If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ]

(Page 1 of 16 Pages)

______________________________

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

This Amendment No. 18 (“Amendment No. 18”) amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on August 30, 2012 (the “Original Schedule 13D”), Amendment No. 1 to the Original Schedule 13D, filed with the SEC on September 5, 2012 (“Amendment No. 1”), Amendment No. 2 to the Original Schedule 13D, filed with the SEC on September 13, 2012 (“Amendment No. 2”), Amendment No. 3 to the Original Schedule 13D, filed with the SEC on September 17, 2012 (“Amendment No. 3”), Amendment No. 4 to the Original Schedule 13D, filed with the SEC on September 19, 2012 (“Amendment No. 4”), Amendment No. 5 to the Original Schedule 13D, filed with the SEC on September 21, 2012 (“Amendment No. 5”), Amendment No. 6 to the Original Schedule 13D, filed with the SEC on September 27, 2012 (“Amendment No. 6”), Amendment No. 7 to the Original Schedule 13D, filed with the SEC on October 1, 2012 (“Amendment No. 7”), Amendment No. 8 to the Original Schedule 13D, filed with the SEC on October 3, 2012 (“Amendment No. 8”), Amendment No. 9 to the Original Schedule 13D, filed with the SEC on October 5, 2012 (“Amendment No. 9”), Amendment No. 10 to the Original Schedule 13D, filed with the SEC on October 22, 2012 (“Amendment No. 10”), Amendment No. 11 to the Original Schedule 13D, filed with the SEC on February 13, 2013 (“Amendment No. 11”), Amendment No. 12 to the Original Schedule 13D, filed with the SEC on June 25, 2013 (“Amendment No. 12”), Amendment No. 13 to the Original Schedule 13D, filed with the SEC on August 22, 2013 (“Amendment No. 13”), Amendment No. 14 to the Original Schedule 13D, filed with the SEC on September 17, 2013 (“Amendment No. 14”), Amendment No. 15 to the Original Schedule 13D, filed with the SEC on December 17, 2013 (“Amendment No. 15”), Amendment No. 16 to the Original Schedule 13D, filed with the SEC on March 11, 2014 (“Amendment No. 16”), and Amendment No. 17 to the Original Schedule 13D, filed with the SEC on March 21, 2014 (“Amendment No. 17” and, together with the Original Schedule 13D, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment No. 11, Amendment No. 12, Amendment No. 13, Amendment No. 14, Amendment No. 15, Amendment No. 16 and this Amendment No. 18, the “Schedule 13D”) with respect to the Class A common stock, par value $0.10 per share (the “Class A Common Stock”), of The Wet Seal, Inc., a Delaware corporation (the “Issuer”). Capitalized terms used herein and not otherwise defined in this Amendment No. 18 have the meanings set forth in the Schedule 13D. This Amendment No. 18 amends Items 3, 4, 5, 6 and 7 as set forth below. This Amendment constitutes an “exit filing” with respect to the Schedule 13D for SPOT and Magnolia.

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: September 3, 2014

EXHIBIT 22

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of September 3, 2014, by and among B. Riley & Co., LLC (“B. Riley”), the Purchasers listed on Exhibit A hereto (the “Other Purchasers” and, together with B. Riley, the “Purchasers”), and The Wet Seal, Inc., a Delaware corporation (the “Company”).

WHEREAS, the Purchasers collectively wish to purchase, and the Company wishes to sell shares of the Company’s Class A common stock, par value $0.10 per share, (the “Common Stock”), for the per share price and upon the other terms and subject to the conditions set forth in this Agreement (the “Private Placement Stock”);

WHEREAS, to induce the Purchasers to purchase the Private Placement Stock, the Company shall either issue each purchaser a warrant to purchase Common Stock on the terms and subject to the conditions set forth in this Agreement or at the election of such purchaser, provide such purchaser a discount equal to of the lesser of (a) four percent (4%) of the Per Share Price (as defined below) and (b) $0.04 per share of Private Placement Stock;

WHEREAS, the Company is considering undertaking a rights offering (the “Rights Offering”) to raise equity capital, pursuant to which the Company expects to distribute, at no charge, to holders of its Common Stock (and to certain persons who have rights to acquire Common Stock) rights (the “Rights”) to purchase shares of Common stock (the “Rights Offering Stock”), which Rights, if any, will be distributed to shareholders and any other participants on a record date to be set by the Board of Directors of the Company (the “Board”);

WHEREAS, the Company intends to register under the Securities Act of 1933, as amended (the "Securities Act") (i) the Rights Offering Stock, if any, (ii) the Private Placement Stock and the Warrant Shares for resale (as defined below).

WHEREAS, the Company anticipates filing with the Securities and Exchange Commission (the “Commission”) (i) one registration statement with respect to the Rights and the Rights Offering Stock, to the extent it proceeds with the Rights Offering, and (ii) one registration statement with respect to the resale of the Private Placement Stock and the resale of the Warrant Shares (the “Resale Registration Statement”) pursuant to a registration rights agreement of even date herewith (the “Registration Rights Agreement”);

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Section 1.                 Purchase; Closing.

(a)                Purchase and Sale of the Private Placement Stock in Connection with Rights Offering; the Per Share Price. At the Closing (as defined below), and on the terms and subject to the conditions set forth herein, each Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to such Purchaser, a dollar value of Private Placement Stock equal to each such Purchaser’s “Commitment Amount” set forth opposite such Purchaser’s name on Exhibit A hereto ( “Commitment Amount”) at a per share purchase price equal to lesser of (i) $1.01, and (ii) 87.5% of the volume weighted-average price for the Common Stock on the NASDAQ Global Select Market (the “NASDAQ”)

over the twenty (20) consecutive trading day period (for the avoidance of doubt, the foregoing refers to the volume weighted-average price for the entire 20 trading day period) ending on the trading day immediately preceding the date the subscription price for the Rights Offering is set by the Company, provided, however, if the Company sets the subscription price for the Rights Offering at a price per share which is less than the price provided for in the previous sub-clause (i) or (ii) of this sentence, the per share purchase price shall be equal to the price per share offered to subscribers in the Rights Offering (such price is referred to as “Per Share Price”). The Per Share Price shall be determined prior to the filing of the Resale Registration Statement with the Commission.

(b)               Purchase and Sale of the Private Placement Stock if Rights Offering Not Consummated Within 180 Days. If the Rights Offering has not been consummated within 180 days of the date of this Agreement, and this agreement has not previously been terminated in accordance with Section 10, any Purchaser that has subscribed for at least 15% of the aggregate Commitment Amounts set forth in the second column of Exhibit A (an “Electing Purchaser”), may elect by providing written notice (the “Election Notice”) to the Company that such Electing Purchaser wishes to proceed with the purchase and sale of the Private Placement Stock on the terms and subject to the conditions set forth herein (the “Elective Purchase”), in which case the Electing Purchaser shall, at the Closing, purchase from the Company, and the Company shall sell to the Electing Purchaser, a dollar value of Private Placement Stock equal to the Electing Purchaser’s Commitment Amount set forth opposite the Electing Purchaser’s name on Exhibit A hereto at a per share purchase price equal to the lesser of (i) $1.01 and (ii) the exercise price for the Rights as set forth in the effective Rights Offering Registration Statement (as defined below), if any (the “Elective Purchase Price”). The Company shall provide each Purchaser that is not an Electing Purchaser (a “Non-Electing Purchaser”) a copy of the Election Notice and provide such Non-Electing Purchaser three (3) business days in which to provide the Company with notice of such Non-Electing Purchaser’s election to participate in the Elective Purchase. Any Non-Electing Purchaser that provides such notice (a “Tag Along Purchaser” and, together with any Electing Purchasers, “Participating Purchasers”) shall purchase a dollar value of Private Placement Stock equal to each such Purchaser’s Commitment Amount set forth opposite such Purchaser’s name on Exhibit A hereto at a per share purchase price equal to the Elective Purchase Price. Any purchaser that does not provide such notice to the Company in a timely manner of its election to participate in the Elective Purchase shall no longer be entitled to purchase Private Placement Stock pursuant to this Agreement. Notwithstanding anything else stated herein to the contrary, in the event of an Elective Purchase, this agreement shall not be terminable pursuant to Sections 10(a)(v) or 10(b)(iv) and the condition to Closing set forth in Section 6(c)(v) shall be suspended, in each case until 120 days after the date of the Election Notice (the “Final Date”).

(c)                Closing. Subject to the satisfaction or waiver of the conditions set forth in Section 6 of this Agreement, the closing of the purchase and sale of the Private Placement Stock (the “Closing”) shall take place at the offices of Paul Hastings LLP, 695 Town Center Drive, Costa Mesa, California 92626, at 10:00 a.m. local time on (i) the date of the closing of the Rights Offering or, (ii) with respect to Participating Purchasers, prior to the closing of the Rights Offering on (a) the date the Resale Registration Statement is declared effective by the Commission or, (b) on the Final Date if the Resale Registration Statement is not declared effective on or prior to the Final Date as to each Participating Purchasers that has delivered to the Company at least five business days before the Final Date a written notice that it has elected to purchase the Private Placement Stock despite the fact the Resale Registration Statement is not yet effective (with the Company providing a copy of such notice to any other Participating Purchaser), or such other place, time or date as may be determined by the parties hereto in writing (the “Closing Date”); provided, however, in no event shall the Rights Offering close prior to the Closing Date.

(d)               Payments to the Company. Payment shall be made to the Company by each Purchaser, on the Closing Date, against delivery of the Common Stock and the Warrants purchased by such Purchaser, in United States dollars by means of wire transfer of immediately available funds.

(e)                Obligations of the Purchasers Several. The failure of any Purchaser to close the transactions contemplated hereby shall not relieve any other Purchaser from such other Purchaser’s obligation to close with respect to its Commitment Amount.

(f)                Termination of Rights Offering Has No Effect on Obligations under this Agreement. At any time, the Company may in its sole discretion withdraw or terminate the Rights Offering upon providing written notice to B. Riley on behalf of the Purchasers.

(g)                Stock Dividends, Splits, Combinations, Reclassifications, Etc. Notwithstanding the foregoing, if, at any time prior to the Closing, the number of shares of Common Stock outstanding is increased or decreased due to a stock dividend, stock split, stock combination, reclassification or other similar transaction, immediately after the effective date for such combination, appropriate adjustments shall be made to all references to a per share price and the number of shares of Private Placement Stock and Warrants to be sold pursuant to this Agreement shall be appropriately adjusted.

Section 2.                 Purchaser Inducement. As an inducement for each Purchaser to enter into this Agreement and to complete the transactions contemplated hereby, in accordance with the election of each Purchaser set forth on Exhibit A, the Company hereby agrees to either (i) issue to such Purchaser, within three (3) business days of the execution of this Agreement, Warrants, in substantially the form attached hereto as Exhibit B (the “Warrants”), representing the right to acquire the number of shares of Common Stock set forth opposite such Purchaser’s name in the third column of Exhibit A at an exercise of $1.20 per share (the “Warrant Shares”) or (ii) sell to such Purchaser at the Closing the Private Placement Stock at a discount of the lesser of (a) four percent (4%) of the Per Share Price and (b) $0.04 per share of Private Placement Stock (“Discounted Private Placement Stock”). Pursuant to the terms of the Warrants, the Warrants will first become exercisable on the day that is six months and one day after the date of issuance and have an expiration date that is five years after the date they first become exercisable.

Section 3.                 Company Termination Right. Notwithstanding any other provision contained in this Agreement, if at any time prior to Closing the volume weighted-average price for the Common Stock on NASDAQ over any fifteen (15) consecutive trading day period is below $0.80 (for the avoidance of doubt, the foregoing refers to the volume weighted-average price for the entire 15 trading day period) as determined by the Company (a “Below $0.80 15 Trading Day Period”), the Company may, in is sole discretion, elect to terminate this Agreement by providing written notice to the Purchasers within three business days after a Below $0.80 15 Trading Day Period (a “Company Termination”), after which neither the Company nor any Purchaser shall have any liability to any other party hereto or shall have any further obligations hereunder, except that (i) the Company shall be required to pay the fees required to be paid to B. Riley in such event pursuant to the terms of a placement agency agreement in the form attached hereto as Exhibit C (the “Placement Agency Agreement”), (ii) each Purchaser that elected in Exhibit A to receive Warrants shall retain such the Warrants, (iii) each Purchaser that elected in Exhibit A to receive Discounted Private Placement Stock at the Closing shall be entitled to receive, within five (5) business days of a Company Termination, a cash payment from the Company equal to four percent (4%) of such Purchaser’s Commitment Amount (as set forth on Exhibit A) and (iv) Sections 4, 5, 9(a) through (c), 9(i) 11, and 12 through 17 shall survive. This Company Termination right is in addition to the rights of the parties to terminate this Agreement pursuant to Section 10 below.

