Grantor jointly and severally agrees to pay to the Collateral Agent costs and expenses in accordance with Section 12.04 of the Financing Agreement.

SECTION 11. Notices, Etc . All notices and other communications provided for hereunder shall be given in accordance with the notice provision of the Financing Agreement.

SECTION 12. Security Interest Absolute; Joint and Several Obligations .

(a) All rights of the Secured Parties, all Liens and all obligations of each of the Grantors hereunder shall be absolute and unconditional irrespective of (i) any lack of validity or enforceability of the Financing Agreement or any other Loan Document, (ii) any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the Secured Obligations, or any other amendment or waiver of or consent to any departure from the Financing Agreement or any other Loan Document, (iii) any exchange or release of, or non-perfection of any Lien on any Collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Secured Obligations, or (iv) any other circumstance that might otherwise constitute a defense available to, or a

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discharge of, any of the Grantors in respect of the Secured Obligations . All authorizations and agencies contained herein with respect to any of the Collateral are irrevocable and powers coupled with an interest .

(b) Each Grantor hereby waives (i) notice of acceptance and notice of the incurrence of any Secured Obligation by any Borrower and (ii) all other notices, demands, and protests in connection with the enforcement of the Secured Obligations, the omission of or delay in which, but for the provisions of this subsection (b), might constitute grounds for relieving such Grantor of any such Grantor’s obligations hereunder.

(c) All of the obligations of the Grantors hereunder are joint and several. The Collateral Agent may, in its sole and absolute discretion, enforce the provisions hereof against any of the Grantors and shall not be required to proceed against all Grantors jointly or seek payment from the Grantors ratably. In addition, the Collateral Agent may, in its sole and absolute discretion, select the Collateral of any one or more of the Grantors for sale or application to the Secured Obligations, without regard to the ownership of such Collateral, and shall not be required to make such selection ratably from the Collateral owned by all of the Grantors. The release or discharge of any Grantor by the Collateral Agent shall not release or discharge any other Grantor from the obligations of such Person hereunder.

SECTION 13. Miscellaneous .

(a) No amendment of any provision of this Agreement (including any Schedule attached hereto) shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent, and no waiver of any provision of this Agreement, and no consent to any departure by any Grantor therefrom, shall be effective unless it is in writing and signed by the Collateral Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(b) No failure on the part of the Secured Parties to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Secured Parties provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Secured Parties under any Loan Document against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights under any other Loan Document against such party or against any other Person, including but not limited to, any Grantor.

(c) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to paragraph (e) below, until the Termination Date and (ii) be binding on each Grantor all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code, and shall inure, together with all rights and remedies of the Secured Parties hereunder, to the benefit of the Secured Parties and their respective successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, each Secured Party may assign or otherwise transfer its respective rights and obligations under this Agreement and any other Loan Document to any other Person pursuant to the terms of the Financing Agreement, and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Secured Parties herein or otherwise. Upon any such assignment or transfer, all references in this Agreement to any Secured Party shall mean the assignee of any such Secured Party. None of the rights or obligations of any Grantor hereunder may be assigned or otherwise transferred without the prior written consent of the Collateral Agent, and any such assignment or transfer shall be null and void.

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(d) After the occurrence of the Termination Date, (i) subject to paragraph (e) below, this Agreement and the security interests and licenses created hereby shall automatically terminate and all rights to the Collateral shall revert to the Grantors, (ii) the Collateral Agent agrees to file UCC amendments on or promptly after the Termination Date to evidence the termination of the Liens so released and (iii) the Collateral Agent will, upon the Grantors’ request and at the Grantors’ cost and expense, (A) promptly return to the Grantors (or whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct) such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof, and (B) promptly execute and deliver to the Grantors such documents and make such other filings as the Grantors shall reasonably request to evidence such termination, without representation, warranty or recourse of any kind . In addition, upon any sale or disposition of any Collateral in a transaction not prohibited by the Financing Agreement, the security interest in such Collateral shall automatically terminate, and the Collateral Agent shall, upon the reasonable request of the Grantors and at the Grantors’ cost and expense, execute and deliver to the Grantors such documents as the Grantors shall reasonably request to evidence such release, without representation, warranty or recourse of any kind .

(e) This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make a general assignment for the benefit of any creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment or performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(f) Upon the execution and delivery, or authentication, by any Person of a security agreement supplement in substantially the form of Exhibit C hereto (each a “ Security Agreement Supplement ”), (i) such Person shall be referred to as an “Additional Grantor” and shall be and become a Grantor, and each reference in this Agreement to “Grantor” shall also mean and be a reference to such Additional Grantor, and each reference in this Agreement and the other Loan Documents to “Collateral” shall also mean and be a reference to the Collateral of such Additional Grantor, and (ii) the supplemental Schedules I-VIII attached to each Security Agreement Supplement shall be incorporated into and become a part of and supplement Schedules I-VIII, respectively, hereto, and the Collateral Agent may attach such Schedules as supplements to such Schedules, and each reference to such Schedules shall mean and be a reference to such Schedules, as supplemented pursuant hereto.

(g) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT (I) AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND (II) TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(h) In addition to and without limitation of any of the foregoing, this Agreement shall be deemed to be a Loan Document and shall otherwise be subject to all of terms and conditions contained in Sections 12.10 and 12.11 of the Financing Agreement, mutatis mutandis .

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(i) Each party hereto irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding with respect to this Agreement any special, exemplary, punitive or consequential damages.

(j) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

(k) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

(l) This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which shall be deemed an original, but all of such counterparts taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart.

(m) For purposes of this Agreement, all references to Schedules I-VIII attached hereto shall be deemed to refer to each such Schedule as updated from time to time in accordance with the terms of this Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.

GRANTORS :

CHEROKEE INC.


By:	/s/ Henry Stupp
	Name:	Henry Stupp
	Title:	Chief Executive Officer


SPELL C. LLC

By:	CHEROKEE INC., its sole member


By:	/s/ Henry Stupp
	Name:	Henry Stupp
	Title:	Chief Executive Officer


CHEROKEE BRANDS LLC

By:	CHEROKEE INC., its sole member


By:	/s/ Henry Stupp
	Name:	Henry Stupp
	Title:	Chief Executive Officer


HAWK 900 BRANDS LLC

By:	CHEROKEE INC., its sole member


By:	/s/ Henry Stupp
	Name:	Henry Stupp
	Title:	Chief Executive Officer

[Signature Page to U.S. Security Agreement]

EDCA LLC

By:	CHEROKEE INC., its sole member


By:	/s/ Henry Stupp
	Name:	Henry Stupp
	Title:	Chief Executive Officer


FFS HOLDINGS, LLC

By:	CHEROKEE INC., its sole member


By:	/s/ Henry Stupp
	Name:	Henry Stupp
	Title:	Chief Executive Officer


FLIP FLOP SHOPS FRANCHISE COMPANY, LLC

By:	FFS HOLDINGS, LLC, its sole member

By:	CHEROKEE INC., its sole member


By:	/s/ Henry Stupp
	Name:	Henry Stupp
	Title:	Chief Executive Officer

[Signature Page to U.S. Security Agreement]

Accepted and Agreed :

GORDON BROTHERS FINANCE COMPANY , as Collateral Agent


By:	/s/	Felicia Galeota
Name:		Felicia Galeota
Title:		Vice President

Exhibit 10.3

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT (the “ Agreement ”) is dated this 3rd day of August, 2018, and is entered into by and between Cherokee Inc., a Delaware corporation (the “ Company ”), and each of the holders of a Participation (defined below) listed on Schedule I hereto (each, a “ Purchaser ”).

WHEREAS, the Company and Gordon Brothers Finance Company, as agent (in such capacity the “ Senior Agent ”) for itself and other Secured Parties (as defined in the Senior Credit Agreement referred to below) (each individually, a “ Senior Creditor ” and collectively, the “ Senior Creditors ”), among others, have entered or concurrently will enter, into a Financing Agreement dated as of August 3, 2018 (the “ Senior Credit Agreement ”);

WHEREAS, the loans made under the Senior Credit Agreement will be used to refinance in part obligations outstanding under that certain Financing Agreement (the “ Existing Facility ”), dated as of December 7, 2016 (as amended) entered into by the Company, Cerberus Business Finance, LLC, a Delaware limited liability company (“ Cerberus ”), as administrative agent and collateral agent, and the lenders from time to time party thereto;

WHEREAS, the Purchasers have heretofore purchased junior participations in the Existing Facility (the “ Participations ”) in the corresponding aggregate principal amount set forth on Schedule I .

