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As filed with the Securities and Exchange Commission on October 30, 2013
Registration No. 333-191336

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

APPAREL HOLDING CORP.*
(Exact name of registrant as specified in its charter)

 
					
Delaware	 	5600	 	75-3264870	
(State or other jurisdiction of incorporation or organization)	 	(Primary Standard Industrial
Classification Code Number)	 	(I.R.S. Employer Identification No.)	
	 	1441 Broadway—6th Floor
New York, New York 10018
(212) 515-2600	 		
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Lisa Klinger
Chief Financial Officer and Treasurer
1441 Broadway—6th Floor
New York, New York 10018
(212) 515-2600
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Gerald T. Nowak, P.C.
Kirkland & Ellis LLP
300 North LaSalle
Chicago, Illinois 60654
(312) 862-2000	 	Kevin P. Kennedy
Simpson Thacher & Bartlett LLP
2475 Hanover Street
Palo Alto, California 94304
(650) 251-5000	

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:   ¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   ¨	 	Accelerated filer   ¨	  	Non-accelerated filer   x	 	Smaller reporting company   ¨	
	 		  	(Do not check if a smaller reporting company)	

 	
Title of Each Class of
Securities to be Registered	 	Proposed
Maximum
Offering Price(1)(2)	 	Amount of
Registration Fee(3)(4)	
Common stock, par value $0.01 per share	 	$200,000,000	 	$27,280	

(1)	Includes the offering price of the shares of common stock that may be sold if the option to purchase additional shares granted by the selling stockholders to the underwriters is exercised in full.	
(2)	Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended.	
(3)	Calculated by multiplying 0.00013460 by the proposed maximum offering price.	
(4)	This amount was previously paid in connection with the initial filing of the Registration Statement.	
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
* Apparel Holding Corp., the registrant whose name appears on the cover of this registration statement, is a Delaware corporation. Immediately prior to the consummation of this offering, Apparel Holding Corp. will change its name to Vince Holding Corp. Shares of the common stock of Vince Holding Corp. are being offered by the prospectus.

 

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
 
Subject to Completion, dated                     , 2013
             Shares

Apparel Holding Corp.
Common Stock

This is an initial public offering of shares of common stock of Apparel Holding Corp. (to be renamed Vince Holding Corp. prior to the consummation of this offering). Apparel Holding Corp. is selling              shares of common stock in this offering.
Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $         and $        . We intend to list the common stock on the New York Stock Exchange under the symbol “VNCE”.
We are an “emerging growth company” as defined under the federal securities laws and are therefore subject to reduced public company reporting requirements.

See ‘‘ Risk Factors ’’ on page 29 to read about the factors you should consider before buying shares of the common stock .

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 
									
 	  	Per Share	 	  	Total	 	
Initial public offering price	  	$	            	  	  	$	            	  	
Underwriting discount	  	$	            	  	  	$	            	  	
Proceeds, before expenses, to us	  	$	            	  	  	$	            	  	
To the extent that the underwriters sell more than              shares of common stock, the underwriters have the option to purchase up to an additional              shares from the selling stockholders at the initial price to the public less the underwriting discount. We will not receive any proceeds with respect to such shares.

The underwriters expect to deliver the shares against payment in New York, New York on or about                     , 2013.

Goldman, Sachs & Co.	  	Baird	

BofA Merrill Lynch	 	Barclays	 	J.P. Morgan	

KeyBanc Capital Markets	 	Stifel	 	William Blair	

Prospectus dated                     , 2013.

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PROSPECTUS SUMMARY	  	 	1	  	
RISK FACTORS	  	 	29	  	
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	  	 	66	  	
RESTRUCTURING TRANSACTIONS	  	 	68	  	
USE OF PROCEEDS	  	 	73	  	
DIVIDEND POLICY OF AHC	  	 	76	  	
CAPITALIZATION OF AHC	  	 	77	  	
DILUTION	  	 	80	  	
ADDITIONAL INFORMATION RELATED TO AHC	  	 	82	  	
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF AHC	  	 	83	  	
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA OF AHC	  	 	86	  	
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF AHC	  	 	106	  	
AHC BUSINESS	  	 	147	  	
AHC MANAGEMENT	  	 	150	  	
AHC EXECUTIVE COMPENSATION	  	 	154	  	
DESCRIPTION OF CERTAIN INDEBTEDNESS OF AHC	  	 	163	  	
ADDITIONAL INFORMATION RELATED TO VINCE	  	 	165	  	
SUPPLEMENTAL SELECTED HISTORICAL FINANCIAL DATA OF VINCE, LLC	  	 	166	  	
SUPPLEMENTAL MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VINCE, LLC	  	 	168	  	
VINCE BUSINESS	  	 	195	  	
VINCE MANAGEMENT	  	 	207	  	
VINCE EXECUTIVE COMPENSATION	  	 	214	  	
DESCRIPTION OF CERTAIN INDEBTEDNESS OF VINCE, LLC	  	 	229	  	
OTHER INFORMATION RELATED TO THIS OFFERING	  	 	231	  	
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS OF AHC	  	 	232	  	
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF AHC	  	 	242	  	
DESCRIPTION OF CAPITAL STOCK OF AHC	  	 	244	  	
SHARES ELIGIBLE FOR FUTURE SALE	  	 	250	  	
MATERIAL U.S. TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK	  	 	253	  	
UNDERWRITING	  	 	258	  	
VALIDITY OF COMMON STOCK	  	 	263	  	
EXPERTS	  	 	263	  	
WHERE YOU CAN FIND ADDITIONAL INFORMATION	  	 	263	  	
INDEX TO THE AUDITED FINANCIAL STATEMENTS FOR AHC	  	 	F-1	  	
INDEX TO THE AUDITED FINANCIAL STATEMENTS FOR VINCE, LLC	  	 	V-1	  	

We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
 
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Persons who come into possession of this prospectus and any such free writing prospectus in jurisdictions outside the United States (the “U.S.”) are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.
Market and Industry Data
We obtained the industry, market and competitive position data throughout this prospectus from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties, including (i) the Worldwide Luxury Markets Monitor, Spring 2012 Update (dated May 7, 2012), the 2012 Luxury Goods Worldwide Market Study (11th Edition) (dated October 15, 2012) and the Worldwide Luxury Markets Monitor, Spring 2013 Update (dated May 16, 2013) (the “Bain Studies”) each of which was prepared by the Altagamma Foundation in cooperation with Bain & Company and (ii) the Vince Survey Among Qualified Non-Customers (dated January 9, 2013) (the “Harris Study”) which was prepared by Harris Interactive. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. Further, while we believe the market opportunity information included in this prospectus is generally reliable, such information is inherently imprecise. In addition, projections assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us. See “Special Note Regarding Forward-Looking Statements.”
The Bain Studies analyze the global luxury market, including the market and financial performance of more than 230 of the world’s leading luxury goods companies and brands. All 2012 figures derived from the Bain Studies are based on an exchange rate of $1.00 to € 0.809.
We commissioned the Harris Study to analyze awareness of the Vince brand, affinity for the Vince brand and overall brand and purchase behavior among 500 qualified respondents.

Basis of Presentation
Our fiscal year ends on the Saturday closest to January 31. Fiscal years are identified in this prospectus according to the calendar year prior to the calendar year in which they end. For example, references to “2012,” “fiscal 2012” or “fiscal year 2012” or similar references refer to the fiscal year ended on February 2, 2013. References to the “first six months of fiscal 2012” and the “first six months of fiscal 2013” refer to the six month periods ended July 28, 2012 and August 3, 2013, respectively.
Unless the context otherwise requires, references to the “company,” “we,” “us” and “our” collectively refer to Vince Holding Corp. (currently known as Apparel Holding Corp.) and its consolidated subsidiaries, which will include Vince, LLC after giving effect to the transactions to be effected immediately prior to the consummation of this offering. When discussing periods prior to the consummation of this offering, such references refer to the historical results and operations of Vince, LLC. We describe these transactions in the “Restructuring Transactions” section of this prospectus as “IPO Restructuring Transactions”. Additionally, unless the context otherwise requires, references to:
 
 	Ÿ	 	“AHC” refer to Apparel Holding Corp. and its consolidated subsidiaries (including Kellwood Company) prior to the completion of the IPO Restructuring Transactions. Apparel Holding Corp. is the historical owner and operator of the Vince and non-Vince businesses;	
 
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 	Ÿ	 	“Kellwood” refer to Kellwood Holding, LLC and its consolidated subsidiaries (including Kellwood Company, LLC) after giving effect to the IPO Restructuring Transactions, as the future owner and operator of the non-Vince businesses, or to the non-Vince businesses of AHC prior to the completion of the IPO Restructuring Transactions, as the context requires;	
 
 	Ÿ	 	“Kellwood Company” refer to Kellwood Company prior to the completion of the IPO Restructuring Transactions and “Kellwood Company, LLC” references refer to such entity after completion of the IPO Restructuring Transactions;	
 
 	Ÿ	 	“Vince” refer to the Vince business after giving effect to the IPO Restructuring Transactions; and	
 
 	Ÿ	 	“Vince, LLC” refer to the entity that has historically held the Vince assets and liabilities and will continue to do so after completion of the IPO Restructuring Transactions and the consummation of this offering and the application of the proceeds of this offering as described herein. Apparel Holding Corp. is the legal issuer of the shares offered in this offering. Investors will be investing in the Vince business, however, they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC.	
In connection with the IPO Restructuring Transactions, affiliates of Sun Capital Partners, Inc. (“Sun Capital”) will retain their ownership of the non-Vince businesses through their ownership of Kellwood Holding, LLC.

Trademarks
Prior to giving effect to the IPO Restructuring Transactions, AHC owned or had rights to trademarks or trade names that it used in conjunction with the operation of both the Vince and non-Vince businesses, including Vince ® , Rebecca Taylor ® , David Meister ® , My Michelle ® , XOXO ® , Jolt ® , Rewind ® , Democracy™, Sag Harbor ® , Briggs New York ® , Jax ® , Sangria™, Kelty ® , Sierra Designs ® , Ultimate Direction ® , Slumberjack ® , Wenzel ® and Isis ® . After giving effect to the IPO Restructuring Transactions, we will own or have the right to use the Vince ® trademark, under which we will operate our business, and Kellwood will continue to own the trademarks and tradenames necessary to operate the non-Vince businesses. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. In this prospectus, we also refer to product names, trademarks, trade names and service marks that are the property of other companies. Each of the trademarks, trade names or service marks of other companies appearing in this prospectus belongs to its owners. Our use or display of other companies’ product names, trademarks, trade names or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship by us of, the product, trademark, trade name or service mark owner, unless we otherwise indicate.
 
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 PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. It does not contain all of the information that may be important to you and your investment decision. You should carefully read the following summary together with the entire prospectus, including the matters set forth under “Risk Factors,” “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC” and our financial statements and related notes included in the “Additional Information Related to Vince—Supplemental Selected Historical Financial Data of Vince, LLC” section of this prospectus. Some of the statements in this prospectus constitute forward-looking statements. See “Special Note Regarding Forward-Looking Statements.” Statement of operations data set forth in this “Prospectus Summary” and the “Additional Information Related to Vince—Vince Business” and “Risk Factors—Risks Related to Vince” sections are calculated and presented on a stand-alone basis for Vince, LLC as if the Vince Transfer (as defined below in “—Corporate and Other Information”) was consummated on the first day of the applicable period, unless the context otherwise requires. See “—Summary Historical Financial Data of Vince, LLC” for additional information.
Restructuring Transactions
Apparel Holding Corp. was formed to hold the assets and liabilities of Kellwood Company in connection with the February 2008 acquisition of Kellwood Company by affiliates of Sun Capital Partners, Inc. (“Sun Capital”). In September 2012, Kellwood Company transferred the assets and liabilities of the Vince business to Vince, LLC in anticipation of this offering. Immediately prior to the consummation of this offering, affiliates of Sun Capital will engage in a series of transactions pursuant to which they will establish new corporate entities that will retain all of the non-Vince businesses after this offering. These non-Vince businesses will accordingly remain privately-held and will not be owned by the investors in this offering. In addition, in connection with the IPO Restructuring Transactions, as described below in “—The Offering—Restructuring Transactions,” Apparel Holding Corp., the entity offering stock in this offering, will change its name to Vince Holding Corp. and its only assets, liabilities, and operations will consist of the Vince business. Vince is the business in which you are investing by buying shares of common stock in this offering. Notwithstanding the foregoing, an investment in us is not the same as an investment in Vince, LLC as there are assets and liabilities of Apparel Holding Corp. not reflected in the Vince, LLC balance sheet. These assets and liabilities will be significantly impacted by the IPO Restructuring Transactions and the application of the net proceeds of this offering. See “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC.”
Consummation of this offering is conditioned upon the successful completion of the IPO Restructuring Transactions, including entry into the Transfer Agreement, which requires the issuance of the Kellwood Note Receivable, the application of the proceeds of this offering to the repayment of the Kellwood Note Receivable and the repayment, discharge or refinancing, as applicable, of certain indebtedness of Kellwood Company. The indebtedness that is to be repaid or discharged immediately after the closing of this offering (after giving effect to an additional capital contribution to be made by affiliates of Sun Capital as part of the IPO Restructuring Transactions) includes the Cerberus Term Loan Agreement, which had an outstanding balance of $45.7 million as of August 3, 2013, and the Sun Term Loan Agreements, which totaled $118.0 million in the aggregate as of August 3, 2013 (each as defined in “Restructuring Transactions”). Kellwood Company, LLC will also, at closing, issue an unconditional redemption notice to redeem all of its 12.875% Second-Priority Senior Secured Payment-In-Kind Notes due 2014, which totaled $146.8 million as of August 3, 2013 (the “12.875% Notes”), and refinance its $155 million revolving credit facility (the “Wells Fargo Facility”), which had an

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outstanding balance of $115.6 million as of August 3, 2013, to, among other things, release Vince, LLC as a guarantor. At or after the closing of this offering, Kellwood Company, LLC may use proceeds remaining from the repayment of the Kellwood Note Receivable to repurchase some or all of its 7.625% 1997 Debentures due 2017, which totaled $87.0 million in the aggregate as of August 3, 2013 (the “7.625% Notes”) and some or all of its 3.5% 2004 Convertible Debentures due June 15, 2034, which totaled $0.2 million in the aggregate as of August 3, 2013 (the “3.5% Convertible Notes”). Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of the 7.625% Notes or the 3.5% Convertible Notes. Although the repayment, discharge, repurchase or refinancing of the Kellwood Company indebtedness described in this paragraph is not a condition to the closing of this offering, the Transfer Agreement requires that Kellwood Company, LLC apply the proceeds from the repayment of the Kellwood Note Receivable to effect such repayments, discharges, repurchases and refinancings and entry into the Transfer Agreement is a closing condition. See “Restructuring Transactions,” “Use of Proceeds” and “Other Information Related to this Offering—Description of Certain Indebtedness of AHC” for additional information. If any of these conditions are not satisfied, the offering will not be consummated and you will not receive or be obligated to pay for shares of Vince Holding Corp. common stock until such time as all such conditions are satisfied or the offering is withdrawn in accordance with applicable law.
Our Company
Apparel Holding Corp. is currently a diversified apparel company that designs, manufactures, and markets a collection of fashion brands which include Vince, Rebecca Taylor, David Meister, Sag Harbor, My Michelle and XOXO, along with numerous private label businesses for major retailers. AHC has four reportable segments which include (i) Vince, contemporary fashion apparel and accessories sold under the Vince ® brand name; (ii) American Recreational Products (“ARP”), recreational apparel and products sold under Kelty, Sierra Designs, Ultimate Direction, Slumberjack, Wenzel and Isis brand names; (iii) Juniors, a collection of denim, dresses and sportswear labels sold under the Rewind, My Michelle and Jolt brand name as well as private label; and (iv) Moderate, moderately priced related separates and pants covering career and casual lifestyles sold through wholesale distribution and produced under private labels, as well as under the Sag Harbor and Briggs New York brands. After giving effect to the IPO Restructuring Transactions, Apparel Holding Corp. will be renamed Vince Holding Corp. and its assets, liabilities, and operations will consist solely of the Vince business. An investment in us is an investment in the Vince business.
Vince is a prominent, high-growth contemporary apparel brand known for its modern, effortless style and everyday luxury essentials. The Vince brand was founded in 2002 with a collection of stylish women’s knits and cashmere sweaters that rapidly attracted a loyal customer base drawn to the casual sophistication and luxurious feel of our products. Over the last decade, Vince has generated strong sales momentum and has successfully grown to include a men’s collection in 2007, expanded denim, leather and outerwear lines in 2010 and women’s footwear, which was launched through a licensing partnership in 2012. The Vince brand is synonymous with a clean, timeless aesthetic, sophisticated design and superior quality. We believe these attributes have generated strong customer loyalty and allow us to hold a distinctive position among contemporary apparel brands. We also believe that we will achieve continued success by expanding our product assortment and distributing this expanded product assortment through our premier wholesale partners in the U.S. and select international markets, as well as through our growing number of branded retail locations and on our e-commerce platform.

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The strength of the Vince brand is demonstrated by our growth trajectory, with net sales, comparable store sales growth, Adjusted EBITDA and net income, as set forth below, for each of fiscal 2010, fiscal 2011 and fiscal 2012 and the first six months of fiscal 2012 and 2013:

Period	 	Net Sales	 	 	Change
from
Prior Period	 	 	Comparable
Store Sales
Growth	 	 	Adjusted
EBITDA	 	 	Change
from
Prior Period	 	 	Net Income	 	
(Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fiscal 2010	 	$	111.5	  	 	 	—	  	 	 	9.3	% 	 	$	23.6	  	 	 	—	  	 	$	9.1	  	
Fiscal 2011	 	 	175.3	  	 	 	57.2	% 	 	 	7.6	% 	 	 	44.2	  	 	 	86.9	% 	 	 	16.7	  	
Fiscal 2012	 	 	240.4	  	 	 	37.1	% 	 	 	23.1	% 	 	 	51.5	  	 	 	16.6	% 	 	 	10.3	  	
	 				 				 				 				 				 				
First six months of Fiscal 2012	 	 	90.5	  	 	 	—	  	 	 	13.9	% 	 	 	15.3	  	 	 	—	  	 	 	1.2	  	
First six months of Fiscal 2013	 	 	114.7	  	 	 	26.6	% 	 	 	31.7	% 	 	 	21.5	  	 	 	40.9	% 	 	 	2.4	  	
See “—Non-GAAP Financial Measures” for the definition of Adjusted EBITDA and a reconciliation from net income to Adjusted EBITDA.
Led by an experienced management team, Vince is evolving from a U.S. wholesale-driven women’s apparel business to a global, dual-gender, multi-channel lifestyle brand. We believe we have significant and visible growth opportunities that include:
 
 	Ÿ	 	expanding the brand’s appeal with new product offerings;	
 
 	Ÿ	 	increasing wholesale penetration and productivity in premier department stores and specialty stores;	
 
 	Ÿ	 	opening new retail locations and improving productivity in existing Vince stores;	
 
 	Ÿ	 	growing our e-commerce business;	
 
 	Ÿ	 	selectively adding new points of distribution globally; and	
 
 	Ÿ	 	building brand awareness to attract new customers.	
We serve our customers through a variety of channels that reinforce the Vince brand image. Our diversified channel strategy allows us to introduce our products to customers through multiple distribution points that are reported in two segments: wholesale and direct-to-consumer. Our wholesale segment is comprised of sales to premier department stores and specialty stores in the U.S. and in select international markets, with U.S. wholesale representing 76% of our fiscal 2012 sales and 70.4% of our sales for the first six months of fiscal 2013. We believe that our success in the U.S. wholesale segment and strong relationships with premier wholesale partners provide opportunities for continued growth. These growth initiatives include creating enhanced product assortments and brand extensions through both in-house development activities and licensing arrangements, as well as by continuing the build-out of Vince branded shop-in-shops in select wholesale partner locations. We also believe international wholesale, which represented 8% of net sales for fiscal year 2012 and 10.3% of net sales for the first six months of fiscal 2013, presents a significant growth opportunity as we strengthen our presence in existing geographies and introduce Vince in new markets globally.
In 2008, we began to broaden our distribution beyond the wholesale channel with the opening of our first retail store. Since then, we have expanded our direct-to-consumer presence, and as of October 5, 2013, we operated 27 stores, which consist of 21 full-price retail stores and six outlet locations. Based on a combination of third-party analyses and internal projections, we believe the U.S. market can currently support at least 100 free-standing Vince store locations. The direct-to-consumer

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segment also includes our website, www.vince.com , which was launched in 2008. The direct-to-consumer segment accounted for 16% of fiscal 2012 net sales and 19.3% of net sales for the first six months of fiscal 2013, and we expect sales from this channel to accelerate as we drive productivity in existing stores, open new stores and upgrade and re-launch our website in 2014.
Our Competitive Strengths
Differentiated Brand for Everyday Luxury Essentials.     We believe that the Vince brand holds a distinct position in today’s marketplace driven by a premium product assortment that combines sophisticated comfort with contemporary and timeless fashion that can be worn virtually everyday. The Vince brand is distinguished by a refined, modern aesthetic with superior quality and attention to detail and fit. The premium nature of the Vince brand is reinforced through our highly selective wholesale partnerships with premier department stores and specialty stores and a retail strategy designed to ensure a consistent brand presentation and enhanced customer experience. We believe the enduring fashion and effortless style of the Vince brand, coupled with a pricing strategy that positions us as an affordable luxury, have created strong and proven global appeal.
Exceptional Customer Loyalty and Reach.     The quality, consistency and design of our products have attracted a loyal following among style-savvy consumers across a broad age demographic. Based on a 2012 third-party survey that we commissioned among 500 qualified consumers, Vince has high levels of brand affinity and purchase intent. Among women surveyed who are aware of Vince, 41% express that they “love” the brand, and 35% report that they are “highly likely” to purchase the brand within the next six months, representing the highest levels of affinity and purchase intent compared to 20 other peer brands included in the survey. While our target customer is between the ages of 30 and 50, we have successfully attracted fashion-conscious customers as young as 18 and customers over 55 who appreciate our brand’s sophistication and design aesthetic.
Established Network of Premier Wholesale Partners .     Vince is a leading brand in premier U.S. department stores, including Nordstrom, Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s, as well as in select specialty stores nationwide. Based on industry experience, we believe that in the majority of these U.S. department stores, Vince was a top selling brand on the contemporary floor in fiscal 2012 and the first six months of fiscal 2013. Our product offerings and brand also resonate with customers outside the U.S., as demonstrated by the strong growth experienced through premium international stores including Harrods and Harvey Nichols in both these periods and by Lane Crawford in the first six months of fiscal 2013. Looking forward, we believe there are opportunities for further growth and productivity gains with our wholesale partners through new initiatives such as product line extensions and the transformation of Vince product displays at select department stores into branded shop-in-shops.
Scalable and Flexible Retail Format.     We opened our first retail location in 2008 and have since grown our retail footprint in the U.S. to a total of 27 stores, which consist of 21 full-price retail stores and six outlet locations, as of October 5, 2013. Our stores offer a personalized, service-oriented shopping experience in a boutique setting that reflects the lifestyle and modern aesthetic of the brand. We have a proven and flexible full-price retail format that targets both street and mall locations, which can accommodate both dual and single gender assortments. The strength of our retail channel is evidenced by the revenue growth across our existing store base, with a 9.3%, 7.6% and 23.1% comparable store sales growth in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, and 31.7% comparable store sales growth in the first six months of fiscal 2013. We continue to open retail locations and invest in infrastructure to support the long-term growth of this channel.

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Experienced Management Team.     We have assembled a world-class management team with extensive experience across a broad range of disciplines including global brand building, merchandising, marketing, design, operations, retail, international, licensing and finance. Our highly skilled team is led by our Chief Executive Officer (“CEO”), Jill Granoff, who was previously CEO of Kenneth Cole Productions, our President and Chief Creative Officer, Karin Gregersen, who was previously Managing Director of Chloé/Richemont Americas, and our Chief Financial Officer (“CFO”), Lisa Klinger, who was previously CFO of The Fresh Market.
Growth Strategy
Capitalize on New and Existing Product Opportunities.     We believe there are significant opportunities to capitalize on our strong customer loyalty and growing customer base by enhancing our current product assortment and introducing new product categories in order to provide additional reasons to shop the Vince brand. We plan to build sales of existing product categories by elevating our men’s collection, expanding our denim and outerwear offerings, increasing our assortment of women’s bottoms and dresses and implementing a replenishment program for core items. Additionally, we continue to identify new product categories that will allow us to capture incremental share from existing customers and attract new customers. Categories already identified include handbags and leather accessories as well as more tailored collections for women and men. We also entered into a licensing agreement for women’s footwear, which launched in 2012, and signed a licensing agreement in 2013 for the launch of children’s apparel in 2014. We will continue to explore additional licensing opportunities for select categories requiring specialized expertise, such as intimates/loungewear, men’s footwear and fashion accessories.
Increase Wholesale Penetration .    In fiscal 2012, we grew our wholesale net sales in the U.S. by 35% compared to fiscal 2011. This revenue growth exceeded our growth of 17% in the number of wholesale doors during fiscal 2012, which illustrates our ability to improve productivity within existing locations. We believe we can continue to increase wholesale net sales by enhancing assortments in existing product categories, introducing new product categories and improving our visual presentation, space layout and fixtures. Working with our wholesale partners, we are planning to open 15 to 20 new branded shop-in-shops in fiscal 2013 and believe there is an attractive opportunity to open additional shop-in-shops in 2014 and beyond. We believe our shop-in-shop strategy will provide our customers with a more elevated retail shopping experience and allow us to better showcase the Vince lifestyle.
Accelerate Growth of U.S. Direct-to-Consumer Segment.     As of October 5, 2013, we operated 27 stores, which consist of 21 full-price retail stores and six outlet locations. Based on a combination of third-party analyses and internal projections, we believe the U.S. market can currently support at least 100 free-standing Vince store locations. We plan to double our current store base over the next three to five years, including opening a net total of six new stores in fiscal 2013. Our new full-price store model ranges from 2,000 to 3,000 gross square feet, and we target a payback period on our new store investments of two to three years. In addition to new store expansion, we also have an opportunity to increase productivity in our existing stores through enhanced merchandising with a focus on a broad lifestyle presentation, personalized customer service strategies, the launch of new product categories, improved inventory management and the expansion of made-for-outlet product. We believe our recently enhanced e-commerce strategy creates additional opportunities for growth. As a component of this strategy, we intend to upgrade and re-launch our www.vince.com website in 2014 to offer a more compelling shopping experience and richer content to increase customer engagement and visit frequency.
Expand Our International Business.     Given increasing worldwide demand for affordable luxury goods, targeted international expansion represents a compelling growth opportunity. Vince products

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are currently sold in 43 countries, either directly to premier department and specialty stores, or through distribution relationships with highly-regarded international partners with exclusive rights to certain territories. As of October 5, 2013, we had eight international shop-in-shops. We believe we can increase international sales by supplementing existing distribution partnerships, increasing wholesale penetration and productivity and selectively adding retail locations with current and prospective partners in attractive international markets including Canada, select European countries, Asia and the Middle East.
Build Our Brand Awareness .    Vince has a significant opportunity to increase brand awareness and drive incremental sales. Based on a 2012 third-party consumer survey we commissioned, Vince has aided brand awareness of 20% compared to 30% to 50% for other contemporary brands and approximately 75% to 90% for brands like Michael Kors, Diane von Furstenburg and Ralph Lauren. Aided brand awareness is when a respondent indicates recognition of a specific brand from a list of possible names presented by those conducting the survey instead of indicating recognition of a specific brand without being offered a list of potential responses. Our low awareness level, coupled with the high affinity and purchase intent we have among existing consumers, underscores what we believe is a significant growth opportunity to convert potential new customers to loyal brand enthusiasts. To address this opportunity, we intend to increase our marketing investment across a range of strategic initiatives, including cooperative advertising with wholesale partners, print media, digital media, editorial coverage, direct mail, search engine optimization, social media initiatives, targeted product placement, celebrity outreach and in-store events. We also believe our brand awareness will increase as we open new retail stores in prominent, high-visibility locations, increase the number of shop-in-shops at our wholesale partner locations and upgrade and re-launch our www.vince.com website.
Recent Developments of Apparel Holding Corp.
Set forth below is selected preliminary, unaudited consolidated financial data of Apparel Holding Corp. and its consolidated subsidiaries for the third quarter of fiscal 2013, based upon AHC’s estimates. It includes selected preliminary, unaudited consolidated financial data associated with the combined Vince and non-Vince businesses and assets and liabilities associated with the Vince business as well as the non-Vince businesses that will be transferred to Kellwood Holding, LLC and its consolidated subsidiaries in connection with the IPO Restructuring Transactions. An investment in us after giving effect to the IPO Restructuring Transactions is an investment in the Vince business. We will not have ongoing involvement with the non-Vince businesses following separation, with the exception of our payments to Kellwood for certain services to be provided under the Shared Services Agreement as further described elsewhere in this prospectus. Similarly, Kellwood will not have ongoing involvement in our business, other than pursuant to the Shared Services Agreement. Once we have completed the IPO Restructuring Transactions, results of operations of the non-Vince businesses will be reported as discontinued operations for accounting purposes and our continuing operations will consist solely of the Vince business.
This data has been prepared by, and is the responsibility of, AHC management. AHC’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has not audited, reviewed, compiled or performed any procedures related to, and does not express an opinion or any other form of assurance with respect to, this data. This summary is not a comprehensive statement of AHC’s financial results for the third quarter of fiscal 2013 and AHC’s actual results may differ materially from these estimates due to the occurrence of events prior to the end of this period, the completion of its financial closing procedures, final adjustments and other developments that may arise between now and the time the financial results for this period are finalized.

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 	Ÿ	 	Net sales are estimated to be between $             million and $             million for the third quarter of fiscal 2013, an increase of         % at the midpoint of the range as compared to $203.4 million for the third quarter of fiscal 2012. The estimated increase in net sales is primarily due to higher net sales within our Vince and Juniors segments, partially offset by lower net sales within our ARP segment.	
 
 	Ÿ	 	Gross margin rate for the third quarter of fiscal 2013 is estimated to be between         % and         %, an increase of approximately              basis points compared to the third quarter fiscal 2012 rate of 30.9%. The estimated increase in gross margin is driven primarily by a higher percentage of our sales coming from the Vince segment, in which AHC generally recognizes higher margins.	
 
 	Ÿ	 	Income from operations is estimated to be between $             million and $             million for the third quarter of fiscal 2013 as compared to $16.1 million for the third quarter of fiscal 2012. The increase in net sales noted above is expected to be offset by increased selling, general and administrative expenses of between $             million and $             million, primarily in its Vince segment and partially offset by a decrease in unallocated corporate selling, general and administrative expenses.	
 
 	Ÿ	 	Net loss is estimated to be between $             million and $             million for the third quarter of fiscal 2013 as compared to net loss of $(14.9) million for the third quarter of fiscal 2012. The estimated decrease in net loss compared to the corresponding period in fiscal 2012 is primarily driven by the net loss from discontinued operations of $6.7 million for the third quarter of fiscal 2012, which was not repeated in fiscal 2013.	
 
 	Ÿ	 	Adjusted EBITDA is estimated to be between $         million and $         million for the third quarter of fiscal 2013, as compared to $21.5 million for the third quarter of fiscal 2012. AHC’s adjusted EBITDA estimate for the third quarter of fiscal 2013 reflects AHC’s estimated net income (loss) from continuing operations before income taxes of between $(        ) million and $         million, plus estimated deprecation of $         million, plus estimated amortization of $         million, plus estimated interest expense, net of between $         million and $         million, plus estimated restructuring, environmental and other charges of between $         million and $         million, plus estimated public company transition costs of between $         million and $         million. AHC’s Adjusted EBITDA for the third quarter of fiscal 2012 reflects AHC’s loss from continuing operations before provision of income taxes of $(8.3) million plus depreciation of $1.0 million, plus amortization of $0.5 million, plus interest expense, net of $23.8 million, plus restructuring, environmental and other charges of $0.6 million plus public company transition costs of $3.9 million, in each case for the third quarter of fiscal 2012.	
AHC includes Adjusted EBITDA for a number of reasons as described in “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC.” AHC’s use of Adjusted EBITDA has certain limitations because it does not reflect all items of income and expense that affect AHC’s operations. Investors are encouraged to review AHC’s financial information in its entirety and not rely on a single financial measure.
AHC has provided a range from the preliminary results described above primarily because its financial closing procedures for the month ending November 2, 2013 and the third quarter of fiscal 2013 have not yet ended and as such, the financial closing procedures are not yet complete. As a result, AHC expects that its financial results upon completion of our closing procedures will vary from the preliminary estimates within the ranges as described above. Among the components of AHC’s financial results as to which it is unable to determine specific amounts prior to the completion of its quarter end closing procedures are: (i) net sales, which AHC estimates based upon recent historical trends, internal analysis and forecasting and preliminary unaudited results for the two fiscal months

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ended October 5, 2013; (ii) certain general operating expenses associated with accrued liabilities arising at the end of the period, which are estimated based upon recent historical trends and internal reporting and forecasting; (iii) employee bonus expenses, which are included in AHC’s operating expenses and estimated based upon a formula that is dependent upon AHC’s forecasted Adjusted EBITDA; (iv) certain operating expenses associated with commitments and contingencies; and (v) AHC’s income tax provision, which has been estimated based upon AHC’s current tax provision as of and at August 3, 2013 and AHC’s forecasted pre-tax income (loss) for the period. AHC expects to complete its closing procedures with respect to the month ending November 2, 2013 and the third quarter of fiscal 2013 in December 2013.
Recent Developments of Vince, LLC
Set forth below is selected preliminary, unaudited financial data of Vince, LLC for the third quarter of fiscal 2013, based upon our estimates. This data has been prepared by, and is the responsibility of, management. Our independent auditor, PricewaterhouseCoopers LLP, has not audited, reviewed, compiled or performed any procedures, and does not express an opinion or any other form of assurance with respect to this data. This summary is not a comprehensive statement of our financial results for this period and our actual results may differ materially from these estimates due to the occurrence of events prior to the end of this period, the completion of our financial closing procedures, final adjustments and other developments that may arise between now and the time the financial results for this period are finalized.
Please note the following:
 
 	Ÿ	 	Apparel Holding Corp. (to be renamed Vince Holding Corp. prior to the consummation of this offering) is the legal issuer of the shares offered in this offering.	
 
 	Ÿ	 	The information set forth below is provided as supplemental information and should not be considered in lieu of the information pertaining to Apparel Holding Corp; and	
 
 	Ÿ	 	The financial information included in this discussion and in Vince, LLC’s historical financial statements may not be indicative of Apparel Holding Corp.’s financial position, operating results and changes in equity after the completion of the IPO Restructuring Transactions, or what they would have been had the Vince business operated separately from the non-Vince businesses during the periods presented.	
 
 	Ÿ	 	Net sales for the third quarter of fiscal 2013 are estimated to be between $       million and $       million, an increase of     % to     % as compared to $77.0 million for the third quarter of fiscal 2012. This net sales growth is on top of a 34% increase in net sales during the corresponding third quarter period in fiscal 2012. The increase in net sales is expected to be primarily due to an increase in our direct to consumer channel with estimated comparable store sales growth of     % to     %, the opening of seven additional retail stores, and increased e-commerce sales volume. The     % to     % comparable store sales growth expectation for the third quarter of fiscal 2013 is in addition to 23% comparable store sales growth reported in the third quarter of fiscal 2012. Additionally, we estimate low single-digit growth in the wholesale channel driven by net sales growth in the mid-teens at our premier U.S. wholesale partners and the opening of 13 new global shop-in-shops, partially offset by the timing of sales with our international and off-price partners that were shifted into the fourth quarter of fiscal 2013.	
 
 	Ÿ	 	Gross margin rate for the third quarter of fiscal 2013 is estimated to be between     % and     %, an increase of approximately        to        basis points compared to the third quarter fiscal 2012	

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 	rate of 46%. The estimated increase in gross margin is driven by (i) a higher percentage of our sales coming from the direct-to-consumer segment, where we generally recognize higher margins, which we estimate will deliver approximately        basis points of gross margin expansion and (ii) an increased percentage of full-price sales compared to off-price sales in the third quarter of fiscal 2013, which we estimate will deliver approximately        basis points of gross margin improvement relative to the third quarter of fiscal 2012. These margin expansion drivers will be partially offset by increased margin contribution payments provided to our wholesale partners in the third quarter of fiscal 2013, which are estimated to result in a        basis points decline in gross margin.	
 
 	Ÿ	 	Income from operations for the third quarter of fiscal 2013 is estimated to be between $         million and $       million, an increase of     % to     % as compared to $15.6 million for the third quarter of fiscal 2012. The estimated increase in income from operations compared to the corresponding period in fiscal 2012 is primarily due to increased net sales, partially offset by higher selling, general and administrative (“SG&A”) expenses. Total SG&A expenses are estimated to be between $             million and $       million, or     % to         % as a percentage of sales, versus $19.4 million, or 25% as a percentage of sales, in the corresponding period in fiscal 2012. The increased SG&A expenses were driven by incremental compensation costs associated with the hiring of the stand-alone Vince management team, higher new store start-up costs and increased marketing expense, each of which reflect continued investment in the business for future growth.	
 
 	Ÿ	 	Net income for the third quarter of fiscal 2013 is estimated to be between $       million and $       million, an increase of     % to     % as compared to net income of $5.6 million for the third quarter of fiscal 2012. The estimated increase in net income versus the corresponding period in fiscal 2012 is primarily due to increased net sales, partially offset by higher SG&A expenses.	
 
 	Ÿ	 	Adjusted EBITDA for the third quarter of fiscal 2013 is estimated to be between $       million and $       million, an increase of     % to     % as compared to $19.9 million for the third quarter of fiscal 2012. Our adjusted EBITDA estimate for the third quarter of fiscal 2013 reflects estimated income before income taxes of between $       million and $       million, plus estimated depreciation of $       million, plus estimated amortization of $       million, plus estimated net interest expense of between $       million and $       million, plus estimated public company transition costs of between $       million and $       million. The adjusted EBITDA for the third quarter of fiscal 2012 reflects income before income taxes of $9.3 million plus depreciation of $0.4 million, plus amortization of $0.2 million, plus net interest expense of $6.1 million, plus public company transition costs of $3.9 million.	
 
We include Adjusted EBITDA for a number of reasons as described in “Additional Information Related to Vince—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince.” Our use of Adjusted EBITDA has certain limitations because it does not reflect all items of income and expense that affect our operations. Investors are encouraged to review our financial information in its entirety and not rely on a single financial measure.
We have provided a range from the preliminary results described above primarily because the financial closing procedures for the month ending November 2, 2013 and the third quarter of fiscal 2013 are not yet complete. As a result, we expect that our financial results upon completion of our closing procedures will vary from our preliminary estimates within the ranges as described above. Among the components of our financial results as to which we are unable to determine specific amounts prior to the completion of its quarter end closing procedures are : (i) net sales, which we estimate based upon recent historical trends, internal analysis and forecasting and preliminary

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unaudited results for the two months ended October 5, 2013; (ii) certain general operating expenses associated with accrued liabilities arising at the end of the period, which are estimated based upon recent historical trends and internal reporting and forecasting; (iii) employee bonus expenses, which are included in our operating expenses and estimated based upon a formula that is dependent upon our forecasted Adjusted EBITDA; (iv) certain operating expenses associated with commitments and contingencies; and (v) our income tax provision, which has been estimated based upon our current tax provision as of and at August 3, 2013 and our forecasted pre-tax income for the period. We expect to complete our closing procedures with respect to the month ending November 2, 2013 and the third quarter of fiscal 2013 in December 2013.
Our Market Opportunity
We operate in the global personal luxury goods industry. According to the Bain Studies, the luxury goods market grew at a compound annual growth rate of approximately 6% between 1996 and 2012, with estimated sales of approximately $260 billion in 2012. The Bain Studies define the global personal luxury goods market to include design, hospitality, wines & spirits, food, cars and yachts. According to the Bain Studies, for fiscal 2010 through fiscal 2012, the global personal luxury goods market grew at an 11% compounded annual growth rate. Going forward, Bain & Company expects the global personal luxury goods market to grow 4% to 5% in 2013, and at a 5% to 6% compounded annual growth rate over the next few years, reflecting a growing middle class possessing increased purchasing power in select international markets, increased demand for higher-end apparel and leather goods, and growing demand for luxury goods in China and South-East Asia. We believe our business is well-positioned to benefit from these trends.
Risks Associated with our Business
There are a number of risks and uncertainties that may affect our financial and operating performance and our growth prospects. You should carefully consider all of the risks discussed in “Risk Factors” before investing in our common stock. Some of these risks include the following:
 
 	Ÿ	 	General economic conditions in the U.S. and other parts of the world, including a continued weakening of the economy and restricted credit markets, can affect consumer confidence and consumer spending patterns;	
 
 	Ÿ	 	Intense competition in the apparel industry could reduce our sales and profitability;	
 
 	Ÿ	 	A substantial portion of our revenue is derived from a small number of large wholesale partners, and the loss of any of these wholesale partners could substantially reduce our total revenue;	
 
 	Ÿ	 	We have grown rapidly in recent years and we have limited operating experience as a team at our current scale of operations. If we are unable to manage our operations at our current size or are unable to manage any future growth effectively, our business results and financial performance may suffer;	
 
 	Ÿ	 	Kellwood provides us with certain key services for our business. If Kellwood fails to perform its obligations to us or if we do not find appropriate replacement services, we may be unable to perform these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us; and	
 
 	Ÿ	 	Our historical financial information may not be representative of our results as a stand-alone public company.	

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Our Equity Sponsor
Sun Capital is a leading private investment firm focused on leveraged buyouts, equity, debt and other investments in market-leading companies that can benefit from its in-house operating professionals and experience. Since its inception in 1995, Sun Capital affiliates have invested in over 320 companies worldwide with combined sales in excess of $45 billion. Sun Capital affiliates have invested in several specialty retail and apparel companies, including Gerber Childrenswear, Hanna Andersson, Limited Stores, Gordmans, Scotch & Soda, Mattress Firm, Pamida and Shopko Stores.
On February 12, 2008, investment funds advised by affiliates of Sun Capital acquired Kellwood Company for aggregate consideration of $955.4 million, including the assumption of debt, in a cash tender offer and subsequent squeeze-out merger. Sun Cardinal, LLC (“Sun Cardinal”) and SCSF Cardinal, LLC (“SCSF Cardinal”), affiliates of Sun Capital and the selling stockholders in this offering, have offered the underwriters an option to purchase an additional                  shares in this offering. Following consummation of this offering, affiliates of Sun Capital will own approximately       % of our outstanding common stock, or         % if the underwriters’ option to purchase additional shares from the selling stockholders is fully exercised. See “Other Information Related to this Offering—Security Ownership of Certain Beneficial Owners of AHC.” Sun Cardinal, LLC, a Sun Capital affiliate, will have the ability to designate a majority of our directors for so long as affiliates of Sun Capital own 30% or more of the outstanding shares of our common stock. As a result, funds advised by affiliates of Sun Capital will be able to have a significant effect relating to votes over fundamental and significant corporate matters and transactions. See “Risk Factors—Risks Related to this Offering and Our Common Stock—We are a “controlled company,” controlled by investment funds advised by affiliates of Sun Capital, whose interests in our business may be different from yours.”
Company History
Kellwood Company was founded in 1961 as the successor by merger of fifteen independent suppliers to Sears, Roebuck & Co. Beginning in 1985, Kellwood implemented a strategy to expand its branded business, broaden its customer base, diversify its distribution channels and further develop its global sourcing capability. In 2006, Kellwood Company acquired the Vince business from its founders. As described above, affiliates of Sun Capital acquired Kellwood Company in February 2008 through Apparel Holding Corp. Affiliates of Sun Capital will continue to control the non-Vince businesses through their ownership of Kellwood Holding, LLC, after giving effect to the IPO Restructuring Transactions.
Corporate and Other Information
Apparel Holding Corp. was incorporated in Delaware in February 2008 in connection with the acquisition of Kellwood Company by affiliates of Sun Capital. In September 2012, Kellwood Company formed Vince, LLC and all assets constituting the Vince business were contributed to Vince, LLC at such time (the “Vince Transfer”). Immediately prior to the consummation of this offering, Apparel Holding Corp. will be renamed Vince Holding Corp., the entity issuing common stock in this offering. Our principal executive office is located at 1441 Broadway, 6th Floor, New York, New York 10018 and our telephone number is (212) 515-2600. Our corporate website address is www.vince.com . The information contained on, or accessible through, our corporate website does not constitute part of this prospectus.
Affiliates of Sun Capital are Apparel Holding Corp.’s controlling stockholders. After consummation of this offering, affiliates of Sun Capital will continue to control both Kellwood and Vince. Kellwood will continue to provide certain services to us through the Shared Services Agreement (as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement”), such as distribution, information technology and back office support.

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Emerging Growth Company Status
We are, and will continue to be after completing the IPO Restructuring Transactions, an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and stockholder advisory votes on golden parachute compensation.
Under the JOBS Act, we will remain an “emerging growth company” until the earliest of:
 
 	Ÿ	 	the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more;	
 
 	Ÿ	 	the last day of the fiscal year following the fifth anniversary of the consummation of this offering;	
 
 	Ÿ	 	the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and	
 
 	Ÿ	 	the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We will qualify as a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700 million in outstanding common equity held by our non-affiliates and (ii) been public for at least 12 months. The value of our outstanding common equity will be measured each year on the last day of our second fiscal quarter.	
The JOBS Act also provides that an “emerging growth company” can utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. However, we are choosing to “opt out” of such extended transition period, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

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The Offering

		
Common stock offered by us	 	             shares.	
		
Option to purchase additional shares offered by the selling stockholders	 	
The selling stockholders have agreed to allow the underwriters to purchase up to an additional              shares in the aggregate from them, at the public offering price, less the underwriting discount, within 30 days of the date of this prospectus. We will not receive proceeds, if any, from the underwriters’ option to purchase additional shares.	
		
Common stock outstanding immediately after the offering	 	
             shares.	
		
Selling stockholders	 	Sun Cardinal, LLC and SCSF Cardinal, LLC, affiliates of Sun Capital.	
		
Use of proceeds	 	We expect to receive net proceeds from this offering of approximately $181 million, based upon an assumed initial public offering price of $             per share, the midpoint of the range set forth on the cover of this prospectus, and after deducting underwriting discounts and estimated offering expenses payable by us.
 
We expect to receive approximately $181 of net proceeds from this offering and retain approximately $5.0 million of such net proceeds for general corporate purposes. We expect to use the remaining estimated net proceeds, together with net borrowings of $169 million under our new term loan facility, to repay the Kellwood Note Receivable, as described in “Restructuring Transactions.” The final amount of the Kellwood Note Receivable will equal the sum of net proceeds from this offering plus net borrowings under our new term loan facility. We estimate that the Kellwood Note Receivable will total $345 million, based on our current estimated net offering proceeds and anticipated net borrowings under our new term loan facility.
 
After giving effect to the contribution of certain indebtedness under the Sun Term Loan Agreements to be made by Sun Capital or its affiliates as part of the IPO Restructuring Transactions (the “Additional Sun Capital Contribution”), which capital contribution will be in addition to the Sun Capital Contribution, as described below in “—Restructuring Transactions,” Kellwood Company, LLC will use	

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	 	proceeds from our repayment of the Kellwood Note Receivable to repay, discharge or repurchase a portion of its indebtedness, including fees, expenses and accrued and unpaid interest related thereto. Additionally, Kellwood Company, LLC will refinance the remainder of such then outstanding indebtedness for which Apparel Holding Corp. or Vince, LLC is a guarantor or obligor. Kellwood Company, LLC also intends to utilize a portion of the proceeds from repayment of the Kellwood Note Receivable to pay (i) a restructuring fee equal to 1% of the aggregate of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Partners Management V, LLC (“Sun Capital Management”) pursuant to that certain management services agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party— Transactions of AHC—Management Fees” (the “Management Services Agreement”) and (ii) a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation— Employment Agreements.” See “Restructuring Transactions” and “Use of Proceeds” for additional information. It is currently estimated that the restructuring fee described in clause (i) above and payable to Sun Capital Management in connection with this offering will total $3.5 million.	
		
Restructuring Transactions	 	Effective September 1, 2012, Kellwood Company, a wholly-owned subsidiary of Apparel Holding Corp., contributed the assets and liabilities constituting the Vince business to Vince, LLC, a Delaware limited liability company and wholly-owned subsidiary of Kellwood Company, in the Vince Transfer.	
		
	 	In anticipation of this offering and effective June 18, 2013, affiliates of Sun Capital, contributed $407.5 million of indebtedness to Apparel Holding Corp. as a capital contribution. We refer to this contribution as the “Sun Capital Contribution.” Affiliates of Sun Capital will contribute an estimated $66.8 million of indebtedness under the Sun Term Loan Agreements to Apparel Holding Corp. in the Additional Sun Capital Contribution as part of the IPO Restructuring Transactions. Such number assumes that the amount of the Kellwood Note Receivable will be $345 million and that the aggregate amount of uses of the Kellwood Note	

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	 	Receivable proceeds (as described in “Restructuring Transactions”) totals $411.8 million.
 
We will complete the IPO Restructuring Transactions immediately prior to the consummation of this offering through which (i) Kellwood Holding, LLC will acquire the non-Vince businesses, which include Kellwood Company, LLC (to be converted from Kellwood Company in connection with these transactions) and (ii) Vince Intermediate Holding, LLC, a to be formed direct subsidiary of Apparel Holding Corp., will retain the Vince business, which includes Vince, LLC. Sun Capital affiliates will continue to own and control the non-Vince businesses through their ownership of Kellwood Holding, LLC after giving effect to the IPO Restructuring Transactions. Additionally, immediately prior to consummation of this offering, and as part of the IPO Restructuring Transactions, Apparel Holding Corp. will (A) convert all of its issued and outstanding non-voting common stock into common stock on a one-for-one basis, (B) effect a stock split of its common stock on a                  for one basis and (C) change its name to Vince Holding Corp. We refer to the Vince Transfer, the Sun Capital Contribution and the IPO Restructuring Transactions collectively as the “Restructuring Transactions.” Successful completion of the IPO Restructuring Transactions is a condition to the consummation of this offering. For a more detailed discussion and charts showing our structure before and after consummation of this offering, see “Restructuring Transactions.”	
		
Dividend policy	 	We currently expect to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness and therefore we do not anticipate paying any cash dividends in the foreseeable future. We anticipate that our ability to pay dividends on our common stock will be limited by our new revolving credit facility and our new term loan facility and may be further restricted by the terms of any other of our future debt or preferred securities. See “Dividend Policy of AHC” and “Additional Information Related to Vince—Description of Certain Indebtedness of Vince, LLC.”	
		
Risk factors	 	See “Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before you decide to invest in our common stock.	
		
Proposed New York Stock Exchange Symbol	 	We intend to apply to list our common stock on the New York Stock Exchange (the “NYSE”) under the symbol “VNCE”.	

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The number of shares of our common stock to be outstanding following this offering is based on          shares of our common stock outstanding as of                 , 2013, and excludes:
 
 	Ÿ	 	         shares of our common stock issuable upon the exercise of options that we intend to grant under our new management equity incentive plan (the "Vince 2013 Incentive Plan"), as described in “Additional Information Related to Vince—Vince Executive Compensation —Employee Stock Plans—Vince 2013 Incentive Plan,” to certain of our employees with an exercise price equal to the public offering price set forth on the cover of this prospectus in connection with the consummation of this offering;	
 
 	Ÿ	 	                 shares of our common stock issuable upon the exercise of options that were issued to Vince employees and to a former AHC executive under the 2010 Option Plan of Kellwood Company (the “2010 Option Plan”), after giving effect to the IPO Restructuring Transactions (including the related stock split) and Apparel Holding Corp.’s assumption of Kellwood Company’s remaining obligations under the 2010 Option Plan. These options have a weighted average exercise price of $                 per share;	
 
 	Ÿ	 	         shares of our common stock which are to be issued to non-Vince employees in exchange for their vested Kellwood Company stock options previously issued under the 2010 Option Plan (as such options are adjusted to give effect to the IPO Restructuring Transactions, including the related stock split). The number of shares to be so issued to each employee shall be calculated by dividing the aggregate spread value of such employee’s vested options (determined as the difference between the exercise price and the public offering price set forth on the cover of this prospectus) by this public offering price;	
 
 	Ÿ	 	         restricted stock units, representing the right, at the option of the company, to deliver             shares of our common stock or an equivalent cash amount, that we intend to grant to our non-employee directors in connection with the consummation of this offering;	
 
 	Ÿ	 	         shares of our common stock that will be reserved and available for future issuance under our Vince 2013 Incentive Plan, after giving effect to the option and restricted stock grants described above; and	
 
 	Ÿ	 	         shares of our common stock reserved for future issuance under our 2013 Employee Stock Purchase Plan (the "Vince ESPP") which we plan to adopt in connection with this offering (as described in “Additional Information Related to Vince—Vince Executive Compensation—Employee Stock Plans—Employee Stock Purchase Plan”).	
Unless otherwise indicated, this prospectus reflects and assumes the following:
 
 	Ÿ	 	the conversion of all of our issued and outstanding non-voting common stock into common stock on a one-for-one basis;	
 
 	Ÿ	 	the subsequent stock split of our common stock on a              for one basis;	
 
 	Ÿ	 	the completion of the remainder of the IPO Restructuring Transactions; and	
 
 	Ÿ	 	an initial public offering price of $             per share, the midpoint of the initial public offering price range indicated on the cover of this prospectus.	

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Summary Historical Consolidated Financial Data of Apparel Holding Corp.
The following tables set forth summary historical consolidated financial data of Apparel Holding Corp. and its consolidated subsidiaries. They include the results of operations associated with the combined Vince and non-Vince businesses and assets and liabilities associated with the Vince business as well as the non-Vince businesses that will be transferred to Kellwood Holding, LLC and its consolidated subsidiaries in connection with the IPO Restructuring Transactions. An investment in us after giving effect to the IPO Restructuring Transactions is an investment in the Vince business. We will not have ongoing involvement with the non-Vince businesses following separation, with the exception of our payments to Kellwood for certain services to be provided under the Shared Services Agreement as further described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement” contained elsewhere in this prospectus. Similarly, Kellwood will not have ongoing involvement in our business, other than pursuant to the Shared Services Agreement. You should read the information set forth below in conjunction with “Use of Proceeds,” “Capitalization of AHC,” “Additional Information Related to AHC—Selected Historical Consolidated Financial Data of AHC,” “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC” and Apparel Holding Corp.’s audited historical consolidated financial statements and notes thereto included elsewhere in this prospectus.
The statement of operations data for each of fiscal 2010, fiscal 2011 and fiscal 2012 set forth below are derived from AHC’s audited consolidated financial statements included elsewhere in this prospectus. The statements of operations data for each of the six month periods ended July 28, 2012 and August 3, 2013 and the balance sheet data as of August 3, 2013 set forth below are derived from AHC’s unaudited quarterly consolidated financial statements included elsewhere in this prospectus and contain all adjustments, consisting of normal recurring adjustments, that management considers necessary for a fair presentation of our financial position and results of operations for the periods presented. Operating results for the six month periods are not necessarily indicative of results for a full financial year, or any other periods. Historical results are not necessarily indicative of results to be expected for future periods.
Once we have completed the IPO Restructuring Transactions, results of operations of the non-Vince businesses will be reported as discontinued operations for accounting purposes and our continuing operations will consist solely of the Vince business. See “—Summary Historical Financial Data of Vince, LLC” for additional information regarding the operations and assets and liabilities of Vince, LLC.

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010(1)	 	 	2011(1)	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands, except per share data)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Statement of Operations Data:	 				 				 				 				 				
Net sales	 	$	586,574	  	 	$	662,846	  	 	$	707,995	  	 	$	319,445	  	 	$	363,967	  	
Cost of products sold	 	 	430,801	  	 	 	490,110	  	 	 	507,905	  	 	 	235,293	  	 	 	256,031	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	155,773	  	 	 	172,736	  	 	 	200,090	  	 	 	84,152	  	 	 	107,936	  	
Operating expenses:	 				 				 				 				 				
Selling, general and administrative expenses	 	 	140,567	  	 	 	155,220	  	 	 	177,755	  	 	 	83,526	  	 	 	93,503	  	
Amortization of intangible assets	 	 	954	  	 	 	1,941	  	 	 	1,899	  	 	 	950	  	 	 	950	  	
Restructuring, environmental remediation and other charges(2)	 	 	9,729	  	 	 	2,651	  	 	 	5,091	  	 	 	2,264	  	 	 	827	  	
Impairment of long-lived assets (excluding goodwill)	 	 	438	  	 	 	2,504	  	 	 	2,349	  	 	 	717	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	10,821	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net(3)	 	 	—	  	 	 	(1,578	) 	 	 	(7,162	) 	 	 	(4,507	) 	 	 	(54	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	151,688	  	 	 	171,559	  	 	 	179,932	  	 	 	82,950	  	 	 	95,226	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	 	 	4,085	  	 	 	1,177	  	 	 	20,158	  	 	 	1,202	  	 	 	12,710	  	
Interest expense, net	 	 	103,074	  	 	 	127,148	  	 	 	122,383	  	 	 	74,151	  	 	 	43,671	  	
Gain on acquisition, net of tax(3)	 	 	(939	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment(3)	 	 	(15,912	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Other expense, net	 	 	2,442	  	 	 	1,914	  	 	 	2,723	  	 	 	1,215	  	 	 	1,233	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before provision for income taxes	 	 	(84,580	) 	 	 	(127,885	) 	 	 	(104,948	) 	 	 	(74,164	) 	 	 	(32,194	) 	
Provision for income taxes	 	 	3,507	  	 	 	3,401	  	 	 	708	  	 	 	2,245	  	 	 	2,679	  	

 
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Table of Contents

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010(1)	 	 	2011(1)	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands, except per share data)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net loss from continuing operations(2)(3)	 	$	(88,087	) 	 	$	(131,286	) 	 	$	(105,656	) 	 	$	(76,409	) 	 	$	(34,873	) 	
Net (loss) income from discontinued operations(2)(4)	 	 	(16,391	) 	 	 	(16,580	) 	 	 	(2,053	) 	 	 	(4,798	) 	 	 	9,230	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(104,478	) 	 	$	(147,866	) 	 	$	(107,709	) 	 	$	(81,207	) 	 	$	(25,643	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share from continuing operations(5)	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	
Basic and diluted (loss) income per share from discontinued operation(5)	 				 				 				 				 				
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share(5)	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding:	 				 				 				 				 				
Basic and diluted(5)	 				 				 				 				 				

(1)	In January 2011, AHC acquired Rebecca Taylor, a women’s contemporary apparel and accessory company. In July 2011, AHC acquired Zobha, a women’s athletic apparel brand, primarily focused on the yoga market. See “Additional Information Related to AHC—Management’s Discussion and Analysis or Financial Condition and Results of Operations of AHC—Basis of Presentation” for information regarding AHC’s decision to divest the Zobha business during the second quarter of 2013.	
(2)	During the years presented, AHC performed several rationalization efforts aimed at improving its operational efficiency to streamline the fashion apparel and recreational apparel and products businesses. These restructuring activities, along with impairment of long-lived assets, environmental remediation charges and other charges included in net loss from continuing operations, are $10.2 million in fiscal 2010, $16.0 million in fiscal 2011, $7.4 million in fiscal 2012, $3.0 million in the first six months of fiscal 2012 and $0.8 million in the first six months of fiscal 2013. These restructuring activities, along with impairment of long-lived assets and other charges included in net (loss) income from discontinued operations, are $27.7 million in fiscal 2010, $6.6 million in fiscal 2011, $4.8 million in fiscal 2012, $0.2 million in the six months of fiscal 2012 and $0.9 million in the six months of fiscal 2013.	
(3)	Net loss from continuing operations includes net gains affecting comparability of the following:	
 
 	Ÿ	 	$16.8 million in fiscal 2010 comprised of a $0.9 million gain on the acquisition of certain net assets from Adampluseve, Inc, (the “Adam operations”) as the fair value of the identifiable assets less the liabilities assumed exceeded the fair value of the purchase price consideration, and a $15.9 million gain on debt extinguishment as a result of AHC’s repurchase of $29.7 million of face value of certain notes outstanding from an affiliate of Sun Capital for $9.1 million in cash;	
 
 	Ÿ	 	$1.6 million in fiscal 2011 due to a reduction in the estimated contingent payments related to the acquisitions of Rebecca Taylor and Zobha as those purchase agreements contained provisions for contingent consideration that would be paid to the respective sellers if certain performance targets are met within a specified timeframe and during the periods presented expectations related to the achievement of these targets were revised; and	
 
 	Ÿ	 	$7.2 million in fiscal 2012, of which $4.5 million was recognized during the six months ended July 28, 2012, due to further reductions in the estimated contingent payments related to the acquisitions of Rebecca Taylor and Zobha.	
 
(4)	During fiscal 2011, AHC discontinued its Adam operations and Koret wholesale operations. During fiscal 2012, AHC discontinued its Baby Phat wholesale and Lamb & Flag businesses. Additionally, AHC sold its Royal Robbins and BLK DNM businesses. During the first quarter of fiscal 2013, AHC discontinued its Phat Licensing business because it sold the related trademarks. During the second quarter of fiscal 2013, AHC divested its Zobha business. As such, these operations have been reflected as discontinued operations for all periods presented.	
 
(5)	Gives effect to the stock split of our common stock on a              for one basis.	

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AHC’s consolidated balance sheet data as of August 3, 2013 is presented on an actual basis:

 	  	As of August 3,
2013	 	
 	  	Actual	 	
(In thousands)	  	 	 	
 	  	(unaudited)	 	
Balance Sheet Data:	  				
Cash and cash equivalents	  	$	2,178	  	
Total current assets	  	 	228,891	  	
Total assets	  	 	467,791	  	
Total current liabilities	  	 	221,230	  	
Long-term debt	  	 	386,842	  	
Total stockholders’ deficit	  	 	(179,102	) 	
Total liabilities and stockholders’ deficit	  	 	467,791	  	
For information relating to the impact of the IPO Restructuring Transactions and this offering on AHC’s consolidated balance sheet, see the balance sheet data of AHC, as presented as of August 3, 2013 on an actual, pro forma and pro forma, as adjusted basis in “—Summary Historical Financial Data of Vince, LLC.”

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Summary Unaudited Pro Forma Consolidated Financial Data of AHC
The following tables set forth the summary unaudited consolidated pro forma financial data of AHC for fiscal 2012 and the first six months of fiscal 2013. They give effect to anticipated transactions and adjustments that are relevant to the understanding of the business being offered and will have a material impact on the comparability of AHC’s results of operations. They are described below and are as follows: (i) “—Kellwood Separation,’ (ii) “—Sun Capital Contribution and Tax Receivable Agreement,’ and (iii) “—This Offering.” You should read the information set forth below together with “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC” included elsewhere in this prospectus for our pro forma results of operations for fiscal 2010 and fiscal 2011. For summary information related to the pro forma, as adjusted balance sheet of AHC after giving effect to this offering, please see “Summary Historical Financial Data of Vince, LLC.” Finally, for additional information relating to the IPO Restructuring Transactions and the use of our proceeds from this offering, please see “Restructuring Transactions,” “Use of Proceeds,” and “Capitalization of AHC.”
The Kellwood Separation.     AHC will use a series of transactions (including the Additional Sun Capital Contribution) to legally separate the Vince business from the non-Vince businesses immediately prior to consummation of this offering. We refer to this series of transactions as the “Kellwood Separation.” Once these transactions have occurred, the non-Vince businesses will be owned and operated separately from us. After consummation of this offering, the Vince business will be our only assets, liabilities and operations. Although Apparel Holding Corp. is the legal issuer of the shares offered in this offering, an investment in us after giving effect to the IPO Restructuring Transactions is an investment in the Vince business.
Sun Capital Contribution and Tax Receivable Agreement.     Additional restructuring activities that have occurred or will occur in order to effect the consummation of this offering, include the following:
 
 	Ÿ	 	effective June 18, 2013, affiliates of Sun Capital contributed $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Notes (each as defined in “Restructuring Transactions”) as a capital contribution to Apparel Holding Corp. in the Sun Capital Contribution; and	
 
 	Ÿ	 	we will enter into a tax receivable agreement (the “Tax Receivable Agreement” or “TRA”) with our stockholders immediately prior to the consummation of this offering (which will include affiliates of Sun Capital, the “Pre-IPO Stockholders”).	
This Offering.     Pro forma adjustments to reflect (i) our receipt of the estimated net proceeds from the sale of common stock by us in the offering at an assumed initial public offering price of $         per share, the midpoint of the range appearing on the cover page of this prospectus, after deducting the assumed underwriting discount and commissions and estimated fees and expenses payable by us; and (ii) our use of these proceeds and the incurrence of approximately $175 million of borrowings under our new term loan facility, as described in “Use of Proceeds,” including repayment of the Kellwood Note Receivable, are described as “Offering Adjustments.”

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Table of Contents
Fiscal 2012 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC(1)

 	 	 	 	 	Kellwood Separation	 	 	Sun Capital Contribution
and TRA	 	 	This Offering(4)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments(2)	 	 	Pro
Forma	 	 	Sun Capital
Contribution
and TRA
Adjustments(3)	 	 	Pro
Forma	 	 	Adjustments	 	 	Pro
Forma,
As Adjusted	 	
(In thousands, except per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	707,995	  	 	$	(467,643	) 	 	$	240,352	  	 	$	—	  	 	$	240,352	  	 	 	—	  	 	$	240,352	  	
Cost of products sold	 	 	507,905	  	 	 	(375,749	) 	 	 	132,156	  	 	 	—	  	 	 	132,156	  	 	 	—	  	 	 	132,156	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	200,090	  	 	 	(91,894	) 	 	 	108,196	  	 	 	—	  	 	 	108,196	  	 	 	—	  	 	 	108,196	  	
Operating Expenses:	 				 				 				 				 				 				 				
Selling, general and administrative expenses	 	 	177,755	  	 	 	(111,094	) 	 	 	66,661	  	 	 	—	  	 	 	66,661	  	 	 	—	  	 	 	66,661	  	
Amortization of intangible assets	 	 	1,899	  	 	 	(1,301	) 	 	 	598	  	 	 	—	  	 	 	598	  	 	 	—	  	 	 	598	  	
Impairment (excluding goodwill), restructuring, environmental remediation, and other charges	 	 	7,440	  	 	 	(7,440	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net	 	 	(7,162	) 	 	 	7,162	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	179,932	  	 	 	(112,673	) 	 	 	67,259	  	 	 	—	  	 	 	67,259	  	 	 	—	  	 	 	67,259	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	 	 	20,158	  	 	 	20,779	  	 	 	40,937	  	 	 	—	  	 	 	40,937	  	 	 	—	  	 	 	40,937	  	
Interest expense,
net(5)	 	 	122,383	  	 	 	(53,700	) 	 	 	68,683	  	 	 	(68,683	) 	 	 	—	  	 	 	10,640	  	 	 	10,640	  	
Other expense, net	 	 	2,723	  	 	 	(1,944	) 	 	 	779	  	 	 	—	  	 	 	779	  	 	 	—	  	 	 	779	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before provision for income taxes	 	 	(104,948	) 	 	 	76,423	  	 	 	(28,525	) 	 	 	68,683	  	 	 	40,158	  	 	 	10,640	  	 	 	29,518	  	
Provision for income
taxes(6)	 	 	708	  	 	 	15,512	  	 	 	16,220	  	 	 	—	  	 	 	16,220	  	 	 	4,413	  	 	 	11,807	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from continuing operations	 	$	(105,656	) 	 	$	60,911	  	 	$	(44,745	) 	 	$	68,683	  	 	$	23,938	  	 	$	6,227	  	 	$	17,711	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share(7)	 	$	 	  	 				 	$	 	  	 				 	$	 	  	 				 	$	 	  	
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	
Diluted earnings (loss) per share(7)	 	$	 	  	 				 	$	 	  	 				 	$	 	  	 				 	$	 	  	
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	
Weighted average number of common shares outstanding, basic(7)	 				 				 				 				 				 				 				
Weighted average number of common shares outstanding, diluted(7)	 				 				 				 				 				 				 				
See accompanying notes to Summary Unaudited Pro Forma Consolidated Financial Data of AHC.

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First Six Months of 2013 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC(1)

 	 	 	 	 	Kellwood Separation	 	 	Sun Capital
Contribution
and TRA	 	 	This Offering(4)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments(2)	 	 	Pro
Forma	 	 	Sun Capital
Contribution
and TRA
Adjustments(3)	 	 	Pro
Forma	 	 	Adjustments	 	 	Pro
Forma,
As Adjusted	 	
(In thousands, except per share
amounts)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	363,967	  	 	$	(249,310	) 	 	$	114,657	  	 	$	—	  	 	$	114,657	  	 	 	—	  	 	$
 	 
114,657	  
  	
Cost of products sold	 	 	256,031	  	 	 	(192,525	) 	 	 	63,506	  	 	 	—	  	 	 	63,506	  	 	 	—	  	 	 	63,506	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	
Gross profit	 	 	107,936	  	 	 	(56,785	) 	 	 	51,151	  	 	 	—	  	 	 	51,151	  	 				 	 	51,151	  	
Operating Expenses:	 				 				 				 				 				 				 				
Selling, general and administrative expenses	 	 	93,503	  	 	 	(59,537	) 	 	 	33,966	  	 	 	—	  	 	 	33,966	  	 	 	—	  	 	 	33,966	  	
Amortization of intangible assets	 	 	950	  	 	 	(650	) 	 	 	300	  	 	 	—	  	 	 	300	  	 	 	—	  	 	 	300	  	
Impairment (excluding goodwill), restructuring, environmental remediation, and other charges	 	 	827	  	 	 	(827	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net	 	 	(54	) 	 	 	54	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	
Total operating expenses	 	 	95,226	  	 	 	(60,960	) 	 	 	34,266	  	 	 	—	  	 	 	34,266	  	 	 	—	  	 	 	34,266	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	 	 	12,710	  	 	 	4,175	  	 	 	16,885	  	 	 	—	  	 	 	16,887	  	 	 	—	  	 	 	16,887	  	
Interest expense, net(5)	 	 	43,671	  	 	 	(27,788	) 	 	 	15,883	  	 	 	(15,883	) 	 	 	—	  	 	 	5,320	  	 	 	5,320	  	
Other expense, net	 	 	1,233	  	 	 	(721	) 	 	 	512	  	 	 	—	  	 	 	512	  	 	 	—	  	 	 	512	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before provision for income taxes	 	 	(32,194	) 	 	 	32,684	  	 	 	490	  	 	 	15,883	  	 	 	16,375	  	 	 	5,320	  	 	 	11,055	  	
Provision for income taxes(6)	 	 	2,679	  	 	 	3,909	  	 	 	6,588	  	 	 	—	  	 	 	6,588	  	 	 	2,166	  	 	 	4,422	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from continuing operations	 	$	(34,873	) 	 	$	28,775	  	 	$	(6,098	) 	 	$	15,883	  	 	$	9,787	  	 	$	3,152	  	 	$	6,633	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share(7)	 	$	 	  	 				 	$	 	  	 				 	$	 	  	 				 	$	            	  	
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	
Diluted earnings (loss) per share(7)	 	$	 	  	 				 	$	 	  	 				 	$	 	  	 				 	$	            	  	
	 	 	 	 	 				 	 	 	 	 				 	 	 	 	 				 	 	 	 	
Weighted average number of common shares outstanding, basic(7)	 				 				 				 				 				 				 				
Weighted average number of common shares outstanding, diluted(7)	 				 				 				 				 				 				 				
See accompanying notes to Summary Unaudited Pro Forma Consolidated Financial Data of AHC.

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(1)	You should refer to the Notes to the Unaudited Pro Forma Consolidated Financial Data of AHC contained in “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC” for detailed information regarding the pro forma adjustments.	
(2)	As described within “Restructuring Transactions” included elsewhere in this prospectus, AHC will use a series of transactions (including the Additional Sun Capital Contribution) to legally separate the non-Vince businesses from the Vince business immediately prior to the consummation of this offering. Once these transactions have occurred, the non-Vince businesses will be owned and operated separately from us. After consummation of this offering, the Vince business will be our only assets, liabilities and operations. An investment in us after giving effect to the IPO Restructuring Transactions is an investment in the Vince business. We will not have ongoing involvement with the non-Vince businesses following separation, with the exception of our payments to Kellwood for certain services to be provided under the Shared Services Agreement as further described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement” contained elsewhere in this prospectus. Similarly, Kellwood will not have ongoing involvement in our business, other than pursuant to the Shared Services Agreement. Following the consummation of this offering, we expect to report the non-Vince businesses as discontinued operations in accordance with ASC Topic 205 Presentation of Financial Statements beginning with our first financial statements filed after the effectiveness of the registration statement of which this prospectus forms a part. All pro forma adjustments to AHC’s historical financial statements that relate to the separation of the Vince business from the non-Vince businesses are described as Kellwood Separation Adjustments and they are included under the caption “Kellwood Separation.”	
(3)	On June 18, 2013, affiliates of Sun Capital contributed $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Notes to AHC in the Sun Capital Contribution. As such, the related interest expense on such indebtedness has been removed from AHC’s pro forma statements of operations for fiscal 2012 and the first six months of fiscal 2013.	
(4)	Reflects pro forma adjustments related to (i) our receipt of the estimated net proceeds from the sale of common stock by us in the offering at an assumed initial public offering price of $         per share, the midpoint of the range appearing on the cover page of this prospectus, after deducting the assumed underwriting discount and commissions and estimated fees and expenses payable by us; and (ii) our use of these proceeds and the incurrence of approximately $175 million of borrowings under our new term loan facility, as described in “Use of Proceeds,” including repayment of the Kellwood Note Receivable. As reflected in the table, the interest expense of this borrowing (including amortization of deferred financing costs), had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.	
(5)	Historical AHC interest represents interest costs and amortization of debt issuance costs on the following indebtedness: the Wells Fargo Facility, the Sun Capital Loan Agreement, the Sun Promissory Notes, the Cerberus Term Loan, the Sun Term Loan Agreements, the 12.875% Notes, the 7.625% Notes and the 3.5% Convertible Notes (each as defined and described in “Restructuring Transactions”). Pro forma for Kellwood Separation interest represents interest costs on the Sun Capital Loan Agreement and the Sun Promissory Notes. Pro forma for Sun Capital Contribution and Tax Receivable Agreement contains no interest. Pro forma, as adjusted includes interest costs on a new revolving credit facility and a new term loan facility we expect to enter into in connection with the consummation of this offering.	
(6)	AHC has historically included the operating results of the combined Vince business and non-Vince businesses in its U.S. federal and state income tax returns. Provision for income taxes in this pro forma presentation have been determined assuming the Kellwood Separation had occurred at the beginning of the earliest period presented, and would therefore exclude the historical operating results of the non-Vince businesses. These amounts are not necessarily indicative of the provision for income taxes that would have been recorded had we operated separately from the non-Vince businesses during the periods presented. The adjustment represents the difference between the amount calculated in accordance with the methodology described herein and the historical amounts recorded.	
(7)	Gives effect to the stock split of our common stock on a              for one basis.	

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Summary Historical Financial Data of Vince, LLC
The following tables set forth the summary historical financial data of Vince, LLC, the entity that has historically held the Vince assets and liabilities and will continue to do so after completion of the IPO Restructuring Transactions and the consummation of this offering.
Please note the following:
 
 	Ÿ	 	Apparel Holding Corp. (to be renamed Vince Holding Corp. prior to the consummation of this offering) is the legal issuer of the shares offered in this offering. Investors will be investing in the Vince business, however, they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC;	
 
 	Ÿ	 	The information set forth below is provided as supplemental information and should not be considered in lieu of the information pertaining to Apparel Holding Corp; and	
 
 	Ÿ	 	The financial information included in this discussion and in Vince, LLC’s historical financial statements may not be indicative of Apparel Holding Corp.’s financial position, operating results and changes in equity after the completion of the IPO Restructuring Transactions, or what they would have been had the Vince business operated separately from the non-Vince businesses during the periods presented.	
You should read the information set forth below in conjunction with “Use of Proceeds,” “Capitalization of AHC,” “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC,” “Additional Information Related to Vince—Supplemental Selected Historical Financial Data of Vince, LLC,” and Vince, LLC’s audited financial statements and notes thereto included elsewhere in this prospectus. The statement of operations data for each of fiscal 2010, fiscal 2011 and fiscal 2012 are derived from Vince, LLC’s audited financial statements included elsewhere in this prospectus.
The statement of operations data for the six month periods ended July 28, 2012 and August 3, 2013 and the balance sheet of Vince, LLC dated as of August 3, 2013 set forth below are derived from Vince, LLC’s unaudited quarterly financial statements and contain all adjustments, consisting of normal recurring adjustments, that our management considers necessary for a fair presentation of our financial position and results of operations for the periods presented. The balance sheet data of AHC dated as of August 3, 2013 set forth below is derived from AHC’s unaudited quarterly consolidated financial statements included elsewhere in this prospectus and contain all adjustments, consisting of normal recurring adjustments, that AHC’s management considers necessary for a fair presentation of our financial position and results of operation for the periods presented. We have included the balance sheet data of AHC on an actual, pro forma and pro forma, as adjusted basis, each as of August 3, 2013, to reflect the assets and liabilities of the business in which you will be investing.
Operating results for the six month periods are not necessarily indicative of results for a full financial year, or any other periods. Vince, LLC’s summary historical financial data include charges from Kellwood Company for certain expenses, including centralized legal, tax, treasury, information technology, employee benefits and other centralized services and infrastructure costs. The charges have been determined on bases that we consider to be reasonable reflections of the utilization of services provided or the benefit received by Vince, LLC.

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Summary Historical Financial Data of Vince, LLC

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands, except for percentages and store counts)	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Statement of Operations Data:	  				 				 				 				 				
Net sales	  	$	111,492	  	 	$	175,255	  	 	$	240,352	  	 	$	90,531	  	 	$	114,657	  	
Cost of products sold	  	 	55,695	  	 	 	89,545	  	 	 	132,156	  	 	 	50,119	  	 	 	63,506	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	55,797	  	 	 	85,710	  	 	 	108,196	  	 	 	40,412	  	 	 	51,151	  	
Operating expenses:	  				 				 				 				 				
Selling, general and administrative expenses(1)(2)	  	 	32,704	  	 	 	42,148	  	 	 	66,639	  	 	 	27,057	  	 	 	33,954	  	
Amortization of intangible assets	  	 	598	  	 	 	599	  	 	 	598	  	 	 	299	  	 	 	300	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	33,302	  	 	 	42,747	  	 	 	67,237	  	 	 	27,356	  	 	 	34,254	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	  	 	22,495	  	 	 	42,963	  	 	 	40,959	  	 	 	13,056	  	 	 	16,897	  	
Interest expense(3)	  	 	7,172	  	 	 	15,004	  	 	 	22,903	  	 	 	10,690	  	 	 	12,429	  	
Other expense, net	  	 	350	  	 	 	478	  	 	 	779	  	 	 	396	  	 	 	512	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before provision for income taxes	  	 	14,973	  	 	 	27,481	  	 	 	17,277	  	 	 	1,970	  	 	 	3,956	  	
Provision for income taxes	  	 	5,923	  	 	 	10,812	  	 	 	6,964	  	 	 	789	  	 	 	1,556	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	9,050	  	 	$	16,669	  	 	$	10,313	  	 	$	1,181	  	 	$	2,400	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Operating and Financial Data:	  				 				 				 				 				
Total stores at end of period	  	 	16	  	 	 	19	  	 	 	22	  	 	 	19	  	 	 	24	  	
Comparable store sales growth	  	 	9.3	% 	 	 	7.6	% 	 	 	23.1	% 	 	 	13.9	% 	 	 	31.7	% 	
Capital expenditures	  	$	1,602	  	 	$	1,450	  	 	$	1,821	  	 	$	457	  	 	$	3,406	  	

(1)	Includes the impact of our public company transition costs and certain one-time costs of $9.3 million, $1.7 million and $4.0 million for fiscal 2012, the first six months of fiscal 2012 and the first six months of fiscal 2013, respectively. These costs include transition payments to our founders, charges that are directly attributable to this offering, incremental costs for external legal counsel and consulting fees incurred to effect the Restructuring Transactions and other one-time charges. We expect additional transaction costs (excluding underwriting discounts and commissions) of approximately $2.9 million for the remainder of fiscal 2013 will be charged to selling, general and administrative expenses (“SG&A”).	
(2)	Vince, LLC is charged for the use of services provided by the departments and shared facilities of Kellwood, which will own and operate the non-Vince businesses after the consummation of this offering. These charges are based upon the actual cost incurred, without markup. These functions and facilities will remain with Kellwood upon separation in the IPO Restructuring Transactions and will continue to be an integral part of the non-Vince businesses going forward. Vince, LLC will continue to use certain of these services for a period of time through the Shared Services Agreement described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement” and will be charged accordingly. The charges to Vince, LLC may not be representative of what the costs would have been had Vince, LLC been a separate, stand-alone entity during the periods presented.	
(3)	Interest expense for fiscal 2010, fiscal 2011 and fiscal 2012 and the six month periods ended July 28, 2012 and August 3, 2013 represents interest costs and amortization of debt issuance costs on certain Kellwood Company indebtedness, including the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements (each as defined and described in “Restructuring Transactions”). These debt instruments and related interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. We intend to enter into a new revolving credit facility and a new term loan facility in connection with the consummation of this offering and expect to incur interest expense on those at market rates prevailing at the time. We also intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing (including amortization of deferred financing costs), had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million for fiscal 2012 or the six months ended August 3, 2013, respectively.	
The balance sheet data as of August 3, 2013 is presented:
 
 	Ÿ	 	on an actual basis for Vince, LLC;	
 
 	Ÿ	 	on an actual basis for AHC.;	

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 	Ÿ	 	on a pro forma basis to reflect changes in AHC’s balance sheet assuming (i) the separation of the assets constituting the Vince business from those of the non-Vince businesses and (ii) our entry into the Tax Receivable Agreement, each in the IPO Restructuring Transactions (as further described in “Restructuring Transactions”) and as if such transactions had occurred on August 3, 2013. See “Restructuring Transactions” for additional information; and	
 
 	Ÿ	 	on a pro forma, as adjusted basis to further reflect changes in AHC’s balance sheet including (i) our receipt of the estimated net proceeds from the sale of                  shares of common stock by us in this offering at an assumed initial public offering price of $         per share, the midpoint of the range appearing on the cover page of this prospectus, after deducting the underwriting discount and commissions payable by us, (ii) our use of these proceeds as described in “Use of Proceeds,” including repayment of the Kellwood Note Receivable and (iii) our entry into our new term loan and revolving credit facilities and approximately $175 million of borrowings under such term loan facility.	

 	  	As of August 3, 2013	 	
 	  	Actual
(Vince, LLC)	 	 	Actual
(AHC)	 	 	Pro Forma
(AHC)	 	 	Pro Forma,
As Adjusted
(AHC)	 	
(In thousands)	  	 	 	 	 	 	 	 	 	 	 	 	
 	  	(unaudited)	 	 	(unaudited)	 	 	(unaudited)	 	 	(unaudited)	 	
Balance Sheet Data:	  				 				 				 				
Cash and cash equivalents	  	$	106	  	 	$	2,178	  	 	$	325	  	 	$	5,000	  	
Total current assets	  	 	82,603	  	 	 	228,891	  	 	 	82,892	  	 	 	87,567	  	
Total assets	  	 	290,562	  	 	 	467,791	  	 	 	389,580	  	 	 	400,255	  	
Kellwood Note Receivable(1)	  	 	—	  	 	 	—	  	 	 	345,000	  	 	 	—	  	
Total current liabilities	  	 	148,005	(2) 	 	 	221,230	  	 	 	377,523	  	 	 	32,523	  	
Long-term debt	  	 	163,675	(2) 	 	 	386,842	  	 	 	—	  	 	 	175,000	  	
Tax Receivable Agreement due(3)	  	 	—	  	 	 	—	  	 	 	172,151	  	 	 	172,151	  	
Invested equity/Stockholders’ deficit	  	 	(26,159	) 	 	 	(179,102	) 	 	 	(163,336	) 	 	 	17,339	  	
Total liabilities and invested equity/Stockholders’ deficit	  	 	290,562	  	 	 	467,791	  	 	 	389,580	  	 	 	400,255	  	

(1)	In connection with Vince Intermediate Holding, LLC’s acquisition of Vince, LLC in the IPO Restructuring Transactions, Vince Intermediate Holding, LLC will issue the Kellwood Note Receivable to Kellwood Company, LLC. The principal amount of the Kellwood Note Receivable represents (i) the face value of the indebtedness, including accrued and unpaid interest and any related fees and expenses, to be repaid, discharged or repurchased by Kellwood Company, LLC in connection with the consummation of this offering, (ii) a restructuring fee equal to 1% of the aggregate of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Management Fees,” and (iii) a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements,” all after giving effect to the Additional Sun Capital Contribution. It is currently estimated that the restructuring fee described in clause (ii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million. Most of the proceeds from this offering, along with the borrowings under our new term loan facility, will be used to repay the Kellwood Note Receivable.	
(2)	Included within current liabilities are short-term borrowings under the Wells Fargo Facility of $88.2 million, $79.8 million and $115.6 million as of January 28, 2012, February 2, 2013 and August 3, 2013, respectively. Long-term debt includes the Cerberus Term Loan and the Sun Term Loan Agreements. Total current liabilities Pro Forma (AHC) include amounts outstanding under the Kellwood Note Receivable. These debt instruments and the related capitalized deferred issuance costs are included in the Vince, LLC financial statements as Vince, LLC is a borrower party. This debt was incurred to fund the operation and growth of the Vince and non-Vince businesses, including to finance certain acquisitions made by AHC since 2008. As discussed above, we intend to enter into a new revolving credit facility and a new term loan facility with the consummation of this offering. We also intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing, (including amortization of deferred financing costs) had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.	
(3)	As described in “Other Information Related to the Offering — Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement” included elsewhere in this Prospectus, we will enter into the Tax Receivable Agreement with the Pre-IPO Stockholders, where we will be obligated to pay 85% of cash savings on federal, state and local income taxes realized by us through our use of certain net tax assets held by us subsequent to the IPO Restructuring Transactions. The amount set forth in this line represents 85% of the value of these net tax assets.	

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Non-GAAP Financial Measures
To provide investors with additional information about our financial results, we disclose within this prospectus Adjusted EBITDA, a non-GAAP financial measure of Vince, LLC, after giving effect to the Vince Transfer. This metric is derived exclusively from the operations of the Vince business, as reflected in the Vince, LLC financial statements and results of operations. We have provided below a reconciliation between Adjusted EBITDA and net income. Net income is the most directly comparable financial measure prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
We have included Adjusted EBITDA in this prospectus because we believe it enhances investors’ understanding of Vince, LLC’s operating results. Adjusted EBITDA is provided because management believes it is an important measure of financial performance commonly used to determine the value of companies, to define standards for borrowing from institutional lenders and because it is the primary measure used by management to evaluate our performance.
Some limitations of Adjusted EBITDA are:
 
 	Ÿ	 	Adjusted EBITDA does not reflect the interest expense of, or the cash requirements necessary to service interest or principal payments on, our debts;	
 
 	Ÿ	 	Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;	
 
 	Ÿ	 	although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future; and	
 
 	Ÿ	 	other companies may calculate Adjusted EBITDA differently or not at all, which reduces its usefulness as a comparative measure.	
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income and Vince, LLC’s audited historical financial results presented elsewhere in the prospectus in accordance with GAAP.
The following table presents a reconciliation of Vince, LLC net income to Adjusted EBITDA based on Vince, LLC’s statements of operations for each of the periods indicated:

 	  	Fiscal Year	 	  	Six Months Ended	 	
 	  	2010	 	  	2011	 	  	2012	 	  	July 28,
2012	 	 	August 3,
2013	 	
(In thousands)	  	 	 	  	 	 	  	 	 	  	 	 	 	 	 	
 	  	 	 	  	 	 	  	 	 	  	(unaudited)	 	 	(unaudited)	 	
Net income	  	$	9,050	  	  	$	16,669	  	  	$	10,313	  	  	$	1,181	  	 	$	2,400	  	
Interest expense(a)	  	 	7,172	  	  	 	15,004	  	  	 	22,903	  	  	 	10,690	  	 	 	12,429	  	
Provision for income taxes	  	 	5,923	  	  	 	10,812	  	  	 	6,964	  	  	 	789	  	 	 	1,556	  	
Depreciation and amortization expense	  	 	1,492	  	  	 	1,701	  	  	 	2,009	  	  	 	921	  	 	 	1,106	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
EBITDA	  	 	23,637	  	  	 	44,186	  	  	 	42,189	  	  	 	13,581	  	 	 	17,491	  	
Public company transition costs(b)	  	 	—	  	  	 	—	  	  	 	9,331	  	  	 	1,679	  	 	 	4,011	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Adjusted EBITDA	  	$	23,637	  	  	$	44,186	  	  	$	51,520	  	  	$	15,260	  	 	$	21,502	  	

(a)	Interest expense for fiscal 2010, fiscal 2011 and fiscal 2012 and the six month periods ended July 28, 2012 and August 3, 2013 represents certain interest costs and amortization of debt issuance costs on Kellwood Company indebtedness, including the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. These debt instruments and related interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. We intend to enter into a new revolving credit facility and new term loan facility in connection with the consummation of this offering and expect to incur interest expense on those at market rates prevailing at the time. We also intend to borrow approximately	

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 	$175 million under our new term loan facility at that time. The interest expense of this borrowing (including amortization of deferred financing costs), had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.	
(b)	Adjusted EBITDA does not include the impact of our public company transition costs and certain one-time costs of $9.3 million, $1.7 million and $4.0 million for fiscal 2012, the first six months of fiscal 2012 and the first six months of fiscal 2013, respectively. These costs include transition payments to our founders, charges that are directly attributable to this offering, incremental costs for external legal counsel and consulting fees incurred to effect the Restructuring Transactions and other one-time costs. These charges are excluded due to their non-recurring nature and ability to impact comparability to other periods.	

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 RISK FACTORS
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this prospectus, before making an investment decision. If any of the following risks actually occurs, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose all or part of your investment.
We have divided the risk factors set forth in this section into the following four categories: (i) Risks Related to Vince; (ii) Risks Related to the Restructuring Transactions; (iii) Risks Related to AHC; and (iv) Risks Related to this Offering and Our Common Stock. The risks set forth in the “Risks Related to AHC” section of this “Risk Factors” section relate to risks related to the Apparel Holding Corp. business (which includes the Vince and non-Vince businesses). Although Apparel Holding Corp. is the legal issuer of the shares offered in this offering, an investment in our common stock is an investment in the Vince business and does not constitute an investment in the non-Vince businesses.
Risks Related to Vince
General economic conditions in the U.S. and other parts of the world, including a continued weakening of the economy and restricted credit markets, can affect consumer confidence and consumer spending patterns.
The apparel industry has historically been subject to cyclical variations, recessions in the general economy or uncertainties regarding future economic prospects that affect consumer spending habits which could negatively impact our business overall, the carrying value of our tangible and intangible assets and specifically sales, gross margins and profitability. The success of our operations depends on consumer spending. Consumer spending is impacted by a number of factors, including actual and perceived economic conditions affecting disposable consumer income (such as unemployment, wages, energy costs and consumer debt levels), business conditions, interest rates and availability of credit and tax rates in the general economy and in the international, regional and local markets in which our products are sold.
Recent global economic conditions have included significant recessionary pressures and declines in employment levels, disposable income and actual and/or perceived wealth and further declines in consumer confidence and economic growth. These conditions have led and could lead to continued declines in consumer spending over the foreseeable future and may have resulted in a shift in consumer spending habits that makes it unlikely that spending will return to prior levels for the foreseeable future. The current depressed economic environment has been characterized by a decline in consumer discretionary spending and has disproportionately affected retailers and sellers of consumer goods, particularly those whose goods are viewed as discretionary or luxury purchases, including fashion apparel such as ours. While we have seen occasional signs of stabilization in the North American markets during 2012 and 2013, a shift towards continued recessionary conditions could adversely impact our sales volumes and overall profitability in the future. Further, the European debt crisis resulting from growing concerns that European countries could default on their national debt, has caused instability in the European economy, which is one of the areas that we are currently targeting for international expansion. Continued economic volatility and declines in the value of the Euro or other foreign currencies could negatively impact the global economy as a whole. Such a condition may have a material adverse impact on the profitability and liquidity of our international operations, as well as hinder our ability to grow through expansion in the international markets.
Economic conditions have also led to a highly promotional environment and strong discounting pressure from both our wholesale partners and retail customers, which have had a negative impact on our revenues and profitability. This promotional environment may continue even after economic growth
 
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returns, as we expect consumer spending trends are likely to remain at historically depressed levels for the foreseeable future. The domestic and international political situation also affects consumer confidence. The threat, outbreak or escalation of terrorism, military conflicts or other hostilities around the world could lead to further decreases in consumer spending.
Intense competition in the apparel industry could reduce our sales and profitability.
As an apparel company, we face intense competition from other domestic and foreign apparel, footwear and accessories manufacturers and retailers. Competition may result in pricing pressures, reduced profit margins, lost market share or failure to grow our market share, any of which could substantially harm our business and results of operations. Competition is based on many factors including, without limitation, the following:
 
 	Ÿ	 	establishing and maintaining favorable brand recognition;	
 
 	Ÿ	 	developing products that appeal to consumers;	
 
 	Ÿ	 	pricing products appropriately;	
 
 	Ÿ	 	determining and maintaining product quality;	
 
 	Ÿ	 	obtaining access to sufficient floor space in retail locations;	
 
 	Ÿ	 	providing appropriate services and support to retailers;	
 
 	Ÿ	 	maintaining and growing market share;	
 
 	Ÿ	 	hiring and retaining key employees; and	
 
 	Ÿ	 	protecting intellectual property.	
Competition in the apparel industry is intense and is dominated by a number of very large brands, many of which have longer operating histories, larger customer bases, more established relationships with a broader set of suppliers, greater brand recognition and greater financial, research and development, marketing, distribution and other resources than we do. These capabilities of our competitors may allow them to better withstand downturns in the economy or apparel industry. Any increased competition, or our failure to adequately address any of these competitive factors, could result in reduced sales, which could adversely affect our business, financial condition and operating results.
Competition, along with such other factors as consolidation within the retail industry and changes in consumer spending patterns, could also result in significant pricing pressure. These factors may cause us to reduce our sales prices to our wholesale partners and retail consumers, which could cause our gross margins to decline if we are unable to appropriately manage inventory levels and/or otherwise offset price reductions with comparable reductions in our operating costs. If our sales prices decline and we fail to sufficiently reduce our product costs or operating expenses, our profitability may decline, which could have a material adverse effect on our business, financial condition and operating results.
Our business depends on a strong brand image, and if we are not able to maintain or enhance our brand, particularly in new markets where we have limited brand recognition, we may be unable to sell sufficient quantities of our merchandise, which would harm our business and cause our results of operations to suffer.
We believe that maintaining and enhancing the Vince brand is critical to maintaining and expanding our customer base. Maintaining and enhancing our brand may require us to make substantial investments in areas such as visual merchandising (including working with our wholesale partners to transform select Vince displays into branded shop-in-shops), marketing and advertising,
 
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employee training and store operations. A primary component of our strategy involves expanding into other geographic markets and working with existing wholesale partners, particularly within the U.S. We anticipate that, as our business expands into new markets and further penetrates existing markets, and as the markets in which we operate become increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive. Certain of our competitors in the apparel industry have faced adverse publicity surrounding the quality, attributes and performance of their products. Our brand may similarly be adversely affected if our public image or reputation is tarnished by failing to maintain high standards for merchandise quality and integrity. Any negative publicity about these types of concerns may reduce demand for our merchandise. Maintaining and enhancing our brand will depend largely on our ability to be a leader in the contemporary apparel industry and to continue to provide high quality products. If we are unable to maintain or enhance our brand image, our results of operations may suffer and our business may be harmed.
A substantial portion of our revenue is derived from a small number of large wholesale partners, and the loss of any of these wholesale partners could substantially reduce our total revenue.
We have a small number of wholesale partners who account for a significant portion of our net sales. Net sales to the full-price, off-price and e-commerce operations of our four largest wholesale partners were 61% of our total revenue for fiscal 2012 and 63% of our total revenue for the first six months of fiscal 2013. These partners, each of which accounted for more than 10% of our total revenue for fiscal 2012, include Nordstrom, Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s. Nordstrom, Saks Fifth Avenue and Neiman Marcus each accounted for more than 10% of our total revenue for the first six months of fiscal 2013 and collectively represented 55.7% of our total revenue in such period. We do not have written agreements with any of our wholesale partners, and purchases generally occur on an order-by-order basis. A decision by any of our major wholesale partners, whether motivated by marketing strategy, competitive conditions, financial difficulties or otherwise, to significantly decrease the amount of merchandise purchased from us or our licensing partners, or to change their manner of doing business with us or our licensing partners, could substantially reduce our revenue and have a material adverse effect on our profitability. Furthermore, due to the concentration of our wholesale partner base, our results of operations could be adversely affected if any of these customers fails to satisfy its payment obligations to us when due. During the past several years, the retail industry has experienced a great deal of ownership change, and we expect such change will continue. For example, Saks Fifth Avenue, one of our top four customers, recently agreed to be acquired by a third party. We cannot guarantee that our relationship with Saks Fifth Avenue will not be impacted by this ownership change and any strategic changes Saks Fifth Avenue may implement as a result. In addition, store closings by our wholesale partners decrease the number of stores carrying our products, while the remaining stores may purchase a smaller amount of our products and may reduce the retail floor space designated for our brand. In the future, retailers may further consolidate, undergo restructurings or reorganizations, realign their affiliations or reposition their stores’ target markets. Any of these types of actions could decrease the number of stores that carry our products or increase the ownership concentration within the retail industry. These changes could decrease our opportunities in the market, increase our reliance on a diminishing number of large wholesale partners and decrease our negotiating strength with our wholesale partners. These factors could have a material adverse effect on our business, financial condition and operating results.
We may not be able to successfully expand our wholesale partnership base or grow our presence with existing wholesale partners.
As part of our growth strategy, we intend to increase productivity and penetration with existing wholesale partners and form relationships with new, international wholesale partners. These initiatives may include the establishment of additional shop-in-shops within select department stores. The
 
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location of Vince displays or shop-in-shops within department stores is controlled in large part by our wholesale partners. Although the investments made by us and our wholesale partners in the development and installation of Vince displays and shop-in-shops decreases the risk that our wholesale partners will require us to move to a less desirable area of their store or reduce the space allocated to such displays and shops, they are not contractually prohibited from doing so or required to grant additional or more desirable space to us. As of October 5, 2013, we had seven shop-in-shops with our U.S. wholesale partners and eight shop-in-shops with our international wholesale partners. While expanding the number of shop-in-shops is part of our growth strategy, there can be no assurances we will be able to align our wholesale partners with this strategy and continue to receive floor space from our wholesale partners to open or expand shop-in-shops.
Our ability to attract customers to our stores depends heavily on successfully locating our stores in suitable locations and any impairment of a store location, including any decrease in customer traffic, could cause our sales to be less than expected.
Our approach to identifying locations for our retail stores typically favors street and mall locations near luxury and contemporary retailers that we believe are consistent with our key customers’ demographics and shopping preferences. Sales at these stores are derived, in part, from the volume of foot traffic in these locations. Changes in areas around our existing retail locations that result in reductions in customer foot traffic or otherwise render the locations unsuitable could cause our sales to be less than expected and the related leases are generally non-cancelable. Store locations may become unsuitable due to, and our sales volume and customer traffic generally may be harmed by, among other things:
 
 	Ÿ	 	economic downturns in a particular area;	
 
 	Ÿ	 	competition from nearby retailers selling similar apparel;	
 
 	Ÿ	 	changing consumer demographics in a particular market;	
 
 	Ÿ	 	changing preferences of consumers in a particular market;	
 
 	Ÿ	 	the closing or decline in popularity of other businesses located near our store; and	
 
 	Ÿ	 	store impairments due to acts of God or terrorism.	
Our ability to successfully open and operate new retail stores depends on many factors, including, among others, our ability to:
 
 	Ÿ	 	identify new markets where our products and brand image will be accepted or the performance of our retail stores will be successful;	
 
 	Ÿ	 	obtain desired locations, including store size and adjacencies, in targeted malls or streets;	
 
 	Ÿ	 	negotiate acceptable lease terms, including desired rent and tenant improvement allowances, to secure suitable store locations;	
 
 	Ÿ	 	achieve brand awareness, affinity and purchase intent in the new markets;	
 
 	Ÿ	 	hire, train and retain store associates and field management;	
 
 	Ÿ	 	assimilate new store associates and field management into our corporate culture;	
 
 	Ÿ	 	source and supply sufficient inventory levels; and	
 
 	Ÿ	 	successfully integrate new retail stores into our existing operations and information technology systems, which will initially be provided by Kellwood under the terms of the Shared Services Agreement.	
As of October 5, 2013, we had 27 stores, which consist of 21 full-price retail stores and six outlet locations. We plan to double our store base over the next three to five years, including opening a net total of six new stores in fiscal 2013. Our new stores, however, may not be immediately profitable and
 
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we may incur losses until these stores become profitable. Unavailability of desired store locations, delays in the acquisition or opening of new stores, delays or costs resulting from a decrease in commercial development due to capital restraints, difficulties in staffing and operating new store locations or a lack of customer acceptance of stores in new market areas may negatively impact our new store growth and the costs or the profitability associated with new stores. There can be no assurance that we will open the planned number of stores in fiscal 2013 or thereafter. Any failure to successfully open and operate new stores may adversely affect our business, financial condition and operating results.
As we expand our store base, we may be unable to maintain or grow comparable store sales or average sales per square foot at the same rates that we have achieved in the past, which could cause our share price to decline.
As we expand our store base, we may not be able to maintain or grow at the same rates of comparable store sales growth that we have achieved historically. In addition, we may not be able to maintain or grow our historic average sales per square foot as we move into new markets. If our future comparable store sales or average sales per square foot decline or fail to meet market expectations, the price of our common stock could decline. In addition, the aggregate results of operations through our wholesale partners and at our retail locations have fluctuated in the past and can be expected to continue to fluctuate in the future. A variety of factors affect both comparable store sales and average sales per square foot, including, among others, consumer spending patterns, fashion trends, competition, current economic conditions, pricing, inflation, the timing of the release of new merchandise and promotional events, changes in our product assortment, the success of marketing programs and weather conditions. If we misjudge the market for our products, we may incur excess inventory for some of our products and miss opportunities for other products. These factors may cause our comparable store sales results and average sales per square foot in the future to be materially lower than recent periods or our expectations, which could harm our results of operations and result in a decline in the price of our common stock.
We have grown rapidly in recent years and we have limited operating experience as a team at our current scale of operations. If we are unable to manage our operations at our current size or are unable to manage any future growth effectively, our business results and financial performance may suffer.
We have expanded our operations rapidly since our inception in 2002, and we have limited operating experience at our current size. Our business has more than doubled over the past two years, as we have grown our total net sales from $111.5 million in fiscal 2010 to $240.4 million in fiscal 2012 and from $90.5 million for the first six months of fiscal 2012 to $114.7 million for the first six months of fiscal 2013. We have made and are making investments to support our near and longer-term growth. If our operations continue to grow over the longer term, of which there can be no assurance, we will be required to expand our sales and marketing, product development and distribution functions, to upgrade our management information systems and other processes, and to obtain more space for our expanding administrative support and other headquarters personnel. Kellwood will continue to provide services to us after this offering under the Shared Services Agreement. Our expansion may exceed the capacity that Kellwood is able to provide, on attractive pricing terms or at all, under the terms of the Shared Services Agreement (as more fully described below in “—Problems with our distribution system could harm our ability to meet customer expectations, manage inventory, complete sales and achieve targeted operating efficiencies”). Our continued growth could strain our existing resources, and we could experience operating difficulties, including obtaining sufficient raw materials at acceptable prices, securing manufacturing capacity to produce our products and experiencing delays in production and shipments. These difficulties would likely lead to a decrease in net revenue, income from operations and the price of our common stock.
 
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Kellwood provides us with certain key services for our business. If Kellwood fails to perform its obligations to us or if we do not find appropriate replacement services, we may be unable to perform these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us.
As a business unit of Kellwood, we have historically relied on the financial resources and the administrative and operational support systems of Kellwood to run our business. Some of the Kellwood systems we are using include enterprise resource planning (“ERP”), human resource management systems and distribution applications. Many of these systems are complex and either highly customized or proprietary. In conjunction with our separation from Kellwood, we are in the process of separating our assets from those of Kellwood and either creating our own financial, administrative, operational and other support systems or contracting with third parties to replace Kellwood’s systems that will not be provided to us under the terms of the Shared Services Agreement as discussed below. In order to successfully implement our own systems and operate as a stand-alone business, we must be able to attract and retain a number of highly skilled employees. We must also obtain goods, technology and services without the benefit of Kellwood’s purchasing power. As an entity separate from Kellwood, we may be unable to obtain such goods, technology and services at prices and on terms as favorable as those available to us prior to the separation, which could increase our costs and reduce our profitability.
We will enter into the Shared Services Agreement in connection with the consummation of the IPO Restructuring Transactions. The Shared Services Agreement will govern the provision by Kellwood of certain support services to us, including distribution, information technology and back office support. Kellwood will provide these services until we elect to terminate the provision thereof in accordance with the terms of such agreement or, for services which require a term as a matter of law or which are based on a third-party agreement with a set term, the related termination date specified in the schedule thereto. Upon the termination of certain services, Kellwood may no longer be in a position to provide certain other related services. Assuming we proceed with our request to terminate the original services, such related services shall also be terminated in connection with such termination. The Shared Services Agreement will terminate automatically upon the termination of all services provided thereunder, unless earlier terminated by either party in connection with the other party’s material breach upon 30 days prior notice to such defaulting party. After termination of the agreement, Kellwood will have no obligation to provide any services to us. See “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement” for a description of these services. The services provided under the Shared Services Agreement (as may be amended from time to time) may not be sufficient to meet our needs and we may not be able to replace these services at favorable costs and on favorable terms, if at all. In addition, Kellwood has experienced financial difficulty in the past. For example, in 2009, Kellwood’s independent auditors raised substantial doubt regarding Kellwood’s ability to continue as a going concern. If Kellwood encounters any issues during the transitional period which impact its ability to provide services pursuant to the Shared Services Agreement, our business could be materially harmed. Any failure or significant downtime in our own financial or administrative systems or in Kellwood’s financial or administrative systems during the transitional period and any difficulty in separating our assets from Kellwood’s assets and integrating newly acquired assets into our business could result in unexpected costs, impact our results or prevent us from paying our suppliers and employees and performing other administrative services on a timely basis and could materially harm our business, financial condition, results of operations and cash flows.
Our limited operating experience and brand recognition in international markets may delay our expansion strategy and cause our business and growth to suffer.
We face additional risks with respect to our strategy to expand internationally, including our efforts to further expand our business in Canada, select European countries, Asia and the Middle East
 
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through arrangements with international partners. Our current operations are based largely in the U.S., with international sales representing approximately 8% of net sales for fiscal 2012 and 10.3% of net sales for the first six months of fiscal 2013. Therefore we have a limited number of customers and experience in operating outside of the U.S. We also do not have extensive experience with regulatory environments and market practices outside of the U.S. and cannot guarantee, notwithstanding our international partners’ familiarity with such environments and market practices, that we will be able to penetrate or successfully operate in any market outside of the U.S. Many of these markets have different operational characteristics, including employment and labor regulations, transportation, logistics, real estate (including lease terms) and local reporting or legal requirements. Furthermore, consumer demand and behavior, as well as style preferences, size and fit, and purchasing trends, may differ in these markets and, as a result, sales of our product may not be successful, or the margins on those sales may not be in line with those that we currently anticipate. In addition, in many of these markets there is significant competition to attract and retain experienced and talented employees. Failure to develop new markets outside of the U.S. or disappointing sales growth outside of the U.S. may harm our business and results of operations.
Our plans to improve and expand our product offerings may not be successful, and the implementation of these plans may divert our operational, managerial and administrative resources, which could harm our competitive position and reduce our net revenue and profitability.
In addition to our store expansion strategy, we plan to grow our business by increasing our core product offerings, which includes expanding our men’s collection, denim, outerwear, women’s bottoms and dresses assortment. We also plan to develop and introduce select new product categories and pursue select additional licensing opportunities such as intimates/loungewear, men’s footwear and fashion accessories.
The principal risks to our ability to successfully carry out our plans to improve and expand our product offerings are that:
 
 	Ÿ	 	if our expected product offerings fail to maintain and enhance our brand identity, our image may be diminished or diluted and our sales may decrease;	
 
 	Ÿ	 	if we fail to find and enter into relationships with external partners with the necessary specialized expertise or execution capabilities, we may be unable to offer our planned product extensions or to realize the additional revenue we have targeted for those extensions; and	
 
 	Ÿ	 	the use of licensing partners may limit our ability to conduct comprehensive final quality checks on merchandise before it is shipped to our stores or to our wholesale partners.	
In addition, our ability to successfully carry out our plans to improve and expand our product offerings may be affected by economic and competitive conditions, changes in consumer spending patterns and changes in consumer preferences and style trends. These plans could be abandoned, could cost more than anticipated and could divert resources from other areas of our business, any of which could impact our competitive position and reduce our net revenue and profitability.
Our current and future licensing arrangements may not be successful and may make us susceptible to the actions of third parties over whom we have limited control.
Our current and future licensing arrangements may not be successful and may make us susceptible to the actions of third parties over whom we have limited control. We entered into a licensing agreement when we launched women’s footwear in 2012 and signed a licensing agreement in 2013 for the launch of children’s apparel in 2014. In the future, we may enter into select additional
 
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licensing arrangements for product offerings which require specialized expertise. We may also enter into select licensing agreements pursuant to which we may grant third parties the right to distribute and sell our products in certain geographic areas. Although we have taken and will continue to take steps to select potential licensing partners carefully and monitor the activities of our licensing partners (through, among other things, approval rights over product design, production quality, packaging, merchandising, marketing, distribution and advertising), such arrangements may not be successful. Our licensing partners may fail to fulfill their obligations under their license agreements or have interests that differ from or conflict with our own, such as the pricing of our products and the offering of competitive products. In addition, the risks applicable to the business of our licensing partners may be different than the risks applicable to our business, including risks associated with each such partner’s ability to:
 
 	Ÿ	 	obtain capital;	
 
 	Ÿ	 	exercise operational and financial control over its business;	
 
 	Ÿ	 	manage its labor relations;	
 
 	Ÿ	 	maintain relationships with suppliers;	
 
 	Ÿ	 	manage its credit and bankruptcy risks; and	
 
 	Ÿ	 	maintain customer relationships.	
Any of the foregoing risks, or the inability of any of our licensing partners to successfully market our products or otherwise conduct its business, may result in loss of revenue and competitive harm to our operations in regions or product categories where we have entered into such licensing arrangements.
Our business will suffer if we fail to respond to changing customer tastes.
Customer tastes can change rapidly. We may not be able to anticipate, gauge or respond to these changes within a timely manner. We may also not be able to continue to satisfy our customers’ existing tastes and preferences. If we misjudge the market for products or product groups, or if we fail to identify and respond appropriately to changing consumer demands, we may be faced with unsold finished goods inventory, which could materially adversely affect expected operating results and decrease sales, gross margins and profitability.
If we are unable to accurately forecast customer demand for our products, our manufacturers may not be able to deliver products to meet our requirements, and this could result in delays in the shipment of products to our stores and to wholesale partners.
We stock our stores, and provide inventory to our wholesale partners, based on our or their estimates of future demand for particular products. Our inventory management and planning team determines the number of pieces of each product that we will order from our manufacturers based upon past sales of similar products, sales trend information and anticipated demand at our suggested retail prices. However, if our inventory and planning team fails to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products. There can be no assurance that we will be able to successfully manage our inventory at a level appropriate for future customer demand.
Factors that could affect our inventory management and planning team’s ability to accurately forecast customer demand for our products include:
 
 	Ÿ	 	a substantial increase or decrease in demand for our products or for products of our competitors;	
 
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 	Ÿ	 	our failure to accurately forecast customer acceptance for our new products;	
 
 	Ÿ	 	new product introductions or pricing strategies by competitors;	
 
 	Ÿ	 	more limited historical store sales information for our newer markets;	
 
 	Ÿ	 	weakening of economic conditions or consumer confidence in the future, which could reduce demand for discretionary items, such as our products; and	
 
 	Ÿ	 	acts or threats of war or terrorism which could adversely affect consumer confidence and spending or interrupt production and distribution of our products and our raw materials.	
Because of our rapid growth, we have occasionally placed insufficient levels of desirable product with our wholesale partners and in our retail locations such that we were unable to fully satisfy customer demand at those locations. We cannot guarantee that we will be able to match supply with demand in all cases in the future, whether as a result of our inability to produce sufficient levels of desirable product or our failure to forecast demand accurately. As a result of these inabilities or failures, we may encounter difficulties in filling customer orders or in liquidating excess inventory at discount prices and may experience significant write-offs. Additionally, if we over-produce a product based on an aggressive forecast of demand, retailers may not be able to sell the product and cancel future orders or require give backs. These outcomes could have a material adverse effect on brand image and adversely impact sales, gross margins and profitability .
Our senior management team has limited experience working together as a group, and may not be able to manage our business effectively.
Our CEO, Jill Granoff, and CFO, Lisa Klinger, joined the company in 2012. Many of the other members of our senior management team, including our new President and Chief Creative Officer, Karin Gregersen, have been with us less than one year. As a result, our senior management team has limited experience working together as a group. This lack of shared experience could negatively impact our senior management team’s ability to quickly and efficiently respond to problems and effectively manage our business. If our management team is not able to work together as a group, our results of operations may suffer and our business may be harmed.
Loss of key personnel could disrupt our operations.
Our continued success is dependent on the ability to attract, retain and motivate qualified management, designers, administrative talent and sales associates to support existing operations and future growth. Competition for qualified talent in the apparel industry is intense, and we compete for these individuals with other companies that in many cases have greater financial and other resources. The loss of the services of any members of senior management or the inability to attract and retain other qualified executives could have a material adverse effect on our business, results of operations and financial condition.
Our competitive position could suffer if our intellectual property rights are not protected.
We believe that our trademarks and designs are of great value. From time to time, third parties have challenged, and may in the future try to challenge, our ownership of our intellectual property. In some cases, third parties with similar trademarks or other intellectual property may have pre-existing and potentially conflicting trademark registrations. We rely on cooperation from third parties with similar trademarks to be able to register our trademarks in jurisdictions in which such third parties have already registered their trademarks. We are susceptible to others imitating our products and infringing our intellectual property rights. Imitation or counterfeiting of our products or infringement of our intellectual property rights could diminish the value of our brands or otherwise adversely affect our
 
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revenues. The actions we have taken to establish and protect our trademarks and other intellectual property rights may not be adequate to prevent imitation of our products by others or to prevent others from seeking to invalidate our trademarks or block sales of our products as a violation of the trademarks and intellectual property rights of others. In addition, others may assert rights in, or ownership of, our trademarks and other intellectual property rights or in similar marks or marks that we license and/or market and we may not be able to successfully resolve these conflicts to our satisfaction. We may need to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of resources. Successful infringement claims against us could result in significant monetary liability or prevent us from selling some of our products. In addition, resolution of claims may require us to redesign our products, license rights from third parties or cease using those rights altogether. Any of these events could harm our business and cause our results of operations, liquidity and financial condition to suffer.
We license our website domain name from a third-party. Pursuant to the license agreement (the “License Agreement”), our license to use www.vince.com will expire in 2018 and will automatically renew for successive one year periods, subject to our right to terminate the arrangement with or without cause; provided, that we must pay the applicable early termination fee and provide 30 days prior notice in connection with a termination without cause. The licensor has no termination rights under the License Agreement. Any failure by the licensor to perform its obligations under the License Agreement could adversely affect our brand and make it more difficult for users to find our website.
Problems with our distribution system could harm our ability to meet customer expectations, manage inventory, complete sales and achieve targeted operating efficiencies.
In the U.S., we rely on a distribution facility operated by Kellwood in City of Industry, California. Our ability to meet the needs of our wholesale partners and our own retail stores depends on the proper operation of this distribution facility. Kellwood will continue to provide distribution services, until we elect to terminate such services, as part of the Shared Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement.” We also have a warehouse in Belgium operated by a third-party logistics provider to support our wholesale orders for customers located in Europe. There can be no assurance that we will be able to enter into other contracts for an alternate or replacement distribution centers on acceptable terms or at all. Such an event could disrupt our operations. In addition, because substantially all of our products are distributed from one location, our operations could also be interrupted by labor difficulties, or by floods, fires, earthquakes or other natural disasters near such facility. We maintain business interruption insurance and are a beneficiary under similar Kellwood insurance policies related to Kellwood assets or services we will continue to utilize under the Shared Services Agreement. These policies, however, may not adequately protect us from the adverse effects that could result from significant disruptions to our distribution system. If we encounter problems with our distribution system, our ability to meet customer expectations, manage inventory, complete sales and achieve targeted operating efficiencies could be harmed. Any of the foregoing factors could have a material adverse effect on our business, financial condition and operating results.
The extent of our foreign sourcing may adversely affect our business.
Our products are primarily produced by, and purchased or procured from, independent manufacturing contractors located outside of the U.S., with approximately 94% of our total revenue for fiscal 2012 and 93% of our total revenue for the first six months of fiscal 2013 attributable to manufacturing contractors located outside of the U.S. These manufacturing contractors are located mainly in countries in Asia and South America, with approximately 70% and 21% of our purchases for fiscal 2012 and approximately 73% and 21% of our purchases for the first six months of fiscal 2013, attributable to manufacturing contractors located in China and Peru, respectively. A manufacturing
 
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contractor’s failure to ship products to us in a timely manner or to meet the required quality standards could cause us to miss the delivery date requirements of our customers for those items. The failure to make timely deliveries may cause customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on us. As a result of the magnitude of our foreign sourcing, our business is subject to the following risks:
 
 	Ÿ	 	political and economic instability in countries or regions, especially Asia, including heightened terrorism and other security concerns, which could subject imported or exported goods to additional or more frequent inspections, leading to delays in deliveries or impoundment of goods;	
 
 	Ÿ	 	imposition of regulations, quotas and other trade restrictions relating to imports, including quotas imposed by bilateral textile agreements between the U.S. and foreign countries;	
 
 	Ÿ	 	imposition of increased duties, taxes and other charges on imports;	
 
 	Ÿ	 	labor union strikes at ports through which our products enter the U.S.;	
 
 	Ÿ	 	labor shortages in countries where contractors and suppliers are located;	
 
 	Ÿ	 	a significant decrease in availability or an increase in the cost of raw materials;	
 
 	Ÿ	 	restrictions on the transfer of funds to or from foreign countries;	
 
 	Ÿ	 	disease epidemics and health-related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas;	
 
 	Ÿ	 	the migration and development of manufacturing contractors, which could affect where our products are or are planned to be produced;	
 
 	Ÿ	 	increases in the costs of fuel, travel and transportation;	
 
 	Ÿ	 	reduced manufacturing flexibility because of geographic distance between our foreign manufacturers and us, increasing the risk that we may have to mark down unsold inventory as a result of misjudging the market for a foreign-made product; and	
 
 	Ÿ	 	violations by foreign contractors of labor and wage standards and resulting adverse publicity.	
If these risks limit or prevent us from manufacturing products in any significant international market, prevent us from acquiring products from foreign suppliers, or significantly increase the cost of our products, our operations could be seriously disrupted until alternative suppliers are found or alternative markets are developed, which could negatively impact our business.
We do not have written agreements with any of our third-party manufacturing contractors. As a result, any single manufacturing contractor could unilaterally terminate its relationship with us at any time. Two of our manufacturers in China, one of which we have worked with since our inception in 2002 and the other with whom we have worked for over five years, accounted for the production of approximately 25% and 23.5% of our finished products during fiscal 2012 and the first six months of fiscal 2013, respectively. Supply disruptions from these manufacturers (or any of our other manufacturers) could have a material adverse effect on our ability to meet customer demands, if we are unable to source suitable replacement materials at acceptable prices or at all. Our inability to promptly replace manufacturing contractors that terminate their relationships with us or cease to provide high quality products in a timely and cost-efficient manner could have a material adverse effect on our business, financial condition and operating results.
 
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Fluctuations in the price, availability and quality of raw materials could cause delays and increase costs and cause our operating results and financial condition to suffer.
Fluctuations in the price, availability and quality of the fabrics or other raw materials, particularly cotton, leather, and synthetics used in our manufactured apparel, could have a material adverse effect on cost of sales or our ability to meet customer demands. The prices of fabrics depend largely on the market prices of the raw materials used to produce them. The price and availability of the raw materials and, in turn, the fabrics used in our apparel may fluctuate significantly, depending on many factors, including crop yields, weather patterns, labor costs and changes in oil prices. We may not be able to create suitable design solutions that utilize raw materials with attractive prices or, alternatively, to pass higher raw materials prices and related transportation costs on to our customers. We are not always successful in our efforts to protect our business from the volatility of the market price of raw materials, and our business can be materially affected by dramatic movements in prices of raw materials. The ultimate effect of this change on our earnings cannot be quantified, as the effect of movements in raw materials prices on industry selling prices are uncertain, but any significant increase in these prices could have a material adverse effect on our business, financial condition and operating results.
Our reliance on independent manufacturers could cause delays or quality issues which could damage customer relationships.
We use independent manufacturers to assemble or produce all of our products, whether inside or outside the U.S. We are dependent on the ability of these independent manufacturers to adequately finance the production of goods ordered and maintain sufficient manufacturing capacity. The use of independent manufacturers to produce finished goods and the resulting lack of direct control could subject us to difficulty in obtaining timely delivery of products of acceptable quality. We generally do not have long-term contracts with any independent manufacturers. Alternative manufacturers, if available, may not be able to provide us with products or services of a comparable quality, at an acceptable price or on a timely basis. Identifying a suitable supplier is an involved process that requires us to become satisfied with their quality control, responsiveness and service, financial stability and labor and other ethical practices. There can be no assurance that there will not be a disruption in the supply of our products from independent manufacturers or, in the event of a disruption, that we would be able to substitute suitable alternative manufacturers in a timely manner. The failure of any independent manufacturer to perform or the loss of any independent manufacturer could have a material adverse effect on our business, results of operations and financial condition.
If our independent manufacturers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity.
We have established and currently maintain operating guidelines which promote ethical business practices such as fair wage practices, compliance with child labor laws and other local laws. While we monitor compliance with those guidelines, we do not control our independent manufacturers or their business practices. Accordingly, we cannot guarantee their compliance with our guidelines. A lack of demonstrated compliance could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations.
Violation of labor or other laws by our independent manufacturers or the divergence of an independent manufacturer’s labor or other practices from those generally accepted as ethical in the U.S. or other markets in which we do business could also attract negative publicity for us and our brand. From time to time, our audit results have revealed a lack of compliance in certain respects, including with respect to local labor, safety and environmental laws. Other apparel companies have faced criticism after highly-publicized incidents or compliance issues have occurred or been exposed at factories producing their products. To the extent our manufacturers do not bring their operations into
 
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compliance with such laws or resolve material issues identified in any of our audit results, we may face similar criticism and negative publicity. This could diminish the value of our brand image and reduce demand for our merchandise. In addition, other apparel companies have encountered organized boycotts of their products in such situations. If we, or other companies in our industry, encounter similar problems in the future, it could harm our brand image, stock price and results of operations.
Monitoring compliance by independent manufacturers is complicated by the fact that expectations of ethical business practices continually evolve, may be substantially more demanding than applicable legal requirements and are driven in part by legal developments and by diverse groups active in publicizing and organizing public responses to perceived ethical shortcomings. Accordingly, we cannot predict how such expectations might develop in the future and cannot be certain that our guidelines would satisfy all parties who are active in monitoring and publicizing perceived shortcomings in labor and other business practices worldwide.
Our operating results are subject to seasonal and quarterly variations in our net revenue and income from operations, which could cause the price of our common stock to decline.
We have experienced, and expect to continue to experience, seasonal variations in our net revenue and income from operations. Seasonal variations in our net revenue are primarily related to increased sales of our products during our fiscal third and fourth quarters, reflecting our historical strength in sales during the fall and holiday seasons. Historically, seasonable variations in our income from operations have been driven principally by increased net revenue in such fiscal quarters.
Our rapid growth may have overshadowed whatever seasonal or cyclical factors might have influenced our business to date. In addition, as our revenue mix evolves over time to include more sales from additional retail stores, we may see an increase in the percentage of sales occurring during the fourth quarter. Such seasonal or cyclical variations in our business may harm our results of operations in the future, if we do not plan inventory appropriately, if customer shopping patterns fluctuate during such seasonal periods or if bad weather during the fourth quarter constrains shopping activity.
Any future seasonal or quarterly fluctuations in our results of operations may not match the expectations of market analysts and investors to assess the longer-term profitability and strength of our business at any particular point, which could lead to increased volatility in our stock price. Increased volatility could cause our stock price to suffer in comparison to less volatile investments.
We are subject to risks associated with leasing retail space, are generally subject to long-term non-cancelable leases and are required to make substantial lease payments under our operating leases, and any failure to make these lease payments when due would likely harm our business, profitability and results of operations.
We do not own any of our stores, but instead lease all of our retail stores under operating leases. Our leases generally have initial terms of 10 years, and generally can be extended only for one additional 5-year term. All of our leases require a fixed annual rent, and most require the payment of additional rent if store sales exceed a negotiated amount. Most of our leases are “net” leases, which require us to pay all of the cost of insurance, taxes, maintenance and utilities, and we generally cannot cancel these leases at our option. Additionally, certain of our leases allow the lessor to terminate the lease if we do not achieve a specified gross sales threshold. We have experienced circumstances in the past where landlords have attempted to invoke these contractual provisions. Although we believe we will achieve the required threshold to continue those leases, we cannot assure you that we will do so. Any loss of our store locations due to underperformance may harm our results of operations, stock price and reputation.
 
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Payments under these leases account for a significant portion of our SG&A expenses. For example, as of October 5, 2013, we were a party to operating leases associated with our retail stores requiring future minimum lease payments of $6.8 million in the aggregate through fiscal 2013 and approximately $55.2 million thereafter. We expect that any new retail stores we open will also be leased by us under operating leases, which will further increase our operating lease expenses and require significant capital expenditures. Our substantial operating lease obligations could have significant negative consequences, including, among others:
 
 	Ÿ	 	increasing our vulnerability to general adverse economic and industry conditions;	
 
 	Ÿ	 	limiting our ability to obtain additional financing;	
 
 	Ÿ	 	requiring a substantial portion of our available cash to pay our rental obligations, thus reducing cash available for other purposes;	
 
 	Ÿ	 	limiting our flexibility in planning for or reacting to changes in our business or in the industry in which we compete; and	
 
 	Ÿ	 	placing us at a disadvantage with respect to some of our competitors.	
We depend on cash flow from operations to pay our lease expenses and to fulfill our other cash needs. If our business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise available to us from borrowings under our new credit facilities or from other sources, we may not be able to service our operating lease expenses, grow our business, respond to competitive challenges or fund our other liquidity and capital needs, which would harm our business.
In addition, additional sites that we lease are likely to be subject to similar long-term non-cancelable leases. If an existing or future store is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term if we cannot negotiate a mutually acceptable termination payment. In addition, as our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close stores in desirable locations. Of our existing leases, one retail lease expires in fiscal 2013 and no existing retail leases expire in fiscal 2014. If we are unable to enter into new leases or renew existing leases on terms acceptable to us or be released from our obligations under leases for stores that we close, our business, profitability and results of operations may be harmed.
The Patient Protection and Affordable Care Act may materially increase our costs and/or make it harder for us to compete as an employer.
The Patient Protection and Affordable Care Act imposed new mandates on employers, including a requirement effective January 1, 2014 (which has temporarily been extended to January 1, 2015 due to a recent executive order) that employers with 50 or more full-time employees provide “credible” health insurance to employees or pay a financial penalty. Given our current health plan design, and assuming the law is implemented without significant changes, these mandates could materially increase our costs. Moreover, if we choose to opt out of offering health insurance to our employees, we may become less attractive as an employer and it may be harder for us to compete for qualified employees.
System security risk issues could disrupt our internal operations or information technology services, and any such disruption could negatively impact our net sales, increase our expenses and harm our reputation.
Experienced computer programmers and hackers, and even internal users, may be able to penetrate our network security and misappropriate our confidential information or that of third parties,
 
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including our customers, create system disruptions or cause shutdowns. In addition, employee error, malfeasance or other errors in the storage, use or transmission of any such information could result in a disclosure to third parties outside of our network. As a result, we could incur significant expenses addressing problems created by any such inadvertent disclosure or any security breaches of our network. This risk is heightened because we collect and store customer information, including credit card information, and use certain customer information for our marketing purposes. In addition, we rely on third parties for the operation of our website, www.vince.com , and for the various social media tools and websites we use as part of our marketing strategy.
Consumers are increasingly concerned over the security of personal information transmitted over the internet, consumer identity theft and user privacy, and any compromise of customer information could subject us to customer or government litigation and harm our reputation, which could adversely affect our business and growth. Moreover, we could incur significant expenses or disruptions of our operations in connection with system failures or breaches. In addition, sophisticated hardware and operating system software and applications that we procure form third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of our systems. The costs to us to eliminate or alleviate security problems, viruses and bugs, or any problems associated with the outsourced services could be significant, and the efforts to address these problems could result in interruptions, delays or cessation of service that may impeded our sales, distribution or other critical functions. In addition to taking the necessary precautions ourselves, we require that third-party service providers implement reasonable security measures to protect our customers’ identity and privacy. We do not, however, control these third-party service providers and cannot guarantee that no electronic or physical computer break-ins and security breaches will occur in the future.
Changes in laws, including employment laws and laws related to our merchandise, could make conducting our business more expensive or otherwise change the way we do business.
We are subject to numerous regulations, including labor and employment, customs, truth-in-advertising, consumer protection, and zoning and occupancy laws and ordinances that regulate retailers generally or govern the importation, promotion and sale of merchandise and the operation of stores and warehouse facilities. If these regulations were to change or were violated by our management, employees, vendors, independent manufacturers or partners, the costs of certain goods could increase, or we could experience delays in shipments of our products, be subject to fines or penalties, or suffer reputational harm, which could reduce demand for our merchandise and hurt our business and results of operations.
In addition to increased regulatory compliance requirements, changes in laws could make ordinary conduct of business more expensive or require us to change the way we do business. For example, changes in federal and state minimum wage laws could raise the wage requirements for certain of our employees at our retail locations, which would increase our selling costs and may cause us to reexamine our wage structure for such employees. Other laws related to employee benefits and treatment of employees, including laws related to limitations on employee hours, supervisory status, leaves of absence, mandated health benefits, overtime pay, unemployment tax rates and citizenship requirements, could negatively impact us, by increasing compensation and benefits costs which would in turn reduce our profitability.
Moreover, changes in product safety or other consumer protection laws could lead to increased costs to us for certain merchandise, or additional labor costs associated with readying merchandise for sale. It is often difficult for us to plan and prepare for potential changes to applicable laws and future actions or payments related to such changes could be material to us.
 
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If we are unable to attract, assimilate and retain new employees, we may not be able to grow or successfully operate our business.
To be successful in continuing to grow our business, we will need to continue to attract, assimilate, retain and motivate highly talented employees with a range of skills and experience, especially at the store management levels. Although we have recently hired and trained new store managers and experienced sales associates at several of our retail locations, competition for employees in our industry is intense and we may from time to time experience difficulty in retaining our associates or attracting the additional talent necessary to support the growth of our business. These problems could be exacerbated as we embark on our strategy of opening new retail stores over the next several years. We will also need to attract and retain other professionals across a range of disciplines, including design, production, sourcing and international business, as we develop new product categories and continue to expand our international presence. Furthermore, we will need to recruit employees to provide, or enter into consulting or outsourcing arrangements with respect to the provision of, services to be provided by Kellwood under the Shared Services Agreement when Kellwood no longer provides such services thereunder. If we are unable to attract, assimilate and retain additional employees with the necessary skills, we may not be able to grow or successfully operate our business.
Our operations will be restricted by our new credit facilities.
We intend to enter into a new revolving credit facility and a new term loan facility in connection with the consummation of this offering. We expect that our new credit facilities will contain significant restrictive covenants. These covenants may impair our financing and operational flexibility and make it difficult for us to react to market conditions and satisfy our ongoing capital needs and unanticipated cash requirements. Specifically, such covenants will likely restrict our ability and, if applicable, the ability of our subsidiaries to, among other things:
 
 	Ÿ	 	incur additional debt;	
 
 	Ÿ	 	make certain investments and acquisitions;	
 
 	Ÿ	 	enter into certain types of transactions with affiliates;	
 
 	Ÿ	 	use assets as security in other transactions;	
 
 	Ÿ	 	pay dividends;	
 
 	Ÿ	 	sell certain assets or merge with or into other companies;	
 
 	Ÿ	 	guarantee the debt of others;	
 
 	Ÿ	 	enter into new lines of businesses;	
 
 	Ÿ	 	make capital expenditures;	
 
 	Ÿ	 	prepay, redeem or exchange our debt; and	
 
 	Ÿ	 	form any joint ventures or subsidiary investments.	
Our ability to comply with the covenants and other terms of our debt obligations will depend on our future operating performance. If we fail to comply with such covenants and terms, we would be required to obtain waivers from our lenders to maintain compliance with our debt obligations. If we are unable to obtain any necessary waivers and the debt is accelerated, a material adverse effect on our financial condition and future operating performance would likely result. See “Additional Information Related to Vince—Description of Certain Indebtedness of Vince, LLC.” The terms of our debt obligations may restrict or delay our ability to fulfill our obligations under the Tax Receivable Agreement. In accordance with the terms of the Tax Receivable Agreement, delayed or unpaid
 
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amounts thereunder would accrue interest at a default rate of one-year LIBOR plus 500 basis points until paid. Our obligations under the Tax Receivable Agreement could result in a failure to comply with covenants or financial ratios required by our debt financing agreements and could result in an event of default under such a debt financing. See “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement” for more information regarding the terms of the Tax Receivable Agreement.
We could incur significant costs in complying with environmental, health and safety laws or as a result of satisfying any liability or obligation imposed under such laws.
Our operations are subject to various federal, state, local and foreign environmental, health and safety laws and regulations. We could be held liable for the costs to address contamination of any real property ever owned, operated or used as a disposal site. In addition, in the event that Kellwood Company becomes financially incapable of addressing the environmental liability incurred prior to the structural reorganization separating Kellwood Company from Vince, LLC, a third-party may file suit and attempt to allege that AHC engaged in a fraudulent transfer by arguing that the purpose of the separation of the non-Vince assets from AHC was to insulate AHC assets from the environmental liability. For example, pursuant to a Consent Decree with the U.S. Environmental Protection Agency (“EPA”) and the State of Missouri, a non-Vince subsidiary of AHC is conducting a cleanup of contamination at the site of a plant in New Haven, Missouri, which occurred between 1973 and 1985. Kellwood Company has posted a letter of credit in the amount of $5.9 million as a performance guarantee for the estimated cost of the required remediation work. If, despite the financial assurance provided by Kellwood Company as required by the EPA, Kellwood Company became financially unable to address this remediation, and if the corporate separateness of Vince, LLC is disregarded or if a fraudulent transfer is found to have occurred, Vince, LLC could be liable for the full amount of the remediation. If this were to occur or if we were to became liable for other environmental liabilities or obligations, it could have a material adverse effect on our business, financial condition or results of operations.
We will incur significant expenses as a result of being a public company, which will negatively impact our financial performance and could cause our results of operations and financial condition to suffer.
We will incur significant legal, accounting, insurance, share-based compensation and other expenses as a result of being a public company. The Sarbanes-Oxley Act, as well as related rules implemented by the SEC and the securities regulators and by the NYSE, have required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404(b) of the Sarbanes-Oxley Act once we are no longer an emerging growth company, will substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. We also expect these laws, rules and regulations to make it more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or to incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as officers. To assist in the recruitment of qualified directors, officers and other members of senior management and to help align their interests with those of our stockholders, we intend to make equity grants under the Vince 2013 Incentive Plan. The Vince, LLC audited financial statements included elsewhere in this prospectus do not include charges for shared based compensation. We will, however, in future periods report charges associated with grants made under the Vince 2013 Incentive Plan as we expect that shared based compensation will constitute a significant component of our executive compensation program. As a result of the foregoing, we expect an increase in legal, accounting, insurance, share based compensation and certain other expenses in the future, which will negatively impact our financial performance and could cause our results of operations and financial condition to suffer.
 
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Risks Related to the Restructuring Transactions
Our historical financial information may not be representative of our results as a stand-alone public company.
The historical financial information we have included in this prospectus has been derived from the consolidated financial statements of AHC and does not necessarily reflect what our financial position, results of operations or cash flows would have been had we operated separately from the non-Vince businesses during the historical periods presented. The historical costs and expenses reflected in our consolidated financial statements include charges for certain corporate functions historically provided by Kellwood Company, including centralized legal, accounting, tax, treasury, information technology and other services and infrastructure costs. We and Kellwood believe these charges are reasonable reflections of the historical utilization levels of these services in support of our business. The historical financial information is not necessarily indicative of our future results of operations, financial position, cash flows or costs and expenses. We have not made adjustments to reflect many significant changes that will occur in our cost structure, funding and operations as a result of our separation from the non-Vince businesses, including changes in our employee base, changes in our legal structure, and increased costs associated with being a publicly traded, stand-alone company. For additional information, see “Additional Information Related to Vince—Supplemental Selected Historical Financial Data of Vince, LLC,” “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC” and Vince, LLC’s historical consolidated financial statements and notes thereto included elsewhere in this prospectus.
Any disputes that arise between us and Kellwood with respect to our past and ongoing relationships could harm our business operations.
Disputes may arise between Kellwood and us in a number of areas relating to our past and ongoing relationships, including:
 
 	Ÿ	 	intellectual property and technology matters;	
 
 	Ÿ	 	labor, tax, employee benefit, indemnification and other matters arising from our separation from Kellwood;	
 
 	Ÿ	 	employee retention and recruiting;	
 
 	Ÿ	 	business combinations involving us;	
 
 	Ÿ	 	the nature, quality and pricing of transitional services Kellwood has agreed to provide us; and	
 
 	Ÿ	 	business opportunities that may be attractive to both Kellwood and us.	
We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party. We anticipate that following this offering, affiliates of Sun Capital, who will also continue to control Kellwood after consummation of this offering, will own approximately     % of our common stock and Sun Cardinal, LLC, an affiliate of Sun Capital, will have the ability to designate a majority of our directors.
Third parties may seek to hold us responsible for liabilities related to the non-Vince businesses that we will not retain in the IPO Restructuring Transactions or for liabilities associated with Vince assets not yet transferred to us.
We are currently subject to a number of liabilities, including the Cerberus Term Loan, the 12.875% Notes, the Sun Term Loan Agreements and various trade credit or other general unsecured obligations. As described further below, in connection with the separation of the non-Vince businesses from the Vince business in the IPO Restructuring Transactions and the consummation of this offering,
 
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Kellwood Company, LLC will repay, repurchase or discharge certain of these obligations in full (after giving effect to the Additional Sun Capital Contribution) using proceeds from the repayment of the Kellwood Note Receivable and will otherwise refinance certain of its other indebtedness. Kellwood Company, LLC will remain liable for any remaining obligations related to the non-Vince businesses. Despite this fact, third parties may seek to hold us responsible for liabilities related to the non-Vince businesses.
As described in “Restructuring Transactions” and “Use of Proceeds,” Kellwood Company, LLC will, immediately after the closing of this offering, use proceeds from the repayment of the Kellwood Note Receivable to repay or discharge the Cerberus Term Loan and the Sun Term Loan Agreements and to deposit with the trustee of the 12.875% Notes an amount sufficient to redeem such notes in full, in connection with the concurrent issuance of an unconditional redemption notice for the 12.875% Notes and the satisfaction and discharge of the indenture governing the 12.875% Notes. While the execution of the IPO Restructuring Transactions is in fact a technical default under these agreements, because we believe that the concurrent repayment or discharge of those obligations satisfies any such default, we do not believe any consent of the lenders or noteholders under the related agreements or instruments is necessary and accordingly we do not intend to seek any such consent. We could nevertheless be subject to claims from Kellwood Company’s creditors as a result of such technical defaults and these claims may force us to engage in costly litigation. If such claims are successful and indemnity is unavailable from Kellwood Company, LLC, our financial condition and results of operations may be harmed.
Also, Kellwood Company will conduct a tender offer to purchase any and all of the 7.625% Notes at par plus accrued but unpaid interest thereon in connection with this offering. Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of the 7.625% Notes. We do not intend to take any extraordinary steps with regard to any other liabilities, including the 3.5% Convertible Notes, trade credit or other general unsecured obligations of Kellwood Company. While we believe the execution of the IPO Restructuring Transactions is not a default under, nor does it create any additional rights with respect to, the 7.625% Notes or any other general unsecured liabilities, it is possible that any holders of 7.625% Notes that remain untendered after consummation of our proposed tender offer or other holders of general unsecured liabilities could attempt to draw the ongoing Vince business into any attempts to collect on any such liabilities from Kellwood Company, LLC. Kellwood Company, LLC has agreed, pursuant to the Transfer Agreement to be entered into as part of the IPO Restructuring Transactions, to indemnify us for any claims and losses that may arise related to such liabilities. But if Kellwood Company, LLC is not able to satisfy its related indemnification obligations to us, our financial condition or results of operations could suffer. See “—Risks Related to Vince—Kellwood provides us with certain key services for our business. If Kellwood fails to perform its obligations to us or if we do not find appropriate replacement services, we may be unable to perform these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us” and “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Transfer Agreement” for additional information regarding the risks related to Kellwood’s ability to satisfy its obligations to us and the indemnity to be provided to us by Kellwood Company, LLC pursuant to the terms of the Transfer Agreement.
We will be required to pay for 85% of certain tax benefits, and could be required to make substantial cash payments in which the stockholders purchasing shares in this offering will not participate.
Immediately prior to the consummation of this offering, we intend to enter into the Tax Receivable Agreement with the Pre-IPO Stockholders. Under the Tax Receivable Agreement, we will be obligated to pay to the Pre-IPO Stockholders an amount equal to 85% of the cash savings in federal, state and local income tax realized by us by virtue of our future use of the federal, state and local net operating losses (“NOLs”) held by us as of October 5, 2013, together with section 197 intangible deductions
 
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(collectively, the “Pre-IPO Tax Benefits”). “Section 197 intangible deductions” means amortization deductions with respect to certain amortizable intangible assets which are held by us and our subsidiaries immediately after this offering. Cash tax savings generally will be computed by comparing our actual federal, state and local income tax liability to the amount of such taxes that we would have been required to pay had such Pre-IPO Tax Benefits not been available to us. While payments made under the Tax Receivable Agreement will depend upon a number of factors, including the amount and timing of taxable income we generate in the future and any future limitations that may be imposed on our ability to use the Pre-IPO Tax Benefits, the payments could be substantial. Assuming the federal, state and local corporate income tax rates presently in effect, no material change in applicable tax law and no limitation on our ability to use the Pre-IPO Tax Benefits under Section 382 of the U.S. Internal Revenue Code, as amended (the “Code”), the estimated cash benefit of the full use of these Pre-IPO Tax Benefits would be approximately $200 million, of which 85%, or $170 million, is potentially payable to the Pre-IPO Stockholders under the terms of the Tax Receivable Agreement. The Tax Receivable Agreement accordingly could require us to make substantial cash payments in which the stockholders purchasing shares in this offering will not participate.
Although we are not aware of any issue that would cause the U.S. Internal Revenue Service (the “IRS”), to challenge any tax benefits arising under the Tax Receivable Agreement, the affiliates of Sun Capital will not reimburse us for any payments previously made if such benefits subsequently were disallowed, although the amount of any tax savings subsequently disallowed will reduce any future payment otherwise owed to the Pre-IPO Stockholders. For example, if our determinations regarding the applicability (or lack thereof) and amount of any limitations on the NOLs under Section 382 of the Code were to be successfully challenged by the IRS after payments relating to such NOLs had been made to the Pre-IPO Stockholders, we would not be reimbursed by the Pre-IPO Stockholders and our recovery would be limited to the extent of future payments (if any) otherwise remaining under the Tax Receivable Agreement. As a result, in such circumstances we could make payments to the Pre-IPO Stockholders under the Tax Receivable Agreement in excess of our actual cash tax savings. Furthermore, while we will generally only make payments under the Tax Receivable Agreement after we have recognized a cash flow benefit from the utilization of the Pre-IPO Tax Benefits, (other than upon a change of control or other acceleration event), the payments required under the agreement could require us to use a substantial portion of our cash from operations for those purposes.
At the effective date of the Tax Receivable Agreement, any liability recognized will be accounted for in our financial statements as a reduction of additional paid-in capital. Subsequent changes in the Tax Receivable Agreement liability will be recorded through earnings in operating expenses. Although we currently have a valuation allowance on the entire amount of NOLs, if we continue to be profitable, the valuation allowance could be reduced or eliminated. Even if the NOLs are available to us, the Tax Receivable Agreement will operate to transfer significantly all of the benefit to the Pre-IPO Stockholders. Additionally, the payments we make to the Pre-IPO Stockholders under the Tax Receivable Agreement are not expected to give rise to any incidental tax benefits to us, such as deductions or an adjustment to the basis of our assets.
Federal and state laws impose substantial restrictions on the utilization of NOL carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Code. Under the rules, such an ownership change is generally any change in ownership of more than 50 percent of a company’s stock within a rolling three-year period, as calculated in accordance with the rules. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning directly or indirectly 5% or more of the stock of the company and any change in ownership arising from new issuances of stock by the company.
At this time, we have not performed a detailed analysis under Section 382 of the Code to determine if the IPO Restructuring Transactions would constitute an ownership change. With this
 
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offering and other transactions that have occurred over the past three years, we may trigger or have already triggered an “ownership change” limitation. We may also experience ownership changes in the future as a result of subsequent shifts in stock ownership. As a result, if we earn net taxable income, our ability to use the pre-change NOL carry-forwards (after giving effect to payments to be made to the Pre-IPO Stockholders under the Tax Receivable Agreement) to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. Notwithstanding the foregoing, our preliminary analysis under Section 382 of the Code indicates that the IPO Restructuring Transactions would not trigger an “ownership change” limitation.
If we did not enter into the Tax Receivable Agreement, we would be entitled to realize the full economic benefit of the Pre-IPO Tax Benefits, to the extent allowed by federal, state and local law, including Section 382 of the Code. Subject to exceptions, the Tax Receivable Agreement is designed with the objective of causing our annual cash costs attributable to federal state and local income taxes (without regard to our continuing 15% interest in the Pre-IPO Tax Benefits) to be the same as we would have paid had we not had the Pre-IPO Tax Benefits available to offset our federal, state and local taxable income. As a result, stockholders purchasing shares in this offering will not be entitled to the economic benefit of the Pre-IPO Tax Benefits that would have been available if the Tax Receivable Agreement were not in effect (except to the extent of our continuing 15% interest in the Pre-IPO Tax Benefits).
In certain cases, payments under the Tax Receivable Agreement to the Pre-IPO stockholders may be accelerated and/or significantly exceed the actual benefits we realize in respect of the Pre-IPO Tax Benefits.
Upon the election of an affiliate of Sun Capital to terminate the Tax Receivable Agreement pursuant to a change in control (as defined in the Tax Receivable Agreement) or upon our election to terminate the Tax Receivable Agreement early, all of our payment and other obligations under the Tax Receivable Agreement will be accelerated and will become due and payable. Additionally, the Tax Receivable Agreement provides that in the event that we breach any of our material obligations under the Tax Receivable Agreement by operation of law as a result of the rejection of the Tax Receivable Agreement in a case commenced under Title 11 of the United States Code (the “Bankruptcy Code”) then all of our payment and other obligations under the Tax Receivable Agreement will be accelerated and will become due and payable.
In the case of any such acceleration, we would be required to make an immediate payment equal to 85% of the present value of the tax savings represented by any portion of the Pre-IPO Tax Benefits for which payment under the Tax Receivable Agreement has not already been made, which upfront payment may be made years in advance of the actual realization of such future benefits. Such payments could be substantial and could exceed our actual cash tax savings from the Pre-IPO Tax Benefits. In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. There can be no assurance that we will have sufficient cash available or that we will be able to finance our obligations under the Tax Receivable Agreement.
If we were to elect to terminate the Tax Receivable Agreement immediately after this offering, based on a discount rate equal to monthly LIBOR plus 300 basis points, we estimate that we would be required to pay $         million in the aggregate under the Tax Receivable Agreement. See “Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement.”
 
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Risks Related to AHC
General economic conditions in the U.S., Europe and other parts of the world, including a continued weakening of the economy and restricted credit markets, can affect consumer confidence and consumer spending patterns.
The apparel industry has historically been subject to cyclical variations, recessions in the general economy or uncertainties regarding future economic prospects that affect consumer spending habits which could negatively impact AHC’s business overall, the carrying value of AHC’s tangible assets and intangible assets and specifically sales, gross margins and profitability. The success of AHC’s operations depends on consumer spending. Consumer spending is impacted by a number of factors, including actual and perceived economic conditions affecting disposable consumer income (such as unemployment, wages, energy costs, consumer debt levels, etc.), business conditions, interest rates and availability of credit and tax rates in the general economy and in the international, regional and local markets where AHC’s products are sold.
Recent global economic conditions have included significant recessionary pressures and declines in employment levels, disposable income and actual and/or perceived wealth and further declines in consumer confidence and economic growth. These conditions have led and could lead to continued substantial declines in consumer spending over the foreseeable future and may have resulted in a resetting of consumer spending habits that makes it unlikely that spending will return to prior levels for the foreseeable future. The current depressed economic environment has been characterized by a dramatic decline in consumer discretionary spending and has disproportionately affected retailers and sellers of consumer goods, particularly those whose goods are viewed as discretionary purchases, including fashion apparel such as AHC brands. While there have been occasional signs of stabilization in the North American markets during 2012, a shift towards continued recessionary conditions could adversely impact AHC’s sales volumes and overall profitability in the future. Further, the European debt crisis resulting from growing concerns that European countries could default on their national debt, have caused instability in the European economy. Continued economic volatility and declines in the value of the Euro could negatively impact the global economy as a whole. Such a condition would have a material adverse impact on the profitability and liquidity of AHC’s international operations, as well as hinder AHC’s ability to grow through expansion in the international markets.
Economic conditions have also led to a highly promotional environment and strong discounting pressure from both AHC’s wholesale and retail customers, which have had a negative effect on its revenues and profitability. This promotional environment may likely continue even after economic growth returns, as AHC expects consumer spending trends are likely to remain at historically depressed levels for the foreseeable future. The domestic and international political situation also affects consumer confidence. The threat, outbreak or escalation of terrorism, military conflicts or other hostilities could lead to further decreases in consumer spending.
Intense competition in the apparel industry could reduce AHC’s sales and profitability.
As an apparel company, AHC faces intense competition from other domestic and foreign apparel, footwear and accessories producers and retailers. Competition may result in pricing pressures, reduced profit margins or lost market share or failure to grow AHC’s market share, any of which could substantially harm its business and results of operations. Competition is based on many factors including, without limitation, the following:
 
 	Ÿ	 	establishing and maintaining favorable brand recognition;	
 
 	Ÿ	 	developing products that appeal to consumers;	
 
 	Ÿ	 	pricing products appropriately;	
 
 	Ÿ	 	determining and maintaining product quality;	
 
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 	Ÿ	 	obtaining access to sufficient floor space in retail outlets;	
 
 	Ÿ	 	providing appropriate services and support to retailers;	
 
 	Ÿ	 	maintaining and growing market share;	
 
 	Ÿ	 	maintaining key employees; and	
 
 	Ÿ	 	protecting intellectual property.	
Competition in the apparel industry is intense and is dominated by a number of very large brands, many of which have longer operating histories, larger customer bases, more established relationships with a broader set of suppliers, greater brand recognition and greater financial, research and development, marketing, distribution and other resources than AHC does. These capabilities of AHC’s competitors may allow them to better withstand downturns in the economy or apparel industry. The aggressive and competitive nature of the apparel industry may result in lower prices for AHC’s products and decreased gross profit margins, either of which may materially adversely affect sales and profitability. Any increased competition, or AHC’s failure to adequately address any of these competitive factors, could result in reduced sales, which could adversely affect AHC’s business, financial condition and operating results.
 
AHC’s business will suffer if AHC fails to continually anticipate fashion trends and consumer tastes.
Customer tastes and fashion trends can change rapidly. AHC may not be able to anticipate, gauge or respond to these changes within a timely manner. If AHC misjudges the market for its products or product groups, or if AHC fails to identify and respond appropriately to changing consumer demands and fashion trends, it may be faced with unsold finished goods inventory, which could materially adversely affect expected operating results and decrease sales, gross margins and profitability.
Alternatively, even if AHC reacts appropriately to changes in fashion trends and consumer preferences, consumers may consider its various brand images to be outdated or associate its brands with styles that are no longer popular or trend-setting. Any of these outcomes could have a material adverse effect on AHC’s brands, business and results of operations.
The apparel industry has relatively long lead times for the design and production of products. Consequently, AHC must in some cases commit to production in advance of orders based on forecasts of customer and consumer demand. If AHC fails to forecast demand accurately, it may under-produce or over-produce a product and encounter difficulty in filling customer orders or in liquidating excess inventory. Additionally, if AHC over-produces a product based on an aggressive forecast of demand, retailers may not be able to sell the product and cancel future orders or require retrospective price adjustments. These outcomes could have a material adverse effect on sales and brand image and adversely impact sales, gross margins and profitability.
A substantial portion of AHC’s revenue is derived from a small number of large wholesale partners, and the loss of any of these wholesale partners could substantially reduce AHC’s total revenue.
A small number of AHC’s wholesale partners account for a significant portion of its total revenue. Total revenue to AHC’s ten largest wholesale partners was 55% of its total revenue for fiscal 2012 and 60% for the first six months of fiscal 2013. AHC does not have written agreements with any of its wholesale partners, and purchases generally occur on an order-by-order basis. A decision by any of AHC’s major wholesale partners, whether motivated by marketing strategy, competitive conditions, financial difficulties or otherwise, to decrease significantly the amount of merchandise purchased from
 
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AHC or its licensing partners, or to change their manner of doing business with AHC or its licensing partners, could substantially reduce AHC’s revenue and have a material adverse effect on its profitability. During the past several years, the retail industry has experienced a great deal of consolidation and other ownership changes, and AHC expects such changes will continue. In addition, store closings by AHC’s wholesale partners decrease the number of stores carrying its products, while the remaining stores may purchase a smaller amount of AHC’s products and may reduce the retail floor space designated for AHC’s brands. In the future, retailers may further consolidate, undergo restructurings or reorganizations, realign their affiliations or reposition their stores’ target markets. Any of these types of actions could decrease the number of stores that carry AHC’s products or increase the ownership concentration within the retail industry. These changes could decrease AHC’s opportunities in the market, increase its reliance on a diminishing number of large wholesale partners and decrease AHC’s negotiating strength with its wholesale partners. These factors could have a material adverse effect on AHC’s business, financial condition and operating results.
Consolidation and change in the retail industry may eliminate existing or potential customers.
A number of apparel retailers have experienced significant changes and difficulties over the past several years, including consolidation of ownership, increased centralization of buying decisions, restructurings, bankruptcies and liquidations. During past years, various apparel retailers, including some of AHC’s customers, have experienced financial problems including bankruptcy that have increased the risk of extending credit to those retailers. Financial problems with respect to any of AHC’s customers could cause it to reduce or discontinue business with those customers or require AHC to assume more credit risk relating to those customers’ receivables, either of which could have a material adverse effect on Kellwood’s business, results of operations and financial condition.
There has been, and continues to be, merger, acquisition and consolidation activity in the retail industry. In 2012, the apparel industry experienced a number of consolidation agreements and acquisitions by private-equity investors. If consumer confidence and overall economic conditions continue to recover in the foreseeable future, AHC would expect consolidation and merger activity to continue. Future consolidation could reduce the number of AHC’s customers and potential customers. A smaller market for AHC’s products could have a material adverse impact on its business and results of operations. In addition, it is possible that the larger customers, which result from mergers or consolidations, could decide to perform many of the services that AHC currently provides. If that were to occur, it could cause AHC’s business to suffer.
With increased consolidation in the retail industry, AHC is increasingly dependent upon key retailers whose bargaining strength and share of AHC’s business is growing. Accordingly, AHC faces greater pressure from these customers to provide more favorable trade terms, often in form of customers requiring AHC to provide price concessions on prior shipments as a prerequisite for obtaining future orders. AHC could be negatively affected by changes in the policies or negotiating positions of its customers. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of AHC’s products at retail. To the extent AHC’s customers have more of its goods on hand at the end of the season, there will be greater pressure for AHC to grant markdown concessions on prior shipments. Additionally, AHC could be negatively affected by changes in the policies or negotiating positions of its customers. AHC’s inability to develop satisfactory programs and systems to satisfy these customers could adversely affect operating results in any reporting period.
AHC is reliant on its retail customers for the sale of its goods.
AHC is primarily a wholesale manufacturer and marketer of womens, juniors and girls apparel. AHC’s customers are primarily retailers who sell AHC’s goods in their retail stores or online. AHC’s
 
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success in selling its products is largely dependent on its retail customers’ success in selling to their customers, the end users of AHC’s products. The success of AHC’s retail customers is in turn subject to a number of factors, many of which are outside of AHC’s and their control.
Loss of key personnel could disrupt AHC’s operations.
AHC’s continued success is dependent on its ability to attract, retain and motivate qualified management, designers, administrative and sales personnel to support existing operations and future growth. Competition for qualified personnel in the apparel industry is intense, and AHC competes for these individuals with other companies that in many cases have greater financial and other resources. The loss of the services of any members of senior management or the inability to attract and retain other qualified personnel could have a material adverse effect on AHC’s business, results of operations and financial condition.
The extent of AHC’s foreign sourcing may adversely affect AHC’s business.
AHC’s products are primarily produced by, and purchased or procured from, independent manufacturing contractors located mainly in countries in Asia. A manufacturing contractor’s failure to ship products to AHC in a timely manner or to meet the required quality standards could cause us to miss the delivery date requirements of AHC’s customers for those items. The failure to make timely deliveries may cause customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on it. As a result of the magnitude of AHC’s foreign sourcing, its business is subject to the following risks:
 
 	Ÿ	 	political and economic instability in countries, including heightened terrorism and other security concerns, which could subject imported or exported goods to additional or more frequent inspections, leading to delays in deliveries or impoundment of goods;	
 
 	Ÿ	 	imposition of regulations and quotas relating to imports, including quotas imposed by bilateral textile agreements between the United States and foreign countries;	
 
 	Ÿ	 	imposition of increased duties, taxes and other charges on imports;	
 
 	Ÿ	 	significant fluctuation of the value of the dollar against foreign currencies;	
 
 	Ÿ	 	labor shortages in countries where contractors and suppliers are located;	
 
 	Ÿ	 	a significant decrease in availability or an increase in the cost of raw materials;	
 
 	Ÿ	 	restrictions on the transfer of funds to or from foreign countries;	
 
 	Ÿ	 	disease epidemics and health-related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas;	
 
 	Ÿ	 	the migration and development of manufacturing contractors, which could affect where AHC’s products are or are planned to be produced;	
 
 	Ÿ	 	increases in the costs of fuel, travel and transportation;	
 
 	Ÿ	 	reduced manufacturing flexibility because of geographic distance between AHC’s foreign manufacturers and us, increasing the risk that we may have to mark down unsold inventory as a result of misjudging the market for a foreign-made product;	
 
 	Ÿ	 	increases in manufacturing costs in the event of a decline in the value of the United States dollar against major world currencies, particularly the Chinese Yuan, and higher labor costs being experienced by our foreign manufacturers in China; and	
 
 	Ÿ	 	violations by foreign contractors of labor and wage standards and resulting adverse publicity.	
 
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If these risks limit or prevent AHC from selling or manufacturing products in any significant international market, prevent AHC from acquiring products from foreign suppliers, or significantly increase the cost of its products, AHC’s operations could be seriously disrupted until alternative suppliers are found or alternative markets are developed, which could negatively impact its business.
The success of AHC’s licenses depends on the value of the licensed brands.
Some of AHC’s products are produced under license agreements with third parties. Similarly, AHC licenses some of its brand names to other companies. Brands that AHC licenses from third parties are integral to its business as is the implementation of AHC’s strategies for growing and expanding these brands and trademarks. AHC markets some of its products under the names and brands of recognized designers. AHC’s sales of these products could decline if any of those designer’s images or reputations were to be negatively impacted. Additionally, AHC relies on continued good relationships with both licensees and licensors, of certain trademarks and brand names. Adverse actions by any of these third parties could damage the brand equity associated with these trademarks and brands, which could have a material adverse effect on AHC’s business, results of operations and financial condition.
AHC’s competitive position could suffer if its intellectual property rights are not protected.
AHC believes that its trademarks, patents and designs are of great value. From time to time, third parties have challenged, and may in the future try to challenge, AHC’s ownership of its intellectual property. AHC is susceptible to others imitating its products and infringing its intellectual property rights. AHC Imitation or counterfeiting of AHC’s products or infringement of its intellectual property rights could diminish the value of AHC’s brands or otherwise adversely affect AHC’s revenues. The actions AHC has taken to establish and protect its trademarks and other intellectual property rights may not be adequate to prevent imitation of its products by others or to prevent others from seeking to invalidate AHC’s trademarks or block sales of its products as a violation of the trademarks and intellectual property rights of others. In addition, others may assert rights in, or ownership of, AHC’s trademarks and other intellectual property rights or in similar marks or marks that AHC licenses and/or market and AHC may not be able to successfully resolve these conflicts to its satisfaction. AHC may need to resort to litigation to enforce its intellectual property rights, which could result in substantial costs and diversion of resources. Successful infringement claims against AHC could result in significant monetary liability or prevent AHC from selling some of its products. In addition, resolution of claims may require AHC to redesign its products, license rights from third parties or cease using those rights altogether. Any of these events could harm AHC’s business and cause its results of operations, liquidity and financial condition to suffer.
AHC currently owns the exclusive right to use various domain names containing or relating to its brands. AHC may be unable to prevent third parties from acquiring and using domain names that infringe or otherwise decrease the value of its trademarks and other proprietary rights. Failure to protect AHC’s domain names could adversely affect its brands and make it more difficult for users to find AHC’s websites.
Fluctuations in the price, availability and quality of raw materials could cause delays and increase costs and cause AHC’s operating results and financial condition to suffer.
Fluctuations in the price, availability and quality of the fabrics or other raw materials, particularly cotton, leather, and synthetics used in AHC’s manufactured apparel, could have a material adverse effect on cost of sales or AHC’s ability to meet customer demands. The prices of fabrics depend largely on the market prices of the raw materials used to produce them. The price and availability of the raw materials and, in turn, the fabrics used in AHC’s apparel may fluctuate significantly, depending on many factors, including crop yields, weather patterns, labor costs and changes in oil prices. AHC may
 
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not be able to pass higher raw materials prices and related transportation costs on to its customers. AHC is not always successful in its efforts to protect its business from the volatility of the market price of raw materials, and AHC’s business can be materially affected by dramatic movements in prices of raw materials. The ultimate effect of this change on AHC’s earnings cannot be quantified, as the effect of movements in raw materials prices on industry selling prices are uncertain, but any significant increase in these prices could have a material adverse effect on its business, financial condition and operating results.
Problems with AHC’s distribution system could harm its ability to meet customer expectations, manage inventory, complete sales and achieve objectives for operating efficiencies.
AHC operates two distribution facilities in City of Industry, California and St. George, Utah, as well as utilizing seven third-party distribution facilities. AHC’s ability to meet the needs of its wholesale partners and its own retail stores depends on the proper operation of these distribution facilities. Because a substantial portion of AHC’s products are distributed from these locations, AHC’s operations could also be interrupted by labor difficulties, or by floods, fires, earthquakes or other natural disasters near such either facility. AHC maintains business interruption insurance, but it may not adequately protect AHC from the adverse effects that could result from significant disruptions to its distribution system, such as the long-term loss of customers or an erosion of AHC’s brand image. If AHC encounters problems with its distribution system, its ability to meet customer expectations, manage inventory, complete sales and achieve objectives for operating efficiencies could be harmed. Any of the foregoing factors could have a material adverse effect on AHC’s business, financial condition and operating results.
AHC’s ability to source its merchandise profitably or at all could be hurt if new trade restrictions are imposed or existing trade restrictions become more burdensome.
The majority of AHC’s products are currently manufactured for it outside of the U.S. The U.S. and the countries in which AHC’s products are produced or sold internationally have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty or tariff levels. Countries impose, modify and remove tariffs and other trade restrictions in response to a diverse array of factors, including global and national economic and political conditions, which make it impossible for AHC to predict future developments regarding tariffs and other trade restrictions. Trade restrictions, including tariffs, quotas, embargoes, safeguards and customs restrictions, could increase the cost or reduce the supply of products available to AHC or may require AHC to modify its supply chain organization or other current business practices, any of which could harm AHC’s business, financial condition and results of operations.
If AHC is unable to accurately forecast customer demand for its products AHC’s manufacturers may not be able to deliver products to meet its requirements, and this could result in delays in the shipment of products to AHC’s wholesale partners.
AHC provides stock to its wholesale partners, based on its estimates of future demand for particular products. AHC’s inventory management and planning teams determine the number of pieces of each product that AHC will order from its manufacturers based upon past sales of similar products, feedback from focus groups, sales trend information and anticipated retail price. However, if AHC’s inventory and planning teams fail to accurately forecast customer demand, AHC may experience excess inventory levels or a shortage of products.
Factors that could affect AHC’s inventory and planning team’s ability to accurately forecast customer demand for its products include:
 
 	Ÿ	 	a substantial increase or decrease in consumer demand for AHC’s products or for products of AHC’s competitors;	
 
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 	Ÿ	 	AHC’s failure to accurately forecast customer acceptance for its new products;	
 
 	Ÿ	 	new product introductions or pricing strategies by competitors;	
 
 	Ÿ	 	more limited historical store sales information for AHC’s newer markets;	
 
 	Ÿ	 	weakening of economic conditions or consumer confidence in future economic conditions, which could reduce demand for discretionary items, such as AHC’s products; and	
 
 	Ÿ	 	acts or threats of war or terrorism which could adversely affect consumer confidence and spending or interrupt production and distribution of AHC’s products and AHC’s raw materials.	
Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discount prices, which would cause our gross margin to suffer and could impair the strength and exclusivity of AHC’s brand.
In addition, if AHC underestimates customer demand for its products, AHC’s manufacturers may not be able to deliver products to meet its requirements, and this could result in delays in the shipment of products to AHC’s wholesale partners and may damage our reputation and customer relationships. There can be no assurances that AHC will be able to successfully manage its inventory at a level appropriate for future customer demand.
We could incur significant costs in complying with environmental, health and safety laws or as a result of satisfying any liability or obligation imposed under such laws.
Our operations are subject to various federal, state, local and foreign environmental, health and safety laws and regulations. We could be held liable for the costs to address contamination of any real property we have ever owned, operated or used as a disposal site. For example, pursuant to a Consent Decree with the EPA and the State of Missouri, we are conducting a cleanup of contamination at the site of a plant in New Haven, Missouri, which occurred between 1973 and 1985. As of August 3, 2013 AHC’s best estimate of the discounted value of the total obligation for required and voluntary remedial activities at this New Haven site was $9.7 million. If AHC’s estimated amount of the discounted value is incorrect or if AHC were to become liable for other environmental liabilities or obligations, it could have a material adverse effect on its business, financial condition or results of operations.
System security risk issues could disrupt AHC’s internal operations or information technology services, and any such disruption could harm AHC’s net sales, increase our expenses and harm its reputation.
Experienced computer programmers and hackers, and even internal users, may be able to penetrate AHC’s network security and misappropriate AHC’s confidential information or that of third parties, including our customers, create system disruptions or cause shutdowns. In addition, employee error, malfeasance or other errors in the storage, use or transmission of any such information could result in a disclosure to third parties outside of AHC’s network. As a result, AHC could incur significant expenses addressing problems created by any such inadvertent disclosure or any security breaches of its network. This risk is heightened because AHC collects and stores customer information, including credit card information, and use certain customer information for its marketing purposes. In addition, AHC relies on third parties for the operation of its various websites and for the various social media tools and websites AHC uses as part of its marketing strategy.
Consumers are increasingly concerned over the security of personal information transmitted over the internet, consumer identity theft and user privacy, and any compromise of customer information could subject AHC to customer or government litigation and harm AHC’s reputation, which could
 
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adversely affect AHC’s business and growth. Moreover, AHC could incur significant expenses or disruptions of its operations in connection with system failures or breaches. In addition, sophisticated hardware and operating system software and applications that AHC procures from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of AHC’s systems. The costs to AHC to eliminate or alleviate security problems, viruses and bugs, or any problems associated with the outsourced services, could be significant, and the efforts to address these problems could result in interruptions, delays or cessation of service that may impeded AHC’s sales, distribution or other critical functions. In addition to taking the necessary precautions, AHC requires that third-party service providers implement reasonable security measures to protect its customers’ identity and privacy. AHC does not, however, control these third-party service providers and cannot guarantee that no electronic or physical computer break-ins and security breaches will occur in the future.
There are claims made against AHC from time to time that can result in litigation or regulatory proceedings which could distract management from AHC’s business activities and result in significant liability.
AHC faces the risk of litigation and other claims against it. Litigation and other claims may arise in the ordinary course of its business and include commercial disputes, intellectual property issues, product-oriented allegations and slip and fall claims. In addition, AHC could face a wide variety of associate claims against it, including general discrimination, privacy, labor and employment, ERISA and disability claims. Any claims could result in litigation against AHC and could also result in regulatory proceedings being brought against AHC by various federal and state agencies that regulate its business, including the U.S. Equal Employment Opportunity Commission. Often these cases raise complex factual and legal issues, which are subject to risks and uncertainties and which could require significant management time and expense. Litigation and other claims and regulatory proceedings against AHC could result in unexpected expenses and liability, and could also materially and adversely affect AHC’s operations and reputation.
Changes in laws, including employment laws and laws related to AHC’s merchandise, could make conducting AHC’s business more expensive or otherwise change the way AHC does business.
AHC is subject to numerous regulations, including labor and employment, customs, truth-in-advertising, consumer protection and zoning and occupancy laws and ordinances that regulate retailers generally or govern the importation, promotion and sale of merchandise and the operation of stores and warehouse facilities. If these regulations were to change or were violated by AHC’s management, associates, vendors, buying agents or trading companies, the costs of certain goods could increase, or AHC could experience delays in shipments of its products, be subject to fines or penalties, or suffer reputational harm, which could reduce demand for AHC’s merchandise and hurt its business and results of operations.
In addition to increased regulatory compliance requirements, changes in laws could make ordinary conduct of business more expensive or require us to change the way AHC does business. Other laws related to employee benefits and treatment of associates, including laws related to limitations on associate hours, supervisory status, leaves of absence, mandated health benefits or overtime pay, could negatively impact AHC, such as by increasing compensation and benefits costs for overtime and medical expenses.
Moreover, changes in product safety or other consumer protection laws could lead to increased costs to AHC for certain merchandise, or additional labor costs associated with readying merchandise for sale. It is often difficult for AHC to plan and prepare for potential changes to applicable laws and future actions or payments related to such changes could be material to AHC.
 