Section 4.                 Representations and Warranties of the Purchasers. Each Purchaser, individually and severally, represents, warrants and covenants to the Company as follows:

(a)                Accredited Investor; Information; Knowledge of Business; Financial Capacity. Such Purchaser is an “Accredited Investor” within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act. Each Purchaser, whether through its members and affiliates or otherwise, is

familiar with the business in which the Company is engaged. Each Purchaser (through its members and affiliates, if applicable) has knowledge and experience in financial and business matters, is familiar with investments such as the Private Placement Stock and the Warrants, is fully aware of the risks involved in making an investment of this type, and is capable of evaluating the merits and risks of this investment. Each Purchaser acknowledges that, before executing this Agreement, it or its representatives have had the opportunity to ask questions of and receive answers or obtain additional information from a representative of the Company concerning the financial and other affairs of the Company. Without limiting the foregoing, each Purchaser is aware of the terms to be contained in the Senior Convertible Note and Warrants between the Company and Hudson Bay Master Fund Ltd. which the Company is exchanging pursuant to the Exchange Agreement (as defined below) with Hudson Bay Master Fund to be entered into on or about the date hereof. Each Purchaser has adequate capital and means of providing for current needs to sustain a complete loss of such Purchaser’s investment in the Company.

(b)               Existence and Good Standing; Authority; Residency. Such Purchaser is validly existing and in good standing under the laws of the State of its formation and has all requisite power and authority to carry on its business as now conducted. Such Purchaser is a resident of the jurisdiction listed in his address in the first column (Name and Address) of Schedule A.

(c)                Authorization of Agreement; Enforceability. This Agreement has been duly and validly authorized, executed and delivered by such Purchaser. This Agreement is valid, binding and enforceable against such Purchaser in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

(d)               Restricted Securities. Except as provided in Section 8, such Purchaser understands that:

(i)                 the offer and sale (the “Placement”) of Private Placement Stock and Warrants (collectively, the “Securities”) have not been, and will not be, registered under the Securities Act;

(ii)               the Securities and the Warrant Shares will be “restricted securities” as defined in Rule 144(a)(3) promulgated under the Securities Act and the certificate(s) representing the Securities and the Warrant Shares will bear appropriate legends to that effect; and

(iii)             the Purchaser must hold such shares indefinitely unless their disposition is registered with the Commission and qualified by applicable state authorities or exemptions from such registration and qualification are available.

(e)                Availability of Funds. Such Purchaser has and will have available sufficient funds to pay such Purchaser’s respective Commitment Amount as and when required hereunder.

(f)                Investment Intent. Such Purchaser is acquiring the Securities for its own account, with the intention of holding such Securities for investment and with no present intention of participating, directly or indirectly, in a distribution of the shares; provided, however, by making the representations herein, such Purchaser does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. Such Purchaser does not presently have any agreement or understanding, directly or indirectly, with any Person (as defined below) to distribute any of the Securities. For purposes of this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(g)                No Manipulation or Stabilization of Price; Regulation M Compliance. Subject to Section 5(oo), such Purchaser has not taken since the date first contacted regarding this investment in the Company and will not take, directly or indirectly, at any time prior to the Closing any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise, stabilization or manipulation of the price of any security of the Company in order to facilitate the sale or resale of any securities of the Company, and such Purchaser is not aware of any such action taken or to be taken by any Person. Without limiting the generality of the foregoing, such Purchaser has not and will not bid for, purchase, or, pay any compensation for soliciting purchases of, any securities of the Company, or pay or agree to pay to any Person any compensation for soliciting another to purchase any securities of the Company, in each case in violation of Regulation M under the Exchange Act.

(h)               Brokers, Finders, etc. All negotiations relating to this Agreement and the transactions contemplated hereby have been carried on in such manner as to not give rise to any valid claim against the Company for any brokerage or finder’s commission, fee or similar compensation based upon arrangements made by or on behalf of any Purchaser, other than arrangements made between the Company and B. Riley.

(i)                 No Conflicts. The execution, delivery and performance by such Purchaser of this Agreement and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to perform its obligations hereunder.

Section 5.                 Representations and Warranties of the Company. The Company represents and warrants to each Purchaser as follows:

(a)                Existence and Good Standing; Authority. Each of the Company and each Subsidiary (defined below), has been duly organized and is validly existing as a corporation in good standing under the laws of its jurisdiction of organization and has all power and authority necessary to own, hold or lease its properties and to conduct the business in which it is engaged and as described in the Company Reports. The term “Company Reports” means (i) the reports, schedules, forms, statements and other documents filed by the Company under the Securities Act and the Exchange Act after February 3, 2013 and prior to the date hereof. Each of the Company and each Subsidiary is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification and has all power and authority necessary to own, hold or lease its properties and to conduct the business in which it is engaged and as described in the Company Reports, except where the failure to so qualify or have such power or authority (i) would not have, individually or in the aggregate, a material adverse effect on the condition (financial or otherwise), results of operations, assets or business of the Company or any Subsidiary, taken as a whole, or (ii) impair in any material respect the ability of the Company to perform its obligations under this Agreement or to consummate any transactions contemplated by this Agreement (any such effect as described in clauses (i) or (ii), a “Material Adverse Effect”). The Company owns or controls, directly or indirectly, only the following corporations, partnerships, limited liability partnerships, limited liability companies, associations or other entities: The Wet Seal Catalog Inc. (Delaware), The Wet Seal GC, LLC (Virginia) and The Wet Seal Retail Inc. (Delaware) (each a “Subsidiary” and collectively, the “Subsidiaries”), and has no other interest, nominal or beneficial, direct or indirect, in any other corporation, joint venture or other business entity.

(b)               Authorization of Agreement; Enforceability. This Agreement and the Warrants have been duly and validly authorized, executed and delivered by the Company. This Agreement and the Warrants are valid, binding and enforceable against the Company in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

(c)                Capitalization. The Company has 300,000,000 shares of Common Stock and 10,000,000 shares of Class B convertible common stock, $0.10 par value per share (“Class B Common Stock”) authorized, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable, have been issued in compliance with federal and state securities laws. As of August 2, 2014, there were: (i) 84,860,314 shares of Common Stock, issued and outstanding; (ii) 0 shares of Class B Common Stock outstanding; (iii) 25,524,108 shares of Common Stock issuable upon the exercise of all then outstanding options, warrants and other convertible securities then outstanding; and (iv) additional shares of Common Stock issuable upon the vesting of restricted stock units. Since such date through the date of this Agreement, the Company has not issued any securities, other than (i) Common Stock of the Company issued pursuant to the exercise of stock options and equity awards issued pursuant to equity compensation plans disclosed in the Company Reports and (ii) the exchange of securities contemplated by the Amendment, Consent and Exchange Agreement with Hudson Bay Master Fund Ltd. (the “Exchange Agreement”), pursuant to which the related Senior Convertible Note and the related Warrant are being exchanged for the Senior Convertible Note and related Warrant previously issued to Hudson Bay Master Fund Ltd. All of the Company’s options, warrants and other rights to purchase or exchange any securities for shares of the Company’s capital stock have been duly authorized and validly issued and were issued in compliance with federal and state securities laws. None of the outstanding shares of Common Stock was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company.

(d)               Consents and Approvals. Except for (i) such consents and governmental approvals that have been previously received, (ii) any vote required by NASDAQ Stock Market Listing Rule 5635, (iii) the approval by the Nasdaq Stock Market of an application for the listing of the Private Placement Stock and the Warrant Shares and (iv) declaration of effectiveness of the Resale Registration Statement by the staff of the Commission, no consent or governmental approval is required on the part of the Company in connection with the execution and delivery by the Company of this Agreement or the consummation of the purchase and sale of the Private Placement Stock and the issuance of the Warrants.

(e)                Due Authorization and Securities; Reservation of Warrant Shares. All corporate actions required to be taken for the authorization, issuance and sale of the Warrants have been duly and validly taken. All of the Securities to be issued pursuant to this Agreement have been duly authorized for issuance, and, when issued in accordance with the provisions of this Agreement will be validly issued, fully paid and non-assessable, and none of such Securities will have been issued in violation of the preemptive rights of any security holders of the Company arising as a matter of law or under or pursuant to the Company’s Restated Certificate of Incorporation, as amended, the Company’s Amended and Restated By-laws or any material agreement or instrument to which the Company is a party or by which it is bound. As of the time of issuance of the Warrants, the Warrant Shares shall have been reserved for issuance upon exercise of the Warrants.

(f)                Subsidiaries. All the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable and, except to the extent set forth in

the Company Reports, are owned by the Company directly or indirectly through one or more wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party. No current director, officer or key employee of the Company named in a Company Report holds any direct equity, debt or other pecuniary interest in any Subsidiary or, to the best of the Company’s knowledge, any Person with whom the Company or any Subsidiary does business or is in privity of contract with, other than, in each case, indirectly through the ownership by such individuals of shares of Common Stock.

(g)                Auditors. Deloitte & Touche LLP, which has provided an audit opinion concerning the Company’s financial statements and schedules, if any, in the Company’s Form 10-K for the fiscal year ended February 1, 2014, has audited the Company’s financial statements and is an independent registered public accounting firm as required by the Securities Act and the Rules and Regulations and the Public Company Accounting Oversight Board (United States) (the “PCAOB”). Deloitte and Touche LLP has not been engaged by the Company to perform any “prohibited activities” (as defined in Section 10A of the Exchange Act).

(h)               Financial Statements. The financial statements, together with the related notes and schedules, included in the Company Reports fairly present the financial position and the results of operations and changes in financial position of the Company and its Subsidiaries at the respective dates or for the respective periods therein specified. Such statements and related notes and schedules have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved except as may be set forth in the related notes included in the Company Reports. The financial statements, together with the related notes and schedules, included in the Company Reports comply in all material respects with the Exchange Act and the rules and regulations promulgated thereunder.

(i)                 Certain Events Subsequent to Audited Financial Statements. Since the date of the latest audited financial statements included in the Company Reports, the Company has not incurred any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Company Reports; and, since such date, there has not been any change in the capital stock or long-term debt of the Company or any Subsidiary, or any material adverse changes in or affecting the business, assets, general affairs, management, financial position, stockholders’ equity or results of operations of the Company or any Subsidiary otherwise than as set forth or contemplated in the Company Reports.

(j)                 Licenses, Certificates, Authorizations, Permits, Etc.. Each of the Company and each Subsidiary possesses all licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate local, state, federal or foreign regulatory agencies or bodies which are necessary or desirable for the ownership of its properties or the conduct of its businesses as described in the Company Reports (collectively, the “Governmental Permits”) except where any failures to possess or make the same, individually or in the aggregate, would not have a Material Adverse Effect. All such Governmental Permits are valid and in full force and effect, except where the validity or failure to be in full force and effect would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary has received notification of any revocation or modification (or investigation, inquiry or proceedings related thereto) of any such Governmental Permit and the Company has no knowledge that any such Governmental Permit will be revoked, suspended or modified in a manner adverse to the Company or a Subsidiary or will not be renewed, except where such revocation, suspension or modification would not have a Material Adverse Effect.

(k)               Investment Company Act. The Company is not, and will not be, after giving effect to the offering of the Securities pursuant to this Agreement and the application of the proceeds thereof be required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

(l)                 Intellectual Property. Except as described in the Company Reports, the Company owns or possesses the right to use all patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licenses, inventions, software, databases, know-how, Internet domain names, trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures, and other intellectual property (collectively, “Intellectual Property”) necessary to carry out its respective businesses as currently conducted and as described in the Company Reports, and the Company is not aware of any claim to the contrary or any challenge by any other person to the rights of the Company or any Subsidiary with respect to the foregoing except for those that would not reasonably be expected to have a Material Adverse Effect. Each of the Company and each Subsidiary have complied in all material respects with, and is not in breach nor has received any asserted or threatened claim of breach of, any Intellectual Property license, where such breach would result in a Material Adverse Effect and the Company has no knowledge of any breach or anticipated breach by any other person to any Intellectual Property license. To the Company’s knowledge, the Company’s and each Subsidiary’s respective businesses as now conducted and as proposed to be conducted (as described in the Company Reports) does not and will not infringe or conflict with any patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses or other Intellectual Property or franchise right of any person. Except as described in the Company Reports, no claim has been made against the Company or any Subsidiary alleging the infringement by the Company or any Subsidiary of any patent, trademark, service mark, trade name, copyright, trade secret, license in or other intellectual property right or franchise right of any person, except for those that would not, individually or in the aggregate, have a Material Adverse Effect. Each of the Company and each Subsidiary has taken all reasonable steps to protect, maintain and safeguard its rights in all Intellectual Property. The consummation of the transactions contemplated by this Agreement will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other person in respect of, the Company or any Subsidiary’s right to own, use, or hold for use any of the Intellectual Property as owned, used or held for use in the conduct of the businesses as currently conducted. No claims have been asserted or, to the best of the Company’s knowledge, threatened against the Company or any Subsidiary alleging a violation of any person’s privacy or personal information or data rights and the consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any law related to privacy, data protection, or the collection and use of personal information collected, used, or held for use by the Company or any Subsidiary in the conduct of the Company’s or any Subsidiary’s business. Each of the Company and each Subsidiary takes reasonable measures to ensure that such information is protected against unauthorized access, use, modification, or other misuse, except for those that would not have a Material Adverse Effect.