WHEREAS, in order to fully retire the Existing Facility concurrently with the entry by the Company into the Senior Credit Agreement, Company and the Purchasers have agreed to exchange the Participations for replacement instruments issued directly by Company on substantially equivalent terms and conditions as the Participations. The replacement instruments shall consist of those certain Subordinated Exchange Note(s), dated as of the date hereof, made by Company in favor of each Purchasers or their designees, in the corresponding aggregate original principal amounts set forth on Schedule I (the “ Notes ”, and together with accrued and unpaid interest and reimbursable expenses, the “ Obligations ”);

WHEREAS, the Obligations are secured by liens on that portion of the Collateral in which the U.S. Loan Parties (defined in the Senior Credit Agreement) have an interest pursuant to a Pledge and Security Agreements, identical in all material respects, dated as of even date herewith made by the Company and its Subsidiaries (defined below) that are party thereto in favor of the Purchasers (collectively without differentiation the “ Security Agreement ”);

WHEREAS, payment and performance of the Obligations is guaranteed by the Subsidiaries of Company that are party thereto pursuant to Guaranties dated as of even date herewith made by the subsidiaries of the Company that are party thereto in favor of each of the Purchasers (the collectively without differentiation the “ Guaranty ” and collectively with the Notes and the Security Agreement, each in form and substance acceptable to the Purchasers, the “ Exchange Documents ”);

WHEREAS, Company and each of the Purchasers acknowledges that Section 4.1 of this Agreement is for the exclusive benefit of Cove Street Capital and that no other Purchaser party hereto or any successor or assign thereof shall have any rights under, or be a party , to Section 4.1 of this Agreement; and

WHEREAS, in reliance upon the representations made by the Purchasers and the Company in this Agreement, the transactions contemplated by this Agreement are such that the offer and sale of securities by the Company under this Agreement will be exempt from registration under applicable United States securities laws as a result of the Exchange being undertaken pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”), and/or Regulation D promulgated thereunder.

NOW, THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Purchaser hereby agree as follows:

Section 1. Exchange . Subject to and upon the terms and conditions set forth in this Agreement, the Purchasers agree to exchange with the Company, and the Company agrees to exchange with the Purchasers, one or more Notes in favor of each Purchaser or its designees and the other Exchange Documents (such transaction, the “ Exchange ”) in the aggregate principal amount set for on Schedule I in exchange for surrender of the Participations by the Purchasers to the Company and delivery by the Purchasers of cash equal to the aggregate principal amount set for on Schedule I (collectively, the “ Exchange Consideration ”). The Exchange Documents shall be in the form of EXHIBIT A hereto.

1.1 Closing . On the Closing Date (as defined below), upon the terms and subject to the conditions set forth herein, the Company agrees to deliver the Exchange Documents to Purchaser in exchange for the Exchange Consideration and the Purchaser agrees to exchange the Exchange Consideration for the Exchange Documents. The closing of the Exchange (the “ Closing ”) shall occur on August 3, 2018, or on such other date as the parties may mutually agree in writing (the “ Closing Date ”). The Notes issuable at the Closing shall bear a restrictive legend as follows:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR APPLICABLE STATE SECURITIES LAWS AND MAY BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF (EACH, A “ TRANSFER ”) ONLY IF SUCH SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR IF SUCH TRANSFER IS MADE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH STATE SECURITIES LAWS AFTER PROVIDING AN OPINION OF COUNSEL TO SUCH EFFECT.

1.2 Section 4(a)(2) . Assuming the accuracy of the representations and warranties of each of the Company and the Purchasers set forth in Section 2 and Section 3 , respectively, the parties acknowledge and agree that the purpose of such representations and

warranties is, among other things, to ensure that the Exchange qualifies as a sale of securities under Section 4(a)(2) of the Securities Act.

1.3 Deliveries .

(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchasers:

(i) the Exchange Documents, fully executed by all parties thereto and in full force and effect; and

(ii) The Registration Rights Agreement in the form attached hereto as EXHIBIT B (the “ Registration Rights Agreement ”), fully executed by the Company.

(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

(i) A written cancellation of such Purchaser’s Participation;

(ii) The cash portion of the Exchange Consideration, if any, payable by such Purchaser by wire transfer in immediately available funds to the account specified by the Company; and

(iii) The Registration Rights Agreement, fully executed by such Purchaser.

1.4 Transaction Fee . As further consideration for the Exchange and in addition to the Exchange Consideration, no later than five (5) business days after the Closing Date, the Company shall pay in cash (i) a transaction fee of $28,571 to Cove Street Capital Small Cap Value Fund, (ii) a transaction fee of $21,429 to Square Deal Growth, LLC, and (iii) a transaction fee of $50,000 to Ravich Revocable Trust of 1989.

Section 2. Representations and Warranties of the Company . The Company hereby represents and warrants to each Purchaser, as of the date of this Agreement and as of the Closing Date, that:

2.1 Organization and Qualification . The Company and each majority-controlled subsidiary of the Company (collectively, the “ Subsidiaries ”) is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company, nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not reasonably be expected to result in: (a) a material adverse effect on the legality, validity or enforceability of this Agreement, the

Notes, the Officer’s Certificate or the Registration Rights Agreement (collectively, the “ Exchange Document s ”), (b) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (c) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Exchange Document (any of (a), (b) or (c), a “ Material Adverse Effect ”), and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. For purposes of this Agreement, a “controlled subsidiary of the Company” is a subsidiary of the Company for which the Company has the power to vote or direct the voting of a majority of the outstanding voting power, or for which the Company has the power to elect a majority of the members of the board of directors or similar governing body, in either case as of the date of this Agreement.

2.2 Authorization; Enforcement . The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Exchange Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Exchange Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company, and no further action is required by the Company, the Board or the Company’s stockholders in connection herewith or therewith. This Agreement and each other Exchange Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

2.3 [Reserved] .

2.4 No Conflicts . The execution, delivery and performance by the Company of this Agreement and the other Exchange Documents to which it is a party, the issuance of the Notes and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (a) conflict with or violate any provision of the Notes, the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any options, contracts, agreements, liens, security interests, or other encumbrances (“ Liens ”) upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (c) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (b) and (c), such as would not have or reasonably be expected to result in a Material Adverse Effect.

2.5 Acknowledgment Regarding the Exchange . The Company acknowledges and agrees that the Purchaser is acting solely in the capacity of an arm’s length third party with respect to this Agreement and the transactions contemplated hereby. The Company also acknowledges that it is not relying on any advice or representation of the Purchaser in connection with entering into this Agreement or the transactions contemplated hereunder other than the representations made by the Purchaser in this Agreement. The Company further acknowledges the Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby, and any advice given by the Purchaser or any of its respective representatives or agents in connection with this Agreement is merely incidental to the Exchange. None of the Company, any of its Affiliates or any person acting on its or their behalf has conducted any general solicitation (as that term is used in Rule 502(c) of Regulation D) or general advertising with respect to any of the Notes, or made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of the Notes under the Securities Act.

2.6 SEC Reports; Financial Statements . The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), including pursuant to Section 13(a) or 15(d) of the Exchange Act, for the two years preceding the date of this Agreement (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Reports ”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Securities Exchange Commission (the “ SEC ”) with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles in the United States applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. As of the date of this Agreement, there are no outstanding or unresolved comments received from the staff of the SEC with respect to the SEC Reports.

2.7 Subsidiaries . All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. The capital stock or other equity interests of each Subsidiary that are owned by the Company are owned by the Company free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary of the Company that are owned by the Company are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

2.8 [Reserved]

2.9 Material Changes; Undisclosed Events, Liabilities or Developments . Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date of this Agreement: (a) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (b) the Company has not incurred any liabilities (contingent or otherwise) other than (i) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, and (ii) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (c) the Company has not altered its method of accounting, (d) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (e) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. Except for the issuance of the Notes contemplated by this Agreement and the entry into the Senior Credit Agreement and the transactions related thereto, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed prior to the date that this representation is made.

2.10 Litigation . Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “ Action ”) which (a) adversely affects or challenges the legality, validity or enforceability of any of the Exchange Documents, (b) adversely affects or imposes any liabilities on the Purchaser or any of its Affiliates with respect the Notes, or (c) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the SEC Reports, none of the Company, any Subsidiary, or any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. To the knowledge of the Company, there is no pending or contemplated investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

2.11 Compliance . Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary: (a) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received any notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (b) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority, or (c) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including

without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, anti-corruption, anti-money laundering, SEC reporting, occupational health and safety, product quality and safety and employment and labor matters (collectively, “ Laws ”), except in each case as would not have, or reasonably be expected to result in, a Material Adverse Effect. The Company holds all material licenses, franchises, permits, certificates, approvals and authorizations from each governmental body, or required by Laws or any governmental body to be obtained, in each case necessary for the lawful conduct of its business and operations as currently conducted (collectively, “ Permits ”). The Company is in compliance in all material respects with the terms of all Permits. To the Company’s knowledge, it has not received written notice since April 19, 2018 (the date of filing the Company’s most recent Annual Report on Form 10-K) to the effect that a governmental body (i) claimed or alleged that the Company was not in compliance with all Laws applicable to the Company, any of its properties or other assets or any of its business or operations other than as previously disclosed to the Purchaser in writing, or (ii) was considering the amendment, termination, revocation or cancellation of any Permit. The consummation of the transactions contemplated hereby, in and of itself, will not cause the revocation or cancellation of any Permit.

2.12 Certain Fees . No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Exchange Documents.

2.13 Investment Company . The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Notes, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

2.14 Disclosure . All of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that the Purchaser makes no, nor has made any, representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3 .

2.15 Taxes . The Company and the Subsidiaries have filed all federal, state, local and foreign tax returns that have been required to be filed and paid all taxes shown thereon through the date of this Agreement, to the extent that such taxes have become due and are not being contested in good faith, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. Except as disclosed in the SEC Reports, no tax deficiency has been determined adversely to the Company or any Subsidiary which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge of any federal, state or other governmental tax deficiency, penalty or assessment which has been or might be asserted or threatened against it which would reasonably be expected to have a Material Adverse Effect.