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AHC is subject to potential challenges relating to overtime pay and other regulations that impact its employees, which could cause its business, financial condition, results of operations or cash flows to suffer.
U.S. federal and state labor laws govern AHC’s relationship with its employees and affect its operating costs. These laws include minimum wage requirements, overtime pay, unemployment tax rates, workers’ compensation rates and citizenship requirements. These laws change frequently and may be difficult to interpret and apply. In particular, as a retailer, AHC may be subject to challenges regarding the application of overtime and related pay regulations to its employees. A determination that AHC does not comply with these laws could harm its brand image, business, financial condition and results of operation. Additional government-imposed increases in minimum wages, overtime pay, paid leaves of absence or mandated health benefits could also cause our business, financial condition, results of operations or cash flows to suffer.
Risks Related to this Offering and Our Common Stock
We cannot assure that a market will develop for our common stock or what the price of our common stock will be.
Before this offering, there was no public trading market for our common stock, and we cannot assure you that one will develop or be sustained after this offering. If a market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at an attractive price or at all. We cannot predict the prices at which our common stock will trade. The initial public offering price for our common stock will be determined through our negotiations with the underwriters and may not bear any relationship to the market price at which our common stock will trade after this offering or to any other established criteria of the value of our business. It is possible that, in future quarters, our operating results may be below the expectations of securities analysts and investors. As a result of these and other factors, the price of our common stock may decline, possibly materially.
Our stock price may be volatile and your investment in our common stock could suffer a decline in value.
Broad market and industry factors may harm the price of our common stock, regardless of our actual operating performance. Factors that could cause fluctuation in the price of our common stock may include, among other things:
 
 	Ÿ	 	actual or anticipated fluctuations in quarterly operating results or other operating metrics, such as comparable store sales, that may be used by the investment community;	
 
 	Ÿ	 	changes in financial estimates by us or by any securities analysts who might cover our stock;	
 
 	Ÿ	 	speculation about our business in the press or the investment community;	
 
 	Ÿ	 	conditions or trends affecting our industry or the economy generally;	
 
 	Ÿ	 	stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in the apparel, accessories and retail industries;	
 
 	Ÿ	 	announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;	
 
 	Ÿ	 	announcements by our wholesale partners of negative business performance or the projection that future business performance will be negative;	
 
 	Ÿ	 	changes in product assortment between high and low margin products;	
 
 	Ÿ	 	capital commitments;	

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 	Ÿ	 	our entry into new markets;	
 
 	Ÿ	 	timing of new store openings;	
 
 	Ÿ	 	percentage of sales from new stores versus established stores;	
 
 	Ÿ	 	additions or departures of key business leaders;	
 
 	Ÿ	 	actual or anticipated sales of our common stock, including sales by our directors, officers or significant stockholders;	
 
 	Ÿ	 	significant developments relating to our manufacturing, distribution, or supplier relationships;	
 
 	Ÿ	 	customer purchases of new products from us and our competitors;	
 
 	Ÿ	 	investor perceptions of the apparel, accessories and retail industries in general and our company in particular;	
 
 	Ÿ	 	major catastrophic events;	
 
 	Ÿ	 	volatility in our stock price, which may lead to higher stock-based compensation expense under applicable accounting standards;	
 
 	Ÿ	 	changes in accounting standards, policies, guidance, interpretation or principles; and	
 
 	Ÿ	 	material litigation or government investigations.	
In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation, even if it does not result in liability for us, could result in substantial costs to us and divert management’s attention and resources.
We are a “controlled company,” controlled by investment funds advised by affiliates of Sun Capital, whose interests in our business may be different from yours.
Upon consummation of this offering, affiliates of Sun Capital will own approximately         % of our outstanding common stock, assuming the underwriters do not exercise their option to purchase additional shares from the selling stockholders. If the underwriters exercise their option to purchase additional shares from the selling stockholders, affiliates of Sun Capital will own approximately         % of our outstanding common stock. As such, affiliates of Sun Capital will, for the foreseeable future, have significant influence over our reporting and corporate management and affairs, and will be able to control virtually all matters requiring stockholder approval. For so long as affiliates of Sun Capital own 30% or more of our outstanding shares of common stock, Sun Cardinal, one of our selling stockholders, will have the right to designate a majority of our board of directors. For so long as Sun Cardinal has the right to designate a majority of our board of directors, the directors designated by Sun Cardinal are expected to constitute a majority of each committee of our board of directors, other than the Audit Committee, and the chairman of each of the committees, other than the Audit Committee, is expected to be a director serving on such committee who is designated by Sun Cardinal, provided that, at such time as we are not a “controlled company” under the NYSE corporate governance standards, our committee membership will comply with all applicable requirements of those standards and a majority of our board of directors will be “independent directors,” as defined under the rules of the NYSE.
As a “controlled company,” the rules of the NYSE exempt us from the obligation to comply with certain corporate governance requirements, including the requirements that a majority of our board of directors consists of “independent directors,” as defined under such rules and that we have nominating and corporate governance and compensation committees that are each composed entirely of independent directors. These exemptions do not modify the requirement for a fully independent audit committee, which is permitted to be phased-in as follows: (1) one independent committee member at
 
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the time of listing; (2) a majority of independent committee members within 90 days of our initial public offering; and (3) all independent committee members within one year of our initial public offering. Similarly, once we are no longer a “controlled company,” we must comply with the independent board committee requirements as they relate to the nominating and corporate governance and compensation committees, on the same phase-in schedule as set forth above, with the trigger date being the date we are no longer a “controlled company” as opposed to our initial public offering date. Additionally, we will have 12 months from the date we cease to be a “controlled company” to have a majority of independent directors on our board of directors.
Affiliates of Sun Capital will control actions to be taken by us and our board of directors, including amendments to our amended and restated certificate of incorporation and amended and restated bylaws and approval of significant corporate transactions, including mergers and sales of substantially all of our assets. The directors designated by Sun Cardinal will have the authority, subject to the terms of our indebtedness and the rules and regulations of the NYSE, to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions. The NYSE independence standards are intended to ensure that directors who meet the independence standard are free of any conflicting interest that could influence their actions as directors. Our amended and restated certificate of incorporation will provide that the doctrine of “corporate opportunity” will not apply against Sun Capital or its affiliates, or any of our directors who are associates of, or affiliated with, Sun Capital, in a manner that would prohibit them from investing in competing businesses or doing business with our partners or customers. It is possible that the interests of Sun Capital and its affiliates may in some circumstances conflict with our interests and the interests of our other stockholders, including you . For example, Sun Capital may have different tax positions from other stockholders which could influence their decisions regarding whether and when we should dispose of assets, whether and when we should incur new or refinance existing indebtedness, especially in light of the existence of the Tax Receivable Agreement that we will enter into in connection with this offering, and whether and when we should terminate the Tax Receivable Agreement and accelerate our obligations thereunder. In addition, the structuring of future transactions may take into consideration tax or other considerations of Sun Capital and its affiliates even where no similar benefit would accrue to us. See “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement.”
If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.
If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $         per share, because the assumed initial public offering price of $        , which is the midpoint of the price range listed on the cover page of this prospectus, is substantially higher than the net tangible book value per share of our outstanding common stock. This dilution is due in large part to the fact that affiliates of Sun Capital paid substantially less than the initial public offering price when they acquired their shares of our capital stock in February 2008.
Our business and stock price may suffer as a result of our lack of public company operating experience. In addition, if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
We are a privately-held company. Our lack of recent public company operating experience may make it difficult to forecast and evaluate our future performance. If we are unable to execute our business strategy, either as a result of our inability to effectively manage our business in a public company environment or for any other reason, our business performance, financial condition and results of operations may be harmed. In addition, the trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our
 
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business. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our stock would be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any dividends on our common stock. We intend to retain all of our earnings for the foreseeable future to finance the operation and expansion of our business and we do not anticipate paying any cash dividends in the future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases. Our board of directors retains the discretion to change this policy.
We are a holding company and we are dependent upon distributions from our subsidiaries to pay dividends and taxes and other expenses.
Vince Holding Corp. will be a holding company with no material assets other than its ownership of membership interests in Vince Intermediate Holding, LLC, a holding company that will have no material assets other than its interest in Vince, LLC. Neither Vince Holding Corp. nor Vince Intermediate Holding, LLC will have any independent means of generating revenue. To the extent that we need funds, for a cash dividend to holders of our common stock or otherwise, and Vince Intermediate Holding, LLC or Vince, LLC is restricted from making such distributions under applicable law or regulation or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
We will file consolidated income tax returns on behalf of Vince Holding Corp. and Vince Intermediate Holding, LLC. Most of our future tax obligations will likely be attributed to the operations of Vince, LLC. Accordingly, most of the payments against the Tax Receivable Agreement will be attributed to the operations of Vince, LLC. We intend to cause Vince, LLC to pay dividends or make funds available to us in an amount sufficient to allow us to pay our taxes and any payments due to the Pre-IPO Stockholders under the Tax Receivable Agreement. If, as a consequence of these various limitations and restrictions, we do not have sufficient funds to pay tax or other liabilities, we may have to borrow funds and thus our liquidity and financial condition could be materially adversely affected. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest at a default rate of one-year LIBOR plus 500 basis points until paid. See “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement” for more information regarding the terms of the Tax Receivable Agreement.
We will have broad discretion over the use of proceeds from this offering after repayment of the Kellwood Note Receivable, and such remaining proceeds will be limited. Additionally, drawings under our new term loan facility will also be used to help repay the Kellwood Note Receivable and we will have no availability under such facility after giving effect to such repayment.
Most of the net proceeds from this offering are being used, along with net borrowings under our new term loan facility, to repay the Kellwood Note Receivable that will be issued to Kellwood Company, LLC in connection with the IPO Restructuring Transactions. Kellwood Company, LLC will use proceeds from the repayment of the Kellwood Note Receivable to (i) repay or retire long-term indebtedness (including accrued and unpaid interest thereon and any related fees and expenses) that was incurred to fund the operation and growth of the Vince and non-Vince businesses, (ii) pay a restructuring fee
 
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equal to 1% of the aggregate of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Management Fees,” and (iii) a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements,” all after giving effect to the Additional Sun Capital Contribution. It is currently estimated that the restructuring fee described in clause (ii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million. Most of the net proceeds from this offering, along with the net borrowings under our new term loan facility, are being used to repay the Kellwood Note Receivable. Kellwood Company, LLC will use the proceeds from such repayment to repay, discharge or repurchase debt incurred to acquire and operate the non-Vince businesses of Apparel Holding Corp. or to pay fees associated with the operation of such businesses, investors should expect that these proceeds will not directly benefit the Vince business or be used to fund its expansion or growth. Additionally, we will have broad discretion over the use of the net proceeds from this offering that are not used to repay the Kellwood Note Receivable. You will be relying on the judgment of our board of directors and management regarding the application of any such remaining proceeds. Finally, as drawings under our new term loan facility will be used to help repay the Kellwood Note Receivable (in an amount equal to the entire availability under such facility), no portion of such facility will available to support our future growth and operations and we may need to draw on our new revolving credit facility to fund such future growth and operations.
Anti-takeover provisions of Delaware law and our amended and restated certificate of incorporation and bylaws could delay and discourage takeover attempts that stockholders may consider to be favorable.
Our amended and restated certificate of incorporation and amended and restated bylaws will contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors. These provisions include:
 
 	Ÿ	 	the classification of our board of directors so that not all members of our board of directors are elected at one time;	
 
 	Ÿ	 	the authorization of the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;	
 
 	Ÿ	 	stockholder action can only be taken at a special or regular meeting and not by written consent following the time that Sun Capital and its affiliates cease to beneficially own a majority of our common stock;	
 
 	Ÿ	 	advance notice procedures for nominating candidates to our board of directors or presenting matters at stockholder meetings;	
 
 	Ÿ	 	removal of directors only for cause following the time that Sun Capital and its affiliates cease to beneficially own a majority of our common stock;	
 
 	Ÿ	 	allowing Sun Cardinal to fill any vacancy on our board of directors for so long as affiliates of Sun Capital own 30% or more of our outstanding shares of common stock and thereafter, allowing only our board of directors to fill vacancies on our board of directors; and	
 
 	Ÿ	 	following the time that Sun Capital and its affiliates cease to beneficially own a majority of our common stock, super-majority voting requirements to amend our bylaws and certain provisions of our certificate of incorporation.	
 
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Our amended and restated certificate of incorporation will also contain a provision that provides us with protections similar to Section 203 of the Delaware General Corporation Law (“DGCL”), and will prevent us from engaging in a business combination, such as a merger, with a person or group who acquires at least 15% of our voting stock for a period of three years from the date such person became an interested stockholder, unless board or stockholder approval is obtained prior to acquisition. However, our amended and restated certificate of incorporation will also provide that both Sun Capital and its affiliates and any persons to whom a Sun Capital affiliate sells its common stock will be deemed to have been approved by our board of directors.
These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change of control of our company, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
A total of             , or     %, of our total outstanding shares after the offering are restricted from immediate resale, but may be sold on the NYSE in the near future. The large number of shares eligible for public sale or subject to rights requiring us to register them for public sale could depress the market price of our common stock.
The market price of our common stock could decline significantly as a result of sales of a large number of shares of our common stock in the market after this offering. The sales, or the perception that these sales might occur, could depress the market price of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Upon consummation of this offering and after giving effect to the IPO Restructuring Transactions, we will have                      shares of common stock outstanding. The shares of common stock offered in this offering will be freely tradable without restriction under the Securities Act, except for any shares of our common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is required under the Securities Act or an exemption from registration is available. In addition, pursuant to our Registration Agreement, affiliates of Sun Capital have rights to require us to file registration statements registering additional sales of shares of common stock or to include sales of such shares of common stock in registration statements that we may file for ourselves. Subject to compliance with applicable lock-up restrictions and satisfaction of certain conditions, shares of common stock sold under these registration statements can be freely sold in the public market. In the event such registration rights are exercised and a large number of shares of common stock are sold in the public market, such sales could reduce the trading price of our common stock. These sales could also impede our ability to raise future capital. Additionally, we will bear all expenses in connection with any such registrations (other than underwriting discounts and commissions). See “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Registration Agreement.”
We and the holders of substantially all of our common stock outstanding on the date of this prospectus, including each of our executive officers and directors, have agreed with the underwriters, that for a period of 180 days after the date of this prospectus, we or they will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of or hedge any shares of our common stock, or any options or warrants to purchase any shares of our common stock or any securities convertible into or exchangeable for shares of common stock, subject to specified exceptions. The representatives of the underwriters may, in their discretion, at any time without prior notice, release all or any portion of the shares from the restrictions in any such agreement. See “Other
 
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Information Related to this Offering—Underwriting” for more information. Substantially all of our shares of common stock outstanding as of the date of this prospectus may be sold in the public market by existing stockholders 90 days after the date of this prospectus, subject to the lock-up agreements and applicable volume and other limitations imposed under federal securities laws. See “Other Information Related to this Offering—Shares Eligible for Future Sale” for a more detailed description of the restrictions on selling shares of our common stock after this offering. Sales by our existing stockholders of a substantial number of shares in the public market, or the perception that these sales might occur, could cause the market price of our common stock to decrease significantly.

Number of shares and % of total outstanding	 	Date Available for Sale into Public Market	
            , or     %	 	Immediately after this offering	

            , or     %	 	180 days after the date of this prospectus due to contractual obligations and lock-up agreements between the holders of these shares and the underwriters. However, the underwriters can waive the provisions of these lock-up agreements and allow these stockholders to sell their shares at any time, provided their respective one-year holding periods under Rule 144 have expired.	
		
            , or     %	 	From time to time after the date 180 days after the date of this prospectus upon expiration of their respective holding periods.	
In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.
Any issuance of preferred stock could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock.
Upon consummation of this offering, our board of directors will have the authority to issue preferred stock and to determine the preferences, limitations and relative rights of shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium over the market price, and adversely affect the market price and the voting and other rights of the holders of our common stock.
We are an “emerging growth company” and may elect to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors.
After giving effect to the IPO Restructuring Transactions, we will continue to be an “emerging growth company,” as defined by the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on
 
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executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years after the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act, which such fifth anniversary will occur in 2018. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we would cease to be an emerging growth company prior to the end of such five-year period. We will become a large accelerated filer the year after we have an aggregate worldwide market value of the voting and non-voting common equity held by non-affiliates of $700 million or more. We have taken advantage of certain of the reduced disclosure obligations regarding executive compensation in this prospectus and may elect to take advantage of other reduced burdens in future filings. As a result, the information we provide to holders of our common stock may be different than you might receive from other public reporting companies in which you hold equity interests. We cannot predict if investors will find our common stock less attractive as a result of our reliance on these exemptions. If some investors find our common stock less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for our common stock and the price for our common stock may be more volatile.
As an emerging growth company we will not be required to comply with the rules of the SEC implementing Section 404(b) of the Sarbanes-Oxley Act and therefore our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal controls over financial reporting until the year following the year we cease to be an emerging growth company. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Section 302 and 404 other than 404(b) of the Sarbanes-Oxley Act. These rules will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Though we will be required to disclose changes made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following the year our first annual report is required to be filed with the SEC. If we are unable to conclude that we have effective internal control over financial reporting, our independent registered public accounting firm is unable to provide us with an unqualified report as and when required by Section 404 or we are required to restate our financial statements, we may fail to meet our public reporting obligations and investors could lose confidence in our reported financial information, which could have a negative impact on the trading price of our stock.
Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. However, we have irrevocably elected not to avail ourselves of this extended transition period for complying with new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
 
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 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus constitute forward-looking statements, including in the sections captioned “Prospectus Summary,” “Risk Factors,” “Additional Information Related to AHC—AHC Business,” “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC,” “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC” and “Additional Information Related to Vince—Vince Business,” Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts or present facts or conditions, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the introduction of new merchandise, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology.
The forward-looking statements contained in this prospectus reflect our views as of the date of this prospectus about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to, those factors described in “Risk Factors,” “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC” and “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC” These factors include without limitation:
 
 	Ÿ	 	changes in consumer spending and general economic conditions;	
 
 	Ÿ	 	our ability to respond to market competition;	
 
 	Ÿ	 	our dependence on a strong brand image;	
 
 	Ÿ	 	our ability to maintain and expand our relationships with our significant wholesale partners;	
 
 	Ÿ	 	our ability to locate suitable locations to open new stores and to attract customers to our stores;	
 
 	Ÿ	 	our ability to maintain recent levels of comparable store sales or average sales per square foot;	
 
 	Ÿ	 	our ability to manage our operations at our current size or manage future growth effectively;	
 
 	Ÿ	 	our reliance on Kellwood to provide us with certain key services for our business;	
 
 	Ÿ	 	our ability to successfully improve and expand our product offerings;	
 
 	Ÿ	 	the success of our current and future licensing arrangements;	
 
 	Ÿ	 	our ability to successfully anticipate customer tastes;	
 
 	Ÿ	 	our ability to forecast customer demand for our products and deliver products to our stores and wholesale partners;	
 
 	Ÿ	 	our ability to successfully expand in the U.S. and other new markets;	
 
 	Ÿ	 	the ability of our senior management team to work together as a group;	
 
 	Ÿ	 	our ability to attract and retain the services of our senior management and key employees;	
 
 	Ÿ	 	our inability to protect our trademarks or other intellectual property rights;	
 
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 	Ÿ	 	the ability of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner;	
 
 	Ÿ	 	our reliance on foreign sourcing for our product offerings;	
 
 	Ÿ	 	our ability to respond to fluctuations in the price, availability and quality of raw materials;	
 
 	Ÿ	 	harm to our brand image due to the failure of our independent manufacturers to use ethical business practices;	
 
 	Ÿ	 	our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results;	
 
 	Ÿ	 	risks associated with leasing retail space subject to long-term non-cancelable leases;	
 
 	Ÿ	 	changes in laws and regulations applicable to our business;	
 
 	Ÿ	 	system security risk issues that could disrupt our internal operations or information technology services;	
 
 	Ÿ	 	the success of our advertising, marketing and promotional strategies;	
 
 	Ÿ	 	our ability to source our merchandise profitably or at all;	
 
 	Ÿ	 	restrictions imposed by our indebtedness on our current and future operations;	
 
 	Ÿ	 	increased costs as a result of being a public company; and	
 
 	Ÿ	 	our failure to maintain adequate internal controls.	
Readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on these forward-looking statements. All of the forward-looking statements we have included in this prospectus are based on information available to us on the date of this prospectus. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law.
 
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 RESTRUCTURING TRANSACTIONS
Effective September 1, 2012, Kellwood Company, a wholly-owned subsidiary of Apparel Holding Corp., contributed the assets and liabilities constituting our business to Vince, LLC in the Vince Transfer. Affiliates of Sun Capital contributed, effective June 18, 2013, $407.5 million of indebtedness under the following instruments as a capital contribution to Apparel Holding Corp. in the Sun Capital Contribution: (i) that certain Loan Authorization Agreement, originally dated February 13, 2008 (the “Sun Capital Loan Agreement”), by and between Apparel Holding Corp. and certain Sun Capital affiliates for a $72.0 million line of credit, (ii) that certain $225,000,000 Senior Subordinated Promissory Note, dated May 2, 2008 (as amended, the “First Sun Promissory Note”), of Apparel Holding Corp. in favor of a certain Sun Capital affiliate and (iii) that certain $75,000,000 Senior Subordinated Promissory Note, dated as of May 2, 2008 (as amended on July 19, 2012, the “Second Sun Promissory Note” and collectively with the First Sun Promissory Note, the “Sun Promissory Notes”), of Apparel Holding Corp. in favor of a certain Sun Capital affiliate (such transactions in clauses (i)-(iii), the “Sun Capital Contribution”).
We have elected to complete the IPO Restructuring Transactions discussed in this section so that investors may invest in a stand-alone Vince business. In addition, the IPO Restructuring Transactions preserve the value of certain of AHC’s pre-offering tax attributes and allow the Pre-IPO Stockholders and Vince Holding Corp. to benefit from those pre-offering tax attributes after the consummation of this offering. We have elected to complete the IPO Restructuring Transactions immediately prior to the consummation of this offering to reduce the risk of incurring the costs and expenses related to the IPO Restructuring Transactions if the offering is not completed.
The chart below is a summary of Apparel Holding Corp.’s current structure prior to the consummation of this offering after giving effect to the Vince Transfer and the Sun Capital Contribution.

 
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(1)	Consists of the Sun Term Loan A Agreement and the Sun Term Loan B/C/D/E/F/G Agreement, as described below. A portion of the indebtedness under such agreements will be contributed by affiliates of Sun Capital to Apparel Holding Corp. in the Additional Sun Capital Contribution, which is a part of the IPO Restructuring Transactions.	
(2)	Vince, LLC is currently a borrower party or guarantor to the Wells Fargo Facility, the Cerberus Term Loan, the Sun Term Loan Agreements and the 12.875% Notes (each as defined below). Vince, LLC will be released from such obligations in connection with the repayment, discharge or refinancing, as applicable, by Kellwood Company, LLC of such obligations, which will happen contemporaneously with the consummation of this offering.	
Immediately prior to consummation of this offering, the following IPO Restructuring Transactions will take place:
 
 	Ÿ	 	affiliates of Sun Capital will contribute certain indebtedness under the Sun Term Loan Agreements as a capital contribution to Apparel Holding Corp., as part of the Additional Sun Capital Contribution;	
 
 	Ÿ	 	Apparel Holding Corp. will contribute such indebtedness to Kellwood Company as a capital contribution, at which time such indebtedness will be cancelled;	
 
 	Ÿ	 	Vince Intermediate Holding, LLC will be formed and become a direct subsidiary of Vince Holding Corp.;	
 
 	Ÿ	 	Kellwood Company, LLC (which is to be converted from Kellwood Company in connection with the IPO Restructuring Transactions) will be contributed to Vince Intermediate Holding, LLC;	
 
 	Ÿ	 	Apparel Holding Corp. and Vince Intermediate Holding, LLC will enter into the Transfer Agreement with Kellwood Company, LLC, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Transfer Agreement;”	
 
 	Ÿ	 	Kellwood Company, LLC will distribute 100% of Vince, LLC’s membership interests to Vince Intermediate Holding, LLC, who will issue the Kellwood Note Receivable to Kellwood Company, LLC. Proceeds from the repayment of the Kellwood Note Receivable will be used to, among other things, repay, discharge or repurchase indebtedness of Kellwood Company, LLC, as described in “Use of Proceeds.” Assuming net proceeds from this offering of $181 million and net borrowings of $169 million under our new term loan facility, the Kellwood Note Receivable will be issued in the amount of $345 million The final amount of the Kellwood Note Receivable will be adjusted to equal the actual net proceeds from this offering (less the $5.0 million of net offering proceeds to be retained by us for general corporate purposes) and net borrowings under our new term loan facility;	
 
 	Ÿ	 	Kellwood Holding, LLC will be formed by Vince Intermediate Holding, LLC and Vince Intermediate Holding, LLC will, through a series of steps, contribute 100% of the membership interests of Kellwood Company, LLC to Kellwood Intermediate Holding, LLC (which will be formed as a wholly-owned subsidiary of Kellwood Holding, LLC);	
 
 	Ÿ	 	100% of the membership interests of Kellwood Holding, LLC will be distributed to the Pre-IPO Stockholders; and	
 
 	Ÿ	 	Vince Holding Corp. will enter into the Tax Receivable Agreement with the Pre-IPO Stockholders, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement;”	
 
 	Ÿ	 	Vince, LLC will enter into the Shared Services Agreement with Kellwood Company, LLC, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement;” and	
 
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 	Ÿ	 	the conversion of all of our issued and outstanding non-voting common stock into common stock on a one-for-one basis and the subsequent stock split of our common stock on a              for one basis, at which time Apparel Holding Corp. will become Vince Holding Corp.	
As a result of the IPO Restructuring Transactions, the non-Vince businesses will be separated from the Vince business, the Pre-IPO Stockholders (through their ownership of Kellwood Holding, LLC) will retain the ownership and control of the non-Vince businesses and a stand-alone Vince business will remain. We refer to the Vince Transfer, the Sun Capital Contribution and the IPO Restructuring Transactions collectively as the “Restructuring Transactions.”
Immediately after the consummation of this offering and as described below, Vince Holding Corp. will contribute the net proceeds from this offering to Vince Intermediate Holding, LLC. Vince Intermediate Holding, LLC will use such proceeds, less $5.0 million to be retained for general corporate purposes, and approximately $169 million of net borrowings under its new term loan facility (as described in “Additional Information Related to Vince—Description of Certain Indebtedness of Vince, LLC”) to immediately repay the Kellwood Note Receivable. There will be no outstanding balance on the Kellwood Note Receivable after giving effect to such repayment. Proceeds from the repayment of the Kellwood Note Receivable will be used to (i) repay, discharge or repurchase indebtedness of Kellwood Company, LLC in connection with the closing of this offering (including $       million of accrued and unpaid interest on such indebtedness, assuming that this offering closes on                 , 2013) and (ii) pay (A) the restructuring fee payable to Sun Capital Management and (B) the debt recovery bonus payable to our Chief Executive Officer, all after giving effect to the Additional Sun Capital Contribution. The Kellwood Note Receivable will not include amounts outstanding under the Wells Fargo Facility. As discussed in “Additional Information Related to AHC—Description of Certain Indebtedness of AHC,” Kellwood Company, LLC will refinance the Wells Fargo Facility in connection with the consummation of this offering. Neither Apparel Holding Corp. nor Vince, LLC will guarantee or be a borrower party to the refinanced credit facility.
Kellwood Company, LLC (currently known as Kellwood Company) will use the proceeds from the repayment of the Kellwood Note Receivable to, after giving effect to the Additional Sun Capital Contribution, (i) repay, at closing, all indebtedness outstanding under (A) the term loan with Cerberus Business Finance, LLC (the “Cerberus Term Loan”), which had an outstanding balance of $45.7 million as of August 3, 2013, (B) that certain Fifth Amended and Restated B/C/D/E/F/G Loan Agreement (the “Sun Term Loan B/C/D/E/F/G Agreement”) between Kellwood Company and certain Sun Capital affiliates and (C) that certain Second Amended and Restated Sun Term Loan A Agreement (the “Sun Term Loan A Agreement” and collectively with the Sun Term Loan B/C/D/E/F/G Agreement, the “Sun Term Loan Agreements”) between Kellwood Company and certain Sun Capital affiliates, and which Sun Term Loan Agreements collectively totaled $118.0 million in the aggregate as of August 3, 2013, (ii) redeem at par all of the 12.875% Notes, which totaled $146.8 million as of August 3, 2013, pursuant to an unconditional redemption notice to be issued at the closing of this offering, plus, with respect to clauses (i) and (ii), fees, expenses and accrued and unpaid interest thereon, (iii) pay a restructuring fee equal to 1% of the aggregate of the offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement and (iv) pay a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements.” It is currently estimated that the restructuring fee described in clause (iii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million.
 
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In addition, Kellwood Company will conduct a tender offer for all of its outstanding 7.625% Notes, which totaled $87.0 million in aggregate principal amount as of August 3, 2013, at par plus accrued and unpaid interest thereon, using proceeds from the repayment of the Kellwood Note Receivable. The tender offer will close at or after the closing of this offering. Kellwood Company, LLC may also, at or after the closing of this offering, use proceeds remaining from the repayment of the Kellwood Note Receivable to discharge or repurchase at par all or any of its 3.5% Convertible Notes, which totaled $0.2 million in aggregate principal amount as of August 3, 2013, plus accrued and unpaid interest thereon. Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of either the 7.625% Notes or the 3.5% Convertible Notes.
If the tender offer for the 7.625% Notes is not completed contemporaneously with the closing of this offering, Kellwood Company, LLC shall enter into an escrow agreement with Vince Intermediate Holding, LLC and US Bank, National Association (the “Escrow Agent”) at the closing of this offering, pursuant to which Kellwood Company, LLC will escrow an amount equal to the face amount of the 7.625% Notes plus accrued and unpaid interest thereon through the anticipated closing date of the tender offer until the termination of the related escrow agreement. If the tender offer is completed contemporaneously with the consummation of this offering, we will not enter into the escrow agreement. No interest will accrue on the funds placed into escrow with the Escrow Agent and both Vince Intermediate Holding, LLC and Kellwood Company, LLC must consent to any distributions from the escrow account in accordance with the terms of the Escrow Agreement. The escrow agreement will automatically terminate upon the earlier of (i) the closing of the tender offer for the 7.625% Notes and (ii) the three-month anniversary of the closing of this offering. Amounts in escrow shall be held for the benefit of Kellwood Company, LLC and not for the benefit of any holders of the 7.625% Notes. Kellwood Company, LLC will retain amounts remaining in the escrow account, if any, after consummation of the tender offer.
In addition, Kellwood Company, LLC will, immediately after the consummation of this offering, refinance the Wells Fargo Facility, to among other things, remove Vince, LLC as an obligor thereunder. See “Use of Proceeds” and “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC” for additional information.
After completion of these various transactions (including the Additional Sun Capital Contribution) and payments and application of the net proceeds from the repayment of the Kellwood Note Receivable, Vince, LLC’s obligations under the Wells Fargo Facility, the Cerberus Term Loan, the Sun Term Loan Agreements and the 12.875% Notes will be terminated or discharged. Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of the 7.625% Notes or the 3.5% Convertible Notes. Thereafter, Vince Holding Corp., and by extension the investors in this offering, will not be responsible for the obligations described above and the only outstanding obligations of Vince Holding Corp. and its subsidiaries immediately after the consummation of this offering will be the $175 million outstanding under its new term loan facility.
While the execution of the IPO Restructuring Transactions is a technical default under the agreements or instruments governing the Cerberus Term Loan, the Sun Term Loan Agreements and the indenture governing the 12.875% Notes, because we believe that the concurrent repayment or discharge of those obligations satisfies any such default, we do not believe any consent of the lenders or noteholders under the related agreements or instruments is necessary and accordingly we do not intend to seek any such consent. We could nevertheless be subject to claims from Kellwood Company’s creditors as a result of such technical defaults and these claims may force us to engage in costly litigation. If such claims are successful and indemnity if unavailable from Kellwood Company, LLC (pursuant to the Transfer Agreement or otherwise), our financial condition and results of operations may be harmed. See “Risk Factors—Risks Related to the Restructuring Transactions—
 
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Third parties may seek to hold us responsible for liabilities related to the non-Vince businesses that we will retain in the IPO Restructuring Transactions or for liabilities associated with the Vince assets not yet transferred to us.”
The chart below is a summary of our corporate structure and that of the assets constituting the non-Vince businesses upon consummation of this offering, assuming the underwriters do not exercise their option to purchase additional shares from the selling stockholders.

 

(1)	The Kellwood Note Receivable will be repaid immediately after the closing of this offering with most of the net proceeds from this offering, along with the borrowings under our new term loan facility. See “Use of Proceeds.”	
 
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 USE OF PROCEEDS
We estimate that we will receive net proceeds from the sale of shares of our common stock in this offering of approximately $181 million, assuming an initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares of our common stock from the selling stockholders, we will not receive any proceeds from the sale of any such shares.
We intend to retain approximately $5.0 million of the net proceeds from this offering for general corporate purposes. We intend to use the remaining $176 million of net proceeds from this offering, together with net borrowings of $169 million under our new term loan facility, to repay the Kellwood Note Receivable, which would then total $345 million. The final amount of the Kellwood Note Receivable will be adjusted to equal the actual net proceeds from this offering (less the $5.0 million of net offering proceeds to be retained by us for general corporate purposes) and net borrowings under our new term loan facility.
As discussed in “Restructuring Transactions” immediately prior to consummation of this offering, Vince Intermediate Holding, LLC will issue the Kellwood Note Receivable to Kellwood Company, LLC in connection with Vince Intermediate Holding, LLC’s acquisition of Vince, LLC. Proceeds from the repayment of the Kellwood Note Receivable will be used to (i) repay, discharge or repurchase certain indebtedness of Kellwood Company, LLC and (ii) pay (A) the restructuring fee payable to Sun Capital Management and (B) the debt recovery bonus payable to our Chief Executive Officer, all after giving effect to the Additional Sun Capital Contribution. The Kellwood Note Receivable will not include amounts outstanding under the Wells Fargo Facility. As discussed in “Additional Information Related to AHC—Description of Certain Indebtedness of AHC,” Kellwood will refinance the Wells Fargo Facility in connection with the consummation of this offering. Neither Apparel Holding Corp. nor Vince, LLC will guarantee or be a borrower party to the refinanced credit facility. It will not bear interest and will be due the date of its issuance. Vince Holding Corp. will contribute all of the net proceeds from this offering to Vince Intermediate Holding, LLC immediately after the consummation of this offering. Vince Intermediate Holding, LLC will use such proceeds (less $5 million which will be retained for general corporate purposes) and approximately $169 million of net borrowings under its new term loan facility to immediately repay the Kellwood Note Receivable. There will be no outstanding balance on the Kellwood Note Receivable after giving effect to such repayment.
As described in the table below, Kellwood Company, LLC will use the proceeds from the repayment of the Kellwood Note Receivable to, after giving effect to the Additional Sun Capital Contribution, (i) repay, at closing, all indebtedness outstanding under (A) the Cerberus Term Loan, which had an outstanding balance of $45.7 million as of August 3, 2013 and (B) the Sun Term Loan Agreements, which collectively totaled $118.0 million in the aggregate as of August 3, 2013, (ii) redeem at par all of the outstanding 12.875% Notes, which totaled $146.8 million as of August 3, 2013, pursuant to an unconditional redemption notice to be issued at the closing of this offering, plus, with respect to clauses (i) and (ii), fees, expenses and accrued and unpaid interest thereon, (iii) pay a restructuring fee equal to the aggregate of 1% of the offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement and (iv) pay a debt recovery bonus of up to $6.0 million to our Chief Executive Officer. It is currently estimated that the restructuring fee described in clause (iii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million.
 
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In addition, Kellwood Company will conduct a tender offer for all of its outstanding 7.625% Notes, which totaled $87.0 million in aggregate principal amount as of August 3, 2013, at par plus accrued and unpaid interest thereon, using proceeds from the repayment of the Kellwood Note Receivable. The tender offer will close at or after the closing of this offering. Kellwood Company, LLC may also, at or after the closing of this offering, use proceeds remaining from the repayment of the Kellwood Note Receivable to discharge or repurchase at par all or any of its 3.5% Convertible Notes, which totaled $0.2 million in aggregate principal amount as of August 3, 2013, plus accrued and unpaid interest thereon. Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of either the 7.625% Notes or the 3.5% Convertible Notes.
If the tender offer for the 7.625% Notes is not completed contemporaneously with the closing of this offering, Kellwood Company, LLC shall enter into an escrow agreement with Vince Intermediate Holding, LLC and the Escrow Agent at the closing of this offering, pursuant to which Kellwood Company, LLC will escrow an amount equal to the face amount of the 7.625% Notes plus accrued and unpaid interest thereon through the anticipated closing date of the tender offer until the termination of the related escrow agreement. If the tender offer is completed contemporaneously with the consummation of this offering, we will not enter into the escrow agreement. No interest will accrue on the funds placed into escrow with the Escrow Agent and both Vince Intermediate Holding, LLC and Kellwood Company, LLC must consent to any distributions from the escrow account in accordance with the terms of the Transfer Agreement. The escrow agreement will automatically terminate upon the earlier of (i) the closing of the tender offer for the 7.625% Notes and (ii) the three-month anniversary of the closing of this offering. Amounts in escrow shall be held for the benefit of Kellwood Company, LLC and not for the benefit of any holders of the 7.625% Notes. Kellwood Company, LLC will retain amounts remaining in the escrow account, if any, after consummation of the tender offer.
The following table sets forth the uses from the repayment of the Kellwood Note Receivable, which we currently estimate will total $345 million, after giving effect to the estimated $66.8 million Additional Sun Capital Contribution. The final amount of the Kellwood Note Receivable will be adjusted to equal the actual net proceeds from this offering (less the $5.0 million of net offering proceeds to be retained by us for general corporate purposes) and net borrowings under our new term loan facility. The final amount of the Additional Sun Capital Contribution will be adjusted to fill any gap between the final amount of the Kellwood Note Receivable and the amount of all payments to be made and indebtedness to be repaid, repurchased or redeemed at or after closing in connection with this offering (including all accrued and unpaid interest thereon and all fees and expenses related thereto).

Use	  	Amount	
Repayment of Cerberus Term Loan	  	$45.7 million (1)	
Repayment of Sun Term Loan Agreements	  	$118 million (1)	
Redemption of the 12.875% Notes	  	$147.6 million (1)	
Repurchase or refinancing of the 7.625% Notes	  	$90.8 million (1)(2)(3)	
Repurchase of the 3.5% Convertible Notes	  	$0.2 million (1)(2)                                   	
Restructuring fee payable to Sun Capital Management	  	$3.5 million	
Debt recovery bonus payable to our Chief Executive Officer	  	$6.0 million	

(1)	Amount includes estimated fees and expenses and accrued and unpaid interest as of August 3, 2013.	
(2)	Amount includes estimated fees and expenses and accrued and unpaid interest as of August 3, 2013.	
(3)	An amount sufficient to repurchase, at par, any notes not repurchased immediately after the closing of this offering (including accrued and unpaid interest thereon through the anticipated date of the closing of the related tender offer) will be placed into escrow with the Escrow Agent, in accordance with the terms of the related escrow agreement and for the period described above.	
 
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After consummation of the IPO Restructuring Transactions and this offering, neither Vince Holding Corp. nor any subsidiary thereof (including Vince, LLC) will have any obligations under any of the following agreements or instruments, which are to be repaid, repurchased or discharged by Kellwood Company, LLC using proceeds from the repayment of the Kellwood Note Receivable:
 
 	Ÿ	 	Cerberus Term Loan .    The Cerberus Term Loan terminates upon the earliest to occur of (i) October 19, 2015, (ii) the date on which the Wells Fargo Facility has been paid in full and all commitments thereunder have been terminated, (iii) 60 days prior to the scheduled December 31, 2014 maturity date of the 12.875% Notes (including any extensions thereof agreed to after October 19, 2011) and (iv) the date on which the loans under the Sun Term Loan Agreements are accelerated. All borrowings under the Cerberus Term Loan bear interest at a rate per annum equal to the applicable margin (which ranges from 10.75% to 11.25% per annum for LIBOR rate loans, based on leverage and income tests contained therein, plus, at the borrowers’ election, LIBOR or an applicable reference rate).	
 
 	Ÿ	 	Sun Term Loan Agreements .    The Sun Term Loan Agreements terminate upon the earliest to occur of (i) January 19, 2017 and (ii) the scheduled maturity of the Cerberus Term Loan (unless such maturity has been extended, in which case the maturity set forth in clause (i) shall be extended by the same amount of time). All borrowings under the Sun Term Loan A Agreement and the Term B Loan, Term C Loan and Term D Loan under the Sun Term Loan B/C/D/E/F/G Agreement bear interest at a rate equal to 10% per annum. All borrowings under the Term E Loan, Term F Loan and Term G Loan under the Sun Term Loan B/C/D/E/F/G Agreement bear interest at a rate equal to 12% per annum. The Term G Loan was entered into on June 28, 2013 and there are currently no amounts outstanding under the Term G Loan. The Term G Loan was entered into to fund working capital, capital expenditures and other general corporate purposes of the Company.	
 
 	Ÿ	 	12.875% Notes .    The 12.875% Notes are scheduled to mature on December 31, 2014. Interest on such notes is paid (i) in cash, at a rate of 7.875% per annum, payable in January and July and (ii) in the form of PIK interest at a rate of 5% per annum.	
Additionally, in connection with the consummation of this offering and the payment of a restructuring fee equal to the aggregate of 1% of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management from proceeds from the repayment of the Kellwood Note Receivable, the Management Services Agreement will be terminated, as will Vince, LLC’s guarantee of obligations thereunder. It is currently estimated that this restructuring fee will total $3.5 million. Additionally, Kellwood Company, LLC will use proceeds from the repayment of the Kellwood Note Receivable to pay a debt recovery bonus of up to $6.0 million to our Chief Executive Officer immediately after the consummation of this offering.
All of the indebtedness under the facilities or agreements described above was incurred to fund the operation and growth of the Vince and non-Vince businesses, including to finance certain acquisitions made by AHC since 2008. See “Risk Factors—Risks Related to this Offering and Our Common Stock—We will have broad discretion over the use of proceeds from this offering after repayment of the Kellwood Note Receivable, and such remaining proceeds will be limited. Additionally, drawings under our new term loan facility will also be used to help repay the Kellwood Note Receivable and we will have no availability under such facility after giving effect to such repayment.”
A $1.00 increase or decrease in the assumed initial public offering price of $         per share would increase or decrease, respectively, the net proceeds to us from this offering by approximately $         million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Any such increase or decrease would increase or decrease the amount of the Kellwood Note Receivable by $         million for each dollar change.
 
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 DIVIDEND POLICY OF AHC
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness, therefore we do not anticipate paying any cash dividends in the foreseeable future. Additionally, because we are a holding company, our ability to pay dividends on our common stock will be limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the terms of the agreements governing our new revolving credit facility or new term loan facility. See “Additional Information Related to Vince—Description of Certain Indebtedness of Vince, LLC.” Any future determination to pay dividends will be at the discretion of our board of directors, subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our results of operations, financial condition, capital requirements, general business conditions, expansion plans and other factors that our board of directors may deem relevant.
 
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 CAPITALIZATION OF AHC
The following table sets forth our cash and cash equivalents, short-term borrowings and capitalization as of August 3, 2013 on:
 
 	Ÿ	 	an actual basis;	
 
 	Ÿ	 	on a pro forma basis to give effect to the IPO Restructuring Transactions (including the Additional Sun Capital Contribution and the conversion of all of our issued and outstanding non-voting common stock on a one-for-one basis), and	
 
 	Ÿ	 	on a pro forma, as adjusted basis to further reflect (i) our receipt of the estimated net proceeds from the sale of                  shares of common stock by us in this offering at an assumed initial public offering price of $         per share, the midpoint of the range appearing on the cover page of this prospectus, after deducting the assumed underwriting discount and commissions payable by us and our estimated fees and expenses; (ii) our use of these proceeds and the incurrence of approximately $175 million of borrowings under our new term loan facility, as described in “Use of Proceeds,” including repayment of the Kellwood Note Receivable and (iii) the issuance of                      shares of Apparel Holding Corp. common stock which are to be issued to non-Vince employees in connection with the closing of this offering in exchange for their vested Kellwood Company stock options previously issued under the 2010 Option Plan.	
You should read this table together with the sections entitled “Use of Proceeds,” “Additional Information Related to Vince—Supplemental Selected Historical Financial Data of Vince, LLC” and the notes thereto and “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC” included elsewhere in this prospectus.
 
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 	 	August 3, 2013	 	
 	 	Actual	 	 	Pro Forma	 	 	Pro Forma,
As Adjusted	 	
(In thousands)	 	 	 	 	 	 	 	 	 	
 	 	(unaudited)	 	 	(unaudited)	 	 	(unaudited)	 	
Cash and restricted cash:	 				 				 				
Cash and cash equivalents	 	$	2,178	  	 	$	325	  	 	$	5,000	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Short-term borrowings:	 				 				 				
Wells Fargo Facility(1)(2)	 	$	115,601	  	 	$	—	  	 	$	—	  	
Kellwood Note Receivable(3)	 	 	—	  	 	 	345,000	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt:	 				 				 				
New Vince revolving credit facility	 	$	—	  	 	$	—	  	 	$	—	  	
New Vince term loan facility	 	 	—	  	 	 	—	  	 	 	175,000	  	
Cerberus Term Loan(2)	 	 	45,660	  	 	 	—	  	 	 	—	  	
12.875% Notes(2)	 	 	143,962	  	 	 	—	  	 	 	—	  	
7.625% Notes	 	 	78,991	  	 	 	—	  	 	 	—	  	
3.5% Convertible Notes	 	 	214	  	 	 	—	  	 	 	—	  	
Sun Term Loan Agreements(2)	 	 	118,015	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total long-term debt	 	 	386,842	  	 	 	—	  	 	 	175,000	  	
Stockholders’ (Deficit) Equity:	 				 				 				
Preferred Stock, $0.001 par value per share actual, $0.01 par value per share pro forma and pro forma, as adjusted; 100,000 shares authorized actual,                      shares authorized pro forma and pro forma, as adjusted; no shares issued and outstanding actual, pro forma and pro forma, as adjusted	 	 	—	  	 	 	—	  	 				
Non-Voting Common Stock, $0.001 par value per share actual; 1,700,000 shares authorized actual, no shares authorized pro forma and pro forma, as adjusted; 193 shares issued and outstanding actual, no shares issued or outstanding, pro forma and pro forma, as adjusted	 				 	 	—	  	 				
Common Stock, $0.001 par value per share actual, $0.01 par value per share pro forma and pro forma, as adjusted; 1,200,000 shares authorized actual,                      shares authorized pro forma and pro forma, as adjusted; 919,118 shares issued and outstanding actual,                      shares issued and outstanding pro forma and                      shares issued and outstanding pro forma, as adjusted	 				 				 				
Additional paid in capital	 	$	794,528	  	 	$	810,295	  	 	$	 	  	
Accumulated deficit	 	 	(973,523	) 	 	 	(973,523	) 	 				
Accumulated other comprehensive loss	 	 	(108	) 	 	 	(108	) 	 				
	 	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ (deficit) equity	 	 	(179,103	) 	 	 	(163,336	) 	 	 	17,339	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total capitalization	 	$	 	  	 	$	 	  	 	$	 	  	

(1)	Includes $12.6 million of outstanding letters of credit. Kellwood Company, LLC will refinance the Wells Fargo Facility in connection with this offering. See “Use of Proceeds” and “Restructuring Transactions.”	
(2)	Vince, LLC is a borrower party or guarantor under the agreements governing the Wells Fargo Facility, the Cerberus Term Loan, the Sun Term Loan Agreements and the 12.875% Notes. Vince, LLC’s obligations under all of the above, other than with respect to the Wells Fargo Facility, which will be refinanced by Kellwood Company, LLC in connection with this offering as described in footnote (1) above, will be terminated or discharged in connection with the repayment of such indebtedness with net proceeds from this offering and borrowings under our new term loan facility, as described in “Use of Proceeds,” after giving effect to the Additional Sun Capital Contribution.	
(3)	As a result of the IPO Restructuring Transactions, Vince Intermediate Holding, LLC will acquire Vince, LLC from Kellwood Company, LLC in exchange for the Kellwood Note Receivable. The net proceeds from this offering (after giving effect to underwriting discounts, fees and expenses related to this offering and $5.0 million of proceeds to be retained by us), along with $169 million of net indebtedness under our new term loan facility, will be used to repay the Kellwood Note Receivable. Proceeds from the repayment of the Kellwood Note Receivable will be used to (i) repay, discharge or repurchase indebtedness of Kellwood Company, LLC (including accrued and unpaid interest and any related fees and expenses) in connection with the consummation of this offering and (ii) pay (A) a restructuring fee equal to 1% of the aggregate of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Management Fees,” and (B) a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements,” all after giving effect to the Additional Sun Capital Contribution. It is currently estimated that the restructuring fee described in clause (ii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million.	
 
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The number of pro forma, as adjusted shares of common stock shown as issued and outstanding excludes:
 
 	Ÿ	 	         shares of our common stock issuable upon the exercise of options that we intend to grant under the Vince 2013 Incentive Plan, as described in “Additional Information Related to Vince—Vince Executive Compensation —Employee Stock Plans—Vince 2013 Incentive Plan,” to certain of our employees with an exercise price equal to the public offering price set forth on the cover of this prospectus in connection with the consummation of this offering;	
 
 	Ÿ	 	         shares of our common stock issuable upon the exercise of options that were issued to Vince employees and to a former AHC executive under the 2010 Option Plan, after giving effect to the IPO Restructuring Transactions (including the related stock split) and Apparel Holding Corp.’s assumption of Kellwood Company’s remaining obligations under the 2010 Option Plan. These options have a weighted average exercise price of $                 per share;	
 
 	Ÿ	 	         shares of our common stock which are to be issued to non-Vince employees in exchange for their vested Kellwood Company stock options previously issued under the 2010 Option Plan (as such options are adjusted to give effect to the IPO Restructuring Transactions, including the related stock split). The number of shares to be so issued to each employee shall be calculated by dividing the aggregate spread value of such employee’s vested options (determined as the difference between the exercise price and the public offering price set forth on the cover of this prospectus) by this public offering price;	
 
 	Ÿ	 	         restricted stock units, representing the right, at the option of the company, to deliver             shares of our common stock or an equivalent cash amount, that we intend to grant to our non-employee directors in connection with the consummation of this offering;	
 
 	Ÿ	 	         shares of our common stock that will be reserved and available for future issuance under our Vince 2013 Incentive Plan, after giving effect to the option and restricted stock grants described above;	
 
 	Ÿ	 	         shares of our common stock reserved for future issuance under the Vince ESPP which we plan to adopt in connection with this offering (as described in “Additional Information Related to Vince—Vince Executive Compensation—Employee Stock Plans—Employee Stock Purchase Plan”); and	
 
 	Ÿ	 	the issuance of 1,823.24 non-voting shares of Apparel Holding Corp. common stock to Kellwood Company on October 3, 2013, which will be converted into              shares of our common stock upon consummation of this offering.	
A $1.00 increase or decrease in the assumed initial public offering price of $             per share, which is the midpoint of the range set forth on the cover of this prospectus, would increase or decrease the amount of the Kellwood Note Receivable by $             million for each dollar change, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions an estimated offering expenses payable by us.
 
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 DILUTION
If you invest in our common stock in this offering, you will experience immediate and substantial dilution in the pro forma net tangible book value of your shares of our common stock. The pro forma net tangible book value (deficit) of our common stock as of August 3, 2013 was $         million, or approximately $         per share. Pro forma net tangible book value per share represents the amount of total pro forma tangible assets reduced by the amount of our total pro forma liabilities divided by the pro forma number of shares of common stock that would have been outstanding on August 3, 2013, prior to the sale of              shares of our common stock in this offering. Pro forma net tangible book value as of             , 2013 gives pro forma effect to the IPO Restructuring Transactions (including (i) the conversion of all of our issued and outstanding non-voting common stock into common stock on a one-for-one basis; and (ii) the subsequent stock split of our common stock on a              for one basis).
On February 12, 2008, affiliates of Sun Capital acquired Kellwood Company for aggregate consideration of $955.4 million, including the assumption of our debt (or approximately $         per pro forma share, as compared to the initial public offering price of $         per share based on the midpoint of the range set forth on the cover page of this prospectus).
Dilution to new investors in pro forma net tangible book value per share represents the difference between the amount per share paid by new investors purchasing shares of common stock in this offering and the pro forma net tangible book value per share of our common stock immediately after the consummation of this offering. After giving effect to the sale of shares of our common stock in this offering based upon an assumed initial public offering price of $        , the midpoint of the range set forth on the cover of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, the Sun Capital Contribution and IPO Restructuring Transactions and the application of the estimated net proceeds therefrom (including the repayment of the Kellwood Note Receivable), our pro forma, as adjusted net tangible book value as of             , 2013 would have been $         million, or $         per share. This represents an immediate increase in pro forma net tangible book value of $         per share to the Pre-IPO Stockholders and an immediate dilution of $         per share to new investors purchasing shares of common stock in this offering at the initial public offering price. The following table illustrates this per share dilution:

Assumed initial public offering price per share	  				  	$	            	  	
	  				  	 	 	 	
Pro forma net tangible book value per share as of August 3, 2013 (before giving effect to this offering)	  	$	            	  	  				
Increase in pro forma net tangible book value per share attributable to new investors in this offering	  				  				
	  	 	 	 	  				
Pro forma, as adjusted net tangible book value per share as of August 3, 2013 (after giving effect to this offering)	  				  				
	  				  	 	 	 	
Dilution per share to new investors	  				  	$	            	  	
	  				  	 	 	 	
A $1.00 increase or decrease in the assumed initial public offering price of $         per share, the midpoint of the range set forth on the cover of this prospectus, would increase or decrease the amount of the Kellwood Note Receivable by $         million for each dollar change but would not otherwise impact our pro forma net tangible book value of this offering, our pro forma net tangible book value per share after this offering or the dilution in pro forma net tangible book value to new investors in this offering (assuming the number of shares set forth on the cover of this preliminary prospectus remains the same and after deducting the assumed underwriting discounts and commissions payable by us).
The following table sets forth, on a pro forma basis as adjusted as of August 3, 2013, after giving effect to the IPO Restructuring Transactions as described in “Restructuring Transactions” included
 
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elsewhere in this prospectus and the sale of                  shares of our common stock in this offering, the total number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid to us by the Pre-IPO Stockholders and by new investors who purchase shares of common stock in this offering, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, assuming an initial public offering price of $         per share:

 	  	Shares Purchased	 	Total Consideration	 	Average Price
Per Share	
 	  	Number	  	Percent	 	Amount	  	Percent	 		
						
Pre-IPO Stockholders	  		  	            %	 		  	            %	 		
						
New investors	  		  	            %	 		  	            %	 		

Total	  		  	            %	 		  	            %	 		
	  	 	  	 	 	 	  	 	 		
A $1.00 increase or decrease in the assumed initial public offering price of $         per share, the midpoint of the range set forth on the cover of this prospectus, would increase or decrease total consideration paid by new investors by approximately $         million, and increase or decrease the percent of total consideration paid by new investors by         %, assuming the number of shares set forth on the cover of this preliminary prospectus remains the same.
Upon consummation of this offering, the Pre-IPO Stockholders will own         %, and new investors will own         % of the total number of shares of common stock outstanding after this offering. Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters’ option to purchase an additional              shares from the selling stockholders. If the underwriters exercise their option to purchase additional shares in full from the selling stockholders, the Pre-IPO Stockholders would own         % and new investors would own         % of the total number of shares of common stock outstanding after this offering.
The foregoing discussion and the tables and calculations above exclude:
 
 	Ÿ	 	           shares of our common stock reserved for issuance under the Vince 2013 Incentive Plan;	
 
 	Ÿ	 	           shares of our common stock issuable upon the exercise of options that were issued to Vince employees and to a former AHC executive under the 2010 Option Plan, after giving effect to the IPO Restructuring Transactions;	
 
 	Ÿ	 	           shares of our common stock which are to be issued to non-Vince employees in exchange for their vested Kellwood Company stock options previously issued under the 2010 Option Plan (as such options are adjusted to give effect to the IPO Restructuring Transactions, including the related stock split);	
 
 	Ÿ	 	           restricted stock units, representing the right, at our option, to deliver shares of our common stock or an equivalent cash amount, that we intend to grant to our non-employee directors under the Vince 2013 Incentive Plan;	
 
 	Ÿ	 	           shares of our common stock reserved for future issuance under the Vince ESPP; and	
 
 	Ÿ	 	1,823.24 non-voting shares of Apparel Holding Corp. common stock issued to Kellwood Company on October 3, 2013 (which will be converted into            shares of our common stock in the IPO Restructuring Transactions).	
To the extent that any options or equity incentive grants are issued in the future, including pursuant to the Vince 2013 Incentive Plan or the Vince ESPP, with an exercise or purchase price below the initial offering price, new investors will experience further dilution. See “Additional Information Related to Vince—Vince Executive Compensation—Employee Stock Plans—Vince 2013 Incentive Plan.”
 
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 ADDITIONAL INFORMATION RELATED TO AHC
The information appearing in this section includes additional information regarding the non-Vince businesses that are to be transferred to Kellwood Holding, LLC and its subsidiaries in the IPO Restructuring Transactions. The Pre-IPO Stockholders will continue to own and operate 100% of the non-Vince businesses through their ownership of Kellwood Holding, LLC after giving effect to the IPO Restructuring Transactions. Vince Holding Corp., the issuer of common stock in this offering, will have no interest in the non-Vince businesses after giving effect to the IPO Restructuring Transactions.
As used in this Additional Information Related to AHC Section, unless the context otherwise requires:
 
 	Ÿ	 	“Kellwood” refers to Kellwood Holding, LLC and its consolidated subsidiaries (including Kellwood Company, LLC) after giving effect to the IPO Restructuring Transactions, or to the non-Vince businesses of AHC prior to the consummation of the IPO Restructuring Transactions, as the context requires; and	
 
 	Ÿ	 	“AHC” refers to Apparel Holding Corp. and its consolidated subsidiaries (including Kellwood Company) prior to consummation of the IPO Restructuring Transactions. Apparel Holding Corp. is the historical owner and operator of the Vince and non-Vince business.	
 
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 SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF AHC
The following tables set forth selected historical consolidated financial data of Apparel Holding Corp. and its consolidated subsidiaries. They include assets and liabilities associated with the Kellwood business that will be transferred to Kellwood Holding, LLC and its consolidated subsidiaries in the IPO Restructuring Transactions. They also include the assets and liabilities of the Vince business transferred to Vince, LLC in connection with the Vince Transfer in September 2012. The Vince, LLC assets and liabilities have no relation to the non-Vince businesses. The following reflects the results of operations associated with the combined Vince and non-Vince assets. An investment in us after giving effect to the IPO Restructuring Transactions is an investment in the Vince business. We will not have ongoing involvement with the non-Vince businesses following separation, with the exception of our payments to Kellwood for certain services to be provided under the Shared Services Agreement as further described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement” contained elsewhere in this prospectus. Similarly, Kellwood will not have ongoing involvement in our business, other than pursuant to the Shared Services Agreement. You should read the information set forth below in conjunction with “Use of Proceeds,” “Capitalization of AHC,” “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC” and AHC’s audited historical consolidated financial statements and notes thereto included elsewhere in this prospectus.
The statement of operations data for each of fiscal 2010, fiscal 2011 and fiscal 2012 and the historical balance sheet data as of fiscal 2010, fiscal 2011 and fiscal 2012 set forth below are derived from AHC’s audited consolidated financial statements included elsewhere in this prospectus. The statements of operations data for each of the six month periods ended July 28, 2012 and August 3, 2013 and the balance sheet data as of August 3, 2013 set forth below are derived from AHC’s unaudited quarterly consolidated financial statements included elsewhere in this prospectus and contain all adjustments, consisting of normal recurring adjustments, that management considers necessary for a fair presentation of AHC’s financial position and results of operations for the periods presented. Operating results for the six month periods are not necessarily indicative of results for a full financial year, or any other periods. Historical results are not necessarily indicative of results to be expected for future periods.
After consummation of this offering and the IPO Restructuring Transactions, AHC’s results of the non-Vince businesses will be reported as discontinued operations for accounting purposes and AHC’s continuing operations will consist solely of the non-Vince businesses. See “Additional Information Related to Vince—Supplemental Selected Historical Financial Data of Vince, LLC” for additional information regarding the operations and assets and liabilities of Vince, LLC.
 
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 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010(1)	 	 	2011(1)	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands, except per share data)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Statement of Operations Data:	 				 				 				 				 				
Net sales	 	$	586,574	  	 	$	662,846	  	 	$	707,995	  	 	$	319,445	  	 	$	363,967	  	
Cost of products sold	 	 	430,801	  	 	 	490,110	  	 	 	507,905	  	 	 	235,293	  	 	 	256,031	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	155,773	  	 	 	172,736	  	 	 	200,090	  	 	 	84,152	  	 	 	107,936	  	
Operating expenses:	 				 				 				 				 				
Selling, general and administrative expenses	 	 	140,567	  	 	 	155,220	  	 	 	177,755	  	 	 	83,526	  	 	 	93,503	  	
Amortization of intangible assets	 	 	954	  	 	 	1,941	  	 	 	1,899	  	 	 	950	  	 	 	950	  	
Restructuring, environmental remediation and other charges(3)	 	 	9,729	  	 	 	2,651	  	 	 	5,091	  	 	 	2,264	  	 	 	827	  	
Impairment of long-lived assets (excluding goodwill)	 	 	438	  	 	 	2,504	  	 	 	2,349	  	 	 	717	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	10,821	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net(2)	 	 	—	  	 	 	(1,578	) 	 	 	(7,162	) 	 	 	(4,507	) 	 	 	(54	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	151,688	  	 	 	171,559	  	 	 	179,932	  	 	 	82,950	  	 	 	95,226	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	 	 	4,085	  	 	 	1,177	  	 	 	20,158	  	 	 	1,202	  	 	 	12,710	  	
Interest expense, net	 	 	103,074	  	 	 	127,148	  	 	 	122,383	  	 	 	74,151	  	 	 	43,671	  	
Gain on acquisition, net of tax(2)	 	 	(939	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment(2)	 	 	(15,912	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Other expense, net	 	 	2,442	  	 	 	1,914	  	 	 	2,723	  	 	 	1,215	  	 	 	1,233	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before provision for income taxes	 	 	(84,580	) 	 	 	(127,885	) 	 	 	(104,948	) 	 	 	(74,164	) 	 	 	(32,194	) 	
Provision for income taxes	 	 	3,507	  	 	 	3,401	  	 	 	708	  	 	 	2,245	  	 	 	2,679	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss from continuing operations(2)(3)	 	 	(88,087	) 	 	 	(131,286	) 	 	 	(105,656	) 	 	 	(76,409	) 	 	 	(34,873	) 	
Net (loss) income from discontinued operations(3)(4)	 	 	(16,391	) 	 	 	(16,580	) 	 	 	(2,053	) 	 	 	(4,798	) 	 	 	9,230	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(104,478	) 	 	$	(147,866	) 	 	$	(107,709	) 	 	$	(81,207	) 	 	$	(25,643	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share from continuing operations(5)	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	
Basic and diluted (loss) income per share from discontinued operation(5)	 				 				 				 				 				
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share(5)	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	 	$	 	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding:	 				 				 				 				 				
Basic and diluted(5)	 				 				 				 				 				

(1)	In January 2011, AHC acquired Rebecca Taylor, a women’s contemporary apparel and accessory company. In July 2011, AHC acquired Zobha, a women’s athletic apparel brand, primarily focused on the yoga market. See “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC—Basis of Presentation” for information regarding AHC’s decision to divest the Zobha business during the second quarter of fiscal 2013.	
 
(2)	Net loss from continuing operations includes net gains affecting comparability of the following:	
 
 	Ÿ	 	$16.8 million in fiscal 2010 comprised of a $0.9 million gain on the acquisition of certain net assets from the Adam operations as the fair value of the identifiable assets less the liabilities assumed exceeded the fair value of the consideration, and a $15.9 million gain on debt extinguishment as a result of AHC’s repurchase of $29.7 million of face value of certain notes outstanding from an affiliate of Sun Capital for $9.1 million in cash;	
 
 	Ÿ	 	$1.6 million in fiscal 2011 due to a reduction in the estimated contingent payments related to the acquisitions of Rebecca Taylor and Zobha as those purchase agreements contain provisions for contingent consideration that will be paid to the respective sellers if certain performance targets are met within a specified timeframe and during the periods presented expectations related to the achievement of these targets were revised; and	
 
 	Ÿ	 	$7.2 million in fiscal 2012, of which $4.5 million was recognized during the six months ended July 28, 2012, due to further reductions in the estimated contingent payments related to the acquisitions of Rebecca Taylor and Zobha.	
 
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(3)	During the years presented AHC performed several rationalization efforts aimed at improving AHC’s operational efficiency to streamline the fashion apparel business and recreational apparel and products businesses. These restructuring activities, along with impairment of long-lived assets, environmental remediation charges and other charges included in net loss from continuing operations are $10.2 million in fiscal 2010, $15.1 million in fiscal 2011, $7.4 million in fiscal 2012, $3.0 million in the first six months of fiscal 2012, and $0.8 million in the first six months of fiscal 2013. These restructuring activities, along with impairment of long-lived assets and other charges included in net (loss) income from discontinued operations are $27.7 million in fiscal 2010, $6.3 million in fiscal 2011, $4.8 million in fiscal 2012, $0.2 million in the first six months of fiscal 2012, and $0.9 million in the first six months of fiscal 2013.	
 
(4)	During fiscal 2011, AHC discontinued its Adam operations and Koret wholesale operations. AHC had previously acquired the net assets which comprised its Adam operations during fiscal 2010. During fiscal 2012, AHC discontinued its Baby Phat wholesale and Lamb & Flag businesses. Additionally, AHC sold its Royal Robbins and BLK DNM businesses. During the first quarter of fiscal 2013, AHC discontinued its Phat Licensing business because AHC sold the related trademarks. During the second quarter of fiscal 2013, AHC divested its Zobha business. As such, these operations have been reflected as discontinued operations for all periods presented.	
 
(5)	Gives effect to the stock split of our common stock on a              for one basis.	

 	  	As of	 	
 	  	January 29,
2011	 	 	January 28,
2012	 	 	February 2,
2013	 	 	August 3,
2013	 	
(In thousands)	  	 	 	 	 	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	
Balance Sheet Data:	  				 				 				 				
Cash and cash equivalents	  	$	5,194	  	 	$	1,839	  	 	$	1,881	  	 	$	2,178	  	
Total current assets	  	 	186,673	  	 	 	211,254	  	 	 	199,792	  	 	 	228,891	  	
Total assets	  	 	410,718	  	 	 	468,445	  	 	 	442,124	  	 	 	467,791	  	
Total current liabilities	  	 	180,939	  	 	 	213,403	  	 	 	190,046	  	 	 	221,230	  	
Long-term debt	  	 	758,473	  	 	 	934,354	  	 	 	761,752	  	 	 	386,842	  	
Total stockholders’ deficit	  	 	(595,219	) 	 	 	(743,021	) 	 	 	(561,265	) 	 	 	(179,102	) 	
Total liabilities and stockholders’ deficit	  	 	410,718	  	 	 	468,445	  	 	 	442,124	  	 	 	467,791	  	
 
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 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA OF AHC
The following unaudited selected consolidated financial data presents AHC’s historical consolidated statements of operations and consolidated balance sheet after giving effect to the transactions and adjustments as described in the accompanying notes. The unaudited pro forma consolidated financial data was prepared (i) on a basis consistent with that used in preparing AHC’s audited consolidated financial statements and includes all adjustments, consisting of normal and recurring items, that AHC considers necessary for a fair presentation of its financial position and results of operations for the unaudited periods and (ii) consistent with the requirements of Article 11 of Regulation S-X.
This unaudited pro forma consolidated financial data should be read in conjunction with the information contained in “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC,” “Additional Information Related to Vince—Supplemental Selected Historical Financial Data of Vince, LLC,” the audited financial statements of Vince, LLC and the related notes thereto appearing elsewhere in this prospectus, “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC,” “Additional Information Related to AHC—Selected Historical Consolidated Financial Data of AHC,” the audited consolidated financial statements of AHC and related notes thereto appearing elsewhere in this prospectus and “Restructuring Transactions.”
As used in this section, unless the context requires otherwise:
 
 	Ÿ	 	“our,” “us,” “we” and “Vince Holding Corp.” refer to Vince Holding Corp. (currently known as Apparel Holding Corp.) and its consolidated subsidiaries (including Vince, LLC) after giving effect to the IPO Restructuring Transactions;	
 
 	Ÿ	 	“Vince” refers to the Vince business after giving effect to the IPO Restructuring Transactions;	
 
 	Ÿ	 	“Vince, LLC” refers to the entity that has historically held the Vince assets and liabilities and will continue to do so after completion of the IPO Restructuring Transactions and the consummation of this offering and the application of the proceeds of this offering as described herein. Apparel Holding Corp. is the legal issuer of the shares offered in this offering. Investors will be investing in the Vince business, however, they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC;	
 
 	Ÿ	 	“AHC” refers to Apparel Holding Corp. and its consolidated subsidiaries (including Kellwood Company) prior to the completion of the IPO Restructuring Transactions. Apparel Holding Corp. is the historical owner and operator of the Vince and non-Vince businesses; and	
 
 	Ÿ	 	“Kellwood” refers to Kellwood Holding, LLC and its consolidated subsidiaries (including Kellwood Company, LLC) after giving effect to the IPO Restructuring Transactions, as the future owner and operator of the non-Vince businesses, or to the non-Vince businesses of AHC prior to the completion of the IPO Restructuring Transactions, as the context requires.	
This unaudited pro forma consolidated financial data gives effect to anticipated transactions that we believe are relevant to the understanding of the business being offered and will have a material impact on the comparability of our results of operations. They are described below and are as follows: (i) “—Kellwood Separation,” (ii) “—Sun Capital Contribution and Tax Receivable Agreement,” and (iii) “—This Offering.”
The Kellwood Separation
As described within “Restructuring Transactions” included elsewhere in this prospectus, AHC will use a series of transactions to legally separate the Vince business from the non-Vince businesses immediately prior to consummation of this offering. We refer to this series of transactions as the
 
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“Kellwood Separation”. Once these transactions have occurred, the non-Vince businesses will be owned and operated separately from us. After consummation of this offering, the Vince business will be our only assets, liabilities, and operations. Although Apparel Holding Corp. is the legal issuer of the shares offered in this offering, an investment in us after giving effect to the IPO Restructuring Transactions is an investment in the Vince business. Following the consummation of this offering, we expect to report the non-Vince operations as discontinued operations in accordance with ASC Topic 205 Presentation of Financial Statements beginning with our first financial statements filed after the effectiveness of the registration statement of which this prospectus forms a part. All pro forma adjustments to our historical financial statements that relate to the separation from the non-Vince businesses are described as “Kellwood Separation Adjustments” and they are included under the caption “—Kellwood Separation.”
In addition, set forth below is supplemental disclosure of the allocation of the pro forma results of operations and financial position of the “Kellwood Separation Adjustments”. This supplemental disclosure is referred to as “Allocation of Pro Forma” and represents the allocation of the unaudited pro forma results of operations and financial position among Apparel Holding Corp., Vince Intermediate Holding, LLC and Vince, LLC after giving effect to the Kellwood Separation. Apparel Holding Corp., Vince Intermediate Holding, LLC and Vince, LLC, collectively, will represent the three corporate or limited liability company entities that represent the consolidated group that will constitute the Vince business after consummation of the IPO Restructuring Transactions. The financial results of Vince, LLC are presented since after giving effect to the IPO Restructuring Transactions, Vince, LLC will be the sole operating subsidiary of the business in which you are investing in this offering. The Vince, LLC financials have been prepared on a standalone, carve-out basis. As such we present an adjustment column within the “Allocation of Pro Forma” table to reconcile the Vince, LLC financials on a stand-alone carve-out basis with the pro forma presentation of AHC after giving effect to the Kellwood Separation.
Sun Capital Contribution and Tax Receivable Agreement
Additional restructuring activities that have occurred or will occur in order to effect the consummation of this offering, include the following:
 
 	Ÿ	 	effective June 18, 2013, affiliates of Sun Capital contributed $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Notes as a capital contribution to Apparel Holding Corp. in the Sun Capital Contribution; and	
 
 	Ÿ	 	we will enter into the Tax Receivable Agreement, (referred to in this “Unaudited Pro Forma Consolidated Financial Data of AHC” as the “TRA”), with the Pre-IPO Stockholders as described in “Other Information Related to the Offering—Certain Relationships and Related Party transactions of AHC—Tax Receivable Agreement.”	
Pro forma adjustments related to these additional restructuring activities are described as “Sun Capital Contribution and TRA Adjustments.”
This Offering
Pro forma adjustments to reflect (i) our receipt of the estimated net proceeds from the sale of shares of common stock by us in this offering at an assumed initial public offering price of $         per share, the midpoint of the range appearing on the cover page of this prospectus, after deducting the assumed underwriting discount and commissions and estimated fees and expenses payable by us; and (ii) our use of these proceeds and the incurrence of approximately $175 million of borrowings under our new term loan facility, as described in “Use of Proceeds,” including repayment of the Kellwood Note Receivable, are described as “ Offering Adjustments.”
 
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Unaudited Pro Forma Statements of Operations
In accordance with Article 11 of Regulation S-X we have provided AHC’s unaudited pro forma consolidated statements of operations for fiscal 2010, fiscal 2011, fiscal 2012 and the first six months of fiscal 2012 and the first six months of fiscal 2013, presented on a pro forma basis to give effect to the Kellwood Separation as if it had occurred at the beginning of fiscal 2010.
Additionally, the unaudited pro forma consolidated statements of operations for fiscal 2012 and the first six months of fiscal 2013 are presented on a pro forma basis, to give effect to the Sun Capital Contribution and entry into the TRA, as if such transactions had been consummated on the first day of fiscal 2012; and finally, the unaudited pro forma consolidated statements of operations are presented for fiscal 2012 and the first six months of fiscal 2013 on a pro forma, as adjusted basis, to further reflect the impact of the Offering Adjustments.
 
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Fiscal 2010 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC

 	 	 	 	 	Kellwood Separation	 	 	 	 	Allocation of Pro Forma(2)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments(1)	 	 	Pro
Forma	 	 	 	 	AHC	 	 	Vince
Intermediate
Holding,
LLC	 	 	Vince, LLC(3)	 	 	Adjustments	 	 	Pro
Forma	 	
(In thousands, except per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	586,574	  	 	$	(475,082	)(a) 	 	$	111,492	  	 		 	$	—	  	 	$	 —	  	 	$	111,492	  	 	$	—	  	 	$	111,492	  	
Cost of products sold	 	 	430,801	  	 	 	(375,106	)(a) 	 	 	55,695	  	 		 	 	—	  	 	 	—	  	 	 	55,695	  	 	 	—	  	 	 	55,695	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	155,773	  	 	 	(99,976	) 	 	 	55,797	  	 		 	 	—	  	 	 	—	  	 	 	55,797	  	 	 	—	  	 	 	55,797	  	
Operating Expenses:	 				 				 				 		 				 				 				 				 				
Selling, general and administrative expenses	 	 	140,567	  	 	 	(107,829	)(b) 	 	 	32,738	  	 		 	 	34	(g) 	 	 	—	  	 	 	32,704	(i) 	 	 	—	  	 	 	32,738	  	
Amortization of intangible assets	 	 	954	  	 	 	(356	) 	 	 	598	  	 		 	 	—	  	 	 	—	  	 	 	598	  	 	 	—	  	 	 	598	  	
Restructuring, environmental remediation and other charges	 	 	9,729	  	 	 	(9,729	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of long-lived assets (excluding goodwill)	 	 	438	  	 	 	(438	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net	 	 	—	  	 	 	—	  	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	151,688	  	 	 	(118,352	) 	 	 	33,336	  	 		 	 	34	  	 	 	—	  	 	 	33,302	  	 	 	—	  	 	 	33,336	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations	 	 	4,085	  	 	 	18,376	  	 	 	22,461	  	 		 	 	(34	) 	 	 	—	  	 	 	22,495	  	 	 	—	  	 	 	22,461	  	
Interest expense, net	 	 	103,074	  	 	 	(35,124	)(c) 	 	 	67,950	  	 		 	 	67,950	(h) 	 	 	—	  	 	 	7,172	(j) 	 	 	(7,172	)(k) 	 	 	67,950	  	
Gain on acquisition, net of tax	 	 	(939	) 	 	 	939	(d) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment	 	 	(15,912	) 	 	 	15,912	(e) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Other expense, net	 	 	2,442	  	 	 	(2,092	) 	 	 	350	  	 		 	 	—	  	 	 	—	  	 	 	350	  	 	 	—	  	 	 	350	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before provision for income taxes	 	 	(84,580	) 	 	 	38,741	  	 	 	(45,839	) 	 		 	 	(67,984	) 	 	 	—	  	 	 	14,973	  	 	 	7,172	  	 	 	(45,839	) 	
Provision for income taxes	 	 	3,507	  	 	 	5,462	(f) 	 	 	8,969	  	 		 	 	—	  	 	 	—	  	 	 	5,923	  	 	 	3,046	(l) 	 	 	8,969	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) from continuing operations	 	$	(88,087	) 	 	$	33,279	  	 	$	(54,808	) 	 		 	$	(67,984	) 	 	$	—	  	 	$	9,050	  	 	$	4,126	  	 	$	(54,808	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Diluted earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Weighted average number of common shares outstanding, basic	 				 				 				 		 				 				 				 				 				
Weighted average number of common shares outstanding, diluted	 				 				 				 		 				 				 				 				 				
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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Table of Contents
Fiscal 2011 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC

 	 	 	 	 	Kellwood Separation	 	 	 	 	Allocation of Pro Forma(2)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments(1)	 	 	Pro
Forma	 	 	 	 	AHC	 	 	Vince
Intermediate
Holding,
LLC	 	 	Vince, LLC(3)	 	 	Adjustments	 	 	Pro
Forma	 	
(In thousands, except per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	662,846	  	 	$	(487,591	)(a) 	 	$	175,255	  	 		 	$	—	  	 	$	 —	  	 	$	175,255	  	 	$	—	  	 	$	175,255	  	
Cost of products sold	 	 	490,110	  	 	 	(400,565	)(a) 	 	 	89,545	  	 		 	 	—	  	 	 	—	  	 	 	89,545	  	 	 	—	  	 	 	89,545	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	172,736	  	 	 	(87,026	) 	 	 	85,710	  	 		 	 	—	  	 	 	—	  	 	 	85,710	  	 	 	—	  	 	 	85,710	  	
Operating Expenses:	 				 				 				 		 				 				 				 				 				
Selling, general and administrative expenses	 	 	155,220	  	 	 	(113,027	)(b) 	 	 	42,193	  	 		 	 	45	(g) 	 	 	—	  	 	 	42,148	(i) 	 	 	—	  	 	 	42,193	  	
Amortization of intangible assets	 	 	1,941	  	 	 	(1,342	) 	 	 	599	  	 		 	 	—	  	 	 	—	  	 	 	599	  	 	 	—	  	 	 	599	  	
Restructuring, environmental remediation and other charges	 	 	2,651	  	 	 	(2,651	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of long-lived assets (excluding goodwill)	 	 	2,504	  	 	 	(2,504	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	10,821	  	 	 	(10,821	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net	 	 	(1,578	) 	 	 	1,578	(m) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	171,559	  	 	 	(128,767	) 	 	 	42,792	  	 		 	 	45	  	 	 	—	  	 	 	42,747	  	 	 	—	  	 	 	42,792	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations	 	 	1,177	  	 	 	41,741	  	 	 	42,918	  	 		 	 	(45	) 	 	 	—	  	 	 	42,963	  	 	 	—	  	 	 	42,918	  	
Interest expense, net	 	 	127,148	  	 	 	(45,785	)(c) 	 	 	81,363	  	 		 	 	81,363	(h) 	 	 	—	  	 	 	15,004	(j) 	 	 	(15,004	)(k) 	 	 	81,363	  	
Other expense, net	 	 	1,914	  	 	 	(1,436	) 	 	 	478	  	 		 	 	—	  	 	 	—	  	 	 	478	  	 	 	—	  	 	 	478	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) Income before provision for income taxes	 	 	(127,885	) 	 	 	88,962	  	 	 	(38,923	) 	 		 	 	(81,408	) 	 	 	—	  	 	 	27,481	  	 	 	15,004	  	 	 	(38,923	) 	
Provision for income taxes	 	 	3,401	  	 	 	13,693	(f) 	 	 	17,094	  	 		 	 	—	  	 	 	—	  	 	 	10,812	  	 	 	6,282	(l) 	 	 	17,094	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from continuing operations	 	$	(131,286	) 	 	$	75,269	  	 	$	(56,017	) 	 		 	$	(81,408	) 	 	$	—	  	 	$	16,669	  	 	$	8,722	  	 	$	(56,017	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Diluted earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Weighted average number of common shares outstanding, basic	 				 				 				 		 				 				 				 				 				
Weighted average number of common shares outstanding, diluted	 				 				 				 		 				 				 				 				 				
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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Table of Contents
Fiscal 2012 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC

 	 	 	 	 	Kellwood Separation	 	 	 	 	Allocation of Pro Forma(2)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments(1)	 	 	Pro
Forma	 	 	 	 	AHC	 	 	Vince
Intermediate
Holding,
LLC	 	 	Vince,
LLC(3)	 	 	Adjustments	 	 	Pro
Forma	 	
(In thousands, except per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	707,995	  	 	$	(467,643	)(a) 	 	$	240,352	  	 		 	$	—	  	 	$	 —	  	 	$	240,352	  	 	$	—	  	 	$	240,352	  	
Cost of products sold	 	 	507,905	  	 	 	(375,749	)(a) 	 	 	132,156	  	 		 	 	—	  	 	 	—	  	 	 	132,156	  	 	 	—	  	 	 	132,156	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	200,090	  	 	 	(91,894	) 	 	 	108,196	  	 		 	 	—	  	 	 	—	  	 	 	108,196	  	 	 	—	  	 	 	108,196	  	
Operating Expenses:	 				 				 				 		 				 				 				 				 				
Selling, general and administrative expenses	 	 	177,755	  	 	 	(111,094	)(b) 	 	 	66,661	  	 		 	 	22	(g) 	 	 	—	  	 	 	66,639	(i) 	 	 	—	  	 	 	66,661	  	
Amortization of intangible assets	 	 	1,899	  	 	 	(1,301	) 	 	 	598	  	 		 	 	—	  	 	 	—	  	 	 	598	  	 	 	—	  	 	 	598	  	
Restructuring, environmental remediation and other charges	 	 	5,091	  	 	 	(5,091	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of long-lived assets (excluding goodwill)	 	 	2,349	  	 	 	(2,349	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net	 	 	(7,162	) 	 	 	7,162	(m) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	179,932	  	 	 	(112,673	) 	 	 	67,259	  	 		 	 	22	  	 	 	—	  	 	 	67,237	  	 	 	—	  	 	 	67,259	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations	 	 	20,158	  	 	 	20,779	  	 	 	40,937	  	 		 	 	(22	) 	 	 	—	  	 	 	40,959	  	 	 	—	  	 	 	40,937	  	
Interest expense, net	 	 	122,383	  	 	 	(53,700	)(c) 	 	 	68,683	  	 		 	 	68,683	(h) 	 	 	—	  	 	 	22,903	(j) 	 	 	(22,903	)(k) 	 	 	68,683	  	
Other expense, net	 	 	2,723	  	 	 	(1,944	) 	 	 	779	  	 		 	 	—	  	 	 	—	  	 	 	779	  	 	 	—	  	 	 	779	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before provision for income taxes	 	 	(104,948	) 	 	 	76,423	  	 	 	(28,525	) 	 		 	 	(68,705	) 	 	 	—	  	 	 	17,277	  	 	 	22,903	  	 	 	(28,525	) 	
Provision for income taxes	 	 	708	  	 	 	15,512	(f) 	 	 	16,220	  	 		 	 	—	  	 	 	—	  	 	 	6,964	  	 	 	9,256	(l) 	 	 	16,220	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from continuing operations	 	$	(105,656	) 	 	$	60,911	  	 	$	(44,745	) 	 		 	$	(68,705	) 	 	$	—	  	 	$	10,313	  	 	$	13,647	  	 	$	(44,745	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 	 	 				 				 				 				 				
Diluted earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 	 	 				 				 				 				 				
Weighted average number of common shares outstanding, basic	 				 				 				 		 				 				 				 				 				
Weighted average number of common shares outstanding, diluted	 				 				 				 		 				 				 				 				 				
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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Table of Contents
First Six Months of Fiscal 2012 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC

 	 	 	 	 	Kellwood Separation	 	 	 	 	Allocation of Pro Forma(2)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments(1)	 	 	Pro
Forma	 	 	 	 	AHC	 	 	Vince
Intermediate
Holding,
LLC	 	 	Vince,
LLC(3)	 	 	Adjustments	 	 	Pro
Forma	 	
(In thousands, except per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	319,445	  	 	$	(228,914	)(a) 	 	$	90,531	  	 		 	$	—	  	 	$	—	  	 	$	90,531	  	 	$	—	  	 	$	90,531	  	
Cost of products sold	 	 	235,293	  	 	 	(185,174	)(a) 	 	 	50,119	  	 		 	 	—	  	 	 	—	  	 	 	50,119	  	 	 	—	  	 	 	50,119	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	84,152	  	 	 	(43,740	) 	 	 	40,412	  	 		 	 	—	  	 	 	—	  	 	 	40,412	  	 	 	—	  	 	 	40,412	  	
Operating Expenses:	 				 				 				 		 				 				 				 				 				
Selling, general and administrative expenses	 	 	83,526	  	 	 	(56,457	)(b) 	 	 	27,069	  	 		 	 	12	(g) 	 	 	—	  	 	 	27,057	(i) 	 	 	—	  	 	 	27,069	  	
Amortization of intangible assets	 	 	950	  	 	 	(651	) 	 	 	299	  	 		 	 	—	  	 	 	—	  	 	 	299	  	 	 	—	  	 	 	299	  	
Restructuring, environmental remediation and other charges	 	 	2,264	  	 	 	(2,264	) 	 				 		 				 				 				 				 				
Impairment of long-lived assets (excluding goodwill)	 	 	717	  	 	 	(717	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net	 	 	(4,507	) 	 	 	4,507	(m) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	82,950	  	 	 	(55,582	) 	 	 	27,368	  	 		 	 	12	  	 	 	—	  	 	 	27,356	  	 	 	—	  	 	 	27,368	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations	 	 	1,202	  	 	 	11,842	  	 	 	13,044	  	 		 	 	(12	) 	 	 	—	  	 	 	13,056	  	 	 	—	  	 	 	13,044	  	
Interest expense, net	 	 	74,151	  	 	 	(26,256	)(c) 	 	 	47,895	  	 		 	 	47,895	(h) 	 	 	—	  	 	 	10,690	(j) 	 	 	(10,690	)(k) 	 	 	47,895	  	
Other expense, net	 	 	1,215	  	 	 	(819	) 	 	 	396	  	 		 	 	—	  	 	 	—	  	 	 	396	  	 	 	—	  	 	 	396	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before provision for income taxes	 	 	(74,164	) 	 	 	38,917	  	 	 	(35,247	) 	 		 	 	(47,907	) 	 	 	—	  	 	 	1,970	  	 	 	10,690	  	 	 	(35,247	) 	
Provision for income taxes	 	 	2,245	  	 	 	2,872	(f) 	 	 	5,117	  	 		 	 	—	  	 	 	—	  	 	 	789	  	 	 	4,328	(l) 	 	 	5,117	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from continuing operations	 	$	(76,409	) 	 	$	36,045	  	 	$	(40,364	) 	 		 	$	(47,907	) 	 	$	—	  	 	$	1,181	  	 	$	6,362	  	 	$	(40,364	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Diluted earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Weighted average number of common shares outstanding, basic	 				 				 				 		 				 				 				 				 				
Weighted average number of common shares outstanding, diluted	 				 				 				 		 				 				 				 				 				
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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First Six Months of Fiscal 2013 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC

 	 	 	 	 	Kellwood Separation	 	 	 	 	Allocation of Pro Forma(2)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments(1)	 	 	Pro
Forma	 	 	 	 	AHC	 	 	Vince
Intermediate
Holding,
LLC	 	 	Vince,
LLC(3)	 	 	Adjustments	 	 	Pro
Forma	 	
(In thousands, except per share amounts)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	363,967	  	 	$	(249,310	)(a) 	 	$	114,657	  	 		 	$	—	  	 	$	—	  	 	$	114,657	  	 	$	—	  	 	$	114,657	  	
Cost of products sold	 	 	256,031	  	 	 	(192,525	)(a) 	 	 	63,506	  	 		 	 	—	  	 	 	—	  	 	 	63,506	  	 	 	—	  	 	 	63,506	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	107,936	  	 	 	(56,785	) 	 	 	51,151	  	 		 	 	—	  	 	 	—	  	 	 	51,151	  	 	 	—	  	 	 	51,151	  	
Operating Expenses:	 				 				 				 		 				 				 				 				 				
Selling, general and administrative expenses	 	 	93,503	  	 	 	(59,537	)(b) 	 	 	33,966	  	 		 	 	12	(g) 	 	 	—	  	 	 	33,954	(i) 	 	 	—	  	 	 	33,966	  	
Amortization of intangible assets	 	 	950	  	 	 	(650	) 	 	 	300	  	 		 	 	—	  	 	 	—	  	 	 	300	  	 	 	—	  	 	 	300	  	
Restructuring, environmental remediation and other charges	 	 	827	  	 	 	(827	) 	 				 		 				 				 				 				 				
Impairment of long-lived assets (excluding goodwill)	 	 	—	  	 	 	—	  	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration, net	 	 	(54	) 	 	 	54	(m) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	95,226	  	 	 	(60,960	) 	 	 	34,266	  	 		 	 	12	  	 	 	—	  	 	 	34,254	  	 	 	—	  	 	 	34,266	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations	 	 	12,710	  	 	 	4,175	  	 	 	16,885	  	 		 	 	(12	) 	 	 	—	  	 	 	16,897	  	 				 	 	16,885	  	
Interest expense, net	 	 	43,671	  	 	 	(27,788	)(c) 	 	 	15,883	  	 		 	 	15,883	(h) 	 	 	—	  	 	 	12,429	(j) 	 	 	(12,429	)(k) 	 	 	15,883	  	
Other expense, net	 	 	1,233	  	 	 	(721	) 	 	 	512	  	 		 	 	—	  	 	 	—	  	 	 	512	  	 	 	—	  	 	 	512	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before provision for income taxes	 	 	(32,194	) 	 	 	32,684	  	 	 	490	  	 		 	 	(15,895	) 	 	 	—	  	 	 	3,956	  	 	 	12,429	  	 	 	490	  	
Provision for income taxes	 	 	2,679	  	 	 	3,909	(f) 	 	 	6,588	  	 		 	 	—	  	 	 	—	  	 	 	1,556	  	 	 	5,035	(l) 	 	 	6,588	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from continuing operations	 	$	(34,873	) 	 	$	28,775	  	 	$	(6,098	) 	 		 	$	(15,895	) 	 	$	—	  	 	$	2,400	  	 	$	7,397	  	 	$	(6,098	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Diluted earnings (loss) per share	 	$	 	  	 				 	$	 	  	 		 				 				 				 				 				
	 	 	 	 	 				 	 	 	 	 		 				 				 				 				 				
Weighted average number of common shares outstanding, basic	 				 				 				 		 				 				 				 				 				
Weighted average number of common shares outstanding, diluted	 				 				 				 		 				 				 				 				 				
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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Fiscal 2012 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC

 	  	 	 	 	Sun Capital Contribution
and TRA	 	  	This Offering(5)	 	
 	  	Pro Forma
for
Kellwood
Separation(4)	 	 	Sun Capital
Contribution
and TRA
Adjustments	 	 	Pro Forma	 	  	Adjustments	 	  	Pro Forma,
As
Adjusted	 	
(In thousands, except per share amounts)	  	 	 	 	 	 	 	 	 	  	 	 	  	 	 	
Net sales	  	$	240,352	  	 	$	—	  	 	$	240,352	  	  	$	—	  	  	$	240,352	  	
Cost of products sold	  	 	132,156	  	 	 	—	  	 	 	132,156	  	  	 	—	  	  	 	132,156	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Gross profit	  	 	108,196	  	 	 	—	  	 	 	108,196	  	  	 	—	  	  	 	108,196	  	
Operating Expenses:	  				 				 				  				  				
Selling, general and administrative expenses	  	 	66,661	  	 	 	—	  	 	 	66,661	  	  	 	—	  	  	 	66,661	  	
Amortization of intangible assets	  	 	598	  	 	 	—	  	 	 	598	  	  	 	—	  	  	 	598	  	
Restructuring, environmental remediation and other charges	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	  	 	—	  	
Impairment of long-lived assets (excluding goodwill)	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	  	 	—	  	
Impairment of goodwill	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	  	 	—	  	
Change in fair value of contingent consideration, net	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Total operating expenses	  	 	67,259	  	 	 	—	  	 	 	67,259	  	  	 	—	  	  	 	67,259	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Income from operations	  	 	40,937	  	 	 	—	  	 	 	40,937	  	  	 	—	  	  	 	40,937	  	
Interest expense, net	  	 	68,683	  	 	 	(68,683	)(n) 	 	 	—	  	  	 	10,640	  	  	 	10,640	  	
Other expense, net	  	 	779	  	 	 	—	  	 	 	779	  	  	 	—	  	  	 	779	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
(Loss) income before provision for income taxes	  	 	(28,525	) 	 	 	68,683	  	 	 	40,158	  	  	 	10,640	  	  	 	29,518	  	
Provision for income taxes	  	 	16,220	  	 	 	—	  	 	 	16,220	  	  	 	4,413	  	  	 	11,807	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Net (loss) income from continuing operations	  	$	(44,745	) 	 	$	68,683	  	 	$	23,938	  	  	$	6,227	  	  	$	17,711	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Basic earnings (loss) per share	  	$	 	  	 				 	$	 	  	  				  	$	 	  	
	  	 	 	 	 				 	 	 	 	  				  	 	 	 	
Diluted earnings (loss) per share	  	$	 	  	 				 	$	 	  	  				  	$	 	  	
	  	 	 	 	 				 	 	 	 	  				  	 	 	 	
Weighted average number of common shares outstanding, basic	  				 				 				  				  				
Weighted average number of common shares outstanding, diluted	  				 				 				  				  				
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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Table of Contents
First Six Months of Fiscal 2013 Unaudited Pro Forma Statement of Operations of Historical Consolidated AHC

 	  	 	 	 	Sun Capital Contribution
and TRA	 	  	This Offering(5)	 	
 	  	Pro Forma for
Kellwood
Separation (4)	 	 	Sun Capital
Contribution
and TRA
Adjustments	 	 	Pro
Forma	 	  	Adjustments	 	  	Pro Forma,
As
Adjusted	 	
(In thousands, except per share amounts)	  	 	 	 	 	 	 	 	 	  	 	 	  	 	 	
Net sales	  	$	114,657	  	 	$	—	  	 	$	114,657	  	  	$	—	  	  	$	114,657	  	
Cost of products sold	  	 	63,506	  	 	 	—	  	 	 	63,506	  	  	 	—	  	  	 	63,506	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Gross profit	  	 	51,151	  	 	 	—	  	 	 	51,151	  	  	 	—	  	  	 	51,151	  	
Operating Expenses:	  				 				 				  				  				
Selling, general and administrative expenses	  	 	33,966	  	 	 	—	  	 	 	33,966	  	  	 	—	  	  	 	33,966	  	
Amortization of intangible assets	  	 	300	  	 	 	—	  	 	 	300	  	  	 	—	  	  	 	300	  	
Impairment of long-lived assets (excluding goodwill)	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	  	 	—	  	
Impairment of goodwill	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	  	 	—	  	
Change in fair value of contingent consideration, net	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Total operating expenses	  	 	34,266	  	 	 	—	  	 	 	32,466	  	  	 	—	  	  	 	32,466	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Income from operations	  	 	16,885	  	 	 	—	  	 	 	16,885	  	  	 	—	  	  	 	16,885	  	
Interest expense, net	  	 	15,883	  	 	 	(15,883	)(n) 	 	 	—	  	  	 	5,320	  	  	 	5,320	  	
Other expense, net	  	 	512	  	 	 	—	  	 	 	512	  	  	 	—	  	  	 	512	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Net income before provision for income taxes	  	 	490	  	 	 	15,883	  	 	 	16,373	  	  	 	5,320	  	  	 	11,055	  	
Provision for income taxes	  	 	6,588	  	 	 	—	  	 	 	6,588	  	  	 	2,166	  	  	 	4,422	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
(Loss) income from continuing operations	  	$	(6,098	) 	 	$	15,883	  	 	$	9,785	  	  	$	3,152	  	  	$	6,633	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
Basic (loss) income per share	  	$	 	  	 				 	$	 	  	  				  	$	 	  	
	  	 	 	 	 				 	 	 	 	  				  	 	 	 	
Diluted (loss) income per share	  	$	 	  	 				 	$	 	  	  				  	$	 	  	
	  	 	 	 	 				 	 	 	 	  				  	 	 	 	
Weighted average number of common shares outstanding, basic	  				 				 				  				  				
Weighted average number of common shares outstanding, diluted	  				 				 				  				  				
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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Table of Contents
Unaudited Pro Forma Consolidated Balance Sheet
AHC’s unaudited consolidated balance sheet is presented as of August 3, 2013 on:
 
 	Ÿ	 	an actual basis;	
 
 	Ÿ	 	a pro forma basis to give effect to the Kellwood Separation as if it occurred on such date;	
 
 	Ÿ	 	a pro forma basis to give effect to entry into the TRA as if such transaction occurred on such date; and	
 
 	Ÿ	 	a pro forma, as adjusted basis to give further effect to this offering and the application of the proceeds therefrom as if such transactions occurred on such date.	
August 3, 2013 Unaudited Pro Forma Balance Sheet of Historical Consolidated AHC

 	 	 	 	 	Kellwood Separation	 	 	 	 	Allocation of Pro Forma(2)	 	
 	 	Historical
Consolidated
AHC	 	 	Kellwood
Separation
Adjustments (6)	 	 	Pro
Forma	 	 	 	 	AHC	 	 	Vince
Intermediate
Holding,
LLC	 	 	Vince,
LLC (3)	 	 	Adjustments	 	 	Pro
Forma	 	
(In thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ASSETS	 				 				 				 		 				 				 				 				 				
Current assets:	 				 				 				 		 				 				 				 				 				
Cash and cash equivalents	 	$	2,178	  	 	$	(1,853	) 	 	$	325	  	 		 	$	219	  	 	$	—	  	 	$	106	  	 	$	—	  	 	$	325	  	
Receivables, net	 	 	115,718	  	 	 	(75,815	) 	 	 	39,903	  	 		 	 	—	  	 	 	—	  	 	 	39,903	  	 	 	—	  	 	 	39,903	  	
Inventories, net	 	 	93,858	  	 	 	(65,853	) 	 	 	28,005	  	 		 	 	—	  	 	 	—	  	 	 	28,005	  	 	 	—	  	 	 	28,005	  	
Prepaid expenses and other current assets	 	 	17,001	  	 	 	(2,342	)(o) 	 	 	14,659	(o) 	 		 	 	—	  	 	 	—	  	 	 	14,589	  	 	 	70	(k) 	 	 	14,659	  	
Current assets of discontinued operations	 	 	136	  	 	 	(136	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	 	 	228,891	  	 	 	(145,999	) 	 	 	82,892	  	 		 	 	219	  	 	 	—	  	 	 	82,603	  	 	 	70	  	 	 	82,892	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	20,261	  	 	 	(10,763	) 	 	 	9,498	  	 		 	 	—	  	 	 	—	  	 	 	9,498	  	 				 	 	9,498	  	
Intangible assets, net	 	 	145,331	  	 	 	(34,789	) 	 	 	110,542	  	 		 	 	—	  	 	 	—	  	 	 	110,542	  	 	 	—	  	 	 	110,542	  	
Goodwill	 	 	65,876	  	 	 	(2,130	) 	 	 	63,746	  	 		 	 	—	  	 	 	—	  	 	 	63,746	  	 	 	—	  	 	 	63,746	  	
Other assets	 	 	7,405	  	 	 	115,497	(o) 	 	 	122,902	(o) 	 		 	 	—	  	 	 	69,744	(t) 	 	 	24,173	  	 	 	28,985	(u) 	 	 	122,902	  	
Long-term assets of discontinued operations	 	 	27	  	 	 	(27	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	467,791	  	 	$	(78,211	) 	 	$	389,580	  	 		 	$	219	  	 	$	69,744	  	 	$	290,562	  	 	$	29,055	  	 	$	389,580	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS’ DEFICIT	 				 				 				 		 				 				 				 				 				
Current liabilities:	 				 				 				 		 				 				 				 				 				
Short-term borrowings	 	 	115,601	  	 	 	(115,601	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	115,601	(j) 	 	 	(115,601	)(k) 	 	 	—	  	
Accounts payable	 	 	73,510	  	 	 	(45,572	) 	 	 	27,938	  	 		 	 	—	  	 	 	—	  	 	 	27,938	  	 	 	—	  	 	 	27,938	  	
Accrued salaries and employee benefits	 	 	13,886	  	 	 	(11,561	) 	 	 	2,325	  	 		 	 	—	  	 	 	—	  	 	 	2,325	  	 	 	—	  	 	 	2,325	  	
Other accrued expenses	 	 	16,535	  	 	 	(14,275	) 	 	 	2,260	  	 		 	 	181	  	 	 	—	  	 	 	2,141	  	 	 	(62	)(k) 	 	 	2,260	  	
Kellwood Note Receivable	 	 	—	  	 	 	345,000	(p) 	 	 	345,000	  	 		 	 	—	  	 	 	345,000	(p) 	 	 	—	  	 	 	—	  	 	 	345,000	 	
Current liabilities of discontinued operations	 	 	1,698	  	 	 	(1,698	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total current liabilities	 	 	221,230	  	 	 	156,293	  	 	 	377,523	  	 		 	 	181	  	 	 	345,000	  	 	 	148,005	  	 	 	(115,663	) 	 	 	377,523	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt	 	 	386,842	  	 	 	(386,842	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	163,675	  	 	 	(163,675	) 	 	 	—	  	
Deferred income taxes and other	 	 	36,409	  	 	 	(33,167	)(o) 	 	 	3,242	(o) 	 		 	 	—	  	 	 	—	  	 	 	5,041	  	 	 	(1,799	) 	 	 	3,242	  	
Tax Receivable Agreement due	 	 	—	  	 				 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Long-term liabilities of discontinued operations	 	 	2,412	  	 	 	(2,412	) 	 	 	—	  	 		 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ deficit invested equity	 	 	(179,102	) 	 	 	187,917	(q) 	 	 	8,815	  	 		 	 	38	  	 	 	(275,256	) 	 	 	(26,159	) 	 	 	310,192	  	 	 	8,815	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and stockholders’ deficit/invested equity	 	$	467,791	  	 	$	(78,211	) 	 	$	389,580	  	 		 	$	219	  	 	$	69,744	  	 	$	290,562	  	 	$	29,055	  	 	$	389,580	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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August 3, 2013 Unaudited Pro Forma Balance Sheet of Historical Consolidated AHC

 	 	Pro Forma
for
Kellwood
Separation(4)	 	 	Sun Capital
Contribution and TRA	 	 	This Offering(5)	 	
 	 			 	Sun Capital
Contribution
and TRA
Adjustments	 	  	Pro
Forma	 	 	Adjustments	 	 	Pro Forma,
As Adjusted	 	
(In thousands)	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	
ASSETS	 				 				  				 				 				
Current assets:	 				 				  				 				 				
Cash and cash equivalents	 	$	325	  	 	$	—	  	  	$	325	  	 	$	4,675	  	 	$	5,000	  	
Receivables, net	 	 	39,903	  	 	 	—	  	  	 	39,903	  	 	 	—	  	 	 	39,903	  	
Inventories, net	 	 	28,005	  	 	 	—	  	  	 	28,005	  	 	 	—	  	 	 	28,005	  	
Prepaid expenses and other current assets	 	 	14,659	  	 	 	—	  	  	 	14,659	  	 	 	—	  	 	 	14,659	  	
Current assets of discontinued operations	 	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	 	 	82,892	  	 	 	—	  	  	 	82,892	  	 	 	4,675	  	 	 	87,567	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	9,498	  	 	 	—	  	  	 	9,498	  	 	 	—	  	 	 	9,498	  	
Intangible assets, net	 	 	110,542	  	 	 	—	  	  	 	110,542	  	 	 	—	  	 	 	110,542	  	
Goodwill	 	 	63,746	  	 	 	—	  	  	 	63,746	  	 	 	—	  	 	 	63,746	  	
Other assets	 	 	122,902	  	 	 	—	  	  	 	122,902	  	 	 	6,000	  	 	 	128,902	  	
Long-term assets of discontinued operations	 	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	389,580	  	 	$	—	  	  	$	389,580	  	 	$	10,675	  	 	$	400,255	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS’ DEFICIT	 				 				  				 				 				
Current liabilities:	 				 				  				 				 				
Short-term borrowings	 	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	$	—	  	
Accounts payable	 	 	27,938	  	 	 	—	  	  	 	27,938	  	 	 	—	  	 	 	27,938	  	
Accrued salaries and employee benefits	 	 	2,325	  	 	 	—	  	  	 	2,325	  	 	 	—	  	 	 	2,325	  	
Other accrued expenses	 	 	2,260	  	 	 	—	  	  	 	2,260	  	 				 	 	2,260	  	
Kellwood Note Receivable	 	 	345,000	  	 	 	—	  	  	 	345,000	  	 	 	(345,000	) 	 	 	—	  	
Current liabilities of discontinued operations	 	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total current liabilities	 	 	377,523	  	 	 	—	  	  	 	377,523	  	 	 	(345,000	) 	 	 	32,523	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt	 	 	—	  	 	 	—	  	  	 	—	  	 	 	175,000	  	 	 	175,000	  	
Deferred income taxes and other	 	 	3,242	  	 	 	—	  	  	 	3,242	  	 	 	—	  	 	 	3,242	  	
Tax Receivable Agreement due	 	 	—	  	 	 	172,151	(r) 	  	 	172,151	  	 	 	—	  	 	 	172,151	  	
Long-term liabilities of discontinued operations	 	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	—	  	
Total stockholders’ deficit	 	 	8,815	  	 	 	(172,151	)(s) 	  	 	(163,336	) 	 	 	180,675	  	 	 	17,339	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and stockholders’ deficit	 	$	389,580	  	 	$	—	  	  	$	389,580	  	 	$	10,675	  	 	$	400,255	  	
	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data.
 
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Notes to Unaudited Pro Forma Consolidated Financial Data
 
(1)	As described within “Restructuring Transactions” included elsewhere in this prospectus, AHC will use a series of transactions (including the Additional Sun Capital Contribution) to legally separate the non-Vince businesses from the Vince business immediately prior to the consummation of this offering. Once these transactions have occurred, the non-Vince businesses will be owned and operated separately from us. After consummation of this offering, the Vince business will be our only assets, liabilities, and operations. An investment in us after giving effect to the IPO Restructuring Transactions is an investment in the Vince business. We will not have ongoing involvement with the non-Vince businesses following separation, with the exception of our payments to Kellwood for certain services to be provided under the Shared Services Agreement as further described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC— Shared Services Agreement” contained elsewhere in this prospectus. Similarly, Kellwood will not have ongoing involvement in our business, other than pursuant to the Shared Services Agreement. Following the consummation of this offering, we expect to report the non-Vince businesses as discontinued operations in accordance with ASC Topic 205 Presentation of Financial Statements beginning with our first financial statements filed after the effectiveness of the registration statement of which this prospectus forms a part. All pro forma adjustments to AHC’s historical financial statements that relate to the separation of the Vince business from the non-Vince businesses are described as Kellwood Separation Adjustments and they are included under the caption “Kellwood Separation.”	
 
    	As the Kellwood Separation is expected to have a material impact on AHC’s results of operations, AHC has included unaudited pro forma financial statements of operations for fiscal 2010, fiscal 2011 and fiscal 2012, as well as for the first six months of fiscal 2012 and fiscal 2013 which gives effect to the Kellwood Separation as though it occurred at the beginning of fiscal 2010. AHC has also included an unaudited pro forma balance sheet as of August 3, 2013, which give effect to the Kellwood Separation as though it had occurred on that date, at which time the non-Vince businesses would be presented as discontinued operations for all historical reporting periods. There will be no gain or loss recognized as a result of the IPO Restructuring Transactions because the entities involved in the transactions are under the common control of affiliates of Sun Capital.	
 
(2)	Set forth within the tables is supplemental disclosure of the allocation of the pro forma results of operations and financial position of the Kellwood Separation Adjustments. This supplemental disclosure is referred to as “Allocation of Pro Forma” and represents the allocation of the unaudited pro forma results of operations and financial position among Apparel Holding Corp., Vince Intermediate Holding, LLC and Vince, LLC after giving effect to the Kellwood Separation. Apparel Holding Corp., Vince Intermediate Holding, LLC and Vince, LLC, collectively, will represent the three corporate or limited liability company entities that represent the consolidated group that will constitute the Vince business after consummation of the IPO Restructuring Transactions. The financial results of Vince, LLC are presented since after giving effect to the IPO Restructuring Transactions as Vince, LLC will be the sole operating subsidiary of the business in which you are investing. The Vince, LLC financials have been prepared on a stand-alone carve-out basis. As such, we present an adjustment column within the “Allocation of Pro Forma” table to reconcile the Vince, LLC financials on a stand-alone carve-out basis with the pro-forma presentation of AHC after giving effect to the Kellwood Separation. The amounts presented for AHC within the Allocation of Pro Forma table are exclusive of AHC’s investment in Vince, LLC.	
 
(3)	Amounts are derived from the Vince, LLC audited financial statements included elsewhere in this prospectus. Those audited statements were prepared on a standalone carve-out basis. The Vince, LLC financial statements include short-term borrowings, long-term debt and interest expense related to certain Kellwood Company indebtedness, including the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. Such debt instruments and related interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder.	
 
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    	Provision for income taxes in the Vince, LLC financial statements has been determined on a stand-alone basis (i.e. on a “separate return” basis.) As such, the assessment of the realization of net deferred tax assets, the need for a valuation allowance and judgments on the recognition of tax benefits were based on Vince, LLC’s own facts and circumstances and excluded from that assessment were any impacts of the overall results of the non-Vince businesses. The provision for income taxes is not necessarily indicative of the income taxes that would have been recorded had the Vince business been owned and operated separately from the non-Vince businesses during the periods presented.	
 
(4)	Reflects the unaudited pro forma results of operations and financial position of AHC after giving effect to the Kellwood Separation.	
 
(5)	Presented on a pro forma, as adjusted basis to further reflect (i) our receipt of the estimated net proceeds from the sale of shares of common stock by us in this offering at an assumed initial public offering price of $             per share, the midpoint of the range appearing on the cover page of this prospectus, after deducting the assumed underwriting discount and commissions and our estimated fees and expenses payable by us and (ii) our use of these proceeds and the incurrence of approximately $175 million of borrowings under our new term loan facility, as described in “Use of Proceeds,” including repayment of the Kellwood Note Receivable. As reflected in the table, the interest expense of this borrowing (including amortization of deferred financing costs), had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.	
 
(6)	AHC will use a series of transactions (including the Additional Sun Capital Contribution) to legally separate the Vince business from the non-Vince businesses immediately prior to consummation of this offering. We refer to this series of transactions as the Kellwood Separation. Once these transactions have occurred, the non-Vince businesses will be owned and operated separately from us and we will present the historical non-Vince businesses as discontinued operations. These pro forma adjustments give effect to the removal of assets and liabilities of the non-Vince businesses, and the net impact of these transactions are reflected as an adjustment to consolidated AHC’s additional paid in capital.	
 
(a)	AHC has maintained distinct financial records of the non-Vince businesses, separate from the Vince business, which include all of the direct revenues and charges pertaining to the applicable business, as appropriate. All operating revenues and cost of sales can be identified as specifically pertaining to sales of products of the non-Vince or Vince business, as applicable.	
 
(b)	As noted above in note (a), AHC has maintained distinct financial records of its Vince and non-Vince businesses. Any SG&A expenses identified as directly pertaining to the Vince or non-Vince businesses are charged directly to the Vince or non-Vince businesses, as appropriate. Additionally, the Vince business is charged for the use of services provided by centralized Kellwood departments and shared facilities. These charges are based upon the actual cost incurred, without mark-up. These functions and facilities will remain with Kellwood upon separation, and will continue to be an integral part of that business going forward. We will continue to use certain of these services for a period of time through the Shared Services Agreement (as described in “Other information related to the Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement”) and will be charged accordingly. The charges to Vince, LLC may not be representative of what the costs would have been had the Vince business been owned and operated separately from the non-Vince businesses during the periods presented, however management believes the amounts to be charged to Vince, LLC are representative of the incremental cost to Kellwood to service the Vince business.	
 
(c)	This pro forma adjustment represents Kellwood Company indebtedness and related interest expense, including under the Wells Fargo Facility, the Cerberus Term Loan, the Sun Term Loan Agreements, the 12.875%, the 7.625% Notes and the 3.5% Convertible Notes. These debt instruments and related interest expense are allocated to discontinued operations as the related indebtedness will be repaid, refinanced, discharged or repurchased in connection with the	
 
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 	Kellwood Separation or, with respect to those obligations for which Vince, LLC is neither a borrower nor a guarantor, they will remain obligations of Kellwood Company. After giving effect to the Additional Sun Capital Contribution, most of the proceeds from this offering, along with the borrowings under our new term loan facility, will be used to repay, discharge or repurchase the related obligations under such instruments (other than the Wells Fargo Facility which will separately be refinanced by Kellwood Company, LLC in connection with this offering) and to pay (i) a restructuring fee equal to 1% of the aggregate of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Management Fees,” and (ii) a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements.” It is currently estimated that the restructuring fee described in clause (i) above and payable to Sun Capital Management in connection with this offering will total $3.5 million. None of the debt obligations that have been allocated to discontinued operations are expected to be retained by the non-Vince businesses subsequent to the consummation of this offering (except for indebtedness for which neither Apparel Holding Corp. nor Vince, LLC is a guarantor or an obligor and which may be repaid, refinanced, discharged or repurchased after the closing of this offering, as described in “Use of Proceeds” and “Restructuring Transactions” and after giving effect to the Additional Sun Capital Contribution).	
 
(d)	This pro forma adjustment relates to the $0.9 million gain on the acquisition of the Adam operations in fiscal 2010 as the fair value of the identifiable assets less the liabilities assumed exceeded the fair value of the purchase price consideration.	
 
(e)	This pro forma adjustment relates to the $15.9 million gain on debt extinguishment as a result of AHC’s repurchase of $29.7 million of face value of certain notes outstanding from an affiliate of Sun Capital for $9.1 million in cash.	
 
(f)	AHC has historically included the operating results of the combined Vince business and non-Vince businesses in its U.S. federal and state income tax returns. Provision for income taxes in this pro forma presentation have been determined assuming the Kellwood Separation had occurred at the beginning of the earliest period presented, and would therefore exclude the historical operating results of the non-Vince businesses. These amounts are not necessarily indicative of the provision for income taxes that would have been recorded had we operated separately from the non-Vince businesses during the periods presented. The adjustment represents the difference between the amount calculated in accordance with the methodology described herein and the historical amounts recorded. The effective tax rate in this pro forma presentation differs from the U.S. statutory tax rate of 35% primarily due to the AHC interest expense that is disallowed for income tax purposes.	
 
(g)	AHC has incurred certain costs related to maintaining its corporate existence and other related overhead costs. These have not been allocated to any of AHC’s subsidiaries. These costs will remain in continuing operations subsequent to the Kellwood Separation due to their ongoing nature as related corporate overhead.	
 
(h)	The amounts reflected in interest expense, net for the AHC within the “Allocation of Pro Forma” table represent the interest expense related to AHC’s indebtedness to affiliates of Sun Capital under the Sun Capital Loan Agreement and the Sun Promissory Notes. This debt, and related interest expense, will not be allocated to discontinued operations for historical periods as a result of the Kellwood Separation. Effective June 18, 2013, affiliates of Sun Capital contributed the $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Note as a capital contribution to Apparel Holding Corp. in the Sun Capital Contribution. Accordingly, for periods subsequent to June 18, 2013 AHC ceased to accrue any interest expense related to that debt.	
 
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(i)	The Vince, LLC financial statements were prepared on a standalone carve-out basis and include SG&A expenses related to the Vince business, including the impact of our public company	
 	transition costs and certain other one-time costs. This results in an amount similar to the SG&A expenses reflected within the AHC pro forma column as expenses related to the Kellwood departments and services to be utilized by us under the Shared Services Agreement will be included as part of the discontinued operations in this pro forma presentation.	
 
(j)	Short-term borrowings represent borrowings under the Wells Fargo Facility. Long-term debt includes the Cerberus Term Loan and the Sun Term Loan Agreements. These debt instruments, the related capitalized deferred issuance costs and related accrued interest and interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. Notwithstanding the foregoing, the related obligations under these debt instruments and the associated expenses are excluded from the historical AHC pro forma financials as they will be reported as part of discontinued operations after consummation of the IPO Restructuring Transactions. Additionally, after consummation of this offering, neither Vince Holding Corp. nor any subsidiary thereof (including Vince, LLC) will have any obligations under any of these agreements or instruments, which are to be repaid, refinanced, repurchased or discharged by Kellwood Company, LLC in connection with this offering (after giving effect to the Additional Sun Capital Contribution, as described in “Restructuring Transactions.”)	
 
(k)	The purpose of the adjustment is to reconcile short-term borrowings, long-term debt, accrued interest, deferred debt issuance costs and related interest expense contained in the Vince, LLC financial statements to that of pro forma consolidated AHC financial statements after giving effect to the Kellwood Separation (to remove the Wells Fargo Facility, Cerberus Term Loan and Sun Term Loan Agreements which are contained in the Vince, LLC financial statements).	
 
(l)	The provision for income taxes was calculated on a separate-return basis for the Vince, LLC financial statements. The purpose of the adjustment is to reconcile the basis of presentation used in preparing the Vince, LLC financial statements to that of the pro forma consolidated AHC financial statements after giving effect to the Kellwood Separation.	
 
(m)	This pro forma adjustment represents the charges to adjust the fair value of contingent consideration for the non-Vince businesses of Rebecca Taylor and Zobha brands due to decreases in estimated contingent purchase price consideration related to the acquisition of such brands.	
 
(n)	On June 18, 2013, affiliates of Sun Capital contributed $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Notes to AHC in the Sun Capital Contribution. The contributed indebtedness consisted of $369.5 million of outstanding principal balances and $38.0 million of capitalized PIK interest. This pro forma adjustment gives effect to that contribution for fiscal 2012 and the first six months of fiscal 2013 as of the beginning of fiscal 2012 for the unaudited pro forma consolidated statement of operations. As such, the related interest expense on such indebtedness has been removed from AHC’s pro forma statements of operations for fiscal 2012 and the first six months of fiscal 2013.	
 
(o)	Set forth in the tables below is additional detail regarding the composition of the following financial statement line items appearing on the unaudited pro forma balance sheet as of August 3, 2013: prepaid expenses and other current assets, other assets, and deferred income taxes and other. We have provided additional information within these tables to explain the calculation and composition of the aforementioned balances in the pro forma presentation.	
 
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 	  	 	 	  	Kellwood Separation	 	
(in thousands)	  	 	 	  	 	 	 	 	 	
 	  	Historical
Consolidated
AHC	 	  	Kellwood
Separation
Adjustments	 	 	Pro Forma	 	
Prepaid expenses and other current assets	  				  				 				
Net current deferred tax assets	  	$	110	  	  	$	2,662	  	 	$	2,772	(i) 	
Other prepaid expenses and other current assets	  	 	16,891	  	  	 	(5,004	)(iii) 	 	 	11,887	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total prepaid expenses and other current assets	  	$	17,001	  	  	$	(2,342	) 	 	$	14,659	  	

Other assets	  				  				 				
Net long-term deferred tax assets	  	$	116	  	  	$	121,092	  	 	$	121,208	  	
Deferred debt issuance costs	  	 	3,835	  	  	 	(3,835	)(ii) 	 	 	—	  	
Other long-term assets	  	 	3,454	  	  	 	(1,760	)(iii) 	 	 	1,694	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total other assets	  	$	7,405	  	  	$	115,497	  	 	$	122,902	  	

Deferred income taxes and other	  				  				 				
Non-current uncertain tax positions	  	$	388	  	  	$	(388	)(iii) 	 	$	—	  	
Non-current deferred tax liabilities	  	 	3,699	  	  	 	(3,699	) 	 	 	—	(i) 	
Other non-current liabilities	  	 	32,322	  	  	 	(29,080	)(iii) 	 	 	3,242	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total deferred income taxes and other	  	$	36,409	  	  	$	(33,167	) 	 	$	3,242	  	

 	(i)	These transactions have been structured in such a way as to preserve a significant amount of tax assets that may otherwise expire prior to being used. Various federal and state net operating losses are available to offset future taxable income; however a full valuation allowance was placed on these assets as AHC’s historical pretax losses indicated that the realization of these benefits was not more likely than not. As Kellwood Company converts to a limited liability company structure as a result of the IPO Restructuring Transactions and becomes Kellwood Company, LLC, the tax assets which will attach to and be available for use by the Vince business after the Kellwood Separation and as such, the pro forma balance sheet gives effect to such conversion.	
 
 	    	After the Kellwood Separation, there are also deferred tax assets related to Section 197 intangibles of the non-Vince businesses and other net deferred tax liabilities related to Kellwood that will carry over to the Vince business after the consummation of this offering.	

Pro forma deferred income tax assets and liabilities consist of the following (in thousands):	  	
Federal and state net operating losses	  	$	77,640	  	
Section 197 intangible basis of the non-Vince businesses	  	 	39,430	  	
Release of valuation allowance on deferred tax assets of the Vince business	  	 	14,808	  	
Other deferred tax liabilities	  	 	(7,898	) 	
	  	 	 	 	
Total net deferred taxes	  	$	123,980	  	
	  	 	 	 	
Pro forma deferred income tax assets and liabilities included in:	  				
Net current deferred tax assets	  	$	2,772	  	
Net non-current deferred tax assets	  	 	121,208	  	
Non-current deferred tax liabilities	  	 	—  	  	
	  	 	 	 	
Total net deferred income taxes	  	$	123,980	  	

 	    	The net deferred tax assets discussed above are all currently recorded in the financial statements of AHC. However, they are fully offset with a valuation allowance. The valuation allowance is released upon the Kellwood Separation, the offset of which is deemed to be additional paid in capital. The use of these assets is subject to the TRA, as further discussed in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement.” Under the TRA we will be obligated to pay to our pre-IPO stockholders 85% of the cash savings on federal, state and local income taxes realized by us through our use of the net tax assets held by us subsequent to the	
 
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 	Kellwood Separation. The difference between the net deferred income tax assets of $124.0 million and the $172.1 million amount due under the Tax Receivable Agreement is due primarily to the book basis of Vince, LLC Section 197 intangible assets. Such assets have not yet generated a deferred tax asset but the tax amortization will be subject to the Tax Receivable Agreement.	
 
 	(ii)	Deferred debt issuance costs relate to Kellwood indebtedness which will be allocated to discontinued operations in connection with the Kellwood Separation.	
 
 	(iii)	These pro forma adjustments give effect to the removal of assets and liabilities of the non-Vince businesses in the Kellwood Separation.	
 
(p)	As a result of the IPO Restructuring Transactions, Vince Intermediate Holding, LLC will acquire Vince, LLC from Kellwood Company, LLC in exchange for the Kellwood Note Receivable. The principal amount of the Kellwood Note Receivable represents (i) the face value amount of the indebtedness, including accrued and unpaid interest and any related fees and expenses, to be repaid, discharged or repurchased by Kellwood Company, LLC in connection with the consummation of this offering and the repayment of the Kellwood Note Receivable by us (after giving effect to the Additional Sun Capital Contribution), (ii) a restructuring fee equal to 1% of the aggregate of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Management Fees,” and (iii) a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements,” all after giving effect to the Additional Sun Capital Contribution. It is currently estimated that the restructuring fee described in clause (ii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million. Most of the net proceeds from this offering, along with approximately $169 million of net borrowings under our new term loan facility, will be used to repay the Kellwood Note Receivable. We currently estimate the amount of the Kellwood Note Receivable to be, based on assumed net offering proceeds of $181 million and net borrowings under our new term loan facility of $169 million, $345.0 million.	
 
    	All Kellwood Company long-term indebtedness outstanding (including accrued and unpaid interest and any related fees and expenses) will be repaid, discharged or repurchased with proceeds from the Kellwood Note Receivable (after giving effect to the Additional Sun Capital Contribution).	
Kellwood Company long-term debt as of August 3, 2013 presented in AHC Financial Statements (dollars in thousands:
													
  	  	Face
Value	 	  	Less:
Discount(1)	 	 	Carrying
Value	 	
Cerberus Term Loan	  	$	45,660	  	  	$	—	  	 	$	45,660	  	
Sun Term Loan Agreements	  	 	118,015	  	  	 	—	  	 	 	118,015	  	
12.875% Notes	  	 	146,768	  	  	 	(2,806	) 	 	 	143,962	  	
7.625% Notes.	  	 	86,953	  	  	 	(7,962	) 	 	 	78,991	  	
3.5% Convertible Debt	  	 	214	  	  	 	—	  	 	 	214	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	397,610	  	  	$	(10,768	) 	 	$	386,842	  	

(1)      Represents original issue discount.	         	
 
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Kellwood Company long-term debt as of August 3, 2013 presented in Vince, LLC Financial Statements (as a borrower party, dollars in thousands):

  	  	Face
Value	 	  	Less:
Discount	 	  	Carrying
Value	 	
Cerberus Term Loan.	  	$	45,660	  	  	$	—	  	  	$	45,660	  	
Sun Term Loan Agreements	  	 	118,015	  	  	 	—	  	  	 	118,015	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total(1)	  	$	163,675	  	  	$	—	  	  	$	163,675	  	

(1)      Does not include the 12.875% Notes in accordance with GAAP requirements as Vince, LLC is only a guarantor, rather than an obligor, of such obligations.	          	
Kellwood Company, LLC’s expected use of the proceeds from the repayment of the Kellwood Note Receivable as of August 3, 2013 is set forth below (dollars in thousands). The final amount of the Kellwood Note Receivable will be adjusted to equal the actual net proceeds from this offering (less the $5.0 million of net proceeds to be retained by us for general corporate purposes) and net borrowings under our new term loan facility. The amount of the Additional Sun Capital Contribution will be adjusted to fill any gap between the final amount of the Kellwood Note Receivable and the amount of all payments to be made and Kellwood Company indebtedness to be repaid, repurchased or redeemed at or after closing using proceeds from the repayment of such note (including any interest accrued after August 3, 2013, but immediately prior to such repayment, repurchase or redemption).

 	  	Face
Value	 	  	Accrued
Interest	 	  	Total	 	
Cerberus Term Loan.	  	$	45,660	  	  	$	—	  	  	$	45,660	  	
Sun Term Loan Agreements	  	 	118,015	  	  	 	—	  	  	 	118,015	  	
12.875% Notes	  	 	146,768	  	  	 	787	  	  	 	147,555	  	
Restructuring fee payable to Sun Capital Management	  	 	—	  	  	 	—	  	  	 	3,500	  	
Debt recovery bonus payable to our Chief Executive Officer	  	 	—	  	  	 	—	  	  	 	6,000	  	
7.625% Notes and 3.5% Convertible Debt.	  	 	87,167	  	  	 	1,935	  	  	 	89,102	  	
Estimated related third-party fees and expenses	  	 	—	  	  	 	—	  	  	 	2,000	  	
Additional Sun Capital Contribution	  	 	—	  	  	 	—	  	  	 	(66,832	) 	
	  				  				  	 	 	 	
Total uses	  				  				  	$	345,000	  	

(q)	Adjustment represents the net impact of the removal of assets and liabilities of the non-Vince businesses with the net impact reflected within stockholders’ deficit as additional paid in capital.	
 
(r)	As described in “Other information related to the Offering—Certain Relationships and Related Party transactions of AHC—Tax Receivable Agreement” included elsewhere in this prospectus, we will enter into the TRA with the Pre-IPO Stockholders, where we will be obligated to pay 85% of cash savings on federal, state and local income taxes realized by us through our use of certain net tax assets held by us subsequent to the Kellwood Separation. This pro forma adjustment gives effect to what we believe the expected liability would have been under such agreement after giving effect to the IPO Restructuring Transactions as though such events had occurred on August 3, 2013. We estimate $30.4 million of net cash savings (after the 85% due to the Pre-IPO stockholders) on federal, state and local income taxes realized by us through our use of certain net tax assets held by us subsequent to the Kellwood Separation. Our ability to realize the net cash savings described in the previous sentence will depend upon a number of factors, including the amount and timing of taxable income we generate in the future and any future limitations that may be imposed on our ability to use certain net tax assets.	
 
(s)	The adjustment to additional paid in capital represents the entry into the TRA of $172.2 million.	
 
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(t)	$69.7 million of deferred tax assets are allocated to Vince Intermediate Holding, LLC. These include $77.6 million of deferred tax assets related to historical NOL carry forwards and $7.9 million of other deferred tax liabilities generated by Kellwood Company that will transfer to Vince Intermediate Holding, LLC upon Kellwood Company’s conversion to a limited liability company.	
 
(u)	The $29.0 million proforma adjustment primarily relates to the $39.4 million of deferred tax assets related to the Section 197 intangible basis of the non-Vince businesses that will attach to the Vince Section 197 intangibles upon separation from Kellwood. This additional deferred tax asset is partially offset by a $7.9 million difference in the deferred income taxes computed on a separate-return basis for Vince, LLC and the overall pro forma consolidated AHC deferred income taxes. It is also partially offset by $2.5 million of deferred debt issuance costs which are reported in the Vince, LLC other assets financial statement line item but excluded from the pro forma AHC other assets financial statement line item after giving effect to the Kellwood Separation.	
 
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 MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF AHC
You should read the following discussion together with “Additional Information Related to AHC—Selected Historical Consolidated Financial Data of AHC” and the consolidated financial statements and related notes of Apparel Holding Corp. included elsewhere in this prospectus. The statements in this discussion regarding expectations of AHC’s future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Risk Factors—Risks Related to AHC” and “Special Note Regarding Forward-Looking Statements.” AHC’s actual results may differ materially from those contained in or implied by any forward-looking statements. As used in this section, unless the context requires otherwise, “AHC” refers to Apparel Holding Corp. and its consolidated subsidiaries prior to giving effect to the IPO Restructuring Transactions, and “Kellwood” refers to Kellwood Holding, LLC and its consolidated subsidiaries (including Kellwood Company, LLC) after giving effect to the IPO Restructuring Transactions.
The businesses of AHC described in this section represent its various operations, including the Vince and non-Vince businesses. The non-Vince businesses will not be owned by investors in this offering following the IPO Restructuring Transactions. For a discussion and analysis of the financial information relating solely to the Vince business, please see “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC.”
Business Summary
AHC is a holding company, controlled by the affiliates of Sun Capital. In 2008, AHC acquired Kellwood Company and its subsidiaries. Kellwood Company was founded in 1961 as the successor by merger of fifteen independent suppliers to Sears, Roebuck & Co. (“Sears”). Beginning in 1985, Kellwood implemented a strategy to expand its branded business, broaden its customer base, diversify its distribution channels and further develop its global product sourcing capability. As a result of this strategy, AHC has redirected its focus from the manufacturing of private label apparel and home fashions for Sears to the development of branded fashion apparel and recreational products. As part of this strategy, AHC also acquired various apparel companies or businesses and has divested numerous others. AHC now has a diversified brand portfolio that serves a broad range of customer segments across multiple wholesale partners and through its own retail stores and websites.
AHC did not have any customers that accounted for more than 10% of consolidated net sales from continuing operations during fiscal 2012. In fiscal 2011, sales to Kohl’s accounted for more than 10% of the consolidated net sales of continuing operations. These sales represented 14% of fiscal 2011 net sales. In fiscal 2010, sales to Kohl’s and Macy’s accounted for more than 10% of the consolidated net sales from continuing operations. These sales represented 15% and 12% of fiscal 2010 net sales, respectively.
AHC manufactures, distributes and markets products under many brands, some of which it owns, and others that are under licensing agreements. In addition, AHC has four reportable segments, as set forth below:
 
 	Ÿ	 	Vince : Contemporary fashion apparel and accessories sold under the Vince ® brand name through wholesale distribution to premier department stores and specialty stores as well as direct-to-consumer through Vince’s retail stores and the www.vince.com website;	
 
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 	Ÿ	 	American Recreational Products (“ARP”) : Recreational apparel and products sold under Kelty, Sierra Designs, Ultimate Direction, Slumberjack, Wenzel and Isis brand names through wholesale distribution to retailers as well as through websites;	
 
 	Ÿ	 	Juniors : A collection of denim, dresses and sportswear labels that appeal to girls and young women sold under the Rewind, My Michelle and Jolt brand name as well as private label to wholesale partners. Additionally, AHC licenses the XOXO brand name and produces apparel under that name for wholesale partners within this segment; and	
 
 	Ÿ	 	Moderate : Moderately priced related separates and pants covering career and casual lifestyle sold through wholesale distribution and produced under private labels as well as under the Sag Harbor and Briggs New York brands.	
Performance results of AHC’s remaining operating segments, primarily apparel sold under the Rebecca Taylor, Democracy, Jax and Sangria brands as well as under the licensed David Meister brand, have been combined in Other, as none of these brands individually meets the quantitative thresholds for disclosures as a reportable segment. Other operations accounted for less than 25% of AHC’s revenues in each of fiscal 2010, fiscal 2011 and fiscal 2012 and the first six months of fiscal 2013.
In connection with this offering, all AHC segments other than the Vince segment will be separated from AHC in the IPO Restructuring Transactions, as defined elsewhere in this prospectus, by Apparel Holding Corp., the entity offering stock in this offering. Apparel Holding Corp. will report operations from all segments other than the Vince segment as discontinued operations in future reporting periods after the consummation of this offering.
Basis of Presentation
AHC operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to January 31 of the following year.
 
 	Ÿ	 	References to “fiscal year 2012” or “fiscal 2012” refer to the fiscal year ended February 2, 2013;	
 
 	Ÿ	 	References to “fiscal year 2011” or “fiscal 2011” refer to the fiscal year ended January 28, 2012;	
 
 	Ÿ	 	References to “fiscal year 2010” or “fiscal 2010” refer to the fiscal year ended January 29, 2011;	
 
 	Ÿ	 	References to “the first six months of fiscal 2012” refer to the six month period ended July 28, 2012; and	
 
 	Ÿ	 	References to “the first six months of fiscal 2013” refer to the six month period ended August 3, 2013.	
Fiscal year 2012 consisted of a 53-week period and each of fiscal 2011 and fiscal 2010 consisted of a 52-week period. Each of the first six months of fiscal 2012 and the first six months of fiscal 2013 consisted of a 26-week period.
Net sales.     Net sales consists of revenues from the sale of products, less returns, discounts and allowances and other offsets to net sales as well as shipping and handling fees and licensing fees and royalties. In AHC’s wholesale operations, revenue is recognized when goods are shipped in accordance with customer orders, at which point title passes. Provisions for discounts, returns and other allowances are recorded as a reduction of net sales in the same period as the related sales. In
 
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AHC’s direct to consumer operations, revenue is recognized at the time of customer purchase in retail stores, and at the time of shipment for customer e-commerce orders. During the second quarter of fiscal 2013, AHC divested its Zobha business to focus resources on its larger contemporary and Juniors brands. Accordingly the historical results of operations and financial position of the Zobha business are reported as discontinued operations for all periods presented.
Cost of products sold .    AHC’s cost of products sold includes:
 
 	Ÿ	 	the cost of purchased merchandise, including raw materials;	
 
 	Ÿ	 	the cost of inbound transportation, including freight;	
 
 	Ÿ	 	the cost of production, sourcing and technical design departments;	
 
 	Ÿ	 	other processing costs associated with acquiring and preparing the inventory for sale;	
 
 	Ÿ	 	shrink and valuation reserves;	
 
 	Ÿ	 	royalties for licensed brand names; and	
 
 	Ÿ	 	depreciation on owned facilities and equipment.	
There may be variations in the costs that other companies use to calculate gross profit. As a result, data in this prospectus regarding AHC’s gross profit dollars and gross margin may not be comparable with similar data made available by other companies.
Gross profit/Gross margin .    Gross profit is defined as net sales less the cost of products sold. Gross margin is the percentage of gross profit to net sales.
Selling, general and administrative expenses .    AHC’s SG&A expenses consist of marketing, advertising, design, occupancy, certain distribution costs, salaries and benefits and other corporate overhead.
Amortization of intangible assets .    Amortization of intangible assets consists of straight-line amortization expense on definite-lived intangible assets over their useful lives (10 or 20 years). These assets are comprised of customer relationships and were valued at the time of AHC’s acquisition of Kellwood Company in 2008. Definite-lived intangible assets are tested for impairment if a triggering event occurs.
Restructuring, environmental remediation and other charges.     AHC’s restructuring, environmental remediation and other charges consist of:
 
 	Ÿ	 	Restructuring expenses associated with efforts to continuously improve operational and organizational efficiency such as costs for moving facilities, exiting businesses, curtailing/downsizing operations because of changing economic conditions, and other costs resulting from asset redeployment decisions;	
 
 	Ÿ	 	Charges to adjust environmental remediation obligations related to a former manufacturing facility, as described below; and	
 
 	Ÿ	 	Charges to record settlement obligations related to unclaimed property.	
During the second quarter of fiscal 2012, Kellwood Company entered into a Consent Decree with the EPA, and Missouri Department of Natural Resources (“MDNR”) to conduct cleanup initiatives for the decontamination of soil and groundwater located near a former metal fabrication plant in New
 
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Haven, Missouri. The agreement became effective August 24, 2012, and was entered into as settlement of a lawsuit filed against Kellwood Company, a wholly-owned subsidiary of AHC, by the EPA and MDNR. The lawsuit alleged that Kellwood Company inappropriately disposed of tetrachloroethylene (“PCE”), an industrial degreaser used to clean metal rods for tent poles, on the surrounding grounds and sewer system of a plant operated by American Recreation Products, a wholly-owned subsidiary of Kellwood Company, between 1973 and 1985.
As of February 2, 2013, AHC recorded $9.6 million for estimated capital costs and ongoing remedial activities at the New Haven site. This amount represents AHC’s best estimate of the discounted value of the total obligation. The recorded liability differs from the $5.9 million letter of credit required by the EPA primarily due to AHC’s use of a lower discount rate, as well as assumption of additional costs not reflected in the EPA’s estimate of the related remediation work. These additional costs include voluntary corrective actions as well as EPA oversight fees.
Impairment of long-lived assets (excluding goodwill).      Definite-lived intangible and long-lived assets are tested for impairment if a triggering event occurs. Under the provisions of ASC Topic 350, AHC tests its indefinite-lived intangible assets, which primarily consist of trademarks, at least annually and in an interim period if a triggering event occurs. During fiscal 2012, AHC tested indefinite-lived intangible assets for impairment under the provisions of ASU 2012-02 and completed its most recent annual impairment testing during the fourth quarter of fiscal 2012.
Impairment of goodwill.     In accordance with ASC Topic 350, goodwill is tested for impairment at least annually and in an interim period if it appears more likely than not that the carrying amount exceeds its fair value. Goodwill represents the excess of the cost of acquired businesses over the fair market value of the identifiable net assets. AHC completed its most recent annual impairment testing of goodwill during the fourth quarter of fiscal 2012.
Change in fair value of contingent consideration.     The purchase agreements related to the acquisitions of the Rebecca Taylor and Zobha businesses contain provisions for contingent consideration that will be paid to the respective sellers if certain performance targets are met within a specified timeframe. These amounts were estimated on the purchase date based on the terms of the purchase agreement and weighted average probability EBITDA forecasts. As forecasted EBITDA amounts change, estimates of future performance are revised and adjustments to the contingent payments are recorded. AHC will continue to estimate these payments through the end of the potential payout period that terminates on January 30, 2016, the last day of fiscal 2015.
Interest expense, net.     AHC’s interest expense consists of interest on its indebtedness with affiliates of Sun Capital and interest on Kellwood Company’s various debt agreements, amortization of deferred debt issuance costs and amortization of debt discounts. The interest associated with the Sun Capital Loan Agreement and the Sun Promissory Notes was contributed as a capital contribution to AHC effective June 18, 2013.
Gain on acquisition, net of tax.     In connection with the acquisition of the Adam operations, the fair value of the identifiable assets acquired less liabilities assumed exceeded the fair value of the consideration and accordingly, the acquisition was accounted for as a bargain purchase and AHC recorded a gain on acquisition during the third quarter of fiscal 2010 when it was acquired. AHC’s Adam operations are now reported within discontinued operations as AHC ceased such operations in the fourth quarter of fiscal 2011.
Gain on debt extinguishment.     Gain on debt extinguishment occurred in fiscal 2010 when Kellwood Company repurchased $29.7 million in aggregate principal amount of its 7.625% Notes from an affiliate of Sun Capital for $9.1 million in cash. The repurchased 7.625% Notes were then retired. Approximately $87.0 million in aggregate principal amount of 7.625% Notes remain outstanding following the repurchase. The extinguishment resulted in a gain of $15.9 million.
 
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Other expense, net.     AHC’s other expense, net consists of miscellaneous income and expenses and management fees paid to Sun Capital Management.
Provision for income taxes .    AHC is subject to taxation in many jurisdictions, and the calculation of its tax liabilities involves dealing with inherent uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. Historically, AHC has been primarily subject to taxation in the U.S. because the majority of products were sold to customers in the U.S. In the future as business expands outside the U.S., AHC could become subject to taxation based on the foreign statutory rates in the countries where these sales occur and its effective tax rate would fluctuate accordingly. AHC is subject to examination of its income tax returns by the IRS and other tax authorities. AHC regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of income tax reserves and expenses. Should actual events differ from current expectations, it could materially impact AHC’s financial position, results of operations and cash flows.
AHC accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. Valuation allowances are determined in accordance with the “more likely than not” recognition criteria. Absent the IPO Restructuring Transactions, based on available information, it is more likely than not that AHC’s net deferred tax assets will not be realized, and accordingly AHC has taken a full valuation allowance against all of its U.S. net deferred tax assets.
As a result of the IPO Restructuring Transactions AHC expects to be able to utilize these net deferred tax assets. As of February 2, 2013 there are deferred tax assets of $67.4 million related to NOL carry-forwards, which has a full valuation allowance recorded against it. AHC had approximately $179.0 million of federal NOL carry-forwards as of February 2, 2013 that will expire between 2029 and 2033 if they are not used prior to the applicable expiration date. In connection with the consummation of this offering, AHC will enter into the Tax Receivable Agreement with the Pre-IPO Stockholders, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement.” As a result of the Tax Receivable Agreement, 85% of any benefits AHC receives from utilization of NOLs and other tax attributes will be paid to the Pre-IPO Stockholders. AHC currently projects that the net benefits from the NOL carry-forwards and other tax attributes covered by the Tax Receivable Agreement will be utilized within ten years. AHC does not anticipate that the existence of the Tax Receivable Agreement, or payments to be made thereunder, will impact its effective tax rate which is estimated to be approximately 38% to 42% both during and after the period AHC will be subject to the Tax Receivable Agreement.
Furthermore, federal and state laws impose substantial restrictions on the utilization of NOL carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Code. Under the rules, such an ownership change is generally any change in ownership of more than 50 percent of a company’s stock within a rolling three-year period, as calculated in accordance with the rules. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning directly or indirectly 5% or more of the stock of the company and any change in ownership arising from new issuances of stock by the company.
At this time, AHC has not performed a detailed analysis under Section 382 of the Code to determine if the IPO Restructuring Transactions would constitute an ownership change. With this offering and other transactions that have occurred over the past three years, AHC may trigger or have already triggered an “ownership change” limitation. AHC may also experience ownership changes in the future as a result of subsequent shifts in stock ownership. As a result, if AHC earns net taxable income, the ability to use the pre-change NOL carry-forwards (after giving effect to payments to be
 
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made to the Pre-IPO Stockholders under the Tax Receivable Agreement) to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. Notwithstanding the foregoing, AHC’s preliminary analysis under Section 382 of the Code indicates that the IPO Restructuring Transactions would not trigger an “ownership change” limitation.
Net (loss) income from discontinued operations.     In accordance with ASC Topic 205, AHC reports the results of operations from discontinued businesses that have been disposed of once the operations and cash flows of the business have been or will be eliminated and AHC will not have significant continuing involvement with the disposed businesses. During the second quarter of fiscal 2013, AHC divested the Zobha business to focus resources on its larger contemporary and Juniors brands. During 2012, AHC decided to exit the Baby Phat wholesale business as a result of the decision to exit the urban-wear market generally. AHC also exited its startup Lamb & Flag business as a result of the decision to refocus on core businesses and cease startup activities. Additionally, the BLK DNM and Royal Robbins, LLC businesses (and certain related Canadian assets and liabilities), were sold during 2012. During 2011, AHC discontinued its Adam operations and Koret wholesale business due to poor operating performance.
The following discussion is a summary of the key factors management considers necessary in reviewing AHC’s results of operations, liquidity, capital resources and operating results. The amounts and disclosures included in management’s discussion and analysis of financial condition and results of operations, unless otherwise indicated, are presented on a continuing operations basis. This discussion should be read in conjunction with “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC” and AHC’s consolidated financial statements and related notes thereto, included elsewhere in this prospectus.
The following discussion includes financial information prepared in accordance with accounting principles generally accepted in the U.S. (GAAP), as well as Adjusted EBITDA, which is considered “a non-GAAP financial measure.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. The presentation of Adjusted EBITDA is intended to supplement understanding of AHC’s operating performance. This non-GAAP financial measure is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than GAAP measures and may not be comparable to similarly titled measures presented by other companies.
Adjusted EBITDA is defined as income or loss from continuing operations before provision for income taxes, net interest expense, depreciation, amortization of intangible assets, restructuring, environmental and other charges, impairment of long-lived assets, impairment of goodwill, and certain gains and losses that affect comparability. AHC believes Adjusted EBITDA assists in comparing performance over various reporting periods and against peers on a consistent basis because it removes from operating results the impact of items that do not reflect our core operating performance. See the “Non-GAAP Reconciliations” section below for reconciliations of this non-GAAP financial measure to its most comparable measure calculated and presented in accordance with GAAP.
All AHC segments, other than the Vince segment, will be separated from AHC in the IPO Restructuring Transactions and reported by Apparel Holding Corp. as discontinued operations in future reporting periods. Affiliates of Sun Capital will control the non-Vince businesses through their ownership of Kellwood Holding, LLC after giving effect to the IPO Restructuring Transactions.
 
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Results of Continuing Operations
The following tables summarize key components of AHC’s results of continuing operations for the periods indicated, both in dollars and as a percentage of AHC’s net sales:

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010	 	 	2011	 	 	2012	 	 	July 28, 2012	 	 	August 3, 2013	 	
(In thousands, except percentages)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Statement of Operations Data:	 				 				 				 				 				 				 				 				 				 				
Net sales	 	$	586,574	  	 	 	100	% 	 	$	662,846	  	 	 	100.0	% 	 	$	707,995	  	 	 	100.0	% 	 	$	319,445	  	 	 	100.0	% 	 	$	363,967	  	 	 	100.0	% 	
Cost of products sold	 	 	430,801	  	 	 	73.4	  	 	 	490,110	  	 	 	73.9	  	 	 	507,905	  	 	 	71.7	  	 	 	235,293	  	 	 	73.7	  	 	 	256,031	  	 	 	70.3	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Profit	 	 	155,773	  	 	 	26.6	  	 	 	172,736	  	 	 	26.1	  	 	 	200,090	  	 	 	28.3	  	 	 	84,152	  	 	 	26.3	  	 	 	107,936	  	 	 	29.7	  	
Operating expenses:	 				 				 				 				 				 				 				 				 				 				
Selling, general and administrative expenses	 	 	140,567	  	 	 	24.0	  	 	 	155,220	  	 	 	23.4	  	 	 	177,755	  	 	 	25.1	  	 	 	83,526	  	 	 	26.1	  	 	 	93,503	  	 	 	25.7	  	
Amortization of intangible assets	 	 	954	  	 	 	0.2	  	 	 	1,941	  	 	 	0.3	  	 	 	1,899	  	 	 	0.3	  	 	 	950	  	 	 	0.3	  	 	 	950	  	 	 	0.3	  	
Restructuring, environmental remediation and other charges	 	 	9,729	  	 	 	1.7	  	 	 	2,651	  	 	 	0.4	  	 	 	5,091	  	 	 	0.7	  	 	 	2,264	  	 	 	0.7	  	 	 	827	  	 	 	0.2	  	
Impairment of long-lived assets (excluding goodwill)	 	 	438	  	 	 	0.1	  	 	 	2,504	  	 	 	0.4	  	 	 	2,349	  	 	 	0.3	  	 	 	717	  	 	 	0.2	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	10,821	  	 	 	1.6	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent
consideration	 	 	—	  	 	 	—	  	 	 	(1,578	) 	 	 	(0.2	) 	 	 	(7,162	) 	 	 	(1.0	) 	 	 	(4,507	) 	 	 	(1.4	) 	 	 	(54	) 	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	151,688	  	 	 	25.9	  	 	 	171,559	  	 	 	25.9	  	 	 	179,932	  	 	 	25.4	  	 	 	82,950	  	 	 	26.0	  	 	 	95,226	  	 	 	26.2	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	 	 	4,085	  	 	 	0.7	  	 	 	1,177	  	 	 	0.2	  	 	 	20,158	  	 	 	2.8	  	 	 	1,202	  	 	 	0.4	  	 	 	12,710	  	 	 	3.5	  	
Interest expense, net	 	 	103,074	  	 	 	17.6	  	 	 	127,148	  	 	 	19.2	  	 	 	122,383	  	 	 	17.3	  	 	 	74,151	  	 	 	23.2	  	 	 	43,671	  	 	 	12.0	  	
Gain on acquisition, net of tax	 	 	(939	) 	 	 	(0.2	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment	 	 	(15,912	) 	 	 	(2.7	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Other expense, net	 	 	2,442	  	 	 	0.4	  	 	 	1,914	  	 	 	0.3	  	 	 	2,723	  	 	 	0.4	  	 	 	1,215	  	 	 	0.4	  	 	 	1,233	  	 	 	0.3	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before provision for income taxes	 	 	(84,580	) 	 	 	(14.4	) 	 	 	(127,885	) 	 	 	(19.3	) 	 	 	(104,948	) 	 	 	(14.8	) 	 	 	(74,164	) 	 	 	(23.2	) 	 	 	(32,194	) 	 	 	(8.8	) 	
Provision for income taxes	 	 	3,507	  	 	 	0.6	  	 	 	3,401	  	 	 	0.5	  	 	 	708	  	 	 	0.1	  	 	 	2,245	  	 	 	0.7	  	 	 	2,679	  	 	 	0.7	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss from continuing operations	 	 	(88,087	) 	 	 	(15.0	) 	 	 	(131,286	) 	 	 	(19.8	) 	 	 	(105,656	) 	 	 	(14.9	) 	 	 	(76,409	) 	 	 	(23.9	) 	 	 	(34,873	) 	 	 	(9.6	) 	
Net (loss) income from discontinued operations	 	 	(16,391	) 	 	 	(2.8	) 	 	 	(16,580	) 	 	 	(2.5	) 	 	 	(2,053	) 	 	 	(0.3	) 	 	 	(4,798	) 	 	 	(1.5	) 	 	 	9,230	  	 	 	2.5	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(104,478	) 	 	 	(17.8	)% 	 	$	(147,866	) 	 	 	(22.3	)% 	 	$	(107,709	) 	 	 	(15.2	)% 	 	$	(81,207	) 	 	 	(25.4	)% 	 	$	(25,643	) 	 	 	(7.0	)% 	

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Non-GAAP Reconciliations
Reconciliations of AHC’s non-GAAP measure to loss of continuing operations before provision for income taxes are included below.

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(in thousands)	  				 				 				 	 	(unaudited	) 	 	 	(unaudited	) 	
Adjusted EBITDA	  				 				 				 				 				
Vince	  	$	23,637	  	 	$	44,186	  	 	$	51,520	  	 	$	15,260	  	 	$	21,502	  	
ARP	  	 	(1,454	) 	 	 	(7,854	) 	 	 	(4,496	) 	 	 	(208	) 	 	 	(528	) 	
Juniors	  	 	13,557	  	 	 	9,411	  	 	 	9,426	  	 	 	3,113	  	 	 	9,384	  	
Moderate	  	 	18,672	  	 	 	250	  	 	 	1,924	  	 	 	(1,003	) 	 	 	832	  	
Other	  	 	(1,301	) 	 	 	10,296	  	 	 	6,916	  	 	 	2,747	  	 	 	3,792	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment Adjusted EBITDA	  	 	53,111	  	 	 	56,289	  	 	 	65,290	  	 	 	19,909	  	 	 	34,982	  	
Unallocated corporate Adjusted EBITDA	  	 	(31,312	) 	 	 	(32,196	) 	 	 	(30,736	) 	 	 	(15,914	) 	 	 	(15,149	) 	
Interest expense, net	  	 	(103,074	) 	 	 	(127,148	) 	 	 	(122,383	) 	 	 	(74,151	) 	 	 	(43,671	) 	
Depreciation	  	 	(9,035	) 	 	 	(8,491	) 	 	 	(5,611	) 	 	 	(2,905	) 	 	 	(2,622	) 	
Amortization of intangible assets	  	 	(954	) 	 	 	(1,941	) 	 	 	(1,899	) 	 	 	(950	) 	 	 	(950	) 	
Restructuring, environmental and other charges	  	 	(9,729	) 	 	 	(2,651	) 	 	 	(5,091	) 	 	 	(2,264	) 	 	 	(827	) 	
Impairment of long-lived assets (excluding goodwill)	  	 	(438	) 	 	 	(2,504	) 	 	 	(2,349	) 	 	 	(717	) 	 	 	—	  	
Impairment of goodwill	  	 	—	  	 	 	(10,821	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration	  	 	—	  	 	 	1,578	  	 	 	7,162	  	 	 	4,507	  	 	 	54	  	
Gain on acquisition, net of tax	  	 	939	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment	  	 	15,912	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Public company transition costs(a)	  	 	—	  	 	 	—	  	 	 	(9,331	) 	 	 	(1,679	) 	 	 	(4,011	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss of continuing operations before provision for income taxes	  	$	(84,580	) 	 	$	(127,885	) 	 	$	(104,948	) 	 	$	(74,164	) 	 	$	(32,194	) 	

(a)	Adjusted EBITDA does not include the impact of public company transition costs and certain one-time costs of $9.3 million for fiscal 2012 and $4.0 million for the first six months of fiscal 2013. These costs include transition payments to the Vince founders, charges that are directly attributable to this offering, incremental costs for external legal counsel and consulting fees incurred to effect the Restructuring Transactions and other one-time costs. These charges are excluded due to their non-recurring nature and ability to impact comparability to other periods.	
First Six Months of Fiscal 2013 Compared to First Six Months of Fiscal 2012
Net sales for continuing operations for the first six months of fiscal 2013 were $364.0 million, increasing $44.5 million, or 13.9%, versus $319.4 million for the first six months of fiscal 2012. The increase in sales compared to the prior year is primarily due to increased sales of contemporary and Juniors brands.
 
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Segment Results of Operations

 	  	Net Sales by Segment	 	  	Segment Adjusted EBITDA	 	
 	  	First Six Months	 	  	First Six Months	 	
 	  	2012	 	    	2013	 	  	2012	 	  	2013	 	
(In thousands)	  	 	 	    	 	 	  	 	 	  	 	 	
 	  	(unaudited)	 	    	(unaudited)	 	  	(unaudited)	 	  	(unaudited)	 	
Net Sales by Segment	  				    				  				  				
Vince	  	$	90,531	  	    	$	114,657	  	  	$	15,260	  	  	$	21,502	  	
ARP	  	 	52,295	  	    	 	51,272	  	  	 	(208	) 	  	 	(528	) 	
Juniors	  	 	89,850	  	    	 	110,575	  	  	 	3,113	  	  	 	9,384	  	
Moderate	  	 	38,509	  	    	 	32,182	  	  	 	(1,003	) 	  	 	832	  	
Other	  	 	48,260	  	    	 	55,281	  	  	 	2,747	  	  	 	3,792	  	
	  	 	 	 	    	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	319,445	  	    	$	363,967	  	  	$	19,909	  	  	$	34,982	  	
	  	 	 	 	    	 	 	 	  	 	 	 	  	 	 	 	
Vince.     Net sales from the Vince segment (which is now operated through Vince, LLC) increased $24.1 million, or 26.6%, to $114.7 million in the first six months of fiscal 2013 from $90.5 million in the first six months of fiscal 2012 due to additional volume at existing as well as new wholesale partners, as well as an increase in the number of retail stores and increased productivity at existing retail stores. The overall increase in net sales was driven primarily by the strength of existing product lines, successful introduction of new products and the increasing recognition of the Vince brand name.
Segment Adjusted EBITDA from the Vince segment increased $6.2 million, or 40.1%, to $21.5 million in the first six months of fiscal 2013 from $15.3 million in the first six months of fiscal 2012 due to the increase in sales noted above, partially offset by higher design, development and marketing expenses to support the growth of the brand.
ARP.     Net sales from the ARP segment decreased $1.0 million, or 2.0% to $51.3 million in the first six months of fiscal 2013 from $52.3 million in the first six months of fiscal 2012, driven by a shift in the timing of product shipments into the third quarter of 2013.
Segment Adjusted EBITDA from the ARP segment decreased $0.3 million, or 153.9%, to $(0.5) million in the first six months of fiscal 2013 from $(0.2) million in the first six months of fiscal 2012, driven by a shift in the timing of product shipments into the third quarter of 2013.
Juniors.     Net sales from the Juniors segment increased $20.7 million, or 23.1% to $110.6 million in the first six months of fiscal 2013 from $89.9 million in the first six months of fiscal 2012 primarily due to increased private label program orders from one of AHC’s wholesale partners, as well an increase in the number of wholesale doors distributing AHC’s products and sales related to its licensed XOXO product.
Segment Adjusted EBITDA from the Juniors segment increased $6.3 million, or 201.5%, to $9.4 million in the first six months of fiscal 2013 from $3.1 million in the first six months of fiscal 2012 primarily due to increased, higher margin net sales coupled with a reduction in advertising expenses.
Moderate.     Net sales from the Moderate segment decreased $6.3 million, or 16.4% to $32.2 million in the first six months of fiscal 2013 from $38.5 million in the first six months of fiscal 2012 due to reduced orders from AHC’s wholesale partners. The moderate segment has been and continues to be a declining source of sales for AHC as retailers expand their private label offerings.
Segment Adjusted EBITDA from the Moderate segment was $0.8 million in the first six months of fiscal 2013 compared to $(1.0) million in the first six months of fiscal 2012 due to improved gross margin rates and expense reductions in compensation costs and design expenses.
 
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Other.     Net revenue from the Other segment increased $7.0 million, or 14.5% to $55.3 million for the first six months of fiscal 2013 from $48.3 million in the first six months of fiscal 2012 due primarily to additional orders from a certain wholesale partner as they continue to implement an out-sourced strategy for their private label brands, as well as growth at Rebecca Taylor and the addition of a new value program with a certain wholesale partner. This was partially offset by a decrease in revenue related to AHC’s David Meister dress business.
Segment Adjusted EBITDA from the Other segment increased $1.0 million, or 38.0% to $3.8 million for the first six months of fiscal 2013 from $2.7 million in the first six months of fiscal 2012 due to a greater percentage of sales coming from the Rebecca Taylor business, where we generally achieve higher margins.
Cost of products sold from continuing operations for the first six months of fiscal 2013 was $256.0 million increasing $20.7 million, or 8.8%, compared to $235.3 million in the first six months of fiscal 2012. The increase in cost of products sold is due primarily to additional sales volume period over period.
Gross profit/gross margin for continuing operations for the first six months of fiscal 2013 increased 330 basis points to 29.7% from 26.3% in the first six months of fiscal 2012. The increase is due to increased volume of the higher margin Vince and Rebecca Taylor brands.
Selling, general and administrative expense (“SG&A”) for continuing operations in the first six months of fiscal 2013 was $93.5 million, or 25.7% of net sales, increasing $10.0 million, or 11.9% compared to $83.5 million, or 26.1%, of net sales in the first six months of fiscal 2012. The increase in SG&A expense is primarily due to: (i) increased marketing expense of $0.8 million and increased compensation expense of $5.6 million to support the growth of AHC’s Vince brand and the opening of new retail stores; and (ii) increased legal, consulting and outside services expenses of $2.0 million related to preparation of the IPO Restructuring Transactions and this offering.
Amortization of intangible assets for continuing operations for the first six months of fiscal 2013 and for the first six months of fiscal 2012 remained unchanged at $1.0 million.
Restructuring, environmental remediation and other charges for continuing operations for the first six months of fiscal 2013 were $0.8 million, decreasing $1.4 million from $2.3 million in the first six months of fiscal 2012 for the reasons set forth in “—Impairment, Restructuring, Environmental Remediation and Other Charges.”
Impairment of long-lived assets (excluding goodwill) for continuing operations was $0.7 million for the first six months of fiscal 2012 due to the realization of an impairment loss for the decline in market value of AHC’s exited facility in Trenton, Tennessee. AHC had no impairments on long-lived assets of its continuing operations during the first six months of fiscal 2013.
Interest expense, net for the first six months of fiscal 2013 was $43.7 million, a decrease of $30.5 million compared to $74.2 million in the first six months of fiscal 2012. The decrease is due primarily to lower average outstanding debt balances during the first six months of fiscal 2013 as compared to the first six months of fiscal 2012. During the fourth quarter of fiscal 2012 all capitalized interest accrued prior to July 19, 2012 related to indebtedness with affiliates of Sun Capital was waived. In June 2013, outstanding debt was contributed to equity in the Sun Capital Contribution.
Other expense, net for continuing operations remained consistent at $1.2 million for the first six months of fiscal 2012 and fiscal 2013.
 
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Provision for income taxes.     AHC’s effective tax rates on pretax earnings for continuing operations for the first six months of fiscal 2013 and the first six months of fiscal 2012 were (8.3%) and (3.0%), respectively. The rate for these periods differs from the U.S. statutory rate of 35% primarily due to the incurrence of additional valuation allowances and nondeductible interest.
Net (loss) income from discontinued operations .    There was $9.2 million of income for the first six months of fiscal 2013 compared to a loss of $4.8 million for the first six months of fiscal 2012 . The change is primarily due to a tax benefit of $11.9 million recognized in the first quarter of fiscal 2013 as a result of releasing a valuation allowance. This release in valuation allowance is due to the allocation of the disallowed tax loss on the sale of the Baby Phat trademark to intangible assets with indefinite lives resulting in fewer deferred tax liabilities that cannot be offset against deferred tax assets for valuation allowance purposes.
Fiscal Year 2012 Compared to Fiscal Year 2011
Net sales for continuing operations for fiscal 2012 were $708.0 million, increasing $45.1 million, or 6.8%, versus $662.8 million for fiscal 2011. The increase in sales compared to the prior year is primarily due to increased sales of the Vince and Rebecca Taylor brands, and recreational apparel and products, partially offset by a decrease in sales in AHC’s Moderate and Juniors brands.
Segment Results of Operations

 	  	Net Sales by Segment	 	  	Segment Adjusted EBITDA	 	
 	  	Fiscal Year	 	  	Fiscal Year	 	
 	  	2011	 	  	2012	 	  	2011	 	 	2012	 	
(In thousands)	  	 	 	  	 	 	  	 	 	 	 	 	
Net Sales by Segment	  				  				  				 				
Vince	  	$	175,255	  	  	$	240,352	  	  	$	44,186	  	 	$	51,520	  	
ARP	  	 	94,606	  	  	 	98,830	  	  	 	(7,854	) 	 	 	(4,496	) 	
Juniors	  	 	190,613	  	  	 	181,582	  	  	 	9,411	  	 	 	9,426	  	
Moderate	  	 	103,817	  	  	 	78,103	  	  	 	250	  	 	 	1,924	  	
Other	  	 	98,555	  	  	 	109,128	  	  	 	10,296	  	 	 	6,916	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	662,846	  	  	$	707,995	  	  	$	56,289	  	 	$	65,290	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Vince.     Net sales from the Vince segment increased $65.1 million, or 37.1%, to $240.4 million in fiscal 2012 from $175.3 million in fiscal 2011 due to additional volume at existing as well as new wholesale partners, as well as an increase in the number of retail stores and increased sales at existing retail stores. The overall increase in net sales was driven primarily by the strength of Vince’s existing product lines, successful introduction of new products and the increasing recognition of the Vince brand name.
Segment Adjusted EBITDA from the Vince segment increased $7.3 million, or 16.6%, to $51.5 million in fiscal 2012 from $44.2 million in fiscal 2011. This increase was due primarily to the increase in sales noted above, partially offset by higher compensation costs incurred to support the growth of the brand.
ARP.     Net sales from the ARP segment increased $4.2 million, or 4.5%, to $98.8 million in fiscal 2012 from $94.6 million in fiscal 2011 driven by additional wholesale volume of camping equipment at recreational retailers, primarily specialty stores, national sporting goods stores and hunting and fishing stores.
Segment Adjusted EBITDA from the ARP segment increased $3.4 million, or 42.8%, to $(4.5) million in fiscal 2012 from $(7.9) million in fiscal 2011 driven primarily but inventory markdowns that occurred in fiscal 2011 but did not recur in fiscal 2012.
 
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Juniors.     Net sales from the Juniors segment decreased $9.0 million, or 4.7% to $181.6 million in fiscal 2012 from $190.6 million in fiscal 2011 primarily due to reduced orders from one of AHC’s wholesale partners who decided to develop one of its Juniors labels internally that AHC previously produced for them.
Segment Adjusted EBITDA from the Juniors segment remained consistent at $9.4 million for fiscal 2011 and fiscal 2012 despite a decrease in net sales volume from fiscal 2011 to fiscal 2012, primarily due to cost reductions.
Moderate .     Net sales from the Moderate segment decreased $25.7 million, or 24.8%, to $78.1 million in fiscal 2012 from $103.8 million in fiscal 2011 due to reduced orders from AHC’s wholesale partners. The Moderate space has been and continues to be a declining source of sales for AHC as retailers expand their private label offerings.
Segment Adjusted EBITDA from the Moderate segment increased $1.7 million, or 669.6%, to $1.9 million in fiscal 2012 from $0.2 million in fiscal 2011 due primarily to expense reduction actions taken as a result of reduced net sales volume.
Other.     Net revenue from the Other segment increased $10.6 million, or 10.7% to $109.1 million in fiscal 2012 from $98.6 million in fiscal 2011 due primarily to additional orders from a certain wholesale partner for whom AHC is developing certain of its private label brands, as well as growth at Rebecca Taylor.
Segment Adjusted EBITDA from the Other segment decreased $3.4 million, or 32.8% to $6.9 million in fiscal 2012 from $10.3 million in fiscal 2011 due primarily to additional compensation, design and occupancy expense as a result of growing the Rebecca Taylor business.
Cost of products sold for continuing operations for fiscal 2012 was $507.9 million increasing $17.8 million, or 3.6%, versus $490.1 million for fiscal 2011. The increase in cost of products sold is due primarily to the additional sales volume year over year.
Gross profit/gross margin for continuing operations increased 220 basis points to 28.3% in fiscal 2012 from 26.1% in fiscal 2011. The increase in margin rate is due to additional volume in AHC’s higher-margin Vince and Rebecca Taylor brands.
Selling, general and administrative expenses for continuing operations in fiscal 2012 was $177.8 million, or 25.1% of net sales, increasing $22.5 million, or 14.5% compared to $155.2 million, or 23.4%, of net sales in fiscal 2011. The increase in SG&A expense compared to the prior year is primarily due to (i) increased compensation expense of $16.7 million related to hiring and retention of certain key employees (including one-time transition payments to the Vince founders); (ii) increased occupancy expense of $2.6 million due to new retail store openings; and (iii) increased design, development and marketing expenses of $3.8 million to support the growth of AHC’s contemporary brands and the opening of new retail stores.
Amortization of intangible assets for continuing operations for fiscal 2011 and fiscal 2012 was unchanged at $1.9 million.
Restructuring, environmental remediation and other charges for continuing operations were $5.1 million in fiscal 2012, increasing $2.4 million from $2.7 million in fiscal 2011. The increase is due to recording $2.5 million in fiscal 2012 for the settlement obligations related to unclaimed property.
Impairment of long-lived assets (excluding goodwill) for continuing operations was $2.3 million for fiscal 2012, decreasing $0.2 million from $2.5 million in fiscal 2011. In fiscal year 2011, we recognized an impairment charge of $2.5 million on a trademark due to declining results of one of our Juniors wholesale businesses. In fiscal year 2012, we recognized an additional impairment charge of $1.2
 
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million on this trademark due to further declines in related operating results, as well as an impairment charge of $0.7 million on our exited facility in Trenton, Tennessee due to a decline in market value.
Impairment of goodwill for continuing operations for fiscal 2011 was $10.8 million. This was due to a decrease in the near-term forecasted EBITDA of Rebecca Taylor. This was primarily due to a delay in expected growth and cost synergies. There were no goodwill impairments during fiscal 2012.
Change in fair value of contingent consideration for continuing operations was $7.2 million for fiscal 2012 and $1.6 million for fiscal 2011 due to decreases in estimated contingent purchase price consideration related to the Rebecca Taylor and Zobha acquisitions. AHC will continue to estimate the Rebecca Taylor payments through the end of the potential payout period that terminates on January 30, 2016, the last day of fiscal 2015.
Interest expense, net for continuing operations for fiscal 2012 was $122.4 million, a decrease of $4.8 million compared to $127.1 million in fiscal 2011. The decrease is due primarily to lower average outstanding debt balances in fiscal 2012 as compared to fiscal 2011. Additionally, a $1.7 million non-cash charge to write-off deferred debt issuance costs occurred in fiscal 2011 as a result of refinancing Kellwood Company’s credit facility. No similar charge was incurred in fiscal 2012.
Other expense, net for continuing operations for fiscal 2012 was $2.7 million, an increase of $0.8 million compared to $1.9 million in fiscal 2011. The change is primarily due to the recognition of the death benefit of a life insurance policy on a former executive during fiscal 2011.
Provision for income taxes. AHC’s effective tax rates on pretax earnings for continuing operations for fiscal 2012 and 2011 were (0.7%) and (2.7%), respectively. The 2012 and 2011 rates differ from the U.S. statutory rate of 35.0% primarily due to nondeductible interest expense and additional valuation allowance placed on U.S. deferred tax assets.
Net (loss) income from discontinued operations was a loss of $2.1 million for fiscal 2012 and a loss of $16.6 million for fiscal 2011. The change is primarily due to discontinuing unprofitable businesses including the Adam operations and the Koret wholesale operations during the fourth quarter of fiscal 2011, discontinuing the BLK DNM and Lamb & Flag businesses during the second and third quarters of fiscal 2012, respectively, and divesting the Zobha business during the second quarter of 2013.
Fiscal Year 2011 Compared to Fiscal Year 2010
Net sales for continuing operations for fiscal 2011 were $662.8 million, increasing $76.2 million, or 13.0%, versus $586.6 million for fiscal 2010. The increase in sales compared to the prior year is primarily due to increased sales of AHC’s contemporary and Juniors brands, including the sales of AHC’s newly acquired Rebecca Taylor brand, partially offset by the closure of the Koret retail outlet stores and decreasing sales in the Moderate segment.
Segment Results of Operations

 	  	Net Sales by Segment	 	 	Segment Adjusted EBITDA	 	
 	  	Fiscal Year	 	 	               Fiscal Year                	 	
 	  	2010	 	  	2011	 	 	2010	 	 	2011	 	
(In thousands)	  	 	 	  	 	 	 	 	 	 	 	 	
Vince	  	$	111,492	  	  	$	175,255	  	 	$	23,637	  	 	$	44,186	  	
ARP	  	 	98,203	  	  	 	94,606	  	 	 	(1,454	) 	 	 	(7,854	) 	
Juniors	  	 	177,629	  	  	 	190,613	  	 	 	13,557	  	 	 	9,411	  	
Moderate	  	 	141,895	  	  	 	103,817	  	 	 	18,672	  	 	 	250	  	
Other	  	 	57,355	  	  	 	98,555	  	 	 	(1,301	) 	 	 	10,296	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	586,574	  	  	$	662,846	  	 	$	53,111	  	 	$	56,289	  	

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Vince.     Net sales from the Vince segment increased $63.8 million, or 57.2%, to $175.3 million in fiscal 2011 from $111.5 million in fiscal 2010 due to additional volume at existing as well as new wholesale partners, as well as an increase in the number of retail stores and increased sales at existing retail stores. The overall increase in net sales was driven primarily by the strength of Vince’s existing products lines, and the increasing recognition of the Vince brand name.
Segment Adjusted EBITDA from the Vince segment increased $20.6 million, or 86.9%, to $44.2 million in fiscal 2011 from $23.6 million in fiscal 2010. This increase was driven primarily from the increased sales volume noted above and a decrease in operating expenses as a percentage of sales. The decrease in operating expenses as a percentage of sales resulted from our sales growing at a greater rate than our expenses during fiscal 2011.
ARP .    Net sales from the ARP segment decreased $3.6 million, or 3.7%, to $94.6 million in fiscal 2011 from $98.2 million in fiscal 2010 driven by a reduction in wholesale volume of camping equipment at recreational retailers, primarily specialty retailers, national sporting goods stores and hunting and fishing stores.
Segment Adjusted EBITDA from the ARP segment decreased $6.4 million, or 440.2%, to $(7.9) million in fiscal 2011 from $(1.5) million in fiscal 2010 driven by a reduction in wholesale volume of camping equipment at recreational retailers, primarily specialty retailers, national sporting goods stores and hunting and fishing stores and a further reduction in margin on these net sales.
Juniors.     Net sales from the Juniors segment increased $13.0 million, or 7.3%, to $190.6 million in fiscal 2011 from $177.6 million in fiscal 2010 as a result of increased volume to AHC’s wholesale partners as a result of expanded product offerings, new labels and new customers.
Segment Adjusted EBITDA from the Juniors segment decreased $4.1 million, or 30.6%, to $9.4 million in fiscal 2011 from $13.6 million in fiscal 2010 as a result of higher raw material and manufacturing costs driven by expanded product offerings, new labels and new customers.
Moderates .    Net sales from the Moderate segment decreased $38.1 million, or 26.8%, to $103.8 million in fiscal 2011 from $141.9 million in fiscal 2010 due to reduced orders from AHC’s wholesale partners as well as the closure of Koret retail outlet stores. The moderate segment has been and continues to be a declining source of sales for AHC as retailers expand their private label offerings.
Segment Adjusted EBITDA from the Moderate segment decreased $18.4 million, or 98.7%, to $0.2 million in fiscal 2011 from $18.7 million in fiscal 2010 due to net sales volume reductions from AHC’s wholesale partners as well as the closure of Koret retail outlet stores.
Other.     Net sales from the Other segment increased $41.2 million, or 71.8%, to $98.6 million in fiscal 2011 from $57.3 million in fiscal 2010 primarily due to the acquisition of Rebecca Taylor during the fourth quarter of fiscal 2010.
Segment Adjusted EBITDA from the Other segment was $10.3 million in fiscal 2011 compared to $(1.3) million in fiscal 2010 primarily due to the acquisition of Rebecca Taylor during the fourth quarter of fiscal 2010.
Cost of products sold for continuing operations for fiscal 2011 was $490.1 million, increasing $59.3 million, or 13.8%, versus $430.8 million for fiscal 2010 due primarily to additional sales volume.
Gross profit/gross margin for continuing operations decreased 50 basis points to 26.1% in fiscal 2011 from 26.6% in fiscal 2010. The decrease in margin rate is primarily driven by increasing raw material and manufacturing costs and excess inventory in the ARP and Moderate segments, partially offset by increased volume of the higher margin Vince and Rebecca Taylor brands.
 