(m)             Real and Personal Property. Each of the Company and each Subsidiary has good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company and any Subsidiary, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, individually or in the aggregate, materially affect the business of the Company and do not interfere with the use made of such property by the Company or any Subsidiary; and all of the leases and subleases material to the business of the Company and any Subsidiary, and under which the Company holds properties described in the Company Reports, are, to the Company’s knowledge in full force and effect, and neither the Company nor any Subsidiary has received any notice of any material claim of any sort that have been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease, which would result in a Material Adverse Effect.

(n)               Labor Relations. No labor dispute by the employees of the Company or any Subsidiary exists or, to the best of the Company’s knowledge, is imminent. The Company is not aware that any key employee or significant group of employees of the Company or any Subsidiary plans to terminate employment with the Company or any Subsidiary.

(o)               Environmental Laws. Each of the Company and each Subsidiary is in compliance with all foreign, federal, state and local rules, laws and regulations, as applicable, relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to its businesses (“Environmental Laws”), except where the failure to comply would not, individually or in the aggregate, have a Material Adverse Effect. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any Subsidiary (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or any Subsidiary is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company or any Subsidiary, or upon any other property, in violation of any United States law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability which would not have, individually or in the aggregate with all such violations and liabilities, a Material Adverse Effect.

(p)               Taxes. Each of the Company and each Subsidiary (i) has filed all necessary federal, state, local and foreign tax returns, and all such returns were materially true, complete and correct, (ii) has paid all federal, state, local and foreign taxes, assessments, governmental or other charges due and payable for which it is liable, including, without limitation, all sales and use taxes and all taxes which the Company or any Subsidiary is obligated to withhold from amounts owing to employees, creditors and third parties, and (iii) does not have any tax deficiency or claims outstanding or assessed or, to the best of its knowledge, proposed against any of them, except those, in each of the cases described in clauses (i), (ii) and (iii) of this paragraph (p), that would not, singularly or in the aggregate, have a Material Adverse Effect. Each of the Company and each Subsidiary has not engaged in any transaction which is a corporate tax shelter or which could be characterized as such by the Internal Revenue Service or any other taxing authority, in each case, that would violate applicable law. The accruals and reserves on the books and records of the Company and each Subsidiary in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any reasonably likely assessments and related liabilities for any such period, and since inception each of the Company and each Subsidiary has not incurred any material liability for taxes other than in the ordinary course.

(q)               Insurance. Each of the Company and the Subsidiaries carry or are covered by insurance against such losses and risks and in such amounts as are reasonably considered prudent and customary in the respective businesses and industries in which the Company and its Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. The Company has no knowledge that it or any Subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect.

(r)                 Internal Controls. Each of the Company and each Subsidiary maintains a system of internal accounting and other controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is

compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Company Reports, since the end of the Company’s most recent audited fiscal year through the date hereof, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) 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.

(s)                Minutes. The minute books of the Company and each Subsidiary have been made available to the Placement Agent and counsel for the Placement Agent, and such books (i) contain a summary of all meetings and actions of the board of directors (including each board committee) and stockholders of the Company and each Subsidiary since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) reflect in all material respects all transactions referred to in such minutes.

(t)                 Franchises, Leases, Contracts, Agreements, Etc. There is no franchise, lease, contract, agreement or document required by the Exchange Act or by the rules and regulations promulgated thereunder to be described in a Company Reports or to be filed as an exhibit to a Company Report which is not described or filed therein as required; and all descriptions of any such franchises, leases, contracts, agreements or documents contained in the Company documents are accurate and complete descriptions of such documents in all material respects. Other than as described in the Company Reports, no such franchise, lease, contract or agreement has been suspended or terminated for convenience or default by the Company or any Subsidiary or any of the other parties thereto, and neither the Company nor any Subsidiary has received notice nor does the Company have any other knowledge of any such pending or threatened suspension or termination, except for such pending or threatened suspensions or terminations that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

(u)               Related Party Transactions. No relationship, direct or indirect, exists between or among the Company and any Subsidiary on the one hand, and the directors, officers, 5% or greater stockholders, customers or suppliers of the Company or any Subsidiary or any of the Company’s or such Subsidiary’s affiliates on the other hand, which is required to be described in the Company Reports and which is not so described.

(v)               Registration Rights. Except as disclosed in the Company Reports, no person or entity has the right to require registration of shares of Common Stock or other securities of the Company or any Subsidiary because of the filing or effectiveness of the Resale Registration Statement or otherwise, except for persons and entities who have expressly waived such right in writing or who have been given timely and proper written notice and have failed to exercise such right within the time or times required under the terms and conditions of such right. Except as described in the Company Reports, there are no persons with registration rights or similar rights to have any securities registered by the Company or any Subsidiary under the Securities Act.

(w)              Brokers, Finders, Etc. Neither the Company nor any Subsidiary is a party to any contract, agreement or understanding with any person (other than the B. Riley) that would give rise to a valid claim against the Company or B. Riley for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities, or any transaction contemplated by this Agreement. The Company (and not the Purchasers) shall be responsible for paying any brokerage commission, finder’s fee or like payment due to B. Riley.

(x)               Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in Company Documents has been made or reaffirmed, to the best of the Company’s knowledge, without a reasonable basis or has been disclosed other than in good faith.

(y)               OFAC. Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities contemplated hereby, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person or entity for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(z)                Registration under the Exchange Act; NASDAQ; The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and, prior to the Closing Date, the Private Placement Stock and the Warrant Shares will be approved for listing on the NASDAQ, and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the Stock under the Exchange Act or delisting the Stock from the NASDAQ, nor has the Company received any notification that the Commission is contemplating terminating such registration nor, except as described in the Company Reports, That The Nasdaq Stock Market is contemplating terminating such listing. No consent, approval, authorization or order of, or filing, notification or registration with, The Nasdaq Stock Market is required for the listing and trading of the Private Placement Stock or the Warrant Shares on the NASDAQ, except for an Additional Listing Application and a Notification Form; Change in Number of Shares Outstanding.

(aa)            Sarbanes-Oxley Act of 2002. Except as disclosed in the Company Reports, the Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and all applicable rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”) that are presently in effect.

(bb)           Nasdaq Corporate Governance Rules. The Company is in compliance in all material respects with all applicable corporate governance requirements set forth in the rules of the Nasdaq Stock Market that are then in effect, except as described in the Company Reports.

(cc)            Off-Balance Sheet Arrangements. There are no transactions, arrangements or other relationships between and/or among the Company or any Subsidiary, any of their affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including, but not limited to, any structure finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company or any Subsidiary’s liquidity or the availability of or requirements for its capital resources required to be described in the Company Reports which have not been described as required.

(dd)           Transactions with Company Officer. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company or any Subsidiary to or for the benefit of any of the executive officers or directors of the Company, any Subsidiary or any of their respective family members, except as disclosed in the Company Reports and except for such as do not violate Section 402 of the Sarbanes-Oxley Act. All transactions by the Company with office holders or control persons of the Company have been duly approved by the board of directors of the Company, or duly appointed committees or officers thereof.

(ee)            Statistical, Market and Related Data. The statistical and market related data included in the Company Reports are based on or derived from sources that the Company believes to be reliable and accurate in all material respects, and such data agree with the sources from which they are derived.

(ff)             Foreign Corrupt Practices Act. Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder; and the Company has instituted and maintain policies and procedures reasonably designed to ensure continued compliance therewith.

(gg)            Money Laundering. The operations of the Company are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the 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 applicable governmental agency (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator or non-governmental authority involving the Company with respect to the Money Laundering Laws is pending or, to the Company’s knowledge, threatened.

(hh)           Periodic Reports. The Company has filed in a timely manner all reports required to be filed pursuant to Sections 13(a), 14 and 15(d) of the Exchange Act during the preceding 12 months, except where the failure to timely file would not reasonably be expected individually or in the aggregate to have a Material Adverse Effect.

(ii)               Agreements Involving Key Persons. To the Company's knowledge, no director, officer, key employee or consultant of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer or prior employer which could materially affect his ability to be and act in his respective capacity of the Company or have a Material Adverse Effect on the Company.

(jj)               No Conflicts. The Company is not in violation of its Restated Certificate of Incorporation, as amended, or its Amended and Restated By-laws or in default under any agreement, indenture or instrument to which the Company is a party, the effect of which violation or default could reasonably be expected to have a Material Adverse Effect, and the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby will not conflict with, or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company pursuant to the terms of any agreement, indenture or instrument to which the Company is a party, which lien, charge or encumbrance could reasonably be expected to have a Material Adverse Effect, or result in a violation of the Company’s Restated Certificate of Incorporation, as amended, or the Company’s Amended and Restated By-laws or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company or any of its property, and, except as may be required by the Securities Act, the Exchange Act and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement.

(kk)           Litigation. Except as disclosed in the Company Reports, there are no actions, suits, investigations or proceedings at law or in equity or by or on behalf of any governmental entity or in arbitration pending as of the date hereof against, or to the knowledge of the Company threatened against, the Company or any of its subsidiaries or any business, property, officers, directors or rights of any such person relating to the Placement and the other transactions contemplated by this Agreement or that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(ll)               Private Placement. Neither the Company nor any Person acting on its behalf has offered to sell, or sold, the Private Placement Stock or Warrants by any form of general solicitation or general advertising (as those terms are used within the meaning of Regulation D (“Regulation D”) under the Securities Act). Neither the Company nor any Person acting on its behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering of the Private Placement Stock or Warrants to be integrated with any prior offering by the Company in a manner that could require the registration of the Private Placement Stock and Warrants under the Securities Act.

(mm)       Company Reports. The Company has timely filed all Company Reports. As of their respective dates, the Company Reports complied in all material respects with the requirements of the Exchange Act, or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder. None of the Company Reports, including any financial statements or schedules included or incorporated by reference therein (the “Financial Statements”), at the time filed or, if amended or superseded by a subsequent filing, as of the date of the last such amendment or superseding filing made at least two (2) Business Days prior to the date hereof, 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 light of the circumstances under which they were made, not misleading. The Financial Statements and the related notes have been prepared in accordance with accounting principles generally accepted in the United States, consistently applied, during the periods involved (except (i) as may be otherwise indicated in the Financial Statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes, may be condensed or summary statements or may conform to the Commission’s rules and instructions for Quarterly Reports on Form 10-Q) and fairly present in all material respects the consolidated financial position of the Company and its subsidiaries as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

(nn)           Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and other than certain financial information relating to the Company’s second fiscal quarter ended August 2, 2014 (collectively, the “Information”). The Company understands and confirms that each of the Purchasers will rely on the foregoing representations in effecting transactions in securities of the Company. Each press release issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or financial conditions, which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly announced or disclosed.

(oo)           Acknowledgement Regarding Purchasers’ Trading Activity. The Company acknowledges and agrees that following the public disclosure of the Information: (i) none of the Purchaser has been asked to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Private Placement Stock, Warrants, Warrant Shares or Rights Offering Stock for any specified term; (ii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock,

and (iii) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that following the public disclosure of the Information (a) one or more Purchasers may engage in hedging and/or trading activities at various times during the period that the Private Placement Stock, Warrants, Warrant Shares or Rights Offering Stock are outstanding, including, without limitation, during the periods that the value of the Private Placement Stock is being determined and (b) such hedging and/or trading activities, if any, can reduce the value of the existing stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Warrants or any of the documents executed in connection herewith.

(pp)           Shell Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1) of the 1933 Act.

Section 6.                 Conditions to Closing.

(a)                Conditions to the Parties’ Obligations. The obligations of the Company and the Purchasers to consummate the transactions contemplated hereunder in connection with the Placement are subject to the fulfillment or waiver, on or before the Closing Date, of the following conditions:

(i)                 no judgment, injunction, decree, regulatory proceeding or other legal restraint shall prohibit, or have the effect of rendering unachievable, the consummation of the Placement or the transactions contemplated by this Agreement;

(ii)               the Company has not exercised a Company Termination; and

(iii)             to the extent required, the Company shall have received approval from its shareholders pursuant to NASDAQ Listing Rule 5635 with respect to the issuance of all the Private Placement Stock and the Warrant Shares.

(b)               Conditions to Company’s Obligations. The obligations of the Company to consummate the transactions contemplated hereunder in connection with the Placement are subject to the fulfillment or waiver, on or before the Closing Date, of the following conditions:

(i)                 the representations and warranties of the Purchasers in Section 5 shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if made as of such date; and

(ii)               the Purchasers shall have performed all of their obligations hereunder.