2.16 Intellectual Property . The Company and the Subsidiaries own or possesses or have valid right to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“ Intellectual Property ”) necessary for the conduct of the business of the Company and its subsidiaries as currently carried on, except as such failure to own, possess, license or acquire such rights has not had and would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect. To the knowledge of the Company, no action or use of such Intellectual Property by the Company or any of its subsidiaries gives rise to any infringement or misappropriation of the Intellectual Property of others. Neither the Company nor the Subsidiaries has received any notice, or has actual knowledge of any pending notice, in each case alleging any such infringement.

2.17 Disclosure Controls . The Company maintains systems of internal accounting controls designed to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the SEC Reports, the Company is not aware of any material weakness in its internal control over financial reporting. Since the date of the latest audited financial statements of the Company included within the SEC Reports, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company and the Subsidiaries is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the Annual Report on Form 10-K for the fiscal year most recently ended (such date, the “ Evaluation Date ”). The Company presented in its Annual Report on Form 10-K for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the most recent Evaluation Date. Since the most recent Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s knowledge, in other factors that would significantly adversely affect the Company’s internal controls.

2.18 No “Bad Actor” Disqualifying Events . No “Bad Actor” disqualifying event described in Rule 506(d)(1)(i) to (viii) of the Securities Act (a “ Disqualification Event ”) is applicable to the Company, except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3), is applicable; provided that, for purposes of this representation and warranty, the Company relied exclusively on completed and executed questionnaires delivered to the Company by its directors and executive officers and beneficial owners of twenty percent (20%) or more of the Company’s outstanding voting equity securities.

2.19 Foreign Corrupt Practices Act . None of the Company, the Subsidiaries, or, to the knowledge of the Company, any agent or other person acting in the course of its actions on behalf of the Company or the Subsidiaries, has, directly or indirectly, (i) used any corporate funds, or will use any proceeds from the sale of the Notes, for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful influence payment to foreign or domestic government officials or to any foreign or domestic political parties or campaigns from corporate funds, or (iii) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder which was or is applicable to the Company or any of the Subsidiaries.

2.20 Compliance with Anti-Money Laundering Laws . The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the USA Patriot Act of 2001 and the applicable money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Anti-Money Laundering Laws ”), the Company has in place policies and procedures reasonably designed to ensure that its and its Subsidiaries’, if any, operations will continue to be conducted in compliance with all applicable Money Laundering Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or the Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

2.21 Sarbanes-Oxley Act . The Company is in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof.

2.22 Application of Takeover Protections . The Company and the Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its formation which is or could become applicable to the Purchaser as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Notes and the Purchaser’s ownership of the Notes.

2.23 Insurance . The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the business in which the Company is engaged. The Company has not been refused any insurance coverage sought or applied for, the refusal of which would reasonably be expected to have a Material Adverse Effect. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.

2.24 Title . The Company has marketable title to all personal property owned by it which is material to the business of the Company, in each case free and clear of all Liens except for Liens which do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company. Any real property and facilities held under material lease by the Company are held by it under valid and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company.

Section 3. Representations and Warranties of each Purchaser . Each Purchaser represents and warrants to the Company solely on its own behalf and not with respect to any other Purchaser, as of the date of this Agreement and as of the Closing Date, that:

3.1 No Public Sale or Distribution . The Purchaser and its designees are acquiring the Notes in the ordinary course of business for their own accounts and not with a view toward, or for resale in connection with, the public sale or distribution thereof. The Purchaser does not presently have any agreement or understanding, directly or indirectly, with any person not managed or advised by Purchaser to distribute, or transfer any interest or grant participation rights in the Notes.

3.2 Accredited Investor Status . The Purchaser is an “accredited investor” as that term is defined in Rule 501 of Regulation D under the Securities Act.

3.3 Reliance on Exemptions . The Purchaser understands that the Exchange is being made in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to complete the Exchange and to acquire the Notes.

3.4 Information . The Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the Exchange which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Purchaser or its representatives shall modify, amend or affect the Purchaser’s right to rely on the Company’s representations and warranties contained herein. The Purchaser acknowledges that all of the documents filed by the Company with the SEC under Sections 13(a), 14(a) or 15(d) of the Exchange Act that have been posted on the SEC’s EDGAR site are available to the Purchaser.

3.5 Risk . The Purchaser understands that its investment in the Notes involves a high degree of risk. The Purchaser is able to bear the risk of an investment in the Notes including, without limitation, the risk of total loss of its investment. The Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the Exchange. The Purchaser is not relying on any advice or representation of the Company in connection with entering into this Agreement or the Registration Rights Agreement or the transactions contemplated hereunder or thereunder (other than the

representations made by the Company in this Agreement) and has not received from the Company any assurance or guarantee as to the merits (whether legal, regulatory, tax, financial or otherwise) of entering into this Agreement or the Registration Rights Agreement or the performance of the Purchaser’s obligations hereunder or thereunder.

3.6 No Governmental Review . The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement in connection with the Exchange or the fairness or suitability of the investment in the Notes.

3.7 Organization; Authorization . The Purchaser is duly organized, validly existing and in good standing under the laws of jurisdiction of its incorporation or organization and has the requisite organizational power and authority to enter into and perform its obligations under this Agreement and the Registration Rights Agreement.

3.8 Validity; Enforcement . This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and delivered on behalf of the Purchaser and constitute the legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their terms. The execution, delivery and performance of this Agreement and the Registration Rights Agreement by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not result in a violation of the organizational documents of the Purchaser.

3.9 Prior Investment Experience . The Purchaser acknowledges that it has prior investment experience, including investment in securities of the type being sold, including the Notes, and has read all of the documents furnished or made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf, and that it recognizes the highly speculative nature of this investment.

3.10 Tax Consequences . The Purchaser acknowledges that the Company has made no representation regarding the potential or actual tax consequences for the Purchaser that will result from entering into this Agreement and from consummation of the Exchange. The Purchaser acknowledges that it bears complete responsibility for obtaining adequate tax advice for the Purchaser itself regarding this Agreement and the Exchange.

3.11 No Registration, Review or Approval; Restricted Securities . The Purchaser acknowledges, understands and agrees that the Notes are being sold hereunder pursuant to an offer exemption under Section 4(a)(2) of the Securities Act and/or the safe harbor provided under Regulation D promulgated thereunder. The Purchaser understands that the Notes constitute “restricted securities” within the meaning of Rule 144 under the Securities Act and may not be sold, pledged or otherwise disposed of unless they are subsequently registered under the Securities Act and applicable state securities laws or unless an exemption from registration thereunder is available.

3.12 Jurisdiction . The Purchaser made its investment decision to purchase the Notes at its offices located at the address set forth on the Purchaser’s signature page hereto. The

Purchaser’s principal place of business is located in the jurisdiction listed in the address set forth on the Purchaser’s signature page hereto.

3.13 Exculpation . The Purchaser acknowledges that it is not relying upon any Person, other than the Company and its officers and directors, in making its investment or decision to invest in the Company.

3.14 No Disqualifying Events . Neither (a) the Purchaser; nor (b) any of the Purchaser’s directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, is subject to any of Disqualification Events, except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed reasonably in advance of the Closing in writing in reasonable detail to the Company.

Section 4. Covenants of the Company .

4.1 Board Representation . On and after the Closing Date, Cove Street Capital shall be entitled to designate two (2) qualified individuals (each a “ Designated Nominee ”) to serve on the Board. Each Designated Nominee shall, as a condition of his/her appointment to the Board, execute and deliver a letter agreement in form and substance satisfactory to Cove Street Capital, agreeing to immediately resign from the Board upon request of the Cove Street Capital; provided that a Designated Nominee’s refusal to resign when so requested shall constitute “cause” for removal from the Board and the Board and the Company shall use their best efforts to support Cove Street Capital’s exercise of its board designation rights. The Cove Street Capital also shall be entitled to designate one (1) qualified Designated Nominee to serve on each committee of the Board. The parties agree that Robert Longnecker shall be an initial Designated Nominee. Cove Street Capital intends to designate a second Designated Nominee within 30 days after the date of this Agreement, subject to extension by Cove Street Capital. The Company shall use its best efforts to ensure that the Company’s director’s and officer’s insurance covers the Designated Nominees as directors and shall propose a director’s compensation program that, in each case, is commensurate with market standards. At any time that less than two (2) Designated Nominees are seated on the Board, the Company and the Board shall maintain a vacancy or vacancies on the Board for such Designated Nominee(s) and shall use their best efforts and take such actions during the Representation Period (as defined below) as may be necessary to ensure that the Designated Nominees are duly seated at all times. If the size of the Board is expanded, for any reason, the Cove Street Capital shall have the right to designate additional Board nominees in order to maintain its proportionate representation as of the Closing Date. The rights under this paragraph shall continue for as long as the Cove Street Capital and its affiliates collectively beneficially own at least 5% of the Company’s outstanding common stock (the “ Representation Period ”). Each of the Purchasers other than Cove Street Capital acknowledges and agrees that the terms and conditions of this Section 4.1 inure solely to the benefit of Cove Street Capital and no other Purchaser shall have or be entitled to exercise any of the rights granted to Cove Street Capital under this Section 4.1. Only Cove Street Capital, acting in its sole and absolute discretion, shall have the power hereunder to designate a Designated Nominee. Each other Purchaser hereby further acknowledges and agrees that only Cove Street Capital and Company shall have the power to, and only the concurrence of Cover Street Capital and the Company shall be required to, enter into an effective waiver, amendment or modification of this Section 4.1. In furtherance of the

foregoing, each Purchaser other than Cove Street Capital hereby waives any right that it may otherwise have in equity, at law or by contract to consent to a waiver, amendment or modification under this Section 4.1.