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Selling, general and administrative expenses for continuing operations in fiscal 2011 was $155.2 million, or 23.4% of net sales, increasing $14.7 million, or 10.4% compared to $140.6 million, or 24.0%, of net sales in fiscal 2010. The increase in selling, general and administrative expenses compared to the prior year is primarily due to (i) increased expenses of $12.8 million related to the newly acquired Rebecca Taylor business; (ii) increased sample and pattern expenses of $1.8 million related to new product offerings; and (iii) increased marketing and advertising expenses of $0.9 million to support the growth of AHC’s contemporary brands and the opening of new retail stores.
Amortization of intangible assets for continuing operations for fiscal 2011 was $1.9 million, increasing $1.0 million compared to $1.0 million in fiscal 2010. The increase in amortization expense was principally due to the new intangible assets arising from AHC’s fiscal 2010 acquisition of Rebecca Taylor.
Restructuring, environmental remediation and other charges for continuing operations were $2.7 million in fiscal 2011, decreasing $7.1 million from $9.7 million in fiscal 2010. The decrease is primarily due to a decrease in employee termination and one-time benefit arrangements of $1.3 million, a decrease in exit costs related to leased facilities of $2.7 million, and a charge of $2.9 million recognized in fiscal 2010 related to an environmental remediation liability at a former manufacturing facility.
Impairment of long-lived assets (excluding goodwill) for continuing operations was $2.5 million for fiscal 2011, increasing $2.1 million from $0.4 million in fiscal 2010. The increase is primarily due to recognizing an impairment charge in fiscal 2011 of $2.5 million on a trademark due to declining results of one of our Juniors wholesale businesses.
Impairment of goodwill for continuing operations for fiscal 2011 was $10.8 million. This was due to a decrease in the near-term forecasted EBITDA of Rebecca Taylor. This was primarily due to a delay in expected growth and cost synergies. There were no goodwill impairments during fiscal 2010.
Change in fair value of contingent consideration for continuing operations was $1.6 million for fiscal 2011 due to decreases in estimated contingent purchase price consideration related to the Rebecca Taylor acquisition. As the acquisition of Rebecca Taylor occurred in January of fiscal 2010, no change in fair value of contingent consideration was recorded in 2010.
Interest expense, net for continuing operations for fiscal 2011 was $127.1 million, an increase of $24.1 million compared to $103.1 million in fiscal 2010. The increase is due primarily to higher average outstanding debt balances as compared to fiscal 2010, as well as a $1.7 million non-cash charge to write-off deferred debt issuance costs recorded in fiscal 2011.
Gain on acquisition, net of tax for continuing operations for fiscal 2010 was $0.9 million. This gain resulted from AHC’s acquisition of the Adam operations. The fair value of the identifiable assets acquired less liabilities assumed of $1.6 million exceeded the fair value of the consideration of $0.1 million and net of tax of $0.6 million. Accordingly, the acquisition has been accounted for as a bargain purchase and, as a result, AHC recognized a gain of $0.9 million associated with the acquisition in the third quarter of fiscal 2010.
Gain on debt extinguishment for continuing operations for fiscal 2010 was $15.9 million as a result of the repurchase of $29.7 million in aggregate principal of the 7.625% Notes completed during the first quarter of fiscal 2010.
Other expense, net for continuing operations for fiscal 2011 was $1.9 million, a decrease of $0.5 million compared to $2.4 million in fiscal 2010. The decrease was primarily due to the recognition of the death benefit of a life insurance policy on a former executive during fiscal 2011.
 
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Provision for income taxes.     AHC’s effective tax rates on pretax earnings for continuing operations for fiscal 2011 and 2010 were (2.7%) and (4.1%), respectively. The fiscal 2011 and 2010 rates differ from the U.S. statutory rate of 35% primarily due to nondeductible interest expense and additional valuation allowance placed on U.S. deferred tax assets.
Net (loss) income from discontinued operations was a loss of $16.6 million for fiscal 2011 and $16.4 million for fiscal 2010, increasing $0.2 million from fiscal 2010 to fiscal 2011. The change is primarily due to increased losses recognized on AHC’s discontinued start-up brands and underperforming businesses in fiscal 2011 as compared to fiscal 2010, substantially offset by impairment charges of $24.1 million recognized on AHC’s Baby Phat and Phat Farm trademarks in fiscal 2010.
Impairment, Restructuring, Environmental Remediation and Other Charges
Restructuring charges are comprised of expenses associated with efforts to continuously improve operational and organizational efficiency. These expenses result from numerous individual actions implemented across AHC’s divisions on an ongoing basis. Restructuring charges include costs for moving facilities, exiting businesses, curtailing/downsizing operations because of changing economic conditions, and other costs resulting from asset redeployment decisions. Unless otherwise indicated, these charges are recorded as part of unallocated corporate expenses and not directly charged to any segment.
Impairment, restructuring, environmental remediation and other charges during the first six months of fiscal 2013 and the first six months of fiscal 2012 included various efforts to create a more efficient operational and organizational structure in AHC’s support operations and apparel businesses. Additionally, AHC recognized an impairment charge of $0.7 million during the first six months of fiscal 2012 due to a decline in the market value of an exited facility in Trenton, Tennessee. Impairment, restructuring, environmental remediation and other charges during fiscal 2012 included:
 
 	Ÿ	 	charges to accrue future lease payments and other contractual obligations associated with exited businesses;	
 
 	Ÿ	 	charges to record settlement obligations related to escheat liability;	
 
 	Ÿ	 	charges to adjust environmental remediation obligations (as described above in “—Basis of Presentation—Restructuring, environmental remediation and other charges”) related to a former manufacturing facility;	
 
 	Ÿ	 	costs to maintain closed facilities, partially offset by the recovery of charges through the sublease and other use of vacant spaces;	
 
 	Ÿ	 	impairment charges of $6.7 million related to intangible assets and other long-lived assets, of which $1.2 million was allocated to our Juniors segment, with the remainder allocated to Corporate expenses and discontinued businesses; and	
 
 	Ÿ	 	severance charges and related costs for exited businesses and various restructuring projects to create a more efficient operational and organizational structure in AHC’s support operations and apparel businesses.	
Impairment, restructuring, environmental remediation and other charges during fiscal 2011 included:
 
 	Ÿ	 	charges to accrue future lease payments and other contractual obligations associated with exited businesses;	
 
 	Ÿ	 	charges related to an environmental remediation obligation at a former manufacturing facility;	
 
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 	Ÿ	 	costs to maintain closed facilities, partially offset by the recovery of charges through the sublease and other use of vacant spaces;	
 
 	Ÿ	 	impairment charges of $19.4 million related to goodwill, intangible assets, and other long-lived assets, of which $2.5 million and $10.8 million was allocated to the Juniors and Other operating segments, respectively, with the remainder relating to discontinued businesses; and	
 
 	Ÿ	 	severance charges and related costs for various restructuring projects to create a more efficient operational and organizational structure in AHC’s support operations and apparel businesses.	
Impairment, restructuring, environmental remediation and other charges during fiscal 2010 included:
 
 	Ÿ	 	charges that related to closing Koret outlet stores and other costs associated with vacant spaces;	
 
 	Ÿ	 	charges to accrue future lease payments due to early exit of leased spaces;	
 
 	Ÿ	 	charges related to an environmental remediation obligation at a former manufacturing facility;	
 
 	Ÿ	 	impairment charges of $24.6 million primarily related to intangible assets of AHC’s discontinued Phat Licensing business; and	
 
 	Ÿ	 	severance charges and related costs for various restructuring projects to create a more efficient operational and organizational structure in AHC’s support operations and apparel businesses.	
For fiscal 2010, fiscal 2011 and fiscal 2012 and the six months ended July 28, 2012 and August 3, 2013, the costs related to impairment of long-lived assets and restructuring, environmental remediation and other charges recorded in continuing and discontinuing operations were as follows:

 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
(In thousands)	  	 	 	  	 	 	  	 	 	
Fiscal 2010	  	$	10,167	  	  	$	27,704	  	  	$	37,871	  	
Fiscal 2011	  	 	15,976	  	  	 	6,627	  	  	 	22,603	  	
Fiscal 2012	  	 	7,440	  	  	 	4,789	  	  	 	12,229	  	
First Six Months Fiscal 2012 (unaudited)	  	 	2,981	  	  	 	221	  	  	 	3,202	  	
First Six Months Fiscal 2013 (unaudited)	  	 	827	  	  	 	942	  	  	 	1,769	  	
For fiscal 2010, fiscal 2011 and fiscal 2012 the costs related to impairment of long-lived assets and restructuring, environmental remediation and other charges were recorded as follows:

 	  	Fiscal 2010	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
(In thousands)	  	 	 	  	 	 	  	 	 	
Restructuring, environmental remediation and other charges	  	$	9,729	  	  	$	3,575	  	  	$	13,304	  	
Impairment of long-lived assets (excluding goodwill)	  	 	438	  	  	 	24,129	  	  	 	24,567	  	
Impairment of goodwill	  	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	10,167	  	  	$	27,704	  	  	$	37,871	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	10,167	  	  	$	27,704	  	  	$	37,871	  	

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 	  	Fiscal 2011	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
(In thousands)	  	 	 	  	 	 	  	 	 	
Restructuring, environmental remediation and other charges	  	$	2,651	  	  	$	489	  	  	$	3,140	  	
Impairment of long-lived assets (excluding goodwill)	  	 	2,504	  	  	 	5,913	  	  	 	8,417	  	
Impairment of goodwill	  	 	10,821	  	  	 	225	  	  	 	11,046	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	15,976	  	  	$	6,627	  	  	$	22,603	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	15,124	  	  	$	6,333	  	  	$	21,457	  	

													
 	  	Fiscal 2012	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
(In thousands)	  	 	 	  	 	 	  	 	 	
Restructuring, environmental remediation and other charges	  	$	5,091	  	  	$	409	  	  	$	5,500	  	
Impairment of long-lived assets (excluding goodwill)	  	 	2,349	  	  	 	4,380	  	  	 	6,729	  	
Impairment of goodwill	  	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	7,440	  	  	$	4,789	  	  	$	12,229	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	7,440	  	  	$	4,789	  	  	$	12,229	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
For the first six months of fiscal 2012 and fiscal 2013, the costs related to impairment of long-lived assets and restructuring, environmental remediation and other charges were recorded as follows:

 	  	First Six Months Fiscal 2012	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
(In thousands)	  	 	 	  	 	 	  	 	 	
 	  	(unaudited)	 	  	(unaudited)	 	  	(unaudited)	 	
Restructuring, environmental remediation and other charges	  	$	2,264	  	  	$	221	  	  	$	2,485	  	
Impairment of long-lived assets (excluding goodwill)	  	 	717	  	  	 	—	  	  	 	717	  	
Impairment of goodwill	  	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	2,981	  	  	$	221	  	  	$	3,202	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	2,981	  	  	$	221	  	  	$	3,202	  	

													
 	  	First Six Months Fiscal 2013	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
(In thousands)	  	 	 	  	 	 	  	 	 	
 	  	(unaudited)	 	  	(unaudited)	 	  	(unaudited)	 	
Restructuring, environmental remediation and other charges	  	$	827	  	  	$	508	  	  	$	1,335	  	
Impairment of long-lived assets (excluding goodwill)	  	 	—	  	  	 	434	  	  	 	434	  	
Impairment of goodwill	  	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	827	  	  	$	942	  	  	$	1,769	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	827	  	  	$	942	  	  	$	1,769	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
The results of operations, impairment of long-lived assets, restructuring and other charges for businesses sold and shut down are reported as discontinued operations. The gains and losses on consummated transactions involving the sale of operations are included as part of net (loss) income from discontinued operations.
AHC completed its most recent annual impairment testing of goodwill and indefinite-lived intangible assets during the fourth quarter of fiscal 2012. AHC recorded no goodwill impairment charges in fiscal 2012 or 2010, but its goodwill impairment charges for fiscal 2011 amounted to $10.8
 
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million and $0.2 million for continuing and discontinued operations, respectively. AHC’s impairment charges for identifiable intangible assets for continuing and discontinued operations amounted to $24.6 million, $8.2 million, and $1.2 million in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, which represent write downs of AHC’s intangible assets to their fair values.
For its long-lived assets, during the fourth quarter of fiscal 2012, AHC determined that its equity investment in the purchaser of BLK DNM was fully impaired due to continued poor operating performance and negative cash flows. AHC retained an equity interest after the sale of its BLK DNM business during the second quarter of fiscal 2012. AHC also recognized impairment charges of $0.7 million related to an exited facility in Trenton, Tennessee due to a decline in market value. This charge was recorded during fiscal 2012 at the time the facility was sold to a third-party. Further AHC recognized an impairment of fixed assets of $4.4 million during fiscal 2012 related to shutting down its Lamb & Flag operations.
Roll-forwards of the major components of the impairment of long-lived assets and restructuring, environmental remediation and other charges for fiscal 2011 and fiscal 2012 and the first six months of fiscal 2013 recorded in continuing operations are as follows:

 	  	Contractual
Obligations	 	 	Employee
Severance
and
Termination
Benefits	 	 	Impairment
of Long-
Lived Assets	 	 	Restructuring,
Environmental
Remediation
and Other
Charges	 	 	Total	 	
(In thousands)	  	 	 	 	 	 	
Accrual as of January 29, 2011	  	$	894	  	 	$	384	  	 	$	—	  	 	$	10,349	  	 	$	11,627	  	
Provision	  	 	342	  	 	 	1,093	  	 	 	13,325	  	 	 	1,216	  	 	 	15,976	  	
Non-cash utilization	  	 	—	  	 	 	—	  	 	 	(13,325	) 	 	 	—	  	 	 	(13,325	) 	
Utilization	  	 	(763	) 	 	 	(1,236	) 	 	 	—	  	 	 	(2,007	) 	 	 	(4,006	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of January 28, 2012	  	 	473	  	 	 	241	  	 	 	—	  	 	 	9,558	  	 	 	10,272	  	
Provision	  	 	142	  	 	 	1,974	  	 	 	2,349	  	 	 	2,975	  	 	 	7,440	  	
Non-cash utilization	  	 	—	  	 	 	—	  	 	 	(2,349	) 	 	 	—	  	 	 	(2,349	) 	
Utilization	  	 	(467	) 	 	 	(1,777	) 	 	 	—	  	 	 	(464	) 	 	 	(2,708	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of February 2, 2013	  	 	148	  	 	 	438	  	 	 	—	  	 	 	12,069	  	 	 	12,655	  	
Provision (unaudited)	  	 	24	  	 	 	511	  	 	 	—	  	 	 	292	  	 	 	827	  	
Non-cash utilization (unaudited)	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Utilization (unaudited)	  	 	(93	) 	 	 	(856	) 	 	 	—	  	 	 	(363	) 	 	 	(1,312	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of August 3, 2013 (unaudited)	  	$	79	  	 	$	93	  	 	$	—	  	 	$	11,998	  	 	$	12,170	  	

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Roll-forwards of the major components of the impairment of long-lived assets and restructuring, environmental remediation and other charges for fiscal 2011 and fiscal 2012 and the first six months of fiscal 2013 recorded in discontinued operations are as follows:

 	  	Contractual
Obligations	 	 	Employee
Severance
and
Termination
Benefits	 	 	Impairment
of Long-
Lived Assets	 	 	Restructuring,
Environmental
Remediation
and Other
Charges	 	 	Total	 	
(In thousands)	  	 	 	
Accrual as of January 29, 2011	  	$	22,047	  	 	$	791	  	 	$	—	  	 	$	188	  	 	$	23,026	  	
Provision (reversal)	  	 	(90	) 	 	 	554	  	 	 	6,138	  	 	 	25	  	 	 	6,627	  	
Non-cash utilization	  	 	—	  	 	 	—	  	 	 	(6,138	) 	 	 	—	  	 	 	(6,138	) 	
Utilization	  	 	(7,925	) 	 	 	(805	) 	 	 	—	  	 	 	(213	) 	 	 	(8,943	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of January 28, 2012	  	 	14,032	  	 	 	540	  	 	 	—	  	 	 	—	  	 	 	14,572	  	
Provision (reversal)	  	 	(599	) 	 	 	551	  	 	 	4,380	  	 	 	457	  	 	 	4,789	  	
Non-cash utilization	  	 	—	  	 	 	—	  	 	 	(4,380	) 	 	 	—	  	 	 	(4,380	) 	
Utilization	  	 	(12,215	) 	 	 	(1,031	) 	 	 	—	  	 	 	(170	) 	 	 	(13,416	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of February 2, 2013	  	 	1,218	  	 	 	60	  	 	 	—	  	 	 	287	  	 	 	1,565	  	
Provision (unaudited)	  	 	230	  	 	 	269	  	 	 	434	  	 	 	9	  	 	 	942	  	
Non-cash utilization (unaudited)	  	 	—	  	 	 	—	  	 	 	(434	) 	 	 	—	  	 	 	(434	) 	
Utilization (unaudited)	  	 	(1,211	) 	 	 	(100	) 	 	 	—	  	 	 	(36	) 	 	 	(1,347	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of August 3, 2013 (unaudited)	  	$	237	  	 	$	229	  	 	$	—	  	 	$	260	  	 	$	726	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contractual obligations represent adverse contractual arrangements under which losses are probable and estimable and where there is no future economic benefit. These include make-whole payments to PVH Corp. (“PVH”) as a result of the termination of the Calvin Klein license agreement and minimum lease payments, as well as costs related to vacated leased spaces for the exited Lamb & Flag business.
In continuing and discontinued operations, contractual obligations and employee severance and termination benefits will largely be settled through the first quarter of fiscal 2015 in accordance with the related agreements.
During fiscal 2013, AHC expects actions to be taken that will result in additional restructuring charges to continuing operations of less than $0.5 million and additional net cash outflows related to restructuring activities of approximately $1.2 million. AHC expects actions to be taken that will result in additional restructuring charges to discontinued operations of approximately $0.2 million and additional net cash outflows related to restructuring activities of approximately $0.6 million.
Discontinued Operations
During the second quarter of fiscal 2013, AHC divested its Zobha business in order to focus resources on its larger contemporary and juniors brands.
During the first quarter of fiscal 2013, AHC sold its Baby Phat trademark to a licensee after having also shut down its Baby Phat wholesale operations during the fourth quarter of fiscal 2012. AHC previously sold its Phat Farm trademark to the same licensee in the second quarter of fiscal 2012. The disposal of these trademarks (collectively, “Phat Licensing”) and related wholesale operations resulted from its decision to exit the urban wear market generally and refocus AHC’s efforts on its larger contemporary and Juniors brands.
In the fourth quarter of fiscal 2012, AHC sold the equity interests of Royal Robbins, LLC, and certain assets and liabilities of its Royal Robbins Canada operations to an unrelated third party.
 
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In the third quarter of fiscal 2012, AHC discontinued its Lamb & Flag operations, and in the second quarter of fiscal 2012, AHC sold substantially all the assets and liabilities of its BLK DNM operations. The decision to exit both these businesses resulted from the determination that AHC’s startup brands are not aligned with its current strategic initiatives.
In the fourth quarter of fiscal 2011, AHC discontinued its Adam operations and Koret businesses due to poor operating performance.
The results of operations and restructuring and other charges for the discontinued operations are reported as discontinued operations in AHC’s consolidated financial statements included elsewhere in this prospectus, for all periods presented. Additionally, assets and liabilities of the discontinued operations are segregated in AHC’s consolidated financial statements included elsewhere in this prospectus.
The following table provides summarized operating results for fiscal 2010, fiscal 2011 and fiscal 2012 and the first six months of fiscal 2012 and fiscal 2013 for discontinued operations.

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands, except effective tax rate)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net sales	  	$	52,454	  	 	$	63,199	  	 	$	47,163	  	 	$	 28,583	  	 	$	  1,097	  	
Cost of products sold	  	 	24,097	  	 	 	45,928	  	 	 	34,014	  	 	 	20,613	  	 	 	1,758	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	28,357	  	 	 	17,271	  	 	 	13,149	  	 	 	7,970	  	 	 	(661	) 	
Selling, general and administrative expenses	  	 	17,238	  	 	 	26,771	  	 	 	20,184	  	 	 	13,381	  	 	 	1,848	  	
Amortization of intangible assets	  	 	83	  	 	 	108	  	 	 	294	  	 	 	261	  	 	 	—	  	
Restructuring and other charges	  	 	3,575	  	 	 	489	  	 	 	409	  	 	 	221	  	 	 	508	  	
Impairment of long-lived assets (excluding goodwill)	  	 	24,129	  	 	 	5,913	  	 	 	4,380	  	 	 	—	  	 	 	434	  	
Impairment of goodwill	  	 	—	  	 	 	225	  	 	 	—	  	 	 	—	  	 	 	—	  	
Interest expense, net	  	 	—	  	 	 	471	  	 	 	1,616	  	 	 	869	  	 	 	—	  	
Other (income) expense, net	  	 	(688	) 	 	 	15	  	 	 	(11,730	) 	 	 	(2,172	) 	 	 	(768	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before provision for income taxes	  	 	(15,980	) 	 	 	(16,721	) 	 	 	(2,004	) 	 	 	(4,590	) 	 	 	(2,683	) 	
Provision for income taxes	  	 	411	  	 	 	(141	) 	 	 	49	  	 	 	208	  	 	 	(11,913	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income from discontinued operations	  	$	(16,391	) 	 	$	(16,580	) 	 	$	(2,053	) 	 	$	(4,798	) 	 	$	9,230	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	  	 	(2.6	)% 	 	 	0.8	% 	 	 	(2.4	)% 	 	 	(4.5	)% 	 	 	N.M.	  	
Net sales for discontinued operations during the first six months of fiscal 2013 were $1.1 million compared to $28.6 million for the first six months of fiscal 2012, at which time the Zobha, Phat Licensing, Lamb & Flag, BLK DNM, Royal Robbins and Baby Phat Wholesale businesses were all still in operation. The significant decrease of $27.5 million, or 96.2% from the first six months of fiscal 2012 to the first six months of fiscal 2013 is attributable to the fact that Zobha and Phat Licensing were the only aforementioned businesses still in operation during the first six months of fiscal 2013. Net sales for discontinued operations for fiscal 2012 were $47.2 million, compared to $63.2 million in fiscal 2011, decreasing $16.0 million, or 25.4%. $16.0 million of the decrease in net sales is due to the shutdown of the Adam operations and Koret businesses at the end of fiscal 2011. Net sales for fiscal 2011 were $63.2 million, compared to $52.5 million in fiscal 2010, increasing $10.7 million, or 20.5%. The increase is primarily a result of the addition of the Baby Phat wholesale operations in fiscal 2011.
Cost of products sold for discontinued operations during the first six months of fiscal 2013 was 1.8, versus $20.6 million in the first six months of fiscal 2012 due to the fact that the businesses described in the immediately prior paragraph were no longer in operation after the first six months of fiscal 2012. Cost of products sold for discontinued operations for fiscal 2012 was $34.0 million, decreasing $11.9 million, or 25.9%, versus $45.9 million for fiscal 2011. Cost of products sold for
 
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discontinued operations for fiscal 2011 was $45.9 million, increasing $21.8 million, or 90.6%, versus $24.1 million for fiscal 2010.
Gross profit/gross margin for discontinued operations was 27.9% during the first six months of fiscal 2012. During the first six months of fiscal 2013, AHC experienced a negative gross margin of (60.3)% primarily due to the concessions granted to customers of AHC’s Baby Phat licensing business to liquidate the inventory of this discontinued business. Gross profit/gross margin increased 60 basis points to 27.9% in fiscal 2012 from 27.3% in fiscal 2011. Gross profit/gross margin decreased 2,680 basis points to 27.3% in fiscal 2011 from 54.1% in fiscal 2010. The decrease from fiscal 2010 to fiscal 2011 is due to the substantial negative margins realized in 2011 from the Adam operations and Koret operations. While these charges did not recur in fiscal 2012, margin improvement was partially offset by the charges of $2.1 million incurred to liquidate the Lamb & Flag and Baby Phat wholesale inventory in fiscal 2012.
Selling, general and administrative expenses for discontinued operations in the first six months of fiscal 2013 was $1.8 million, representing costs associated with AHC’s Zobha business prior to the divestiture thereof. During the first six months of fiscal 2012, SG&A for discontinued operations was $13.4 million, or 46.8%, of sales for discontinued operations, at which time the Zobha, Phat Licensing, Lamb & Flag, BLK DNM, Royal Robbins and Baby Phat Wholesale businesses were still operating. Selling, general and administrative expenses for discontinued operations in fiscal 2012 were $20.2 million, compared to $26.8 million in fiscal 2011, decreasing $6.6 million, or 24.6%. The decrease is attributable to exiting the Adam operations and Koret businesses in the fourth quarter of fiscal 2011, for which these costs were eliminated. SG&A expenses for fiscal 2011 were $26.8 million, compared to $17.2 million in fiscal 2010, increasing $9.5 million, or 55.3%. The increase resulted from incurring only partial year charges related to the startup of the BLK DNM operations and acquisition of the Adam operations in 2010. AHC also incurred additional expenses related to the addition of the Zobha and Baby Phat wholesale operations in the third quarter of fiscal 2011.
Amortization of intangible assets for discontinued operations is related to the definite-lived assets recognized as a result of acquiring the Royal Robbins and Adam brands. Amortization remained relatively unchanged at $0.1 million in fiscal 2010 and fiscal 2011 and was $0.3 million in fiscal 2012. Amortization was $0 for the first six months of fiscal 2013 and $0.3 million for the first six months of fiscal 2012.
Restructuring and other charges for discontinued operations were $0.5 million during the first six months of fiscal 2013, and $0.2 million during the first six months of fiscal 2012. Charges recognized during the first six months of fiscal 2013 were primarily related to costs to divest AHC’s Zobha business, while the changes recognized during the first six months of fiscal 2012 resulted from the recognition of costs to exit AHC’s Lamb & Flag business, partially offset by adjustments to decrease AHC’s estimated reserves on exited lease spaces and other shutdown costs. Restructuring and other charges for discontinued operations decreased from $0.5 million in fiscal 2011 to $0.4 million in fiscal 2012. Charges recognized in fiscal 2012 primarily relate to costs incurred to exit our Lamb & Flag business, partially offset by reversals of previously accrued make-whole payments related to our terminated Calvin Klein license agreement. Charges recognized in fiscal 2011 primarily relate to costs incurred to exit our Adam business, partially offset by reversals of accrued make-whole payments for our Calvin Klein license agreement. Restructuring and other charges decreased from $3.6 million in fiscal 2010 to $0.5 million during fiscal 2011 as a result of recognizing various costs in fiscal 2010 to reduce overhead and obtain operational efficiencies within our Phat Licensing business.
Impairment of long-lived assets for discontinued operations was $0.4 million for the first six months of fiscal 2013 due to the write-off of obsolete fixed assets related to AHC’s Zobha business. Impairment of long-lived assets was $4.4 million for fiscal 2012, decreasing $1.5 million from $5.9 million in fiscal 2011. The decrease is primarily due to recognizing impairment losses of
 
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$5.2 million on our Phat Licensing and Adam intangible assets in fiscal 2011, partially offset by the write-down of the Lamb & Flag fixed assets of $4.4 million in fiscal 2012. Impairment of long-lived assets decreased from $24.1 million in fiscal 2010 to $5.9 million in fiscal 2011. In fiscal 2010, we recognized an impairment charge of $24.1 million on our Phat Licensing trademarks due to the declining results of our licensees, which was partially offset by the additional impairment charges recognized for our Phat Licensing and Adam intangible assets in fiscal 2011.
Interest expense, net for discontinued operations incurred on the portion of debt required to be repaid upon completing the sale of the Royal Robbins operations in the fourth quarter of fiscal 2012 was retrospectively allocated to discontinued operations in fiscal 2011 and fiscal 2012. Interest expense, net for discontinued operations was $0 in the first six months of fiscal 2013 compared to $0.9 million in the first six months of fiscal 2012. This balance increased to $0.5 million in fiscal 2011 from no interest expense in fiscal 2010 and to $1.6 million in fiscal 2012 as AHC did not obtain financing under the Wells Fargo Facility and the Cerberus Term Loan until the third quarter of fiscal 2011.
Other (income) expense, net from discontinued operations during the first six months of fiscal 2013 was income of $0.8 million, representing the gain on the sale of the Baby Phat trademark. Other (income) expense, net for discontinued operations was income of $2.2 in the first six months of fiscal 2012, which primarily consisted of a $3.7 million gain on the sale of AHC’s Phat Farm trademark, partially offset by a loss recognized on the sale of AHC’s BLK DNM business. Other (income) expenses, net increased from $0 in fiscal 2011 to income of $11.7 million in fiscal 2012. This change resulted from the $9.1 million gain realized on AHC’s sale of the Royal Robbins business and the $3.7 million gain realized on the sale of AHC’s Phat Farm trademark, partially offset by the $1.9 million loss recognized on the sale of the BLK DNM operations in fiscal 2012. No operations were disposed of in fiscal 2011 through sale transactions.
Effective tax rates for discontinued operations for fiscal 2010, fiscal 2011 and fiscal 2012 differs from the U.S. statutory rate of 35% primarily due to a full valuation allowance on current year deferred tax assets offset in part by state taxes. The rate for the first six months of fiscal 2013 differs from the U.S. statutory rate of 35% primarily due to a release of valuation allowance. The release in valuation allowance is primarily due to the allocation of the disallowed tax loss on the sale of the Baby Phat trademark to intangible assets with indefinite lives resulting in fewer deferred tax liabilities that cannot be offset against deferred tax assets for valuation allowance purposes. The effective tax rate for discontinued operations for the first six months of fiscal 2012 differs from the U.S. statutory rate of 35% primarily due to an increase in the valuation allowance offset in part by state taxes and the lower tax rate on foreign earnings.
AHC expects to have future net cash outflows related to its discontinued operations of approximately $1.5 million, which is primarily payable through fiscal 2014.
 
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Quarterly Financial Data
The following table presents AHC’s unaudited consolidated quarterly results of operations for the ten fiscal quarters ended August 3, 2013. This table includes all adjustments, consisting only of normal recurring adjustments that AHC considers necessary for fair presentations of its financial position and operating results for the quarters presented:

 	 	Quarter Ended	 	
 	 	April 30,
2011	 	 	July 30,
2011	 	 	October 29,
2011	 	 	January 28,
2012	 	 	April 28,
2012	 	 	July 28,
2012	 	 	October 27,
2012	 	 	February 2,
2013	 	 	May 4,
2013	 	 	August 3,
2013	 	
(In thousands,
unaudited)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Revenues	 	$	146,102	  	 	$	164,010	  	 	$	194,517	  	 	$	158,217	  	 	$	151,664	  	 	$	167,781	  	 	$	203,355	  	 	$	185,195	  	 	$	170,714	  	 	$	193,253	  	
Cost of products sold	 	 	107,460	  	 	 	119,191	  	 	 	143,480	  	 	 	119,979	  	 	 	113,737	  	 	 	121,556	  	 	 	140,440	  	 	 	132,172	  	 	 	124,673	  	 	 	131,358	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross Profit	 	 	38,642	  	 	 	44,819	  	 	 	51,037	  	 	 	38,238	  	 	 	37,927	  	 	 	46,225	  	 	 	62,915	  	 	 	53,023	  	 	 	46,041	  	 	 	61,895	  	
Operating expenses:	 				 				 				 				 				 				 				 				 				 				
Selling, general and administrative expenses	 	 	38,641	  	 	 	40,201	  	 	 	37,145	  	 	 	39,233	  	 	 	41,814	  	 	 	41,712	  	 	 	45,786	  	 	 	48,443	  	 	 	45,174	  	 	 	48,329	  	
Amortization of intangible assets	 	 	350	  	 	 	350	  	 	 	766	  	 	 	475	  	 	 	475	  	 	 	475	  	 	 	475	  	 	 	474	  	 	 	475	  	 	 	475	  	
Restructuring, environmental remediation and other charges	 	 	1,367	  	 	 	323	  	 	 	109	  	 	 	852	  	 	 	988	  	 	 	1,276	  	 	 	556	  	 	 	2,271	  	 	 	782	  	 	 	45	  	
Impairment of long-lived assets (excluding goodwill)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	2,504	  	 	 	—	  	 	 	717	  	 	 	9	  	 	 	1,623	  	 	 	—	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	—	  	 	 	—	  	 	 	10,821	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(1,578	) 	 	 	—	  	 	 	(4,507	) 	 	 	—	  	 	 	(2,655	) 	 	 	—	  	 	 	(54	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	40,358	  	 	 	40,874	  	 	 	38,020	  	 	 	52,307	  	 	 	43,277	  	 	 	39,673	  	 	 	46,826	  	 	 	50,156	  	 	 	46,431	  	 	 	48,795	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income from operations	 	 	(1,716	) 	 	 	3,945	  	 	 	13,017	  	 	 	(14,069	) 	 	 	(5,350	) 	 	 	6,552	  	 	 	16,089	  	 	 	2,867	  	 	 	(390	) 	 	 	13,100	  	
Interest expense, net	 	 	28,746	  	 	 	29,917	  	 	 	33,672	  	 	 	34,813	  	 	 	37,291	  	 	 	36,860	  	 	 	23,773	  	 	 	24,459	  	 	 	24,303	  	 	 	19,368	  	
Gain on acquisition, net of tax	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Other expense, (income) net	 	 	674	  	 	 	597	  	 	 	(314	) 	 	 	957	  	 	 	667	  	 	 	548	  	 	 	609	  	 	 	899	  	 	 	338	  	 	 	895	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before provision for income taxes	 	 	(31,136	) 	 	 	(26,569	) 	 	 	(20,341	) 	 	 	(49,839	) 	 	 	(43,308	) 	 	 	(30,856	) 	 	 	(8,293	) 	 	 	(22,491	) 	 	 	(25,031	) 	 	 	(7,163	) 	
Provision for income taxes	 	 	1,296	  	 	 	1,169	  	 	 	556	  	 	 	380	  	 	 	1,238	  	 	 	1,007	  	 	 	(58	) 	 	 	(1,479	) 	 	 	1,354	  	 	 	1,325	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss from continuing operations	 	 	(32,432	) 	 	 	(27,738	) 	 	 	(20,897	) 	 	 	(50,219	) 	 	 	(44,546	) 	 	 	(31,863	) 	 	 	(8,235	) 	 	 	(21,012	) 	 	 	(26,385	) 	 	 	(8,488	) 	
Net income (loss) from discontinued operations, net of income taxes	 	 	1,793	  	 	 	(1,894	) 	 	 	(960	) 	 	 	(15,519	) 	 	 	(2,609	) 	 	 	(2,189	) 	 	 	(6,660	) 	 	 	9,405	  	 	 	11,276	  	 	 	(2,046	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(30,639	) 	 	$	(29,632	) 	 	$	(21,857	) 	 	$	(65,738	) 	 	$	(47,155	) 	 	$	(34,052	) 	 	$	(14,895	) 	 	$	(11,607	) 	 	$	(15,109	) 	 	$	(10,534	) 	

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Liquidity and Capital Resources
AHC has substantial indebtedness as a result of its February 2008 acquisition of Kellwood Company by the Pre-IPO Stockholders. Since its acquisition, AHC has incurred additional debt in order to fund negative cash flows, principally due to significant cash outflows resulting from its numerous restructuring activities, the significant level of interest expense arising from its substantial indebtedness, and significant cash outflows related to payments for acquisitions. The retail and apparel industry and economy as a whole have suffered recessionary conditions, a decline in employment levels and declines in consumer confidence in a number of the years since the acquisition of Kellwood Company by affiliates of Sun Capital, which have negatively impacted operating results. As a result, AHC has been, and continues to be, challenged by its heavily leveraged capital structure, negative cash flows, and significant level of interest expense.
AHC currently funds its cash requirements primarily through cash generated from operations and relies on its revolving credit facility for cash borrowings as needed. At February 2, 2013, its borrowing base provided for a borrowing level of $110.9 million under the Wells Fargo Facility and there were borrowings outstanding and letters of credit outstanding of $79.8 million and $13.3 million, respectively. AHC expects that cash on hand, cash flows from operating activities, and available credit under the Wells Fargo Facility will be adequate to meet its liquidity needs for the next 12 months. As of October 5, 2013, availability under the Wells Fargo Facility was $17.7 million.
AHC will continue to evaluate potential financing transactions, including refinancing certain tranches of its indebtedness, issuing incremental debt, obtaining incremental letter of credit facilities and extending maturities of its existing debt, as well as evaluating other potential transactions which may provide it with additional liquidity. In addition, AHC’s capital and SG&A spending, restructuring plans, and growth initiatives contain discretionary elements. The discretionary elements can be deferred or otherwise eliminated in the near term to provide additional flexibility to manage its liquidity requirements. However, there can be no assurance as to which, if any, of these alternatives AHC may choose, or whether financing or refinancing will be available to it on acceptable terms or at all.
Wells Fargo Facility
On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers, (“Borrowers”), entered into a credit agreement with the Wells Fargo Bank, National Association, as agent, and lenders from time to time party thereto, as amended, the Wells Fargo Facility. The Wells Fargo Facility provides the Borrowers with a non-amortizing senior revolving credit facility with aggregate lending commitments of $160.0 million, reduced to $155.0 million by the December 31, 2012 Amendment described below. The Wells Fargo Facility terminates at the earliest to occur of (a) October 19, 2016, (b) 90 days prior to the scheduled December 31, 2014, maturity date of the 12.875% Notes (including any extension effective on or prior to such 90th day prior to such scheduled maturity date) or (c) 90 days prior to the scheduled maturity date of the Cerberus Term Loan (including any extension effective on or prior to such 90th day prior to such scheduled maturity date). The amount which the Borrowers may borrow from time to time under the Wells Fargo Facility is determined on the basis of a borrowing base formula that is a percentage of Kellwood Company’s accounts receivable and inventory that meet eligibility criteria specified in the Wells Fargo Facility, but in no case more than the aggregate lending commitments of the participating lenders. All borrowings under the Wells Fargo Facility bear interest at a rate per annum equal to an applicable margin (ranging from 2.5% to 3.0% per annum for LIBOR Revolver Loans (as defined therein) and 1.25% to 1.75% for Base Rate Loans (as defined therein) based on average availability under the Wells Fargo Facility plus, at the Borrowers’ election, LIBOR or a Base Rate (as defined in the Wells Fargo Facility)). In addition to paying interest, the Borrowers will pay a periodic commitment fee to the lenders under the Wells Fargo Facility based on the amount of unused availability under the borrowing base formula. The Wells Fargo Facility is
 
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secured by a first-priority security interest in substantially all of the assets of the Borrowers, principally consisting of accounts receivable, inventory, and intellectual property. The Wells Fargo Facility contains certain customary representations, warranties, provisions and restrictions. The Wells Fargo Facility requires that the Borrowers maintain a fixed charge coverage ratio of at least 1:1 during any Covenant Testing Period (as defined in therein) which is triggered when excess availability is below 12.5% of the aggregate commitments under the Wells Fargo Facility (the “Covenant Testing Trigger Date”). The fixed charge ratio is defined as the ratio of Consolidated EBITDA (as defined in the Wells Fargo Facility) (with certain addbacks as defined in the Wells Fargo Facility for certain restructuring charges, startup losses in newly developed brands, costs incurred in certain acquisitions, management fees, as well as certain other costs and charges) minus certain capital expenditures and certain distributions, redemptions and management fees; to fixed charges, defined as consolidated net interest expense paid or payable in cash, scheduled principal payments on debt in cash and certain earnout payments paid in cash, excluding earnout payments related to the Vince brand for the 2011 fiscal year, up to a certain amount, calculated over the trailing four fiscal quarters. Upon the occurrence and during the continuance of an event of default or upon the occurrence of a Covenant Testing Trigger Date, a cash dominion period will go into effect whereby the agent has the ability to direct the disposition of the balances in controlled deposit accounts. The cash dominion period will expire when availability is over 12.5% of the aggregate commitments under the Wells Fargo Facility for a period of 90 consecutive days and any other events of default have been waived.
On March 23, 2012, Kellwood Company amended the Wells Fargo Facility to modify the Covenant Testing Period such that it is now triggered when excess availability is below $5.0 million, and triggered the cash dominion period, as defined therein. This amendment was entered into in consideration for a guaranty of payment of Kellwood Company’s obligations under the Wells Fargo Facility and a $20.0 million letter of credit to the benefit of Wells Fargo Bank, National Association, as agent, issued by an affiliate of Sun Capital for repayment under the guaranty should it ever become payable pursuant to its terms.
On April 20, 2012, Kellwood Company amended the Wells Fargo Facility to extend the modification to the Covenant Testing Period to be in effect until March 21, 2014 unless the guaranty described above is no longer in effect or the full face amount of the letter of credit described above is no longer available to be drawn. The guaranty will be released, the letter of credit returned and the trigger for the Covenant Testing Period will return to the pre-amendment level when availability is above $35.0 million for 90 consecutive days and is projected to remain above $25.0 million through the remaining term of the Wells Fargo Facility. This amendment also provided for the consent of the Wells Fargo Facility lenders to the additional loans under the Sun Loan Agreements.
On December 31, 2012, Kellwood Company amended the Wells Fargo Facility to obtain consent to the sale of the Royal Robbins business, to release Royal Robbins, LLC as a Borrower and/or Obligor under the Wells Fargo Facility, and to release the agent’s lien on the assets of the Royal Robbins business. Additionally, the first $10 million of the net cash proceeds arising from the cash purchase price paid at closing (excluding any escrow amount) were to be applied to the Cerberus Term Loan and the remaining portion to be remitted to the Wells Fargo Facility. This amendment also resulted in a permanent reduction to availability of $5.0 million.
On June 28, 2013, Kellwood Company and the lenders under the Wells Fargo Facility entered into a consent pursuant with respect to Kellwood Company’s incurrence of Term Loan G under the Sun Term Loan B/C/D/E/F/G Agreement.
In connection with consummation of this offering, Kellwood Company, LLC will refinance the Wells Fargo Facility. See “Use of Proceeds” and “Restructuring Transactions.”
 
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Sun Promissory Notes
On May 2, 2008, AHC issued the Sun Promissory Notes in amounts totaling $300.0 million. The unpaid principal balance of the note accrues interest at 15% per annum until the maturity date of October 15, 2011, at which point any unpaid principal balance of the note shall accrue interest at a rate of 17% per annum until the note is paid in full. All interest which is not paid in cash on or before an interest payment date shall be deemed paid in kind and added to the principal balance of the note. All interest accrued shall be deemed interest paid in kind unless an election is made otherwise. No interest has been paid on the Sun Promissory Notes.
On July 19, 2012, AHC amended the Sun Promissory Notes to extend the maturity date to October 15, 2016 and reduce the interest rate to 12% per annum until maturity, at which point any unpaid principal balance of the notes shall accrue interest at a rate of 14% per annum until the notes are paid in full.
On December 28, 2012, all interest accrued under the note prior to July 19, 2012 was waived. This resulted in an increase to additional paid-in-capital in the amount of $270.8 million as both parties were under the common control of affiliates of Sun Capital.
Effective June 18, 2013, an affiliate of Sun Capital contributed $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Notes as a capital contribution to AHC in the Sun Capital Contribution.
Sun Capital Loan Agreement
AHC is party to the Sun Capital Loan Agreement with SCSF Kellwood Finance, LLC (“SCSF Finance”) and Sun Kellwood Finance (as successors to Bank of Montreal) for a $72.0 million line of credit. Under the terms of this agreement, as amended from time to time, interest accrues at the greater of prime plus 2% per annum or LIBOR plus 4.75% per annum and is due by the last day of each fiscal quarter. The principal balance of the loan which remains unpaid after demand for repayment or during the existence of any other Event of Default, as defined in the credit agreement, bears interest until paid in full at a post-maturity rate of 2% per annum above the rate otherwise applicable. Interest on the loan is payable either in immediately available funds on each interest payment date or by adding such interest to the unpaid principal balance of the loan on each interest payment date. No interest has been paid on the Sun Capital Loan Agreement. The original maturity date of the loan was August 6, 2009. On July 19, 2012, the maturity date of the loan was extended to August 6, 2014.
On December 28, 2012, Sun Kellwood Finance and SCSF Finance waived all interest capitalized and accrued under the loan authorization agreement prior to July 19, 2012. As all parties are under the common control of affiliates of Sun Capital, this transaction resulted in a capital contribution of $18.2 million, which was recorded as an adjustment to additional paid-in-capital as of February 2, 2013.
Effective June 18, 2013, an affiliate of Sun Capital contributed $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Notes as a capital contribution to AHC in the Sun Capital Contribution.
Cerberus Term Loan
On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers, entered into the Cerberus Term Loan with Cerberus Business Finance, LLC (the “Agent”) as collateral agent, and the lenders from time to time party thereto. The Cerberus Term Loan provides the
 
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Borrowers with a non-amortizing secured Cerberus Term Loan in an aggregate amount of $55.0 million. The Cerberus Term Loan terminates at the earliest to occur of (a) October 19, 2015, (b) the date on which the Wells Fargo Facility has been paid in full and all commitments thereunder have been terminated, (c) 60 days prior to the scheduled December 31, 2014 maturity date of the 12.875% Notes (including any extensions thereof agreed to after October 19, 2011) or (d) the date on which the term loans under the Sun Term Loan Agreements are accelerated. All borrowings under the Cerberus Term Loan bear interest, from the date of the agreement until the effective date of the amendment described below at a rate per annum equal to an applicable margin (10.25% per annum for LIBOR Rate Loans (as defined therein) and 7.75% for Reference Rate Loans (as defined therein)) plus, at the Borrowers’ election, LIBOR or a Reference Rate as defined in the Cerberus Term Loan. The Cerberus Term Loan is secured by a security interest in substantially all of the assets of the Borrowers, principally consisting of accounts receivable, inventory and intellectual property, which security interest is contractually subordinated to security interests of the lenders under the Wells Fargo Facility. The Cerberus Term Loan contains certain customary representations, warranties, provisions and restrictions. The Cerberus Term Loan required that the Borrowers maintain a fixed charge coverage ratio as of each fiscal quarter end prior to the effective date of the amendment described below of at least 1:1. The fixed charge ratio is defined as the ratio of Consolidated EBITDA (as defined in the December 31 amendment to the Cerberus Term Loan as described below ) (with certain addbacks as defined in the amended Cerberus Term Loan for certain restructuring charges, startup losses in newly developed brands, costs incurred in certain acquisitions, as well as certain other costs and charges) minus certain capital expenditures and certain distributions, redemptions and management fees; to fixed charges, defined as consolidated net interest expense paid or payable in cash, scheduled principal payments on debt in cash and certain earnout payments paid in cash, excluding earnout payments related to the Vince brand for the 2011 fiscal year, up to a certain amount, calculated over the trailing four fiscal quarters. The Cerberus Term Loan also required that the Borrowers maintain a leverage ratio as defined in the Cerberus Term Loan and ranging from 2.85:1 to 4.25:1 during the life of the Cerberus Term Loan prior to the effective date of the amendment described below. The leverage ratio is defined as the ratio of indebtedness secured by a lien on any collateral (including the debt under the Wells Fargo Facility and Cerberus Term Loan and capitalized leases, but excluding the debt under the Sun Loan Agreements (as defined below) and the 12.875% Notes), divided by Consolidated EBITDA (as defined in the December 31 amendment to the Cerberus Term Loan described below) for the trailing four fiscal quarters.
On January 26, 2012, Kellwood Company obtained a waiver to the Cerberus Term Loan until the end of the first quarter of fiscal 2012 (the “Waiver Period”) as AHC anticipated not being in compliance with the fixed charge coverage ratio and the leverage ratio covenants as of January 28, 2012. In conjunction with this waiver, Kellwood Company paid the Agent a $75,000 waiver fee and an affiliate of Sun Capital provided the Agent with a $10.0 million letter of credit. The waiver required the parties to the Cerberus Term Loan to work in good faith during the Waiver Period to amend the financial covenants set forth in the Cerberus Term Loan at levels mutually acceptable to all parties.
On March 23, 2012, Kellwood Company entered into a waiver consenting to the March 23, 2012 amendment entered into with respect to the Wells Fargo Facility referred to above.
On April 20, 2012, Kellwood Company entered into Consent and Amendment No. 1 to Cerberus Term Loan. This amendment provided for the consent of the Cerberus Term Loan lenders to the additional term loans under the Sun Loan Agreement (as defined below), the release of the $10.0 million letter of credit noted above and the delivery of Kellwood Company’s audited fiscal 2011 financial statements within 97 days of the fiscal year-end. This amendment increased the applicable margins for borrowings under the Cerberus Term Loan which bore interest from and after the effective date of the amendment at a rate per annum equal to an applicable margin (ranging from 10.75% to 11.25% per annum for LIBOR Rate Loans (as defined in the Cerberus Term Loan) and 8.25% to
 
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8.75% for Reference Rate Loans (as defined in the Cerberus Term Loan) based on leverage and income tests under the Cerberus Term Loan) plus, at the Borrowers’ election, LIBOR or a Reference Rate as defined in the Cerberus Term Loan. The amendment also provided for a portion of such interest equal to 1% per annum to be paid-in-kind and added to the principal amount of such term loans at Kellwood Company’s option so long as no event of default exists. The amendment also modified the financial covenant levels required to be maintained by the Borrowers beginning with the second quarter of fiscal 2012 for each financial covenant. The Cerberus Term Loan, as amended, requires that the Borrowers maintain a fixed charge coverage ratio as of each fiscal quarter end (beginning with the second quarter of fiscal 2012) ranging from 0.14:1 to 1.28:1 during the life of the Cerberus Term Loan. The Cerberus Term Loan, as amended, also required that the Borrowers maintain a leverage ratio as defined in the Cerberus Term Loan and ranging from 2.44:1 to 7.77:1 during the life of the Cerberus Term Loan (beginning with the second quarter of fiscal 2012). The minimum fixed charge coverage ratios for the second, third and fourth quarters of fiscal 2012 were 0.14:1, 0.41:1 and 0.67:1, respectively. The minimum fixed charge coverage ratios for 2013 were 0.89:1, 1.24:1, 1.28:1, and 1.22:1 for the first through fourth quarters, respectively. Subsequent to 2013, the quarterly minimum fixed charge coverage ratio remained at 1.22:1. The maximum leverage ratios for the second, third and fourth quarters of fiscal 2012 were 7.77:1, 5.71:1 and 3.51:1, respectively. The maximum leverage ratios for 2013 were 3.47:1, 358:1, 3.08:1, and 2.44:1 for the first through fourth quarters, respectively. Subsequent to 2013, the maximum quarterly leverage ratio remains at 2.44:1.
On December 31, 2012, Kellwood Company amended the Cerberus Term Loan to obtain consent to the sale of the Royal Robbins business, to release Royal Robbins, LLC as a Borrower and/or Obligor under the Cerberus Term Loan, and to release the agent’s lien on the assets of Royal Robbins. This amendment required the prepayment of the obligations under the Cerberus Term Loan in an amount not less than $10.0 million from a portion of the proceeds from the sale of Royal Robbins, with the remaining funds to be remitted to the Wells Fargo Facility. This amendment also redefined the definition Consolidated EBITDA to allow for certain additional addbacks.
On May 3, 2013, Kellwood Company amended the Cerberus Term Loan in anticipation of not being in compliance with the fixed charge coverage ratio covenant during fiscal 2013. This amendment modified the definition of the fixed charge coverage ratio to allow Kellwood Company to exclude certain types of capital expenditures in the calculation of the minimum fixed charge coverage ratio for the second, third, and fourth quarters of fiscal 2013, not to exceed $7.5 million in total. Additionally, this amendment modified the minimum fixed charge coverage ratios for the second, third, and fourth quarters of fiscal 2013 to be 1.10:1, 1.175:1, and 1.25:1, respectively. The minimum fixed charge coverage ratio for all fiscal quarters subsequent to fiscal 2013 was modified to be 1.25:1. Kellwood Company anticipates that it will be in compliance with all provisions of the amended Cerberus Term Loan during fiscal 2013, until consummation of this offering, at which time Kellwood Company, LLC will use a portion of the net proceeds from this offering to repay all amounts outstanding under the Cerberus Term Loan (and accrued and unpaid interest thereon). At February 2, 2013, Kellwood Company was in compliance with all provisions of the amended Cerberus Term Loan. On June 28, 2013, Cerberus and Kellwood Company entered into a consent to the Cerberus Term Loan with respect to AHC’s incurrence of the Term G Loan under the Sun Term Loan B/C/D/E/F/G Agreement.
Immediately after the consummation of this offering, Kellwood Company, LLC will use a portion of the proceeds from the repayment of the Kellwood Note Receivable to repay all amounts outstanding under the Cerberus Term Loan (and accrued and unpaid interest thereon) in full .
Sun Term Loan A/B/C/D/E/F/G Obligations
On July 23, 2009, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Borrowers”), affiliates of Sun Capital, as lenders, and Sun Kellwood Finance, LLC, as collateral agent,
 
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entered into the Sun Term Loan A Loan Agreement pursuant to which the Sun Capital affiliated lenders made certain Term A loans with an original principal amount of $12.2 million, the proceeds of which were used by the Borrowers to fund payment of the principal amounts outstanding, plus accrued and unpaid interest on Kellwood Company’s 7.875% 1999 Debentures due July 15, 2009 that were not tendered as part of the exchange offer for the 12.875% Notes.
On October 19, 2011, the Sun Term Loan A Loan Agreement was amended and restated in order to conform to representations, warranties and covenants to that of the Wells Fargo Facility and the Cerberus Facility which were entered into on that date. The Sun Term Loan Agreements were also amended to provide a termination date of the earlier of (i) January 19, 2017 or (ii) the date on which the Cerberus Term Loan has been terminated; provided that, if the Cerberus Term Loan is extended, the stated maturity date set forth in (i) above shall be extended by a period of the same duration. The interest terms of the Sun Term Loan Agreements were amended such that the Sun Term Loan Agreements bear interest at 10% per annum (or 12% per annum in the case of the Term E Loans, Term F Loans and the Term G Loans described below) that will be added to the principal amounts of the term loans thereunder. If the availability under the Wells Fargo Facility is not less than $45.0 million, Kellwood Company may pay interest at a rate of 5% per annum in cash with respect to the Term A, B, C and D Loans and at a rate of 6% per annum in cash with respect to the Term E, F and G Loans. The Sun Term Loan Agreements are secured by a security interest in substantially all of the assets of the Borrowers, which security interest is contractually subordinated to the security interests of the lenders under the Wells Fargo Facility and the Cerberus Term Loan. The Sun Term Loan Agreements contain customary representations, warranties, provisions and restrictions substantially similar to Wells Fargo Facility and the Cerberus Term Loan.
The Sun Term Loan B/C/D Agreement, dated as of July 23, 2009 pursuant to which the lenders made certain (i) Term B Loans with an original principal amount of $22.4 million issued on January 4, 2011, the proceeds of which were used by the Borrowers solely to finance the acquisition of Rebecca Taylor, (ii) Term C Loans with an original principal amount of $14.9 million issued on March 18, 2011, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers and (iii) Term D Loans with an original principal amount of $10.0 million issued on August 5, 2011, the proceeds of which were used to fund all or any part of the purchase price or cost of design, construction, installation or improvement or lease of property (real or personal), plant or equipment (whether through the direct acquisition of such assets or the acquisition of capital stock of any person owning such assets) used in the business of the Borrowers.
On October 19, 2011, the Sun Term Loan B/C/D Agreement and the Sun Term Loan A Agreement each were amended and restated in order to confirm the related representations, warranties and covenants to those of the Wells Fargo Term Facility and the Cerberus Term Loan entered into on that date. The Sun Term Loan Agreements were also amended to provide a termination date of the earlier of (i) January 19, 2017 or (ii) the date on which the Cerberus Term Loan has been terminated; provided that, if the Cerberus Term Loan is extended, the stated maturity date set forth in (i) above shall be extended by a period of the same duration. The interest terms of the Sun Term Loan Agreements were amended such that the Sun Term Loan Agreements bear interest at 10% per annum (or 12% per annum in the case of the Term E Loans, Term F Loans and the Term G Loans described below) that will be added to the principal amounts of such term loans. If the availability under the Wells Fargo Facility is not less than $45.0 million, AHC may pay interest at a rate of 5% per annum in cash with respect to the Term A Loan, Term B Loan, Term C Loan and Term D Loans and at a rate of 6% per annum in cash with respect to the Term E Loan, Term F Loan and Term G Loan. The Sun Term Loan Agreements are secured by a security interest in substantially all of the assets of the Borrowers, which security interest is contractually subordinated to the security interests of the lenders under the Wells Fargo Facility and the Cerberus Term Loan. The Sun Term Loan Agreements contain customary representations, warranties, provisions and restrictions substantially similar to Wells Fargo Facility and the Cerberus Term Loan.
 
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On April 20, 2012, Kellwood Company entered into an amendment and restatement of each of the Sun Term Loan Agreements. The Sun Term Loan B/C/D Agreement was amended and restated and became the Sun Term Loan B/C/D/E/F Agreement in order to (i) provide for new Term E Loans with an original principal amount of $5.1 million, the proceeds of which were used to finance costs and expenses and earnout payments in respect of certain acquisitions consummated by the Borrowers prior to the date of the Term E Loans, (ii) provide for new Term F Loans with an original principal amount of $24.9 million, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers, and (iii) conform certain covenant and definitional changes made to the Wells Fargo Facility and the Cerberus Term Loan. The primary reason for entering into the amendment and restatement of the Sun Term A Loan Agreement was to conform to the aforementioned changes made to the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan B/C/D Agreement. The Term E Loans and the Term F Loans bear interest at a rate of 12% per annum and such interest will be added to the principal amounts of such loans at the end of each fiscal quarter. If the availability under the Wells Fargo Facility is not less than $45.0 million, Kellwood Company may pay interest at a rate of 6% per annum in cash. No cash interest has been paid on the Sun Term Loan Agreements.
On June 28, 2013, Kellwood Company entered into an amendment and restatement of the Sun Term Loan B/C/D/E/F Agreement in order to (i) provide for new Term G Loans with an original principal amount of $5.0 million, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers and (ii) to conform to the changes made to the Wells Fargo Facility and the Cerberus Term Loan. On June 28, 2013 Kellwood Company also entered into an amendment to the Sun Term Loan A Agreement to allow for the addition of the Term G Loans and to conform to the changes made to the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan B/C/D/E/F Agreement.
As part of the IPO Restructuring Transactions, affiliates of Sun Capital will contribute certain indebtedness under the Sun Term Loan Agreements as a capital contribution to Apparel Holding Corp. in the Additional Sun Capital Contribution (which indebtedness shall be subsequently cancelled in connection with Apparel Holding Corp.’s subsequent contribution of such indebtedness to Kellwood Company). Immediately after the consummation of this offering, Kellwood Company, LLC will use a portion of the proceeds from the repayment of the Kellwood Note Receivable to repay all amounts outstanding under the Sun Term Loan Agreements (and accrued and unpaid interest thereon) in full (after giving effect to the Additional Sun Capital Contribution).
12.875% Notes
Interest on the 12.875% Notes is paid (a) in cash at a rate of 7.875% per annum payable in January and July; and (b) in the form of PIK interest at a rate of 5% per annum (“PIK Interest”) payable either by increasing the principal amount of the outstanding 12.875% Notes, or by issuing additional 12.875% Notes with a principal amount equal to the PIK Interest accrued for the interest period. The 12.875% Notes are guaranteed by various of Kellwood Company’s subsidiaries on a secured basis, which security interest is contractually subordinated to security interests of lenders under the Wells Fargo Facility, the Cerberus Term Loan and the Sun Loan Agreements. The 12.875% Notes contain certain customary provisions that, among other things, limit Kellwood Company’s ability to incur additional indebtedness, make certain restricted payments, dispose of assets or redeem or repurchase capital stock or prepay subordinated indebtedness.
 
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Immediately after the consummation of this offering, Kellwood Company, LLC will issue an unconditional redemption notice to redeem at par all issued and outstanding 12.875% Notes (including accrued and unpaid interest thereon) in full and deposit such amounts with the trustee under the indenture governing the 12.875% Notes using a portion of proceeds from the repayment of the Kellwood Note Receivable, with such amounts to be distributed to the holders of the 12.875% Notes when such notes are redeemed in accordance with the notice of redemption.
7.625% Notes
On April 15, 2010, Kellwood Company repurchased $29.7 million in aggregate principal amount of the 7.625% Notes from an affiliate of Sun Capital for $9.1 million in cash. The repurchased 7.625% Notes were then retired. Approximately $87.0 million in aggregate principal amount of 7.625% Notes remain outstanding following the repurchase. Interest is payable in April and October. The extinguishment resulted in a gain of $15.9 million during 2010.
In connection with consummation of this offering, Kellwood Company will conduct a tender offer for all of the outstanding 7.625% Notes at par plus accrued and unpaid interest thereon and will use a portion of proceeds from the repayment of the Kellwood Note Receivable to purchase, at or after the closing of this offering, all such notes validly tendered and not validly withdrawn in such tender offer.
Cash (used in)/provided by operating activities.     Cash provided by operating activities primarily consists of net loss, adjusted for certain non-cash items including depreciation and amortization, share-based compensation, capitalized PIK interest expense, deferred income taxes, amortization of bond discounts and debt issuance costs, impairment, restructuring, environmental remediation and other charges, gains and losses on dispositions of various assets and businesses, and the effect of changes in working capital and other activities.
In the first six months of fiscal 2013, net cash used in operating activities was $41.0 million and consisted of a net loss of $25.6 million plus non-cash items of $21.5 million less changes in working capital and other activities of $36.9 million. Non-cash items consisted primarily of capitalized PIK interest expense of $23.3 million, deferred income tax benefit of $9.7 million, depreciation and amortization of $3.7 million, and amortization of bond discounts and debt issue costs of $3.5 million. Cash used in working capital and other activities consisted of an increase in receivables, net of $4.2 million, an increase in inventories, net of $18.8 million, an increase in prepaid and other current assets of $7.3 million and a decrease in accounts payable and other accrued expenses of $4.2 million as a result of timing of payments to vendors.
In the first six months of fiscal 2012, net cash used in operating activities was $41.0 million and consisted of a net loss of $81.2 million plus non-cash items of $61.5 million less changes in working capital and other activities of $21.4 million. Non-cash items consisted primarily of capitalized PIK interest expense of $55.2 million, depreciation and amortization of $4.6 million, amortization of bond discounts and debt issuance costs of $3.6 million, net gains of $2.4 million on the disposition of trademarks and businesses, and a net gain of $4.5 million on fair value of contingent consideration. Cash used in working capital and other activities consisted primarily of an increase in inventories, net of $8.3 million, an increase in receivables, net of $7.5 million as a result of timing of customer payments, an increase in prepaid expenses and other current assets of $2.3 million, and payments of liabilities associated with restructuring and environmental remediation activities of $7.4 million.
In fiscal 2012, net cash used in operating activities was $26.0 million and consisted of a net loss of $107.7 million plus non-cash items of $98.3 million less changes in working capital and other activities of $16.6 million. Non-cash items consisted primarily of capitalized PIK interest expense of $86.5 million, depreciation and amortization of $8.4 million, amortization of bond discounts and debt
 
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issuance costs of $7.2 million, impairment charges of $6.7 million, restructuring, environmental remediation and other charges of $5.5 million, gains on disposition of trademarks of $4.2 million, gains on disposition of businesses of $7.3 million and a net gain on fair value of contingent consideration of $7.2 million. Cash used for working capital and other activities consisted primarily of payments of liabilities associated with restructuring and environmental remediation activities of $16.1 million, a decrease in accounts payable and accrued expenses of $7.8 million due to timing of vendor payments and payroll, partially offset by an increase in other assets and liabilities of $5.7 million.
In fiscal 2011, net cash used in operating activities was $38.3 million and consisted of a net loss of $147.9 million plus $135.6 million of non-cash items less $26.0 million for changes in working capital and other activities. Non-cash items consisted primarily of capitalized PIK interest expense of $92.1 million, depreciation and amortization of $11.1 million, amortization of bond discounts and debt issuance costs of $6.4 million, impairment charges of $19.5 million and restructuring, environmental remediation and other charges of $3.1 million. Cash used for working capital and other activities consisted primarily of an increase in receivables, net of $20.9 million due to increased net sales, an increase in inventories, net of $5.9 million due to a forecasted increase in net sales, payments of liabilities associated with restructuring and environmental remediation activities of $12.9 million, partially offset by an increase in accounts payable and accrued expense of $12.6 million due to timing of vendor payments and payroll.
In fiscal 2010, net cash used in operating activities was $44.7 million and consisted of a net loss of $104.5 million plus $118.2 million of non-cash items less $58.5 million for changes in working capital and other activities. Non-cash items consisted primarily of capitalized PIK interest expense of $75.1 million, depreciation and amortization of $10.3 million, amortization of bond discounts and debt issuance costs of $6.8 million, impairment charges of $24.6 million and restructuring, environmental remediation and other charges of $13.3 million, and a gain on debt extinguishment of $15.9 million. Cash used for working capital and other activities consisted primarily of an increase in inventories, net of $28.5 million due to timing of inventory purchases, payments of liabilities associated with restructuring and environmental remediation activities of $18.6 million, an increase in receivables, net of $5.8 million due to the timing of customer payments, and an increase in accounts payable and accrued expenses of $6.0 million due to timing of vendor payments and payroll.
Net cash (used in)/provided by investing activities.     Net cash from investing activities primarily relates to capital expenditures and payments for acquisitions and proceeds from dispositions. Net cash provided by investing activities was $0.5 million in the first six months of fiscal 2013 due primarily to proceeds received from the disposition of a trademark and other assets, partially offset by capital expenditures of $5.5 million. Net cash used in the first six months of fiscal 2012 was $2.5 million due to deposits to restricted accounts and capital expenditures, partially offset by proceeds from dispositions of trademarks and businesses. Net cash from investing activities increased $87.0 million from $69.6 million used in investing activities in fiscal 2011 to $17.5 million provided by investing activities in fiscal 2012. The increase is primarily attributable to significantly higher amounts of cash used in fiscal 2011 for cash purchase consideration related to the Vince acquisition, as well as proceeds received from the disposition of various trademarks, the disposition of two closed distribution center facilities, and the sale of the BLK DNM and Royal Robbins business during fiscal 2012. Net cash from investing activities decreased $35.5 million from $34.0 million used in investing activities in fiscal 2010 to $69.6 million used in investing activities in fiscal 2011. The change is due to significant cash purchase consideration paid during fiscal 2011 related to the Vince acquisition as well as additional capital expenditures for new retail store development.
Net cash (used in)/provided by financing activities.     Net cash from financing activities primarily relates to borrowings and repayments of short-term debt obligations, long-term debt obligations, revolving credit facilities and debt issuance costs related thereto. Net cash provided by financing
 
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activities was $40.8 million in the first six months of fiscal 2013 due to additional net borrowings of $35.8 million on the Wells Fargo Facility and additional borrowings of $5.0 million under the Sun Term Loan Agreements. Net cash provided by financing activities was $43.6 million in the first six months of fiscal 2012 due to additional borrowings of $30.0 million under the Sun Term Loan Agreements and net borrowings of $16.5 million on the Wells Fargo Facility. Net cash from financing activities decreased $95.8 million from $104.5 million provided by financing activities in fiscal 2011 to $8.6 million provided by financing activities in fiscal 2012. The decrease is primarily due to a fiscal 2012 repayment on a long-term loan obligation incurred in the prior year, as well as fewer net borrowings of long-term loan obligations and revolving credit facilities during fiscal 2012, net of fees paid for amendments. Net cash from financing activities increased $37.1 million from $67.3 million provided by financing activities in fiscal 2010 to $104.5 million provided by financing activities in fiscal 2011. This increase is due to additional debt obligations incurred during fiscal 2011 partially offset by lower net borrowings from revolving credit facilities and fees paid for debt issuance.
Cash from discontinued operations.     All cash flows from discontinued operations are combined with cash flows from continuing operations within our discussions of net cash from operating activities, investing activities, and financing activities above.
Net cash used in operating activities of AHC included a $14.8 million increase, $13.3 million increase, and $11.2 million increase in working capital of discontinued operations for fiscal 2010, fiscal 2011, and fiscal 2012, respectively. Net cash used in operating activities of AHC included a $0.5 million increase and $1.9 million decrease in working capital requirements of discontinued operations for the first six months of fiscal 2012 and fiscal 2013, respectively.
Noteworthy investing activities of discontinued operations consist of proceeds received from the dispositions of various businesses and trademarks. In fiscal 2012, AHC received a combined amount of $28.3 million net of selling costs for the sale of its Phat Farm trademark, BLK DNM business, and Royal Robbins business. During the first six months of fiscal 2013, AHC sold the Baby Phat trademark and received $4.8 million in sale proceeds, net of related selling costs. During the first six months of fiscal 2012, AHC received $4.6 million net of selling costs to sell various trademarks related to discontinued operations, including its Phat Farm trademark. There were no investing activities related to discontinued operations that generated material cash flows in fiscal 2010 or fiscal 2011.
Net cash from financing activities was not materially impacted by discontinued operations for all periods presented.
Cash and cash equivalents.     Cash and cash equivalents increased $0.1 million from $1.8 million at January 28, 2012 to $1.9 million at February 2, 2013. The increase is due to cash provided by investing activities, specifically the disposition of businesses and trademarks, as well as net borrowings on AHC’s long-term loan obligations, offset by cash used to finance operating activities.
 
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Contractual Obligations and Commitments
A summary of AHC’s contractual obligations and commitments at February 2, 2013 is as follows:

 	  	Future payments due by period(1)	 	
 	  	Less than
1 Year	 	  	1-3
Years	 	  	3-5
Years	 	  	After
5
Years	 	  	Total	 	
(In thousands)	  	 	 	
Wells Fargo Facility(2)(3)	  	$	—	  	  	$	79,783	  	  	$	—	  	  	$	—	  	  	$	79,783	  	
Sun Promissory Notes—principal and PIK interest(4)	  	 	—	  	  	 	—	  	  	 	497,894	  	  	 	—	  	  	 	497,894	  	
Sun Capital Loan Agreement—principal and PIK interest(4)	  	 	—	  	  	 	77,450	  	  	 	—	  	  	 	—	  	  	 	77,450	  	
Other long-term debt—principal and PIK interest(3)	  	 	—	  	  	 	331,685	  	  	 	86,953	  	  	 	200	  	  	 	418,838	  	
Long-term debt—cash interest(2)(3)	  	 	18,047	  	  	 	24,750	  	  	 	13,260	  	  	 	244	  	  	 	56,301	  	
Operating lease obligations	  	 	16,367	  	  	 	28,016	  	  	 	19,822	  	  	 	30,081	  	  	 	94,286	  	
Minimum royalty/advertising obligations	  	 	574	  	  	 	508	  	  	 	—	  	  	 	—	  	  	 	1,082	  	
Purchase orders/commitments	  	 	103	  	  	 	—	  	  	 	—	  	  	 	—	  	  	 	103	  	
Contingent purchase price(5)	  	 	—	  	  	 	3,663	  	  	 	3,454	  	  	 	—	  	  	 	7,117	  	
Uncertain tax positions(6)	  	 	2,357	  	  	 	4,138	  	  	 	690	  	  	 	—	  	  	 	7,185	  	
Environmental remediation(7)	  	 	656	  	  	 	2,115	  	  	 	1,611	  	  	 	8,499	  	  	 	12,881	  	
State income tax settlement(8)	  	 	2,042	  	  	 	3,067	  	  	 	—	  	  	 	—	  	  	 	5,109	  	
Employment contracts(9)	  	 	132	  	  	 	332	  	  	 	—	  	  	 	—	  	  	 	464	  	
Obligation from exit activities	  	 	3,356	  	  	 	1,594	  	  	 	—	  	  	 	—	  	  	 	4,950	  	
Other contractual commitments(10)	  	 	1,334	  	  	 	624	  	  	 	—	  	  	 	—	  	  	 	1,958	  	
Tax Receivable Agreement(11)	  	 	—	  	  	 	—	  	  	 	—	  	  	 	—	  	  	 	172,087	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	44,968	  	  	$	557,725	  	  	$	623,684	  	  	$	39,024	  	  	$	1,437,488	  	

(1)	In connection with consummation of this offering, Vince, LLC will enter into the Shared Services Agreement with Kellwood Company, LLC pursuant to which Kellwood will provide support services in various operational areas including, among other things, distribution, information technology and back office support (as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement”). We have excluded the amounts due under such agreement from the table herein as we cannot precisely estimate the future payments to be made thereunder and timing thereof. However, we currently expect to pay between $8.0 million to $10.0 million on an annualized basis in the near to intermediate term after consummation of this offering for services to be provided by Kellwood under the Shared Services Agreement.	
(2)	The cash interest commitment excludes cash interest on the Wells Fargo Facility as the agreement contains variable interest provisions for which no reliable estimate of future payment amounts can be made. These long-term debt obligations will be repaid, refinanced or discharged in connection with the consummation of this offering.	
(3)	Payments under these instruments will not be required in any period after consummation of this offering, as most of the net proceeds from this offering, along with the net borrowings under our new term loan facility, will be used to repay the Kellwood Note Receivable. In turn, Kellwood Company, LLC will use the proceeds from such repayment to repay, refinance or discharge this indebtedness for which Vince, LLC is a guarantor or an obligor (after giving effect to the Additional Sun Capital Contribution immediately after the closing of this offering. Kellwood Company, LLC may also use such proceeds to repurchase or refinance the other indebtedness represented by these instruments at or after the closing of this offering.	
(4)	On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in both the Sun Promissory Notes and note under the Sun Capital Loan Agreement to Sun Cardinal. Immediately following the assignment of these notes, Sun Cardinal contributed all outstanding principal and interest due as of June 18, 2013 to the capital of AHC. These transactions were recorded in the second quarter of fiscal 2013 as increases to AHC’s additional paid in capital in the amounts of $334.6 million and $72.9 million for the Sun Promissory Notes and Sun Capital Loan Agreement, respectively, in connection with the Sun Capital Contribution.	
 
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(5)	Represents the amount of potential additional cash purchase consideration related to the Rebecca Taylor acquisition. The obligor under such agreements and contracts is Kellwood Company and such obligations will remain with Kellwood Company after the consummation of this offering. These commitments and obligations are not currently, and will not become, the obligations of Vince, LLC or the Vince business subsequent to the IPO Restructuring Transactions and the consummation of this offering.	
(6)	These amounts are inclusive of estimated interest currently due, as well as an estimate of future interest that will be payable. AHC has excluded $2.7 million from the table that it believes is not reasonably possible to predict when it may be paid.	
(7)	Kellwood Company has posted a letter of credit in the amount of $5.9 million as a performance guarantee related to environmental remediation work. AHC currently estimates undiscounted cash flows of $12.9 million related to this remediation work. The obligor under such agreements and contracts is Kellwood Company and such obligations will remain with Kellwood Company after the consummation of this offering. These commitments and obligations are not currently, and will not become, the obligations of Vince, LLC or the Vince business subsequent to the IPO Restructuring Transactions and the consummation of this offering.	
(8)	Kellwood Company settled an ongoing income tax case with a state jurisdiction during fiscal 2012 payable over a three year period. The amounts within the table include estimated interest payments at a rate of 7.5%. The obligor under such agreements and contracts is Kellwood Company and such obligations will remain with Kellwood Company after the consummation of this offering. These commitments and obligations are not currently, and will not become, the obligations of Vince, LLC or the Vince business subsequent to the IPO Restructuring Transactions and the consummation of this offering.	
(9)	Kellwood Company has entered into agreements with certain employees to provide for relocation benefits.	
(10)	Other contractual commitments include payments under significant non-cancellable consulting and software contracts. The obligor under such agreements and contracts is Kellwood Company and such obligations will remain with Kellwood Company after the consummation of this offering. These commitments and obligations are not currently, and will not become, the obligations of Vince, LLC or the Vince business subsequent to the IPO Restructuring Transactions and the consummation of this offering.	
(11)	Immediately prior to the consummation of this offering, Vince Holding Corp. will enter into the Tax Receivable Agreement with the Pre-IPO Stockholders (as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement”). While we have included the total amount estimated to be due under such agreement, we cannot reliably estimate in which future periods these amounts would become due.	
Inflation
While inflation may impact AHC’s sales and cost of goods sold, AHC believes the effects of inflation on its results of operations and financial condition are not significant. While the offering involves only an investment in the Vince business, AHC cannot provide any assurances that its results of operations and financial condition will not be materially impacted by inflation in the future.
Quantitative and Qualitative Disclosures About Market Risk
AHC is exposed to interest rate risk resulting from fluctuations in interest expense of variable-rate debt, as well as fluctuations in the fair value of its fixed-rate debt instruments. These obligations were contributed to the capital of AHC in the Sun Capital Contribution or will be repaid, refinanced, repurchased or discharged in connection with this offering (including the Additional Sun Capital Contribution).
As of February 2, 2013, 23.4% of AHC’s total debt outstanding related to variable-rate debt instruments, including the Wells Fargo Facility, Cerberus Term Loan, and the Sun Capital Loan Agreement and the Sun Promissory Notes. Affiliates of Sun Capital contributed $407.5 million of
 
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indebtedness, including under the Sun Capital Loan Agreement, in the Sun Capital Contribution. Any increase in interest rates of these financial instruments could have an adverse impact on the results of AHC’s operations, as management does not currently hedge against interest rate fluctuations and does not intend to engage in such hedging activity in the foreseeable future. A 100 basis point increase to the market rates utilized within each of the variable-rate debt instruments would have resulted in a $1.8 million increase to AHC’s interest expense for fiscal 2012. AHC’s strategy regarding management of its exposure to interest rate fluctuations did not change significantly during the year. Management does not expect any significant changes in AHC’s exposure to interest rate fluctuations or in how such exposure is managed during the remainder of fiscal 2013.
Based on quoted market prices obtained through independent pricing sources for the same or similar types of borrowing arrangements, AHC’s fixed-rate debt had a fair value of approximately $620.4 million as of February 2, 2013, which compares to the book value of $644.8 million. Market interest rate changes result in increases or decreases in the fair value of AHC’s fixed-rate debt. Notwithstanding that all of AHC’s fixed-rate debt will be repaid, refinanced, repurchased or discharged in connection with this offering (after giving effect to the Sun Capital Contribution and the Additional Sun Capital Contribution), at February 2, 2013 a 100 basis point increase in interest rates would have resulted in approximately a $4.4 million decrease in the fair value of its fixed-rate debt; a 100 basis point decrease in interest rates would have resulted in approximately a $4.5 million increase in the fair value of its fixed-rate debt.
In addition, AHC does not believe that foreign currency risk, commodity price or inflation risks are expected to be material to its business or its consolidated financial position, results of operations or cash flows after giving effect to the Sun Capital Contribution and the IPO Restructuring Transactions (including the Additional Sun Capital Contribution).
Off-Balance Sheet Arrangements
During fiscal 2010, fiscal 2011 and fiscal 2012, AHC did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Policies and Estimates
The preparation of the consolidated financial statements included elsewhere in this prospectus in conformity with generally accepted accounting principles requires that management make certain estimates and assumptions that affect amounts reported in AHC’s consolidated financial statements and accompanying notes. Actual results will differ from those estimates and assumptions and the differences may be material. Significant accounting policies, estimates and judgments which management believes are the most critical to aid in fully understanding and evaluating the reported financial results are discussed below.
Revenue Recognition
Sales are recognized when goods are shipped in accordance with customer orders for AHC’s wholesale and e-commerce businesses, and at the time of sale to consumer for AHC’s retail business. The Vince segment and the Rebecca Taylor operations are the only parts of AHC’s business with retail store operations. The estimated amounts of sales discounts, returns and allowances are accounted for as reductions of sales when the associated sale occurs. These estimated amounts are adjusted periodically based on changes in facts and circumstances when the changes become known to AHC. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the balance sheets for AHC’s wholesale business.
 
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Accounts Receivable—Reserves for Allowances
Accounts receivable are recorded net of allowances for returns and existing and expected future chargebacks from customers. It is the nature of the apparel and recreational products industry that suppliers like AHC face significant pressure from customers in the retail industry to provide allowances to compensate for customer margin shortfalls. This pressure often takes the form of customers requiring AHC to provide price adjustments on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of AHC’s products at retail. To the extent AHC’s customers have more of its goods on hand at the end of the season, there will be greater pressure for AHC to grant markdown allowances on prior shipments. AHC’s accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and its estimates of the level of markdowns and allowances that will be required in the coming season in order to collect the receivables. AHC evaluates the allowance balances on a continuing basis and adjust them as necessary to reflect changes in anticipated allowance activity. AHC also provides an allowance for sales returns based on historical return rates.
Accounts Receivable—Allowance for Doubtful Accounts
AHC maintains an allowance for doubtful accounts receivable for estimated losses resulting from customers that are unable to meet their financial obligations. AHC’s estimation of the allowance for doubtful accounts involves consideration of the financial condition of specific customers as well as general estimates of future collectability based on historical experience and expected future trends. The estimation of these factors involves significant judgment. In addition, actual collection experience, and thus bad debt expense, can be significantly impacted by the financial difficulties of as few as one customer.
Inventory Valuation
Inventories are stated at lower of cost or market. Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost. AHC’s products can be classified into two types: replenishment and non- replenishment. Replenishment items are those basics that are not highly seasonal or dependent on fashion trends. The same products are sold by retailers 12 months a year and styles evolve slowly. Retailers generally replenish their stocks of these items as they are sold. Only a relatively small portion of AHC’s business involves replenishment items.
The majority of AHC’s products consist of items that are non-replenishment as a result of being highly tied to a season or fashion look. These products are economically “perishable”. The value of this seasonal merchandise might be sufficient for AHC to generate a profit over its cost at the beginning of its season, but by the end of its season a few months later the same inventory might be salable only at less than cost. For these products, the selling season generally ranges from three to six months. The value may rise again the following year when the season in which the goods sell approaches—or it may not, depending on the level of prior year merchandise on the market and on year-to-year fashion changes.
The majority of out-of-season inventories must be sold to off-price retailers and other customers who serve a customer base that will purchase prior year fashions. The amount, if any, that these customers will pay for prior year fashions is determined by the desirability of the inventory itself as well as the general level of prior year goods available to these customers. The assessment of inventory value, as a result, is highly subjective and requires an assessment of the seasonality of the inventory, its future desirability, and future price levels in the off-price sector.
Many of AHC’s products are purchased for and sold to specific customers’ orders. Others are purchased in anticipation of selling them to a specific customer. The loss of a major customer, whether
 
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due to the customer’s financial difficulty or other reasons, could have a significant negative impact on the value of the inventory expected to be sold to that customer. This negative impact can also extend to purchase obligations for goods that have not yet been received. These obligations involve product to be received into inventory over the next one to six months.
Fair Value Assessments of Goodwill and Intangible Assets
Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. AHC completed its most recent annual impairment testing on goodwill and indefinite-lived intangible assets during the fourth quarter of fiscal 2012.
Goodwill represents the excess of the cost of acquired businesses over the fair market value of their identifiable net assets. As the acquisition by Kellwood Company of the net assets of Vince occurred prior to the current requirements of ASC Topic 805: Business Combinations , the additional purchase consideration paid to the former owners of Vince subsequent to the acquisition date was recorded as an addition to the purchase price, and therefore goodwill, once determined. In September 2011, the Financial Accounting Standards Board (“FASB”) issued an amendment to the Intangibles—Goodwill and Other Topic of Accounting Standards Codification (“ASC”). The goodwill impairment qualitative assessment requires an assessment of the reporting unit to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If adverse qualitative trends are identified that could negatively impact the fair value of the reporting unit, a “step one” goodwill impairment test is performed. The “step one” goodwill impairment test requires an estimate of the fair value of the reporting unit and certain assets and liabilities. If the fair value of a reporting unit exceeds its book value, goodwill of the reporting unit is not considered impaired and “step two” of the impairment test is not required. If the book value of a reporting unit exceeds its fair value, “step two” of the impairment test is performed to measure the amount of impairment loss, if any. The implied fair value of the reporting unit’s goodwill is compared to the book value of that goodwill. If the book value of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination.
An entity may pass on performing the qualitative assessment for a reporting unit and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. These amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. AHC early adopted these amendments during fiscal year 2011 and performed a qualitative assessment of impairment in fiscal 2011 for goodwill related to its reporting units, with the exception of Vince, as there was significant related purchase consideration capitalized in fiscal 2011.
In July 2012, the FASB issued Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite Lived Assets for Impairment . Under this amendment, an entity may elect to perform a qualitative impairment assessment for indefinite-lived intangible assets similar to the goodwill impairment testing guidance discussed above.
This amendment is effective for annual and interim impairment tests for indefinite-lived intangible assets performed for fiscal years beginning after September 15, 2012. AHC early adopted this amendment during fiscal 2012 and performed a quantitative assessment of impairment in fiscal 2012 for trademarks associated with certain brands.
For trademarks that AHC directly proceeded to “step one” during fiscal 2012, and for impairment tests performed in prior years, AHC primarily uses the relief from royalty method to calculate the fair value of the intangible assets, which uses revenue projections, royalty rates and discount rates in the calculation.
 
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Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results (which will need to give effect to give effect to the IPO Restructuring Transactions and the discontinuance of the Kellwood operations) could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.
Definite-lived intangible assets are primarily compromised of customer relationships and are being amortized on a straight-line basis over their useful lives of 10 to 20 years.
Income Taxes
AHC is subject to taxation in many jurisdictions, and the calculation of its tax liabilities involves dealing with inherent uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. AHC assesses the income tax positions and record tax liabilities for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. AHC accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities at enacted rates. AHC bases its estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans and other expectations about future outcomes. AHC records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized.
AHC’s accounting for deferred tax consequences represents management’s best estimate of future events that can be appropriately reflected in the accounting estimates. Changes in existing tax laws, regulations, rates and future operating results may affect the amount of deferred tax liabilities or the valuation of deferred tax assets over time.
The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are also subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Although AHC believes the measurement of liabilities for uncertain tax positions is reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. If AHC ultimately determines that the payment of these liabilities will be unnecessary, the liability will be reversed and a tax benefit will be recognized during the period in which it is determined the liability no longer applies. Conversely, additional tax charges are recorded in a period in which it is determined that a recorded tax liability is less than the ultimate assessment is expected to be. If additional taxes are assessed as a result of an audit or litigation, it could have a material effect on AHC’s income tax provision and net income in the period or periods for which that determination is made.
Recent Accounting Pronouncements
In June 2011, the FASB issued an accounting standards update regarding the presentation of comprehensive income in financial statements. The provisions of this standard provide an option to present the components of net income and other comprehensive income either as one continuous statement of comprehensive income or as two separate but consecutive statements. This standard was amended December 2011 as it relates to the presentation of comprehensive income. This amendment defers the requirement to present the effects of reclassifications out of accumulated other comprehensive income on AHC’s consolidated statements of income, which was required in the
 
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Comprehensive Income amendment made in June 2011. The provisions of this new disclosure standard were effective January 1, 2012. AHC has provided a separate Statement of Other Comprehensive Income during the current year. The requirement to present the effects of reclassifications out of accumulated other comprehensive income will impact only the presentation of the financial statements to the extent AHC has instances of these transactions in the future.
In September 2011 and July 2012, the FASB issued amendments to the Intangibles—Goodwill and Other topic of ASC. Under these amendments, an entity may elect to perform a qualitative impairment assessment for goodwill and indefinite-lived intangible assets. We have adopted these amendments, as discussed above.
In May 2011, the FASB issued ASU 2011-04. The new guidance resulted in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The new guidance did not extend the use of fair value accounting, but provided guidance on how it should be applied where its use is already required or permitted by other standards within GAAP. This update was effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance in fiscal 2011 did not have a material impact on AHC’s consolidated financial position, results of operations, or cash flows.
 
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 AHC BUSINESS
Overview
AHC is a holding company, controlled by the affiliates of Sun Capital. Kellwood Company was founded in 1961 as the successor by merger of fifteen independent suppliers to Sears, Roebuck & Co. (“Sears”). Beginning in 1985, Kellwood implemented a strategy to expand its branded business, broaden its customer base, diversify its distribution channels and further develop its global product sourcing capability. As a result of this strategy, AHC has redirected its focus from the manufacturing of private label apparel and home fashions for Sears to the development of branded fashion apparel and recreational products. As part of this strategy, AHC also acquired various apparel companies or businesses and has divested numerous others. AHC now has a diversified brand portfolio that serves a broad range of customer segments across multiple wholesale partners and through its own retail stores and websites.
AHC did not have any customers that accounted for more than 10% of consolidated net sales from continuing operations during fiscal 2012. In fiscal 2011, sales to Kohl’s accounted for more than 10% of the consolidated net sales of continuing operations. These sales represented 14% of fiscal 2011 net sales. In fiscal 2010, sales to Kohl’s and Macy’s accounted for more than 10% of the consolidated net sales from continuing operations. These sales represented 15% and 12% of fiscal 2010 net sales, respectively.
AHC manufactures, distributes and markets products under many brands, some of which it owns, and others that are under licensing agreements. In addition, prior to the IPO Restructing Transactions, AHC had four reportable segments, as set forth below. Each segment is responsible for its own design, merchandising and sourcing activities:
 
 	Ÿ	 	Vince : Contemporary fashion apparel and accessories sold under the Vince ® brand name through wholesale distribution to premier department stores and specialty stores as well as direct-to-consumer through our retail stores and the www.vince.com website;	
 
 	Ÿ	 	American Recreational Products (“ARP”) : Recreational apparel and products sold under Kelty, Sierra Designs, Ultimate Direction, Slumberjack, Wenzel and Isis brand names through wholesale distribution to retailers as well as through websites;	
 
 	Ÿ	 	Juniors : A collection of denim, dresses and sportswear labels that appeal to girls and young women sold under the Rewind, My Michelle and Jolt brand name as well as private label to wholesale partners. Additionally, AHC licenses the XOXO brand name and produces apparel under that name for wholesale partners within this segment; and	
 
 	Ÿ	 	Moderate : Moderately priced related separates and pants covering career and casual lifestyle sold through wholesale distribution and produced under private labels as well as under the Sag Harbor and Briggs New York brands.	
Performance results of AHC’s remaining operating segments, primarily apparel sold under the Rebecca Taylor, Democracy, Jax and Sangria brands as well as under the licensed David Meister brand, have been combined in Other, as none of these brands individually meets the quantitative thresholds for disclosures as a reportable segment. Other operations accounted for less than 25% of AHC’s revenues in each of fiscal 2010, fiscal 2011 and fiscal 2012 and the first six months of fiscal 2013.
In connection with this offering, all AHC segments other than the Vince segment will be separated from AHC in the IPO Restructuring Transactions, as defined elsewhere in this prospectus, by Apparel Holding Corp., the entity offering stock in this offering. Apparel Holding Corp. will report operations from all segments other than the Vince segment as discontinued operations in future reporting periods after the consummation of this offering.
 
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Company History
Affiliates of Sun Capital acquired Kellwood Company and formed AHC in connection with the February 2008 acquisition of Kellwood Company by affiliates of Sun Capital. As discussed in “Additional Information Related to Vince—Vince Business” elsewhere in this prospectus, Kellwood Company acquired the Vince business in September 2006. Gerber Childrenswear LLC and Hanna Andersson LLC were sold during the fourth quarter of fiscal 2008 to affiliates of Sun Capital. In January 2010, AHC acquired certain net assets from Juno Rising, Inc. AHC subsequently acquired the Adam operations in August 2010. Thereafter, AHC acquired Rebecca Taylor and Zobha in July 2011. Additionally, during 2011, AHC discontinued its Adam operations and Koret wholesale business. During 2012, AHC decided to exit its Baby Phat wholesale and Lamb & Flag businesses. Additionally, BLK DNM and Royal Robbins, LLC businesses (and certain related Canadian assets and liabilities), were sold during 2012. AHC divested the Zobha operations during the second quarter of fiscal 2013.
Properties; Distribution and Production
At October 5, 2013, AHC operated two distribution or production facilities and utilized six third-party distribution centers. AHC’s operating facilities are leased under operating leases that generally contain renewal options. AHC also operated 35 retail stores at October 5, 2013. AHC’s retail spaces are leased under operating leases. AHC leases its corporate office spaces in St. Louis County, Missouri and New York City, as well as showrooms and divisional office spaces in City of Industry, Los Angeles, California, New York City, Boulder, Colorado, and Mississauga, Ontario.
The fashion apparel divisions currently operate one warehousing and distribution center totaling approximately 471,000 square feet in City of Industry, California. All of AHC’s warehousing and distribution occurs at its distribution facility in City of Industry, California or third party distribution centers. These facilities serve multiple divisions, thereby generating economies of scale in warehousing and distribution activities.
The recreational apparel and products division operates one warehousing and distribution center totaling approximately 177,000 square feet in St. George, Utah, and also uses third-party distribution facilities.
Information Systems
AHC is responsible for and maintains the following information technology systems and services across all of its segments (except as described in the following paragraph): information technology and planning and administration; desktop support and help desk; its ERP system; financial applications, warehouse systems, reporting and analysis applications; and its retail and e-commerce interfaces. Kellwood will continue to provide such services to Vince after consummation of the IPO Restructuring Transactions and this offering, until such time as Vince elects to terminate provision of such services in accordance with the terms of the Shared Services Agreement.
AHC’s ERP system was developed from a core system that is widely used in the apparel and fashion industry, which AHC has customized to suit its inventory management and order processing requirements. AHC has integrated Oracle Financials with its ERP system to meet its financial reporting and accounting requirements. Additionally, AHC uses a suite of third-party hosted retail applications integrated with its ERP system that provide it with merchandising , retail inventory management, point-of-sale systems, customer relationship management and retail accounting. Its retail applications are supported through a “Software as Service” model, which allows for new implementations to occur quickly. AHC’s ERP and warehouse systems are also integrated with a hosted, third-party e-commerce platform.
 
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Competition
AHC faces strong competition in each of its segments and markets where it competes on the basis of price, quality, style and brand recognition and is facing increased competition from private label brands. Some of AHC’s competitors have achieved significant recognition for their brand names or have substantially greater financial, marketing, distribution and other resources than AHC. AHC’s competitors vary across segment but include other fashion label platforms, including the Jones Group, Fifth and Pacific, PVH Corp., VF Corporation, G-III Apparel Group, Ltd. and Perry Ellis.
In management’s opinion, AHC’s current facilities are generally well maintained and provide adequate capacity for future operations. However, management continues to evaluate the need to reposition its portfolio of businesses and facilities to meet the needs of the changing markets we serve and to reflect the international business environment.
Employees
As of October 5, 2013, AHC had approximately 1,514 employees. None of our employees are currently covered by a collective bargaining agreement, and we believe our employee relations are good.
Intellectual Property
AHC owns or has rights to trademarks or tradenames that it uses for the production, marketing and distribution of its products in the U.S. and internationally. These trademarks and tradenames include the following: Vince ® , Rebecca Taylor ® , David Meister ® , My Michelle ® , XOXO ® , Jolt ® , Rewind ® , Democracy ™ , Sag Harbor ® , Briggs New York ® , Jax ® , Sangria ™ , Kelty ® , Sierra Designs ® , Ultimate Direction ® , Slumberjack ® , Wenzel ® and Isis ® . After giving effect to the IPO Restructuring Transactions and the consummation of this offering, Vince, LLC will have the sole right to use the Vince ® trademark, under which Vince will operate the Vince business and Kellwood will continue to own the trademarks and tradenames necessary to operate the non-Vince businesses.
Legal Proceedings
During the second quarter of fiscal 2012, Kellwood Company entered into a Consent Decree with the EPA and MDNR to conduct cleanup initiatives for the decontamination of soil and groundwater located near a former metal fabrication plant in New Haven, Missouri. The agreement became effective August 24, 2012, and was entered into as settlement of a lawsuit filed against Kellwood Company by the EPA and MDNR. Effective October 15, 2012, in accordance with the terms of the agreement, Kellwood Company posted a letter of credit payable to the EPA in the amount of $5.9 million as a performance guarantee for the estimated cost of remediation work. As of February 2, 2013, AHC recorded $9.6 million for estimated capital costs and ongoing remedial activities at the New Haven site. AHC’s recorded liability differs from the performance guarantee required by the EPA primarily due to management’s use of a lower discount rate, as well as assumption of additional costs not reflected in the EPA’s estimate of remediation work. These additional costs include voluntary corrective actions implemented by AHC, as well as EPA oversight fees.
AHC is currently party to various legal proceedings. While management currently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse impact on AHC’s financial position, cash flows or results of operations, litigation is subject to inherent uncertainties.
 
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 AHC MANAGEMENT
Below is a list of names, ages and a brief overview of the business experience of AHC’s executive officers and directors:

Name	  	Age	 	Position/Title	
Christopher T. Metz	  	48	 	Director and Chairman	
Mark E. Brody	  	52	 	Director	
Jason H. Neimark	  	42	 	Director	
Jerome Griffith	  	55	 	Director Nominee	
Robert A. Bowman	  	58	 	Director Nominee	
Jill Granoff	  	51	 	Director and Chief Executive Officer	
Lynn Shanahan	  	53	 	Chief Executive Officer, Kellwood Brands	
Arthur Gordon	  	72	 	Chief Executive Officer, Kellwood Western Region	
Lisa Klinger	  	46	 	Chief Financial Officer and Treasurer	
Deena Gianoncelli	  	40	 	Senior Vice President, Human Resources	
Keith Grypp	  	49	 	Senior Vice President, General Counsel and Secretary	
Directors and Executive Officers
AHC believes that Apparel Holding Corp.’s board of directors should be composed of individuals with knowledge and experience in many substantive areas that impact our business. The following areas are the most important to AHC: fashion and consumer goods; retail and wholesale; marketing and merchandising; sales and distribution; international business development; strategic planning and leadership of complex organizations; accounting, finance, and capital structure; legal/regulatory and government affairs; talent management; and board practices of other major corporations. AHC believes that all of Apparel Holding Corp.’s current board members possess the professional and personal qualifications necessary for board service, and have highlighted in the individual biographies below the specific experience, attributes, and skills that led to the conclusion that each board member should serve as a director.
Christopher T. Metz.     Mr. Metz has served as a director since 2008 and will be appointed to serve as the Chairman of Apparel Holding Corp.’s board of directors prior to the consummation of this offering. Mr. Metz has served as Managing Director of Sun Capital since 2005 and has extensive global operating and leadership experience in the consumer and durable goods industries. Prior to joining Sun Capital, Mr. Metz was President at Black & Decker, leading its Hardware and Home Improvement Group from 1999 to 2005. During his 13 years at Black & Decker, Mr. Metz held various other senior leadership positions, including President of Kwikset Corporation, President of Price Pfister faucets, President of Baldwin Hardware, and General Manager of European Professional Power Tools and Accessories, based in Frankfurt, Germany. Mr. Metz also serves on several boards of Sun Capital portfolio companies, including Avion Services Group Holding Corp., Captain D’s Holding Corp., Friendly’s Ice Cream LLC, Grandy’s Holding Corp., Lexington Furniture Industries, Inc., Pemco World Air Services, Inc., Rowe Fine Furniture, Inc., and SK Financial Services Corp. Mr. Metz also served on the board of Amicus Wind Down Corporation, a public company, from 2010 to 2012. Mr. Metz brings to Apparel Holding Corp.’s board extensive public and international leadership experience.
Mark E. Brody.     Mr. Brody has served as a director since 2008. Mr. Brody has served as a Managing Director and Group Chief Financial Officer of Sun Capital since 2006. Prior to joining Sun Capital, Mr. Brody served from 2001 to 2006 as Chief Financial Officer for Flight Options, a leading provider of fractional jet services. Prior to Flight Options, he served as Chief Financial Officer or Vice President, Finance for manufacturing-related public companies, including Sudbury, Inc., Essef
 
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Corporation, Anthony & Sylvan Pools, and Waterlink, Inc. Mr. Brody also serves on several boards of Sun Capital portfolio companies, including Limited Stores Company, LLC, Cello-Foil Products, Inc., Emerald Performance Materials LLC, Exopack Holding Corp., Garden Fresh Restaurant Corp., and TPG Enterprises, Inc. Mr. Brody started his career as an auditor with Ernst & Young. Mr. Brody brings to the board significant experience in finance, accounting and corporate strategy development.
Jason H. Neimark.     Mr. Neimark has served as a director since May 2013. Mr. Neimark has served as a Managing Director of Sun Capital since 2001. Mr. Neimark has led more than 65 buyout and capital markets transactions in a broad range of industries on behalf of affiliates of Sun Capital in the U.S. and Europe. From 2000 to 2001, Mr. Neimark was a Principal and President of K&D Distributors, a national direct marketer and specialty distributor of optical products where he led a financial and operational turnaround which concluded in a successful sale. From 1995 to 2000, Mr. Neimark served as a principal of Midwest Mezzanine Funds, a provider of junior capital to middle market businesses. After receiving his CPA designation in 1992, Mr. Neimark worked as a tax consultant and auditor for KPMG Peat Marwick. Mr. Neimark also serves on several boards of Sun Capital portfolio companies, including Gordmans Stores Inc. Mr. Neimark was a director of Accuride Corporation, a public company, from February 2009 to October 2009 and was a director of Loud Technologies, a private company, from May 2005 to July 2008. Mr. Neimark provides strong finance skills to Apparel Holding Corp.’s board of directors and valuable experience gained from previous board service.
Jerome Griffith.     Mr. Griffith will be appointed to our board of directors in connection with the consummation of this offering. Mr. Griffith has served as the Chief Executive Officer, President and a member of the board of directors of Tumi Holding, Inc. since April 2009. From 2002 to February 2009, Mr. Griffith was employed at Esprit Holdings Limited, a global fashion brand, where he was promoted to Chief Operating Officer and appointed to the board of directors in 2004, then promoted to President of Esprit North and South America in 2006. From 1999 to 2002, Mr. Griffith worked as an Executive Vice President at Tommy Hilfiger. From 1998 to 1999, Mr. Griffith worked as the President of Retail at the J. Peterman Company, a catalog-based apparel and retail company. From 1989 through 1998, Mr. Griffith worked in various positions at Gap, Inc. Mr. Griffith brings to our board experience as a public company director, experience as a senior executive of a major global consumer products company and a proven track record of innovation and driving international growth and expansion.
Robert A. Bowman.     Mr. Bowman will be appointed to our board of directors in connection with the consummation of this offering. Mr. Bowman currently serves as President and Chief Executive Officer of Major League Baseball Advanced Media (“MLB.com”), the Internet and interactive media unit of Major League Baseball. Prior to joining MLB.com in November 2000, Mr. Bowman was President and Chief Executive Officer of Cyberian Outpost, Inc., an online retailer of computers and electronics. Before joined Cyberian Outpost in September 1999, Mr. Bowman held several senior management positions at ITT Corporation, including President, Chief Operating Officer and Chief Financial Officer. Earlier in his career, Mr. Bowman served for eight years as Treasurer of the State of Michigan. Mr. Bowman is currently a director and chairman of the audit committee of Take-Two Interactive Software Inc. Mr. Bowman previously served as a director of Warnaco Group, Inc. from 2004 to 2013, Director of Blockbuster, Inc. from 2003 to 2010 and director of World Wrestling Entertainment, Inc. from 2003 to 2008. Mr. Bowman brings to our board experience as a public company director and extensive financial experience in both the public and private sectors.
Jill Granoff.     Ms. Granoff has served as AHC’s Chief Executive Officer and a director since May 2012. Ms. Granoff has also served as Vince’s Chief Executive Officer since August 2012. Previously, Ms. Granoff served as Chief Executive Officer of Kenneth Cole Productions, Inc., a designer and marketer of women’s and men’s apparel, footwear and accessories, from 2008 until 2011. Prior to that, Ms. Granoff served as Executive Vice President of Liz Claiborne Inc. where she had global
 
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responsibility for Juicy Couture, Lucky Brand Jeans, Kate Spade and the company’s e-commerce and outlet businesses. Prior to joining Liz Claiborne, Ms. Granoff was President and Chief Operating Officer of Victoria Secret Beauty, a division of Limited Brands, where she worked from 1999 to 2006. From 1990 to 1999, Ms. Granoff held various executive positions at The Estée Lauder Companies. Ms. Granoff is a member of the board of directors of Demandware and the Fashion Institute of Technology Foundation. Ms. Granoff brings significant senior leadership, operating and industry experience to Apparel Holding Corp.’s board of directors. Ms. Granoff’s position as AHC’s Chief Executive Officer also allows her to advise the board of directors on management’s perspective over a full range of issues affecting AHC.
Lynn Shanahan .      Ms. Shanahan has served as the Chief Executive Officer of Kellwood Brands, since July 2013. Previously, Ms. Shanahan was founder of C2 Group, LLC (“C2 Group”) a company that partners with leading fashion and lifestyle companies to provide operating management, brand development and overall growth strategies. Most recently, through C2 Group, Ms. Shanahan was President of Marimekko NA from 2011 to 2013. Prior to that, Ms. Shanahan worked at Tommy Hilfiger for 15 years where she last served as Group President, with responsibility for U.S. Wholesale, E-commerce, Licensing and Marketing.
Arthur Gordon .      Mr. Gordon has served as the Chief Executive Officer of Kellwood Western Region since August 2009. Previously, Mr. Gordon served as Chief Executive Officer of Kellwood ENC (previously En Chant’e Inc.) and My Michelle from 1998 to 2009. Prior to that, Mr. Gordon served as President of ENC from 1987 to 1997.
Lisa Klinger.     Ms. Klinger has served as AHC’s Chief Financial Officer and Treasurer since December 2012. Ms. Klinger has also served as Vince’s Chief Financial Officer since December 2012. Previously, Ms. Klinger served as Executive Vice President and Chief Financial Officer of The Fresh Market, Inc., a specialty retailer, from 2009 until 2012. Prior to that, Ms. Klinger served as interim Chief Financial Officer of Michael’s Stores during 2008 and Senior Vice President of Finance and Treasurer from 2005 to 2009. Ms. Klinger previously served as Assistant Treasurer at Limited Brands from 2000 to 2005.
Deena Gianoncelli.     Ms. Gianoncelli began serving as our Senior Vice President, Human Resources in September 2013. Previously, Ms. Gianoncelli served as Director of Human Resources for Amazon.com from 2012 to 2013. Prior to that, Ms. Gianoncelli served as the Vice President of Human Resources for Hugo Boss Americas from 2010 to 2012. In addition, Ms. Gianoncelli served as Senior Director of Human Resources for Medco Health Solutions from 2005 to 2010.
Keith Grypp.     Mr. Grypp has worked at AHC for over 20 years and has served as AHC’s Senior Vice President, Secretary and General Counsel since 2009. Mr. Grypp served as Vice President, Secretary and General Counsel from 2008 to 2009. Prior to that, Mr. Grypp served as Assistant General Counsel and Assistant Secretary from 2007 to 2008 and Attorney and Assistant Secretary from 2002 to 2007. Prior to that, Mr. Grypp held various management positions in the audit and information technology department from 1989 to 2002. Mr. Grypp is also a licensed CPA and was employed as an auditor with PricewaterhouseCoopers LLP from 1986 to 1989 and as an attorney with a law firm in St. Louis from 1995 to 1997.
Family Relationships
There are no family relationships between any of AHC’s executive officers or directors.
 
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Corporate Governance
See “Additional Information Related to Vince—Vince Management—Corporate Governance” for a description of the corporate governance provisions and practices to be adopted by the AHC board of directors and stockholders in connection with the consummation of this offering.
Compensation Committee Interlocks and Insider Participation
In fiscal year 2012, AHC did not have a Compensation Committee. All compensation decisions were made by the board of directors of AHC, which held deliberations during fiscal year 2012 concerning executive officer compensation. As a member of the board of directors of AHC, Ms. Granoff participated in deliberations concerning compensation of executive officers. See “Additional Information Related to AHC—AHC Executive Compensation—Employment Agreements” for a description of the employment agreements of our executive officers.
None of our executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors.
 
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 AHC EXECUTIVE COMPENSATION
The following executive compensation section contains information related to the historical Named Executive Officers of AHC. In connection with this offering, all AHC segments other than the Vince segment will be separated from AHC in the IPO Restructuring Transactions as defined elsewhere in this prospectus. Some of the current AHC officers will remain with the Kellwood business and thus will not be officers of Vince, LLC or Apparel Holding Corp. (to be renamed Vince Holding Corp.), the entity offering stock in this offering, after consummation of this offering.
The following section provides compensation information pursuant to the scaled disclosure rules applicable to “emerging growth companies” under the rules of the SEC and may contain statements regarding future individual and company performance targets and goals. These targets and goals are disclosed in the limited context of the company’s executive compensation program and should not be understood to be statements of management’s expectations or estimates of results or other guidance. AHC specifically cautions investors not to apply these statements to other contexts. AHC’s Named Executive Officers for fiscal 2012 and the positions they held with AHC during fiscal 2012 are set forth below:
Jill Granoff, Chief Executive Officer, Kellwood and Vince
Arthur Gordon, Chief Executive Officer, Kellwood Western Region
Michael Saunders, Senior Vice President and Chief Operating Officer, Kellwood
This executive compensation section contains certain forward-looking statements that are based on our current plans and expectations regarding future compensation plans and arrangements. The actual compensation plans and expectations that we adopt may differ materially from the currently anticipated plans and arrangements as summarized in this discussion.
Overview
AHC is a privately-held company solely owned by the Pre-IPO Stockholders. As a result, AHC was not subject to any stock exchange listing or SEC rules requiring a majority of its board of directors to be independent or relating to the formation and functioning of board committees, including audit, compensation and nominating committees. As such, all compensation decisions have historically been made by the board of directors of Kellwood Company, a wholly-owned subsidiary of AHC. Furthermore, AHC’s executive officers are currently compensated by Kellwood Company for performing services on its behalf. To date, the compensation of the executive officers identified in the “Summary Compensation Table” in this prospectus, who are referred to as AHC’s Named Executive Officers, has consisted of a combination of base salary, bonuses (sign-on, performance based and guaranteed) and long-term incentive compensation in the form of Kellwood Company stock options issued under the 2010 Option Plan). Executive officers and all salaried employees are also eligible to receive health and welfare benefits. Pursuant to employment agreements or an offer letter, the Named Executive Officers were also eligible to receive certain payments and benefits upon termination of employment under certain circumstances, as well as acceleration of vesting of certain outstanding equity awards in connection with a change in control. See “—Employment Agreements” for additional information.
In connection with the consummation of the IPO Restructuring Transactions and this offering, Kellwood Company will assign to Vince Holding Corp. or one of its subsidiaries (after giving effect to the IPO Restructuring Transactions) Kellwood Company’s obligations under those executive employment agreements pursuant to which the related executive officers will be providing services to Vince after consummation of this offering. Employment Agreements for the non-Vince officers will remain with Kellwood Company. See “—Employment Agreements” for additional information.
 
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The compensation paid to AHC’s Named Executive Officers for fiscal 2012 may not necessarily be indicative of how Vince Holding Corp. or Kellwood Company, LLC, a wholly-owned subsidiary to be separated from Apparel Holding Corp. in the IPO Restructuring Transactions, may compensate its Named Executive Officers following the consummation of this offering. See “Additional Information Related to Vince—Vince Executive Compensation” for a description of executive compensation paid to Vince’s named executive officers.
Executive Compensation Design Overview
AHC’s executive compensation programs have historically been designed to provide competitive total compensation opportunities. They were designed to align pay with achievement of Kellwood’s annual and long-term financial and operational goals and recognize individual achievement. In setting pay levels, AHC reviewed published survey information and other available compensation data that was specific to companies of similar size and positioning in our industry. As currently structured, AHC’s executive compensation program is designed to:
 
 	Ÿ	 	provide aggregate compensation that reflects the market compensation for executives with similar responsibilities in similar companies with appropriate adjustments to reflect the experience, performance and other distinguishing characteristics of specific individuals;	
 
 	Ÿ	 	be commensurate with our short-term and long-term financial performance;	
 
 	Ÿ	 	be aligned with the value for stakeholders; and	
 
 	Ÿ	 	provide a competitive compensation opportunity to allow us to attract and retain key executive talent.	
AHC believes that an important criterion for the determination of the aggregate value of its compensation program and the allocation of such value among the various elements of its compensation plans is market data on the amounts, allocations and structures utilized by similarly situated companies for positions of comparable responsibility. As discussed in “Additional Information Related to Vince—Executive Compensation—Executive Compensation Design Overview,” Apparel Holding Corp. intends to work with Aon to determine the elements of its go-forward public company compensation program, for Vince officers and directors. Affiliates of Sun Capital and AHC management are continuing to evaluate the elements of the compensation package for Kellwood officers that will remain employed by Kellwood Company, LLC after the consummation of this offering.
Risk Assessment and Compensation Practices
AHC’s management assesses and discusses with the board of directors its compensation policies and practices for its employees as they relate to AHC’s overall risk management, and based upon this assessment, AHC believes that any risks arising from such policies and practices are not reasonably likely to have a material adverse effect on us.
Compensation of Named Executive Officers
Base Salaries .     In fiscal 2012, the board of directors of Kellwood Company, a wholly-owned subsidiary of AHC, reviewed and held deliberations concerning the compensation of its executive officers, including AHC’s Named Executive Officers. Going forward, Vince’s compensation committee will review the base salaries of Vince’s executive officers, including Ms. Granoff, at least annually and make adjustments as it determines to be reasonable and necessary. AHC anticipates that Kellwood Company, LLC’s board of managers (after giving effect to the IPO Restructuring Transactions and
 
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Kellwood Company’s conversion) will continue to make compensation decisions for its managers and the non-Vince officers. The current base salaries of the Named Executive Officers are as follows:

Named Executive Officer	  	Base Salary	 	
Jill Granoff, Chief Executive Officer, Kellwood and Vince(1)	  	$	1,000,000	  	
Arthur Gordon, Chief Executive Officer, Kellwood Western Region	  	$	800,000	  	
Michael Saunders, Senior Vice President and Chief Operating Officer, Kellwood(2)	  	$	540,000	  	

(1)	Ms. Granoff joined AHC as Chief Executive Officer in May 2012 and subsequently became the Chief Executive Officer of the Vince business in August 2012. The board of directors approved a base salary increase for Ms. Granoff from $900,000 to $1,000,000 effective as of February 1, 2013.	
(2)	Mr. Saunders resigned his position as Senior Vice President and Chief Operating Officer of Kellwood effective June 30, 2013. He will not be an AHC Named Executive Officer for fiscal 2013 or any subsequent period.	
Sign-On Bonuses .     Certain executives received a one-time sign-on bonus when they joined AHC. For fiscal 2012, no Named Executive Officers received any sign-on bonus.
Guaranteed Bonus .     Certain executives were eligible to receive a guaranteed minimum bonus based on their annual salary and their targeted bonus opportunity. If an executive’s award in fiscal 2012 under the AHC 2012 Bonus Plan was lower than their guaranteed minimum bonus as set forth in their employment agreement or offer letter, they received a cash bonus for such year in amount equal to the difference, so that their total cash bonus award for fiscal 2012 was equal to their guaranteed minimum bonus. For fiscal 2012, Ms. Granoff, Mr. Gordon and Mr. Saunders had guaranteed bonuses of $500,000, $250,000 and $100,000, respectively. See “Summary Compensation Table” and “—Cash Bonus Plan” for additional information.
Cash Bonus Plan .     The AHC 2012 Bonus Plan was designed to encourage a high level of performance in each year so that the achievement of targeted performance levels is rewarded with a target incentive payout, and performance above such levels is rewarded with higher-level payouts. Each executive officer is assigned a target annual award opportunity based on the achievement of EBITDA performance that is expressed as a percentage of such executive’s base salary. Kellwood Company’s board of directors has historically approved these targeted award opportunities for each executive officer. Ms. Granoff received additional cash bonus payments for fiscal 2012, as the amount of her guaranteed bonus exceeded the amount she received based on the EBITDA targets under the AHC 2012 Bonus Plan. For fiscal 2012, the threshold, target and maximum EBITDA targets for AHC were $42.4 million, $47.4 million and $57.4 million, respectively. Actual EBITDA for AHC for fiscal 2012 was $46.9 million. Neither Mr. Saunders nor Mr. Gordon received any additional cash bonus payment for fiscal 2012 as the amount they received under the AHC 2012 Bonus Plan exceeded their guaranteed bonuses for fiscal 2012.
Kellwood Company’s board of directors established EBITDA targets for fiscal 2013 for AHC’s Named Executive Officers under the AHC 2013 Bonus Plan. For fiscal 2013, Ms. Granoff’s targeted incentive payout under the AHC 2013 Bonus Plan is based on the following allocations:
 
 	Ÿ	 	From February 2, 2013 to July 31, 2013, 50% of her targeted incentive payout under the AHC 2013 Bonus Plan is based on the achievement of EBITDA targets for AHC’s non-Vince businesses and 50% of such payment is based on the achievement of Vince EBITDA targets;	
 
 	Ÿ	 	From August 1, 2013 until the date of consummation of this offering, 25% of her targeted incentive payout under the AHC 2013 Bonus Plan is based on the achievement of EBITDA targets for AHC’s non-Vince businesses and 75% of such payment is based on the achievement of Vince EBITDA targets; and	
 
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 	Ÿ	 	After the date of consummation of this offering, 100% of such payout will be based on the achievement of Vince EBITDA targets.	
AHC believes it is currently on track to achieve the targeted AHC non-Vince and Vince EBITDA performance levels under the AHC 2013 Bonus Plan. The EBITDA targets under the AHC 2013 Incentive Plan for Mr. Saunders are based on the achievement of targeted AHC Non-Vince EBITDA levels. For Mr. Gordon, the EBITDA targets under the AHC 2013 Bonus Plan are based on the achievement of targeted AHC Non-Vince and AHC regional EBITDA levels.
Although AHC is using EBITDA performance as a financial measure for fiscal 2013 and have done so historically, it may use other objective financial performance indicators for the cash bonus plan in the future, including but not limited to the price of our common stock, stockholder return, return on equity, return on investment, return on capital, sales productivity, same-store sales growth, economic value added, gross margin, cash flow, earnings per share or market share.
Kellwood Equity Incentives.     On June 30, 2010, the board of directors of Kellwood Company, a wholly-owned subsidiary of AHC, approved the 2010 Option Plan. The 2010 Option Plan provides for the grant of options to acquire up to 105,000 shares of non-voting common stock of Kellwood Company. Options granted under the 2010 Option Plan (i) have an exercise price based on the fair market value; (ii) vest over a five year period at a rate of 20% per year, (iii) expire on the earlier of the tenth anniversary of the grant date or upon termination of employment for cause and (iv) become exercisable upon termination or a liquidity event, as defined by the 2010 Option Plan. The fair value of the stock options is determined at the grant date using a probability-weighted expected return method model, which requires us to make several significant assumptions including long-term EBITDA growth rates, future enterprise value, discount rates, and timing and probability of a future liquidity event. This methodology was selected based on the current capital structure and forecasted operational performance.
In determining the number of shares underlying each option grant, the Kellwood Company board of directors took into account each executive officer’s existing unvested equity grants and made awards that they determined would be sufficient to motivate and retain each executive officer past the expected date of this offering. The stock option grants made to AHC’s Named Executive Officers in fiscal 2012 were as follows:

Named Executive Officer	  	Date of Grant	  	Number of Shares	 	  	Exercise Price(1)	 	
Jill Granoff	  	May 4, 2012	  	 	44,000	  	  	$	150.78	  	
Arthur Gordon(2)	  	N/A	  				  				
Michael Saunders	  	N/A	  				  				

(1)	The grant date fair value of these option grants is reflected in the “Summary Compensation Table” under the “Option Awards” column.	
(2)	As described below in “—Employment Agreements,” Mr. Gordon agreed to cancel his outstanding Kellwood Company stock options in exchange for payments under his retirement agreement. Such options were effectively surrendered and cancelled on October 4, 2012 in accordance with the terms of the related option cancellation agreement.	
In connection with the consummation of this offering, Apparel Holding Corp. employees who will continue as employees of the non-Vince businesses after the consummation of this offering will receive shares of Apparel Holding Corp. common stock in exchange for their vested Kellwood Company stock options (previously issued under the 2010 Option Plan). The number of shares of Apparel Holding Corp. to be issued to each such employee shall be calculated by dividing the aggregate spread value of such employee’s vested options (determined as the difference between the exercise price and the public
 
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offering price set forth on the cover of this prospectus) by this public offering price. All other stock options previously issued to such employees under the 2010 Option Plan will be cancelled upon the closing of this offering. Apparel Holding Corp. will assume Kellwood Company’s remaining obligations under the 2010 Option Plan. After giving effect to such assumption and the IPO Restructuring Transactions (including the related stock split), the stock options previously issued to Vince employees and to Mr. Saunders (as discussed below in Note 5 to “—Outstanding Equity Awards at Fiscal 2012 Year-End”) under the 2010 Option Plan will become options to acquire shares of Apparel Holding Corp. common stock. The options to acquire 44,000 shares of Kellwood Company common stock previously issued to Ms. Granoff will become options to acquire             shares of Apparel Holding Corp. common stock with an exercise price of $         per share. The grant date fair value of Ms. Granoff’s option grant, as set forth below in the “Summary Compensation Table” under the “Option Awards” column, will remain unchanged, after giving effect to Apparel Holding Corp.’s assumption of Kellwood Company’s obligations under the 2010 Option Plan and the IPO Restructuring Transactions.
Summary Compensation Table
The following table provides information regarding the total compensation for services rendered in all capacities that was earned by each individual who served as a principal executive officer of AHC at any time during fiscal 2012 and the two other most highly compensated executive officers who were serving as executive officers during the fiscal year ended February 2, 2013.

Name and Principal Position	 	Year	 	 	Salary ($)	 	 	Bonus ($)	 	 	Option
Awards
($)(1)	 	 	Non-Equity
Incentive
Plan
Compen-
sation
($)(2)	 	 	All Other
Compen-
sation
($)	 	 	Total ($)	 	
Jill Granoff	 				 				 				 				 				 				 				
Chief Executive Officer (3)	 	 	2012	  	 	$	661,154	(4) 	 	$	27,363	(5) 	 	$	2,128,920	  	 	$	472,637	  	 	$	11,245	(6) 	 	$	3,301,319	  	
								
Arthur Gordon	 				 				 				 				 				 				 				
Chief Executive Officer, Kellwood Western Region	 	 	2012	  	 	$	800,000	  	 	 	—	  	 	 	—	  	 	$	308,766	  	 	$	21,074	(6) 	 	$	1,129,840	  	
	 	 	2011	  	 	$	800,000	  	 	 	—	  	 	 	—	  	 	$	190,109	  	 	$	21,645	(6) 	 	$	1,011,754	  	
								
Michael Saunders	 				 				 				 				 				 				 				
Senior Vice President and Chief Operating Officer	 	 	2012	  	 	$	540,000	  	 	 	—	  	 	 	—	  	 	$	189,055	  	 	$	14,988	(6) 	 	$	744,043	  	
	 	 	2011	  	 	$	539,846	  	 	 	—	  	 	 	—	  	 	$	0	  	 	$	14,932	(6) 	 	$	554,778	  	

(1)	The fair value of stock options granted in fiscal 2012 was determined at the grant date using a Black-Scholes model, which requires us to make several significant assumptions including risk-free interest rate, volatility, expected term, and discount factors for stockholders in a privately-held company. At the grant date, the options granted in fiscal year 2012 had a weighted average fair value of $43.01 per share. As discussed above in “—Compensation of Named Executive Officers—Kellwood Equity Incentives,” the options previously issued to Ms. Granoff will become options to acquire              shares of Apparel Holding Corp. common stock (after giving effect to the IPO Restructuring Transactions (including the related stock split) and Apparel Holding Corp.’s assumption of Kellwood Company’s obligations under the 2010 Option Plan), with an exercise price per share equal to $        .	
(2)	Amounts reflect the annual incentive cash bonus earned in the fiscal year shown but paid in the following fiscal year.	
(3)	Ms. Granoff was not employed by the company in fiscal 2011.	
(4)	Salary reflects base compensation from hire date of May 4, 2012 through February 2, 2013.	
(5)	Amount reflects cash bonus payment after giving effect to the $472,637 which was paid upon the achievement of targeted objectives under the AHC 2012 Bonus. The aggregate of such amounts (or $500,000) represents the amount of Ms. Granoff’s guaranteed bonus under the terms of her employment agreement.	
(6)	Amounts reflect the value of their clothing allowance, car allowance and excess life insurance.	
 
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Employment Agreements
Jill Granoff, Chief Executive Office r .     Kellwood Company entered into an employment agreement with Ms. Granoff on May 4, 2012. Pursuant to the terms of the employment agreement, Ms. Granoff received an annual base salary of $900,000 in fiscal 2012. In addition to base salary, Ms. Granoff was eligible to participate in the AHC 2012 Bonus Plan which provided her with the opportunity to earn a bonus targeted at 75% of her base salary in fiscal 2012. Under her employment agreement, Ms. Granoff was guaranteed an annual cash bonus of $500,000 for fiscal 2012. Effective February 1, 2013, Ms. Granoff received a base salary increase to $1,000,000 and her targeted bonus opportunity increased to 100% of her base salary. Ms. Granoff has no guaranteed bonus for fiscal 2013.
In connection with the consummation of this offering and the repayment of certain Kellwood Company indebtedness, Ms. Granoff will earn a debt recovery bonus under the terms of her amended employment agreement. The amount of the bonus is equal to 4.4% of the related debt recovery, subject to the aggregate maximum bonus cap of $6.0 million; provided, that she remain continuously employed with AHC through the related payment date. As set forth therein, she is eligible to receive a debt recovery bonus upon any reduction in the debt outstanding under the Cerberus Term Loan, the Public Bonds and the Sun Term Loan Agreements. In connection with Kellwood Company’s sale of Royal Robbins in December 2012, Kellwood Company repaid $10.0 million of indebtedness under the Cerberus Term Loan. This repayment triggered a $440,000 debt recovery bonus for Ms. Granoff. Ms. Granoff has agreed to delay the payment of such bonus until the earlier of (i) December 31, 2013, (ii) the consummation of this offering, (iii) the consummation of a sale of all or substantially all of the Vince business to a third-party not affiliated with Kellwood Company or (iv) the termination of Ms. Granoff’s employment for any reason, pursuant to the terms of a related letter agreement. This payment reduces the amount of debt recovery bonus to which she would otherwise be entitled to receive upon the repayment of the Cerberus Term Loan, the Public Bonds and the Sun Term Loan Agreements in connection with the consummation of this offering on a dollar for dollar basis.
On September 24, 2013, Ms. Granoff and Kellwood Company entered into an amendment to her employment agreement. Pursuant to the terms of the amendment, Kellwood Company has agreed to pay the debt recovery bonus to Ms. Granoff upon the closing of this offering prior to paying the restructuring fee to Sun Capital Management or repaying, refinancing or repurchasing the 7.625% Notes, each as described in “Use of Proceeds” and “Restructuring Transactions.” Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of the 7.625% Notes.
In the event Ms. Granoff’s employment is terminated without cause or Ms. Granoff terminates her employment for good reason, she would be eligible to receive (i) any unpaid base salary through her termination date, together with a pro-rated portion of the annual bonus for the year in which her termination occurs, (ii) reimbursement for any unreimbursed business expenses incurred through her termination date, (iii) any accrued and unused vacation time, (iv) all other payments, benefits or fringe benefits to which she is entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant, (v) her base salary during a period ending on the 18th month anniversary of her termination date, less any salary she receives from other full-time employment after the 12-month anniversary of her termination, (vi) continued participation in our group health plan for 18 months or until she obtains other employment following the first anniversary of her termination and such employment offers comparable group health benefits for which she is eligible, (vii) the pro rata portion of shares subject to Ms. Granoff’s option grants which would have otherwise vested on the next scheduled vesting date had her employment continued until such time and (viii) any prior period bonus earned and not yet paid.
 
Kellwood Company’s obligations under Ms. Granoff’s employment agreement will be assigned to Vince Holding Corp. or one of its subsidiaries in connection with this offering.
 
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Arthur Gordon, Chief Executive Officer , Kellwood Western Region .     Beginning fiscal 2009, Mr. Gordon received an annual base salary of $800,000. In addition to base salary, Mr. Gordon was eligible to participate in the AHC 2012 Bonus Plan that provided him with the opportunity to earn a bonus targeted at 70% of his base salary. Effective May 1, 2013, Mr. Gordon entered into an amended and restated retirement agreement and related option cancellation agreement with Kellwood Company, a wholly-owned subsidiary of AHC. Pursuant to the terms of his retirement agreement, Kellwood Company agreed to make the following payments to Mr. Gordon in the event he is terminated without cause or voluntarily resigns or retires after February 1, 2014: (i) any unpaid and earned cash incentive bonus for the prior year; (ii) a lump sum equal to 18 months of his base salary, plus a lump sum equal to the average of his three prior year cash incentive bonuses, each subject to Mr. Gordon’s execution of a satisfactory release; and (iii) provided that Mr. Gordon is paying the employee portion of his COBRA premium, the amount in excess of the COBRA premium for a period of 18 months or until he secures other employment. In such event, Kellwood Company may retain his exclusive consulting services, upon the mutual agreement of the parties, for a period beginning on his termination date and ending on the earlier of: (A) the 12-month anniversary of his termination date; (B) his death or disability; and (C) his termination as a consultant for cause. Mr. Gordon will earn a bonus of $130,563 upon the consummation of this offering, which constitutes a “Sale” under the terms of his retirement agreement. Such amount shall be paid by Kellwood Company, LLC upon the earlier of (1) 30 days following the consummation of this offering; (2) the payment of severance amounts to him; and (3) February 1, 2014. Notwithstanding the foregoing, he shall not be entitled to any payments under his retirement agreement if he voluntarily resigns or retires before February 2, 2014, upon his death or disability or if he is terminated for cause. Mr. Gordon agreed to cancel his outstanding Kellwood Company stock options in connection with his entry into this amended and restated retirement agreement.
It is currently anticipated that Mr. Gordon’s sole operational responsibilities will relate to AHC’s non-Vince businesses after consummation of this offering, and that he will remain an employee of Kellwood Company, LLC. As such, he will not be one of Vince Holding Corp.’s Named Executive Officers for fiscal 2013 or beyond.
Outstanding Equity Awards at Fiscal 2012 Year-End
The following table sets forth information regarding outstanding equity awards of Kellwood Company held by our Named Executive Officers at the end of fiscal 2012:

 	 	Options Awards(1)	 	
Name	 	Vesting
Commencement Date	 	 	Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable	 	 	Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable	 	 	Option Exercise
Price ($)	 	 	Option
Expiration Date	 	
Jill Granoff	 	 	May 4, 2012	(2) 	 	 	—	  	 	 	44,000	(3) 	 	$	150.78	(3) 	 	 	May 4, 2022	(3) 	
Arthur Gordon(4)	 	 	N/A	  	 				 				 				 				
Michael Saunders	 	 	February 20, 2008	  	 	 	8,000	  	 	 	2,000	  	 	$	1.00	  	 	 	June 30, 2020	(5) 	

(1)	Each stock option was granted pursuant to the 2010 Option Plan. Pursuant to the terms of his extension agreement (as described below in Note 4), the options previously issued to Mr. Saunders will be exercisable into shares of Apparel Holding Corp. common stock upon the consummation of this offering.	
(2)	Ms. Granoff’s options will vest 20% each year on the anniversary of the grant date beginning on the first anniversary of the grant date so long as she remains continuously employed with the company. Notwithstanding the foregoing, unvested options will automatically vest upon the consummation of certain sale and change of control transactions.	
(3)	As discussed above in “—Compensation of Named Executive Officers—Kellwood Equity Incentives,” the options to acquire 44,000 shares of Kellwood Company common stock previously issued to Ms. Granoff will become options to acquire             shares of Apparel Holding Corp. common stock with an exercise price of $         per share (after giving effect to the IPO Restructuring Transactions (including the related stock split) and the assumption by Apparel Holding Corp. of Kellwood	
 
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 	Company’s remaining obligations under the 2010 Option Plan). The option expiration date will remain May 4, 2022 and will be subject to the same vesting terms.	
(4)	As described below in “—Employment Agreements,” Mr. Gordon agreed to cancel his outstanding Kellwood Company stock options in exchange for payments under his retirement agreement. Such options were effectively surrendered and cancelled on October 4, 2012 in accordance with the terms of the related option cancellation agreement.	
(5)	Mr. Saunders entered into an Extension Agreement with Kellwood Company on August 5, 2013, pursuant to which the expiration date of his previously granted Kellwood Company options was extended from the date which was ten days after the date upon which his employment with Kellwood Company was terminated, or July 8, 2013, to the earliest of (a) the date which is 10 days after the consummation of this offering, (b) the date of the consummation of a Sale (as such term is defined in Saunders’ original Grant Agreement) and (c) on June 30, 2020 (such earliest of (a), (b) or (c) referred to herein as, the “Expiration Time”). Kellwood Company shall provide Saunders with at least 10 days’ notice of the Expiration Time. Mr. Saunders has agreed not to exercise any of the subject options until the date that is 10 days prior to the Expiration Time. Within the 30 day period prior to the Expiration Time, affiliates of Sun Capital shall have the right to purchase all or any of Mr. Saunders’ options at the lower of (i) $120.78 per option (as such price may be adjusted in accordance with the Extension Agreement) and (ii) the fair market value of the underlying share, minus $1.00 per option. Such options will become options to acquire shares of Apparel Holding Corp. common stock in connection with the assumption by Apparel Holding Corp. of Kellwood Company’s remaining obligations under the 2010 Option Plan (with the number of shares subject to such options and the related exercise price adjusted to give effect to the stock split which will occur as part of the IPO Restructuring Transactions). Affiliates of Sun Capital would pay any such option purchase price in cash. In the event Mr. Saunders exercises his options prior to the Expiration Time, he will receive shares of Apparel Holding Corp. common stock. Additionally, affiliates of Sun Capital shall have the right, within seven months of the related exercise date, to purchase any or all of such shares of Apparel Holding Corp. common stock at the lower of (i) $121.78 per share (as may be adjusted in accordance with the Extension Agreement) and (ii) the fair market value of such share at the time of repurchase. They would pay for any such shares in cash.	
Director Compensation
During fiscal 2012, AHC did not make any compensation payments (including any equity grants) to its directors, for service as directors, as all of its directors were employees of AHC or affiliates of Sun Capital, which will continue to be AHC’s controlling stockholder after consummation of this offering. Sun Cardinal, an affiliate of Sun Capital, will also have the authority to designate a majority of AHC’s directors after consummation of this offering. AHC did reimburse directors for out-of-pocket expenses they incurred in connection with their service as directors, including those incurred in connection with attending all board and committee meetings. See “Additional Information Related to Vince—Vince Executive Compensation—Director Compensation” for a description of Vince Holding Corp.’s director compensation arrangements after consummation of this offering.
Director and Officer Indemnification and Limitation of Liability
There is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.
Employee Stock Plans
2010 Option Plan
The 2010 Option Plan was adopted by the board of directors of Kellwood Company, a wholly-owned subsidiary of Apparel Holding Corp., on June 30, 2010. As of October 5, 2013, Kellwood Company had reserved 105,000 shares of its common stock for issuance under the 2010 Option Plan. The Kellwood Company board of directors will not grant any further awards under the 2010 Option Plan to any of AHC’s officers or directors after the consummation of this offering. Future awards to executive officers that will provide services to Vince after consummation of this offering and AHC’s directors shall be granted by AHC’s board of directors or compensation committee under the Vince 2013 Incentive Plan, as described in “Additional Information Related to Vince—Vince Executive Compensation.”
 
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As discussed above in “—Compensation of Named Executive Officers—Kellwood Equity Incentives,” Apparel Holding Corp. employees who will continue as employees of the non-Vince businesses after the consummation of this offering will receive shares of Apparel Holding Corp. common stock in exchange for their vested Kellwood Company stock options (previously issued under the 2010 Option Plan). The number of shares of Apparel Holding Corp. to be issued to each such employee shall be calculated by dividing the aggregate spread value of such employee’s vested options (determined as the difference between the exercise price and the public offering price set forth on the cover of this prospectus) by this public offering price. All other stock options previously issued to such employees under the 2010 Option Plan will be cancelled upon the closing of this offering. Vince Holding Corp. will assume Kellwood Company’s remaining obligations under the 2010 Option Plan. After giving effect to such assumption, the stock options previously issued to Vince employees and to Mr. Saunders under the 2010 Option Plan will become options to acquire shares of Apparel Holding Corp. common stock (with the number of shares subject to such options and the related exercise price adjusted to give effect to the stock split which will occur as part of the IPO Restructuring Transactions).
Section 401(k) Plan
AHC provides the defined contribution Kellwood Retirement Savings Plan, a 401(k) Plan, as well as various group health and welfare programs that are generally available to all Kellwood employees, including AHC’s Named Executive Officers.
Under the plan, eligible employees electing to participate may contribute up to 100% of their pretax income, subject to IRS rules limiting an individual’s total contributions and the application of IRS tests designed to ensure that the plan does not discriminate in favor of highly compensated employees.
Effective February 1, 2013, AHC reinstated the 401(k) match for all employees. AHC will match 50% up to the first 3% of the employee’s deferral. AHC did not make any contributions to any AHC Named Executive Officer’s 401(k) account in fiscal 2012.
 
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 DESCRIPTION OF CERTAIN INDEBTEDNESS OF AHC
The following description of certain indebtedness of AHC sets forth the debt of historical AHC and its consolidated subsidiaries. Immediately prior to the consummation of this offering, all AHC segments other than the Vince segment (or the non-Vince businesses) will be separated from AHC in the IPO Restructuring Transactions. In connection with these transactions, the Pre-IPO Stockholders will continue to own the non-Vince businesses through their ownership of Kellwood Holding, LLC. Kellwood Company, LLC will become a subsidiary of Kellwood Holding, LLC and will remain liable for its obligations under the debt described in this section. Additionally, Vince, LLC’s obligations under the Wells Fargo Facility, the Cerberus Term Loan, the Sun Term Loan Agreements and the 12.875% Notes will be terminated or released immediately after the consummation of this offering (after giving effect to the Additional Sun Capital Contribution) and Vince, LLC will not guarantee or become a party to Kellwood’s new revolving credit facility. As a result, the debt of Kellwood after giving effect to the IPO Restructuring Transactions will not be the debt of Apparel Holding Corp, the entity offering stock in this offering.
Immediately after the consummation of this offering, Kellwood Company, LLC will use the proceeds from the repayment of the Kellwood Note Receivable to, after giving effect to the Additional Sun Capital Contribution, (i) repay, at closing, all indebtedness outstanding under (A) the Cerberus Term Loan, which had an outstanding balance of $45.7 million as of August 3, 2013 and (B) the Sun Term Loan Agreements, which collectively totaled $118.0 million in the aggregate as of August 3, 2013, (ii) redeem at par all of the outstanding 12.875% Notes, which totaled $146.8 million as of August 3, 2013, pursuant to an unconditional redemption notice to be issued at the closing of this offering, plus, with respect to clauses (i) and (ii), fees, expenses and accrued and unpaid interest thereon, (iii) pay a restructuring fee equal to 1% of the aggregate of the offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement and (iv) pay a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements.” It is currently estimated that the restructuring fee described in clause (iii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million. There will be no outstanding balance on the Kellwood Note Receivable after giving effect to the repayment thereof to be made by Vince Intermediate Holding, LLC immediately after the closing of this offering.
In addition, Kellwood Company will conduct a tender offer for all of its outstanding 7.625% Notes, which totaled $87.0 million in aggregate principal amount as of August 3, 2013, at par plus accrued and unpaid interest thereon, using proceeds from the repayment of the Kellwood Note Receivable. The tender offer will close at or after the closing of this offering. Kellwood Company, LLC may also, at or after the closing of this offering, use proceeds remaining from the repayment of the Kellwood Note Receivable to discharge or repurchase at par all or any of its 3.5% Convertible Notes, which totaled $0.2 million in aggregate principal amount as of August 3, 2013, plus accrued and unpaid interest thereon. Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of either the 7.625% Notes or the 3.5% Convertible Notes.
If the tender offer for the 7.625% Notes is not completed contemporaneously with the closing of this offering, Kellwood Company, LLC shall enter into an escrow agreement with Vince Intermediate Holding, LLC and the Escrow Agent at the closing of this offering, pursuant to which Kellwood Company, LLC will escrow an amount equal to the face amount of the 7.625% Notes plus accrued and unpaid interest thereon through the anticipated closing date of the tender offer until the termination of
 
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the related escrow agreement. If the tender offer is completed contemporaneously with the consummation of this offering, we will not enter into the escrow agreement. No interest will accrue on the funds placed into escrow with the Escrow Agent and both Vince Intermediate Holding, LLC and Kellwood Company, LLC must consent to any distributions from the escrow account in accordance with the terms of the Transfer Agreement. The escrow agreement will automatically terminate upon the earlier of (i) the closing of the tender offer for the 7.625% Notes and (ii) the three-month anniversary of the closing of this offering. Amounts in escrow shall be held for the benefit of Kellwood Company, LLC and not for the benefit of any holders of the 7.625% Notes.
In addition, Kellwood Company, LLC will, immediately after the consummation of this offering, refinance the Wells Fargo Facility, to among other things, remove Vince, LLC as an obligor thereunder. See “Use of Proceeds” and “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC” for additional information and “Additional Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC—Liquidity and Capital Resources” for a description of such indebtedness.
In connection with the refinancing of the Wells Fargo Facility, Kellwood Company, LLC anticipates entering into a $120 million revolving facility. Kellwood is still in preliminary discussions with Wells Fargo with respect to the terms any such new revolving credit facility. In general, we expect that such facility will contain representations and warranties, financial and restrictive covenants, events of default and collateral arrangements that are customary for this type of financing. Vince, LLC will not guarantee or be a borrower party or guarantor to any such new revolving credit facility.
 
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 ADDITIONAL INFORMATION RELATED TO VINCE
The information appearing in this section relates to the Vince business and Apparel Holding Corp., the entity offering shares of common stock in this offering after giving effect to the IPO Restructuring Transactions, and to the operations of Vince, LLC and the Vince business on a historical basis, as the context requires.
Please note the following:
 
 	Ÿ	 	Apparel Holding Corp. (to be renamed Vince Holding Corp. prior to the consummation of this offering) is the legal issuer of the shares offered in this offering. Investors will be investing in the Vince business, however, they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC;	
 
 	Ÿ	 	The information set forth below is provided as supplemental information and should not be considered in lieu of the information pertaining to Apparel Holding Corp; and	
 
 	Ÿ	 	The financial information included in this discussion and in Vince, LLC’s historical financial statements may not be indicative of Apparel Holding Corp.’s financial position, operating results and changes in equity after the completion of the IPO Restructuring Transactions, or what they would have been had the Vince business operated separately from the non-Vince businesses during the periods presented.	
As used in this “Additional Information Related to Vince” section, unless the context otherwise requires:
 
 	Ÿ	 	“our,” “us,” “we” and “Vince Holding Corp.” refers to Vince Holding Corp. (currently known as Apparel Holding Corp.) and its consolidated subsidiaries (including Vince, LLC) after giving effect to the IPO Restructuring Transactions;	
 
 	Ÿ	 	“Vince” refers to the Vince business after giving effect to the IPO Restructuring Transactions;	
 
 	Ÿ	 	“Vince, LLC” refers to the entity that has historically held the Vince assets and liabilities and will continue to do so after completion of the IPO Restructuring Transactions and the consummation of this offering and the application of proceeds of this offering as discussed herein. Apparel Holding Corp. is the legal issuer of the shares offered in this offering. Investors will be investing in the Vince business, however, they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC.;	
 
 	Ÿ	 	“AHC” refers to Apparel Holding Corp. and its consolidated subsidiaries (including Kellwood Company) prior to the completion of the IPO Restructuring Transactions. Apparel Holding Corp. is the historical owner and operator of the Vince and non-Vince businesses; and	
 
 	Ÿ	 	“Kellwood” refers to Kellwood Holding, LLC and its consolidated subsidiaries (including Kellwood Company, LLC) after giving effect to the IPO Restructuring Transactions, as the future owner and operator of the non-Vince businesses, or to the non-Vince businesses of AHC prior to the completion of the IPO Restructuring Transactions, as the context requires.	
 
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 SUPPLEMENTAL SELECTED HISTORICAL FINANCIAL DATA OF VINCE, LLC
The following tables set forth the supplemental selected historical financial data of Vince, LLC, the entity that has historically held the Vince assets and liabilities and will continue to do so after completion of the IPO Restructuring Transactions and the consummation of this offering.
You should read the information set forth below in conjunction with “Use of Proceeds,” “Capitalization of AHC,” “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC” and Vince, LLC’s audited financial statements and notes thereto included elsewhere in this prospectus. The statement of operations data for each of fiscal 2010, fiscal 2011 and fiscal 2012 and the balance sheet data as of January 28, 2012 and February 2, 2013 set forth below are derived from Vince, LLC’s audited financial statements included elsewhere in this prospectus.
The statement of operations data for the six month periods ended July 28, 2012 and August 3, 2013 and the balance sheet data as of August 3, 2013 set forth below are derived from Vince, LLC’s unaudited quarterly financial statements and contain all adjustments, consisting of normal recurring adjustments, that management considers necessary for a fair presentation of our financial position and results of operations for the periods presented.
Operating results for the six month periods are not necessarily indicative of results for a full financial year, or any other periods. Vince, LLC’s summary historical financial data include charges from Kellwood Company for certain expenses, including centralized legal, tax, treasury, information technology, employee benefits and other centralized services and infrastructure costs. The charges have been determined on bases that we considered to be reasonable reflections of the utilization of services provided or the benefit received by Vince, LLC.

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands, except for percentages and store counts)	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Statement of Operations Data:	  				 				 				 				 				
Net sales	  	$	111,492	  	 	$	175,255	  	 	$	240,352	  	 	$	90,531	  	 	$	114,657	  	
Cost of products sold	  	 	55,695	  	 	 	89,545	  	 	 	132,156	  	 	 	50,119	  	 	 	63,506	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	55,797	  	 	 	85,710	  	 	 	108,196	  	 	 	40,412	  	 	 	51,151	  	
Operating expenses:	  				 				 				 				 				
Selling, general and administrative expenses(1)(2)	  	 	32,704	  	 	 	42,148	  	 	 	66,639	  	 	 	27,057	  	 	 	33,954	  	
Amortization of intangible assets	  	 	598	  	 	 	599	  	 	 	598	  	 	 	299	  	 	 	300	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	33,302	  	 	 	42,747	  	 	 	67,237	  	 	 	27,356	  	 	 	34,254	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	  	 	22,495	  	 	 	42,963	  	 	 	40,959	  	 	 	13,056	  	 	 	16,897	  	
Interest expense(3)	  	 	7,172	  	 	 	15,004	  	 	 	22,903	  	 	 	10,690	  	 	 	12,429	  	
Other expense, net	  	 	350	  	 	 	478	  	 	 	779	  	 	 	396	  	 	 	512	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before provision for income taxes	  	 	14,973	  	 	 	27,481	  	 	 	17,277	  	 	 	1,970	  	 	 	3,956	  	
Provision for Income taxes	  	 	5,923	  	 	 	10,812	  	 	 	6,964	  	 	 	789	  	 	 	1,556	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	9,050	  	 	$	16,669	  	 	$	10,313	  	 	$	1,181	  	 	$	2,400	  	

Other Operating and Financial Data:	  				 				 				 				 				
Total stores at end of period	  	 	16	  	 	 	19	  	 	 	22	  	 	 	19	  	 	 	24	  	
Comparable store sales growth	  	 	9.3	% 	 	 	7.6	% 	 	 	23.1	% 	 	 	13.9	% 	 	 	31.7	% 	
Capital expenditures	  	$	1,602	  	 	$	1,450	  	 	$	1,821	  	 	$	457	  	 	$	3,406	  	

(1)	Includes the impact of our public company transition costs and certain one-time costs of $9.3 million for fiscal 2012 and $4.0 million for the first six months of 2013. These costs include transition payments to our founders, charges that are directly attributable to offering, incremental costs for external legal counsel and consulting fees incurred to effect the Restructuring Transactions and other one-time charges. We expect additional transaction costs (excluding underwriting discounts and commissions) of approximately $2.9 million for the remainder of fiscal 2013 will be charged to SG&A.	
 
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(2)	Vince, LLC is charged for the use of services provided by Kellwood Company departments and shared facilities. These charges are based upon the actual cost incurred, without markup. These functions and facilities will remain with Kellwood upon separation in the IPO Restructuring Transactions and will continue to be an integral part of the non-Vince businesses going forward. Vince, LLC will continue to use certain of these services for a period of time through the shared services agreement described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement” and will be charged accordingly. The charges to Vince, LLC may not be representative of what the costs would have been had Vince, LLC been a separate, stand-alone entity during the periods presented.	
(3)	Interest expense for fiscal 2010, fiscal 2011 and fiscal 2012 and the six month periods ended July 28, 2012 and August 3, 2013 represents interest costs and amortization of debt issuance costs on certain Kellwood Company indebtedness, including the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. These debt instruments and related interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. The Kellwood Note Receivable will include accrued and unpaid interest on such indebtedness (and on the Public Bonds and the 3.5% Convertible Notes), through the closing date of this offering. All such debt instruments are to be repaid, refinanced or discharged in connection with the consummation of this offering. We intend to enter into a new revolving credit facility and a new term loan facility with the consummation of this offering and expect to incur interest expense on those at market rates prevailing at the time. We also intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing, had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million for fiscal 2012 or the six months ended August 3, 2013, respectively.	
The balance sheet data of Vince, LLC is presented on an actual basis as of January 28, 2012, February 2, 2013 and August 3, 2013.

 	  	As of January 28,
2012	 	 	As of February 2,
2013	 	 	As of
August 3,
2013	 	
(In thousands)	  	 	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	(unaudited)	 	
Balance Sheet Data:	  				 				 				
Cash and cash equivalents	  	$	34	  	 	$	35	  	 	$	106	  	
Total current assets	  	 	40,861	  	 	 	60,854	  	 	 	82,603	  	
Total current liabilities(1)	  	 	102,470	  	 	 	110,466	  	 	 	148,005	  	
Long-term debt(1)	  	 	122,207	  	 	 	152,675	  	 	 	163,675	  	
Total invested equity	  	 	(1,524	) 	 	 	(22,017	) 	 	 	(26,159	) 	
Total liabilities and invested equity	  	 	228,942	  	 	 	247,211	  	 	 	290,562	  	

(1)	Included within current liabilities are short-term borrowings under the Wells Fargo Facility of $88.2 million, $79.8 million and $115.6 million as of January 28, 2012, February 2, 2013 and August 3, 2013, respectively. Long-term debt includes the Cerberus Term Loan and the Sun Term Loan Agreements. These debt instruments and the related capitalized deferred issuance costs are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. This debt was incurred to fund the operation and growth of the Vince and non-Vince businesses, including to finance certain acquisitions made by Kellwood Company since 2008. As discussed above, we intend to enter into a new revolving credit facility and a new term loan facility with the consummation of this offering. We also intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing, had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013 would have been $10.6 million or $5.3 million, respectively.	
 
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 SUPPLEMENTAL MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF VINCE, LLC
You should read the following discussion together with “Additional Information Related to Vince—Supplemental Selected Historical Financial Data of Vince, LLC,” “Additional Information Related to AHC—Description of Certain Indebtedness of AHC” and Vince, LLC’s audited financial statements and related notes thereto included elsewhere in this prospectus. You should also read this discussion in connection with “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC” for a detailed discussion of the effects of the IPO Restructuring Transactions on our financial condition and results of operations. The statements in this discussion regarding expectations of our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Risk Factors—Risks Related to Vince,” “Risk Factors—Risks Related to the Restructuring Transactions,” “Risk Factors— Risks Related to this Offering and Our Common Stock” and “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.
As used in this section, unless the context requires otherwise:
 
 	Ÿ	 	“our,” “us,” “we” and “Vince Holding Corp.” refer to Vince Holding Corp. (currently known as Apparel Holding Corp.) and its consolidated subsidiaries (including Vince, LLC) after giving effect to the IPO Restructuring Transactions;	
 
 	Ÿ	 	“Vince” refers to the Vince business after giving effect to the IPO Restructuring Transactions;	
 
 	Ÿ	 	“Vince, LLC” refers to the entity that has historically held the Vince assets and liabilities and will continue to do so after completion of the IPO Restructuring Transactions and the consummation of this offering. Apparel Holding Corp. is the legal issuer of the shares offered in this offering. Investors will be investing in the Vince business, however, they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC;	
 
 	Ÿ	 	“AHC” refers to Apparel Holding Corp. and its consolidated subsidiaries (including Kellwood Company) prior to consummation of the IPO Restructuring Transactions. AHC is the historical owner and operator of the Vince and non-Vince businesses; and	
 
 	Ÿ	 	“Kellwood” refers to Kellwood Holding, LLC and its consolidated subsidiaries (including Kellwood Company, LLC) after giving effect to the IPO Restructuring Transactions, as the future owner and operator of the non-Vince businesses, or to the non-Vince businesses of AHC prior to the consummation of the IPO Restructuring Transactions, as the context requires.	
As described elsewhere in this prospectus AHC will use a series of transactions to separate the non-Vince businesses from the Vince business in the IPO Restructuring Transactions. In connection with Vince Intermediate Holding, LLC’s acquisition of Vince, LLC, Vince Intermediate Holding, LLC will issue the Kellwood Note Receivable to Kellwood Company, LLC immediately prior to the consummation of this offering. Proceeds from the repayment of the Kellwood Note Receivable will be used to (i) repay, discharge or repurchase indebtedness of Kellwood Company, LLC in connection with the closing of this offering (including accrued and unpaid interest and any related fees and expenses) and (ii) pay (A) a restructuring fee equal to 1% of the aggregate of this offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management pursuant to the Management Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Management Fees,” and (B) a debt recovery bonus of up to $6.0 million to our Chief Executive Officer, as described in “Additional Information Related to Vince—Vince
 
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Executive Compensation—Employment Agreements,” all after giving effect to the Additional Sun Capital Contribution. It is currently estimated that the restructuring fee described in clause (ii) above and payable to Sun Capital Management in connection with this offering will total $3.5 million. Most of the net proceeds from this offering will be used to repay the Kellwood Note Receivable. As further described within “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC,” the estimated pro forma amount due under the Kellwood Note Receivable is $345.0 million (based on estimated net offering proceeds of $181 million and net borrowings of $169 million under our new term loan facility). Once the IPO Restructuring Transactions have occurred, the non-Vince businesses will operate separately from the Vince business. After consummation of this offering, the Vince business will be our only operations going forward. An investment in Vince Holding Corp. is an investment in the Vince business. Vince, LLC’s assets and liabilities consist solely of the Vince business.
AHC has maintained distinct financial records of its Vince and non-Vince businesses. Revenues and expenses identified as directly pertaining to the Vince or non-Vince businesses have been credited or charged directly to the Vince or non-Vince businesses, as applicable. Additionally, we will continue to be charged for the use of services provided by centralized Kellwood departments and shared facilities, such as distribution, information technology and back office support, after the consummation of this offering. However, the financial information included herein may not necessarily reflect the financial position, results of operations and cash flows of the Vince business in the future or what they would have been had we been operated separately from the non-Vince businesses during the periods presented.
AHC has significant indebtedness. Vince, LLC is a borrower party or guarantor to a significant amount of this debt. Kellwood Company, LLC will use proceeds from the Kellwood Note Receivable together with new financing arrangements to repay, refinance or discharge, much of this debt. Because Vince, LLC is a borrower party to the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements, all such debt and related balances are included on the Vince, LLC balance sheet, and the corresponding interest expense is included in our statements of operations. Vince, LLC will have no obligations under such debt (or under the 12.875% Notes, the 7.625% Notes or the 3.5% Convertible Notes that are also to be repaid, refinanced or discharged by Kellwood Company, LLC with proceeds from the repayment of the Kellwood Note Receivable) after giving effect to the consummation of this offering and the application of the related proceeds. We intend to enter into a new revolving credit facility and new term loan facility in connection with the consummation of this offering and expect to incur interest expense on those at market rates prevailing at the time. We also intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing, had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.
Our future results of operations after giving effect to the IPO Restructuring Transactions and the consummation of this offering will include costs and expenses for us to operate as a stand-alone company, and, consequently, these costs and expenses may be materially different than our historical results of operations. We expect that we will incur significantly higher expenses such as audit fees, professional fees, and costs to maintain our corporate functions, such as board of director fees and expenses, SEC reporting costs and costs to comply with Sarbanes-Oxley Act and other internal control requirements. Also, as a stand-alone company, we may not be able to negotiate as favorable terms in contracts, such as those for materials, services and intellectual property, as those negotiated in the past by AHC. Accordingly, the Vince, LLC financial information for these periods may not be indicative of our future results of operations, financial position and cash flows.
 
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Business Summary
Vince is a prominent, high-growth contemporary apparel brand known for modern, effortless style and everyday luxury essentials. Founded in 2002, Vince has generated strong sales momentum over the last decade. We believe that we will achieve continued success by expanding our product assortment distributed through premier wholesale partners in the U.S. and select international markets, as well as in our own branded retail locations and on our e-commerce platform. We have a small number of wholesale partners who account for a significant portion of our net sales. Net sales to the full-price, off-price and e-commerce operations of our four largest wholesale partners were 59% of our total revenue for fiscal 2011, 61% of our total revenue for fiscal 2012 and 63% of our total revenue for the first six months of 2013. These partners, each of which accounted for more than 10% of our total revenue for fiscal 2011 and fiscal 2012, include Nordstrom, Saks Fifth Avenue, Neiman Marcus and Bloomingdales. Nordstrom, Saks Fifth Avenue and Neiman Marcus each accounted for more than 10% of our total revenue for the first six months of fiscal 2013 and collectively represented 55.7% of our total revenue in such period. We design our products in the U.S. and source the vast majority of our products from contract manufacturers outside the U.S., primarily in Asia and South America.
We serve our customers through a variety of channels that reinforce the Vince brand image. Our diversified channel strategy allows us to introduce our products to customers through multiple distribution points that are reported in two segments: wholesale and direct-to-consumer. Our wholesale segment is comprised of sales to premier department stores and specialty stores in the U.S. and in select international markets, with U.S. wholesale representing 76% of our fiscal 2012 sales and 70.4% of our sales in the first six months of fiscal 2013. We believe that our success in the U.S. wholesale channel and our strong relationships with premier wholesale partners provide opportunities for continued growth. These growth initiatives include creating enhanced product assortments and brand extensions through both in-house development activities and licensing arrangements, as well as continuing the build-out of branded shop-in-shops in select wholesale partner locations. We also believe international wholesale, which represented 8% of net sales for fiscal 2012 and 10.3% of net sales for the first six months of fiscal 2013, presents a significant growth opportunity as we strengthen our presence in existing geographies and introduce Vince in new markets globally.
In 2008, we initiated a direct-to-consumer strategy with the opening of our first retail store. As of October 5, 2013, we operated 27 stores, which consist of 21 full-price retail stores and six outlet locations. Based on a combination of third-party analyses and internal projections, we believe that the U.S. market can currently support at least 100 free-standing Vince store locations. Comparable store sales reflect net revenue at retail stores that have been open for at least 12 months. Net revenue from a store is included in comparable store sales in the 13 th month following its opening. Non-comparable store sales include sales from new stores that have not been open for at least 12 months. In the event that we relocate, or change square footage of an existing store, we would treat that store as a non-comparable store until the 13th month following the relocation or square footage adjustment. For 53-week fiscal years, we do not adjust comparable store sales to exclude the additional week. Fiscal 2012 was a 53-week year while fiscal 2011 reflects a 52-week year. Our comparable store sales grew by 23.1% in fiscal 2012 and by 31.7% in the first six months of fiscal 2013 primarily as a result of a 24.4% increase in average dollar sale and a 7.3% increase in transaction volume. We plan to continue to drive our comparable store sales growth through a balanced combination of increased traffic, conversion and average dollar sale.
The direct-to-consumer segment also includes our website, www.vince.com , which was also launched in 2008. The direct-to-consumer segment accounted for 16% of fiscal 2012 net sales and 19.3% of net sales in the first six months of fiscal 2013, and we expect sales from this channel to grow as we drive productivity in existing stores, open new stores and upgrade and re-launch our website in 2014.
 
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Despite recent global economic trends which led to a decline in discretionary consumer spending, we believe, based on industry experience, that our performance remained strong due primarily to a strong design aesthetic and superior quality. Our net sales are derived exclusively from the sale of Vince branded apparel and accessories and have grown from $175.3 million in 2011 to $240.4 million in 2012, representing a 37.1% increase. Total net sales were $90.5 million and $114.7 million in the first six months of fiscal 2012 and fiscal 2013, respectively, representing growth of 26.7%. Since the start of fiscal 2011, we have experienced significant sales growth within both the wholesale and direct-to-consumer segments. Wholesale segment sales growth since 2011 through the first six months of fiscal 2013 was driven primarily by the addition of over 600 wholesale doors, bringing total wholesale door count to 2,145 as of August 3, 2013 compared to 1,527 as of January 29, 2011, as well as increased penetration in our existing wholesale doors, primarily due to the continued expansion of our product offerings. Wholesale door count represents the number of third party wholesalers, such as department stores, who currently stock our products. Some of these wholesalers sell our products mixed in with their other apparel and accessories, while others carve out a dedicated area for Vince products. Each such store, regardless of whether it utilizes a dedicated area for Vince products and whether it offers men’s and women’s Vince product in different locations within the same store, counts as a single location for purposes of calculating our wholesale door count. Direct-to-consumer segment sales growth during these periods was driven by an increase in comparable store sales, the opening of eight additional retail stores in addition to the 16 stores opened as of January 29, 2011, and strong e-commerce sales growth. Our comparable store sales growth was 7.6%, 23.1% and 31.7% in fiscal 2011, fiscal 2012 and the first six months of fiscal 2013, respectively.
Opportunities, Challenges and Risks
We intend to focus on generating sales by increasing our wholesale productivity and by expanding our direct-to-consumer segment. In our wholesale business, we will work with our existing wholesale partners to increase our wholesale penetration by capitalizing on new and existing product categories (whether developed in-house or through licensing arrangements), improving our visual presentation, space layout and fixtures and opening branded shop-in-shops. We anticipate that an increasing percentage of our new sales will come from our direct-to-consumer segment and our international operations as we grow and expand our business. The growth in our direct-to-consumer business will be primarily driven by the opening of new retail stores, improving the productivity of our existing stores (by enhancing store-level merchandising, launching new product categories and improving our inventory management) and leveraging our recently enhanced e-commerce strategy.
Over the last decade, Vince has generated strong sales momentum and has successfully grown to include a men’s collection in 2007, expanded denim, leather and outerwear lines in 2010, and women’s footwear, which was launched through a licensing partnership in 2012. We intend to continue building existing product categories by elevating our men’s collection, expanding our denim and outwear businesses, increasing the assortment of women’s bottoms and dresses and implementing a replenishment program for core items. Additionally, we have identified new product categories, including handbags and leather accessories as well as more tailored collections for women and men, which we believe will allow us to capture incremental share from existing customers and attract new customers in our wholesale and direct-to-consumer businesses.
We have a small number of wholesale partners who account for a significant portion of our net sales. Net sales to the full-price, off-price and e-commerce operations of our four largest wholesale partners represented 63.0% of our total revenue in the first six months of fiscal year 2013, 61% of our total revenue for fiscal 2012 and 59% of our total revenue for fiscal 2011. We do not have written agreements with any of these wholesale partners, which include Nordstrom, Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s. As such, purchases from our wholesale partners generally occur
 
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on an order-by-order basis. A decision by any of our major wholesale partners to significantly decrease the amount of merchandise purchased from us or our licensing partners could substantially reduce our revenue and have a material adverse effect on our profitability.
As of October 5, 2013, we had seven shop-in-shops with our U.S. wholesale partners and eight shop-in-shops with our international wholesale partners. Working with our wholesale partners, we are planning to open 15 to 20 new branded shop-in-shops in fiscal 2013 and believe there is an attractive opportunity to open additional shop-in-shops in 2014 and beyond. While expanding the number of shop-in-shops is part of our growth strategy, there can be no assurances we will be able to align our wholesale partners with this strategy and continue to receive floor space from our wholesale partners to open or expand shop-in-shops.
In fiscal 2012, approximately 16% of our net sales were generated from our direct-to-consumer segment, which consists of our retail stores and our e-commerce platform. In the first six months of fiscal 2013 approximately 19.3% of our net sales were generated from our direct-to-consumer segment. Based on a combination of third-party analyses and internal projections, we believe the U.S. market can currently support at least 100 free-standing Vince store locations. We plan to double our store base over the next three to five years, including opening net six new stores in fiscal 2013. As we expand our store base, we may not be able to maintain or grow the levels of comparable store sales that we have experienced historically.
Vince products are currently sold in 43 countries, either directly to premier department and specialty stores, or through distribution relationships with highly-regarded international partners with exclusive rights to certain territories. Approximately 8% of our net sales for fiscal 2012 and 10.3% of our net sales for the first six months of fiscal 2013 resulted from our international wholesale operations. We intend to continue to increase our presence in international markets, including Canada, select European countries, Asia and the Middle East, by supplementing existing distribution partnerships, increasing wholesale partner penetration and productivity and selectively adding stand-alone retail locations with current and prospective partners. Locating and managing these international partnerships may be challenging and we may incur additional costs in doing so.
We entered into a licensing agreement when we launched women’s footwear in 2012 and signed a licensing agreement in 2013 for the launch of children’s apparel in 2014. We will continue to explore additional licensing opportunities for select categories requiring specialized expertise, such as intimates/loungewear, men’s footwear and fashion accessories. While these licensing arrangements present an attractive way to grow our business, identifying, implementing and maintaining licensing arrangements requires additional expenditures of management time and oversight to ensure brand consistency and brand integrity.
We have expanded our operations since our inception in 2002 and have limited operating experience at our current size. Our business has more than doubled over the past two years, as we have grown our total net sales from $111.5 million in fiscal 2010 to $240.4 million in fiscal 2012 and from $90.5 million in the first six months of fiscal 2012 to $114.7 million in the first six months of fiscal 2013. Although we have made and are continuing to make investments to support our near and longer-term growth, we will continue to have an ongoing relationship with Kellwood which will provide services, including distribution, information technology and back office support, under the Shared Services Agreement. Our continued expansion may exceed the capacity that Kellwood is able to provide under the terms of such agreement. In addition, Kellwood has experienced financial difficulties in the past. If Kellwood encounters any such issues during the term of the Shared Services Agreement or is unable to satisfy its obligations thereunder on a timely basis, we may be unable to provide these services internally or implement acceptable, substitute arrangements with third-party providers.
 
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After the IPO Restructuring Transactions, we must obtain goods, technology and services we will not obtain from Kellwood on our own. We may be unable, as an entity separate from and smaller than Kellwood, to obtain such goods, technology and services at prices and terms as favorable as those available to us prior to the separation. As a result, our costs may increase and our profitability may decrease.
Our CEO, Jill Granoff, and CFO, Lisa Klinger, joined the company in 2012. Many of the other members of our senior management team, including our President and Chief Creative Officer, Karin Gregersen, have been with us less than one year. As a result, our senior management team has limited experience working together as a group. The lack of shared experience could negatively impact our senior management’s ability to quickly and efficiently respond to problems and effectively manage our business.
Basis of Presentation
We operate on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to January 31 of the following year.
 
 	Ÿ	 	References to “fiscal year 2012” or “fiscal 2012” refer to the fiscal year ended February 2, 2013;	
 
 	Ÿ	 	References to “fiscal year 2011” or “fiscal 2011” refer to the fiscal year ended January 28, 2012; and	
 
 	Ÿ	 	References to “fiscal year 2010” or “fiscal 2010” refer to the fiscal year ended January 29, 2011.	
 