(c)                Conditions to the Purchasers’ Obligations. The obligations of each Purchaser to consummate the transactions contemplated hereunder in connection with the Placement are subject to the fulfillment or waiver, before or on the Closing Date, of the following conditions:

(i)                 the representations and warranties of the Company in Section 4 shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if made as of such date (unless such representations and warranties are specifically made as of another date, in which case they shall be deemed made as of such specific date);

(ii)               the Resale Registration Statement shall have been declared effective by the Commission, and no stop order suspending the effectiveness of the Registration Statement shall have been issued under the Securities Act and no proceedings initiated under Section 8(d) or 8(e) of the Securities Act for that purpose shall be pending or threatened by the Commission;

(iii)             the Securities Act registration statement relating to the Rights Offering (the “Rights Offering Registration Statement”) shall have been declared effective by the Commission, the Company shall not have cancelled or withdrawn the Rights Offering and the Rights Offering shall have closed pursuant to the to the terms set forth in the Rights Offering Registration Statement;

(iv)             the Company shall have substantially performed its obligations hereunder; and

(v)               subject to Section 1(b), seven (7) months shall not have elapsed since the date of this Agreement.

Section 7.                 Survival. The representations and warranties of the parties contained in this Agreement or in any certificate delivered hereunder shall survive the Closing.

Section 8.                 Registration Rights. Subject to the terms and conditions of this Agreement and the Registration Rights Agreement, the Company shall prepare and file with the Commission after the execution of this Agreement the Resale Registration Statement covering the resale of the Private Placement Stock and the Warrant Shares.

Section 9.                 Covenants.

(a)                Removal of Restrictive Legends. Subject to the Company’s receipt of reasonable factual confirmations or certifications, no legal opinion shall be required to be delivered to remove a restrictive legend from the Private Placement Stock or the Warrant Shares if the Purchaser resells such Private Placement Stock pursuant to the Resale Registration Statement when effective or, to the extent such Purchaser is not an affiliate of the Company, requests the removal of restrictive legends from the Private Placement Stock after the one-year anniversary of the Closing of the transactions contemplated by the Purchase Agreement. To the extent permitted by the rules policies of The Depository Trust Company and the Company’s transfer agent, the shares of Private Placement Stock and the Warrant Shares shall be delivered to each Purchaser in electronic form.

(b)               Public Announcements. No Purchaser shall issue any public announcement, statement or other disclosure with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed, except if such public announcement, statement or other disclosure is required by applicable law or applicable stock market regulations, in which case such Purchaser shall consult in advance with respect to such disclosure with the Company to the extent reasonably practicable.

(c)                Expenses. Each party to this Agreement shall be responsible for its own fees and expenses, except that the Company shall reimburse (i) B. Riley for its reasonable out-of-pocket fees and expenses in negotiating this Agreement and the other documents contemplated hereby in an aggregate amount not to exceed $50,000 pursuant to the Placement Agency Agreement, and (ii) The Clinton Group, Inc. (“Clinton”) for its reasonable out-of-pocket fees and expenses in negotiating this Agreement and the other documents contemplated hereby in an aggregate amount not to exceed $10,000.

(d)               Clinton Nominee. Concurrently with the execution of this Agreement by the parties hereto, Clinton and the Company shall execute and deliver to each other the letter attached hereto as Exhibit D with respect to appointment by the Company of a director to the Board, which such director shall be a designee of Clinton reasonably acceptable to the Board as provided for in such letter.

(e)                Limitation on Obligations Purchasers. Notwithstanding anything to the contrary contained herein, the Company shall not effect the sale of any securities, and no Purchaser shall be obligated to complete the purchase of shares of the Private Placement Stock to the extent that such purchase would result such Purchaser would beneficially owning in excess of 9.99% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such purchase. For purposes of this Section 9(e), beneficial ownership shall be calculated in accordance with Section13(d)of the Exchange Act and Rule 13d-3 thereunder, and, for purposes of determining the Maximum Percentage in this Section 9(e), only shares of Private Placement Stock to be purchased by B. Riley pursuant to this Agreement shall be considered to be beneficially owned by B. Riley.

(f)                Placement Agency Agreement. Concurrently with the execution of this Agreement, the Company and B. Riley shall enter into the Placement Agency Agreement (the “Placement Agency Agreement”) pursuant to which, among other things, B. Riley will act as placement agent (the “Agent”) with respect to the Placement.

(g)                Dealer-Manager Agreement. The Company and B. Riley shall enter into a dealer-manager agreement with respect to the Rights Offering substantially in the form set forth in Exhibit E.

(h)               Obtaining Stockholder Approval. The parties hereto acknowledge that approval by the Company’s stockholders is required pursuant to NASDAQ Listing Rule 5635 prior to the issuance of all the Private Placement Stock and the Warrant Shares as contemplated by this Agreement and upon an exercise of the Warrants, respectively (“Stockholder Approval”). The Company shall, as soon as reasonably practicable after the date hereof, prepare and file a preliminary proxy statement with the Commission in order to seek such Stockholder Approval. The Company agrees to use commercially reasonable efforts to respond to any comments received from the staff of the Commission concerning such preliminary proxy statement and then prepare and file a definitive proxy statement and call a meeting of stockholders and seek Stockholder Approval as soon as reasonably practicable thereafter. Each of the Purchasers individually hereby irrevocably agrees with the Company (and not with any other Purchaser) that, to the extent such Purchaser is a stockholder of the Company and is entitled to vote on the Stockholder Approval proposal, then such Purchaser shall vote all of such Purchaser’s Common Stock in favor of the Stockholder Approval proposal.

(i)                 Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York City time, on the first business day after the date this Agreement has been executed, the Company shall issue a press release (or press releases) reasonably acceptable to the Purchasers and file one or more Current Reports on Form 8-K including with respect to the Information and describing the material terms of the transactions contemplated by this Agreement in the form required by the Exchange Act and attaching the material transaction documents (including, without limitation, this Agreement, the form of Warrant, the Placement Agency Agreement and the Registration Rights Agreement as exhibits to such filing (collectively, the “8-K Filing”). From and after the filing of the 8-K Filing with the SEC, no Purchaser shall be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Purchasers or any of their affiliates, on the other hand, shall terminate. The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide any Purchaser with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of the 8-K Filing with the SEC without the express prior written consent of such Purchaser. To the extent that the Company delivers any material,

non-public information to a Purchaser without such Purchaser’s consent Purchaser (or, if such consent is conditioned upon the release of such material, nonpublic information at a specific date, after such specific date), the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Purchaser shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Purchaser, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Purchaser shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Except for the 8-K Filing, the Registration Statement required to be filed pursuant to the Registration Rights Agreement or as otherwise required by law, without the prior written consent of any applicable Purchaser, neither the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Purchaser in any filing, announcement, release or otherwise.

(j)            Enforcement of B. Riley Commitment Letter.  The Company has entered into that certain letter agreement, dated September 3, 2014, between B. Riley and the Company, pursuant to which, among other things, B. Riley committed to purchase as principal or cause the purchase of, a total of $12.5 million of Private Placement Stock pursuant to this Agreement.  B. Riley has agreed that, to the extent that by 5:00 pm (California time) on Thursday, September 4, 2014 the total of accounts and B. Riley have not accounted for $12.5 million of Private Placement Stock, B. Riley has committed to purchase Private Placement Stock equal to such shortfall (the “B. Riley Commitment”).  The Company hereby agrees, to enforce, to the fullest extent permitted by law, the B. Riley Commitment and shall not waive or terminate the B. Riley Commitment without the express written consent of each of the Purchasers. 

Section 10.             Termination.

(a)                By the Purchasers. Any Purchaser may terminate this Agreement, but only with respect to its own commitment, if:

(i)                 the Company materially breaches its obligations under this Agreement and such breach is not cured within five business days following written notice to the Company;

(ii)               consummation of the Placement is prohibited by applicable law, rules or regulations;

(iii)             the Resale Registration Statement may not be used to register the resale of the Private Placement Stock and/or Warrant Shares pursuant to the rules of the Commission or the interpretations of the staff of the Commission;

(iv)             a meeting of the Company’s stockholders is held to obtain Stockholder Approval and Stockholder Approval is not received from the Company’s stockholders at such meeting or any adjournment or postponement thereof; or

(v)               subject to Section 1(b), the Closing has not occurred within seven (7) months of the date of this Agreement.

(b)               By Company. The Company may terminate this Agreement if:

(i)                 any Purchaser materially breaches its obligations under this Agreement and such breach is not cured within five business days following written notice to such Purchaser, provided, however, the Company’s termination right pursuant hereto shall only be with respect to such breaching Purchaser;

(ii)               consummation of the Placement is prohibited by applicable law, rules or regulations;

(iii)             a meeting of the Company’s stockholders is held to obtain Stockholder Approval and Stockholder Approval is not received from the Company’s stockholders at such meeting or any adjournment or postponement thereof; or

(iv)             subject to Section 1(b), the Closing has not occurred within seven (7) months of the date of this Agreement; or

(v)               there is a Company Termination pursuant to Section 3.

(c)                Effect of Termination. The Company and the Purchasers hereby agree that any termination of this Agreement pursuant to this Section 10 (other than termination by one party in the event of a breach of this Agreement by the other party or a misrepresentation of any of the statements made hereby by the other party or a Company Termination pursuant to Section 3), shall be without liability to the Company or the Purchasers. In the event this Agreement is terminated, all Warrants issued pursuant to this Agreement shall survive, other than any Warrants issued to a Purchaser that has materially breached its obligations under this Agreement, which Warrants shall immediately terminate upon written notice to such Purchaser that this Agreement has been terminated pursuant to Section 10(b)(1) because such Purchaser materially breached its obligations under this Agreement. Notwithstanding the foregoing, Sections 4, 5, 9(a) through (c), 9(i) 11, and 12 through 17 shall survive any termination of this Agreement.

Section 11.             Notices. All notices, communications and deliveries required or permitted by this Agreement shall be made in writing signed by the party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (a)on the date delivered if delivered in person, (b) on the third business day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid) or (c)on the day after it is delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows:

If to the Company:

The Wet Seal, Inc.
26972 Burbank
Foothill Ranch, CA 92610
Facsimile: (949) 699-4825
Attn: Chief Financial Officer

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

Paul Hastings LLP
695 Town Center Drive
Costa Mesa, CA92626
Attn: Stephen D. Cooke
Facsimile: (714) 979-1921

If to any Purchaser, to his, her or its respective address in the Company’s records, or to such other representative or at such other address of a party as such party hereto may furnish to the other parties in writing in accordance with this Section 10, with a copy to:

Manatt, Phelps & Phillips LLP

695 Town Center Drive, 14^th Floor

Costa Mesa, CA 92646

Attention: Thomas J. Poletti, Esq.

Facsimile: (714) 371-2551

Section 12.              Entire Agreement. This Agreement constitutes the entire agreement and understanding between the Purchasers and the Company, and supersedes all prior agreements and understandings relating to the subject matter hereof.

Section 13.             Indemnification by Company. To the fullest extent permitted by law, the Company hereby agrees to indemnify and hold harmless the Purchasers and each of their respective affiliates, and their respective directors, officers and authorized agents from and against any and all losses, claims, damages, expenses and liabilities relating to or arising out of any breach of any representation, warranty, covenant or undertaking made by or on behalf of the Company in this Agreement.

Section 14.             Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

Section 15.             Amendments. This Agreement may be modified or amended only with the written consent of the each of the parties hereto. If the Company pays consideration to any Purchaser in connection with obtaining an amendment, modification, supplement, waiver or consent under this Agreement, the Company shall offer to pay such consideration to all other Purchasers.

Section 16.             Severability. If any provision of this Agreement shall be held invalid, unlawful, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected.

Section 17.             Miscellaneous.

(a)                Notwithstanding any term to the contrary herein, no Person other than the Company or the Purchasers shall be entitled to rely on and/or have the benefit of, as a third party beneficiary or under any other theory, any of the representations, warranties, agreements, covenants or other provisions of this Agreement.

(b)               The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning of this Agreement.

(c)                This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same instrument.

(d)               No Purchaser shall assign this Agreement or any of its rights hereunder without the Company’s prior written consent.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first set forth above.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first set forth above.

EXHIBITA

The Agent

The Purchasers

EXHIBIT B – FORM OF WARRANT

EXHIBIT C –PLACEMENT AGENCY AGREEMENT

EXHIBIT D – LETTER AGREEMENT RE CLINTON NOMINEE

EXHIBIT E – FORM OF DEALER MANAGER AGREEMENT

EXHIBIT 23

[FORM OF WARRANT]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

THE WET SEAL, INC.

Warrant to Purchase Common Stock

Warrant No.:
Number of Shares of Common Stock: _____________
Date of Issuance: September [___], 2014 (“Issuance Date”)

The Wet Seal, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [______], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after [_______]^[1] (the “Initial Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), [______________ (_____________)]^[2] fully paid nonassessable shares of Common Stock, subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings set forth in Section 18. This Warrant is one of the Warrants to purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 2 of that certain Securities Purchase Agreement, dated as of September [2], 2014 (the “Subscription Date”), by and among the Company and the purchasers (the “Purchasers”) referred to therein (the “Securities Purchase Agreement”). Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Securities Purchase Agreement.