4.2 Warrants. Concurrent with the Closing, the Company shall issue and deliver to each of the Purchasers named on Schedule II a warrant or warrants in substantially the form attached here to as EXHIBIT B (the “ Warrant ”) exercisable for the number of shares of the Company’s Common Stock set forth opposite such Purchaser’s name on Schedule II with an exercise price per share as set forth on Schedule II hereto. Each Warrant shall be issued to such parties and in such amounts as are designated by the Purchaser consistently with Schedule II prior to the Closing Date.

Section 5. Conditions Precedent to Obligations of the Company . The obligation of the Company to consummate the transactions contemplated by this Agreement is subject to the satisfaction of each of the following conditions; provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Purchaser with prior written notice thereof:

5.1 Delivery of Exchange Consideration . The Purchaser shall have delivered to the Company the Exchange Consideration;

5.2 No Prohibition . No order of any court, arbitrator or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement;

5.3 Representations . The representations and warranties of the Purchaser contained in Section 3 shall be true and correct in all material respects (other than representations and warranties which are already qualified as to materiality, which shall be true and correct in all respects) as of the date when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date; and

Section 6. Conditions Precedent to Obligations of the Purchaser . The obligation of the Purchaser to consummate the transactions contemplated by this Agreement is subject to the satisfaction of each of the following conditions; provided that these conditions are for the Purchaser’s sole benefit and may be waived by the Purchaser, on behalf of itself, at any time in its sole discretion by providing the Company with prior written notice thereof:

6.1 Delivery . The Company shall have delivered or caused to be delivered to the Purchaser the items set forth in Section 1.3(a) ;

6.2 No Prohibition . No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement;

6.3 Representations . The representations and warranties of the Company contained in Section 2 shall be true and correct in all material respects (other than representations and warranties which are already qualified as to materiality, which shall be true and correct in all

respects) as of the date when made and as of the Closing Date, as though made on and as of such date, except for such representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date; and

6.4 Credit Facilities .

6.4.1 The Senior Credit Facility shall be, or concurrently will be, in form and substance acceptable to Purchaser in its sole discretion, in full force and effect and the term loans to be made thereunder shall have been or concurrently will be advanced to the Company and used to repay the Existing Facility and a complete set of documentation evidencing the Senior Credit Facility shall have been or concurrently will be delivered to Purchaser.

6.4.2 The entire outstanding balance due, save and except for the Participations issued thereunder, under the Existing Facility shall have been or currently will be paid in full and in cash and all liens and security interests securing the Existing Facility shall have been, or concurrently will be, terminated, and Cerberus shall have, or concurrently will, deliver a customary “payoff letter” acknowledging termination of the documentation for the Existing Facility and payment in full of all obligations under the Existing Facility, and operatively terminating all liens and security interests securing the Existing Facility.

Section 7. [Reserved]

Section 8. Furnishing of Information . As long as the Purchaser owns any Notes, the Company covenants to use its best efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date of this Agreement pursuant to the Exchange Act.

Section 9. Indemnification . In addition to any other indemnity provided in the Exchange Documents, the Company will indemnify and hold the Purchaser and its directors, officers, stockholders, partners, employees, advisers, affiliates and agents (each, a “ Purchaser Party ”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “ Losses ”) that any such Purchaser Party may suffer or incur as a result of or relating to (a) any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Exchange Document, and (b) any action instituted against a Purchaser Party in any capacity, or any of them or their respective affiliates, by any individual who is not an affiliate of such Purchaser Party, with respect to any of the transactions contemplated by this Agreement. In addition to the indemnity contained herein, the Company will reimburse each Purchaser Party for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred.

Section 10. Governing Law; Jurisdiction; Waiver of Jury Trial . This Agreement shall be construed under the laws of the State of Delaware, without regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another jurisdiction. The Company and the Purchaser hereby agree that all actions or proceedings arising directly or indirectly from or in connection with this Agreement shall be litigated only in the Superior Court

of the State of California or the United States District Court for the Southern District of California located in Los Angeles County, California. The Company and the Purchaser consent to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of motion or other application to either of said courts or a judge thereof may be served inside or outside the State of California or the Southern District of California by generally recognized overnight courier or certified or registered mail, return receipt requested, directed to such party at its or his address set forth below (and service so made shall be deemed “personal service”) or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE PURCHASER HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

Section 11. Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a .pdf or other form of electronic signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a .pdf or other form of electronic signature.

Section 12. Headings . The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

Section 13. Fees and Expenses . The Company shall promptly pay or reimburse the Purchaser upon request for the fees and expenses of legal counsel incurred by the Purchaser in connection with the transactions contemplated by this Agreement .

Section 14. Severability . If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

Section 15. Entire Agreement; Amendments . This Agreement supersedes all other prior oral or written agreements between the Purchaser, the Company, their Affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the Notes and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Purchaser makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended, waived or modified other than by an instrument in writing signed by the Company and the Purchaser. Any such amendment, waiver or modification effected in accordance with this Section 15 shall be binding upon the Purchaser and each transferee of the Notes, each future holder of all such securities and the Company.

Section 16. Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by e-mail (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and

national banking holidays in the United States) after deposit with an overnight courier service, in each case properly addressed to the party to receive the same.

The addresses and e-mail addresses for such communications shall be:

If to the Company:

Cherokee Inc.

5990 Sepulveda Boulevard, Suite 600

Sherman Oaks, CA 91411

E-mail: henrys@cherokeeglobalbrands.com

Attn: Henry Stupp

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

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

3580 Carmel Mountain Road, Suite 300

San Diego, CA 92130

E-mail: smstanton@mintz.com

Attn: Scott Stanton, Esq.

If to a Purchaser: To the address set forth on the Purchaser’s signature page hereto;

or to such other address and/or e-mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change.

Section 17. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes.

Section 18. No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

Section 19. Survival of Representations . The representations, warranties and covenants of the Company and the Purchaser contained in this Agreement shall survive the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Purchaser or the Company. The Company shall indemnify and hold harmless the Purchaser for any and all losses suffered by the Purchaser as a result of, in connection with, or relating to, any breach by the Company of any representation, warranty and/or covenant of the Company in this Agreement or in any certificate, document or other writing delivered by the Company to the Purchaser pursuant to this Agreement.

Section 20. Further Assurances . Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in

order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

[ Signature Page Follows ]

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

COMPANY:

CHEROKEE INC.

By:	/s/	Henry Stupp
Name:		Henry Stupp
Title:		Chief Executive Officer

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

Cove Street Capital, LLC

By:	/s/	Eugene Robin
Name:		Eugene Robin
Title:		Principal

Cove Street Capital Small Cap Value Fund, a series of Managed Portfolio Series, a Delaware statutory trust

By:	Cove Street Capital, LLC
	Its Investment Advisor

By:	/s/ Eugene Robin
	Name:	Eugene Robin
	Title:	Principal

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

Square Deal Growth, LLC

an Oklahoma limited liability company

By:	Cove Street Capital, LLC
	Its Investment Advisor

By:	/s/ Eugene Robin
	Name:	Eugene Robin
	Title:	Principal

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

Ravich Revocable Trust of 1989, a trust established by Jess M. Ravich

By:	/s/	Jess M. Ravich
Name:		Jess M. Ravich
Title:		Trustee

Address:	149 S. Barrington Ave, #828
	Los Angeles, CA 90049

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

HENRY I STUPP

By:	/s/	Henry Stupp
Name:
Title:

Exhibit 10.4

THIS AGREEMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AND INTERCREDITOR AGREEMENT DATED AS OF AUGUST 3, 2018, BY AND AMONG, AMONG OTHERS, SUBORDINATED CREDITOR AND GORDON BROTHERS FINANCE COMPANY, AS SENIOR AGENT (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED IN ACCORDANCE WITH ITS TERMS, THE “SUBORDINATION AGREEMENT”). In the event of any conflict between the terms of the SUBORDINATION Agreement and this agreement, the terms of the SUBORDINATION Agreement shall control.

SUBORDINATED EXCHANGE NOTE

Dated as of August 3, 2018

FOR VALUE RECEIVED, Cherokee, Inc., a Delaware corporation (the “ Issuer ”), hereby promises to pay, without setoff, deduction, recoupment or counterclaim, to Cove Street Capital Small Cap Value Fund, a series of Managed Portfolio Series, a Delaware statutory trust (the “ Holder ”), or its permitted assigns, the principal sum of $5,142,857.14, togethe r with interest thereon from the date of this Subordinated Exchange Note (this “ Note ”) through the date that all principal and accrued interest under this Note is paid in full. The obligations under this Note are guaranteed by that certain Guaranty, dated as of the date hereof, among certain affiliates of the Issuer (the “ Guarantors ”) in favor of the Holder.

Subject to the terms hereof, on November 2, 2021 (the “ Maturity Date ”), the entire outstanding principal balance of this Note, plus any and all accrued and unpaid interest thereon, shall be due and payable in full by the Issuer to the Holder.