 	Ÿ	 	References to “first six months of fiscal 2013” refer to the six months ended August 3, 2013; and	
 
 	Ÿ	 	References to “first six months of fiscal 2012” refer to the six months ended July 28, 2012.	
Fiscal year 2012 consists of a 53-week period and each of fiscal 2011 and fiscal 2010 consisted of a 52-week period. The first six months of fiscal 2013 and the first six months of fiscal 2012 each consisted of 26 weeks.
Net sales.     Our net sales consist of revenues from the sale of products, less returns, discounts and allowances and other offsets to net sales as well as shipping and handling fees and licensing fees and royalties. In our wholesale segment, revenue is recognized when goods are shipped in accordance with customer orders, at which point title passes. Provisions for discounts, returns and other allowances are recorded as a reduction of net sales in the same period as the related sales. Historically, increases in revenues have been driven primarily by the addition of new wholesale doors, increased penetration in our existing wholesale doors and by incorporating higher priced items into our product assortment. Going forward, we anticipate that the wholesale and direct-to-consumer segments will contribute almost equivalent amounts to future sales growth, with the direct-to-consumer channel becoming a higher percentage of the business than it is today (but not higher than wholesale overall). In our direct-to-consumer segment, revenue is recognized at the time of customer purchase in our retail stores, and at the time of shipment for customer e-commerce orders. Comparable store sales are calculated based on our own branded retail locations that have been open for at least 13 months and do not include any sales from our e-commerce business. There may be variations in the way other companies and retailers calculate comparable store or “same store” sales. As a result, data in this prospectus regarding our comparable store sales may not be comparable with similar data made available by other companies. Additionally, comparable store sales for companies like our own that are in the midst of opening additional retail locations may be of limited utility.
Cost of products sold .    Our cost of products sold includes:
 
 	Ÿ	 	the cost of purchased merchandise, including raw materials;	
 
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 	Ÿ	 	the cost of inbound transportation, including freight;	
 
 	Ÿ	 	the cost of our production, sourcing and technical design departments;	
 
 	Ÿ	 	other processing costs associated with acquiring and preparing the inventory for sale as charged by Kellwood as part of the Shared Services Agreement; and	
 
 	Ÿ	 	shrink and valuation reserves.	
Gross profit/Gross margin .    Gross profit is defined as net sales less the cost of products sold. Gross margin is gross profit expressed as a percentage of net sales. As we have continued to use more expensive but lower margin raw materials such as leather and fur-trimmed items and as our men’s business has become a larger portion of our sales, we have seen a reduction in our gross margin rate; however our gross profit dollars have continued to increase. Our gross margins have also been adversely impacted in the past by margin assistance to our wholesale customers. Such margin arrangements are customary in the industry and will continue to impact future margins in relation to the overall performance of the Vince product with our retail partners. Going forward, we expect our margin rate to improve as a result of increasing the percentage of our net sales derived from our direct-to-consumer segment, which tends to generate higher margins than our wholesale business, optimizing our pricing strategy and by leveraging economies of scale as we evolve into a larger organization.
There may be variations in the costs that other companies use to calculate gross profit. As a result, data in this prospectus regarding our gross profit dollars and gross margin may not be comparable with similar data made available by other companies.
Selling, general and administrative expenses .    Our selling, general and administrative expenses (“SG&A expenses”) consist of all other operating expenses, excluding amortization of intangible assets, which are not included in cost of products sold. These expenses include marketing, advertising, design, occupancy, certain distribution costs, salaries and benefits and other corporate overhead. Additionally, our historical financials include charges for the use of services provided by centralized Kellwood departments and shared facilities. These costs were charged upon the actual cost incurred, without mark-up. The charges to Vince, LLC may not be representative of what the costs would have been had we been operated separately from the non-Vince businesses during the periods presented, however, we believe the amounts charged are representative of incremental cost to Kellwood to provide these services to us. In future periods we will continue to use certain of these services, such as distribution, information technology and back office support, from Kellwood as part of the Shared Services Agreement. SG&A expenses have increased over the past 18 months as we have added resources and capabilities to operate as a stand-alone company. We expect our SG&A expenses as a percentage of sales to slightly increase over the near-term as we incur additional costs associated with our retail operations as sales from our direct-to-consumer segment becomes a larger percentage of our business and as we incur costs associated with the consummation of this offering (including stock based compensation charges). Additionally, in an effort to build our brand awareness, we intend to increase our marketing investment across a range of strategic initiatives, including cooperative advertising with wholesale partners, print media, digital media, editorial coverage, direct mail, search engine optimization, social media initiatives, targeted product placement, celebrity outreach and in-store events. In the long-term, we expect our SG&A expenses, as a percentage of sales, to increase slightly from recent levels as we grow our direct-to-consumer business and invest in expanded marketing efforts, as well as from ongoing public company costs.
Amortization of intangible assets .    Our amortization of intangible assets consists of straight-line amortization expense on our definite-lived intangible assets over a 20 year life. These assets are comprised of Vince customer relationships and were valued at the time of the acquisition of Kellwood Company by affiliates of Sun Capital in 2008. We test definite-lived intangible assets if a triggering
 
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event occurs. There have been no triggering events or impairments recorded on the Vince customer relationships. Under the provisions of ASC Topic 350, we do not amortize indefinite-lived tangible assets (our Vince trademark). In accordance with ASC Topic 350, indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. The fair value of the trademark is estimated and compared to its carrying value. We estimate the fair value of these assets primarily based on a royalty savings model, which uses discounted cash flow assumptions. We completed our most recent annual impairment testing on our indefinite-lived intangible assets during the fourth quarter of fiscal 2012 and no impairments were identified.
Interest expense .    Our interest expense has historically included interest and related costs on the Wells Fargo Facility, Cerberus Term Loan and the Sun Term Loan Agreements. These debt instruments and the related interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party under such instruments. Vince, LLC will have no obligations under such debt (or under the 12.875% Notes, the 7.625% Notes or the 3.5% Convertible Notes that are also to be repaid, refinanced or discharged by Kellwood Company, LLC with proceeds from the repayment of the Kellwood Note Receivable) after giving effect to the consummation of this offering and the application of the related proceeds. As this expense is expected to be significantly less than our historical interest expense under the Wells Fargo, Cerberus and Sun Term Loans, we believe that our interest expense will decrease in both absolute terms and as a percentage of revenue in both the near and intermediate term.
We intend to enter into a new revolving credit facility and new term loan facility in connection with the consummation of this offering and expect to incur interest expense on those at market rates prevailing at the time. We intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing, had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.
Other expense, net .    Our other expense, net primarily consists of miscellaneous income and expenses and management fees incurred by Kellwood Company which were charged to Vince in the amounts of $0.4 million, $0.5 million, $0.8 million and $0.2 million for fiscal 2010, fiscal 2011, fiscal 2012 and the first six months of fiscal 2013, respectively. Upon consummation of this offering, Vince will no longer incur management fees payable to Sun Capital Management as the obligations under the Management Services Agreement will be terminated or remain with Kellwood. As a result, we do not expect to report other expense, net, after consummation of this offering. We will enter into a services agreement with Sun Capital Management, pursuant to which we will agree to reimburse Sun Capital Management for out-of-pocket expenses incurred in connection with providing consulting services to us. We intend to report any expense associated with this new services agreement as SG&A expense in future reporting periods.
Provision for income taxes .    We are subject to taxation in many jurisdictions, and the calculation of our tax liabilities involves dealing with inherent uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. Historically, we have been primarily subject to taxation in the U.S. because we have sold the majority of our products to customer in the U.S. We anticipate that in the future as we expand our sale of products to customers outside the U.S., we could become subject to taxation based on the foreign statutory rates in the countries where these sales occurred and our effective tax rate would fluctuate accordingly. We are subject to examination of our income tax returns by the IRS and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our income tax reserve and expense. Should actual events differ from our current expectations, we could experience a material impact to our financial position, results of operations and cash flows.
 
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Our operating results have historically been included in the U.S. federal and state income tax returns for AHC. Provision for income taxes in the Vince, LLC financial statements have been determined on a stand-alone basis (i.e., on a “separate return” basis). As such, we are required to assess the realization of our net deferred tax assets, the need for a valuation allowance and judgments on the recognition of tax benefits based on our own facts and circumstances and exclude from that assessment any impact of the overall results of AHC. We believe the assumptions underlying the allocation of income taxes are reasonable; however, the amounts allocated for income taxes in the Vince, LLC financial statements are not necessarily indicative of the income taxes that would have been recorded had Vince, LLC been a separate, stand-alone entity during the periods presented.
We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. We determine the appropriateness of valuation allowances in accordance with the “more likely than not” recognition criteria.
AHC has generated certain tax benefits (including NOLs) and tax credits which it has been unable to utilize, and will generate certain section 197 intangible deductions. Absent the IPO Restructuring Transactions, based on available information, it is more likely than not that AHC’s net deferred tax assets will not be realized, and accordingly there is currently a full valuation allowance against all of the U.S. net deferred tax assets.
As a result of the IPO Restructuring Transactions, we expect that these net deferred tax assets will be available to offset future taxable income. As of August 3, 2013 AHC has deferred tax assets of $77.6 million related to U.S. NOL carry-forwards, which has a full valuation allowance recorded against them. Approximately $205.0 million in federal NOL carry-forwards would become available to offset future taxable income as of August 3, 2013. In connection with the consummation of this offering, we will enter into the Tax Receivable Agreement with the Pre-IPO Stockholders. As a result of the Tax Receivable Agreement, 85% of any benefits we receive from utilization of NOLs and other tax attributes will be paid to the Pre-IPO Stockholders. As further described within “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC,” the pro forma amount due under the Tax Receivable Agreement as of August 3, 2013 is $172.1 million. We anticipated funding amounts due under the Tax Receivable Agreement with internally generated cash flow from operations and availability under our new revolving credit facility. We estimate the net benefits from the NOL carry-forwards and other tax attributes covered by the Tax Receivable Agreement will be utilized within ten years. We do not anticipate that the existence of the Tax Receivable Agreement, or payments to be made thereunder, will impact our effective tax rate which is estimated to be approximately 38% to 42% both during and after the period we will be subject to the Tax Receivable Agreement. The expansion of our international operations may cause our effective tax rate to fluctuate and be different than expected.
Furthermore, federal and state laws impose substantial restrictions on the utilization of NOL carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Code. Under the rules, such an ownership change is generally any change in ownership of more than 50 percent of a company’s stock within a rolling three-year period, as calculated in accordance with the rules. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning directly or indirectly 5% or more of the stock of the company and any change in ownership arising from new issuances of stock by the company.
At this time, we have not performed a detailed analysis under Section 382 of the Code to determine if the IPO Restructuring Transactions would constitute an ownership change. However, with this offering and other transactions that have occurred over the past three years, we may trigger or have already triggered an “ownership change” limitation. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As a result, if we earn net taxable
 
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income, our ability to use our pre-change NOL carry-forwards (after giving effect to payments to be made to the Pre-IPO Stockholders under the Tax Receivable Agreement) to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. Notwithstanding the foregoing, our preliminary analysis under Section 382 of the Code indicates that the IPO Restructuring Transactions would not trigger an “ownership change” limitation.
Vince, LLC Results of Operations

 	 	Fiscal Year	 	 	Percentage of Net Sales	 	
 	 	2010	 	 	2011	 	 	2012	 	 	    2010    	 	 	    2011    	 	 	    2012    	 	
(In thousands, except store counts,
percentages)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Statements of Operations:	 				 				 				 				 				 				
Net sales	 	$	111,492	  	 	$	175,255	  	 	$	240,352	  	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	
Cost of products sold	 	 	55,695	  	 	 	89,545	  	 	 	132,156	  	 	 	50.0	% 	 	 	51.1	% 	 	 	55.0	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	55,797	  	 	 	85,710	  	 	 	108,196	  	 	 	50.0	% 	 	 	48.9	% 	 	 	45.0	% 	
Operating expenses:	 				 				 				 				 				 				
Selling, general and administrative expenses	 	 	32,704	  	 	 	42,148	  	 	 	66,639	  	 	 	29.3	% 	 	 	24.1	% 	 	 	27.7	% 	
Amortization of intangible assets	 	 	598	  	 	 	599	  	 	 	598	  	 	 	0.5	% 	 	 	0.3	% 	 	 	0.3	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	33,302	  	 	 	42,747	  	 	 	67,237	  	 	 	29.8	% 	 	 	24.4	% 	 	 	28.0	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	 	 	22,495	  	 	 	42,963	  	 	 	40,959	  	 	 	20.2	% 	 	 	24.5	% 	 	 	17.0	% 	
Interest expense	 	 	7,172	  	 	 	15,004	  	 	 	22,903	  	 	 	6.5	% 	 	 	8.5	% 	 	 	9.5	% 	
Other expense, net	 	 	350	  	 	 	478	  	 	 	779	  	 	 	0.3	% 	 	 	0.3	% 	 	 	0.3	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before provision for income taxes	 	 	14,973	  	 	 	27,481	  	 	 	17,277	  	 	 	13.4	% 	 	 	15.7	% 	 	 	7.2	% 	
Provision for income taxes	 	 	5,923	  	 	 	10,812	  	 	 	6,964	  	 	 	5.3	% 	 	 	6.2	% 	 	 	2.9	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	9,050	  	 	$	16,669	  	 	$	10,313	  	 	 	8.1	% 	 	 	9.5	% 	 	 	4.3	% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Operating and Financial Data:	 				 				 				 				 				 				
Total stores at end of period	 	 	16	  	 	 	19	  	 	 	22	  	 				 				 				
Comparable store sales growth	 	 	9.3	% 	 	 	7.6	% 	 	 	23.1	% 	 				 				 				
Capital expenditures	 	$	1,602	  	 	$	1,450	  	 	$	1,821	  	 				 				 				

 	  	Six Months Ended	 	 	Percentage of Net Sales	 	
 	  	July 28, 2012	 	 	August 3, 2013	 	 	July 28, 2012	 	  	August 3, 2013	 	
(In thousands, except store counts,
percentages)	  	 	 	 	 	 	 	 	 	  	 	 	
 	  	(unaudited)	 	 	(unaudited)	 	 	(unaudited)	 	  	(unaudited)	 	
Statements of Operations:	  				 				 				  				
Net sales	  	$	90,531	  	 	$	114,657	  	 	 	100.0%	  	  	 	100.0%	  	
Cost of products sold	  	 	50,119	  	 	 	63,506	  	 	 	55.4	  	  	 	55.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Gross profit	  	 	40,412	  	 	 	51,151	  	 	 	44.6	  	  	 	44.6	  	
Operating expenses:	  				 				 				  				
Selling, general and administrative expenses	  	 	27,057	  	 	 	33,954	  	 	 	29.9	  	  	 	29.6	  	
Amortization of intangible assets	  	 	299	  	 	 	300	  	 	 	0.3	  	  	 	0.3	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Total operating expenses	  	 	27,356	  	 	 	34,254	  	 	 	30.2	  	  	 	29.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Income from operations	  	 	13,056	  	 	 	16,897	  	 	 	14.4	  	  	 	14.7	  	
Interest expense	  	 	10,690	  	 	 	12,429	  	 	 	11.8	  	  	 	10.8	  	
Other expense, net	  	 	396	  	 	 	512	  	 	 	0.4	  	  	 	0.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Income before provision for income taxes	  	 	1,970	  	 	 	3,956	  	 	 	2.2	  	  	 	3.5	  	
Provision for income taxes	  	 	789	  	 	 	1,556	  	 	 	0.9	  	  	 	1.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net income	  	$	1,181	  	 	$	2,400	  	 	 	1.3%	  	  	 	2.1%	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Other Operating and Financial Data:	  				 				 				  				
Total stores at end of period	  	 	19	  	 	 	24	  	 				  				
Comparable store sales growth	  	 	13.9	% 	 	 	31.7	% 	 				  				
Capital expenditures	  	$	457	  	 	$	3,406	  	 				  				
 
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Non-GAAP Financial Measure
To provide investors with additional information about our financial results, we disclose within this prospectus Adjusted EBITDA, a non-GAAP financial measure. We have provided below a reconciliation between Adjusted EBITDA and net income. Net income is the most directly comparable GAAP financial measure.
We have included Adjusted EBITDA in this prospectus because we believe it enhances investors’ understanding of our operating results. Adjusted EBITDA is provided because management believes it is an important measure of financial performance commonly used to determine the value of companies, to define standards for borrowing from institutional lenders and because it is the primary measure used by management to evaluate our performance.
Some limitations of Adjusted EBITDA are:
 
 	Ÿ	 	Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;	
 
 	Ÿ	 	Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;	
 
 	Ÿ	 	although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future; and	
 
 	Ÿ	 	other companies may calculate Adjusted EBITDA differently or not at all, which reduces its usefulness as a comparative measure.	
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income and Vince, LLC’s audited historical financial results presented elsewhere in this prospectus in accordance with GAAP.
The following table presents a reconciliation of Adjusted EBITDA to net income based on our combined statements of operations for each of the periods indicated:

  	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	 	 	 	 	 	 	 	 	 	July 28,	 	 	August 3,	 	
 	  	2010	 	 	2011	 	 	2012	 	 	2012	 	 	2013	 	
(in thousands)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA:	  				 				 				 				 				
Wholesale	  	$	39,353	  	 	$	63,171	  	 	$	73,515	  	 	$	27,932	  	 	$	32,072	  	
Direct-to-consumer	  	 	1,045	  	 	 	1,713	  	 	 	5,865	  	 	 	(698	) 	 	 	3,002	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment Adjusted EBITDA	  	 	40,398	  	 	 	64,884	  	 	 	79,380	  	 	 	27,234	  	 	 	35,074	  	
Unallocated Corporate Adjusted EBITDA	  	 	(16,761	) 	 	 	(20,698	) 	 	 	(27,860	) 	 	 	(11,974	) 	 	 	(13,572	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Adjusted EBITDA	  	 	23,637	  	 	 	44,186	  	 	 	51,520	  	 	 	15,260	  	 	 	21,502	  	
Interest expense (a)	  	 	(7,172	) 	 	 	(15,004	) 	 	 	(22,903	) 	 	 	(10,690	) 	 	 	(12,429	) 	
Provision for income taxes	  	 	(5,923	) 	 	 	(10,812	) 	 	 	(6,964	) 	 	 	(789	) 	 	 	(1,556	) 	
Depreciation and amortization expense	  	 	(1,492	) 	 	 	(1,701	) 	 	 	(2,009	) 	 	 	(921	) 	 	 	(1,106	) 	
Public company transition costs (b)	  	 	—  	  	 	 	—  	  	 	 	(9,331	) 	 	 	(1,679	) 	 	 	(4,011	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	9,050	  	 	$	16,669	  	 	$	10,313	  	 	$	1,181	  	 	$	2,400	  	

(a)	Interest expense for fiscal 2010, fiscal 2011 and fiscal 2012 and the six month periods ended July 28, 2012 and August 3, 2013 represents interest costs and amortization of debt issuance	
 
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 	costs on certain Kellwood Company indebtedness, including the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. These debt instruments and related interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. We intend to enter into a new revolving credit facility and new term loan facility in connection with the consummation of this offering and expect to incur interest expense on those at market rates prevailing at the time. We intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing, had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.	
(b)	Adjusted EBITDA does not include the impact of our public company transition costs and certain one-time costs of $9.3 million for fiscal 2012 and $4.0 million for the first six months of fiscal 2013. These costs include transition payments to our founders, charges that are directly attributable to this offering, incremental costs for external legal counsel and consulting fees incurred to effect the Restructuring Transactions and other one-time costs. These charges are excluded due to their non-recurring nature and ability to impact comparability to other periods.	
First Six Months of Fiscal 2013 Compared to First Six Months of Fiscal 2012
Net Sales for the first six months of fiscal 2013 were $114.7 million, increasing $24.2 million, or 26.6%, versus $90.5 million for the first six months of fiscal 2012. The increase in sales compared to the prior year is due to an increase in volume across both of our business segments.
Segment Results of Operations

   	  	Net Sales by Segment	 	  	Segment Adjusted EBITDA	 	
  	  	Six Months Ended	 	  	Six Months Ended	 	
  	  	July 28,
2012	 	  	August 3,
2013	 	  	July 28,
2012	 	 	August 3,
2013	 	
(in thousands)	  				  				  				 				
 	  	(unaudited)	 	  	(unaudited)	 	  	(unaudited)	 	 	(unaudited)	 	
Wholesale	  	$	78,064	  	  	$	92,551	  	  	$	27,932	  	 	$	32,072	  	
Direct-to-consumer	  	 	12,467	  	  	 	22,106	  	  	 	(698	) 	 	 	3,002	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	90,531	  	  	$	114,657	  	  	$	27,234	  	 	$	35,074	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Net sales from our wholesale segment increased $14.5 million, or 18.6%, to $92.6 million in the first six months of fiscal 2013 from $78.1 million in the first six months of fiscal 2012. We increased volume with many of our premier wholesale partners through increased sales productivity in existing doors, including our first women’s shop-in-shop at Saks Fifth Avenue, opened in September 2012, and the opening of 13 new shop-in-shops with our domestic and international partners.
Segment Adjusted EBITDA from our wholesale segment increased $4.2 million, or 14.8%, to $32.1 million in the first six months of fiscal 2013 from $27.9 million in the first six months of fiscal 2012. This increase was driven primarily from a sales volume increase of $14.5 million and a decrease in operating expenses as a percentage of wholesale sales, partially offset by a reduction in the gross margin rate primarily due to one-time charges associated with the recording of inventory reserves. The decrease in operating expenses as a percentage of net wholesale sales resulted as our net wholesale sales grew at a rate greater than our expenses during fiscal 2013.
Net sales from our direct-to-consumer segment increased $9.6 million, or 77.3%, to $22.1 million in the first six months of fiscal 2013 from $12.5 million in the first six months of fiscal 2012. This sales growth was due to (i) comparable retail store sales growth of 31.7% contributing $3.1 million, or 32.0%, driven by a 24.4% increase in average dollar sale and a 7.3% increase in transactions, (ii) opening five
 
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stores (bringing our total retail store count to 24 as of August 3, 2013, compared to 19 as of July 28, 2012) contributing $4.7 million, or 48.9%, and (iii) e-commerce sales growth of 68.9% contributing $1.8 million, or 19.1%.
Segment Adjusted EBITDA from our direct-to-consumer segment was $3.0 million in the first six months of fiscal 2013 compared to $(0.7) million in the first six months of fiscal 2012. The $3.7 million increase resulted primarily from a sales volume increase of $9.6 million which more than offset the additional operating expenses incurred during the period to support the sales growth.
Cost of products sold for first six months of fiscal 2013 was $63.5 million, increasing $13.4 million, or 26.7%, versus $50.1 million for the first six months of fiscal 2012. The increase in costs of products sold is due to (i) additional volume contributing $11.9 million, or 88.9% and (ii) one-time charges to record inventory reserves for excess goods and raw materials purchased using prior inventory control management systems and processes contributing $1.5 million, or 11.1%.
Gross Profit/Gross Margin was 44.6% for the first six months of fiscal 2012 and the first six months of fiscal 2013. While the margin rate remained constant year over year, it was unfavorably impacted in fiscal 2013 by one-time inventory reserves for excess merchandise, which accounted for 130 basis points of decline, and increased margin assistance provided to our wholesale partners, which accounted for 54 basis points of decline. Favorable margin upside of 146 basis points was driven by a higher percentage of our sales coming from the direct-to-consumer segment, in which we generally recognize higher margins, and an increased percentage of full-price to off-price sales, which accounted for 38 basis points of upside.
Selling, general and administrative expenses for the first six months of fiscal 2013 were $34.0 million, increasing $6.9 million, or 25.5%, versus $27.1 million for the first six months of fiscal 2012. The increase in SG&A expenses compared to the prior year is primarily due to:
 
 	Ÿ	 	Increased compensation expense of $1.1 million related to hiring and retaining certain key employees;	
 
 	Ÿ	 	Increased occupancy and depreciation expense of $1.4 million due primarily to new retail store openings;	
 
 	Ÿ	 	Increased design, development and marketing expenses of $2.4 million to support our brand awareness growth efforts and the opening of new retail stores; and	
 
 	Ÿ	 	Increased corporate costs such as legal and audit fees of $2.0 million associated with preparing to become a public company.	
Amortization of intangible assets for the first six months of fiscal 2013 and fiscal 2012 were unchanged at $0.3 million.
Interest expense for the first six months of 2013 was $12.4 million, increasing $1.7 million, or 16.3%, versus $10.7 million for the first six months of 2012. Interest expense increased as we had higher average debt balances period over period. The increase in overall debt balances was primarily due to additional borrowings under the Sun Term Loan Agreements during the first six months of fiscal 2013 to fund capital spending and corporate costs associated with preparation for this offering, combined with the payment-in-kind feature of the interest recognized on these instruments.
Other expense, net for the first six months of fiscal 2013 and fiscal 2012 was largely unchanged at $0.5 million and $0.4 million, respectively.
Provision for income taxes for the first six months of fiscal 2013 was $1.6 million, increasing $0.8 million, or 97.2%, versus $0.8 million for the first six months of fiscal 2012. Our effective tax rate
 
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on pretax income for the first six months of fiscal 2013 and fiscal 2012 was 39.3% and 40.1%, respectively. The rates for the first six months of fiscal 2013 and the first six months of fiscal 2012 differed from the U.S. statutory rate of 34.0% primarily due to state taxes for the periods presented.
Fiscal Year 2012 Compared to Fiscal Year 2011
Net sales for fiscal 2012 were $240.4 million, increasing $65.1 million, or 37.1%, versus $175.3 million for fiscal 2011. The increase in sales compared to the prior year was due to volume increases across both of our business segments. Net sales for the fifty-third week of fiscal 2012 were approximately $0.6 million for the direct-to-consumer and $17.6 million for the wholesale segment, which represents approximately 7.5% of Vince, LLC’s net sales for fiscal 2012.
Segment Results of Operations

 	  	Net Sales by Segment	 	  	Segment Adjusted EBITDA	 	
 	  	Fiscal Year	 	  	Fiscal Year	 	
 	  	2011	 	  	2012	 	  	        2011        	 	  	        2012        	 	
(in thousands)	  				  				  				  				
Wholesale	  	$	151,921	  	  	$	203,107	  	  	$	63,171	  	  	$	73,515	  	
Direct-to-consumer	  	 	23,334	  	  	 	37,245	  	  	 	1,713	  	  	 	5,865	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	175,255	  	  	$	240,352	  	  	$	64,884	  	  	$	79,380	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net sales from our wholesale segment increased $51.2 million, or 33.7%, to $203.1 million in fiscal 2012 from $151.9 million in fiscal 2011, partially attributable to the expansion of the number of our wholesale doors by nearly 400 doors, or over 20% of our door base. This increase was also a result of increased sales volume with our four largest wholesale partners, which contributed $43.4 million, or 85%.
Segment Adjusted EBITDA from our wholesale segment increased $10.3 million, or 16.4%, to $73.5 million in fiscal 2012 from $63.2 million in fiscal 2011. This increase was driven primarily by a sales volume increase of $51.2 million in fiscal 2012, partially offset by a decrease in the gross margin rate as a result of higher cost of goods and increased margin assistance to our wholesale partners and higher operating expenses as a percentage of wholesale sales driven by increased compensation costs.
Net sales from our direct-to-consumer segment increased $13.9 million, or 59.6%, to $37.2 million in fiscal 2012 from $23.3 million in fiscal 2011. This sales growth was due to (i) comparable retail store sales growth of 23.1% contributing $4.4 million, or 31.4%, driven by a 16.0% increase in transactions and 7.1% increase in average dollar sale, (ii) opening three stores (bringing our total retail store count to 22 as of February 2, 2013, compared to 19 as of January 28, 2012) contributing $5.2 million, or 37.1%, and (iii) e-commerce sales growth of 103.4% contributing $4.4 million, or 31.6%.
Segment Adjusted EBITDA from our direct-to-consumer segment increased $4.2 million, or 242.4%, to $5.9 million in fiscal 2012 from $1.7 million in fiscal 2011. The increase was driven primarily by a sales volume increase of $13.9 million in fiscal 2012, which more than offset the additional expenses incurred during the period to support the sales growth.
Cost of products sold for fiscal 2012 was $132.2 million, increasing $42.6 million, or 47.6%, versus $89.5 million for fiscal 2011. The increase in costs of products sold is due to (i) additional volume contributing $21.9 million, or 51.4%, and (ii) increased material costs and a product assortment shift to more expensive but lower margin products contributing $20.7 million, or 48.6%.
 
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Gross Profit/Gross Margin decreased 389 basis points to 45.0% in fiscal 2012 from 48.9% in fiscal 2011. The decrease in gross margin was due primarily to additional margin assistance provided to our wholesale partners, which accounted for 169 basis points of decline but which we believe was a major contributor to volume growth. The margin rate was further impacted by shifts in our product mix and the use of more expensive but lower margin raw materials such as leather and furs, which accounted for 106 basis points of the decline. The balance of our margin decline, or 114 basis points, was attributable to the increased penetration of off-price sales to full-price sales.
Selling, general and administrative expenses for fiscal 2012 were $66.6 million, increasing $24.5 million, or 58.1%, versus $42.1 million for 2011. The increase in SG&A expenses compared to the prior year is primarily due to:
 
 	Ÿ	 	Increased compensation expense of $15.1 million related to hiring and retention of certain key employees (including one-time transition payments of $6.4 million in the aggregate to our founders), and increased charges from expanded and dedicated resources in retail operations that were previously centralized at the Kellwood level;	
 
 	Ÿ	 	Increased occupancy expense of $1.9 million due primarily to new retail store openings;	
 
 	Ÿ	 	Increased design, development and marketing expenses of $1.9 million to support our brand awareness growth efforts and the opening of new retail stores; and	
 
 	Ÿ	 	Increased corporate costs, such as legal and audit fees, of $2.7 million associated with preparing to become a public company.	
Amortization of intangible assets for fiscal 2011 and fiscal 2012 was unchanged at $0.6 million in each period.
Interest expense for fiscal 2012 was $22.9 million, increasing $7.9 million, or 52.6%, versus $15.0 million for fiscal 2011. The increase was primarily due to higher average outstanding debt balances in fiscal 2012. Interest expense increased as we had higher average debt balances period over period, partially offset by a one-time charge of $1.7 million to write off debt issuance costs during the third quarter of fiscal 2011. The increase in overall debt balances was primarily due to (i) additional borrowings on the Sun Term Loan Agreements during fiscal 2012 to fund capital spending and corporate costs associated with preparations of this offering, combined with the payment-in-kind feature of the interest recognized on these instruments, and (ii) the full year impact of entering into the Cerberus Term Loan during the third quarter of fiscal 2011 to fund the fiscal 2011 cash purchase consideration payment of $58.5 million to CRL Group, LLC (“CRL Group”).
Other expense, net for fiscal 2012 and fiscal 2011 was $0.8 million and $0.5 million, respectively. The increase is primarily due to higher management fees payable to Sun Capital Management under the Management Services Agreement due to our increased revenue year over year.
Provision for income taxes for fiscal years 2012 and 2011 was an expense of $7.0 million and $10.8 million, respectively. Our effective tax rate on pretax income for fiscal 2012 and fiscal 2011 was 40.3% and 39.3%, respectively. The rates for the fiscal year 2012 and fiscal 2011 differed from the U.S. statutory rate of 34.0% primarily due to state taxes for the periods presented.
 
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Fiscal Year 2011 Compared to Fiscal Year 2010
Net sales for fiscal 2011 were $175.3 million, an increase of $63.8 million, or 57.2%, versus $111.5 million for fiscal 2010. The increase in sales compared to the prior year is due to an increase in volume across both of our business segments.
Segment Results of Operations

 	  	Net Sales by Segment	 	  	Segment Adjusted EBITDA	 	
 	  	Fiscal Year	 	  	Fiscal Year	 	
 	  	2010	 	  	2011	 	  	2010	 	  	2011	 	
(in thousands)	  				  				  				  				
Wholesale	  	$	95,798	  	  	$	151,921	  	  	$	39,353	  	  	$	63,171	  	
Direct-to-consumer	  	 	15,694	  	  	 	23,334	  	  	 	1,045	  	  	 	1,713	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	111,492	  	  	$	175,255	  	  	$	40,398	  	  	$	64,884	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net sales from the wholesale segment increased $56.1 million, or 58.6%, to $151.9 million in fiscal 2011 from $95.8 million in fiscal 2010, due largely to increased sales volume with our four largest wholesale partners, which contributed $42.8 million, or 76%. This increase was also partially attributable to the expansion of the number of our wholesale doors by over 200 doors, or 15% of our door base.
Segment Adjusted EBITDA from the wholesale segment increased $23.8 million, or 60.5%, to $63.2 million in fiscal 2011 from $39.4 million in fiscal 2010. This increase was driven primarily by a sales volume increase of $56.1 million and a decrease in operating expenses as a percentage of wholesale sales, partially offset by a gross margin rate reduction due to higher cost of goods and an increase in our off-price sales penetration. The decrease in operating expenses as a percentage of net wholesale sales resulted from our net wholesale sales growing at a greater rate than our expenses during fiscal 2011.
Net sales from our direct-to-consumer segment increased $7.6 million, or 48.7%, to $23.3 million in 2011 from $15.7 million in 2010. This sales growth was due to (i) comparable retail stores sales growth of 7.6% contributing $1.0 million, or 13.2%, driven by the strength of our existing and expanded product categories and the increasing recognition of the Vince brand by consumers; (ii) opening three stores (bringing our total retail store count to 19 as of January 28, 2012 from 16 as of January 28, 2011) contributing $4.1 million, or 53.3%, and (iii) e-commerce sales growth of 146.7% contributing $2.5 million, or 33.1%.
Segment Adjusted EBITDA from our direct-to-consumer segment increased $0.7 million, or 63.9%, to $1.7 million in fiscal 2011 from $1.0 million in fiscal 2010. The increase was due primarily to a sales volume increase of $7.6 million during fiscal 2011, which more than offset the additional expenses incurred during the period to support sales growth.
Cost of products sold for fiscal 2011 was $89.5 million, increasing $33.9 million, or 60.8%, versus $55.7 million for fiscal 2010. The increase in costs of products sold compared to the prior year is primarily due to (i) additional sales volume contributing $17.5 million, or 51.8%, and (ii) increased material costs and a product shift to more expensive products but lower margin items contributing $16.3 million, or 48.2%.
Gross Profit/Gross Margin decreased 114 basis points to 48.9% in fiscal 2011 from 50.0% in fiscal 2010. The decrease in gross margin was due to increased off-price wholesale sales, which decreased margin by 56 basis points, and the use of more expensive but lower margin raw materials such as leathers and furs in our products, which had a 58 basis point impact.
 
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Selling, general and administrative expenses for fiscal 2011 were $42.1 million, increasing $9.4 million, or 28.9%, versus $32.7 million for fiscal 2010. The increase in SG&A expenses compared to the prior year is primarily due to:
 
 	Ÿ	 	Increased incentive compensation expense of $0.5 million related to the brand’s strong financial performance;	
 
 	Ÿ	 	Increased occupancy expense of $1.7 million due primarily to new retail store openings;	
 
 	Ÿ	 	Increased design, development and marketing expenses of $1.8 million to support our brand awareness growth efforts and the opening of new retail stores; and	
 
 	Ÿ	 	Increased salaries, benefits, travel expenses, outside services and costs to support our information systems of $4.6 million due to increased focus on expanding our direct-to-consumer segment.	
Amortization of intangible assets for fiscal 2011 and fiscal 2010 was unchanged at $0.6 million in each period.
Interest expense for fiscal 2011 was $15.0 million, increasing $7.8 million, or 109.2%, from $7.2 million in fiscal 2010. Interest expense increased as we had higher average debt balances period over period, partially offset by a one-time charge of $1.7 million to write off debt issuance costs during the third quarter of fiscal 2011. The increase in overall debt balances was primarily due to (i) additional borrowings on the Sun Term Loan Agreements during fiscal 2011 to fund capital spending, combined with the payment-in-kind feature of the interest recognized on these instruments and (ii) entering into the Cerberus Term Loan during the third quarter of fiscal 2011.
Other expense, net for fiscal 2011 and fiscal 2010 was $0.5 million and $0.4 million, respectively, for management fees payable to Sun Capital Management under the Management Services Agreement.
Provision for income taxes for fiscal years 2011 and 2010 was an expense of $10.8 million and $5.9 million, respectively. Our effective tax rate on pretax income for fiscal 2011 and fiscal 2010 was 39.3% and 39.6%, respectively. The rates for the fiscal year 2011 and fiscal 2010 differed from the U.S. statutory rate of 34.0% primarily due to state taxes for the periods presented.
 
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Quarterly Financial Data
The following table presents our unaudited quarterly results of operations for the ten fiscal quarters ended August 3, 2013. This information includes all adjustments, consisting only of normal recurring adjustments that management considers necessary for the fair presentation of such data. This quarterly data should be read in conjunction with our audited financial statements and related notes. Our historical unaudited quarterly consolidated results of operations are not necessarily indicative of results for any future fiscal quarters or fiscal years.

 	 	Three Months Ended	 	
 	 	April 30,
2011	 	 	July 30,
2011	 	 	October 29,
2011	 	 	January 28,
2012	 	 	April 28,
2012	 	 	July 28,
2012	 	 	October 27,
2012	 	 	February 2,
2013	 	 	May 4,
2013	 	 	August 3,
2013	 	
(In thousands,
unaudited)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales	 	$	25,993	  	 	$	43,492	  	 	$	57,459	  	 	$	48,311	  	 	$	33,376	  	 	$	57,155	  	 	$	76,990	  	 	$	72,831	  	 	$	40,363	  	 	$	74,294	  	
Cost of products sold	 	 	12,715	  	 	 	21,609	  	 	 	28,931	  	 	 	26,290	  	 	 	18,599	  	 	 	31,520	  	 	 	41,872	  	 	 	40,165	  	 	 	22,850	  	 	 	40,656	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	13,278	  	 	 	21,883	  	 	 	28,528	  	 	 	22,021	  	 	 	14,777	  	 	 	25,635	  	 	 	35,118	  	 	 	32,666	  	 	 	17,513	  	 	 	33,638	  	
Selling, general and administrative expenses	 	 	9,100	  	 	 	10,414	  	 	 	10,498	  	 	 	12,136	  	 	 	12,323	  	 	 	14,734	  	 	 	19,406	  	 	 	20,176	  	 	 	15,456	  	 	 	18,498	  	
Amortization of intangible assets	 	 	150	  	 	 	149	  	 	 	150	  	 	 	150	  	 	 	149	  	 	 	150	  	 	 	150	  	 	 	149	  	 	 	150	  	 	 	150	  	
Interest expense	 	 	2,649	  	 	 	2,839	  	 	 	5,289	  	 	 	4,227	  	 	 	4,887	  	 	 	5,803	  	 	 	6,059	  	 	 	6,154	  	 	 	6,025	  	 	 	6,404	  	
Other expense, net	 	 	117	  	 	 	118	  	 	 	118	  	 	 	125	  	 	 	193	  	 	 	203	  	 	 	193	  	 	 	190	  	 	 	125	  	 	 	387	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before provision for income taxes	 	 	1,262	  	 	 	8,363	  	 	 	12,473	  	 	 	5,383	  	 	 	(2,775	) 	 	 	4,745	  	 	 	9,310	  	 	 	5,997	  	 	 	(4,243	) 	 	 	8,199	  	
Provision for income taxes	 	 	503	  	 	 	3,320	  	 	 	4,949	  	 	 	2,040	  	 	 	(1,101	) 	 	 	1,890	  	 	 	3,748	  	 	 	2,427	  	 	 	(1,688	) 	 	 	3,244	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	759	  	 	$	5,043	  	 	$	7,524	  	 	$	3,343	  	 	$	(1,674	) 	 	$	2,855	  	 	$	5,562	  	 	$	3,570	  	 	$	(2,555	) 	 	$	4,955	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Our wide-range of merchandise and our strategy of carrying a broad selection but limited quantities of each item reduce our overall seasonality relative to other contemporary brands. Nevertheless, our business is mildly seasonal in nature and sales are generally the highest in the third and fourth fiscal quarters due to the year-end holiday season and lowest in the first and second fiscal quarters. As a result of this seasonality and generally because of variation in consumer spending habits, we experience fluctuations in net sales and EBITDA during the year.
We incurred certain public company transition and certain one-time costs during the last three quarters of fiscal 2012 and the first six months of fiscal 2013. Those costs totaled $9.3 million in fiscal 2012 and $4.0 million in the first six months of fiscal 2013, which were recorded in SG&A. These costs include transition payments to our founders, charges that are directly attributable to this offering, incremental costs for legal counsel and consulting fees incurred to effect the Restructuring Transactions and other one-time costs. Such costs incurred during the second, third and fourth quarters of fiscal 2012 were $1.7 million, $4.2 million and $3.4 million, respectively.
 
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Liquidity and Capital Resources
Our primary cash requirements are to support inventory purchases, working capital and capital expenditures for retail store expansion and remodeling. Historically, we were financed as part of Kellwood Company. Interest expense associated with a portion of Kellwood Company’s indebtedness, including under the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements, is included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. Vince, LLC will have no obligations under such debt (or under the 12.875% Notes, the 7.625% Notes or the 3.5% Convertible Notes which are also to be repaid by Kellwood Company, LLC with proceeds from the repayment of the Kellwood Note Receivable), after giving effect to the consummation of this offering and the application of the related proceeds.
Capital expenditures are expected to aggregate approximately $10.0 to $12.0 million in fiscal 2013, including approximately $5.0 million to $7.0 million for new and remodeled stores, approximately $1.0 to $2.0 million for wholesale shop-in-shop build-out, and the remainder for other corporate activities, including a new corporate headquarters and information technology enhancements.
Capital expenditures are expected to increase as we invest in the direct-to-consumer store expansion and wholesale shop-in-shop buildout. In fiscal 2014, we project capital expenditures to aggregate $9.0 to $11.0 million, including $4.0 to $6.0 million for new and remodeled stores, approximately $2.0 to $3.0 million on new and updated store-in-store locations and the remainder for other corporate activities.
We anticipate funding our cash requirements and growth initiatives primarily from internally generated cash flow from operations and availability under our new revolving credit facility. If our business fails to perform, to our expectations we may require additional liquidity resources or we may need to reduce our growth initiatives.
We intend to enter into a new $50 million revolving credit facility and a new $175 million term loan facility in connection with the consummation of this offering. We expect that interest rates on the revolving credit facility will be based on a LIBOR or base rate plus, in either case, a margin based on an excess availability calculation. We also expect that interest rates on the new term loan facility will be payable either at (i) the Eurodollar rate (subject to a 1.00% floor) plus 4.25% or (ii) the base rate (subject to a 2.00% floor) plus 3.00%. We expect that our new credit facilities will contain significant restrictive covenants. These covenants may limit or impair our financing and operational flexibility and make it difficult for us to react to market conditions and satisfy our ongoing capital needs and unanticipated cash requirements. See “Additional Information Related to Vince—Description of Certain Indebtedness of Vince, LLC” for a description of the proposed material terms of such new credit facilities.
We expect that cash flow from operations, availability under our new credit and term loan facilities, and proceeds from this offering will be sufficient to fund our operations for at least the next 18 months.
 
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Operating Cash Flow Information

 	  	Fiscal Years	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Operating Activities:	  				 				 				 				 				
Net income	  	$	9,050	  	 	$	16,669	  	 	$	10,313	  	 	$	1,181	  	 	$	2,400	  	
Add (deduct) items not affecting operating cash flows:	  				 				 				 				 				
Depreciation	  	 	894	  	 	 	1,102	  	 	 	1,411	  	 	 	622	  	 	 	806	  	
Amortization of intangible assets	  	 	598	  	 	 	599	  	 	 	598	  	 	 	299	  	 	 	300	  	
Amortization of debt issuance costs	  	 	1,289	  	 	 	1,499	  	 	 	2,154	  	 	 	1,104	  	 	 	1,050	  	
Deferred income taxes	  	 	3,091	  	 	 	5,825	  	 	 	(2,050	) 	 	 	2,441	  	 	 	1,173	  	
Capitalized PIK interest	  	 	1,486	  	 	 	5,614	  	 	 	10,468	  	 	 	4,511	  	 	 	5,999	  	
Deferred debt issuance cost write-off	  	 	738	  	 	 	1,747	  	 	 	—	  	 	 	—	  	 	 	—	  	
Loss on disposition of property, plant and equipment	  	 	—	  	 	 	8	  	 	 	—	  	 	 	—	  	 	 	262	  	
Changes in assets and liabilities:	  				 				 				 				 				
Receivables, net	  	 	(4,423	) 	 	 	(12,174	) 	 	 	(7,457	) 	 	 	(10,366	) 	 	 	(5,972	) 	
Inventories, net	  	 	(3,987	) 	 	 	(2,592	) 	 	 	(8,360	) 	 	 	(10,905	) 	 	 	(9,118	) 	
Prepaid expenses and other current assets	  	 	(2,036	) 	 	 	(490	) 	 	 	(2,455	) 	 	 	(3,829	) 	 	 	(6,588	) 	
Accounts payable and accrued expenses	  	 	3,779	  	 	 	3,133	  	 	 	17,108	  	 	 	8,138	  	 	 	1,213	  	
Other assets and liabilities	  	 	30	  	 	 	350	  	 	 	900	  	 	 	468	  	 	 	307	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) operating activities	  	$	10,509	  	 	$	21,290	  	 	$	22,630	  	 	$	(6,336	) 	 	$	(8,168	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Because we have been financed as part of Kellwood Company and cash is centrally managed by Kellwood Company, our cash balance as of August 3, 2013 was $0.1 million and represents retail store deposits.
Net cash provided by (used in) operating activities primarily consists of net income, adjusted for certain non-cash items including PIK interest on the Cerberus Term Loan and the Sun Term Loan Agreements depreciation, amortization and changes in deferred income taxes and the effects of changes in working capital and other activities.
Net cash used in operating activities for the first six months of fiscal 2013 was $8.2 million, which consisted of net income of $2.4 million, impacted by non-cash items of $9.6 million and cash used in working capital of $20.2 million. Net cash used in working capital primarily resulted from an increase in receivables, net of $6.0 million due to the timing of customer receipts as well as increases in inventories and prepaid expenses of $15.7 million due to anticipated retail store openings and shipments for the fall season. This was offset in part due to increases in our accounts payable and other accrued expenses of $1.2 million.
Net cash used in operating activities for the first six months of fiscal 2012 was $6.3 million, which consisted of net income of $1.2 million, impacted by non-cash items of $9.0 million and cash used in working capital of $16.5 million. Non-cash expenses included depreciation, amortization and PIK interest expense of $6.5 million, offset in part by a $2.4 million decrease in deferred income taxes. Net cash used in working capital primarily resulted from an increase in receivables, net of $10.4 million due to the timing of customer receipts as well as increases in inventories and prepaid expenses of $14.7 million due to anticipated shipments for the fall season. This was offset in part due to increases in our accounts payable and other accrued expenses of $8.1 million due to the timing of vendor payments.
Net cash provided by operating activities for fiscal 2012 was $22.6 million, which consisted of net income of $10.3 million, impacted by non-cash items of $12.6 million and cash used in working capital
 
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of $0.3 million. Non-cash expenses included depreciation, amortization and PIK interest expense of $14.6 million, offset in part by a $2.1 million decrease in deferred income taxes. Net cash used in working capital resulted primarily from an increase in receivables, net of $7.5 million due to timing of customer receipts and an increase in inventories, net of $8.4 million due to timing of inventory receipts. This was partially offset by an increase in our accounts payable and other accrued expenses of $17.1 million due to timing of payments to our vendors, as well as the accrual of $6.4 million in transition payment to our founders, which was subsequently paid during fiscal 2013.
Net cash provided by operating activities for fiscal 2011 was $21.3 million, which consisted of net income of $16.7 million, impacted by non-cash items of $16.4 million and cash used in working capital of $11.8 million. Non-cash expenses included depreciation, amortization and PIK interest expense of $8.8 million, the write-off of debt placement costs of $1.8 million, as well as a $5.8 million increase to deferred income taxes. Net cash used in working capital resulted from an increase in receivables, net of $12.2 million due to timing of customer receipts and increase in inventories, net of $2.6 million due to timing of inventory receipts. This was partially offset by an increase in our accounts payable and other accrued expenses of $3.1 million due to timing of payments to our vendors.
Net cash provided by operating activities for 2010 was $10.5 million, which consisted of net income of $9.1 million, impacted by non-cash items of $8.1 million and cash used in working capital of $6.6 million. Non-cash expenses included depreciation, amortization and PIK interest expense of $4.3 million, the write-off of debt placement costs of $0.7 million, as well as a $3.1 million increase to deferred income taxes. Net cash used in working capital primarily resulted from an increase in receivables, net of $4.4 million due to timing of customer receipts and an increase in inventories, net of $4.0 million due to timing of inventory receipts. This was partially offset by an increase in our accounts payable and other accrued expenses of $3.8 million due to timing of payments to our vendors.
Investing Cash Flow Information

 	  	Fiscal Years	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Investing Activities:	  				 				 				 				 				
Payments for capital expenditures	  	$	(1,602	) 	 	$	(1,450	) 	 	$	(1,821	) 	 	$	(457	) 	 	$	(3,406	) 	
Payments for contingent purchase price	  	 	(4,475	) 	 	 	(58,465	) 	 	 	(806	) 	 	 	(806	) 	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash used in investing activities	  	$	(6,077	) 	 	$	(59,915	) 	 	$	(2,627	) 	 	$	(1,263	) 	 	$	(3,406	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash used in investing activities.     Cash used in investing activities represents capital expenditures, primarily related to retail store build-outs, including leasehold improvements and store fixtures, and cash payments paid to CRL Group related to the acquisition of the Vince business as a result of achievement of performance goals as specified in the purchase agreement.
Cash used in investing activities increased $2.1 million from $1.3 million used in investing activities in the first six months of fiscal 2012 to $3.4 million used in investing activities in the first six months of fiscal 2013. The increase is primarily attributable to an increase in capital expenditures of $2.9 million as a result of timing of retail store construction.
Cash used in investing activities decreased $57.3 million from $59.9 million used in investing activities in fiscal 2011 to $2.6 million used in investing activities in fiscal 2012. The decrease is primarily attributable to the cash purchase consideration of $58.5 million paid to CRL Group related to the acquisition of the Vince business, offset by a small increase in capital expenditures.
 
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Cash used in investing activities increased $53.8 million from $6.1 million used in investing activities in fiscal 2010 to $59.9 million used in investing activities in fiscal 2011. The decrease is due to the cash purchase consideration paid to CRL Group during fiscal 2011 related to the acquisition of the Vince business.
Financing Cash Flow Information

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
(In thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Financing activities:	 				 				 				 				 				
Borrowing of short-term debt obligations	 	$	—	  	 	$	14,900	  	 	$	—	  	 	$	—	  	 	$	—	  	
Payments for short-term debt obligations	 	 	—	  	 	 	(14,900	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Borrowings of long-term loan obligations	 	 	22,393	  	 	 	79,900	  	 	 	30,000	  	 	 	30,000	  	 	 	5,000	  	
Payments for debt extinguishment	 	 	—	  	 	 	—	  	 	 	(15,000	) 	 	 	—	  	 	 	—	  	
Borrowings of revolving credit facilities	 	 	185,172	  	 	 	399,621	  	 	 	620,367	  	 	 	221,940	  	 	 	392,627	  	
Payments for revolving credit facilities	 	 	(127,576	) 	 	 	(368,995	) 	 	 	(623,806	) 	 	 	(205,404	) 	 	 	(356,809	) 	
Fees paid for amendments to credit facility	 	 	(3,644	) 	 	 	—	  	 	 	—	  	 	 	(114	) 	 	 	—	  	
Fees paid for short-term debt obligations	 	 	—	  	 	 	(101	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Fees paid for revolving credit facilities	 	 	—	  	 	 	(2,147	) 	 	 	(114	) 	 	 	(609	) 	 	 	32	  	
Fees paid for long-term loan obligations	 	 	—	  	 	 	(2,675	) 	 	 	(643	) 	 	 	(34	) 	 	 	(60	) 	
Distributions to Kellwood Company	 	 	(80,773	) 	 	 	(66,959	) 	 	 	(30,806	) 	 	 	(38,185	) 	 	 	(29,145	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in) provided by financing activities	 	$	(4,428	) 	 	$	38,644	  	 	$	(20,002	) 	 	$	7,594	  	 	$	11,645	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in) provided by financing activities.     Net cash (used in) provided by financing activities primarily relates to distributions to Kellwood Company, borrowings and repayments of certain Kellwood Company’s short-term debt obligations, long-term debt obligations, revolving credit facilities, and debt issuance costs related thereto.
Historically, Kellwood Company provided all cash management functions on our behalf through a centralized treasury function. Substantially all of our cash balances were swept to Kellwood Company on a daily basis, where the cash is managed and invested by Kellwood Company. As a result, all charges from Kellwood Company are transacted through the centralized treasury function and are deemed to have been paid by us to Kellwood Company, in cash, during the period in which the charges are recorded. In addition, all of our cash receipts were advanced to Kellwood upon receipt. We consider all transactions with Kellwood Company to be financing activities, which are presented as one net amount.
Net cash provided by financing activities was $11.6 million in the first six months of fiscal 2013 due to net borrowings on the Wells Fargo Facility of $35.8 million and additional borrowings of $5.0 million on the Sun Term Loan Agreements, offset in part by distributions to Kellwood Company of $29.1 million. Net cash provided by financing activities was $7.6 million in the first six months of fiscal 2012 due to net borrowings on the Wells Fargo Facility of $16.5 million and additional borrowings of $30.0 million on the Sun Term Loan Agreements, offset in part by distributions to Kellwood Company of $38.2 million. Net cash (used in) provided by financing activities changed by $58.6 million from $38.6 million provided by financing activities in fiscal 2011 to $20.0 million used in financing activities in fiscal 2012. The change is primarily due to a decrease in net repayments on our revolving credit facilities of $3.4 million and borrowings on long-term loan obligations of $30.0 million, as well as $15.0 million in payments for debt extinguishment during fiscal 2012. This compares to net borrowings of $30.6 million on our revolving credit facilities and $79.9 million of long-term loan obligations during fiscal 2011. Finally, distributions to Kellwood Company decreased period over period. Net cash from financing activities changed by $43.1 million from $4.4 million used in financing activities in fiscal 2010
 
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to $38.6 million provided by financing activities in fiscal 2011. This increase is primarily due to increased net borrowings of long-term loan obligations of $57.5 million in fiscal 2011 as compared to fiscal 2010, as well as an increase in fees paid for borrowings of $4.9 million period over period. This compares to $80.0 million of borrowings and $3.6 million in related fees in fiscal 2010.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations and commitments as of February 2, 2013, and the effect such obligations will have on our liquidity and cash flows in future periods.
AHC has substantial indebtedness. Vince, LLC is a borrower party to a significant amount of this debt, with borrowings under the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. These debt instruments and the related interest expense are included in the Vince, LLC financial statements as Vince, LLC is a borrower party thereunder. Vince, LLC will have no obligations under such debt after giving effect to the consummation of this offering and the application of the related proceeds.
We intend to enter into a new revolving credit facility and new term loan facility in connection with the consummation of this offering and expect to incur interest expense on those at market rates prevailing at the time. We intend to borrow approximately $175 million under our new term loan facility at that time. The interest expense of this borrowing, had it been incurred on the first day of fiscal 2012 or the first day of fiscal 2013, would have been $10.6 million or $5.3 million, respectively.

 	 	Future payments due by period(1)	 	
 	 	Less than
1 Year	 	 	1 – 3 Years	 	 	3 – 5 Years	 	 	After
5 Years	 	 	Total	 	
(In thousands)	 	 	 	
Operating lease obligations	 	$	6,613	  	 	$	13,599	  	 	$	12,501	  	 	$	17,335	  	 	$	50,048	  	
Employment contracts(2)	 	 	142	  	 	 	332	  	 	 	—	  	 	 	—	  	 	 	474	  	
Purchase commitments	 	 	16	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	16	  	
Kellwood Company’s Wells Fargo Facility(3)(4)	 	 	—	  	 	 	79,783	  	 	 	—	  	 	 	—	  	 	 	79,783	  	
Kellwood Company’s long-term debt— principal and PIK interest(4)(5)	 	 	—	  	 	 	152,675	  	 	 	—	  	 	 	—	  	 	 	152,675	  	
Kellwood Company’s long-term debt—cash interest(3)(4)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Tax Receivable Agreement(6)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	172,087	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	6,771	  	 	$	246,389	  	 	$	12,501	  	 	$	17,335	  	 	$	455,083	  	

(1)	In connection with consummation of this offering, Vince, LLC will enter into the Shared Services Agreement with Kellwood Company, LLC pursuant to which Kellwood will provide support services in various operational areas including, among other things, distribution, information technology and back office support (as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement”). We have excluded the amounts due under such agreement as from the table herein as we cannot precisely estimate the future payments to be made thereunder and timing thereof. However, we currently expect to pay between $8.0 million to $10.0 million on an annualized basis in the near to intermediate term after consummation of the IPO for services to be provided by Kellwood under the Shared Services Agreement.	
(2)	We have entered into agreements with certain employees to provide for relocation benefits.	
(3)	The cash interest commitment excludes cash interest on the Wells Fargo Facility and Cerberus Term Loan as the agreements contain variable interest provisions for which no reliable estimate of future payment amounts can be made. In connection with the consummation of this offering, we intend to enter into a new $         million revolving credit facility, with interest rates ranging from     % to     %.	
(4)	Payments under these instruments will not be required in any period after consummation of this offering, as most of the net proceeds from this offering, along with the borrowings under our new term loan facility, will be used to repay the Kellwood Note Receivable. In turn, Kellwood Company, LLC will use a portion of the proceeds from such repayment to repay, discharge or repurchase a portion of Kellwood’s indebtedness (after giving effect to any indebtedness to be forgiven or a capital contribution to be made by Sun Capital or its affiliates) and will refinance certain of its other indebtedness. The remainder of such Kellwood Note Receivable proceeds will be used by Kellwood Company, LLC to (i) pay a restructuring fee equal to 1% of this offering to Sun Capital Management pursuant to the Management Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Management Fees,” and (ii) pay a debt recovery bonus of up to $6.0 million to our Chief Executive	
 
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 	Officer, as described in “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements.” It is currently estimated that the restructuring fee described in clause (i) above and payable to Sun Capital Management in connection with this offering will total $3.5 million.	
(5)	The 12.875% Notes, which totaled $143.2 million in aggregate principal amount (including capitalized PIK interest) as of February 2, 2013, are guaranteed by various AHC subsidiaries on a secured basis, including Vince, LLC. This security interest is contractually subordinated to security interests of lenders under the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. The 12.875% Notes contain certain customary provisions that, among other things, limit the ability of Kellwood Company and its restricted subsidiaries, which include Vince, LLC, to incur additional indebtedness, make certain restricted payments, dispose of assets or redeem or repurchase capital stock or prepay subordinated indebtedness. In the event that Kellwood Company fails to satisfy any of its obligations thereunder, Vince, LLC, as a subsidiary guarantor, shall be jointly and severally liable to satisfy such obligations (along with the other guarantors), until such time as its guarantee is discharged or released, which will occur in connection with the consummation of this offering. All issued and outstanding 12.875% Notes will be redeemed after the consummation of this offering, using a portion of the proceeds from the repayment of the Kellwood Note Receivable.	
(6)	In connection with the consummation of this offering, Vince Holding Corp. will enter into the Tax Receivable Agreement with the Pre-IPO Stockholders (as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement”). Although Vince, LLC is not the obligor under such agreement, we have included the total amount estimated to be due. We cannot, however, reliably estimate in which future periods these amounts would become due. The amount set forth in this line represents 85% of the value of these net tax assets.	
Inflation
While inflation may impact our sales and cost of goods sold, we believe the effects of inflation on our results of operations and financial condition are not significant. We cannot assure you, however, that our results of operations and financial condition will not be materially impacted by inflation in the future.
Quantitative and Qualitative Disclosures About Market Risk
We do not believe that foreign currency risk, commodity price or inflation risks are expected to be material to our business or our consolidated financial position, results of operations or cash flows. All of our foreign sales and purchases are made in U.S. dollars. We will enter into a new $         million revolving credit facility and a new $         million term loan facility in connection with the consummation of this offering, with interest rates ranging from     % to     %. A 10% increase or decrease to the interest rate applicable to our new term loan facility would increase or decrease our annual interest expense on the $         million of indebtedness to be outstanding thereunder after the consummation of this offering by $         million. While we are still in preliminary discussions with potential arrangers and lenders with respect to the terms of the new credit facilities, interest thereunder will accrue at a specified floating rate plus a specified margin. We do not anticipate that interest rate changes thereunder will affect the fair market value of such indebtedness but will impact future earnings and cash flows, assuming other factors are held constant, as we do not expect to enter into interest rate hedges with respect to these new credit facilities.
Off-Balance Sheet Arrangements
Vince, LLC did not maintain any off-balance sheet arrangements during fiscal 2010, fiscal 2011, fiscal 2012 or the first six months of fiscal 2013.
Critical Accounting Policies and Estimates
Revenue Recognition .    Sales are recognized when goods are shipped in accordance with customer orders for the wholesale and e-commerce businesses, and at the time of sale to consumer for the retail business. The estimated amounts of sales discounts, returns and allowances are accounted for as reductions of sales when the associated sale occurs. These estimated amounts are
 
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adjusted periodically based on changes in facts and circumstances when the changes become known. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the Vince, LLC’s audited financial statements included elsewhere in this prospectus.
Accounts Receivable—Reserves for Allowances.     Accounts receivable are recorded net of allowances for expected future chargebacks and margin support from wholesale partners. It is the nature of the apparel industry that suppliers like us face significant pressure from wholesale partners in the retail industry to provide allowances to compensate for their margin shortfalls. This pressure often takes the form of customers requiring us to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of our products at retail. To the extent our wholesale partners have more of our goods on hand at the end of the season, there will be greater pressure for us to grant markdown concessions on prior shipments. Our accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and our estimates of the level of markdowns and allowances that will be required in the coming season in order to collect the receivables. We evaluate the allowance balances on a continual basis and adjust them as necessary to reflect changes in anticipated allowance activity. We also provide an allowance for sales returns based on historical return rates.
Accounts Receivable—Allowance for Doubtful Accounts.     We maintain an allowance for doubtful accounts receivable for estimated losses resulting from wholesale partners that are unable to meet their financial obligations. Our estimation of the allowance for doubtful accounts involves consideration of the financial condition of specific customers as well as general estimates of future collectability based on historical experience and expected future trends. The estimation of these factors involves significant judgment. In addition, actual collection experience, and thus bad debt expense, can be significantly impacted by the financial difficulties of as few as one customer.
Inventory Valuation .    Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost. Our products can be classified into two types: replenishment and non-replenishment. Replenishment items are those basics that are not highly seasonal or dependent on fashion trends. The same products are sold by retailers 12 months a year and styles evolve slowly. Retailers generally replenish their stocks of these items as they are sold. Only a relatively small portion of our business involves replenishment items.
The majority of our products consist of items that are non-replenishment as a result of being tied to a season. For these products, the selling season generally ranges from three to six months. The value of this seasonal merchandise might be sufficient for us to generate a profit over its cost throughout the season, but after its season a few months later the same inventory might be saleable at less than cost. The value may rise again the following year when the season in which the goods sell approaches—or it may not, depending on the level of prior year merchandise on the market and on year-to-year fashion changes.
The majority of out-of-season inventories may be sold to off-price retailers and other customers who serve a customer base that will purchase prior year fashions in addition to liquidation through our Vince outlets. The amount, if any, that these customers will pay for prior year fashions is determined by the desirability of the inventory itself as well as the general level of prior year goods available to these customers. The assessment of inventory value, as a result, is highly subjective and requires an assessment of the seasonality of the inventory, its future desirability, and future price levels in the off-price sector.
Many of our products are purchased for and sold to specific customers’ orders. Others are purchased in anticipation of selling them to a specific customer based on historical trends. The loss of
 
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a major customer, whether due to the customer’s financial difficulty or other reasons, could have a significant negative impact on the value of the inventory expected to be sold to that customer. This negative impact can also extend to purchase obligations for goods that have not yet been received. These obligations involve product to be received into inventory over the next one to six months.
Deferred Rent and Deferred Lease Incentives.     We lease various office spaces, showrooms and retail stores. Many of these operating leases contain predetermined fixed escalations of the minimum rentals during the original term of the lease. For these leases, we recognize the related rental expense on a straight-line basis over the life of the lease and record the difference between the amount charged to operations and amounts paid as deferred rent. Certain of our retail store leases contain provisions for contingent rent, typically a percentage of retail sales once a predetermined threshold has been met. These amounts are expensed as incurred. Additionally, we received lease incentives in certain leases. These allowances have been deferred and are amortized on a straight-line basis over the life of the lease as a reduction of rent expense.
Fair Value Assessments of Goodwill and Other Intangible Assets .    Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. We completed our annual impairment testing on our goodwill and indefinite-lived intangible assets during the fourth quarters of fiscal 2010, fiscal 2011 and fiscal 2012.
Goodwill represents the excess of the cost of acquired businesses over the fair market value of their identifiable net assets. As the acquisition by Kellwood Company of the net assets of Vince occurred prior to the current requirements of ASC Topic 805 Business Combinations , the additional purchase consideration paid to the former owners of Vince subsequent to the acquisition date was recorded as an addition to the purchase price, and therefore goodwill, once determined.
In September 2011, the Financial Accounting Standards Board (“FASB”) issued an amendment to ASC Topic 350 Intangibles-Goodwill and Other . Under this amendment, an entity may elect to perform a qualitative impairment assessment for goodwill. If adverse trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is required. “Step one” of this quantitative impairment test requires that the fair value of the reporting unit be estimated and compared to its carrying amount. If the carrying amount exceeds the estimated fair value of the asset, “step two” of the impairment test is performed to calculate the impairment loss. An impairment loss is recognized to the extent the carrying amount of the reporting unit exceeds the implied fair value.
An entity may pass on performing the qualitative assessment for a reporting unit and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. The amendment is effective for annual and interim impairment tests for goodwill performed for fiscal years beginning after December 15, 2011. We adopted this amendment during fiscal 2012.
In fiscal 2012, we performed a qualitative assessment on the goodwill and determined that it was more likely than not that the carrying value of the reporting unit was greater than the fair value. In fiscal 2011, we performed “step one” of the impairment test for the goodwill rather than electing early adoption of the guidance noted above due to the additional capitalized contingent purchase price. We estimated the fair value of the reporting unit primarily based on an income approach, which uses discounted cash flow assumptions. The implied fair value of the reporting unit exceeded the book value. As such, we were not required to perform “step two” of the impairment test.
In July 2012, FASB issued Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite Lived Assets for Impairment . Under this amendment, an entity may elect to perform a qualitative impairment assessment for indefinite-lived intangible assets similar to the goodwill impairment testing guidance discussed above.
 
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An entity may pass on performing the qualitative assessment for an indefinite-lived intangible asset and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. The amendment is effective for annual and interim impairment tests for indefinite-lived intangible assets performed for fiscal years beginning after September 15, 2012. We early adopted this amendment during fiscal 2012.
In fiscal 2012, we elected to perform a qualitative assessment on indefinite-lived intangible assets and determined that it was more likely than not that the carrying value of the assets exceeded the fair value. In fiscal 2011, we performed “step one” of the impairment test for indefinite-lived intangible assets. We estimated the fair value of the indefinite-lived assets primarily based on a relief from royalty model, which uses revenue projections, royalty rates and discount rates to estimate fair value. The implied fair value of the assets exceeded the book value, as such we were not required to perform “step two” of the impairment test.
Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.
Definite-lived intangible assets are comprised of customer relationships and are being amortized on a straight-line basis over their useful lives of 20 years.
Provision for income taxes .    We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. We determine the appropriateness of valuation allowances in accordance with the “more likely than not” recognition criteria. We recognize tax positions in our consolidated balance sheets as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with tax authorities assuming full knowledge of the position and all relevant facts.
Our operating results have historically been included in the U.S. federal and state income tax returns for AHC. Provision for income taxes in the Vince, LLC financial statements have been determined on a stand-alone basis (i.e., on a “separate return” basis). As such, we are required to assess the realization of our net deferred tax assets, the need for a valuation allowance and judgments on the recognition of tax benefits based on our own facts and circumstances and exclude from that assessment any impact of the overall results of AHC. We believe the assumptions underlying the allocation of income taxes are reasonable; however the amounts allocated for income taxes in the Financial Statements are not necessarily indicative of the income taxes that would have been recorded had Vince been a separate, stand-alone entity during the periods presented.
Recent Accounting Pronouncements
In September 2011 and July 2012, the FASB issued amendments to the Intangibles-Goodwill and Other topic of ASC. Under these amendments, an entity may elect to perform a qualitative impairment assessment for goodwill and indefinite-lived intangible assets. We adopted the provisions of these new standards during fiscal 2012.
 
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 VINCE BUSINESS
Vince is a prominent, high-growth contemporary apparel brand known for its modern, effortless style and everyday luxury essentials. The Vince brand is synonymous with a clean, timeless aesthetic, sophisticated design and superior quality. We believe these attributes have generated strong customer loyalty and allow us to hold a distinctive position among contemporary apparel brands. We also believe that we will achieve continued success by expanding our product assortment and distributing this expanded product assortment through our premier wholesale partners in the U.S. and select international markets, as well as through our growing number of branded retail locations and on our e-commerce platform.
The Vince brand was founded in 2002 with a collection of stylish women’s knits and cashmere sweaters that rapidly attracted a loyal customer base drawn to the casual sophistication and luxurious feel of our products. Over the last decade, Vince has generated strong sales momentum and has successfully grown to include a men’s collection in 2007, expanded denim, leather and outerwear lines in 2010 and women’s footwear, which was launched through a licensing partnership in 2012. Led by an experienced management team, Vince is evolving from a U.S. wholesale-driven women’s apparel business to a global, dual-gender, multi-channel lifestyle brand. We believe we have significant and visible growth opportunities that include:
 
 	Ÿ	 	expanding the brand’s appeal with new product offerings;	
 
 	Ÿ	 	increasing wholesale penetration and productivity in premier department stores and specialty stores;	
 
 	Ÿ	 	opening new retail locations and improving productivity in existing Vince stores;	
 
 	Ÿ	 	growing our e-commerce business;	
 
 	Ÿ	 	selectively adding new points of distribution globally; and	
 
 	Ÿ	 	building brand awareness to attract new customers.	
We serve our customers through a variety of channels that reinforce the Vince brand image. Our diversified channel strategy allows us to introduce our products to customers through multiple distribution points that are reported in two segments: wholesale and direct-to-consumer. Our wholesale segment is comprised of sales to premier department stores and specialty stores in the U.S. and in select international markets, with U.S. wholesale representing 76% of our fiscal 2012 sales and 70.4% of our sales in the first six months of fiscal 2013. We believe that our success in the U.S. wholesale segment and strong relationships with premier wholesale partners provide opportunities for continued growth. These growth initiatives include creating enhanced product assortments and brand extensions through both in-house development activities and licensing arrangements, as well as by continuing the build-out of Vince branded shop-in-shops in select wholesale partner locations. We also believe international wholesale, which represented 8% of net sales for fiscal 2012 and 10.3% of our net sales for the first six months of fiscal 2013, presents a significant growth opportunity as we strengthen our presence in existing geographies and introduce Vince in new markets globally.
In 2008, we began to broaden our distribution beyond the wholesale channel with the opening of our first retail store. Since then, we have expanded our direct-to-consumer presence, and as of October 5, 2013, we operated 27 stores, which consist of 21 full-price retail stores and six outlet locations. Based on a combination of third-party analyses and internal projections, we believe the U.S. market can currently support at least 100 free-standing Vince store locations. The direct-to-consumer segment also includes our website, www.vince.com , which was launched in 2008. The direct-to-consumer segment accounted for 16% of fiscal 2012 net sales and 19.3% of net sales in the first six months of fiscal 2013, and we expect sales from this channel to accelerate as we drive productivity in existing stores, open new stores and upgrade and re-launch our website in 2014.
 
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The strength of the Vince brand is exhibited through our growth trajectory:
 
 	Ÿ	 	Total net sales of $111.5 million, $175.3 million and $240.4 million in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, representing year-over-year growth of 57.2% in fiscal 2011 and 37.1% in fiscal 2012, and total net sales of $90.5 million and $114.7 million in the first six months of fiscal 2012 and fiscal 2013, respectively, representing growth of 26.6% between the first six months of fiscal 2012 and fiscal 2013;	
 
 	Ÿ	 	Comparable store sales growth of 9.3%, 7.6% and 23.1% in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, and of 13.9% and 31.7% in the first six months of fiscal 2012 and fiscal 2013, respectively;	
 
 	Ÿ	 	Adjusted EBITDA of $23.6 million, $44.2 million and $51.5 million in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, representing year-over-year growth of 86.9% in fiscal 2011 and 16.6% in fiscal 2012, and Adjusted EBITDA of $15.3 million and $21.5 million in the first six months of fiscal 2012 and fiscal 2013, respectively, representing growth of 40.9% between the first six months of fiscal 2012 and fiscal 2013. See “Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC—Non-GAAP Financial Measures” for the definition of Adjusted EBITDA and a reconciliation from net income to Adjusted EBITDA; and	
 
 	Ÿ	 	Net income of $9.1 million, $16.7 million and $10.3 million in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, and net income of $1.2 million and $2.4 million in the first six months of fiscal 2012 and fiscal 2013, respectively.	
Kellwood and Vince are both currently owned by the Pre-IPO Stockholders. After consummation of this offering, we will continue to have an ongoing relationship with Kellwood through the Shared Services Agreement, which will set out various services, such as distribution, information technology and back office support that Kellwood will provide us after this offering. These services will allow us to continue to benefit from Kellwood’s infrastructure, providing us with the necessary capabilities needed to meet the growing operational needs of our business. We have also agreed to pay 85% of the future tax benefits we expect to realize as a result of certain tax attributes related to the non-Vince businesses to the Pre-IPO Stockholders. See “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Tax Receivable Agreement.”
Our Competitive Strengths
Differentiated Brand for Everyday Luxury Essentials.     We believe that the Vince brand holds a distinct position in today’s marketplace driven by a premium product assortment that combines sophisticated comfort with contemporary and timeless fashion that can be worn virtually everyday. The Vince brand is distinguished by a refined, modern aesthetic with superior quality and attention to detail and fit. Our assortment features luxurious basics such as cashmere sweaters and silk blouses as well as more fashion-forward offerings including leather jackets, leather and suede leggings and fur-trimmed coats and vests. The premium nature of the Vince brand is reinforced through our highly selective wholesale partnerships with premier department stores and specialty stores and a retail strategy designed to ensure a consistent brand presentation and enhanced customer experience. We believe the enduring fashion and effortless style of the Vince brand, coupled with a pricing strategy that positions us as an affordable luxury, have created strong and proven global appeal.
Exceptional Customer Loyalty and Reach.     The quality, consistency and design of our products have attracted a loyal following among style-savvy consumers across a broad age demographic. Based on a 2012 third-party survey that we commissioned among 500 qualified consumers, Vince has high levels of brand affinity and purchase intent. Among women surveyed who are aware of Vince, 41% express that they “love” the brand, and 35% report that they are “highly likely” to purchase the
 
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brand within the next six months, representing the highest levels of affinity and purchase intent compared to 20 other peer brands included in the survey. While our target customer is between the ages of 30 and 50, we have successfully attracted fashion-conscious customers as young as 18 and customers over 55 who appreciate our brand’s sophistication and design aesthetic.
Established Network of Premier Wholesale Partners .    Vince is a leading brand in premier U.S. department stores, including Nordstrom, Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s, as well as in select specialty stores nationwide. Based on industry experience we believe that in the majority of these U.S. department stores, Vince was a top selling brand on the contemporary floor in fiscal 2012 and the first six months of fiscal 2013. Our product offerings and brand also resonate with customers outside the U.S., as demonstrated by the strong growth experienced through premium international stores including Harrods and Harvey Nichols in both these periods and by Lane Crawford in the first six months of fiscal 2013. Our wholesale relationships enable us to gain access to a geographically diverse consumer base while simultaneously increasing awareness of the Vince brand. We are implementing initiatives to further drive wholesale productivity, including product line extensions and the transformation of additional Vince product displays at select department stores into branded shop-in-shops. By utilizing targeted strategies to capture additional dedicated floor space, we believe we can better showcase the Vince lifestyle and offer consumers a more personalized shopping experience while helping to ensure the consistency of the brand image through customized visual elements.
Scalable and Flexible Retail Format.     We opened our first retail location in 2008 and have since grown our retail footprint in the U.S. to a total of 27 stores, which consist of 21 full-price retail stores and six outlet locations, as of October 5, 2013. Our stores offer a personalized, service-oriented shopping experience in a boutique setting that reflects the lifestyle and modern aesthetic of the brand. We have a proven and flexible full-price retail format that targets both street and mall locations. These locations are selected based on rigorous financial, geographic and demographic criteria, and can accommodate both dual and single gender assortments. Our three outlet stores allow us to extend our reach to additional consumer groups. The strength of our retail channel is evidenced by the revenue growth across our existing store base, with 9.3%, 7.6% and 23.1% comparable store sales growth in fiscal 2010, fiscal 2011 and fiscal 2012, respectively, and 31.7% comparable store sales growth in the first six months of fiscal 2013. Given the increasing scale of our retail operations, we continue to invest in our infrastructure and appointed a new Senior Vice President, Retail and E-Commerce, in June 2012, to drive growth across our direct-to-consumer segment.
Experienced Management Team.     We have assembled a world-class management team with extensive experience across a broad range of disciplines including global brand building, merchandising, marketing, design, operations, retail, international, licensing and finance. Our highly skilled team is led by our CEO, Jill Granoff, who was previously CEO of Kenneth Cole Productions, our President and Chief Creative Officer, Karin Gregersen, who was previously Managing Director of Chloé/Richemont Americas, and our CFO, Lisa Klinger, who was previously CFO of The Fresh Market. Our CEO and CFO bring public company experience and, along with our President, are committed to the expansion of the brand and the profitable growth of the company.
Growth Strategy
Capitalize on New and Existing Product Opportunities.     We believe there are significant opportunities to capitalize on our strong customer loyalty and growing customer base by enhancing our current product assortment and introducing new product categories in order to provide additional reasons to shop the Vince brand. We plan to build sales of existing product categories by elevating our men’s collection, expanding our denim and outerwear collections, increasing our assortment of women’s bottoms and dresses and implementing a replenishment program for core items. Additionally,
 
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we continue to identify new product categories that will allow us to capture incremental share from existing customers and attract new customers. Categories already identified include handbags and leather accessories as well as more tailored collections for women and men. We also entered into a licensing agreement for women’s footwear, which launched in 2012, and signed a licensing agreement in 2013 for the launch of children’s apparel in 2014. We will continue to explore additional licensing opportunities for select categories requiring specialized expertise, such as intimates/loungewear, men’s footwear and fashion accessories.
Increase Wholesale Penetration.     In fiscal 2012 and the first six months of fiscal 2013, we grew our wholesale net sales in the U.S. by 35% compared to fiscal 2011. This revenue growth exceeded our growth of 17% in the number of wholesale doors during the same period, which illustrates our ability to improve productivity within existing locations. We believe we can continue to increase wholesale net sales by enhancing assortments in existing product categories, introducing new product categories and improving our visual presentation, space layout and fixtures. Working with our wholesale partners, we are planning to open 15 to 20 new branded shop-in-shops in fiscal 2013 and believe there is a an attractive opportunity to open additional shop-in-shops in 2014 and beyond. These shop-in-shops underscore the commitment of our wholesale partners to the Vince brand and are expected to generate a sales lift as we can better showcase the Vince lifestyle via customized presentations with branded fixtures and utilize a staff that is trained to offer a more elevated retail shopping experience.
Accelerate Growth of U.S. Direct-to-Consumer Segment.     As of October 5, 2013, we operated 27 stores, which consist of 21 full-price retail stores and six outlet locations. Based on a combination of third-party analyses and internal projections, we believe the U.S. market can currently support at least 100 Vince free-standing store locations. We plan to double our current store base over the next three to five years, including opening net six new stores in fiscal 2013. Our new full-price store model ranges from 2,000 to 3,000 gross square feet, and we target a payback period on our new store investments of two to three years. In addition to new store expansion, we also have an opportunity to increase productivity in our existing stores through enhanced merchandising with a focus on a broad lifestyle presentation, personalized customer service strategies, the launch of new product categories, improved inventory management and the expansion of made-for-outlet product. We believe our e-commerce strategy, which is focused on increasing brand awareness, customer traffic and conversion, creates additional opportunities for growth. As a component of this strategy, we intend to upgrade and re-launch our www.vince.com website in 2014 to offer a more compelling shopping experience and richer content to allow consumers to more fully engage with the brand on a more frequent basis.
Expand Our International Business.     Given increasing worldwide demand for affordable luxury goods, targeted international expansion represents a compelling growth opportunity. Our success in our current international markets demonstrates how our modern, sophisticated style resonates globally. Vince products are currently sold in 43 countries, either directly to premier department and specialty stores, or through distribution relationships with highly-regarded international partners with exclusive rights to certain territories. As of October 5, 2013, we had eight international shop-in-shops. We believe we can increase international sales by supplementing existing distribution partnerships, increasing wholesale penetration and productivity and selectively adding retail locations with current and prospective partners in attractive international markets including Canada, select European countries, Asia and the Middle East.
Build Our Brand Awareness.     Vince has a significant opportunity to increase brand awareness and drive incremental sales. Based on a 2012 third-party consumer survey we commissioned, Vince has aided brand awareness of 20% compared to 30% to 50% for other contemporary brands and approximately 75% to 90% for brands like Michael Kors, Diane von Furstenburg and Ralph Lauren. Aided brand awareness is when a respondent indicates recognition of a specific brand from a list of
 
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possible names presented by those conducting the survey instead of indicating recognition of a specific brand without being offered a list of potential responses. Our low awareness level, coupled with the high affinity and purchase intent we have among existing consumers, underscores what we believe is a significant growth opportunity to convert potential new customers to loyal brand enthusiasts. To address this opportunity, we intend to increase our marketing investment across a range of strategic initiatives including cooperative advertising with wholesale partners, print media, digital media, editorial coverage, direct mail, search engine optimization, social media initiatives, targeted product placement, celebrity outreach and in-store events. We also believe our brand awareness will increase as we open new retail stores in prominent, high-visibility locations, increase the number of shop-in-shops at our wholesale partner locations and upgrade and re-launch our www.vince.com website.
Our Market Opportunity
We operate in the global personal luxury goods industry. According to the Bain Studies, which defines such market to include design, hospitality, wines & spirits, foods, cars and yachts:
 
 	Ÿ	 	the global personal luxury goods market grew at a compound annual growth rate of 11% for fiscal 2010 through fiscal 2012 (the periods through which we disclose summary historical financial data in this prospectus);	
 
 	Ÿ	 	the global personal luxury goods market is expected to grow at approximately 4% to 5% in 2013, and at a 5% to 6% compounded annual growth rate over the next few years, reflecting a growing middle class possessing increased purchasing power in select international markets, increased demand for higher-end apparel and leather goods, and growing demand for luxury goods in China and South-East Asia;	
 
 	Ÿ	 	within the global personal luxury goods market, apparel and accessories are the largest categories, accounting for 26% and 27%, respectively, of total spending as of 2012; and	
 
 	Ÿ	 	the global luxury apparel category grew at an annual growth rate of 10%, with estimated sales of approximately $68 billion, in 2012.	
According to the Bain Studies, the global women’s ready-to-wear category totaled $33 billion in 2011, an 8% increase from 2010, driven by outperformance of strong brands and fashion trends including furs and fur-wear. The global men’s ready-to-wear category totaled $32 billion in 2011, a 9% increase from 2010, as more brands, department stores and online players focused on men through dedicated concepts. We believe we are well positioned to continue to benefit from growth in both categories as we enhance our existing product offerings and expand into new categories in both women’s and men’s apparel.
In addition, according to the Bain studies, the Americas luxury market grew at an annual growth rate of 5%, with estimated sales of approximately $81 billion in 2012. U.S. growth continues to be driven by increased consumer confidence, the growing importance of omni-channel shopping, strong performance of department stores, the main personal luxury distribution channel where we have a strong presence, and increased tourist and destination-based shopping for luxury goods. We believe we are well-positioned to continue to take market share in the U.S. market as we expand our product assortment and grow our store base.
Company History
Vince was founded in Los Angeles in 2002 by Rea Laccone and Christopher LaPolice. In 2006, the Vince business was sold to Kellwood Company, which was later acquired by affiliates of Sun Capital in 2008. Over the last decade, Vince has experienced strong sales momentum and has begun
 
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to evolve from a U.S. wholesale-driven women’s apparel business into a global dual-gender, multi-channel lifestyle brand. This is evidenced by our successful expansion into new product categories, the growth of our direct-to-consumer business, and the acceptance and appeal of the Vince brand in many international markets. In order to prepare for the next phase of growth, we carefully planned and orchestrated a management transition and built our retail, wholesale and international teams to enhance our talent and capabilities. Key leadership appointments are outlined below:
 
 	Ÿ	 	Jill Granoff as CEO, bringing over 25 years of industry and strategic leadership experience, including most recently as CEO of Kenneth Cole Productions. Ms. Granoff previously held senior executive roles at Liz Claiborne, Victoria’s Secret and Estée Lauder;	
 
 	Ÿ	 	Lisa Klinger as CFO, bringing 24 years of relevant financial experience, including most recently as the EVP—CFO of The Fresh Market where she helped to lead The Fresh Market through its successful IPO in 2010. Ms. Klinger previously held senior financial management positions at Michaels Stores and Limited Brands; and	
 
 	Ÿ	 	Karin Gregersen as President and Chief Creative Officer, bringing 19 years of industry experience in the designer and contemporary segments, including most recently as Managing Director of Chloé/Richemont Americas. Ms. Gregersen brings creative, merchandising, marketing and new business development expertise that will support Vince’s continued evolution into a global lifestyle brand.	
Our Brand and Products
Since our inception in 2002, we have offered contemporary apparel with a focus on clean and authentic design and superior quality. We believe that our differentiated design aesthetic and strong attention to detail and fit allow us to maintain premium pricing, and that the combination of quality and value positions Vince as an everyday luxury brand that encourages repeat purchases among our customers.
Over 85% of Vince’s net sales were comprised of women’s products with particular strength in sweaters and knit tops in fiscal 2012 and the first six months of fiscal 2013. Our women’s line includes seasonal collections of luxurious cashmere sweaters and silk blouses, leather and suede leggings and jackets, dresses, denim, tanks and t-shirts and a growing assortment of outerwear. Our men’s collection includes t-shirts, woven tops, sweaters, denim, pants, blazers, outerwear and stylish leather jackets.
We have identified additional brand extension opportunities, including elevating and expanding our men’s collections, denim offerings, outerwear, women’s bottoms and dress product lines and implementing a replenishment program for core items. In addition to apparel, we currently offer women’s footwear through a licensing arrangement and are preparing to launch children’s apparel in 2014 with another licensing partner. We are also evaluating other brand extension opportunities through both in-house development activities and licensing arrangements with third parties.
Business Segments
Wholesale Segment
We began in 2002 as a wholesale business, and we continue to sell our products through premier department stores and select specialty stores in the U.S. and targeted international markets. Wholesale distribution is an important component of our overall strategy as it provides access to customers in a variety of geographic areas. Our three largest wholesale partners, which include Nordstrom, Saks Fifth Avenue and Neiman Marcus, each accounted for more than 10% of our total
 
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revenue for fiscal 2011, 2012 and the first six months of fiscal 2013. We work closely with our wholesale partners to ensure consistent product presentation across all channels. We do not have written agreements with any of these wholesale partners. Prices are set by the company and communicated to accounts during market. As such, purchases from our wholesale partners generally occur on an order-by-order basis. As a result we generally have less certainty into our required levels of inventory and run a greater risk of producing unsalable inventory than if we were creating such products under long term contractual commitments. We believe, however, that operating on a purchase order basis is very common in the apparel industry and that the timeless nature of our fashions helps partially insulate us from this risk. Between fiscal 2010 and 2012, we grew our wholesale business more than 30% annually, with the entire wholesale segment accounting for $203.1 million, or 84% of total net sales, in fiscal 2012. We grew our wholesale business more than 18.6% between the first six months of fiscal 2012 and the first six months of 2013, with the entire wholesale channel accounting for $92.6 million, or 80.7% of total net sales, during the first six months of fiscal 2013.
United States.     Premier department stores and select specialty stores are a significant distribution channel in the U.S. for Vince. Our top four wholesale partners, based on sales, are Nordstrom, Saks Fifth Avenue, Neiman Marcus and Bloomingdale’s. We believe we have significant opportunities to increase our wholesale productivity through enhanced product assortments, brand extensions and the build-out of shop-in-shops in select locations. As of October 5, 2013 we had seven shop-in-shops with our U.S. wholesale partners. We expect to add 15 to 20 new shop-in-shops in fiscal 2013, and we believe there is continued opportunity to open additional shop-in-shops with key wholesale partners in fiscal 2014 and beyond.
International .    We believe the Vince brand, with its distinctive designs, sophisticated comfort and superior quality, resonates with customers globally, and, based on sales in recent periods, we believe that international expansion offers a significant growth opportunity. Vince products are currently sold in 43 countries. As of October 5, 2013, we had eight international shop-in-shops. We have established direct wholesale relationships with premier department stores, such as Harrods, Harvey Nichols and Lane Crawford, specialty stores and highly-regarded distribution partners with exclusive rights to certain territories outside the U.S. We do not have written agreements with our international wholesale partners who buy from us on a purchase order basis. We do, however, have multi-year written agreements in place with our distribution partners which outline certain business terms, including but not limited to defining the territories outside of the U.S. in which the distributor has exclusive distribution rights, any minimum product purchase amounts and advertising levels and circumstances under which the relationship may be terminated. We believe we can continue to drive growth in our current markets such as Canada, select European countries, Asia and the Middle East by improving our wholesale penetration and productivity and selectively adding new retail locations. We are also pursuing attractive growth opportunities in new geographies such as the Middle East and select European countries where we plan to supplement and elevate our existing presence by forming strategic alliances with highly regarded distribution partners.
Licensing .    We believe the establishment of strong licensing partnerships will be a contributor to future growth. In fiscal 2012, we signed our first licensing agreement for Vince footwear, a segment which we believe offers significant growth potential. Our footwear is sold in our own stores and by our licensee to select wholesale partners, and we earn a royalty based on total net sales through our wholesale partners. We are continuously evaluating new licensing opportunities for categories requiring specialized expertise to accelerate the growth of our brand. We have signed a licensing agreement to launch children’s apparel in 2014 and continue to evaluate new categories including intimates/loungewear, men’s footwear and fashion accessories. We are, and will continue to be, integrally involved in the design of all our licensed products and the approval of related marketing, distribution and other branding decisions.
 
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Direct-to-Consumer Segment
Our direct-to-consumer segment is critical to expanding brand recognition and reinforcing the Vince image. It also presents a key near-term growth opportunity in the U.S. The direct-to-consumer segment currently generates sales through full-price retail stores, outlet stores and our e-commerce platform. We opened our first retail store in 2008, and as of October 5, 2013, we operated 27 stores, which consist of 21 full-price retail stores and six outlet locations. Our retail stores, together with our website, collectively accounted for $37.2 million, or 16%, of total net sales in fiscal 2012 and accounted for $22.1 million, or 19.3%, of total net sales in the first six months of fiscal 2013. We plan to double our store base over the next three to five years, including opening net six new stores in fiscal 2013. Based on a combination of third-party analyses and internal projections, we believe the U.S. market can currently support at least 100 free-standing Vince store locations. In addition, we have built a successful and growing e-commerce business that allows us to expand our customer base and to market and distribute Vince products more broadly and cost-effectively. We believe our e-commerce channel, including mobile technology, represents a key growth driver over the mid- to long-term.
Full-Price Retail .    Our full-price retail stores offer a personalized, service-oriented shopping experience in a boutique setting that reflects the clean, modern aesthetic of the brand. Our new stores are designed by the world-class design firm Marmol Radziner, known for its award-winning retail spaces. Vince boutiques combine sophisticated, elevated design elements such as warm lighting and rich palettes that include reclaimed oak floors, leather, suede and velvet upholstery as well as architectural wood and metal cube fixtures that showcase our product. Our stores carry a wide range of women’s, and in some cases men’s, merchandise and provide a venue in which to test new products and brand extension initiatives. Vince retail stores are strategically selected to best position the brand and avoid cannibalization with the wholesale segment while also maximizing foot traffic among our targeted demographics. Our full-price retail stores are located on high-end shopping streets and in upscale shopping malls. Our new full-price store model ranges from 2,000 to 3,000 gross square feet, and we target a payback period on our new store investments of two to three years.
Outlet .    Our outlet stores provide us with an opportunity to reach additional customer segments and also act as a vehicle to sell excess and seasonal inventory outside of our full-price wholesale and retail channels, while controlling the product pricing, presentation and customer experience in a brand-right manner. We currently operate five outlet locations in premium outlet centers. We believe we have significant opportunity to grow our outlet store business through the combination of new store openings and improved productivity in existing outlet locations by introducing enhanced product assortments, including products specifically designed for the outlet channel.
E-Commerce .    We launched our website, www.vince.com , in 2008 and achieved 103% sales growth in fiscal 2012 compared to fiscal 2011 and 68.9% sales growth in the first six months of fiscal 2013 compared to the first six months of fiscal 2012. We are preparing to upgrade and re-launch our website in 2014 to enhance the customer experience through improved website functionality and product presentation, a greater focus on head-to-toe styling and the introduction of editorial content to increase customer engagement and visit frequency. Our website serves as an extension of the Vince brand, allowing us to market directly to consumers, and acts as a storefront where consumers can find the entire Vince collection.
Design and Merchandising
Our product design and merchandising efforts are led by our President and Chief Creative Officer, Karin Gregersen, and a team of designers and merchandisers based in Los Angeles. Ms. Gregersen has extensive experience in the designer and contemporary markets and oversees our design and merchandising teams. Led by Ms. Gregersen, our design team is focused on developing an elevated collection of Vince apparel and accessories that build upon the brand’s product heritage of
 
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modern, effortless style and everyday luxury essentials. The current design vision is to create a cohesive and compelling lifestyle product assortment with sophisticated head-to-toe looks for multiple wear occasions. Our design efforts are supported by well-established product development and production teams and processes that allow us to bring new products to market quickly. We are looking to further build our merchant capabilities and believe continued collaboration between design and merchandising will ensure we respond to consumer preferences and market trends with new innovative product offerings while maintaining our core fashion foundation.
Marketing, Advertising and Public Relations
We use marketing, advertising and public relations as critical tools to deliver a consistent brand message. Our marketing is focused on showcasing our product and a sophisticated style, as well as building an emotional connection with the customer. The Vince brand image is developed and cultivated by dedicated creative marketing, visual merchandising and public relations teams that, along with the Vince design team and select outside agencies, work closely to ensure consistency of the brand message across various consumer touchpoints.
We engage in a wide range of direct marketing programs that include traditional media (direct mail, print advertising, cooperative advertising with wholesale partners and outdoor advertising), digital media (email, web) and social media (Facebook, Instagram and Pinterest) to drive traffic across channels. We believe our customers will continue to be receptive to our marketing and social media efforts, which, in management’s opinion, have presented us with a strong new marketing channel to reach existing and prospective customers. We use Facebook as the main social media hub to generate conversation about the brand through daily lifestyle posts, focusing on product launches, style tips and in-store events. Social media platforms like Instagram allow us to tell our brand story creatively by offering behind-the-scenes access to events, press reviews and the Vince showroom, as well as featuring Vince enthusiasts wearing our products. In addition, the growing number of visits to www.vince.com , which totaled 1.7 million in fiscal 2012, representing a 42% increase from fiscal 2011, provides an opportunity to grow our customer base and communicate directly with our customers.
Our public relations team conducts a wide variety of press activities to reinforce the Vince brand image and create excitement around the brand. Vince apparel has appeared in the pages of major fashion magazines such as Vogue, Harper’s Bazaar, Elle, W, GQ, Esquire and Vanity Fair . Well-known trend-setters in entertainment and fashion are also regularly seen wearing the brand.
Sourcing and Manufacturing
Vince does not own or operate any manufacturing facilities. We contract for the purchase of finished goods with manufacturers who are responsible for the entire manufacturing process, including the purchase of piece goods and trim. Although we do not have written contracts, we have long-standing relationships with a diverse base of vendors which we believe to be mutually satisfactory. We work with over 30 manufacturers across five countries, with 70% and 73% of our products produced in China in fiscal 2012 and the first six months of fiscal 2013, respectively. For cost and control purposes, we contract with select third-party vendors in the U.S. to produce a small portion of our merchandise that includes woven bottoms and products manufactured with man-made fibers.
All of our garments are produced according to our specifications, and we require that all of our manufacturers adhere to strict regulatory compliance and standards of conduct. Our factories are monitored annually by our production team to ensure quality control, and they are monitored by independent third-party inspectors we employ for compliance with local manufacturing standards and regulations on an annual basis. Our quality assurance staff in the U.S. and Asia also monitors our manufacturing facilities regularly, providing technical assistance and performing in-line and final audits to ensure the highest possible quality.
 
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Distribution Facilities
Kellwood will continue to provide distribution facilities and services in the U.S. pursuant to the Shared Services Agreement, as described in “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Shared Services Agreement.” These services include distribution, storage and fulfillment. Kellwood will continue to provide these services until such time as we elect to terminate the provision of such services in accordance with the terms of the Shared Services Agreement.
As of October 5, 2013, we operated out of three distribution centers, two located in the U.S. and one in Belgium. The primary warehouse, located in City of Industry, California, includes 75,000 square feet dedicated to fulfilling orders for our wholesale partners and retail locations. An adjacent warehouse spanning 22,000 square feet supports Vince’s e-commerce business and offers additional capacity to support our projected growth over the next several years. Our space in both of the California warehouses utilize state-of-the-art warehouse management systems that are fully customer and vendor compliant and are completely integrated with our ERP and accounting systems.
The warehouse in Belgium is operated by a third-party logistics provider and supports our wholesale orders for customers located in Europe. The warehouse management systems of the Belgium warehouse are integrated with our ERP systems to provide us with near real-time visibility into our international distribution. We believe we have sufficient capacity in our domestic and international distribution facilities to support our continued growth.
Information Systems
Kellwood will continue to provide certain information technology services to us until such time as we elect to terminate provision of such services in accordance with the terms of the Shared Services Agreement. These services include information technology planning and administration, desktop support and help desk, our ERP system, financial applications, warehouse systems, reporting and analysis applications and our retail and e-commerce interfaces.
Our ERP system was developed from a core system that is widely used in the apparel and fashion industry, which we have customized to suit our inventory management and order processing requirements. We have integrated Oracle Financials with our ERP system to meet our financial reporting and accounting requirements. Additionally, we use a suite of third-party hosted retail applications integrated with our ERP system that provide us with merchandising, retail inventory management, point-of-sale systems, customer relationship management and retail accounting. Our retail applications are supported through a “Software as a Service” model, which allows for new implementations to occur quickly. Our ERP and warehouse management systems are also integrated with a hosted, third-party e-commerce platform.
Competition
We face strong competition in each of the product categories and markets where we compete on the basis of style, quality, price and brand recognition. Some of our competitors have achieved significant recognition for their brand names or have substantially greater financial, marketing, distribution and other resources than us. However, we believe that we have established a sustainable advantage and distinct position in the current marketplace, driven by a product assortment that combines classic and fashion-forward styling, and a pricing strategy that offers customers affordable luxury. Our competitors are varied but include Theory, Helmut Lang, Rag & Bone, James Perse, J. Crew, Michael Kors, Diane von Furstenberg and Tory Burch.
 
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Employees
As of October 5, 2013, we had 316 employees, of which 197 were employed in retail stores. None of our employees are currently covered by a collective bargaining agreement, and we believe our employee relations are good.
Intellectual Property
We own the Vince trademark for the production, marketing and distribution of our products in the U.S. and internationally. We have registered the trademark domestically and have registrations on file or pending in 16 foreign jurisdictions. We intend to continue to strategically register, both domestically and internationally, trademarks that we use today and those we develop in the future. We license the domain name for our website, www.vince.com , pursuant to the License Agreement. Under the License Agreement, we have an exclusive, irrevocable license to use the www.vince.com domain name without restriction at a nominal annual cost. While we may terminate the License Agreement at our discretion, the agreement does not provide for termination by the licensor. We also own unregistered copyright rights in our design marks.
Properties
We do not own any real estate. Our 16,283-square-foot principal executive and administrative offices are located at 1441 Broadway, 6th Floor, New York, New York 10018 and are leased under an agreement expiring in December 2014. Our 5,900-square-foot showroom is located at 80 W. 40th Street, New York, New York 10018 and is leased under an agreement expiring in December 2017. Our 17,640 square-foot design studios are located at 5410 Wilshire Boulevard, Los Angeles, California and are leased under an agreement expiring in January 2015. We are currently in the process of evaluating our long-term corporate real estate needs and expect to consolidate our New York offices into one location by the end of fiscal 2014.
As of October 5, 2013, we leased approximately 52,390 gross square feet related to our 27 retail stores. Our leases generally have initial terms of 10 years and cannot be extended or can be extended for one additional 5-year term. Our leases require a fixed annual rent, and most require the payment of additional rent if store sales exceed a negotiated amount. Most of our leases are “net” leases, which require us to pay all of the cost of insurance, taxes, maintenance and utilities. Although we generally cannot cancel these leases at our option, certain of our leases allow us, and in some cases, the lessor, to terminate the lease if we do not achieve a specified gross sales threshold.
 
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The following store list shows the location, opening date, type and size of our retail locations as of October 5, 2013:

Vince Location	  	State	  	Opening Date	  	Type	  	Gross Square
Feet	 	  	Selling Square
Feet	 	
Robertson (Los Angeles)	  	CA	  	April 9, 2008	  	Street	  	 	1,151	  	  	 	938	  	
Melrose (Los Angeles)	  	CA	  	September 4, 2008	  	Street	  	 	1,537	  	  	 	1,385	  	
Washington St. (Meatpacking)	  	NY	  	February 3, 2009	  	Street	  	 	2,000	  	  	 	1,239	  	
Prince St. (Nolita)	  	NY	  	July 25, 2009	  	Street	  	 	1,396	  	  	 	1,108	  	
San Francisco	  	CA	  	October 15, 2009	  	Street	  	 	1,895	  	  	 	1,408	  	
Chicago	  	IL	  	October 1, 2010	  	Street	  	 	2,590	  	  	 	1,371	  	
Madison Ave.	  	NY	  	August 3, 2012	  	Street	  	 	3,503	  	  	 	1,928	  	
Westport	  	CT	  	March 28, 2013	  	Street	  	 	1,801	  	  	 	1,344	  	
Greenwich	  	CT	  	July 19, 2013	  	Street	  	 	2,463	  	  	 	1,724	  	
Mercer St. (Soho)	  	NY	  	August 22, 2013	  	Street	  	 	4,500	  	  	 	3,080	  	
	  		  		  		  	 	 	 	  	 	 	 	
Total Street (10):	  	 	22,836	  	  	 	15,525	  	

Malibu	  	CA	  	August 9, 2009	  	Mall	  	 	797	  	  	 	705	  	
Dallas	  	TX	  	August 28, 2009	  	Mall	  	 	1,368	  	  	 	1,182	  	
Boca Raton	  	FL	  	October 13, 2009	  	Mall	  	 	1,547	  	  	 	1,199	  	
Boston	  	MA	  	October 20, 2009	  	Mall	  	 	1,370	  	  	 	1,015	  	
White Plains	  	NY	  	November 6, 2009	  	Mall	  	 	1,325	  	  	 	1,045	  	
Atlanta	  	GA	  	April 16, 2010	  	Mall	  	 	1,643	  	  	 	1,356	  	
Palo Alto	  	CA	  	September 17, 2010	  	Mall	  	 	2,028	  	  	 	1,391	  	
Bellevue Square	  	WA	  	November 5, 2010	  	Mall	  	 	1,460	  	  	 	1,113	  	
Manhasset	  	NY	  	April 22, 2011	  	Mall	  	 	1,414	  	  	 	1,000	  	
Newport Beach	  	CA	  	May 20, 2011	  	Mall	  	 	1,656	  	  	 	1,242	  	
The Grove	  	CA	  	November 20 ,  2012	  	Mall	  	 	1,862	  	  	 	1,160	  	
	  		  		  		  	 	 	 	  	 	 	 	
Total Mall (11):	  	 	16,470	  	  	 	12,408	  	
	  		  		  		  	 	 	 	  	 	 	 	
Total Full-Price (21):	  	 	39,306	  	  	 	27,933	  	

Orlando	  	FL	  	July 17, 2009	  	Outlet	  	 	2,065	  	  	 	1,165	  	
Cabazon	  	CA	  	November 11, 2011	  	Outlet	  	 	2,066	  	  	 	1,118	  	
Riverhead	  	NY	  	November 30, 2012	  	Outlet	  	 	2,100	  	  	 	1,490	  	
Chicago	  	IL	  	August 1, 2013	  	Outlet	  	 	2,611	  	  	 	1,828	  	
Seattle	  	WA	  	August 30, 2013	  	Outlet	  	 	2,214	  	  	 	1,550	  	
Las Vegas	  	NV	  	October 3, 2013	  	Outlet	  	 	2,028	  	  	 	1,420	  	
	  		  		  		  	 	 	 	  	 	 	 	
Total Outlets (6) :	  	 	13,084	  	  	 	8,571	  	
	  		  		  		  	 	 	 	  	 	 	 	
Total (27):	  	 	52,390	  	  	 	36,504	  	
	  		  		  		  	 	 	 	  	 	 	 	
Seasonality
Our wide-range of merchandise and our strategy of carrying a broad selection but limited quantities of each item reduce our overall seasonality relative to other contemporary brands. Nevertheless, our business is mildly seasonal in nature and sales are generally the highest in the third and fourth fiscal quarters due to the year-end holiday season and lowest in the first and second fiscal quarters. As a result of this seasonality and generally because of variation in consumer spending habits, we experience fluctuations in net sales and EBITDA during the year. See “—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC—Quarterly Financial Data” for more information.
Legal Proceedings
We are subject to various legal proceedings and claims, which arise in the ordinary course of our business. Although the outcome of these and other claims cannot be predicted with certainty, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition, cash flows or results of operation.
 
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 VINCE MANAGEMENT
Below is a list of names, ages and a brief overview of the business experience of the directors, executive officers and members of senior management of Vince that we anticipate will be serving in these capacities upon consummation of this offering:

Name	  	Age	  	Position/Title	
Christopher T. Metz	  	48	  	Director and Chairman	
Mark E. Brody	  	52	  	Director	
Jason H. Neimark	  	42	  	Director	
Jerome Griffith	  	55	  	Director Nominee	
Robert A. Bowman	  	58	  	Director Nominee	
Jill Granoff	  	51	  	Director and Chief Executive Officer	
Lisa Klinger	  	46	  	Chief Financial Officer and Treasurer	
Karin Gregersen	  	43	  	President and Chief Creative Officer	
Beth Cohn	  	45	  	Senior Vice President, Retail and E-Commerce	
Rebecca Damavandi	  	41	  	Group President, Global Business Development	
Jay Dubiner	  	49	  	Senior Vice President, General Counsel and Secretary	
Deena Gianoncelli	  	40	  	Senior Vice President, Human Resources	
Michele Sizemore	  	50	  	Senior Vice President, Operations	
Jill Steinberg	  	37	  	Senior Vice President, Wholesale	
Directors and Executive Officers
We believe that our board of directors should be composed of individuals with knowledge and experience in many substantive areas that impact our business. The following areas are the most important to us: fashion and consumer goods; retail and wholesale; marketing and merchandising; sales and distribution; international business development; strategic planning and leadership of complex organizations; accounting, finance, and capital structure; legal/regulatory and government affairs; talent management; and board practices of other major corporations. We believe that all of our current board members possess the professional and personal qualifications necessary for board service, and have highlighted in the individual biographies below the specific experience, attributes, and skills that led to the conclusion that each board member should serve as a director.
Christopher T. Metz.     Mr. Metz has served as a director since 2008 and will be appointed to serve as the Chairman of our board of directors prior to the consummation of this offering. Mr. Metz has served as Managing Director of Sun Capital since 2005 and has extensive global operating and leadership experience in the consumer and durable goods industries. Prior to joining Sun Capital, Mr. Metz was President at Black & Decker, leading its Hardware and Home Improvement Group from 1999 to 2005. During his 13 years at Black & Decker, Mr. Metz held various other senior leadership positions, including President of Kwikset Corporation, President of Price Pfister faucets, President of Baldwin Hardware, and General Manager of European Professional Power Tools and Accessories, based in Frankfurt, Germany. Mr. Metz also serves on several boards of Sun Capital portfolio companies, including Avion Services Group Holding Corp., Captain D’s Holding Corp., Friendly’s Ice Cream LLC, Grandy’s Holding Corp., Lexington Furniture Industries, Inc., Pemco World Air Services, Inc., Rowe Fine Furniture, Inc., and SK Financial Services Corp. Mr. Metz also served on the board of Amicus Wind Down Corporation, a public company, from 2010 to 2012. Mr. Metz brings to our board extensive public company and international leadership experience.
Mark E. Brody.     Mr. Brody has served as a director since 2008. Mr. Brody has served as a Managing Director and Group Chief Financial Officer of Sun Capital since 2006. Prior to joining Sun Capital, Mr. Brody served from 2001 to 2006 as Chief Financial Officer for Flight Options, a leading
 
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provider of fractional jet services. Prior to Flight Options, he served as Chief Financial Officer or Vice President, Finance for manufacturing-related public companies, including Sudbury, Inc., Essef Corporation, Anthony & Sylvan Pools, and Waterlink, Inc. Mr. Brody also serves on several boards of Sun Capital portfolio companies, including Limited Stores Company, LLC, Cello-Foil Products, Inc., Emerald Performance Materials LLC, Exopack Holding Corp., Garden Fresh Restaurant Corp., and TPG Enterprises, Inc. Mr. Brody started his career as an auditor with Ernst & Young. Mr. Brody brings to the board significant experience in finance, accounting and corporate strategy development.
Jason H. Neimark.     Mr. Neimark has served as a director since May 2013. Mr. Neimark has served as a Managing Director of Sun Capital since 2001. Mr. Neimark has led more than 65 buyout and capital markets transactions in a broad range of industries on behalf of affiliates of Sun Capital in the U.S. and Europe. From 2000 to 2001, Mr. Neimark was a Principal and President of K&D Distributors, a national direct marketer and specialty distributor of optical products where he led a financial and operational turnaround which concluded in a successful sale. From 1995 to 2000, Mr. Neimark served as a principal of Midwest Mezzanine Funds, a provider of junior capital to middle market businesses. After receiving his CPA designation in 1992, Mr. Neimark worked as a tax consultant and auditor for KPMG Peat Marwick. Mr. Neimark also serves on several boards of Sun Capital portfolio companies, including Gordmans Stores Inc. Mr. Neimark was a director of Accuride Corporation, a public company, from February 2009 to October 2009 and was a director of Loud Technologies, a private company, from May 2005 to July 2008. Mr. Neimark provides strong finance skills to our board of directors and valuable experience gained from previous board service.
Jerome Griffith.     Mr. Griffith will be appointed to our board of directors in connection with the consummation of this offering. Mr. Griffith has served as the Chief Executive Officer, President and a member of the board of directors of Tumi Holding, Inc. since April 2009. From 2002 to February 2009, Mr. Griffith was employed at Esprit Holdings Limited, a global fashion brand, where he was promoted to Chief Operating Officer and appointed to the board of directors in 2004, then promoted to President of Esprit North and South America in 2006. From 1999 to 2002, Mr. Griffith worked as an Executive Vice President at Tommy Hilfiger. From 1998 to 1999, Mr. Griffith worked as the President of Retail at the J. Peterman Company, a catalog-based apparel and retail company. From 1989 through 1998, Mr. Griffith worked in various positions at Gap, Inc. Mr. Griffith brings to our board experience as a public company director, experience as a senior executive of a major global consumer products company and a proven track record of innovation and driving international growth and expansion.
Robert A. Bowman.     Mr. Bowman will be appointed to our board of directors in connection with the consummation of this offering. Mr. Bowman currently serves as President and Chief Executive Officer of Major League Baseball Advanced Media (“MLB.com”), the Internet and interactive media unit of Major League Baseball. Prior to joining MLB.com in November 2000, Mr. Bowman was President and Chief Executive Officer of Cyberian Outpost, Inc., an online retailer of computers and electronics. Before joined Cyberian Outpost in September 1999, Mr. Bowman held several senior management positions at ITT Corporation, including President, Chief Operating Officer and Chief Financial Officer. Earlier in his career, Mr. Bowman served for eight years as Treasurer of the State of Michigan. Mr. Bowman is currently a director and chairman of the audit committee of Take-Two Interactive Software Inc. Mr. Bowman previously served as a director of Warnaco Group, Inc. from 2004 to 2013, Director of Blockbuster, Inc. from 2003 to 2010 and director of World Wrestling Entertainment, Inc. from 2003 to 2008. Mr. Bowman brings to our board experience as a public company director and extensive financial experience in both the public and private sectors.
Jill Granoff.     Ms. Granoff has served as Vince’s Chief Executive Officer and a director since August 2012. Ms. Granoff has also served as AHC’s Chief Executive Officer and a director since May 2012. Previously, Ms. Granoff served as Chief Executive Officer of Kenneth Cole Productions, Inc., a designer and marketer of women’s and men’s apparel, footwear and accessories, from 2008
 
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until 2011. Prior to that, Ms. Granoff served as Executive Vice President of Liz Claiborne Inc. where she had global responsibility for Juicy Couture, Lucky Brand Jeans, Kate Spade and the company’s e-commerce and outlet businesses. Prior to joining Liz Claiborne, Ms. Granoff was President and Chief Operating Officer of Victoria Secret Beauty, a division of Limited Brands, where she worked from 1999 to 2006. From 1990 to 1999, Ms. Granoff held various executive positions at The Estée Lauder Companies. Ms. Granoff is a member of the board of directors of Demandware and the Fashion Institute of Technology Foundation. Ms. Granoff brings significant senior leadership, operating and industry experience to our board of directors. Ms. Granoff’s position as Vince’s Chief Executive Officer also allows her to advise the board of directors on management’s perspective over a full range of issues affecting the company.
Lisa Klinger.     Ms. Klinger has served as Vince’s Chief Financial Officer and Treasurer since December 2012. Ms. Klinger has also served as AHC’s Chief Financial Officer since December 2012. Previously, Ms. Klinger served as Executive Vice President and Chief Financial Officer of The Fresh Market, Inc., a specialty retailer, from 2009 until 2012. Prior to that, Ms. Klinger served as interim Chief Financial Officer of Michael’s Stores during 2008 and Senior Vice President of Finance and Treasurer from 2005 to 2009. Ms. Klinger previously served as Assistant Treasurer at Limited Brands from 2000 to 2005.
Karin Gregersen.     Ms. Gregersen has served as Vince’s President since May 2013 and as Vince’s President and Chief Creative Officer since October 2013. Previously, Ms. Gregersen worked at Chloé/Richemont for 13 years, where she last served as the Executive Vice President and Managing Director of Chloé/Richemont Americas from 2007 to 2013. Prior to this role, she served as the Sales and Marketing Director for Chloé/Richemont Europe/Middle East from 1999 to 2007. Ms. Gregersen previously served as the Europe Sales Manager for Givenchy from 1997 to 1999.
Beth Cohn.     Ms. Cohn has served as Vince’s Senior Vice President of Retail and E-Commerce since June 2012. Previously, Ms. Cohn served as Senior Vice President of Retail for Theory and Helmut Lang from 2009 to 2012. Prior to that, Ms. Cohn served as General Manager of Retail and Vice President for Juicy Couture from 2006 to 2009 and General Merchandise Manager, Retail and Senior Vice President for Prada North America from 1997 to 2006.
Rebecca Damavandi.     Ms. Damavandi has served as Vince’s Group President of Global Business Development since August 2012. Ms. Damavandi has also served as AHC’s Group President of Global Business Development since August 2012. Previously, Ms. Damavandi worked as a self-employed global apparel consultant from 2010 to 2012. Prior to that, Ms. Damavandi served as President of Licensing and Global Business Development for Elie Tahari from 2006 to 2010, Vice President of International and Licensing for Earl Jeans/VF Corporation from 2004 to 2006 and Senior Director of Global Product Licensing for Guess?, Inc. from 1999 to 2003, after joining the company in 1996.
Jay Dubiner .    Mr. Dubiner has served as Vince’s Senior Vice President, General Counsel and Secretary since September 2013. Previously, Mr. Dubiner served as the Executive Vice President, General Counsel and Corporate Secretary of The Warnaco Group, Inc. from 2008 to 2013. Prior to that, Mr. Dubiner served as Of Counsel for Paul, Hastings, Janofsky & Walker, LLP from 2006 until 2008. Previously, he held the position of Executive Vice President, Corporate Development & General Counsel for Martha Stewart Living Omnimedia, Inc. from 2004 until 2006. Prior to this, Mr. Dubiner provided legal and corporate development consulting services to clients primarily in the media industry. From 2000 to 2002, he served as Senior Vice President, Business Development & Strategic Planning for a division of The Universal Music Group. Mr. Dubiner was an associate in the corporate department of the New York law firm of Paul Weiss Rifkind Wharton & Garrison from 1993 to 2000.

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Deena Gianoncelli.     Ms. Gianoncelli began serving as our Senior Vice President, Human Resources in September 2013. Previously, Ms. Gianoncelli served as Director of Human Resources for Amazon.com from 2012 to 2013. Prior to that, Ms. Gianoncelli served as the Vice President of Human Resources for Hugo Boss Americas from 2010 to 2012. In addition, Ms. Gianoncelli served as Senior Director of Human Resources for Medco Health Solutions from 2005 to 2010.
Michele Sizemore .     Ms. Sizemore has served as Vince’s Senior Vice President, Operations since May 2013. Previously, Ms. Sizemore worked at Gap, Inc. for 20 years, where she last served as Senior Vice President of Global Sourcing for the Gap brand worldwide from 2011 to 2013. Prior to that, she served as Vice President of Global Sourcing for Banana Republic from 2009 to 2011.
Jill Steinberg.     Ms. Steinberg has served as Vince’s Senior Vice President, Wholesale since March 2013. Previously, Ms. Steinberg served as Vince’s Senior Vice President, Women’s Sales from 2012 to 2013. Prior to that, Ms. Steinberg served as Vice President of Sales for Diane von Furstenberg from 2005 to 2012. Previously, Ms. Steinberg served as Senior Account Executive for BCBG from 2003 to 2005 and Senior Account Executive for Theory from 2001 to 2003.
Family Relationships
There are no family relationships between any of our executive officers or directors.
Corporate Governance
Board Composition
Our amended and restated certificate of incorporation, which will be in effect prior to the consummation of this offering, will provide that our board of directors shall consist of such number of directors as determined from time to time by resolution adopted by a majority of the total number of directors then in office. Initially, our board of directors will consist of six members. Until such time as Sun Capital and its affiliates cease to beneficially own 30% or more of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, Sun Cardinal, an affiliate of Sun Capital, will have the right to designate a majority of our board of directors under our amended and restated certificate of incorporation, provided that, at such time as we are not a “controlled company” under the NYSE corporate governance standards, a majority of our board of directors will be “independent directors,” as defined under the rules of the NYSE market, subject to the applicable phase-in requirements. Until such time as Sun Capital and its affiliates cease to beneficially own 30% or more of the voting power of the voting stock then outstanding, Sun Cardinal shall also have the ability to fill any vacancy on our board of directors, whether resulting from an increase to the board size, death, resignation or removal. Thereafter, only our board of directors shall be authorized to fill such vacancies. Additionally, even if Sun Capital and its affiliates cease to beneficially own at least 30% of the voting power of the voting stock then outstanding, directors previously designated by Sun Cardinal shall have the right to serve the remainder of their respective terms, unless they are otherwise removed for cause in accordance with the terms of our amended and restated certificate of incorporation.
Our board of directors will be divided into three classes, with one class being elected at each year’s annual meeting of stockholders. Mr. Brody and Mr. Bowman will serve as the Class I directors with an initial term expiring in 2014. Messrs. Neimark, and Metz will serve as Class II directors with an initial term expiring in 2015. Ms. Granoff and Mr. Griffith will serve as Class III directors with an initial term expiring in 2016. Following the expiration of the initial term of a class of directors, each class of directors will serve a three-year term. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors.
 
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Controlled Company
Upon consummation of this offering, affiliates of Sun Capital will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a “controlled company” under the NYSE corporate governance standards. As a controlled company, exemptions under the standards will free us from the obligation to comply with certain corporate governance requirements, including the requirements:
 
 	Ÿ	 	that a majority of our board of directors consists of “independent directors,” as defined under the rules of the NYSE market;	
 
 	Ÿ	 	that we have a nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;	
 
 	Ÿ	 	that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and	
 
 	Ÿ	 	that we conduct annual performance evaluations of the nominating committee and compensation committee.	
These exemptions do not modify the independence requirements for our Audit Committee. The rules of the NYSE market permit the composition of our Audit Committee to be phased in as follows: (1) one independent committee member at the time of our initial public offering; (2) a majority of independent committee members within 90 days of our initial public offering; and (3) all independent committee members within one year of our initial public offering.
We intend to comply with the applicable requirements of the Sarbanes-Oxley Act and rules with respect to our Audit Committee by having two independent directors on our Audit Committee at the time of pricing of this offering and appointing the remaining independent director to our Audit Committee within the applicable time frame.
Similarly, once we are no longer a “controlled company,” we must comply with the independent board committee requirements as they relate to our Nominating and Corporate Governance Committee and our Compensation Committee, on the same phase-in schedule as set forth above, with the trigger date being the date we are no longer a “controlled company” as opposed to our initial public offering date. In addition, we will have 12 months from the date we cease to be a “controlled company” to have a majority of independent directors on our board of directors.
Board Committees
Prior to the consummation of this offering, our board of directors will establish an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The directors designated by Sun Cardinal, an affiliate of Sun Capital, are expected to constitute a majority of each committee of our board of directors (other than the Audit Committee) and the chairman of each of the committees (other than the Audit Committee) is expected to be a director serving on such committee who is selected by Sun Cardinal, provided that, at such time as we are not a “controlled company” under the NYSE corporate governance standards, our committee membership will comply with all the applicable requirements of those standards. The composition, duties and responsibilities of these committees are set forth below. In the future, our board may establish other committees, as it deems appropriate, to assist it with its responsibilities.
 
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Audit Committee
The Audit Committee will be responsible for, among other matters: (1) appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; (2) discussing with our independent registered public accounting firm their independence from management; (3) reviewing with our independent registered public accounting firm the scope and results of their audit; (4) approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; (5) overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; (6) reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; (7) establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; and (8) reviewing and approving related person transactions.
Upon consummation of this offering, our Audit Committee will consist of Messrs. Bowman, Griffith and Brody. We believe that Messrs. Bowman and Griffith will qualify as independent directors according to the rules and regulations of the SEC with respect to audit committee membership. We also believe that Mr. Bowman will qualify as an “audit committee financial expert,” as such term is defined in Item 401(h) of Regulation S-K. We expect to add an additional independent director to our Audit Committee within one year of the effective date of the registration statement in order to comply with applicable rules and regulations of our stock exchange. Our board of directors will adopt a new written charter for the Audit Committee, which will be available on our corporate website at www.vince.com prior to the consummation of this offering. Our website is not part of this prospectus.
Compensation Committee
The Compensation Committee will be responsible for, among other matters: (1) reviewing key corporate compensation goals, policies, plan and programs; (2) reviewing and approving the compensation of our directors, chief executive officer and other named executive officers; (3) reviewing and approving employment agreements and other similar arrangements between us and our named executive officers; and (4) administering stock plans and other incentive compensation plans (including the Vince 2013 Incentive Plan and the Vince ESPP).
Upon consummation of this offering, our Compensation Committee will consist of Messrs. Metz, Brody and Neimark. Our board of directors will adopt a written charter for the Compensation Committee, which will be available on our corporate website at www.vince.com prior to the consummation of this offering. Our website is not part of this prospectus.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee will be responsible for, among other matters: (1) identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; (2) overseeing the organization of our board of directors so that it can satisfy its duties and responsibilities properly and efficiently; (3) identifying best practices and recommending corporate governance principles; and (4) developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to us.
Upon consummation of this offering, our Nominating and Corporate Governance Committee will consist of Messrs. Metz, Brody and Neimark. Our board of directors will adopt a written charter for the Nominating and Corporate Governance Committee, which will be available on our corporate website at www.vince.com prior to the consummation of this offering. Our website is not part of this prospectus.
 
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Compensation Committee Interlocks and Insider Participation
In fiscal year 2012, we did not have a Compensation Committee. All compensation decisions were made by the board of directors of AHC, which held deliberations during fiscal year 2012 concerning executive officer compensation. As a member of the board of directors of AHC, Ms. Granoff participated in deliberations concerning compensation of executive officers. See “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements” for a description of the employment agreements of our executive officers.
None of our executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Business Conduct and Ethics
We will adopt a code of business conduct and ethics applicable to our principal executive, financial and accounting officers and all persons performing similar functions. A copy of that code will be available on our corporate website at www.vince.com upon consummation of this offering. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed on our website. Our website is not part of this prospectus.
Risk Oversight
Our board of directors will oversee the risk management activities designed and implemented by our management. The board of directors will execute its oversight responsibility for risk management both directly and through its committees. The full board of directors will also consider specific risk topics, including risks associated with our strategic plan, business operations and capital structure. In addition, the board of directors will receive detailed regular reports from members of our senior management and other associates that include assessments and potential mitigation of the risks and exposures involved with their respective areas of responsibility.
Our board of directors will delegate to the Audit Committee oversight of our risk management process. Our other board committees will also consider and address risk as they perform their respective committee responsibilities. All committees will report to the full board of directors as appropriate, including when a matter rises to the level of a material or enterprise level risk.
Other Committees
Our board of directors may establish other committees as it deems necessary or appropriate from time to time.
 
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 VINCE EXECUTIVE COMPENSATION
The following section provides compensation information pursuant to the scaled disclosure rules applicable to “emerging growth companies” under the rules of the SEC and may contain statements regarding future individual and company performance targets and goals. These targets and goals are disclosed in the limited context of the company’s executive compensation program and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts. Vince’s Named Executive Officers for fiscal 2012 and the positions they held with us during fiscal 2012 are set forth below:
Jill Granoff, Chief Executive Officer
Lisa Klinger, Chief Financial Officer and Treasurer
Arthur Gordon, Chief Operating Officer
Rea Laccone, former Chief Executive Officer
This executive compensation section contains certain forward-looking statements that are based on our current plans and expectations regarding future compensation plans and arrangements. The actual compensation plans and expectations that we adopt may differ materially from the currently anticipated plans and arrangements as summarized in this discussion.
Neither Mr. Gordon nor Ms. Laccone will be Named Executive Officers for Vince after fiscal 2012.
Overview
We are a privately-held company owned almost exclusively by affiliates of Sun Capital. As a result, we were not subject to any stock exchange listing or SEC rules requiring a majority of our board of directors to be independent or relating to the formation and functioning of board committees, including audit, compensation and nominating and corporate governance committees. As such, all compensation decisions have historically been made by the board of directors of AHC. Furthermore, our executive officers are currently compensated by Kellwood Company for performing services on our behalf. To date, the compensation of the executive officers identified in the “Summary Compensation Table” in this prospectus, who are referred to as Vince’s Named Executive Officers, has consisted of a combination of base salary, bonuses (sign-on, performance based and guaranteed) and long-term incentive compensation in the form of Kellwood Company stock options issued under its 2010 Stock Option Plan (the “2010 Option Plan”). Executive officers and all salaried employees are also eligible to receive health and welfare benefits. Pursuant to employment agreements or an offer letter, the Named Executive Officers were also eligible to receive certain payments and benefits upon termination of employment under certain circumstances, as well as acceleration of vesting of certain outstanding equity awards in connection with a change in control. See “—Employment Agreements” for additional information.
In connection with the consummation of the IPO Restructuring Transactions and this offering, Kellwood Company will assign to Vince Holding Corp. or one of its subsidiaries (after giving effect to the IPO Restructuring Transactions) Kellwood Company’s obligations under those of the Vince executive employment agreements to which Kellwood Company is a party. See “—Employment Agreements” for additional information. Going forward, we intend to grant long-term equity incentives to our executives under the Vince 2013 Incentive Plan, as described below in “—Employee Stock Plans—Vince 2013 Incentive Plan.”
We will also establish a compensation committee that will assume the responsibility, from our board of directors, for making compensation decisions for Vince’s executive officers and directors. We
 
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expect that that our new compensation committee will review compensation elements and amounts for our Named Executive Officers on an annual basis and at the time of a promotion or other change in level of responsibilities, as well as when competitive circumstances or business needs may require. In addition, as we gain experience as a public company, we expect that the specific direction, emphasis and components of our executive compensation program will continue to evolve. Accordingly, the compensation paid to Vince’s Named Executive Officers for fiscal 2012 may not necessarily be indicative of how we may compensate Vince’s Named Executive Officers following the consummation of this offering.
Executive Compensation Design Overview
Vince’s executive compensation programs have historically been designed to provide competitive total compensation opportunities. They were designed to align pay with achievement of our annual and long-term financial and operational goals and recognize individual achievement. In setting pay levels, we reviewed published survey information and other available compensation data that was specific to companies of similar size or positioning in our industry. As currently structured, our executive compensation program is designed to:
 
 	Ÿ	 	provide aggregate compensation that reflects the market compensation for executives with similar responsibilities in similar companies with appropriate adjustments to reflect the experience, performance and other distinguishing characteristics of specific individuals;	
 
 	Ÿ	 	be commensurate with our short-term and long-term financial performance;	
 
 	Ÿ	 	be aligned with the value for stockholders; and	
 
 	Ÿ	 	provide a competitive compensation opportunity to allow us to attract and retain key executive talent.	
We believe that an important criterion for the determination of the aggregate value of our compensation program and the allocation of such value among the various elements of our compensation plans is market data on the amounts, allocations and structures utilized by similarly situated companies for positions of comparable responsibility.
In fiscal 2013, we retained the services of Aon Hewitt (“Aon”), a compensation consultant to prepare a comprehensive analysis of our compensation packages for our executive officers (including our Named Executive Officers), to compare the specific elements of compensation and the aggregate value with a group of peer companies selected by Aon and to assist us in establishing the elements of our compensation program following consummation of this offering, including elements of our compensation for fiscal 2013. We intend to continue to collaborate with Aon, using the results of their benchmarking study, to determine the elements of our go-forward public company compensation program. We anticipate that this program will include grants under the Vince 2013 Incentive Plan and the Vince ESPP, each of which we intend to adopt in connection with this offering and implement after the closing thereof.
Risk Assessment and Compensation Practices
Our management assesses and discusses with the board of directors our compensation policies and practices for our employees as they relate to our overall risk management, and based upon this assessment, we believe that any risks arising from such policies and practices are not reasonably likely to have a material adverse effect on us.
 
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Compensation of Named Executive Officers
Base Salaries .    In fiscal 2012, our board of directors reviewed and held deliberations concerning the compensation of our executive officers, including our Named Executive Officers. Going forward, our compensation committee will review the base salaries of our executive officers, including the Named Executive Officers, at least annually and make adjustments as it determines to be reasonable and necessary. The current base salaries of the Named Executive Officers are as follows:

Named Executive Officer	  	Base Salary	 	
Jill Granoff, Chief Executive Officer(1)	  	$	1,000,000	  	
Lisa Klinger, Chief Financial Officer and Treasurer(2)	  	$	450,000	  	
Arthur Gordon, Chief Operating Officer(3)	  	 	N/A	  	
Rea Laccone, former Chief Executive Officer(4)	  	 	N/A	  	

(1)	Ms. Granoff assumed the executive functions of Chief Executive Officer from Ms. Laccone in June 2012, and was officially appointed as Chief Executive Officer in August 2012. The board of directors approved a base salary increase for Ms. Granoff from $900,000 to $1,000,000 effective as of February 1, 2013.	
(2)	Ms. Klinger was hired and began performing the duties of Chief Financial Officer and Treasurer in December 2012.	
(3)	Mr. Gordon has been employed by Kellwood Company since 1979 and was appointed as Vince’s Chief Operating Officer effective September 2, 2009. Mr. Gordon also serves as the Chief Executive Officer of Kellwood Western Region, a division of Kellwood Company. He received an annual base salary of $800,000 during fiscal 2012. In connection with the appointment of Ms. Sizemore as Senior Vice President, Operations for Vince in May 2013, Mr. Gordon ceased serving as our Chief Operating Officer and now solely serves as the Chief Executive Officer of Kellwood Western Region. Mr. Gordon does not have, and will not have, any operational responsibilities relating to Vince following consummation of this offering and will not be one of our Named Executive Officers for fiscal 2013 or beyond.	
(4)	Ms. Laccone resigned from her position as Chief Executive Officer and became our Chief Creative Officer in June 2012. She received an annual base salary of $1,000,000 during the period from January 28, 2012 through August 23, 2012, at which time her salary was increased to $2,400,000 for the remainder of her tenure with the company. Ms. Laccone relinquished all of her duties for the company when she resigned on January 31, 2013 and will not be one of our Named Executive Officers for fiscal 2013 or beyond.	
Sign-On Bonuses .     Certain executives received a one-time sign-on bonus when they joined us. For fiscal 2012, no Named Executive Officers received any sign-on bonuses.
Guaranteed Bonus .     Certain executives were eligible to receive a guaranteed minimum bonus based on their annual salary and their targeted bonus opportunity. If an executive’s award in fiscal 2012 under the Performance Management and Incentive Compensation Program, as described below in “—Cash Bonus Plan,” (the “AHC 2012 Bonus Plan”), was lower than their guaranteed minimum bonus as set forth in their employment agreement or offer letter, they received a cash bonus for such year in an amount equal to the difference, so that their total cash bonus award for fiscal 2012 was equal to their guaranteed minimum bonus. For fiscal 2012, Ms. Granoff, Ms. Klinger and Mr. Gordon had guaranteed bonuses of $500,000, $350,000 and $250,000, respectively. Ms. Laccone did not have a guaranteed bonus for fiscal 2012. See “Summary Compensation Table” and “—Cash Bonus Plan” for additional information.
Cash Bonus Plan .     The AHC 2012 Bonus Plan was designed to encourage a high level of performance in each year so that the achievement of targeted performance levels is rewarded with a target incentive payout, and performance above such levels is rewarded with higher-level payouts. Each executive officer is assigned a target annual award opportunity based on the achievement of EBITDA performance that is expressed as a percentage of such executive’s base salary. Our board of directors has historically approved these targeted award opportunities for each Vince executive officer. Ms. Granoff and Ms. Klinger received additional cash bonus payments for fiscal 2012, as the amount of their guaranteed bonus was greater than the amounts they received based on the EBITDA targets under the AHC 2012 Bonus Plan. For fiscal 2012, the threshold, target and maximum EBITDA targets for AHC were $42.4 million, $47.4 million and $57.4 million, respectively. Actual EBITDA for AHC for fiscal 2012 was $46.9 million. Mr. Gordon did not receive any additional cash bonus payment for fiscal
 
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2012 as the amount he received under the AHC 2012 Bonus Plan was greater than his guaranteed bonus for fiscal 2012. Ms. Laccone was not a participant in the AHC 2012 Bonus Plan.
Our board of directors established EBITDA targets for fiscal 2013 for our Named Executive Officers under the Performance Management and Incentive Compensation Program (the “AHC 2013 Bonus Plan”).
For fiscal 2013, Ms. Granoff’s and Ms. Klinger’s targeted incentive payouts under the AHC 2013 Bonus Plan are based on the following allocations:
 
 	Ÿ	 	From February 2, 2013 to July 31, 2013, 50% of their targeted incentive payout under the AHC 2013 Bonus Plan is based on the achievement of EBITDA targets for AHC’s non-Vince businesses and 50% of such payment is based on the achievement of Vince EBITDA targets;	
 
 	Ÿ	 	From August 1, 2013 until the date of consummation of this offering, 25% of their targeted incentive payout under the AHC 2013 Bonus Plan is based on the achievement of EBITDA targets for AHC’s non-Vince businesses and 75% of such payment is based on the achievement of Vince EBITDA targets; and	
 
 	Ÿ	 	After the date of consummation of this offering, 100% of such payout will be based on the achievement of Vince EBITDA targets.	
AHC believes it is currently on track to achieve the targeted AHC non-Vince and Vince EBITDA performance levels under the AHC 2013 Bonus Plan.
Mr. Gordon’s EBITDA targets under the AHC 2013 Bonus Plan are based on the achievement of AHC non-Vince businesses EBITDA levels and AHC regional EBITDA levels.
Although we are using EBITDA performance as a financial measure for fiscal 2013 and have done so historically, Vince may use other objective financial performance indicators for the cash bonus plan in the future, including but not limited to the price of our common stock, stockholder return, return on equity, return on investment, return on capital, sales productivity, same-store sales growth, economic value added, gross margin, cash flow, earnings per share or market share.
Kellwood Equity Incentives.     On June 30, 2010, the board of directors of Kellwood Company, a wholly-owned subsidiary of AHC, approved the 2010 Stock Option Plan. The 2010 Option Plan provides for the grant of options to acquire up to 105,000 shares of non-voting common stock of Kellwood Company. Options granted under the 2010 Option Plan (i) have an exercise price based on the fair market value; (ii) vest over a five year period at a rate of 20% per year, (iii) expire on the earlier of the tenth anniversary of the grant date or upon termination of employment for cause and (iv) become exercisable upon termination or a liquidity event, as defined by the 2010 Option Plan. The fair value of the stock options is determined at the grant date using a probability-weighted expected return method model, which requires us to make several significant assumptions including long-term EBITDA growth rates, future enterprise value, discount rates, and timing and probability of a future liquidity event. This methodology was selected based on the current capital structure and forecasted operational performance.
In addition, 100% of any outstanding and unvested shares granted under the 2010 Option Plan will vest upon a “Sale of the Company.” Sale of the Company is defined as (i) any consolidation, merger or other transaction in which Kellwood Company is not the surviving entity or which results in the acquisition of all or substantially all of Kellwood Company’s outstanding shares of common stock by a single person or entity or by a group of persons or entities acting in concert; (ii) any sale or transfer of all or substantially all of (A) Kellwood Company’s assets (excluding, however, for this purpose any real estate “sale-lease back” transaction) or (B) the subsidiaries which make up Kellwood Company’s “women’s business;” or (iii) the date that (A) more than fifty percent (50%) of the shares of voting stock of the surviving or
 
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acquiring entity is owned and/or controlled (by agreement or otherwise), directly or indirectly, by a single person or entity or by a group of persons or entities acting in concert other than Sun Capital or its affiliates; and (B) Sun Capital or its affiliates no longer controls Kellwood Company’s board of directors; provided, however, that the term “sale” shall not include transactions either (x) with affiliates of Kellwood Company or Sun Capital (as determined by the board of directors of Kellwood Company in its good faith sole discretion) or (y) pursuant to which more than fifty percent (50%) of the shares of voting stock of the surviving or acquiring entity is owned and/or controlled (by agreement or otherwise), directly or indirectly, by Sun Capital or its affiliates. Because the IPO Restructuring Transactions all involve transactions with affiliates of Kellwood Company or Sun Capital, they will not constitute a “Sale of the Company” which would result in the vesting of Kellwood Company options held by our named executive officers.
In determining the number of shares underlying each option grant, the Kellwood Company board of directors took into account each executive officer’s existing unvested equity grants and made awards that they determined would be sufficient to motivate and retain each executive officer past the expected date of this offering. The stock option grants made to these Named Executive Officers in fiscal 2012 were as follows:

Named Executive Officer	  	Date of Grant	  	Number of Shares(1)	 	  	Exercise Price(1)(2)	 	
Jill Granoff	  	May 4, 2012	  	 	44,000	  	  	$	150.78	  	
Lisa Klinger	  	December 10, 2012	  	 	7,500	  	  	$	150.78	  	
Arthur Gordon	  	—	  	 	—	  	  	 	—	  	
Rea Laccone	  	—	  	 	—	  	  	 	—	  	

(1)	In connection with the consummation of this offering, Apparel Holding Corp. will assume Kellwood Company’s remaining obligations under the 2010 Option Plan and all Kellwood Company stock options previously issued to Vince employees under such plan will become options to acquire shares Apparel Holding Corp. common stock. After giving effect to this assumption and the consummation of the IPO Restructuring Transactions and this offering, (i) the options to acquire 44,000 shares of Kellwood Company stock previously issued to Ms. Granoff will become options to acquire                  shares of Apparel Holding Corp. common stock with an exercise price of $         per share and (ii) the options to acquire 7,500 shares of Kellwood Company stock previously issued to Ms. Klinger will become options to acquire                  shares of Apparel Holding Corp. common stock with an exercise price of $         per share.	
(2)	The grant date fair value of these option grants is reflected in the “Summary Compensation Table” under the “Option Awards” column.	
Summary Compensation Table
The following table provides information regarding the total compensation for services rendered in all capacities that was earned by each individual who served as our principal executive officer at any time during fiscal 2012 and our two other most highly compensated executive officers who were serving as executive officers during the fiscal year ended February 2, 2013.

Name and Principal Position	 	Year	 	 	Salary ($)	 	 	Bonus ($)	 	 	Option
Awards
($)(1)	 	 	Non-Equity
Incentive
Plan
Compen-
sation
($)(2)	 	 	All Other
Compen-
sation
($)	 	 	Total ($)	 	
Jill Granoff	 	 	2012	  	 	$	661,154	(4) 	 	$	27,363	(5) 	 	$	2,128,920	  	 	$	472,637	  	 	$	11,245	(6) 	 	$	3,301,319	  	
Chief Executive Officer(3)	 				 				 				 				 				 				 				
								
Lisa Klinger	 	 	2012	  	 	$	60,577	(6) 	 	$	336,861	(7) 	 	$	309,924	  	 	$	13,139	  	 	 	—	  	 	$	720,501	  	
Chief Financial Officer and Treasurer(3)	 				 				 				 				 				 				 				
								
Arthur Gordon	 				 				 				 				 				 				 				
Chief Operating Officer	 	 	2012	  	 	$	800,000	  	 	 	—	  	 	 	—	  	 	$	308,766	(8) 	 	$	21,074	(9) 	 	$	1,129,840	  	
	 	 	2011	  	 	$	800,000	  	 	 	—	  	 	 	—	  	 	$	190,109	  	 	$	21,645	(9) 	 	$	1,011,754	  	
								
Rea Laccone	 				 				 				 				 				 				 				
Former Chief Executive Officer	 	 	2012	  	 	$	1,875,385	(10) 	 	$	5,427,867	(11) 	 	 	—	  	 	 	—	  	 	$	187,259	(12) 	 	$	7,490,511	  	
	 	 	2011	  	 	$	849,231	  	 	$	240,000	  	 	 	—	  	 	 	—	  	 	$	47,571	(12) 	 	$	1,136,802	  	
 
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(1)	The fair value of stock options granted in fiscal 2012 was determined at the grant date using a Black-Scholes model, which requires us to make several significant assumptions including risk-free interest rate, volatility, expected term, and discount factors for stockholders in a privately-held company. At the grant date, the options granted in fiscal year 2012 had a weighted average fair value of $43.01 per share. As discussed above in “—Compensation of Named Executive Officers—Kellwood Equity Incentives,” the options previously issued to Ms. Granoff and Ms. Klinger will become (after giving effect to the IPO Restructuring Transactions (including the related stock split) and the assumption by Apparel Holding Corp. of Kellwood Company’s remaining obligations under the 2010 Option Plan) options to acquire                  shares and                  shares, respectively, of Apparel Holding Corp. common stock, with an exercise price of $             per share in each case. Additionally, Apparel Holding Corp. will issue options to acquire shares             and             shares of Apparel Holding Corp. common stock to each of Ms. Granoff and Ms. Klinger, respectively, under the Vince 2013 Incentive Plan in connection with the consummation of this offering. All such options will have an exercise price equal to the public offering price set forth on the cover of this prospectus.	
(2)	Amounts reflect the annual incentive cash bonus earned in the fiscal year shown but paid in the following fiscal year.	
(3)	Neither Ms. Granoff nor Ms. Klinger was employed by the company in fiscal 2011.	
(4)	Salary reflects base compensation from hire date of May 4, 2012 through February 2, 2013.	
(5)	Amount reflects cash bonus payment after giving effect to the $472,637 which was paid upon the achievement of targeted objectives under the AHC 2012 Bonus Plan. The aggregate of such amounts (or $500,000) represents the amount of Ms. Granoff’s guaranteed bonus under the terms of her employment agreement.	
(6)	Salary reflects base compensation from hire date of December 10, 2012 through February 2, 2013.	
(7)	Amount reflects cash bonus payment after giving effect to the $13,139 which was paid upon the achievement of targeted objectives under the AHC 2012 Bonus Plan. The aggregate of such amounts (or $350,000) represents the amount of Ms. Klinger’s guaranteed bonus under the terms of her employment agreement.	
(8)	Reflects compensation paid under the AHC 2012 Bonus Plan. Because this amount exceeds Mr. Gordon’s guaranteed minimum bonus of $250,000, no additional cash bonus payments were made to Mr. Gordon for fiscal 2012.	
(9)	Amounts reflect the value of their clothing allowance, car allowance and excess life insurance.	
(10)	Salary reflects base compensation through January 31, 2013, the effective date of Ms. Laccone’s resignation.	
(11)	Amounts reflect a $3,616,438 transition bonus payment and $1,811,429 performance bonus payment paid pursuant to Ms. Laccone’s employment agreement. See “—Employment Agreements” for additional information.	
(12)	For fiscal 2012, amounts reflect $57,346 in clothing allowance, $9,600 in car allowance, $8,124 in excess life insurance payments and $112,188 in unused vacation payout. For fiscal 2011, amounts reflect $31,605 in clothing allowance, $9,600 in car allowance and $6,366 in excess life insurance payments.	
Employment Agreements
Jill Granoff, Chief Executive Office r .     Kellwood Company entered into an employment agreement with Ms. Granoff on May 4, 2012. Pursuant to the terms of the employment agreement, Ms. Granoff received an annual base salary of $900,000 in fiscal 2012. In addition to base salary, Ms. Granoff was eligible to participate in the AHC 2012 Bonus Plan which provided her with the opportunity to earn a bonus targeted at 75% of her base salary in fiscal 2012. Under her employment agreement, Ms. Granoff was guaranteed an annual cash bonus of $500,000 for fiscal 2012. Effective February 1, 2013, Ms. Granoff received a base salary increase to $1,000,000 and her targeted bonus opportunity increased to 100% of her base salary. Ms. Granoff has no guaranteed bonus for fiscal 2013.
In connection with the consummation of this offering and the repayment of certain Kellwood Company indebtedness, Ms. Granoff will earn a debt recovery bonus under the terms of her amended employment agreement. The amount of the bonus is equal to 4.4% of the related debt recovery, subject to the aggregate maximum bonus cap of $6.0 million; provided, that she remain continuously employed with us through the related payment date. As set forth therein, she is eligible to receive a debt recovery bonus upon any reduction in the debt outstanding under the Cerberus Term Loan, the Sun Term Loan Agreements and the Public Bonds. In connection with Kellwood Company’s sale of Royal Robbins in December 2012, Kellwood Company repaid $10.0 million of indebtedness under the Cerberus Term Loan. This repayment triggered a $440,000 debt recovery bonus for Ms. Granoff. Ms. Granoff has agreed to delay the payment of such bonus until the earlier of (i) December 31, 2013, (ii) the consummation of this offering, (iii) the consummation of a sale of all or substantially all of the Vince business to a third-party not affiliated with Kellwood Company or (iv) the termination of Ms. Granoff’s employment for any reason. This payment will reduce the amount of debt recovery
 
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bonus to which she would otherwise be entitled to receive upon the repayment of the Cerberus Term Loan, the Sun Term Loan Agreements and the Public Bonds in connection with the consummation of this offering on a dollar for dollar basis.
On September 24, 2013, Ms. Granoff and Kellwood Company entered into an amendment to her employment agreement. Pursuant to the terms of the amendment, Kellwood Company has agreed to pay the debt recovery bonus to Ms. Granoff upon the closing of this offering prior to paying the 1% restructuring fee to Sun Capital Management or repaying, refinancing or repurchasing the 7.625% Notes, each as described in “Use of Proceeds” and “Restructuring Transactions.” Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of the 7.625% Notes.
In the event Ms. Granoff’s employment is terminated without cause or Ms. Granoff terminates her employment for good reason, she would be eligible to receive (i) any unpaid base salary through her termination date, together with a pro-rated portion of the annual bonus for the year in which her termination occurs, (ii) reimbursement for any unreimbursed business expenses incurred through her termination date, (iii) any accrued and unused vacation time, (iv) all other payments, benefits or fringe benefits to which she is entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant, (v) her base salary during a period ending on the 18-month anniversary of her termination date, less any salary she receives from other full-time employment after the 12-month anniversary of her termination, (vi) continued participation in our group health plan for 18 months or until she obtains other employment following the first anniversary of her termination and such employment offers comparable group health benefits for which she is eligible, (vii) the pro rata portion of shares subject to Ms. Granoff’s option grants which would have otherwise vested on the next scheduled vesting date had her employment continued until such time and (viii) any prior period bonus earned and not yet paid.
Kellwood Company’s obligations under Ms. Granoff’s employment agreement will be assigned to Vince Holding Corp. or one of its subsidiaries in connection with this offering.
Lisa Klinger, Chief Financial Officer and Treasurer.     Effective December 10, 2012, Ms. Klinger entered into an employment agreement with Kellwood Company. Pursuant to the terms of her employment agreement, Ms. Klinger receives an annual base salary of $450,000. Her annual base salary will be increased to a minimum of $500,000 upon the earlier of completing her relocation or 18 months after the commencement of her employment. Under her employment agreement, Ms. Klinger was guaranteed an annual cash bonus of $350,000 for fiscal 2012. Beginning in fiscal 2013, in addition to base salary, Ms. Klinger is eligible to participate in the AHC 2013 Bonus Plan that provides her with the opportunity to earn a bonus targeted at 50% of her base salary.
In the event Ms. Klinger’s employment is terminated without cause, she would be eligible to receive (i) her base salary during a period ending on the earlier of the 12 month anniversary of her termination date and the date on which she secures replacement employment (the “salary continuation period”) and (ii) continued medical and dental coverage in accordance with the company’s medical plans that are then in place until the end of the salary continuation period, or at the company’s option, coverage under another medical and/or dental plan.
Kellwood Company’s obligations under Ms. Klinger’s employment agreement will be assigned to Vince Holding Corp. or one of its subsidiaries in connection with this offering.
Arthur Gordon, Chief Operating Officer .    Beginning fiscal 2009, Mr. Gordon received an annual base salary of $800,000. In addition to base salary, Mr. Gordon was eligible to participate in the AHC 2012 Bonus Plan that provided him with the opportunity to earn a bonus targeted at 70% of his base salary. Effective May 1, 2013, Mr. Gordon entered into an amended and restated retirement agreement and related option cancellation agreement with Kellwood Company. Pursuant to the terms of his retirement agreement, Kellwood Company agreed to make the following payments to Mr. Gordon in the event he is terminated without cause or voluntarily resigns or retires after February 1, 2014: (i) any unpaid and earned cash incentive bonus for the prior year; (ii) a lump sum equal to 18 months of his base salary, plus a lump sum equal to the average of his three prior year cash incentive bonuses, each subject to Mr. Gordon’s execution of a satisfactory release; and (iii) provided that
 
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Mr. Gordon is paying the employee portion of his COBRA premium, the amount in excess of the COBRA premium for a period of 18 months or until he secures other employment. In such event, Kellwood Company may retain his exclusive consulting services, upon the mutual agreement of the parties, for a period beginning on his termination date and ending on the earlier of: (A) the 12-month anniversary of his termination date; (B) his death or disability; and (C) his termination as a consultant for cause. Mr. Gordon will earn a bonus of $130,563 upon the consummation of this offering, which constitutes a “Sale” under the terms of his retirement agreement. Such amount shall be paid upon the earlier of (1) 30 days following the consummation of this offering; (2) the payment of severance amounts to him; and (3) February 1, 2014. Notwithstanding the foregoing, he shall not be entitled to any payments under his retirement agreement if he voluntarily resigns or retires before February 2, 2014, upon his death or disability or if he is terminated for cause. Mr. Gordon agreed to cancel his outstanding Kellwood Company stock options in exchange for his entry into and payments under his retirement agreement. Mr. Gordon does not have, and will not have, any operational responsibilities relating to Vince following consummation of this offering and will not be one of our Named Executive Officers for fiscal 2013 or beyond.
Rea Laccone, former Chief Executive Officer.     Effective October 31, 2006, Ms. Laccone entered into an employment agreement with Kellwood Company, a subsidiary of AHC prior to the consummation of this offering. The agreement was amended and restated on August 13, 2010 and further amended on August 23, 2012. Pursuant to the terms of her amended and restated employment agreement, Ms. Laccone received an annual base salary of $800,000 from August 13, 2010 until November 1, 2011. In addition, Ms. Laccone was eligible to participate in the cash bonus plan which provided her with the opportunity to earn a bonus targeted at 40% of her base salary in fiscal 2011. Under the terms of the amended and restated employment agreement, Ms. Laccone’s base salary increased to $1,000,000 on November 1, 2011 and she became eligible to receive an annual cash incentive bonus in an amount equal to 3.5% of Vince EBITDA for Kellwood’s 2012, 2013 and 2014 fiscal years. Pursuant to the terms of her employment agreement as amended on August 23, 2012, Ms. Laccone received an annual base salary of $2,400,000 from June 26, 2012 through her resignation on January 31, 2013. The terms of the amended employment agreement also provided that Ms. Laccone was eligible to receive an annual cash incentive bonus in an amount equal to 3.5% of Vince EBITDA through June 26, 2012 and 2.4% of Vince EBITDA thereafter. In addition, Ms. Laccone was eligible to receive a transition bonus of up to $6.0 million during the period from June 26, 2012 through June 26, 2013. The amount of her actual transition bonus was $3.6 million, reflecting a prorated amount in accordance with the terms of her agreement as she resigned on January 31, 2013. See “—Summary Compensation Table” for the specific amounts of the performance bonus and transition payments paid to Ms. Laccone in fiscal 2011 and fiscal 2012 in accordance with the terms of her amended employment agreement. Ms. Laccone will not be one of our Named Executive Officers in fiscal 2013 or beyond.
Outstanding Equity Awards at Fiscal 2012 Year-End
The following table sets forth information regarding outstanding equity awards of Kellwood Company held by our Named Executive Officers at the end of fiscal 2012:

 	  	Options Awards(1)	
Name	  	Vesting
Commencement
Date(2)	  	Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable	 	  	Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(3)	 	  	Option
Exercise
Price
($)(3)	 	  	Option
Expiration Date(3)	
Jill Granoff	  	May 4, 2012	  	 	—	  	  	 	44,000	  	  	$	150.78	  	  	May 4, 2022	
Lisa Klinger	  	December 10, 2012	  	 	—	  	  	 	7,500	  	  	$	150.78	  	  	December 10, 2022	
Arthur Gordon(4)	  	—	  	 	—	  	  	 	—	  	  	 	—	  	  	—	
Rea Laccone	  	—	  	 	—	  	  	 	—	  	  	 	—	  	  	—	
 
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(1)	Each stock option was granted pursuant to the 2010 Option Plan. As discussed above in “—Compensation of Named Executive Officers—Kellwood Equity Incentives,” the options previously issued to Ms. Granoff and Ms. Klinger will be exchanged for              and                  options, respectively, to acquire Apparel Holding Corp. common stock, with an exercise price equal to $             .	
(2)	Ms. Granoff’s and Ms. Klinger’s options will vest 20% each year on the anniversary of the grant date beginning on the first anniversary of the grant date so long as they remain continuously employed with the company. Notwithstanding the foregoing, unvested options will automatically vest upon the consummation of certain sale and change of control transactions.	
(3)	As discussed above in “—Compensation of Named Executive Officers—Kellwood Equity Incentives,” the options previously issued to Ms. Granoff and Ms. Klinger will become (after giving effect to the IPO Restructuring Transactions (including the related stock split) and the assumption by Apparel Holding Corp. of Kellwood Company’s remaining obligations under the 2010 Option Plan) options to acquire              shares and              shares, respectively, of Apparel Holding Corp. common stock, with an exercise price of $             per share in each case. The option expiration date and vesting terms will remain unchanged. Additionally, we will issue options to acquire              shares and             shares of Apparel Holding Corp. common stock to Ms. Granoff and Ms. Klinger, respectively, under the Vince 2013 Incentive Plan in connection with the consummation of this offering. All such options will have an exercise price equal to the public offering price set forth on the cover of this prospectus.	
(4)	As described below in “—Employment Agreements,” Mr. Gordon agreed to cancel his outstanding Kellwood Company stock options in exchange for payments under his retirement agreement. Such options were effectively surrendered and cancelled on October 4, 2012 in accordance with the terms of the related option cancellation agreement.	
Director Compensation
During fiscal 2012, we did not make any compensation payments (including any equity grants) to our directors, for service as directors, as all of our directors were employees of AHC or affiliates Sun Capital, which will continue to be our controlling stockholder after consummation of this offering. Sun Cardinal, an affiliate of Sun Capital, will also have the authority to designate a majority of our directors after consummation of this offering. We did reimburse directors for out-of-pocket expenses they incurred in connection with their service as directors, including those incurred in connection with attending all board and committee meetings.
We will adopt a compensation policy with respect to our directors in contemplation of the consummation of this offering. All members of our board of directors that are not employed by us will be entitled to receive compensation for their services to the board of directors and related committees pursuant to the policy described below.
Following this offering, the annual cash fees paid to our non-employee directors and directors not employed by Sun Capital or its affiliates will be as follows:

Description	  	Amount	
Annual Retainer(1)	  	$50,000	
Retainer for Chair of Committee(1)	  	$15,000 for chairing our audit committee; $10,000 for chairing our compensation committee; and $5,000 for chairing our nominating and corporate governance committee	

(1)	Such amounts shall be paid to each of our non-employee directors elected or appointed to our board and, as applicable, for serving as the chair of one of our board committees in connection with the consummation of this offering. Such amounts shall be paid to each non-employee director elected or appointed after the consummation of this offering to our board and, as applicable, to serve as the chair of one of our committees, upon his or her appointment or election, with such amount calculated on a pro rata basis for the first year of service.	
All directors will also be entitled to be reimbursed for their reasonable out-of-pocket expenses incurred to attend meetings of our board of directors and related committees.
 
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In addition, following this offering, our non-employee directors will be entitled to receive the following equity awards:
Annual Restricted Stock Grant.     On an annual basis, each of our non-employee directors then in office will receive a grant of $75,000 worth of restricted common stock. These shares of restricted common stock will vest over a three-year period from the grant date. Each non-employee director elected or appointed to our board in connection with the consummation of this offering will receive his or her annual grant of $75,000 worth of restricted stock in connection with the closing of this offering. Each non-employee director elected or appointed after the consummation of this offering will receive a pro rata amount of the annual grant for the first year in which he or she serves on our board based on the date such non-employee director is elected or appointed.
Director and Officer Indemnification and Limitation of Liability
Our amended and restated certificate of incorporation and amended and restated bylaws will provide that we will indemnify our directors and officers to the fullest extent permitted by the DGCL. In addition, our amended and restated certificate of incorporation will provide that our directors will not be liable for monetary damages for breach of fiduciary duty, except for liability (i) for any breach of the director’s duty of loyalty to us or our stockholders or (ii) for acts or omissions not in good faith or acts or omissions that involve intentional misconduct or a knowing violation of law.
In addition, prior to the consummation of this offering, we will enter into indemnification agreements with each of our executive officers and directors. The indemnification agreements will provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the DGCL.
There is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.
Employee Stock Plans
2010 Option Plan
The 2010 Option Plan was adopted by the board of directors of Kellwood Company on June 30, 2010. As of October 5, 2013, Kellwood Company had reserved 105,000 shares of its common stock for issuance under the 2010 Option Plan. AHC will not grant any further awards under the 2010 Option Plan to any of Vince’s officers or directors after the consummation of this offering. Future awards to Vince’s executive officers and directors shall be granted by our board of directors or compensation committee under the Vince 2013 Incentive Plan, as described below.
In connection with the consummation of this offering, Apparel Holding Corp. employees who will continue as employees of the non-Vince businesses will receive shares of Apparel Holding Corp. common stock in exchange for their vested Kellwood Company stock options (previously issued under the 2010 Option Plan). All other stock options previously issued to such employees under the 2010 Option Plan will be cancelled upon the closing of this offering. Apparel Holding Corp. will assume Kellwood Company’s remaining obligations under the 2010 Option Plan. After giving effect to such assumption, the stock options previously issued to Vince employees and to Michael Saunders, AHC’s former Senior Vice President and Chief Operating Officer, Kellwood, under the 2010 Option Plan will become options to acquire shares of Apparel Holding Corp. common stock (with the number of shares subject to such options and the related exercise price adjusted to give effect to the stock split which will occur as part of the IPO Restructuring Transactions).
 
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Vince 2013 Incentive Plan
In connection with this offering, we intend to adopt the Vince 2013 Incentive Plan. We expect that the Vince 2013 Incentive Plan will provide for grants of stock options, stock appreciation rights, restricted stock, and other stock-based awards. Directors, officers and our employees, as well as others performing consulting or advisory services for us, would be eligible for grants under the Vince 2013 Incentive Plan. The purpose of the Vince 2013 Incentive Plan is to provide incentives that will attract, retain and motivate high performing officers, directors, employees and consultants by providing them with appropriate incentives and rewards either through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities. Set forth below is a summary of what we expect will be the material terms of the Vince 2013 Incentive Plan. We have included a form of the Vince 2013 Incentive Plan as an exhibit to the registration statement of which this prospectus forms a part reflecting such terms.
Administration .    The Vince 2013 Incentive Plan will be administered by our compensation committee. Among the compensation committee’s powers will be to determine the form, amount and other terms and conditions of awards; clarify, construe or resolve any ambiguity in any provision of the Vince 2013 Incentive Plan or any award agreement; amend the terms of outstanding awards; and adopt such rules, forms, instruments and guidelines for administering the Vince 2013 Incentive Plan as it deems necessary or proper. The compensation committee will have authority to administer and interpret the Vince 2013 Incentive Plan, to grant discretionary awards under the Vince 2013 Incentive Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of common stock to be covered by each award, to make all other determinations in connection with the Vince 2013 Incentive Plan and the awards thereunder as the compensation committee deems necessary or desirable and to delegate authority under the Vince 2013 Incentive Plan to our executive officers.
Available Shares .    The aggregate number of shares of common stock which may be issued or used for reference purposes under the Vince 2013 Incentive Plan or with respect to which awards may be granted may not exceed              shares. The number of shares available for issuance under the Vince 2013 Incentive Plan may be subject to adjustment in the event of a reorganization, stock split, merger or similar change in the corporate structure or the outstanding shares of common stock. In the event of any of these occurrences, we may make any adjustments we consider appropriate to, among other things, the number and kind of shares, options or other property available for issuance under the plan or covered by grants previously made under the plan. The shares available for issuance under the plan may be, in whole or in part, either authorized and unissued shares of our common stock or shares of common stock held in or acquired for our treasury. In general, if awards under the Vince 2013 Incentive Plan are for any reason cancelled, or expire or terminate unexercised, the shares covered by such awards may again be available for the grant of awards under the Vince 2013 Incentive Plan.
The maximum number of shares of our common stock with respect to which any stock option, stock appreciation right, shares of restricted stock or other stock-based awards that are subject to the attainment of specified performance goals and intended to satisfy Section 162(m) of the Code and may be granted under the Vince 2013 Incentive Plan during any fiscal year to any eligible individual will be              shares (per type of award); provided, that the total number of shares of our common stock with respect to all awards that may be granted under the Vince 2013 Incentive Plan during any fiscal year will be              shares. There will be no annual limits on the number of shares of our common stock with respect to an award of restricted stock that is not subject to the attainment of specified performance goals to eligible individuals. The maximum number of shares of our common stock subject to any performance award which may be granted under the Vince 2013 Incentive Plan during any fiscal year to any eligible individual will be              shares. The total number of shares of our common stock subject to any award which may be granted under the Vince 2013 Incentive Plan during any fiscal year
 
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to any non-employee director will be             shares. The maximum value of any cash payment made pursuant to an award which may be granted under the Vince 2013 Incentive Plan during any fiscal year to any non-employee director will be $            . The maximum value of a cash payment made under a performance award which may be granted under the Vince 2013 Incentive Plan during any fiscal year to any eligible individual will be $        . The maximum value of a cash payment made under a performance award which may be granted under the Vince 2013 Incentive Plan during any fiscal year to any non-employee director will be $        .
Eligibility for Participation .    Members of our board of directors, as well as employees of, and consultants to, us or any of our subsidiaries and affiliates will be eligible to receive awards under the Vince 2013 Incentive Plan.
Award Agreement .    Awards granted under the Vince 2013 Incentive Plan are evidenced by award agreements, which need not be identical, that provide additional terms, conditions, restrictions and/or limitations covering the grant of the award, including, without limitation, additional terms providing for the acceleration of exercisability or vesting of awards in the event of a change of control or conditions regarding the participant’s employment, as determined by the compensation committee.
Stock Options .    The compensation committee may grant nonqualified stock options to eligible individuals and incentive stock options only to eligible employees. The compensation committee will determine the number of shares of our common stock subject to each option, the term of each option, which may not exceed ten years, or five years in the case of an incentive stock option granted to a ten percent stockholder, the exercise price, the vesting schedule, if any, and the other material terms of each option. No incentive stock option or nonqualified stock option may have an exercise price less than the fair market value of a share of our common stock at the time of grant or, in the case of an incentive stock option granted to a ten percent stockholder, 110% of such share’s fair market value. Options will be exercisable at such time or times and subject to such terms and conditions as determined by the compensation committee at grant and the exercisability of such options may be accelerated by the compensation committee.
Stock Appreciation Rights .    The compensation committee may grant stock appreciation rights, which we refer to as SARs, either with a stock option, which may be exercised only at such times and to the extent the related option is exercisable, which we refer to as a Tandem SAR, or independent of a stock option, which we refer to as a Non-Tandem SAR. A SAR is a right to receive a payment in shares of our common stock or cash, as determined by the compensation committee, equal in value to the excess of the fair market value of one share of our common stock on the date of exercise over the exercise price per share established in connection with the grant of the SAR. The term of each SAR may not exceed ten years. The exercise price per share covered by an SAR will be the exercise price per share of the related option in the case of a Tandem SAR and will be the fair market value of our common stock on the date of grant in the case of a Non-Tandem SAR. The compensation committee may also grant limited SARs, either as Tandem SARs or Non-Tandem SARs, which may become exercisable only upon the occurrence of a change in control, as defined in the Vince 2013 Incentive Plan, or such other event as the compensation committee may designate at the time of grant or thereafter.
Restricted Stock .    The compensation committee may award shares of restricted stock. Except as otherwise provided by the compensation committee upon the award of restricted stock, the recipient generally has the rights of a stockholder with respect to the shares, including the right to receive dividends, the right to vote the shares of restricted stock and, conditioned upon full vesting of shares of restricted stock, the right to tender such shares, subject to the conditions and restrictions generally applicable to restricted stock or specifically set forth in the recipient’s restricted stock agreement. The compensation committee may determine at the time of award that the payment of dividends, if any, will be deferred until the expiration of the applicable restriction period.
 
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Recipients of restricted stock are required to enter into a restricted stock agreement with us that states the restrictions to which the shares are subject, which may include satisfaction of pre-established performance goals, and the criteria or date or dates on which such restrictions will lapse.
If the grant of restricted stock or the lapse of the relevant restrictions is based on the attainment of performance goals, the compensation committee will establish for each recipient the applicable performance goals, formulae or standards and the applicable vesting percentages with reference to the attainment of such goals or satisfaction of such formulae or standards while the outcome of the performance goals are substantially uncertain. Such performance goals may incorporate provisions for disregarding, or adjusting for, changes in accounting methods, corporate transactions, including, without limitation, dispositions and acquisitions, and other similar events or circumstances. Section 162(m) of the Code requires that performance awards be based upon objective performance measures in order to qualify as “performance based compensation” for purposes of Section 162(m). The performance goals for restricted stock intended to qualify as “performance based compensation” will be based on one or more of the objective criteria set forth on an exhibit to the Vince 2013 Incentive Plan and are further discussed in general below.
Other Stock-Based Awards .    The compensation committee may, subject to limitations under applicable law, make a grant of such other stock-based awards, including, without limitation, performance units, dividend equivalent units, stock equivalent units, restricted stock and deferred stock units under the Vince 2013 Incentive Plan that are payable in cash or denominated or payable in or valued by shares of our common stock or factors that influence the value of such shares. The compensation committee may determine the terms and conditions of any such other awards, which may include the achievement of certain minimum performance goals for purposes of compliance with Section 162(m) of the Code and/or a minimum vesting period. The performance goals for performance-based other stock-based awards intended to qualify as “performance based compensation” will be based on one or more of the objective criteria set forth on an exhibit to the Vince 2013 Incentive Plan and discussed in general below.
Other Cash-Based Awards .    The compensation committee may grant awards payable in cash. Cash-based awards will be in such form, and dependent on such conditions, as the compensation committee will determine, including, without limitation, being subject to the satisfaction of vesting conditions or awarded purely as a bonus and not subject to restrictions or conditions. If a cash-based award is subject to vesting conditions, the compensation committee may accelerate the vesting of such award in its discretion.
Performance Awards .    The compensation committee may grant a performance award to a participant payable upon the attainment of specific performance goals. If the performance award is payable in cash, it may be paid upon the attainment of the relevant performance goals either in cash or in shares of restricted stock, based on the then current fair market value of such shares, as determined by the compensation committee. Based on service, performance and/or other factors or criteria, the compensation committee may, at or after grant, accelerate the vesting of all or any part of any performance award.
Performance Goals .    The compensation committee may grant awards of restricted stock, performance awards, and other stock-based awards that are intended to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code. These awards may be granted, vest and be paid based on attainment of specified performance goals established by the committee. These performance goals may be based on the attainment of a certain target level of, or a specified increase or decrease in, one or more of the following measures selected by the compensation committee: (1) earnings per share; (2) operating income; (3) gross income; (4) net income, before or after taxes; (5) cash flow; (6) gross profit; (7) gross profit return on investment; (8) gross margin return on
 
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investment; (9) gross margin; (10) operating margin; (11) working capital; (12) earnings before interest and taxes; (13) earnings before interest, tax, depreciation and amortization; (14) return on equity; (15) return on assets; (16) return on capital; (17) return on invested capital; (18) net revenues; (19) gross revenues; (20) revenue growth; (21) annual recurring revenues; (22) recurring revenues; (23) license revenues; (24) sales or market share; (25) total stockholder return; (26) economic value added; (27) specified objectives with regard to limiting the level of increase in all or a portion of our bank debt or other long-term or short-term public or private debt or other similar financial obligations, which may be calculated net of cash balances and other offsets and adjustments as may be established by the compensation committee; (28) the fair market value of a share of our common stock; (29) the growth in the value of an investment in our common stock assuming the reinvestment of dividends; or (30) reduction in operating expenses.
To the extent permitted by law, the compensation committee may also exclude the impact of an event or occurrence which the compensation committee determines should be appropriately excluded, such as (1) restructurings, discontinued operations, extraordinary items and other unusual or non-recurring charges; (2) an event either not directly related to our operations or not within the reasonable control of management; or (3) a change in accounting standards required by generally accepted accounting principles.
Performance goals may also be based on an individual participant’s performance goals, as determined by the compensation committee.
In addition, all performance goals may be based upon the attainment of specified levels of our performance, or the performance of a subsidiary, division or other operational unit, under one or more of the measures described above relative to the performance of other corporations. The compensation committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria.
Change in Control .    In connection with a change in control, as defined in the Vince 2013 Incentive Plan, the compensation committee may accelerate vesting of outstanding awards under the Vince 2013 Incentive Plan. In addition, such awards may be, in the discretion of the committee, (1) assumed and continued or substituted in accordance with applicable law; (2) purchased by us for an amount equal to the excess of the price of a share of our common stock paid in a change in control over the exercise price of the awards; or (3) cancelled for no consideration if the price of a share of our common stock paid in a change in control is less than the exercise price of the award. The compensation committee may also provide for accelerated vesting or lapse of restrictions of an award at any time.
Stockholder Rights .    Except as otherwise provided in the applicable award agreement, and with respect to an award of restricted stock, a participant has no rights as a stockholder with respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares.
Amendment and Termination.     Notwithstanding any other provision of the Vince 2013 Incentive Plan, our board of directors may at any time amend any or all of the provisions of the Vince 2013 Incentive Plan, or suspend or terminate it entirely, retroactively or otherwise, subject to stockholder approval in certain instances; provided, however, that, unless otherwise required by law or specifically provided in the Vince 2013 Incentive Plan, the rights of a participant with respect to awards granted prior to such amendment, suspension or termination may not be adversely affected without the consent of such participant.
Transferability.     Awards granted under the Vince 2013 Incentive Plan generally will be nontransferable, other than by will or the laws of descent and distribution, except that the committee may provide for the transferability of nonqualified stock options at the time of grant or thereafter to certain family members.
 