^[1] Insert the date six months and one day after the Issuance Date.

^[2] Each Purchaser to receive 150,000 warrants per $1 million Commitment Amount committed by such Purchaser.

1.                  EXERCISE OF WARRANT.

(a)                Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash by wire transfer of immediately available funds or (B) if the provisions of Section 1(d) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first (1st) Trading Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd) Trading Day following the date on which the Company has received the Exercise Notice, so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2nd) Trading Day following the date on which the Company has received the Exercise Notice (the “Share Delivery Date”) (provided that if the Aggregate Exercise Price has not been delivered by such date, the Share Delivery Date shall be one (1) Trading Day after the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this

Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination. Notwithstanding anything to the contrary contained in this Warrant or the Registration Rights Agreement, the Company shall cause the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) for delivery via DTC to the transferee in connection with any sale of Registrable Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular Resale Registration Statement (as defined in the Registration Rights Agreement) to the extent applicable, after the effective date of such Registration Statement and prior to the Holder’s receipt of the notice of a Delay Period (as defined in the Registration Rights Agreement) and for which the Holder has not yet settled.

(b)               Exercise Price. For purposes of this Warrant, “Exercise Price” means $1.20, subject to adjustment as provided herein.

(c)                Company’s Failure to Timely Deliver Securities. If the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the Share Delivery Date (a “Delivery Failure”) either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant or (II) if the Resale Registration Statement (as defined in the Registration Rights Agreement) covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in clause (I) above, an “Exercise Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for

the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account with DTC for such shares of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii). Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof.

(d)               Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than the limitations set forth in Section 1(f)), if the Resale Registration Statement (as defined in the Registration Rights Agreement) covering the resale of the Unavailable Warrant Shares is not available for the resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

For purposes of the foregoing formula:

For purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the date hereof, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Securities Purchase Agreement.

(e)                Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.

(f)                Beneficial Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including the other SPA Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in the most recent of (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission (the

“SEC”), as the case may be, (y) a more recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

(g)               Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant at least a number of shares of Common Stock equal to 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of this Warrant then outstanding (the “Required Reserve Amount” and the failure to have such sufficient number of authorized and unreserved shares of Common Stock, an “Authorized Share Failure”), then the

Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its reasonable best efforts to solicit its shareholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the shareholders that they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares of its issued and outstanding Common Stock to approve the increase in the number of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information Statement on Schedule 14C. In the event that upon any exercise of this Warrant, the Company does not have sufficient authorized shares to deliver in satisfaction of such exercise (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”), then unless the Holder elects to void such attempted exercise, the Holder may require, within three (3) Trading Days of the applicable exercise, in lieu of delivering such Authorization Failure Shares to the Holder, the Company to pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of the shares of Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment under this Section 1(g) and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith

2.                  ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

(a)                Stock Dividends and Splits. Without limiting any provision of Section 4, if the Company, at any time on or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or

distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.

(b)               Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).

(c)                Calculations. All calculations under this Section 2 shall be made by rounding to the nearest 1/100th of cent or the nearest share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.

(d)               Voluntary Adjustment by Company. The Company may at any time during the term of this Warrant, with the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

3.                  RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), in each case excluding the issuance of the Designated Securities in connection with the Designated Transactions (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and

any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).

4.                  PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

(a)                Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without taking into account any limitations or restrictions on exercise of this Warrant) immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage (such excess number of shares of Common stock, the “Purchase Right Excess Shares”), then at the Company’s option, either (x) the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time, or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation) or (y) the Holder shall receive upon exercise of any Purchase Rights for Purchase Right Excess Shares and the payment of the subscription price therefor (and in lieu of such Purchase Right Excess Shares) a right to acquire such Purchase Right Excess Shares in the future without the payment of any additional consideration (the “Excess Share Right”), which Excess Share Right shall contain a limitation on exercise in the form of Section 1(f) above, mutatis mutandis. If requested by the Company, the Holder shall promptly provide the Company with such information as the Company reasonably requests in order for the Company to determine the Holder’s and the Attribution Parties beneficial ownership.

(b)               Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements, if so requested by the Holder, to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an

exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and (ii) except to the extent of a Change of Control in which the Company (or the Successor Entity), as applicable, complies with Section 4(c) below in all respects, the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market (a “Public Company”). If the Successor Entity (or its Parent Entity) is a Public Company and the Company (or the Successor Entity), as applicable, complies with Section 4(c) below in all respects, upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of Common Stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.

(c)                Black-Scholes Redemption Right. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Change of Control, (y) the consummation of any Change of Control and (z) the Holder first becoming aware of any Change of Control through the date that is ninety (90) days after the public disclosure of the consummation of such Change of Control by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder on the later of (x) the fifth (5th) Trading Day after the date of such request and (y) the date of consummation of such Change of Control, as applicable, by paying to the Holder cash in an amount equal to the Black Scholes Value. For the avoidance of doubt, if a potential Change of Control is not consummated, the Holder shall have no right to be redeemed pursuant to this Section 4(c) in connection therewith.

(d)               Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).

5.                  NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, 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 of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the SPA Warrants, 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without regard to any limitations on exercise).

6.                  WARRANT HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant

Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.

7.                  REISSUANCE OF WARRANTS.

(a)                Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

(b)               Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.

(c)                Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no SPA Warrants for fractional Warrant Shares shall be given.

(d)               Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

8.                  AGREEMENTS OF THE HOLDER.

(a)                The Holder hereby agrees that this Warrant and all rights of the Holder hereunder shall terminate upon notice of termination of the Securities Purchase Agreement pursuant to Section 10(b)(i) as a result of Holder’s material breach of its obligations under the Securities Purchase Agreement.

(b)               The Company shall not be obligated to issue any shares of Common Stock pursuant to the terms of this Warrant, and the Holder shall not have the right to receive pursuant to the terms of this Warrant any shares of Common Stock, if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the Company may issue pursuant to the terms of the Securities Purchase Agreement and the Warrants without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (i) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of Common Stock in excess of such amount or (ii) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Holder. Until such approval or written opinion is obtained, no Purchaser shall be issued in the aggregate, pursuant to the terms of the Securities Purchase Agreement in an amount greater than the product of the Exchange Cap multiplied by such Purchaser’s Holder Pro Rata Amount (with respect to each Purchaser, the “Exchange Cap Allocation”).

9.                  NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 11 of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) 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 shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the Commission (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.

10.              AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived 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 written consent of the Holder. The Holder shall be entitled, at its option, to the benefit of any amendment of (a) any other similar warrant issued under the Securities Purchase Agreement or (b) any other similar warrant. No consideration shall be offered or paid to the Holder to amend or consent to a waiver or modification of any provision of this Warrant unless the same consideration is also offered to all of the holders of the other SPA Warrants. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.

11.              GOVERNING LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 11 of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

12.              CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all the Purchasers and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

13.              DISPUTE RESOLUTION.

(a)                Submission to Dispute Resolution.

(i)                 In the case of a dispute relating to the Exercise Price, the Closing Sale Price, Option Value, Black Scholes Value or fair market value or the arithmetic

calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Option Value, Black Scholes Value or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, subject to the Consent of the Company, not to be unreasonably withheld, select an independent, reputable investment bank to resolve such dispute.

(ii)               The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 13 and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).

(iii)             The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be split 50/50 by the Company and the Holder (or, to the extent any other holders of SPA Warrants submitted such dispute to dispute resolution, such 50% shall be allocated and paid pro rata by the Holder and such applicable other holders of SPA Warrants based upon the number of shares of Common Stock then issuable upon exercise of the Warrant of the Holder and the SPA Warrants of the such other Holders), and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent manifest error.

(b)               Miscellaneous. The Company and the Holder each expressly acknowledge and agree that (i) this Section 13 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that either the Company or the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 13, (ii) a dispute relating to the Exercise Price, (iii) the terms of this Warrant and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Warrant and any other applicable Transaction Documents, (iv) either the Holder or the Company, in its sole discretion, shall have the right to submit any dispute described in this Section 13 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 13 and (v) nothing in this Section 13 shall limit the Holder or the Company from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 13).

14.              REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

15.              TRANSFER. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company.

16.              SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

17.              DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries (as defined in the Securities Purchase Agreement), the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.

18.              CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

(a)                “1933 Act” means the Securities Act of 1933, as amended.

(b)               “Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or sale of shares of Common Stock (other than rights of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).

(c)                “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

(d)               “Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts,

currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.

(e)                “Approved Stock Plan” means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer, consultant or director for services provided to the Company.

(f)                “Bid Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.) as of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

(g)               “Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Weighted Average Price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable Change of Control (or the consummation of the applicable Change of Control, if earlier) and ending on the Trading Day of the Holder’s request pursuant to Section 4(c) and (2) the sum of the price per share being offered in cash in the applicable Change of Control (if any) plus the value of the non-cash consideration being offered in the applicable Change of Control (if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Change

of Control or as of the date of the Holder’s request pursuant to Section 4(c) if such request is prior to the date of the consummation of the applicable Change of Control, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable Change of Control and (B) the consummation of the applicable Change of Control.

(h)               “Bloomberg” means Bloomberg Financial Markets.

(i)                 “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

(j)                 “Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its direct or indirect wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification or (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.

(k)               “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 13. All such determinations to be appropriately adjusted for any

stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

(l)                 “Common Stock” means (i) the Company’s shares of Class A Common Stock, par value $0.10 per share, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

(m)             “Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.

(n)               “Designated Securities” means any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property offered pro rata to record holders of any class of Common Stock in the Rights Offering.

(o)               “Designated Transactions” means the Rights Offering and the transactions contemplated by the Securities Purchase Agreement, pursuant to which, among other things, the Holder and certain other purchasers party thereto will agree to purchase, in a private placement separate from the Rights Offering, shares of Common Stock and receive warrants to purchase shares of Common Stock, in each case pursuant to the terms and conditions of such Securities Purchase Agreement.

(p)               “Eligible Market” means the Principal Market, the NYSE MKT LLC, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market or The New York Stock Exchange, Inc.

(q)               “Expiration Date” means the date sixty (60) months after the Initial Exercisability Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next day that is not a Holiday.

(r)                 “Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation) any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify the Common

Stock (which shall not include a reverse stock split), or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

(s)                “Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

(t)                 “Holder Pro Rata Amount” means a fraction (i) the numerator of which is the aggregate number of Warrants issued to the Holder of this Warrant on the Issuance Date and (ii) the denominator of which is the aggregate number of Warrants issued to the Purchasers pursuant to the Securities Purchase Agreement on the Issuance Date. In the event the initial Holder of this Warrant (or any subsequent transferee) shall sell or otherwise transfer or assign any portion of its Warrant, the transferee thereof shall be allocated a pro rata portion of such Holder Pro Rata Amount.

(u)               “Option Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the case may be) determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable of such Option, Convertible Security or Adjustment Right (as the case may be), if the issuance of such of such Option, Convertible Security or Adjustment Right (as the case may be) is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option is not publicly announced, for pricing purposes calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) the underlying price per share used in such calculation shall be the highest Weighted Average Price of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive documentation relating to the issuance of such Option or Convertible Security (as the case may be) and ending on (A) the Trading Day immediately following the public announcement of such issuance, if the issuance of such Option, Convertible Security or Adjustment Right (as the case may be) is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Option if the issuance of such Option, Convertible Security or Adjustment Right (as the case may be) is not publicly announced, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of (A) the Trading Day immediately following the public announcement of the applicable Option if the issuance of such Option is publicly announced or (B) the Trading Day immediately following the issuance of the applicable of such Option, Convertible Security or Adjustment Right (as the case may be) if the issuance of such of such Option, Convertible Security or Adjustment Right (as the case may be) is not publicly announced.

(v)               “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

(w)             “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose common shares or common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected by the Holder, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

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

(y)               “Principal Market” means the NASDAQ Global Select Market.

(z)                “Registration Rights Agreement” means that certain Registration Rights Agreement dated as of the Subscription Date by and among the Company and the Purchasers.

(aa)            “Rights Offering” means a rights offering commenced on or after September [__], 2014 and consummated on or prior to March 31, 2015, pursuant to which the Company anticipates issuing to holders of its Common Stock (and certain Person(s) who have the right to acquire shares of Common Stock) rights to subscribe for and purchase shares of Common Stock.

(bb)           “Successor Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

(cc)            “Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

(dd)          “Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

(ee)            “Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly

announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 13 with the term “Weighted Average Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

THE WET SEAL, INC.

By:_________________________________
Name:
Title:

EXHIBIT A

EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK

THE WET SEAL, INC.

The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of The Wet Seal, Inc., a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

____________ a “Cash Exercise” with respect to _________________ Warrant Shares; and/or

____________ a “Cashless Exercise” with respect to _______________ Warrant Shares.

In the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.