“ Senior Financing Agreement ”). All capitalized terms used in this Note that are not otherwise defined herein shall have the same mean ings herein as set forth in the Senior Financing Agreement.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, and the Issuer agree:

1. Interest . This Note shall bear interest on the principal amount hereof from time to time outstanding until repaid, at a rate per annum equal to the LIBOR Rate (as defined below) plus the Applicable Margin (as defined below). Interest on this Note shall be payable monthly, in arrears, on the first day of each month, commencing on the first day of the month following the month in which the Note is made and at maturity (whether upon demand, by acceleration or otherwise). Any interest not paid when due shall accrue interest as provided in this Section 1, including clause (iv)(3) of the definition of Applicable Margin below.

“ Applicable Margin ” means, as of any date of determination:

(i) From the date hereof through August 2, 2019, 8.75%.

(ii) From August 3, 2019 and thereafter, the relevant Applicable Margin shall be set at the respective level indicated below, based upon the Consolidated EBITDA for the trailing twelve month period of the Issuer and its subsidiaries. For purposes of the immediately preceding sentence, Consolidated EBITDA of the Issuer and its subsidiaries shall be as defined in the Senior Financing Agreement. Consolidated EBITDA shall be calculated as of the end of the most recent fiscal quarter of the Issuer and its Subsidiaries for which quarterly financial statements have been delivered to the Senior Agent pursuant to the terms of the Senior Financing Agreement:

Pricing Level	Consolidated EBITDA	Applicable Margin
1	< $10,000,000	8.75%
2	≥ $10,000,000 and < 15,000,000	8.50%
3	≥ $15,000,000	8.25%

(iii) Subject to clause (iv) below, the adjustment of the Applicable Margin (if any) will occur five (5) business days after the date the Senior Agent receives the quarterly financial statements required to be delivered pursuant to the terms of the Senior Financing Agreement.

(iv) Notwithstanding the foregoing:

(1) the Applicable Margin shall be set at Pricing Level 1 in the table above if for any period the Senior Agent does not receive the financial statements as

required pursuant to the terms of the Senior Financing Agreement, and for the period commencing on the date such financial statements were required to be delivered through the date on which such financial statements and certificate are actually received by the Senior Agent;

(2) in the event that the financial information required to be delivered pursuant to the terms of the Senior Financing Agreement is inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any fiscal period, then the Applicable Margin for such fiscal period shall be adjusted retroactively (to the effective date of the determination of the Applicable Margin that was based upon the delivery of such inaccurate financial information) to reflect the correct Applicable Margin, and the Issuer shall promptly make payments to the Holder to reflect such adjustment;

(3) if an Event of Default has occurred and is continuing and the Applicable Margin is being determined pursuant to clause (ii) above, the Applicable Margin shall be 10.75% until the date such Event of Default is cured or waived; and

(4) any provision or definition of the Senior Financing Agreement incorporated or referenced in this Section 1 shall be deemed at all times to be in the form in which it existed on the date hereof, provided that any modification of the applicable margin table in the definition of Applicable Margin under the Senior Financing Agreement that results in an increase in the overall interest rates from time to time under the Senior Financing Agreement shall automatically modify the Applicable Margin under this Note unless waived by Holder in writing in Holder’s sole and absolute discretion.

“ LIBOR Rate ” means the greater of (a) two percent (2.00%), and (b) the offered rate per annum for three-month deposits of U.S. Dollars that appears on Reuters Screen Page LIBOR 01 at approximately 11:00 A.M. (London, England time) two (2) business days prior to the first day of such month; provided that, if such rate is not available, the LIBOR Rate shall be deemed to be a comparable successor or alternative rate that is, at such time, designated by the Senior Agent to be the rate utilized under the Senior Financing Agreement in lieu of LIBOR or, if the monetary obligations under the Senior Financing Agreement are no longer outstanding or the Senior Agent has not specified a rate in lieu of LIBOR, the rate that is, at such time, broadly accepted by the loan market in lieu of LIBOR; provided, further, notwithstanding anything to the contrary contained herein, until such time as the monetary obligations under the Senior Financing Agreement are paid in full, any alternative LIBOR Rate utilized under this Note shall not exceed the LIBOR Rate applicable to the Senior Financing Agreement. LIBOR Rate shall be determined on a monthly basis.

All interest shall be computed on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed

2. Payments . Payments of principal and interest are payable by the Issuer in lawful monies of the United States of America via wire transfer in immediately available funds for deposit in the account(s) designated in writing by the Holder prior to the date of such payment.

3. Mandatory Prepayment. In each case s ubject to the terms of the Subordination Agreement, the Issuer shall make mandatory prepayments on this Note as follows:

(a) Upon any Disposition (as defined in the Senior Financing Agreement) of Non-Primary Brands (as defined in the Senior Financing Agreement) by any Loan Party or its Subsidiaries, the Issuer shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal amount of the Note, in an amount equal to 50% of the Net Cash Proceeds (as defined in the Senior Financing Agreement) received by such Person in connection with such Disposition.

(b) upon any Disposition (excluding Dispositions which qualify as Permitted Dispositions (as defined in the Senior Financing Agreement) under clauses (a), (b), (c), (d), (e), (f), (g), (i), (j), (k), (l), (m), (n) or (q) (without limiting clause (a) above) of the definition of Permitted Disposition set forth in the Senior Financing Agreement) by any Loan Party or its Subsidiaries, the Issuer shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal amount of this Note, in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such Disposition to the extent that the aggregate amount of Net Cash Proceeds received by all Loan Parties and their Subsidiaries (and not paid to the Holder as a prepayment of the Note) shall exceed for all such Dispositions $250,000 in any Fiscal Year; provided that no such prepayment shall be required to the extent such proceeds are used to replace, repair or restore properties or assets (other than current assets) used or useful in such Person’s business in accordance with Section 2.05(c) of the Senior Financing Agreement;

(c) upon the issuance or incurrence by any Loan Party or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness), or upon an Equity Issuance (other than, so long as no default or Event of Default has occurred and is continuing, Excluded Equity Issuances (as defined in the Senior Financing Agreement)), the Issuer shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal amount of this Note, in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection therewith; and

(d) upon the receipt by any Loan Party or any of its Subsidiaries of any Extraordinary Receipts, the Issuer shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal amount of this Note in an amount equal to 100% of the Net Cash Proceeds received by such Person; provided that no such prepayment shall be required to the extent such proceeds are used to replace, repair or restore properties or assets (other than current assets) used or useful in such Person’s business in accordance with Section 2.05(c)(v) of the Senior Financing Agreement.

Notwithstanding anything to the contrary contained herein, no prepayment shall be required pursuant to this Section 3 to the extent such proceeds have been, or will be, applied to the prepayment of the Loans in accordance with Section 2.05(c)(v) of the Senior Financing Agreement.

4. Yield Maintenance . (a) Subject to the terms of the Subordination Agreement, to the extent that any Lender or Agent makes any claim for additional payments pursuant to the

terms of Section 2.10 of the Senior Financing Agreement, Holder shall be entitled to receive any such additional payments to the extent such additional payments would be due to Holder if it were a Lender under the Senior Financing Agreement.

(b) If at any time on or prior to May 4, 2019, (i) (x) this Note is accelerated (or deemed accelerated), (y) the Issuer repays this Note (other than unasserted contingent obligation) in full in cash, or (z) the Issuer repays or is required to pay this Note in whole or in part, including, without limitation, as a voluntary or mandatory prepayment, as a result of an acceleration (including an automatic acceleration) of this Note after the occurrence of an Event of Default or upon the commencement of any proceeding pursuant to any Debtor Relief Law, or as a result of any refinancing of the Note, then on the effective date of such payment the Issuer shall pay to the Holder a prepayment premium equal to the greater of (i) 3.00% of the principal amount of this Note paid or required to be paid and (ii) the Lost Yield Revenue (as defined below) in respect of the principal amount of this Note paid or required to be paid.

“ Lost Yield Revenue ” means, with respect to any amount of this Note being paid or required to be paid at any time on or prior to May 4, 2019, the sum of (a) the amount of interest that would have accrued on such amount during the first nine-months of the term of the Note minus (b) the portion of such interest that actually has been paid.

5. Events of Default. The occurrence of any of the following shall constitute an “ Event of Default ” under this Note:

(a) Issuer (i) fails to pay the principal or interest when required hereunder, and Issuer fails to cure such breach within five days of the date when due, or (ii) is in breach of any of the other terms, provisions or conditions set out in this Note, and Issuer fails to cure such breach within 30 days after notice thereof is provided by Holder;

(b) Issuer or any Guarantor (i) shall institute any proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such person or for any substantial part of its property, (ii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, or (iii) shall make a general assignment for the benefit of creditors;

(c) any proceeding shall be instituted against Issuer or any Guarantor seeking to adjudicate it a bankrupt or insolve nt, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 45 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relie f against any such person or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur ; or

(d) Issuer or any Guarantor shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of indebtedness (excluding indebtedness evidenced by this Note) having an aggregate principal amount outstanding in excess of $750,000, including, without limitation, the Senior Financing Agreement, and such failure shall continue after the applicable grace or cure period, if any, specified in the agreement or instrument relating to such indebtedness, or any other default under any agreement or instrument relating to any such indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, in each case including, without limitation, the Senior Financing Agreement, if the effect of such default or event is to accelerate the maturity of such indebtedness; or any such indebtedness shall be accelerated, declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such indebtedness shall be required to be made, in each case, prior to the stated maturity thereof. Waiver of any such default by the Holder shall not constitute a waiver under this event of default unless agreed by the Holder in writing.