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Recoupment of Awards.     The Vince 2013 Incentive Plan will provide that awards granted thereunder are subject to any recoupment policy that we may have in place or any obligation that we may have regarding the clawback of “incentive-based compensation” under the Exchange Act or under any applicable rules and regulations promulgated by the Securities and Exchange Commission.
Effective Date; Term.     The Vince 2013 Incentive Plan will be effective when adopted by the board of directors and approved by stockholders. We expect to adopt the Vince 2013 Incentive Plan prior to the consummation of this offering. The Vince 2013 Incentive Plan will expire ten years following its approval by our board of directors. Any award outstanding under the Vince 2013 Incentive Plan at the time of expiration will remain in effect until such award is exercised or has expired in accordance with its terms.
Severance Benefits
Upon certain types of terminations of employment, severance benefits may be payable to our Named Executive Officers. Severance benefits payable to the Named Executive Officers are addressed in their employment agreements. See “—Employment Agreements.”
Vince Employee Stock Purchase Plan
Prior to the consummation of this offering, our board of directors intend to adopt the Vince ESPP subject to the approval of our stockholders. If adopted, the Vince ESPP would be effective as of the consummation of this offering, but the first offering period under the Vince ESPP would not commence until specifically authorized by the committee that administers the Vince ESPP. The Vince ESPP would generally be designed to encourage employees to become stockholders and to increase their ownership of our common stock. The maximum number of shares of common stock which may be issued pursuant to the Vince ESPP may not exceed              shares. We anticipate that shares of our common stock issued under the Vince ESPP would be issued at a discount to market no greater than     % and with a measurement period equal to                     . The Vince ESPP would also be intended to comply with the requirements of Section 423 of the Code and to assure the participants of the tax advantages provided thereby.
Section 401(k) Plan
We provide the defined contribution Kellwood Retirement Savings Plan, a 401(k) Plan, as well as various group health and welfare programs that are generally available to all Kellwood and Vince employees, including the Named Executive Officers.
Under the plan, eligible employees electing to participate may contribute up to 100% of their pretax income, subject to IRS rules limiting an individual’s total contributions and the application of IRS tests designed to ensure that the plan does not discriminate in favor of highly compensated employees.
Effective February 1, 2013, we reinstated the 401(k) for all employees. We will match 50% up to the first 3% of the employee’s deferral. We did not make any contributions to any Named Executive Officer’s 401(k) account in fiscal 2012.
 
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 DESCRIPTION OF CERTAIN INDEBTEDNESS OF VINCE, LLC
Concurrently with the consummation of this offering, we intend to enter into a new senior secured revolving credit facility and a new senior secured term loan credit facility. While we are still negotiating the final forms of these new facilities, the proposed material terms of these facilities are described below.
New Revolving Credit Facility
Vince, LLC plans to enter into a new senior secured revolving credit facility in connection with the consummation of this offering. Bank of America, N.A. (“BofA”) will serve as administrative agent for the other lenders party thereto under this new facility. This revolving credit facility is expected to provide for a revolving line of credit of up to $50 million. It is intended that the closing of our revolving credit facility will be conditioned upon consummation of this offering and other customary closing conditions. It is further intended that our revolving credit facility will include borrowing capacity available for letters of credit in an amount to be mutually agreed and for an incremental facility of up to $20 million. Vince, LLC will be the borrower and Vince Holding Corp. and Vince Intermediate Holding, LLC will be guarantors under the new revolving credit facility. Interest is expected to be payable on the loans under the revolving credit facility, at either the LIBOR or the base rate, in each case, with applicable margins subject to a pricing grid to be mutually agreed based on an excess availability calculation. During the continuance of an event of default and at the election of the required lender, interest is expected to accrue at a rate to be mutually agreed in excess of the rate otherwise applicable.
The revolving credit facility is expected to contain certain financial covenants, to be mutually agreed. In general, it will contain representations and warranties, covenants, and events of default that are customary for this type of financing, including limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, the repurchase of capital stock, transactions with affiliates, the ability to change the nature of its business or its fiscal year, and distributions and dividends; provided, however, that Vince Holding Corp. will be permitted to pay distributions to its stockholders out of available cash so long as no default or event of default under the revolving credit facility has occurred and is continuing at the time of such distribution (or would result therefrom) and that we meet certain additional financial conditions.
New Term Loan Facility:
Vince, LLC and Vince Intermediate Holding, LLC also plan to enter into a new senior secured term loan credit facility with the lenders party thereto, BofA, as administrative agent, JPMorgan Chase Bank and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers, and Cantor Fitzgerald as documentation agent. Under the new term loan facility, Vince, LLC and Vince Intermediate Holding, LLC are contemplated to borrow a $175.0 million term loan in connection with the consummation of this offering (and as described in “Use of Proceeds”). The new term loan facility is expected to provide for an incremental facility of up to the greater of $50 million and an amount that would result in the consolidated net total secured leverage ratio not exceeding 3.00 to 1.00, in addition to certain other rights to refinance or repurchase portions of the term loan. It is intended that the closing of our new term loan facility will be conditioned upon consummation of this offering and other customary closing conditions. The new term loan facility is expected to be subject to quarterly amortization of principal equal to 0.25% of the original aggregate principal amount of the term loan facility, with the balance payable at final maturity. Interest is expected to be payable on loans under the term loan facility at a rate of either (i) the Eurodollar rate (subject to a 1.00% floor) plus 4.25% or (ii) the base rate (subject to a 2.00% floor) plus 3.00%. During the continuance of a payment or bankruptcy event of default, interest is expected to accrue (i) on the overdue principal amount of any
 
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loan at a rate of 2% in excess of the rate otherwise applicable to such loan and (ii) on any overdue interest or any other outstanding overdue amount at a rate of 2% in excess of the non-default interest rate then applicable to base rate loans.
The proposed new term loan facility is expected to have a maximum consolidated net total leverage ratio covenant. In addition, the new term loan facility is expected to contain customary representations and warranties, covenants, and events of default, including but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, the repurchase of capital stock, transactions with affiliates, the ability to change the nature of its business or its fiscal year, and distributions and dividends; provided, however, that Vince Holding Corp. will be permitted to pay distributions to its stockholders out of available cash so long as no default or event of default under the term loan facility has occurred and is continuing at the time of such distribution (or would result therefrom) and that we meet certain additional financial conditions. All obligations under the term loan facility are expected to be guaranteed by Vince Holding Corp. and any future material domestic restricted subsidiaries of Vince, LLC and secured by a lien on substantially all of the assets of Vince Holding Corp., Vince, LLC and Vince Intermediate Holding, LLC and any future material domestic restricted subsidiaries.

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 OTHER INFORMATION RELATED TO THIS OFFERING
This section contains additional information related to Apparel Holding Corp., the entity offering shares of common stock in this offering. Investors will be investing in the Vince business, however they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC.
 
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 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS OF AHC
Shared Services Agreement
In connection with consummation of this offering, Vince, LLC will enter into the Shared Services Agreement with Kellwood Company, LLC pursuant to which Kellwood will provide support services in various operational areas including, among other things, retail e-commerce, finance, distribution, logistics, information technology, accounts payable, credit and collections and payroll and benefits.
The Shared Services Agreement may be modified or supplemented to include new services under terms and conditions to be mutually agreed upon in good faith by the parties. The fees for all services received by Vince, LLC from Kellwood, including any new services mutually agreed upon by the parties, will be at cost. Such costs shall be the full amount of any and all actual and direct out-of-pocket expenses (including base salary and wages but without providing for any margin of profit or allocation of depreciation or amortization expense) incurred by the service provider or its affiliates in connection with the provision of the services.
We may terminate any or all of the services at any time for any reason (with or without cause) upon giving Kellwood the required advance notice for termination for that particular service. Additionally, the provision of the following services, which are services which require a term as a matter of law and services which are based on a third-party agreement with a set term, shall terminate automatically upon the related date specified on the schedules to the Shared Services Agreement: Building Services NY; Tax; and Compensation & Benefits. If no specific notice requirement has been provided, 90 days prior written notice shall be required to be given. Upon the termination of certain services, Kellwood may no longer be in a position to provide certain other related services. Kellwood must notify us within 10 days following our request to terminate any services if they will no longer be able to provide other related services. Assuming we proceed with our request to terminate the original services, such related services shall also be terminated in connection with such termination.
We will be invoiced by Kellwood monthly for these amounts and generally be required to pay within 15 business days of receiving such invoice. The payments will be trued-up and can be disputed once each fiscal quarter.
Tax Receivable Agreement
In connection with the consummation of this offering, Vince Holding Corp. will enter into the Tax Receivable Agreement with the Pre-IPO Stockholders. AHC and its former subsidiaries have generated certain tax benefits (including NOLs and tax credits) prior to the IPO Restructuring Transactions and will generate certain section 197 intangible deductions, or the Pre-IPO Tax Benefits, which would reduce the actual liability for taxes that we might otherwise be required to pay. The Tax Receivable Agreement provides for payments to the Pre-IPO Stockholders in an amount equal to 85% of the aggregate reduction in taxes payable realized by us and our subsidiaries from the utilization of the Pre-IPO Tax Benefits (the “Net Tax Benefit”).
For purposes of the Tax Receivable Agreement, the Net Tax Benefit shall equal (i) with respect to a taxable year, the excess, if any, of (A) our liability for taxes using the same methods, elections, conventions and similar practices used on the relevant company return assuming there were no Pre-IPO Tax Benefits over (B) our actual liability for taxes for such taxable year (the “Realized Tax Benefit”), plus (ii) for each prior taxable year, the excess, if any, of the Realized Tax Benefit reflected on an amended schedule applicable to such prior taxable year over the Realized Tax Benefit reflected on the original tax benefit schedule for such prior taxable year, minus (iii) for each prior taxable year, the excess, if any, of the Realized Tax Benefit reflected on the original tax benefit schedule for such
 
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prior taxable year over the Realized Tax Benefit reflected on the amended schedule for such prior taxable year; provided, however, that to extent any of the adjustments described in clauses (ii) and (iii) were reflected in the calculation of the tax benefit payment for any subsequent taxable year, such adjustments shall not be taken into account in determining the Net Tax Benefit for any subsequent taxable year.
While the Tax Receivable Agreement is designed with the objective of causing our annual cash costs attributable to federal, state and local income taxes (without regard to our continuing 15% interest in the Pre-IPO Tax Benefits) to be the same as that which we would have paid had we not had the Pre-IPO Tax Benefits available to offset our federal, state and local taxable income, there are circumstances in which this may not be the case. In particular, the Tax Receivable Agreement provides that any payments by us thereunder shall not be refundable. In that regard, the payment obligations under the Tax Receivable Agreement differ from a payment of a federal income tax liability in that a tax refund would not be available to us under the Tax Receivable Agreement even if we were to incur a net operating loss for federal income tax purposes in a future tax year. Similarly, the Pre-IPO Stockholders will not reimburse us for any payments previously made if any tax benefits relating to such payments are subsequently disallowed, although the amount of any such tax benefits subsequently disallowed will reduce future payments (if any) otherwise owed to such Pre-IPO Stockholders. In addition, depending on the amount and timing of our future earnings (if any) and on other factors including the effect of any limitations imposed on our ability to use the Pre-IPO Tax Benefits, it is possible that all payments required under the Tax Receivable Agreement could become due within a relatively short period of time following this offering.
If we did not enter into the Tax Receivable Agreement, we would be entitled to realize the full economic benefit of the Pre-IPO Tax Benefits to the extent allowed by federal, state and local law. The Tax Receivable Agreement is designed with the objective of causing our annual cash costs attributable to federal, state and local income taxes (without regard to our continuing 15% interest in the Pre-IPO Tax Benefits) to be the same as we would have paid had we not had the Pre-IPO Tax Benefits available to offset our federal, state and local taxable income. As a result, stockholders purchasing shares in this offering will not be entitled to the economic benefit of the Pre-IPO Tax Benefits that would have been available if the Tax Receivable Agreement were not in effect, except to the extent of our continuing 15% interest in the Pre-IPO Benefits.
Additionally, the payments we make to the Pre-IPO Stockholders under the Tax Receivable Agreement are not expected to give rise to any incidental tax benefits to us, such as deductions or an adjustment to the basis of our assets.
An affiliate of Sun Capital may elect to terminate the Tax Receivable Agreement upon the occurrence of a Change of Control (as defined below). In connection with any such termination, we will be obligated to pay the present value (calculated at a rate per annum equal to LIBOR plus 200 basis points as of such date) of all remaining Net Tax Benefit payments that would be required to be paid to the Pre-IPO Stockholders from such termination date, applying the valuation assumptions set forth in the Tax Receivable Agreement (the “Early Termination Period”). “Change of control,” as defined in the Tax Receivable Agreement shall mean an event or series of events by which (i) Apparel Holding Corp. shall cease directly or indirectly to own 100% of the capital stock of Vince, LLC; (ii) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than one or more permitted investors, shall be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of capital stock having more, directly or indirectly, than 35% of the total voting power of all outstanding capital stock of Apparel Holding Corp. in the election of directors, unless at such time the permitted investors are direct or indirect “beneficial owners” (as so defined) of capital stock of Apparel Holding Corp. having a greater percentage of the total voting power of all outstanding capital stock of Apparel Holding Corp. in the election of directors than that owned by each other
 
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“person” or “group” described above; (iii) for any reason whatsoever, a majority of the board of directors of Apparel Holding Corp. shall not be continuing directors; or (iv) a “Change of Control” (or comparable term) shall occur under (x) any term loan or revolving credit facility of Apparel Holding Corp. or its subsidiaries or (y) any unsecured, senior, senior subordinated or subordinated Indebtedness of Apparel Holding Corp. or its subsidiaries, if, in each case, the outstanding principal amount thereof is in excess of $15,000,000. We may also terminate the Tax Receivable Agreement by paying the Early Termination Payment to the Pre-IPO Stockholders. Additionally, the Tax Receivable Agreement provides that in the event that we breach any material obligations under the Tax Receivable Agreement by operation of law as a result of the rejection of the Tax Receivable Agreement in a case commenced under the Bankruptcy Code, then the Early Termination Payment plus other outstanding amounts under the Tax Receivable Agreement shall become due and payable.
The term of the Tax Receivable Agreement will commence upon consummation of the IPO Restructuring Transactions and will continue until the earlier of (i) the date all such tax benefits have been utilized or expired, (ii) the last day of the tax year including the tenth anniversary of the IPO Restructuring Transactions and (iii) the mutual agreement of the parties thereto, unless earlier terminated in accordance with the terms thereof.
Transfer Agreement
As part of the IPO Restructuring Transactions, Kellwood Company, LLC and Vince Intermediate Holding, LLC will enter into a transfer agreement (the “Transfer Agreement”). Pursuant to the terms of the Transfer Agreement, Kellwood Company, LLC will distribute the Vince, LLC equity interests to Vince Intermediate Holding, LLC in exchange for the Kellwood Note Receivable.
Apparel Holding Corp. will agree to contribute the net proceeds of this offering to Vince Intermediate Holding, LLC immediately following the consummation of this offering. Vince Intermediate Holding, LLC will agree to immediately pay Kellwood Company, LLC the principal amount outstanding under the Kellwood Note Receivable in full satisfaction of its obligations thereunder after the receipt of such proceeds pursuant to the terms of the Transfer Agreement. Additionally, Kellwood Company, LLC will be obligated to use proceeds from the Kellwood Note Receivable, after giving effect to the Additional Sun Capital Contribution, to immediately repay or discharge indebtedness outstanding under the Cerberus Term Loan and the Sun Term Loan Agreements, and to issue an unconditional notice to redeem all of the issued and outstanding 12.875% Notes (after giving effect to the Additional Sun Capital Contribution).
Kellwood Company, LLC will also be obligated to use such proceeds to immediately pay a restructuring fee equal to 1% of the offering and certain related debt repayment and the amount of the new Vince and Kellwood credit facilities to Sun Capital Management and to pay a debt recovery bonus of up to $6.0 million to our Chief Executive Officer. Prior to entry into the Transfer Agreement, Kellwood Company shall have commenced a tender offer for all of the 7.625% Notes at par (including accrued and unpaid interest thereon). The closing of the tender offer will be conditioned, among other things, upon the closing of this offering. Kellwood Company, LLC will be obligated, pursuant to the terms of the Transfer Agreement, to use a portion of the proceeds from the repayment of the Kellwood Note Receivable to purchase all 7.625% Notes validly tendered and not validly withdrawn in the tender offer, in accordance with the terms thereof. In the event the tender offer for the 7.625% Notes is not
 
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completed contemporaneously with the consummation of this offering, Kellwood Company, LLC will be required to an escrow an amount equal to the face value of the outstanding 7.625% Notes (including accrued and unpaid interest thereon through the anticipated closing date of the tender offer) with the Escrow Agent until the earlier of (i) the closing of the tender offer; and (ii) the three-month anniversary of the closing of this offering. As discussed in “Restructuring Transactions,” Kellwood Company, LLC will retain amounts remaining in the escrow account, if any, after consummation of the tender offer. Finally, Kellwood Company, LLC will be obligated to refinance the Wells Fargo Facility immediately following the consummation of this offering to, among other things, release Vince, LLC as a guarantor or obligor thereunder. See “Use of Proceeds” and the “Restructuring Transactions” for additional information.
In accordance with the terms of the Transfer Agreement, Kellwood Company, LLC will agree to indemnify us for any losses which we may suffer, sustain or become subject to, relating to the Kellwood Company, LLC business or in connection with any contract contributed to us by Kellwood Company which is not by its terms permitted to be assigned. Kellwood Company, LLC will also agree to indemnify us for any losses associated with its failure to satisfy its obligations under the Transfer Agreement with respect to the repayment, repurchase, discharge or refinancing of certain of its indebtedness, as described in the immediately prior paragraph (including with respect to the removal of Vince, LLC as an obligor or guarantor under the refinanced Wells Fargo Facility). Additionally, Vince Intermediate Holding, LLC will agree to indemnify Kellwood Company, LLC against any losses which Kellwood Company, LLC may suffer, sustain or become subject to relating to the Vince business. The parties also agreed, upon the request of either the other party to, without further consideration, execute and deliver, or cause to be executed and delivered, such other instruments of conveyance, transfer, assignment and confirmation, and shall take or cause to be taken, such further or other actions as the other party may deem necessary or desirable to carry out the intent and purpose of the Transfer Agreement and give effect to the transactions contemplated thereby.
Kellwood Note Receivable
Immediately prior to the consummation of this offering, Vince Intermediate Holding, LLC will issue the Kellwood Note Receivable in the aggregate principal amount of $345 million to Kellwood Company, LLC (assuming net offering proceeds of $181 million and net borrowings under our new term loan facility of $169 million). No interest will accrue under the Kellwood Note Receivable as the Kellwood Note Receivable will be repaid on the date of issuance, immediately after Vince Intermediate Holding, LLC has received the net proceeds from this offering from Apparel Holding Corp. and has incurred borrowings under our new term loan facility.
Debt Recovery Bonus to Our Chief Executive Officer
Jill Granoff, our CEO, will receive a debt recovery bonus in connection with the repayment of certain Kellwood Company indebtedness, calculated as 4.4% of the related debt recovery, capped at $6.0 million (which includes $440,000 in a prior unpaid debt recovery bonus) upon consummation of this offering. See “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements” for additional information. Kellwood Company, LLC will use proceeds from the repayment of the Kellwood Note Receivable to pay this bonus to Ms. Granoff at the closing of this offering. See “Use of Proceeds” and “Restructuring Transactions.” Kellwood Company has agreed, pursuant to the terms of her amended employment agreement to pay such fee to her prior to paying the restructuring fee to Sun Capital Management or repaying, refinancing or repurchasing the 7.625% Notes. Neither Apparel Holding Corp. nor Vince, LLC is a guarantor or obligor of the 7.625% Notes. See “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements.”
 
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Earnout Agreement
In connection with the acquisition of the Vince business, Kellwood Company entered into an agreement with CRL Group providing for contingent earnout payments as additional consideration for the purchase of substantially all of the assets and properties of CRL Group (the “Earnout Agreement”). Rea Laccone is a member of the CRL Group. The Earnout Agreement provides for the payment of contingent annual earnout payments to CRL Group for five periods between 2007 and 2011, with the contingent amounts earned based on the amount of net sales and gross margin in each such period. The Earnout Agreement also provides for a cumulative contingent payment based on the amount of net sales during the Earnout Agreement period. Kellwood Company made payments under the Earnout Agreement of $0.8 million, $58.5 million and $4.5 million for fiscal 2012, fiscal 2011 and fiscal 2010, respectively.
Certain Indebtedness to Sun Capital
Sun Capital Loan Agreement.     Apparel Holding Corp. is party to a Loan Authorization Agreement, originally dated February 13, 2008, by and between Apparel Holding Corp, SCSF Kellwood Finance and Sun Kellwood, as successors to Bank of Montreal for a $72.0 million line of credit (the “Sun Capital Loan Agreement”). On July 19, 2012, Apparel Holding Corp., SCSF Finance and Sun Kellwood Finance entered into an Amendment No. 4 of the Sun Capital Loan Agreement pursuant to which the maturity date of our indebtedness was extended to August 6, 2014. On December 28, 2012, Apparel Holding Corp., SCSF Finance and Sun Kellwood Finance entered into an Agreement Regarding Amendment No. 4 forgiving all our unpaid interest accrued under the Sun Capital Loan Agreement prior to July 19, 2012. During fiscal 2012, fiscal 2011 and fiscal 2010, we made no payments (whether with respect to principal or interest thereon) on our indebtedness under the Sun Capital Loan Agreement. From July 19, 2012, interest accrues at a rate equal to the rate per annum announced by the Bank of Montreal, Chicago, Illinois, from time to time as its prime commercial rate, or equivalent, for U.S. dollar loans to borrowers located in the U.S. plus 2%. Effective June 18, 2013, affiliates of Sun Capital contributed all indebtedness outstanding the Sun Capital Loan Agreement to AHC as a capital contribution in the Sun Capital Contribution. See “Restructuring Transactions” for additional information.
Sun Promissory Notes.     Apparel Holding Corp. is party to a $225,000,000 Senior Subordinated Promissory Note and a $75,000,000 Senior Subordinated Promissory Note, each in favor of Sun Kellwood Finance and originally dated May 2, 2008 (collectively, the “Sun Promissory Notes”). On July 19, 2012, we entered into an Amendment No. 1 with Sun Kellwood Finance regarding each of our Sun Promissory Notes pursuant to which the maturity date of our indebtedness thereunder was extended to October 15, 2016 and our interest rate thereunder was decreased from 15% per annum to 12% per annum. On December 28, 2012, Apparel Holding Corp. and Sun Kellwood Finance entered into an Agreement Regarding Amendment No. 1 with respect to each Sun Promissory Notes forgiving all our unpaid interest which accrued prior to July 19, 2012. During fiscal 2012, fiscal 2011 and fiscal 2010, we paid no interest on our indebtedness under the Sun Promissory Notes and we paid none of the principal. Affiliates of Sun Capital contributed all indebtedness outstanding under the Sun Promissory Notes, respectively, to AHC as a capital contribution effective June 18, 2013. See “Restructuring Transactions” for additional information.
Capital Contribution.     On June 18, 2013, in anticipation of this offering, affiliates of Sun Capital contributed $407.5 million of indebtedness under the Sun Capital Loan Agreement and the Sun Promissory Notes to Apparel Holding Corp. in the Sun Capital Contribution. Affiliates of Sun Capital will contribute certain indebtedness outstanding under the Sun Term Loan Agreements in the Additional Sun Capital Contribution as part of the IPO Restructuring Transactions. See “Restructuring Transactions” for additional information.
 
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Sun Term Loan Agreements.     Kellwood Company and certain of its domestic subsidiaries, as borrowers, affiliates of Sun Capital, as lenders, and Sun Kellwood Finance, as collateral agent, are party to the Sun Term Loan Agreements. On September 1, 2012, Vince, LLC was joined to each of the Sun Term Loan Agreements and the related security agreement as a borrower party. As a result, Vince, LLC is jointly and severally liable up to its allocable amount for Kellwood’s outstanding indebtedness under the Sun Term Loan Agreements, and substantially all of Vince, LLC’s assets are collateral for such indebtedness. Vince, LLC will be released as a borrower party or guarantor thereunder in connection with consummation of the IPO Restructuring Transactions upon repayment of the Sun Term Loan Agreements. The Term A Loan, Term B Loan, Term C Loan and Term D Loan under the Sun Term Loan Agreements bear interest at a rate of 10% per annum. The Term E Loan, Term F Loan and Term G Loan under the Sun Term Loan Agreements bear interest at a rate of 12% per annum. During fiscal 2012, fiscal 2011 and fiscal 2010, Kellwood Company paid no interest on, and repaid no principal amounts under, the Sun Term Loan Agreements. During fiscal 2012, fiscal 2011 and fiscal 2010, the largest aggregate principal amount outstanding under each Sun Term Loan Agreement was as follows:

Term A Loan:	  	$	17,251,562	  	
Term B Loan:	  	$	27,507,775	  	
Term C Loan:	  	$	17,945,208	  	
Term D Loan:	  	$	11,595,349	  	
Term E Loan:	  	$	5,600,546	  	
Term F Loan:	  	$	27,343,843	  	
The Term G Loan was entered into on June 28¸ 2013 and there were no amounts outstanding under that loan in each of fiscal 2012, fiscal 2011 and fiscal 2010. The Sun Term Loan Agreements will terminate on the earlier of (i) January 19, 2017 and (ii) the date on which the Cerberus Term Loan has been paid in full and commitments to lenders thereunder have been terminated, except if the maturity of the Cerberus Term Loan is extended, the termination date of the Sun Term Loan Agreements will be extended to the same date.
The indebtedness outstanding under the Sun Term Loan Agreements will be repaid in connection with this offering (after giving effect to the Additional Sun Capital Contribution and the subsequent contribution of such indebtedness by Apparel Holding Corp. to Kellwood Company, at which time such indebtedness shall be canceled). See “Use of Proceeds” and “Restructuring Transactions.”
For additional information on our indebtedness to affiliates of Sun Capital, see “Additional Information Related to Vince—Supplemental Management’s Discussion and Analysis of Financial Condition and Results of Operations of Vince, LLC” and “Information Related to AHC—Management’s Discussion and Analysis of Financial Condition and Results of Operations of AHC.”
Management Fees
In connection with the acquisition of Kellwood Company by affiliates of Sun Capital in 2008, Sun Capital Management, an affiliate of Sun Capital, entered into a Management Services Agreement with Kellwood Company that expires in May 2018, with automatic one-year extensions thereafter. Under this agreement, Sun Capital Management provides Kellwood Company with consulting and advisory services, including services relating to financing alternatives, financial reporting, accounting and management information systems. In exchange, Kellwood Company reimburses Sun Capital Management for reasonable out-of-pocket expenses incurred in connection with providing consulting and advisory services, additional and customary and reasonable fees for management consulting services provided in connection with corporate events, and also pays an annual management fee equal to $2.2 million payable in equal quarterly installments. A portion of the management fees incurred by Kellwood Company were charged to Vince, LLC in the amounts of $0.8 million, $0.4 million and $0.4 million for fiscal 2012, fiscal 2011 and fiscal 2010, respectively.
 
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Upon the consummation of certain corporate events involving Kellwood Company or its direct or indirect subsidiaries (including restructurings and equity offerings), Kellwood Company is required to pay Sun Capital Management a transaction fee in an amount equal to 1% of the aggregate consideration (including assumed debt and long-term liabilities and the value of any refinancing consummated by Kellwood Company, LLC in connection with this offering) paid to or by Kellwood Company and any of its direct or indirect subsidiaries or stockholders. It is currently estimated that this restructuring fee will total $3.5 million. The obligation to pay such amount to Sun Capital Management will be an obligation of Kellwood Company, LLC after consummation of the IPO Restructuring Transactions; provided that such amount shall be repaid at the closing of this offering with proceeds from the repayment of the Kellwood Note Receivable. See “Use of Proceeds” and “Restructuring Transactions.”
As a subsidiary of Kellwood Company, Vince, LLC guarantees, jointly and severally, Kellwood Company’s payment obligations under the Management Services Agreement, which payment Sun Capital Management may seek from Vince, LLC in the first instance without first proceeding against Kellwood Company. In addition, as a subsidiary of Kellwood Company, Vince, LLC has agreed to indemnify Sun Capital Management and certain affiliates, related persons and any successor by operation of law against any liabilities, including legal fees, whether or not related to the performance by such persons of Sun Capital Management’s obligations under the Management Services Agreement. Vince, LLC will be released as a guarantor of the Management Services Agreement following the completion of the IPO Restructuring Transactions and this offering and the payment of this restructuring fee, at which time the Management Services Agreement will be terminated.
Sun Capital Consulting Agreement
In connection with this offering, we intend to enter into an agreement with Sun Capital Management to (i) reimburse Sun Capital Management or any of its affiliates providing consulting services under the agreement for out-of-pocket expenses incurred in providing consulting services to us and (ii) provide Sun Capital Management with customary indemnification for any such services.
The agreement will commence upon completion of this offering and, unless earlier terminated by us or Sun Capital Management as described below, will terminate on the tenth anniversary of the completion of this offering. Under the consulting agreement, we will have no obligation to pay Sun Capital Management or any of its affiliates any consulting fees other than those which are approved by a majority of our directors that are not affiliated with Sun Capital. To the extent such fees are approved, we will be obligated to pay such fees in addition to reimbursing Sun Capital Management or any of its affiliates that provide us services under the consulting agreement for all reasonable out-of-pocket fees and expenses incurred by such party in connection with the provision of consulting services under the consulting agreement and any related matters. Reimbursement of such expenses shall not be conditioned upon the approval of a majority of our directors that are not affiliated with Sun Capital Management, and shall be payable in addition to any fees that such directors may approve.
Neither Sun Capital Management nor any of its affiliates will be liable to us or our affiliates, securityholders or creditors for (1) any liabilities arising out of, related to, caused by, based upon or in connection with the performance of services under the consulting agreement, unless such liability is proven to have resulted directly and primarily from the willful misconduct or gross negligence of such person or (2) pursuing any outside activities or opportunities that may conflict with our best interests, which outside activities we consent to and approve under the consulting agreement, and which opportunities neither Sun Capital Management nor any of its affiliates will have any duty to inform us of. In no event will the aggregate of any liabilities of Sun Capital Management or any of its affiliates exceed the aggregate of any fees paid under the consulting agreement.
 
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In addition, we are required to indemnify Sun Capital Management, its affiliates and any successor by operation of law against any and all liabilities, whether or not arising out of or related to such party’s performance of services under the consulting agreement, except to the extent proven to result directly and primarily from such person’s willful misconduct or gross negligence. We are also required to defend such parties in any lawsuits which may be brought against such parties and advance expenses in connection therewith. In the case of affiliates of Sun Capital Management that have rights to indemnification and advancement from affiliates of Sun Capital, we agree to be the indemnitor of first resort, to be liable for the full amounts of payments of indemnification required by any organizational document of such entity or any agreement to which such entity is a party, and that we will not make any claims against any affiliates of Sun Capital Partners for contribution, subrogation, exoneration or reimbursement for which they are liable under any organizational documents or agreement.
Sun Capital Management may, in its sole discretion, elect to terminate the consulting agreement at any time. We may elect to terminate the consulting agreement if SCSF Cardinal, Sun Cardinal or any of their respective affiliates’ aggregate ownership of our equity securities falls below 30%.
Indemnification Agreements
Prior to the consummation of this offering, we will enter into indemnification agreements with each of our executive officers and directors. The indemnification agreements will provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the DGCL.
Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation will provide that for so long as affiliates of Sun Capital own 30% or more of our outstanding shares of common stock, Sun Cardinal, a Sun Capital affiliate, will have the right to designate a majority of our board of directors. For so long as Sun Cardinal has the right to designate a majority of our board of directors, the directors designated by Sun Cardinal are expected to constitute a majority of each committee of our board of directors (other than the Audit Committee), and the chairman of each of the committees (other than the Audit Committee) is expected to be a director serving on the committee who is selected by affiliates of Sun Capital, provided that, at such time as we are not a “controlled company” under the NYSE corporate governance standards, our committee membership will comply with all applicable requirements of those standards and a majority of our board of directors will be “independent directors,” as defined under the rules of the NYSE, subject to any applicable phase in requirements.
Stockholders’ Agreement
In connection with the February 2008 acquisition of Kellwood Company by affiliates of Sun Capital, Apparel Holding Corp. entered into a stockholders’ agreement with affiliates of Sun Capital and certain minority stockholders of Apparel Holding Corp. on February 20, 2008. Under the terms of this agreement, these minority stockholders have agreed and any future minority stockholders must agree to vote all of their Apparel Holding Corp. capital stock (including warrants and options to purchase such capital stock and securities convertible or exchangeable for capital stock), to the extent such capital stock has voting rights, in the manner specified by Sun Cardinal in connection with certain fundamental transactions, including this offering and in the IPO Restructuring Transactions, in the election of our directors and any other matter on which stockholders of Delaware corporations generally have a right to vote, and to grant an irrevocable proxy to Sun Cardinal with respect to such securities. This agreement also subjects such minority stockholders to certain transfer restrictions and drag-along rights with respect to their Apparel Holding Corp. capital stock, and grants to them certain tag-along and preemptive rights with respect to issuances of Apparel Holding Corp. capital stock by Apparel Holding Corp. to Sun Capital and its affiliates.
 
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Sun Cardinal has the right, in its sole discretion, to terminate all or any portion of the stockholders’ agreement immediately prior to the effectiveness of the registration statement relating to this offering. Sun Cardinal has advised us that it intends to terminate such agreement in its entirety prior to the consummation of this offering. If such termination right is not exercised, the stockholders’ agreement will otherwise terminate automatically on the later of (a) the date on which Sun Cardinal, SCSF Cardinal and their respective affiliates no longer own or control at least 25% of our common stock on a fully-diluted basis and (b) the date on which Sun Cardinal, SCSF Cardinal and their respective affiliates no longer control our board of directors.
Securityholders’ Agreement
Apparel Holding Corp. and Kellwood Company entered into a securityholders’ agreement with certain minority stockholders of Kellwood Company on June 30, 2010. Under the terms of this agreement, each minority stockholder has agreed to vote all their debt and equity securities of Kellwood Company and, where applicable, of Apparel Holding Corp. in the manner specified by Apparel Holding Corp. in connection with certain transactions (including this offering), in the election of Kellwood Company directors and on any other matter on which the stockholders of Delaware corporations generally have a right to vote or which is submitted to a vote of the Kellwood Company stockholders, and to grant an irrevocable proxy to us with respect to such securities. This agreement also subjects such minority stockholders to certain transfer restrictions and drag-along rights with respect to Kellwood Company capital stock. It grants to them certain tag-along rights with respect to any debt or equity Kellwood Company securities held by Apparel Holding Corp.
Under the securityholders’ agreement, Kellwood Company has the option, but not the obligation, to repurchase the debt and equity securities of Kellwood Company and, where applicable, of Apparel Holding Corp., held by minority stockholders immediately prior to the effective time of this offering. The securityholders’ agreement will automatically terminate on the later of (a) the date on which we no longer own or control at least 25% of Kellwood Company’s common stock on a fully-diluted basis and (b) the date on which we no longer control Kellwood Company’s board. As Apparel Holding Corp. will no longer own or control Kellwood Company, LLC after consummation of this offering, the securityholders’ agreement will automatically terminate upon the consummation of the IPO Restructuring Transactions, which will occur immediately prior to this offering.
Registration Agreement
Apparel Holding Corp. entered into a registration agreement with Sun Cardinal and SCSF Cardinal and certain other investors in connection with the February 2008 acquisition of Kellwood Company by affiliates of Sun Capital. Pursuant to the terms of this agreement, holders of at least a majority of “Sun Registrable Securities” (which include (i) shares of Apparel Holding Corp. common stock originally issued to Sun Capital and its affiliates; (ii) all shares of common stock or other securities of Apparel Holding Corp. issuable upon the conversion, exercise or exchange of Apparel Holding Corp. common stock in connection with certain reorganization transactions; and (iii) any other shares of common stock or other securities of Apparel Holding Corp. held by persons holding the securities described in clauses (i) and (ii)) are entitled to request that Apparel Holding Corp. register its shares on a registration statement on one or more occasions in the future. Sun Capital and its affiliates and the other investors party to the registration agreement are also eligible to participate in certain registered offerings by Apparel Holding Corp., subject to the restrictions in the registration rights agreement. The Pre-IPO Stockholders have been deemed to waive, or have affirmatively waived, their piggy back registration rights to participate in this offering in accordance with the terms of the registration agreement. We are obligated, within 30 days of receiving a request for registration, to file with the SEC a registration statement with respect to such registrable securities. In addition, we are
 
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obligated to use our best efforts to make short-form registrations on Form S-3 available for the sale of registrable securities after the consummation of this offering. Apparel Holding Corp. will pay the expenses of the investors party to the registration agreement in connection with their exercise of the rights described in this paragraph, other than underwriting commissions or selling commissions attributable to the registrable securities sold by the holders thereof, as well reimburse the holders of registrable securities included in any registration for the reasonable fees and disbursements of one counsel chosen by the holders of a majority of the registrable securities included in such registration. Our obligation to bear all registration expenses is absolute and does not depend on whether any contemplated offering is completed or whether any registration statement is declared effective.
Employment Agreements
See “Additional Information Related to Vince—Vince Executive Compensation—Employment Agreements” for a description of our employment agreements with certain of our executive officers.
Statement of Policy Regarding Transactions with Related Persons
In connection with this offering, we will adopt a written statement of policy with respect to related party transactions, which is administered by our Nominating and Corporate Governance Committee. Under our related party transaction policy, a “Related Party Transaction” is any transaction, arrangement or relationship between us or any of our subsidiaries and a Related Person not including any transactions involving less than $120,000 when aggregated with all similar transactions, or transactions that have received pre-approval of our Nominating and Corporate Governance Committee. A “Related Person” is any of our executive officers, directors or director nominees, any stockholder beneficially owning in excess of 5% of our stock or securities exchangeable for our stock, any immediate family member of any of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is an executive officer, a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest in such entity.
Pursuant to our related party transaction policy, a Related Party Transaction may only be consummated or may only continue if:
 
 	Ÿ	 	our Nominating and Corporate Governance Committee approves or ratifies such transaction in accordance with the terms of the policy; or	
 
 	Ÿ	 	the chair of our Nominating and Corporate Governance Committee pre-approves or ratifies such transaction and the amount involved in the transaction is less than $120,000, provided that for the Related Party Transaction to continue it must be approved by our Audit Committee at its next regularly scheduled meeting.	
If advance approval of a Related Party Transaction is not feasible, then that Related Party Transaction will be considered and, if our Nominating and Corporate Governance Committee determines it to be appropriate, ratified, at its next regularly scheduled meeting. If we decide to proceed with a Related Party Transaction without advance approval, then the terms of such Related Party Transaction must permit termination by us without further material obligation in the event our ratification is not forthcoming at our next regularly scheduled meeting.
Transactions with Related Persons, though not classified as Related Party Transactions by our related party transaction policy and thus not subject to its review and approval requirements, may still need to be disclosed if required by the applicable securities laws, rules and regulations.
 
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 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OF AHC
The following table contains information about the beneficial ownership of our common stock as of                 , 2013 and as adjusted to give effect to this offering by:
 
 	Ÿ	 	each person, or group of persons, who beneficially owns more than 5% of our capital stock, including the selling stockholders;	
 
 	Ÿ	 	each of our named executive officers;	
 
 	Ÿ	 	each of our directors as of the consummation of this offering; and	
 
 	Ÿ	 	all directors and executive officers as a group.	
For further information regarding material transactions between us and certain of our stockholders, see “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC.”
Beneficial ownership and percentage ownership are determined in accordance with the rules and regulations of the SEC and include voting or investment power with respect to shares of stock. This information does not necessarily indicate beneficial ownership for any other purpose. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to restrictions, options or warrants held by that person that are currently exercisable or exercisable within 60 days of                 , 2013 are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Except as indicated in the footnotes to the following table or pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder’s name.
Our calculation of the percentage of beneficial ownership prior to the offering is based on              shares of our common stock outstanding on                      , 2013 (after giving effect to the IPO Restructuring Transactions and the related stock split). Our calculation of the percentage of beneficial ownership after the offering is based on              shares of our common stock outstanding immediately after consummation of the offering. The selling stockholders have granted the underwriters an option to purchase an additional              shares of our common stock in the aggregate from them.
Unless otherwise indicated in the footnotes, the address of each of the individuals named below is: c/o Vince Holding Corp., 1441 Broadway, 6th Floor, New York, New York 10018.

Name of Beneficial Owner	 	Shares
Beneficially
Owned Prior
to the
Offering	 	 	Percentage of
Shares
Beneficially
Owned Prior to
the Offering	 	 	Shares Beneficially
Owned After the
Offering Assuming
No Exercise of the
Option to Purchase
Additional Shares	 	 	Shares Beneficially
Owned After the
Offering Assuming
Full Exercise of the
Option to Purchase
Additional Shares	 	
	 	Number	 	 	Percentage	 	 	Number	 	 	Percentage	 	 	Number	 	 	Percentage	 	
5% Stockholder:	 				 				 				 				 				 				
Sun Capital(1)	 				 	 	        	% 	 				 	 	        	% 	 				 	 	        	% 	
Named Executive Officers & Directors:	 				 				 				 				 				 				
Jill Granoff	 				 				 				 				 				 				
Lisa Klinger	 				 				 				 				 				 				
Arthur Gordon(2)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Michael Saunders(2)(3)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Rea Laccone	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Christopher T. Metz(4)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Mark E. Brody(4)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Jason H. Neimark(4)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Jerome Griffith	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Robert A. Bowman	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
All Executive Officers and Directors as a Group (18 Persons):	 				 				 				 				 				 				
 
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*	Less than 1%	
(1)	Includes                  shares owned by Sun Cardinal,                  shares owned by H.I.G. Sun Partners, Inc. (“H.I.G.”) and                  shares owned by SCSF Cardinal. Sun Cardinal is a wholly owned subsidiary of Sun Capital Partners V, L.P. SCSF Cardinal is jointly owned by Sun Capital Securities Offshore Fund, Ltd. (“SCSF Offshore”) and Sun Capital Securities Fund, L.P. (“SCSF LP”). Indirectly through their respective revocable trusts, Messrs. Marc J. Leder and Rodger Krouse each control 50% of the shares in Sun Capital V., Ltd. (“Sun Partners V Ltd”), which in turn is the general partner of Sun Capital Advisors V, L.P. (“Sun Advisors V”), which in turn is the general partner of Sun Capital Partners V, L.P. (“Sun Partners V LP”). Pursuant to that certain stockholders agreement (as described under “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC”), H.I.G. has agreed to vote its shares in connection with the election of directors and certain other matters in the manner specified by Sun Cardinal. Apparel Holding Corp. intends to terminate the stockholders agreement in connection with the consummation of this offering. As a result, Messrs. Leder and Krouse (and/or their respective revocable trusts), Sun Partners V Ltd, Sun Advisors V and Sun Partners V LP may be deemed to have indirect beneficial ownership of the securities owned directly by Sun Cardinal or H.I.G. (prior to the consummation of this offering). Messrs. Leder and Krouse also control, indirectly through their respective irrevocable trusts, 50% of the membership interests in Sun Capital Securities, LLC (“SCSF LLC”), which in turn is the general partner of Sun Capital Securities Advisors, LP (“SCSF Advisors”), which in turn is the general partner of SCSF LP. As a result, Messrs. Leder and Krouse (and their respective revocable trusts), SCSF LLC, SCSF Advisors, SCSF LP and SCSF Offshore may be deemed to have indirect beneficial ownership of the securities directly owned by SCSF Cardinal. Each of Messrs. Leder and Krouse (and their respective revocable trusts), Sun Partners V Ltd, Sun Advisors V, Sun Partners V LP, SCSF LLC, SCSF Advisors, SCSF LP and SCSF Offshore expressly disclaims beneficial ownership of any securities in which they do not have a pecuniary interest.	
Does not include Mr. Saunders’ options to acquire                  shares of Apparel Holding Corp. after the consummation of this offering but prior to the Expiration Time (as defined in note (5) to the “Outstanding Equity Awards at Fiscal 2012 Year End” table in “Additional Information Related to AHC—AHC Executive Compensation”), with respect to which affiliates of Sun Capital have an option to purchase such options or the shares of Apparel Holding Corp. issuable upon the exercise of such options within the 30 days of the Expiration Time or seven months of the exercise date, as applicable.
The business address for Messrs. Leder and Krouse, Sun Partners V Ltd, Sun Advisors V, Sun Partners V LP, SCSF LLC, SCSF Advisors, SCSF LP and SCSF Offshore is c/o Sun Capital Partners, Inc., 5200 Town Center Circle, Suite 600, Boca Raton, FL 33486.
 
(2)	The address for each of Mr. Gordon and Mr. Saunders is: c/o Kellwood Company, 600 Kellwood Pkwy, Chesterfield, MO 63107.	
 
(3)	Does not include Mr. Sauders’ options to acquire                  shares of Apparel Holding Corp. after the consummation of this offering but prior to the Expiration Time. See note (5) to the “Outstanding Equity Awards at Fiscal 2012 Year End” table in “Additional Information Related to AHC—AHC Executive Compensation” for additional information.	
 
(4)	The address for each of Messrs. Metz, Neimark and Brody is c/o Sun Capital Partners, Inc., 5200 Town Center Circle, Suite 600, Boca Raton, FL 33486.	
 
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 DESCRIPTION OF CAPITAL STOCK OF AHC
The following is a description of the material terms of our amended and restated certificate of incorporation and amended and restated bylaws as they will be in effect upon consummation of this offering. The following description may not contain all of the information that is important to you. To understand them fully, you should read our amended and restated certificate of incorporation and amended and restated bylaws, copies of which are or will be filed with the SEC as exhibits to the registration statement of which this prospectus is a part.
Authorized Capitalization
Our currently authorized capital stock consists of 1,200,000 shares of voting common stock, par value $0.001 per share, 1,700,000 shares of non-voting common stock and 100,000 shares of preferred stock, par value $0.001 per share. In connection with this offering, we will be amending and restating our certificate of incorporation and pursuant to which we will be converting all of our issued and outstanding non-voting common stock into common stock on a one-for-one basis and consummating a subsequent stock split of our common stock on a                  for one basis, thereby increasing our authorized capital stock to consist of                  shares of common stock, par value $0.01 per share and                  shares of preferred stock, par value 0.01 per share. On October 5, 2013, there were 920,956.24 shares of our voting and non-voting common stock outstanding in the aggregate, held of record by four stockholders and no shares of preferred stock outstanding. Following consummation of this offering, there will be                  shares of our common stock outstanding.
Common Stock
Voting Rights
Each share of common stock entitles the holder to one vote with respect to each matter presented to our stockholders on which the holders of common stock are entitled to vote. Our common stock will vote as a single class on all matters relating to the election and removal of directors on our board of directors and as provided by law. Holders of our common stock will not have cumulative voting rights. Except in respect of matters relating to the election of directors, or as otherwise provided in our amended and restated certificate of incorporation or required by law, all matters to be voted on by our stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter. In the case of the election of directors, all matters to be voted on by our stockholders must be approved by a plurality of the shares present in person or by proxy at the meeting and entitled to vote on the election of directors.
Dividend Rights
The holders of our outstanding shares of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. Because we are a holding company, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including restrictions under the terms of the agreements governing our indebtedness. See “Additional Information Related to AHC—Description of Certain Indebtedness of AHC.” See also “Dividend Policy of AHC.”
Liquidation Rights
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our common stock would be entitled to share ratably in our assets that are legally available
 
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for distribution to stockholders after payment of our debts and other liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either such case, we must pay the applicable distribution to the holders of our preferred stock before we may pay distributions to the holders of our common stock.
Other Rights
Our stockholders will have no preemptive, conversion or other rights to subscribe for additional shares. All outstanding shares are, and all shares offered by this prospectus will be, when sold, validly issued, fully paid and nonassessable. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
Listing
We intend to apply to have our common stock approved for listing on the NYSE under the symbol “VNCE”.
Preferred Stock
Our amended and restated certificate of incorporation will authorize our board of directors to provide for the issuance of shares of preferred stock in one or more series and to fix the preferences, powers and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including the dividend rate, conversion rights, voting rights, redemption rights and liquidation preference and to fix the number of shares to be included in any such series without any further vote or action by our stockholders. Any preferred stock so issued may rank senior to our common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up, or both. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders and may adversely affect the voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others. At present, we have no plans to issue any preferred stock.
Board Composition
Following the consummation of this offering, we will be deemed to be a “controlled company” under the rules of the NYSE because more than 50% of our outstanding voting power will be held by affiliates of Sun Capital. See “Other Information Related to this Offering—Security Ownership of Certain Beneficial Owners of AHC” and “Additional Information Related to Vince—Vince Management —Corporate Governance—Controlled Company.” We intend to rely upon the “controlled company” exception to the NYSE board of directors and committee independence requirements. Pursuant to this exception, we will be exempt from the rules that would otherwise require that our board of directors consist of a majority of independent directors and that our Compensation Committee and Nominating and Corporate Governance Committee be composed entirely of independent directors. The “controlled company” exception does not modify the independence requirements for the Audit Committee, and we intend to comply with the requirements of the Sarbanes-Oxley Act and the stock exchange rules, which require that our Audit Committee consist exclusively of independent directors within one year of our initial public offering, after the expiration of the initial public offering phase in rule.
 
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Our amended and restated certificate of incorporation will provide that for so long as affiliates of Sun Capital own 30% or more of our outstanding shares of common stock, Sun Cardinal will have the right to designate a majority of our board of directors. For so long as Sun Cardinal has the right to designate a majority of our board of directors, the directors designated by affiliates of Sun Cardinal are expected to constitute a majority of each committee of our board of directors (other than the Audit Committee) and the chairman of each of the committees (other than the Audit Committee) is expected to be a director serving on such committee who is selected by Sun Cardinal. At such time as we are not a “controlled company” under the NYSE corporate governance standards, our committee membership will comply with all applicable requirements of those standards and a majority of our board of directors will be “independent directors,” as defined under the rules of NYSE.
Corporate Opportunity
Messrs. Christopher T. Metz, Mark E. Brody and Jason H. Neimark, who are officers or employees of Sun Capital, currently serve on our board of directors and will continue to serve as directors following consummation of this offering. In addition, Sun Cardinal, an affiliate of Sun Capital, will have the right to designate an additional              directors upon consummation of this offering, assuming no exercise of the underwriters’ option to purchase additional shares from the selling stockholders and that the board size remains the same. Affiliates of Sun Capital are our ultimate principal equityholders and our majority stockholders (after giving effect to the IPO Restructuring Transactions and the consummation of this offering). Sun Capital and affiliates controlled by them may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts between the interests of Sun Capital and its affiliates, on the one hand, and of other stockholders, on the other hand, arise, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and our amended and restated certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approved the transactions, (2) the material facts relating to the director’s or officer’s relationship or interest are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us.
Our amended and restated certificate of incorporation will provide that the doctrine of “corporate opportunity” will not apply against Sun Capital and its affiliates, or any of our directors who are associates of, or affiliated with, Sun Capital, in a manner that would prohibit them from investing in competing businesses or doing business with our clients or guests. Our amended and restated certificate of incorporation will also provide that any principal, officer, member, manager and/or employee of Sun Capital and its affiliates or any entity that controls, is controlled by or under common control with Sun Capital or any investment funds advised by Sun Capital will not be required to offer any transaction opportunity of which they become aware to us and could take any such opportunity for themselves or offer it to other companies in which they have an investment. See “Risk Factors—Risks Related to this Offering and Our Common Stock—We are a ‘controlled company,’ controlled by investment funds advised by affiliates of Sun Capital, whose interests in our business may be different from yours.”
 
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Antitakeover Effects of Delaware Law and Our Amended and Restated Certificate of Incorporation and Our Amended and Restated Bylaws
Our amended and restated certificate of incorporation and our amended and restated bylaws will also contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board of directors the power to discourage acquisitions that some stockholders may favor.
Undesignated Preferred Stock
The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue preferred stock with super voting, special approval, dividend or other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us. These and other provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.
Classified board of directors
Our amended and restated certificate of incorporation will provide that our board of directors will be divided into three classes, with each class serving three-year staggered terms. In addition, (i) prior to the first date on which Sun Capital and its affiliates cease to beneficially own at least 30% of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, our directors may be removed with or without cause upon the affirmative vote of Sun Capital and its affiliates which beneficially own our outstanding voting stock and (ii) on and after such date, directors may only be removed for cause and only upon the affirmative vote of the majority of our outstanding voting stock, at a meeting of our stockholders called for that purpose. In the event Sun Capital and its affiliates cease to beneficially own at least 30% of the voting power of the voting stock then outstanding, directors previously designated by affiliates of Sun Cardinal would be entitled to serve the remainder of their respective terms, unless they are otherwise removed for cause in accordance with the terms of our amended and restated certificate of incorporation. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.
Requirements for Advance Notification of Stockholder Meetings
Our amended and restated certificate of incorporation will provide that special meetings of the stockholders may be called only upon a resolution approved by a majority of the total number of directors that we would have if there were no vacancies or, prior to the date that Sun Capital and its affiliates cease to beneficially own a majority of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors (the “Trigger Date”) at the request of the holders of a majority of the voting power of our then outstanding shares of voting capital stock.
Requirements for Nominations and Proposals at Stockholder Meetings
Our amended and restated bylaws will prohibit the conduct of any business at a special meeting other than as specified in the notice for such meeting. Our amended and restated bylaws will also provide that nominations of persons for election to our board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the notice of meeting (1) by or
 
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at the direction of our board of directors or (2) provided that our board of directors has determined that directors shall be elected at such meeting, by any stockholder who (i) is a stockholder of record both at the time the notice is delivered and on the record date for the determination of stockholders entitled to vote at the special meeting, (ii) is entitled to vote at the meeting and upon such election and (iii) complies with the notice procedures set forth in our amended and restated bylaws. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management, of our company. These provisions will not apply to nominations by Sun Cardinal.
Stockholder Action by Written Consent
Pursuant to Section 228 of the DGCL, any action required to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless our certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation will provide that, prior to the Trigger Date, any action required or permitted to be taken by our stockholders may be effected by written consent. From and after the Trigger Date, any action required or permitted to be taken by our stockholders may be effected only at a duly called annual or special meeting of our stockholders.
Business Combinations with Interested Stockholders
We will elect in our amended and restated certificate of incorporation not to be subject to Section 203 of the DGCL, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we will not be subject to any anti-takeover effects of Section 203. However, our amended and restated certificate of incorporation will contain provisions that have the same effect as Section 203, except that they will provide that both Sun Capital and its affiliates and any persons to whom such persons sell their common stock will be deemed to have been approved by our board of directors, and thereby not subject to the restrictions set forth in our amended and restated certificate of incorporation that have the same effect as Section 203.
Requirements for Amendments to our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws
Prior to the Trigger Date, our amended and restated certificate of incorporation will provide that our bylaws may be adopted, amended, altered or repealed by the vote of a majority of the voting power of our then outstanding voting stock, voting together as a single class. After the Trigger Date, our bylaws may be adopted, amended, altered or repealed by either (i) a vote of a majority of the total number of directors that the company would have if there were no vacancies or (ii) in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least 66 2/3% of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class.
Following the Trigger Date, our amended and restated certificate of incorporation will provide that the provisions of our certificate of incorporation relating to the size and composition of our board of directors, limitation on liabilities of directors, stockholder action by written consent, the ability of
 
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stockholders to call special meetings, business combinations with interested persons, amendment of our bylaws or certificate of incorporation and the Court of Chancery as the exclusive forum for certain disputes, may only be amended, altered, changed or repealed by the affirmative vote of the holders of at least 66 2/3% of the voting power of all of our outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class. Prior to the Trigger Date, our amended and restated certificate of incorporation will provide that such provisions may be amended, altered, changed or repealed by the affirmative vote of the holders of a majority of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class. Our amended and restated certificate of incorporation will also provide that the provision of our certificate of incorporation that deals with corporate opportunity may only be amended, altered or repealed by a vote of 80% of the voting power of our then outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class. See “—Corporate Opportunity.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock will be Broadridge Corporate Issuer Solutions, Inc.
 
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 SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could adversely affect market prices prevailing from time to time. Furthermore, because only a limited number of shares will be available for sale shortly after this offering due to existing contractual and legal restrictions on resale as described below, there may be sales of substantial amounts of our common stock in the public market after the restrictions lapse. This may put downward pressure on the market price of our common stock and our ability to raise capital through a future sale of our securities.
Upon the consummation of this offering,                      shares of common stock will be outstanding. The number of shares outstanding after this offering is based on the number of shares outstanding as of October 5, 2013. The              shares sold in this offering and shares sold by certain stockholders pursuant to Rules 144 and 701 under the Securities Act will be freely tradable without restriction under the Securities Act, unless those shares are purchased by affiliates as that term is defined in Rule 144. Persons who may be deemed to be affiliates generally include individuals or entities that control, are controlled by, or are under common control with, us and may include our directors and officers. The remaining              shares of common stock held by existing stockholders are “restricted securities” within the meaning of Rule 144 under the Securities Act. Restricted shares may be sold in the public market only if they are registered under the Securities Act or if they qualify for an exemption from registration, such as Rule 701 under the Securities Act, or meet the safe harbor requirements of Rule 144 under the Securities Act, which are summarized below. The remaining shares of common stock held by our existing stockholders upon the consummation of this offering will be available for sale in the public market after the expiration of the lock-up agreements described below and under “Other Information Related to this Offering—Underwriting,” taking into account the provisions of Rules 144 and 701 of the Securities Act.
Sales of Restricted Shares and Shares Held by Our Affiliates
Rule 144
In general, under Rule 144, an affiliate who beneficially owns shares that were purchased from us, or any affiliate, at least six months previously, is entitled to sell, upon the expiration of the lock-up agreement described below and in “Other Information Related to this Offering—Underwriting” and within any three month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of 1% of our then-outstanding shares of common stock, which will equal approximately                  shares immediately after this offering, or the average weekly trading volume of our common stock on NYSE during the four calendar weeks preceding the filing of a notice of the sale with the SEC. Sales under Rule 144 are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.
Under Rule 144(b)(1), a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least six months (including the holding period of any prior owner other than an affiliate), is entitled to sell its shares without complying with the volume limitation or the manner of sale or notice provisions of Rule 144 beginning 90 days after the date of this prospectus, provided current public information about us is available. A person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least one year (including the holding period of any prior owner other than an affiliate), is entitled to freely sell such shares under Rule 144 without restrictions.
 
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Rule 701
Subject to certain limitations on the aggregate offering price of a transaction and other conditions, Rule 701 may be relied upon with respect to the resale of securities originally purchased from us by our employees, directors, officers, consultants or advisors prior to the date we become subject to the reporting requirements of the Exchange Act. To be eligible for resale under Rule 701, shares must have been issued in connection with written compensatory benefit plans or written contracts relating to the compensation of such persons. In addition, the SEC has indicated that Rule 701 will apply to typical stock options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after the date of this offering. Securities issued in reliance on Rule 701 are restricted securities and, subject to the contractual restrictions described below, beginning 90 days after the date of this prospectus, may be sold by persons other than “affiliates,” as defined in Rule 144, subject only to the manner of sale provisions of Rule 144 and by “affiliates” under Rule 144 without compliance with its one-year minimum holding period requirement. Subject to the 180 day lock-up period described below and in “Other Information Related to this Offering—Underwriting,” approximately              shares of our common stock will be eligible for sale in accordance with Rule 701.
Sales under Rules 144 and 701
No precise prediction can be made as to the effect, if any, that market sales of shares or the availability of shares for sale will have on the market price of our common stock prevailing from time to time. We are unable to estimate the number of our shares that may be sold in the public market pursuant to Rule 144 or Rule 701 (or pursuant to Form S-8, if applicable) because this will depend on the market price of our common stock, the personal circumstances of the sellers and other factors. Nevertheless, sales of significant amounts of our common stock in the public market could adversely affect the market price of our common stock.
Stock Plan
We intend to file registration statements on Form S-8 under the Securities Act to register (i) all shares of our common stock reserved for issuance under the Vince 2013 Incentive Plan we intend to adopt in connection with this offering, (ii) the vested Kellwood Company options previously issued to employees of the non-Vince businesses under the 2010 Option Plan that will be cancelled in exchange for shares of our common stock and (iii) all shares of our common stock reserved for issuance under the 2010 Option Plan (after giving effect to the exchanges described in clause (ii) and the assumption by Apparel Holding Corp. of Kellwood Company’s remaining obligations under the 2010 Option Plan in connection with the consummation of this offering). We expect to file this registration statement as soon as practicable after this offering and adoption of the 2013 Incentive Plan and Apparel Holding Corp.’s assumption of Kellwood Company’s remaining obligations under the 2010 Option Plan. Accordingly, shares registered under the registration statement on Form S-8 will be available for sale in the open market following its effective date, subject to compliance with the resale provisions of Rule 144 applicable to affiliates. Our 2013 Incentive Plan is described in more detail under “Additional Information Related to Vince—Vince Executive Compensation—Employee Stock Plans—Vince 2013 Incentive Plan.” The 2010 Option Plan is described in more detail under “Additional Information Related to Vince—Vince Executive Compensation—2010 Option Plan.”
 
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Lock-Up Agreements
We and certain holders of substantially all of our common stock outstanding on the date of this prospectus, including the selling stockholders and each of our executive officers and directors, have entered into lock-up agreements with the underwriters providing that we and they will not, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of or hedge any of our shares of common stock, any options or warrants to purchase shares of our common stock, or any securities convertible into, or exchangeable for or that represent the right to receive shares of our common stock, without the prior written consent of Goldman, Sachs & Co. and Robert W. Baird & Co. Incorporated for a period of 180 days from the date of this prospectus. The lock-up agreements are subject to customary exceptions, including transfers of shares (i) as a bona fide gift of shares, provided that the done agrees to be bound in writing by the restrictions described above; (ii) to any trust for the benefit of the lock-up party or the immediate family of the lock-up party, provided that the trustee agrees to be bound in writing by the restrictions described above, and provided further that any such transfer shall not involve a disposition for value; (iii) to the underwriters pursuant to the underwriting agreement; (iv) to the Company to satisfy tax withholding obligations in connection with the exercise of stock options or the vesting of restricted stock outstanding as of the date of the lock-up agreement; (v) in transactions relating to shares of stock acquired in open market transactions after the consummation of this offering; and (vi) by will or intestate succession, provided the beneficiary or beneficiaries thereof agree to be bound in writing by the restrictions described above, and provided further that any such transfer shall not involve a disposition for value; provided further that, in the cases of (iv), (v) and (vi), no filing under the Exchange Act shall be required or voluntarily made. The 180-day lock-up period may be extended under certain circumstances where we release, or pre-announce a release of, our earnings shortly before or after the termination of the 180-day period, or we announce material news or a material event shortly before the termination of the 180-day period, unless Goldman, Sachs & Co. and Robert W. Baird & Co. Incorporated waive, in writing, such extension. For a description of the lock-up agreements that we, all of our directors and executive officers and certain holders of our outstanding shares of common stock have entered into in connection with this offering, see “Other Information Related to this Offering—Underwriting.”
Registration Rights
Our Registration Agreement also provides that shares of our common stock held by Sun Cardinal, SCSF Cardinal or any of their affiliates may be registered on demand and also on registration statements relating to our securities, subject to various conditions and limitations. The right to include shares in an underwritten registration is subject to the ability of the underwriters to limit the number of shares included in the offering. By exercising their registration rights and causing a large number of shares to be registered and sold in the public market, these holders could cause the price of our common stock to fall. In addition, any demand to include such shares in our registration statements could have a material adverse effect on our ability to raise needed capital. For more information, see “Other Information Related to this Offering—Certain Relationships and Related Party Transactions of AHC—Registration Agreement.”
 
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 MATERIAL U.S. TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK
This section summarizes the material U.S. federal income and estate tax considerations relating to the acquisition, ownership and disposition of our common stock by “non-U.S. holders” (defined below) pursuant to this offering. This summary does not provide a complete analysis of all potential U.S. federal income tax and estate tax considerations relating thereto. The information provided below is based upon provisions of the Code, U.S. Treasury regulations promulgated thereunder, rulings and other administrative pronouncements and judicial decisions, all as in effect as of the date hereof. These authorities are subject to different interpretations and may change at any time, possibly retroactively, so as to result in U.S. federal income and estate tax consequences different from those summarized below. We have not sought and do not expect to seek any rulings from the IRS regarding the matters discussed herein. There can be no assurance that the IRS will not take positions concerning the tax consequences of the ownership or disposition of shares of our common stock that differ from those discussed below, in which case, the tax considerations of owning or disposing of our common stock could differ from those described below. We cannot assure you that a change in law will not alter significantly the tax considerations described in this summary. For purposes of this summary, a “non-U.S. holder” is any beneficial owner of our common stock, for U.S. federal income tax purposes, that is an individual, corporation, estate or trust, but is not any of the following:
 
 	Ÿ	 	an individual who is a citizen or resident of the U.S.;	
 
 	Ÿ	 	a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized under the laws of the U.S., any state therein or the District of Columbia;	
 
 	Ÿ	 	a trust if it (1) is subject to the primary supervision of a U.S. court and one or more U.S. persons have authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or	
 
 	Ÿ	 	an estate whose income is subject to U.S. income tax regardless of source.	
If you are an individual, you may, in many cases, be deemed to be a resident alien, as opposed to a nonresident alien, by virtue of being present in the U.S. for at least 31 days in the calendar year and for an aggregate of at least 183 days during a three-year period ending in the current calendar year. Such an individual is urged to consult his or her own tax advisor regarding his or her status as a resident alien for U.S. federal income tax purposes under these rules and the U.S. federal income tax consequences of the ownership or disposition of our common stock. If a partnership or other pass-through entity is a beneficial owner of our common stock, the tax treatment of a partner in the partnership or an owner of the entity will depend upon the status of the partner or other owner and the activities of the partnership or other entity. Any partner in a partnership or owner of a pass-through entity holding shares of our common stock should consult its own tax advisor. A partnership that is not formed under the laws of the U.S. or a state or the District of Columbia is a non-U.S. holder for purposes of the Additional Withholding Rules described below.
This discussion assumes that a non-U.S. holder will hold our common stock as a capital asset (generally, property held for investment). The summary generally does not address tax considerations that may be relevant to particular investors because of their specific circumstances, or because they are subject to special rules, including, without limitation, if the investor is a former citizen or long-term resident of the U.S., a financial institution, an insurance company, a tax-exempt organization, a trader, broker or dealer in securities or currencies, traders that elect to mark–to–market their securities, a “controlled foreign corporation,” a “passive foreign investment company,” an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes (or a partner in a partnership or a beneficial owner of a pass-through entity that holds our common stock), a person who
 
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acquired shares of our common stock as compensation or otherwise in connection with the performance of services, or a person who has acquired shares of our common stock as part of a straddle, hedge, conversion transaction or other integrated investment. Finally, the summary does not describe the effects of the alternative minimum tax, any applicable non-U.S., state or local laws, considerations under the unearned income Medicare contribution tax, or, except to the extent discussed below, the effects of any applicable gift or estate tax laws.
THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED TO CONSTITUTE A COMPLETE DESCRIPTION OF ALL U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES FOR NON-U.S. HOLDERS RELATING TO THE OWNERSHIP AND DISPOSITION OF SHARES OF OUR COMMON STOCK. INVESTORS CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME AND ESTATE TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THE CONSEQUENCES OF NON-U.S., STATE OR LOCAL LAWS, AND TAX TREATIES.
Dividends
We do not expect to declare or pay any dividends on our common stock in the foreseeable future. If we do pay dividends on shares of our common stock, however, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our current and accumulated earnings and profits will constitute a non-taxable return of capital that is applied against and reduces, but not below zero, a non-U.S. holder’s adjusted tax basis in shares of our common stock on a share by share basis. Any remaining excess will be treated as gain realized on the sale or other disposition of our common stock. See “—Sale of Common Stock.”
Any distribution to the extent treated for U.S. federal income tax purposes as a dividend paid to a non-U.S. holder on our common stock will generally be subject to U.S. withholding tax at a 30% rate. The withholding tax might not apply, however, or might apply at a reduced rate, under the terms of an applicable income tax treaty between the U.S. and the non-U.S. holder’s country of residence. You should consult your tax advisors regarding your entitlement to benefits under a relevant income tax treaty. Dividends that are effectively connected with the conduct of a trade or business within the U.S. by a non-U.S. holder (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment of the non-U.S. holder) generally will not be subject to such withholding tax, provided certain certification and disclosure requirements are satisfied (including the provision of a properly completed IRS Form W-8 ECI or other applicable form). Instead, unless an applicable income tax treaty provides otherwise, such dividends will generally be subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. person as defined under the Code. A corporate non-U.S. holder may be subject to an additional “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on its earnings and profits that are effectively connected with its conduct of a U.S. trade or business, unless an applicable income tax treaty provides otherwise.
A non-U.S. holder of shares of our common stock who wishes to claim the benefit of an applicable treaty rate and avoid backup withholding, as discussed below, for dividends will be required (a) to complete IRS Form W-8BEN (or other applicable form) and certify under penalty of perjury that such holder is not a U.S. person as defined under the Code and is eligible for treaty benefits or (b) if shares of our common stock are held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other requirements apply to certain non-U.S. holders that are pass-through entities rather than corporations
 
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or individuals. If you are eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty, you may obtain a refund or credit of any excess amounts withheld by filing an appropriate claim for a refund with the IRS in a timely manner.
If you are a non-U.S. holder (including for this purpose, a partnership) and not an individual, you may be subject to a 30% withholding even if you are eligible to claim the benefits of a tax treaty if you do not comply with certain information reporting rules, described below under “—Additional Withholding Rules.”
Sale of Common Stock
Subject to the discussions below of the backup withholding tax and FATCA withholding, non-U.S. holders will generally not be subject to U.S. federal income tax on any gains realized on the sale, exchange or other disposition of our common stock unless:
 
 	Ÿ	 	the gain (1) is effectively connected with the conduct by the non-U.S. holder of a U.S. trade or business and (2) if required by an applicable income tax treaty between the U.S. and the non-U.S. holder’s country of residence, is attributable to a permanent establishment (or, in certain cases, a fixed base) maintained by the non-U.S. holder in the U.S. (in which case the special rules described below apply);	
 
 	Ÿ	 	the non-U.S. holder is an individual who is present in the U.S. for 183 days or more in the taxable year of the sale, exchange or other disposition of our common stock, and certain other requirements are met; or	
 
 	Ÿ	 	the rules of the Foreign Investment in Real Property Tax Act (“FIRPTA”), treat the gain as effectively connected with a U.S. trade or business.	
In the case of a non-U.S. holder described in the first bullet point above, any gain will be subject to U.S. federal income tax on a net income basis generally in the same manner as if the non-U.S. holder were a U.S. person as defined under the Code (unless an applicable income tax treaty provides otherwise), and a corporate non-U.S. holder may also be subject to the “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on its earnings and profits that are effectively connected with its conduct of a U.S. trade or business, unless an applicable income tax treaty provides otherwise. Except as otherwise provided by an applicable income tax treaty, an individual non-U.S. holder described in the second bullet point above will be subject to a 30% tax on any gain derived from the sale, which may be offset by certain U.S. source capital losses.
The FIRPTA rules may apply to a sale, exchange or other disposition of our common stock if we are, or were within the shorter of the five-year period preceding the disposition and the non-U.S. holder’s holding period, a “U.S. real property holding corporation” (“USRPHC”). In general, we would be a USRPHC if interests in U.S. real estate comprised at least half of our business assets. We do not believe that we are a USRPHC and we do not anticipate becoming one in the future. Even if we become a USRPHC, as long as our common stock is “regularly traded on an established securities market” (as defined in the Code and applicable U.S. Treasury regulations), such common stock will be treated as U.S. real property interests only if beneficially owned by a non-U.S. holder that actually or constructively owned more than 5% of our outstanding common stock at some time within the five-year period preceding the disposition. If we are or become a USRPHC and you actually or constructively owned more than 5% of our common stock at any time during the specified testing period, you will be subject to tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates. You should consult your own tax advisor about the consequences that could result if we are, or become, a USRPHC.
 
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Backup Withholding and Information Reporting
We must report annually to the IRS and to each non-U.S. holder the amount of dividends paid to such holder and the tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable income tax treaty or agreement.
A non-U.S. holder will be subject to backup withholding (currently at a rate of 28%) for dividends paid to such holder unless such holder certifies under penalty of perjury that it is not a U.S. person as defined under the Code (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code), or such holder otherwise establishes an exemption.
Information reporting and, depending on the circumstances, backup withholding will apply to the proceeds of a sale or other disposition by a non-U.S. holder of shares of our common stock within the U.S. or conducted through certain U.S.-related financial intermediaries unless such non-U.S. holder certifies under penalty of perjury that it is not a U.S. person (as defined under the Code), and the payor does not have actual knowledge or reason to know that the non-U.S. holder is a U.S. person, or such non-U.S. holder otherwise establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld from a payment to a holder of common stock under the backup withholding rules can be credited against any U.S. federal income tax liability of the holder and may entitle the holder to a refund, provided that the required information is furnished to the IRS in a timely manner.
Additional Withholding Rules
In addition to withholding described above, under legislation enacted in 2010 and related administrative guidance, known as the “FATCA” legislation, a non-U.S. holder that is an entity (including, for this purpose, a partnership) may be subject to a U.S. withholding tax at a rate of 30% on payments of dividends, if any, that we declare, and on the gross proceeds on the disposition of our common stock, unless the foreign entity has complied with various U.S. information reporting, due diligence and certification requirements that are generally designed to identify U.S. owners or account holders in the foreign entity. Recently finalized Treasury Regulations delay the implementation of withholding under FATCA with respect to dividends until after June 30, 2014, and with respect to payments of gross proceeds until after December 31, 2016.
The withholding under FATCA may be avoided if (i) the foreign entity is a “foreign financial institution” (as defined in this legislation) and such institution enters into an agreement with the U.S. government to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which would include certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) or (ii) the foreign entity is not a “foreign financial institution” and makes a certification identifying its substantial U.S. owners (as defined for this purpose) or makes a certification that such foreign entity does not have any substantial U.S. owners. In certain cases, the relevant foreign financial institution or non-financial foreign entity may qualify for an exemption from, or be deemed to be in compliance with, these rules, or may additionally be required to meet certain other specified requirements. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the U.S. governing FATCA may be subject to different rules.
Non-U.S. holders should consult their tax advisors regarding the possible implications of this legislation on their investment in our common stock.
 
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U.S. Federal Estate Tax
Shares of our common stock that are owned (or treated as owned) by an individual who is not a citizen or resident of the U.S. (as specially defined for U.S. federal estate tax purposes) at the time of death will be included in such individual’s gross estate for U.S. federal estate tax purposes, unless an applicable estate or other tax treaty provides otherwise, and, therefore, may be subject to U.S. federal estate tax.
THE PRECEDING DISCUSSION OF U.S. FEDERAL TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.
 
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 UNDERWRITING
Goldman, Sachs & Co. and Robert W. Baird & Co. Incorporated are acting as joint book-running managers of the offering, and Goldman, Sachs & Co. and Robert W. Baird & Co. Incorporated are the representatives of the underwriters. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc. and J.P. Morgan Securities LLC are joint book-running managers in the offering. We, the selling stockholders and the underwriters have entered into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table from us.

Underwriters	  	Number of Shares	
Goldman, Sachs & Co.	  		  		
Robert W. Baird & Co. Incorporated	  		  		
Merrill Lynch, Pierce, Fenner & Smith
                  Incorporated	  		  		
Barclays Capital Inc.	  		  		
J.P. Morgan Securities LLC	  		  		
KeyBanc Capital Markets Inc.
Stifel, Nicolaus & Company, Incorporated	  		  		
William Blair & Company, L.L.C.	  		  		
	  	 	  	 	
Total	  		  		
	  	 	  	 	
The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised. The obligations of the underwriters under the underwriting agreement may be terminated upon the occurrence of certain stated events.
The underwriters have an option to buy up to an additional              shares from the selling stockholders to cover sales by the underwriters of a greater number of shares than the total number set forth in the table above. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.
The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by us. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase              additional shares from the selling stockholders.

 	  	No Exercise	 	  	Full Exercise	 	
Per Share	  	$	            	  	  	$	            	  	
Total	  	$	 	  	  	$	 	  	
We have agreed to reimburse the underwriters for certain expenses relating to clearing this offering with the Financial Industry Regulatory Authority in an amount up to $20,000.
Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $         per share from the initial public offering price. After the initial offering of the shares, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.
We and holders of substantially all of our common stock on the date of this prospectus, including the selling stockholders and each of our executive officers and directors, have agreed with the
 
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underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date that is 180 days after the date of this prospectus, except with the prior written consent of the representatives. This agreement does not apply to any existing employee benefit plans. See “Other Information Related to this Offering—Shares Eligible for Future Sale” for a discussion of certain transfer restrictions.
Prior to this offering, there has been no public market for the shares. The initial public offering price will be negotiated among us and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses. We offer no assurances that the initial public offering price will correspond to the price at which the shares will trade in the public market subsequent to this offering or that an active trading market for the shares will develop and continue after the offering.
We intend to list the common stock on the NYSE under the symbol “VNCE”. In order to meet one of the requirements for listing the common stock on the NYSE, the underwriters have undertaken to sell lots of 100 or more shares to a minimum of 400 beneficial owners.
We and the selling stockholders have agreed to indemnify the underwriters and their controlling persons against certain liabilities, including liabilities under the Securities Act.
In connection with this offering, the underwriters may purchase and sell shares of common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional shares for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to cover the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the amount of additional shares for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares made by the underwriters in the open market prior to the consummation of the offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of our stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not
 
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required to engage in these activities and may end any of these activities at any time. These transactions may be effected on the NYSE, in the over-the-counter market or otherwise.
The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.
We estimate that our share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $         million.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or
(c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
Each underwriter has represented and agreed that:
(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA would not, if the Issuer was not an authorized person, apply to us; and
(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.
 
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Hong Kong
The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore or the SFA, (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.
Japan
The shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “Financial Instruments and Exchange Law”), and each underwriter has agreed that it will not offer or sell any shares, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.
 
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Switzerland
This document as well as any other material relating to the shares which are the subject of the offering contemplated by this prospectus (the “Shares”), does not constitute an issue prospectus pursuant to Articles 652a and/or 1156 of the Swiss Code of Obligations. The Shares will not be listed on the SIX Swiss Exchange and, therefore, the documents relating to the Shares, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange. The Shares are being offered in Switzerland by way of a private placement, i.e., to a small number of selected investors only, without any public offer and only to investors who do not purchase the Shares with the intention to distribute them to the public. The investors will be individually approached by us from time to time. This document as well as any other material relating to the Shares is personal and confidential and does not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.
Dubai International Financial Centre
This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for this prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
 
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 VALIDITY OF COMMON STOCK
The validity of the common stock being offered hereby will be passed upon for the company by Kirkland & Ellis LLP, Chicago, Illinois. Certain partners of Kirkland & Ellis LLP are members of a limited partnership that is an investor in one or more investment funds affiliated with Sun Capital. Kirkland & Ellis LLP represents entities affiliated with Sun Capital and its affiliates in connection with legal matters. Certain legal matters will be passed upon for the underwriters by Simpson Thacher & Bartlett LLP, Palo Alto, California.
 EXPERTS
The financial statements of Apparel Holding Corp. and Vince, LLC as of February 2, 2013 and January 28, 2012 and for each of the three years in the period ended February 2, 2013 included in this registration statement have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
 WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered by this prospectus. This prospectus does not contain all of the information set forth in the registration statement and its exhibits, certain portions of which are omitted as permitted by the rules and regulations of the SEC. For further information pertaining to us and our common stock to be sold in this offering, we refer you to the registration statement, including its exhibits and the financial statements, notes and schedules filed as a part of that registration statement. Statements contained in this prospectus regarding the contents of any contract or other document referred to in those documents are not necessarily complete, and in each instance we refer you to the copy of the contract or other document filed as an exhibit to the registration statement or other document. Each of these statements is qualified in all respects by this reference.
You may read and copy the registration statement and its exhibits and schedules at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You also may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants, such as Vince Holding Corp., that file electronically with the SEC.
Upon consummation of this offering, we will become subject to the reporting and information requirements of the Exchange Act, and as a result will file reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above. We also maintain a website at www.vince.com , at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus.
 
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Table of Contents
 INDEX TO THE AUDITED FINANCIAL STATEMENTS FOR AHC

Consolidated Financial Statements	  				
Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm on Consolidated Financial Statements	  	 	F-2	  	
Consolidated Statements of Operations	  	 	F-3	  	
Consolidated Statements of Comprehensive Loss	  	 	F-4	  	
Consolidated Balance Sheets	  	 	F-5	  	
Consolidated Statements of Cash Flows	  	 	F-6	  	
Consolidated Statements of Stockholders’ Deficit	  	 	F-7	  	
Notes to Consolidated Financial Statements	  	 	F-8	  	
		
Financial Statement Schedules	  				
Schedule I—Condensed Financial Information of Registrant	  	 	F-51	  	
Schedule II—Valuation and Qualifying Accounts	  	 	F-59	  	
 
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Table of Contents
 Report of Independent Registered Public Accounting Firm
To the Board of Directors of Apparel Holding Corp.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows present fairly, in all material respects, the financial position of Apparel Holding Corp. and its subsidiaries at February 2, 2013 and January 28, 2012, and the results of their operations and their cash flows for each of the three years in the period ended February 2, 2013 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
/s/ PricewaterhouseCoopers LLP
St. Louis, Missouri
July 11, 2013, except for the effects of the discontinued operations discussed in Note 4 to the consolidated financial statements, as to which the date is September 24, 2013
 
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Table of Contents
 APPAREL HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data and share amounts)

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net sales	 	$	586,574	  	 	$	662,846	 	 	$	707,995	  	 	$	319,445	  	 	$	363,967	  	
Cost of products sold	 	 	430,801	  	 	 	490,110	  	 	 	507,905	  	 	 	235,293	  	 	 	256,031	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	155,773	  	 	 	172,736	  	 	 	200,090	  	 	 	84,152	  	 	 	107,936	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 				 				 				 				 				
Selling, general and administrative expenses	 	 	140,567	  	 	 	155,220	  	 	 	177,755	  	 	 	83,526	  	 	 	93,503	  	
Amortization of intangible assets	 	 	954	  	 	 	1,941	  	 	 	1,899	  	 	 	950	  	 	 	950	  	
Restructuring, environmental remediation and other charges	 	 	9,729	  	 	 	2,651	  	 	 	5,091	  	 	 	2,264	  	 	 	827	  	
Impairment of long-lived assets (excluding goodwill)	 	 	438	  	 	 	2,504	  	 	 	2,349	  	 	 	717	  	 	 	—	  	
Impairment of goodwill	 	 	—	  	 	 	10,821	  	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration	 	 	—	  	 	 	(1,578	) 	 	 	(7,162	) 	 	 	(4,507	) 	 	 	(54	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	151,688	  	 	 	171,559	  	 	 	179,932	  	 	 	82,950	  	 	 	95,226	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from operations	 	 	4,085	  	 	 	1,177	  	 	 	20,158	  	 	 	1,202	  	 	 	12,710	  	
Interest expense, net	 	 	103,074	  	 	 	127,148	  	 	 	122,383	  	 	 	74,151	  	 	 	43,671	  	
Gain on acquisition, net of tax	 	 	(939	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment	 	 	(15,912	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Other expense, net	 	 	2,442	  	 	 	1,914	  	 	 	2,723	  	 	 	1,215	  	 	 	1,233	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before provision for income taxes	 	 	(84,580	) 	 	 	(127,885	) 	 	 	(104,948	) 	 	 	(74,164	) 	 	 	(32,194	) 	
Provision for income taxes	 	 	3,507	  	 	 	3,401	 	 	 	708	  	 	 	2,245	  	 	 	2,679	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss from continuing operations	 	 	(88,087	) 	 	 	(131,286	) 	 	 	(105,656	) 	 	 	(76,409	) 	 	 	(34,873	) 	
Net (loss) income from discontinued operations, net of tax	 	 	(16,391	) 	 	 	(16,580	) 	 	 	(2,053	) 	 	 	(4,798	) 	 	 	9,230	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(104,478	) 	 	$	(147,866	) 	 	$	(107,709	) 	 	$	(81,207	) 	 	$	(25,643	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted earnings per share	 				 				 				 				 				
Net loss from continuing operations	 	$	(0.10	) 	 	$	(0.14	) 	 	$	(0.12	) 	 	$	(0.08	) 	 	$	(0.04	) 	
Net (loss) income from discontinued operations	 	 	(0.01	) 	 	 	(0.02	) 	 	 	—	  	 	 	(0.01	) 	 	 	0.01	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(0.11	) 	 	$	(0.16	) 	 	$	(0.12	) 	 	$	(0.09	) 	 	$	(0.03	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of common shares outstanding, basic and diluted	 	 	919,118	  	 	 	919,118	  	 	 	919,118	  	 	 	919,118	  	 	 	919,118	  	
See accompanying notes to Consolidated Financial Statements.
 
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Table of Contents
 APPAREL HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net loss	 	$	(104,478	) 	 	$	(147,866	) 	 	$	(107,709	) 	 	$	(81,207	) 	 	$	(25,643	) 	
Foreign currency translation adjustment	 	 	100	 	 	 	(1	) 	 	 	(3	) 	 	 	4	  	 	 	(42	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive loss	 	$	(104,378	) 	 	$	(147,867	) 	 	$	(107,712	) 	 	$	(81,203	) 	 	$	(25,685	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to Consolidated Financial Statements.
 
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Table of Contents
 APPAREL HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

 	 	January 28,
2012	 	 	February 2,
2013	 	 	August 3,
2013	 	
 	 	 	 	 	 	 	 	(unaudited)	 	
Assets	 				 				 				
				
Current assets:	 				 				 				
Cash and cash equivalents	 	$	1,839	  	 	$	1,881	  	 	$	2,178	  	
Trade receivables, net	 	 	99,155	  	 	 	108,343	  	 	 	115,248	  	
Other receivables	 	 	973	  	 	 	961	  	 	 	470	  	
Inventories, net	 	 	73,441	  	 	 	74,056	  	 	 	93,858	  	
Prepaid expenses and other current assets	 	 	8,060	  	 	 	9,861	  	 	 	17,001	  	
Current assets of discontinued operations	 	 	27,786	  	 	 	4,690	  	 	 	136	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	 	 	211,254	  	 	 	199,792	  	 	 	228,891	  	
Property, plant and equipment:	 				 				 				
Land	 	 	62	  	 	 	62	  	 	 	62	  	
Building and improvements	 	 	18,084	  	 	 	19,132	  	 	 	20,341	  	
Machinery and equipment	 	 	8,062	  	 	 	9,778	  	 	 	10,013	  	
Capitalized software	 	 	24,010	  	 	 	24,775	  	 	 	24,457	  	
Construction in process	 	 	1,740	  	 	 	758	  	 	 	3,579	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total property, plant and equipment	 	 	51,958	  	 	 	54,505	  	 	 	58,452	  	
Less accumulated depreciation and amortization	 	 	(33,332	) 	 	 	(36,668	) 	 	 	(38,191	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	18,626	  	 	 	17,837	  	 	 	20,261	  	
Intangible assets, net	 	 	149,386	  	 	 	146,287	  	 	 	145,331	  	
Goodwill	 	 	65,876	  	 	 	65,876	  	 	 	65,876	  	
Other assets	 	 	11,159	  	 	 	8,636	  	 	 	7,405	  	
Long-term assets of discontinued operations	 	 	12,144	  	 	 	3,696	  	 	 	27	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	468,445	  	 	$	442,124	  	 	$	467,791	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities and Stockholders’ Deficit	 				 				 				
				
Current liabilities:	 				 				 				
Short-term borrowings	 	$	88,222	  	 	$	79,783	  	 	$	115,601	  	
Accounts payable	 	 	74,542	  	 	 	71,257	  	 	 	73,510	  	
Accrued salaries and employee benefits	 	 	8,855	  	 	 	20,290	  	 	 	13,886	  	
Other accrued expenses	 	 	14,580	  	 	 	14,979	  	 	 	16,535	  	
Current liabilities of discontinued operations	 	 	27,204	  	 	 	3,737	  	 	 	1,698	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total current liabilities	 	 	213,403	  	 	 	190,046	  	 	 	221,230	  	
Long-term debt	 	 	934,354	  	 	 	761,752	  	 	 	386,842	  	
Deferred income taxes and other	 	 	60,593	  	 	 	49,175	  	 	 	36,409	  	
Long-term liabilities of discontinued operations	 	 	3,116	  	 	 	2,416	  	 	 	2,412	  	
				
Commitments and contingencies (Note 15)	 				 				 				
				
Stockholders’ deficit:	 				 				 				
Voting Common Stock at $0.001 par value (1,200,000 shares authorized, 918,924.91 issued and outstanding)	 	 	1	  	 	 	1	  	 	 	1	  	
Non-voting Common Stock at $0.001 par value (1,700,000 shares authorized, 193.09 issued and outstanding)	 	 	—	  	 	 	—	  	 	 	—	  	
Additional paid in capital	 	 	97,212	  	 	 	386,680	  	 	 	794,528	  	
Accumulated deficit	 	 	(840,171	) 	 	 	(947,880	) 	 	 	(973,523	) 	
Accumulated other comprehensive loss	 	 	(63	) 	 	 	(66	) 	 	 	(108	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ deficit	 	 	(743,021	) 	 	 	(561,265	) 	 	 	(179,102	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and stockholders’ deficit	 	$	468,445	  	 	$	442,124	  	 	$	467,791	  	
	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to Consolidated Financial Statements.
 
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Table of Contents
 APPAREL HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Operating activities	 				 				 				 				 				
Net loss	 	$	(104,478	) 	 	$	(147,866	) 	 	$	(107,709	) 	 	$	(81,207	) 	 	$	(25,643	) 	
Add (deduct) items not affecting operating cash flows:	 				 				 				 				 				
Depreciation	 	 	9,256	  	 	 	9,024	  	 	 	6,198	  	 	 	3,355	  	 	 	2,765	  	
Amortization of intangible assets	 	 	1,037	  	 	 	2,049	  	 	 	2,192	  	 	 	1,211	  	 	 	950	  	
Amortization of bond discounts and debt issuance costs	 	 	6,753	  	 	 	6,395	  	 	 	7,199	  	 	 	3,635	  	 	 	3,470	  	
Deferred income taxes	 	 	4,091	  	 	 	2,734	  	 	 	1,410	  	 	 	1,653	  	 	 	(9,699	) 	
Share-based compensation expense	 	 	248	  	 	 	65	  	 	 	367	  	 	 	13	  	 	 	321	  	
Capitalized PIK Interest	 	 	75,108	  	 	 	92,100	  	 	 	86,460	  	 	 	55,174	  	 	 	23,341	  	
Other charges (gains):	 				 				 				 				 				
Restructuring, environmental remediation and other charges	 	 	13,304	  	 	 	3,140	  	 	 	5,500	  	 	 	2,485	  	 	 	1,335	  	
Impairment of long-lived assets	 	 	24,567	  	 	 	19,463	  	 	 	6,729	  	 	 	717	  	 	 	434	  	
Deferred debt issuance cost write-off	 	 	738	  	 	 	1,747	  	 	 	397	  	 	 	—	  	 	 	—	  	
(Gain) loss on disposition of property, plant and equipment	 	 	(19	) 	 	 	463	  	 	 	483	  	 	 	164	  	 	 	262	  	
Gain on dispositions of trademarks, net	 	 	—	  	 	 	—	  	 	 	(4,226	) 	 	 	(4,228	) 	 	 	(1,298	) 	
(Gain) loss on dispositions of businesses, net	 	 	—	  	 	 	—	  	 	 	(7,262	) 	 	 	1,866	  	 	 	—	  	
Gain on dispositions of other assets	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(292	) 	
Change in fair value of contingent consideration	 	 	—	  	 	 	(1,578	) 	 	 	(7,162	) 	 	 	(4,507	) 	 	 	(54	) 	
Gain on acquisition, net of tax	 	 	(939	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment	 	 	(15,912	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Changes in assets and liabilities, net of acquisitions:	 				 				 				 				 				
Receivables, net	 	 	(5,823	) 	 	 	(20,851	) 	 	 	(3,612	) 	 	 	(7,537	) 	 	 	(4,184	) 	
Inventories, net	 	 	(28,540	) 	 	 	(5,863	) 	 	 	2,053	  	 	 	(8,284	) 	 	 	(18,776	) 	
Prepaid expenses and other current assets	 	 	(2,752	) 	 	 	(228	) 	 	 	(1,007	) 	 	 	(2,330	) 	 	 	(7,265	) 	
Accounts payable and accrued expenses	 	 	(6,027	) 	 	 	12,599	  	 	 	7,791	  	 	 	1,631	  	 	 	(4,215	) 	
Other assets and liabilities	 	 	3,243	  	 	 	1,302	  	 	 	(5,711	) 	 	 	2,563	  	 	 	205	  	
Payment of liabilities associated with restructuring and environmental remediation activities	 	 	(18,595	) 	 	 	(12,949	) 	 	 	(16,124	) 	 	 	(7,417	) 	 	 	(2,659	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by operating activities	 	 	(44,740	) 	 	 	(38,254	) 	 	 	(26,034	) 	 	 	(41,043	) 	 	 	(41,002	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investing activities	 				 				 				 				 				
Payments for capital expenditures	 	 	(5,327	) 	 	 	(10,275	) 	 	 	(10,138	) 	 	 	(6,084	) 	 	 	(5,489	) 	
Payments for intangible assets	 	 	—	  	 	 	(132	) 	 	 	—	  	 	 	—	  	 	 	(60	) 	
Payments for acquisitions, net of cash acquired	 	 	(28,719	) 	 	 	(59,154	) 	 	 	(806	) 	 	 	(806	) 	 	 	—	  	
Proceeds from dispositions of property, plant and equipment, net	 	 	25	  	 	 	9	  	 	 	1,978	  	 	 	—	  	 	 	—	  	
Proceeds from dispositions of trademarks, net	 	 	—	  	 	 	—	  	 	 	4,617	  	 	 	4,619	  	 	 	4,800	  	
Proceeds from dispositions of businesses, net	 	 	—	  	 	 	—	  	 	 	22,310	  	 	 	1,749	  	 	 	150	  	
Proceeds from dispositions of other assets	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	608	  	
Deposits to restricted accounts	 	 	—	  	 	 	—	  	 	 	(2,466	) 	 	 	(1,966	) 	 	 	—	  	
Deposits released from restricted accounts	 	 	—	  	 	 	—	  	 	 	1,966	  	 	 	—	  	 	 	500	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by investing activities	 	 	(34,021	) 	 	 	(69,552	) 	 	 	17,461	  	 	 	(2,488	) 	 	 	509	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financing activities	 				 				 				 				 				
Borrowings of short-term debt obligations	 	 	—	  	 	 	14,900	  	 	 	—	  	 	 	—	  	 	 	—	  	
Payments for short-term debt obligations	 	 	—	  	 	 	(14,900	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Borrowings of long-term loan obligations	 	 	22,393	  	 	 	79,900	  	 	 	30,000	  	 	 	30,000	  	 	 	5,000	  	
Payments for debt extinguishment	 	 	(9,060	) 	 	 	—	  	 	 	(15,000	) 	 	 	—	  	 	 	—	  	
Borrowings of revolving credit facilities	 	 	185,172	  	 	 	399,621	  	 	 	620,367	  	 	 	221,940	  	 	 	392,635	  	
Payments for revolving credit facilities	 	 	(127,576	) 	 	 	(368,995	) 	 	 	(623,806	) 	 	 	(205,404	) 	 	 	(356,817	) 	
Fees paid for amendments to credit facility	 	 	(3,644	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Fees paid for short-term debt obligations	 	 	—	  	 	 	(101	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Fees paid for revolving credit facilities	 	 	—	  	 	 	(2,147	) 	 	 	(114	) 	 	 	(114	) 	 	 	—	  	
Fees paid for long-term loan obligations	 	 	—	  	 	 	(2,675	) 	 	 	(643	) 	 	 	(643	) 	 	 	(28	) 	
Payments to settle contingent consideration recognized at acquisition	 	 	—	  	 	 	—	  	 	 	(1,928	) 	 	 	(1,928	) 	 	 	—	  	
Change in bank overdraft	 	 	34	  	 	 	(1,144	) 	 	 	(261	) 	 	 	(261	) 	 	 	—	  	
Other	 	 	(14	) 	 	 	(8	) 	 	 	—	  	 	 	—	  	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by financing activities	 	 	67,305	  	 	 	104,451	  	 	 	8,615	  	 	 	43,590	  	 	 	40,790	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Decrease) increase in cash and cash equivalents	 	 	(11,456	) 	 	 	(3,355	) 	 	 	42	  	 	 	59	  	 	 	297	  	
Cash and cash equivalents, beginning of period	 	 	16,650	  	 	 	5,194	  	 	 	1,839	  	 	 	1,839	  	 	 	1,881	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	 	$	5,194	  	 	$	1,839	  	 	$	1,881	  	 	$	1,898	  	 	$	2,178	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Supplemental Disclosures of Cash Flow Information	 				 				 				 				 				
Cash payments for interest	 	$	20,910	  	 	$	23,665	  	 	$	30,454	  	 	$	14,828	  	 	$	14,295	  	
Cash payments for income taxes, net of refunds	 	 	336	  	 	 	1,065	  	 	 	910	  	 	 	182	  	 	 	436	  	
Supplemental Disclosures of Non-Cash Investing and Financing Activities	 				 				 				 				 				
Capital expenditures in accounts payable	 	 	—	  	 	 	451	  	 	 	424	  	 	 	545	  	 	 	807	  	
Accrued purchase consideration for acquisitions	 	 	8,137	  	 	 	806	  	 	 	—	  	 	 	—	  	 	 	—	  	
Accrued adjustment to sale proceeds from disposed business	 	 	—	  	 	 	—	  	 	 	221	  	 	 	—	  	 	 	—	  	
Equity interest retained in disposed business	 	 	—	  	 	 	—	  	 	 	—	  	 	 	424	  	 	 	—	  	
Forgiveness of capitalized and accrued interest on related-party debt	 	 	—	  	 	 	—	  	 	 	(289,101	) 	 	 	—	  	 	 	(407,527	) 	
Capital contribution from stockholder	 	 	—	  	 	 	—	  	 	 	289,101	  	 	 	—	  	 	 	407,527	  	
See accompanying notes to Consolidated Financial Statements.
 
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 APPAREL HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands, except share amounts)

 	 	Common Stock	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Number of
Shares
Outstanding	 	 	Par
Value	 	 	Additional
Paid in
Capital	 	 	Accumulated
Deficit	 	 	Accumulated
Other
Comprehensive
Income	 	 	Total
Stockholders’
Deficit	 	
Balance as of January 30, 2010	 	 	919,118	  	 	$	1	  	 	$	96,899	  	 	$	(587,827	) 	 	$	           (162	) 	 	$	(491,089	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(104,478	) 	 	 	—	  	 	 	(104,478	) 	
Foreign currency translation adjustment	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	100	  	 	 	100	  	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	248	  	 	 	—	  	 	 	—	  	 	 	248	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 29, 2011	 	 	919,118	  	 	 	1	  	 	 	97,147	  	 	 	(692,305	) 	 	 	(62	) 	 	 	(595,219	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(147,866	) 	 	 	—	  	 	 	(147,866	) 	
Foreign currency translation adjustment	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(1	) 	 	 	(1	) 	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	65	  	 	 	—	  	 	 	—	  	 	 	65	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 28, 2012	 	 	919,118	  	 	 	1	  	 	 	97,212	  	 	 	(840,171	) 	 	 	(63	) 	 	 	(743,021	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(107,709	) 	 	 	—	  	 	 	(107,709	) 	
Foreign currency translation adjustment	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(3	) 	 	 	(3	) 	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	367	  	 	 	—	  	 	 	—	  	 	 	367	  	
Capital contribution from stockholder	 	 	—	  	 	 	—	  	 	 	289,101	  	 	 	—	  	 	 	—	  	 	 	289,101	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of February 2, 2013	 	 	919,118	  	 	 	1	  	 	 	386,680	  	 	 	(947,880	) 	 	 	(66	) 	 	 	(561,265	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(25,643	)  	 	 	—	  	 	 	(25,643	) 	
Foreign currency translation adjustment (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(42	) 	 	 	(42	) 	
Share-based compensation expense (unaudited)	 	 	—	  	 	 	—	  	 	 	321	  	 	 	—	  	 	 	—	  	 	 	321	  	
Capital contribution from stockholder (unaudited)	 	 	—	  	 	 	—	  	 	 	407,527	  	 	 	—	  	 	 	—	  	 	 	407,527	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of August 3, 2013 (unaudited)	 	 	919,118	  	 	$	1	  	 	$	794,528	  	 	$	(973,523	) 	 	$	(108	) 	 	$	(179,102	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to Consolidated Financial Statements.
 
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 APPAREL HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data and share amounts)
Note 1. Summary of Significant Accounting Policies
(A) Description of Business :    Apparel Holding Corp. (“AHC”), together with its wholly—owned subsidiaries, design, merchandise and sell a growing collection of premier fashion brands across a broad range of consumer lifestyles, and recreational apparel and products aimed to improve the consumer outdoor experience. We market branded as well as private label products and market to all channels of distribution with product specific to the particular channel. We market products under many brands, some of which we own, and others that are under licensing agreements. The majority of our products are sourced from contract manufacturers, primarily in the Eastern Hemisphere. Products are manufactured to meet our product specifications and labor standards.
(B) Basis of Presentation :    The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).
The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. The amounts and disclosures included in the notes to the consolidated financial statements, unless otherwise indicated, are presented on a continuing operations basis. In the opinion of management, the financial statements contain all adjustments (consisting solely of normal recurring adjustments) and disclosures necessary to make the information presented therein not misleading. As used in this report, unless the context requires otherwise, “our,” “us” and “we” refer to AHC and its consolidated subsidiaries.
Under the terms of the agreements governing the Wells Fargo Facility, Cerberus Term Loan, and 12.785% Notes (as defined in Notes 7 and 8 of the Consolidated Financial Statements), Kellwood Company, a wholly-owned subsidiary of AHC and substantially all of its existing and future 100%-owned U.S. subsidiaries are significantly restricted, under certain circumstances, from making dividend payments, loans or advances to AHC. Additionally, our cash is under the control of a third party agent until certain minimum cash thresholds are met for a specified minimum period of time. These restrictions have resulted in the restricted net assets (as defined in Rule 4-08(e)(3) of Regulation S-X) of our subsidiaries exceeding 25% of the consolidated net assets of AHC. The condensed financial statements presented in Schedule I should be read in conjunction with the consolidated financial statements and related notes thereto included in this filing.
(C) Fiscal Year and Fiscal Quarter :    AHC operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31 of the following year.
 
 	Ÿ	 	References to “fiscal year 2010” or “fiscal 2010” refer to the fiscal year ended January 29, 2011;	
 
 	Ÿ	 	References to “fiscal year 2011” or “fiscal 2011” refer to the fiscal year ended January 28, 2012;	
 
 	Ÿ	 	References to “fiscal year 2012” or “fiscal 2012” refer to the fiscal year ended February 2, 2013;	
 
 	Ÿ	 	References to “first six months of fiscal 2012” refer to the six months ended July 28, 2012; and	
 
 	Ÿ	 	References to “first six months of fiscal 2013” refer to the six months ended August 3, 2013.	
 
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Fiscal year 2012 consisted of a 53-week period and each of fiscal years 2011 and 2010 consisted of a 52-week period. The first six months of fiscal 2013 and the first six months of fiscal 2012 each consisted of 26 weeks.
(D) Unaudited Interim Financial Statements :    The accompanying consolidated balance sheet as of August 3, 2013, the consolidated statements of operations and cash flows for the six months ended July 28, 2012 and August 3, 2013 and the consolidated statement of stockholders’ deficit for the six months ended August 3, 2013 are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position as of August 3, 2013 and our results of operations and cash flows for the six months ended July 28, 2012 and August 3, 2013. The financial data and other financial information disclosed in these notes to the consolidated financial statements related to the interim periods are unaudited. The results of operations for the six months ended August 3, 2013 are not necessarily indicative of the results to be expected for the fiscal year ending February 1, 2014 or for any other future year or interim period.
(E) Use of Estimates :    The preparation of consolidated financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements which affect revenues and expenses during the period reported. Estimates are adjusted when necessary to reflect actual experience. Significant estimates and assumptions may affect many items in the financial statements. These include restructuring and environmental remediation reserves, accounts receivable allowances, valuations of goodwill and other identified intangible assets, valuation of contingent consideration, income tax liabilities and assets and related valuation allowances, inventory obsolescence, asset impairments, valuation of share-based compensation, and other contingencies. Actual results may differ from those estimates and assumptions.
(F) Financial Condition and Liquidity :    We have substantial indebtedness after giving effect to our February 2008 acquisition of Kellwood Company by affiliates of Sun Capital Partners, Inc. (the “Acquisition”). Since the Acquisition, we have incurred additional debt in order to fund negative cash flows, principally due to significant cash outflows resulting from numerous restructuring activities, the significant level of interest expense arising from substantial indebtedness and significant cash outflows related to payments for acquisitions. As of February 2, 2013, total debt (including short-term borrowings) was $841,535, a decrease of $181,041 since January 28, 2012. The decrease is primarily related to a debt extinguishment of capitalized and accrued interest related to our Sun Promissory Notes and Sun Capital Loan Agreement as defined and further discussed in Note 8. As of August 3, 2013 (unaudited), total debt was $502,443. Our net losses for fiscal 2010, fiscal 2011, and fiscal 2012 were $104,478, $147,866, and $107,709, respectively, and our net loss for the first six months of fiscal 2013 (unaudited) was $25,643. The retail and apparel industry and economy as a whole have suffered recessionary conditions, a decline in employment levels and declines in consumer confidence since the Acquisition, which have negatively impacted our operating results. As a result, we have been, and continue to be, challenged by our heavily leveraged capital structure, negative cash flows, and significant level of interest expense. We expect that cash on hand, cash flows from operating activities, and available credit under the Wells Fargo Facility (as defined in Note 7) will be adequate to meet our liquidity needs for the next 12 months. As of October 5, 2013 (unaudited), availability under the Wells Fargo Facility was $17,734.
The Credit Agreement and Term Loan Agreement (as defined in Notes 7 and 8) contain certain financial covenants related to the fixed charge coverage ratio and leverage ratio, as those terms are defined in those agreements. On May 3, 2013, the Term Loan Agreement was amended in anticipation of not being in compliance with the fixed charge coverage ratio covenant during the 2013 fiscal year. Kellwood Company
 
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was in compliance with all covenants under its debt agreements for fiscal year 2012 and expects to be in compliance with all covenants, as amended, during fiscal year 2013, as further detailed in Notes 7 and 8.
If Kellwood Company, our wholly-owned subsidiary, experiences an event of default under its Credit Agreement or Term Loan Agreement, including but not limited to a failure to pay cash interest obligations under said agreements or under the indentures, or a failure to maintain, or a failure to cure a default of, the applicable fixed charge or leverage ratios under such instruments, or other lack of liquidity caused by substantial leverage and the adverse conditions in the retail and apparel market or other factors, such an event would materially and adversely affect our financial condition and our operating results.
We will continue to evaluate potential financing transactions, including refinancing certain tranches of our subsidiaries’ indebtedness, issuing incremental debt, obtaining incremental letter of credit facilities and extending maturities of our existing debt, as well as evaluate other potential transactions which may provide us with additional liquidity. In addition, our capital and selling, general and administrative spending, restructuring plans, and growth initiatives contain discretionary elements. The discretionary elements can be deferred or otherwise eliminated in the near term to provide additional flexibility to manage our liquidity requirements. There can be no assurance as to which, if any, of these alternatives we may pursue as the choice of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our existing financing agreements and the consents we may need to obtain under the relevant documents. There also can be no assurance that financing or refinancing will be available to us on acceptable terms or at all.
(G) Cash and cash equivalents.     All demand deposits and highly liquid short-term deposits with original maturities of three months or less maintained under cash management activities are considered cash equivalents. The effect of foreign currency exchange rate fluctuations on cash and cash equivalents was not significant for fiscal 2010, fiscal 2011, or fiscal 2012.
(H) Accounts Receivable and Concentration of Credit Risk :    We maintain an allowance for trade accounts receivable estimated to be uncollectible. The activity in this allowance for continuing operations is summarized as follows (in thousands):

 	  	Fiscal Year
2010	 	 	Fiscal Year
2011	 	 	Fiscal Year
2012	 	
Balance, beginning of year	  	$	1,376	  	 	$	926	  	 	$	1,004	  	
(Reversals) provisions for bad debt expense	  	 	(473	) 	 	 	464	  	 	 	779	  	
Bad debts recovered (written off)	  	 	23	  	 	 	(386	) 	 	 	(922	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of year	  	$	926	  	 	$	1,004	  	 	$	861	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The provision for bad debts is included in selling, general and administrative expense. Substantially all of our trade receivables are derived from sales to retailers and are recorded at the invoiced amount and do not bear interest. We perform ongoing credit evaluations of our customers’ financial condition and require collateral as deemed necessary. Account balances are charged off against the allowance when we believe the receivable will not be collected.
Trade accounts receivable are recorded net of allowances for expected future chargebacks from customers. It is the nature of the apparel and recreational products industry that suppliers like us face significant pressure from customers in the retail industry to provide allowances to compensate for customer margin shortfalls. This pressure often takes the form of customers requiring us to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these
 
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concessions is largely determined by overall retail sales performance and, more specifically, the performance of our products at retail. To the extent our customers have more of our goods on hand at the end of the season, there will be greater pressure for us to grant markdown concessions on prior shipments. Our trade accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and our estimates of the level of markdowns and allowances that will be required in the coming season in order to collect the receivables. We evaluate the allowance balances on a continual basis and adjust them as necessary to reflect changes in anticipated allowance activity. We also provide an allowance for sales returns based on historical return rates, which is addressed further in our discussion of revenue recognition below.
In fiscal 2012, no customer accounted for more than 10% of net sales. In fiscal 2011, sales to one customer accounted for more than 10% of our consolidated net sales of continuing operations. These sales represented 14% of fiscal 2011 net sales. In fiscal 2010, sales to two customers accounted for more than 10% of our consolidated net sales from continuing operations. These sales represented 15% and 12% of fiscal 2010 net sales, respectively. For fiscal 2010 and fiscal 2011, we generated sales from these two major customers within our Vince, Juniors, and Moderate segments.
No individual customer represented more than 10% of trade accounts receivable in fiscal 2012, however in fiscal 2011 accounts receivable from one customer accounted for more than 10% of gross accounts receivable in continuing operations. These receivables represented 13% of fiscal 2011 gross accounts receivable in continuing operations.
(I) Inventories and Cost of Products Sold :    Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out basis. The cost of inventory includes manufacturing or purchase cost as well as sourcing, pre-production, transportation, duty, overhead costs, and other processing costs associated with acquiring, importing and preparing inventory for sale. Inventory costs are included in cost of products sold at the time of their sale. In addition to inventory costs, other costs included in cost of products sold are royalties for licensed brand names and distribution costs. Product development costs are expensed in selling, general and administrative expense when incurred. Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost. Inventories of continuing operations consist of the following (in thousands):

 	  	January 28,
2012	 	  	February 2,
2013	 	  	August 3,
2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Finished goods	  	$	70,442	  	  	$	71,588	  	  	$	92,107	  	
Work in process	  	 	1,096	  	  	 	1,085	  	  	 	663	  	
Raw materials	  	 	1,903	  	  	 	1,383	  	  	 	1,088	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total inventories	  	$	73,441	  	  	$	74,056	  	  	$	93,858	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net of reserves of:	  	$	7,889	  	  	$	6,722	  	  	$	8,029	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
(J) Property, Plant and Equipment :    Property, plant and equipment are stated at cost. Depreciation is computed generally on the straight-line method over estimated useful lives of 15 years for buildings and of 3 to 10 years for machinery and equipment. Leasehold improvements are amortized principally on the straight-line basis over the shorter of their estimated useful lives or the remaining lease term, excluding renewal terms. Capitalized software is amortized on the straight-line basis over the estimated economic useful life of the software, generally 3 to 5 years. Depreciation expense related to continuing operations was $9,068, $8,373 and $5,129 for fiscal 2010, fiscal 2011, and fiscal 2012, respectively.
 
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(K) Impairment of Long-lived Assets :    We review long-lived assets with a finite life for existence of facts and circumstances which indicate that the asset useful life is shorter than previously estimated or the carrying amount may not be recoverable from future operations based on undiscounted expected future cash flows. Impairment losses are then recognized in operating results to the extent discounted expected future cash flows are less than the carrying value of the asset. See Note 3 to the Consolidated Financial Statements for discussion of impairment of long-lived assets related to certain restructuring activities.
(L) Goodwill and Other Intangible Assets:     Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if it appears more likely than not that the carrying amount of an asset exceeds its fair value. We completed our annual impairment testing on our goodwill and indefinite-lived intangible assets during the fourth quarter of fiscal 2012.
Goodwill represents the excess of the cost of acquired businesses over the fair market value of the identifiable net assets. As the acquisition by Kellwood Company of the net assets of Vince occurred prior to the current requirements of ASC Topic 805 Business Combinations , the additional purchase consideration paid to the former owners of Vince subsequent to the acquisition date was recorded as an addition to the purchase price, and therefore goodwill, once determined. Indefinite-lived intangible assets are primarily company-owned trademarks.
In September 2011, the Financial Accounting Standards Board (“FASB”) issued an amendment to the Intangibles-Goodwill and Other topic of Accounting Standards Codification (“ASC”). Under this amendment, an entity may elect to perform a qualitative impairment assessment for goodwill. If adverse qualitative trends are identified during the qualitative assessment that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is required. “Step one” of this quantitative impairment test requires that the fair value of the reporting unit be estimated and compared to its carrying amount. If the carrying amount exceeds the estimated fair value, “step two” of the impairment test is performed to calculate the impairment loss. An impairment loss is recognized to the extent the carrying amount of the reporting unit exceeds the implied fair value.
An entity may pass on performing the qualitative assessment for a reporting unit and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. This amendment is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We early adopted this amendment during fiscal year 2011 for goodwill related to our reporting units, with the exception of Vince, as there was significant related purchase consideration capitalized in fiscal 2011. We performed a qualitative assessment on the Vince reporting unit during fiscal 2012.
In July 2012, the FASB issued Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite Lived Assets for Impairment . Under this amendment, an entity may elect to perform a qualitative impairment assessment for indefinite-lived intangible assets similar to the goodwill impairment testing guidance discussed above.
This amendment is effective for annual and interim impairment tests for indefinite-lived intangible assets performed for fiscal years beginning after September 15, 2012. We early adopted this amendment during fiscal 2012 and performed a quantitative assessment of impairment in fiscal 2012 for trademarks associated with certain brands.
For trademarks that we directly proceeded to “step one” during fiscal 2012, and for impairment tests performed in prior years, we primarily use the relief from royalty method to calculate the fair value of the intangible assets, which uses revenue projections, royalty rates and discount rates in the calculation.
 
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Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.
Definite-lived intangible assets are primarily compromised of customer relationships. These are amortized on a straight-line basis over their useful lives of 10 to 20 years.
See Note 3 and Note 5 to the Consolidated Financial Statements for more information on the details surrounding the goodwill and intangible assets as well as any impairment charges.
(M) Deferred Financing Costs :    Deferred financing costs, such as underwriting, financial advisory, professional fees, and other similar fees are capitalized and recognized in interest expense over the contractual life of the related debt instrument using the straight-line method, as this method results in recognition of interest expense that is materially consistent with that of the effective interest method.
(N) Deferred Rent and Deferred Lease Incentives:     Certain of our operating leases contain predetermined fixed escalations of the minimum rentals during the original term of the lease. For these leases, we recognize the related rental expense on a straight-line basis over the life of the lease and record the difference between the amount charged to operations and amounts paid as deferred rent. Certain of our retail store leases contain provisions for contingent rent, typically a percentage of retail sales once a predetermined threshold has been met. These amounts are expensed as incurred. Additionally, we received lease incentives in certain leases. These allowances have been deferred and are amortized on a straight-line basis over the life of the lease as a reduction of rent expense.
(O) Environmental Remediation Reserves and Expenses :    We recognized, and will continue to recognize, an environmental liability when it is probable, the liability exists, and the amount is reasonably estimable. We estimated the duration and extent of our remediation obligations based upon internal analyses of clean-up costs, ongoing monitoring costs, estimated legal fees, communications with regulatory agencies, and changes in environmental law. If we were to determine that our estimates of the duration or extent of our environmental obligations were no longer accurate, we would adjust our environmental liabilities accordingly in the period that such determination is made. Estimated future expenditures for environmental remediation are discounted to their present value. See Note 15 for additional information.
(P) Foreign Currency Translation :    The financial statements of foreign subsidiaries are translated into United States dollars. Where the functional currency of a foreign subsidiary is its local currency, income statement items are translated at the average exchange rate for the period and balance sheet accounts are translated using period-end exchange rates. Gains and losses resulting from translation are reported as a separate component of other comprehensive loss within stockholders’ deficit and the Consolidated Statements of Comprehensive Loss.
Where the local currency of a foreign subsidiary is not its functional currency, financial statements are translated at either current or historical exchange rates as appropriate. These adjustments, together with gains and losses on foreign currency transactions, are recognized in the income statement as incurred.
(Q) Revenue Recognition :    Sales are recognized when goods are shipped in accordance with customer orders for our wholesale business and ecommerce business, and at the time of register receipt for our retail business. The estimated amounts of sales discounts, returns and allowances are
 
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accounted for as reductions of sales when the associated sale occurs. These estimated amounts are adjusted periodically based on changes in facts and circumstances when the changes become known to us. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the balance sheet for our wholesale businesses. The activity in the accrued discounts, returns, and allowances account is summarized as follows (in thousands).

 	  	Fiscal Year
2010	 	 	Fiscal Year
2011	 	 	Fiscal Year
2012	 	
Balance, beginning of year	  	$	25,767	  	 	$	20,309	  	 	$	21,709	  	
Provision	  	 	74,211	  	 	 	79,780	  	 	 	94,524	  	
Utilization	  	 	(79,669	) 	 	 	(78,380	) 	 	 	(92,073	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of year	  	$	20,309	  	 	$	21,709	  	 	$	24,160	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
For our wholesale businesses, amounts billed to customers for shipping and handling costs are recorded as a reduction to our cost of products sold. These costs are not significant. Our stated terms are FOB shipping point. There is no stated obligation to customers after shipment, other than specifically set forth allowances or discounts that are accrued at the time of sale. The rights of inspection or acceptance contained in certain sales agreements are limited to whether the goods received by our customers are in conformance with the order specifications.
(R) License Agreements :    We have exclusive license agreements to market apparel and recreational products under trademarks owned by other parties. These agreements contain provisions for minimum guaranteed royalty and advertising payments based on anticipated sales. In any year, if we do not anticipate meeting the minimum sales amounts to satisfy the guaranteed minimum royalty and advertising amounts, the guaranteed minimum royalty and advertising amounts are accrued. In fiscal 2010, fiscal 2011, and fiscal 2012, sales of licensed products were approximately $70,373, $58,030, and $62,485, respectively. See Note 15 to the Consolidated Financial Statements for additional discussion regarding license agreement commitments.
(S) Marketing and Advertising :    We provide cooperative advertising allowances to certain of our customers. These allowances are accounted for as reductions in sales as discussed in “Revenue Recognition” above. Advertising expense includes contractually set forth amounts paid to licensors that are specifically identified as advertising payments and advertising we conduct for products we sell. Production expense related to company-directed advertising is deferred until the first time at which the advertisement runs. Communication expense related to company-directed advertising is expensed as incurred. Marketing and advertising expense recorded within selling, general and administrative expenses was $4,821, $7,164, and $9,630, for fiscal 2010, fiscal 2011, and fiscal 2012, respectively. There were not significant amounts of deferred production expenses associated with company-directed advertising at January 28, 2012 and February 2, 2013.
(T) Income Taxes :    We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. We determine the appropriateness of valuation allowances in accordance with the “more likely than not” recognition criteria. We recognize tax positions in the Consolidated Balance Sheets as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with tax authorities assuming full knowledge of the position and all relevant facts. Accrued interest and penalties related to unrecognized tax benefits are included in income taxes in the Consolidated Statements of Operations.
(U) Earnings Per Share :    We calculate basic earnings per share in accordance with ASC Topic 260, Earnings Per Share. This requires the income per share for common stock to be calculated
 
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assuming 100% of our earnings are distributed as dividends to common stock, even though we do not anticipate distributing 100% of our earnings as dividends.
Basic earnings per share applicable to common shareholders is computed by dividing earnings applicable to common shareholders by the weighted-average number of common shares. Since there are no dilutive securities for all periods presented, basic EPS and diluted EPS are the same.
(V) New Accounting Standards:
Presentation of comprehensive income
In June 2011, the FASB issued an accounting standards update regarding the presentation of comprehensive income in financial statements. The provisions of this standard provide an option to present the components of net income and other comprehensive income either as one continuous statement of comprehensive income or as two separate but consecutive statements. The provisions of this new disclosure standard were effective January 1, 2012. We have provided a separate Consolidated Statement of Other Comprehensive Loss during the current year.
In February 2013, the FASB issued another accounting standards update that requires an entity to present the effects of significant reclassifications out of each component of accumulated other comprehensive income on the respective line items of the entity’s statement of operations. This presentation can be made either on the face of the statement of operations or within a note to the financial statements. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. This requirement will only impact the presentation of our financial statements to the extent we have instances of these transactions in the future.
Testing Goodwill for Impairment
In September 2011 and July 2012, the FASB issued amendments to the Intangibles-Goodwill and Other topic of ASC. Under these amendments, an entity may elect to perform a qualitative impairment assessment for goodwill and indefinite-lived intangible assets. We adopted the provisions of these new standards, as discussed above.
Fair Value Measurements
In May 2011, the FASB issued an accounting standards update that resulted in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. The new guidance did not extend the use of fair value accounting, but provided guidance on how it should be applied where its use is already required or permitted by other standards within GAAP. This update was effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance in fiscal 2011 did not have a material impact on our consolidated financial position, results of operations, or cash flows.
Note 2. Business Combinations
Zobha
On July 26, 2011, Kellwood Company, our wholly-owned subsidiary, acquired 100% of the issued and outstanding equity interests of Zobha, LLC and 100% of the issued and outstanding shares of Zobha Limited (together, “Zobha”). Zobha designs and sells women’s athletic apparel, primarily focused on the yoga market, which combines superior performance fabric with a high-fashion inspired design aesthetic.
The total consideration transferred was $1,845, including estimated contingent consideration of $945 that was expected be paid to the seller based on an estimated applicable percentage and the fair
 
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market value of Zobha at the trigger date of the contingent payment, as defined in the Contingent Payment Agreement. The applicable percentage was originally established at 49% and could increase or decrease based on our subsequent capital contributions to the business and future capital contributions by the seller. The contingent payment could have been triggered by us or the seller at any time after January 1, 2016.
The estimated contingent consideration was revised during the fourth quarter of fiscal 2012 based on the most recent forecasted results of operations of Zobha, Zobha contributions to date, and assumed future contributions to Zobha. This resulted in a gain of $531 that was recorded within change in fair value of contingent consideration in the Consolidated Statement of Operations. As of February 2, 2013, we estimated the range of total undiscounted contingent consideration to be between $0 and $215, and we recorded the estimated discounted value of $54 within deferred income taxes and other on the Consolidated Balance Sheet. The amount was subsequently written off during the second quarter of fiscal 2013 when we divested the Zobha business (See Note 4 to our Consolidated Financial Statements) as the estimated discounted value of the contingent consideration was $0 at that time. The contingent consideration was estimated based on a weighted probability EBITDA forecast, the terms of the purchase agreement, assumed capital contributions to Zobha and a trigger date of January 1, 2016. This is considered to be a Level 3 fair value measure as it is measured utilizing significant unobservable inputs.
The Zobha acquisition was accounted for as a business combination, and accordingly, the assets and liabilities of the acquired entities were recorded at their estimated fair value. The following table summarizes the fair value of the assets acquired and the liabilities assumed (in thousands).

 	  	Zobha	 	
 	  	July 26, 2011	 	
ASSETS	  				
Cash	  	$	211	  	
Trade receivables	  	 	25	  	
Inventory	  	 	1,008	  	
Other current assets	  	 	59	  	
Furniture and equipment	  	 	23	  	
Intangible assets:	  				
Trademark	  	 	475	  	
Customer relationships	  	 	103	  	
Goodwill	  	 	225	  	
Other assets	  	 	27	  	
	  	 	 	 	
Total assets acquired	  	$	2,156	  	
	  	 	 	 	
LIABILITIES	  				
Accounts payable	  	 	250	  	
Other accrued expenses	  	 	61	  	
	  	 	 	 	
Total liabilities assumed	  	$	311	  	
	  	 	 	 	
Goodwill consisted of expected growth synergies through expansion of distribution channels and cost synergies resulting from economies of scale and supply chain process improvements. Intangible assets consisted of customer relationships with an estimated average life of 10 years and a trademark with an indefinite life. The goodwill and intangible assets were impaired during fiscal 2011 primarily due to delays in expected growth and cost synergies as further described in Note 3 to the Consolidated Financial Statements. We incurred $586 of acquisition expenses related to the Zobha acquisition and these amounts were recorded in selling, general and administrative expenses in the Consolidated
 
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Statement of Operations. Zobha was divested during the second quarter of fiscal 2013 as further described in Note 4 to the Consolidated Financial Statements.
Rebecca Taylor
On January 4, 2011, Kellwood Company acquired (a) 100% of the capital stock of Meow Inc.; (b) 100% of the capital stock, share capital, interests, units and equivalent interests of each of RT Licensing, Inc., Beth’s Boutique LLC, and MeowHK Limited; and (c) the related intellectual property (together “Rebecca Taylor”). The purchase agreement includes a provision for contingent consideration that will be paid to the sellers if Rebecca Taylor meets certain EBITDA performance targets. If the performance targets are met, annual payments will be due approximately 120 days following the end of our 2011 through 2015 fiscal years (the “Earn-Out Amounts”) with an additional payment approximately 120 days following the end of our 2015 fiscal year based on the cumulative EBITDA results of Rebecca Taylor from 2011 through 2015 fiscal years (the “Earn-Up Amount”). The maximum contingent consideration is not limited; however the Earn-Up Amount is limited to $10,000. At the time of the acquisition, we recorded $9,356 within deferred income taxes and other on the Consolidated Balance Sheet for the fair value of our expected consideration payment.
The estimated contingent consideration was revised during the second and fourth quarters of fiscal 2012 based on the most recent forecasted results of operations of Rebecca Taylor and 2012 financial results. This resulted in a total gain of $6,631 that was recorded in change in fair value of contingent consideration in the Consolidated Statement of Operations. We have estimated the range of total undiscounted contingent consideration payments to be between $7,500 and $9,000.
As of February 2, 2013, we have recorded $4,209 for the fair value of our contingent consideration in deferred income taxes and other on the Consolidated Balance Sheet. The fair value of our total obligation was estimated based on a weighted probability EBITDA forecast and the terms of the purchase agreement, using a discount factor of 22.8%. This is considered to be a Level 3 fair value measure as it is measured utilizing significant unobservable inputs. As of August 3, 2013 (unaudited), we have recorded contingent consideration of $1,413 in other accrued expenses and $3,252 in deferred income taxes and other on the Consolidated Balance Sheet. The Earn-Out Amount for fiscal year 2011 was $1,928 and was paid in May 2012. There was no Earn-Out Amount earned in fiscal year 2012.
On a quarterly basis, management reviews internal EBITDA forecasts and other relevant factors for Rebecca Taylor to assess the appropriateness of the recorded contingent consideration. No adjustments to the estimated fair value of this liability were deemed necessary for the first six months of fiscal 2013.
Goodwill largely consists of expected growth synergies through expansion of distribution channels and cost synergies resulting from economies of scale and supply chain process improvements. Intangible assets consist of customer relationships with an estimated average life of 10 years and a trademark with an indefinite life.
Adam
On August 25, 2010, Kellwood Company acquired certain assets of Adampluseve, Inc. (“Adam”) for the consideration of one dollar and forgiveness of a receivable due to Kellwood Company of $133, and the assumption of certain liabilities. The receivable was a result of inventory payments made by Kellwood Company on the behalf of Adam immediately prior to the acquisition. Adam is a full contemporary sportswear collection for men and women available at its retail stores, online, and luxury retailers under the ADAM ® brand. The acquisition supported our growth strategy of contemporary brands.
 
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The fair value of the identifiable assets acquired less liabilities assumed of $1,637 exceeded the fair value of the consideration of $133. Accordingly, the acquisition has been accounted for as a bargain purchase and, as a result, we recognized a gain of $939 (net of deferred tax of $565) associated with the acquisition in the third quarter of fiscal year 2010 as a gain on acquisition, net of tax on our Consolidated Statement of Operations. Intangible assets recognized as a result of the transaction consisted of customer relationships with an estimated average life of 10 years and a trademark with an indefinite life.
We incurred $271 of acquisition expense during fiscal 2010 related to the Adam acquisition and these amounts were recorded in selling, general and administrative expenses in the Consolidated Statement of Operations for the year ended January 29, 2011. Adam was discontinued during the fourth quarter of fiscal 2011 as further described in Note 4 to the Consolidated Financial Statements.
The Rebecca Taylor and Adam acquisitions were accounted for as business combinations, and accordingly, the assets and liabilities of the acquired entities were recorded at the estimated fair value. The following table summarizes the fair value of the assets acquired and liabilities assumed (in thousands).

 	  	Rebecca Taylor	 	  	Adam	 	
 	  	January 4, 2011	 	  	August 25, 2010	 	
ASSETS	  				  				
Cash	  	$	—	  	  	$	11	  	
Trade receivables	  	 	2,003	  	  	 	696	  	
Inventory	  	 	1,299	  	  	 	1,066	  	
Other current assets	  	 	194	  	  	 	90	  	
Leasehold improvements and equipment	  	 	839	  	  	 	412	  	
Intangible assets:	  				  				
Trademark	  	 	8,509	  	  	 	730	  	
Customer relationships	  	 	9,985	  	  	 	207	  	
Goodwill	  	 	12,951	  	  	 	—	  	
Other assets	  	 	315	  	  	 	106	  	
	  	 	 	 	  	 	 	 	
Total assets acquired	  	$	36,095	  	  	$	3,318	  	
	  	 	 	 	  	 	 	 	
LIABILITIES	  				  				
Capital lease obligation	  	$	5	  	  	$	—	  	
Accounts payable	  	 	1,029	  	  	 	1,284	  	
Other accrued expenses	  	 	1,594	  	  	 	397	  	
	  	 	 	 	  	 	 	 	
Total liabilities assumed	  	$	2,628	  	  	$	1,681	  	
	  	 	 	 	  	 	 	 	
The Zobha, Rebecca Taylor and Adam acquisitions were accounted for under the acquisition method of accounting. Accordingly, their results have been included in the Consolidated Financial Statements from the acquisition dates. Unaudited consolidated results of operations on a pro-forma basis, assuming these acquisitions had occurred at the beginning of the year in which they occurred, are not included as the acquisitions were not significant to our consolidated results of operations.
Vince
In connection with our acquisition of certain net assets from CRL Group, LLC in 2006, owner of the Vince ® brand and trademark, additional cash purchase consideration was paid based upon achievement of certain specified financial performance targets for each of the five full years after the acquisition (2007 through 2011), and the cumulative performance from 2007 to 2011. The additional consideration for fiscal 2010 and fiscal 2011 was $8,137 and $51,134, respectively. We paid $50,328
 
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of the fiscal 2011 consideration during the fourth quarter of fiscal 2011 and paid the remaining consideration during the second quarter of fiscal 2012. The fiscal 2010 additional cash consideration was paid during first quarter of fiscal 2011.
Note 3. Impairment, restructuring, environmental remediation and other charges
For fiscal 2010, fiscal 2011, and fiscal 2012 and the six months ended July 28, 2012 and August 3, 2013, the costs related to impairment of long-lived assets and restructuring, environmental remediation and other charges recorded in continuing and discontinued operations were as follows (in thousands):

 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
Fiscal Year 2010	  	$	10,167	  	  	$	27,704	  	  	$	37,871	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Fiscal Year 2011	  	$	15,976	  	  	$	6,627	  	  	$	22,603	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Fiscal Year 2012	  	$	7,440	  	  	$	4,789	  	  	$	12,229	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
First Six months Fiscal 2012 (unaudited)	  	$	2,981	  	  	$	221	  	  	$	3,202	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
First Six months Fiscal 2013 (unaudited)	  	$	827	  	  	$	942	  	  	$	1,769	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
For fiscal 2010, fiscal 2011, and fiscal 2012, the costs related to impairment of long-lived assets and restructuring, environmental remediation and other charges were recorded as follows (in thousands):

 	  	Fiscal Year 2010	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
Restructuring, environmental remediation and other charges	  	$	9,729	  	  	$	3,575	  	  	$	13,304	  	
Impairment of long-lived assets	  	 	438	  	  	 	24,129	  	  	 	24,567	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	10,167	  	  	$	27,704	  	  	$	37,871	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	10,167	  	  	$	27,704	  	  	$	37,871	  	

													
 	  	Fiscal Year 2011	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
Restructuring, environmental remediation and other charges	  	$	2,651	  	  	$	489	  	  	$	3,140	  	
Impairment of long-lived assets (excluding goodwill)	  	 	2,504	  	  	 	5,913	  	  	 	8,417	  	
Impairment of goodwill	  	 	10,821	  	  	 	225	  	  	 	11,046	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	15,976	  	  	$	6,627	  	  	$	22,603	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	15,124	  	  	$	6,333	  	  	$	21,457	  	

													
 	  	Fiscal Year 2012	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
Restructuring, environmental remediation and other charges	  	$	5,091	  	  	$	409	  	  	$	5,500	  	
Impairment of long-lived assets	  	 	2,349	  	  	 	4,380	  	  	 	6,729	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	7,440	  	  	$	4,789	  	  	$	12,229	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	7,440	  	  	$	4,789	  	  	$	12,229	  	

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For the first six months of fiscal 2012 and fiscal 2013, the costs related to impairment of long-lived assets and restructuring, environmental remediation and other charges were recorded as follows (in thousands):

 	  	First Six Months of Fiscal 2012
(unaudited)	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
Restructuring, environmental remediation and other charges	  	$	2,264	  	  	$	221	  	  	$	2,485	  	
Impairment of long-lived assets	  	 	717	  	  	 	—	  	  	 	717	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	2,981	  	  	$	221	  	  	$	3,202	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	2,981	  	  	$	221	  	  	$	3,202	  	

													
 	  	First Six Months of Fiscal 2013
(unaudited)	 	
 	  	Continuing
Operations	 	  	Discontinued
Operations	 	  	Total	 	
Restructuring, environmental remediation and other charges	  	$	827	  	  	$	508	  	  	$	1,335	  	
Impairment of long-lived assets	  	 	—	  	  	 	434	  	  	 	434	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total pretax cost	  	$	827	  	  	$	942	  	  	$	1,769	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
After tax cost	  	$	827	  	  	$	942	  	  	$	1,769	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
The results of operations, impairment of long-lived assets, and restructuring, environmental remediation and other charges for businesses sold and shut down are reported within net (loss) income from discontinued operations, net of tax, on the Consolidated Statements of Operations. The gains and losses on consummated transactions involving the sale of operations are also reported within net (loss) income from discontinued operations, net of tax on the Consolidated Statements of Operations.
We completed our annual impairment testing of goodwill and indefinite-lived intangible assets during the fourth quarter of fiscal 2012. We recorded no goodwill impairment charges in fiscal 2012 or fiscal 2010, but our impairment charges for fiscal 2011 amounted to $10,821 and $225 for continuing and discontinued operations, respectively. Our impairment charges for identifiable intangible assets for continuing operations amounted to $438, $2,504, and $1,200, in fiscal 2010, fiscal 2011, and fiscal 2012, respectively, which represent write downs of our intangible assets to their fair values. See Note 5 to the Consolidated Financial Statements for further discussion. Impairment charges for identifiable assets of discontinued operations amounted to $24,129 and $5,672 for fiscal 2010 and fiscal 2011, respectively. These charges primarily relate to the Phat Licensing trademarks due to declining results at our licensees.
During the fourth quarter of 2012, we determined that our equity investment in the purchaser of BLK DNM was fully impaired due to continued poor operating performance and negative cash flows. This investment was acquired through the sale of our BLK DNM business during the second quarter of fiscal 2012. See Note 4 to the Consolidated Financial Statements for further discussion of this transaction. We also recognized impairment charges of $725 related to our exited facility in Trenton, Tennessee due to a decline in market value, which was recorded during fiscal 2012 at the time the facility was sold to a third party.
Restructuring charges are comprised of expenses associated with our efforts to continuously improve operational and organizational efficiency. These expenses result from numerous individual actions implemented across the company on an ongoing basis. Restructuring charges include costs for moving facilities, exiting businesses, curtailing/downsizing operations because of changing economic conditions, and other costs resulting from asset redeployment decisions.
 
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Impairment, restructuring, environmental remediation and other charges during fiscal 2010 included:
 
 	1)	charges that related to closing Koret outlet stores and other costs associated with vacant spaces;	
 
 	2)	charges to accrue future lease payments due to early exit of leased spaces;	
 
 	3)	charges related to an environmental liability at a former manufacturing facility;	
 
 	4)	impairment charges of $24,567 primarily related to intangible assets of our discontinued Phat Licensing business; and	
 
 	5)	severance charges and related costs for various restructuring projects to create a more efficient operational and organizational structure in our support operations and apparel businesses.	
Impairment, restructuring, environmental remediation and other charges during fiscal 2011 included:
 
 	1)	charges to accrue future lease payments and other contractual obligations associated with exited businesses, as further described in Note 4 to the Consolidated Financial Statements;	
 
 	2)	charges related to an environmental liability at a former manufacturing facility;	
 
 	3)	costs to maintain closed facilities, partially offset by the recovery of charges through the sublease and other use of vacant spaces;	
 
 	4)	impairment charges of $19,463 related to goodwill, intangible assets and other long-lived assets, of which $2,504 and $10,821 was allocated to the Juniors and Other operating segments, respectively, with the remainder relating to discontinued business; and	
 
 	5)	severance charges and related costs for various restructuring projects to create a more efficient operational and organizational structure in our support operations and apparel businesses.	
Impairment, restructuring, environmental remediation and other charges during fiscal 2012 included:
 
 	1)	charges to accrue future lease payments and other contractual obligations associated with exited businesses, as further described in Note 4 to the Consolidated Financial Statements;	
 
 	2)	charges to record settlement obligations related to escheat liability;	
 
 	3)	charges to adjust our environmental remediation obligations related to a former manufacturing facility;	
 
 	4)	costs to maintain closed facilities, partially offset by the recovery of charges through subleases and other use of vacant spaces;	
 
 	5)	impairment charges of $6,729 related to intangible assets and other long-lived assets, of which $1,200 was allocated to our Juniors Segment, $1,149 was allocated to Corporate expenses for the write-down of an exited facility and our equity investment, and the remainder related to our discontinued Lamb & Flag business; and	
 
 	6)	severance charges and related costs for exited businesses and various restructuring projects to create a more efficient operational and organizational structure in our support operations and apparel businesses.	
During the first six months of fiscal 2012, we recognized an impairment charge of $717 related to the decline in market value of our exited facility in Trenton, Tennessee. Other noteworthy restructuring activities in continuing operations for the first six months of fiscal 2012 and fiscal 2013 included various efforts to create a more efficient operational and organizational structure in our support operations and womenswear businesses.
 
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As of August 3, 2013 (unaudited), we expect actions to be taken that will result in additional restructuring charges for continuing operations in fiscal 2013 of less than $500. We expect additional cash outflows related to restructuring activities of continuing operations in fiscal 2013 of approximately $1,200.
The following table presents a rollforward of impairment of long-lived assets and restructuring, environmental remediation and other charges recorded in continuing operations for fiscal 2011, fiscal 2012, and the first six months of fiscal 2013 (in thousands).

 	 	Contractual
obligations	 	 	Employee
severance and
termination
benefits	 	 	Impairment
of long-lived
assets	 	 	Restructuring,
Environmental
remediation
and other
charges	 	 	Total	 	
Accrual as of January 29, 2011	 	$	894	  	 	$	384	  	 	$	—	  	 	$	10,349	  	 	$	11,627	  	
Provision	 	 	342	  	 	 	1,093	  	 	 	13,325	  	 	 	1,216	  	 	 	15,976	  	
Non-cash utilization	 	 	—	  	 	 	—	  	 	 	(13,325	) 	 	 	—	  	 	 	(13,325	) 	
Utilization	 	 	(763	) 	 	 	(1,236	) 	 	 	—	  	 	 	(2,007	) 	 	 	(4,006	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of January 28, 2012	 	$	473	  	 	$	241	  	 	$	—	  	 	$	9,558	  	 	$	10,272	  	
Provision	 	 	142	  	 	 	1,974	  	 	 	2,349	  	 	 	2,975	  	 	 	7,440	  	
Non-cash utilization	 	 	—	  	 	 	—	  	 	 	(2,349	) 	 	 	—	  	 	 	(2,349	) 	
Utilization	 	 	(467	) 	 	 	(1,777	) 	 	 	—	  	 	 	(464	) 	 	 	(2,708	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of February 2, 2013	 	$	148	  	 	$	438	  	 	$	—	  	 	$	12,069	  	 	$	12,655	  	
Provision (unaudited)	 	 	24	  	 	 	511	  	 	 	—	  	 	 	292	  	 	 	827	  	
Non-cash utilization (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Utilization (unaudited)	 	 	(93	) 	 	 	(856	) 	 	 	—	  	 	 	(363	) 	 	 	(1,312	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of August 3, 2013 (unaudited)	 	$	79	  	 	$	93	  	 	$	—	  	 	$	11,998	  	 	$	12,170	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The following table presents a rollforward of impairment of long-lived assets and restructuring, environmental remediation and other charges recorded in discontinued operations for fiscal 2011, fiscal 2012, and the first six months of fiscal 2013 (in thousands).

 	 	Contractual
obligations	 	 	Employee
severance and
termination
benefits	 	 	Impairment
of long-lived
assets	 	 	Restructuring,
Environmental
remediation
and other
charges	 	 	Total	 	
Accrual as of January 29, 2011	 	$	22,047	  	 	$	791	  	 	$	—	  	 	$	188	  	 	$	23,026	  	
Provision (reversal)	 	 	(90	) 	 	 	554	  	 	 	6,138	  	 	 	25	  	 	 	6,627	  	
Non-cash utilization	 	 	—	  	 	 	—	  	 	 	(6,138	) 	 	 	—	  	 	 	(6,138	) 	
Utilization	 	 	(7,925	) 	 	 	(805	) 	 	 	—	  	 	 	(213	) 	 	 	(8,943	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of January 28, 2012	 	$	14,032	  	 	$	540	  	 	$	—	  	 	$	—	  	 	$	14,572	  	
Provision	 	 	(599	) 	 	 	551	  	 	 	4,380	  	 	 	457	  	 	 	4,789	  	
Non-cash utilization	 	 	—	  	 	 	—	  	 	 	(4,380	) 	 	 	—	  	 	 	(4,380	) 	
Utilization	 	 	(12,215	) 	 	 	(1,031	) 	 	 	—	  	 	 	(170	) 	 	 	(13,416	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of February 2, 2013	 	$	1,218	  	 	$	60	  	 	$	—	  	 	$	287	  	 	$	1,565	  	
Provision (unaudited)	 	 	230	  	 	 	269	  	 	 	434	  	 	 	9	  	 	 	942	  	
Non-cash utilization (unaudited)	 	 	—	  	 	 	—	  	 	 	(434	) 	 	 	—	  	 	 	(434	) 	
Utilization (unaudited)	 	 	(1,211	) 	 	 	(100	) 	 	 	—	  	 	 	(36	) 	 	 	(1,347	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrual as of August 3, 2013 (unaudited)	 	$	237	  	 	$	229	  	 	$	—	  	 	$	260	  	 	$	726	  	

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Contractual obligations are adverse contractual arrangements under which losses are probable and estimable and where there is no future economic benefit. These include make-whole payments to PVH Corp. (“PVH”) as a result of the termination of the Calvin Klein license agreement and minimum lease payments, as well as costs related to vacated leased spaces for the exited Lamb & Flag business (as discussed further in Note 4 to the Consolidated Financial Statements).
In continuing and discontinued operations, contractual obligations and employee severance and termination benefits will largely be settled through the first quarter of fiscal 2015 in accordance with the related agreements.
Note 4. Discontinued Operations
During the second quarter of 2013, we divested our Zobha business in order to focus resources on larger contemporary and Juniors brands. As a result of the divestiture, we realized a total loss of $1,239 within net (loss) income from discontinued operations on the Consolidated Statements of Operations for the six months ended August 3, 2013 (unaudited). The total loss includes charges to adjust inventory values to the lower of cost or market, impairment charges to write down obsolete assets, employee termination costs, and accrued rent commitments and other costs associated with the exit of our leased office and retail spaces. We anticipate future cash outflows related to employee termination and non-cancellable lease payments for Zobha of approximately $560, which are primarily payable through fiscal year 2014.
In fiscal 2004, we acquired Phat Fashions, LLC and Phat Licensing, LLC (together referred to as “Phat Fashions”), a licensor of apparel, athletic shoes and accessories through the Phat Farm and Baby Phat trademarks. In fiscal 2011, we began producing and selling Baby Phat junior’s apparel after assuming the license for this portion of the Phat Fashions business (referred to as the “Baby Phat wholesale operations”). Due to diminishing prospects in the urban market, we decided to exit our businesses in this market during fiscal 2012. We sold the Phat Farm trademark to a licensee during the second quarter of fiscal 2012, recognizing a gain on the sale of these assets of $3,673, net of disposal costs. We subsequently sold the Baby Phat trademark to the same party on March 20, 2013. We recognized $447 during the fourth quarter of fiscal 2012 for a nonrefundable deposit received from the buyer, net of disposal costs incurred to date. We recognized the remaining $902 gain on the sale of the asset during the first quarter of fiscal 2013, after the closing of the Baby Phat trademark sale, at which time the Phat Fashions licensing business was reported as discontinued operations. We anticipate net cash outflows in fiscal 2013 related to this business of less than $1,000, primarily consisting of accounts payable and other current liabilities, net of accounts receivable due from licensees.
On December 31, 2012, we sold the equity interests of Royal Robbins, LLC, and certain assets and liabilities of our Royal Robbins Canada operations to an unrelated third party. As a result of the sale, we realized a gain of $9,124 included within net (loss) income from discontinued operations on the Consolidated Statement of Operations for the fiscal year ended February 2, 2013. The gain was recorded net of disposal costs primarily related to broker fees, legal fees, and one-time employee benefit arrangements. As of February 2, 2013, we anticipated future cash outflows of $359 for unpaid seller costs, which were primarily paid through the first quarter of fiscal 2013. Proceeds from the sale were utilized to pay our selling costs and portions of our outstanding debt under the Wells Fargo Facility and Term Loan Facility, as defined and further discussed in Notes 7 and 8 to the Consolidated Financial Statements. Accordingly, our gain on the sale of Royal Robbins was reduced by $397 to write off unamortized debt issuance costs related to the portion of our debt that was required to be repaid upon completion of the sale.
During the second quarter of fiscal 2012, we decided to exit our BLK DNM business. This decision resulted from the determination that our greenfield startup brands are not aligned with our current strategic initiatives, as they require significant cash outlays and only offer long-term payback.
 
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On May 31, 2012, we sold substantially all the assets and liabilities of our BLK DNM operations. As a result of the sale, we recognized a loss of $1,862 included within net (loss) income from discontinued operations on the Consolidated Statement of Operations for the current fiscal year. The loss was recorded net of disposal costs for legal fees and non-cancellable contract obligations, of which $49 remained outstanding as of February 2, 2013 and was paid in the first quarter of fiscal year 2013.
In a continued effort to exit our startup concept brands, the e-commerce site and retail stores of our Lamb & Flag business were closed during the third quarter of fiscal 2012. All runoff operations of the business were substantially complete at that time. Additionally, we exited our Baby Phat wholesale business during the fourth quarter of fiscal 2012 as a result of our decision to exit the urban wear market. As a result of abandoning these operations, we recognized total losses in fiscal year 2012 of $7,638 and $1,992 for Lamb & Flag and Baby Phat, respectively. Costs to exit these businesses include sales allowances provided to customers, inventory adjustments to reduce inventory to the lower of cost or market during the inventory liquidation process, and charges for non-cancellable fabric and trim obligations to our vendors. In connection with the exit of these businesses, we also recorded impairment charges to write-down obsolete assets, charges for employee termination benefits, and contract termination costs to exit our leased spaces and website service agreements. As of February 2, 2013, we expected to have $568 and $461 of future cash outflows related to the Baby Phat wholesale and Lamb & Flag businesses, respectively, to settle our non-cancellable contract obligations. These obligations are primarily payable through fiscal 2013.
The following table summarizes the costs incurred to exit the Zobha, Lamb & Flag and Baby Phat wholesale operations by type (in thousands). All disposal costs related to the sales of our other discontinued businesses are recorded as a reduction (increase) to the gain (loss) recognized on these sales within net (loss) income from discontinued operations on the Consolidated Statement of Operations.

 	  	Fiscal Year	 	
 	  	2012	 	  	2013	 	
 	  	Lamb & Flag	 	  	Baby Phat	 	  	Zobha	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Sales allowances	  	$	—	  	  	$	1,011	  	  	$	—	  	
Inventory adjustment to lower of cost or market	  	 	1,528	  	  	 	610	  	  	 	342	  	
Impairment of long-lived assets	  	 	4,349	  	  	 	31	  	  	 	434	  	
Contract termination costs	  	 	1,290	  	  	 	146	  	  	 	203	  	
Employee termination benefits	  	 	361	  	  	 	194	  	  	 	254	  	
Other	  	 	110	  	  	 	—	  	  	 	6	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total exit costs	  	$	7,638	  	  	$	1,992	  	  	$	1,239	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
The Lamb & Flag and Baby Phat wholesale exit costs are recorded in the Consolidated Statement of Operations for fiscal year 2012 as illustrated below (in thousands):

 	  	Lamb & Flag	 	 	Baby Phat	 	
Net sales	  	$	—	  	 	$	(1,011	) 	
Cost of products sold	  	 	1,528	  	 	 	610	  	
	  	 	 	 	 	 	 	 	
Gross profit	  	 	(1,528	) 	 	 	(1,621	) 	
Restructuring and other charges	  	 	1,761	  	 	 	340	  	
Impairment of long-lived assets	  	 	4,349	  	 	 	31	  	
	  	 	 	 	 	 	 	 	
Loss before provision for income taxes	  	 	(7,638	) 	 	 	(1,992	) 	
Provision for income taxes	  	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	
Net loss	  	$	(7,638	) 	 	$	(1,992	) 	

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The Zobha exit costs are recorded in the Consolidated Statement of Operations for the six months ended August 3, 2013 as illustrated below (in thousands):

 	  	Zobha	 	
 	  	(unaudited)	 	
Net sales	  	$	—	  	
Cost of products sold	  	 	342	  	
	  	 	 	 	
Gross profit	  	 	(342	) 	
Restructuring and other charges	  	 	463	  	
Impairment of long-lived assets	  	 	434	  	
	  	 	 	 	
Loss before provision for income taxes	  	 	(1,239	) 	
Provision for income taxes	  	 	—	  	
	  	 	 	 	
Net loss	  	$	(1,239	) 	
	  	 	 	 	
During the fourth quarter of fiscal 2011, we abandoned our Adam operations and Koret wholesale operations due to poor operating performance. Costs to exit these operations included sales allowances to customers, inventory liquidation costs, and impairment charges of $614 on related intangible assets.
During the second quarter of fiscal 2008, our Calvin Klein women’s better sportswear division and ck Calvin Klein women’s bridge sportswear division were discontinued due to our decision to exit the related license agreements. As a result of terminating the license agreements early, we have a contractual obligation to provide make-whole payments to PVH. We have recorded $485 for our final make-whole payment within other accrued expenses of discontinued operations as of February 2, 2013. This payment was settled in the first quarter of fiscal 2013.
Operating results for the discontinued operations, including all charges incurred during the periods presented for impairment of long-lived assets and restructuring and other charges as described in Note 3 to the Consolidated Financial Statements, are as follows (in thousands):

 	  	Fiscal Year Ended	 	 	Six Months Ended	 	
 	  	January 29,
2011	 	 	January 28,
2012	 	 	February 2,
2013	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net sales	  	$	52,454	  	 	$	63,199	  	 	$	47,163	  	 	$	28,583	  	 	$	1,097	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring and other charges	  	$	3,575	  	 	$	489	  	 	$	409	  	 	$	221	  	 	$	508	  	
Impairment of long-lived assets (excluding goodwill)	  	 	24,129	  	 	 	5,913	  	 	 	4,380	  	 	 	—	  	 	 	434	  	
Impairment of goodwill	  	 	—	  	 	 	225	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before provision for income taxes	  	$	(15,980	) 	 	$	(16,721	) 	 	$	(2,004	) 	 	$	(4,590	) 	 	$	(2,683	) 	
Provision for income taxes	  	 	411	  	 	 	(141	) 	 	 	49	  	 	 	208	  	 	 	(11,913	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income	  	$	(16,391	) 	 	$	(16,580	) 	 	$	(2,053	) 	 	$	(4,798	) 	 	$	9,230	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effective tax rate	  	 	(2.6%	) 	 	 	0.8%	  	 	 	(2.4%	) 	 	 	(4.5%	) 	 	 	N.M.	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The fiscal 2010, fiscal 2011, and fiscal 2012 effective tax rates for discontinued operations differs from the U.S. statutory rate of 35% primarily due to a full valuation allowance on current year deferred tax assets offset in part by state taxes. The rate for the first six months of fiscal 2013 differs from the U.S. statutory rate of 35% primarily due to a release of valuation allowance. The release in valuation
 
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allowance is primarily due to the allocation of the disallowed tax loss on the sale of the Baby Phat trademark to intangible assets with indefinite lives resulting in fewer deferred tax liabilities that cannot be offset against deferred tax assets for valuation allowance purposes. The effective tax rate for discontinued operations for the first six months of fiscal 2012 differs from the U.S. statutory rate of 35% primarily due to an increase in the valuation allowance offset in part by state taxes.
Summarized assets and liabilities of discontinued operations are as follows (in thousands):

 	  	January 28, 2012	 	  	February 2, 2013	 	  	August 3, 2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Receivables, net	  	$	11,752	  	  	$	2,535	  	  	$	96	  	
Other receivables	  	 	—	  	  	 	12	  	  	 	—	  	
Inventories	  	 	14,713	  	  	 	1,529	  	  	 	—	  	
Prepaid expenses and other current assets	  	 	1,321	  	  	 	614	  	  	 	40	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Current assets of discontinued operations	  	$	27,786	  	  	$	4,690	  	  	$	136	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Property, plant and equipment, net	  	$	3,613	  	  	$	167	  	  	$	—	  	
Intangible assets, net	  	 	8,073	  	  	 	3,450	  	  	 	—	  	
Other assets	  	 	458	  	  	 	79	  	  	 	27	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Long-term assets of discontinued operations	  	$	12,144	  	  	$	3,696	  	  	$	27	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Accounts payable	  	$	10,938	  	  	$	903	  	  	$	142	  	
Accrued salaries and employee benefits	  	 	642	  	  	 	233	  	  	 	44	  	
Other accrued expenses	  	 	15,624	  	  	 	2,601	  	  	 	1,512	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Current liabilities of discontinued operations	  	$	27,204	  	  	$	3,737	  	  	$	1,698	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Deferred income taxes and other	  	$	3,116	  	  	$	2,416	  	  	$	2,412	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Long-term liabilities of discontinued operations	  	$	3,116	  	  	$	2,416	  	  	$	2,412	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Current assets as of February 2, 2013 primarily consist of the outstanding sale proceeds for Royal Robbins, net receivables from our Baby Phat wholesale operations prior to completion of its shutdown in the fourth quarter of fiscal 2012, net receivables from our Phat Fashions business prior to the sale of our Baby Phat trademark in the first quarter of fiscal 2013 and net receivables and inventory of our Zobha operations. Current liabilities as of February 2, 2013 are primarily related to unpaid disposal costs related to the sale of Royal Robbins, non-cancellable contract termination costs to exit our Lamb & Flag business and Baby Phat wholesale operations, accrued liabilities associated with our Phat Fashions business, and our final make-whole payment of $485 to PVH related to the early termination of our Calvin Klein license agreements. Current liabilities as of August 3, 2013 is primarily related to amounts owed for non-cancellable contract payments for our Zobha business.
Cash flows from discontinued operations are combined with cash flows from continuing operations under Operating Activities, Investing Activities and Financing Activities in the Consolidated Statements of Cash Flows. As of August 3, 2013 (unaudited), we expect to have future net cash outflows related to our discontinued operations of approximately $1,500, which is primarily payable through fiscal 2014.
 
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Note 5. Goodwill and Intangible Assets
Goodwill balances by segment and changes therein subsequent to the January 29, 2011 Consolidated Balance Sheet are as follows (in thousands):

 	  	Vince	 	 	ARP	 	  	Juniors	 	 	Moderate	 	 	Other	 	  	Total	 	
Balance as of January 29, 2011	  				 				  				 				 				  				
Goodwill	  	$	59,554	  	 	 	        —	  	  	$	6,395	  	 	$	8,859	  	 	$	13,478	  	  	$	88,286	  	
Accumulated impairment losses	  	 	(46,942	) 	 	 	—	  	  	 	(6,395	) 	 	 	(8,859	) 	 	 	(527	) 	  	 	(62,723	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net goodwill	  	 	12,612	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	12,951	  	  	 	25,563	  	
Additional contingent purchase price	  	 	51,134	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	—	  	  	 	51,134	  	
Impairment loss	  	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	(10,821	) 	  	 	(10,821	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Balance as of January 28, 2012	  				 				  				 				 				  				
Goodwill	  	 	110,688	  	 	 	—	  	  	 	6,395	  	 	 	8,859	  	 	 	13,478	  	  	 	139,420	  	
Accumulated impairment losses	  	 	(46,942	) 	 	 	—	  	  	 	(6,395	) 	 	 	(8,859	) 	 	 	(11,348	) 	  	 	(73,544	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net goodwill	  	 	63,746	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	2,130	  	  	 	65,876	  	
Impairment loss	  	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Balance as of February 2, 2013	  				 				  				 				 				  				
Goodwill	  	 	110,688	  	 	 	—	  	  	 	6,395	  	 	 	8,859	  	 	 	13,478	  	  	 	139,420	  	
Accumulated impairment losses	  	 	(46,942	) 	 	 	—	  	  	 	(6,395	) 	 	 	(8,859	) 	 	 	(11,348	) 	  	 	(73,544	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net goodwill	  	 	63,746	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	2,130	  	  	 	65,876	  	
Impairment loss	  	 	—	  	 	 	—	  	  	 	—	  	 	 	—	  	 	 	—	  	  	 	—	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Balance as of August 3, 2013 (unaudited)	  				 				  				 				 				  				
Goodwill	  	 	110,688	  	 	 	—	  	  	 	6,395	  	 	 	8,859	  	 	 	13,478	  	  	 	139,420	  	
Accumulated impairment losses	  	 	(46,942	) 	 	 	—	  	  	 	(6,395	) 	 	 	(8,859	) 	 	 	(11,348	) 	  	 	(73,544	) 	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net goodwill	  	$	63,746	  	 	$	—	  	  	$	—	  	 	$	—	  	 	$	2,130	  	  	$	65,876	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Identifiable intangible assets of continuing operations are as follows (in thousands):

 	  	Gross Amount	 	  	Accumulated
Amortization	 	 	Net Book
Value	 	
Balance as of January 28, 2012:	  				  				 				
Amortizable intangible assets:	  				  				 				
Customer relationships	  	$	28,363	  	  	$	(4,978	) 	 	$	23,385	  	
Indefinite-lived intangible assets:	  				  				 				
Trademarks	  	 	125,935	  	  	 	—	  	 	 	125,935	  	
Domain name	  	 	66	  	  	 	—	  	 	 	66	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total intangible assets	  	$	154,364	  	  	$	(4,978	) 	 	$	149,386	  	

 
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 	  	Gross Amount	 	  	Accumulated
Amortization	 	 	Net Book
Value	 	
Balance as of February 2, 2013:	  				  				 				
Amortizable intangible assets:	  				  				 				
Customer relationships	  	$	28,363	  	  	$	(6,877	) 	 	$	21,486	  	
Indefinite-lived intangible assets:	  				  				 				
Trademarks	  	 	124,735	  	  	 	—	  	 	 	124,735	  	
Domain Name	  	 	66	  	  	 	—	  	 	 	66	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total intangible assets	  	$	153,164	  	  	$	(6,877	) 	 	$	146,287	  	

													
 	  	Gross Amount	 	  	Accumulated
Amortization	 	 	Net Book
Value	 	
Balance as of August 3, 2013 (unaudited):	  				  				 				
Amortizable intangible assets:	  				  				 				
Customer relationships	  	$	28,363	  	  	$	(7,827	) 	 	$	20,536	  	
Indefinite-lived intangible assets:	  				  				 				
Trademarks	  	 	124,795	  	  	 	—	  	 	 	124,795	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total intangible assets	  	$	153,158	  	  	$	(7,827	) 	 	$	145,331	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Amortization of identifiable intangible assets for continuing operations was $954, $1,941, and $1,899 for fiscal 2010, fiscal 2011, and fiscal 2012, respectively. Amortization expense for each of the first six months of fiscal 2012 and fiscal 2013 (unaudited) was $950. Amortization expense for each of the fiscal years 2013 to 2017 is expected to be as follows (in thousands):

 	  	Future
Amortization	 	
2013	  	$	1,899	  	
2014	  	 	1,899	  	
2015	  	 	1,899	  	
2016	  	 	1,899	  	
2017	  	 	1,899	  	
	  	 	 	 	
Total next 5 years	  	$	9,495	  	
	  	 	 	 	
Goodwill consists of the additional purchase consideration paid to the previous owners of Vince, as well as goodwill resulting from our acquisition of Rebecca Taylor. We recognized $10,821 of goodwill impairment in fiscal 2011 due to a decrease in the near-term forecasted EBITDA of Rebecca Taylor. This was primarily due to a delay in expected growth and cost synergies. We utilized a combination of income and market approaches to estimate the fair value of the reporting unit and determine the amount of the impairment. This is considered a Level 3 fair value measure as management forecasts are a significant unobservable input utilized in these approaches. No goodwill impairment charges were recognized as a result of our annual impairment test for fiscal year 2012, and no events occurred in the first six months of fiscal 2013 that would trigger an impairment test to be performed.
Identifiable indefinite-lived intangible assets consist of company owned trademarks and one domain name. Our fiscal 2011 and fiscal 2012 indefinite-lived intangible asset impairment tests resulted in $2,504 and $1,200 of impairment charges, respectively, due to declining results at one of our Juniors wholesale businesses. The fair value of this trademark was determined using the relief from royalty method for both fiscal years. The relief from royalty method calculates fair value using a royalty savings method, which measures the value by estimating cost savings. Key assumptions include
 
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revenue projections, royalty rates and discount rates for each trademark being valued. This method utilizes significant unobservable inputs and is therefore considered a Level 3 fair value measure.
During the second quarter of fiscal 2010, we ended our relationship with one of our customers and at the time did not expect any future sales to this customer and therefore recognized an impairment loss of $438.
All impairment charges disclosed above (excluding goodwill) have been recorded in impairment of long-lived assets (excluding goodwill) in the Consolidated Statements of Operations. Definite-lived intangible assets are amortized and tested for impairment if a triggering event occurs during the year. Indefinite-lived intangible assets are not amortized but are tested for impairment annually during the fourth quarter of our fiscal year and in an interim period if a triggering event were to occur during the year. No events occurred in the first six months of fiscal 2013 that would have triggered an impairment test to be performed for our definite-lived and indefinite-lived intangible assets.
It is possible that our estimates of future operating results for certain of our divisions could change adversely and impact the evaluation of the recoverability of the carrying value of intangible assets and that the effect of such changes on our Consolidated Financial Statements could be material. While we believe that the current recorded carrying value of our intangible assets at February 2, 2013 is not impaired, there can be no assurance that a significant non-cash write down or write-off will not be required in the future.
Note 6. Fair Value
ASC Subtopic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This guidance outlines a valuation framework, creates a fair value hierarchy to increase the consistency and comparability of fair value measurements, and details the disclosures that are required for items measured at fair value. Financial assets and liabilities are to be measured using inputs from three levels of the fair value hierarchy as follows:

Level 1—	 	quoted market prices in active markets for identical assets or liabilities	
		
Level 2—	 	observable market-based inputs (quoted prices for similar assets and liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active) or inputs that are corroborated by observable market data	
		
Level 3—	 	significant unobservable inputs that reflect our assumptions and are not substantially supported by market data	
 
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The following table presents our liabilities measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands). We do not measure any assets at fair value on a recurring basis.

 	 	Fair Value Measurements as of January 28, 2012	 	
 	 	Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)	 	 	Other
Observable
Inputs
(Level 2)	 	 	Significant
Unobservable
Inputs
(Level 3)	 	 	Total	 	
Liabilities at fair value:	 				 				 				 				
Contingent consideration for acquisition—Rebecca Taylor	 	$	            —	  	 	$	            —	  	 	$	10,881	  	 	$	10,881	  	
Contingent consideration for acquisition—Zobha	 	 	—	  	 	 	—	  	 	 	585	  	 	 	585	  	
Environmental Remediation obligations	 	 	—	  	 	 	—	  	 	 	8,747	  	 	 	8,747	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities at fair value	 	$	—	  	 	$	—	  	 	$	20,213	  	 	$	20,213	  	

																	
 	 	Fair Value Measurements as of February 2, 2013	 	
 	 	Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)	 	 	Other
Observable
Inputs
(Level 2)	 	 	Significant
Unobservable
Inputs
(Level 3)	 	 	Total	 	
Liabilities at fair value:	 				 				 				 				
Contingent consideration for acquisition—Rebecca Taylor	 	$	            —	  	 	$	            —	  	 	$	4,209	  	 	$	4,209	  	
Contingent consideration for acquisition—Zobha	 	 	—	  	 	 	—	  	 	 	54	  	 	 	54	  	
Environmental Remediation obligations	 	 	—	  	 	 	—	  	 	 	9,604	  	 	 	9,604	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities at fair value	 	$	—	  	 	$	—	  	 	$	13,867	  	 	$	13,867	  	

																	
 	 	Fair Value Measurements as of August 3, 2013	 	
 	 	(unaudited)	 	
 	 	Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)	 	 	Other
Observable
Inputs
(Level 2)	 	 	Significant
Unobservable
Inputs
(Level 3)	 	 	Total	 	
Liabilities at fair value:	 				 				 				 				
Contingent consideration for acquisition—Rebecca Taylor	 	$	            —	  	 	$	            —	  	 	$	4,665	  	 	$	4,665	  	
Environmental Remediation obligations	 	 	—	  	 	 	—	  	 	 	9,702	  	 	 	9,702	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities at fair value	 	$	—	  	 	$	—	  	 	$	14,367	  	 	$	14,367	  	

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The following table presents changes in Level 3 liabilities for fiscal years 2011 and 2012 (in thousands).