2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

3. Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant Shares in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:

[_] Check here if requesting delivery as a certificate to the following name and to the following address:

Issue to:           __________________________________________________________________

__________________________________________________________________

__________________________________________________________________

[_] Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

DTC Participant: ____________________________________________________________

DTC Number: ____________________________________________________________

Account Number: ____________________________________________________________

Date: _______________ __, ______

_________________________________
Name of Registered Holder

By: _______________________
Name:
Title:

ACKNOWLEDGMENT

The Company hereby acknowledges this Exercise Notice and hereby directs American Stock Transfer & Trust Company, LLC. to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated September [__], 2014 from the Company and acknowledged and agreed to by American Stock Transfer & Trust Company, LLC.

THE WET SEAL, INC.

By:_________________________________
Name:
Title:

EXHIBIT 24

REGISTRATION RIGHTS AGREEMENT

by and among

THE WET SEAL, INC.

AND

THE HOLDERS SIGNATORY HERETO

Dated as of September 3, 2014

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of September 3, 2014, among those parties signatories hereto who purchased shares of Common Stock pursuant to the Securities Purchase Agreement dated September 3, 2014 (the “Holders”) and The Wet Seal, Inc., a Delaware corporation (the “Company”).

WHEREAS:

A. Pursuant to a Securities Purchase Agreement, the Holders purchased from the Company shares of Common Stock. The shares sold under the Purchase Agreement were sold only to “accredited investors” pursuant to a private placement under Section 4(a)(2) under the Securities Act of 1933, as amended.

B. In order to induce the Holders who are parties to the Securities Purchase Agreement to purchase shares of Common Stock, the Company issued warrants to such Holders;

C. The Company also decided to file a resale Registration Statement for the Holders to cover the resale of the shares of Common Stock purchased by the Holders and to cover the resale of the shares of Common Stock underlying the Warrants;

NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as follows:

1.                  Definitions.

In addition to the terms defined elsewhere herein and the capitalized terms set forth in the Purchase Agreement that are not otherwise defined herein, which terms shall have the same meanings herein as in the Purchase Agreement, the following terms shall have the following meanings when used herein with initial capital letters:

“Advice” has the meaning set forth in Section 3(b).

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or is under common control with such Person. For the purposes of this definition, “control”, when used with respect to any Person, means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms of “affiliated”, “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent” shall mean B. Riley & Co. LLC.

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are permitted or required by any applicable law to close.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means (i) the Company’s shares of Series A common stock, par value $0.10 per share, and (ii) any share of capital into which Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

“Company” has the meaning set forth in the Preamble and also includes the Company’s successors.

“Delay Notice” has the meaning set forth in Section 2(c).

“Delay Period” has the meaning set forth in Section 2(c).

“Effectiveness Period” has the meaning set forth in Section 2(b).

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

“FINRA” means the Financial Industry Regulatory Authority

“Holder” or “Holders” has the meaning set forth in the Preamble. The Holder of a Warrant shall be deemed to be the Holder of Warrant Shares issuable with respect to such Warrant.

“Person” means a natural person, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or other entity, or a governmental entity or any department, agency or political subdivision thereof.

“Purchase Agreement” or “Securities Purchase Agreement” means that certain Securities Purchase Agreement dated September 3, 2014 among the Company and the Holders.

“Prospectus” shall mean the prospectus included in a Resale Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Resale Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and, in each case, including all documents incorporated by reference therein.

“Registrable Securities” shall mean (i) shares of Common Stock issued to Holders pursuant to the Securities Purchase Agreement and Warrant Shares issued to the Holders upon the exercise of the Warrants, and (ii) any other securities issued as a result of, or in connection with, any stock dividend, stock split or reverse stock split, combination, recapitalization, reclassification, merger or consolidation, exchange or distribution in respect of the Common Stock or the Warrant referred to above. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities on the earliest to occur of: (a) the date on which a Registration Statement with respect to the sale of such Registrable Securities shall have become effective under the Securities Act and such Registrable Securities shall have been sold, transferred, disposed of in accordance with such Registration Statement; (b) the date on which such Registrable Securities shall have ceased to be outstanding; or (c) any date on which such Holder’s Registrable Securities are eligible for sale without registration pursuant to Rule 144 (or

any successor provision) under the Securities Act and without volume limitations or other restrictions on transfer thereunder; or (d) the date on which such Registrable Securities have been sold to a third party and all transfer restrictions and restrictive legends with respect to such Registrable Securities are removed upon the consummation of such sale.

“Resale Registration” shall mean a registration effected pursuant to Section 2(a).

“Resale Registration Statement” shall mean a “resale” registration statement of the Company pursuant to the provisions of Section 2(a) which covers the resale of all of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act, on Form S-3 (or if such form is not available, any other appropriate available form) under the Securities Act, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein.

“Rule 144” shall mean Rule 144 promulgated under the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended.

“Transfer” means and includes the act of selling, giving, transferring, creating a trust (voting or otherwise), assigning or otherwise disposing of (other than pledging, hypothecating or otherwise transferring as security or any transfer upon any merger or, consolidation) (and correlative words shall have correlative meanings); provided, however, that any transfer or other disposition upon foreclosure or other exercise of remedies of a secured creditor after an event of default under or with respect to a pledge, hypothecation or other transfer as security shall constitute a Transfer.

“Warrants” means the Warrants issued to the Holders pursuant to the Securities Purchase Agreement.

“Warrant Shares” means the Common Stock issued or issuable to the Holders upon the exercise of any of the Warrants.

2.                  Resale Registration Statement.

(a)                Registration Requirement.

Subject to the last sentence of this paragraph, the Company shall prepare promptly and file with the Commission a Resale Registration Statement meeting the requirements of the Securities Act within four (4) Business Days following the earliest to occur of (i) the date the “Per Share Price” is determined in accordance pursuant to Section 1(a) of the Securities Purchase Agreement and (ii) the date of the Company’s receipt of an Election Notice (as such term is defined in Section 1(b) of the Securities Purchase Agreement), and will use its commercially reasonable best efforts to cause the Resale Registration Statement to be declared effective by the Commission as soon as practicable thereafter and in any event not later than ninety (90) days after such filing. The Company shall not be obligated to file a Resale Registration Statement and to have it declared effective within the time periods set forth in the

first sentence of this Section 2(a) in the event of a termination of the Securities Purchase Agreement by the Company pursuant to Section 10(b)(ii), 10(b)(iii) or 10(b)(v) of the Securities Purchase Agreement.

(b)               Effectiveness Requirement.

The Company agrees to use its commercially reasonable best efforts to keep the Resale Registration Statement continuously effective and the Prospectus usable for resales for a period commencing on the date that such Resale Registration Statement is initially declared effective by the Commission and terminating on the date when all of the Registrable Securities covered by such Resale Registration Statement have ceased to be Registrable Securities (the “Effectiveness Period”); provided, however, the Company is permitted to suspend sales of the Registrable Securities during any Delay Period.

(c)                Delay Period.

The term “Delay Period” means, with respect to any obligation to file any Resale Registration Statement or to keep any Resale Registration Statement or Prospectus usable for resales pursuant to this Section 2, the shortest period of time determined in good faith by the Company’s Board of Directors to be necessary when there exist circumstances relating to a material pending development, including, but not limited to, a pending or contemplated material acquisition or merger or other material transaction or event, which would require additional disclosure by the Company in such Resale Registration Statement or Prospectus of previously non-public material information which the Company determines in good faith upon the advice of counsel that it has a bona fide business purpose for keeping confidential and non-public and the non-disclosure of which in such Resale Registration Statement or Prospectus might cause such Resale Registration Statement or Prospectus to fail to comply with applicable disclosure requirements or if the Company becomes ineligible to use the registration form on which the Resale Registration Statement is filed and declared effective (such circumstances, “Delay Circumstances”). A Delay Period shall commence on and include the date that the Company gives written notice (a “Delay Notice”) to the Holders that it is delaying the filing of the Resale Registration Statement or that the Prospectus is no longer usable as a result of such Delay Circumstances and shall end on the date when the Holders are advised in writing by the Company that the current Delay Period has terminated (it being understood that the Company shall give such notice to all Holders promptly upon making the determination that the Delay Period has ended). If as a result of the circumstances giving rise to the Delay Period the Prospectus included in the Resale Registration Statement has been amended to comply with the requirements of the Securities Act, the Company shall enclose such revised Prospectus (or a URL link thereto) with the notice to the Holders advising them that the Delay Period has terminated. Notwithstanding anything herein to the contrary the Company is only entitled to three (3) Delay Periods having durations of not more than twenty (20) days each during any consecutive 12 month period, and not to exceed more than forty-five (45) days in the aggregate in any consecutive 12 month period, and in no event shall the Company be entitled to any Delay Period with respect to the filing of the initial Resale Registration Statement pursuant to the first sentence of Section 2(a) that would delay the filing of such initial Resale Registration Statement by more than five (5) Business days. A Delay Period may not commence if a prior Delay Period has terminated within the previous 30 days or if three Delay Periods have occurred during the

consecutive 12 month period ending on the date that the Company gives notice that a Delay Period has commenced. The Company covenants and agrees that it will not deliver a Delay Notice with respect to a Delay Period unless the Company’s executive officers and directors and their affiliates are also prohibited by the Company for the duration of the Delay Period from effecting any public sales of shares of Common Stock beneficially owned by them.

(d)               Notice.

The Company will, in the event a Resale Registration Statement is declared effective, notify each such Holder as promptly as practicable, and in any event no later than the next Business Day, when such Resale Registration Statement has become effective and take such other actions as are reasonably necessary to permit resales of the Registrable Securities, including providing to each Holder a reasonable number of copies of the Prospectus which is a part of such Resale Registration Statement as is requested by such Holder. The Company further agrees to supplement or amend the Resale Registration Statement if and as required by the rules, regulations or instructions applicable to the registration form used by the Company for such Resale Registration Statement or by the Securities Act or by any other rules and regulations thereunder for registrations, and the Company agrees to notify the Holders of Registrable Securities of any such supplement or amendment promptly after its being used or filed with the Commission.

(e)                Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement.

If (i) the Resale Registration Statement when declared effective fails to register the entire amount of the shares of Common Stock issued to Holders pursuant to the Securities Purchase Agreement and the Warrant Shares issued to the Holders upon exercise of the Warrants (a “Registration Failure”), (ii) a Resale Registration Statement covering all of the Registrable Securities required to be covered thereby and required to be filed by the Company pursuant to this Agreement is (A) not filed with the Commission on or before the applicable filing deadline provided for in Section 2(a) (a “Filing Failure”) or (B) not declared effective by the Commission on or before the applicable deadline provided for in Section 2(a), (an “Effectiveness Failure”), (iii) on any day after the applicable Effective Date, sales of all of the Registrable Securities required to be included on such Resale Registration Statement cannot be made as provided for in this Agreement (other than during an allowable Delay Period) pursuant to such Resale Registration Statement (a “Maintenance Failure”) or (iv) if a Resale Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any reason, and the Company fails to file with the Commission any required reports under Section 13 or 15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable) (a “Current Public Information Failure”) as a result of which any of the Holders are unable to sell Registrable Securities without restriction under Rule 144 (including, without limitation, volume restrictions) then, as partial relief for the damages to any Holder by reason of any such delay in or reduction of its ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance), the Company shall pay to each holder of Registrable Securities relating to such Resale Registration Statement an amount in cash equal to (x) one percent (1.0%) of the aggregate Commitment Amount (as such term is defined

in the Securities Purchase Agreement) of such Holder’s Registrable Securities for the first month, or part thereof, that : (i) a Registration Failure shall continue, (ii) a Filing Failure shall continue; (iii) an Effectiveness Failure shall continue; (iv) a Maintenance Failure shall continue; (v) a Current Public Information Failure shall continue and (y) two percent (2.0%) of the aggregate Commitment Amount (as such term is defined in the Securities Purchase Agreement) of such Holder’s Registrable Securities, for each month, or part thereof after such first month that: (i) a Registration Failure continues (prorated for periods totaling less than thirty days)until such Registration Failure is cured; (ii) a Filing Failure continues (prorated for periods totaling less than thirty days) until such Filing Failure is cured; (iii) an Effectiveness Failure continues (prorated for periods totaling less than thirty days) until such Effectiveness Failure is cured; (iv) a Maintenance Failure continues (prorated for periods totaling less than thirty days) until such Maintenance Failure is cured; and (v) a Public Information Failure continues (prorated for periods totaling less than thirty days) until such Public Information Failure is cured. The payments to which a holder shall be entitled pursuant to this Section 2(e) are referred to herein as “Registration Delay Payments.” Registration Delay Payments shall be paid on the earlier of (I) the dates set forth above and (II) the third Business Day after the event or failure giving rise to the Registration Delay Payments is cured. In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of one and one-half percent (1.5%) per month (prorated for partial months) until paid in full. Notwithstanding anything to the contrary contained herein, (i) Registration Delay Payments shall cease to accrue when all of the Registrable Securities may be sold pursuant to Rule 144 without any restrictions or limitations, (ii) in no event shall the aggregate amount of all Registration Delay Payments (without regard to any accrued interest thereon in accordance with the preceding sentence) paid to a Holder exceed an amount equal to 10% of the aggregate amount such Holder paid for the shares of Common Stock issued to such Holder pursuant to the Securities Purchase Agreement and the Warrant Shares issued to such Holder upon exercise of the Warrants, (iii) no single event or failure shall give rise to more than one type of Registration Delay Payment or (iv) if a Holder would be required to be named as an “underwriter” in the Resale Registration Statement by the Commission and such Holder elects not to include any Registrable Securities of such Holder in the Resale Registration Statement, or such Holder’s Registrable Securities are not included in the Resale Registration Statement at Holder’s determination, or as a result of Holder’s failure to comply with Section 3(b) of this Agreement, no Registration Delay Payments shall accrue with respect to such Registrable Securities of such Holder.