6. Rights of Holder. Upon the occurrence and during the continuance of any Event of Default, unless such Event of Default has been waived in writing by the Holder, Holder may declare all outstanding obligations and liabilities of the Issuer payable hereunder to be immediately due and payable; provided that, in the case of an Event of Default described in paragraphs (b) or (c) above, all amounts payable by the Issuer hereunder, including, without limitation, the principal balance and all accrued interest on this Note, shall automatically become immediately due and payable, without notice, action or election by the Holder. In addition to the foregoing remedies, Holder may exercise any other right, power or remedy granted to it or otherwise permitted to it by law or under any other agreement either by suit in equity or by action at law, or both. No failure on the part of the Holder in exercising any right or remedy hereunder, and no single, partial or delayed exercise by the Holder of any right or remedy shall preclude the full and timely exercise by the Holder at any time of any right or remedy of the Holder hereunder without notice. No course of dealing or other conduct, no oral agreement or representation made by the Holder or usage of trade shall operate as a waiver of any right or remedy of the Holder.

7. Prepayment . This Note may be prepaid in whole or in part at any time, together with any accrued and unpaid interest, without premium, penalty or discount.

8. Successors and Assigns. The rights and obligations of the Issuer and the Holder of this Note shall be binding upon and benefit their respective permitted successors, assigns, heirs, administrators and transferees. The Issuer may not assign this Note, in whole or in part, without the written consent of the Holder. Subject to the Subordination Agreement, Holder may transfer, assign, hypothecate or otherwise convey its rights and obligations under this Note and any related documents and agree ments, including the right to receive payment hereunder to any (i) Affiliates of the Holder or Cove Street Capital, LLC, (ii) funds or accounts managed or advised by the Holder or Cove Street Capital, LLC or any of their respective Affiliates or (iii) offi cers, directors, partners, shareholders (or similar roles) of the Holder or Cove Street Capital, LLC or any of their respective Affiliates, in each case, without the consent of the Issuer or any Guarantor .

9. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Issuer and Holder.

10. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be hand delivered or sent via facsimile, overnight courier service or mailed by certified or registered mail, postage prepaid, return receipt requested, addressed or sent to the respective parties at such address for a party as shall be furnished the other party hereto in writing.

11. Indemnification; Waivers. (a) In addition to the Issuer’s other obligations under this Note, the Issuer agrees to defend, protect, indemnify and hold harmless the Holder and all of its Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively called the “ Indemnitees ”) from and against any and all losses, damages, liabilities, obligations, penalties, fees, reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Indemnitees, whether prior to or from and after the date hereof, whether direct, indirect or consequential, as a result of or arising from or relating to or in connection with any of the following: (i) the negotiation, preparation, execution or performance or enforcement of this Note or any other document executed in connection with the transactions contemplated by this Note, (ii) any Holder’s furnishing of funds to the Issuer under this Note, including, without limitation, the Issuer’s use of the proceeds thereof, (iii) the Holder relying on any instructions of the Issuer or the handling of the collateral pledged by the Issuer in support of this Note, (iv) any matter relating to the transactions contemplated by this Note or by any document executed in connection with the transactions contemplated by this Note, or (v) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (collectively, the “ Indemnified Matters ”); provided , however , that the Issuer shall not have any obligation to any Indemnitee under this subsection (a) for any breach of the Subordination Agreement by the Indemnitees or for any Indemnified Matter caused by the gross negligence or willful misconduct of such Indemnitee as determined by a final non-appealable judgment of a court of competent jurisdiction.

(b) To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 11 may be unenforceable because it is violative of any law or public policy, the Issuer shall contribute the maximum portion which it is permitted to pay and satisfy under

applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.

(c) The Issuer shall not assert, and hereby waives, any claim against the Indemnitees, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Note or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any use of the proceeds thereof or any act or omission or event occurring in connection therewith, and the Issuer hereby waives, releases and agrees not to sue upon any such claim or seek any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

(d) The indemnities and waivers set forth in this Section 11 shall survive the termination of this Note; provided , however , no monetary amount of such indemnities and waivers shall be included in the amount that the Issuer is required to pay to the Holder in order to fully repay, cancel and terminate this Note and discharge any guaranties or liens securing repayment of this Note unless a claim by a Person has been made against an Indemnitee that constitutes an Indemnified Matter and the monetary amount of such claim remains unsatisfied.

(e) The Issuer hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this Note.

shall be required to the extent any such costs and expenses are the result of a breach of the Subordination Agreement by the Holder. Without limitation of the fore going: (y) the Issuer agrees to pay all stamp, document, transfer, recording, filing or similar fees or Taxes required to be paid under applicable law in connection with this Note and the other documents entered into in connection herewith, and the Issuer agrees to save the Holder harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission by the Issuer to timely pay any such fees or Taxes, and (z) if the Issuer fails to perform any c ovenant or agreement contained in this Note and the other documents entered into in connection herewith, the Holder may itself perform or cause performance of such covenant or agreement, and the expenses of the Holder incurred in connection therewith shall be reimbursed on demand by the Issuer. The obligations of the Issuer under this Section 12 shall survive the repayment of this Note and discharge of any liens granted in connection herewith.

13. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

14. CONSENT TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS NOTE, THE ISSUER HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE ISSUER HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY ANY MEANS PERMITTED BY APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUER AT 5990 Sepulveda BoulevarD, Sherman Oaks, CA 91411 (or such other address as shall be designated by written notice to the Holder from time to time) , SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE ISSUER AGREES 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. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE HOLDER TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER IN ANY OTHER JURISDICTION. THE ISSUER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE ISSUER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT

PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE ISSUER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS NOTE.

15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS NOTE, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER NOTE DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS NOTE, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. ISSUER CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE HOLDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT HOLDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. ISSUER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER ENTERING INTO THIS NOTE

16. Entire Agreement. This Note contains the entire agreement between the parties with respect to the subject matter hereof, and supersedes every course of dealing, other conduct, oral agreement or representation previously made by the parties. In the event that any court of competent jurisdiction shall determine that any provision, or portion thereof, contained in this Note shall be unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it enforceable, and the remaining provisions of this Note shall nevertheless remain in full force and effect.

17. Subordination . Notwithstanding anything contained in this Note to the contrary, the rights and benefits of the Holder hereof, including any successor or assign, are subject and subordinated pursuant to the terms of the Subordination Agreement, and Holder shall not exercise any rights or remedies under this Note except as expressly permitted by the Subordination Agreement.

18. Note Issued in Exchange for Existing Participations .

(a) The extensions of credit made under the Senior Financing Agreement will be used, in part, to refinance obligations outstanding under that certain Financing Agreement (the “ Existing Facility ”), dated as of December 7, 2016 (as amended) entered into by the Issuer, Cerberus Business Finance, LLC, a Delaware limited liability company, as administrative agent and collateral agent, and the lenders from time to time party thereto. The Holder has heretofore purchased a junior participation in the Existing Facility.

(b) In order to fully refinance, cancel and discharge the Existing Facility, Issuer and Holder have agreed, pursuant to an exchange agreement, that Holder will exchange its participation interest in the Existing Facility for this Note as a replacement instrument issued directly by Issuer on substantially equivalent terms and conditions as such participation interest.

19. Reporting . Issuer agrees that it will promptly, and in any event within (5) five Business Days, after receipt of any written request therefore from Holder deliver to Holder any financial statements, notices, reports or other information delivered by or on behalf of Issuer to the Senior Agent pursuant to Section 7.01(a) of the Senior Financing Agreement. For avoidance of doubt, Issuer shall not deliver any material non-public information to Holder unless specifically requested by Issuer in writing.

[Signature Page Follows]

IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed as of the date first above indicated.

CHEROKEE INC. , as Issuer

By:	/s/	Henry Stupp
Name:		Henry Stupp
Title:		Chief Executive Officer

Signature Page to

Cove Street Exchange Note

AGREED AND ACCEPTED:

Cove Street Capital Small Cap Value Fund,

a series of Managed Portfolio Series,

a Delaware statutory trust

By:	Cove Street Capital, LLC
	Its Investment Advisor

	By:	/s/ Eugene Robin
		Name: Eugene Robin
		Title: Principal

Signature Page to

Cove Street Exchange Note

Execution version

Exhibit 10.5

SUBORDINATED EXCHANGE NOTE

Dated as of August 3, 2018

FOR VALUE RECEIVED, Cherokee, Inc., a Delaware corporation (the “ Issuer ”), hereby promises to pay, without setoff, deduction, recoupment or counterclaim, to Henry I. Stupp , an individual with an address at 5990 Sepulveda Blvd. Suite 600, Sherman Oaks, CA 91411 (the “ Holder ”), or his permitted assigns, the principal sum of $100,000, together with interest thereon from the date of this Subordinated Exchange Note (this “ Note ”) through the date that all principal and accrued interest under this Note is paid in full. The obligations under this Note are guaranteed by that certain Guaranty, dated as of the date hereof, among certain affiliates of the Issuer (the “ Guarantors ”) in favor of the Holder.

“ Senior Financing Agreement ”). All capitalized terms used in this Note that are not otherwise defined herein shall have the same meanings herein as set forth in the Senior Financing Agreement.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, and the Issuer agree:

“ Applicable Margin ” means, as of any date of determination:

(i) From the date hereof through August 2, 2019, 8.75%.