 	  	Rebecca Taylor
Contingent
Consideration
(2)	 	 	Zobha
Contingent
Consideration
(2)	 	 	Environmental
Remediation
Obligations
(3)	 	 	Total	 	
Balance as of January 29, 2011	  	$	9,356	  	 	$	—	  	 	$	9,054	  	 	$	18,410	  	
Acquisition of Zobha	  	 	—	  	 	 	945	  	 	 	—	  	 	 	945	  	
Payments	  	 	—	  	 	 	—	  	 	 	(220	) 	 	 	(220	) 	
Losses (gains) recognized in earnings(1)	  	 	1,525	  	 	 	(360	) 	 	 	(87	) 	 	 	1,078	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 28, 2012	  	 	10,881	  	 	 	585	  	 	 	8,747	  	 	 	20,213	  	
Payments	  	 	(1,928	) 	 	 	—	  	 	 	(311	) 	 	 	(2,239	) 	
(Gains) losses recognized in earnings(1)	  	 	(4,744	) 	 	 	(531	) 	 	 	1,168	  	 	 	(4,107	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of February 2, 2013	  	 	4,209	  	 	 	54	  	 	 	9,604	  	 	 	13,867	  	
Payments (unaudited)	  	 	—	  	 	 	—	  	 	 	(71	) 	 	 	(71	) 	
(Gains) losses recognized in earnings (unaudited)(1)	  	 	456	  	 	 	(54	) 	 	 	169	  	 	 	571	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of August 3, 2013 (unaudited)	  	$	4,665	  	 	$	—	  	 	$	9,702	  	 	$	14,367	  	

(1)	In fiscal years 2011 and 2012, gains of ($1,578) and ($7,162), respectively, were recognized within change in fair value of contingent consideration on our Statement of Operations. We recorded offsetting charges to interest expense of $2,743 and $1,887 in fiscal 2011 and fiscal 2012, respectively, for the accretion of our contingent consideration obligations. We recorded additional interest expense of $456 in the six months ended August 3, 2013 (unaudited) for the accretion of our contingent consideration obligations. We also recorded an additional gain of ($54) within change in fair value of contingent consideration for the six months ended August 3, 2013 (unaudited) due to a decrease in the fair value of our Zobha C ontingent C onsideration. All adjustments to our environmental remediation obligations were recognized within restructuring, environmental remediation and other charges on our Consolidated Statement of Operations for fiscal 2011, fiscal 2012 and for the first six months of fiscal 2013.	
(2)	See Note 2, Business Combinations, for additional discussion pertaining to the valuation of our contingent consideration obligations.	
(3)	See Note 15, Commitments and Contingencies, for additional discussion pertaining to the valuation of our environmental remediation obligations.	
The recorded amounts of cash, receivables, accounts payable and short-term debt approximate their fair values at January 28, 2012, February 2, 2013, and August 3, 2013 (unaudited) due to the short maturity of these instruments. The estimated fair value of our long-term debt, including both variable-rate and fixed-rate debt, at February 2, 2013 is $737,365, compared to the recorded amount of $761,752. The estimated fair value of our long-term debt, at August 3, 2013 (unaudited) is $398,618, compared to the recorded amount of $386,842. These estimated fair values utilize quoted prices obtained through independent pricing sources for the same or similar types of borrowing arrangements.
Note 7. Short-Term Borrowings
Credit Agreement
On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Borrowers”), entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as agent, and lenders from time to time. The Credit Agreement provides the Borrowers with a non-amortizing senior revolving credit facility with aggregate lending commitments of $160,000 (the “Wells Fargo Facility”), reduced to $155,000 by the December 31, 2012 Amendment
 
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described below. The Wells Fargo Facility terminates at the earliest to occur of (a) October 19, 2016, (b) 90 days prior to the scheduled December 31, 2014, maturity date of the 12.875% Notes (as defined below) (including any extension effective on or prior to such 90th day prior to such scheduled maturity date) or (c) 90 days prior to the scheduled maturity date of the Cerberus Term Loan (as defined below) (including any extension effective on or prior to such 90th day prior to such scheduled maturity date). The amount which the Borrowers may borrow from time to time under the Wells Fargo Facility is determined on the basis of a borrowing base formula that is a percentage of Kellwood Company and subsidiaries accounts receivable and inventory that meet eligibility criteria specified in the Credit Agreement, but in no case more than the aggregate lending commitments of the participating lenders. All borrowings under the Wells Fargo Facility bear interest at a rate per annum equal to an applicable margin (ranging from 2.5%-3.0% per annum for LIBOR Revolver Loans (as defined in the Credit Agreement) and 1.25%-1.75% for Base Rate Loans (as defined in the Credit Agreement) based on average availability under the Credit Agreement) plus, at the Borrowers’ election, LIBOR or a Base Rate as defined in the Credit Agreement. In addition to paying interest, the Borrowers will pay a periodic commitment fee to the lenders under the Credit Agreement based on the amount of unused availability under the borrowing base formula. The Wells Fargo Facility is secured by a first-priority security interest in substantially all of the assets of the Borrowers, principally consisting of accounts receivable, inventory, and intellectual property. The Credit Agreement contains certain customary representations, warranties, provisions and restrictions. The Credit Agreement requires that the Borrowers maintain a fixed charge coverage ratio of at least 1:1 during any Covenant Testing Period (as defined in the Credit Agreement) which is triggered when excess availability is below 12.5% of the aggregate commitments under the Wells Fargo Facility (the “Covenant Testing Trigger Date”). The fixed charge ratio is defined as the ratio of Consolidated EBITDA (as defined in the Credit Agreement) (with certain addbacks as defined in the Credit Agreement for certain restructuring charges, startup losses in newly developed brands, costs incurred in certain acquisitions, management fees, as well as certain other costs and charges) minus capital expenditures and certain distributions; to fixed charges, defined as consolidated net interest expense paid or payable in cash, scheduled principal payments on debt in cash and certain earnout payments paid in cash up to a certain amount, calculated over the trailing four fiscal quarters. If the covenants are not met, a cash dominion period will go into effect whereby the agent has the ability to direct the disposition of the balances in controlled deposit accounts. The cash dominion period will expire when availability is over 12.5% of the aggregate commitments under the Wells Fargo Facility for a period of 90 consecutive days.
On March 23, 2012, the Credit Agreement was amended to modify the Covenant Testing Period such that it is now triggered when excess availability is below $5,000 and triggered the cash dominion period, as defined in the Credit Agreement. This amendment was entered into in consideration for a guaranty of payment of obligations under the Credit Agreement and a $20,000 letter of credit to the benefit of Wells Fargo Bank, National Association, as agent, issued by an affiliate of Sun Capital Partners, Inc.
On April 20, 2012, the Credit Agreement was amended to extend the modification to the Covenant Testing Period to be in effect until March 21, 2014 unless the guaranty described above is no longer in effect or the full face amount of the letter of credit described above is no longer available to be drawn. The guaranty will be released, the letter of credit returned and the trigger for the Covenant Testing Period will return to the pre-amendment level when availability is above $35,000 for 90 consecutive days and is projected to remain above $25,000 through the remaining term of the Credit Agreement. This amendment also provided for the consent of the Wells Fargo Facility lenders to the additional loans under the Sun Term Loan Agreements (as defined in Note 8).
On December 31, 2012, the Credit Agreement was amended to obtain consent to the sale of the Royal Robbins business, to release Royal Robbins as a Borrower and/or Obligor under the Credit Agreement, and to release the agent’s lien on the assets of Royal Robbins. Additionally, the first $10,000 of the net cash proceeds arising from the cash purchase price paid at closing (excluding any
 
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escrow amount) were to be applied to the Cerberus Term Loan (Note 8) and the remaining portion to be remitted to the Wells Fargo Facility. This amendment also resulted in a permanent reduction to availability of $5,000.
At February 2, 2013, the maximum capacity on the Wells Fargo Facility was $110,838 and there were borrowings outstanding and letters of credit outstanding of $79,783 and $13,304, respectively. At August 3, 2013, the maximum capacity on the Wells Fargo Facility was $146,646 and there were borrowings outstanding and letters of credit outstanding of $115,601 and $12,569, respectively. At February 2, 2013 and August 3, 2013 (unaudited) availability under the Wells Fargo Facility was $17,751 and $18,476, respectively. Kellwood Company was in compliance with all provisions as of all periods presented.
BMO Facility
On September 12, 2011 Kellwood Company, as borrower, and certain of its domestic subsidiaries, as guarantors, entered into a Loan Authorization Agreement with BMO Harris Financing, Inc. and Bank of Montreal, as lender, (the “BMO Facility”) for a revolving credit facility up to a maximum credit line of $14,900 (the “BMO Obligations”). The BMO Facility was guaranteed by an affiliate of Sun Capital Partners, Inc. and was subordinated in payment and security interest to the Amended and Restated Credit Facility, the 12.875% Notes, the Term A Obligations, the Term B Obligations, the Term C Obligations and the Term D Obligations (all as defined below). Interest accrued on the BMO Obligations at a rate equal to the greater of (i) the Reference Bank’s Prime Rate plus 2% per annum or (ii) LIBOR plus 4.75% per annum. Such interest was to be paid quarterly either in cash or with PIK Interest, at our option. The BMO Obligations were payable on demand with a 10-day grace period and was used for liquidity, working capital and other general corporate purposes.
On October 19, 2011, Kellwood Company terminated the BMO Facility and the Amended and Restated Credit Facility and entered into certain debt agreements further described above. As a result of the termination, Kellwood Company incurred a $1,747 non-cash charge recorded in interest expense, net, related to the write-off of deferred debt issuance costs of the Amended and Restated Credit Facility.
Note 8. Long-Term Debt
Long-term debt, net of applicable discounts or premiums, consisted of the following at January 28, 2012, February 2, 2013 and August 3, 2013 (in thousands):

 	  	January 28,
2012	 	  	February 2,
2013	 	  	August 3,
2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Sun Promissory Notes	  	$	520,536	  	  	$	319,926	  	  	$	—	  	
Sun Capital Loan Agreement	  	 	84,756	  	  	 	71,508	  	  	 	—	  	
Cerberus Term Loan	  	 	55,000	  	  	 	45,431	  	  	 	45,660	  	
Term A Obligations	  	 	15,604	  	  	 	17,252	  	  	 	18,118	  	
Term B Obligations	  	 	24,884	  	  	 	27,507	  	  	 	28,889	  	
Term C Obligations	  	 	16,231	  	  	 	17,945	  	  	 	18,846	  	
Term D Obligations	  	 	10,488	  	  	 	11,595	  	  	 	12,177	  	
Term E Obligations	  	 	—	  	  	 	5,601	  	  	 	5,937	  	
Term F Obligations	  	 	—	  	  	 	27,344	  	  	 	28,989	  	
Term G Obligations	  	 	—	  	  	 	—	  	  	 	5,059	  	
12.875% 2009 Debentures due December 31, 2014	  	 	130,471	  	  	 	139,378	  	  	 	143,962	  	
7.625% 1997 Debentures due October 15, 2017	  	 	76,180	  	  	 	78,054	  	  	 	78,991	  	
3.5% 2004 Convertible Debentures due June 15, 2034	  	 	204	  	  	 	211	  	  	 	214	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total long-term debt	  	$	934,354	  	  	$	761,752	  	  	$	386,842	  	

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Sun Promissory Notes
On May 2, 2008, AHC entered into a $225,000 Senior Subordinated Promissory Note and a $75,000 Senior Subordinated Promissory Note with Sun Kellwood Finance, LLC (“Sun Kellwood Finance”), an affiliate of Sun Capital Partners, Inc.. We collectively refer to these notes as our “Sun Promissory Notes”. The unpaid principal balance of the notes accrue interest at 15% per annum until the maturity date of October 15, 2011, at which point any unpaid principal balance of the notes shall accrue interest at a rate of 17% per annum until the notes are paid in full. All interest which is not paid in cash on or before the last day of each calendar month are deemed paid in kind and added to the principal balance of the notes unless an election is made otherwise.
On July 19, 2012, AHC amended the Sun Promissory Notes to extend the maturity date to October 15, 2016 and reduce the interest rate to 12% per annum until maturity, at which point any unpaid principal balance of the notes shall accrue interest at a rate of 14% per annum until the notes are paid in full.
On December 28, 2012, Sun Kellwood Finance waived all interest capitalized and accrued under the notes prior to July 19, 2012. As both parties are under the common control of Sun Capital, this transaction resulted in a capital contribution of $270,852 which was recorded as an adjustment to additional paid in capital on our Consolidated Balance Sheet as of February 2, 2013.
On June 18, 2013, Sun Kellwood Finance assigned all title and interest in the Sun Promissory Notes to Sun Cardinal, LLC (“Sun Cardinal”). Immediately following the assignment, Sun Cardinal contributed all outstanding principal and interest due under these notes as of June 18, 2013 to the capital of AHC. As both parties are under common control of Sun Capital, this transaction resulted in a capital contribution of $334,595, which was recorded as an adjustment to AHC’s additional paid in capital on the Consolidated Balance Sheet at August 3, 2013 (unaudited).
Sun Capital Loan Agreement
AHC is party to a Loan Authorization Agreement, originally dated February 13, 2008, by and between AHC (as the successor entity to Cardinal Integrated, LLC), SCSF Kellwood Finance, LLC (“SCSF Finance”) and Sun Kellwood Finance (as successors to Bank of Montreal) for a $72,000 line of credit, and $69,485 principal balance, which we refer to as the “Sun Capital Loan Agreement”. Under the terms of this agreement, as amended from time to time, interest accrues at a rate equal to the rate per annum announced by the Bank of Montreal, Chicago, Illinois, from time to time as its prime commercial rate, or equivalent, for U.S. dollar loans to borrowers located in the U.S. plus 2%. Interest on the loan is due by the last day of each fiscal quarter and is payable either in immediately available funds on each interest payment date or by adding such interest to the unpaid principal balance of the loan on each interest payment date. The original maturity date of the loan was August 6, 2009. On July 19, 2012, the maturity date of the loan was extended to August 6, 2014.
On December 28, 2012, Sun Kellwood Finance and SCSF Finance waived all interest capitalized and accrued under the loan authorization agreement prior to July 19, 2012. As all parties are under the common control of Sun Capital, this transaction resulted in a capital contribution of $18,249, which was recorded as an adjustment to additional paid in capital on our Consolidated Balance Sheet as of February 2, 2013.
On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in the note under the Sun Capital Loan Agreement. Immediately following the assignment, Sun Cardinal contributed all outstanding principal and interest due under this note as of June 18, 2013 to the capital of AHC. As all parties are under common control of Sun Capital, this transaction resulted in a capital contribution of $72,932, which was recorded as an adjustment to AHC’s additional paid in capital on the Consolidated Balance Sheet at August 3, 2013 (unaudited).
 
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Term Loan Agreement
On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Borrowers”), entered into a Term Loan Agreement (the “Term Loan Agreement”) with Cerberus Business Finance, LLC (the “Agent”), as agent and the lenders from time to time party thereto. The Term Loan Agreement provides the Borrowers with a non-amortizing secured Cerberus Term Loan in an aggregate amount of $55,000 (the “Cerberus Term Loan”). The Cerberus Term Loan terminates at the earliest to occur of (a) October 19, 2015, (b) the date on which the Wells Fargo Facility (as defined above in Note 7 to the Consolidated Financial Statements) has been paid in full and all commitments thereunder have been terminated or (c) 60 days prior to the scheduled December 31, 2014, maturity date of our 12.875% Notes (as defined below) (including any extensions thereof agreed to after October 19, 2011). All borrowings under the Cerberus Term Loan bear interest, from the date of the agreement until the effective date of the amendment described below at a rate per annum equal to an applicable margin (10.25% per annum for LIBOR Rate Loans (as defined in the Term Loan Agreement) and 7.75% for Reference Rate Loans (as defined in the Term Loan Agreement)) plus, at the Borrowers’ election, LIBOR or a Reference Rate as defined in the Term Loan Agreement. The Cerberus Term Loan is secured by a security interest in substantially all of the assets of the Borrowers, principally consisting of accounts receivable, inventory and intellectual property, which security interest is contractually subordinated to security interests of the lenders under the Credit Agreement. The Term Loan Agreement contains certain customary representations, warranties, provisions and restrictions. The Term Loan Agreement requires that the Borrowers maintain a fixed charge coverage ratio as of each fiscal quarter end prior to the effective date of the amendment described below of at least 1:1. The fixed charge ratio is defined as the ratio of Consolidated EBITDA (as defined in the December 31 amendment to the Term Loan Agreement as described below ) (with certain addbacks as defined in the amended Term Loan Agreement for certain restructuring charges, startup losses in newly developed brands, costs incurred in certain acquisitions, as well as certain other costs and charges) minus capital expenditures and certain distributions and management fees; to fixed charges, defined as consolidated net interest expense paid or payable in cash, scheduled principal payments on debt in cash and certain earnout payments paid in cash, excluding earnout payments related to the Company’s Vince brand for the 2011 fiscal year, up to a certain amount, calculated over the trailing four fiscal quarters. The Term Loan Agreement also requires that the Borrowers maintain a leverage ratio as defined in the Term Loan Agreement and ranging from 2.85:1-4.25:1 during the life of the Cerberus Term Loan prior to the effective date of the amendment described below. The leverage ratio is defined as the ratio of indebtedness secured by a lien on any collateral (including the debt under the Credit Agreement and Cerberus Term Loan, but excluding the debt under the Sun Term Loan Agreements (as defined below) and the 12.875% Notes (as defined below)), divided by Consolidated EBITDA (as defined in the December 31 amendment to the Cerberus Term Loan described below) for the trailing four fiscal quarters.
On January 26, 2012, Kellwood Company obtained a waiver to the Cerberus Term Loan until the end of the first quarter of fiscal 2012 (the “Waiver Period”), as it anticipated not being in compliance with the fixed charge coverage ratio and the leverage ratio covenants as of January 28, 2012. In conjunction with this waiver, we paid the Agent a $75 waiver fee and an affiliate of Sun Capital Partners, Inc. provided the Agent with a $10,000 letter of credit. The waiver required the parties to the Cerberus Term Loan to work in good faith during the Waiver Period to amend the financial covenants set forth in the Cerberus Term Loan at levels mutually acceptable to all parties.
On April 20, 2012 Kellwood Company entered into Consent and Amendment No. 1 to the Cerberus Term Loan. This amendment provided for the consent of the Cerberus Term Loan lenders to the additional term loans under the Sun Term Loan Agreement (as defined below), the release of the $10,000 letter of credit noted above and the delivery of audited fiscal 2011 financial statements within 97 days of fiscal year-end. This amendment increased the applicable margins for borrowings under the Cerberus Term Loan which will bear interest from and after the effective date of the amendment at a
 
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rate per annum equal to an applicable margin (ranging from 10.75%-11.25% per annum for LIBOR Rate Loans (as defined in the Cerberus Term Loan) and 8.25%-8.75% for Reference Rate Loans (as defined in the Cerberus Term Loan) based on leverage and income tests under the Cerberus Term Loan) plus, at the Borrowers’ election, LIBOR or a Reference Rate as defined in the Cerberus Term Loan. The amendment also provided for a portion of such interest equal to 1% per annum to be paid-in-kind and added to the principal amount of such term loans. The amendment also modified the financial covenant levels required to be maintained by the Borrowers beginning with the second quarter of fiscal 2012 for each financial covenant. The Cerberus Term Loan, as amended, requires that the Borrowers maintain a fixed charge coverage ratio as of each fiscal quarter end (beginning with the second quarter of fiscal 2012) ranging from 0.14:1-1.28:1 during the life of the Cerberus Term Loan. The Cerberus Term Loan, as amended, also requires that the Borrowers maintain a leverage ratio as defined in the Cerberus Term Loan and ranging from 2.44:1-7.77:1 during the life of the Cerberus Term Loan (beginning with the second quarter of fiscal 2012). The minimum fixed charge coverage ratios for the second, third and fourth quarters of fiscal 2012 were 0.14:1, 0.41:1 and 0.67:1, respectively. The minimum fixed charge coverage ratios for 2013 are 0.89:1, 1.24:1, 1.28:1, and 1.22:1 for the first through fourth quarters, respectively. Subsequent to 2013, the minimum fixed charge coverage ratio remains at 1.22:1 as of the last day of each fiscal quarter. The maximum leverage ratios for the second, third and fourth quarters of fiscal 2012 were 7.77:1, 5.71:1 and 3.51:1, respectively. The maximum leverage ratios for 2013 are 3.47:1, 358:1, 3.08:1, and 2.44:1 for the first through fourth quarters, respectively. Subsequent to 2013, the maximum leverage ratio remains at 2.44:1 as of the last day of each fiscal quarter. At February 2, 2013 Kellwood Company was in compliance with all provisions of the amended Cerberus Term Loan.
On December 31, 2012, Kellwood Company amended the Cerberus Term Loan to obtain consent to the sale of the Royal Robbins business, to release Royal Robbins, LLC as a Borrower and/or Obligor under the Cerberus Term Loan, and to release the agent’s lien on the assets of Royal Robbins. This amendment required the prepayment of the obligations under the Cerberus Term Loan in an amount not less than $10,000 from a portion of the proceeds from the sale of Royal Robbins with the remaining funds to be remitted to the Wells Fargo Facility (as defined in Note 7 to the Consolidated Financial Statements). This amendment also redefined the definition Consolidated EBITDA to allow for certain additional addbacks.
On May 3, 2013, Kellwood Company amended the Cerberus Term Loan in anticipation of not being in compliance with the fixed charge coverage ratio covenant during the 2013 fiscal year. This amendment modified the definition of the fixed charge coverage ratio to allow us to exclude certain types of capital expenditures in the calculation of the minimum fixed charge coverage ratio for the second, third, and fourth quarters of fiscal 2013, not to exceed $7,500 in total. Additionally, this amendment modified the minimum fixed charge coverage ratios for the second, third, and fourth quarters of fiscal 2013 to be 1.10:1, 1.175:1, and 1.25:1, respectively. The minimum fixed charge coverage ratio for all fiscal quarters subsequent to 2013 was modified to be 1.25:1. On June 28, 2013 (unaudited), Cerberus and Kellwood Company entered into a consent to the Cerberus Term Loan with respect to AHC’s incurrence of the Term G Loan under the Sun Term Loan B/C/D/E/F/G Agreement. Kellwood Company anticipates that it will be in compliance with all provisions of the amended Cerberus Term Loan during fiscal 2013.
Term A/B/C/D/E/F/G Obligations
On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Borrowers”), affiliates of Sun Capital Partners, Inc., as lenders, and Sun Kellwood Finance, LLC, as collateral agent, entered into (a) the Amended and Restated Term A Loan Agreement (the “Term A Loan Agreement”) and (b) the Third Amended and Restated Term Loan (the “Term B/C/D Loan Agreement”, and together with the Term A Loan Agreement, the “Sun Term Loan Agreements”).
 
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The Term A Loan Agreement serves to amend and restate in its entirety the Term Loan dated July 23, 2009, as previously amended (the “Prior Term A Agreement”) pursuant to which the lenders made certain Term A loans with an original principal amount of $12,168, the proceeds of which were used by the Borrowers to fund payment of the principal amounts outstanding, plus accrued and unpaid interest on the 7.875% 1999 Debentures due July 15, 2009 that were not tendered as part of the exchange offer for the 12.875% Notes.
The Term B/C/D Loan Agreement serves to amend and restate in its entirety the Second Amended and Restated Term Loan dated as of August 5, 2011 (as amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Prior Term B/C/D Agreement”) pursuant to which the lenders made certain (i) Term B loans with an original principal amount of $22,393 issued on January 4, 2011, the proceeds of which were used by the Borrowers solely to finance the acquisition of Rebecca Taylor, (ii) Term C loans with an original principal amount of $14,900 issued on March 18, 2011, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers and (iii) Term D loans with an original principal amount of $10,000 issued on August 5, 2011, the proceeds of which were used to fund all or any part of the purchase price or cost of design, construction, installation or improvement or lease of property (real or personal), plant or equipment (whether through the direct acquisition of such assets or the acquisition of capital stock of any person owning such assets) used in the business of the Borrowers.
The primary reason for entering into the Sun Term Loan Agreements was to conform the major non-economic terms of such agreements, including the representations, warranties and covenants, to those of the Credit Agreement and the Cerberus Term Loan. The Sun Term Loan Agreements were also amended to provide a termination date of the earlier of (i) January 19, 2017 or (ii) the date on which the Cerberus Term Loan has been terminated; provided that, if the Cerberus Term Loan is extended, the stated maturity date set forth in (i) above shall be extended by a period of the same duration. The Sun Term Loan Agreements were amended such that the Sun Term Loan Agreements bear interest at 10% per annum (or 12% per annum in the case of the Term E loans, the Term F loans and the Term G loans described below) that will be added to the principal amounts of the Sun Term Loans. If the availability under the Credit Agreement is not less than $45,000, Kellwood Company may pay interest at a rate of 5% per annum in cash with respect to the Term A, B, C and D Loans and at a rate of 6% per annum in cash with respect to the Term E, F, and G Loans. The Sun Term Loan Agreements are secured by a security interest in substantially all of the assets of the Borrowers, which security interest is contractually subordinated to the security interests of the lenders under the Credit Agreement and the Cerberus Term Loan. The Sun Term Loan Agreements contain certain customary representations, warranties, provisions and restrictions substantially similar to the Credit Agreement and Cerberus Term Loan.
On April 20, 2012, Kellwood Company entered into an amendment and restatement of each of the Sun Term Loan Agreements. The Term B/C/D Loan Agreement was amended and restated in order to (i) provide for new Term E loans with an original principal amount of $5,100, the proceeds of which were used to finance costs and expenses and earnout payments in respect of certain acquisitions consummated by the Borrowers prior to the date of the Term E loans, (ii) provide for new Term F loans with an original principal amount of $24,900, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers, and (iii) to conform to the changes made to the Credit Agreement and the Cerberus Term Loan. The primary reason for entering into the amendment and restatement of the Term A Loan Agreement was to conform to the changes made to the Credit Agreement, the Cerberus Term Loan and the Term B/C/D Loan Agreement. On June 28, 2013 (unaudited), Kellwood Company entered into an amendment and restatement of the Sun Term Loan B/C/D/E/F Agreement in order to (i) provide for new Term G loans with an original principal amount of $5,000, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers and (ii) to conform to the changes made to the Credit Agreement and the Cerberus Term Loan. The Term E loans, the Term F loans and the Term G loans
 
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bear interest at 12% per annum that will be added to the principal amounts of such loans. If the availability under the Credit Agreement is not less than $45,000, Kellwood Company may pay interest at a rate of 6% per annum in cash. No cash interest has been paid on the Sun Term Loan Agreements.
12.875% Notes
Interest on the 12.875% 2009 Debentures due December 31, 2014 (the “12.875% Notes”) is paid (a) in cash at a rate of 7.875% per annum payable in January and July; and (b) in the form of PIK interest at a rate of 5% per annum (“PIK Interest”) payable either by increasing the principal amount of the outstanding 12.875% Notes, or by issuing additional 12.875% Notes with a principal amount equal to the PIK Interest accrued for the interest period. The 12.875% Notes are guaranteed by various of Kellwood’s subsidiaries on a secured basis, which security interest is contractually subordinated to security interests of lenders under the Credit Agreement, the Cerberus Term Loan and the Sun Term Loan Agreements. The 12.875% Notes contain certain customary provisions that, among other things, limit the ability to incur additional indebtedness, make certain restricted payments, dispose of assets or redeem or repurchase capital stock or prepay subordinated indebtedness.
Retirement of 7.625% Notes
On April 15, 2010, Kellwood Company repurchased $29,704 in aggregate principal amount of the 7.625% 1997 Debentures due October 15, 2017 (the “7.625% Notes”) from an affiliate of Sun Capital Partners, Inc. for $9,060 in cash. The repurchased 7.625% Notes were then retired. Approximately $86,953 in aggregate principal amount of 7.625% Notes remain outstanding following the repurchase. Interest is payable in April and October. The extinguishment resulted in a gain of $15,912 during fiscal 2010.
Principal amounts of the notes payable and long-term debt outstanding at February 2, 2013 include the following (in thousands):

 	  	Outstanding
Principal	 	  	Capitalized
PIK Interest	 	  	Total	 	  	Less:
Discount	 	 	Amount per
Consolidated
Balance
Sheet	 	
Sun Promissory Notes	  	$	300,000	  	  	$	19,926	  	  	$	319,926	  	  	$	—	  	 	$	319,926	  	
Sun Capital Loan Agreement	  	 	69,485	  	  	 	2,023	  	  	 	71,508	  	  	 	—	  	 	 	71,508	  	
Cerberus Term Loan	  	 	45,000	  	  	 	431	  	  	 	45,431	  	  	 	—	  	 	 	45,431	  	
Term A Obligations	  	 	12,168	  	  	 	5,084	  	  	 	17,252	  	  	 	—	  	 	 	17,252	  	
Term B Obligations	  	 	22,393	  	  	 	5,114	  	  	 	27,507	  	  	 	—	  	 	 	27,507	  	
Term C Obligations	  	 	14,900	  	  	 	3,045	  	  	 	17,945	  	  	 	—	  	 	 	17,945	  	
Term D Obligations	  	 	10,000	  	  	 	1,595	  	  	 	11,595	  	  	 	—	  	 	 	11,595	  	
Term E Obligations	  	 	5,100	  	  	 	501	  	  	 	5,601	  	  	 	—	  	 	 	5,601	  	
Term F Obligations	  	 	24,900	  	  	 	2,444	  	  	 	27,344	  	  	 	—	  	 	 	27,344	  	
12.875% 2009 Debentures due December 31, 2014	  	 	120,590	  	  	 	22,598	  	  	 	143,188	  	  	 	(3,810	) 	 	 	139,378	  	
7.625% 1997 Debentures due October 15, 2017	  	 	86,953	  	  	 	—	  	  	 	86,953	  	  	 	(8,899	) 	 	 	78,054	  	
3.5% 2004 Convertible Debentures due June 15, 2034	  	 	200	  	  	 	11	  	  	 	211	  	  	 	—	  	 	 	211	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Total long-term debt outstanding	  	$	711,689	  	  	$	62,772	  	  	$	774,461	  	  	$	(12,709	) 	 	$	761,752	  	

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Principal amounts of the notes payable and long-term debt outstanding at August 3, 2013 (unaudited) include the following (in thousands):

 	  	Outstanding
Principal	 	  	Capitalized
PIK Interest	 	  	Total	 	  	Less:
Discount	 	 	Amount per
Consolidated
Balance
Sheet	 	
Cerberus Term Loan	  	$	45,000	  	  	$	660	  	  	$	45,660	  	  	$	—	  	 	$	45,660	  	
Term A Obligations	  	 	12,168	  	  	 	5,950	  	  	 	18,118	  	  	 	—	  	 	 	18,118	  	
Term B Obligations	  	 	22,393	  	  	 	6,496	  	  	 	28,889	  	  	 	—	  	 	 	28,889	  	
Term C Obligations	  	 	14,900	  	  	 	3,946	  	  	 	18,846	  	  	 	—	  	 	 	18,846	  	
Term D Obligations	  	 	10,000	  	  	 	2,177	  	  	 	12,177	  	  	 	—	  	 	 	12,177	  	
Term E Obligations	  	 	5,100	  	  	 	837	  	  	 	5,937	  	  	 	—	  	 	 	5,937	  	
Term F Obligations	  	 	24,900	  	  	 	4,089	  	  	 	28,989	  	  	 	—	  	 	 	28,989	  	
Term G Obligations	  	 	5,000	  	  	 	59	  	  	 	5,059	  	  	 	—	  	 	 	5,059	  	
12.875% 2009 Debentures due December 31, 2014	  	 	120,590	  	  	 	26,178	  	  	 	146,768	  	  	 	(2,806	) 	 	 	143,962	  	
7.625% 1997 Debentures due October 15, 2017	  	 	86,953	  	  	 	—	  	  	 	86,953	  	  	 	(7,962	) 	 	 	78,991	  	
3.5% 2004 Convertible Debentures due June 15, 2034	  	 	200	  	  	 	14	  	  	 	214	  	  	 	—	  	 	 	214	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Total long-term debt outstanding	  	$	347,204	  	  	$	50,406	  	  	$	397,610	  	  	$	(10,768	) 	 	$	386,842	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Note 9. Leases
We lease substantially all of our office space, distribution facilities, retail stores and certain machinery and equipment under operating leases having remaining terms up to twelve years, excluding renewal terms. Most of our real estate leases contain covenants that require us to pay real estate taxes, insurance, and other executory costs. Certain of these leases require contingent rent payments, kick-out clauses and/or opt-out clauses, based on the operating results of the retail operations utilizing the leased premises. Rent under leases with scheduled rent changes or lease concessions are recorded on a straight-line basis over the lease term. Rent expense under all operating leases of our continuing operations was $15,620, $15,004 and $18,040 for fiscal 2010, fiscal 2011, and fiscal 2012, respectively.
The future minimum lease payments under operating leases at February 2, 2013 were as follows (in thousands):

 	  	Operating	 	
2013	  	$	16,376	  	
2014	  	 	15,667	  	
2015	  	 	12,349	  	
2016	  	 	10,866	  	
2017	  	 	8,956	  	
Thereafter	  	 	30,081	  	
	  	 	 	 	
Total minimum lease payments	  	$	94,295	  	
	  	 	 	 	
Future minimum lease payments are not reduced for expected sublease rental income of approximately $275.
Note 10. Retirement Benefits
We sponsor or contribute to various defined contribution retirement benefit and savings plans covering substantially all employees. Total retirement benefits expense was $620, $258, and $168, for fiscal 2010, fiscal 2011, and fiscal 2012, respectively.
 
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Note 11. Share-Based Compensation
Apparel Holding Corp.
AHC does not have convertible equity or convertible debt securities, any of which could result in share-based compensation expense.
Kellwood Company
Kellwood Company has convertible equity securities that result in recognition of share-based compensation expense. On June 30, 2010, the Board of Directors approved the 2010 Stock Option Plan of Kellwood Company (the “Plan”). The Plan provides for the grant of options to acquire up to 100,000 shares of non-voting common stock (“Stock”) of Kellwood Company. The shares used may be newly issued shares or treasury shares. As of February 2, 2013, 24,500 shares from the Plan remain available for grants.
Kellwood Company granted options to purchase a total of 58,500 and 10,000 shares of Stock to key executives of Kellwood Company during the fiscal years ended February 2, 2013 and January 28, 2012, respectively. The options granted (i) vest in five equal installments on the first, second, third, fourth, and fifth anniversary of the grant date, subject to the employee’s continued employment, (ii) expire on the earlier of the tenth anniversary of the grant date or upon termination of employment by the company for cause, and (iii) become exercisable upon termination or a liquidity event, as defined by the Plan.
The fair value of stock options granted in fiscal 2012 was determined at the grant date using a Black-Scholes model, which requires us to make several significant assumptions including risk-free interest rate, volatility, expected term, and discount factors for shareholders in a privately-held company. The estimated term of 6.5 years for these options was developed using a simplified method permitted by SEC Staff Accounting Bulletin Topic 14: Share-Based Payment , available for companies with “plain-vanilla” options and have limited historical exercise data. Our selected volatility rate of 55.0% was estimated using both: (i) volatility reported by companies comparable to Kellwood Company with publicly-traded stock, and (ii) calculated volatility of companies comparable to Kellwood Company with publicly-traded stock using historical stock prices. We applied a cumulative discount factor to the price per share of 36.25% to adjust for the lack of marketability of the shares, as well as the impact of the shares representing a minority interest in a privately-held company. Our estimates were developed using market data for companies comparable to Kellwood Company and empirical studies regarding the impact on the value of private-company shares resulting from transfer restrictions. Finally, the risk-free rate of 0.85% is based upon the U.S. Treasury five year yield curve. At the grant date, the options granted in fiscal year 2012 had a weighted average fair value of $43.01 per share.
The fair value of stock options granted in fiscal 2011 was determined at the grant date using a probability-weighted expected return method model, which requires us to make several significant assumptions including long-term EBITDA growth rates, future enterprise value, discount rates, and timing and probability of a future liquidity event. This methodology was selected based on our capital structure and forecasted operational performance at the time of the valuation. At the grant date, the options granted in fiscal year 2011 had a weighted average fair value of $0.46 per share. Prior to 2012, our estimates of future enterprise value for Kellwood Company as compared to the value of Kellwood Company’s debt obligations precluded us from using a closed-form model (including a Black-Scholes formula) to estimate the fair value of our stock options. Due to more favorable operating results in the current year, which are expected to continue into future periods, we believe that the Black-Scholes formula provides a more refined estimate of the value of our stock options, in consideration of our current capital structure and estimates of future operating performance. A change in option-pricing model is not considered a change in accounting principle.
 
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A summary of stock option activity is as follows:

 	  	Options	 	 	Weighted
Average
Exercise Price	 	  	Weighted Average
Remaining
Contractual Term	 	
Outstanding at January 29, 2011	  	 	81,000	  	 	$	1.00	  	  				
Granted	  	 	10,000	  	 	$	1.00	  	  				
Exercised	  	 	—	  	 				  				
Forfeited or expired	  	 	(55,000	) 	 	$	1.00	  	  				
	  	 	 	 	 				  				
Outstanding at January 28, 2012	  	 	36,000	  	 	$	1.00	  	  	 	8.7	  	
	  	 	 	 	 				  				
Vested or expected to vest at January 28, 2012	  	 	36,000	  	 	$	1.00	  	  	 	8.7	  	
Exercisable at January 28, 2012	  	 	—	  	 	 	—	  	  				
Outstanding at January 28, 2012	  	 	36,000	  	 	$	1.00	  	  				
Granted	  	 	58,500	  	 	$	137.98	  	  				
Exercised	  	 	—	  	 				  				
Forfeited or expired	  	 	(19,000	) 	 	$	1.00	  	  				
	  	 	 	 	 				  				
Outstanding at February 2, 2013	  	 	75,500	  	 	$	107.14	  	  	 	7.0	  	
	  	 	 	 	 				  				
Vested or expected to vest at February 2, 2013	  	 	75,500	  	 	$	107.14	  	  	 	7.0	  	
Exercisable at February 2, 2013	  	 	—	  	 	 	—	  	  				
We recognized $65 and $367 of compensation expense in selling, general, and administrative expense in the Consolidated Statement of Operations for fiscal years ended January 28, 2012 and February 2, 2013, respectively. At February 2, 2013, there was $2,011 of unrecognized compensation costs that will be recognized over a remaining weighted average period of 3.3 years.
Note 12. Stockholders’ Equity
We currently have authorized for issuance 1,200,000 shares of our Voting Common Stock, par value of $0.001 per share. As of January 28, 2012 and February 2, 2013 we had 918,924.91 shares issued and outstanding. We currently have authorized for issuance 1,700,000 shares of our Non-Voting Common Stock, par value of $0.001 per share. As of January 28, 2012 and February 2, 2013 we had 193.09 shares issued and outstanding. All voting common shares issued and outstanding are held by affiliates of Sun Capital. All non-voting common shares issued and outstanding are owned by H.I.G. Sun Partners, Inc.
Both classes of common shares have identical terms and liquidation preferences, except for voting rights. Accordingly, they are treated as substantially identical for purposes of computing earnings per share.
We have not paid dividends, and our current ability to pay such dividends is restricted by the terms of our debt agreements. Our future dividend policy will be determined on a yearly basis and will depend on earnings, financial condition, capital requirements, and certain other factors. We do not expect to declare dividends with respect to our common stock in the foreseeable future.
Note 13. Earnings Per Share
The numerator for both basic and diluted earnings (loss) per share is Net loss. The denominator for basic and diluted earnings (loss) per share is the weighted-average number of common shares outstanding during the period. There are no dilutive equity securities issued or outstanding.
 
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The following is a reconciliation of basic shares to diluted shares:

 	  	January 29, 2011	 	  	January 28, 2012	 	  	February 2, 2013	 	
Weighted-average shares—basic	  	 	919,118	  	  	 	919,118	  	  	 	919,118	  	
Effect of dilutive equity securities—none	  	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Weighted-average shares—diluted	  	 	919,118	  	  	 	919,118	  	  	 	919,118	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
For fiscal 2010, fiscal 2011, and fiscal 2012, there were no potential common shares excluded from diluted earnings per share.
There are no differences in the dividend and liquidation preferences or participation rights of the Voting Common Stock and Non-Voting Common Stock shares.
Note 14. Income Taxes
The provision (benefit) for income taxes for continuing operations consists of the following (in thousands):

 	  	    2010    	 	 	    2011    	 	  	    2012    	 	
Current:	  				 				  				
Domestic:	  				 				  				
Federal	  	$	(1,045	) 	 	$	100	  	  	$	(1,568	) 	
State	  	 	754	  	 	 	7	  	  	 	927	  	
Foreign	  	 	318	  	 	 	247	  	  	 	394	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total current	  	 	27	  	 	 	354	  	  	 	(247	) 	
Deferred:	  				 				  				
Domestic:	  				 				  				
Federal	  	 	2,094	  	 	 	2,120	  	  	 	1,228	  	
State	  	 	1,191	  	 	 	670	  	  	 	(275	) 	
Foreign	  	 	195	  	 	 	257	  	  	 	2	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total deferred	  	 	3,480	  	 	 	3,047	  	  	 	955	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total provision for income taxes	  	$	3,507	  	 	$	3,401	  	  	$	708	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
The sources of (loss) income before provision for income taxes are (in thousands):

 	  	    2010    	 	 	    2011    	 	 	    2012    	 	
United States	  	$	(85,780	) 	 	$	(129,208	) 	 	$	(105,824	) 	
Foreign	  	 	1,200	  	 	 	1,323	  	 	 	876	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	(84,580	) 	 	$	(127,885	) 	 	$	(104,948	) 	

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Current income taxes are the amounts payable under the respective tax laws and regulations on each year’s earnings and on foreign earnings remitted during the year. A reconciliation of the federal statutory income tax rate to the effective tax rate (including impairment of long-lived assets and restructuring, environmental remediation and other charges) is as follows:

 	  	    2010    	 	 	    2011    	 	 	    2012    	 	
Statutory rate	  	 	(35.0	%) 	 	 	(35.0	%) 	 	 	(35.0	%) 	
State taxes, net of federal benefit	  	 	(0.9	%) 	 	 	(1.7	%) 	 	 	(1.4	%) 	
Foreign tax rate differential	  	 	0.3	% 	 	 	0.7	% 	 	 	(0.3	%) 	
Tax reserve adjustment	  	 	(0.5	%) 	 	 	(0.2	)% 	 	 	(0.8	%) 	
Nondeductible interest	  	 	28.1	% 	 	 	22.3	% 	 	 	22.9	% 	
Valuation allowances	  	 	12.3	% 	 	 	16.5	% 	 	 	15.2	% 	
Other	  	 	(0.2	%) 	 	 	0.1	% 	 	 	0.1	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	 	4.1	% 	 	 	2.7	% 	 	 	0.7	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Deferred income tax assets and liabilities for continuing operations consisted of the following (in thousands):

 	  	January 28, 2012	 	 	February 2, 2013	 	
Deferred tax assets:	  				 				
Depreciation and amortization	  	$	26,416	  	 	$	29,948	  	
Employee related costs	  	 	2,803	  	 	 	5,781	  	
Allowance for asset valuations	  	 	2,212	  	 	 	2,718	  	
Accrued expenses	  	 	5,278	  	 	 	6,110	  	
Net operating losses	  	 	54,831	  	 	 	67,419	  	
Other	  	 	5,800	  	 	 	5,171	  	
	  	 	 	 	 	 	 	 	
Total deferred tax assets	  	 	97,340	  	 	 	117,147	  	
Less: Valuation allowances	  	 	(81,502	) 	 	 	(105,616	) 	
	  	 	 	 	 	 	 	 	
Net deferred tax assets	  	 	15,838	  	 	 	11,531	  	
	  	 	 	 	 	 	 	 	
Deferred tax liabilities:	  				 				
Depreciation and amortization	  	 	(13,133	) 	 	 	(13,901	) 	
Long-term debt	  	 	(14,861	) 	 	 	(10,534	) 	
Other	  	 	(50	) 	 	 	(270	) 	
	  	 	 	 	 	 	 	 	
Total deferred tax liabilities	  	 	(28,044	) 	 	 	(24,705	) 	
	  	 	 	 	 	 	 	 	
Net deferred tax liabilities	  	$	(12,206	) 	 	$	(13,174	) 	
	  	 	 	 	 	 	 	 	
Included in:	  				 				
Prepaid expenses and other current assets	  	$	170	  	 	$	114	  	
Other assets	  	 	93	  	 	 	146	  	
Deferred income taxes and other	  	 	(12,469	) 	 	 	(13,434	) 	
	  	 	 	 	 	 	 	 	
Net deferred income tax liabilities	  	$	(12,206	) 	 	$	(13,174	) 	
	  	 	 	 	 	 	 	 	
As of February 2, 2013, various federal, state and foreign net operating losses were available for carryforward to offset future taxable income. Substantially all of these net operating losses will expire between 2029 and 2033. A full valuation allowance was placed on the U.S. net deferred tax assets during fiscal 2009 due to the fact that there was not sufficient positive evidence to outweigh the existing negative evidence that we would be able to utilize these net operating loss carryforwards, primarily our historical pretax losses. In addition, a deemed change of ownership occurred under Section 382 of the U.S. tax code resulting in $112,258 of net operating losses, as well as certain built in losses, to be subject to an annual limitation of $0. Since the realization of these benefits is remote, the associated deferred tax assets have been written down to zero. The total valuation allowance on deferred tax assets for continuing operations increased by $27,550 and $24,114 in the years ended January 28, 2012 and February 2, 2013, respectively.
 
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Federal income taxes are provided on earnings of foreign subsidiaries except to the extent such earnings are currently expected to be permanently reinvested abroad. We do not currently consider any undistributed foreign earnings to be permanently reinvested abroad as of February 2, 2013.
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):

 	  	2010	 	 	2011	 	 	2012	 	
Beginning balance	  	$	14,836	  	 	$	16,296	  	 	$	11,057	  	
Increases for tax positions in current year	  	 	2,113	  	 	 	1,098	  	 	 	2,199	  	
Increases for tax positions in prior years	  	 	1,174	  	 	 	159	  	 	 	52	  	
Decreases for tax positions in prior years	  	 	(298	) 	 	 	(5,500	) 	 	 	(102	) 	
Settlements	  	 	(417	) 	 	 	(937	) 	 	 	(2,105	) 	
Lapse in statute of limitations	  	 	(1,112	) 	 	 	(59	) 	 	 	(1,723	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Ending balance	  	$	16,296	  	 	$	11,057	  	 	$	9,378	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
As of January 28, 2012 and February 2, 2013, unrecognized tax benefits in the amount of $8,817 and $5,305 (net of tax), respectively, would impact our effective tax rate if recognized. We reached a settlement with a local tax jurisdiction resulting in a reduction to our gross unrecognized tax benefits of $3,023 during the six months ended August 3, 2013 (unaudited). However, there was no impact to the tax provision. It is reasonably possible that within the next 12 months we could settle some ongoing audits with various taxing jurisdictions and/or we could have the statute of limitations expire in various jurisdictions. Should these events occur, our unrecognized tax benefits could be reduced by up to $2,500.
We include accrued interest and penalties on underpayments of income taxes in our income tax provision. As of January 28, 2012 and February 2, 2013, we had interest and penalties accrued on our Consolidated Balance Sheets in the amount of $5,929 and $3,898, respectively. Net interest and penalty provisions of $478, $1,401, and $600 were recognized in our Consolidated Statements of Operations for fiscal 2010, fiscal 2011, and fiscal 2012, respectively. Interest is computed on the difference between the tax position recognized net of any unrecognized tax benefits and the amount previously taken or expected to be taken in our tax returns.
All amounts above related to unrecognized tax benefits include continuing and discontinued operations.
We are no longer subject to examination for U.S. federal income tax for 2007 and prior. With limited exceptions, we are no longer subject to state income tax examinations for 2006 and prior. Foreign income tax returns are principally no longer subject to examination for 2007 and prior.
Our effective tax rate for continuing operations for the first six months of fiscal 2012 and fiscal 2013 (unaudited) was 3.0% and 8.3%, respectively. The rate for these periods differs from the U.S. statutory rate of 35% primarily due to additional valuation allowance and nondeductible interest.
Note 15. Commitments and Contingencies
Environmental Considerations
We are subject to a variety of environmental laws and regulations governing discharges to air and water, the handling, storage and disposal of hazardous or solid waste materials and the remediation of contamination associated with releases of hazardous substances, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
 
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During the second quarter of fiscal 2012, Kellwood Company, our wholly-owned subsidiary, entered into a Consent Decree with the United States Environmental Protection Agency (“EPA”) and Missouri Department of Natural Resources (“MDNR”) to conduct cleanup initiatives for the decontamination of soil and groundwater located near a former metal fabrication plant in New Haven, MO. The agreement became effective August 24, 2012, and was entered into as settlement of a lawsuit filed against Kellwood Company by the EPA and MDNR. The lawsuit alleged that Kellwood Company inappropriately disposed of tetrachloroethylene (“PCE”) an industrial degreaser used to clean metal rods for tent poles, on the surrounding grounds and sewer system of a plant operated by American Recreation Products, a wholly owned subsidiary of Kellwood Company and AHC, between 1973 and 1985. Effective October 15, 2012, in accordance with the terms of the agreement, we posted a letter of credit payable to the EPA in the amount of $5,920 as a performance guarantee for the estimated cost of remediation work.
As of February 2, 2013 and August 3, 2013 (unaudited), we have recorded $9,604 and $9,702, respectively, for estimated capital costs and ongoing remedial activities at the New Haven site. This represents our best estimate of the discounted value of the total obligation using a discount rate of 3.0% for ongoing remediation activities, and rates ranging from 0.1% to 1.0% for activities expected to be completed during the next five years. We have projected undiscounted cash flows of $12,881, after adjusting for a 2.65% inflation rate. Our recorded liability differs from the performance guarantee required by the EPA primarily due to management’s use of a lower discount rate, as well as assumption of additional costs not reflected in the EPA’s estimate of remediation work. These additional costs include voluntary corrective actions implemented by Kellwood, as well as EPA oversight fees.
Although we believe we are currently in material compliance with all of the various regulations applicable to our business, there can be no assurance that requirements will not change in the future or that we will not incur significant costs to comply with such requirements. We are currently not aware of any environmental matters which may have a material impact on our financial position, results of operations, or liquidity.
Tax Settlements
During the fourth quarter of fiscal 2012, we settled an ongoing income tax case with a state jurisdiction for a total of $4,636 (including interest). The settlement amount will be paid over a three year period subject to interest of 7.5%. We have $1,805 and $1,256 of the settlement liability recorded within other accrued expenses for the short-term portion due as of February 2, 2013 and August 3, 2013 (unaudited), respectively. The remaining amount of our obligation is recorded within deferred income taxes and other for both periods.
During the six months ended August 3, 2013 (unaudited), we settled an ongoing income tax case with a local jurisdiction for a total of $6,616 (including interest). We began making payments on the settlement amount during the third quarter of 2013, which will be paid over a three year period and subject to interest of 7.5%. As of August 3, 2013, we had $2,563 of the settlement liability recorded within other accrued expenses for the short-term portion due. The remaining amount of our obligation is recorded within deferred income taxes and other.
Litigation
We are currently party to various legal proceedings. While management currently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse impact on our financial position or results of operations, litigation is subject to inherent uncertainties.
 
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License Agreements
We have exclusive license agreements to market apparel under trademarks owned by other parties. These include XOXO ® for juniors sportswear and dresses, as well as various others for recreational products and apparel. These agreements contain provisions for minimum royalty and advertising payments based on anticipated sales in future periods. Royalty and advertising expense for license agreements within continuing operations were $4,161 and $1,206, respectively in fiscal 2010 and $3,645 and $977, respectively in fiscal 2011. In fiscal year 2012, the royalty and advertising expense within continuing operations for all license agreements totaled $713 and $500, respectively.
Our future minimum payments for all license agreements within continuing operations are as follows (in thousands):

 	  	Royalties	 	  	Advertising	 	
2013	  	$	74	  	  	$	500	  	
2014	  	 	8	  	  	 	500	  	
2015	  	 	—	  	  	 	—	  	
2016	  	 	—	  	  	 	—	  	
2016	  	 	—	  	  	 	—	  	
Thereafter	  	 	—	  	  	 	—	  	
	  	 	 	 	  	 	 	 	
Total	  	$	82	  	  	$	1,000	  	
	  	 	 	 	  	 	 	 	
Contingent Consideration for Certain Acquisitions
As further described in Note 2 to the Consolidated Financial Statements, there is a deferred purchase price component to the Rebecca Taylor acquisition. The amount of this contingent consideration will be determined based on the operating results of this business and the others factors outlined in the related contingent consideration agreement.
Note 16. Segment and Geographical Financial Information
AHC designs, merchandises and sells a collection of brands across a broad range of consumer lifestyles, as well as recreational apparel and products aimed to improve the consumer outdoor experience. We operate and manage our business by brand and have identified four reportable segments, as further described below. These segments represent brand-based activities for which discrete financial information is readily available and utilized by our Chief Operating Decision Maker (“CODM”) to evaluate each brand’s performance on a regular basis. We considered both similar and dissimilar economic characteristics, internal reporting and management structures, as well as products, customers, and supply chain logistics to identify the following reportable segments:
 
 	Ÿ	 	Vince segment—consists of the specialty retail, wholesale, e-commerce, and licensing operations of our high-growth contemporary Vince brand.	
 
 	Ÿ	 	American Recreational Products (“ARP”) segment—consists of our outdoor recreational equipment and apparel operations.	
 
 	Ÿ	 	Juniors segment—consists of a collection of denim, dresses, and sportswear labels sold through wholesale distribution to retailers.	
 
 	Ÿ	 	Moderate segment—consists of our moderately priced career and casual lifestyle brands sold through wholesale distribution to retailers.	
Performance results of our remaining operating segments have been combined in Other, as none of these brands individually meet the quantitative thresholds for disclosure as a reportable segment.
 
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Segment performance is evaluated by the Company’s CODM based on Adjusted EBITDA, defined as net earnings from continuing operations before interest expense, provision for income taxes, depreciation, amortization, long-lived asset impairment losses, fair value adjustments to contingent consideration obligations, restructuring charges, environmental remediation costs, gain on acquisitions, gain on debt extinguishment, and other non-recurring charges. Although impairment losses and adjustments to contingent consideration liabilities relate to specific brands, they are excluded from the Adjusted EBITDA of our operating segments as these measures can fluctuate significantly year over year and are not considered to be primary measures of segment performance by our CODM.
Unallocated corporate expenses are comprised of selling, general, and administrative expenses attributable to corporate and administrative activities, and other charges that are not directly attributable to our operating segments. There were no inter-segment sales or transfers for the periods presented below. Summary information for our operating segments is presented below (in thousands).

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net Sales	  				 				 				 				 				
Vince	  	$	111,492	  	 	$	175,255	  	 	$	240,352	  	 	$	90,531	  	 	$	114,657	  	
ARP	  	 	98,203	  	 	 	94,606	  	 	 	98,830	  	 	 	52,295	  	 	 	51,272	  	
Juniors	  	 	177,629	  	 	 	190,613	  	 	 	181,582	  	 	 	89,850	  	 	 	110,575	  	
Moderate	  	 	141,895	  	 	 	103,817	  	 	 	78,103	  	 	 	38,509	  	 	 	32,182	  	
Other	  	 	57,355	  	 	 	98,555	  	 	 	109,128	  	 	 	48,260	  	 	 	55,281	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total net sales	  	$	586,574	  	 	$	662,846	  	 	$	707,995	  	 	$	319,445	  	 	$	363,967	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	  				 				 				 				 				
Vince	  	$	23,637	  	 	$	44,186	  	 	$	42,189	  	 	$	13,581	  	 	$	17,491	  	
ARP	  	 	(1,454	) 	 	 	(7,854	) 	 	 	(4,496	) 	 	 	(208	) 	 	 	(528	) 	
Juniors	  	 	13,557	  	 	 	9,411	  	 	 	9,426	  	 	 	3,113	  	 	 	9,384	  	
Moderate	  	 	18,672	  	 	 	250	  	 	 	1,924	  	 	 	(1,003	) 	 	 	832	  	
Other	  	 	(1,301	) 	 	 	10,296	  	 	 	6,916	  	 	 	2,747	  	 	 	3,792	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment adjusted EBITDA	  	 	53,111	  	 	 	56,289	  	 	 	55,959	  	 	 	18,230	  	 	 	30,971	  	
Unallocated corporate expense	  	 	(31,312	) 	 	 	(32,196	) 	 	 	(30,736	) 	 	 	(15,914	) 	 	 	(15,149	) 	
Interest expense, net	  	 	(103,074	) 	 	 	(127,148	) 	 	 	(122,383	) 	 	 	(74,151	) 	 	 	(43,671	) 	
Depreciation	  	 	(9,035	) 	 	 	(8,491	) 	 	 	(5,611	) 	 	 	(2,905	) 	 	 	(2,622	) 	
Amortization of intangible assets	  	 	(954	) 	 	 	(1,941	) 	 	 	(1,899	) 	 	 	(950	) 	 	 	(950	) 	
Restructuring, environmental and other charges	  	 	(9,729	) 	 	 	(2,651	) 	 	 	(5,091	) 	 	 	(2,264	) 	 	 	(827	) 	
Impairment of long-lived assets (excluding goodwill)	  	 	(438	) 	 	 	(2,504	) 	 	 	(2,349	) 	 	 	(717	) 	 	 	—	  	
Impairment of goodwill	  	 	—	  	 	 	(10,821	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Change in fair value of contingent consideration	  	 	—	  	 	 	1,578	  	 	 	7,162	  	 	 	4,507	  	 	 	54	  	
Gain on acquisition, net of tax	  	 	939	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
Gain on debt extinguishment	  	 	15,912	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss of continuing operations before provision for income taxes	  	$	(84,580	) 	 	$	(127,885	) 	 	$	(104,948	) 	 	$	(74,164	) 	 	$	(32,194	) 	

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 	  	Fiscal Year	 	  	Six Months Ended	
 	  	2010	 	  	2011	 	  	2012	 	  	July 28,
2012	  	August 3,
2013	
 	  	 	 	  	 	 	  	 	 	  	(unaudited)	  	(unaudited)	
Capital Expenditures	  				  				  				  		  		
Vince	  	$	1,602	  	  	$	1,450	  	  	$	1,821	  	  		  		
ARP	  	 	104	  	  	 	159	  	  	 	727	  	  		  		
Juniors	  	 	—	  	  	 	—	  	  	 	10	  	  		  		
Moderate	  	 	3	  	  	 	—	  	  	 	—	  	  		  		
Other	  	 	818	  	  	 	1,357	  	  	 	3,397	  	  		  		
Corporate	  	 	2,595	  	  	 	4,067	  	  	 	1,748	  	  		  		
	  	 	 	 	  	 	 	 	  	 	 	 	  		  		
Total capital expenditures	  	$	5,122	  	  	$	7,033	  	  	$	7,703	  	  		  		

													
 	  	January 28, 2012	 	  	February 2, 2013	 	  	August 3, 2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Total Assets	  				  				  				
Vince	  	$	222,456	  	  	$	241,008	  	  	$	265,379	  	
ARP	  	 	61,811	  	  	 	61,781	  	  	 	68,892	  	
Juniors	  	 	55,932	  	  	 	49,453	  	  	 	57,865	  	
Moderate	  	 	21,564	  	  	 	15,316	  	  	 	24,302	  	
Other	  	 	35,579	  	  	 	49,777	  	  	 	47,212	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total assets of segments	  	 	397,342	  	  	 	417,335	  	  	 	463,650	  	
Unallocated corporate	  	 	31,173	  	  	 	16,403	  	  	 	3,978	  	
Discontinued operations	  	 	39,930	  	  	 	8,386	  	  	 	163	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total assets	  	$	468,445	  	  	$	442,124	  	  	$	467,791	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net sales results and long-lived assets are presented on a geographic basis below. We predominately operate within the United States and have a limited presence in international markets. Sales are presented based on customer location, while long-lived assets are presented based on asset location. Long-lived assets presented by geographic region below (in thousands) include property, plant and equipment, net of accumulated depreciation, as well as fixtures installed at our retailer sites, net of accumulated amortization.

 	  	2010	 	  	2011	 	  	2012	 	
Domestic	  	$	541,305	  	  	$	612,624	  	  	$	655,879	  	
International	  	 	45,269	  	  	 	50,222	  	  	 	52,116	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total net sales	  	$	586,574	  	  	$	662,846	  	  	$	707,995	  	

											
 	  	 	  	January 28,
2012	 	  	February 2,
2013	 	
Domestic	  		  	$	19,158	  	  	$	18,378	  	
International	  		  	 	37	  	  	 	23	  	
	  		  	 	 	 	  	 	 	 	
Total long-lived assets	  		  	$	19,195	  	  	$	18,401	  	
	  		  	 	 	 	  	 	 	 	
Note 17. Related Party Transactions
Vince Earnout Agreement
In connection with the acquisition of the Vince business, Kellwood Company entered into an agreement with CRL Group providing for contingent earnout payments as additional cash purchase consideration based upon the achievement of specified performance targets. Rea Laccone, former Chief Executive Officer and Chief Creative Officer of the Vince brand, is a member of the CRL Group.
 
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The agreement provided for the payment of contingent annual earnout payments to CRL Group for five periods between 2007 and 2011, as well as a cumulative contingent payment at the end of the agreement period. Additional consideration of $4,475, $58,465, and $806 was paid in fiscal 2010, fiscal 2011, and fiscal 2012, respectively. All consideration was recorded as an adjustment to the goodwill balance of our Vince segment in the fiscal year it was earned. See Note 5 to the Consolidated Financial Statements for a rollforward of goodwill balances by segment. As of January 28, 2012, we reported $806 within other accrued expenses on our Consolidated Balance Sheet.
Certain Indebtedness to affiliates of Sun Capital Partners, Inc.
We have substantial indebtedness to affiliates of Sun Capital Partners, Inc. (“Sun Capital”) after giving effect to the Acquisition in February 2008. Our debt obligations to affiliates of Sun Capital under the Sun Promissory Notes, Sun Capital Loan Agreement, and Sun Term Loan Agreements (as defined in Note 8 to the Consolidated Financial Statements) totaled $498,678 and $118,015 as of February 2, 2013 and August 3, 2013, respectively. These obligations were reported within long-term debt on the Consolidated Balance Sheets as of the respective periods and are comprised of both principal and capitalized PIK interest. See Note 8 to the Consolidated Financial Statements for additional discussion on the terms of each agreement.
On December 28, 2012, Sun Kellwood Finance waived all interest capitalized and accrued under the Sun Promissory notes prior to July 19, 2012. Additionally, Sun Kellwood Finance and SCSF Finance waived all interest capitalized and accrued under the Sun Capital Loan Agreement prior to July 19, 2012. As all parties are under the common control of Sun Capital, both transactions resulted in capital contributions of $270,852 and $18,249 for the Sun Promissory Notes and Sun Capital Loan Agreement, respectively. The capital contributions were recorded as adjustments to additional paid in capital on our Consolidated Balance Sheet as of February 2, 2013. These transactions had no significant income tax consequences.
On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in both the Sun Promissory Notes and note under our Sun Capital Loan Agreement to Sun Cardinal, LLC. Immediately following the assignment of these notes, Sun Cardinal contributed all outstanding principal and interest due under these notes as of June 18, 2013 to the capital of AHC. As all parties are under the common control of Sun Capital, these transactions were recorded in the second quarter of fiscal 2013 (unaudited) as increases to AHC’s additional paid in capital in the amounts of $334,595 and $72,932 for the Sun Promissory Notes and Sun Capital Loan Agreement, respectively. See Note 8 to the Consolidated Financial Statements.
Management Fees
In connection with the acquisition of Kellwood Company by affiliates of Sun Capital in 2008, Sun Capital Management, an affiliate of Sun Capital, entered into a Management Services Agreement with Kellwood Company that expires in May 2018, with automatic one-year extensions thereafter. Under this agreement, Sun Capital Management provides Kellwood Company with consulting and advisory services, including services relating to financing alternatives, financial reporting, accounting and management information systems. In exchange, Kellwood Company reimburses Sun Capital Management for reasonable out-of-pocket expenses incurred in connection with providing consulting and advisory services, additional and customary and reasonable fees for management consulting services provided in connection with corporate events, and also pays an annual management fee equal to $2,200 which is prepaid in equal quarterly installments. We reported $2,357, $2,420, and $2,447 for management fees to Sun Capital in other expense, net of the Consolidated Statements of Operations for fiscal 2010, fiscal 2011, and fiscal 2012, respectively. We reported management fees of $1,243 and $1,201 for the first six months of fiscal 2012 and fiscal 2013 (unaudited), respectively.
 
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Upon the consummation of certain corporate events involving Kellwood Company or its direct or indirect subsidiaries, Kellwood Company is required to pay Sun Capital Management a transaction fee in an amount equal to 1% of the aggregate consideration paid to or by Kellwood Company and any of its direct or indirect subsidiaries or stockholders. We incurred no material transaction fees payable to Sun Capital Management during all periods presented on the Consolidated Statement of Operations. We reported $825, $926, and $971 for outstanding transaction fees within deferred income taxes and other on the Consolidated Balance Sheets as of January 28, 2012, February 2, 2013, and August 3, 2013 (unaudited).
Note 18. Subsequent Events
During the second quarter of fiscal 2013 we divested our Zobha business to focus resources on our larger contemporary and Juniors brands, as discussed further in Note 4 to our Consolidated Financial Statements. The historical results of operations and financial position of the Zobha business are reported as discontinued operations for all periods presented within our Consolidated Financial Statements.
On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in both the Sun Promissory Notes and the note under our Sun Capital Loan Agreement to Sun Cardinal, LLC. Immediately following the assignment of these notes, Sun Cardinal contributed all outstanding principal and interest due under these notes as of June 18, 2013 to the capital of AHC. These transactions were recorded in the second quarter of fiscal 2013 as increases to AHC’s additional paid in capital in the amounts of $334,595 and $72,932 for the Sun Promissory Notes and the note under the Sun Capital Loan Agreement, respectively. See Note 8 to the Consolidated Financial Statements.
On June 28, 2013 Kellwood Company and certain of its domestic subsidiaries, as borrowers, entered into the Fifth Amended and Restated Term Loan Agreement with SCSF Finance, LLC and Sun Kellwood Finance, LLC, as lenders, to provide for new Term G loans with a principal amount of $5,000, as discussed within Note 8 to the Consolidated Financial Statements.
We evaluated our consolidated financial statements as of and for the year ended February 2, 2013 for subsequent events through September 24, 2013, the date the financial statements were available to be issued.
 
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 SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Apparel Holding Corp. (Parent Company Only)
Condensed Statements of Operations
(In thousands)

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net sales	  	$	—	  	 	$	—	  	 	$	—	  	 	$	—	  	 	$	—	  	
Cost of products sold	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	  				 				 				 				 				
Selling, general and administrative expenses	  	 	34	  	 	 	45	  	 	 	22	  	 	 	12	  	 	 	12	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	34	  	 	 	45	  	 	 	22	  	 	 	12	  	 	 	12	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from operations	  	 	(34	) 	 	 	(45	) 	 	 	(22	) 	 	 	(12	) 	 	 	(12	) 	
Interest expense, net	  	 	67,950	  	 	 	81,363	  	 	 	68,683	  	 	 	47,895	  	 	 	15,883	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before provision for income taxes	  	 	(67,984	) 	 	 	(81,408	) 	 	 	(68,705	) 	 	 	(47,907	) 	 	 	(15,895	) 	
Provision for income taxes	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss before equity loss	  	 	(67,984	) 	 	 	(81,408	) 	 	 	(68,705	) 	 	 	(47,907	) 	 	 	(15,895	) 	
Equity loss, net of tax	  	 	(36,494	) 	 	 	(66,458	) 	 	 	(39,004	) 	 	 	(33,300	) 	 	 	(9,748	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	  	$	(104,478	) 	 	$	(147,866	) 	 	$	(107,709	) 	 	$	(81,207	) 	 	$	(25,643	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to condensed financial statements.
 
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Apparel Holding Corp. (Parent Company Only)
Condensed Statements of Comprehensive Loss
(In thousands)

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net Loss	  	$	(104,478	) 	 	$	(147,866	) 	 	$	(107,709	) 	 	$	(81,207	) 	 	$	(25,643	) 	
Foreign currency translation adjustment	  	 	100	  	 	 	(1	) 	 	 	(3	) 	 	 	4	  	 	 	(42	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive loss	  	$	(104,378	) 	 	$	(147,867	) 	 	$	(107,712	) 	 	$	(81,203	) 	 	$	(25,685	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to condensed financial statements.
 
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Apparel Holding Corp. (Parent Company Only)
Condensed Balance Sheets
(In thousands, except share amounts)

 	  	January 28,
2012	 	 	February 2,
2013	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	(unaudited)	 	
Assets	  				 				 				
Current assets:	  				 				 				
Cash and cash equivalents	  	$	402	  	 	$	282	  	 	$	219	  	
Receivables, net	  	 	—	  	 	 	2	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	  	 	402	  	 	 	284	  	 	 	219	  	
Investment in subsidiary	  	 	(130,994	) 	 	 	(169,659	) 	 	 	(179,140	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	(130,592	) 	 	$	(169,375	) 	 	$	(178,921	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Liabilities and Stockholders’ Deficit	  				 				 				
Current liabilities:	  				 				 				
Other accrued expenses	  	$	367	  	 	$	246	  	 	$	181	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current liabilities	  	 	367	  	 	 	246	  	 	 	181	  	
Long-term debt	  	 	605,292	  	 	 	391,434	  	 	 	—	  	
Deferred income taxes and other	  	 	6,770	  	 	 	210	  	 	 	—	  	
Stockholders’ Deficit:	  				 				 				
Voting Common Stock at $0.001 par value (1,200,000 shares authorized, 918,924.91 issued and outstanding)	  	 	1	  	 	 	1	  	 	 	1	  	
Non-Voting Common Stock at $0.001 par value (1,700,000 shares authorized, 193.09 shares issued and
outstanding)	  	 	—	  	 	 	—	  	 	 	—	  	
Additional paid in capital	  	 	97,212	  	 	 	386,680	  	 	 	794,528	  	
Accumulated deficit	  	 	(840,171	) 	 	 	(947,880	) 	 	 	(973,523	) 	
Other comprehensive loss	  	 	(63	) 	 	 	(66	) 	 	 	(108	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ deficit	  	 	(743,021	) 	 	 	(561,265	) 	 	 	(179,102	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and stockholders’ deficit	  	$	(130,592	) 	 	$	(169,375	) 	 	$	(178,921	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to condensed financial statements.
 
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Apparel Holding Corp. (Parent Company Only)
Condensed Statements of Cash Flows
(In thousands)

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Operating activities	  				 				 				 				 				
Net loss from Parent operations	  	$	(67,984	) 	 	$	(81,408	) 	 	$	(68,705	) 	 	$	(47,907	) 	 	$	(15,895	) 	
Add items not affecting operating cash flows:	  				 				 				 				 				
Capitalized Payment-In-Kind interest	  	 	67,371	  	 	 	79,915	  	 	 	69,085	  	 	 	47,227	  	 	 	13,758	  	
Changes in assets and liabilities:	  				 				 				 				 				
Receivables, net	  	 	—	  	 	 	—	  	 	 	(2	) 	 	 	—	  	 	 	2	  	
Accounts payable and accrued expenses	  	 	(80	) 	 	 	49	  	 	 	(121	) 	 	 	(12	) 	 	 	(65	) 	
Other assets and liabilities	  	 	579	  	 	 	1,448	  	 	 	(402	) 	 	 	667	  	 	 	2,125	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	(114	) 	 	 	4	  	 	 	(145	) 	 	 	(25	) 	 	 	(75	) 	

Investing activities	  				 				 				 				 				
Capital distributions from subsidiary	  	 	32	  	 	 	45	  	 	 	25	  	 	 	13	  	 	 	12	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by investing activities	  	 	32	  	 	 	45	  	 	 	25	  	 	 	13	  	 	 	12	  	

Financing activities	  				 				 				 				 				
Other	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by financing activities	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	

(Decrease) increase in cash and cash equivalents	  	 	(82	) 	 	 	49	  	 	 	(120	) 	 	 	(12	) 	 	 	(63	) 	
Cash and cash equivalents, beginning of period	  	 	435	  	 	 	353	  	 	 	402	  	 	 	402	  	 	 	282	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	  	$	353	  	 	$	402	  	 	$	282	  	 	$	390	  	 	$	219	  	

Supplemental Disclosures of Cash Flow Information	  	
Cash payments for interest	  	$	—	  	 	$	—	  	 	$	—	  	 	$	—	  	 	$	—	  	
	
Supplemental Disclosures of Non-Cash Investing and Financing Activities	  	
Forgiveness of capitalized and accrued interest on related-party debt	  	$	—	  	 	$	—	  	 	$	(289,101	) 	 	$	—	  	 	$	(407,527	) 	
Capital contribution from stockholder	  	 	—	  	 	 	—	  	 	 	289,101	  	 	 	—	  	 	 	407,527	  	
See accompanying notes to condensed financial statements.
 
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Apparel Holding Corp. (Parent Company Only)
Condensed Statements of Stockholders’ Deficit
(In thousands, except share amounts)

 	 	Common Stock	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Number of
Shares
Outstanding	 	 	Par Value	 	 	Additional
Paid in
Capital	 	 	Accumulated
Deficit	 	 	Accumulated
Other
Comprehen-
sive Income	 	 	Total
Stockholders’
Deficit	 	
Balance as of January 30, 2010	 	 	919,118	  	 	$	1	  	 	$	96,899	  	 	$	(587,827	) 	 	$	(162	) 	 	$	(491,089	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(67,984	) 	 	 	—	  	 	 	(67,984	) 	
Foreign currency translation adjustment	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	100	  	 	 	100	  	
Earnings in equity investees	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(36,494	) 	 	 	—	  	 	 	(36,494	) 	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	248	  	 	 	—	  	 	 	—	  	 	 	248	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 29, 2011	 	 	919,118	  	 	$	1	  	 	$	97,147	  	 	$	(692,305	) 	 	$	(62	) 	 	$	(595,219	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(81,408	) 	 	 	—	  	 	 	(81,408	) 	
Foreign currency translation adjustment	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(1	) 	 	 	(1	) 	
Earnings in equity investees	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(66,458	) 	 	 	—	  	 	 	(66,458	) 	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	65	  	 	 	—	  	 	 	—	  	 	 	65	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 28, 2012	 	 	919,118	  	 	$	1	  	 	$	97,212	  	 	$	(840,171	) 	 	$	(63	) 	 	$	(743,021	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(68,705	) 	 	 	—	  	 	 	(68,705	) 	
Foreign currency translation adjustment	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(3	) 	 	 	(3	) 	
Earnings in equity investees	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(39,004	) 	 	 	—	  	 	 	(39,004	) 	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	367	  	 	 	—	  	 	 	—	  	 	 	367	  	
Capital contribution from stockholder	 	 	—	  	 	 	—	  	 	 	289,101	  	 	 	—	  	 	 	—	  	 	 	289,101	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of February 2, 2013	 	 	919,118	  	 	$	1	  	 	$	386,680	  	 	$	(947,880	) 	 	$	(66	) 	 	$	(561,265	) 	
Comprehensive loss:	 				 				 				 				 				 				
Net loss (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(15,895	) 	 	 	—	  	 	 	(15,895	) 	
Foreign currency translation adjustment (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(42	) 	 	 	(42	) 	
Earnings in equity investees (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(9,748	) 	 	 	—	  	 	 	(9,748	) 	
Share-based compensation expense (unaudited)	 	 	—	  	 	 	—	  	 	 	321	  	 	 	—	  	 	 	—	  	 	 	321	  	
Capital contribution from stockholder (unaudited)	 	 	—	  	 	 	—	  	 	 	407,527	  	 	 	—	  	 	 	—	  	 	 	407,527	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of August 3, 2013 (unaudited)	 	 	919,118	  	 	$	1	  	 	$	794,528	  	 	$	(973,523	) 	 	$	(108	) 	 	$	(179,102	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to condensed financial statements.
 
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Apparel Holding Corp. (Parent Company Only)
Notes to Condensed Financial Statements
(In thousands)
Note 1. Basis of Presentation
The condensed parent company-only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of the subsidiaries of Apparel Holding Corp. (“AHC”) (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the consolidated net assets of the company. The ability of AHC’s operating subsidiaries to pay dividends may be restricted due to the terms of the subsidiaries’ Credit Agreement, Term Loan Agreement, and the agreement governing the subsidiaries’ 12.785% Debentures, as defined in Notes 7 and 8 to the Consolidated Financial Statements.
The condensed parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the parent company accounts for its subsidiaries using the equity method. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in this filing.
Note 2. Long-term Debt
Long-term debt consisted of the following as of fiscal years ended January 28, 2012 and February 2, 2013, and as of the six months ended August 3, 2013 (in thousands):

 	  	January 28,
2012	 	  	February 2,
2013	 	  	August 3,
2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Sun Promissory Notes	  	$	520,536	  	  	$	319,926	  	  	$	      —	  	
Sun Capital Loan Agreement	  	 	84,756	  	  	 	71,508	  	  	 	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total long-term debt	  	$	605,292	  	  	$	391,434	  	  	$	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Sun Promissory Notes
On May 2, 2008, AHC entered into a $225,000 Senior Subordinated Promissory Note and a $75,000 Senior Subordinated Promissory Note with Sun Kellwood Finance, LLC (“Sun Kellwood Finance”), an affiliate of Sun Capital Partners, Inc. We collectively refer to these notes as our “Sun Promissory Notes”. The unpaid principal balance of the notes accrue interest at 15% per annum until the maturity date of October 15, 2011, at which point any unpaid principal balance of the notes shall accrue interest at a rate of 17% per annum until the notes are paid in full. All interest which is not paid in cash on or before the last day of each calendar month are deemed paid in kind and added to the principal balance of the notes unless an election is made otherwise.
On July 19, 2012, AHC amended the Sun Promissory Notes to extend the maturity date to October 15, 2016 and reduce the interest rate to 12% per annum until maturity, at which point any unpaid principal balance of the notes shall accrue interest at a rate of 14% per annum until the notes are paid in full.
On December 28, 2012, Sun Kellwood Finance waived all interest capitalized and accrued under the notes prior to July 19, 2012. As both parties are under the common control of Sun Capital, this transaction resulted in a capital contribution of $270,852 which was recorded as an adjustment to additional paid in capital on our Condensed Balance Sheet as of February 2, 2013.
 
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On June 18, 2013, Sun Kellwood Finance assigned all title and interest in the Sun Promissory Notes to Sun Cardinal, LLC (“Sun Cardinal”). Immediately following the assignment, Sun Cardinal contributed all outstanding principal and interest due as of June 18, 2013 to the capital of AHC. As both parties are under common control of Sun Capital, this transaction resulted in a capital contribution of $334,595, which was recorded as an adjustment to AHC’s additional paid in capital on the Condensed Balance Sheet at August 3, 2013 (unaudited).
Sun Capital Loan Agreement
AHC is party to a Loan Authorization Agreement, originally dated February 13, 2008, by and between AHC (as the successor entity to Cardinal Integrated, LLC), SCSF Kellwood Finance, LLC (“SCSF Finance”) and Sun Kellwood Finance (as successors to Bank of Montreal) for a $72,000 line of credit, and $69,485 principal balance, which we refer to as the “Sun Capital Loan Agreement”. Under the terms of this agreement, as amended from time to time, interest accrues at a rate equal to the rate per annum announced by the Bank of Montreal, Chicago, Illinois, from time to time as its prime commercial rate, or equivalent, for U.S. dollar loans to borrowers located in the U.S. plus 2%. Interest on the loan is due by the last day of each fiscal quarter and is payable either in immediately available funds on each interest payment date or by adding such interest to the unpaid principal balance of the loan on each interest payment date. The original maturity date of the loan was August 6, 2009. On July 19, 2012, the maturity date of the loan was extended to August 6, 2014.
On December 28, 2012, Sun Kellwood Finance and SCSF Finance waived all interest capitalized and accrued under the loan authorization agreement prior to July 19, 2012. As all parties are under the common control of Sun Capital, this transaction resulted in a capital contribution of $18,249, which was recorded as an adjustment to additional paid in capital on our Consolidated Balance Sheet as of February 2, 2013.
On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in the note under the Sun Capital Loan Agreement to Sun Cardinal. Immediately following the assignment, Sun Cardinal contributed all outstanding principal and interest due under these notes as of June 18, 2013 to the capital of AHC. As all parties are under common control of Sun Capital, this transaction resulted in a capital contribution of $72,932, which was recorded as an adjustment to AHC’s additional paid in capital on the Condensed Balance Sheet at August 3, 2013 (unaudited).
Principal amounts of the notes payable and long-term debt outstanding at February 2, 2013 include the following (in thousands):

 	  	Outstanding
Principal	 	  	Capitalized
PIK Interest	 	  	Total	 	  	Less:
Discount	 	  	Amount per
Condensed
Balance
Sheet	 	
Sun Promissory Notes	  	$	300,000	  	  	$	19,926	  	  	$	319,926	  	  	$	—	  	  	$	319,926	  	
Sun Capital Loan Agreement	  	 	69,485	  	  	 	2,023	  	  	 	71,508	  	  	 	—	  	  	 	71,508	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total long-term debt outstanding	  	$	369,485	  	  	$	21,949	  	  	$	391,434	  	  	$	—	  	  	$	391,434	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Principal amounts of the notes payable and long-term debt outstanding at August 3, 2013 (unaudited) include the following (in thousands):

 	  	Outstanding
Principal	 	  	Capitalized
PIK Interest	 	  	Total	 	  	Less:
Discount	 	  	Amount per
Consolidated
Balance
Sheet	 	
Sun Promissory Notes	  	$	—	  	  	$	—	  	  	$	—	  	  	$	—	  	  	$	—	  	
Sun Capital Loan Agreement	  	 	—	  	  	 	—	  	  	 	—	  	  	 	—	  	  	 	—	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total long-term debt outstanding	  	$	—	  	  	$	—	  	  	$	—	  	  	$	—	  	  	$	—	  	

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The following table provides a summary of future payments related to the principal and capitalized interest of our debt agreements at February 2, 2013. As discussed above, on June 18, 2013, Sun Cardinal contributed all outstanding principal and interest due under the Sun Promissory Notes and Sun Capital Loan Agreement as of June 18, 2013 to the capital of AHC. As such, no future payments will be made under these notes.

 	  	Future Payments due by Period	 	
  	  	Less than 1
Year	 	  	1 – 3
Years	 	  	3 – 5
Years	 	  	After 5
Years	 	  	Total	 	
Sun Promissory Notes	  	$	—	  	  	$	—	  	  	$	497,894	  	  	$	—	  	  	$	497,894	  	
Sun Capital Loan Agreement	  	 	—	  	  	 	77,450	  	  	 	—	  	  	 	—	  	  	 	77,450	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Payments	  	$	—	  	  	$	77,450	  	  	$	497,894	  	  	$	—	  	  	$	575,344	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Note 4. Distributions from Subsidiary
Cash distributions received by AHC were $32, $45, and $25 for fiscal 2010, fiscal 2011 and fiscal 2012, respectively. The distributions represented a return of capital.
Note 5. Subsequent Events
On June 18, 2013, Sun Kellwood Finance and SCSF Finance assigned all title and interest in both the Sun Promissory Notes and note under our Sun Capital Loan Agreement to Sun Cardinal, LLC. Immediately following the assignment of these notes, Sun Cardinal contributed all outstanding principal and interest due as of June 18, 2013 to the capital of AHC. These transactions were recorded in the second quarter of fiscal 2013 as increases to AHC’s additional paid in capital in the amounts of $334,595 and $72,932 for the Sun Promissory Notes and Sun Capital Loan Agreement, respectively. We evaluated our condensed financial statements as of and for the year ended February 2, 2013 for subsequent events through September 24, 2013, the date the financial statements were available to be issued.
 
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 SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)

Description	  	Beginning
of Period	 	 	Expense
Charges,
net of
Reversals	 	 	Deductions
and
Write-offs,
net of
Recoveries	 	 	End of
Period	 	
Slow Moving and Obsolescence Provision on Finished Goods and Raw Materials	  				 				 				 				
Fiscal 2010	  	$	(7,259	) 	 	$	(8,537	) 	 	$	9,552	  	 	$	(6,244	) 	
Fiscal 2011	  	 	(6,244	) 	 	 	(11,455	) 	 	 	9,810	  	 	 	(7,889	) 	
Fiscal 2012	  	 	(7,889	) 	 	 	(10,009	) 	 	 	11,176	  	 	 	(6,722	) 	
Sales Allowances	  				 				 				 				
Fiscal 2010	  	 	(25,767	) 	 	 	(74,211	) 	 	 	79,669	  	 	 	(20,309	) 	
Fiscal 2011	  	 	(20,309	) 	 	 	(79,780	) 	 	 	78,380	  	 	 	(21,709	) 	
Fiscal 2012	  	 	(21,709	) 	 	 	(94,524	) 	 	 	92,073	  	 	 	(24,160	) 	
Allowance for Doubtful Accounts	  				 				 				 				
Fiscal 2010	  	 	(1,376	) 	 	 	473	  	 	 	(23	) 	 	 	(926	) 	
Fiscal 2011	  	 	(926	) 	 	 	(464	) 	 	 	386	  	 	 	(1,004	) 	
Fiscal 2012	  	 	(1,004	) 	 	 	(779	) 	 	 	922	  	 	 	(861	) 	
Valuation Allowance on Deferred Income Taxes	  				 				 				 				
Fiscal 2010	  	 	(44,644	) 	 	 	(9,308	) 	 	 	—	  	 	 	(53,952	) 	
Fiscal 2011	  	 	(53,952	) 	 	 	(33,663	) 	 	 	6,113	  	 	 	(81,502	) 	
Fiscal 2012	  	 	(81,502	) 	 	 	(31,197	) 	 	 	7,083	  	 	 	(105,616	) 	
 
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 INDEX TO THE AUDITED FINANCIAL STATEMENTS FOR VINCE, LLC

Independent Auditor’s Report on Financial Statements	  	 	V-2	  	
Statements of Operations	  	 	V-3	  	
Balance Sheets	  	 	V-4	  	
Statements of Cash Flows	  	 	V-5	  	
Statements of Invested Equity	  	 	V-6	  	
Notes to Financial Statements	  	 	V-7	  	
Please note the following:
 
 	Ÿ	 	Apparel Holding Corp. (to be renamed Vince Holding Corp. prior to the consummation of this offering) is the legal issuer of the shares offered in this offering. Investors will be investing in the Vince business, however, they will be purchasing shares issued by Apparel Holding Corp., not Vince, LLC;	
 
 	Ÿ	 	The information set forth in this section is provided as supplemental information and should not be considered in lieu of the information pertaining to Apparel Holding Corp;	
 
 	Ÿ	 	The financial information included in this section may not be indicative of Apparel Holding Corp.’s financial position, operating results and changes in equity after the completion of the IPO Restructuring Transactions, or what they would have been had the Vince business operated separately from the non-Vince businesses during the periods presented.	
 
 	Ÿ	 	You should read the information in this section in conjunction with “Additional Information Related to AHC—Unaudited Pro Forma Consolidated Financial Data of AHC.”	
 
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Table of Contents
 Independent Auditor’s Report
To the Board of Directors of Vince, LLC:
We have audited the accompanying financial statements of Vince, LLC, which comprise the balance sheets as of February 2, 2013 and January 28, 2012, and the related statements of operations, invested equity, and cash flows for each of the three years ended February 2, 2013.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Vince, LLC at February 2, 2013 and January 28, 2012, and the results of its operations and its cash flows for each of the three years ended February 2, 2013 in accordance with accounting principles generally accepted in the United States of America.
/s/    PricewaterhouseCoopers LLP
St. Louis, Missouri
July 11, 2013
 
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Table of Contents
 VINCE, LLC
STATEMENTS OF OPERATIONS
(In thousands)

 	  	Fiscal Year	 	  	Six Months Ended	 	
 	  	2010	 	  	2011	 	  	2012	 	  	July 28,
2012	 	  	August 3,
2013	 	
 	  	 	 	  	 	 	  	 	 	  	(unaudited)	 	  	(unaudited)	 	
Net sales	  	$	111,492	  	  	$	175,255	  	  	$	240,352	  	  	$	90,531	  	  	$	114,657	  	
Cost of products sold	  	 	55,695	  	  	 	89,545	  	  	 	132,156	  	  	 	50,119	  	  	 	63,506	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gross profit	  	 	55,797	  	  	 	85,710	  	  	 	108,196	  	  	 	40,412	  	  	 	51,151	  	
Operating expenses:	  				  				  				  				  				
Selling, general and administrative expenses	  	 	32,704	  	  	 	42,148	  	  	 	66,639	  	  	 	27,057	  	  	 	33,954	  	
Amortization of intangible assets	  	 	598	  	  	 	599	  	  	 	598	  	  	 	299	  	  	 	300	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total operating expenses	  	 	33,302	  	  	 	42,747	  	  	 	67,237	  	  	 	27,356	  	  	 	34,254	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Income from operations	  	 	22,495	  	  	 	42,963	  	  	 	40,959	  	  	 	13,056	  	  	 	16,897	  	
Interest expense	  	 	7,172	  	  	 	15,004	  	  	 	22,903	  	  	 	10,690	  	  	 	12,429	  	
Other expense, net	  	 	350	  	  	 	478	  	  	 	779	  	  	 	396	  	  	 	512	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Income before provision for income taxes	  	 	14,973	  	  	 	27,481	  	  	 	17,277	  	  	 	1,970	  	  	 	3,956	  	
Provision for income taxes	  	 	5,923	  	  	 	10,812	  	  	 	6,964	  	  	 	789	  	  	 	1,556	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net income	  	$	9,050	  	  	$	16,669	  	  	$	10,313	  	  	$	1,181	  	  	$	2,400	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
See accompanying notes to Financial Statements.
 
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Table of Contents
 VINCE, LLC
BALANCE SHEETS
(In thousands)

 	  	January 28,
2012	 	 	February 2,
2013	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	(unaudited)	 	
Assets	  				 				 				
Current assets:	  				 				 				
Cash and cash equivalents	  	$	34	  	 	$	35	  	 	$	106	  	
Trade receivables, net	  	 	26,474	  	 	 	33,931	  	 	 	39,903	  	
Inventories, net	  	 	10,527	  	 	 	18,887	  	 	 	28,005	  	
Prepaid expenses and other current assets	  	 	3,826	  	 	 	8,001	  	 	 	14,589	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	  	 	40,861	  	 	 	60,854	  	 	 	82,603	  	
Property, plant and equipment:	  				 				 				
Leasehold improvements	  	 	8,170	  	 	 	9,373	  	 	 	10,256	  	
Furniture, fixtures, and computer equipment	  	 	1,253	  	 	 	1,449	  	 	 	1,636	  	
Capitalized software	  	 	34	  	 	 	51	  	 	 	635	  	
Construction in process	  	 	122	  	 	 	219	  	 	 	2,018	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total property, plant and equipment	  	 	9,579	  	 	 	11,092	  	 	 	14,545	  	
Less accumulated depreciation and amortization	  	 	(2,985	) 	 	 	(4,104	) 	 	 	(5,047	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment, net	  	 	6,594	  	 	 	6,988	  	 	 	9,498	  	
Intangible assets, net	  	 	111,440	  	 	 	110,842	  	 	 	110,542	  	
Goodwill	  	 	63,746	  	 	 	63,746	  	 	 	63,746	  	
Other assets	  	 	6,301	  	 	 	4,781	  	 	 	24,173	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	228,942	  	 	$	247,211	  	 	$	290,562	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Liabilities and Invested Equity	  				 				 				
Current liabilities:	  				 				 				
Short-term borrowings	  	$	88,222	  	 	$	79,783	  	 	$	115,601	  	
Accounts payable	  	 	11,037	  	 	 	18,478	  	 	 	27,938	  	
Accrued salaries and employee benefits	  	 	1,438	  	 	 	11,151	  	 	 	2,325	  	
Other accrued expenses	  	 	967	  	 	 	1,054	  	 	 	2,141	  	
Accrued contingent purchase price	  	 	806	  	 	 	—	  	 	 	—	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current liabilities	  	 	102,470	  	 	 	110,466	  	 	 	148,005	  	
Long-term debt	  	 	122,207	  	 	 	152,675	  	 	 	163,675	  	
				
Commitments and contingencies (Note 9)	  				 				 				
				
Deferred income taxes and other	  	 	5,789	  	 	 	6,087	  	 	 	5,041	  	
Invested equity	  	 	(1,524	) 	 	 	(22,017	) 	 	 	(26,159	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and invested equity	  	$	228,942	  	 	$	247,211	  	 	$	290,562	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to Financial Statements.
 
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Table of Contents
 VINCE, LLC
STATEMENTS OF CASH FLOWS
(In thousands)

 	 	Fiscal Year	 	 	Six Months Ended	 	
 	 	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	 	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Operating activities	 				 				 				 				 				
Net income	 	$	9,050	  	 	$	16,669	  	 	$	10,313	  	 	$	1,181	  	 	$	2,400	  	
Add (deduct) items not affecting operating cash flows:	 				 				 				 				 				
Depreciation	 	 	894	  	 	 	1,102	  	 	 	1,411	  	 	 	622	  	 	 	806	  	
Amortization of intangible assets	 	 	598	  	 	 	599	  	 	 	598	  	 	 	299	  	 	 	300	  	
Amortization of debt issuance costs	 	 	1,289	  	 	 	1,499	  	 	 	2,154	  	 	 	1,104	  	 	 	1,050	  	
Deferred income taxes	 	 	3,091	  	 	 	5,825	  	 	 	(2,050	) 	 	 	2,441	  	 	 	1,173	  	
Capitalized PIK interest	 	 	1,486	  	 	 	5,614	  	 	 	10,468	  	 	 	4,511	  	 	 	5,999	  	
Deferred debt issuance cost write-off	 	 	738	  	 	 	1,747	  	 	 	—	  	 	 	—	  	 	 	—	  	
Loss on disposition of property, plant and equipment	 	 	—	  	 	 	8	  	 	 	—	  	 	 	—	  	 	 	262	  	
Changes in assets and liabilities:	 				 				 				 				 				
Receivables, net	 	 	(4,423	) 	 	 	(12,174	) 	 	 	(7,457	) 	 	 	(10,366	) 	 	 	(5,972	) 	
Inventories, net	 	 	(3,987	) 	 	 	(2,592	) 	 	 	(8,360	) 	 	 	(10,905	) 	 	 	(9,118	) 	
Prepaid expenses and other current assets	 	 	(2,036	) 	 	 	(490	) 	 	 	(2,455	) 	 	 	(3,829	) 	 	 	(6,588	) 	
Accounts payable and accrued expenses	 	 	3,779	  	 	 	3,133	  	 	 	17,108	  	 	 	8,138	  	 	 	1,213	  	
Other assets and liabilities	 	 	30	  	 	 	350	  	 	 	900	  	 	 	468	  	 	 	307	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by operating activities	 	 	10,509	  	 	 	21,290	  	 	 	22,630	  	 	 	(6,336	) 	 	 	(8,168	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investing activities	 				 				 				 				 				
Payments for capital expenditures	 	 	(1,602	) 	 	 	(1,450	) 	 	 	(1,821	) 	 	 	(457	) 	 	 	(3,406	) 	
Payments for contingent purchase price	 	 	(4,475	) 	 	 	(58,465	) 	 	 	(806	) 	 	 	(806	) 	 	 	—	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by investing activities	 	 	(6,077	) 	 	 	(59,915	) 	 	 	(2,627	) 	 	 	(1,263	) 	 	 	(3,406	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financing activities	 				 				 				 				 				
Borrowings of short-term debt obligations	 	 	—	  	 	 	14,900	  	 	 	—	  	 	 	—	  	 	 	—	  	
Payments for short-term debt obligations	 	 	—	  	 	 	(14,900	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Borrowings of long-term loan obligations	 	 	22,393	  	 	 	79,900	  	 	 	30,000	  	 	 	30,000	  	 	 	5,000	  	
Payments for debt extinguishment	 	 	—	  	 	 	—	  	 	 	(15,000	) 	 	 	—	  	 	 	—	  	
Borrowings of revolving credit facilities	 	 	185,172	  	 	 	399,621	  	 	 	620,367	  	 	 	221,940	  	 	 	392,627	  	
Payments for revolving credit facilities	 	 	(127,576	) 	 	 	(368,995	) 	 	 	(623,806	) 	 	 	(205,404	) 	 	 	(356,809	) 	
Fees paid for amendments to credit facility	 	 	(3,644	) 	 	 	—	  	 	 	—	  	 	 	(114	) 	 	 	—	  	
Fees paid for short-term debt obligations	 	 	—	  	 	 	(101	) 	 	 	—	  	 	 	—	  	 	 	—	  	
Fees paid for revolving credit facilities	 	 	—	  	 	 	(2,147	) 	 	 	(114	) 	 	 	(609	) 	 	 	32	  	
Fees paid for long-term loan obligations	 	 	—	  	 	 	(2,675	) 	 	 	(643	) 	 	 	(34	) 	 	 	(60	) 	
Distributions to Kellwood Company	 	 	(80,773	) 	 	 	(66,959	) 	 	 	(30,806	) 	 	 	(38,185	) 	 	 	(29,145	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/provided by financing activities	 	 	(4,428	) 	 	 	38,644	  	 	 	(20,002	) 	 	 	7,594	  	 	 	11,645	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Increase (decrease) in cash and cash equivalents	 	 	4	  	 	 	19	  	 	 	1	  	 	 	(5	) 	 	 	71	  	
Cash and cash equivalents, beginning of period	 	 	11	  	 	 	15	  	 	 	34	  	 	 	34	  	 	 	35	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	 	$	15	  	 	$	34	  	 	$	35	  	 	$	29	  	 	$	106	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Supplemental Disclosures of Cash Flow Information	 				 				 				 				 				
Cash payments for interest	 	$	3,569	  	 	$	6,103	  	 	$	6,715	  	 	$	5,639	  	 	$	5,432	  	
Supplemental Disclosures of Non-Cash Investing and Financing Activities	 				 				 				 				 				
Capital expenditures in accounts payable	 	 	—	  	 	 	27	  	 	 	160	  	 	 	53	  	 	 	668	  	
Accrued contingent purchase price	 	 	8,137	  	 	 	806	  	 	 	—	  	 	 	—	  	 	 	—	  	
See accompanying notes to Financial Statements.
 
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 VINCE, LLC
STATEMENTS OF INVESTED EQUITY
(In thousands)

 	  	Invested Equity	 	
Balance January 30, 2010	  	$	120,489	  	
Net distributions to Kellwood Company	  	 	(80,773	) 	
Net income	  	 	9,050	  	
	  	 	 	 	
Balance January 29, 2011	  	 	48,766	  	
Net distributions to Kellwood Company	  	 	(66,959	) 	
Net income	  	 	16,669	  	
	  	 	 	 	
Balance January 28, 2012	  	 	(1,524	) 	
Net distributions to Kellwood Company	  	 	(30,806	) 	
Net income	  	 	10,313	  	
	  	 	 	 	
Balance February 2, 2013	  	 	(22,017	) 	
Net distributions to Kellwood Company	  	 	(6,542	) 	
Net income	  	 	2,400	  	
	  	 	 	 	
Balance August 3, 2013 (unaudited)	  	$	(26,159	) 	
	  	 	 	 	
See accompanying notes to Financial Statements.
 
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 VINCE, LLC
NOTES TO FINANCIAL STATEMENTS
(In thousands)
Note 1. Summary of Significant Accounting Policies
(A) Description of Business :    Vince is a prominent, high-growth contemporary apparel brand known for modern, effortless style and everyday luxury essentials. We reach our customers through a variety of channels, specifically through premier wholesale department stores and specialty stores in the United States (“U.S.”) and select international markets, as well as through our branded retail locations and our website. We design our products in the U.S. and source the vast majority of our products from contract manufacturers outside the U.S., primarily in Asia and South America.
Kellwood Company and its subsidiaries (“Kellwood Company”) acquired certain net assets from CRL Group, LLC, owner of the Vince ® brand and trademark (“Vince”) in 2006. On February 12, 2008, Kellwood Company was acquired by Cardinal Integrated, LLC, now known as Apparel Holding Corp., wholly-owned by affiliates of Sun Capital Partners, Inc., through a cash tender offer, including the assumption of debt. Effective September 1, 2012, Kellwood Company contributed the assets constituting the Vince business to Vince, LLC, a Delaware limited liability company and wholly-owned subsidiary of Kellwood Company. In these financial statements, unless the context otherwise requires, references to the “our,” “us,” and “we” refer to Vince, LLC.
(B) Basis of Presentation :    These financial statements have been presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Vince, LLC is a subsidiary of Kellwood Company and does not necessarily reflect a stand-alone entity. The financial statements of Vince, LLC reflect the assets, liabilities, operations and activities directly attributable to Vince, LLC, and charges for the use of services provided by centralized Kellwood Company departments and shared facilities, all of which were deemed reasonable by management to present the financial position, results of operations and changes in cash flows and invested equity of Vince, LLC on a stand-alone basis.
Vince, LLC is a borrower party under certain agreements governing Kellwood Company indebtedness, including the Wells Fargo Facility, the Cerberus Term Loan, and the Sun Term Loan Agreements (defined in Notes 3 and 4). As is such, these debt instruments and related balances including (but not limited to) interest expense and debt issuance costs have been reflected in these financial statements, as discussed further in Notes 3 and 4 herein. This presentation has been retrospectively applied to all periods presented to any debt instruments under which Vince, LLC would have been considered a borrower party had it been in existence.
The financial information included herein may not necessarily reflect the financial position, results of operations, changes in invested equity and cash flows of Vince, LLC in the future or what they would have been had Vince, LLC been a separate, stand-alone entity during the periods presented.
All intercompany accounts and transactions within Vince, LLC have been eliminated. In the opinion of management, the financial statements contain all adjustments (consisting solely of normal recurring adjustments) and disclosures necessary to make the information presented therein not misleading.
 
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Statements of Operations
Operating expenses and revenues specifically identified as pertaining to Vince, LLC are charged or credited directly to Vince, LLC without allocation, which is true for all revenues recorded on the Statements of Operations. Additionally, Vince, LLC was charged for services provided by centralized Kellwood Company departments. These costs were charged based upon the actual cost incurred, without mark-up, and the method to determine the amount charged varied depending on the nature of the costs. See below for a summary of charges to Vince, LLC recorded within selling, general and administrative expenses:

 	  	2010	 	  	2011	 	  	2012	 	
Information technology support	  	$	3,263	  	  	$	4,399	  	  	$	2,626	  	
Corporate shared services	  	 	2,711	  	  	 	3,099	  	  	 	9,520	  	
Shared facilities	  	 	976	  	  	 	609	  	  	 	448	  	
Marketing support	  	 	2,015	  	  	 	2,352	  	  	 	1,783	  	
Retail and e-commerce support	  	 	1,460	  	  	 	2,918	  	  	 	3,459	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total charges from Kellwood Company	  	$	10,425	  	  	$	13,377	  	  	$	17,836	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Information technology (“IT”) support includes costs to purchase, maintain and support the use of IT hardware, software, and various financial and operational systems used by Vince, LLC. These costs are primarily charged based upon number of users or percentage of revenue.
Corporate shared services represent the costs of corporate departments that provide services across all or several divisions of Kellwood Company. These departments provide accounting, tax, legal, collections, invoice processing, treasury, human resources and other services which are charged using percentage of revenue or other drivers that approximate the volume of usage (such as number of invoices processed).
Charges for shared facilities were related to facility and other costs, which are charged primarily based upon percentage of revenue. In fiscal 2010 and fiscal 2011, marketing costs were incurred by a centralized marketing function and were charged based upon actual usage. In fiscal 2012, third party marketing spend was charged directly to Vince, LLC, as such the charges solely represent the marketing support provided by a centralized marketing department. Retail and e-commerce support are centralized functions in which costs are charged to the divisions of Kellwood Company that utilize these direct-to-consumer channels based upon sales volume.
Management fees incurred by Kellwood Company were charged to Vince, LLC in the amounts of $350, $471, and $779 for fiscal 2010, 2011 and 2012, respectively, based upon percentage of revenue, and are recorded in other expense, net.
Balance Sheets
The Balance Sheets are comprised of assets and liabilities that are directly identified as pertaining to Vince, LLC, as of the periods presented. Any assets or liabilities that are not specifically identifiable to Vince, LLC are not presented within these financial statements, which may include certain accounts payable, other current and accrued liabilities, fixed assets, and prepaid and other balances, with the exception of the Kellwood Company debt instruments and related balances discussed above. The invested equity balance is reflective of these types of balances that were absorbed by Kellwood Company on behalf of Vince, LLC, as well as balances that were absorbed by Vince, LLC on behalf of Kellwood Company, namely the debt and related balances. See Note 8 for further discussion of the invested equity balance.
 
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(C) Fiscal Year and Fiscal Quarter :    Vince, LLC operates on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52 or 53-week period ending on the Saturday closest to January 31 of the following year.
 
 	Ÿ	 	References to “fiscal year 2010” or “fiscal 2010” refer to the fiscal year ended January 29, 2011.	
 
 	Ÿ	 	References to “fiscal year 2011” or “fiscal 2011” refer to the fiscal year ended January 28, 2012;	
 
 	Ÿ	 	References to “fiscal year 2012” or “fiscal 2012” refer to the fiscal year ended February 2, 2013;	
 
 	Ÿ	 	References to “first six months of fiscal 2012” refer to the six months ended July 28, 2012; and	
 
 	Ÿ	 	References to “first six months of fiscal 2013” refer to the six months ended August 3, 2013.	
Each of fiscal years 2011 and 2010 consisted of a 52-week period and fiscal year 2012 consisted of a 53-week period.
(D) Use of Estimates :    The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements which affect revenues and expenses during the period reported. Estimates are adjusted when necessary to reflect actual experience. Significant estimates and assumptions may affect many items in the financial statements. These include accounts receivable allowances, valuations of goodwill and other identified intangible assets, income tax liabilities and assets and related valuation allowances, inventory obsolescence, asset impairments, and other contingencies, as well as charges for services provided by centralized Kellwood Company departments and shared facilities (as described above). Actual results may differ from those estimates and assumptions.
(E) Financial Condition and Liquidity :    Kellwood Company has substantial indebtedness after giving effect to the February 2008 acquisition by affiliates of Sun Capital Partners, Inc. (the “Acquisition”). Since the Acquisition, Kellwood Company has incurred additional debt in order to fund negative cash flows, principally due to significant cash outflows resulting from numerous restructuring activities, the significant level of interest expense arising from substantial indebtedness and significant cash outflows related to payments for acquisitions. As a wholly owned subsidiary of Kellwood Company, Vince, LLC is a borrower party under the Wells Fargo Facility, the Cerberus Term Loan, and the Sun Term Loan Agreements (defined in Notes 3 and 4 below).
The Wells Fargo Facility and Cerberus Term Loan contain certain financial covenants related to the fixed charge coverage ratio and leverage ratio, as those terms are defined in those agreements. On May 3, 2013, Kellwood Company amended the Cerberus Term Loan in anticipation of not being in compliance with the fixed charge coverage ratio covenant during fiscal 2013. Kellwood Company was in compliance with all covenants under the debt agreements for fiscal year 2012 and expects to be in compliance during fiscal 2013, as further detailed in Notes 3 and 4 to the Financial Statements.
If Kellwood Company experiences an event of default under the Wells Fargo Facility and Cerberus Term Loan, including but not limited to a failure to pay cash interest obligations under said agreements or under the indenture, or a failure to maintain, or a failure to cure a default of, the applicable fixed charge or leverage ratios under such instruments, or other lack of liquidity caused by substantial leverage and the adverse conditions in the retail and apparel market or other factors, such an event would materially and adversely affect the financial condition and operating results of Vince, LLC.
(F) Cash and Cash Equivalents :    All highly liquid short-term time deposits with original maturities of three months or less maintained under cash management activities are considered cash
 
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equivalents. The effect of foreign currency exchange rate fluctuations on cash and cash equivalents was not significant for fiscal 2010, 2011 or 2012.
(G) Accounts Receivable and Concentration of Credit Risk :    We maintain an allowance for accounts receivable estimated to be uncollectible. The activity in this allowance is summarized as follows.

 	  	2010	 	 	2011	 	 	2012	 	
Balance, beginning of year	  	$	455	  	 	$	114	  	 	$	320	  	
Provisions for bad debt expense	  	 	(224	) 	 	 	319	  	 	 	314	  	
Bad debts written off	  	 	(117	) 	 	 	(113	) 	 	 	(485	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of year	  	$	114	  	 	$	320	  	 	$	149	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The provision for bad debts is included in selling, general and administrative expense. Substantially all of our trade receivables are derived from sales to retailers and are recorded at the invoiced amount and do not bear interest. We perform ongoing credit evaluations of our wholesale partners’ financial condition and require collateral as deemed necessary. Account balances are charged off against the allowance when we believe the receivable will not be collected.
Accounts receivable are recorded net of allowances for expected future chargebacks and margin support from wholesale partners. It is the nature of the apparel industry that suppliers like us face significant pressure from customers in the retail industry to provide allowances to compensate for wholesale customer margin shortfalls. This pressure often takes the form of customers requiring us to provide price concessions on prior shipments as a prerequisite for obtaining future orders. Pressure for these concessions is largely determined by overall retail sales performance and, more specifically, the performance of our products at retail. To the extent our wholesale partners have more of our goods on hand at the end of the season, there will be greater pressure for us to grant markdown concessions on prior shipments. Our accounts receivable balances are reported net of expected allowances for these matters based on the historical level of concessions required and our estimates of the level of markdowns and allowances that will be required in the coming season in order to collect the receivables. We evaluate the allowance balances on a continual basis and adjust them as necessary to reflect changes in anticipated allowance activity. We also provide an allowance for sales returns based on historical return rates.
In fiscal 2010, sales to three wholesale partners each accounted for more than ten percent of our net sales. These sales represented 15.2%, 13.0% and 11.2% of fiscal 2010 net sales. In fiscal 2011, sales to three wholesale partners each accounted for more than ten percent of our net sales. These sales represented 15.1%, 14.9% and 13.9% of fiscal 2011 net sales. In fiscal 2012, sales to three wholesale partners each accounted for more than ten percent of our net sales. These sales represented 21.4%, 15.5% and 14.3% of fiscal 2012 net sales.
In fiscal 2010, accounts receivable from two wholesale partners accounted for more than ten percent of our gross accounts receivable. These receivables represented 10.7% and 10.2% of fiscal 2010 gross accounts receivable. In fiscal 2011, accounts receivable from three wholesale partners accounted for more than ten percent of our gross accounts receivable. These receivables represented 12.4%, 11.2% and 11.0% of fiscal 2011 gross accounts receivable. In fiscal 2012, accounts receivable from three wholesale partners accounted for more than ten percent of our gross accounts receivable. These receivables represented 21.4%, 13.5% and 13.5% of fiscal 2012 gross accounts receivable.
(H) Inventories :    Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out basis. The cost of inventory includes manufacturing or purchase cost as well as
 
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sourcing, transportation, duty and other processing costs associated with acquiring, importing and preparing inventory for sale. Inventory costs are included in cost of products sold at the time of their sale. Product development costs are expensed in selling, general and administrative expense when incurred. Inventory values are reduced to net realizable value when there are factors indicating that certain inventories will not be sold on terms sufficient to recover their cost.
Inventories consist of the following:

 	  	2011	 	  	2012	 	  	August 3,
2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Finished goods	  	$	9,838	  	  	$	18,443	  	  	$	27,739	  	
Work in process	  	 	303	  	  	 	229	  	  	 	147	  	
Raw materials	  	 	386	  	  	 	215	  	  	 	119	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total inventories	  	$	10,527	  	  	$	18,887	  	  	$	28,005	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net of reserves of:	  	$	464	  	  	$	1,247	  	  	$	1,790	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
(I) Property, Plant and Equipment :    Property, plant and equipment are stated at cost. Depreciation is computed on the straight-line method over estimated useful lives of 3 to 10 years for furniture, fixtures, and computer equipment. Leasehold improvements are amortized on the straight-line basis over the shorter of their estimated useful lives or the remaining lease term, excluding renewal terms. Capitalized software is amortized on the straight-line basis over the estimated economic useful life of the software, generally three to five years. Depreciation expense was $894, $1,102 and $1,411 for fiscal 2010, 2011 and 2012, respectively.
(J) Impairment of Long-lived Assets :    We review long-lived assets with a finite life for existence of facts and circumstances which indicate that the useful life is shorter than previously estimated or the carrying amount may not be recoverable from future operations based on undiscounted expected future cash flows. Impairment losses are then recognized in operating results to the extent discounted expected future cash flows are less than the carrying value of the asset. There were no impairment charges related to long-lived assets recorded in fiscal 2010, fiscal 2011 or fiscal 2012.
(K) Goodwill and Other Intangible Assets:     Goodwill and other indefinite-lived intangible assets are tested for impairment at least annually and in an interim period if a triggering event occurs. We completed our annual impairment testing on our goodwill and indefinite-lived intangible assets during the fourth quarters of fiscal 2010, fiscal 2011 or fiscal 2012.
Goodwill represents the excess of the cost of acquired businesses over the fair market value of the identifiable net assets. Indefinite-lived intangible assets are primarily company-owned trademarks. As the acquisition by Kellwood Company of the net assets of Vince occurred prior to the current requirements of ASC Topic 805 Business Combinations , the additional purchase consideration paid to the former owners of Vince subsequent to the acquisition date was recorded as an addition to the purchase price, and therefore goodwill, once determined.
In September 2011, the Financial Accounting Standards Board (“FASB”) issued an amendment to the Intangibles-Goodwill and Other topic of Accounting Standards Codification (“ASC”). Under this amendment, an entity may elect to perform a qualitative impairment assessment for goodwill. If adverse qualitative trends are identified during the qualitative assessment that indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test is required. “Step one” of this quantitative impairment test requires that the fair value of the reporting unit be estimated and compared to carrying amount. If the carrying amount exceeds the
 
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estimated fair value of the asset, “step two” of the impairment test is performed to calculate the impairment loss. An impairment loss is recognized to the extent the carrying amount of the reporting unit exceeds the implied fair value.
An entity may pass on performing the qualitative assessment for a reporting unit and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. This amendment is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. We adopted this amendment during fiscal year 2012.
In fiscal 2012, we performed a qualitative assessment on the goodwill and determined that it was more likely than not that the carrying value of the reporting unit was greater than the fair value. In fiscal 2011, we performed “step one” of the impairment test for goodwill rather than electing early adoption of the guidance noted above due to the additional capitalized contingent purchase price. We estimated the fair value of the reporting unit based on an income approach, which uses discounted cash flow assumptions. The implied fair value of the reporting unit exceeded the book value. As such, we were not required to perform “step two” of the impairment test.
In July 2012, the FASB issued Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite Lived Assets for Impairment (“ASU 2012-02”). Under this amendment, an entity may elect to perform a qualitative impairment assessment for indefinite-lived intangible assets similar to the goodwill impairment testing guidance discussed above.
An entity may pass on performing the qualitative assessment for an indefinite-lived intangible asset and directly perform “step one” of the assessment. This determination can be made on an asset by asset basis, and an entity may resume performing a qualitative assessment in subsequent periods. The amendment is effective for annual and interim impairment tests for indefinite-lived intangible assets performed for fiscal years beginning after September 15, 2012. We early adopted this amendment during fiscal 2012.
In fiscal 2012, we elected to perform a qualitative assessment on indefinite-lived intangible assets and determined that it was more likely than not that the carrying value of the assets exceeded the fair value. In fiscal 2011, we performed “step one” of the impairment test for indefinite-lived intangible assets. We estimated the fair value of the indefinite-lived assets primarily based on a relief from royalty model, which uses revenue projections, royalty rates and discount rates to estimate fair value. The implied fair value of the assets exceeded the book value, as such we were not required to perform “step two” of the impairment test.
Determining the fair value of goodwill and other intangible assets is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and operating margins, discount rates and future market conditions, among others. It is possible that estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of goodwill and intangible assets and that the effect of such changes could be material.
Definite-lived intangible assets are comprised of customer relationships and are being amortized on a straight-line basis over their useful lives of 20 years.
See Note 2 for more information on the details surrounding the goodwill and intangible assets.
(L) Deferred Financing Costs :    Deferred financing costs, such as underwriting, financial advisory, professional fees, and other similar fees are capitalized and recognized in interest expense over the contractual life of the related debt instrument using the straight-line method, as this method results in recognition of interest expense that is materially consistent with that of the effective interest method.
 
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(M) Deferred Rent and Deferred Lease Incentives:     We lease various office spaces, showrooms and retail stores. Many of these operating leases contain predetermined fixed escalations of the minimum rentals during the original term of the lease. For these leases, we recognize the related rental expense on a straight-line basis over the life of the lease and record the difference between the amount charged to operations and amounts paid as deferred rent. Certain of our retail store leases contain provisions for contingent rent, typically a percentage of retail sales once a predetermined threshold has been met. These amounts are expensed as incurred. Additionally, we received lease incentives in certain leases. These allowances have been deferred and are amortized on a straight-line basis over the life of the lease as a reduction of rent expense.
(N) Revenue Recognition :    Sales are recognized when goods are shipped in accordance with customer orders for our wholesale business and e-commerce businesses, and at the time of sale to consumer for our retail business. The estimated amounts of sales discounts, returns and allowances are accounted for as reductions of sales when the associated sale occurs. These estimated amounts are adjusted periodically based on changes in facts and circumstances when the changes become known to us. Accrued discounts, returns and allowances are included as an offset to accounts receivable in the Balance Sheets for our wholesale business. The activity in the accrued discounts, returns and allowances account is summarized as follows.

 	  	2010	 	 	2011	 	 	2012	 	
Balance, beginning of year	  	$	1,452	  	 	$	2,540	  	 	$	4,347	  	
Provision	  	 	11,736	  	 	 	17,916	  	 	 	29,400	  	
Utilization	  	 	(10,648	) 	 	 	(16,109	) 	 	 	(26,568	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of year	  	$	2,540	  	 	$	4,347	  	 	$	7,179	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
For our wholesale business, amounts billed to customers for shipping and handling costs are not significant. Our stated terms are FOB shipping point. There is no stated obligation to customers after shipment, other than specifically set forth allowances or discounts that are accrued at the time of sale. The rights of inspection or acceptance contained in certain sales agreements are limited to whether the goods received by our wholesale partners are in conformance with the order specifications.
(O) Marketing and Advertising :    We provide cooperative advertising allowances to certain of our customers. These allowances are accounted for as reductions in sales as discussed in “Revenue Recognition” above. Production expense related to company-directed advertising is deferred until the first time at which the advertisement runs. Communication expense related to company-directed advertising is expensed as incurred. Marketing and advertising expense was $2,610, $3,609 and $2,591 in fiscal 2010, 2011 and 2012, respectively. There were not significant amounts of deferred production expenses associated with company-directed advertising at January 29, 2011, January 28, 2012 or February 2, 2013.
(P) Income Taxes :    Our operating results have historically been included in the U.S. federal and state income tax returns for Kellwood Company. Provision for income taxes in the financial statements have been determined on a stand-alone basis (i.e., on a “separate return” basis). As such, we are required to assess the realization of our net deferred tax assets, the need for a valuation allowance and judgments on the recognition of tax benefits based on our own facts and circumstances and exclude from that assessment any impact of the overall results of Kellwood Company. We believe the assumptions underlying the allocation of income taxes are reasonable; however the amounts allocated for income taxes in the financial statements are not necessarily indicative of the income taxes that would have been recorded had Vince, LLC been a separate, stand-alone entity during the periods presented.
 
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We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities at enacted rates. We determine the appropriateness of valuation allowances in accordance with the “more likely than not” recognition criteria. We recognize tax positions in the Balance Sheets as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with tax authorities assuming full knowledge of the position and all relevant facts. Accrued interest and penalties related to unrecognized tax benefits are included in provision for income taxes in the Statements of Operations. See Note 7 for further discussion.
(Q) New Accounting Standards :    In September 2011 and July 2012, the FASB issued amendments to the Intangibles-Goodwill and Other topic of ASC. Under these amendments, an entity may elect to perform a qualitative impairment assessment for goodwill and indefinite-lived intangible assets, as discussed above. We adopted the provisions of these new standards during fiscal 2012.
Note 2. Goodwill and Intangible Assets
Goodwill balances by segment and changes therein subsequent to the January 29, 2011 Balance Sheet are as follows (in thousands):

 	  	Gross Goodwill	 	  	Accumulated
Impairment	 	 	Net Goodwill	 	
Balance as of January 29, 2011	  	$	59,554	  	  	$	(46,942	) 	 	$	12,612	  	
Additional contingent purchase price	  	 	51,134	  	  	 	—	  	 	 	51,134	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Balance as of January 28, 2012	  	 	110,688	  	  	 	(46,942	) 	 	 	63,746	  	
Additional contingent purchase price	  	 	—	  	  	 	—	  	 	 	—	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Balance as of February 2, 2013	  	 	110,688	  	  	 	(46,942	) 	 	 	63,746	  	
Additional contingent purchase price	  	 	—	  	  	 	—	  	 	 	—	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Balance as of August 3, 2013 (unaudited)	  	$	110,688	  	  	$	(46,942	) 	 	$	63,746	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Identifiable intangible assets are as follows:

 	  	Gross Amount	 	  	Accumulated
Amortization	 	 	Net Book
Value	 	
Balance as of January 28, 2012:	  				  				 				
Amortizable intangible assets:	  				  				 				
Customer relationships	  	$	11,970	  	  	$	(2,380	) 	 	$	9,590	  	
Indefinite-lived intangible assets:	  				  				 				
Trademark	  	 	101,850	  	  	 	—	  	 	 	101,850	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total intangible assets	  	$	113,820	  	  	$	(2,380	) 	 	$	111,440	  	

													
 	  	Gross Amount	 	  	Accumulated
Amortization	 	 	Net Book
Value	 	
Balance as of February 2, 2013:	  				  				 				
Amortizable intangible assets:	  				  				 				
Customer relationships	  	$	11,970	  	  	$	(2,978	) 	 	$	8,992	  	
Indefinite-lived intangible assets:	  				  				 				
Trademark	  	 	101,850	  	  	 	—	  	 	 	101,850	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total intangible assets	  	$	113,820	  	  	$	(2,978	) 	 	$	110,842	  	

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 	  	Gross Amount	 	  	Accumulated
Amortization	 	 	Net Book
Value	 	
Balance as of August 3, 2013 (unaudited)	  				  				 				
Amortizable intangible assets:	  				  				 				
Customer relationships	  	$	11,970	  	  	$	(3,278	) 	 	$	8,692	  	
Indefinite-lived intangible assets:	  				  				 				
Trademark	  	 	101,850	  	  	 	—	  	 	 	101,850	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Total intangible assets	  	$	113,820	  	  	$	(3,278	) 	 	$	110,542	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Amortization of identifiable intangible assets was $598, $599 and $598 for fiscal 2010, 2011 and 2012, respectively. Amortization expense for the six months ended July 28, 2012 and August 3, 2013 (unaudited) was $299 and $300, respectively. Amortization expense for each of the fiscal years 2013 to 2017 is expected to be as follows (in thousands):

 	  	Future
Amortization	 	
2013	  	$	598	  	
2014	  	 	598	  	
2015	  	 	598	  	
2016	  	 	598	  	
2017	  	 	598	  	
	  	 	 	 	
Total next 5 fiscal years	  	$	2,990	  	
	  	 	 	 	
Identifiable indefinite-lived intangible assets represent the Vince trademark. No impairments of the Vince trademark were recorded as a result of our annual asset impairment tests during fiscal years 2010, 2011 or 2012. In fiscal 2011 and 2010, the fair value of the trademark was determined utilizing the relief from royalty method. The relief from royalty method calculates fair value using a royalty savings method, which measures the value by estimating cost savings. Key assumptions include revenue projections, royalty rates and discount rates for the business. In fiscal 2012, we performed the qualitative assessment on the Vince Trademark as allowed by ASU 2012-02 and determined that it was not more likely than not that the carrying value exceeded the fair value of the asset.
Additionally, there were no impairments recorded as a result of our annual goodwill impairment test during fiscal 2010, 2011 or 2012. In fiscal 2011 and 2010, we utilized an income approach to estimate the fair value of Vince and no impairment to goodwill was recorded as a result. This is considered a Level 3 fair value measure as management forecasts are a significant unobservable input utilized in the analyses. In fiscal 2012, we used a qualitative analysis to assess the goodwill and determined that it was not more likely than not that the fair value was less than the carrying value, as allowed by the Intangible—Goodwill and Other Topic of ASC. No events occurred during the first six months of fiscal 2013 that would trigger an impairment test to be performed on our goodwill or other intangible assets.
It is possible that our estimates of future operating results could change adversely and impact the evaluation of the recoverability of the carrying value of intangible assets and that the effect of such changes on our Financial Statements could be material. While we believe that the current recorded carrying value of our intangible assets is not impaired, there can be no assurance that a significant non-cash write down or write-off will not be required in the future.
In connection with the Kellwood Company acquisition of certain net assets from CRL Group, LLC in 2006, owner of the Vince ® brand and trademark, additional cash purchase consideration was paid based upon achievement of certain specified financial performance targets for each of the five full years after the acquisition (2007 through 2011) and the cumulative performance from 2007 to 2011.
 
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The additional consideration earned in fiscal 2011 and 2010 was $51,134 and $8,137, respectively. We paid $50,328 of the fiscal 2011 consideration during the fourth quarter of fiscal 2011 and paid the remaining consideration during the second quarter of fiscal 2012. The fiscal 2010 additional cash consideration was paid during first quarter of fiscal 2011.
Note 3. Short-term borrowings
Wells Fargo Facility
On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Borrowers”), entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association, as agent, and lenders from time to time, to provide the Borrowers with a non-amortizing senior revolving credit facility (the “Wells Fargo Facility”). The Wells Fargo Facility had aggregate lending commitments of $155,000 as of February 2, 2013. Vince, LLC is a borrower party under the Credit Agreement.
The Wells Fargo Facility terminates at the earliest to occur of (a) October 19, 2016, (b) 90 days prior to the scheduled December 31, 2014, maturity date of the 12.875% Notes (as defined in Note 4) (including any extension effective on or prior to such 90th day prior to such scheduled maturity date) or (c) 90 days prior to the scheduled maturity date of the Cerberus Term Loan (as defined in Note 4) (including any extension effective on or prior to such 90th day prior to such scheduled maturity date). The amount which the Borrowers may borrow from time to time under the Wells Fargo Facility is determined on the basis of a borrowing base formula that is a percentage of Kellwood Company and subsidiaries accounts receivable and inventory that meet eligibility criteria specified in the Credit Agreement, but in no case more than the aggregate lending commitments of the participating lenders. All borrowings under the Wells Fargo Facility bear interest at a rate per annum equal to an applicable margin (ranging from 2.5%-3.0% per annum for LIBOR Revolver Loans (as defined in the Credit Agreement) and 1.25%-1.75% for Base Rate Loans (as defined in the Credit Agreement) based on average availability under the Credit Agreement) plus, at the Borrowers’ election, LIBOR or a Base Rate as defined in the Credit Agreement. In addition to paying interest, the Borrowers will pay a periodic commitment fee to the lenders under the Credit Agreement based on the amount of unused availability under the borrowing base formula. The Wells Fargo Facility is secured by a first-priority security interest in substantially all of the assets of the Borrowers, principally consisting of accounts receivable, inventory, and intellectual property. The Credit Agreement contains certain customary representations, warranties, provisions and restrictions. The Credit Agreement requires that the Borrowers maintain a fixed charge coverage ratio of at least 1:1 during any Covenant Testing Period (as defined in the Credit Agreement) which is triggered when excess availability is below 12.5% of the aggregate commitments under the Wells Fargo Facility (the “Covenant Testing Trigger Date”). The fixed charge ratio is defined as the ratio of Consolidated EBITDA (as defined in the Credit Agreement) (with certain addbacks as defined in the Credit Agreement for certain restructuring charges, startup losses in newly developed brands, costs incurred in certain acquisitions, management fees, as well as certain other costs and charges) minus capital expenditures and certain distributions; to fixed charges, defined as consolidated net interest expense paid or payable in cash, scheduled principal payments on debt in cash and certain earnout payments paid in cash up to a certain amount, calculated over the trailing four fiscal quarters. If the covenants are not met, a cash dominion period will go into effect whereby the agent has the ability to direct the disposition of the balances in controlled deposit accounts. The cash dominion period will expire when availability is over 12.5% of the aggregate commitments under the Wells Fargo Facility for a period of 90 consecutive days.
On March 23, 2012, the Credit Agreement was amended to modify the Covenant Testing Period such that it is now triggered when excess availability is below $5,000 and triggered the cash dominion period, as defined in the Credit Agreement. This amendment was entered into in consideration for a
 
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guaranty of payment of obligations under the Credit Agreement and a $20,000 letter of credit to the benefit of Wells Fargo Bank, National Association, as agent, issued by an affiliate of Sun Capital Partners, Inc.
On April 20, 2012, the Credit Agreement was amended to extend the modification to the Covenant Testing Period to be in effect until March 21, 2014 unless the guaranty described above is no longer in effect or the full face amount of the letter of credit described above is no longer available to be drawn. The guaranty will be released, the letter of credit returned and the trigger for the Covenant Testing Period will return to the pre-amendment level when availability is above $35,000 for 90 consecutive days and is projected to remain above $25,000 through the remaining term of the Credit Agreement.
At February 2, 2013, the maximum capacity on the Wells Fargo Facility was $110,838 and there were borrowings outstanding and letters of credit outstanding of $79,783 and $13,304, respectively. At August 3, 2013, the maximum capacity on the Wells Fargo Facility was $146,646 and there were borrowings outstanding and letters of credit outstanding of $115,601 and $12,569, respectively. At February 2, 2013 and August 3, 2013 (unaudited), availability under the Wells Fargo Facility was $17,751 and $18,476, respectively. Kellwood Company was in compliance with all provisions as of all periods presented.
BMO Facility
On September 12, 2011 Kellwood Company, as borrower, and certain of its domestic subsidiaries, as guarantors, entered into a Loan Authorization Agreement with BMO Harris Financing, Inc. and Bank of Montreal, as lender, (the “BMO Facility”) for a revolving credit facility up to a maximum credit line of $14,900 (the “BMO Obligations”). The BMO Facility was guaranteed by an affiliate of Sun Capital Partners, Inc. and was subordinated in payment and security interest to the Amended and Restated Credit Facility, the 12.875% Notes, the Term A Obligations, the Term B Obligations, the Term C Obligations and the Term D Obligations (all as defined below). Interest accrued on the BMO Obligations at a rate equal to the greater of (i) the Reference Bank’s Prime Rate plus 2% per annum or (ii) LIBOR plus 4.75% per annum. Such interest was to be paid quarterly either in cash or with PIK Interest, at the option of Kellwood Company. The BMO Obligations were payable on demand with a 10-day grace period and was used for liquidity, working capital and other general corporate purposes. Vince, LLC would have been a borrower party under the BMO Facility, had it been in existence.
On October 19, 2011, Kellwood Company terminated the BMO Facility and the Amended and Restated Credit Facility and entered into certain debt agreements further described above. As a result of the termination, a non-cash charge of $1,747 was recorded in interest expense, net, related to the write-off of deferred debt issuance costs of the Amended and Restated Credit Facility.
Note 4. Long-Term Debt
Long-term debt consisted of the following as of January 28, 2012, February 2, 2013 and August 3, 2013 (in thousands):

  	  	January 28,
2012	 	  	February 2,
2013	 	  	August 3,
2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Cerberus Term Loan	  	$	55,000	  	  	$	45,431	  	  	$	45,660	  	
Term A Obligations	  	 	15,604	  	  	 	17,252	  	  	 	18,118	  	
Term B Obligations	  	 	24,884	  	  	 	27,507	  	  	 	28,889	  	
Term C Obligations	  	 	16,231	  	  	 	17,945	  	  	 	18,846	  	
Term D Obligations	  	 	10,488	  	  	 	11,595	  	  	 	12,177	  	
Term E Obligations	  	 	—	  	  	 	5,601	  	  	 	5,937	  	
Term F Obligations	  	 	—	  	  	 	27,344	  	  	 	28,989	  	
Term G Obligations	  	 	—	  	  	 	—	  	  	 	5,059	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total long-term debt	  	$	122,207	  	  	$	152,675	  	  	$	163,675	  	

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Cerberus Term Loan
On October 19, 2011, Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Borrowers”), entered into a Term Loan Agreement (the “Term Loan Agreement”) with Cerberus Business Finance, LLC (the “Agent”), as agent and the lenders from time to time party thereto. The Term Loan Agreement provides the Borrowers with a non-amortizing secured Term Loan in an aggregate amount of $55,000 (the “Cerberus Term Loan”). Vince, LLC is a borrower party under the Term Loan Agreement. On December 31, 2012, Kellwood Company sold a wholly-owned subsidiary, of which $10,000 in proceeds was remitted to the Agent as prepayment on the Cerberus Term Loan.
The Cerberus Term Loan terminates at the earliest to occur of (a) October 19, 2015, (b) the date on which the Wells Fargo Facility (as defined above in Note 3) has been paid in full and all commitments thereunder have been terminated or (c) 60 days prior to the scheduled December 31, 2014, maturity date of the 12.875% Notes (as defined below) (including any extensions thereof agreed to after October 19, 2011). All borrowings under the Cerberus Term Loan bear interest, from the date of the agreement until the effective date of the amendment described below at a rate per annum equal to an applicable margin (10.25%-11.25% per annum for LIBOR Rate Loans (as defined in the Term Loan Agreement) and 8.25%-8.75% for Reference Rate Loans (as defined in the Term Loan Agreement) based upon leverage and income tests under the Term Loan Agreement) plus, at the Borrowers’ election, LIBOR or a Reference Rate as defined in the Term Loan Agreement. Beginning on April 20, 2012 Kellwood Company, entered into an amendment which provided for a portion of interest equal to 1% per annum to be paid-in-kind and added to the principal amount of such term loans. The Cerberus Term Loan is secured by a security interest in substantially all of the assets of the Borrowers, principally consisting of accounts receivable, inventory and intellectual property, which security interest is contractually subordinated to security interests of the lenders under the Credit Agreement (as defined above in Note 3). The Term Loan Agreement contains certain customary representations, warranties, provisions and restrictions. The Term Loan Agreement requires that the Borrowers maintain a minimum fixed charge coverage ratio as of each fiscal quarter end prior to the effective date of the amendment described below ranging from 0.14:1—1.28:1 through the first quarter of fiscal 2013, and 1.10:1, 1.175:1, and 1.25:1 for the second, third and fourth quarters of fiscal 2013, respectively. The minimum fixed charge coverage ratio remains at 1.25:1 for fiscal quarters subsequent to 2013.
The fixed charge ratio is defined as the ratio of Consolidated EBITDA (as defined in the Term Loan Agreement) (with certain addbacks as defined in the amended Term Loan Agreement for certain restructuring charges, startup losses in newly developed brands, costs incurred in certain acquisitions, as well as certain other costs and charges) minus capital expenditures and certain distributions and management fees; to fixed charges, defined as consolidated net interest expense paid or payable in cash, scheduled principal payments on debt in cash and certain earnout payments paid in cash, excluding earnout payments related to the Company’s Vince brand for the 2011 fiscal year, up to a certain amount, calculated over the trailing four fiscal quarters. An amendment on May 3, 2013 allows Kellwood Company to exclude certain types of capital expenditures in the calculation of the minimum fixed charge coverage ratio for the second, third, and fourth quarters of fiscal 2013, not to exceed $7,500 in total. The Term Loan Agreement also requires that the Borrowers maintain a leverage ratio as defined in the Term Loan Agreement and ranging from 2.44:1—7.77:1 during the life of the Cerberus Term Loan. The leverage ratio is defined as the ratio of indebtedness secured by a lien on any collateral (including the debt under the Credit Agreement and Cerberus Term Loan, but excluding the debt under the Sun Term Loan Agreements (as defined below) and the 12.875% Notes (as defined below)), divided by Consolidated EBITDA (as defined in the Term Loan Agreement) for the trailing four fiscal quarters.
On January 26, 2012, Kellwood Company obtained a waiver to the Cerberus Term Loan until the end of the first quarter of fiscal 2012 (the “Waiver Period”), as it anticipated not being in compliance
 
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with the fixed charge coverage ratio and the leverage ratio covenants as of January 28, 2012. In conjunction with this waiver Kellwood Company, paid the Agent a $75 waiver fee and an affiliate of Sun Capital Partners, Inc. provided the Agent with a $10,000 letter of credit. The covenants were amended on April 20, 2012 prior to the end of the Waiver Period, at which time the $10,000 letter of credit was also released. On May 3, 2013, Kellwood Company amended the Cerberus Term Loan in anticipation of not being in compliance with the fixed charge coverage ratio covenant during the 2013 fiscal year. This amendment modified the definition of the fixed charge coverage ratio to allow Kellwood Company to exclude certain types of capital expenditures in the calculation of the minimum fixed charge coverage ratio for the second, third, and fourth quarters of fiscal 2013, as described above. Additionally, this amendment modified the minimum fixed charge coverage ratios starting in the second quarter of fiscal 2013.
At February 2, 2013 and August 3, 2013 (unaudited), Kellwood Company was in compliance with all provisions of the amended Cerberus Term Loan.
Term A/B/C/D/E/F/G Obligations
Kellwood Company and certain of its domestic subsidiaries, as borrowers (the “Borrowers”), affiliates of Sun Capital Partners, Inc., as lenders, and Sun Kellwood Finance, LLC, as collateral agent, have entered into various agreements (collectively the “Sun Term Loan Agreements”) to provide for Term Loans A/B/C/D/E/F/G (together the “Sun Term Loan Obligations”).
On July 23, 2009, the lenders made certain Term A loans with an original principal amount of $12,168, the proceeds of which were used by the Borrowers to fund payment of the principal amounts outstanding, plus accrued and unpaid interest on the 7.875% 1999 Debentures due July 15, 2009 that were not tendered as part of the exchange offer for the 12.875% Notes (defined below). On January 4, 2011, the lenders made certain Term B loans with an original principal amount of $22,393, the proceeds of which were used by the Borrowers solely to finance Kellwood Company’s acquisition of Rebecca Taylor. On March 18, 2011, the lenders made certain Term C loans with an original principal amount of $14,900, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers. On August 5, 2011, the lenders made certain Term D loans with an original principal amount of $10,000, the proceeds of which were used to fund all or any part of the purchase price or cost of design, construction, installation or improvement or lease of property (real or personal), plant or equipment (whether through the direct acquisition of such assets or the acquisition of capital stock of any person owning such assets) used in the business of the Borrowers.
On April 20, 2012, the lenders made certain Term E loans with an original principal amount of $5,100, the proceeds of which were used to finance costs and expenses and earnout payments in respect of certain acquisitions consummated by the Borrowers, as well as certain Term F loans with an original principal amount of $24,900, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers. On June 28, 2013 (unaudited), the lenders made certain Term G loans with an original principal amount of $5,000, the proceeds of which were used to fund working capital, capital expenditures and other general corporate purposes of the Borrowers.
The Sun Term Loan Agreements conform with the major non-economic terms of the Credit Agreement and the Term Loan Agreement, including the representations, warranties and covenants. The Sun Term Loan Agreements provide a termination date of the earlier of (i) January 19, 2017 or (ii) the date on which the Cerberus Term Loan has been terminated; provided that, if the Cerberus Term Loan is extended, the stated maturity date set forth in (i) above shall be extended by a period of the same duration. The Sun Term Loan Obligations bear interest at 10% per annum (or 12% per annum in the case of the Term E loans, the Term F loans and the Term G loans) that will be added to the principal amounts
 
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of the Sun Term Loan Obligations. If the availability under the Credit Agreement is not less than $45,000, Kellwood Company may pay interest at a rate of 5% per annum in cash (6% in the case of the Term E loans, Term F Loans and the Term G loans). No cash interest has been paid on the Sun Term Loan Agreements. The Sun Term Loan Agreements are secured by a security interest in substantially all of the assets of the Borrowers, which security interest is contractually subordinated to the security interests of the lenders under the Credit Agreement and the Term Loan Agreement.
Principal amounts of the notes payable and long-term debt outstanding at February 2, 2013 include the following (in thousands):

 	  	Outstanding
Principal	 	  	Capitalized
PIK
Interest	 	  	Total	 	
Cerberus Term Loan	  	$	45,000	  	  	$	431	  	  	$	45,431	  	
Term A Obligations	  	 	12,168	  	  	 	5,084	  	  	 	17,252	  	
Term B Obligations	  	 	22,393	  	  	 	5,114	  	  	 	27,507	  	
Term C Obligations	  	 	14,900	  	  	 	3,045	  	  	 	17,945	  	
Term D Obligations	  	 	10,000	  	  	 	1,595	  	  	 	11,595	  	
Term E Obligations	  	 	5,100	  	  	 	501	  	  	 	5,601	  	
Term F Obligations	  	 	24,900	  	  	 	2,444	  	  	 	27,344	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total long-term debt	  	$	134,461	  	  	$	18,214	  	  	$	152,675	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Principal amounts of the notes payable and long-term debt outstanding at August 3, 2013 include the following (in thousands):

 	  	Outstanding
Principal	 	  	Capitalized
PIK
Interest	 	  	Total	 	
Cerberus Term Loan	  	$	45,000	  	  	$	660	  	  	$	45,660	  	
Term A Obligations	  	 	12,168	  	  	 	5,950	  	  	 	18,118	  	
Term B Obligations	  	 	22,393	  	  	 	6,496	  	  	 	28,889	  	
Term C Obligations	  	 	14,900	  	  	 	3,946	  	  	 	18,846	  	
Term D Obligations	  	 	10,000	  	  	 	2,177	  	  	 	12,177	  	
Term E Obligations	  	 	5,100	  	  	 	837	  	  	 	5,937	  	
Term F Obligations	  	 	24,900	  	  	 	4,089	  	  	 	28,989	  	
Term G Obligations	  	 	5,000	  	  	 	59	  	  	 	5,059	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total long-term debt	  	$	139,461	  	  	$	24,214	  	  	$	163,675	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
The 12.875% Notes, which totaled $143,188 and $146,768 in aggregate principal amount (including capitalized PIK interest) as of February 2, 2013 and August 3, 2013 (unaudited), respectively, are guaranteed by various Kellwood Company subsidiaries on a secured basis, including Vince, LLC. This security interest is contractually subordinated to security interests of lenders under the Wells Fargo Facility, the Cerberus Term Loan and the Sun Term Loan Agreements. The 12.875% Notes contain certain customary provisions that, among other things, limit the ability of Kellwood Company and its restricted subsidiaries, which include Vince, LLC, to incur additional indebtedness, make certain restricted payments, dispose of assets or redeem or repurchase capital stock or prepay subordinated indebtedness. In the event that Kellwood Company fails to satisfy any of its obligations thereunder, Vince, LLC, as a subsidiary guarantor, shall be jointly and severally liable to satisfy such obligations (along with the other guarantors), until such time as its guarantee is discharged or released.
Note 5. Fair Value
The recorded amounts of cash, receivables, accounts payable and short-term debt approximate their fair values at January 28, 2012 and February 2, 2013, due to the short maturity of these instruments. The estimated fair value of our long-term debt at January 28, 2012 and February 2, 2013 approximates the carrying value.
 
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Note 6. Leases
We lease substantially all of our office space, retail stores and certain machinery and equipment under operating leases having remaining terms up to twelve years, excluding renewal terms. Most of our real estate leases contain covenants that require us to pay real estate taxes, insurance, and other executory costs. Certain of these leases require contingent rent payments, kick-out clauses and/or opt-out clauses, based on the operating results of the retail operations utilizing the leased premises. Rent under leases with scheduled rent changes or lease concessions are recorded on a straight-line basis over the lease term. Rent expense under all operating leases was $4,295, $5,567 and $7,448 for 2010, 2011 and 2012, respectively.
The future minimum lease payments under operating leases at February 2, 2013 were as follows:

2013	  	$	6,612	  	
2014	  	 	6,750	  	
2015	  	 	6,850	  	
2016	  	 	6,422	  	
2017	  	 	6,080	  	
Thereafter	  	 	17,335	  	
	  	 	 	 	
Total minimum lease payments	  	$	50,049	  	
	  	 	 	 	
Note 7. Income Taxes
The provision (benefit) for income taxes consists of the following:

 	  	Fiscal Year Ended
January 29, 2011	 	  	Fiscal Year Ended
January 28, 2012	 	  	Fiscal Year Ended
February 2, 2013	 	
Current:	  				  				  				
Federal	  	$	2,208	  	  	$	3,932	  	  	$	5,819	  	
State	  	 	635	  	  	 	1,059	  	  	 	1,559	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total current	  	 	2,843	  	  	 	4,991	  	  	 	7,378	  	
Deferred:	  				  				  				
Federal	  	 	2,685	  	  	 	5,075	  	  	 	(361	) 	
State	  	 	395	  	  	 	746	  	  	 	(53	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total deferred	  	 	3,080	  	  	 	5,821	  	  	 	(414	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total provision for income taxes	  	$	5,923	  	  	$	10,812	  	  	$	6,964	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
$1,645 of income tax benefit was recorded in invested equity during 2012 related to an increase in tax basis resulting from a disallowed loss that was reallocated from other businesses of Kellwood Company to Vince, LLC. This is included as part of net distributions to Kellwood Company within the statement of Invested Equity for fiscal 2012. Income before provision for income taxes is from domestic sources for all years.
Current income taxes are the amounts payable under the respective tax laws and regulations on each year’s earnings. A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

 	  	Fiscal Year Ended
January 29, 2011	 	 	Fiscal Year Ended
January 28, 2012	 	 	Fiscal Year Ended
February 2, 2013	 	
Statutory rate	  	 	34.0	% 	 	 	34.0	% 	 	 	34.0	% 	
State taxes, net of federal benefit	  	 	5.4	% 	 	 	5.2	% 	 	 	5.6	% 	
Other	  	 	0.2	% 	 	 	0.1	% 	 	 	0.7	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	 	39.6	% 	 	 	39.3	% 	 	 	40.3	% 	

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Deferred income tax assets and liabilities consisted of the following:

 	  	January 28, 2012	 	 	February 2, 2013	 	
Deferred tax assets:	  				 				
Depreciation and amortization	  	$	4,431	  	 	$	3,652	  	
Employee related costs	  	 	513	  	 	 	1,811	  	
Allowance for asset valuations	  	 	883	  	 	 	1,487	  	
Accrued expenses	  	 	5	  	 	 	1,118	  	
Long-term debt	  	 	1,674	  	 	 	4,782	  	
Other	  	 	8	  	 	 	13	  	
	  	 	 	 	 	 	 	 	
Total deferred tax assets	  	 	7,514	  	 	 	12,863	  	
Deferred tax liabilities:	  				 				
Depreciation and amortization	  	 	(9,616	) 	 	 	(11,605	) 	
	  	 	 	 	 	 	 	 	
Total deferred tax liabilities	  	 	(9,616	) 	 	 	(11,605	) 	
	  	 	 	 	 	 	 	 	
Net deferred tax assets (liabilities)	  	$	(2,102	) 	 	$	1,258	  	
	  	 	 	 	 	 	 	 	
Included in:	  				 				
Prepaid expenses and other current assets	  	$	983	  	 	$	2,703	  	
Deferred income taxes and other	  	 	(3,085	) 	 	 	(1,445	) 	
	  	 	 	 	 	 	 	 	
Net deferred income tax assets (liabilities)	  	$	(2,102	) 	 	$	1,258	  	
	  	 	 	 	 	 	 	 	
A deemed change of ownership occurred in 2008 under Section 382 of the U.S. tax code resulting in certain built in losses to be subject to an annual limitation of $0. Since the realization of these benefits is remote, the associated deferred tax assets have been written down to zero.
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

 	  	2010	 	 	2011	 	 	2012	 	
Beginning balance	  	$	325	  	 	$	701	  	 	$	399	  	
Increases for tax positions in current year	  	 	700	  	 	 	395	  	 	 	1,693	  	
Decreases for tax positions in prior years	  	 	(324	) 	 	 	(290	) 	 	 	(181	) 	
Lapse in statute of limitations	  	 	0	  	 	 	(407	) 	 	 	(216	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Ending balance	  	$	701	  	 	$	399	  	 	$	1,695	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
As of January 28, 2012 and February 2, 2013, no unrecognized tax benefits would impact our effective tax rate if recognized. It is reasonably possible that within the next 12 months we could have the statute of limitations expire in various jurisdictions. Should these events occur, our unrecognized tax benefits could be reduced by up to $321.
We include accrued interest and penalties on underpayments of income taxes in our income tax provision. As of January 28, 2012 and February 2, 2013, we had interest and penalties accrued on our Balance Sheets of $75 and $89, respectively. Net interest and penalty provisions of $11, $4 and $9 were recognized in our Statements of Operations for the years ended January 29, 2011, January 28, 2012, and February 2, 2013, respectively. Interest is computed on the difference between the tax position recognized net of any unrecognized tax benefits and the amount previously taken or expected to be taken in our tax returns.
With limited exceptions, we are no longer subject to examination for U.S. federal and state income tax for 2007 and prior.
 
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During the first quarter of fiscal 2013 (unaudited), Kellwood Company sold a non-Vince trademark that resulted in a disallowed tax loss, of which a portion was allocated to the basis of the Vince intangible assets. This resulted in an increase to Vince, LLC’s deferred tax assets of $22,603, with the offset recorded to Invested Equity.
Our effective tax rate for continuing operations for the six months ended July 28, 2012 and August 3, 2013 (unaudited) was 40.1% and 39.3%, respectively. The rates for the six months ended July 28, 2012 and August 3, 2013 differed from the statutory rate of 34% primarily due to state taxes for the periods presented.
Note 8. Related Party Transactions
Transactions with Kellwood Company
Our results of operations include charges for the use of services provided by centralized Kellwood departments and shared facilities. These costs were charged upon the actual cost incurred, without mark-up. The charges to Vince, LLC may not be representative of what the costs would have been had we been operated separately from the Kellwood Company during the periods presented, however, we believe the amounts charged are representative of incremental cost to Kellwood Company to provide these services to us. In future periods we will continue to use certain of these services, such as distribution, information technology and back office support, from Kellwood Company as part of a shared services agreement.
During the years ended January 29, 2011, January 28, 2012, and February 2, 2013 and the first six months of fiscal 2013, Kellwood Company provided all cash management functions on behalf of Vince, LLC through a centralized treasury function. Substantially all of the cash balances of Vince, LLC are swept to Kellwood Company on a daily basis, where the cash is managed and invested by Kellwood Company. As a result, all costs charged to Vince, LLC from Kellwood Company are transacted through the centralized treasury function and are deemed to have been paid by us to Kellwood Company, in cash, during the period in which the charges are recorded. In addition, all of our cash receipts are advanced to Kellwood Company upon receipt. The invested equity balance recorded on the Balance Sheets is reflective of the accumulated cash disbursements made by Kellwood Company on behalf of Vince, LLC, net of cash receipts advanced to Kellwood Company by Vince, LLC, during the period. We consider all transactions with Kellwood Company to be financing activities, which are presented as one net amount within the Statements of Cash Flows.
The invested equity balance for Vince, LLC may not be indicative of the capital structure that Vince, LLC would have required had it been a stand-alone entity during the periods presented as there was no independent financing. Any contributions from or distributions to Kellwood Company were recorded at cost, without mark-up. Accordingly, no interest expense is charged or allocated between Vince, LLC and Kellwood Company based upon this balance.
From time to time, Kellwood Company posts letters of credit on behalf of Vince, LLC, primarily related to leased facilities. The outstanding letters of credit related to Vince, LLC totaled $352, $995 and $847 as of January 29, 2011, January 28, 2012 and February 2, 2013, respectively.
Vince Earnout Agreement
In connection with the acquisition of the Vince business, Kellwood Company entered into an agreement with CRL Group, LLC providing for contingent earnout payments as additional cash purchase consideration based upon the achievement of specified performance targets. Rea Laccone, a former Chief Executive Officer and Chief Creative Officer of the Vince brand, is a member of the CRL Group, LLC. The agreement provided for the payment of contingent annual earnout payments to CRL
 
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Group, LLC for five periods between fiscal 2007 and fiscal 2011, as well as a cumulative contingent payment at the end of the agreement period. Additional consideration of $4,475, $58,465, and $806 was paid in fiscal 2010, fiscal 2011, and fiscal 2012, respectively. All consideration was recorded as an adjustment to the goodwill balance in the fiscal year it was earned; see Note 2 for a rollforward of the goodwill balance. As of January 28, 2012, we reported $806 within other accrued contingent purchase price on our Balance Sheet.
Kellwood Company Indebtedness to Sun Capital Partners, Inc.
Kellwood Company has substantial indebtedness to Sun Capital Partners, Inc. (“Sun Capital”) to which Vince, LLC is a borrower party. Kellwood Company’s debt obligations to Sun Capital under the Sun Term Loan Agreements (as defined in Note 4) totaled $107,244 and $118,015 as of February 2, 2013 and August 3, 2013 (unaudited), respectively. These obligations were reported within long-term debt on the Balance Sheets as of the respective periods and are comprised of both principal and capitalized PIK interest. See Note 4 for additional discussion on the terms of these agreements.
Management Fees
Kellwood Company pays management fees to Sun Capital Partners Management V, LLC (“Sun Capital Management”) under a Management Services Agreement. Under this agreement, Sun Capital Management provides Kellwood Company with consulting and advisory services, including services relating to financing alternatives, financial reporting, accounting and management information systems. In exchange, Kellwood Company reimburses Sun Capital Management for reasonable out-of-pocket expenses incurred in connection with providing consulting and advisory services, additional and customary and reasonable fees for management consulting services provided in connection with corporate events, and also pays an annual management fee. Kellwood Company charged Vince, LLC a portion of these fees incurred in the amounts of $350, $478, $779 and $250 for fiscal 2010, fiscal 2011, fiscal 2012 and the six months ended August 3, 2013 (unaudited), respectively. These amounts were recorded in in other expense, net within the Statements of Operations.
Upon the consummation of certain corporate events involving Kellwood Company or its direct or indirect subsidiaries (including Vince, LLC), Kellwood Company is required to pay Sun Capital Management a transaction fee in an amount equal to 1% of the aggregate consideration paid to or by Kellwood Company and any of its direct or indirect subsidiaries or stockholders.
Upon consummation of this offering, Vince, LLC will no longer incur management fees payable to Sun Capital Management, as the obligations under the related Management Services Agreement will be terminated or remain with Kellwood Company. We will enter into a services agreement with Sun Capital Management, pursuant to which we will agree to reimburse Sun Capital Management for out-of-pocket expenses incurred in connection with providing consulting services to us.
Note 9. Contingencies
We are currently party to various legal proceedings. While management, including internal counsel, currently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse impact on our financial position or results of operations, litigation is subject to inherent uncertainties.
Note 10. Segment and Geographical Financial Information
Vince is a prominent, high-growth contemporary apparel brand known for its modern, effortless style and everyday luxury essentials. We operate and manage our business by distribution channel and have identified two reportable segments, as further described below. These segments represent activities driven by distribution channels for which discrete financial information is readily available and
 
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utilized by our Chief Operating Decision Maker (“CODM”) to evaluate each segment’s performance on a regular basis. We considered both similar and dissimilar economic characteristics, internal reporting and management structures, as well as products, customers, and supply chain logistics to identify the following reportable segments:
 
 	Ÿ	 	Wholesale segment – consists of our operations to distribute products to premier department stores and specialty stores in the United States and select international markets.	
 
 	Ÿ	 	Direct-to-consumer segment – consists of our operations to distribute products directly to the consumer through our branded full-price specialty retail stores, outlet stores, and e-commerce platform.	
Segment performance is evaluated by the Company’s CODM based on Adjusted EBITDA, defined as net earnings before interest expense, provision for income taxes, depreciation and amortization. Unallocated corporate expenses are comprised of selling, general, and administrative expenses attributable to corporate and administrative activities, and other charges that are not directly attributable to our operating segments. Unallocated corporate assets are comprised of capitalized debt placement costs, the carrying values of our goodwill and unamortized trademark, and other assets that will be utilized to generate revenue for both of our reportable segments.
Our wholesale segment sells apparel to our direct-to-consumer segment at cost. The wholesale intercompany sales of $3,905, $6,027, and $9,907 have been excluded from the net sales totals presented below for fiscal 2010, fiscal 2011, and fiscal 2012, respectively. Wholesale intercompany sales of $4,282 and $5,973 have been excluded from the net sales totals presented for the first six months of fiscal 2012 and fiscal 2013 (unaudited), respectively. Furthermore, as intercompany sales are sold at cost, no intercompany profit is reflected in Adjusted EBITDA or income before provision for income taxes for the three periods presented below.
Summary information for our operating segments is presented below (in thousands).

 	  	Fiscal Year	 	 	Six Months Ended	 	
 	  	2010	 	 	2011	 	 	2012	 	 	July 28,
2012	 	 	August 3,
2013	 	
 	  	 	 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	
Net Sales	  				 				 				 				 				
Wholesale	  	$	95,798	  	 	$	151,921	  	 	$	203,107	  	 	$	78,064	  	 	$	92,551	  	
Direct-to-consumer	  	 	15,694	  	 	 	23,334	  	 	 	37,245	  	 	 	12,467	  	 	 	22,106	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total net sales	  	$	111,492	  	 	$	175,255	  	 	$	240,352	  	 	$	90,531	  	 	$	114,657	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	  				 				 				 				 				
Wholesale	  	$	39,353	  	 	$	63,171	  	 	$	73,515	  	 	$	27,932	  	 	$	32,072	  	
Direct-to-consumer	  	 	1,045	  	 	 	1,713	  	 	 	5,865	  	 	 	(698	) 	 	 	3,002	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment adjusted EBITDA	  	 	40,398	  	 	 	64,884	  	 	 	79,380	  	 	 	27,234	  	 	 	35,074	  	
Unallocated corporate expense	  	 	(16,761	) 	 	 	(20,698	) 	 	 	(37,191	) 	 	 	(13,653	) 	 	 	(17,583	) 	
Interest expense	  	 	(7,172	) 	 	 	(15,004	) 	 	 	(22,903	) 	 	 	(10,690	) 	 	 	(12,429	) 	
Depreciation	  	 	(894	) 	 	 	(1,102	) 	 	 	(1,411	) 	 	 	(622	) 	 	 	(806	) 	
Amortization of intangible assets	  	 	(598	) 	 	 	(599	) 	 	 	(598	) 	 	 	(299	) 	 	 	(300	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before provision for income taxes	  	$	14,973	  	 	$	27,481	  	 	$	17,277	  	 	$	1,970	  	 	$	3,956	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital Expenditures	  				 				 				 				 				
Wholesale	  	$	13	  	 	$	146	  	 	$	459	  	 				 				
Direct-to-consumer	  	 	1,589	  	 	 	1,304	  	 	 	1,362	  	 				 				
	  	 	 	 	 	 	 	 	 	 	 	 	 				 				
Total capital expenditures	  	$	1,602	  	 	$	1,450	  	 	$	1,821	  	 				 				

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 	  	January 28, 2012	 	  	February 2, 2013	 	  	August 3, 2013	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Total Assets	  				  				  				
Wholesale	  	$	45,648	  	  	$	60,627	  	  	$	80,684	  	
Direct-to-consumer	  	 	11,012	  	  	 	14,679	  	  	 	19,099	  	
Unallocated corporate	  	 	172,282	  	  	 	171,905	  	  	 	190,779	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total assets	  	$	228,942	  	  	$	247,211	  	  	$	290,562	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Sales results are presented on a geographic basis below (in thousands). We predominately operate within the U.S. and sell our products in 43 countries either directly to premier department and specialty stores, or through distribution relationships with highly-regarded international partners with exclusive rights to certain territories. Sales are presented based on customer location. All long-lived assets, including property, plant and equipment and fixtures installed at our retailer sites, are located in the U.S.

 	  	2010	 	  	2011	 	  	2012	 	
Domestic	  	$	104,139	  	  	$	164,209	  	  	$	226,691	  	
International	  	 	7,353	  	  	 	11,046	  	  	 	13,661	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total net sales	  	$	111,492	  	  	$	175,255	  	  	$	240,352	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Note 11. Subsequent Events
On June 28, 2013, Kellwood Company and certain of its domestic subsidiaries, as borrowers, entered into the Fifth Amended and Restated Term Loan Agreement with SCSF Finance, LLC and Sun Kellwood Finance, LLC, as lenders, as disclosed in Note 4 above. We evaluated our financial statements for fiscal 2012 for subsequent events through September 24, 2013, the date the financial statements were available to be issued.
 
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Table of Contents

Through and including                     , 2013 (the 25 th  day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

             Shares
Common Stock

PRELIMINARY    PROSPECTUS

 
			
Goldman, Sachs & Co.	 	Baird	

			
BofA Merrill Lynch	 	Barclays	 	J.P. Morgan	

			
KeyBanc Capital Markets	 	Stifel	 	William Blair	
                    , 2013

 

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PART II
Item 13.    Other expenses of issuance and distribution
The following table sets forth the costs and expenses, other than underwriting discounts and commissions, to be paid by us in connection with the sale of the shares of common stock being registered hereby. All amounts are estimates except for the SEC registration fee, the FINRA filing fee and the New York Stock Exchange listing fee.

SEC registration fee	  	$	27,280	  	
FINRA filing fee	  	 	30,500	  	
New York Stock Exchange listing fee	  	 	            	* 	
Blue Sky fees and expenses	  	 	            	* 	
Accounting fees and expenses	  	 	            	* 	
Directors’ and Officers’ Insurance	  	 	            	* 	
Legal fees and expenses	  	 	            	* 	
Printing and engraving expenses	  	 	            	* 	
Transfer agent and registrar fees and expenses	  	 	            	* 	
Other expenses	  	 	            	* 	
	  	 	 	 	
Total	  	$	            	* 	

*	To be provided by amendment.	
Item 14.    Indemnification of directors and officers
Section 102(b)(7) of the DGCL allows a corporation to provide in its certificate of incorporation that a director of the corporation will not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached the duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our amended and restated certificate of incorporation will provide for this limitation of liability.
Section 145 of the DGCL (“Section 145”), provides that a Delaware corporation may indemnify any person who was, is or is threatened to be made, party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer, director, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, were or are a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests, provided that no indemnification is permitted without judicial approval if the officer, director, employee or agent is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director has actually and reasonably incurred.
 
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Section 145 further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him under Section 145.
Our amended and restated bylaws will provide that we must indemnify our directors and officers to the fullest extent permitted by the DGCL and must also pay expenses incurred in defending any such proceeding in advance of its final disposition upon delivery of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately that such person is not entitled to be indemnified.
In addition, prior to the consummation of this offering, we will enter into indemnification agreements with certain of our executive officers and directors pursuant to which we will agree to indemnify such persons against all expenses and liabilities incurred or paid by such person in connection with any proceeding arising from the fact that such person is or was an officer or director of our company, and to advance expenses as incurred by or on behalf of such person in connection therewith.
The indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our amended and restated certificate of incorporation, our amended and restated bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
We expect to maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act and (2) to us with respect to indemnification payments that we may make to such directors and officers.
The proposed form of Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement provides for indemnification of our directors and officers by the underwriters party thereto against certain liabilities. See “Item 17. Undertakings” for a description of the SEC’s position regarding such indemnification provisions.
Item 15.    Recent sales of unregistered securities
On October 3, 2013, David Falwell, Kellwood Company (“Kellwood”) and Apparel Holding Corp. (“AHC”) entered into an Option Settlement Agreement (the “Option Settlement Agreement”). Mr. Falwell previously held a vested and exercisable option to acquire 2,000 shares of non-voting Kellwood common stock under the 2010 Option Plan and a grant agreement dated August 11, 2011 (the “Option”). Pursuant to the Option Settlement Agreement, when Mr. Falwell exercised the Option, he received 1,838.236 non-voting shares of common stock of AHC from Kellwood in lieu of 2,000 shares of non-voting common stock of Kellwood. Kellwood received $127,897 from Mr. Falwell in connection with the exercise of the Option. AHC received no monetary proceeds from the exercise of the Option, and instead received 2,000 shares of non-voting stock of Kellwood in return for the issuance of the 1,838.236 non-voting shares of AHC common stock to Kellwood. The shares of non-voting common stock of AHC were issued to Kellwood pursuant to Section 4(a)(2) of the Securities Act.
Item 16.    Exhibits and Financial Statement Schedules
 
 	(a)	Exhibits	
The exhibit index attached hereto is incorporated herein by reference.
 
 	(b)	Financial Statement Schedule	
 
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All schedules have been omitted because the information required to be set forth in the schedules is either not applicable or is shown in the financial statements or notes thereto.
Item 17.    Undertakings
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the purchase agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.
 
II-3

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Apparel Holding Corp., a Delaware corporation, has duly caused this Amendment No. 2 to Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on October 30, 2013.

APPAREL HOLDING CORP.	
		
By:	 	/s/ Jill Granoff	
	 	Name:	 	Jill Granoff	
	 	Title:	 	Chief Executive Officer	
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates listed.

Signature	  	Title	  	Date	
			
/s/ Jill Granoff
Jill Granoff	  	Chief Executive Officer (principal executive officer) and Director	  	October 30, 2013	
			
/s/ Lisa Klinger
Lisa Klinger	  	Chief Financial Officer and Treasurer (principal financial and accounting officer)	  	October 30, 2013	
			
*
Christopher T. Metz	  	Director	  	October 30, 2013	
			
*
Mark E. Brody	  	Director	  	October 30, 2013	
			
*
Jason H. Neimark	  	Director	  	October 30, 2013	
 
*	The undersigned by signing her name hereto, signs and executes this Amendment No. 2 to Registration Statement pursuant to the Powers of Attorney executed by the above named signatures and previously filed with the Securities and Exchange Commission on September 24, 2013.	

	 	By:	 	/s/ Lisa Klinger	
	 		 	Lisa Klinger	
	 		 	Attorney-in-fact	
 
II-4

Table of Contents
EXHIBIT INDEX

Exhibit
Number	 	Exhibit Description	
		
  1.1**	 	Form of Underwriting Agreement	
		
  3.1**	 	Certificate of Incorporation of Apparel Holding Corp., as amended	
		
  3.2**	 	Bylaws of Apparel Holding Corp.	
		
  3.3**	 	Form of Amended & Restated Certificate of Incorporation of Vince Holding Corp.	
		
  3.4**	 	Form of Amended & Restated Bylaws of Vince Holding Corp.	
		
  4.1*	 	Form of Stock certificate	
		
  4.2**	 	Registration Agreement, dated as of February 20, 2008, among Apparel Holding Corp., Sun Cardinal, LLC, SCSF Cardinal, LLC and the Other Investors party thereto	
		
  5.1**	 	Form of Opinion of Kirkland & Ellis LLP	
		
10.1**	 	Form of Contribution and Acceptance Agreement, dated as of September 12, 2012, by and between Kellwood Company and Vince, LLC	
		
10.2**	 	Form of Shared Services Agreement between Vince, LLC and Kellwood Company, LLC	
		
10.3	 	Form of Tax Receivable Agreement between Vince Intermediate Holding, LLC, the Stockholders, and Sun Cardinal, LLC as Stockholder Representative	
		
10.4	 	Form of Transfer Agreement between Vince Intermediate Holding, LLC and Kellwood Intermediate Holding, LLC	
		
10.5**	 	Form of Kellwood Note Receivable between Vince Intermediate Holding, LLC and Kellwood Company	
		
10.6	 	Form of Consulting Agreement between Vince Holding Corp. and Sun Capital Partners Management V, LLC	
		
10.7**	 	$75,000,000 Senior Subordinated Promissory Note, dated as of May 2, 2008, by Apparel Holding Corp. to SCSF Kellwood Finance, LLC	
		
10.8**	 	Amendment No. 1 to Senior Subordinated Promissory Note, dated as of July 19, 2012, by and between Apparel Holding Corp. and SCSF Kellwood Finance, LLC	
		
10.9**	 	Agreement Regarding Amendment No. 1 to Senior Subordinated Promissory Note, dated as of December 28, 2012, by and between Apparel Holding Corp. and SCSF Kellwood Finance, LLC	
		
10.10**	 	$225,000,000 Senior Subordinated Promissory Note, dated as of May 2, 2008, by Apparel Holding Corp. to Sun Kellwood Finance, LLC	
		
10.11**	 	Amendment No. 1 to Senior Subordinated Promissory Note, dated as of July 19, 2012, by and between Apparel Holding Corp. and Sun Kellwood Finance, LLC	
		
10.12**	 	Agreement Regarding Amendment No. 1 to Senior Subordinated Promissory Note, dated as of December 28, 2012, by and between Apparel Holding Corp. and Sun Kellwood Finance, LLC	
		
10.13**	 	Bank of Montreal Loan Authorization Agreement, dated as of February 13, 2008, by and between Bank of Montreal and Apparel Holding Corp.	
		
10.14**	 	First Amendment to Bank of Montreal Loan Authorization Agreement, dated May 2, 2008, by and between Bank of Montreal and Apparel Holding Corp.	
		
10.15**	 	Second Amendment to Bank of Montreal Loan Authorization Agreement, dated August 13, 2008, by and between Bank of Montreal and Apparel Holding Corp.	
		
10.16**	 	Third Amendment to Bank of Montreal Loan Authorization Agreement, dated December 28, 2012, by and between Bank of Montreal and Apparel Holding Corp.	
 
II-5

Table of Contents

Exhibit
Number	 	Exhibit Description	
		
10.17**	 	Assignment and Assumption Agreement, dated as of April 9, 2009, by and among Bank of Montreal, SCSF Kellwood Finance, LLC, Sun Kellwood Finance, LLC and Apparel Holding Corp.	
		
10.18**	 	Loan Authorization Agreement, dated as of September 9, 2011, by and among Kellwood Company and BMO Harris Financing, Inc.	
		
10.19**	 	Amendment No. 4 to Loan Authorization Agreement, dated as of July 19, 2012, by and among Apparel Holding Corp., SCSF Kellwood Finance, LLC and Sun Kellwood Finance, LLC	
		
10.20**	 	Agreement Regarding Amendment No. 4 to Loan Authorization Agreement, dated as of December 28, 2012, by and among Apparel Holding Corp., SCSF Kellwood Finance, LLC and Sun Kellwood Finance, LLC	
		
10.21**	 	Credit Agreement, dated as of October 19, 2011, among Kellwood Company and its Domestic Subsidiaries, other Obligors and Wells Fargo Bank, National Association	
		
10.22	 	Amendment No. 1 to Credit Agreement, entered into as of March 23, 2012, by and among the Lenders, Wells Fargo Bank, National Association, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.23**	 	Consent and Amendment No. 2 to Credit Agreement, entered into as of April 20, 2012, by and among the Lenders, Wells Fargo Bank, National Association, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.24**	 	Amendment No. 3 to Credit Agreement, entered into as of July 25, 2012, by and among the Lenders, Wells Fargo Bank, National Association, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.25**	 	Consent and Amendment No. 4 to Credit Agreement, entered into as of December 31, 2012, by and among the Lenders, Wells Fargo Bank, National Association, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.26**	 	Amended and Restated Term A Loan Agreement dated as of October 19, 2011, by and among Kellwood Company and its domestic subsidiaries, other Obligors, SCSF Kellwood Finance, LLC and Sun Kellwood Finance, LLC	
		
10.27**	 	Second Amended and Restated Term A Loan Agreement, dated as of April 20, 2012, among Kellwood Company and its Domestic Subsidiaries, other Obligors, SCSF Kellwood Finance, LLC and Sun Kellwood Finance, LLC	
		
10.28**	 	Amendment No. 1 to Second Amended and Restated Term A Loan Agreement, entered into as of July 2012, by and among the Lenders, Sun Kellwood Finance, LLC, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.29**	 	Consent and Amendment No. 2 to Second Amended and Restated Term A Loan Agreement, entered into as of December 31, 2012, by and among the Lenders, Sun Kellwood Finance, LLC, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.30**	 	Amendment No. 3 to Second Amended and Restated Term A Loan Agreement, dated as of June 28, 2013, by and among Kellwood Company, the Domestic Subsidiaries, the other Obligors, SCSF Kellwood Finance, LLC and Sun Kellwood Finance, LLC	
		
10.31**	 	Fifth Amended and Restated Term Loan B/C/D/E/F/G Agreement, dated as of June 28, 2013, among Kellwood Company, the Domestic Subsidiaries, other Obligors, SCSF Kellwood Finance, LLC and Sun Kellwood Finance, LLC	
 
II-6

Table of Contents

Exhibit
Number	 	Exhibit Description	
		
10.32	 	Term Loan Agreement, dated as of October 19, 2011, among Kellwood Company, the Domestic Subsidiaries, other Obligors and Cerberus Business Finance LLC	
		
10.33**	 	Consent and Amendment No. 1 to Credit Agreement, entered into as of April 20, 2012, by and among the Lenders, Cerberus Business Finance LLC, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.34**	 	Amendment No. 2 to Credit Agreement, entered into as of July 25, 2012, by and among the Lenders, Cerberus Business Finance LLC, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.35**	 	Consent and Amendment No. 3 to Term Loan Agreement, entered into as of December 31, 2012, by and among the Lenders, Cerberus Business Finance LLC, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.36**	 	Modification to Consent and Amendment No. 4 to Term Loan Agreement, entered into as of March 2013, by and among the Lenders, Cerberus Business Finance LLC, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.37**	 	Amendment No. 5 to Credit Agreement, entered into as of May 3, 2013, by and among the Lenders, Cerberus Business Finance LLC, Kellwood Company, the Domestic Subsidiaries and the other Obligors	
		
10.38*	 	Form of new term loan credit facility of Vince Intermediate Holding, LLC	
		
10.39*	 	Form of new revolving credit facility of Vince Intermediate Holding, LLC	
		
10.40**	 	Indenture Agreement, dated as of July 23, 2009, by and among Kellwood Company, the Guarantors named therein and Wells Fargo Bank National Association	
		
10.41**	 	Indenture Agreement, dated as of September 30, 1997, by and between Kellwood Company and The Chase Manhattan Bank	
		
10.42**	 	Indenture Agreement, dated as of June 22, 2004, by and between Kellwood Company and Union Bank of California, N.A.	
		
10.43**	 	Joinder Agreement, dated as of September 18, 2012, by and between Vince, LLC and Wells Fargo Bank, National Association	
		
10.44**	 	Fourth Supplemental Indenture, dated as of September 18, 2012, among Vince, LLC, Kellwood Company, the other Guarantors and Wells Fargo Bank, National Association	
		
10.45**	 	Joinder to Term Loan Agreement, dated as of September 1, 2012, by Vince, LLC	
		
10.46**	 	Joinder to Second Amended and Restated Term Loan A Agreement, dated as of September 1, 2012, by Vince, LLC	
		
10.47**	 	Joinder to Fourth Amended and Restated Term Loan Agreement, dated as of September 1, 2012, by Vince, LLC	
		
10.48†**	 	Employment Agreement, dated as of May 4, 2012, between Jill Granoff and Kellwood Company	
		
10.49†**	 	Amendment to Employment Agreement, dated as of December 30, 2012, between Jill Granoff and Kellwood Company	
		
10.50†**	 	Amendment No. 2 to Employment Agreement, dated as of September 24, 2013, between Jill Granoff and Kellwood Company	
		
10.51†**	 	Debt Recovery Bonus Side Letter Agreement, dated June 11, 2013, between Jill Granoff and Kellwood Company	
		
10.52†**	 	Employment Offer Letter, dated as of November 2, 2012, between Lisa Klinger and Kellwood Company	
 
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Table of Contents

Exhibit
Number	 	Exhibit Description	
		
10.53†**	 	Amended and Restated Letter Agreement, effective May 1, 2013, by and between Kellwood Company and Arthur Gordon	
		
10.54†**	 	Option Cancellation Agreement, dated as of October 4, 2012, by and between Arthur Gordon and Kellwood Company	
		
10.55†**	 	Option Extension Agreement, dated as of August 5, 2013, by and between Michael Saunders, Kellwood Company, Apparel Holding Corp., SCSF Cardinal, LLC and Sun Cardinal, LLC.	
		
10.56†**	 	2010 Stock Option Plan of Kellwood Company	
		
10.57†**	 	Form of 2010 Stock Option Plan grant agreement for executive officers	
		
10.58†**	 	2010 Stock Plan of Kellwood Company Grant Agreement, dated as of May 4, 2012, by and between Kellwood Company and Jill Granoff	
		
10.59†**	 	Amendment to Grant Agreement, between Kellwood Company and Jill Granoff	
		
10.60†**	 	First Amendment to Grant Agreement, dated December 30, 2012, between Kellwood Company and Jill Granoff	
		
10.61†**	 	2010 Stock Plan of Kellwood Company Grant Agreement, dated as of December 10, 2012, by and between Kellwood Company and Lisa Klinger	
		
10.62†**	 	2010 Stock Plan of Kellwood Company Grant Agreement, dated as of June 30, 2010, by and between Kellwood Company and Michael Saunders	
		
10.63†	 	Form of Indemnification Agreement (for directors and officers affiliated with Sun Capital Partners)	
		
10.64†	 	Form of Indemnification Agreement (for directors and officers not affiliated with Sun Capital Partners)	
		
10.65	 	Form of Escrow Agreement	
		
10.66†	 	Form of Vince Holding Corp. 2013 Incentive Plan	
		
10.67†	 	Form of Vince Holding Corp. 2013 Employee Stock Purchase Plan	
		
21.1**	 	List of subsidiaries of Vince Holding Corp.	
		
23.1	 	Consent of Pricewaterhouse Coopers LLP for Apparel Holding Corp.	
		
23.2	 	Consent of Pricewarterhouse Coopers LLP for Vince, LLC	
		
23.3	 	Consent of Kirkland & Ellis LLP (included in Exhibit 5.1)	

*	Indicates to be filed by amendment.	
**	Indicates exhibits previously filed by the registrant.	
†	Indicates exhibits that constitute management contracts or compensatory plans or arrangements.	
 