3.                  Registration Procedures.

(a)                Obligations of the Company.

In connection with its obligations under Section 2 with respect to the Resale Registration Statement, the Company shall:

                                              (i)                   prepare and file with the Commission a Resale Registration Statement as prescribed by Section 2(a) within the relevant time period specified in Section 2(a) on Form S-3 (or if such form is not available, any other appropriate available form), which form shall (A) be available for the resale of the Registrable Securities by the selling Holders thereof and (B) comply as to form in all material respects with the requirements of the

applicable form and include all financial statements required by the Commission to be filed therewith; the Company shall use its commercially reasonable best efforts to cause such Resale Registration Statement to become effective and remain effective and the Prospectus usable for resales in accordance with Section 2, subject to the proviso contained in Section 2(b), as applicable; provided, however, that, no fewer than three (3) calendar days before filing the Resale Registration Statement or Prospectus or any amendments or supplements thereto, the Company shall furnish to and afford the Holders covered by such Resale Registration Statement and their counsel a reasonable opportunity to review copies of such documents as proposed to be filed; and provided further, however, the Plan of Distribution disclosed in the Resale Registration Statement shall be substantially in the form attached hereto as Exhibit B, with such changes as the Company and Holders of a majority of interest of the Registrable Securities may agree;

                                            (ii)                   prepare and file with the Commission such amendments (including post effective amendments) to any Resale Registration Statement as may be necessary to keep such Resale Registration Statement effective for the Effectiveness Period, subject to the proviso contained in Section 2(b) and cause each Prospectus to be supplemented, if so determined by the Company or requested by the Commission, by any required prospectus supplement and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force), under the Securities Act; respond as promptly as reasonably possible to any comments received from the Commission with respect to such Resale Registration Statement, or any amendment, post-effective amendment or supplement relating thereto; and as promptly as reasonably possible, upon request, provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Resale Registration Statement; and comply in all material respects with the provisions of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder applicable to it with respect to the disposition of all Registrable Securities covered by such Resale Registration Statement during the Effectiveness Period in accordance with the intended method or methods of distribution by the selling Holders thereof described in this Agreement;

                                          (iii)                   register or qualify the Registrable Securities under all applicable state securities or “blue sky” laws of such jurisdictions as any Holder shall reasonably request in writing, keep each such registration or qualification effective during the Effectiveness Period and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company shall not be required to (A) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(a)(iii), (B) file any general

consent to service of process in any jurisdiction where it would not otherwise be subject to such service of process or (C) subject itself to taxation in any such jurisdiction if it is not then so subject;

                                          (iv)                   promptly notify each Holder and promptly confirm such notice in writing, if such notice was verbally given, (A) when the Resale Registration Statement covering such Registrable Securities has become effective and when any post effective amendments thereto become effective, (B) of the receipt of any comments from the Commission with respect to any such Resale Registration Statement, (C) of any request by the Commission or any other federal or state securities authority for amendments or supplements to such Resale Registration Statement or Prospectus or for additional information after such Resale Registration Statement has become effective, (D) of the issuance or threatened issuance by the Commission or any state securities authority of any stop order suspending the effectiveness of such Resale Registration Statement or the qualification of the Registrable Securities in any jurisdiction described in Section 3(a)(iii) or the initiation of any proceedings for that purpose, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (F) of the happening of any event or the failure of any event to occur or the discovery of any facts, during the Effectiveness Period, which makes any statement made in such Resale Registration Statement or the related Prospectus untrue in any material respect or which causes such Resale Registration Statement or Prospectus to omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (G) when a Prospectus or Prospectus Supplement or post-effective amendment to such Resale Registration Statement is proposed to be filed;

                                            (v)                   use its commercially reasonable best efforts to prevent the entry of any stop order or other suspension of effectiveness of any Resale Registration Statement, or if entered, to obtain the withdrawal of any such stop order or to avoid the issuance of, or, if issued, obtain the withdrawal of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest possible moment;

                                          (vi)                   furnish to each Holder, upon written request and without charge, one conformed copy of the Resale Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested) promptly after the filing of such documents with the Commission, and additional conformed copies of such Resale Registration Statement as such Holder may reasonably request;

                                        (vii)                   promptly deliver to each selling Holder, without charge, as many copies of the applicable Prospectus (including each preliminary Prospectus) as such Holder from time to time may reasonably request (it being understood that the Company consents to the use of the Prospectus by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by the Prospectus), such other documents incorporated by reference therein and any exhibits thereto as such selling Holder from time to time may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder;

                                      (viii)                   as soon as practicable after the resolution of any matter or event specified in Sections 3(a)(iv)(B), 3(a)(iv)(C), 3(a)(iv)(E) and 3(a)(iv)(F) (subject to the proviso contained in Section 2(b)), prepare and file with the Commission a supplement or post-effective amendment to the Resale Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document, and provide revised or supplemented Prospectuses to the Holders so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

                                          (ix)                   reasonably cooperate with each Holder of Registrable Securities covered by a Resale Registration Statement and its counsel in connection with any filings required to be made with FINRA;

                                            (x)                   use its commercially reasonable best efforts to cause all Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

                                          (xi)                   cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Resale Registration Statement and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request;

                                        (xii)                   from and after the date of this Agreement, the Company shall not, and shall not agree to, allow the holders of any securities of the Company to include any of their securities that are not Registrable Securities in the Resale Registration Statement under Section 2(a) hereof or any amendment or supplement thereto without the consent of the holders of a majority in interest of the Registrable Securities;

                                      (xiii)                   not identify any Holder as an “underwriter” in any public disclosure or filing with the Commission or any listing exchange without the prior

written consent of such Holder (it being understood, that if the Company is required to name such Investor as an “underwriter” in such Resale Registration Statement by the Commission (after a good faith discussion with the Commission to lift such requirement, including, without limitation, any reduction in the number of Registrable Securities of such Holder to be registered on such Registration Statement (to the extent necessary to lift such requirement)), such Holder shall have the option of electing to exclude all such Registrable Securities from such Resale Registration Statement or to be named as an “underwriter” in such Resale Registration Statement); provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the “Plan of Distribution” section attached hereto as Exhibit B in the Resale Registration Statement; and

                                      (xiv)                   notwithstanding any other provision of this Section 3(a), if the Company becomes ineligible to use the registration form on which the Resale Registration Statement is filed and declared effective pursuant to Section 2(a), thereby precluding any Holder from using the related Prospectus, the Company shall use its commercially reasonable best efforts to prepare and file either a post effective amendment to the Resale Registration Statement to convert such registration statement to, or a new Resale Registration Statement on, another registration form which the Company is eligible to use within thirty (30) days after the date that the Company becomes ineligible, provided such other registration form shall be available for the sale of the Registrable Securities by the selling Holders thereof and such amended or new Resale Registration Statement shall remain subject in all respects to the provisions of this Section 3(a).

(b)               Holders’ Obligations.

                                              (i)                   Each Holder agrees that, upon receipt of any notice from the Company of the occurrence of any event specified in Sections 3(a)(iv)(B), 3(a)(iv)(C), 3(a)(iv)(E), 3(a)(iv)(F) or any Delay Notice, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Resale Registration Statement at issue until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(a)(viii) or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, if so directed by the Company, such Holder will deliver to the Company (at the Company’s expense) all copies in such Holder’s possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.

                                            (ii)                   Each Holder agrees that the Company may require each seller of Registrable Securities as to which any registration is being effected to furnish to it such information regarding such seller specified in Exhibit A

or as may otherwise be required by the staff of the Commission to be included in the applicable Resale Registration Statement, the Company may exclude from such registration the Registrable Securities of any seller who fails to furnish such information which is not otherwise readily available to the Company within five (5) Business Days after receiving such request, and the Company shall have no obligation to register under the Securities Act the Registrable Securities of a seller who so fails to furnish such information.

                                          (iii)                   Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act, as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Resale Registration Statement.

4.                  Registration Expenses.

All Registration Expenses will be borne by the Company whether or not the Resale Registration Statement becomes effective. “Registration Expenses” means all fees and expenses incident to the performance of, or compliance with, this Agreement by the Company, including, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of compliance with securities or “blue sky” laws (including, without limitation, fees and disbursements of counsel for the selling Holders in connection with “blue sky” qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Holders of a majority of the Registrable Securities being sold may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company, only if such security is currently traded on an established trading market, and of printing Prospectuses if the printing of Prospectuses is requested by the Holders of a majority of the Registrable Securities included in the Resale Registration Statement), (iii) fees and disbursements of counsel for the Company and one single special counsel for the Holders, (iv) all fees and expenses of listing the Registrable Securities on the NASDAQ Stock Market, and (v) fees and expenses of all other Persons retained by the Company in connection with this Agreement; provided, however, that Registration Expenses shall not include fees and expenses of any counsel for the Holders except as provided in clause (iii) above and any local counsel that are not included in the definition of Registration Expenses nor shall it include underwriting fees, discounts or commissions relating to the offer and sale of Registrable Securities which shall be borne by the Holders included in such registration pro rata in proportion to the number of Registrable Securities of such Holder included in such registration. In addition, the Company will pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange on which similar securities issued by the Company are then listed and the fees and expenses of any Person, including special experts, retained by the Company.

5.                  Indemnification.

(a)                Indemnification by the Company.

The Company will indemnify and hold harmless, to the fullest extent permitted by law, each Holder whose Registrable Securities are registered pursuant to this Agreement, the officers, directors, agents, members, partners, limited partners and employees of each of them, each Person who controls such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents, members, partners, limited partners and employees of any such controlling Person, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, the costs of investigation and attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, preliminary Prospectus or Prospectus or in any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are based upon information furnished in writing to the Company by such Holder expressly for use therein; provided, however, that the Company will not be liable to any Holder to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary Prospectus if either (A) (i) after receiving copies thereof from the Company, such Holder failed to send or deliver a copy of the Prospectus with or prior to the delivery of written confirmation of the sale by such Holder to the Person asserting the claim from which such Losses arise and (ii) the Prospectus would have corrected in all material respects such untrue statement or alleged untrue statement or such omission or alleged omission; or (B) such untrue statement or alleged untrue statement, omission or alleged omission is corrected in all material respects in an amendment or supplement to the Prospectus previously furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, and, after receiving copies thereof from the Company, such Holder thereafter fails to deliver such Prospectus as so amended or supplemented prior to or concurrently with the sale of a Registrable Security to the Person asserting the claim from which such Losses arise. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Holder or any officer, director, agent or employee of such Holder.

(b)               Indemnification by Holders of Registrable Securities.

In connection with any Resale Registration Statement in which a Holder is participating, such Holder will furnish to the Company in writing such information concerning the Holder as the Company reasonably requests concerning such Holder for use in connection with any Resale Registration Statement or Prospectus and will severally and not jointly indemnify, to the fullest extent permitted by law, the Company, its directors and officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, from and against any and all Losses arising out of or based upon (i) any disposition of Registrable Securities after receiving notice of a Delay Period and prior to receiving Advice under Section 3(b)(i) that use of the Prospectus may be resumed or (ii) any untrue statement of a material fact contained in any Registration Statement, Prospectus

or preliminary Prospectus or arising out of or based upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is finally judicially determined by a court of competent jurisdiction to have been contained in any information so furnished in writing by such Holder to the Company expressly for use in such Resale Registration Statement or Prospectus and to have been relied upon by the Company in the preparation of such Registration Statement, Prospectus or preliminary Prospectus. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any officer, director, agent or employee of the Company. In no event will the liability of any selling Holder under this Section 5(b) be greater in amount than the excess of the amount by which the total price at which the Registrable Securities sold by such Indemnifying Party and distributed to the public pursuant to the Resale Registration Statement (net of all related expenses) is over the amount of any damages which such Indemnifying Party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

(c)                Conduct of Indemnification Proceedings.

If any Person shall become entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall give prompt notice to the party from which such indemnity is sought (the “Indemnifying Party”) of any claim or of the commencement of any action or proceeding with respect to which such Indemnified Party seeks indemnification or contribution pursuant hereto; and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, however, that the failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any obligation or liability except to the extent that it shall be finally determined by a court of competent jurisdiction that the Indemnifying Party has been prejudiced materially by such failure.