Pricing Level	Consolidated EBITDA	Applicable Margin
1	< $10,000,000	8.75%
2	≥ $10,000,000 and < 15,000,000	8.50%
3	≥ $15,000,000	8.25%

(iv) Notwithstanding the foregoing:

(1) the Applicable Margin shall be set at Pricing Level 1 in the table above if for any period the Senior Agent does not receive the financial statements as

All interest shall be computed on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed

3. Mandatory Prepayment. In each case subject to the terms of the Subordination Agreement, the Issuer shall make mandatory prepayments on this Note as follows:

4. Yield Maintenance . (a) Subject to the terms of the Subordination Agreement, to the extent that any Lender or Agent makes any claim for additional payments pursuant to the

5. Events of Default. The occurrence of any of the following shall constitute an “ Event of Default ” under this Note:

(c) any proceeding shall be instituted against Issuer or any Guarantor seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 45 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against any such person or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur; or

(d) Issuer or any Guarantor shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of indebtedness (excluding indebtedness evidenced by this Note) having an aggregate principal amount outstanding in excess of $750,000, including, without limitation, the Senior Financing Agreement, and such failure shall continue after the applicable grace or cure period, if any, specified in the agreement or instrument relating to such indebtedness, or any other default under any agreement or instrument relating to any such indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, in each case including, without limitation, the Senior Financing Agreement, if the effect of such default or event is to accelerate the maturity of such indebtedness; or any such indebtedness shall be accelerated, declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such indebtedness shall be required to be made, in each case, prior to the stated maturity thereof . Waiver of any such default by the Holder shall not constitute a waiver under this event of default unless agreed by the Holder in writing.

7. Prepayment . This Note may be prepaid in whole or in part at any time, together with any accrued and unpaid interest, without premium, penalty or discount.

9. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Issuer and Holder.

fully repay, cancel and terminate this Note and discharge any guaranties or liens securing repayment of this Note unless a claim by a Person has been made against an Indemnitee that constitutes an Indemnified Matter and the monetary amount of such claim remains unsatisfied.

(e) The Issuer hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this Note.

12. Expenses. The Issuer agrees to pay, without duplication, within 3 Business Days after receipt of an invoice that sets forth such costs and expenses in reasonable detail, all reasonable and documented out-of-pocket costs and expenses incurred by or on behalf of the Holder, including, without limitation, reasonable and documented fees, out-of-pocket costs and expenses of counsel for the Holder (but limited to one primary counsel), and in connection with (a) the negotiation, preparation, execution, delivery, performance and administration of this Note and the other documents entered into in connection herewith, (b) any requested amendments, waivers or consents to this Note and the other documents entered into in connection herewith whether or not such documents become effective, (c) the enforcement of any rights under this Note and the other documents entered into in connection herewith and the preservation and protection of the Holder’s rights under this Note and the other documents entered into in connection herewith, (d) the defense of any claim or action asserted or brought against the Holder by any Person that arises from or relates to this Note or the other documents entered into in connection herewith, or the Holder’s claims against the Issuer, (e) the commencement or defense of, or intervention in, any court proceeding arising from or related to this Note or the other documents entered into in connection herewith, (f) the filing of any petition, complaint, answer, motion or other pleading by the Holder, or the taking of any action in respect of the collateral or other security, in connection with this Note or the other documents entered into in connection herewith, except (i) in each case under clauses (d), (e) and (f), no reimbursement shall be required to the extent any such costs and expenses are the result of the gross negligence, willful misconduct of or breach of a funding obligation under the Note or the other documents entered into in connection herewith by such Person claiming reimbursement, as determined by a final, non-appealable judgment of a court of competent jurisdiction and (ii) no reimbursement shall be required to the extent any such costs and expenses are the result of a breach of the Subordination Agreement by the Holder. Without limitation of the foregoing: (y) the Issuer agrees to pay all stamp, document, transfer, recording, filing or similar fees or Taxes required to be paid under applicable law in connection with this Note and the other documents entered into in connection herewith, and the Issuer agrees to save the Holder harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission by the Issuer to timely pay any such fees or Taxes, and (z) if the Issuer fails to perform any covenant or agreement contained in this Note and the other documents entered into in connection herewith, the Holder may itself perform or cause performance of such covenant or agreement, and the expenses of the Holder incurred in connection therewith shall be reimbursed on demand by the Issuer. The obligations of the Issuer under this Section 12 shall survive the repayment of this Note and discharge of any liens granted in connection herewith.

13. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK

APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK .

COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. ISSUER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER ENTERING INTO THIS NOTE

18. Note Issued in Exchange for Existing Participations .

[Signature Page Follows]

IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed as of the date first above indicated.

CHEROKEE INC. , as Issuer

By:	/s/	Henry Stupp
Name:		Henry Stupp
Title:		Chief Executive Officer

Signature Page to

Stupp Exchange Note

AGREED AND ACCEPTED:

HENRY I. STUPP

By:	/s/	Henry Stupp
Name:
Title:

Signature Page to

Exchange Note

81002355v.1

Execution version

Exhibit 10.6

SUBORDINATED EXCHANGE NOTE

Dated as of August 3, 2018

FOR VALUE RECEIVED, Cherokee, Inc., a Delaware corporation (the “ Issuer ”), hereby promises to pay, without setoff, deduction, recoupment or counterclaim, to Ravich Revocable Trust of 1989, a trust established by Jess M. Ravich (the “ Holder ”), or his permitted assigns, the principal sum of $4,400,000, together with interest thereon from the date of this Subordinated Exchange Note (this “ Note ”) through the date that all principal and accrued interest under this Note is paid in full. The obligations under this Note are guaranteed by that certain Guaranty, dated as of the date hereof, among certain affiliates of the Issuer (the “ Guarantors ”) in favor of the Holder.

“ Senior Financing Agreement ”). All capitalized terms used in this Note that are not otherwise defined herein shall have the same meanings herein as set forth in the Senior Financing Agreement.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, and the Issuer agree:

“ Applicable Margin ” means, as of any date of determination:

(i) From the date hereof through August 2, 2019, 8.75%.

Pricing Level	Consolidated EBITDA	Applicable Margin
1	< $10,000,000	8.75%
2	≥ $10,000,000 and < 15,000,000	8.50%
3	≥ $15,000,000	8.25%

(iv) Notwithstanding the foregoing:

(1) the Applicable Margin shall be set at Pricing Level 1 in the table above if for any period the Senior Agent does not receive the financial statements as

“ LIBOR Rate ” means the greater of (a) two percent (2.00%), and (b) the offered rate per annum for three-month deposits of U.S. Dollars that appears on Reuters Screen Page LIBOR 01 at approximately 11:00 A.M. (London, England time) two (2) business days prior to the first day of such month; provided that, if such rate is not available, the LIBOR Rate shall be deemed to be a comparable successor or alternative rate that is, at such time, designated by the Senior Agent to be the rate utilized under the Senior Financing Agreement in lieu of LIBOR or, if the monetary obligations under the Senior Financing Agreement are no longer outstanding or the Senior Agent has not specified a rate in lieu of LIBOR, the rate that is, at such time, broadly accepted by the loan market in lieu of LIBOR ; provided, further, notwithstanding anything to the contrary contained herein, until such time as the monetary obligations under the Senior Financing Agreement are paid in full, any alternative LIBOR Rate utilized under this Note shall not exceed the LIBOR Rate applicable to the Senior Financing Agreement . LIBOR Rate shall be determined on a monthly basis.

All interest shall be computed on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed

3. Mandatory Prepayment. In each case subject to the terms of the Subordination Agreement , the Issuer shall make mandatory prepayments on this Note as follows:

4. Yield Maintenance . (a) Subject to the terms of the Subordination Agreement, to the extent that any Lender or Agent makes any claim for additional payments pursuant to the terms of Section 2.10 of the Senior Financing Agreement , Holder shall be entitled to receive any such additional payments to the extent such additional payments would be due to Holder if it were a Lender under the Senior Financing Agreement.

5. Events of Default. The occurrence of any of the following shall constitute an “ Event of Default ” under this Note:

(c) any proceeding shall be instituted against Issuer or any Guarantor seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 45 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against any such person or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur; or

(d) Issuer or any Guarantor shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of indebtedness (excluding indebtedness evidenced by this Note) having an aggregate principal amount outstanding in excess of $750,000, including, without limitation, the Senior Financing Agreement, and such failure shall continue after the applicable grace or cure period, if any, specified in the agreement or instrument relating to such indebtedness, or any other default under any agreement or instrument relating to any such indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, in each case including, without limitation, the Senior Financing Agreement, if the effect of such def ault or event is to accelerate the maturity of such indebtedness; or any such indebtedness shall be accelerated, declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such indebtedness shall be required to be made, in each case, prior to the stated maturity thereof . Waiver of any such default by the Holder shall not constitute a waiver under this event of default unless agreed by the Holder in writing.

7. Prepayment . This Note may be prepaid in whole or in part at any time, together with any accrued and unpaid interest, without premium, penalty or discount.

9. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Issuer and Holder.

fully repay , cancel and terminate this Note and discharge any guaranties or liens securing repayment of this Note unless a claim by a Person has b een made against an Indemnitee that constitutes an Indemnified Matter and the monetary amount of such claim remains unsatisfied.

(e) The Issuer hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this Note.

13. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

14. CONSENT TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS NOTE , THE ISSUER HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE ISSUER HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY ANY MEANS PERMITTED BY APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ISSUER AT 5990 Sepulveda BoulevarD, Sherman Oaks, CA 91411 (or such other address as shall be designated by written notice to the Holder from time to time) , SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE ISSUER AGREES 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. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE HOLDER TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER IN ANY OTHER JURISDICTION. THE ISSUER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE ISSUER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE ISSUER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS NOTE .

16. Entire Agreement. This Note contains the entire agreement between the parties with respect to the subject matter hereof, and supersedes every course of dealing, other conduct, oral agreement or representation previously made by the parties . In the event that any court of competent jurisdiction shall determine that any provision, or portion thereof, contained in this Note shall be unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it enforceable, and the remaining provisions of this Note shall nevertheless remain in full force and effect.

18. Note Issued in Exchange for Existing Participations .

[Signature Page Follows]

IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed as of the date first above indicated.

CHEROKEE INC. , as Issuer

By:		/s/ Henry Stupp
Name:		Henry Stupp
Title:		Chief Executive Officer

Signature Page to

Ravich Exchange Note

AGREED AND ACCEPTED:

RAVICH REVOCABLE TRUST OF 1989


By:		/s/ Jess M. Ravich
Name:		Jess M. Ravich
Title:		Trustee

Signature Page to

Ravich Exchange Note

Execution Version

Exhibit 10.7

SUBORDINATED EXCHANGE NOTE

Dated as of August 3, 2018

FOR VALUE RECEIVED, Cherokee, Inc., a Delaware corporation (the “ Issuer ”), hereby promises to pay, without setoff, deduction, recoupment or counterclaim, to Square Deal Growth, LLC, an Oklahoma limited liability company (the “ Holder ”), or its permitted assigns, the principal sum of $3,857,142.86, together with interest thereon from the date of this Subordinated Exchange Note (this “ Note ”) through the date that all principal and accrued interest under this Note is paid in full. The obligations under this Note are guaranteed by that certain Guaranty, dated as of the date hereof, among certain affiliates of the Issuer (the “ Guarantors ”) in favor of the Holder.

Reference is made to that certain Financing Agreement, dated as of the date hereof, among the Issuer, certain of its affiliates as guarantors, Gordon Brothers Finance Company, as administrative and collateral agent (the “ Senior Agent ”), and the lenders party thereto from time to time ( as amended, restated, supplemented or otherwise modified from time to time, the “ Senior Financing Agreement ”). All capitalized terms used in this Note that are not otherwise defined herein shall have the same meanings herein as set forth in the Senior Financing Agreement.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, and the Issuer agree:

“ Applicable Margin ” means, as of any date of determination:

(i) From the date hereof through August 2, 2019, 8.75%.

Pricing Level	Consolidated EBITDA	Applicable Margin
1	< $10,000,000	8.75%
2	≥ $10,000,000 and < 15,000,000	8.50%
3	≥ $15,000,000	8.25%

(iv) Notwithstanding the foregoing:

(1) the Applicable Margin shall be set at Pricing Level 1 in the table above if for any period the Senior Agent does not receive the financial statements as required pursuant to the terms of the Senior Financing Agreement, and for the period commencing on the date such financial statements were required to be delivered through the date on which such financial statements and certificate are actually received by the Senior Agent;

“ LIBOR Rate ” means the greater of (a) two percent (2.00%), and (b) the offered rate per annum for three-month deposits of U.S. Dollars that appears on Reuters Screen Page LIBOR 01 at approximately 11:00 A.M. (London, England time) two (2) business days prior to the first day of such month; provided that, if such rate is not available, the LIBOR Rate shall be deemed to be a comparable successor or alternative rate that is, at such time, designated by the Senior Agent to be the rate utilized under the Senior Financing Agreement in lieu of LIBOR or, if the monetary obligations under the Senior Financing Agreement are no longer outstanding or the Senior Agent has not specified a rate in lieu of LIBOR, the rate that is, at such time, broadly accepted by the loan market in lieu of LIBOR ; provided, further, notwithstanding anything to the contrary contained herein, until such time as the monetary obligations under the Senior Financing Agreement are paid in full, any alternative LIBOR Rate utilized under this Note shall not exceed the LIBOR Rate applicable to the Senior Financing Agreement . LIBOR Rate shall be determined on a monthly basis.

All interest shall be computed on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed

3. Mandatory Prepayment. In each case subject to the terms of the Subordination Agreement, the Issuer shall make mandatory prepayments on this Note as follows:

(a) Upon any Disposition (as defined in the Senior Financing Agreement) of Non-Primary Brands (as defined in the Senior Financing Agreement) by any Loan Party or its Subsidiaries, the Issuer shall promptly (and in any event within two (2) Business Days) prepay the outstanding principal amount of the Note , in an amount equal to 50% of the Net Cash Proceeds (as defined in the Senior Financing Agreement) received by such Person in connection w ith such Disposition .

4. Yield Maintenance . (a) Subject to the terms of the Subordination Agreement, to the extent that any Lender or Agent makes any claim for additional payments pursuant to the terms of Section 2.10 of the Senior Financing Agreement, Holder shall be entitled to receive any such additional payments to the extent such additional payments would be due to Holder if it were a Lender under the Senior Financing Agreement.

(b) If at any time on or prior to May 4 , 2019, (i) (x) this Note is accelerated (or deemed accelerated), (y) the Issuer repays this Note (other than unasserted contingent obligation) in full in cash, or (z) the Issuer repays or is required to pay this Note in whole or in part, including, without limitation, as a voluntary or mandatory prepayment, as a result of an acceleration (including an automatic acceleration) of this Note after the occurrence of an Event of Default or upon the commencement of any proceeding pursuant to any Debtor Relief Law, or as a result of any refinancing of the Note, then on the effective date of such payment the Issuer shall pay to the Holder a prepayment premium equal to the greater of (i) 3.00% of the principal amount of this Note paid or required to be paid and (ii) the Lost Yield Revenue (as defined below) in respect of the principal amount of this Note paid or required to be paid.

5. Events of Default. The occurrence of any of the following shall constitute an “ Event of Default ” under this Note:

(c) any proceeding shall be instituted against Issuer or any Guarantor seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 45 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against any such person or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur; or

(d) Issuer or any Guarantor shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of indebtedness (excluding indebtedness evidenced by this Note) having an aggregate principal amount outstanding in excess of $750,000, including, without limitation, the Senior Financing Agreement, and such failure shall continue after the applicable grace or cure period, if any, specified in the agreement or instrument relating to such indebtedness, or any other default under any agreement or instrument relating to any such indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, in each case including, without limitation, the Senior Financing Agreement, if the effect of such def ault or event is to accelerate the maturity of such indebtedness; or any such indebtedness shall be, accelerated, declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such indebtedness shall be required to be made, in each case, prior to the stated maturity thereof . Waiver of any such default by the Holder shall not constitute a waiver under this event of default unless agreed by the Holder in writing.

7. Prepayment . This Note may be prepaid in whole or in part at any time, together with any accrued and unpaid interest, without premium, penalty or discount.

8. Successors and Assigns. The rights and obligations of the Issuer and the Holder of this Note shall be binding upon and benefit their respective permitted successors, assigns, heirs, administrators and transferees. The Issuer may not assign this Note, in whole or in part, without the written consent of the Holder. Subject to the Subordination Agreement, Holder may transfer, assign, hypothecate or otherwise convey its rights and obligations under this Note and any related documents and agreements, including the right to receive payment hereunder to any (i) Affiliates of the Holder or Cove Street Capital, LLC, (ii) funds or accounts managed or advised by the Holder or Cove Street Capital, LLC or any of their respective Affiliates or (iii) officers, directors, partners, shareholders (or similar roles) of the Holder or Cove Street Capital, LLC or any of their respective Affiliates, in each case, without the consent of the Issuer or any Guarantor.

9. Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of the Issuer and Holder.

(e) The Issuer hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this Note.

13. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK .

OR ATTORNEY OF THE HOLDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT HOLDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. ISSUER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER ENTERING INTO THIS NOTE

18. Note Issued in Exchange for Existing Participations .

[Signature Page Follows]

IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed as of the date first above indicated.

CHEROKEE INC. , as Issuer


By:		/s/ Henry Stupp
Name:		Henry Stupp
Title:		Chief Executive Officer

Signature Page to

Square Deal Exchange Note

AGREED AND ACCEPTED:

Square Deal Growth, LLC,

an Oklahoma limited liability company

By:	Cove Street Capital, LLC
	Its investment advisor

	By:	/s/ Eugene Robin
		Name: Eugene Robin
		Title: Principal

Signature Page to

Square Deal Exchange Note

81002359v.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Henry Stupp, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cherokee Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Dated: September 13, 2018	By:	/s/ Henry Stupp
		Henry Stupp
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven L. Brink, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cherokee Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Dated: September 13, 2018	By:	/s/ Steven L. Brink
		Steven L. Brink
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Cherokee Inc. (the “ Company ”) hereby certifies, to such officer’s knowledge, that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended August 4, 2018 (the “ Report ”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated: September 13, 2018	By:	/s/ Henry Stupp
		Henry Stupp
		Chief Executive Officer
		(Principal Executive Officer)

This certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated: September 13, 2018	By:	/s/ Steven L. Brink
		Steven L. Brink
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

This certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.