II-8

Exhibit 10.3

 
TAX RECEIVABLE AGREEMENT
by and between
APPAREL HOLDING CORP.
(F/K/A KELLWOOD HOLDING CORP.),
THE STOCKHOLDERS
and
THE STOCKHOLDER REPRESENTATIVE
Dated as of [            ], 2013

 

TABLE OF CONTENTS

 	 	 	  	Page	 	
ARTICLE I	  	
DEFINITIONS	  	
			
Section 1.01	 	Definitions	  	 	1	  	
	
ARTICLE II	  	
DETERMINATION OF REALIZED TAX BENEFIT	  	
			
Section 2.01	 	Tax Benefit Utilization	  	 	7	  	
Section 2.02	 	Tax Benefit Schedule	  	 	7	  	
Section 2.03	 	Procedures, Amendments	  	 	7	  	
	
ARTICLE III	  	
TAX BENEFIT PAYMENTS	  	
			
Section 3.01	 	Payments	  	 	8	  	
Section 3.02	 	No Duplicative Payments; Intent	  	 	9	  	
	
ARTICLE IV	  	
TERMINATION	  	
			
Section 4.01	 	Termination, Early Termination and Breach of Agreement	  	 	10	  	
Section 4.02	 	Early Termination Notice	  	 	11	  	
Section 4.03	 	Payment upon Early Termination	  	 	11	  	
	
ARTICLE V	  	
LATE PAYMENTS	  	
			
Section 5.01	 	Late Payments by the Company	  	 	11	  	
	
ARTICLE VI	  	
COMPANY TAX MATTERS; CONSISTENCY; COOPERATION	  	
			
Section 6.01	 	The Stockholder Representative Participation in Company Tax Matters	  	 	11	  	
Section 6.02	 	Consistency	  	 	12	  	
Section 6.03	 	Cooperation	  	 	12	  	
	
ARTICLE VII	  	
MISCELLANEOUS	  	
			
Section 7.01	 	Notices	  	 	12	  	
Section 7.02	 	Counterparts	  	 	13	  	
Section 7.03	 	Entire Agreement; Third Party Beneficiaries	  	 	13	  	
Section 7.04	 	Governing Law	  	 	13	  	
 
i

							
Section 7.05	  	Severability	  	 	13	  	
Section 7.06	  	Successors; Assignment; Amendments; Waivers	  	 	14	  	
Section 7.07	  	Titles and Subtitles	  	 	14	  	
Section 7.08	  	Waiver of Jury Trial	  	 	15	  	
Section 7.09	  	Reconciliation	  	 	15	  	
Section 7.10	  	Withholding	  	 	16	  	
Section 7.11	  	Affiliated Corporations; Admission of the Company into a Consolidated Group; Transfers of Corporate Assets	  	 	16	  	
Section 7.12	  	Confidentiality	  	 	16	  	
Section 7.13	  	Tax Treatment	  	 	17	  	
Section 7.14	  	Stockholder Representative.	  	 	17	  	
Section 7.15	  	Headings	  	 	19	  	
 
ii

TAX RECEIVABLE AGREEMENT
This TAX RECEIVABLE AGREEMENT (this “ Agreement ”), dated as of [            ], 2013, is hereby entered into by and between Apparel Holding Corp., a Delaware corporation, formerly known as Kellwood Holding Corp. (the “ Company ”), the Stockholders (as defined herein) and Sun Cardinal, LLC, a Delaware limited liability company (along with any successor as provided in Section 7.06 ), as the “ Stockholder Representative ”). Capitalized terms used herein have the definitions set forth in Section 1.01 .
RECITALS
WHEREAS, the stockholders listed on Schedule A (the “ Stockholders ”) are the record owners of one-hundred percent (100%) of the Common Stock on the date hereof;
WHEREAS, the Company intends to consummate the IPO;
WHEREAS, the Company and certain of its present and former Subsidiaries have generated NOLs and Tax Credits prior to the IPO and will generate certain Section 197 Intangible Deductions that the Company and its Subsidiaries will be entitled to utilize;
WHEREAS, if utilized, the Pre-IPO Tax Benefits will reduce the actual liability for Taxes that the Company and its Subsidiaries might otherwise be required to pay;
WHEREAS, subject to the completion of the IPO, the parties hereto desire to make certain arrangements with respect to the effect of the Pre-IPO Tax Benefits on the actual liability for Taxes of the Company and its Subsidiaries;
WHEREAS, this Agreement is intended to provide payments to the Stockholders by the Company in an amount equal to eighty-five percent (85%) of the aggregate reduction in Taxes payable realized by the Company and its Subsidiaries from the utilization of the Pre-IPO Tax Benefits;
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).
“ABL Credit Agreement” means that certain Credit Agreement, dated as of                     , by and among Vince, LLC, as the borrower, Vince Intermediate Holding, LLC and Vince Holding Corp. as guarantors, the lenders from time to time party thereto, and         , as administrative agent, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, including any refinancing or replacement thereof.
 
1

“ Advisory Firm ” means Ernst & Young, and if Ernst & Young refuses or is unable to perform the requested services, Deloitte. If Deloitte refuses or is unable to perform the requested services, the Company and the Stockholder Representative shall negotiate in good faith to agree upon a different valuation firm, which valuation firm shall not be one of the twenty largest accounting firms in the United States.
“ Advisory Firm Letter ” shall mean a letter from the Advisory Firm (or any other “Big Four” accounting firm, including the Company’s third party tax return preparer) stating that the relevant schedule, notice or other information to be provided by the Company to the Stockholder Representative and all supporting schedules and work papers were prepared in a manner consistent with the terms of this Agreement and, to the extent not expressly provided in this Agreement, on a reasonable basis in light of the facts and applicable law in existence on the date to which such schedule, notice or other information relates.
“ Affiliate ” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by or is under common Control with, such first Person.
“ Aggregate Tax Benefit Payment ” is defined in Section 3.01(b) of this Agreement.
“ Agreed Rate ” means a rate per annum equal to LIBOR plus 200 basis points.
“ Agreement ” is defined in the preamble of this Agreement.
“ Amended Schedule ” is defined in Section 2.03(b) of this Agreement.
“ Applicable Percentage ” with respect to any Stockholder means the quotient, expressed as a percentage set forth opposite such Stockholder’s name on Schedule A, obtained by dividing (i) the number of outstanding shares of Common Stock owned by such Stockholder immediately prior to the IPO by (ii) the aggregate number of shares of Common Stock issued and outstanding immediately prior to the IPO.
“ Board ” means the board of directors of the Company.
“ Business Day ” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of New York shall not be regarded as a Business Day.
“ Change of Control ” means an event or series of events by which (i) the Company shall cease directly or indirectly to own 100% of the Capital Stock of Vince, LLC; (ii) any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Securities Exchange Act), other than one or more Permitted Investors, shall be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act) of Capital Stock having more, directly or indirectly, than 35% of the total voting power of all outstanding Capital Stock of the Company in the election of directors, unless at such time the Permitted Investors are direct or indirect “beneficial owners” (as so defined) of Capital Stock of the Company having a greater percentage of the total voting power of all outstanding Capital Stock of the Company in the election of directors than that owned by each other “person” or “group” described above; (iii) for any reason whatsoever, a majority of the board of directors of the Company shall not be Continuing Directors; or (iv) a “Change of Control” (or comparable term) shall occur under (x) any term loan or revolving credit facility of the Company or its subsidiaries or (y) any unsecured, senior, senior subordinated or subordinated Indebtedness of the Company or its subsidiaries, if, in each case, the outstanding principal amount thereof is in excess of $15,000,000. Defined terms used in this definition shall have the meaning set forth in the Term Loan Credit Agreement as in effect on the date hereof.
“ Code ” means the U.S. Internal Revenue Code of 1986, as amended.
“ Common Stock ” means the issued and outstanding shares of common stock of the Company.
 
2

“ Company ” is defined in the preamble of this Agreement.
“ Company Return ” means the U.S. federal, state and local income tax returns of the Company and its Subsidiaries filed with respect to Taxes of any Taxable Year, including, for the avoidance of doubt, any Consolidated Return.
“ Confidential Information ” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the business, products, financial condition, services, or research or development of either party or their respective suppliers, distributors, customers, independent contractors or other business relations. Confidential Information includes, but is not limited to, the following: (i) internal business and financial information (including information relating to strategic and staffing plans and practices, business, finances, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures and accounting and business methods); (ii) identities of, individual requirements of, specific contractual arrangements with, and information about, either party’s suppliers, distributors, customers, independent contractors or other business relations and their confidential information; (iii) trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, recipes, research, records, reports, manuals, documentation, models, data and databases relating thereto; (iv) inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable); and (v) other intellectual property rights. Notwithstanding the foregoing, “ Confidential Information ” does not include (a) information that either party can demonstrate was or has become generally available to the public other than as a result of disclosure by such party or its Affiliates, (b) information that is disclosed to a party or its Affiliates, other than under an obligation of confidentiality, by a third party who had no obligation not to disclose such information to others or (c) information that is independently developed after the date hereof by a party or its Affiliates without the use of the other party’s or its Affiliates’ Confidential Information.
“ Consolidated Return ” is defined in Section 7.11(a) .
“ Control ” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise, and such “control” will be presumed if any Person owns 10% or more of the voting capital stock or other ownership interests, directly or indirectly, of any other Person.
“ Default Rate ” means a rate per annum equal to LIBOR plus 500 basis points.
“ Determination ” has the meaning ascribed to such term in Section 1313(a) of the Code or any other event (including the execution of a Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax.
“ Early Termination Agreement Date ” is defined in Section 4.03(a) of this Agreement.
“ Early Termination Date ” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.
 
3

“ Early Termination Notice ” is defined in Section 4.02 of this Agreement.
“ Early Termination Option Notice ” is defined in Section 4.01(c) of this Agreement.
“ Early Termination Payment ” is defined in Section 4.03(b) of this Agreement.
“ Early Termination Rate ” means a rate per annum equal to the Agreed Rate.
“ Early Termination Schedule ” is defined in Section 4.02 of this Agreement.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ Expert ” is defined in Section 7.09 of this Agreement.
“ Interest Amount ” is defined in Section 3.01(b) of this Agreement.
“ IPO ” means the initial public offering of Common Stock of the Company pursuant to the Registration Statement.
“ IRS ” means the U.S. Internal Revenue Service.
“ Law ” means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, injunction, judgment, determination, directive, ruling, decree, requirement or rule of law, or any other provision, decision or requirement having the force and effect of law.
“ LIBOR ” means for each month (or portion thereof) during any period, an interest rate per annum equal to the rate of interest published in The Wall Street Journal, Eastern Edition, two Business Days prior to the first day of such month as the “London Interbank Offered Rate” applicable to such month. In the event that The Wall Street Journal, Eastern Edition is not published or such rate does not appear in The Wall Street Journal, Eastern Edition, LIBOR shall be determined by any other publicly available source of such market rate for London interbank offered rates for U.S. dollar deposits for such month (or portion thereof).
“ Net Tax Benefit ” is defined in Section 3.01(b) of this Agreement.
“ Tax Benefit Payment ” is defined in Section 3.01(b) of this Agreement.
“ NOLs ” shall mean all net operating losses for U.S. federal, state and local income tax purposes.
“ Non-Tax Benefit Tax Liability ” means, with respect to any Taxable Year, the liability for Taxes of the Company and its Subsidiaries using the same methods, elections, conventions and similar practices used on the relevant Company Return, but assuming that there were no Pre-IPO Tax Benefits. If all or any portion of the liability for Taxes for the Taxable Year arises as a result of an audit by a Taxing Authority of such Taxable Year, such liability shall not be included in determining the Non-Tax Benefit Tax Liability unless and until there has been a Determination.
“ Objection Notice ” is defined in Section 2.03(a) of this Agreement.
 
4

“ Payment Date ” means any date on which a Tax Benefit Payment is required to be made by the Company pursuant to this Agreement.
“ Person ” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.
“ Post-IPO Tax Benefits ” shall mean Tax Credits and NOLs generated by the Company and its Subsidiaries on or after [            ] 1 , 2013.
“ Pre-IPO Tax Benefits ” shall mean Tax Credits and NOLs generated by the Company and its Subsidiaries prior to [            ] 2 , 2013, and the Section 197 Intangible Deductions.
“ Realized Tax Benefit ” means, for a Taxable Year, the excess, if any, of (i) the Non-Tax Benefit Tax Liability over (ii) the actual liability for Taxes of the Company and its Subsidiaries for such Taxable Year. If all or a portion of the actual liability for Taxes for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.
“ Reconciliation Dispute ” is defined in Section 7.09 of this Agreement.
“ Reconciliation Procedures ” means those procedures set forth in Section 7.09 of this Agreement.
“ Registration Statement ” means the registration statement on Form S-1 (File No. [                    ]) of the Company, as amended.
“ Schedule ” means any Tax Benefit Schedule and the Early Termination Schedule.
“ Section 197 Intangible Deductions ” means depreciation or amortization deductions with respect to “amortizable section 197 intangibles” as defined in Section 197(c) and (d) of the Code, which such “amortizable section 197 intangibles” are held by the Company and its Subsidiaries immediately after the IPO.
“ Stockholders ” is defined in the recitals to this Agreement.
“Stockholder Representative ” is defined in the preamble to this Agreement.
“ Subsidiaries ” means, with respect to any Person, as of any date of determination, any other Person as to which such Person, owns, directly or indirectly, or otherwise controls more than fifty percent (50%) of the voting power or other similar interests or the sole general partner interest or managing member or similar interest of such Person.
“ Sun ” means Sun Capital Partners, Inc.

1  	Note to draft: Date of IPO.	
2	Note to draft: Day after IPO.	
 
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“ Sun Entity ” means Sun and any investment fund controlled by or under common control with Sun.
“ Tax Benefit Payment ” is defined in Section 3.01(b) of this Agreement.
“ Tax Benefit Schedule ” is defined in Section 2.02 of this Agreement.
“ Tax Credits ” means U.S. federal, state and local tax credits that may be utilized to offset U.S. federal, state and local income or alternative minimum Tax.
“ Tax Return ” means any return, declaration, report or similar statement required to be filed with respect to Taxes (including any attached schedules), including, without limitation, any information return, claim for refund, amended return, and declaration of estimated Tax.
“ Taxable Year ” means a taxable year as defined in Section 441(b) of the Code (and, therefore, for the avoidance of doubt, may include a period of less than twelve months for which a Company Return is made), ending on or after the date hereof. For all purposes of this Agreement, the year 2013 shall consist of two “Taxable Years” (i) [            ] 3 , 2013 through [            ] 4 , 2013 and (ii) [            ] 5 , 2013 through [            ] 6 , 2014.
“ Taxes ” means any and all U.S. federal, state and local taxes, assessments or similar charges measured with respect to net income or profits and any interest related to such Taxes.
“ Taxing Authority ” means any domestic, foreign, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority exercising regulatory authority with respect to Taxes.
“Term Loan Credit Agreement” means that certain Credit Agreement, dated as of                     , by and among Vince, LLC and Vince Intermediate Holding, LLC, as borrowers, Vince Holding Corp. as a guarantor, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time, including any refinancing or replacement thereof.
“ Treasury Regulations ” means the final, temporary and proposed regulations under the Code promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.
“ Valuation Assumptions ” means, as of an Early Termination Date, the assumptions that (i) in each Taxable Year ending on or after such Early Termination Date, the Company and its Subsidiaries will have taxable income sufficient to fully utilize the Company’s and its

3	Note to Draft: First day of tax year 2013.	
4  	Note to Draft: Date of IPO.	
5  	Note to draft: Day after IPO.	
6  	Note to Draft: Last date of the tax year of 2013 (which shall be in 2014).	
 
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Subsidiaries’ NOLs, Section 197 Intangible Deductions and other tax attributes (in accordance with all applicable limitations) during such Taxable Year or future Taxable Years, as applicable; (ii) the utilization of the Pre-IPO Tax Benefits for such Taxable Year or future Taxable Years, as applicable, will be determined based on the Tax laws in effect on the Early Termination Date; and (iii) the federal, state and local Tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code as in effect on the Early Termination Date.
ARTICLE II
DETERMINATION OF REALIZED TAX BENEFIT
Section 2.01 Tax Benefit Utilization . The Company, on the one hand, and the Stockholders, on the other hand, acknowledge that the Company and its Subsidiaries may utilize the Pre-IPO Tax Benefits to reduce the amount of Taxes that the Company and its Subsidiaries would otherwise be required to pay in the future.
Section 2.02 Tax Benefit Schedule . Within forty-five calendar days after the filing of the Company Return for any Taxable Year, the Company shall provide to the Stockholder Representative a schedule showing, in reasonable detail, (i) the calculation, which may be $0.00, of the Realized Tax Benefit for such Taxable Year, if any, (ii) the calculation, which may be $0.00, of any payment to be made to the Stockholders pursuant to Article III with respect to such Taxable Year (together, a “ Tax Benefit Schedule ”), and (iii) supporting information (including work papers and valuation reports) reasonably necessary to support the calculation of such payment. The Schedule will become final as provided in Section 2.03(a) and may be amended as provided in Section 2.03(b) (subject to the procedures set forth in Section 2.03(a) ).
Section 2.03 Procedures, Amendments.
(a) Procedure . Every time the Company delivers to the Stockholder Representative an applicable Schedule under this Agreement, including, except as otherwise provided in Section 2.03( b), any Amended Schedule delivered pursuant to Section 2.03(b) , and including any Early Termination Schedule or amended Early Termination Schedule, the Company shall also (x) deliver to the Stockholder Representative schedules, valuation reports, if any, and work papers providing reasonable detail regarding the preparation of the Schedule and an Advisory Firm Letter with respect to such Schedule and (y) allow the Stockholder Representative and its advisors reasonable access, at no cost, to the appropriate representatives, books, records and work papers at each of the Company and the preparer of the Advisory Firm Letter in connection with a review of such Schedule. The applicable Schedule shall become final and binding on all parties hereto upon mutual agreement of the parties hereto or final determination of the Expert pursuant to the Reconciliation Procedures in Section 7.08 . The applicable Schedule shall become final and binding on the parties hereto unless the Stockholder Representative, within forty-five calendar days after receiving any Schedule or amendment thereto, provides the Company with notice of an objection to such Schedule (“ Objection Notice ”) made in good faith. The Company and the Stockholder Representative shall cooperate in good faith to reconcile any items of disagreement set forth in the Objection Notice. If the parties, for any reason, are unable to successfully resolve the issues raised in any Objection Notice within thirty calendar days of receipt by the Company of such notice, the Company and the Stockholder Representative shall employ the Reconciliation Procedures.
 
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(b) Amended Schedule . The Schedule for any Taxable Year shall be amended by the Company (i) in connection with a Determination affecting such Schedule, (ii) to correct material inaccuracies in the Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was provided to the Stockholder Representative, (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (iv) to reflect a material change (relative to the amounts in the original Schedule or the prior Amended Schedule) in the Realized Tax Benefit for such Taxable Year attributable to a carryback or carryforward (including, to the extent affecting the Non-Tax Benefit Tax Liability, a hypothetical carryback or carryforward attributable to any Post-IPO Tax Benefits) of a loss or other tax item to such Taxable Year, or (v) to reflect a material change (relative to the amounts in the original Schedule) in the Realized Tax Benefit for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year (such Schedule, an “ Amended Schedule ”; provided , however , that such a change under clause (i) attributable to an audit of a Tax Return by an applicable Taxing Authority shall not be taken into account on an Amended Schedule unless and until there has been a Determination with respect to such change). The Company shall provide any Amended Schedule to the Stockholder Representative within thirty calendar days of becoming aware of the occurrence of an event referred to in clauses (i) through (v) of the preceding sentence (or, to the extent such event occurs in connection with the preparation of a Company Return filing described in Section 2.02 , concurrently with the delivery of the Tax Benefit Schedule with respect to such Company Return pursuant to Section 2.02 ) and any such Amended Schedule shall be subject to the approval procedures described in Section 2.03(a) ; provided , however, that any Amended Schedule provided pursuant to an Expert’s determination under the Reconciliation Procedures as described in clause (iii) of the preceding sentence shall be final and binding on all parties hereto and not subject to the approval procedures described in Section 2.03 .
ARTICLE III
TAX BENEFIT PAYMENTS
Section 3.01 Payments.
(a) Timing of Payments to the Stockholders . Within five Business Days of a Tax Benefit Schedule with respect to a Taxable Year becoming final in accordance with Section 2.03(a) or Section 7.08 , the Company shall pay to each of the Stockholders the Tax Benefit Payments for such Taxable Year determined pursuant to Section 3.01(b) . Each such Tax Benefit Payment shall be made by wire transfer of immediately available funds to a bank account designated by the applicable Stockholder to the Company or as otherwise agreed by the Company and the applicable Stockholder. For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including, without limitation, estimated U.S. federal, state and local income tax payments.
(b) The “ Tax Benefit Payment ” with respect to any Stockholder means an amount equal to such Stockholder’s Applicable Percentage of the Aggregate Tax Benefit Payment. The “ Aggregate Tax Benefit Payment ” means an amount, not less than zero, equal to
 
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eighty-five percent (85%) of the sum of the Net Tax Benefit (as defined below) and the Interest Amount (as defined below). The “ Net Tax Benefit ” with respect to a Taxable Year shall equal (i) the Realized Tax Benefit, if any, for such Taxable Year plus (ii) for each prior Taxable Year, the excess, if any, of the Realized Tax Benefit reflected on an Amended Schedule applicable to such prior Taxable Year over the Realized Tax Benefit reflected on the original Tax Benefit Schedule for such prior Taxable Year, minus (iii) for each prior Taxable Year, the excess, if any, of the Realized Tax Benefit reflected on the original Tax Benefit Schedule for such prior Taxable Year over the Realized Tax Benefit reflected on the Amended Schedule for such prior Taxable Year; provided, however, that to the extent any of the adjustments described in Section 3.01(b)(ii) or (iii)  was reflected in the calculation of the Aggregate Tax Benefit Payment for any Taxable Year, such adjustments shall not be taken into account in determining the Aggregate Tax Benefit Payment for any subsequent Taxable Year; and provided, further, that for the avoidance of doubt, none of the Stockholders shall be required to return any portion of any previously made Tax Benefit Payment except through the adjustment described in clause (iii)  of the definition of Net Tax Benefit. The “ Interest Amount ” shall equal the interest on any Net Tax Benefit calculated at the Agreed Rate from the due date (without extensions) for filing the Company Return with respect to Taxes for the Taxable Year for which the Net Tax Benefit is being measured until the Payment Date. Notwithstanding anything to the contrary in this Agreement, for purposes of determining the amount of Pre-IPO Tax Benefits, the first Taxable Year to which this Agreement applies and the amount of any Tax Benefit Payments attributable to 2013, the parties agree to treat the year 2013 as consisting of two Taxable Years, (i) [            ] 7 , 2013 through [            ] 8 , 2013 and (ii) [            ] 9 , 2013 through [            ] 10 , 2014.
Section 3.02 No Duplicative Payments; Intent . It is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement. It is also intended that the provisions of this Agreement provide that eighty-five percent (85%) of the Company’s Realized Tax Benefit and Interest Amount for all years be paid to the Stockholders pursuant to this Agreement. Such amount shall be determined using a “ with and without ” methodology. Carryovers or carrybacks of (a) any U.S. federal tax item shall be considered to be subject to the rules of the Code (or any successor U.S. federal income tax statute) and the Treasury Regulations or (b) any state and local tax item, shall be considered subject to the appropriate provisions of Tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item includes a portion that is attributable to the Pre-IPO Tax Benefits and another portion that is not, the Company’s Realized Tax Benefit shall be determined using such “with and without” methodology. The provisions of this Agreement shall be construed in the appropriate manner so that such intentions are realized.

7  	Note to Draft: First day of tax year 2013.	
8  	Note to Draft: Date of IPO.	
9  	Note to draft: Day after IPO.	
10  	Note to Draft: Last date of the tax year of 2013 (which shall be in 2014).	
 
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ARTICLE IV
TERMINATION
Section 4.01 Termination, Early Termination and Breach of Agreement
(a) This Agreement shall terminate on the earliest to occur of (i) the date on which all Tax Benefit Payments have been made under this Agreement, (ii) the last day of the tax year including the tenth anniversary of the IPO or (iii) the mutual agreement of the Company and the Stockholder Representative.
(b) Notwithstanding Section 4.01(a) , the Company may terminate this Agreement by paying to the Stockholders the Early Termination Payments. Upon payment of the Early Termination Payments by the Company, the Company shall not have any further payment obligations under this Agreement, other than any (i) Tax Benefit Payment agreed to by the Company and the Stockholder Representative as due and payable but unpaid as of the date the Early Termination Notice is delivered and (ii) Tax Benefit Payment due for a Taxable Year ending prior to, with or including the date of the Early Termination Notice (except to the extent that such amount is included in the Early Termination Payment).
(c) Notwithstanding Section 4.01(a) , the Stockholder Representative may terminate this Agreement in connection with a Change of Control The Company hereby agrees to provide ten (10) days prior written notice to the Stockholder Representative of a Change of Control (an “ Early Termination Option Notice ”). Within five (5) days of receipt of the Early Termination Option Notice, the Stockholder Representative shall provide written notice of its determination whether to require the Company to make the Early Termination Payments and terminate this Agreement. If the Stockholder Representative determines to require the Company to make the Early Termination Payments and terminate the Agreement in accordance with this Section 4.01(c) , then the Company shall make the Early Termination Payments in accordance with Section 4.03 . Upon payment of the Early Termination Payments by the Company, the Company shall not have any further payment obligations under this Agreement, other than any (i) Tax Benefit Payment agreed to by the Company and the Stockholder Representative as due and payable but unpaid as of the date the Early Termination Notice is delivered and (ii) Tax Benefit Payment due for a Taxable Year ending prior to, with or including the date of the Early Termination Notice (except to the extent that such amount is included in the Early Termination Payment). For the avoidance of doubt, if the Early Termination Payments have not been made by the date of the sale of all or substantially all of the assets of the Company, the Company shall cause such acquirer of all or substantially all of the assets of the Company to assume the Company’s obligations under this Agreement.
(d) In the event that the Company breaches any of its material obligations under this Agreement by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code, then all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of the filing of such case and shall include, but not be limited to, (i) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of filing of such case, (ii) any Tax Benefit Payment agreed to by the Company and the Stockholder Representative as due and payable but unpaid as of such date and (iii) any Tax Benefit Payment due for the Taxable Year ending prior to, with or including such date.
 
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Section 4.02 Early Termination Notice . If the Company or the Stockholder Representative chooses to exercise its right of early termination under Section 4.01 above, the Company shall deliver to the Stockholder Representative, other than in the case of termination pursuant to Section 4.01(c) above, notice of such intention to exercise such right (“ Early Termination Notice ”) and, including in the case of termination pursuant to Section 4.01(c) above, a schedule (the “ Early Termination Schedule ”) showing in reasonable detail the information required pursuant to Section 2.02 and the calculation of the Aggregate Early Termination Payment. The delivery and finalization of such Early Termination Schedule shall be governed by Section 2.03 (including, for the avoidance of doubt, in the case of termination pursuant to Section 4.01(c) above).
Section 4.03 Payment upon Early Termination .
(a) Within five Business Days after the Early Termination Schedule becomes final and binding on the parties hereto, the Company shall pay to the Stockholders the Early Termination Payment. Such payment shall be made by wire transfer of immediately available funds to a bank account designated by the applicable Stockholder or as otherwise agreed by the Company and such Stockholder.
(b) The “ Early Termination Payment ” with respect to any Stockholder means an amount equal to such Stockholder’s Applicable Percentage of the Aggregate Early Termination Payment. The “ Aggregate Early Termination Payment ” as of the date of the delivery of an Early Termination Schedule shall equal the present value, discounted at the Early Termination Rate as of such date, of all Tax Benefit Payments that would be required to be paid by the Company to the Stockholders beginning from the Early Termination Date applying the Valuation Assumptions. For purposes of calculating the present value pursuant to this Section 4.03(b) of all Tax Benefit Payments that would be required to be paid, it shall be assumed that absent the Early Termination Notice all Tax Benefit Payments would be paid on the due date (without extensions) for filing the Company Return with respect to Taxes for each Taxable Year.
ARTICLE V
LATE PAYMENTS
Section 5.01 Late Payments by the Company . The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment required to be made by the Company to any Stockholder under this Agreement not made to such Stockholder when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Default Rate and commencing from the date on which such payment was due and payable.
ARTICLE VI
COMPANY TAX MATTERS; CONSISTENCY; COOPERATION
Section 6.01 The Stockholder Representative Participation in Company Tax Matters . Except as otherwise provided herein, the Company shall have full responsibility for, and sole discretion over, all Tax matters concerning the Company including without limitation
 
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the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes, subject to a requirement that the Company act in good faith in connection with its control of any matter which is reasonably expected to affect the Stockholders’ rights and obligations under this Agreement. Notwithstanding the foregoing, the Company shall notify the Stockholder Representative of, and keep the Stockholder Representative reasonably informed with respect to, the portion of any audit of the Company by a Taxing Authority the outcome of which is reasonably expected to affect the Stockholders’ rights and obligations under this Agreement, and shall give the Stockholder Representative reasonable opportunity to provide information and participate in the applicable portion of such audit.
Section 6.02 Consistency . Except upon the written advice of an Advisory Firm, the Company, the Stockholder Representative and the Stockholders (through the Stockholder Representative) agree to report and cause to be reported for all purposes, including federal, state, local and foreign tax purposes and financial reporting purposes, all Tax-related items (including without limitation the Tax Benefit Payments) in a manner consistent with that specified by the Company in any Schedule or statement required to be provided by or on behalf of the Company under this Agreement or under applicable Tax law. Any dispute concerning such advice shall be subject to the Reconciliation Procedures; provided , however , that only the Stockholder Representative shall have the right to object to such advice pursuant to this Section 6.02 . In the event that an Advisory Firm is replaced with another firm acceptable to the Company and the Stockholder Representative pursuant to the definition of “ Advisory Firm ,” such replacement Advisory Firm shall be required to perform its services under this Agreement using procedures and methodologies consistent with those used by the previous Advisory Firm, unless otherwise required by law (or the Company and the Stockholder Representative agree to the use of other procedures and methodologies).
Section 6.03 Cooperation . Each of the Company, on the one hand, and the Stockholder Representative and the Stockholders, on the other hand, shall (a) furnish to the other party in a timely manner such information, documents and other materials as the other party may reasonably request for purposes of making or approving any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority relating to this Agreement, (b) make itself available to the other party and its representatives to provide explanations of documents and materials and such other information as the requesting party or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any such matter, and the requesting party shall reimburse the other party for any reasonable third-party costs and expenses incurred pursuant to this Section 6.03 .
ARTICLE VII
MISCELLANEOUS
Section 7.01 Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given and received (a) on the date of delivery if delivered personally, or by facsimile upon confirmation of transmission by the sender’s fax machine if sent on a Business Day (or otherwise on the next Business Day), (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day
 
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courier service or (c) when sent by electronic mail (with hard copy to follow) during a Business Day (or on the next Business Day if sent after the close of normal business hours or on any non-Business Day). All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
If to the Company, to:
Apparel Holding Corp. (f/k/a Kellwood Holding Corp)
[Address]
[Address]
Facsimile: [Fax]
 	Attn:	Chief Executive Officer	
 	 	General Counsel	
If to the Stockholder Representative or any Stockholder, to:
[Address]
[Address]
Facsimile: [Fax]
Attn: [                    ]
Any party hereto may change its address or fax number by giving the other party hereto written notice of its new address or fax number in the manner set forth above.
Section 7.02 Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
Section 7.03 Entire Agreement; Third Party Beneficiaries . This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties hereto any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 7.04 Governing Law . This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware, without regard to the conflicts of laws provisions thereof.
Section 7.05 Severability . Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
 
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Section 7.06 Successors; Assignment; Amendments; Waivers.
(a) The Stockholder Representative may assign this Agreement to any person without the prior written consent of the Company or the Stockholders.
(b) No Stockholder may assign his or her rights under this Agreement without the prior written consent of the Stockholder Representative; provided , however , that the rights hereunder may be freely assigned without the consent of the Company or the Stockholder Representative from one Stockholder to another Stockholder provided that the Company receives notice of such assignment within five days after the effective date of such assignment. Any assignment of a Stockholder’s rights meeting the requirements of this paragraph shall be referred to herein as a “ Permitted Assignment ”.
(c) Except as otherwise provided herein (including, without limitation, Section 7.06(a) , Section 7.06(b) , Section 7.06(c) and Section 7.14 ) , neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated without the prior written consent of the other party hereto, such consent not to be unreasonably withheld or delayed, and any purported assignment or delegation in violation hereof shall be null and void (it being agreed and understood that, in accordance with Section 7.14 a consent of the Stockholder Representative shall be deemed to be a consent of, and shall be binding upon all of, the Stockholders); provided that any party hereto may assign its rights under this Agreement without the consent of any other party hereto, in whole but not in part, to any Affiliate of such assigning party, to any lender as collateral security or in connection with any transfer or disposition of all or any material portion of such party’s business.
(d) No provision of this Agreement may be amended unless such amendment is approved in writing by the Company and the Stockholder Representative. For the avoidance of doubt, any amendment of this Agreement that is approved in writing by the Company and the Stockholder Representative shall be binding upon the Stockholders. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective. Notwithstanding anything contained herein to the contrary, the Stockholder Representative may, in its good faith discretion, amend Schedule A without the consent of any other party hereto; provided that such amendment does not materially, adversely and disproportionately affect any Stockholder vis-à-vis any other Stockholder.
(e) All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
Section 7.07 Titles and Subtitles . The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
 
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Section 7.08 Waiver of Jury Trial . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION, ACTION, PROCEEDING, CROSS-CLAIM, OR COUNTERCLAIM IN ANY COURT (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF, RELATING TO OR IN CONNECTION WITH (I) THIS AGREEMENT OR THE VALIDITY, PERFORMANCE, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR (II) THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, AUTHORIZATION, EXECUTION, DELIVERY, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
Section 7.09 Reconciliation . In the event that the Company and the Stockholder Representative are unable to resolve a disagreement with respect to the matters governed by Section 2.03 , Section 4.02 and Section 6.02 (which matters, for the avoidance of doubt, may include the calculations of any amounts set forth in any Schedule or Amended Schedule) within the relevant period designated in this Agreement (“ Reconciliation Dispute ”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “ Expert ”) in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner in a nationally recognized accounting firm or a law firm (other than the Advisory Firm or the preparer of the Advisory Firm Letter), and the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Company or the Stockholder Representative or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within fifteen (15) days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by the International Chamber of Commerce Centre for Expertise. The Expert shall resolve any matter relating to the Early Termination Schedule or an amendment thereto within thirty calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within fifteen calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement is due or any Tax Return reflecting the subject of a disagreement is due, such payment shall be made on the date prescribed by this Agreement and such Tax Return may be filed as prepared by the Company, subject to adjustment (by an increase or decrease in the amount of subsequent payments otherwise due under this Agreement) or amendment of such Tax Returns upon resolution. The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne inversely based upon the relative success (in terms of percentages) of each party’s claims. For example, if the final determination reflects a 60-40 compromise of the parties’ claims, the costs and expenses would be allocated 40% to the party whose claim was determined to be 60% successful and 60% to the party whose claim was determined to be 40% successful. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.08 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.08 shall be binding on the Company and all Stockholders and may be entered and enforced in any court having jurisdiction. The determination of the Expert with respect to any dispute that is submitted to it for determination pursuant to this Section 7.08 shall be based solely on presentations and materials provided by the parties hereto which are in accordance with the guidelines and procedures set forth in this Agreement ( i.e. , such determination shall not be made on the basis of an independent review by the Expert). The Expert shall not assign a value to any Reconciliation Dispute that is greater than the greatest
 
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value for such item assigned by the Company, on the one hand, or the Stockholder Representative, on the other hand, or less than the smallest value for such assigned by the Company, on the one hand, and The Stockholder Representative, on the other hand.
Section 7.10 Withholding . The Company shall be entitled to deduct and withhold from any amount payable to any Stockholder pursuant to this Agreement such amounts as the Company is required to deduct and withhold under the Code or any provision of state, local or foreign tax law, with respect to entering into or making payments under this Agreement. To the extent that amounts are so withheld and paid over to the appropriate governmental authority by the Company, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Stockholder in respect of whom such withholding was made. The Company shall provide evidence of such payment to such Stockholder. To the extent the amount of any withholding hereunder cannot be finally determined until after the end of the taxable year in which the amount otherwise payable to such Stockholder pursuant to this Agreement is required to be paid, the Company shall be entitled to deduct and withhold the maximum amount of tax that, in the Company’s reasonable judgment, may be required to be remitted to the applicable government authority with respect to such Stockholder, and after the applicable amount of withholding is finally determined, the Company shall promptly pay over any excess withheld amounts to such Stockholder.
Section 7.11 Affiliated Corporations; Admission of the Company into a Consolidated Group; Transfers of Corporate Assets .
(a) If the Company was, is or becomes a member of an affiliated, combined, unitary or consolidated group of corporations that files a consolidated income tax return pursuant to Sections 1501 et seq. of the Code or any comparable provision of applicable state or local Tax law (a “ Consolidated Return ”): (i) the provisions of this Agreement relating to the Company shall be applied with respect to the group as a whole as of any date of determination; and (ii) Tax Benefit Payments shall be computed with reference to the consolidated taxable income of the group as a whole.
(b) If any Person the income of which is included in the income of the Company’s affiliated or consolidated group transfers one or more assets to a corporation or any Person treated as such for Tax purposes with which such entity does not file a consolidated tax return pursuant to Section 1501 of the Code, for purposes of calculating the amount of any Tax Benefit Payment (e.g., calculating the gross income of the Company’s affiliated or consolidated group and determining the Realized Tax Benefit) due hereunder, such Person shall be treated as having disposed of such asset in a fully taxable transaction on the date of such transfer. The consideration deemed to be received by such entity shall be determined as if such transfer occurred on an arm’s-length basis with an unrelated third party.
Section 7.12 Confidentiality .
(a) Each party shall maintain in strict confidence and shall not disclose to any third party (except to its Affiliates in connection with performing any duties as necessary for the other party hereunder) any and all Confidential Information, except as may be necessary in order to comply with a requirement of Law, in which case the receiving party shall, if permissible,
 
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promptly notify the disclosing party of any such requirement and such disclosing party shall be permitted to seek confidential treatment for such information; provided that any party hereto or its Affiliates may disclose the terms of this Agreement in any registration statement relating to the IPO.
(b) With respect to any such Confidential Information, each of the parties hereto shall: (i) use the same degree of care in safeguarding the other party’s Confidential Information as it uses to safeguard its own information which is proprietary and/or treated as confidential; and (ii) upon the discovery of any inadvertent disclosure or unauthorized use of the Confidential Information, or upon obtaining notice of such disclosure or use from the other party, take or cause to be taken all necessary actions to prevent any further inadvertent disclosure or unauthorized use.
Section 7.13 Tax Treatment . Each Stockholder, the Stockholder Representative and the Company agree that by entering into this Agreement, each Stockholder is receiving a distribution in an amount equal to the fair market value of its rights under this Agreement, as jointly determined by the Company and the Stockholder Representative, and that such distribution is subject to Section 301 of the Code for U.S. federal income tax purposes and any similar or comparable state law provision for state tax purposes. Each such party shall file all Tax Returns in accordance with such treatment described in the previous sentence, unless otherwise required by a “determination” within the meaning of Section 1313 of the Code.
Section 7.14 Stockholder Representative.
(a) Appointment . Without further action of any of the Company, the Stockholder Representative or any Stockholder, and as partial consideration of the benefits conferred by this Agreement, the Stockholder Representative is hereby irrevocably constituted and appointed, with full power of substitution, to act in the name, place and stead of each Stockholder with respect to the taking by the Stockholder Representative of any and all actions and the making of any decisions required or permitted to be taken by the Stockholder Representative under this Agreement. The power of attorney granted herein is coupled with an interest and is irrevocable and may be delegated by the Stockholder Representative. No bond shall be required of the Stockholder Representative, and the Stockholder Representative shall receive no compensation for their services.
(b) Expenses . If at any time a Stockholder Representative shall incur out of pocket expenses in connection with the exercise of its duties hereunder, upon written notice to the Company from the Stockholder Representative of documented costs and expenses (including fees and disbursements of counsel and accountants) incurred by the Stockholder Representative in connection with the performance of its rights or obligations under this Agreement and the taking of any and all actions in connection therewith, the Company shall reduce any future payments (if any) due to the Stockholders hereunder pro rata (based on their respective Applicable Percentages) by the amount of such expenses which it shall instead remit directly to the requesting Stockholder Representative. In connection with the performance of its rights and obligations under this Agreement and the taking of any and all actions in connection therewith, a Stockholder Representative shall not be required to expend any of its own funds (though, for the avoidance of doubt, it may do so at any time and from time to time in its sole discretion).
 
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(c) Limitation on Liability . The Stockholder Representative shall not be liable to any Stockholder for any act of the Stockholder Representative arising out of or in connection with the acceptance or administration of its duties under this Agreement, except to the extent any liability, loss, damage, penalty, fine, cost or expense is actually incurred by such Stockholder as a proximate result of the gross negligence, bad faith or willful misconduct of the Stockholder Representative (it being understood that any act done or omitted pursuant to the advice of legal counsel shall be conclusive evidence of such good faith and reasonable judgment). The Stockholder Representative shall not be liable for, and shall be indemnified by the Stockholders (on a several but not joint basis) for, any liability, loss, damage, penalty or fine incurred by the Stockholder Representative (and any cost or expense incurred by the Stockholder Representative in connection therewith and herewith and not previously reimbursed pursuant to subsection (b) above) arising out of or in connection with the acceptance or administration of its duties under this Agreement, except to the extent that any such liability, loss, damage, penalty, fine, cost or expense is the proximate result of the gross negligence, bad faith or willful misconduct of the Stockholder Representative (it being understood that any act done or omitted pursuant to the advice of legal counsel shall be conclusive evidence of such good faith and reasonable judgment); provided, however, in no event shall any Stockholder be obligated to indemnify the Stockholder Representative hereunder for any liability, loss, damage, penalty, fine, cost or expense to the extent (and only to the extent) that the aggregate amount of all liabilities, losses, damages, penalties, fines, costs and expenses indemnified by such Stockholder hereunder is or would be in excess of the aggregate payments under this Agreement actually remitted to such Stockholder.
(d) Actions of the Stockholder Representative . A decision, act, consent or instruction of the Stockholder Representative shall constitute a decision of all Stockholders and shall be final, binding and conclusive upon each Stockholder, and the Company may rely upon any decision, act, consent or instruction of the Stockholder Representative as being the decision, act, consent or instruction of each Stockholder. The Company is hereby relieved from any liability to any person for any acts done by the Company in accordance with any such decision, act, consent or instruction of the Stockholder Representative. Each Stockholder hereby agrees that the Stockholder Representative may, at any time and in its sole discretion, elect to enter into a transaction which is likely to result in the assignment, in whole or in part, of this Agreement to a Person (upon such election, an “ Approved Assignment ”), and each such Stockholder will raise no objections against such Approved Assignment, regardless of the consideration (if any) being paid in such Approved Assignment, so long as such Approved Assignment does not materially and adversely impact such Stockholders in a manner materially adverse to the other Stockholders. Each Stockholder will take all actions requested by Stockholder Representative in connection with the consummation of an Approved Assignment, including the execution of all agreements, documents and instruments in connection therewith requested by Stockholder Representative of such Stockholder. Upon the consummation of the Approved Assignment, each Stockholder will receive their Applicable Percentage of such consideration, if any, relating to such Approved Assignment. Stockholders will bear their Applicable Percentage of the costs of any Approved Assignment to the extent such costs are incurred for the benefit of all Stockholders.
 
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(e) Involvement in Company Determinations . In the event that any determination must be made under this Agreement by the Stockholder Representative or any dispute arises hereunder, should any representatives of the Stockholder Representative or their Affiliates then be serving on the Board, such directors shall be excluded from all deliberations and actions of the Board related to such determination or dispute.
Section 7.15 Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
*        *        *         *        *        *        *        *         *
 
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IN WITNESS WHEREOF, the Company, the Stockholder Representative and the Stockholders have duly executed this Agreement as of the date first written above.

APPAREL HOLDING CORP.	
(F/K/A KELLWOOD HOLDING CORP.)	
		
By:	 	 	
Name:	 		
Title:	 		
	
SUN CARDINAL, LLC, AS STOCKHOLDER REPRESENTATIVE	
		
By:	 	 	
Name:	 		
Title:	 		
	
SUN CARDINAL, LLC	
		
By:	 	 	
Name:	 		
Title:	 		
	
SCSF CARDINAL, LLC	
		
By:	 	 	
Name:	 		
Title:	 		
	
H.I.G. SUN PARTNERS, INC.	
		
By:	 	 	
Name:	 		
Title:	 		
	
DAVID FALWELL	
		
By:	 	 	
Signature Page to Tax Receivable Agreement

Schedule A
STOCKHOLDERS
Sun Cardinal, LLC - 74.8345%
SCSF Cardinal, LLC - 24.9449%
H.I.G. Sun Partners, Inc. - 0.0210%
David Falwell - 0.1996%

Exhibit 10.4
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this “ Agreement ”) is made and entered into as of [        ] [    ], 2013, by and between Kellwood Company, LLC a Delaware limited liability company (“ Transferor ”), Vince Intermediate Holding, LLC, a Delaware limited liability company (“ Transferee ”) and solely with respect to Sections 2.04 and 6.01(a) hereof, Apparel Holding Corp., a Delaware corporation (to be renamed Vince Holding Corp., “ Apparel Holding ”). Transferor and Transferee are referred to collectively herein as the “ Parties ” and each as a “ Party ”. Capitalized terms used and not otherwise defined herein have the meanings assigned to such terms in ARTICLE I below.
WHEREAS, Transferor is the owner of 100% of the issued and outstanding equity interests (the “ Equity Interests ”) of Vince, LLC, a Delaware limited liability company (“ Vince ”);
WHEREAS, subject to the terms and conditions set forth in this Agreement, Transferor desires to transfer and convey to Transferee, and Transferee desires to receive from Transferor, all of the Equity Interests in exchange for Transferee’s issuance of the promissory note to Transferor attached hereto as Exhibit A (the “ Promissory Note ”);
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions . The following terms have the meaning set forth below:
“ 7.625% Notes ” is defined in Section 6.01(b) .
“ 12.875% Notes ” is defined in Section 6.01(b) .
“ Additional Sun Capital Contribution ” is defined in Section 6.01(b) .
“ Affiliate ” of any particular Person means any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and such “control” will be presumed if any Person owns 10% or more of the voting capital stock or other ownership interests, directly or indirectly, of any other Person.
“ Agreement ” is defined in the Preamble.
“ Apparel Holding ” is defined in the Preamble.
“ Closing ” is defined in Section 3.01 .
 
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“ Electronic Delivery ” is defined in Section 7.09 .
“ Encumbrance ” means a mortgage, charge, pledge, lien, claim, option, encumbrance, charge, agreement, voting trust, proxy, right of preemption, right of first refusal or any other security interest or transfer restriction of any kind.
“ Escrow Agreement ” is defined in Section 6.01(b) .
“ Equity Interest ” is defined in the Recitals.
“ Initial Public Offering ” is defined in Section 6.01(a) .
“ IPO Proceeds ” is defined in Section 2.04 .
“ Kellwood Business ” means the business of the Transferor immediately prior to the Closing, other than the Vince Business.
“ Losses ” means any loss, liability, demand, claim, action, cause of action, cost, damage, diminution in value, deficiency, tax, penalty, fine or expense, whether or not arising out of third party claims (including interest, penalties, reasonable attorneys’ fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing and the enforcement of any rights hereunder).
“ Management Services Agreement ” is defined in Section 6.01(b) .
“ Party ” is defined in the Preamble.
“ Person ” means an individual, a corporation, a limited liability company, an association, a joint-stock company, a business trust or other similar organization, a partnership, a joint venture, a trust, an unincorporated organization or a government or any agency, instrumentality or political subdivision thereof.
“ Promissory Note ” is defined in the Recitals.
“ Specific Assets ” means any tangible or intangible assets, such as, inter alia, customer and supplier contracts, equipment, drawings or intellectual property.
“ Sun Capital ” is defined in Section 6.01(b) .
“ Sun Capital Management ” is defined in Section 6.01(b) .
“ Sun Term Loan A Agreements ” is defined in Section 6.01(b) .
“ Sun Term Loan Agreements ” is defined in Section 6.01(b) .
“ Sun Term B/C/D/E/F/G Loan Agreement ” is defined in Section 6.01(b) .
“ Transferee ” is defined in the Preamble.
“ Transferor ” is defined in the Preamble.
“ Vince ” is defined in the Recitals.
 
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“ Vince Business ” means the design, development, manufacturing, sourcing, marketing, licensing, distribution and sale of Vince branded apparel and related accessories through wholesale, retail stores, e-commerce and any other distribution channels.
ARTICLE II
THE TRANSACTION
2.01 Transfer of Equity Interests . On and subject to the terms and conditions of this Agreement, in exchange for the issuance of the Promissory Note by Transferee for the benefit of Transferor, (i) Transferor hereby assigns, conveys, sells, transfers and delivers to Transferee, all rights, title and interest in and to the Equity Interests, free and clear of any Encumbrances and (ii) Transferee hereby accepts the Equity Interests from Transferor, free and clear of any Encumbrances.
2.02 Deliveries by Transferee . At the Closing, Transferee shall deliver (a) the Promissory Note duly executed by Transferee and (b) such documents relating to the transactions contemplated by this Agreement as Transferor may reasonably request.
2.03 Deliveries by Transferor . At the Closing, Transferor shall deliver (a) the Equity Interests, and all certificates reflecting ownership thereof, if any, free and clear of any Encumbrances, duly endorsed in blank or accompanied by duly executed unit powers, with appropriate transfer stamps, if any, affixed thereto and (b) such other documents relating to the transactions contemplated by this Agreement as Transferee or its counsel may reasonably request.
2.04 Deliveries by Apparel Holding . Immediately after the closing of the Initial Public Offering (as defined below), Apparel Holding shall deliver the net proceeds from the Initial Public Offering (after giving effect to fees and expenses related thereto, including any underwriting discount, the “ IPO Proceeds ”) to Transferee.
ARTICLE III
CLOSING OF THE TRANSACTION
3.01 The Closing . The closing of the transactions contemplated hereby (the “ Closing ”) shall take place at the offices of Kirkland & Ellis LLP in Chicago, Illinois at 8 a.m. on the date hereof, or at such other place or on such other date and time as may be mutually agreeable to the Parties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR
Transferor hereby represents to Transferee that:
4.01 Ownership . The Equity Interests are owned of record and beneficially by Transferor and Transferor has good and marketable title to the Equity Interests, free and clear of all Encumbrances, other than pursuant to applicable securities laws. Other than the Equity Interests, there are no issued or outstanding equity interests or other securities of Vince, nor any rights or options to subscribe for or to purchase equity interests or other securities of Vince.
 
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4.02 Authorization; No Breach . The execution, delivery, and performance of this Agreement and all other agreements contemplated hereby to which Transferor is a party have been duly authorized by Transferor. This Agreement and all other agreements contemplated hereby each constitutes a valid and binding obligation of Transferor, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws affecting creditors’ rights generally and limitations on the availability of equitable remedies. The execution and delivery by Transferor of this Agreement and all other agreements contemplated hereby to which Transferor is a party, and the fulfillment of and compliance with the respective terms hereof and thereof by Transferor, do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any Encumbrance upon Transferor’s or Vince’s equity interests or assets pursuant to, (iv) give any third party the right to modify, terminate, or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption, or other action by or notice to any court or administrative or governmental body pursuant to, its or Vince’s operating agreement or any material law, statute, rule, or regulation to which Transferor or Vince is subject, or any material agreement, instrument, order, judgment, or decree to which Transferor or Vince is subject, except (A) where the failure to obtain such authorization, consent, approval, exemption, or other action by or notice to any third party under any agreement or instrument would not reasonably be expected to have a material adverse effect on the Vince Business and (B) (ii) for any such occurrence arising in connection with indebtedness that is to be repaid, refinanced, repurchased or discharged in connection with the consummation of the Initial Public Offering (as defined below).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TRANSFEREE
Transferee hereby represents to Transferor that:
5.01 Authorization; No Breach . The execution, delivery, and performance of this Agreement and all other agreements contemplated hereby to which Transferee is a party have been duly authorized by Transferee. This Agreement and all other agreements contemplated hereby each constitutes a valid and binding obligation of Transferee, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws affecting creditors’ rights generally and limitations on the availability of equitable remedies. The execution and delivery by Transferee of this Agreement and all other agreements contemplated hereby to which Transferee is a party, and the fulfillment of and compliance with the respective terms hereof and thereof by Transferee, do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any Encumbrance upon Transferee’s equity interests or assets pursuant to, (iv) give any third party the right to modify, terminate, or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption, or other action by or notice to any court or administrative or
 
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governmental body pursuant to, its operating agreement or any material law, statute, rule, or regulation to which Transferee is subject, or any material agreement, instrument, order, judgment, or decree to which Transferee is subject.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Post-Closing Transaction .
(a) Apparel Holding hereby covenants and agrees that immediately following the consummation of the initial public offering of its common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “ Initial Public Offering ”), it shall contribute the IPO Proceeds to Transferee. Transferee hereby covenants and agrees to pay to Transferor, using (i) all but $5.0 million of the IPO Proceeds and (ii) $[        ] million of net borrowings under its new term loan facility, immediately upon receipt of the IPO Proceeds, the principal amount outstanding under the Promissory Note, in full satisfaction thereof by wire transfer of immediately available funds in accordance with instructions provided by Transferor to Transferee in writing not less than two (2) business days prior to the Closing.
(b) Transferor hereby covenants and agrees that immediately following the receipt of the principal amount outstanding under the Promissory Note from Transferee, Transferor shall use such amounts to (i) immediately repay all amounts outstanding under the following instruments (including accrued and unpaid interest thereon and all fees, expenses related thereto), after giving effect to the contribution of certain indebtedness under the Sun Term Loan Agreements (as defined below) to be made by Sun Capital Partners, Inc. (“ Sun Capital ”) or its affiliates immediately prior to the consummation of the transactions contemplated by that certain Contribution Agreement by and between Apparel Holding and Transferee (the “ Additional Sun Capital Contribution ”): (A) Transferor’s $45 million term loan facility with Cerberus Business Finance, LLC, dated as of October 19, 2011 (as amended or supplemented); (B) that certain Fifth Amended and Restated Sun Term B/C/D/E/F/G Loan Agreement between Transferor, Sun Kellwood Finance, LLC, SCSF Kellwood Finance, LLC and the other Borrowers party thereto, dated as of June 28, 2013 (as amended or supplemented, the “ Sun Term Loan B/C/D/E/F/G Agreement ”); and (C) that certain Sun Term A Loan Agreement between Transferor, Sun Kellwood Finance, LLC, SCSF Kellwood Finance, LLC and the other Borrowers party thereto, dated as of October 19, 2011 (as amended or supplemented, the “ Sun Term Loan A Agreement ” and collectively with the Sun Term Loan B/C/D/E/F/G Agreement, the “ Sun Term Loan Agreements ”); (ii) redeem at par all of the Transferor’s Second-Priority Senior Secured Payment-In-Kind Notes due 2014 (the “ 12.875% Notes ”) by (A) immediately issuing an unconditional redemption notice with respect to all issued and outstanding 12.875% Notes and (B) immediately depositing with the trustee of the indenture governing the 12.875% Notes an amount sufficient to redeem all issued and outstanding 12.875% Notes (including all accrued and unpaid interest thereon) in accordance with the terms of such indenture and the redemption notice; and (iii) immediately pay (A) that certain debt recovery bonus to Jill Granoff, as contemplated by the terms of her employment agreement, dated as of May 4, 2012 (as amended or supplemented) and (B) the restructuring fee payable to Sun Capital Management V, LLC (“ Sun Capital Management ”) pursuant to that Management Services Agreement, dated as of May 29, 2008 (as amended or supplemented, the “ Management Services Agreement ”), by and between Sun Capital Management and Transferor in connection with the consummation of the transactions related to the Initial Public Offering and in accordance with the terms of the Management Services Agreement.
 
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Additionally, Transferor may, but is not obligated to, use such amounts to repurchase its 7.625% Debentures due October 5, 2017 (the “ 7.625% Notes ”) and Transferor’s 3.5% Convertible Senior Debentures due June 15, 2034 on or after the closing of the Initial Public Offering. In the event the tender offer for the 7.625% Notes is to be consummated after the closing of the Initial Public Offering, Transferor shall escrow an amount equal to the face value of the issued and outstanding 7.625% Notes (including accrued and unpaid interest thereon through the anticipated closing date of the tender offer) with U.S. Bank National Association, as escrow agent, in accordance with the terms of the escrow agreement (substantially in the form attached hereto as Exhibit B, the “ Escrow Agreement ”) until the earlier of (i) the closing of the tender offer; and (ii) the three-month anniversary of the closing of the Initial Public Offering and Transferee agrees to issue a Joint Written Direction (as defined in the Escrow Agreement) to the extent necessary to affect any payments, whether in whole or in part, with respect to the foregoing clauses (i) through (ii), as reasonably requested by Transferor. Any amounts remaining in the escrow account after the termination of the Escrow Agreement shall be returned to the Transferor.
(c) Transferor hereby further covenants and agrees that immediately following the receipt of the principal amount outstanding under the Promissory Note from Transferee, Transferor shall refinance its $155 million revolving credit facility with Wells Fargo Bank National Association, dated as of October 19, 2011 (as amended or supplemented, the “Wells Fargo Facility”) to remove Vince, LLC as a guarantor or obligor thereunder.
6.02 Further Assurances .
(a) Upon the request of either Party, the other Party shall, without further consideration, execute and deliver, or cause to be executed and delivered, such other instruments of conveyance, transfer, assignment and confirmation, and shall take, or cause to be taken, such further or other actions as the other Party may deem necessary or desirable to carry out the intent and purposes of this Agreement and to consummate and give effect to the transactions contemplated hereby.
6.03 Indemnity .
(a) Transferee shall indemnify Transferor and hold it harmless against any Losses which Transferor may suffer, sustain or become subject to the extent relating to the Vince Business (including Losses of Transferor relating to Section 9 of the Escrow Agreement to the extent such Losses relate to acts or omissions of the Transferee).
(b) Transferor shall indemnify Transferee and hold it harmless against (i) any Losses which Transferee or Vince may suffer, sustain or become subject to the extent relating to (A) the Kellwood Business (including Losses of Transferee relating to Section 9 of the Escrow Agreement to the extent such Losses relate to acts or omissions of the Transferor) or (B) any failure by Transferor to fully perform its obligations under Section 4 of that certain Contribution and Acceptance Agreement by and between Transferor and Vince dated September 1, 2012 and (ii) any Losses which Transferee or Vince may suffer, sustain or become subject to relating to any failure by Transferor to perform its obligations under Section  6.01(b) or Transferor’s inability to remove Vince as an obligor or guarantor under the Wells Fargo Facility.
 
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ARTICLE VII
MISCELLANEOUS
7.01 Assignment .
(a) This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, except that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by a Party without the prior written consent of the other Party.
(b) Either Party may assign in whole or in part its rights and obligations pursuant to this Agreement and all other agreements, documents and instruments executed and/or delivered in connection herewith to one or more of its affiliates. Either Party may assign this Agreement, all other agreements, documents and instruments executed and/or delivered in connection herewith, and its rights and obligations hereunder and thereunder in connection with a merger or consolidation involving such Party or in connection with a sale of stock (or other ownership interests) or assets of such Party. Either Party may assign any or all of its rights pursuant to this Agreement, including its rights to indemnification, and all other agreements, documents and instruments executed and/or delivered in connection herewith, to any of its lender(s) as collateral security.
7.02 Survival . All representations and warranties and covenants contained herein or made in writing by any Party in connection herewith shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, regardless of any investigation made by a Party or on its behalf.
7.03 Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.
7.04 Interpretation . The headings and captions used in this Agreement and the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized term used in any Schedule attached hereto and not otherwise defined therein shall have the meaning set forth in this Agreement. The use of the word “including” herein shall mean “including without limitation.” The word “or” is used in the inclusive sense of “and/or”.
 
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7.05 Construction . The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.
7.06 Amendment and Waiver . Except as provided herein, any provision of this Agreement may be amended or waived only in a writing signed by the Parties. No waiver of any provision hereunder or any breach or default thereof shall extend to or affect in any way any other provision or prior or subsequent breach or default.
7.07 Complete Agreement . This Agreement and the other agreements, instruments, and documents contemplated hereby or executed in connection herewith contain the complete agreement between the Parties and supersede any prior understandings, agreements or representations by or between the Parties, written or oral, which may have related to the subject matter hereof in any way (including any letter of intent or non-binding terms of sale).
7.08 No Third-Party Beneficiaries . This Agreement is for the sole benefit of the Parties hereto and their permitted assigns and nothing herein expressed or implied, shall give or be construed to give any Person, other than the parties hereto and such permitted assigns, any legal or equitable rights hereunder.
7.09 Electronic Delivery; Counterparts . This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .peg or similar attachment to electronic mail (any such delivery, an “ Electronic Delivery ”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any Party, each other Party shall re-execute the original form of this Agreement and deliver such form to all other parties. No Party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
7.10 Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal Law of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware.
7.11 WAIVER OF TRIAL BY JURY . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION, ACTION, PROCEEDING, CROSS-CLAIM, OR COUNTERCLAIM IN ANY COURT (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF, RELATING TO OR IN CONNECTION WITH (I) THIS AGREEMENT OR THE VALIDITY, PERFORMANCE, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR
 
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(II) THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, AUTHORIZATION, EXECUTION, DELIVERY, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
*        *        *
 
9

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

TRANSFEROR:	
	
KELLWOOD COMPANY, LLC	
		
By:	 	 	
Name:	 		
Title:	 		
	
TRANSFEREE:	
	
VINCE INTERMEDIATE HOLDING, LLC	
		
By:	 	 	
Name:	 		
Title:	 		
Acknowledged and Agreed with respect to Sections 2.04 and 6.01(a) only:

APPAREL HOLDING:	
	
APPAREL HOLDING CORP.	
		
By:	 	 	
Name:	 		
Title:	 		
Signature Page to Transfer Agreement

Exhibit A
Form of Promissory Note
See attached. (Exhibit 10.5)

Exhibit B
Form of Escrow Agreement
See attached. (Exhibit 10.65)

Exhibit 10.6
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this “ Agreement ”), dated as of [        ] [    ], 2013, is entered into by and between Apparel Holding Corp., a Delaware corporation (the “ Company ”) and Sun Capital Partners Management V, LLC, a Delaware limited liability company (the “ Consultant ”). The Company and Consultant are referred to herein as the “ Parties ”.
W I T N E S S E T H :
WHEREAS, the Company filed a Form S-1 Registration Statement with the Securities and Exchange Commission on [        ] [    ], 2013 with the intent of making an initial public offering of shares as soon as practicable after the Registration Statement becomes effective (the “ IPO ”);
WHEREAS, historically, the Consultant has provided to the Company the consulting services set forth on Exhibit A (the “ Services ”), and received compensation for providing the Services pursuant to that certain Management Services Agreement, dated as of May 29, 2008 by and between Kellwood Company and Consultant (as amended from time to time, the “ Management Services Agreement ”);
WHEREAS, in connection with the IPO the Management Services Agreement will be terminated;
WHEREAS, after the IPO, the Consultant has expressed the willingness to continue to provide to the Company the Services without compensation, other than as set forth herein;
WHEREAS, after the IPO, the Company and its direct and indirect subsidiaries (the “ Subsidiaries ”) desire to continue to receive the Services from the Consultant and to obtain the benefit of the experience of the Consultant in business and financial management;
WHEREAS, after the IPO, the Consultant desires to provide the Services to the Company and the Subsidiaries pursuant to the terms of this Agreement; and
WHEREAS, the arrangements set forth in this Agreement are designed to reimburse the Consultant for expenses incurred while providing the Services to the Company and the Subsidiaries and provide the Consultant with indemnity from Losses as described herein.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the Company and the Consultant hereby agree as follows:
 
 	1.	Agreement; Term.	
(a) The Company and the Subsidiaries have requested that the Consultant perform the Services. To the extent the Consultant performs such Services for the Company and/or any Subsidiary, unless otherwise agreed to by the Parties and specified in writing, the terms and conditions by which the Consultant will provide such Services are specified herein. The Parties agree and acknowledge that the Consultant shall have no obligation to perform any such Services except as agreed to by the Consultant from time to time.

(b) It is expressly understood and agreed that the Consultant shall devote only so much time, and shall consult with and advise the officers and directors of the Company and/or any Subsidiary only to such extent and at such times and places as may be mutually agreed by the Company and/or such Subsidiary and the Consultant. Subject to Section 22 , the Consultant shall be free to provide similar services to such other business enterprises or activities as the Consultant may deem fit without any limitation or restriction whatsoever.
(c) The term of this Agreement shall commence as of the completion of the IPO (the “ Effective Date ”) and shall terminate on the tenth (10 th ) anniversary of the Effective Date, and shall be extended automatically thereafter on a year-to-year basis; provided that the Consultant may (in its sole discretion) elect in writing to terminate this Agreement at any time; provided , further that the Company may (in its sole discretion) elect in writing to terminate this Agreement if SCSF Cardinal, LLC, Sun Cardinal, LLC and/or their respective affiliates’ aggregate ownership of the Company’s equity interests falls below thirty percent (30%). Notwithstanding any other provisions hereof, (A) the Company’s obligation to pay amounts due with respect to periods prior to the termination hereof and (B) the provisions of Sections 3 through 21 hereof, in each case shall survive any termination of this Agreement.
 
 	2.	Compensation and Expenses.	
(a) Except as contemplated hereby or as approved by a majority of the Company’s Unaffiliated Directors (as defined below), the Company shall have no obligation to pay the Consultant and/or any of its affiliates (other than, for the avoidance of doubt, the Company and the Subsidiaries) (each, a “ Consultant Affiliate ”) any fees for the Services rendered hereunder and all matters related thereto (the “ Consulting Fees ”). As used herein, the term “ Unaffiliated Directors ” shall mean the Company’s directors who are not employees of the Consultant and/or any Consultant Affiliate.
(b) The Company shall reimburse, or cause the Subsidiaries to reimburse, the Consultant, any Consultant Affiliate or any of their respective members, managers, partners, directors, officers, employees or agents from time to time at the request of such party for the cost of all reasonable out-of-pocket fees and expenses incurred by such party in the performance of the Services rendered hereunder and all matters related thereto (the “ Consultant Expenses ”). Such out-of-pocket costs shall include, but are not limited to, the costs of airfare, lodging and transportation, as well as the costs of any service providers, attorneys, accountants, investment bankers, management, restructuring, real estate or other consultants, or other similar agents, advisors, or representatives engaged by the Consultant or Consultant Affiliate for the Company’s or any Subsidiary’s benefit, and shall not include any portion of salary or bonuses paid to any employee of the Consultant; provided that Consultant shall not be reimbursed for fees to such third party service providers except to the extent that such engagement is approved by Company, such approval not to be unreasonably conditioned, withheld or delayed. For the avoidance of doubt, reimbursement of such Consultant Expenses shall not be conditioned on the approval of the Unaffiliated Directors and shall be in addition to any Consulting Fees payable hereunder.
(c) The aforementioned Consulting Fees and Consultant Expenses (together, the “ Fees ”) will be payable promptly, but in no event more than fifteen (15) business days following the date which Consultant or any Consultant Affiliate submits to the Company an invoice (in form and substance consistent with past practice) for such fees and expenses (which may be more than once per month).
 
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(d) The Company agrees and acknowledges that certain Consultant Affiliates (including, without limitation, Sun Capital Partners Sourcing, LLC, Neuheim Lux Group Holding V, S.a.r.l., and certain restructuring consultants) may provide certain Services to the Company and/or the Subsidiaries. For the avoidance of doubt, the fees and expense paid by the Company to such Consultant Affiliates for such Services shall be Consultant Expenses. All such services provided by a Consultant Affiliate shall be covered by the terms hereof and the Consultant and each Consultant Affiliate shall be considered a Consultant Indemnitee with respect to such services provided. The Company agrees that each Consultant Affiliate shall also be a third party beneficiary hereunder. For avoidance of doubt, when used herein, the term “affiliate” includes, without limitation, Sun Capital Advisors, Inc. and any similar entities (it being understood and agreed that the failure to list any entity as an affiliate shall in no way suggest any entity is not an affiliate).
3. Relationship of the Parties . The Consultant is providing services hereunder as an independent contractor. Nothing in this Agreement shall be deemed to constitute the Parties hereto as joint venturers, alter egos, partners or participants in an unincorporated business or other separate entity, nor in any manner create any employer-employee or principal-agent relationship between the Company and/or any of the Subsidiaries on the one hand, and the Consultant or any of the Consultant’s members, managers, agents, sub-contractors, officers or employees on the other hand (notwithstanding the fact that the Company and the Consultant may have in common any officers, directors, stockholders, members, managers, employees, or other personnel).
4. Directors and Officers . Nothing in this Agreement shall be construed to relieve the directors or officers of the Company or any of the Subsidiaries from the performance of their respective duties or limit the exercise of their powers in accordance with the Company’s or such Subsidiary’s, as applicable, charter, bylaws, operating agreement, other constituent documents, applicable law, or otherwise. The activities of the Company and each of the Subsidiaries shall at all times be subject to the control and direction of their respective directors, managers and officers. The Company and the Subsidiaries reserve the right to make all decisions with regard to any matter upon which the Consultant or any Consultant Affiliate has rendered its advice and consultation. The Parties expressly acknowledge and agree that the Consultant is being engaged by the Company to provide consulting services to the Company and the Subsidiaries, for which the Consultant will be compensated pursuant to the terms of this Agreement. The Consultant shall not, and shall have no authority to, control the Company or any of the Subsidiaries or the Company’s or any of the Subsidiaries’ day-to-day operations, whether through the performance of the Consultant’s duties hereunder or otherwise. Moreover, although the Company and/or any of the Subsidiaries may grant to the Consultant authority to sign, review or approve the Company’s and/or such Subsidiary’s checks, payments, expenditures, transfers and/or conveyances, any such grant of authority shall be made by the Company or such Subsidiary, as applicable, and accepted by the Consultant with the express understanding and limitation that the Consultant shall possess and exercise such authority solely in its capacity as a provider of consulting services pursuant to the terms of this Agreement and in no other capacity, and that no inference shall be drawn therefrom as to any ability of the Consultant to control the Company or such Subsidiary or the Company’s or such Subsidiary’s day-to-day operations or as to any
 
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liability or responsibility therefor. The Company’s and each of the Subsidiaries’ directors, managers, officers and employees shall retain all responsibility for the Company or such Subsidiary, as applicable, and its operations as and to the extent required by the Company’s or such Subsidiary’s charter, bylaws, operating agreement, other constituent documents, and applicable law.
5. Limitation of Liability . Neither the Consultant nor any of its affiliates, nor any of their respective past, current or future members, managers, partners, directors, officers, employees, agents and/or controlling persons, nor any successor by operation of law (including by merger) of any such person, nor any entity that acquires all or substantially all of the assets of any such person in a single transaction or series of related transactions (all of the foregoing, collectively, the “ Consultant Indemnitees ”) shall be liable to the Company or any of the Subsidiaries or affiliates or any of the security holders or creditors of the Company or any of its affiliates for (a) any damage, loss, liability, deficiency, diminution in value, action, suit, claim, proceeding, investigation, audit, demand, assessment, fine, judgment, cost or other expense (including, without limitation, legal fees and expenses) (collectively “ Liabilities ”) directly or indirectly (whether direct or indirect, in contract or tort or otherwise) arising out of, related to, caused by, based upon or in connection with the performance of services contemplated by this Agreement unless such Liability shall be proven to result directly and primarily from the willful misconduct of such person or (b) any Outside Activities (as defined in Section 17 below). The Consultant makes no representations or warranties, express or implied, in respect of the services provided by any Consultant Indemnitee. In no event will any Consultant Indemnitee be liable to (i) the Company or any of the Subsidiaries or affiliates (x) for any special, indirect, punitive, incidental or consequential damages, including, without limitation, loss of profits or savings or lost business, whether or not such damages are foreseeable or such Consultant Indemnitee has been advised of the possibility of such damages or (y) in respect of any Liabilities relating to any third party claims (whether based in contract, tort or otherwise), except as set forth in Section 5 below or (ii) to any of the security holders or creditors of the Company for any Liability whatsoever. Under no circumstances will the aggregate of any and all Liabilities of the Consultant Indemnitees exceed the aggregate of the fees actually paid to the Consultant hereunder.
6. Indemnification; Advancement . The Company and the Subsidiaries shall jointly and severally reimburse, defend, indemnify and hold the Consultant Indemnitees, and each of them, harmless from and against any Liabilities arising out of, related to, caused by, based upon or in connection with (a) any act or omission of, or on behalf of, the Company, any of the Subsidiaries, the Consultant or any of the Consultant Indemnitees, except to the extent proven to result directly and primarily from the willful misconduct or gross negligence of the person seeking indemnification, or (b) any act or omission made at the direction of the Company or any of the Subsidiaries (collectively, the items in (a) and (b) above, “ Claims ”). The Company, the Subsidiaries and any of their affiliates (other than the Consultant Indemnitees) shall jointly and severally defend at their own cost and expense any and all suits or actions (just or unjust) which may be brought against the Company, any of the Subsidiaries or any of their affiliates, or any Consultant Indemnitee or in which any Consultant Indemnitee may be impleaded with others upon any Claims, or upon any matter, directly or indirectly arising out of, related to, caused by, based upon or in connection with this Agreement or the performance (or failure of performance) hereof by any Consultant Indemnitee. Reasonable expenses incurred by a Consultant Indemnitee entitled to be indemnified under this Section 6 who was, is or is threatened to be made subject to
 
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a Claim shall be paid by the Company in advance of the final disposition of the Claim upon receipt of an undertaking by or on behalf of such Consultant Indemnitee to repay such amount if it shall ultimately be determined that he, she or it is not entitled to be indemnified by the Company and the Subsidiaries. If the Company has acknowledged in writing its indemnification obligations hereunder with respect to a Claim and is actively defending a Claim, a Consultant Indemnitee shall not be entitled to reimbursement of expenses related to the engagement of separate legal counsel with respect to such Claim unless Consultant Indemnitee, in good faith upon the advice of counsel, believes a conflict of interest necessitates the engagement of such legal counsel. Neither Party may settle any Claim without the consent of the other Party, such consent not to be unreasonably withheld or delayed. The Company hereby acknowledges that the Consultant Indemnities have certain rights to advancement and/or indemnification by certain affiliates of Sun Capital Partners, Inc. (collectively, the “ Fund Indemnitors ”). The Company hereby agrees that the Company is the indemnitor of first resort (i.e., its obligations to the Consultant Indemnitees are primary and those of the Fund Indemnitors are secondary), that the Company shall be liable for the full amount of payments of indemnification required by any organizational document of such entity or any agreement to which such entity is a party, and that the Company irrevocably and unconditionally waives any claims against the Fund Indemnitors for contribution, subrogation, exoneration, reimbursement or any other recovery of any kind for which it is liable pursuant to any organizational document or agreement including this Agreement. The Company further agrees that no payment for indemnification by the Fund Indemnitors on behalf of any Indemnified Party with respect to any claim for which an Indemnified Party has sought payment from it shall affect the foregoing, and the Fund Indemnitors, to the extent of such payment, shall be subrogated to all of the rights of recovery of such Indemnified Party against it.
7. Notices . All notices, requests, demands and other communications permitted or required to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed conclusively to have been given (i) when personally delivered, (ii) when sent by facsimile (with hard copy to follow) during a business day (or on the next business day if sent after the close of normal business hours or on any non-business day), (iii) when sent by electronic mail (with hard copy to follow) during a business day (or on the next business day if sent after the close of normal business hours or on any non-business day), (iv) one (1) business day after being sent by reputable overnight express courier (charges prepaid), or (v) three (3) business day following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing, notices, requests, demands and communications to the Parties shall be sent to the addresses indicated below:
If to the Company:
Apparel Holding Corp.
1441 Broadway – 6th Floor
New York, New York 10018
Attention: Chief Executive Officer and General Counsel
Facsimile: (855) 640-3896
 
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If to the Consultant:
Sun Capital Partners Management V, LLC
c/o Sun Capital Partners, Inc.
5200 Town Center Circle, Suite 600
Boca Raton, FL 33486
Attention: C. Deryl Couch, Jason H. Neimark and Brian McGee
Facsimile: (561) 394-0540
8. Assignment; Successors and Assigns . This Agreement and the rights, duties and obligations of the Company and the Subsidiaries hereunder may not be assigned or delegated by the Company or any Subsidiary without the prior written consent of the Consultant. All covenants, promises and agreements by or on behalf of the Parties contained in this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective heirs, legal representatives, successors and assigns.
9. Amendments . No modification, amendment, supplement or supplement of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the Consultant and the Company. No waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the waiving Party.
10. Applicable Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.
11. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION, ACTION, PROCEEDING, CROSS-CLAIM, OR COUNTERCLAIM IN ANY COURT (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF, RELATING TO OR IN CONNECTION WITH (I) THIS AGREEMENT OR THE VALIDITY, PERFORMANCE, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR (II) THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, AUTHORIZATION, EXECUTION, DELIVERY, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
12. Section Headings . The headings of each section are contained herein for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
13. Entire Agreement . This Agreement sets forth the entire agreement of the Parties hereto with regard to the subject matter hereof and supersedes and replaces all prior agreements, understandings and representations, oral or written, with regard to such matters.
14. Severability . If any provision of this Agreement or application thereof under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.
 
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15. Electronic Delivery; Counterparts . This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .peg or similar attachment to electronic mail (any such delivery, an “ Electronic Delivery ”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any Party hereto, each other Party hereto or thereto shall re-execute the original form of this Agreement and deliver such form to all other Parties. No Party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such Party forever waives any such defense, except to the extent such defense relates to lack of authenticity.
16. Further Assurances . Each Party hereto agrees to use all reasonable efforts to obtain all consents and approvals, and to do all other things, necessary for the transactions contemplated by this Agreement. The Parties agree to take such further action and to deliver or cause to be delivered any additional agreements or instruments as any of them may reasonably request for the purpose of carrying out this Agreement and the agreements and transactions contemplated hereby.
17. Attorneys’ Fees . If any action at law or in equity is necessary or desirable to enforce or interpret the terms of this Agreement, to protect the rights obtained hereunder, or where any provision hereof is validly asserted as a defense, then the Consultant, if the Consultant is the prevailing party in such action, shall be entitled to recover from the Company and/or from any Subsidiary its reasonable attorneys’ fees incurred in connection therewith, including attorneys’ fees on appeal, and all costs and disbursements, in addition to any other available relief or remedy to which it may be entitled.
18. Outside Activities . The Company hereby acknowledges and agrees that one or more of the Consultant Indemnitees have had, and from time to time may have, outside activities or interests that conflict or may conflict with the best interests of the Company, any Subsidiary or any of their affiliates (collectively, “ Outside Activities ”), including (without limitation) investment opportunities or investments in, ownership of, or participation in entities that are or could be complementary to, or competitive with, the Company, any Subsidiary or any of their affiliates or for which the Company or its Subsidiaries or affiliates could have an expectancy, interest or desire to engage. The Company hereby approves and consents to all Outside Activities not in violation of Section 22 , and no Consultant Indemnitee shall be liable to the Company, any Subsidiary or any of their affiliates for breach of any duty (contractual or otherwise), including without limitation any fiduciary duties, by reason of any such activities or of such person’s participation therein. No Consultant Indemnitee shall have any duty to communicate or offer any opportunity or the existence of any Outside Activities to the Company, its Subsidiaries or its affiliates, and no Consultant Indemnitee shall have any duty to refrain therefrom (directly, indirectly or through any assignee or transferee). In the event that any Consultant Indemnitee acquires knowledge of a potential transaction or matter that may be a
 
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corporate opportunity for both the Company, any Subsidiary or any of their affiliates, on the one hand, and any Consultant Indemnitee, on the other hand, or any other person, no Consultant Indemnitee shall have any duty (contractual or otherwise), including without limitation any fiduciary duties, to communicate, present or offer such corporate opportunity to the Company or such Subsidiary or affiliate and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company or such Subsidiary or affiliate for breach of any duty (contractual or otherwise), including, without limitation any fiduciary duties, by reason of the fact that any Consultant Indemnitee directly or indirectly pursued or acquired such opportunity for itself, directed such opportunity to another person, or did not present or communicate such opportunity to the Company or such Subsidiary or affiliate, even though such corporate opportunity may be of a character that, if presented to the Company or such Subsidiary or affiliate, could be taken by the Company or such Subsidiary or affiliate, as applicable. The Company hereby renounces any interest, right, or expectancy in, or in being offered an opportunity to participate in, any such opportunity not offered to it by any Consultant Indemnitee to the fullest extent permitted by law, including pursuant to §122(17) of the General Corporation Law of the State of Delaware.
19. Intellectual Property . The Consultant shall retain all forms of legal rights and protections in any country of the world, including all right, title and interest arising under common and statutory law, in and to all: (a) letters patents, provisional patents, design patents, patent cooperation treaty filings and other rights to inventions or designs; (b) trade secret and equivalent rights in confidential or proprietary information and know-how; (c) copyrights, mask works, moral rights or other literary property or authors’ rights; (d) rights regarding trade names, logos, domain names, URLs, trademarks, service marks and other proprietary indicia or addresses and all goodwill associated therewith; (e) any similar, corresponding or equivalent rights relating to intangible intellectual property; and (f) all applications, registrations, issuances, divisions, continuations, renewals, reissuances and extensions of the foregoing, in each of the clauses (a) through (f) above in and to any work product or deliverables created for, or provided to, the Company or any Subsidiary under this Agreement or otherwise developed in connection with the services provided hereunder (collectively, the “ Consultant Owned Materials ”); provided that the Consultant Owned Materials shall not include any of the foregoing to the extent created exclusively for, and provided exclusively to, the Company or any Subsidiary under the Agreement. The Consultant has no obligation to provide any Consultant Owned Materials to the Company or any Subsidiary, but if the Consultant does so provide any Consultant Owned Materials to the Company or any Subsidiary, then the Consultant hereby grants to the Company and any such Subsidiary, a revocable, non-transferable and non-sublicensable, worldwide royalty-free, nonexclusive license, during the term of this Agreement, to copy, use and distribute such Consultant Owned Materials solely in connection with the use of the services by the Company or any such Subsidiary contemplated by this Agreement.
20. Construction . The construction of this Agreement shall not take into consideration the Party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document.
21. Review by Board . Each of the Company and each Subsidiary represent and warrant to each Consultant Indemnitee that the execution of this Agreement has been duly authorized by the Company and each Subsidiary. The Company agrees to take, and cause the
 
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Subsidiaries and affiliates to take, all action requested by any Consultant Indemnitee such that such Consultant Indemnitee receives the full benefit contemplated by the terms hereof (including those set forth and contemplated by Sections 6 and 18 ).
22. Confidential Information . To the extent that, after the date hereof, Consultant becomes aware of any Confidential Information of the Company or its Subsidiaries from the Company or its Subsidiaries, Consultant will not, directly or indirectly, without the prior written consent of the Company, disclose or use any Confidential Information (including, without limitation, Confidential Information with respect to strategy, acquisitions, retail real estate opportunities, sourcing, pricing, vendors and customers); provided that such Confidential Information will not include (i) any information generally available to, or known by, the public (other than as a result of disclosure in violation hereof), (ii) any information independently developed after the date hereof without use or referring to any Confidential Information of the Company or its Subsidiaries, (iii) any information that is also Confidential Information of the Consultant or its affiliates or (iv) any information that becomes available to Consultant from a source other than the Company (provided that such source is not known to by Consultant to be bound by a confidentiality agreement with the Company); provided further that the provisions of this Section 22 will not restrict the use by the Consultant or any of its respective agents, consultants, advisors, representatives or affiliates’ overall knowledge and understanding of the Company’s industry that is not specific to the Company for the Consultant’s own purposes, including the purchase, sale, consideration of, advice regarding and decisions related to, investments; and provided further that the provisions of this Section 22 will not prohibit any retention of copies of records or disclosure (A) required by any applicable Law so long as reasonable prior notice is given to the Company of such disclosure and a reasonable opportunity is afforded to the Company to contest the same or (B) made in connection with the enforcement of any right or remedy relating to, or the performance of any obligation arising under, this Agreement or the transactions contemplated hereby. As used herein, the term “ Confidential Information ” means information if (A) the owner thereof has taken reasonable measures to keep such information secret and (B) such information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by the public. Notwithstanding anything to the contrary contained herein, “ Confidential Information ” shall include acquisition opportunities of the Company and its subsidiaries disclosed by the Company or its subsidiaries to the Consultant or its affiliates if (i) such acquisition opportunity is first learned of by the Consultant or its affiliates from the Company and (ii) the Company has requested that the Consultant or its affiliates (and the Consultant or its affiliate has agreed to) be involved in the evaluation of such acquisition. Notwithstanding anything contained herein to the contrary, the Consultant shall be entitled to disclose Confidential Information to its agents, consultants, advisors, representatives and affiliates (but not portfolio companies) and the partners, investors or equivalent members of Sun Capital Partners V, L.P, Sun Capital Securities Fund, L.P. and Sun Capital Securities Offshore Fund, Ltd to the extent such persons or entities are subject to confidentiality obligations to the Consultant.
23. Securities Laws . The Consultant acknowledges that the Company is an issuer with securities that will be registered pursuant to the Securities Exchange Act of 1934, as amended, and that the disclosure of material nonpublic information regarding the Company or any of its subsidiaries by the Consultant or trading in the securities of the Company by the Consultant while in the possession of such information may, depending on the facts and circumstances, subject the Consultant to liability under certain securities laws.
 
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IN WITNESS WHEREOF, the Parties have executed this Consulting Agreement as of the date first above written.

 SUN CAPITAL PARTNERS MANAGEMENT V, LLC	
		
By:	 	 	
Name:	 	Michael J. McConvery	
Title:	 	Vice President and Assistant Secretary	
	
APPAREL HOLDING CORP.	
		
By:	 	 	
Name:	 		
Title:	 		
[Signature Page to Consulting Agreement]

Exhibit A
Services
Services related to:
Finance and Accounting
Human Resources and Employee Benefits
Intellectual Property
Purchasing, Distribution and Customer Services
Licensing
Facilities and Equipment
Regulatory Compliance
Mergers, Acquisitions, Divestitures and Debt Financings
Capital Markets
Strategy
Corporate Governance
Insurance
Other Historically Provided Services
Exhibit A to Consulting Agreement

Exhibit 10.22
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “ Amendment ”) is entered into as of March 23, 2012, by and among the Lenders identified on the signature pages hereof (such Lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “ Lender ” and collectively as the “ Lenders ”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as agent for the Lenders (in such capacity, “ Agent ”), KELLWOOD COMPANY, a Delaware corporation (“ Borrower Representative ”), the Domestic Subsidiaries of Borrower Representative party hereto as Borrowers (together with Borrower Representative, “Borrowers”) and the other Obligors party hereto (together with the Borrowers, the “ Loan Parties ”).
WHEREAS, the Loan Parties, Agent, and Lenders are parties to that certain Credit Agreement dated as of October 19, 2011 (as amended, modified or supplemented from time to time, the “ Credit Agreement ”);
WHEREAS, the Loan Parties have requested (i) that Agent and Lenders temporarily modify the Covenant Testing Trigger Date and (ii) that Agent and Lenders waive the application of certain provisions of the Credit Agreement as they may apply to the execution and delivery of a Guaranty by SK Financial Services Corp. (“ SK ”), dated as of the date hereof (the “ SK/Cerberus Guaranty ”) in favor of the Second Lien Agent;
WHEREAS, in connection therewith, the Loan Parties, Agent and Lenders have agreed to amend the Credit Agreement in certain respects;
NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:
1. Defined Terms . Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. Amendments to Credit Agreement . In reliance upon the representations and warranties of the Loan Parties set forth in Section 7 below, the Credit Agreement is hereby amended as follows:
(a) The definition of “Covenant Testing Trigger Date” appearing in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:
Covenant Testing Trigger Date - means any day that Excess Availability is less than 12.5% of the Maximum Revolver Amount (other than during the Availability Modification Period).
(b) The definition of “Permitted Acquisition” appearing in Section 1.1 of the Credit Agreement is hereby amended to delete the phrase “any Acquisition effected with the consent and approval of the board of directors” appearing therein and replace it with the following: “any Acquisition (other than an Acquisition effected during the Availability Modification Period) effected with the consent and approval of the board of directors”.

(c) Section 1.1 of the Credit Agreement is hereby amended to insert the following definitions in the proper order alphabetically:
Availability Modification Period - the period commencing on March 26, 2012 and ending upon the earliest of (i) the occurrence of any Event of Default, (ii) any date on which Excess Availability is less than $5,000,000, (iii) any termination or cancellation of, or reduction in the amount available to be drawn on (as a result of a draw or otherwise), the Sun Letter of Credit, (iv) any date on which the Sun Guaranty ceases to be in full force and effect or any party thereto challenges the validity thereof and (v) April 28, 2012.
Sun Guaranty - that certain Guaranty dated as of March 23, 2012 made by SK Financial Services Corp. in favor of Agent.
Sun Letter of Credit - a standby letter of credit with an expiration date of no earlier than May 31, 2012 and a face amount of $20,000,000 issued by Bank of Montreal to Agent on behalf of SK Financial Services Corp.
(d) The first sentence Section 2.1.7 of the Credit Agreement is hereby amended to delete the phrase “Borrowers may, by written notice to Agent” appearing therein and replace it with the following: “Borrowers may, at any time other than during the Availability Modification Period, by written notice to Agent”
(e) The first sentence of Section 8.1 of the Credit Agreement is hereby amended to delete the phrase: “ provided that, if at any time Excess Availability is less than 12.5% of the Maximum Revolver Amount and, thereafter, so long as Borrowers do not maintain an average daily Excess Availability (measured as of the close of business of each Business Day) in excess of 12.5% of the Maximum Revolver Amount for a period of two (2) consecutive fiscal months” and replace it with the following:
“ provided that, (i) if at any time Excess Availability is less than 12.5% of the Maximum Revolver Amount and, thereafter, so long as Borrowers do not maintain an average daily Excess Availability (measured as of the close of business of each Business Day) in excess of 12.5% of the Maximum Revolver Amount for a period of two (2) consecutive fiscal months and (ii) at all times during the Availability Modification Period,”
(f) Section 10.2.8(b) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(b) Exercise its option to make cash payments of interest in respect of the Last Out Term Loan at any time during the Availability Modification Period or if an Event of Default exists or would be caused thereby or make any cash payments of interest in respect of the Last Out Term Loan except as provided in the Last Out Term Loan Agreement as in effect on the date hereof.”
 
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(g) Section 10.2.17 of the Credit Agreement is hereby amended to amend and restate clauses (g) and (h) thereof in their entirety as follows:
“(g) at any time other than during the Availability Modification Period, payment of management fees and customary and reasonable fees for management consulting services to Sun Capital Partners Management V, LLC pursuant to Section 2 of the Management Services Agreement; provided that (i) no Event of Default has occurred and is continuing at the time of any such payment thereof or would result after giving effect thereto and (ii) Availability after giving effect to such payment is greater than $25,000,000 (it being understood that any management fees which may not be paid pursuant to the foregoing conditions set forth in this proviso may accrue and be paid at such time as such conditions would be satisfied after giving effect to such payment), and (h) at any time other than during the Availability Modification Period, payment of indemnities and reimbursements of reasonable out-of-pocket fees and expenses incurred by Sun Capital Partners Management V, LLC in connection with the performance of the services under the Management Services Agreement; provided that this clause (h) shall not limit reimbursement of Sun Capital Partners Management V, LLC or its affiliates for compensation paid by Sun Capital Partners Management V, LLC or its affiliates to the “performance improvement team” assisting the Borrower Representative in an amount not to exceed $500,000 in any Fiscal Year”.
3. Waiver .
(a) Subject to the terms and conditions contained herein, the Agent and the Lenders hereby waive application of Section 10.1.10 of the Credit Agreement, as such section may apply to the execution and delivery of the SK/Cerberus Guaranty in favor of the Second Lien Agent, provided that the conditions to the effectiveness of this Waiver described in Section 6 below are satisfied.
(b) By its signature below, SK agrees that any and all subrogation rights of SK under the SK/Cerberus Guaranty following any payment by SK to the Second Lien Agent thereunder are fully subordinated to the prior payment in full in cash of all Obligations under the Credit Agreement. Accordingly, to the extent SK is entitled to exercise any subrogation rights under the SK/Cerberus Guaranty, SK agrees that it shall not take any action in respect of such subrogation rights until all Obligations (other than contingent indemnity obligations for which a claim has not been asserted) have been paid in full in cash.
4. Continuing Effect . Except as expressly set forth in Section 2 or 3 of this Amendment, nothing in this Amendment shall constitute a modification or alteration of the terms, conditions or covenants of the Credit Agreement or any other Loan Document, or a waiver of any other terms or provisions thereof, and the Credit Agreement and the other Loan Documents shall remain unchanged and shall continue in full force and effect, in each case as amended hereby.
5. Reaffirmation and Confirmation; Covenant . Each Loan Party hereby ratifies, affirms, acknowledges and agrees that the Credit Agreement and the other Loan Documents represent the valid, enforceable (except as enforceability may be limited by
 
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bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally) and collectible obligations of such Loan Party, and further acknowledges that there are no existing claims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Credit Agreement or any other Loan Document. Each Loan Party hereby agrees that this Amendment in no way acts as a release or relinquishment of the Liens and rights securing payments of the Obligations. The Liens and rights securing payment of the Obligations are hereby ratified and confirmed by each Loan Party in all respects. The Loan Parties agree that during the Availability Modification Period they shall provide collateral reporting on a weekly basis. Failure to comply with the foregoing agreement shall constitute an immediate Event of Default.
6. Conditions to Effectiveness . This Amendment shall become effective upon the satisfaction of each of the following conditions precedent, each in form and substance acceptable to Agent:
(a) Agent shall have received a fully executed copy of this Amendment;
(b) Agent shall have received the Sun Letter of Credit, in the form attached hereto as Exhibit A;
(c) Agent shall have received the Sun Guaranty, in the form attached hereto as Exhibit B, together with an opinion of counsel in form and substance satisfactory to Agent and a copy of the corresponding guaranty executed in favor of the Second Lien Agent;
(d) Agent shall have received payment of an amendment fee in the amount of $50,000 in immediately available funds; and
(e) No Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment.
7. Representations and Warranties . In order to induce Agent and Lenders to enter into this Amendment, each Loan Party hereby represents and warrants to Agent and Lenders that, after giving effect to this Amendment:
(a) All representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of this Amendment, in each case as if then made, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties were true and correct in all material respects on and as of such earlier date);
(b) No Default or Event of Default has occurred and is continuing; and
(c) This Amendment and the Credit Agreement, as modified hereby, constitute legal, valid and binding obligations of each Loan Party and are enforceable against each Loan Party in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.
 
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8. Other Agreements .
(d) Application of LC Draws . If Agent receives any payment in respect of the Sun Guaranty, including any proceeds from a draw on the Sun Letter of Credit, such payment shall be applied as set forth in Section 5.6 of the Credit Agreement.
(e) Cash Dominion . The Loan Parties acknowledge and agree that, as a result of Excess Availability being less than 12.5% of the Maximum Revolver Amount, as of the date hereof there exists a Cash Dominion Period pursuant to Section 8.5 of the Credit Agreement, which shall remain in effect until the time that such Cash Dominion Period ends pursuant to the terms of Section 8.5 of the Credit Agreement.
(f) Limit on Cash-Pay Interest . Each Loan Party and each Last-Out Term Lender agree and acknowledge that the Loan Parties shall not exercise their option to make cash payments of interest in respect of the Last Out Term Loan at any time during the Availability Modification Period.
9. Miscellaneous .
(a) Expenses . The Loan Parties jointly and severally agree to pay on demand all expenses of Agent (including, without limitation, the fees and expenses of outside counsel for Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith, all in accordance with Section 3.4 of the Credit Agreement. The Loan Parties further agree to reimburse Agent for expenses incurred by Agent in connection with a collateral audit of the Loan Parties to be conducted in April, 2012, notwithstanding any limitations on such reimbursement set forth in Section 10.1.1(b) of the Credit Agreement. All obligations provided herein shall survive any termination of this Amendment and the Credit Agreement as modified hereby.
(b) Governing Law . This Amendment shall be a contract made under and governed by the internal laws of the State of Illinois.
(c) Counterparts . This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment.
10. Release .
(a) In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the “ Releasees ” and individually as a “ Releasee ”), of
 
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and from all demands, actions, causes of action, suits, controversies, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “ Claim ” and collectively, “ Claims ”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which any Loan Party or any of their respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever in relation to, or in any way in connection with any of the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto which arises at any time on or prior to the day and date of this Amendment.
(b) Each Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
(c) Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.
[signature pages follow]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized and delivered as of the date first above written.

BORROWERS:	
	
KELLWOOD COMPANY	
KELLWOOD FINANCIAL RESOURCES, INC.	
(formerly known as Newkell, Inc.)	
KWD HOLDINGS, INC.	
PHAT FASHIONS LLC	
PHAT LICENSING LLC	
ZOBHA, LLC	
MEOW INC.	
BETH’S BOUTIQUE, LLC	
AMERICAN RECREATION PRODUCTS, INC.	
SIERRA DESIGNS ACQUISITION CORPORATION	
ROYAL ROBBINS, INC.	
		
By:	 	/s/ Adrian Kowalewski	
Name: 	 	Adrian Kowalewski	
Title:	 	Senior Vice President	
Amendment No. 1 to Credit Agreement

			
AGENT AND LENDERS:	
	
WELLS FARGO, NATIONAL ASSOCIATION, as Agent and a Lender	
		
By:	 	/s/ Robert Bernier	
	 	 	
Name:	 	ROBERT BERNIER	
Title:	 	VICE PRESIDENT	
Amendment No. 1 to Credit Agreement

			
PNC BANK, N.A., as Lender	
		
By:	 	/s/ Mark Herdman	
	 	 	
Name:	 	Mark Herdman	
Title:	 	Vice President	
Amendment No. 1 to Credit Agreement

			
UBS LOAN FINANCE LLC, as a Lender	
		
By:	 	/s/ Mary E. Evans	
	 	 	
Name:	 	Mary E. Evans	
Title:	 	Associate Director	
		
By:	 	Irja R. Otsa	
	 	 	
Name:	 	Irja R. Otsa	
Title:	 	Associate Director	
Amendment No. 1 to Credit Agreement

Agreed and acknowledged with respect to Section 7(c):

SUN KELLWOOD FINANCE, LLC	
		
By:	 	/s/ Michael J. McConvery	
	 	 	
Name:	 	Michael J. McConvery	
Title:	 	Vice President	
	
SCSF KELLWOOD FINANCIAL, LLC	
		
By:	 	/s/ Michael J. McConvery	
	 	 	
Name:	 	Michael J. McConvery	
Title:	 	Vice President	
Amendment No. 1 to Credit Agreement

Agreed and acknowledged with respect to Section 3(b):

SK FINANCIAL SERVICES CORP.	
		
By:	 	/s/ Michael J. McConvery	
	 	 	
Name:	 	Michael J. McConvery	
Title:	 	Vice President	
Amendment No. 1 to Credit Agreement

EXHIBIT A
See attached.

			
	  	Bank of Montreal, Chicago, Illinois	
	  	 
STANDBY/LETTERS OF CREDIT	
	  	C/O 234 Simcoe Street	
	  	3rd Floor	
	  	Toronto, Ontario M5T 1T4	
	  	Canada	
	  	Tel: 1-877-801-0414	
	  	Fax: 1-877-801-7787	
	  	SWIFT: BOFMUS4X	
Irrevocable
Standby Letter of Credit No.: [On file with the Company]

Date Issued: March 21, 2012	  	DRAFT	
Beneficiary:
Wells Fargo Bank, N.A., as Administrative Agent
2450 Colorado Avenue
Suite 3000W
Santa Monica, CA 90404
Applicant:
SK Financial Services Corp.
5200 Town Center Circle, Suite 600
Boca Raton, FL 33486
Amount: Twenty Million and 00/100’s United States Dollars (USD20,000,000.00)
Expiry Date: March 21, 2013
We hereby issue our Irrevocable Standby Letter of Credit No. [On file with the Company] (“Letter of Credit”) in your favor as Beneficiary. This Letter of Credit is available by sight payment with ourselves only against presentation at Bank of Montreal, 111 West Monroe Street, 17th Floor West, Chicago, IL 60603 of the following documentation:
1. A sight draft drawn on us, purportedly signed by an authorized representative or officer of the Beneficiary, marked: “Drawn under Bank of Montreal Irrevocable Standby Letter of Credit No. [On file with the Company] dated March 21, 2012.”

[On file with the Company]	  	Page 1 of 6	

			
	  	Bank of Montreal, Chicago	
 
2. A dated statement purportedly signed by an authorized representative or officer of the Beneficiary stating one or more of the following:
(a) “The undersigned being a duly authorized representative or officer of Wells Fargo Bank, N.A., a national banking association (“Beneficiary”), hereby represents and warrants that one or more Events of Default (as defined in the Credit Agreement referred to below) exist. “Credit Agreement” means that certain Credit Agreement, dated as of October 19, 2011 (as amended from time to time, the “Credit Agreement”), among Kellwood Company and certain of its subsidiaries, the lenders party thereto, and the Beneficiary as administrative agent for such lenders.”
OR
(b) “The undersigned being a duly authorized representative or officer of Wells Fargo Bank, N.A., a national banking association (“Beneficiary”), hereby represents and warrants that Excess Availability (as defined in the Credit Agreement referred to below) has been less than $5,000,000 on one or more days during the period commencing March 22, 2012 and ending April 28, 2012. “Credit Agreement” means that certain Credit Agreement, dated as of October 19, 2011 (as amended from time to time, the “Credit Agreement”), among Kellwood Company and certain of its subsidiaries, the lenders party thereto, and the Beneficiary as administrative agent for such lenders.”
OR
(c) “The undersigned being a duly authorized representative or officer of Wells Fargo Bank, N.A., a national banking association (“Beneficiary”), hereby represents and warrants that Excess Availability (as defined in the Credit Agreement referred to below) has been less than USD20,000,000 on one or more days during the period commencing April 28, 2012 and ending March 21, 2013. “Credit Agreement” means that certain Credit Agreement, dated as of October 19, 2011 (as amended from time to time, the “Credit Agreement”), among Kellwood Company and certain of its subsidiaries, the lenders party thereto, and the Beneficiary as administrative agent for such lenders.”
OR
(d) The undersigned being a duly authorized representative or officer of Wells Fargo Bank, N.A., a national banking association (“Beneficiary”), hereby represents and warrants that the date of this draw is on or after May 14, 2012 and the Fixed Charge Coverage Ratio (as defined in the Credit Agreement referred to below) for the 12 month period ending March 31, 2012 was less than 1.00 to 1.00. “Credit Agreement” means that certain Credit Agreement, dated as of October 19, 2011 (as amended from time to time, the “Credit Agreement”), among Kellwood Company and certain of its subsidiaries, the lenders party thereto, and the Beneficiary as administrative agent for such lenders.”
Partial drawings are permitted.
This Letter of Credit shall be deemed automatically extended without an amendment for a one year period from the present expiration date hereof, and upon each anniversary of such date, unless at least thirty (30) days prior to any such expiration date we have sent to Beneficiary written notice by courier service or overnight mail that we elect not to permit this Letter of Credit to be so extended beyond, and it will then expire on its then current expiry date. No presentation made under this Letter of Credit after such expiry date will be honored.

[On file with the Company]	  	Page 2 of 6	

			
	  	Bank of Montreal, Chicago	
 
This Letter of Credit shall finally expire on the earlier of (i) the Beneficiary’s return of this Letter of Credit to us without any draw request or (ii) March 21, 2013, if it has not previously expired in accordance with the preceding sentence.
This Letter of Credit is transferable successively in its entirety only up to the then available amount in favor of any nominated transferee (“Transferee”), provided, however, such transfer to such Transferee in compliance with then applicable law and regulations, including but not limited to the regulations of the U.S. Department of Treasury and U.S Department of Commerce. At the time of transfer, the original Letter of Credit and original Amendment(s), if any, must be surrendered to us together with our Letter of Transfer documentation (in the form of Annex A attached hereto).
This Letter of Credit sets forth in full the terms of our undertaking, and such terms shall not be modified, amended or amplified by any document, instrument or agreement referred to in this Letter of Credit, in which this Letter of Credit is referred to or to which this Letter of Credit relates.
Except as stated herein, this Letter of Credit is not subject to any condition or qualification and is our individual obligation which is in no way contingent upon reimbursement or any right of subrogation. We irrevocably waive any and all rights of subrogation, whether as provided by statute or otherwise, now or hereafter that might, but for such waiver, exist, in respect to this Letter of Credit or any payment we make under it, as to the Applicant, you, or the transaction between you and the Applicant. We further give irrevocable notice that we are not now and will not be the secondary obligor or co-obligator of Applicant’s obligations and liabilities to you for any purpose. Our obligations to you under this Letter of Credit are our primary obligations and are strictly as stated herein.
A copy of Letter of Credit must be presented together with the above documents in order to endorse the amount of each drawing on the reverse side. If the original Letter of Credit is presented, it will be returned to the Beneficiary unless it is fully utilized. Fax drawings are acceptable.
All charges under this Letter of Credit including transfer commission are for the account of the Applicant.
We hereby agree with you that drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation and delivery to Bank of Montreal, 111 West Monroe Street, 17th Floor West, Chicago, IL 60603 or by facsimile to 1-877-801-7787. Documents are to be sent in one lot by courier service, overnight mail, hand delivery or facsimile.
Except as otherwise specified herein, this Letter of Credit is subject to the 2007 revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication No. 600).

[On file with the Company]	  	Page 3 of 6	

			
	  	Bank of Montreal, Chicago	
 
THIS LETTER OF CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

Signing Officer	  	Authorized Signing Officer	

[On file with the Company]	  	Page 4 of 6	

			
	  	Bank of Montreal, Chicago	
 
THIS IS AN INTEGRAL PART OF STANDBY LETTER OF CREDIT NO. [On file with the Company] AND MUST BE ATTACHED THERETO.
Annex A to Letter of Credit No. [On file with the Company]
REQUEST FORM FOR FULL TRANSFER
(Transfer Form to be prepared on beneficiary’s letter head)
BANK OF MONTREAL
111 WEST MONROE STREET
17TH FLOOR WEST
CHICAGO, IL 60603
 
DATE:	BANK OF MONTREAL REFERENCE	
RE LC# ISSUED BY
DEAR SIR/MADAM:
FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:
NAME OF TRANSFEREE
ADDRESS OF TRANSFEREE
OTHER TRANSFEREE INFORMATION
ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF CREDIT IN ITS ENTIRETY.
BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF CREDIT ARE TRANSFERRED TO THE TRANSFEREE, AND THE TRANSFEREE SHALL HAVE THE SOLE RIGHTS AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS NOW EXISTING OR HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECTLY TO THE TRNASFEREE WITHOUT NECESSITY OF ANY CONSENT OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

[On file with the Company]	  	Page 5 of 6	

			
	  	Bank of Montreal, Chicago	
 
THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, TOGETHER WITH ANY AND ALL AMENDMENTS, AND WE ASK YOU TO TRANSFER THE LETTER OF CREDIT AND FORWARD IT DIRECTLY TO THE TRANSFEREE WITH YOUR NOTICE OF TRANSFER.
SIGNATURE AUTHENTICATION
BENEFICIARY’S NAME AS PER L/C
SIGNATURE OF BENEFICIARY
BENEFICIARY’S BANK
BENEFICIARY’S BANK AUTHORIZED SIGNATURE

[On file with the Company]	  	Page 6 of 6	

EXHIBIT B
See attached.

LIMITED GUARANTY
LIMITED GUARANTY, dated as of March 23, 2012 (this “ Guaranty ”), made by SK Financial Services Corp., in favor of each of the Lenders from time to time party to the Credit Agreement referred to below (the “ Lenders ”) and Wells Fargo Bank, National Association, a national banking association, as administrative agent for the Lenders under the Credit Agreement (in such capacities, together with any successors and assigns, if any, the “ Agent ”).
W I T N E S S E T H :
WHEREAS, the Lenders and the Agent are parties to (i) that certain Credit Agreement, dated as of October 19, 2011 (as amended or modified from time to time, including pursuant to the First Amendment (as defined below)), the “ Credit Agreement ”), by and among the Lenders, the Agent, Kellwood Company, a Delaware corporation (“ Kellwood ”) and each of Kellwood’s Domestic Subsidiaries (as defined in the Credit Agreement) from time to time party thereto as Borrowers or Guarantors (such Domestic Subsidiaries, together with Kellwood, each a “ Loan Party ”, and collectively, the “ Loan Parties ”) and (ii) that certain Amendment No. 1 to Credit Agreement, dated as of the date hereof (the “ First Amendment ”), by and among the Lenders party thereto, the Agent and the Loan Parties;
WHEREAS, as a condition to executing the First Amendment, the Loan Parties are required to cause the Guarantor to execute and deliver to the Agent, for the benefit of the Agent and the Lenders, this Guaranty; and
WHEREAS, the Guarantor has determined that its execution, delivery and performance of this Guaranty benefit, and are within the purposes and in the business interests of, the Guarantor;
NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Lenders to maintain the Loans (as defined in the Credit Agreement) pursuant to the Credit Agreement and to enter into the First Amendment, the Guarantor hereby agrees with Agent as follows:

SECTION 1. Definitions .
(a) Reference is hereby made to the Credit Agreement for a statement of the terms thereof. All terms used in this Guaranty which are defined in the Credit Agreement and not otherwise defined herein shall have the same meanings herein as set forth therein.
(b) As used in this Guaranty, the following terms have the meanings set forth below:
(i) “ Sun Letter of Credit ” means that certain standby letter of credit no. [on file with the company] issued by Bank of Montreal to Agent on behalf of SK Financial Services Corp.
(ii) “ Termination Date ” means, subject to Section 3(c), the earliest date on which (x) all the Loans and the other Obligations (other than contingent indemnity obligations for which a claim has not been asserted) shall have been paid in full in cash and the Credit Agreement and the other Loan Documents shall have been terminated.
SECTION 2. Guaranty .
(a) Subject to Section 2(b) below, the Guarantor unconditionally and irrevocably (i) guarantees the payment of the Obligations by the Loan Parties, whether for principal, interest, fees, expense reimbursements (including, without limitation, all interest, fees and expense reimbursements that accrue after the commencement of any insolvency proceeding of any Loan Party, whether or not a claim for post filing interest, fees or expense reimbursements are allowed in such proceeding), commissions, indemnifications or any other Obligation (such obligations being the “ Guaranteed Obligations ”) and (ii) agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Agent and the Lenders in enforcing any rights under this Guaranty. Without limiting the generality of the foregoing, the Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations, and would be owed by the Loan Parties to the Agent and the Lenders under the Credit Agreement or any Loan Document but for the fact that they are unenforceable or not allowable due to the existence of an insolvency proceeding involving the Loan Parties. Notwithstanding the foregoing, in no event shall the obligations of the Guarantor under clause (i) of Section 2(a) exceed $20,000,000. For purposes of determining the amount guaranteed hereunder, repayments of the Guaranteed Obligations from any source other than the Guarantor or a draw on the Sun Letter of Credit shall be applied first to the Guaranteed Obligations in excess of $20,000,000 and to the extent applied to such excess shall not reduce or affect the Guaranteed Obligations guaranteed by the Guarantor hereunder.
(b) Notwithstanding anything contained herein to the contrary, Agent agrees that (i) it will not make any demand for payment on this Guaranty or the Sun Letter of Credit during the Availability Modification Period, (ii) to the extent it intends to seek payment in respect of the Guaranteed Obligations after the Availability Modification Period, it shall first make a demand under the Sun Letter of Credit as payment of such Guaranteed Obligations and thereafter may make a demand for payment under this Guaranty only if the Guaranteed Obligations have not otherwise been paid in full in cash with the proceeds of such Sun Letter of Credit, and (iii) the
 
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proceeds of a draw under the Sun Letter of Credit received by Agent that are applied to the Guaranteed Obligations shall reduce, dollar for dollar, Guarantor’s liability under Section 2(a)(i) of this Guaranty. Guarantor acknowledges and agrees that (i) nothing herein shall be construed to limit the Agent’s right to draw on the Sun Letter of Credit pursuant to the terms thereof or require the Agent to make any demand hereunder prior to making any such draw, and (ii) no lack of validity or enforceability hereof, termination hereof or any other defense the Guarantor may have against collection hereunder shall have any effect on the Agent’s rights pursuant to the Sun Letter of Credit.
SECTION 3. Guaranty Absolute: Continuing Guaranty .
(a) The Guarantor hereby guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Credit Agreement and the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Agent or any Lender with respect thereto. The Guarantor agrees that this Guaranty constitutes a guaranty of payment when due and not of collection and waives any right to require that any resort be made by Agent or any Lender to any Collateral. The obligations of the Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce such obligations, irrespective of whether any action is brought against any Loan Party or whether any Loan Party is joined in any such action or actions. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and the Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:
(i) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, or any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from the Credit Agreement, or any other Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or otherwise;
(iii) any taking, exchange, release or non-perfection of any Collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;
(iv) the existence of any claim (other than payment of in full of the Guaranteed Obligations), set-off, defense or other right that the Guarantor may have at any time against any Person, including, without limitation, the Agent or any Lender;
(v) any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Loan Party; or
(vi) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Agent or any Lender that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety.
 
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(b) This Guaranty is a continuing guaranty and shall remain in full force and effect until the Termination Date, provided that the obligations of each the Guarantor set forth in Section 5 shall continue to survive the termination of this Guaranty.
(c) Notwithstanding anything to contrary set forth herein (including without limitation, Section 3(b) above), this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment by any the Guarantor under this Guaranty is rescinded or must otherwise be returned by the Agent, any Lender or any other Person to the Guarantor or a Loan Party, all as though such payment had not been made.
SECTION 4. Waivers . The Guarantor hereby waives (i) promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty, (ii) any requirement that the Agent or any Lender exhaust any right or take any action against any Loan Party or any other Person or any Collateral, (iii) other than as set forth in Section 2(b), any right to compel or direct the Agent or any Lender to seek payment or recovery of any amounts owed under this Guaranty from any one particular fund or source or to exhaust any right or take any action against any other Loan Party or any other Person or any Collateral, (iv) any requirement that the Agent or any Lender protect, secure, perfect or insure any security interest or Lien or any property subject thereto, or exhaust any right or take any action against any Loan Party or any other Person or any Collateral, and (v) any other defense available to the Guarantor. The Guarantor agrees that neither Agent nor any Lender shall have any obligation to marshal any assets in favor of the Guarantor or against, or in payment of, any or all of the Obligations. The Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and in the Loan Documents and that the waiver set forth in this Section 4 is knowingly made in contemplation of such benefits. The Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.
SECTION 5. Subrogation . The Guarantor will not exercise any rights that it may now or hereafter acquire against any Loan Party or any other guarantor that arise from the existence, payment, performance or enforcement of the Guarantor’s obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Agent and any Lender against any Loan Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until (a) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full (other than unasserted contingent indemnification obligations), and (b) the Termination Date shall have occurred. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the date on which all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full (other
 
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than unasserted contingent indemnification obligations) and the Termination Date shall have occurred, such amount shall be held in trust for the benefit of the Agent and the Lenders and shall forthwith be paid to the Agent and the applicable Lenders, to be credited and applied to the applicable Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of this Guaranty and the Loan Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) the Guarantor shall make payment to the Agent or any Lender, of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall be paid in full (other than unasserted contingent indemnification obligations) and (iii) the Termination Date shall have occurred, the Agent and the Lenders will, at the Guarantor’s request and expense, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Guaranteed Obligations resulting from the payment by the Guarantor.
SECTION 6. Representations, Warranties and Covenants . The Guarantor hereby represents and warrants to the Agent and the Lenders as follows:
(a) The Guarantor (i) is a corporation, duly organized, validly existing and in good standing under the laws of the state, province or other applicable jurisdiction of its organization as set forth on the first page hereof, (ii) has all requisite corporate power and authority to conduct its business as now conducted and as presently contemplated and to execute and deliver this Guaranty and to consummate the transactions contemplated hereby and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except to the extent failure to be so qualified would not reasonably be expected to result in an Material Adverse Effect.
(b) The execution, delivery and performance by the Guarantor of this Guaranty (i) has been duly authorized by all necessary corporate action on the part of the Guarantor, (ii) does not and will not contravene its certificate of incorporation or bylaws, or any applicable law or any material contractual restriction binding on or otherwise affecting the Guarantor or any of its properties, (iii) does not and will not result in or require the creation of any Lien upon or with respect to any of its properties, and (iv) does not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties, which in the case of clause (iv) could not reasonably be expected to have a material adverse effect upon the Guarantor.
(c) No authorization or approval or other action by, and no notice to or filing with, any Governmental Body is required in connection with the due execution, delivery and performance by the Guarantor of this Guaranty except, those which have been obtained on or prior to the date hereof.
(d) This Guaranty is a legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally or general equitable principles relating to enforceability.
 
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(e) (i) There is no pending or, to the knowledge of the Guarantor, threatened action, suit or proceeding affecting the Guarantor or its properties before any court or other Governmental Body or any arbitrator that (A) if adversely determined, could reasonably be expected to have a material adverse effect upon the Guarantor or (B) relates to this Guaranty or any transaction contemplated hereby and (ii) as of the date hereof, the Guarantor does not hold any commercial tort claims in respect of which a claim has been filed in a court of law or a written notice by an attorney has been given to a potential defendant.
(f) The Guarantor (i) has read and understands the terms and conditions of the Credit Agreement and the other Loan Documents, and (ii) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Loan Parties, and has no need of, or right to obtain from the Agent or any Lender, any credit or other information concerning the affairs, financial condition or business of the Loan Parties that may come under the control of the Agent or any Lender.
SECTION 7. Notices, Etc. All notices and other communications provided for hereunder shall be given in accordance with the notice provisions of the Credit Agreement.
SECTION 8. CONSENT TO JURISDICTION: SERVICE OF PROCESS AND VENUE . ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY, SHALL BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES OF AMERICA LOCATED IN COOK COUNTY, ILLINOIS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GUARANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES, AND DOCUMENTS IN ANY SUIT, ACTION, OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY BY THE MAILING (BY REGISTERED MAIL OR CERTIFIED MAIL, POSTAGE PREPAID) OR DELIVERING OF A COPY OF SUCH PROCESS TO, IN THE CASE OF THE GUARANTOR, AT 5200 TOWN CENTER CIRCLE, #600, BOCA RATON, FLORIDA 33489 AND, IN THE CASE OF THE AGENT, AT THE ADDRESS FOR NOTICES AS SET FORTH IN THE CREDIT AGREEMENT. THE GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY
 
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ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
SECTION 9. WAIVER OF JURY TRIAL, ETC. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. THE GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT.
SECTION 10. Miscellaneous .
(a) The Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to the Agent, for the benefit of the Agent and the Lenders, at such address specified by the Agent from time to time by notice to the Guarantor.
(b) No amendment or waiver of any provision of this Guaranty and no consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by the Guarantor and the Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
(c) No failure on the part of the Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder or under the Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, The rights and remedies of the Agent and the Lenders provided herein and in the Credit Agreement and the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Agent and the Lenders under the Credit Agreement and the other Loan Documents against any party thereto are not conditional or contingent on any attempt by the Agent or any Lender to exercise any of their rights under the Credit Agreement or such other Loan Document against such party or against any other Person.
 
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(d) Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
(e) This Guaranty shall (i) be binding on the Guarantor and its successors and assigns, and (ii) inure, together with all rights and remedies of the Agent and the Lenders hereunder, to the benefit of (and be enforceable by) the Agent and the Lenders and their respective successors, pledgees, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, to the extent permitted by the Credit Agreement, any Lender may pledge, assign or otherwise transfer all or any part of its rights and obligations under the Credit Agreement or the other Loan Documents to any other Person, and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Lenders herein or otherwise. The Guarantor agrees that each participant shall be entitled to the benefits of this Section 10 with respect to its participation in any portion of the Loans as if it was a Lender. None of the rights or obligations of the Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of the Agents.
(f) This Guaranty and the other Loan Documents reflect the entire understanding of the parties with respect to the transactions contemplated hereby and thereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
(g) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
(h) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT OT FEDERAL LAWS RELATING TO NATIONAL BANKS).
(i) Delivery of an executed signature page of this Guaranty by telecopy shall be effective as delivery of a manually executed counterpart of this Guaranty; provided , that the Guarantor also shall promptly deliver an original executed counterpart of this Guaranty but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Guaranty.
[Remainder of page intentionally left blank]
 
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed by an officer thereunto duly authorized, as of the date first above written.

SK FINANCIAL SERVICES CORP.	
		
By:	 	/s/ Michael J. McConvery	
	 	 	
Name:	 	Michael J. McConvery	
Title:	 	Vice President	
Signature Page to Limited Guaranty

Exhibit 10.32
EXECUTION COPY

KELLWOOD COMPANY
and
each of its Domestic Subsidiaries party hereto,
as Borrowers

TERM LOAN AGREEMENT
Dated as of October 19, 2011
Term A Loan: $47,900,000.00
Term B Loan: $7,100,000.00

CERTAIN FINANCIAL INSTITUTIONS,
as Lenders
and
CERBERUS BUSINESS FINANCE, LLC,
as Collateral Agent

TABLE OF CONTENTS

 	  	 	  	Page	 	
			
Section 1.	  	DEFINITIONS; RULES OF CONSTRUCTION	  	 	1	  	
				
	 	1.1	  	Definitions	  	 	1	  	
	 	1.2	  	Accounting Terms	  	 	27	  	
	 	1.3	  	Certain Matters of Construction	  	 	28	  	
			
Section 2.	  	CREDIT FACILITIES	  	 	28	  	
				
	 	2.1	  	Term Loans	  	 	28	  	
			
Section 3.	  	INTEREST, FEES AND CHARGES	  	 	31	  	
				
	 	3.1	  	Rates and Payment of Interest	  	 	31	  	
	 	3.2	  	Fees	  	 	31	  	
	 	3.3	  	Computation of Interest and Yield Protection	  	 	32	  	
	 	3.4	  	Reimbursement Obligations	  	 	32	  	
	 	3.5	  	Capital Adequacy	  	 	32	  	
	 	3.6	  	Mitigation	  	 	32	  	
	 	3.7	  	Maximum Interest	  	 	33	  	
	 	3.8	  	LIBOR Option	  	 	33	  	
	 	3.9	  	Funding Losses	  	 	34	  	
	 	3.10	  	Changes in Law; Impracticability or Illegality	  	 	34	  	
	 	3.11	  	No Requirements to Match Fund	  	 	35	  	
			
Section 4.	  	LOAN ADMINISTRATION	  	 	35	  	
				
	 	4.1	  	Borrower Representative	  	 	35	  	
	 	4.2	  	One Obligation	  	 	35	  	
	 	4.3	  	Effect of Termination	  	 	36	  	
			
Section 5.	  	PAYMENTS	  	 	36	  	
				
	 	5.1	  	General Payment Provisions	  	 	36	  	
	 	5.2	  	Payment of Other Obligations	  	 	36	  	
	 	5.3	  	Marshaling; Payments Set Aside	  	 	36	  	
	 	5.4	  	Post-Default Allocation of Payments	  	 	37	  	
	 	5.5	  	Loan Account; Account Stated	  	 	37	  	
	 	5.6	  	Taxes	  	 	38	  	
	 	5.7	  	[Intentionally Omitted]	  	 	41	  	
	 	5.8	  	Nature and Extent of Each Borrower’s Liability	  	 	41	  	
			
Section 6.	  	CONDITIONS PRECEDENT	  	 	43	  	
				
	 	6.1	  	Conditions Precedent to Initial Loans	  	 	43	  	
 
i

									
Section 7.	  	[Intentionally Omitted]	  	 	45	  	
			
Section 8.	  	REPRESENTATIONS AND WARRANTIES	  	 	45	  	
				
	 	8.1	  	General Representations and Warranties	  	 	45	  	
	 	8.2	  	Complete Disclosure	  	 	52	  	
			
Section 9.	  	COVENANTS AND CONTINUING AGREEMENTS	  	 	52	  	
				
	 	9.1	  	Affirmative Covenants	  	 	52	  	
	 	9.2	  	Negative Covenants	  	 	58	  	
			
Section 10.	  	EVENTS OF DEFAULT; REMEDIES ON DEFAULT	  	 	66	  	
				
	 	10.1	  	Events of Default	  	 	66	  	
	 	10.2	  	Remedies upon Default	  	 	68	  	
	 	10.3	  	License	  	 	68	  	
	 	10.4	  	Setoff	  	 	69	  	
	 	10.5	  	Remedies Cumulative; No Waiver	  	 	69	  	
			
Section 11.	  	COLLATERAL AGENT	  	 	70	  	
				
	 	11.1	  	Appointment, Authority and Duties of Collateral Agent	  	 	70	  	
	 	11.2	  	Agreements Regarding Collateral and Field Examination Reports	  	 	71	  	
	 	11.3	  	Reliance By Collateral Agent	  	 	72	  	
	 	11.4	  	Action Upon Default	  	 	72	  	
	 	11.5	  	Ratable Sharing	  	 	73	  	
	 	11.6	  	Indemnification of Agent Indemnitees	  	 	73	  	
	 	11.7	  	Limitation on Responsibilities of Collateral Agent	  	 	74	  	
	 	11.8	  	Successor Agent and Co-Agents	  	 	74	  	
	 	11.9	  	Due Diligence and Non-Reliance	  	 	75	  	
	 	11.10	  	No Third Party Beneficiaries	  	 	75	  	
	 	11.11	  	Collateral Agent in its Individual Capacity	  	 	75	  	
			
Section 12.	  	BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS	  	 	76	  	
				
	 	12.1	  	Benefit of Agreement	  	 	76	  	
	 	12.2	  	Participations	  	 	76	  	
	 	12.3	  	Assignments	  	 	77	  	
	 	12.4	  	Tax Treatment	  	 	79	  	
			
Section 13.	  	MISCELLANEOUS	  	 	79	  	
				
	 	13.1	  	Consents, Amendments and Waivers	  	 	79	  	
	 	13.2	  	Indemnity	  	 	80	  	
	 	13.3	  	Notices and Communications	  	 	80	  	
	 	13.4	  	Performance of Borrowers’ Obligations	  	 	81	  	
	 	13.5	  	Credit Inquiries	  	 	82	  	
	 	13.6	  	Severability	  	 	82	  	
 
ii

									
	 	13.7	  	Cumulative Effect; Conflict of Terms	  	 	82	  	
	 	13.8	  	Counterparts; Facsimile Signatures	  	 	82	  	
	 	13.9	  	Entire Agreement	  	 	82	  	
	 	13.10	  	Obligations of Lenders	  	 	82	  	
	 	13.11	  	Confidentiality	  	 	83	  	
	 	13.12	  	GOVERNING LAW	  	 	83	  	
	 	13.13	  	Consent to Forum	  	 	83	  	
	 	13.14	  	Waivers by Obligors	  	 	83	  	
	 	13.15	  	Patriot Act Notice	  	 	84	  	
	 	13.16	  	Subordination	  	 	84	  	
	 	13.17	  	Advertisement	  	 	85	  	
	 	13.18    	  	Intercreditor Agreement	  	 	85	  	
 
iii

LIST OF EXHIBITS AND SCHEDULES

Exhibit A	  	Form of Term A/B Note	
Exhibit B	  	Assignment and Acceptance	
Exhibit C	  	LIBOR Notice	
Exhibit D	  	Compliance Certificate	
Exhibit E	  	Joinder Agreement	

Schedule 1.1A	 	Lender Term A Loan Amounts	
Schedule 1.1B	 	Lender Term B Loan Amounts	
Schedule 8.1.1	 	Business Locations	
Schedule 8.1.4	 	Names and Capital Structure	
Schedule 8.1.5	 	Corporate Names; Locations	
Schedule 8.1.8	 	Surety Obligations	
Schedule 8.1.11	 	Patents, Trademarks, Copyrights and Licenses	
Schedule 8.1.14	 	Environmental Matters	
Schedule 8.1.15	 	Restrictive Agreements	
Schedule 8.1.16	 	Litigation	
Schedule 8.1.18	 	Pension Plans	
Schedule 8.1.20	 	Labor Contracts	
Schedule 8.1.27	 	Insurance	
Schedule 8.1.29	 	Material Contracts	
Schedule 9.2.1	 	Existing Indebtedness	
Schedule 9.2.2	 	Existing Liens	
Schedule 9.2.5	 	Investments	
Schedule 9.2.17	 	Existing Affiliate Transactions	
 
iv

TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (this “ Agreement ”) is dated as of October 19, 2011 among KELLWOOD COMPANY , a Delaware corporation (“ Borrower Representative ” or “ Parent ”) and its Domestic Subsidiaries from time to time a party hereto (each a “ Borrower ” and collectively with Borrower Representative, “ Borrowers ”), other Obligors (as defined below) party hereto, the lenders from time to time party hereto (each a “ Lender ” and collectively, the “ Lenders ”) and Cerberus Business Finance, LLC, solely in its capacity as collateral agent for each Lender (the “ Collateral Agent ”).
RECITALS :
WHEREAS, the Borrowers have asked the Lenders to extend credit to the Borrowers consisting of (a) a Term A Loan (as hereinafter defined) in the aggregate principal amount of $47,900,000 and (b) a Term B Loan (as hereinafter defined) in the aggregate principal amount of $7,100,000. The proceeds of the Loans (as hereinafter defined) shall be used (i) with respect to the Term A Loan, to finance the payments of certain earnouts relating to past acquisitions and/or the funding of Permitted Acquisitions, and (ii) with respect to the Term B Loan, for working capital and liquidity purposes and/or to finance the payments of certain earnouts relating to past acquisitions and/or the funding of Permitted Acquisitions. The Lenders are severally, and not jointly, willing to extend such credit to the Borrowers subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE , for valuable consideration hereby acknowledged, the parties agree as follows:
 
Section 1.	DEFINITIONS; RULES OF CONSTRUCTION	
1.1 Definitions . As used herein, the following terms have the meanings set forth below:
2009 Debentures - the 2009 notes issued pursuant to the 2009 Indenture.
2009 Debenture Intercreditor Agreement - that certain Amended and Restated Intercreditor Agreement dated as of October 19, 2011, by and between Wells Fargo Bank, National Association (or such other Person reasonably acceptable to Collateral Agent), as collateral agent under the 2009 Indenture, the Collateral Agent, the Revolving Credit Agent, and the Sun Collateral Agent.
2009 Indenture - that certain indenture, dated as of July 23, 2009, by and between Parent and Wells Fargo Bank, National Association (or such other Person reasonably acceptable to Collateral Agent), as trustee and collateral agent, pursuant to which Parent issued $120,590,000 in aggregate principal amount of 12.875% Second-Priority Senior Secured PIK Notes due December 31, 2014.
2009 Indenture Guaranty - that certain Guaranty Agreement (and including any guaranty agreement executed pursuant to the terms thereof and any replacement guaranty) dated as of July 23, 2009, by and among the Guarantors and Wells Fargo Bank, National Association (or such other Person reasonably acceptable to Collateral Agent), as trustee, for the holders of the 2009 Debentures, as amended or supplemented from time to time.
 
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Account - as defined in the UCC, including all rights to payment for goods sold or leased, or for services rendered.
Account Debtor - a Person who is obligated under an Account, Chattel Paper or General Intangible.
Acquisition - the acquisition of (a) a controlling Equity Interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such Equity Interest or upon exercise of an option or warrant for, or conversion of securities into, such Equity Interest, or (b) assets of another Person which constitute all or substantially all of the assets of such Person or of a line or lines of business conducted by such Person.
Additional Amount - as defined in Section 5.6(a) .
Affiliate - with respect to any Person, another Person (a) who directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such first Person; (b) who beneficially owns 10% or more of the voting securities or any class of Equity Interests of such first Person; (c) at least 10% of whose voting securities or any class of Equity Interests is beneficially owned, directly or indirectly, by such first Person; or (d) who is an executive or financial officer, director, partner or managing member of such first Person. “ Control ” means the possession, directly or indirectly, of the power to direct or cause direction of the management and policies of a Person, whether through ownership of Equity Interests, by contract or otherwise.
Agent Indemnitees - Collateral Agent and its officers, directors, employees, Affiliates, agents and attorneys.
Agent Professionals - attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals and experts retained by Collateral Agent.
Agreement - as defined in the preamble hereto.
Allocable Amount - as defined in Section 5.8.3 .
Anti-Terrorism Laws - any laws relating to terrorism or money laundering, including the Patriot Act.
Applicable Law - all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law, common law and equitable principles, and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.
 
-2-

Applicable Margin - any date of determination, with respect to the interest rate of any Loan or any portion thereof:
(a) From the Effective Date until March 31, 2012 (the “ Initial Applicable Margin Period ”), the relevant Applicable Margin shall be set at (i) 10.25% for a LIBOR Rate Loan, and (ii) 7.75% for a Reference Rate Loan.
(b) After the Initial Applicable Margin Period, the relevant Applicable Margin for a LIBOR Rate Loan or a Reference Rate Loan shall be set at the respective level indicated below based upon the Leverage Ratio of the Parent and its Subsidiaries set forth opposite thereto, which financial tests shall be calculated for the four consecutive fiscal quarter period ending on the last day of the most recently ended fiscal quarter of the Parent and its Subsidiaries for which quarterly financial statements and a certificate of the Chief Financial Officer, Vice President, Finance or Controller of the Borrower Representative are received by the Collateral Agent and the Lenders in accordance with Section 9.1.2(b) , provided, however, that if at the time of such calculation Consolidated EBITDA of the Parent and its Subsidiaries for the corresponding four consecutive fiscal quarter period is equal to or greater than $50,000,000, then the relevant Applicable Margin for any Loan indicated below shall be reduced by 0.75%:

Level	 	Leverage Ratio	 	Applicable Margin	 	
	 		 	LIBOR Rate
Loan	 	 	Reference Rate
Loan	 	
I	 	Leverage Ratio greater than or equal to 2.125 to 1.0	 	 	10.25	% 	 	 	7.75	% 	
II	 	Leverage Ratio less than 2.125 to 1.0 but greater than 1.75 to 1.0	 	 	10.00	% 	 	 	7.50	% 	
III	 	Leverage Ratio less than or equal to 1.75 to 1.0	 	 	9.75	% 	 	 	7.25	% 	
(c) Subject to clause (d) below, the adjustment of the Applicable Margin (if any) will occur on the date the Collateral Agent receives the quarterly financial statements and a certificate of the Chief Financial Officer, Vice President, Finance or Controller of the Borrower Representative in accordance with Section 9.1.2(b) .
(d) Notwithstanding the foregoing:
(i) if for any period, the Collateral Agent does not receive the financial statements and certificates described in clause (c) above, then for the period commencing on the date such financial statements and certificate were required to be delivered through the date on which such financial statements and certificate are actually received by the Collateral Agent and the Lenders, the Applicable Margin shall be set at Level I in the table above; and
 
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(ii) in the event that the audited annual financial statements of the Parent and its Subsidiaries required to be delivered pursuant to Section 9.1.2(a) for any Fiscal Year shall indicate that the actual Leverage Ratio and/or Consolidated EBITDA of the Parent and its Subsidiaries for any fiscal quarter or four consecutive fiscal quarter period, as applicable, in such Fiscal Year was higher or lower than as previously certified by the Parent in the Compliance Certificate for such fiscal quarter or period, then the Applicable Margin for such fiscal quarter shall be adjusted retroactively (to the effective date of the determination of the Applicable Margin that was based upon the delivery of such Compliance Certificate) to reflect the correct Applicable Margin, and the Borrowers shall promptly make payments to or receive a future credit or payment from the Collateral Agent and Lenders, as the case may be, to reflect such adjustment.
Applicable Prepayment Premium - as of any date of determination, an amount equal to (a) during the period of time from and after the Closing Date up to and including the date that is the first anniversary of the Closing Date, an amount equal to 2.50% times the principal amount of any prepayment of the Loans on such date, and (b) thereafter, zero.
Asset Disposition - a sale, lease, license, consignment, transfer or other disposition of Property of an Obligor, including a disposition of Property in connection with a sale-leaseback transaction or synthetic lease.
Asset Loss Event - the loss, destruction or damage to or condemnation, requisition, seizure or taking of, any assets of any Obligor or any of its Subsidiaries (other than any Foreign Subsidiaries).
Assignment and Acceptance - an assignment agreement in the form of Exhibit B .
Availability - as defined in the Revolver Agreement as in effect on the date hereof.
Bankruptcy Code - Title 11 of the United States Code.
Blocked Person - as defined in Section 8.1.33 .
Board of Governors - the Board of Governors of the Federal Reserve System.
Borrower Representative - as defined in the preamble to this Agreement.
Borrowers - Borrower and its Domestic Subsidiaries (other than Immaterial Subsidiaries and U.S. Foreign Holdcos) from time to time parties hereto.
Borrowing Base - as defined in the Revolver Agreement as in effect on the date hereof.
Business Day - (a) any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required to close, and (b) with respect to the borrowing, payment or continuation of, or determination of interest rate on, LIBOR Rate Loans, any day that is a Business Day described in clause (a) above and on which dealings in Dollars may be carried on in the interbank eurodollar markets in New York City and London.
 
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Capital Adequacy Regulation - any law, rule, regulation, guideline, request or directive of any central bank or other Governmental Authority, whether or not having the force of law, regarding capital adequacy of a bank or any Person controlling a bank.
Capital Expenditures - all liabilities incurred, expenditures made or payments due (whether or not made) for the acquisition of any fixed assets, or any improvements, replacements, substitutions or additions thereto with a useful life of more than one year, including the principal portion of Capital Leases.
Capital Lease - any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP (but without giving effect to FASB ASC 840).
Capital Lease Obligations - with respect to any Person, obligations of such Person and its Subsidiaries under Capital Leases, and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP (but without giving effect to FASB ASC 840).
Cash Collateral - cash, and any interest or other income earned thereon, that is delivered to Collateral Agent to Cash Collateralize any Obligations.
Cash Collateralize - the delivery of cash to Collateral Agent, as security for the payment of Obligations, in an amount equal to with respect to any inchoate or contingent Obligations, Collateral Agent’s good faith estimate of the amount due or to become due, including all fees and other amounts relating to such Obligations.
Cash Equivalents - (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the United States government, maturing within 12 months of the date of acquisition; (b) certificates of deposit, time deposits and bankers’ acceptances maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case which are issued by a commercial bank organized under the laws of the United States or any state or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by a Lender) not subject to offset rights; (c) repurchase obligations with a term of not more than 30 days for underlying investments of the types described in clauses (a) and (b) entered into with any bank meeting the qualifications specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing within nine months of the date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Moody’s or S&P.
Cerberus - Cerberus Business Finance, LLC, and its successors and assigns.
Cerberus Indemnitees - Cerberus and its officers, directors, employees, Affiliates, agents and attorneys.
CERCLA - the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq .).
 
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Change of Control - the occurrence of any of the following events: (a) Sponsor ceases to own and control, beneficially and of record, directly or indirectly, more than 50.1% of the voting and economic Equity Interests in Parent on a fully diluted basis, or (b) any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than Sponsor shall have acquired beneficial ownership on a fully diluted basis of the voting Equity Interests of Parent sufficient to (whether or not exercised) elect a majority of the members of the board of directors (or similar governing body) of Parent.
Chattel Paper - as defined in the UCC.
Claims - all liabilities, obligations, losses, damages, penalties, judgments, proceedings, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations, resignation or replacement of Collateral Agent, or replacement of any Lender) incurred by or asserted against any Indemnitee in any way relating to (a) any Loans, Loan Documents, or the use thereof or transactions relating thereto, (b) any action taken or omitted to be taken by any Indemnitee in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.
Closing Date - as defined in Section 6.1 .
Code - the Internal Revenue Code of 1986, as amended.
Collateral - all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or purported to be granted by such Person as security for all or any part of the Obligations pursuant to the Security Agreement or other Loan Documents.
Collateral Agent - Cerberus in it capacity as collateral agent for the Lenders.
Collateral Agent Advances - as defined in Section 11.1.5 .
Compliance Certificate - a certificate, substantially in the form of Exhibit D hereto, and in substance reasonably satisfactory to Collateral Agent.
Consolidated EBITDA - for any period, for Parent and its Subsidiaries on a consolidated basis and without duplication, an amount equal to the sum (provided, that any gains referred to in clauses (e) or (m) below shall be deducted from such sum) of (without duplication) (a) Consolidated Net Income, (b) Consolidated Net Interest Expense deducted in determining such Consolidated Net Income, (c) the amount of taxes, based on or measured by income, used or included in determining such Consolidated Net Income, (d) the amount of depreciation and amortization expense deducted in determining such Consolidated Net Income, (e) to the extent added or deducted in the calculation of Consolidated Net Income, all gains or losses in connection with restructuring the Calvin Klein license owned by Parent and its Subsidiaries in an aggregate amount not to exceed $3,000,000 in the aggregate (for all periods), (f) to the extent
 
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deducted in the calculation of Consolidated Net Income, all costs in connection with the closure of certain business segments (including certain retail stores) relating to the Borrowers’ Koret and Sag Harbor names (including, but not limited to, severance, lease buy-outs, termination costs and losses on inventory), as well as other severance costs, contract termination costs, and costs associated with the shutdown of Borrowers’ Trenton, Tennessee distribution facility, in an aggregate amount not to exceed $1,500,000 during the term of this Agreement; provided , that the aggregate amount added back under this clause (f) for the Fiscal Year ending January 28, 2012 shall not exceed $1,000,000, (g) to the extent deducted in the calculation of Consolidated Net Income, any costs and expenses relating to environmental claims in respect of Borrowers’ New Haven property in an amount not to exceed $2,000,000 in the aggregate (for all periods), (h) nonrecurring restructuring charges incurred in Fiscal Years 2011 and 2012, in an aggregate amount for both years not to exceed $3,500,000, in each case, to the extent not already covered by any of the clauses (a)-(g) above, (i) losses or expenses reflected in Consolidated Net Income as a result of (A) amounts paid to Sponsor in respect of management fees to the extent (1) permitted under Section 9.2.17 (but not to exceed $3,000,000 in any Fiscal Year) and (2) not included in Consolidated EBTIDA for a prior period as accrued but unpaid management fees and expenses pursuant to clause (C) below, (B) amounts paid to Sponsor in respect of expense reimbursements to the extent permitted under Section 9.2.17, and (C) accrued but unpaid management fees and expenses payable to Sponsor permitted under Section 9.2.17, (j) costs and expenses incurred in connection with Permitted Acquisitions, (k) costs and expenses incurred in connection with Acquisitions which are ultimately not consummated so long as such costs and expenses do not exceed $1,000,0000 during any trailing twelve month period included in the calculation of Consolidated EBITDA, (1) losses associated with the start up of the “Lamb & Flag”, “Chord” and “BLK DNM” brands not to exceed $2,750,000 in any trailing twelve month period included in the calculation of Consolidated EBITDA, and (m) all gains or losses resulting from any adjustments of future purchase price or earnout obligations recorded on the balance sheet (to the extent required by GAAP) in connection with the Rebecca Taylor and Zobha acquisitions or any Permitted Acquisition, in an amount not to exceed $1,000,000 in the aggregate during the term of this Agreement. For each period of 12 consecutive Fiscal Months ending next following the date of any Acquisition (whether consummated before or after the Closing Date), Consolidated EBITDA shall include the results of operations of the Person or assets so acquired on a historical pro forma basis, and which amounts may include such adjustments as are permitted under Regulation S-X of the Securities and Exchange Commission and reasonably satisfactory to Collateral Agent.
Consolidated Net Income - for any period of computation thereof, the gross revenues from operations of Parent and its Subsidiaries (including payments received by Parent and its Subsidiaries of (a) interest income, and (b) Distributions made in the Ordinary Course of Businesses by Persons in which investment is permitted pursuant to this Agreement and not related to an extraordinary event), less all operating and non-operating expenses of Parent and its Subsidiaries including taxes on income, all determined on a consolidated basis in accordance with GAAP; but excluding (without duplication): (i) net gains or losses on the sale, conversion or other disposition of capital assets, (ii) net gains or losses on the acquisition, retirement, sale or other disposition of capital stock and other securities of Parent or any Subsidiary, (iii) net gains or losses on the collection of proceeds of life insurance policies, (iv) any write-up or write-down of any asset (provided, that write-downs of Accounts and/or Inventory shall not be so excluded), (v) any net gains resulting from repurchases of Debt, and (vi) any other net gain or loss of an extraordinary nature as determined in accordance with GAAP.
 
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Consolidated Net Interest Expense - for any period, for Parent and its Subsidiaries on a consolidated basis, the sum of (a) all interest and similar expenses that are treated as interest in accordance with GAAP, and (b) the portion of rent expense with respect to such period under Capital Lease Obligations that is treated as interest in accordance with GAAP. For each period of 12 consecutive Fiscal Months ending next following the date of each Acquisition (whether consummated before or after the Closing Date), Consolidated Net Interest Expense as a component of Consolidated EBITDA shall be adjusted on a historical pro forma basis to (i) eliminate interest expense accrued during such period on any Debt repaid in connection with such Acquisition and (ii) include interest expense on any Debt (including Obligations) incurred, acquired or assumed in connection with such Acquisition (“ Incremental Debt ”) calculated (A) as if all such Incremental Debt had been incurred as of the first day of such 12 consecutive Fiscal Month period and (B) at the following interest rates: (I) for all periods subsequent to the date of the Acquisition and for Incremental Debt assumed or acquired in the Acquisition and in effect prior to the date of Acquisition, at the actual rates of interest applicable thereto, and (II) for all periods prior to the actual incurrence of such Incremental Debt, equal to the rate of interest actually applicable to such Incremental Debt hereunder or under other financing documents applicable thereto as at the end of each affected period of such 12 consecutive Fiscal Months, as the case may be.
Contingent Obligation - any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation (“ primary obligations ”) of another obligor (“ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.
Convertible Debentures - those certain $200,000,000 3.50% Convertible Senior Debentures maturing June 15, 2034, issued pursuant to that certain Indenture dated as of June 22, 2004 by and between the Parent and Union Bank of California, N.A. or any of its successors, as trustee (as amended or supplemented from time to time, the “ Convertible Debenture Agreement ”).
Copyright Security Agreement - each copyright security agreement pursuant to which an Obligor grants to Collateral Agent, a Lien on such Obligor’s interest in copyrights as security for the Obligations.
CWA - the Clean Water Act (33 U.S.C. §§ 1251 et seq .).
 
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Debt - as applied to any Person, without duplication, (a) all indebtedness for borrowed money, (b) all obligations evidenced by notes, bonds, debentures, credit documents or similar instruments, (c) all Capital Leases, (d) all obligations to pay the deferred purchase price of property or services, other than trade payables incurred and being paid in the Ordinary Course of Business, (e) all payments that would be required to be made in respect of any Hedging Agreement in the event of a termination (including an early termination) on the date of determination, (f) all Contingent Obligations; (g) all reimbursement obligations in connection with (i) letters of credit, bank guarantees or bankers’ acceptances issued for the account of such Person or (ii) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation) other than those entered into in the Ordinary Course of Business, (h) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse and (i) in the case of Borrowers, the Obligations. The Debt of a Person shall include any recourse Debt of any partnership in which such Person is a general partner or joint venturer. Notwithstanding anything herein to the contrary, the term “Debt” shall not include any operating leases that, as a result of changes in GAAP, would classify such operating leases as Capitalized Lease Obligations, required to be reflected on a consolidated balance sheet of Borrowers in accordance with GAAP.
Default - an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.
Default Rate - as defined in Section 3.1(b) .
Distribution - any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment-in-kind); or any purchase, redemption, or other acquisition or retirement for value of any Equity Interest; or any payment of management or advisory fees (or other fees of a similar nature) or out-of-pocket expenses in connection therewith by any Borrower to any holder of any Equity Interest of Parent or any Affiliate of such holder.
Document - as defined in the UCC.
Dollars - lawful money of the United States.
Domestic Subsidiary - a Subsidiary (other than an Immaterial Subsidiary) which is created or organized under the laws of the United States of America, any of its states or the District of Columbia.
Enforcement Action - any action to enforce any Obligations or Loan Documents or to realize upon any Collateral (whether by judicial action, self-help, notification of Account Debtors, exercise of setoff or recoupment, or otherwise).
Environmental Laws - all Applicable Laws (including all programs, permits and guidance promulgated by regulatory agencies), relating to public health (but excluding occupational safety and health, to the extent regulated by OSHA) or the protection or pollution of the environment, including CERCLA, RCRA and CWA.
 
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Environmental Notice - a notice from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.
Environmental Release - a release as defined in CERCLA or under any other Environmental Law.
Equipment - as defined in the UCC, including all machinery, apparatus, equipment, fittings, furniture, fixtures, motor vehicles and other tangible personal Property (other than Inventory), and all parts, accessories and special tools therefor, and accessions thereto.
Equity Interest - the interest of any (a) shareholder in a corporation, (b) partner in a partnership (whether general, limited, limited liability or joint venture), (c) member in a limited liability company, or (d) other Person having any other form of equity security or ownership interest.
ERISA - the Employee Retirement Income Security Act of 1974.
Event of Default - as defined in Section 10 .
Exchange Act - the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.
Exchange Offer - that certain offer by Borrower Representative, completed as of July 23, 2009, pursuant to which Borrower Representative exchanged $117,832,000 in aggregate principal amount of its 7.875% debentures maturing July 15, 2009 and $13,790,000 in aggregate principal amount of its 7.625% debentures maturing October 15, 2017 for $120,590,000 in aggregate principal amount of its 2009 Debentures.
Excluded Issuance - (a) sales or issuances of Equity Interests of Ultimate Parent to Sponsor or any other Person holding the Equity Interests of Ultimate Parent as of the Closing Date, (b) sales or issuances of Equity Interests of Borrower Representative or Ultimate Parent pursuant to any employee stock option or other equity-based compensation plan approved by the governing body of Borrower Representative or Ultimate Parent, respectively, and (c) any capital contribution by, or equity issuance to, any Person, the proceeds of which are used to make Permitted Investments or Permitted Acquisitions.
Excluded Tax - as defined in Section 5.6(a) .
Extraordinary Expenses - all costs, expenses or advances that Collateral Agent or a Lender may incur during a Default or Event of Default, or during the pendency of an Insolvency Proceeding of a Borrower (which shall be reasonable under the circumstances in which they are incurred), including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against any Lender, any Borrower, any
 
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representative of creditors of a Borrower or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of Collateral Agent’s Liens with respect to any Collateral), Loan Documents or Obligations, including any lender liability or other Claims; (c) the exercise, protection or enforcement of any rights or remedies of any Lender in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; or (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations. Such costs, expenses and advances include transfer fees, taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Borrower or independent contractors in liquidating any Collateral, and travel expenses.
Extraordinary Receipts - any cash received by any Obligor or any of its Subsidiaries not in the ordinary course of business (and not consisting of Asset Loss Event proceeds described in Section 2.1.6(b) hereof), including, without limitation, (i) pension plan reversions, (ii) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (iii) indemnity payments and (iv) any purchase price adjustment received in connection with any purchase agreement, net of any withholding or other Tax required to be paid on any distribution by such Person (other than an Obligor) to an Obligor.
Fee Letter - the fee letter agreement dated as of the date hereof between Collateral Agent and Borrowers.
Fiscal Month - one of the three fiscal periods in a Fiscal Quarter each of which is approximately one month in duration. There are 12 Fiscal Months in each Fiscal Year.
Fiscal Quarter - one of the four 13-week, or, if applicable, 14-week quarters in a Fiscal Year, with the first of such quarters beginning on the first day of a Fiscal Year and ending on a Saturday of the thirteenth (or fourteenth, if applicable) week in such quarter.
Fiscal Year - the fiscal year of the Parent for financial accounting purposes. The current Fiscal Year will end on January 28, 2012.
Fixed Charge Coverage Ratio - the ratio, determined on a consolidated basis for Parent and its Subsidiaries for the most recent 12 consecutive Fiscal Months, of (a) Consolidated EBITDA minus the sum of (i) Capital Expenditures (except those financed with Permitted Debt (other than Revolver Debt or the Loans)) plus (ii) cash taxes paid, plus (iii) Distributions made by Parent in cash (other than, to the extent included in clause (iii), without duplication, (x) any purchase, redemption or other acquisition or retirement for value of any Equity Interest held by an employee in connection with the termination of employment, death or disability of that employee of any Obligor and (y) management fees, costs and expenses paid to Sponsor by Borrowers to the extent deducted in calculation of Consolidated Net Income), to (b) Fixed Charges.
Fixed Charges - the sum, determined on a consolidated basis for Parent and its Subsidiaries for the most recent 12 consecutive Fiscal Months, of (a) Consolidated Net Interest Expense paid or payable in cash (and, for the avoidance of doubt, excluding those paid-in-kind
 
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or capitalized), plus (b) scheduled principal payments made on Debt in cash and earnout payments paid in cash (other than earnout payments made in Fiscal Year 2011 in an aggregate amount not to exceed $58,500,000 by Parent and its Subsidiaries with respect to the “Vince” brand).
FLSA - the Fair Labor Standards Act of 1938.
Foreign Lender - any Lender that is organized under the laws of a jurisdiction other than the laws of the United States, or any state or district thereof.
Foreign Plan - any employee benefit plan or arrangement maintained or contributed to by any Obligor or Subsidiary that is not subject to the laws of the United States, or any employee benefit plan or arrangement mandated by a government other than the United States for employees of any Obligor or Subsidiary.
Foreign Subsidiary - a Subsidiary that is not a Domestic Subsidiary or an Immaterial Subsidiary.
Full Payment - with respect to any Obligations, (a) the full and indefeasible cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding) and (b) a release of any Claims of Obligors against Collateral Agent and Lenders arising on or before the payment date.
Funding Losses - as defined in Section 3.9 .
GAAP - generally accepted accounting principles in the United States in effect from time to time.
General Intangibles - as defined in the UCC, including choses in action, causes of action, company or other business records, inventions, blueprints, designs, patents, patent applications, trademarks, trademark applications, trade names, trade secrets, service marks, goodwill, brand names, copyrights, registrations, licenses, franchises, customer lists, permits, tax refund claims, computer programs, operational manuals, internet addresses and domain names, insurance refunds and premium rebates, all rights to indemnification, and all other intangible Property of any kind.
Governmental Approvals - all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.
Governmental Authority - any federal, state, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality, political subdivision, or other entity or officer exercising executive, legislative, judicial, regulatory or administrative functions for or pertaining to any government or court, in each case whether associated with the United States, a state, district or territory thereof, or a foreign entity or government.
Guarantor Payment - as defined in Section 5.8.3 .
 
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Guarantors - each Person who guarantees payments or performance of any Obligations pursuant to Section 5.8 hereof and after the date hereof pursuant to a Joinder Agreement. It is understood that the Obligations shall not be guaranteed by any existing or future Foreign Subsidiary, including any Foreign Subsidiary of any Guarantor.
Hedging Agreement - an agreement relating to any swap, cap, floor, collar, option, forward, cross right or obligation, or combination thereof or similar transaction, with respect to interest rate, foreign exchange, currency, commodity, credit or equity risk.
Immaterial Subsidiaries - American Recreation Products International, Inc., a Delaware corporation, The Kellwood Foundation, an Illinois charitable foundation, Kellwood Financial Services, Inc., a Delaware corporation, XCSI, Inc., a Delaware corporation, Kellwood Retail Group, Inc., a Delaware corporation, MJF Imports, Inc., a New York corporation, Tri W Corporation, a North Carolina corporation, Halmode Apparel, Inc., a Delaware corporation, New Campaign, Inc., a Delaware corporation and any other Domestic Subsidiary formed or acquired after the Closing Date (a) which is designated as such by the Borrower Representative in a written notice delivered to the Lenders from time to time and (b) which does not (i) own or generate any Accounts (other than intercompany Accounts) or Inventory located in the United States of America and (ii) have revenues in any Fiscal Year in excess of $1,000,000 unless such Immaterial Subsidiary has become a Borrower pursuant to Section 9.2.20 or is an Obligor under the Revolver Agreement.
Indemnified Taxes - as defined in Section 5.6(a) .
Indemnitees - Agent Indemnitees, Lender Indemnitees and Cerberus Indemnitees.
Indenture - that certain Indenture dated September 30, 1997 by and between The Chase Manhattan Bank, as trustee, or any successor trustee and the Parent, as amended, supplemented or restated from time to time, pursuant to which certain debt securities have been issued by the Parent.
Insolvency Proceeding - any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to (a) the entry of an order for reorganization or other similar relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.
Insurance Assignment - each collateral assignment of insurance pursuant to which an Obligor assigns to Collateral Agent, for the benefit of the Lenders, such Obligor’s rights under business interruption or other insurance policies as Collateral Agent and Required Lenders reasonably deems it appropriate to be assigned, as security for the Obligations.
Intellectual Property - all intellectual and similar Property of a Person, including inventions, designs, patents, patent applications, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, registrations and franchises; all books and records describing or used in connection with the foregoing; and all licenses or other rights to use any of the foregoing.
 
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Intellectual Property Claim - any claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s or Domestic Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Intellectual Property or other Property violates another Person’s Intellectual Property.
Intercreditor Agreement - that certain Intercreditor Agreement, dated as of October 19, 2011, by and among the Collateral Agent, the Revolving Credit Agent, the Parent and any other parties thereto.
Interest Period - with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Reference Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided , however , that (a) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (d) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2 or 3 months after the date on which the Interest Period began, as applicable, and (e) the Borrowers may not elect an Interest Period which will end after the Termination Date.
Inventory - as defined in the UCC, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in an Obligor’s business (but excluding Equipment).
Investment - any acquisition of all or substantially all assets of a Person; any acquisition of record or beneficial ownership of any Equity Interests of a Person; or any advance or capital contribution to or other investment in a Person.
IPO - a bona fide underwritten initial public offering of Equity Interests of Parent (or any other direct or indirect parent of Parent) pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission resulting in total gross proceeds received by Parent, Ultimate Parent (so long as Ultimate Parent is the direct or indirect parent of Parent) or other direct or indirect parent or any holder of the Equity Interests of Parent, Ultimate Parent (so long as Ultimate Parent is the direct or indirect parent of Parent) or such parent of at least $75,000,000.
 
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Joinder Agreement - an agreement substantially in the form of Exhibit E hereto by which a Domestic Subsidiary of Parent becomes a Borrower hereunder.
Lender Indemnitees - Lenders and their officers, directors, employees, Affiliates (other than an Obligor or any Subsidiary of an Obligor), agents and attorneys.
Lenders - as defined in the preamble to this Agreement, including any other Person who hereafter becomes a “Lender” pursuant to an Assignment and Acceptance.
Leverage Ratio - with respect to any Person and its Subsidiaries for any period, the ratio of (a) Indebtedness of such Person and its Subsidiaries the repayment of which is secured by a Lien on any Collateral (including, without limitation, the Revolver Debt and Capital Lease Obligations, but excluding the Sun Debt and excluding the obligations under the 2009 Indenture) outstanding as of the end of such period to (b) Consolidated EBITDA of such Person and its Subsidiaries for such period.
LIBOR - with respect to each day during each Interest Period pertaining to a LIBOR Rate Loan, the rate of interest published in The Wall Street Journal, Eastern Edition, two Business Days prior to such Interest Period as the “London Interbank Offered Rate” applicable to such Interest Period. In the event that The Wall Street Journal, Eastern Edition is not published or such rate does not appear in The Wall Street Journal, Eastern Edition, LIBOR shall be the rate determined by the Collateral Agent to be the rate at which deposits in Dollars are offered to major banks in the London interbank market, two Business Days prior to the beginning of such Interest Period, in an amount approximately equal to the principal amount of the LIBOR Rate Loan to which such Interest Period is to apply and for a period of time comparable to such Interest Period, which determination shall be conclusive absent manifest error.
LIBOR Deadline - as defined in Section 3.8(a) .
LIBOR Notice - a written notice substantially in the form of Exhibit C .
LIBOR Option - as defined in Section 3.8(a) .
LIBOR Rate - for each Interest Period for each LIBOR Rate Loan, the greater of (a) 1.50% per annum, and (b) the rate per annum determined by the Collateral Agent (rounded upwards if necessary, to the next 1/100%) by dividing (i) LIBOR for such Interest Period by (ii) 100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage.
LIBOR Rate Loan - each portion of a Loan that bears interest at a rate determined by reference to the LIBOR Rate.
License - any license or agreement under which a Borrower is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.
Licensor - any Person from whom a Borrower obtains the right to use any Intellectual Property.
 
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Lien - any Person’s interest in Property securing an obligation owed to, or a claim by, such Person, whether such interest is based on common law, statute or contract, including liens, security interests, pledges, hypothecations, statutory trusts, reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Property.
Lien Waiver - an agreement, in form and substance reasonably satisfactory to Collateral Agent, by which (a) for any material Collateral located on leased premises, the lessor waives or subordinates any Lien it may have on the Collateral, and agrees to permit Collateral Agent to enter upon the premises and remove the Collateral or to use the premises to store or dispose of the Collateral; (b) for any Collateral held by a warehouseman, processor, shipper or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any Documents in its possession relating to the Collateral as agent for Collateral Agent, and agrees to deliver the Collateral to Collateral Agent upon request; (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges Collateral Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to Collateral Agent upon request; and (d) for any Collateral subject to a Licensor’s Intellectual Property rights, the Licensor grants to Collateral Agent the right, vis-à-vis such Licensor, to enforce Collateral Agent’s Liens with respect to the Collateral, including the right to dispose of it with the benefit of the Intellectual Property, whether or not a default exists under any applicable License.
Loan (s) - the Term A Loan and the Term B Loan.
Loan Account - the loan account established by each Lender on its books pursuant to Section 5.5 .
Loan Documents - this Agreement and the Other Agreements.
Loan Year - each calendar year commencing on the Closing Date and on each anniversary of the Closing Date.
Management Services Agreement - that certain Management Services Agreement dated as of May 29, 2008 by and between Parent and Sun Capital Partners Management V, LLC, as in effect on the date hereof.
Margin Stock - as defined in Regulation U of the Board of Governors.
Material Adverse Effect - the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, (a) has or could be reasonably expected to have a material adverse effect on the business, operations, Properties, or condition (financial or otherwise) of Borrowers taken as a whole (provided that actions or transactions permitted hereunder, including Permitted Acquisitions, that reduce Excess Availability (as defined in the Revolver Agreement) shall not, in and of themselves, constitute a Material Adverse Effect), on the value of any material Collateral, on the enforceability of any Loan Documents, or on the validity or priority of Collateral Agent’s Liens on any Collateral; (b) impairs the ability of Borrowers taken as a whole to repay the Obligations or materially impairs the ability of any Borrower to perform any other obligation under the Loan Documents, or (c) otherwise impairs the ability of any Lender to enforce or collect any Obligations or of the Collateral Agent to realize upon any Collateral.
 
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Material Contract - any agreement or arrangement to which an Obligor is party (other than the Loan Documents, the Revolver Loan Documents or the Sun Loan Documents) (a) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect, or (b) that relates to Subordinated Debt, Debt under the 2009 Indenture or Debt in an aggregate amount of $46,000,000 or more.
Moody’s - Moody’s Investors Service, Inc., and its successors.
Multiemployer Plan - any employee benefit plan or arrangement described in Section 4001(a)(3) of ERISA that is maintained or contributed to by any Obligor.
Net Cash Proceeds - for any Person with respect to:
(a) any Asset Disposition, the aggregate cash proceeds (including cash proceeds received by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by such Person pursuant to such disposition, net of (i) the direct costs relating to such sale, transfer or other disposition (including sales commissions and legal, accounting and investment banking fees); (ii) Taxes paid or reasonably estimated by such Person to be payable as a result thereof (after taking into account any available Tax credits or deductions and any Tax sharing arrangements and any Tax distributions reasonably expected to be made with respect thereto); (iii) withholding or other Tax required to be paid on any distribution by such Person (other than an Obligor) to any Obligor or any of its Subsidiaries; (iv) amounts required to be applied to the repayment of any Debt secured by a Permitted Lien having priority over the Liens of Collateral Agent under and in accordance with the Other Documents on the asset subject to such disposition (other than the Obligations); (v) the direct costs relating to or associated with the relocation of assets; and (vi) any amount required to be provided by such Person, as a reserve, in accordance with GAAP against any liabilities associated with such disposition including, without limitation, pension and other post- employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with any such Asset Disposition; provided , however , that the amount of any such reserve, at the time that such reserve is no longer required in accordance with GAAP and to the extent that such amount is not actually applied to the liability for which it was reserved, shall be deemed to be part of the Net Cash Proceeds of such disposition and remitted to Collateral Agent for application to the Loans in accordance with the terms of Section 2.1.7 ;
(b) any Asset Loss Event or Extraordinary Receipts, the aggregate cash proceeds received by such Person in connection therewith (other than cash proceeds constituting business interruption insurance), net of (i) the direct costs incurred in collecting such amount, (ii) Taxes paid or reasonably estimated by such Person to be payable as a result thereof (after taking into account any available Tax credits or deductions and any Tax sharing arrangements and any Tax distributions reasonably expected to be made with respect thereto); provided , however , that the amount of such Taxes paid in excess of any such estimate shall be deemed to be part of the Net Cash Proceeds of such disposition and remitted to Collateral Agent for application to the Loans in accordance with the terms of Section 2.1.7 and (iii) withholding or other Tax required to be paid on any distribution by such Person (other than an Obligor) to any Obligor or any of its Subsidiaries;
 
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(c) any sale or issuance of Equity Interests of any Person (other than Excluded Issuances), the aggregate cash proceeds received (directly or indirectly) by such Person pursuant to such sale or issuance, net of the direct costs relating to such sale, or issuance (including legal, accounting and investment banking fees and underwriting discounts); and
(d) any sale, issuance or incurrence of Debt by any Person, the aggregate cash proceeds received (directly or indirectly) by such Person pursuant to such sale, issuance or incurrence, net of the direct costs relating to such sale, or issuance (including legal, accounting and investment banking fees).
New Lending Office - as defined in Section 5.6(d) .
Non-U.S. Lender - as defined in Section 5.6(d) .
Notes - each Term A Note, Term B Note or other promissory note executed by a Borrower to evidence any Obligations.
Obligations - all (a) principal of and premium, if any, on the Loans, (b) interest (which shall include any capitalized interest), expenses, fees and other sums payable by Obligors under Loan Documents, (c) obligations of Obligors under any indemnity for Claims, (d) Extraordinary Expenses, and (e) other Debts, obligations and liabilities of any kind owing by Obligors pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed or allowable in any Insolvency Proceeding, whether arising from an extension of credit, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.
Obligor - each Borrower, any Guarantor and any other Person that is liable for payment of the Obligations or that has granted a Lien in favor of Collateral Agent on its assets to secure the Obligations.
OFAC - The Office of Foreign Assets Control of the U.S. Department of the Treasury.
OFAC Sanctions Programs - the laws, regulations and Executive Orders administered by OFAC, including but not limited to, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as it has been or shall thereafter be renewed, extended, amended, or replaced, and the list of Specially Designated Nationals and Blocked Persons administered by OFAC, as such list may be amended from time to time.
Ordinary Course of Business - the ordinary course of business of any Borrower or Subsidiary and undertaken in good faith.
Organic Documents - with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.
 
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OSHA - the Occupational Safety and Hazard Act of 1970.
Other Agreement - each Note, Fee Letter, Security Agreement, Compliance Certificate, Copyright Security Agreement, Patent Security Agreement, Trademark Security Agreement, financial statement, report delivered hereunder, 2009 Debenture Intercreditor Agreement, Intercreditor Agreement, Sun Intercreditor Agreement, or other document, instrument or agreement (other than this Agreement, the Revolver Loan Documents and the Sun Loan Documents) now or hereafter executed by an Obligor or other Person in favor of the Collateral Agent or a Lender in connection with any transactions relating hereto.
Other Taxes - as defined in Section 5.6(b) .
Parent - as defined in the preamble to this Agreement.
Patriot Act - the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
Participant Register - as defined in Section 12.3(g) .
Patent Security Agreement - each patent security agreement pursuant to which an Obligor grants to Agent a Lien on such Obligor’s interests in its patents, as security for the Obligations.
Payment Item - each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.
Perfection Certificate - a certificate, in form and substance reasonably satisfactory to Collateral Agent, providing information with respect to the property of each Obligor as of the Closing Date.
Permitted Acquisition - any Acquisition effected with the consent and approval of the board of directors or other applicable governing body of the Person being acquired, and with the duly obtained approval of such shareholders or other holders of equity or other ownership interest as such Person may be required to obtain, so long as (a) immediately prior to and immediately after the consummation of such Acquisition, no Default or Event of Default has occurred and is continuing, (b) substantially all of the sales and operating profits generated by such Person (or assets) so acquired or invested are derived from a line or lines of business that are part of, or complementary, to the business as then conducted by Borrowers and Subsidiaries, (c) such Acquisition is otherwise permitted under the Revolver Agreement, (d) Availability after giving effect to such Acquisition exceeds $35,000,000, (e) the Fixed Charge Coverage Ratio of the Parent and its Subsidiaries after giving pro forma effect to such Acquisition, calculated as if the same had occurred at the beginning of the applicable period, is greater than the actual Fixed Charge Coverage Ratio for such period, (f) the consideration for any Acquisition shall not exceed $25,000,000 (unless otherwise consented to by the Required Lenders), and the total aggregate consideration for all such Acquisitions during the term of this Agreement shall not
 
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exceed $50,000,000 (unless otherwise consented to by the Required Lenders), and (g) Borrower Representative shall have furnished to the Collateral Agent at least 5 Business Days prior to the consummation of such Acquisition (i) an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of such Acquisition) and, thereafter, promptly after the request of Collateral Agent, such other information and documents that any Collateral Agent may reasonably request, including, without limitation, executed counterparts of the respective agreements, instruments or other documents pursuant to which such Acquisition is to be consummated (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, instruments or other documents and all other material ancillary agreements, instruments or other documents to be executed or delivered in connection therewith, (ii) pro forma financial statements of the Parent and its Subsidiaries after the consummation of such Acquisition, (iii) a certificate of the chief financial officer or the vice president and controller of the Parent, demonstrating on a pro forma basis compliance with all covenants set forth in Section 9.2.24 hereof after the consummation of such Acquisition, and (iv) copies of such other agreements, instruments or other documents (including, without limitation, the Other Documents required by Section 9.1.10 (unless otherwise agreed by Collateral Agent)) as Collateral Agent shall reasonably request.
Permitted Asset Disposition - an Asset Disposition that is (a) a sale of Inventory in the Ordinary Course of Business; (b) one or more dispositions of Equipment or Real Estate so long as the net book value, as determined in accordance with GAAP, in the aggregate for all such dispositions does not exceed $5,000,000 over the term of the Agreement; (c) a disposition of Inventory that is obsolete, unmerchantable or otherwise unsalable in the Ordinary Course of Business; (d) termination of a lease of real or personal Property or License that is not necessary for the Ordinary Course of Business, could not reasonably be expected to have a Material Adverse Effect and does not result from an Obligor’s default; (e) disposition of Investments of the type described in clause (c) of the definition of “Restricted Investments” in the ordinary course of management of the investment portfolio of Borrowers and Subsidiaries; (f) replacement of Equipment that is worn, damaged or obsolete with Equipment of like function and value, if the replacement Equipment is acquired substantially contemporaneously with such disposition and is free of Liens, (g) the sale of the Phat Farm business and related intellectual property, so long as no Event of Default exists and the gross cash proceeds from such sale are not less than $4,000,000, or (h) otherwise permitted under the Revolver Agreement, as in effect on the date hereof, provided, however, that no Event of Default exists and all Asset Dispositions pursuant to this clause (h) shall not exceed $2,500,000 in the aggregate during any Fiscal Year or $5,000,000 in the aggregate over the term of the Agreement.
Permitted Contingent Obligations - Contingent Obligations (a) arising from endorsements of Payment Items for collection or deposit in the Ordinary Course of Business; (b) arising from Hedging Agreements permitted hereunder; (c) existing on the Closing Date, and any extension or renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed; (d) incurred in the Ordinary Course of Business with respect to surety, appeal or performance bonds, or other similar obligations; (e) arising from customary indemnification obligations in favor of purchasers in connection with dispositions of Equipment permitted hereunder; (f) arising under the Loan Documents; or (g) guarantee obligations of a Borrower or any Domestic Subsidiary in respect of Debt or operating leases and other non-Debt obligations otherwise permitted under this Agreement of a Borrower or any wholly-owned Domestic Subsidiary.
 