An Indemnified Party shall have the right to employ separate counsel in any such proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to the Indemnified Party in any such proceeding; or (3) the named parties to any such proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of one separate counsel (and one local counsel in each applicable jurisdiction) shall be at the expense of the Indemnifying Party).

The Indemnifying Party will not consent to entry of any judgment or enter into any settlement or otherwise seek to terminate any action or proceeding in which any Indemnified

Party is or could be a party and as to which indemnification or contribution could be sought by such Indemnified Party under this Section 5, unless such judgment, settlement or other termination includes, as an unconditional term thereof, the giving by the claimant or plaintiff to such Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation for which such Indemnified Party would be entitled to indemnification hereunder and shall not include a statement as to the admission of fault or culpability of the Indemnified Party.

(d)               Contribution.

If the indemnification provided for in this Section 5 is unavailable to an Indemnified Party under Section 5(a) or 5(b) hereof in respect of any Losses or is insufficient to hold such Indemnified Party harmless, then each applicable Indemnifying Party, in lieu of or in addition to indemnifying such Indemnified Party, as applicable, will, jointly and severally, contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party or Indemnifying Parties, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party or Indemnifying Parties, on the one hand, and such Indemnified Party, on the other hand, will be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or related to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses will be deemed to include, subject to any limitations set forth in Section 5(c), any reasonable legal or other fees or expenses incurred by such party in connection with any action or proceeding to the extent such party would have been indemnified for such fees and expenses if the indemnification provided for in this Section 5(d) was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), an Indemnifying Party that is a selling Holder will not be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by such Indemnifying Party and distributed to the public pursuant to the applicable Resale Registration Statement (net of all related expenses) exceeds the amount of any damages which such Indemnifying Party 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) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

The indemnity, contribution and expense reimbursement obligations of a party hereunder will be in addition to any liability such party may otherwise have hereunder or otherwise.

6.                  Miscellaneous.

(a)                Reporting.

With a view to making available to the Holders the benefits of Rule 144 or any other similar rule or regulation of the Commission that may at the time permit the Holders to sell securities of the Company to the public without registration, for so long as the Holders continue to own Registrable Securities, the Company shall use commercially reasonable efforts to:

                                              (i)                   Make and keep public information available, as those terms are understood and defined in Rule 144, and file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

                                            (ii)                   Furnish to each Holder, for so long as the Holder owns Registrable Securities, promptly upon request, a written statement by the Company, if true, that it has complied with the applicable reporting requirements of Rule 144, the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other information as may be reasonably requested to permit the Holders to sell such securities pursuant to Rule 144 without registration.

(b)               Remedies.

In the event of a breach by the Company of its obligations under this Agreement, each Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it will waive the defense that a remedy at law would be adequate.

(c)                Amendments and Waivers.

                                              (i)                   The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority of the then-outstanding Registrable Securities; provided, however, if the foregoing adversely and disproportionately impacts a particular Holder, as compared to the other Holders, such amendment, modification, supplement, waiver or consent shall require the consent of such affected Holder. If the Company pays consideration to any Holder in connection with obtaining an amendment, modification, supplement, waiver or consent under this Agreement, the Company shall offer to pay such consideration to all other Holders.

                                            (ii)                   Any amendment or waiver effected in accordance with this Section 6(c) shall be binding upon each holder of Registrable Securities at the time outstanding, each future Holder of all such securities, and the Company.

                                          (iii)                   No failure or delay by any party in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided will be cumulative and not exclusive of any rights or remedies provided by law.

(d)               Notices.

All notices, requests and other communications to either party hereunder must be in writing (including telecopy or similar writing) and must be given:

                                              (i)                   if to a Holder, to the address set forth opposite such Holder’s name on the signature pages hereto, with a copy to such additional party as indicated on such page.

                                            (ii)                   If to the Company, to:

The Wet Seal, Inc.
26972 Burbank
Foothill Ranch, California 92610
Facsimile No. (949) 699-4825
Attention: Steven Benrubi, Chief Financial Officer

with a copy to:

Paul Hastings LLP
695 Town Center Drive, 17th Floor
Costa Mesa, California 92626
Facsimile No. (714) 668-6264
Attention: Stephen D. Cooke, Esq.

or such other address or telecopier number as such Person may hereafter specify by written notice to the other parties hereto given five (5) days prior to the effectiveness of such change. Each such notice, request or other communication will be effective only when actually delivered at the address specified in this Section 6(d), if delivered prior to 5 p.m. (local time) and such day is a Business Day, and if not, then such notice, request or other communication will not be effective until the next succeeding Business Day. Written confirmation of receipt (A) given by the recipient of such notice or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission, or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a reputable overnight delivery service.

(e)                Owner of Registrable Securities.

The Company will maintain, or will cause its registrar and transfer agent to maintain, a stock book with respect to the Common Stock, in which all transfers of Registrable Securities of which the Company has received notice will be recorded. The Company may deem and treat the Person in whose name Registrable Securities are registered in the stock book of the Company as the owner thereof for all purposes, including, without limitation, the giving of notices under this Agreement.

(f)                Successors and Assigns.

Subject to this paragraph (f), this Agreement will inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and will inure to the benefit of each of the Holders. The Company may not assign its rights or obligations hereunder. Holders may not assign their rights and obligations under this Agreement; provided, however, that a Holder may assign its rights and obligations under this Agreement to a third party in connection with any transfer of Registrable Securities (a “Permitted Transferee”). Notwithstanding the foregoing, no Permitted Transferee shall be entitled to any of the transferring Holder’s rights under this Agreement unless and until such Permitted Transferee shall have acknowledged in writing its acceptance of such Holder’s obligations hereunder.

(g)               Counterparts; Effectiveness.

This Agreement may be signed in any number of counterparts, each of which will be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Facsimile counterpart signatures shall be acceptable. This Agreement will become effective when each party hereto receives a counterpart hereof signed by the other party hereto.

(h)               Headings.

The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to limit or affect the meaning or interpretation of this Agreement. All references herein to “Sections” shall refer to corresponding provisions of this Agreement unless otherwise expressly noted.

(i)                 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York as applied to agreements among New York residents entered into and to be performed entirely within New York, without giving effect to the principles of conflict of laws thereof that would cause the application of the laws of any other jurisdiction.

(j)                 Jurisdiction; Consent to Service of Process.

Each party hereby irrevocably submits, for itself and its property, to the non−exclusive jurisdiction of the Supreme Court of the State of New York located in New York, New York in the Borough of Manhattan or the United States District Court for the Southern District of New York, and any appellate court from any such court (as applicable, a “New York

Court”), in any suit, action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment resulting from any such suit, action or proceeding, and each party hereby irrevocably and unconditionally agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in the New York Court. Each party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, (i) any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in the New York Court, (ii) the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court, and (iii) the right to object, with respect to such suit, action or proceeding, that such court does not have jurisdiction over such party. Each party irrevocably consents to service of process in any manner permitted by law.

(k)               WAIVER OF JURY TRIAL.

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6(k).

(l)                 Severability.

The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision unless so expressed herein.

(m)             Entire Agreement.

This Agreement constitutes the entire understanding and agreement among the parties relating to the subject matter hereof and supersedes any and all prior agreements, representations or understandings, both written and oral, with respect to the subject matter

hereof. Nothing in this Agreement, express or implied, is intended to confer upon any Person, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein.

(n)               No Strict Construction.

The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

(o)               Third Party Beneficiaries.

This Agreement and all of its provisions and conditions are for the benefit of the parties to this Agreement, any Permitted Transferee and solely with respect to the provisions of Section 5 hereof, any Indemnified Party.

(p)               Termination.

This Agreement shall terminate on the date on which there cease to be any Registrable Securities outstanding. The provisions of Section 5 and Section 6(o) shall survive the termination of this Agreement.

(q)               Independent Nature of Holders’ Obligations and Rights.

The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.

(r)                 No Inferences.

Nothing in this Agreement shall create any inference that any Purchaser is required to register any securities of the Company for resale under the Securities Act, other than the Common Stock issuable pursuant to the Purchase Agreement and the Warrant Shares.

[Signature page follows]

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

EXHIBIT A

Affidavit

By executing the signature line(s), the undersigned hereby certifies that he/she/it is the principal beneficial owner of the securities of the Company set forth below.

The undersigned certifies that it (i) is the sole beneficial owner of the securities of the Company set forth below, or (ii) if not the sole beneficial owner of the securities set forth below, shares beneficial ownership of the securities set forth below with the additional signatories set forth below.

The undersigned understands that to be granted rights under the Agreement, it must fill in the information on this form and return it to the Company, at the address set forth in Section 6(d)(ii) of the Agreement.

SUBMISSION OF THIS AFFIDAVIT WILL ENTITLE THE UNDERSIGNED TO RIGHTS UNDER THE AGREEMENT BUT THESE RIGHTS ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE AGREEMENT.

EXHIBIT B

PLAN OF DISTRIBUTION

We are registering issued and outstanding shares of common stock for resale and, the resale of shares of common stock to be issued upon exercise of the Company’s warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.

The selling shareholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,

If the selling shareholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling shareholders may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.

The selling shareholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling shareholders and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the

shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling shareholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.

The selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling shareholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreement, or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.

Once sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.

B-3

EXHIBIT 25

WET SEAL, INC.

September 3, 2014

Clinton Group, Inc.

601 Lexington Avenue

51st Floor

New York, New York 10022

Re: Letter Agreement

Reference is made to that certain Securities Purchase Agreement, dated as of September 3, 2014, by and among The Wet Seal, Inc. (the “Company”), Clinton Group, Inc. (“Clinton”), and certain other purchasers party thereto (the “Purchase Agreement”).

As an inducement to Clinton’s entering into the Purchase Agreement, the Company agrees, subject to the terms and conditions of this letter agreement, to appoint a designee of Clinton to the Board of Directors of the Company (the “Board”). Clinton has indicated that it desires to designate Greg Taxin (the “Candidate”) to stand for appointment to the Board.

In accordance with the foregoing, this letter agreement sets forth certain understandings among the parties in connection with the appointment of the Candidate to the Board.

The parties agree as follows:

[Signature Page Follows]

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof by returning to The Wet Seal, Inc. an executed counterpart hereof.

Very truly yours,

THE WET SEAL, INC.

By: ____________________

Name: Steven H. Benrubi

Title: Executive Vice President, Chief Financial Officer

Accepted and agreed as of the date first above written:

CLINTON GROUP, INC.

in its capacity as investment manager

on behalf of various funds and managed

accounts that purchased securities pursuant

to the Securities Purchase Agreement

By: ____________________

Name: John L. Hall

Title: Authorized Signatory

EXHIBIT 26

The Purchaser Listed on the Signature Page Below

September 3, 2014

The Wet Seal, Inc.

26972 Burbank

Foothill Ranch, CA 92610

To whom it may concern:

Reference is made to that certain Securities Purchase Agreement (the “Purchase Agreement”), dated of even date herewith, by and among B. Riley & Co., LLC (“B. Riley”) the purchasers named therein (the “Other Purchasers” and, together with B. Riley, the “Purchasers”) and The Wet Seal, Inc. (the “Company”) relating to the issuance and sale of Securities (as defined in the Purchase Agreement) by the Company to the Purchasers (the “Transaction”).

This letter agreement is entered into to set forth the parties’ understanding concerning certain matters in connection with the Transaction, and in consideration therefor, the undersigned Purchaser represents and warrants to the Company as of the date hereof, as follows:

Information has not been disclosed by the Company to the undersigned Purchaser is material to its determination to enter into this letter agreement and to consummate the Transaction pursuant to the Purchase Agreement.

The undersigned Purchaser acknowledges that the Company is relying on this letter agreement and would not enter into the Transaction absent this letter agreement.

The undersigned Purchaser does, for itself and its respective officers, directors, stockholders, employees, agents, affiliates, representatives, successors and/or assigns, hereby:

This letter agreement may be amended only by a written instrument executed by each of the parties hereto. This letter agreement shall be binding upon, inure to the benefit of and be

enforceable by the parties hereto and their respective successors and assigns. This letter agreement shall be governed by and construed under the laws of the State of New York, without giving effect to the choice of law or conflict of laws provisions thereof. The undersigned Purchaser agrees to submit to the exclusive jurisdiction of the state or federal courts of the State of New York. This letter agreement may be executed in counterparts, with all such counterparts together constituting one instrument. This letter agreement may be executed and delivered by facsimile, followed promptly upon request by delivery of the original.

The parties agree that if any provision of this letter agreement is held to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect, and shall be construed (to the maximum extent possible) in such a way as to give effect to the intent of the invalid, void, or unenforceable provision in question.

If the foregoing accurately sets forth our agreement, please execute and deliver a copy hereof to the undersigned, whereupon this letter shall constitute a binding agreement among us.

(Remainder of Page Intentionally Left Blank)

PURCHASER:

[___________]

By______________________________________
Name: __________________________________
Title: ___________________________________

Agreed to and Accepted:

THE WET SEAL, INC.

By______________________________________
Name: __________________________________
Title: ___________________________________