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Permitted Discretion - a determination made in good faith and in the exercise of commercially reasonable (from the perspective of a secured second-lien lender) business judgment.
Permitted Distributions - Distributions to the extent permitted under Sections 9.2.17(g), (h) and (i) .
Permitted Investment - investments described in clauses (a) - (i) of the definition of Restricted Investment.
Permitted Lien - as defined in Section 9.2.2 .
Permitted Purchase Money Debt - Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, provided that the aggregate outstanding amount of such Purchase Money Debt shall not exceed $5,000,000 at any time.
Person - any individual, corporation, limited liability company, partnership, joint venture, joint stock company, land trust, business trust, unincorporated organization, Governmental Authority or other entity.
Plan - an employee pension benefit plan that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and that is either (a) maintained by an Obligor for employees or (b) maintained pursuant to a collective bargaining agreement, or other arrangement under which more than one employer makes contributions and to which an Obligor is making or accruing an obligation to make contributions or has within the preceding five years made or accrued such contributions.
Pro Rata - with respect to any Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the amount of such Lender’s Loan amount as set forth on Schedule 1.1 by all outstanding Loans.
Properly Contested - with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or such Obligor’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non-payment could not have a Material Adverse Effect, nor result in forfeiture or sale of any Collateral of such Obligor with a value in excess of $250,000; (e) no Lien is imposed on Collateral of such Obligor, unless bonded and stayed to the satisfaction of the Required Lenders; and (f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review.
Property - any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
 
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Purchase Money Debt - (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets which does not exceed on the date of acquisition the cost or fair market value, whichever is lower, of the Property being acquired on the date of acquisition; (b) Debt (other than the Obligations) incurred within 10 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any renewals, extensions or refinancings (but not increases) of items described in the preceding clauses (a) and (b) .
Purchase Money Lien - a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and constituting a Capital Lease or a purchase money security interest under the UCC.
RCRA - the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).
Real Estate - all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.
Reference Bank - JPMorgan Chase Bank, its successors or any other commercial bank designated by the Collateral Agent to the Borrower Representative from time to time.
Reference Rate - the greater of (a) the rate of interest publicly announced by the Reference Bank in New York, New York from time to time as its reference rate, base rate or prime rate and (b) 5.00%. The reference rate, base rate or prime rate is determined from time to time by the Reference Bank as a means of pricing some loans to its borrowers and neither is tied to any external rate of interest or index nor necessarily reflects the lowest rate of interest actually charged by the Reference Bank to any particular class or category of customers. Each change in the Reference Rate shall be effective from and including the date such change is publicly announced as being effective.
Reference Rate Loan - each portion of a Loan that bears interest at a rate determined by reference to the Reference Rate.
Refinancing Conditions - the following conditions for Refinancing Debt: (a) it is in an aggregate principal amount (including, any capitalized interest with respect thereto that does not exceed the principal amount (to the extent such interest was permitted to be capitalized hereunder)) of the Debt being extended, renewed or refinanced; (b) if the original Debt was subordinated to the Obligations, it is subordinated to the Obligations at least to the same extent as the Debt being extended, renewed or refinanced; (c) the representations, covenants and defaults applicable to it are no less favorable in any material respect to Obligors than those applicable to the Debt being extended, renewed or refinanced; (d) no Lien is granted to secure it other than Liens securing the original Debt; (e) if the original Debt was the obligation of a Foreign Subsidiary, no Obligor becomes obligated on such Debt; (f) upon giving effect to it, no Default or Event of Default exists; (g) (i) if the Stated Maturity of the Debt being extended, renewed or refinanced is earlier than the Stated Maturity of the Obligations, it has a Stated Maturity no earlier than the Stated Maturity of the Debt being extended, renewed or refinanced, or (ii) if the Stated Maturity of the Debt being extended, renewed or refinanced is later than the Stated Maturity of the Obligations, it has a Stated Maturity at least 91 days later than the Stated
 
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Maturity of the Obligations, and (h) it has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Debt being extended, renewed or refinanced.
Refinancing Debt - Debt that is the result of an extension, renewal or refinancing of Debt permitted under Section 9.2.1(b), (d) or (i) .
Register - as defined in Section 12.3(d) .
Registered Loan - as defined in Section 12.3(d) .
Related Fund - with respect to any Person, an Affiliate of such Person, or a fund or account managed by such Person or an Affiliate of such Person.
Reportable Event - any event set forth in Section 4043(b) of ERISA.
Required Lenders - the Lenders having Loans in excess of 51% of all outstanding Loans.
Reserve Percentage - on any day, for any Lender, the maximum percentage prescribed by the Board of Governors (or any successor Governmental Authority) for determining the reserve requirements (including any basic, supplemental, marginal, or emergency reserves) that are in effect on such date with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities”) of that Lender, but so long as such Lender is not required or directed under applicable regulations to maintain such reserves, the Reserve Percentage shall be zero.
Responsible Officer - with respect to all certificates and financial matters hereunder, President, Chief Executive Officer, and Chief Financial Officer of a Borrower (the “ Principal Responsible Officers ”) and, with respect to all notices and other matters hereunder, any Principal Responsible Officer, the Vice President, Finance and Controller, Vice President, Treasurer or General Counsel of the Borrower Representative or any other officer expressly designated by the Board of Directors of the Borrower Representative (or the appropriate committee thereof) or a Principal Responsible Officer as a Responsible Officer of the Borrower Representative. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower Representative shall be conclusively presumed to have been authorized by all necessary corporate and/or other action on the part of the Borrower Representative and each other Borrower on whose behalf it is delivered and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower Representative and each such Borrower.
Restricted Investment - any Investment by an Obligor, other than (a) Investments (other than those permitted by clause (b) through (g)  of this definition) that are existing on the Closing Date and are listed on Schedule 9.2.5 ; (b) Investments in Subsidiaries to the extent existing on the Closing Date; (c) cash and Cash Equivalents that are subject to Collateral Agent’s Lien and control (subject to the Intercreditor Agreement); provided that cash consisting of collected funds and Cash Equivalents held by the Obligors shall not exceed $10,000,000 in the aggregate (excluding amounts held in employee trust accounts) for more than three (3) consecutive Business Days so long as any Revolver Debt is outstanding, (d) loans, advances and
 
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credit extensions permitted under Section 9.2.7 ; (e) Investments of (i) any Subsidiary in a Borrower or (ii) any Obligor in another Obligor or (iii) any Subsidiary which is not an Obligor in another Subsidiary which is not an Obligor; (f) with respect to any Obligor, Permitted Acquisitions; (g) Investments permitted by Section 9.2.9 ; (h) other Investments and Acquisitions consummated after the Closing Date by any Subsidiary which is not an Obligor which Investments or Acquisitions do not contain any Contingent Obligations, or any direct or contingent liabilities, of any Obligor and which have not been financed in whole or in part by any Obligor and (i) any other Investment permitted under the Revolver Agreement, as in effect on the date hereof, so long as after giving effect to such Investment, Availability exceeds $12,500,000 and Borrowers’ accounts payable are not being extended in a manner inconsistent with past business practices, and provided that all such Investments made pursuant to this clause (i) shall not exceed $5,000,000 in the aggregate during the term of the Agreement.
Restrictive Agreement - an agreement (other than a Loan Document, Revolver Loan Document or Sun Loan Document) that conditions or restricts the right of any Borrower, Domestic Subsidiary or other Obligor to incur or repay the Obligations, to grant Liens on the Collateral, to declare or make Distributions to an Obligor, to modify, extend or renew the Obligations, or to repay any intercompany Debt owed to an Obligor.
Revolver Agreement - that certain Credit Agreement dated as of October 19, 2011, among the Parent and its Domestic Subsidiaries from time to time party thereto, the financial institutions party thereto and Wells Fargo Bank, N.A., as agent for the Lenders (as defined therein), as amended, restated, supplemented, refunded, refinanced or otherwise modified from time to time, subject in each case to the terms of this Agreement and the Intercreditor Agreement.
Revolver Debt - the ‘Obligations’ as defined in the Revolver Agreement (other than part (f) of such definition), as in effect on the date hereof or as amended, restated, supplemented, refunded, refinanced or otherwise modified from time to time in a manner consistent with the terms of the Intercreditor Agreement.
Revolver Guaranty - the guaranty of each Person who guarantees the Revolver Debt.
Revolver Loan Documents - ‘Loan Documents’ as defined in the Revolver Agreement, as in effect on the date hereof or as amended, restated, supplemented, refunded, refinanced or otherwise modified from time to time in a manner consistent with the terms of the Intercreditor Agreement.
Revolver Security Documents - ‘Security Documents’ as defined in the Revolver Agreement, as in effect on the date hereof or as amended, restated, supplemented, refunded, refinanced or otherwise modified from time to time in a manner consistent with the terms of the Intercreditor Agreement.
Revolving Credit Agent - Wells Fargo Bank, National Association, in its capacity as Agent under the Revolver Agreement.
 
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Royalties - all royalties, fees, expense reimbursement and other amounts payable by an Obligor under a License.
S&P - Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.
Security Agreement - the security agreement dated as of the date hereof made by each Obligor in favor of the Collateral Agent, for the benefit of the Collateral Agent and the Lenders, securing the Obligations.
Solvent - as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is able to pay all of its debts as they mature; (d) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any loan documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates. “ Fair salable value ” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.
Sponsor - Sun Capital Partners, Inc. or any of its Affiliates.
Stated Maturity - with respect to any installment of interest or principal on any series of Debt, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Debt as of the date of this Agreement, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
Subordinated Debt - Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations in a manner and form satisfactory to Required Lenders, and is unsecured and does not amortize prior to the Termination Date.
Subsidiary - any entity at least 50% of whose voting securities or Equity Interests is owned by an Obligor or any combination of Obligors (including indirect ownership by an Obligor through other entities in which such Obligor directly or indirectly owns 50% of the voting securities or Equity Interests).
Sun Collateral Agent - Sun Kellwood Finance, LLC, as collateral agent under the Sun Last Out Term A Loan Agreement and the Sun Last Out Term B/C/D Loan Agreement.
Sun Debt - the ‘Obligations’ as defined in each of the Sun Last Out Term A Loan Agreement and the Sun Last Out Term B/C/D Loan Agreement, as in effect on the date hereof or as amended or modified in a manner consistent with the terms of the Sun Intercreditor Agreement.
 
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Sun Intercreditor Agreement - that certain Intercreditor Agreement, dated as of October 19, 2011, by and among the Collateral Agent, the Revolving Credit Agent, the Sun Collateral Agent, the Parent and any other parties thereto.
Sun Last Out Term A Loan Agreement - that certain Amended and Restated Term Loan Agreement, dated as of October 19, 2011, by and among Parent, Borrowers, the other obligors party thereto, SCSF Kellwood Finance LLC, Sun Kellwood Finance, LLC and the Sun Collateral Agent.
Sun Last Out Term B/C/D Loan Agreement - that certain Third Amended and Restated Term Loan Agreement, dated as of October 19, 2011, by and among Parent, Borrowers, the other obligors party thereto, SCSF Kellwood Finance LLC, Sun Kellwood Finance, LLC and the Sun Collateral Agent.
Sun Lenders - the lenders party to the Sun Last Out Term A Loan Agreement and the lenders party to the Sun Last Out Term B/C/D Loan Agreement.
Sun Loan Documents - ‘Loan Documents’ as defined in each of the Sun Last Out Term A Loan Agreement and the Sun Last Out Term B/C/D Loan Agreement, as in effect on the date hereof or as amended or modified in a manner consistent with the terms of the Sun Intercreditor Agreement.
Taxes - any taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of whatever nature, including income, receipts, excise, property, sales, use, transfer, license, payroll, withholding, social security, franchise, intangibles, stamp or recording taxes imposed by any Governmental Authority, and all interest, penalties and similar liabilities relating thereto.
Term A Loans - the loans made pursuant to Section 2.1.1 of this Agreement on the Closing Date. The amount of each Lender’s Pro Rata share of the Term A Loans as of the Closing Date is set forth on Schedule 1.1(A) .
Term B Loans - the loans made pursuant to Section 2.1.2 of this Agreement on the Closing Date. The amount of each Lender’s Pro Rata share of the Term B Loans as of the Closing Date is set forth on Schedule 1.1(B) .
Term A Notes - a promissory note executed by Borrowers on the Closing Date in favor of a Lender in the form of Exhibit A , evidencing the amount of such Lender’s Term A Loan amount as set forth on Schedule 1.1A .
Term B Notes - a promissory note to be executed by Borrowers in favor of a Lender in the form of Exhibit A , which shall evidence the amount of such Lender’s Term B Loan amount as set forth on Schedule 1.1B .
Termination Date - the earliest of (a) October 19, 2015, (b) the date on which the Revolver Debt under the Revolver Agreement has been paid in Ml in cash and all commitments
 
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to lend under the Revolver Agreement have been terminated; (c) 60 days prior to the scheduled maturity date of the 2009 Debentures (including any extensions thereof agreed to after the Closing Date), and (d) the date on which all the Term A Loans, Term B Loans and Obligations are accelerated pursuant to Section 10.2 .
Trademark Security Agreement - each trademark security agreement pursuant to which an Obligor grants to Agent a Lien on such Obligor’s interests in trademarks, as security for the Obligations.
Transferee - any actual or potential assignee, participant or other Person acquiring an interest in any Obligations.
UCC - the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.
Ultimate Parent - Kellwood Holding Corp., a Delaware corporation.
Upstream Payment - a Distribution by a Subsidiary of a Borrower to such Borrower.
U.S. Foreign Holdco - any Domestic Subsidiary, the assets of which (other than de minimis assets) consist of stock or securities of a Foreign Subsidiary.
U.S. Lender - as defined in Section 5.6(d) .
Weighted Average Life to Maturity - when applied to any Debt at any date, the number of years obtained by dividing (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Debt, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (b) the then outstanding principal amount of such Debt.
1.2 Accounting Terms . Under the Loan Documents (except as otherwise specified herein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of Borrowers delivered to the Lenders before the Closing Date and using the same inventory valuation method as used in such financial statements. If GAAP changes during the term of this Agreement, or if the Borrowers interpret or apply GAAP differently (and Borrowers’ certified public accountants concur in such interpretation or application) from how it was interpreted or applied in preparing the financial statements provided to the Lenders prior to the Closing Date, such that any financial ratios or covenants contained herein would then be calculated in a different manner or with different components, then Borrowers shall provide the Lenders with prior written notice of any such changes and upon the request of either the Borrowers or the Lenders, the Borrowers and the Lenders agree to negotiate in good faith to amend this Agreement in such respects as are necessary to conform those financial ratios or covenants as criteria for evaluating the Obligors’ financial condition to substantially the same criteria as were effective prior to such change in GAAP; provided, however, that, until the Borrowers, the Required Lenders (or the Lenders, to the extent provided in Section 13.1 ) so amend this Agreement, all such covenants shall be calculated in accordance with GAAP as in effect immediately prior to such change.
 
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1.3 Certain Matters of Construction . The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. All references to (a) laws or statutes include all related rules, regulations, interpretations, amendments and successor provisions; (b) any document, instrument or agreement include any amendments, waivers and other modifications, extensions or renewals (to the extent permitted by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Person include successors and assigns; (f) time of day mean time of day at Lenders’ notice addresses under Section 13.3.1 ; or (g) discretion of any Lender mean the sole and absolute discretion of such Person. All calculations of fundings of the Loans, and payments of Obligations shall be in Dollars and, unless the context otherwise requires, all determinations made from time to time under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowers shall have the burden of establishing any alleged negligence, misconduct or lack of good faith by any Lender under any Loan Documents. No provision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision.
 
Section 2.	CREDIT FACILITIES	
2.1 Term Loans Term A Loans. Each Lender agrees, severally to make a Term A Loan to the Borrowers on the date hereof, on the terms set forth herein and in the amounts set forth on Schedule 1.1A hereto.
2.1.2 Term B Loans . Each Lender agrees, severally to make a Term B Loan to the Borrowers on the date hereof, on the terms set forth herein and in the amounts set forth on Schedule 1.1B hereto.
2.1.3 Term Notes . The Term A Loans and Term B Loans made by each Lender and interest accruing thereon shall be evidenced by the records of such Lender. At the request of any Lender, Borrowers shall deliver a Term A Note or a Term B Note in the principal amount equal to such Lender’s Term A Loans or Term B Loans, as applicable, to such Lender.
2.1.4 Use of Proceeds . The proceeds of the Loans shall be used by Borrowers, in the case of the Term A Loan, to finance the payments of certain earnouts relating to past acquisitions and/or the funding of Permitted Acquisitions, and in the case of the Term B Loan, for working capital and liquidity purposes and/or to finance the payments of certain earnouts relating to past acquisitions and/or the funding of Permitted Acquisitions.
 
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2.1.5 Voluntary Prepayments .
Borrowers may at any time on at least five (5) days’ prior written notice by Borrower Representative to each Lender voluntarily prepay all or part of the Loans; provided that any such prepayments or reductions shall be in a minimum amount of $500,000 and integral multiples of $250,000 in excess of such amount.
2.1.6 Mandatory Prepayments . Subject to the terms of the Intercreditor Agreement,
(a) Upon the occurrence of a Change of Control, the Borrowers shall make Full Payment of all Obligations.
(b) When an Obligor or any Subsidiary thereof (other than a Foreign Subsidiary) makes any Asset Disposition (other than a disposition described under clause (a), (b), (c), (d), (e), (f) or (g) of the definition of “Permitted Asset Disposition” hereof) or experiences any Asset Loss Event, the Borrowers shall repay the Loans in an amount equal to 100% of the Net Cash Proceeds thereof, such repayments to be made promptly but in no event more than five (5) Business Days following receipt of such Net Cash Proceeds, and until the date of payment, such Net Cash Proceeds shall be held in trust for Collateral Agent; provided , however , that the Net Cash Proceeds of the foregoing received since the Closing Date shall not be required to be applied to the prepayment of the Loans to the extent such proceeds are to be reinvested in or otherwise used to replace, repair or restore the properties or assets used in such Obligor’s or such Subsidiary’s, as applicable, business and so long as: (i) no Default or Event of Default has occurred and is continuing on the date such Person receives such Net Cash Proceeds, (ii) Borrower Representative delivers a certificate to Collateral Agent within three (3) Business Days after such Asset Disposition or ten (10) Business Days after the occurrence of Asset Loss Event (as applicable), stating that such Net Cash Proceeds shall be used (or committed to be used) to reinvest in new assets useful in the business, or otherwise replace, repair or restore any such properties or assets to be used in such Obligor’s or such Subsidiaries’ business, as the case may be, within a period specified in such certificate not to exceed 270 days (or such longer period as Collateral Agent may agree, but not to exceed 360 days without the Required Lenders’ consent) after the receipt of such proceeds (which certificate shall set forth estimates of the proceeds to be so expended and shall set forth in reasonable detail any plans for such replacement, repair or restoration, which shall be acceptable to Collateral Agent in its Permitted Discretion) and (iii) such Net Cash Proceeds are deposited in a non-interest bearing account subject to the dominion and control of Collateral Agent (or, so long as the Revolver Agreement is in effect, the Revolving Credit Agent, acting as agent for Collateral Agent) which proceeds shall then be disbursed by Collateral Agent to such Obligor or such Subsidiary promptly upon Borrower Representative’s written request therefor setting forth in reasonable detail the use of such proceeds and certifying that such proceeds are being applied in the manner set forth in the certificate delivered to Collateral Agent in accordance with clause (ii); provided , further , that (A) if all or any portion of such Net Cash Proceeds not so applied to the prepayment of the Loans are not used (or committed to be used) in accordance with the foregoing proviso within 270 days (or such longer period as Collateral Agent may agree, but not to exceed 360 days without the Required Lenders’ consent) of receipt of such Net Cash Proceeds, such amount shall be applied to the Loans as otherwise set forth herein, on the last day of such specified period, (B) if such Obligor or such Subsidiary, as the case may be, is not permitted to reinvest or utilize such Net
 
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Cash Proceeds in accordance with this Section 2.1.6(b) as a result of the existence of a Default, Borrower Representative may request, and upon the written approval of Collateral Agent, such Net Cash Proceeds shall be deposited in a non-interest bearing account subject to the dominion and control of Collateral Agent (or, so long as the Revolver Agreement is in effect, the Revolving Credit Agent, acting as agent for Collateral Agent) until the earlier of (x) the date on which such Default is cured or waived in writing in accordance with the terms of this Agreement, in which case such amounts may be reinvested or utilized in accordance with the proviso above and (y) the date on which an Event of Default shall occur, in which case such Net Cash Proceeds shall be applied to the Loans in accordance with Section 5.4.1 on such date and (C) if such Obligor or such Subsidiary, as the case may be, is not permitted to reinvest or utilize such net cash proceeds as a result of a continuing Event of Default, such Net Cash Proceeds shall be applied in accordance with Section 5.4.1 . The foregoing shall not be deemed to be implied consent to any Asset Disposition or other event otherwise prohibited by the terms and conditions hereof.
(c) Upon the sale or issuance of any of the Equity Interests (other than Excluded Issuances) of Ultimate Parent or any of its Subsidiaries, Borrowers shall repay the Loans in an amount equal to 100% of the Net Cash Proceeds of such sale or issuance, such repayments to be made promptly but in no event more than five (5) Business Days following receipt of such Net Cash Proceeds, and until the date of payment, such Net Cash Proceeds shall be held in trust for Collateral Agent.
(d) Upon the sale, issuance or incurrence of any Debt of any Obligor or any of its Subsidiaries (other than Debt permitted under Section 9.2.1 ), Borrowers shall repay the Loans in an amount equal to 100% of the Net Cash Proceeds of such sale, issuance or incurrence, such repayments to be made promptly but in no event more than five (5) Business Days following receipt of such Net Cash Proceeds, and until the date of payment, such proceeds shall be held in trust for Collateral Agent. The foregoing shall not be deemed to be implied consent to any such sale, issuance or incurrence otherwise prohibited by the terms and conditions hereof.
(e) When any Obligor or any Subsidiary (other than a Foreign Subsidiary) thereof receives any Extraordinary Receipts, Borrowers shall repay the Loans in an amount equal to 100% of the Net Cash Proceeds thereof, such repayment to be made promptly but in no event more than five (5) Business Days following receipt of such Net Cash Proceeds. The foregoing shall not be deemed to be implied consent to any event or condition giving rise to any Extraordinary Receipts which would otherwise constitute a Default or Event of Default under this Agreement.
2.1.7 Application of Prepayments .
Notwithstanding anything in Section 2.1.6 to the contrary, Borrowers shall not be obligated to prepay the Loans pursuant to Section 2.1.6(b) through (e) , to the extent that the Net Cash Proceeds received by any Obligor are applied to prepay the Revolver Debt together with a concurrent permanent reduction of the Revolver Commitment (as defined in the Revolver Agreement) and the Revolving Credit Agent has established a permanent reserve against the Borrowing Base (as defined in the Revolver Agreement) in an amount equal to the amount of such prepayment. Any prepayment made pursuant to Section 2.1.5 or Section 2.1.6 shall be accompanied by (i) accrued interest on the principal amount being prepaid to the date of
 
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prepayment, (ii) any Funding Losses payable pursuant to Section 3.9 , (iii) the Applicable Prepayment Premium, if any, payable in connection with such prepayment of the Loans and (iv) if such prepayment would reduce the amount of the outstanding Loans to zero, such prepayment shall be accompanied by the payment of all fees accrued to such date pursuant to Section 3.2 .
 
Section 3.	INTEREST, FEES AND CHARGES	
3.1 Rates and Payment of Interest Subject to the terms of this Agreement, at the option of the Borrower Representative, the Loans shall bear interest on the principal amount thereof from time to time outstanding, from the date of the Loans until repaid, at a rate per annum equal to (i) in the case of LIBOR Rate Loans, the LIBOR Rate for the Interest Period in effect for the Loans (or such portion thereof) plus the Applicable Margin, or (ii) in the case of Reference Rate Loans, the Reference Rate plus the Applicable Margin.
(b) During an Insolvency Proceeding with respect to any Borrower, or during any other Event of Default if the Collateral Agent or the Required Lenders in their discretion so elect, Obligations shall bear interest at a rate equal to the rates set forth in Section 3.1(a) plus 2.0% (the “ Default Rate ”). Each Borrower acknowledges that the cost and expense to each Lender due to an Event of Default are difficult to ascertain and that the Default Rate is a fair and reasonable estimate to compensate the Lenders for such added cost and expense.
(c) Interest accrued on the Loans shall be due and payable in arrears, (i) on the first day of the following month, (ii) on any date of prepayment, with respect to the principal amount of the Loans being prepaid; and (iii) on the Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable on demand. Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand.
3.2 Fees .
(a) In the event of the termination of this Agreement and repayment of the Obligations in full at any time prior to October 19, 2015, for any reason, including (i) termination upon the election of the Required Lenders after the occurrence and during the continuation of an Event of Default, (ii) foreclosure and sale of Collateral, (iii) sale of the Collateral in any Insolvency Proceeding, or (iv) restructure, reorganization, or compromise of the Obligations by the confirmation of a plan of reorganization or any other plan of compromise, restructure, or arrangement in any Insolvency Proceeding, then, in view of the impracticability and extreme difficulty of ascertaining the actual amount of damages to the Collateral Agent and the Lenders or profits lost by the Collateral Agent and the Lenders as a result of such early termination, and by mutual agreement of the parties as to a reasonable estimation and calculation of the lost profits or damages of the Collateral Agent and the Lenders, the Borrowers shall pay to the Collateral Agent, for the account of the Lenders in accordance with their respective Pro Rata shares, the Applicable Prepayment Premium (if any), measured as of the date of such termination; provided, however, that notwithstanding anything to the contrary set forth in this Agreement, no Applicable Prepayment Premium shall be payable in connection with the Full Payment of the Obligations resulting from an IPO of any Borrower or the sale of substantially all of the assets or a division of any Borrower.
(b) As and when due and payable under the terms of the Fee Letter, the Borrower shall pay the fees set forth in the Fee Letter.
 
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3.3 Computation of Interest and Yield Protection . All computations of interest shall be computed for the actual days elapsed, based on a 360-day year. Each determination by the Lenders of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error.
3.4 Reimbursement Obligations Borrowers shall reimburse Collateral Agent and Lenders, without duplication, for all Extraordinary Expenses. Borrowers shall also reimburse the Collateral Agent and each Lender for all reasonable out-of-pocket and invoiced legal fees (which invoice may omit information that such counsel reasonably deems privileged) and all reasonable out-of-pocket accounting, appraisal, consulting, and other fees, costs and expenses incurred by it in connection with (a) negotiation and preparation of any Loan Documents, including any amendment or other modification thereof; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Collateral Agent’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section 9.1.1 , each inspection, audit or appraisal with respect to any Obligor or Collateral, whether prepared by Collateral Agent’s or Lender’s personnel or a third party. All legal, accounting and consulting fees shall be charged to Borrowers by Collateral Agent’s or a Lender’s professionals at their full hourly rates, regardless of any reduced or alternative fee billing arrangements that Collateral Agent, any Lender or any of their Affiliates (other than an Obligor or any Subsidiary of an Obligor) may have with such professionals with respect to this or any other transaction. All amounts reimbursable by Borrowers under this Section shall constitute Obligations secured by the Collateral and shall be payable on demand.
3.5 Capital Adequacy . If a Lender determines that any introduction of or any change in a Capital Adequacy Regulation, any change in the interpretation or administration of a Capital Adequacy Regulation by a Governmental Authority charged with interpretation or administration thereof, or any compliance by such Lender or any Person controlling such Lender with a Capital Adequacy Regulation, increases the amount of capital required or expected to be maintained by such Lender or Person (taking into consideration its capital adequacy policies and desired return on capital) as a consequence of such Lender’s Loans or other Obligations under the Loan Documents, then Borrowers shall, within five days following demand therefor, pay such Lender an amount sufficient to compensate for such increase. A Lender’s demand for payment (delivered to Borrower Representative) shall set forth the nature of the occurrence giving rise to such compensation and a calculation of the amount to be paid. In determining such amount, the Lender may use any reasonable averaging and attribution method.
3.6 Mitigation . Each Lender agrees that (a) upon becoming aware that it is subject to Section 3.5 or 5.6 , it will take reasonable measures to reduce Borrowers’ obligations under such Sections, including funding or maintaining its Loans through another office, as long as use of such measures would not adversely affect the Lender’s Loans, business or interests, and would not be inconsistent with any internal policy or applicable legal or regulatory restriction and (b) Borrowers shall have no obligation to reimburse any Lender under Sections 3.5 or 5.6 for costs or taxes incurred more than 90 days prior to notice to Borrower Representative with respect thereto.
 
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3.7 Maximum Interest . In no event shall interest, charges or other amounts that are contracted for, charged or received by the Lenders pursuant to any Loan Documents and that are deemed interest under Applicable Law (“ interest ”) exceed the highest rate permissible under Applicable Law (“ maximum rate ”). If, in any month, any interest rate, absent the foregoing limitation, would have exceeded the maximum rate, then the interest rate for that month shall be the maximum rate and, if in a future month, that interest rate would otherwise be less than the maximum rate, then the rate shall remain at the maximum rate until the amount of interest actually paid equals the amount of interest which would have accrued if it had not been limited by the maximum rate during prior periods. If, upon Full Payment of the Obligations, the total amount of interest actually paid under the Loan Documents is less than the total amount of interest that would, but for this Section, have accrued under the Loan Documents, then Borrowers shall, to the extent permitted by Applicable Law, pay to each Lender (a) the lesser of (i) the amount of interest that would have been charged if the maximum rate had been in effect at all times, or (ii) the amount of interest that would have accrued had the interest rate otherwise set forth in the Loan Documents been in effect, minus (b) the amount of interest actually paid under the Loan Documents. If a court of competent jurisdiction determines that any Lender has received interest in excess of the maximum amount allowed under Applicable Law, such excess shall be deemed received on account of, and shall automatically be applied to reduce, Obligations other than interest (regardless of any erroneous application thereof by any Lender), and upon Full Payment of the Obligations, any balance shall be refunded to Borrowers. In determining whether any excess interest has been charged or received by any Lender, all interest at any time charged or received from Borrowers in connection with the Loan Documents shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated and spread in equal parts throughout the full term of the Obligations.
3.8 LIBOR Option .
(a) In lieu of having interest charged at the rate based upon the Reference Rate, the Borrowers shall have the option (the “ LIBOR Option ”) to have interest on all or a portion of the Loans be charged at a rate of interest based upon the LIBOR Rate. On the last day of each applicable Interest Period, unless the Borrowers properly have exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR Rate Loans automatically shall convert to the rate of interest then applicable to Reference Rate Loans. The Borrowers may, at any time and from time to time, elect to exercise the LIBOR Option by notifying the Collateral Agent prior to 11:00 a.m. (New York City time) at least 3 Business Days prior to (i) the commencement of the proposed Interest Period or (ii) in the case of the conversion of a LIBOR Rate Loan into a Reference Rate Loan, the last day of the then current Interest Period (the “ LIBOR Deadline ”). Notice of the Borrowers’ election of the LIBOR Option for a permitted portion of the Loans and an Interest Period pursuant to this subsection (a) shall be made by delivery to the Collateral Agent of a LIBOR Notice received by the Collateral Agent before the LIBOR Deadline, or by telephonic notice received by the Collateral Agent before the LIBOR Deadline (to be confirmed by delivery to the Collateral Agent of a LIBOR Notice received by the Collateral Agent prior to 5:00 p.m. (New York City time) on the same day). Promptly upon its receipt of each such LIBOR Notice, the Collateral Agent shall provide a copy thereof to each of the Lenders. Each LIBOR Notice shall be irrevocable and binding on the Borrowers.
 
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(b) Notwithstanding anything to the contrary contained in this Agreement, the Borrowers (i) shall have not more than 3 LIBOR Rate Loans in effect at any given time, and (ii) only may exercise the LIBOR Option for LIBOR Rate Loans of at least $500,000 and integral multiples of $100,000 in excess thereof.
(c) The Borrowers may prepay LIBOR Rate Loans at any time; provided , however , that in the event that LIBOR Rate Loans are prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any mandatory prepayment pursuant to Section 2.1.6 or any application of payments or proceeds of Collateral in accordance with Section 5.4 or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, the Borrowers shall indemnify, defend, and hold the Collateral Agent and the Lenders and their participants harmless against any and all Funding Losses in accordance with Section 3.9 .
3.9 Funding Losses . In connection with each LIBOR Rate Loan, the Borrowers shall jointly and severally indemnify, defend, and hold the Collateral Agent and the Lenders harmless against any loss, cost, or expense incurred by the Collateral Agent or any Lender as a result of (a) the payment of any principal of any LIBOR Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of a Default or an Event of Default, or (b) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, and expenses, collectively, “ Funding Losses ”). Funding Losses shall, with respect to the Collateral Agent or any Lender, be deemed to equal the amount reasonably determined by the Collateral Agent or such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such LIBOR Rate Loan had such event not occurred, at the LIBOR Rate that would have been applicable thereto, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period therefor), minus (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which the Collateral Agent or such Lender would be offered were it to be offered, at the commencement of such period, Dollar deposits of a comparable amount and period in the London interbank market. A certificate of the Collateral Agent or a Lender delivered to the Borrower Representative setting forth any amount or amounts that such Agent or such Lender is entitled to receive pursuant to this Section 3.9 shall be conclusive absent manifest or demonstrable error.
3.10 Changes in Law: Impracticability or Illegality .
(a) The LIBOR Rate may be adjusted by the Collateral Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits or increased costs due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period (except changes in Indemnified Taxes and Excluded Taxes covered by Section 6.5 ) and changes in the reserve requirements imposed by the Board of Governors (or any successor), excluding the Reserve Percentage, which additional or increased costs would increase the cost of funding loans bearing interest at the LIBOR Rate. In any such event, the affected Lender shall give the Borrower Representative and the Collateral Agent notice of such a determination and adjustment and the Collateral Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, the Borrower Representative may, by notice to
 
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such affected Lender (i) require such Lender to furnish to the Borrower Representative a statement setting forth the basis for adjusting such LIBOR Rate and the method for determining the amount of such adjustment, or (ii) repay the LIBOR Rate Loans with respect to which such adjustment is made (together with any amounts due under Section 3.9 ).
(b) In the event that any change in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation or application thereof, shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give notice of such changed circumstances to the Borrower Representative and the Collateral Agent, and the Collateral Agent promptly shall transmit the notice to each other Lender. In the case of any LIBOR Rate Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate then applicable to Reference Rate Loans of the same type hereunder, and the Borrowers shall not be entitled to elect the LIBOR Option until such Lender determines that it would no longer be unlawful or impractical to do so.
3.11 No Requirements to Match Fund . Anything to the contrary contained herein notwithstanding, neither the Collateral Agent nor any Lender, nor any of their participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate. The provisions of this Section 3 shall apply as if each Lender or its participants had match funded any Obligation as to which interest is accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the amount of the LIBOR Rate Loans.
 
Section 4.	LOAN ADMINISTRATION	
4.1 Borrower Representative . Each Borrower hereby designates the Borrower Representative as its representative and agent for all purposes under the Loan Documents, including delivery or receipt of communications with the Collateral Agent any Lender, preparation and delivery of financial reports, receipt and payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with the Collateral Agent or any Lender. Borrower Representative hereby accepts such appointment. Collateral Agent and Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication delivered by Borrower Representative on behalf of any Borrower. Lenders may send any notice or communication with a Borrower hereunder to Borrower Representative on behalf of such Borrower. The Collateral Agent and the Lenders shall have the right, in its discretion, to deal exclusively with Borrower Representative for any or all purposes under the Loan Documents. Each Borrower agrees that any notice election, communication, representation, agreement or undertaking made on its behalf by Borrower Representative shall be binding upon and enforceable against it.
4.2 One Obligation . The Loans and other Obligations shall constitute one general obligation of Borrowers and (unless otherwise expressly provided in any Loan Document) shall be secured by Collateral Agent’s Lien upon all Collateral; provided , however that Collateral
 
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Agent and each Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent of any Obligations jointly or severally owed by such Borrower.
4.3 Effect of Termination . On the Termination Date, all Obligations shall be immediately due and payable. All undertakings of Borrowers contained in the Loan Documents shall survive any termination, and Collateral Agent shall retain its Liens in the Collateral and all of its rights and remedies under the Loan Documents until Full Payment of the Obligations. Notwithstanding Full Payment of the Obligations, Collateral Agent shall not be required to terminate its Liens in any Collateral unless, with respect to any damages Collateral Agent may incur as a result of the dishonor or return of Payment Items applied to Obligations, Collateral Agent receives (a) a written agreement, executed by Borrower Representative and any Person whose advances are used in whole or in part to satisfy the Obligations, indemnifying Collateral Agent and Lenders from any such damages; or (b) such Cash Collateral as Collateral Agent, in its discretion, deems necessary to protect against any such damages. The provisions of Sections 3.3, 3.4, 3.9, 5.3, 5.6, 11, 13.2 and this Section, and the obligation of each Obligor and Lender with respect to each indemnity given by it in any Loan Document, shall survive Full Payment of the Obligations and any release relating to this credit facility.
 
Section 5.	PAYMENTS	
5.1 General Payment Provisions . All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense of any kind, free of (and without deduction for) any Taxes except as set forth in Section 5.6 , and in immediately available funds, not later than 12:00 noon on the due date. Any payment after such time shall be deemed made on the next Business Day. Borrower Representative may, at the time of payment, specify to each Lender the Obligations to which such payment is to be applied, but each Lender shall in all events retain the right to apply such payment in such manner as the Lenders, subject to the provisions hereof, may determine to be appropriate. If any payment under the Loan Documents shall be stated to be due on a day other than a Business Day, the due date shall be extended to the next Business Day and such extension of time shall be included in any computation of interest and fees. All payments received by the Lenders pursuant to this Agreement shall be applied in accordance with such Lender’s applicable Pro Rata portion of the aggregate outstanding Loans as of such date.
5.2 Payment of Other Obligations . Subject to the Intercreditor Agreement, Obligations other than the Loans, including Extraordinary Expenses, shall be paid by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand.
5.3 Marshaling; Payments Set Aside . None of the Collateral Agent or the Lenders shall be under any obligation to marshal any assets in favor of any Obligor or against any Obligations. If any Obligor makes a payment to the Lenders, or if Collateral Agent or any Lender receives payment from the proceeds of Collateral, exercise of setoff or otherwise, and such payment is subsequently invalidated or required to be repaid to a trustee, receiver or any other Person, then the Obligations originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been received and any enforcement or setoff had not occurred.
 
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5.4 Post-Default Allocation of Payments .
5.4.1 Allocation . Notwithstanding anything herein to the contrary, during an Event of Default, monies to be applied to the Obligations, whether arising from payments by Obligors, realization on Collateral, setoff or otherwise, shall be allocated as follows and subject to the Intercreditor Agreement:
(a) first , to all costs and expenses, including Extraordinary Expenses and any Collateral Agent Advances made by Collateral Agent with respect to the Collateral under or pursuant to the terms of this Agreement, in each case, owing to Collateral Agent and then to Lenders;
(b) second , to all Obligations constituting unpaid fees;
(c) third , to all Obligations constituting accrued and unpaid interest; and
(d) last , to all other Obligations.
Amounts shall be applied to each category of Obligations set forth above until Full Payment thereof and then to the next category. If amounts are insufficient to satisfy a category, they shall be applied on a Pro Rata basis among the Obligations in the category. The allocations set forth in this Section are solely to determine the rights and priorities of the Collateral Agent and Lenders as among themselves, and may be changed by agreement among them without the consent of any Obligor. This Section is not for the benefit of or enforceable by any Obligor.
5.4.2 Erroneous Application . Collateral Agent and the Lenders shall not be liable for any application of amounts made by it/them in good faith and, if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been made shall be to recover the amount from the Person that actually received it (and, if such amount was received by any Lender, such Lender hereby agrees to return it).
5.5 Loan Account: Account Stated .
5.5.1 Loan Account . Each Lender shall maintain in accordance with its usual and customary practices an account or accounts (“ Loan Account ”) evidencing the Debt of Borrowers resulting from each Loan. Any failure of a Lender to record anything in the Loan Account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder. Each Lender may maintain a single Loan Account in the name of the Borrower Representative for such Lender’s Loans, and each Borrower confirms that such arrangement shall have no effect on the joint and several character of its liability for the Obligations.
5.5.2 Entries Binding . Entries made in a Loan Account shall constitute presumptive evidence of the information contained therein. If any information contained in the Loan Accounts is provided to or inspected by any Person, then such information shall be conclusive and binding on such Person for all purposes absent manifest error, except to the extent such Person notifies the applicable Lender in writing within 60 days after receipt or inspection that specific information is subject to dispute.
 
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5.6 Taxes . (a) Any and all payments made by Borrowers hereunder or under any Other Agreement shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, except for (i) taxes imposed on the net income or similar measure (or taxes imposed in lieu thereof) of Collateral Agent or any Lender (or any Transferee) or, in the case of a pass-through entity, any of its beneficial owners by the United States or the jurisdiction in which such Person is organized or has its principal lending office or in which its applicable lending office is located, or with which such person has any other present or former connection (other than a connection arising solely from entering into, receiving any payment under or enforcing its rights under this Agreement or any Other Agreement), or (ii) any branch profits imposed by the United States or any similar tax imposed by any other jurisdiction in which any Borrower is located, together with all interest, penalties and additions to Tax thereon (each such tax, together with all interest, penalties and additions to tax thereon, an “ Excluded Tax ”), (all nonexcluded taxes, levies, imposts, deductions, charges withholdings and liabilities, collectively or individually, imposed on any payment by Borrowers or on account of any Obligation hereunder, “ Indemnified Taxes ”). If Borrowers shall be required to deduct or withhold any Indemnified Taxes from or in respect of any sum payable hereunder to Collateral Agent or any Lender (or any Transferee), (i) the sum payable shall be increased by the amount (an “ Additional Amount ”) necessary so that after making all such required deductions or withholdings (including deductions or withholdings applicable to additional sums payable under this Section 5.6 ) Collateral Agent or such Lender (or such Transferee) shall receive an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) Borrowers shall make such deductions and (iii) Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, Borrowers jointly and severally agree to pay to the relevant Governmental Authority in accordance with applicable law any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any Other Agreement (“ Other Taxes ”). Borrower Representative shall deliver to Collateral Agent and each Lender official receipts (or other evidence of payment reasonably satisfactory to Collateral Agent) in respect of any Indemnified Taxes or Other Taxes payable hereunder promptly after payment of such Indemnified Taxes or Other Taxes.
(c) Borrowers jointly and severally indemnify and agree to hold Collateral Agent and each Lender harmless from and against Indemnified Taxes and Other Taxes (including, Indemnified Taxes and Other Taxes imposed on any amounts payable under this Section 5.6 ) paid by such Person, whether or not such Indemnified Taxes or Other Taxes were correctly or legally asserted. Such indemnification shall be paid within 10 days from the date on which any such Person makes written demand therefor specifying in reasonable detail the nature and amount of such Indemnified Taxes or Other Taxes.
(d) (i) Each Lender (or Transferee) that is organized under the laws of a jurisdiction outside the United States (a “ Non-U.S. Lender ”) agrees that it shall, no later than the Closing Date (or, in the case of a Lender which becomes a party hereto pursuant to Section 12.3 after the Closing Date, promptly after the date upon which such Lender becomes a party hereto) deliver to Collateral Agent (who shall promptly provide a copy to the Borrower Representative and, in the case of a participant, to the Lender granting the participation only) a properly
 
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completed and duly executed copy of either U.S. Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY (including the appropriate attachments thereto) or any subsequent versions thereof or successors thereto, in each case claiming complete exemption from, or reduced rate of, U.S. Federal withholding tax and payments of interest hereunder along with any other appropriate documentation establishing such exemption or reduction. In addition, in the case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the IRC, such Non-U.S. Lender hereby represents to Agent and Borrower that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the IRC, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the IRC) of the Ultimate Parent and is not a controlled foreign corporation related to the Ultimate Parent (within the meaning of Section 864(d)(4) of the IRC), and such Non-U.S. Lender agrees that it shall promptly notify Collateral Agent in the event any such representation is no longer accurate. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of a Transferee that is a participation holder, on or before the date such participation holder becomes a Transferee hereunder) and on or before the date, if any, such Non-U.S. Lender changes its applicable lending office by designating a different lending office (a “ New Lending Office ”). In addition, such Non-U.S. Lender shall deliver such forms within 20 days after receipt of a written request therefor from Collateral Agent, the assigning Lender or the Lender granting a participation, as applicable. If the lapse of time or a change in circumstances renders a previous certification obsolete or inaccurate in any material respect, the Non-U.S. Lender shall deliver to Collateral Agent (who shall promptly provide a copy to the Borrower Representative and, in the case of a participant, to the Lender granting the participation only), new, properly completed and duly executed copies of the applicable Internal Revenue Service Form establishing such exemption or reduction and any related documentation as may be required to establish such Non-U.S. Lender’s entitlement to a continued exemption from or reduction in United States withholding tax if such Non-U.S. Lender or beneficial owner continues to be so entitled.
(ii) Each Lender (or Transferee) and Agent that is a “United States person” (within the meaning of Section 7701(a)(30) of the IRC) (each a “ U.S. Lender ”) agrees that it shall, no later than the Closing Date (or, in the case of a Lender which becomes a party hereto pursuant to Section 12.3 after the Closing Date, promptly after the date upon which such Lender becomes a party hereto) deliver to Collateral Agent (who shall promptly provide a copy to the Borrower Representative and, in the case of a participant, to the Lender granting the participation only) a complete and duly executed copy of Internal Revenue Service Form W-9 or successor form certifying that such Lender (or Transferee) is not subject to United States backup withholding tax on the date it becomes a party to this Agreement. In addition, such U.S. Lender shall deliver such forms within 20 days after receipt of a written request therefor from Collateral Agent, the assigning Lender or the Lender granting a participation, as applicable.
(iii) Notwithstanding any other provision of this Section 5.6 , a Lender shall not be required to deliver any form pursuant to this Section 5.6(d) that such Lender is not legally able to deliver. Upon written request by Borrower Representative, Collateral Agent shall provide to Borrower Representative any U.S. Internal Revenue Service Form received by Collateral Agent pursuant to clauses (d)(i) and (d)(ii) above.
(e) The Borrowers shall not be required to indemnify Collateral Agent or any Lender, or pay any Additional Amounts to Collateral Agent or any Lender, in respect of any
 
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withholding or backup withholding tax pursuant to this Section 5.6 to the extent that (i) the obligation to withhold amounts with respect to withholding or backup withholding tax existed on the date Collateral Agent or such Lender became a party to this Agreement (or, in the case of a Transferee that is a participation holder, on the date such participation holder became a Transferee hereunder) or, with respect to payments to a New Lending Office, the date such Lender designated such New Lending Office with respect to a Loan; provided, however, that this clause (i) shall not apply to the extent the indemnity payment or Additional Amounts any Transferee, or Lender (or Transferee) through a New Lending Office, would be entitled to receive (without regard to this clause (i)) do not exceed the indemnity payment or Additional Amounts that the Person making the assignment, participation or transfer to such Transferee, or Lender (or Transferee) making the designation of such New Lending Office, would have been entitled to receive in the absence of such assignment, participation, transfer or designation, or (ii) the obligation to pay such Additional Amounts would not have arisen but for a failure by such Lender or Collateral Agent to comply with the provisions of clause (d) above.
(f) If Collateral Agent or any Lender determines in its good faith that it has received a refund of any Indemnified Taxes as to which it has been indemnified by a Borrower or with respect to which a Borrower has paid Additional Amounts pursuant to this Section 5.6 , it shall pay to such Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or Additional Amounts paid, by a Borrower under this Section 5.6 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses of Collateral Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant governmental authority with respect to such refund), provided that such Borrower, upon the request of the Collateral Agent or such Lender, agrees to repay the amount paid over by Collateral Agent or such Lender (plus any penalties, interest or other charges imposed by the relevant governmental authority) to Collateral Agent or such Lender in the event Collateral Agent or such Lender is required to repay such refund to such governmental authority. This paragraph shall not be construed to require Collateral Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to any Borrower or any other Person.
(g) Collateral Agent or any Lender (or Transferee) claiming any indemnity payment or additional payment amounts payable pursuant to this Section 5.6 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document reasonably requested in writing by Borrower Representative or to change the jurisdiction of its applicable lending office if the making of such a filing or change would avoid the need for or reduce the amount of any such indemnity payment or Additional Amounts that may thereafter accrue, would not require Collateral Agent or such Lender (or Transferee) to disclose any information Collateral Agent or such Lender (or Transferee) deems confidential and would not, in the sole determination of Collateral Agent or such Lender (or Transferee), be otherwise disadvantageous to Collateral Agent or such Lender (or Transferee).
(h) The obligations of the parties under this Section 5.6 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
 
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5.7 [ Intentionally Omitted ]. Nature and Extent of Each Borrower’s Liability .
5.8.1 Joint and Several Liability . Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Collateral Agent and the Lenders the prompt payment and performance of, all Obligations and all agreements under the Loan Documents. Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and performance and not of collection, that such obligations shall not be discharged until Full Payment of the Obligations, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or liable; (b) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by any Lender with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for the Obligations or any action, or the absence of any action, by Collateral Agent or any Lender in respect thereof (including the release of any security or guaranty); (d) the insolvency of any Obligor; (e) any election by Collateral Agent or any Lender in an Insolvency Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) the disallowance of any claims of Collateral Agent or any Lender against any Obligor for the repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except Full Payment of all Obligations.
5.8.2 Waivers .
(a) Each Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel the Collateral Agent or the Lenders to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Borrower. It is agreed among each Borrower, Collateral Agent and the Lenders that the provisions of this Section are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Collateral Agent and the Lenders would decline to make Loans. Notwithstanding anything to the contrary in any Loan Document, and except as set forth in Section 5.8.3 , each Borrower expressly waives all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off, as well as all defenses available to a surety, guarantor or accommodation co-obligor. Each Borrower acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.
(b) The Collateral Agent and Lenders may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral by judicial foreclosure or non-judicial sale or enforcement, without affecting any rights and remedies under this Section 5.8 . If, in the exercise of any rights or remedies, any Collateral Agent or Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Borrower or any other Person, whether because of any applicable laws pertaining to “election of remedies” or otherwise, each Borrower consents to such action by Collateral Agent or such Lender and waives any claim based upon such action, even if the action may result in loss of any rights of subrogation that any Borrower might otherwise have had but for such action.
 
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Any election of remedies that results in denial or impairment of the right of Collateral Agent or any Lender to seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of the Obligations. Each Borrower waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for the Obligations, even though that election of remedies destroys such Borrower’s rights of subrogation against any other Person. If a Lender bids at any foreclosure or trustee’s sale or at any private sale, such Lender may bid all or a portion of the Obligations and the amount of such bid need not be paid by such Lender but shall be credited against the Obligations. The amount of the successful bid at any such sale, whether a Lender or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section 5.8 , notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which any Lender might otherwise be entitled but for such bidding at any such sale.
5.8.3 Extent of Liability; Contribution .
(a) Notwithstanding anything herein to the contrary, each Borrower’s liability under this Section 5.8 shall be limited to the greater of (i) all amounts for which such Borrower is primarily liable, as described below, and (ii) such Borrower’s Allocable Amount.
(b) If any Borrower makes a payment under this Section 5.8 of any Obligations (other than amounts for which such Borrower is primarily liable) (a “ Guarantor Payment ”) that, taking into account all other Guarantor Payments previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such Borrower’s Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such Borrower shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other Borrower for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. The “ Allocable Amount ” for any Borrower shall be the maximum amount that could then be recovered from such Borrower under this Section 5.8 without rendering such payment voidable or avoidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.
(c) Nothing contained in this Section 5.8 shall limit the liability of any Borrower to pay the Loans made directly or indirectly to that Borrower (including Loans advanced to any other Borrower and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Borrower shall be primarily liable for all purposes hereunder.
5.8.4 Joint Enterprise . Each Borrower has requested that the Lenders make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business most efficiently and economically. Borrowers’ business is a mutual and collective enterprise, and Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease the administration of their relationship with Lenders, all to the mutual advantage of Borrowers. Borrowers acknowledge and agree that and
 
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Lenders’ willingness to extend credit to Borrowers and to administer the Collateral on a combined basis, as set forth herein, is done solely as an accommodation to Borrowers and at Borrowers’ request.
5.8.5 Subordination . Each Borrower hereby subordinates any claims it may have as a result of this Section 5.8 , including any right of payment, subrogation, contribution and indemnity, that it may have at any time against any other Obligor, howsoever arising, to the Full Payment of all Obligations.
 
Section 6.	CONDITIONS PRECEDENT	
6.1 Conditions Precedent to Initial Loans . The Lenders shall not be required to fund the requested Loans or otherwise extend credit to Borrowers hereunder, until the date (“ Closing Date ”) that each of the following conditions (except to the extent that such conditions are permitted by each Lender to be satisfied on a post-closing basis pursuant to a post-closing agreement) has been satisfied:
(a) Each Lender that requests issuance of a Note shall have received a Note executed by the Borrowers and delivered to each such Lender. Each other Loan Document shall have been duly executed and delivered to the Lenders by each of the signatories thereto, and each Obligor shall be in compliance with all terms thereof.
(b) The Lenders shall have received UCC and Lien searches.
(c) The Lenders shall have received fully-executed account control agreements for each Deposit Account (as defined in the Revolver Agreement) and Securities Account (as defined in the Revolver Agreement) (other than the Deposit Accounts at Bank of America, N.A. and JPMorgan Chase Bank, N.A. for which account control agreements shall be delivered pursuant to Section 9.1.16 ) subject to the “control” (for purposes of the UCC) of the Revolving Credit Agent and, upon the termination of the Revolver Agreement, the Collateral Agent, each in form and substance reasonably satisfactory to the Collateral Agent.
(d) The Lenders shall have received certificates, in form and substance reasonably satisfactory to it, from a knowledgeable Responsible Officer of Borrower Representative certifying that, after giving effect to the Loans and transactions hereunder, (i) each Obligor is Solvent; (ii) no Default or Event of Default exists or would result from this Agreement or other Loan Documents becoming effective in accordance with its or their respective terms; (iii) the representations and warranties set forth in Section 8 are true and correct in all respects; and (iv) such Obligor has complied with all agreements and conditions to be satisfied by it under the Loan Documents.
(e) The Lenders shall have received a certificate of a duly authorized officer of each Borrower, certifying (i) that attached copies of such Borrower’s Organic Documents are true and complete, and in full force and effect, without amendment except as shown, (ii) that an attached copy of resolutions (to the extent necessary under Applicable Law or applicable Organic Documents) authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been
 
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amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility, and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. The Lenders may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.
(f) The Lenders shall have received copies of the charter documents of each Obligor, certified as appropriate by the Secretary of State or another official of such Obligor’s jurisdiction of organization. The Lenders shall have received good standing certificates for each Obligor, issued by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization.
(g) The Lenders shall have received an opinion of Kirkland & Ellis LLP, counsel to the Borrowers, as to such matters as the Collateral Agent may reasonably request.
(h) The Lenders shall have received a copy of the financial statements and the financial projections described in Section 8.1.7 hereof.
(i) [Intentionally omitted.]
(j) Borrowers shall have paid all fees, costs and expenses which are payable pursuant to the terms hereof to Lenders on the Closing Date.
(k) The Collateral Agent shall have received Lien Waivers, each in form and substance reasonably satisfactory to the Collateral Agent, as it may request, in respect of (a) the following locations: (i) 500 North Industrial Road, St. George, Utah 84770, and (ii) 13085, 13039 and 13053 East Temple Avenue, City of Industry, California, and (b) the imported goods that Carmichael International Service has been engaged by the Borrowers to facilitate the import of.
(1) The Lenders shall have received evidence that (i) the Term A Loans under this Agreement have been designated as “Additional Priority Permitted Debt” under the 2009 Debenture Intercreditor Agreement, and (ii) the Term B Loans under this Agreement have been designated as “Additional Priority Permitted Debt” under the 2009 Debenture Intercreditor Agreement.
(m) The Collateral Agent shall have received the Intercreditor Agreement, executed and delivered by each of the parties thereto.
(n) The Collateral Agent shall have received the Sun Intercreditor Agreement, executed and delivered by each of the parties thereto.
(o) The Collateral Agent shall have received an executed copy of the Revolver Agreement, in form and substance satisfactory to the Collateral Agent.
(p) The Collateral Agent shall have received an executed copy of the Sun Last Out Term A Loan Agreement, in form and substance satisfactory to the Collateral Agent.
(q) The Collateral Agent shall have received an executed copy of the Sun Last Out Term B/C/D Loan Agreement, in form and substance satisfactory to the Collateral Agent.
 
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(r) The Collateral Agent shall have received an executed copy of the 2009 Debenture Intercreditor Agreement, in form and substance satisfactory to the Collateral Agent.
(s) No event or development shall have occurred since January 29, 2011 which could reasonably be expected to have a Material Adverse Effect.
(t) All consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person reasonably required in connection with the making of the Loans shall have been obtained and shall be in full force and effect.
(u) All proceedings in connection with the making of the initial Loans and the other transactions contemplated by this Agreement and the other Loan Documents, and all documents incidental hereto and thereto, shall be reasonably satisfactory to the Collateral Agent and its counsel, and the Collateral Agent and such counsel shall have received all such information and such counterpart originals or certified or other copies of such documents as the Collateral Agent or such counsel may reasonably request.
(v) The Lenders shall have received copies of the Management Fee Agreement and the other Material Contracts as in effect on the Effective Date, certified as true and correct copies thereof by a Responsible Officer of the Borrower Representative, together with a certificate of a Responsible Officer of the Borrower Representative stating that such agreements remain in full force and effect and that none of the Obligors has breached or defaulted in any of its obligations under such agreements.
(w) No action, suit, investigation, litigation or proceeding shall have been pending or threatened in any court or before any arbitrator or governmental instrumentality that in Collateral Agent’s judgment (i) could reasonably be expected to have a material adverse effect on Borrowers’ business, operations, properties, or condition (financial or otherwise) or could materially and adversely impair Borrowers’ ability to perform satisfactorily under this Agreement; or (ii) could reasonably be expected to materially and adversely affect this Agreement or the transactions contemplated hereby.
(x) The Lenders shall have received such other agreements, instruments, approvals, opinions and other documents, each satisfactory to the Collateral Agent in form and substance, as the Collateral Agent may reasonably request.
 
Section 7.	[INTENTIONALLY OMITTED]	
 
Section 8.	REPRESENTATIONS AND WARRANTIES	
8.1 General Representations and Warranties . To induce Lenders to enter into this Agreement and to make available the Loans, each Obligor represents and warrants that:
8.1.1 Organization and Qualification . Each Obligor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Obligor is duly qualified, authorized to do business and in good standing as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a Material Adverse Effect.
 
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8.1.2 Power and Authority . Each Obligor is duly authorized to execute, deliver and perform its Loan Documents, and has all requisite power and authority to conduct its business as now conducted and as presently contemplated and, in the case of the Borrowers, to make the borrowings hereunder. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action, and do not (a) require any consent or approval of any holders of Equity Interests of any Obligor, other than those already obtained; (b) contravene the Organic Documents of any Obligor; (c) violate or cause a default under any Applicable Law or Material Contract; or (d) result in or require the imposition of any Lien (other than Permitted Liens) on any Property of any Obligor.
8.1.3 Enforceability . Each Loan Document is a legal, valid and binding obligation of each Obligor party thereto, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.
8.1.4 Capital Structure . Schedule 8.1.4 (as such schedule may be amended or supplemented from time to time with respect to the following) shows, for each Obligor, its name and its jurisdiction of organization and its authorized and issued Equity Interests, and for each Domestic Subsidiary only, the holders of its Equity Interests and all agreements binding on such holders with respect to their Equity Interests. Each Obligor has good title to the Equity Interests of its Domestic Subsidiaries, free and clear of all Liens (other than Permitted Liens), and all such Equity Interests are duly issued, fully paid and non-assessable. Except as set forth on Schedule 8.1.4 (as such schedule may be amended or supplemented from time to time with respect to the following), there are no outstanding options to purchase, warrants, subscription rights, agreements to issue or sell, convertible interests, phantom rights or powers of attorney relating to any Equity Interests of any Obligor or Domestic Subsidiary.
8.1.5 Corporate Names: Locations . During the five years preceding the Closing Date, except as shown on Schedule 8.1.5 , no Person that is an Obligor as of the Closing Date has been known as or used any corporate, fictitious or trade names, has been the surviving corporation of a merger or combination, or has acquired any substantial part of the assets of any Person. The chief executive offices and other locations of Collateral of Obligors as of the Closing Date are shown on Schedule 8.6.1 (as such schedule may be amended or supplemented from time to time).
8.1.6 Title to Properties: Priority of Liens . Each Obligor has good and marketable title to (or valid leasehold interests in) all of its Real Estate, and good title to all of its personal Property, including all Property reflected in any financial statements delivered to Lenders, in each case free of all Liens except Permitted Liens. Each Obligor has paid and discharged all lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens.
8.1.7 Financial Statements . (a) The consolidated balance sheets, and related statements of income, cash flow and shareholder’s equity, of Parent and its Subsidiaries and consolidating balance sheets and related statements of income for Parent and its Subsidiaries, separately presenting Obligors, Immaterial Subsidiaries and Foreign Subsidiaries, copies of which have been delivered to the Collateral Agent and each Lender prior to the Closing Date, fairly present in all material respects the consolidated financial condition of the Parent and its
 
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Subsidiaries as at the respective dates thereof and the consolidated results of operations of the Parent and its Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP. Since January 29, 2011 there has been no change in the condition, financial or otherwise, of any Obligor or Domestic Subsidiary that could reasonably be expected to have a Material Adverse Effect. No financial statement delivered to the Agent or any Lender at any time contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading. Each Obligor and Domestic Subsidiary is Solvent, both before and after giving effect to the transactions contemplated by this Agreement and the Loans.
(b) All projections furnished to the Collateral Agent prior to the Closing Date are believed by the Borrower Representative at the time furnished to be reasonable, have been prepared on a reasonable basis and in good faith by the Borrower Representative, and have been based on assumptions believed by the Borrower Representative to be reasonable at the time made and upon the best information then reasonably available to the Borrower Representative, and the Borrower Representative is not aware of any facts or information that would lead it to believe that such projections are incorrect or misleading in any material respect; it being recognized by the Lenders that any projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by such projections may differ from the projected results and such differences may be material.
8.1.8 Surety Obligations . Except as set forth on Schedule 8.1.8 (as such schedule may be amended or supplemented from time to time), no Obligor is obligated as indemnitor under any bond or other contract that assures payment or performance of any obligation of any Person, except as permitted hereunder.
8.1.9 Taxes . Each Obligor has filed all federal, state and local tax returns and other reports that it is required by law to file, and has paid, or made provision for the payment of, all Taxes upon it, its income and its Properties that are due and payable, except to the extent being Properly Contested and except where the failure to file or pay the same could not reasonably be expected to have a Material Adverse Effect. The provision for Taxes on the books of each Obligor is adequate for all years not closed by applicable statutes, and for its current Fiscal Year.
8.1.10 Brokers . There are no brokerage commissions, finder’s fees or investment banking fees payable in connection with any transactions contemplated by the Loan Documents, except for the payment of transaction fees to Sun Capital Partners Management V, LLC pursuant to the Management Services Agreement.
8.1.11 I ntellectual Property . Each Obligor owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without conflict with any rights of others, except where the failure to own or have rights to use such Intellectual Property could not reasonably be expected to have a Material Adverse Effect. There is no pending or, to any Obligor’s knowledge, threatened Intellectual Property Claim with respect to any Obligor or any of its Property (including any Intellectual Property, except for Intellectual Property Claims which could not reasonably be expected to have a Material Adverse Effect). Except as disclosed on Schedule 8.1.11 (as such schedule may be amended or supplemented from time to time), no Obligor pays or owes any Royalty or other compensation to any Person with respect to any Intellectual Property. All Intellectual Property owned, used or licensed by, or otherwise subject to any interests of, any Obligor is shown on Schedule 8.1.11 .
 
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8.1.12 Governmental Approvals . Each Obligor has, is in compliance with, and is in good standing with respect to, all Governmental Approvals, licenses and permits necessary to conduct its business and to own, lease and operate its Properties, except where noncompliance or failure to be in good standing could not reasonably be expected to have a Material Adverse Effect. All necessary import, export or other licenses, permits or certificates for the import or handling of any goods or other Collateral have been procured and are in effect, and Obligors have complied with all foreign and domestic laws with respect to the shipment and importation of any goods or Collateral, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.
8.1.13 Compliance with Laws . Each Obligor has duly complied, and its Properties and business operations are in compliance, with all Applicable Laws, except where noncompliance could not reasonably be expected to have a Material Adverse Effect. To the knowledge of any Obligor, as of the Closing Date, there have been no citations, notices or orders of material noncompliance issued to Obligor under any Applicable Law.
8.1.14 Compliance with Environmental Laws . Except as disclosed on Schedule 8.1.14 , no Obligor’s past or present operations, Real Estate or other Properties are subject to any on-going federal, state or local investigation to determine whether any remedial action is needed to address any environmental pollution, hazardous material or environmental clean-up that could reasonably be expected to have a Material Adverse Effect. To the knowledge of any Obligor, as of the Closing Date, no Obligor has received any Environmental Notice. As of the Closing Date, no Obligor has any contingent liability with respect to any Environmental Release, environmental pollution or hazardous material on any Real Estate now or previously owned, leased or operated by it.
8.1.15 Burdensome Contracts . No Obligor is a party or subject to any contract, agreement or charter restriction that could reasonably be expected to have a Material Adverse Effect. No Obligor or Subsidiary is party or subject to any Restrictive Agreement, except as shown on Schedule 8.1.15 (as such schedule may be amended or supplemented from time to time), none of which prohibit the execution or delivery of any Loan Documents by an Obligor nor the performance by an Obligor of any obligations thereunder.
8.1.16 Litigation . Except as shown on Schedule 8.1.16 , there are no proceedings or investigations pending or, to any Obligor’s knowledge, threatened against any Obligor or any of their businesses, operations, Properties, prospects or conditions, that (a) relate to any Loan Documents or transactions contemplated thereby; or (b) could reasonably be expected to have a Material Adverse Effect if determined adversely to any Obligor. No Obligor is in default with respect to any order, injunction or judgment of any Governmental Authority that could reasonably be expected to have a Material Adverse Effect.
8.1.17 No Defaults . No event or circumstance has occurred or exists that constitutes a Default or Event of Default (subject to, with respect to the Revolver Loan Documents, the cure period in Section 10.1(t)). As of the Closing Date, no Obligor or Subsidiary is in default, and no event or circumstance has occurred or exists that with the
 
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passage of time or giving of notice would constitute a default, under any Material Contract or in the payment of any Debt in excess of $23,000,000 (subject to, with respect to the Revolver Loan Documents, the cure period in Section 10.1(t)). As of the Closing Date, there is no basis upon which any party (other than an Obligor or Domestic Subsidiary) could terminate a Material Contract prior to its scheduled termination date.
8.1.18 ERISA . Except as disclosed on Schedule 8.1.18 (as such schedule may be amended or supplemented from time to time), no Obligor has any Multiemployer Plan. Each Obligor is in full compliance with the requirements of all Applicable Law, including ERISA, relating to each Multiemployer Plan. As of the Closing Date, no Obligor has any obligations under a Foreign Plan. No fact or situation exists that could reasonably be expected to result in a Material Adverse Effect in connection with any Multiemployer Plan. No Obligor has any withdrawal liability in connection with a Multiemployer Plan or Foreign Plan. All employer and employee contributions to Foreign Plans, to the extent required by law or the terms of such plans, have been made or accrued in accordance with normal accounting principles. The fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance and/or the book reserve established for each Foreign Plan, together with any accrued contributions, are sufficient to provide the accrued benefit obligations of all participants in such plans according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles.
8.1.19 Trade Relations . There exists no actual or threatened termination, limitation or modification of any business relationship between any Obligor and any customer or supplier, or any group of customers or suppliers, which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect. There exists no condition or circumstance that could reasonably be expected to impair the ability of any Obligor to conduct its business at any time hereafter in substantially the same manner as conducted on the Closing Date.
8.1.20 Labor Relations . Except as described on Schedule 8.1.20 (as such schedule may be amended or supplemented from time to time), no Obligor is party to or bound by any collective bargaining agreement. As of the Closing Date, there are no material grievances, disputes or controversies with any union or other organization of any Obligor’s employees, or, to any Obligor’s knowledge, any asserted or threatened strikes, work stoppages or demands for collective bargaining.
8.1.21 Payable Practices . No Obligor has made any material change in its historical accounts payable practices from those in effect on the Closing Date.
8.1.22 Not a Regulated Entity . No Obligor is (a) an “investment company” or a “person directly or indirectly controlled by or acting on behalf of an investment company” within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any public utilities code or any other Applicable Law regarding its authority to incur Debt.
8.1.23 Margin Stock . No Obligor is engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. The Loan proceeds will not be used
 
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by Obligors to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose governed by Regulations T, U or X of the Board of Governors.
8.1.24 Plan Assets . As of the Closing Date, no Obligor is an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. §2510.3-101 of any “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA or any “plan” (within the meaning of Section 4975 of the Internal Revenue Code), and the execution of this Agreement is not a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
8.1.25 Immaterial Subsidiaries . No Immaterial Subsidiary (a) owns or generates any Accounts (other than intercompany Accounts) or Inventory located in the United States of America or (ii) has revenues (other than from intercompany Accounts) in any Fiscal Year in excess of $1,000,000.
8.1.26 Nature of Business . No Obligor is engaged in any business other than the business it is engaged in on the Closing Date or any activities ancillary or related thereto, or logical extensions thereof.
8.1.27 Insurance . Each Obligor keeps its property adequately insured and maintains (a) insurance to such extent and against such risks as is customary with companies in the same or similar businesses, (b) workmen’s compensation insurance in the amount required by applicable law, (c) public liability insurance in the amount customary with companies in the same or similar business against claims for personal injury or death on properties owned, occupied or controlled by it, and (d) such other insurance as may be required by law or as may be reasonably required by the Collateral Agent. Schedule 8.1.27 sets forth a list of all insurance maintained by each Obligor on the Closing Date.
8.1.28 Use of Proceeds . The proceeds of the Loans shall be used to (a) refinance the existing obligations (including with respect to the Term Loan B to refinance indebtedness incurred to finance all or any part of the purchase price or cost of design, construction, installation or improvement or lease of property (real or personal), plant or equipment (whether through the direct acquisition of such assets or the acquisition of capital stock of any Person owning such assets) used in the business or the Borrowers), (b) pay fees and expenses in connection with the transactions contemplated hereby and (c) for general working capital purposes of the Borrowers (including the payments of certain earnouts and funding of Permitted Acquisitions).
8.1.29 Material Contracts . Set forth on Schedule 8.1.29 is a complete and accurate list as of the Closing Date of all Material Contracts of each Obligor, showing the parties and subject matter thereof and amendments and modifications thereto. Each such Material Contract (a) is in full force and effect and is binding upon and enforceable against each Loan Party that is a party thereto and, to the knowledge of such Obligor, all other parties thereto in accordance with its terms, (b) has not been otherwise amended or modified, and (c) is not in default due to the action of any Obligor or, to the best knowledge of any Obligor, any other party thereto.
 
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8.1.30 [ Intentionally Omitted ]. No Bankruptcy Filing . No Obligor is contemplating either an Insolvency Proceeding or the liquidation of all or a major portion of such Obligor’s assets or property, and no Obligor has any knowledge of any Person contemplating an Insolvency Proceeding against it.
8.1.32 Security Interests . Each Security Agreement creates in favor of the Collateral Agent, for the benefit of the Lenders, a legal, valid and enforceable security interest in the Collateral secured thereby. Upon the filing of the UCC-1 financing statements described in Section 6.1(b) and the recording of the Collateral Assignments for Security referred to in each Security Agreement in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, such security interests in and Liens on the Collateral granted thereby shall be perfected, first priority security interests (to the extent perfection may be obtained by filing, and subject to Permitted Liens that are expressly allowed to have priority over the Collateral Agent’s Liens under Applicable Law and the Intercreditor Agreement), and no further recordings or filings are or will be required in connection with the creation, perfection or enforcement of such security interests and Liens, other than (i) the filing of continuation statements in accordance with applicable law, (ii) the recording of the Collateral Assignments for Security pursuant to each Security Agreement in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, with respect to after-acquired U.S. patent and trademark applications and registrations and U.S. copyrights, (iii) the recordation of appropriate evidence of the security interest in the appropriate foreign registry with respect to all foreign intellectual property, and (iv) additional UCC filings to the extent new Obligors are acquired or existing Obligors change their states of organization.
8.1.33 Anti-Terrorism Laws .
(a) General . None of the Obligors nor, to the knowledge of each Obligor, any Affiliates of such Obligor, is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the Anti-Terrorism Laws.
(b) None of the Obligors nor, to the knowledge of each Obligor, any Affiliates of such Obligor, or their respective agents acting or benefiting in any capacity in connection with the Loans, or other transactions hereunder, is any of the following (each a “ Blocked Person ”):
(i) a Person that is prohibited pursuant to any of the OFAC Sanctions Programs, including a Person named on OFAC’s list of Specially Designated Nationals and Blocked Persons;
(ii) a Person that is owned or controlled by, or that owns or controls, or that is acting for or on behalf of, any Person described in (A), above;
(iii) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; or
(iv) a Person that is affiliated or associated with a Person described in (A) through (C), above.
 
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(c) None of the Obligors, nor any of their agents acting in any capacity in connection with the Loans or other transactions hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to any OFAC Sanctions Programs.
8.2 Complete Disclosure . No Loan Document contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make the statements contained therein not materially misleading. There is no fact or circumstance that any Obligor has failed to disclose to a Lender in writing that could reasonably be expected to have a Material Adverse Effect.
 
Section 9.	COVENANTS AND CONTINUING AGREEMENTS	
9.1 Affirmative Covenants . For so long as any Loans or Obligations are outstanding, each Obligor shall, and shall cause each Domestic Subsidiary to:
9.1.1 Inspections: Appraisals .
(a) Permit Collateral Agent from time to time, subject (except when a Default or Event of Default exists) to reasonable notice and normal business hours, to visit and inspect the Properties of any Obligors or Domestic Subsidiary, inspect, audit and make extracts from any Borrowers’ or Domestic Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Obligor’s or Domestic Subsidiary’s business, financial condition, assets, prospects and results of operations. Lenders may participate in any such visit or inspection, at their own expense; provided , that upon the occurrence and during the continuation of an Event of Default, each Lender may participate in any visit or inspection conducted by Collateral Agent and all charges, costs and expenses of such Lender shall be paid by Borrowers; provided , further , that the Lenders will use commercially reasonable efforts to coordinate amongst such Lenders to minimize duplicative costs. Neither Collateral Agent nor any Lender shall have any duty to any Obligors to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligors. To the extent any other information is shared by Collateral Agent or a Lender with any Obligor, such Obligors acknowledges that it was prepared by the Lenders for their purposes and Obligors shall not be entitled to rely upon it.
(b) Reimburse Collateral Agent for all charges, costs and expenses of each Lender in connection with examinations of any Obligor’s books and records or any other financial or Collateral matters as Collateral Agent deems appropriate up to two times per Loan Year; provided , however , that if an examination is initiated during the continuance of a Default or Event of Default, all charges, costs and expenses therefor shall be reimbursed by Obligors without regard to such limits.
 
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9.1.2 Financial and Other Information . Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions; and furnish to each Lender:
(a) as soon as available, and in any event within 90 days after the close of each Fiscal Year, consolidated balance sheets as of the end of such Fiscal Year and the related statements of income, cash flow and shareholders’ equity for such Fiscal Year of Parent and its Subsidiaries, which consolidated statements shall be prepared in accordance with GAAP, audited and certified (without qualification as to scope, “going concern” or similar items) by a firm of independent certified public accountants of recognized standing selected by Borrower Representative and acceptable to Required Lenders, and shall set forth in comparative form corresponding figures for the preceding Fiscal Year and other information filed with the Securities and Exchange Commission, and the consolidating balance sheets as of the end of such Fiscal Year and related statements of income for such Fiscal Year of Parent and its Subsidiaries, separately presenting Obligors, Immaterial Subsidiaries and Foreign Subsidiaries;
(b) as soon as available, (i) and in any event within 45 days after the end of each Fiscal Quarter the following: (A) unaudited consolidated balance sheets as of the end of such Fiscal Quarter and the related statements of income and cash flow for such Fiscal Quarter and for the portion of the Fiscal Year then elapsed, for Parent and its Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and (B) consolidating balance sheets as of the end of such Fiscal Quarter and the related statements of income for such portion of the Fiscal Year then elapsed for Parent and its Subsidiaries, separately presenting Obligors, Immaterial Subsidiaries and Foreign Subsidiaries (provided, that for the purposes of this clause (B) only, in the case of each Fiscal Quarter that corresponds with the end of a Fiscal Year, such delivery shall be made within 90 days after the end of such Fiscal Quarter), (ii) and in any event within 30 days after the end of each Fiscal Month, unaudited consolidated balance sheets as of the end of such Fiscal Month and a related consolidated profit and loss statement and cash flow statement (which cash flow statement need not be prepared in accordance with GAAP but instead may be prepared in a manner substantially similar to the cash flow statement presented to the Collateral Agent with respect to the Fiscal Month ending on July 30, 2011) for such Fiscal Month and for the portion of the Fiscal Year then elapsed, for Parent and its Subsidiaries (excluding discontinued operations), setting forth in comparative form corresponding figures for the preceding Fiscal Year and (iii) and in any event within 45 days after the end of each Fiscal Quarter (but within 90 days after the last Fiscal Quarter in a Fiscal Year) a report setting forth a copy of Parent’s Management Discussion and Analysis for such Fiscal Quarter, and, in each case of clauses (i), (ii) and (iii), certified by either the Chief Financial Officer, Vice President, Finance or Controller of the Borrower Representative as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such Fiscal Quarter or Fiscal Month, as applicable, and period, subject to normal year end adjustments and the absence of footnotes;
(c) concurrently with delivery of financial statements under clauses (a) and (b)(i) above, or more frequently if requested by Collateral Agent while a Default or Event of Default exists, a Compliance Certificate executed by the Chief Financial Officer, Vice President, Finance or Controller of the Borrower Representative;
(d) to the extent available and upon Lenders’ request, copies of all management letters and other material reports submitted to Borrowers by their accountants in connection with such financial statements;
 
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(e) not later than 30 days after the end of each Fiscal Year, projections of Borrowers’ consolidated balance sheets, results of operations and cash flow for the next Fiscal Year, quarter by quarter, in form and substance reasonably satisfactory to the Collateral Agent, which projections shall be prepared on a reasonable basis and in good faith, and based on assumptions believed by the Borrowers to be reasonable at the time made based on the circumstances known at such time; it being recognized by the Lenders that any projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material;
(f) promptly after the sending or filing thereof, copies of any regular, periodic and special reports or registration statements or prospectuses that any Borrower files with the Securities and Exchange Commission or any other Governmental Authority, or any securities exchange; provided , that each statement or report required to be delivered pursuant to this clause (f) shall be deemed to have been delivered on the date on which the Borrower Representative posts such document on the Borrower Representative’s website on the Internet at the website address www.kellwood.com, or when such document is posted on the Securities and Exchange Commission’s website at www.sec.gov (the “ SEC Website ”) or on an Internet website established by the Lenders with Intralinks, Inc. or other similarly available electronic media (each of the foregoing an “ Informational Website ”); provided , further , that (i) the Borrower Representative shall deliver paper copies of all such documents to any Lender that requests the Borrower Representative to deliver such paper copies (without impairment of the effectiveness of any document previously delivered in electronic media form) until a request to cease delivering paper copies is given by such Lender and (ii) each Lender shall be notified by electronic mail of the applicable Informational Website and of the posting of each such document; it being understood and agreed that (x) Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above in this clause (f), and in any event shall have no responsibility to monitor compliance by the Borrower Representative with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents; and (y) Borrowers shall be responsible for (other than with respect to the SEC Website) and shall incur all risks associated with (including with respect to the SEC Website) the security and confidentiality of the Informational Websites and its information posted thereon;
(g) concurrently with delivery thereof to the Revolving Credit Agent (but only to the extent not duplicative of items required hereunder), delivery of the notices, certificates, reports and other information required by Sections 8.1, 8.2, and 8.3 of the Revolver Agreement; and
(h) such other reports and information (financial or otherwise) as any Lender may reasonably request from time to time in connection with any Collateral or any Obligor’s financial condition or business.
9.1.3 Notices . Notify the Lenders in writing, promptly (but in any event within 5 Business Days) after an Obligor obtaining knowledge thereof, of any of the following that affects an Obligor: (a) the threat or commencement of any proceeding or investigation, whether or not covered by insurance, if it is reasonably likely that an adverse determination could have a Material Adverse Effect; (b) any pending or threatened labor dispute, strike or walkout, or the
 
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expiration of any material labor contract; (c) any default under or termination of a Material Contract; (d) the existence of any Default or Event of Default; (e) any adverse judgment not covered by insurance in an amount exceeding $5,000,000; (f) the assertion of any Intellectual Property Claim, if an adverse resolution could reasonably be expected to have a Material Adverse Effect; (g) any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could reasonably be expected to have a Material Adverse Effect; (h) any Environmental Release by an Obligor or on any Property owned, leased or occupied by an Obligor; or receipt of any Environmental Notice, which could reasonably be expected to have a Material Adverse Effect; (i) the discharge of or any withdrawal or resignation by Borrowers’ independent accountants; or (j) any opening of a new office or place of business where Collateral is located, within 30 days after such opening.
9.1.4 Landlord and Storage Agreements . Upon request, provide the Lenders with copies of all existing agreements, and promptly after execution thereof provide the Lenders with copies of all future agreements, between an Obligor and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral having a book value in excess of $1,000,000 in the aggregate at any time.
9.1.5 Compliance with Laws . Comply with all Applicable Laws, including ERISA, Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding collection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failure to comply (other than failure to comply with Anti-Terrorism Laws) or maintain could not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Obligor or Domestic Subsidiary, it shall act promptly and diligently to investigate and report to the Lenders and, to the extent required by Applicable Law, all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, whether or not directed to do so by any Governmental Authority.
9.1.6 Taxes . Pay and discharge all Taxes (other than de minimis Taxes) prior to the date on which they become delinquent or penalties attach, unless such Taxes are being Properly Contested.
9.1.7 Insurance . In addition to the insurance required hereunder with respect to Collateral, maintain insurance with insurers reasonably satisfactory to the Required Lenders or other insurers rated A+ or better by Best Rating Guide, (a) with respect to the Properties and business of the Obligors of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and deductibles as are customary for companies similarly situated, and (b) business interruption insurance with deductibles and subject to an Insurance Assignment in favor of the Collateral Agent reasonably satisfactory to the Required Lenders. All certificates of insurance are to be delivered to the Collateral Agent, with the loss payable and additional insured endorsement in favor of the Collateral Agent and such other Persons as the Collateral Agent may designate from time to time, and shall provide for not less than 30 days’ prior written notice to the Collateral Agent of the exercise of any right of cancellation. If any Obligor or any of its Subsidiaries fails to maintain such insurance, the Collateral Agent may arrange for such
 
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insurance, but at the Borrowers’ expense and without any responsibility on the Collateral Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Upon the occurrence and during the continuance of an Event of Default, but subject to the Intercreditor Agreement, the Collateral Agent shall have the sole right, in the name of the Lenders, any Obligor and its Subsidiaries, to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.
9.1.8 Licenses . Keep each License affecting any material portion of the Collateral (including the manufacture, distribution or disposition of Inventory) or any other material Property of Obligors in full force and effect subject to non-renewal or termination by the applicable Obligor in the Ordinary Course of Business, or otherwise in its reasonable judgment; notify Lenders of any proposed modification to any such License increasing the Royalties payable thereunder, or entry into any new License, in each case at least 30 days after the effective date of such License or modification; pay all Royalties when due; and notify Lenders of any material default or breach asserted by any Person to have occurred under any License.
9.1.9 Future Subsidiaries . Promptly notify the Lenders upon any Person becoming a Domestic Subsidiary and cause it to execute and deliver to Lenders a Joinder Agreement and to take such other actions as Collateral Agent shall require to evidence and perfect a Lien in favor of Collateral Agent (for the benefit of Lenders) on the Collateral in which such Person has an interest, including delivery of such legal opinions, in form and substance reasonably satisfactory to the Required Lenders, as they shall deem appropriate, provided, that prior to any Person becoming a Borrower hereunder, Borrower Representative shall provide at least 5 days written notice to Collateral Agent.
9.1.10 Additional Guarantors . In the event that any Person becomes party to the Revolver Guaranty and such Person is not a Borrower hereunder, Borrower Representative shall immediately notify each Lender thereof and cause such Person to execute and deliver to the Lenders a Joinder Agreement and to take such other actions as Collateral Agent shall require to evidence and perfect a Lien in favor of Agent (for the benefit of Secured Parties) on the Collateral in which such Person has an interest, including delivery of such legal opinions, in form and substance satisfactory to Collateral Agent, as it shall deem appropriate.
9.1.11 Preservation of Existence. Etc. Maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except as permitted by Section 9.2.9 or except to the extent failure to be so qualified or in good standing could not reasonably be likely to have a Material Adverse Effect.
9.1.12 Keeping of Records and Books of Account . Keep accurate records and books of account, with entries made to permit the preparation of financial statements in accordance with GAAP.
 
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9.1.13 Maintenance of Properties. Etc. Maintain and preserve all of its properties which are necessary for the proper conduct of its business in good working order and condition, ordinary wear and tear and casualty and condemnation losses excepted.
9.1.14 Obtaining of Permits. Etc. Obtain, maintain and preserve and take all necessary action to timely renew, all permits, licenses, authorizations, approvals, entitlements and accreditations which are necessary or useful in the proper conduct of its business, except to the extent failure to do so could not reasonably be likely to have a Material Adverse Effect.
9.1.15 Further Assurances . Take such action and execute, acknowledge and deliver at its sole cost and expense, such agreements, instruments or other documents as the Collateral Agent may reasonably require from time to time in order (a) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (b) to subject to valid and perfected first priority Liens any of the Collateral, (c) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfection and priority of the Liens intended to be created thereby, and (d) to better assure, convey, grant, assign, transfer and confirm unto the Collateral Agent and each Lender the rights now or hereafter intended to be granted to it under this Agreement or any other Loan Document. In furtherance of the foregoing, to the maximum extent permitted by applicable law, each Obligor (i) authorizes the Collateral Agent to execute any such agreements, instruments or other documents in such Obligor’s name and to file such agreements, instruments or other documents in any appropriate filing office, (ii) authorizes the Collateral Agent to file any financing statement required hereunder or under any other Loan Document, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of such Obligor, and (iii) ratifies the filing of any financing statement, and any continuation statement or amendment with respect thereto, filed without the signature of such Obligor prior to the date hereof, in each case to the extent such filings are necessary or desirable in order to perfect or maintain the perfection of the Collateral Agent’s security interest in the Collateral.
9.1.16 Post-Closing Covenants
(a) On or before the date that is 30 days after the Closing Date (or such later date as the Collateral Agent may consent to in its discretion), deliver to the Collateral Agent copies of policies or certificates of insurance for the insurance policies carried by Obligors, all in compliance with the Loan Documents, together with such endorsements as to the named insureds or loss payees thereunder as the Collateral Agent may request and providing that such policy may be terminated or canceled (by the insurer or the insured thereunder) only upon 30 days’ prior written notice to the Collateral Agent and each such named insured or loss payee, together with evidence of the payment of all premiums due in respect thereof for such period as the Collateral Agent may request;
(b) On or before the date that is 30 days after the Closing Date (or such later date as the Collateral Agent may consent to in its discretion), use commercially reasonable efforts to obtain Lien Waivers, each in form and substance reasonably satisfactory to the Collateral Agent, as it may request, in respect of (a) the following locations: (i) 302 Hawthorne Drive, Glasgow, Missouri 65254, and (ii) 7101 NW 32nd Avenue, Miami, Florida and 1898 Marigold Street, Redlands, California, and (b) the imported goods that Barthco Int’l Inc. has been engaged by the Borrowers to facilitate the import of;
 
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(c) On or before the date that is 30 days after the Closing Date, use commercially reasonable efforts to provide the Collateral Agent with: (a) all documents necessary to effect and reflect the release of the Lien in favor of Wells Fargo Bank, National Association (granted by Levi Strauss & Co.), recorded at the United States Patent and Trademark Office on November 5, 1985 at Reel 0509, Frame 218; (b) all documents necessary to effect and reflect the release of the Lien in favor of Bankers Trust Company (granted by Koret of California, Inc.), recorded at the United States Patent and Trademark Office on December 18, 1986 at Reel 0547, Frame 322; and (c) all documents necessary to effect and reflect the release of the Lien in favor of BNY Financial Corp. (granted by Koret of California, Inc.), recorded at the United States Patent and Trademark Office on July 9, 1992 at Reel 0883, Frame 616; and
(d) On or before the date that is 10 days after the Closing Date (or such later date as the Collateral Agent may consent to in its discretion), deliver to the Collateral Agent fully- executed account control agreements for each Deposit Account (as defined in the Revolver Agreement) of the Borrowers at Bank of America, N.A. and JPMorgan Chase Bank, N.A, which shall be subject to the “control” of the Revolving Credit Agent and, upon termination of the Revolver Agreement, the Collateral Agent, each in form and substance reasonably satisfactory to the Collateral Agent.
9.2 Negative Covenants . For so long as any Loans or Obligations are outstanding, each Obligor shall not, and shall cause each Domestic Subsidiary not to:
9.2.1 Permitted Debt . Create, incur, guarantee or suffer to exist any Debt, except:
(a) the Obligations;
(b) Subordinated Debt;
(c) Permitted Purchase Money Debt;
(d) Debt (other than the Obligations, Subordinated Debt, Permitted Purchase Money Debt, the 2009 Debentures, the Revolver Debt and the Sun Debt), but only to the extent outstanding on the Closing Date and not satisfied with proceeds of the initial Loans and which is listed on Schedule 9.2.1 ;
(e) Permitted Contingent Obligations, provided no Obligor or any Domestic Subsidiary thereof shall incur any Contingent Obligations in respect of the obligations of any Foreign Subsidiary;
(f) Refinancing Debt as long as each Refinancing Condition is satisfied in respect of such Refinancing Debt at the time such Refinancing Debt is incurred;
(g) the endorsement of negotiable instruments for deposit or collection or similar transactions in the Ordinary Course of Business;
(h) unsecured intercompany Debt for loans and advances made by any Borrower or wholly owned Subsidiary to (i) a Borrower, (ii) any other Obligor or (iii) if such wholly owned Subsidiary making such loan or advance is not an Obligor, any other wholly owned Subsidiary, provided that such intercompany Debt of any Obligor is subordinated pursuant to Section 13.16 ;
 
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(i) financing of insurance premiums;
(j) unsecured Debt in an amount not to exceed $5,000,000 at any time outstanding;
(k) other unsecured Debt of any Domestic Subsidiary which is not an Obligor, provided that, in connection with such Debt, no Obligor has incurred a Contingent Obligation or any direct or contingent liability with respect thereto unless such Contingent Obligation is unsecured and is expressly permitted hereunder;
(l) other Debt of any Obligor incurred or assumed in connection with a Permitted Acquisition that is created, incurred or guaranteed after the Closing Date so long as, in each case, (i) Availability after giving pro forma effect thereto exceeds $12,500,000, and (ii) Borrowers’ accounts payable are not being extended in a manner inconsistent with past business practices;
(m) (i) the 2009 Debentures, as long as such Debt is subject to the 2009 Debenture Intercreditor Agreement; provided that , the principal amount of the Debt owing under the 2009 Debentures shall not exceed at any time an amount equal to the principal amount outstanding under the 2009 Debentures as of the date of the consummation of the Exchange Offer, plus any interest thereon that is paid-in-kind in accordance with the terms thereof and added to the outstanding principal thereof, (ii) the Revolver Debt not to exceed $160,000,000, as long as such Debt is subject to the Intercreditor Agreement and (iii) the Sun Debt, as long as such Debt is subject to the Sun Intercreditor Agreement; and
(n) Bank Product Debt (as defined in the Revolver Agreement).
Notwithstanding anything in this Section 9.2.1 to the contrary, Borrowers shall not incur any Debt that is not permitted to be incurred under the 2009 Indenture or the Indenture.
9.2.2 Permitted Liens . Create or suffer to exist any Lien upon any of its Property, except the following (collectively, “ Permitted Liens ”):
(a) Liens in favor of Collateral Agent securing the Obligations;
(b) Purchase Money Liens securing Permitted Purchase Money Debt;
(c) Liens for Taxes not yet due or being Properly Contested;
(d) statutory Liens (other than Liens for Taxes or imposed under ERISA but including carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens) arising in the Ordinary Course of Business, but only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the Property or materially impair operation of the business of any Borrower or Subsidiary;
 
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(e) Liens incurred or deposits made in the Ordinary Course of Business to secure the performance of tenders, bids, leases, contracts (except those relating to Debt), statutory obligations (including in connection with workers’ compensation, unemployment insurance and other social security legislation (other than Liens for Taxes or imposed under ERISA)) and other similar obligations, or arising as a result of progress payments under government contracts, as long as such Liens are at all times junior to Collateral Agent’s Liens;
(f) Liens securing judgments for the payment of money in an aggregate amount not in excess of $5,000,000 (except to the extent covered by independent third-party insurance as to which the insurer has acknowledged in writing its obligation to cover), unless any such judgment remains undischarged for a period of more than 10 consecutive days during which execution is not effectively stayed;
(g) easements, rights-of-way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business;
(h) normal and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items in the course of collection;
(i) existing Liens shown on Schedule 9.2.2 and any renewals or extensions thereof, provided that the Property covered thereby is not increased and any renewal or extension of the obligations secured or benefited thereby does not increase the maximum outstanding principal amount of such obligations;
(j) Liens on fixed assets acquired in connection with a Permitted Acquisition so long as such Liens were existing at the time of such Acquisition by a Borrower or Subsidiary and were not incurred, extended or renewed in contemplation of such Acquisition; provided that (i) the Lien shall attach solely to the property acquired, and (ii) at the time of acquisition of such fixed assets, the aggregate amount remaining unpaid on all Debt secured by Liens on such fixed assets whether or not assumed by a Borrower or Subsidiary shall not exceed an amount equal to the lesser of the total purchase price or fair market value at the time of acquisition of such fixed assets;
(k) other Liens that are created upon any of its Property (other than Collateral) after the Closing Date, so long as the fair market value of such Property subject to such Liens does not exceed $5,000,000 at any time outstanding
(l) Liens on deposits and unearned insurance premiums securing Debt permitted under Section 9.2.1(i);
(m) (i) Liens on Collateral securing the Debt owing under the 2009 Debentures, as long as such Liens are subject to the 2009 Debenture Intercreditor Agreement and such Debt is permitted under Section 9.2.1(m)(i) ; (ii) Liens on Collateral securing the Revolver Debt, as long as such Debt is permitted under S ection 9.2.1(m)(ii) , and such Liens are subject to the Intercreditor Agreement; (iii) Liens on Collateral securing the Sun Debt, as long as such Debt is permitted under Section 9.2.1(m)(iii), and such Liens are subject to the Sun Intercreditor Agreement; and
 
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(n) Liens on Collateral securing Bank Product Debt (as defined in the Revolver Agreement), as long as such Debt is permitted under Section 9.2.1(n) , and such Liens are subject to the Intercreditor Agreement.
9.2.3 [Intentionally Omitted]
9.2.4 Distributions: Upstream Payments
(a) Declare or make any Distributions, except (i) Permitted Distributions and (ii) Upstream Payments; or
(b) Create or suffer to exist any encumbrance or restriction on the ability of a Domestic Subsidiary to make any Upstream Payment, except for restrictions under the Loan Documents, the Revolver Loan Documents, the Sun Loan Documents, and under Applicable Law or restrictions in effect on the Closing Date as shown on Schedule 8.1.15 .
9.2.5 Restricted Investments . Make any Restricted Investment.
9.2.6 Disposition of Assets . Make any Asset Disposition, except a Permitted Asset Disposition or a transfer of Property by a Subsidiary or Obligor to a Borrower.
9.2.7 Loans: Extensions of Credit . Make any loans or other advances of money to any Person, except (a) advances to an officer or employee for salary, travel expenses, commissions and similar items in the Ordinary Course of Business; (b) prepaid expenses and extensions of trade credit made in the Ordinary Course of Business; (c) deposits with financial institutions permitted hereunder; (d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the Ordinary Course of Business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled Account Debtors to the extent reasonably necessary in the relevant Obligor’s reasonable business judgment to prevent or limit loss; (e) intercompany loans permitted by Section 9.2.1(h); and (f) other loans or extensions of credit made in the ordinary course of business after the Closing Date as long as (i) Availability after giving effect to such loans or extensions of credit exceeds $12,500,000 and Borrowers’ accounts payable are not being extended in a manner inconsistent with past business practices, and (ii) they are permitted under the Revolver Agreement as in effect on the date hereof, in an aggregate amount not to exceed $5,000,000 at any time outstanding.
9.2.8 Restrictions on Payment of Certain Debt . Make (a) any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any (i) Subordinated Debt, except regularly scheduled payments of principal, interest and fees, but only to the extent permitted under any subordination agreement relating to such Debt (and a Responsible Officer of Borrower Representative shall certify to each Lender, not less than five Business Days prior to the date of payment, that all conditions under such agreement have been satisfied); or (ii) other Debt (other than the Obligations and Revolver Debt) prior to its due date under the agreements evidencing such Debt, except for any such prepayment with respect to the currently issued and outstanding notes under the Convertible Debentures, Indenture or 2009 Indenture to the extent such repayment involves (A) a repurchase of any currently issued and outstanding notes under the Indenture or 2009 Indenture in an
 
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amount not to exceed 80% of the par value thereof so long as either (x) the trailing 60 day average daily Availability, calculated after giving effect to such payment to repurchase the notes, exceeds $30,000,000 or (y) Parent and its Subsidiaries have maintained a Fixed Charge Coverage Ratio of at least 1.00:1.00 calculated at the end of the most recent Fiscal Month for the period of 12 consecutive Fiscal Months then ending and the trailing 60 day average daily Availability exceeds $25,000,000, in each case calculated after giving effect to such payment to repurchase the notes, or (B) a repayment of outstanding amounts under the Convertible Debentures in an aggregate amount not to exceed $300,000, or (b) any cash payments on or in respect of the Sun Debt if (i) any Event of Default has occurred and is continuing at the time of any such payment or would result after giving effect thereto, or (ii) Availability is less then $45,000,000, calculated after giving effect to such payment.
9.2.9 Fundamental Changes Merge, combine or consolidate with any Person, or liquidate, wind up its affairs or dissolve itself, in each case whether in a single transaction or in a series of related transactions, except:
(i) any Subsidiary may merge (x) with a Borrower, provided that such Borrower shall be the continuing or surviving Person, or (y) with any one or more Subsidiaries, provided that when any wholly-owned Subsidiary or Guarantor is merging with another Subsidiary, the wholly-owned Subsidiary or Guarantor shall be the continuing or surviving Person, or (z) with any other Person in connection with any Permitted Acquisition, provided that the continuing or surviving Person shall be a wholly-owned Subsidiary and, if such Subsidiary was a Guarantor or a Borrower, also a Guarantor or a Borrower;
(ii) any Subsidiary may sell all or substantially all of its assets (upon voluntary liquidation or otherwise), to a Borrower or to another Subsidiary; provided that if the seller in such a transaction is a wholly-owned Subsidiary or a Guarantor, then the purchaser must also be a wholly-owned Subsidiary or Guarantor, respectively; or
(iii) in connection with a Permitted Asset Disposition.
(b) Except following thirty (30) days prior written notice to each Lender, change its name or conduct business under any fictitious name; change its tax or other organizational identification number; or change its form or state of organization.
9.2.10 Subsidiaries . Form or acquire any Subsidiary after the Closing Date, except in accordance with Section 9.1.9 or Section 9.2.9 in connection with Permitted Acquisitions; or permit any existing Domestic Subsidiary to issue any additional Equity Interests except director’s qualifying shares and except for Permitted Investments and issuances by a wholly-owned Subsidiary in connection with any Permitted Acquisition.
9.2.11 Organic Documents . Amend, modify or otherwise change any of its Organic Documents as in effect on the Closing Date except for any amendment, modification or other change that does not adversely affect any Lender or any duty to pay Obligations.
9.2.12 Tax Consolidation . File or consent to the filing of any consolidated income tax return with any Person other than Ultimate Parent and its Subsidiaries.
 
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9.2.13 Accounting Changes . Make any material change in accounting treatment or reporting practices, except as required by GAAP and in accordance with Section 1.2 ; or change its Fiscal Year.
9.2.14 Restrictive Agreements . Become a party to or permit any Subsidiary to become a party to any Restrictive Agreement, except a Restrictive Agreement as in effect on the Closing Date and shown on Schedule 8.1.15 and the Indenture, 2009 Indenture, 2009 Indenture Guaranty, Convertible Debentures, Revolver Debt and Sun Debt.
9.2.15 Hedging Agreements . Enter into any Hedging Agreement, except to hedge risks arising in the Ordinary Course of Business and not for speculative purposes.
9.2.16 Conduct of Business . Engage in any business, other than its business as conducted on the Closing Date and any activities incidental thereto.
9.2.17 Affiliate Transactions . Enter into or be party to any transaction with an Affiliate, except (a) transactions contemplated by the Loan Documents; (b) payment of reasonable compensation to officers and employees for services actually rendered, and loans and advances permitted by Section 9.2.7 ; (c) payment of customary directors’ fees and indemnities; (d) transactions solely among Obligors; (e) transactions with Affiliates that were consummated prior to the Closing Date, as shown on Schedule 9.2.17 ; (f) transactions with Affiliates (other than those described in clause (g) below) in the Ordinary Course of Business, upon fair and reasonable terms fully disclosed to each Lender and no less favorable than would be obtained in a comparable arm’s-length transaction with a non-Affiliate, other than any purchase or prepayment with respect to any issued and outstanding notes under the Convertible Debentures, Indenture or 2009 Indenture owned by an Affiliate; (g) the accrual or payment of management fees and customary and reasonable fees for management consulting services to Sun Capital Partners Management V, LLC pursuant to Section 2 of the Management Services Agreement; provided that (i) no Event of Default has occurred and is continuing at the time of any such payment thereof or would result after giving effect thereto, and (ii) Availability after giving effect to such payment is greater than $25,000,000 (it being understood that any management fees which may not be paid pursuant to the foregoing conditions set forth in this proviso may accrue and be paid at such time as such conditions would be satisfied after giving effect to such payment); (h) payment of indemnities and reimbursements of reasonable out-of-pocket fees and expenses incurred by Sun Capital Partners Management V, LLC in connection with the performance of the services under the Management Services Agreement; and (i) the payment of dividends or other distributions to Ultimate Parent (whether made to Ultimate Parent directly or to any Person directly or indirectly owned by Ultimate Parent and ultimately remitted to Ultimate Parent) in an amount sufficient to permit Ultimate Parent to pay (A) franchise taxes and other fees required to maintain Ultimate Parent’s corporate existence, and (B) to pay consolidated or combined federal, state or local taxes, including estimated taxes, which payments in the aggregate by each Obligor and Domestic Subsidiary are not in excess of the aggregate tax liabilities that would have been payable by each Obligor and Domestic Subsidiary calculated on a stand-alone basis.
9.2.18 Plans . Become party to any Multiemployer Plan or Foreign Plan, other than any in existence on the Closing Date or assumed in connection with any Permitted Acquisition.
 
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9.2.19 Amendments to the Indenture, the 2009 Indenture, the 2009 Indenture Guaranty, Convertible Debenture, the Convertible Debenture Agreement, the Revolver Agreement or Subordinated Debt .
(a) Amend, supplement or otherwise modify (i) the Indenture, the 2009 Indenture or the 2009 Indenture Guaranty or (ii) any Convertible Debenture or Convertible Debenture Agreement, in a manner that directly or indirectly accelerates the time of payment, increases the principal amount of or interest rate applicable to indebtedness issued or provides for more restrictive terms that adversely affect the Lenders;
(b) Amend, supplement or otherwise modify any other document, instrument or agreement relating to any Subordinated Debt, if such modification (i) increases the principal balance of such Debt, or increases any required payment of principal or interest; (ii) accelerates the date on which any installment of principal or any interest is due, or adds any additional redemption, put or prepayment provisions; (iii) shortens the final maturity date or otherwise accelerates amortization; (iv) increases the interest rate; (v) increases or adds any fees or charges; (vi) modifies any covenant in a manner or adds any representation, covenant or default that adversely affects the Lenders; or (vii) results in the Obligations not being fully benefited by the subordination provisions thereof; or
(c) Amend, supplement or otherwise modify the Revolver Agreement in violation of the Intercreditor Agreement.
(d) Amend, supplement or otherwise modify the Sun Last Out Term A Loan Agreement or the Sun Last Out Term B/C/D Loan Agreement in violation of the Sun Intercreditor Agreement.
9.2.20 Immaterial Subsidiaries . Permit or suffer any Immaterial Subsidiary to (a) own or generate any Accounts (other than intercompany Accounts) or Inventory located in the United States of America or (ii) have revenues in any Fiscal Year in excess of $1,000,000, unless Borrower Representative causes such Immaterial Subsidiary to execute a Joinder Agreement and to take such other action as the Collateral Agent shall require to evidence and perfect a Lien in favor of the Collateral Agent (for the benefit of the Lenders) on the Collateral in which such Person has an interest, including delivery of such legal opinions, in form and substance reasonably satisfactory to Collateral Agent, as it shall deem appropriate.
9.2.21 Federal Reserve Regulations . Permit any Loan or the proceeds of any Loan under this Agreement to be used by Obligors to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose governed by Regulations T, U or X of the Board of Governors.
9.2.22 Investment Company Act of 1940 . Engage in any business, enter into any transaction, use any securities or take any other action that would cause any Obligor to become an “investment company” or a “person directly or indirectly controlled by or acting on behalf of an investment company” within the meaning of the Investment Company Act of 1940.
 
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9.2.23 Anti-Terrorism Laws . None of the Obligors nor any of their agents shall:
(a) conduct any business or engage in any transaction or dealing with any Blocked Person, including the making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person,
(b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the OFAC Sanctions Programs or
(c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the OFAC Sanctions Programs, the Patriot Act or any other Anti-Terrorism Law.
9.2.24 Financial Covenants .
(a) Leverage Ratio . Permit the Leverage Ratio of the Parent and its Subsidiaries as of the last day of any fiscal quarter ending nearest to the dates set forth below to be greater than the applicable ratio set forth below:

Fiscal Quarter End	  	Leverage Ratio	
		
January 31, 2012	  	3.27:1.00	
		
April 30, 2012	  	3.01:1.00	
		
July 31, 2012	  	3.62:1.00	
		
October 31, 2012	  	4.25:1.00	
		
January 31, 2013	  	3.35:1.00	
		
April 30, 2013	  	3.22:1.00	
		
July 31, 2013	  	3.65:1.00	
		
October 31, 2013	  	3.54:1.00	
		
January 31, 2014 and as of the last day of each fiscal quarter thereafter	  	2.85:1.00	
 
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(b) Fixed Charge Coverage Ratio . Permit the Fixed Charge Coverage Ratio of the Parent and its Subsidiaries for each period of four (4) consecutive fiscal quarters of the Parent and its Subsidiaries for which the last quarter ends nearest to the date set forth below to be less than the amount set forth opposite such date:

Fiscal Quarter End	  	Fixed Charge Coverage Ratio	
		
January 31, 2012	  	1.00:1.00	
		
April 30, 2012	  	1.00:1.00	
		
July 31, 2012	  	1.00:1.00	
		
October 31, 2012	  	1.00:1.00	
		
January 31, 2013	  	1.00:1.00	
		
April 30, 2013	  	1.00:1.00	
		
July 31, 2013	  	1.10:1.00	
		
October 31, 2013	  	1.10:1.00	
		
January 31, 2014 and as of the last day of each fiscal quarter thereafter	  	1.10:1.00	
9.2.25 2009 Debenture Intercreditor Agreement . Incur Debt after the Closing Date pursuant to Section 4.09(b)(1) of the 2009 Indenture and designate the holders of such Debt as additional holders of “Priority Obligations” (as defined in the 2009 Debenture Intercreditor Agreement).
 
Section 10.	EVENTS OF DEFAULT; REMEDIES ON DEFAULT	
10.1 Events of Default . Each of the following shall be an “ Event of Default ” hereunder, if the same shall occur for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:
(a) Any Borrower fails to pay any Obligations when due (whether at stated maturity, on demand, upon acceleration or otherwise);
(b) Any representation, warranty or other written statement of any Obligor made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect when given;
(c) Any Obligor breaches or fail to perform any covenant contained in Section 9.1.1, 9.1.2, 9.1.3 (other than Section 9.1.3(j)), 9.1.7, 9.1.11 or 9.2 , or Section 6 of the Security Agreement;
(d) Any Obligor breaches or fails to perform any other covenant contained in any Loan Documents, and such breach or failure is not cured within 20 days after a Responsible Officer of such Obligor has knowledge thereof or a Responsible Officer of Borrower Representative receives notice thereof from any Lender, whichever is sooner; provided , however , that such notice and opportunity to cure shall not apply if the breach or failure to perform is not capable of being cured within such period or is a willful breach by an Obligor;
 
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(e) Any Guarantor repudiates, revokes or attempts to revoke its guaranty hereunder; any Obligor denies or contests the validity or enforceability of any Loan Documents or Obligations, or the perfection or priority of any Lien granted to Collateral Agent (for the benefit of the Lenders); or any Loan Document ceases to be in full force or effect for any reason (other than a waiver or release by the Required Lenders);
(f) Any breach or default of an Obligor occurs under any document, instrument or agreement to which it is a party or by which it or any of its Properties is bound, relating to any Debt (other than the Obligations) in excess of $5,000,000, if the maturity of or any payment with respect to such Debt may be accelerated or demanded due to such breach;
(g) Any judgment or order for the payment of money remains outstanding for more than 30 days against an Obligor in an amount that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all Obligors, $5,000,000 (net of any insurance coverage therefor acknowledged in writing by the insurer), unless a stay of enforcement of such judgment or order is in effect, by reason of a pending appeal or otherwise;
(h) Any loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $5,000,000;
(i) Any Obligor is enjoined, restrained or in any way prevented by any Governmental Authority from conducting a portion of its business, which action could reasonably be expected to have a Material Adverse Effect; any Obligor suffers the loss, revocation or termination of one or more licenses, permits, leases or agreements, which loss, revocation or termination could reasonably be expected to have a Material Adverse Effect, except in connection with a Permitted Asset Disposition, there is a cessation of any part of an Obligor’s business for a period of time (other than in connection with a Permitted Asset Disposition), which cessation could reasonably be expected to have Material Adverse Effect; any Obligor agrees to or commences any liquidation, dissolution or winding up of its affairs (other than in connection with a Permitted Asset Disposition); or any Obligor ceases to be Solvent;
(j) Any Insolvency Proceeding is commenced by any Obligor on its behalf;
(k) Any Insolvency Proceeding is commenced against any Obligor and (i) such Obligor consents to the institution of the proceeding against it, (ii) the petition commencing the proceeding is not timely controverted by such Obligor, (iii) such petition is not dismissed within 60 days after its filing, or (iv) an order for relief is entered in the proceeding;
(l) A trustee (including an interim trustee) is appointed to take possession of any substantial Property of or to operate any of the business of any Obligor; or any Obligor makes an offer of settlement, extension or composition to its unsecured creditors generally;
(m) A Reportable Event occurs that constitutes grounds for termination by the Pension Benefit Guaranty Corporation of any Multiemployer Plan or appointment of a trustee for any Multiemployer Plan; any Multiemployer Plan is terminated or any such trustee is requested or appointed; any Obligor is in “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from any withdrawal therefrom; or any event similar to the foregoing occurs or exists with respect to a Foreign Plan;
 
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(n) Any Obligor or any of its Responsible Officers is criminally indicted or convicted for (i) a felony committed in the conduct of such Obligor’s business, or (ii) any state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Collateral;
(o) A Change of Control occurs; or
(p) The Obligations at any time fail to constitute “Additional Priority Permitted Debt” under and as defined in the 2009 Debenture Intercreditor Agreement.
10.2 Remedies upon Default . If an Event of Default described in Section 10.1(j) and/or Section 10.1(k) occurs with respect to any Obligor, then to the extent permitted by Applicable Law, all Obligations shall become automatically due and payable and all Loans shall terminate, without any action by any Lender or notice of any kind. In addition, or if any other Event of Default exists, the Required Lenders may do any one or more of the following from time to time, subject to the terms of the Intercreditor Agreement:
(a) declare any Obligations immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Borrowers to the fullest extent permitted by law; and
(b) instruct the Collateral Agent to exercise any other rights or remedies afforded under the Loan Documents, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Obligors to assemble Collateral, at Obligors’ expense, and make it available to Collateral Agent at a place designated by Collateral Agent; (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by an Obligor, Obligors agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Collateral Agent, in its discretion, deems advisable. Each Obligor agrees that 10 days notice of any proposed sale or other disposition of Collateral by Collateral Agent shall be reasonable. Collateral Agent shall have the right to conduct such sales on any Obligor’s owned (or, with the permission of the landlords with respect to such premises, leased) premises, without charge, and such sales may be adjourned from time to time in accordance with Applicable Law. Collateral Agent shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Collateral Agent may purchase any Collateral at public, or if permitted by law, private sale and, in lieu of actual payment of the purchase price, may set off the amount of such price against the Obligations.
10.3 License . Collateral Agent for the benefit of each Lender is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Property of Obligors, including,
 
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without limitation, all Intellectual Property of Obligors, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels and packaging materials, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral if and for so long as such non-exclusive license or other right to use, license or sub-license would not constitute or result in (a) the abandonment, invalidation or unenforceability of any right, title or interest of such Obligor therein or (b) a breach or termination pursuant to the terms of, or a default under, any such non-exclusive license or other right to use, license or sublicense, provided however , that at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and to the extent severable, such grant shall include immediately and automatically any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in clauses (a)  or (b)  above. Each Obligor’s rights and interests under Intellectual Property shall inure to Collateral Agent (for the benefit of the Lenders).
10.4 Setoff . Lenders and their Affiliates (other than an Obligor or any Subsidiary of an Obligor) are each authorized by Obligors at any time during an Event of Default, without notice to Obligors or any other Person, to set off and to appropriate and apply any deposits (general or special), funds, claims, obligations, liabilities or other Debt at any time held or owing by any Lender or any such Affiliate (other than an Obligor or any Subsidiary of an Obligor) to or for the account of any Obligor against any Obligations, whether or not demand for payment of such Obligation has been made, any Obligations have been declared due and payable, are then due, or are contingent or unmatured, or the Collateral or any guaranty or other security for the Obligations is adequate; it being understood and agreed, as between Lenders and their Affiliates (other than an Obligor or any Subsidiary of an Obligor), that all such deposits, funds or other moneys to be applied against any Obligations, subject to the Intercreditor Agreement.
10.5 Remedies Cumulative: No Waiver Cumulative Rights . All covenants, conditions, provisions, warranties, guaranties, indemnities and other undertakings of Obligors contained in the Loan Documents are cumulative and not in derogation or substitution of each other. In particular, the rights and remedies of Lenders are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and shall not be exclusive of any other rights or remedies that Lenders may have, whether under any agreement, by law, at equity or otherwise.
10.5.2 Waivers . The failure or delay of any Lender to require strict performance by Obligors with any terms of the Loan Documents, or to exercise any rights or remedies with respect to Collateral or otherwise, shall not operate as a waiver thereof nor as establishment of a course of dealing. All rights and remedies shall continue in full force and effect until Full Payment of all Obligations. No modification of any terms of any Loan Documents (including any waiver thereof) shall be effective, unless such modification is specifically provided in a writing directed to Obligors and executed by the Lenders or the requisite Lenders, and such modification shall be applicable only to the matter specified. No waiver of any Default or Event of Default shall constitute a waiver of any other Default or Event of Default that may exist at such time, unless expressly stated. If any Lender accepts performance by any Obligor under any Loan Documents in a manner other than that specified therein, or during any Default or Event of Default, or if any Lender shall delay or exercise any right or remedy under any Loan Documents, such acceptance, delay or exercise shall not operate to waive any Default or Event of Default nor
 
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to preclude exercise of any other right or remedy. It is expressly acknowledged by Obligors that any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.
 
Section 11.	COLLATERAL AGENT	
11.1 Appointment. Authority and Duties of Collateral Agent Appointment and Authority . Each Lender appoints and designates Cerberus as Collateral Agent hereunder. Collateral Agent has and may further, and each Lender authorizes Collateral Agent to, enter into all Loan Documents (including, without limitation, the 2009 Debenture Intercreditor Agreement, the Intercreditor Agreement and the Sun Intercreditor Agreement, any amendments thereto, and any and all other subordination and/or intercreditor agreements required under the terms of this Agreement) to which Collateral Agent is intended to be a party and accept all Loan Documents, for Collateral Agent’s benefit and the Pro Rata benefit of Lenders. Each Lender agrees that any action taken by Collateral Agent or Required Lenders in accordance with the provisions of the Loan Documents, and the exercise by Collateral Agent or Required Lenders of any rights or remedies set forth therein, together with all other powers reasonably incidental thereto, shall be authorized and binding upon all Lenders. Without limiting the generality of the foregoing, Collateral Agent shall have the sole and exclusive authority to (a) act as collateral agent for each Lender for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated therein; (b) manage, supervise or otherwise deal with Collateral; and (c) exercise all rights and remedies given to Collateral Agent with respect to any Collateral under the Loan Documents, Applicable Law or otherwise. The duties of Collateral Agent shall be ministerial and administrative in nature, and Collateral Agent shall not have a fiduciary relationship with any Lender, participant or other Person, by reason of any Loan Documents or any transaction relating thereto.
11.1.2 Duties . Collateral Agent shall not have any duties except those expressly set forth herein and in the Loan Documents, nor be required to initiate or conduct any Enforcement Action except to the extent directed to do so by Required Lenders in accordance with and pursuant to the terms of this Agreement and subject to the terms of the Intercreditor Agreement. The conferral upon Collateral Agent of any right under any Loan Document shall not imply a duty on Collateral Agent’s part to exercise such right unless instructed to do so by Required Lenders in accordance with this Agreement and subject to the terms of the Intercreditor Agreement, and the Collateral Agent shall not, without the prior written consent of the Required Lenders, exercise any right conferred upon Collateral Agent under the Intercreditor Agreement or the Sun Intercreditor Agreement.
11.1.3 Collateral Agent Professionals . Collateral Agent may perform its duties through agents and employees. Collateral Agent may consult with and employ Agent Professionals, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by an Agent Professional. Collateral Agent shall not be responsible for the negligence or misconduct of any agents, employees or Agent Professionals selected by it with reasonable care.
11.1.4 Instructions of Required Lenders . The rights and remedies conferred upon Collateral Agent under the Loan Documents may be exercised without the necessity of joinder of any other party, unless required by Applicable Law. Collateral Agent may request instructions
 
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from Required Lenders with respect to any act (including the failure to act) in connection with any Loan Documents, and may seek assurances to its satisfaction from Lenders of their indemnification obligations under Section 11.5 against all Claims that could be incurred by Collateral Agent in connection with any act. Collateral Agent shall be entitled to refrain from any act until it has received such instructions or assurances, and Collateral Agent shall not incur liability to any Person by reason of so refraining. Instructions of Required Lenders shall be binding upon all Lenders, and no Lender shall have any right of action whatsoever against Collateral Agent as a result of Collateral Agent acting or refraining from acting in accordance with the instructions of Required Lenders. Notwithstanding the foregoing, instructions by and consent of all Lenders shall be required in the circumstances described in Section 13.1.1 , and in no event shall Required Lenders, without the prior written consent of each Lender, direct Collateral Agent to accelerate and demand payment of Loans held by one Lender without accelerating and demanding payment of all other Loans. In no event shall Collateral Agent be required to take any action that, in its opinion, is contrary to Applicable Law or any Loan Document or could subject any Agent Indemnitee to personal liability.
11.1.5 Collateral Agent Advances .
Upon the occurrence and during the continuance of an Event of Default, Collateral Agent may from time to time make such disbursements and advances (“ Collateral Agent Advances ”) which Collateral Agent, in its sole discretion, deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by Borrowers of the Loans and other Obligations or to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in Section 3.4 and costs and expenses incurred by Collateral Agent in performing any covenant or agreement required to be performed by Borrowers which Borrowers have failed to perform. Collateral Agent Advances shall be repayable on demand and be secured by the Collateral. Collateral Agent Advances shall constitute Obligations hereunder which may be charged to the applicable Borrower’s account. Collateral Agent shall notify each Lender and Borrower Representative in writing of each such Collateral Agent Advance, which notice shall include a description of the purpose of such Collateral Agent Advance. Without limitation to its obligations pursuant to Section 11.6 , each Lender agrees that it shall make available to Collateral Agent, upon Collateral Agent’s demand, in Dollars in immediately available funds, the amount equal to such Lender’s Pro Rata share of each such Collateral Agent Advance. If such funds are not made available to Collateral Agent by such Lender, Collateral Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to Collateral Agent at the Reference Rate.
11.2 Agreements Regarding Collateral and Field Examination Reports Lien Releases: Care of Collateral . Lenders authorize Collateral Agent to release any Lien with respect to any Collateral (a) upon Full Payment of the Obligations, (b) that is the subject of an Asset Disposition which Borrower Representative certifies in writing to Collateral Agent is a Permitted Asset Disposition or a Lien which Borrower Representative certifies is a Permitted Lien entitled to priority over Collateral Agent’s Liens (and Collateral Agent may rely conclusively on any such certificate without further inquiry), (c) that is within the limitations set forth in Section 13.1.1(c)(iii) , (d) with the written consent of all Lenders or (e) in accordance with the terms of
 
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the Intercreditor Agreement; provided further, upon request of Borrower Representative, Collateral Agent will provide Borrower Representative with a release of the Collateral Agent’s security interest in any assets or Collateral in conjunction with a Permitted Asset Disposition. Collateral Agent shall have no obligation whatsoever to any Lenders to assure that any Collateral exists or is owned by an Obligor, or is cared for, protected, insured or encumbered, nor to assure that Collateral Agent’s Liens have been properly created, perfected or enforced, or are entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral.
11.2.2 Possession of Collateral . Collateral Agent and Lenders appoint each other Lender as agent for the purpose of perfecting Liens (for the benefit of the Lenders) in any Collateral that, under the UCC or other Applicable Law, can be perfected by possession. If any Lender obtains possession of any such Collateral, it shall notify Collateral Agent thereof and, promptly upon Collateral Agent’s request, deliver such Collateral to Collateral Agent or otherwise deal with such Collateral in accordance with Collateral Agent’s instructions.
11.2.3 Reports . Collateral Agent shall promptly, upon receipt thereof, forward to each Lender copies of the results of any field audit or other examination or any appraisal prepared by or on behalf of Collateral Agent with respect to any Obligor or Collateral (“ Report ”). Each Lender agrees (a) that Cerberus makes no any representation or warranty as to the accuracy or completeness of any Report, and shall not be liable for any information contained in or omitted from any Report; (b) that the Reports are not intended to be comprehensive audits or examinations, and that Collateral Agent or any other Person performing any audit or examination will inspect only specific information regarding Obligations or the Collateral and will rely significantly upon Obligors books and records as well as upon representations of Obligors officers and employees; and (c) to keep all Reports confidential and strictly for such Lender’s internal use, and not to distribute any Report (or the contents thereof) to any Person (except to such Lender’s participants, attorneys and accountants) or use any Report in any manner other than administration of the Loans and other Obligations. Each Lender agrees to indemnify and hold harmless Collateral Agent and any other Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from any Report, as well as any Claims arising in connection with any third parties that obtain all or any part of a Report through such Lender.
11.3 Reliance By Collateral Agent . Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any certification, notice or other communication (including those by telephone, telex, telegram, telecopy or e-mail) believed by it to be genuine and correct and to have been signed, sent or made by the proper Person, and upon the advice and statements of Agent Professionals.
11.4 Action Upon Default . Agent shall not be deemed to have knowledge of any Default or Event of Default unless it has received written notice from a Lender or Borrower specifying the occurrence and nature thereof. If any Lender acquires knowledge of a Default or Event of Default, it shall promptly notify Agent and the other Lenders thereof in writing. Each Lender agrees that, except as otherwise provided in any Loan Documents or with the written consent of Agent and Required Lenders, it will not take any Enforcement Action, accelerate its Obligations, or exercise any right that it might otherwise have under Applicable Law to credit bid at foreclosure sales, UCC sales or other similar dispositions of Collateral. Notwithstanding the foregoing, however, a Lender may take action to preserve or enforce its rights against an
 
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Obligor where a deadline or limitation period is applicable that would, absent such action, bar enforcement of Obligations held by such Lender, including the filing of proofs of claim in an Insolvency Proceeding.
11.5 Ratable Sharing . If any Lender shall obtain any payment or reduction of any Obligation, whether through set-off or otherwise, in excess of its share of such Obligation, determined on a Pro Rata basis or in accordance with Section 5.4.1 , as applicable, such Lender shall forthwith purchase from the other Lenders such participations in the affected Obligation as are necessary to cause the purchasing Lender to share the excess payment or reduction on a Pro Rata basis or in accordance with Section 5.4.1 , as applicable. If any of such payment or reduction is thereafter recovered from the purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.
11.6 Indemnification of Agent Indemnitees Indemnification . EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGOR (BUT WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN DOCUMENTS), ON A PRO RATA BASIS, AGAINST ANY AND ALL LIABILITIES, CLAIMS, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING ALL REASONABLE FEES AND EXPENSES OF COUNSEL TO SUCH AGENT INDEMNITEES), ADVANCES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT INDEMNITEES IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY TRANSACTIONS CONSUMMATED PURSUANT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE AGENT INDEMNITEES UNDER THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY TRANSACTIONS CONSUMMATED PURSUANT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, BY REASON OF COLLATERAL AGENT’S ENTERING INTO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT) other than liabilities, claims, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements resulting from the gross negligence or willful misconduct of Agent Indemnitees. If Collateral Agent is sued by any receiver, trustee in bankruptcy, debtor-in-possession or other Person for any alleged preference from an Obligor or fraudulent transfer, then any monies paid by Collateral Agent in settlement or satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys’ fees) incurred in the defense of same, shall be promptly reimbursed to Collateral Agent by Lenders to the extent of each Lender’s Pro Rata share.
11.6.2 Proceedings . Without limiting the generality of the foregoing, if at any time (whether prior to or after the Termination Date) any proceeding is brought against any Agent Indemnitees by an Obligor, or any Person claiming through an Obligor, to recover damages for any act taken or omitted by Collateral Agent in connection with any Obligations, Collateral, Loan Documents or matters relating thereto, or otherwise to obtain any other relief of any kind on account of any transaction relating to any Loan Documents, each Lender agrees to indemnify and hold harmless Agent Indemnitees with respect thereto and to pay to Agent Indemnitees such Lender’s Pro Rata share of any amount that any Agent Indemnitee is required to pay under any judgment or other order entered in such proceeding or by reason of any
 
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settlement, including all interest, costs and expenses (including attorneys’ fees) incurred in defending same other than damages resulting from the gross negligence or willful misconduct of Agent Indemnitees. In Collateral Agent’s discretion, Collateral Agent may reserve for any such proceeding, and may satisfy any judgment, order or settlement, from proceeds of Collateral prior to making any distributions of Collateral proceeds to Lenders subject to the Intercreditor Agreement.
11.7 Limitation on Responsibilities of Collateral Agent . Collateral Agent shall not be liable to Lenders for any action taken or omitted to be taken under the Loan Documents, except for losses directly and solely caused by Collateral Agent’s gross negligence or willful misconduct. Collateral Agent does not assume any responsibility for any failure or delay in performance or any breach by any Obligor or Lender of any obligations under the Loan Documents. Collateral Agent does not make to Lenders any express or implied warranty, representation or guarantee with respect to any Obligations, Collateral, Loan Documents or Obligor. No Agent Indemnitee shall be responsible to Lenders for any recitals, statements, information, representations or warranties contained in any Loan Documents; the execution, validity, genuineness, effectiveness or enforceability of any Loan Documents; the genuineness, enforceability, collectibility, value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein; the validity, enforceability or collectibility of any Obligations; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or Account Debtor. No Agent Indemnitee shall have any obligation to any Lender to ascertain or inquire into the existence of any Default or Event of Default, the observance or performance by any Obligor of any terms of the Loan Documents, or the satisfaction of any conditions precedent contained in any Loan Documents.
11.8 Successor Agent and Co-Agents Resignation; Successor Collateral Agent . Collateral Agent may resign at any time by giving at least 30 days (or, upon payment in full of the Revolver Debt, 10 days) written notice thereof to Lenders and Borrower Representative. Upon receipt of such notice, Required Lenders shall have the right to appoint a successor Collateral Agent which shall be (provided no Default or Event of Default exists) reasonably acceptable to Borrower Representative. If no successor agent is appointed prior to the effective date of the resignation of Collateral Agent, then Collateral Agent may appoint a successor agent from among the Lenders. Immediately upon such appointment by Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the powers and duties of the retiring Collateral Agent without further act, and the retiring Collateral Agent shall be discharged from its duties and obligations hereunder but shall continue to have the benefits of the indemnification set forth in Sections 11.5 and 13.2 . Notwithstanding any Collateral Agent’s resignation, the provisions of this Section 11 shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while Collateral Agent. Any successor by merger or acquisition of the stock or assets of Cerberus shall continue to be Collateral Agent hereunder without further act on the part of the parties hereto, unless such successor resigns as provided above.
11.8.2 Separate Collateral Agent . It is the intent of the parties that there shall be no violation of any Applicable Law denying or restricting the right of financial institutions to transact business in any jurisdiction. If Collateral Agent believes that it may be limited in the exercise of any rights or remedies under the Loan Documents due to any Applicable Law,
 
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Collateral Agent may appoint an additional Person who is not so limited, as a separate collateral agent or co-collateral agent. If Collateral Agent so appoints a collateral agent or co-collateral agent, each right and remedy intended to be available to Collateral Agent under the Loan Documents shall also be vested in such separate agent. Every covenant and obligation necessary to the exercise thereof by such agent shall run to and be enforceable by it as well as Collateral Agent. Lenders shall execute and deliver such documents as Collateral Agent deems appropriate to vest any rights or remedies in such agent. If any collateral agent or co-collateral agent shall die or dissolve, become incapable of acting, resign or be removed, then all the rights and remedies of such agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Collateral Agent until appointment of a new agent.
11.9 Due Diligence and Non-Reliance . Each Lender acknowledges and agrees that it has, independently and without reliance upon Collateral Agent or any other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of each Obligor and its own decision to enter into this Agreement and to fund the Loans hereunder. Each Lender has made such inquiries concerning the Loan Documents, the Collateral and each Obligor as such Lender feels necessary. Each Lender further acknowledges and agrees that the other Lenders and Collateral Agent have made no representations or warranties concerning any Obligor, any Collateral or the legality, validity, sufficiency or enforceability of any Loan Documents or Obligations. Each Lender will, independently and without reliance upon the other Lenders or Collateral Agent, and based upon such financial statements, documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making the Loans, and in taking or refraining from any action under any Loan Documents. Collateral Agent shall have no duty or responsibility to provide any Lender with any notices, reports or certificates furnished to Collateral Agent by any Obligor or any credit or other information concerning the affairs, financial condition, business or Properties of any Obligor (or any of its Affiliates) which may come into possession of Collateral Agent or any of Collateral Agent’s Affiliates.
11.10 No Third Party Beneficiaries . This Section 11 is an agreement solely among Lenders and Collateral Agent, and does not confer any rights or benefits upon Obligor or any other Person. As between Obligors and Collateral Agent, any action that Collateral Agent may take under any Loan Documents shall be conclusively presumed to have been authorized and directed by Lenders as herein provided.
11.11 Collateral Agent in its Individual Capacity . As a Lender, Cerberus shall have the same rights and remedies under the other Loan Documents as any other Lender, and the terms “Lenders,” “Required Lenders” or any similar term shall include Cerberus in its capacity as a Lender. Each of Cerberus and its Affiliates may accept deposits from, maintain deposits or credit balances for, invest in, lend money to, provide Bank Products to, act as trustee under indentures of, act as an agent under the Revolver Loan Documents, serve as financial or other advisor to, and generally engage in any kind of business with, Obligors and their Affiliates, as if Cerberus were any other bank, without any duty to account therefor (including any fees or other consideration received in connection therewith) to the Lenders. In their individual capacity, Cerberus and its Affiliates may receive information regarding Obligors, their Affiliates and their Account Debtors (including information subject to confidentiality obligations), and each Lender agrees that Cerberus and its Affiliates shall be under no obligation to provide such information to Lenders.
 
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Section 12.	BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS	
12.1 Benefit of Agreement . This Agreement shall be binding upon and inure to the benefit of Obligors, Collateral Agent and Lenders and their respective successors and assigns, except that (a) no Obligor shall have the right to assign its rights or delegate its obligations under any Loan Documents, and (b) any assignment by a Lender must be made in compliance with Section 12.3 . Any authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee or assignee of such Lender.
12.2 Participations . 12.2.1 Participations
Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the Other Agreements (including, all or any portion of the Loans made by it); provided, that (a) such Lender’s obligations under this Agreement (including without limitation, its Commitment hereunder) and the Other Agreements shall remain unchanged; (b) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and Borrowers, Collateral Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the Other Agreements; and (c) a participant shall not be entitled to require such Lender to take or omit to take any action hereunder except (i) action directly effecting an extension of the maturity dates or decrease in the principal amount of the Loans, (ii) action directly effecting an extension of the due dates or a decrease in the rate of interest payable on the Loans or the fees payable under this Agreement (other than by virtue of removal of the Default Rate), or (iii) actions directly effecting a release of all or a substantial portion of the Collateral or Borrowers (except as set forth in Section 11.2.1 of this Agreement or any Other Agreement). Borrowers agree that each participant shall be entitled to the benefits of Section 5.6 of this Agreement with respect to its participation in any portion of the Commitment and the Loans as if it was a Lender, except that a participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.6 unless Borrowers agree otherwise in writing; provided that (i) any participant shall not be entitled to any greater benefit thereunder than the Lender (or assignee) selling such participant its participation would have been entitled to in the absence of such participation, except to the extent the entitlement to such greater benefit arose as a result of a change in law, regulations, treaties, or any official interpretations thereof, after such participant acquired its participation and (ii) any participant complies with and is subject to Section 5.6 as if it were a Lender.
12.2.2 Register
In the event that any Lender sells participations in a Registered Loan, such Lender shall maintain a register acting for this purpose as a non-fiduciary agent of Borrower on which it enters the name of all participants in the Registered Loans held by it and the principal amount (and stated interest thereon) of the portion of the Registered Loan that is the subject of the participation (the “ Participant Register ”). A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. Any such Participant Register shall be available for inspection by Borrowers, Collateral Agent and any Lender at any reasonable time and from time to time upon reasonable prior notice.
 
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12.3 Assignments This Agreement and the Other Agreements shall be binding upon and inure to the benefit of Borrowers, Collateral Agent, each Lender, all future permitted holders of the Obligations and their respective permitted successors and assigns; provided , however , that no Borrower may assign or transfer any of its rights hereunder or under the Loan Documents without the prior written consent of Collateral Agent and each Lender and any such assignment without Collateral Agent’s and Lenders’ prior written consent shall be null and void.
(b) Each Lender may with the written consent of Collateral Agent (not to be unreasonably withheld), assign to one or more other lenders or other entities all or a portion of its rights and obligations under this Agreement with respect to all or any portion of the Loans made by it; provided , however , that (i) such assignment is in an amount which is at least $5,000,000 or a multiple of $1,000,000 in excess thereof (or the remainder of such Lender’s portion of the Loans) (except such minimum amount shall not apply to an assignment by a Lender to (x) a Lender, an Affiliate of such Lender or a Related Fund of such Lender or (y) a group of new Lenders, each of whom is an Affiliate or Related Fund of each other to the extent the aggregate amount to be assigned to all such new Lenders is at least $2,500,000 or a multiple of $500,000 in excess thereof), (ii) the parties to each such assignment shall execute and deliver to Collateral Agent, for its acceptance, an Assignment and Acceptance, together with any promissory note subject to such assignment and such parties shall deliver to Collateral Agent, for the benefit of Collateral Agent, a processing and recordation fee of $5,000 (except the payment of such fee shall not be required (y) in connection with an assignment by a Lender to a Lender, an Affiliate of such Lender or to a Related Fund of such Lender or (z) if Collateral Agent, in its sole discretion, waives payment of such fee) and (iii) no written consent of Collateral Agent shall be required (1) in connection with any assignment by a Lender to a Lender, an Affiliate of such Lender or a Related Fund of such Lender or (2) if such assignment is in connection with any merger, consolidation, sale, transfer, or other disposition of all or any substantial portion of the business or loan portfolio of such Lender). Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least three (3) Business Days after the delivery thereof to Collateral Agent (or such shorter period as shall be agreed to by Collateral Agent and the parties to such assignment), (A) the assignee thereunder shall become a “Lender” hereunder and, in addition to the rights and obligations hereunder held by it immediately prior to such effective date, have the rights and obligations hereunder that have been assigned to it pursuant to such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the assigning Lender and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any Other Document or the execution, legality, validity, enforceability, genuineness, sufficiency or
 
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value of this Agreement or any Loan Document furnished pursuant hereto; (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers, Guarantors or any of their Subsidiaries or the performance or observance by Borrowers or Guarantors of any of their obligations under this Agreement or any Loan Document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement and the Loan Documents, together with such other documents and information it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the assigning Lender, Collateral Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the Loan Documents; (v) such assignee appoints and authorizes Collateral Agent to take such action as agents on its behalf and to exercise such powers under this Agreement and the Loan Documents as are delegated to Collateral Agent by the terms hereof and thereof, together with such powers as are reasonably incidental hereto and thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the Loan Documents are required to be performed by it as a Lender.
(d) Collateral Agent shall, acting solely for this purpose as a non-fiduciary agent of Borrowers, maintain, or cause to be maintained at the Payment Office, a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the “ Register ”) for the recordation of the names and addresses of the Lenders and the principal amount of the Loans (and stated interest thereon) (each, a “ Registered Loan ”) owing to each Lender from time to time. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and Borrowers, Collateral Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrowers and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon receipt by Collateral Agent of an Assignment and Acceptance, and subject to any consent required from Collateral Agent pursuant to Section 12.3(b) (which consent of Collateral Agent must be evidenced by the Collateral Agent’s execution of an acceptance to such Assignment and Acceptance), Collateral Agent shall accept such assignment, record the information contained therein in the Register and provide to Collateral Agent a copy of the fully executed Assignment and Acceptance.
(f) A Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide). Any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any, evidencing the same), Collateral Agent shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon, notwithstanding notice to the contrary.
 
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(g) Any Non-U.S. Lender who purchases or is assigned or participates in any portion of such Registered Loan shall comply with Section 5.6(d) .
12.4 Tax Treatment . If any interest in a Loan Document is transferred to a Transferee that is organized under the laws of any jurisdiction other than the United States or any state or district thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 5.6.
 
Section 13.	MISCELLANEOUS	
13.1 Consents, Amendments and Waivers Amendment . No modification of any Loan Document, including any extension or amendment of a Loan Document or any waiver of a Default or Event of Default, shall be effective without the prior written agreement of the Collateral Agent, with the written consent of Required Lenders, and each Obligor party to such Loan Document; provided, however, that
(a) without the prior written consent of Collateral Agent, no modification shall be effective with respect to any provision in a Loan Document that relates to any rights, duties or discretion of Collateral Agent (including, without limitation, any provision in Section 11 hereunder);
(b) without the prior written consent of each affected Lender, no modification shall be effective that would (i) increase the amount set forth on Schedule 1.1(A) or Schedule 1.1(B) regarding such Lender; or (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender;
(c) without the prior written consent of all Lenders, no modification shall be effective that would (i) extend the Termination Date; (ii) alter Section 5.4 or 13.1.1 ; (iii) except as currently contemplated by the Loan Documents (including, without limitation, in connection with a Permitted Asset Disposition) release Collateral with a book value greater than $10,000,000 during any calendar year; or (iv) except in connection with a Permitted Asset Disposition, release any Obligor from liability for any Obligations.
(d) With the written acknowledgment (without implying a requirement of consent) of Collateral Agent, Borrower Representative, and (if applicable) the signature of a Domestic Subsidiary becoming a Borrower, Joinder Agreements may be entered into and Schedules 8.1.4, 8.1.8, 8.1.11, 8.1.15, 8.1.18, and 8.1.20 may be modified.
13.1.2 Limitations . The agreement of Obligors shall not be necessary to the effectiveness of any modification of a Loan Document that deals solely with the rights and duties of Lenders and/or Collateral Agent as among themselves. Any waiver or consent granted by Lenders hereunder shall be effective only if in writing, and then only in the specific instance and for the specific purpose for which it is given.
13.1.3 Payment for Consents . No Obligors will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to
 
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any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such Lender with any modification of any Loan Documents, unless such remuneration or value is concurrently paid, on the same terms, on a Pro Rata basis to all Lenders providing their consent.
13.2 Indemnity . EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.
13.3 Notices and Communications Notice Address . All notices, requests and other communications by or to a party hereto shall be in writing, at the following address:

 Kellwood Company	
600 Kellwood Parkway	
Chesterfield, MO 63017	
Attention: Keith A. Grypp	
Telephone:	 	(314) 576-3425	
Telecopier:	 	(314) 576-3460	
	
with a copy to:	
	
Kirkland & Ellis LLP	
300 North LaSalle	
Chicago, Illinois 60654	
Attention: Jocelyn A. Hirsch, Esq.	
Telephone:	 	(312) 862-3201	
Telecopier:	 	(312) 862-2200	
	
if to the Collateral Agent, to it at the following address:	
	
Cerberus Business Finance, LLC	
299 Park Avenue, 22 nd Floor	
New York, New York 10171	
Attention: Daniel E. Wolf	
Telephone:	 	(212) 891-2121	
Telecopier:	 	(212) 891-1541	
 
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 in each case, with a copy to:	
	
Schulte Roth & Zabel LLP	
919 Third Avenue	
New York, New York 10022	
Attention: Eliot L. Relies, Esq.	
Telephone:	 	212-756-2199	
Telecopier:	 	212-593-5955	
or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties complying as to delivery with the terms of this Section 13.3 .
Each such notice, request or other communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business Days after deposit in the U.S. mail, with first-class postage pre-paid, addressed to the applicable address, or via Federal Express or other reputable overnight courier; or (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice to any Lender pursuant to Section 2.1.4 shall be effective until actually received by the individual to whose attention at Lender such notice is required to be sent. Any written notice, request or other communication that is not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by the Borrower Representative shall be deemed received by all Obligors.
13.3.2 Electronic Communications: Voice Mail . Electronic mail and internet websites may be used only for routine communications, such as financial statements and other information required by Section 9.1.2 , administrative matters and distribution of Loan Documents for execution. Collateral Agent and Lenders make no assurances as to the privacy and security of electronic communications. Electronic and voice mail may not be used as effective notice under the Loan Documents.
13.3.3 Non-Conforming Communications . Collateral Agent and Lenders may rely upon any notices purportedly given by or on behalf of any Obligor even if such notices were not made in a manner specified herein, were incomplete or were not confirmed, or if the terms thereof, as understood by the recipient, varied from a later confirmation. Each Obligor shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any telephonic communication purportedly given by or on behalf of an Obligor.
13.4 Performance of Borrowers’ Obligations . Collateral Agent or Lenders may, in its/their discretion at any time and from time to time, at Borrowers’ expense, pay any amount or do any act required of a Borrower under any Loan Documents or otherwise lawfully requested by Collateral Agent or any Lender to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Collateral Agent’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including Extraordinary Expenses) of Collateral Agent or any Lender under this Section shall be reimbursed to Collateral Agent and/or such Lender by Borrowers, on demand , with interest from the date incurred to the
 
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date of payment thereof at the Default Rate applicable to the Loans. Any payment made or action taken by Collateral Agent or Lenders under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.
13.5 Credit Inquiries . Each Obligor hereby authorizes Collateral Agent and Lenders (but they shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Obligor or Subsidiary in connection with the establishment of credit lines and/or trade credit or any verification of any Obligor’s Accounts.
13.6 Severability . Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.
13.7 Cumulative Effect: Conflict of Terms . The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters, and they agree that these are cumulative and that each must be performed as provided. Except as otherwise specifically provided in another Loan Document (by specific reference to the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.
13.8 Counterparts: Facsimile Signatures . Any Loan Document may be executed in counterparts, each of which taken together shall constitute one instrument. Loan Documents may be executed and delivered by facsimile, and they shall have the same force and effect as manually signed originals. Collateral Agent and each Lender may require confirmation by a manually-signed original, but failure to request or deliver same shall not limit the effectiveness of any facsimile signature.
13.9 Entire Agreement . Time is of the essence of the Loan Documents. The Loan Documents embody the entire understanding of the parties with respect to the subject matter thereof and supersede all prior understandings regarding the same subject matter.
13.10 Obligations of Lenders . The obligations of each Lender hereunder are several, and no Lender shall be responsible for the Obligations of any other Lender. Amounts payable hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled, to the extent not otherwise restricted hereunder, to protect and enforce its rights arising out of the Loan Documents. It shall not be necessary for any Lender to be joined as an additional party in any proceeding for such purposes. Nothing in this Agreement and no action of Collateral Agent or Lenders pursuant to the Loan Documents shall be deemed to constitute Collateral Agent and Lenders to be a partnership, association, joint venture or any other kind of entity, nor to constitute control of any Obligor. Each Obligor acknowledges and agrees that in connection with all aspects of any transaction contemplated by the Loan Documents, Obligors, Collateral Agent and Lenders have an arms-length business relationship that creates no fiduciary duty on the part of Collateral Agent or any Lender, and each Obligor, Collateral Agent and Lender expressly disclaims any fiduciary relationship.
 
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13.11 Confidentiality . During the term of this Agreement and for 12 months thereafter, Lenders agree to take reasonable precautions to maintain the confidentiality of any information that Borrowers deliver to Lenders and identify as confidential at the time of delivery, except that Lenders may disclose such information (a) to their respective officers, directors, employees, Affiliates and agents, including legal counsel, auditors and other professional advisors; (b) to any party to the Loan Documents from time to time; (c) pursuant to the order of any court or administrative agency; (d) upon the request of any Governmental Authority exercising regulatory authority over such Lender; (e) which ceases to be confidential, other than by an act or omission of any Lender, or which becomes available to any Lender on a nonconfidential basis; (f) to the extent reasonably required in connection with any litigation relating to any Loan Documents or transactions contemplated thereby, or otherwise as required by Applicable Law; (g) to the extent reasonably required for the exercise of any rights or remedies under the Loan Documents; (h) to any Transferee, as long as such Person agrees to be bound by the provisions of this Section; (i) to the National Association of Insurance Commissioners or any similar organization, or to any nationally recognized rating agency that requires access to information about a Lender’s portfolio in connection with ratings issued with respect to such Lender; (j) to any investor or potential investor in a Related Fund that is a Lender or Transferee, but solely for use by such investor to evaluate an investment in such Related Fund, or to any manager, servicer or other Person in connection with its administration of any such Related Fund; or (k) with the consent of Borrower Representative. Notwithstanding the foregoing, Lenders may issue and disseminate to the public general information describing this credit facility, including the names and addresses of Borrowers and a general description of Borrowers’ businesses, and may use Borrowers’ names in advertising and other promotional materials.
13.12 GOVERNING LAW . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).
13.13 Consent to Forum . EACH OBLIGOR HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. Nothing herein shall limit the right of Collateral Agent or any Lender to bring proceedings against any Obligor in any other court. Nothing in this Agreement shall be deemed to preclude enforcement by Collateral Agent or any Lender of any judgment or order obtained in any forum or jurisdiction.
13.14 Waivers by Obligors . To the fullest extent permitted by Applicable Law, Obligors waive (a) the right to trial by jury (which Collateral Agent and each Lender hereby also waives) in any proceeding, claim or counterclaim of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest,
 
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notice of presentment, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties at any time held by Collateral Agent on which Obligors may in any way be liable, and hereby ratifies anything Collateral Agent may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Collateral Agent to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against Collateral Agent or any Lender, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each Obligor acknowledges that the foregoing waivers are a material inducement to Collateral Agent and Lenders entering into this Agreement and that Collateral Agent and Lenders are relying upon the foregoing in their dealings with Obligor. Each Obligor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
13.15 Patriot Act Notice . Collateral Agent and Lenders hereby notify Obligor that pursuant to the requirements of the Patriot Act, Collateral Agent and Lenders may be required to obtain, verify and record information that identifies each Obligor, including its legal name, address, tax ID number and other information that will allow Collateral Agent and Lenders to identify it in accordance with the Patriot Act. Collateral Agent and Lenders will also require information regarding each personal guarantor, if any, and may require information regarding Obligor’s management and owners, such as legal name, address, social security number and date of birth.
13.16 Subordination . Each Obligor covenants and agrees that the payment of all indebtedness, principal, interest (including interest which accrues after the commencement of any case or proceeding in bankruptcy, or for the reorganization of any Obligor), fees, charges, expenses, reasonable attorneys’ fees and any other sum, obligation or liability owing by any other Obligor to such Obligor, including any intercompany trade payables or royalty or licensing fees (collectively, the “ Intercompany Obligations ”), is subordinated, to the extent and in the manner provided in this Section 13.16 , to the prior payment in full of all Obligations (herein, the “ Senior Obligations ”) and that the subordination is for the benefit of Lenders, and Lenders may enforce such provisions directly (it being understood that nothing in this Section 13.16 shall prohibit any payment on any Intercompany Obligations so long as no Default or Event of Default has occurred and is continuing).
(a) Each Obligor hereby (i) authorizes Lenders to demand specific performance of the terms of this Section 13.16 whether or not any other Obligor shall have complied with any of the provisions hereof applicable to it, at any time when such Obligor shall have failed to comply with any provisions of this Section 13.16 which are applicable to it and (ii) irrevocably waives any defense based on the adequacy of a remedy at law, which might be asserted as a bar to such remedy of specific performance.
 
-84-

(b) Upon any distribution of assets of any Obligor in any dissolution, winding-up, liquidation or reorganization (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise) and subject to the provisions of Section 13.16 :
(i) Lenders shall first be entitled to receive payment in full in cash of the Senior Obligations before any Obligor is entitled to receive any payment on account of the Intercompany Obligations.
(ii) Any payment or distribution of assets of any Obligor of any kind or character, whether in cash, property or securities, to which any other Obligor would be entitled except for the provisions of Section 13.16 , shall be paid by the liquidating trustee or agent or other Person making such payment or distribution directly to Lenders, to the extent necessary to make payment in full of all Senior Obligations remaining unpaid after giving effect to any concurrent payment or distribution or provisions therefor to Lenders.
(iii) In the event that notwithstanding the foregoing provisions of Section 13.16 , any payment or distribution of assets of any Obligor of any kind or character, whether in cash, property or securities, shall be received by any other Obligor on account of the Intercompany Obligations before all Senior Obligations are paid in full, such payment or distribution shall be received and held in trust for and shall be paid over to Lenders for application to the payment of the Senior Obligations until all of the Senior Obligations shall have been paid in full, after giving effect to any concurrent payment or distribution or provision therefor to Lenders.
(c) No right of the Lenders or any other present or future holders of any Senior Obligations to enforce the subordination provisions herein shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Obligor or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by any Obligor with the terms hereof, regardless of any knowledge thereof which any such holder may have or be otherwise charged with.
13.17 Advertisement . Each Obligor hereby authorizes Lenders to publish the names of Borrowers and the amount of the credit facility provided hereunder in any “tombstone” or comparable advertisement which Lenders elect to publish.
13.18 Intercreditor Agreement . Notwithstanding anything contained herein, the rights, remedies, duties and obligations of the Collateral Agent and the Lenders with respect to the Collateral are subject in all respects to the terms and conditions of the Intercreditor Agreement. Furthermore, without limitation of the sentence above, the rights of the Lenders and the duty and/or obligation of Collateral Agent to take any enforcement action with respect to the Collateral is subject in all respects to the terms and conditions of the Intercreditor Agreement. In the event there is a conflict between this Agreement and/or any other Loan Documents and the Intercreditor Agreement, the Intercreditor Agreement shall control and govern.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
 
-85-

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set forth above.

BORROWERS:	
	
KELLWOOD COMPANY	
KELLWOOD FINANCIAL RESOURCES, INC.	
(formerly known as Newkell, Inc.)	
KWD HOLDINGS, INC.	
PHAT FASHIONS LLC	
PHAT LICENSING LLC	
ZOBHA, LLC	
MEOW INC.	
BETH’S BOUTIQUE, LLC	
AMERICAN RECREATION PRODUCTS, INC.	
SIERRA DESIGNS ACQUISITION CORPORATION	
ROYAL ROBBINS, INC.	
		
By:	 		
Name:	 	Adrian Kowalewski	
Title:	 	Treasurer	
 
Financing Agreement

					
LENDERS :	
	
ABLECO FINANCE LLC	
		
By:	 		
	 	Name:	 	Daniel Wolf	
	 	Title:	 	President	
	
A5 FUNDING L.P.	
		
By:	 	A5 Fund Management LLC,	
	 	its General Partner	
		
By:	 		
	 	Name:	 	Daniel Wolf	
	 	Title:	 	Vice President	
	
 CERBERUS LEVERED LOAN	
OPPORTUNITIES FUND I, L.P.	
		
By:	 	Cerberus Levered Opportunities GP, LLC,	
	 	its General Partner	
		
By:	 		
	 	Name:	 	Daniel Wolf	
	 	Title:	 	Managing Director	
 
Financing Agreement

					
LENDERS :	
	
COREPOINTE CAPITAL FINANCE LLC	
		
By:	 		
	 	Name:	 	Timothy D. Fording	
	 	Title:	 	Managing Director	
 
Financing Agreement

			
COLLATERAL AGENT :	
	
CERBERUS BUSINESS FINANCE, LLC,
as Collateral Agent	
		
By:	 		
Name:	 	Daniel Wolf	
Title:	 	President	
 
Financing Agreement

SCHEDULE 1.1A
to
Term Loan Agreement
LENDER TERM A LOAN AMOUNTS
[on file with the Company]
SCHEDULE 1.1B
to
Term Loan Agreement
LENDER TERM B LOAN AMOUNTS
[on file with the Company]

SCHEDULE 8.6.1
Business Locations
[on file with the Company]

SCHEDULE 8.1.4
Names and Capital Structure
 
1.	The corporate names, jurisdictions of incorporation, and authorized and issued Equity Interests of each Obligor are as follows:	

Name	  	Jurisdiction
of
Organization	  	Number and Class of
Authorized Shares	  	Number and Class of
Issued Shares	
Kellwood Company	  	Delaware	  	3,000,000 shares:
 
2,900,000 $.001/share Common
100,000 $.001/share Preferred	  	1,000,000 Common shares to Kellwood Holding Corp.
 
81,000 Common shares subject to options granted to management	
				
KWD Holdings, Inc.	  	Delaware	  	10,000 $.01/share Common	  	1,000 shares to Kellwood Company	
				
Kellwood Financial Resources, Inc. (f/k/a Newkell, Inc.)	  	Delaware	  	1,000 $.01/share Common	  	1,000 shares to Kellwood Company	
				
American Recreation Products, Inc.	  	Delaware	  	800,000 $.01/share Common
 
20,000 $1,000/share Preferred	  	99,000 Common shares to Kellwood Company	
				
Sierra Designs Acquisition Corporation	  	Delaware	  	1,000 $.01/share Common	  	100 shares to American Recreation Products, Inc.	
				
Royal Robbins, Inc.	  	California	  	1,068,760 $1.00/share Common	  	900,000 to Kellwood Company	
				
Meow Inc.	  	New York	  	200 No Par Common	  	100 shares to Kellwood Company	
			
Beth’s Boutique, LLC	  	New York	  	100% of membership interests to Kellwood Company	

							
Name	  	Jurisdiction
of
Organization	  	Number and Class of
Authorized Shares	  	Number and Class of
Issued Shares	
Phat Fashions LLC	  	New York	  	100% of membership interests to Kellwood Company	
			
Phat Licensing LLC	  	New York	  	100% of membership interests issued to Phat Fashions LLC	
			
Zobha, LLC	  	Delaware	  	100% of membership interests to Kellwood Company	
 
2.	The record holders of Equity Interests of each Domestic Subsidiary are as follows:	
Except for the authorized and issued shares of Kellwood Company, reference is hereby made to the table in Section 1 above.
 
3.	All agreements binding on holders of Equity Interests of Obligors and Domestic Subsidiaries with respect to such interests are as follows:	
Securityholders’ Agreement dated June 30, 2010 by and among Kellwood Holding Corp., Minority Stockholders and Kellwood Company.
 
6

SCHEDULE 8.1.5
Corporate Names; Locations
Other Names
Each Obligor’s correct corporate name, as registered with the Secretary of State of its state of incorporation, is shown on Schedule 8.1.4.
In the five years preceding the Closing Date, no Obligor has been the surviving corporation of a merger or combination, except:
 
1.	On February 20, 2008, Cardinal Group Integrated, Inc., a Delaware corporation merged into Kellwood Company with Kellwood Company being the surviving corporation, resulting in Kellwood Company being a wholly-owned subsidiary of Kellwood Holding Corp. (f.k.a. Cardinal Integrated, LLC), a Delaware corporation, an affiliate of Sun Capital Partners, Inc.	
 
2.	On December 5, 2006 a subsidiary of Kellwood Company, Newkell III, Inc., a Delaware corporation merged with Hollywould, Inc. and changed its name to Hollywould, Inc. On February 2, 2008 Hollywould, Inc. was dissolved and the business was consolidated into Kellwood Company.	
 
3.	On July 7, 2006 a subsidiary of Kellwood Company, Newkell IV, Inc., acquired assets of CRL Group, LLC. Newkell IV, Inc., a Delaware corporation changed its name to Vince, Inc. and on February 2, 2008 Vince, Inc. was dissolved and the business was consolidated into Kellwood Company.	
 
4.	On February 2, 2008 Briggs New York, Inc., a Delaware corporation was dissolved and all of its assets were transferred to Kellwood Company.	
 
5.	On February 4, 2008 Koret of California, Inc. was dissolved and all of its assets were transferred to Kellwood Company.	
 
6.	On January 29, 2011, RT Licensing, Inc., a New York corporation merged into Kellwood Company with Kellwood Company being the sole survivor company.	

Entity	  	Fictitious. Trade or Other Name	  	 	
Kellwood Company	  	See Schedule 8.1.11 - Trademarks	  		
			
American Recreation Products, Inc.	  	See Schedule 8.1.11 - Trademarks	  		
			
Royal Robbins, Inc.	  	See Schedule 8.1.11 - Trademarks	  		
			
Sierra Designs Acquisition Corporation	  	See Schedule 8.1.11 - Trademarks	  		
			
Phat Fashions LLC	  	See Schedule 8.1.11 - Trademarks	  		

In the five years preceding the Closing Date, no Obligor has acquired any substantial part of the assets of any Person, except:
 
1.	See transactions listed above in this Schedule 8.1.5.	
 
2.	On July 3, 2007 Kellwood Company purchased stock of Royal Robbins, Inc.	
 
3.	On July 13, 2007, Kellwood Company purchased all of the stock of Hanna Andersson Corporation through a merger of Hanna Andersson Corporation with a wholly-owned subsidiary of Kellwood Company, whereby Hanna Andersson Corporation was the surviving entity.	
 
4.	On January 8, 2010, Kellwood Company acquired ISIS through American Recreation Products, Inc., a wholly-owned subsidiary of Kellwood Company.	
 
5.	On August 25, 2010, Kellwood Company acquired substantially all of the assets of ADAMPLUSEVE, INC. through an Asset Purchase Agreement.	
 
6.	On January 4, 2011, Kellwood Company acquired all the outstanding stock of Meow Inc., RT Licensing, Inc and Beth’s Boutique, LLC through an Equity Purchase Agreement. On January 29, 2011 Kellwood Company transferred its shares of Meow HK to Beth’s Boutique, LLC.	
 
7.	On July 26, 2011, Kellwood Company acquired all the issued and outstanding limited liability company equity interests of Zobha, LLC and Zobha Limited. On August 19, 2011 Kellwood Company transferred ownership interest of Zobha Limited to Zobha, LLC.	
 
8

SCHEDULE 8.1.8
Surety Obligations
None.

Schedule 8.1.11
Patents, Trademarks, Copyrights and Licenses
Obligors’ Domestic Patents:

Adjustable Length Sleeping Bag	 	American Recreation Products, Inc.	 	Issued	 	6,073,282	 	06/13/2000	
					
Aisle Banner	 	American Recreation Products, Inc.	 	Issued	 	D600,755	 	9/22/2009	
					
Beverage Bottle	 	American Recreation Products, Inc.	 	Issued	 	D 512,874	 	12/20/2005	
					
Beverage Bottle	 	American Recreation Products, Inc.	 	Issued	 	D 529,338	 	09/13/2006	
					
Carry Bag	 	American Recreation Products, Inc.	 	Issued	 	D 387,555	 	12/16/1997	
					
Child Carrier	 	American Recreation Products, Inc.	 	Issued	 	5,609,279	 	03/11/1997	
					
Child Carrier with Kickstand	 	American Recreation Products, Inc.	 	Issued	 	5,626,271	 	05/06/1997	
					
Collapsible Stroller	 	American Recreation Products, Inc.	 	Issued	 	6,533,310	 	03/18/2003	
					
Container for Semi- Fluid Materials	 	American Recreation Products, Inc.	 	Issued	 	D414,113	 	9/21/1999	
					
Convertible Camping Stool and Table	 	American Recreation Products, Inc.	 	Issued	 	D 398,785	 	09/29/1998	
					
Heated Sleeping Bag	 	American Recreation Products, Inc.	 	Published	 	[s/n 12/511,221]	 	[filed 7/29/2009]	
					
Pack	 	American Recreation Products, Inc.	 	Issued	 	5,465,886	 	11/14/1995	
					
Pentagon Tent	 	American Recreation Products, Inc.	 	Issued	 	D 465,004	 	10/29/2002	
					
Pentagon Tent	 	American Recreation Products, Inc.	 	Issued	 	D 470,559	 	02/18/2003	
					
Single Person Shelter	 	American Recreation Products, Inc.	 	Issued	 	D 396,086	 	07/14/1998	

									
					
Sleeping Bag with Adjustable Foot Space	 	American Recreation Products, Inc.	 	Issued	 	6,175,976	 	01/23/2001	
					
Sleeping Bag with Stretchable Panels	 	American Recreation Products, Inc.	 	Issued	 	6,931,680	 	08/23/2005	
					
Sleeping Bag with Vented Footbox	 	American Recreation Products, Inc.	 	Issued	 	7,849,534	 	12/14/2010	
					
Tent	 	American Recreation Products, Inc.	 	Issued	 	D 478,645	 	08/19/2003	
					
Tent Assembly Having Multiple Configurations	 	American Recreation Products, Inc.	 	Issued	 	5,421,355	 	06/06/1995	
					
Tent Having Truncated Corners	 	American Recreation Products, Inc.	 	Issued	 	D 403,041	 	12/22/1998	
					
Tent Including Folding Directions	 	American Recreation Products, Inc.	 	Pending	 	[s/n 61/172,327]	 	[filed 4/24/2009]	
					
Tent with Convertible Fly	 	American Recreation Products, Inc.	 	Pending	 	[s/n 12/957,815]	 	[filed 12/1/2010]	
					
Tent with Fly Wing Locker	 	American Recreation Products, Inc.	 	Pending	 	[s/n 61/321,545]	 	[filed 4/7/2010]	
					
Tent with Integral Folding and Packaging Features	 	American Recreation Products, Inc.	 	Pending	 	[s/n 61/332,304]	 	[filed 5/7/2010]	
					
Tent with Ridge Pole	 	American Recreation Products, Inc.	 	Issued	 	D 534,614	 	12/13/2006	
					
Tent with Self- Erecting Frames	 	American Recreation Products, Inc.	 	Issued	 	5,915,400	 	06/29/1999	
					
Tent with Storage Receptacle	 	American Recreation Products, Inc.	 	Issued	 	6,450,186	 	09/17/2002	
					
Tent with Storage Receptacle	 	American Recreation Products, Inc.	 	Issued	 	6,772,779	 	08/10/2004	
					
Tent with Truss System	 	American Recreation Products, Inc.	 	Issued	 	6,866,055	 	03/15/2005	
					
Tent with Two Ridge Poles	 	American Recreation Products, Inc.	 	Issued	 	D 562,930	 	02/6/2008	
					
Sleeping Bag Device	 	Sierra Designs, Inc.	 	Issued	 	6,292,961	 	09/25/2001	
					
Versatile Tent Door	 	Sierra Designs, Inc.	 	Issued	 	6,296,003	 	10/02/2001	
 
11

Obligors’ Domestic Trademarks:

4 ON THE FLOOR	  	American Recreation Products, Inc.	  	Registered	  	3,515,286	  	10/14/2008	  	N/A	
						
A ACADEMY BROADWAY (and Design)	  	American Recreation Products, Inc.	  	Renewed	  	1,768,454	  	5/4/1993	  	N/A	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Renewed	  	1,778,706	  	6/29/1993	  	N/A	
						
AGILE	  	American Recreation Products, Inc.	  	Pending	  	[85/311,005]	  	[filed 5/3/2011]	  	YES	
						
ARP SAFETY PRODUCTS	  	American Recreation Products, Inc.	  	Renewed	  	1,882,992	  	3/7/1995	  	N/A	
						
BLACK SHEEP	  	American Recreation Products, Inc.	  	Renewed	  	785,434	  	2/23/1965	  	N/A	
						
BLACK SHEEP	  	American Recreation Products, Inc.	  	Renewed	  	1,302,411	  	10/30/1984	  	N/A	
						
BLACK SHEEP	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/179,317]	  	[filed 11/17/2010]	  	YES	
						
BLACK SHEEP	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/179,327]	  	[filed 11/17/2010]	  	YES	
						
BLACK SHEEP (and Design)	  	American Recreation Products, Inc.	  	Renewed	  	1,661,770	  	10/22/1991	  	N/A	
						
[Black Sheep Design]	  	American Recreation Products, Inc.	  	Registered	  	783,045	  	1/12/1965	  	N/A	
						
COMFORTEC	  	American Recreation Products, Inc.	  	Registered	  	3,614,735	  	5/5/2009	  	N/A	
						
DRYTHERM	  	American Recreation Products, Inc.	  	Registered	  	1,941,343	  	12/12/1995	  	N/A	
						
EVEREST ELITE	  	American Recreation Products, Inc.	  	Renewed	  	1,289,067	  	8/7/1984	  	N/A	
						
FREEPORT	  	American Recreation Products, Inc.	  	Registered	  	2,082,116	  	7/22/1997	  	N/A	
						
FREYR	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/926,147]	  	[filed 2/2/2010]	  	YES	
 
12

											
						
HILLARY	  	American Recreation Products, Inc.	  	Renewed	  	1,900,641	  	6/20/1995	  	N/A	
						
H2DOWN	  	American Recreation Products, Inc.	  	Pending	  	[85/310,811]	  	[filed 5/3/2011]	  	YES	
						
INSTA-BED	  	American Recreation Products, Inc.	  	Registered	  	3,259,010	  	73/2007	  	N/A	
						
INSUL-THERM	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/241,347]	  	[filed 2/14/2011]	  	NO	
						
ISIS	  	American Recreation Products, Inc.	  	Registered	  	3,692,629	  	10/6/2009	  	N/A	
						
ISIS	  	American Recreation Products, Inc.	  	Registered	  	3,850,428	  	9/21/2010	  	N/A	
						
ISIS (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,075,774	  	4/4/2006	  	N/A	
						
JUBILEE	  	American Recreation Products, Inc.	  	Registered	  	3,945,746	  	4/12/2011	  	N/A	
						
KELTY	  	American Recreation Products, Inc.	  	Renewed	  	1,059,258	  	2/15/1977	  	N/A	
						
KELTY	  	American Recreation Products, Inc.	  	Renewed	  	1,063,542	  	4/12/1977	  	N/A	
						
KELTY	  	American Recreation Products, Inc.	  	Renewed	  	1,294,302	  	9/11/1984	  	N/A	
						
KELTY	  	American Recreation Products, Inc.	  	Registered	  	3,894,030	  	12/21/2010	  	N/A	
						
KELTY	  	American Recreation Products, Inc.	  	Registered	  	3,904,440	  	1/11/2011	  	N/A	
						
KELTY	  	American Recreation Products, Inc.	  	Registered	  	4,034,313	  	10/4/2011	  	N/A	
						
KELTY (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,886,466	  	12/7/2010	  	N/A	
						
KELTY (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,886,467	  	12/7/2010	  	N/A	
 
13

											
						
KELTY (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,886,468	  	12/7/2010	  	N/A	
						
KELTY (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,995,061	  	7/12/2011	  	N/A	
						
KELTY (and Design)	  	American Recreation Products, Inc.	  	Registered	  	4,022,650	  	9/6/2011	  	N/A	
						
KELTY K.I.D.S.	  	American Recreation Products, Inc.	  	Registered	  	2,045,780	  	3/18/1997	  	N/A	
						
KELTY KIDS (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,890,335	  	12/14/2010	  	N/A	
						
KELTY - THE ACTIVE FAMILY EXPERTS	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/966,218]	  	[filed 3/23/2010]	  	YES	
						
KELTY - THE ACTIVE FAMILY EXPERTS	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/966,280]	  	[filed 3/23/2010]	  	YES	
						
KELTY - THE ACTIVE FAMILY EXPERTS	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/966,401]	  	[filed 3/23/2010]	  	YES	
						
MIJO	  	American Recreation Products, Inc.	  	Registered	  	3,945,763	  	4/12/2011	  	N/A	
						
MINISTRY	  	American Recreation Products, Inc.	  	Registered	  	3,945,744	  	4/12/2011	  	N/A	
						
MOUNTAIN TRAILS	  	American Recreation Products, Inc.	  	Renewed	  	1,612,072	  	9/4/1990	  	N/A	
						
MOUNTAIN TRAILS	  	American Recreation Products, Inc.	  	Registered	  	3,957,647	  	5/10/2011	  	N/A	
						
NASSAU	  	American Recreation Products, Inc.	  	Registered	  	2,082,115	  	7122/1997	  	N/A	
						
NO FLY ZONE	  	American Recreation Products, Inc.	  	Registered	  	3,444,912	  	6/10/2008	  	N/A	
						
OMEGA II	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/241,374]	  	[filed 2/14/2011]	  	NO	
						
PENTADOME	  	American Recreation Products, Inc.	  	Registered	  	3,002,197	  	9/27/2005	  	N/A	
 
14

											
PROPHECY	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/926,213]	  	[filed 2/2/2010]	  	YES	
						
QUIET COMFORT	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/318,305]	  	[filed 5/11/2011]	  	YES	
						
READYREST	  	American Recreation Products, Inc.	  	Registered	  	3,211,341	  	2/20/2007	  	N/A	
						
REVIVAL	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/926,282]	  	[filed 2/2/2010]	  	YES	
						
RIDGEWAY	  	American Recreation Products, Inc.	  	Renewed	  	1,612,077	  	9/4/1990	  	N/A	
						
RIDGEWAY	  	American Recreation Products, Inc.	  	Renewed	  	1,613,893	  	9/18/1990	  	N/A	
						
RIDGEWAY	  	American Recreation Products, Inc.	  	Renewed	  	1,621,279	  	11/6/1990	  	N/A	
						
RIDGEWAY BY KELLY	  	American Recreation Products, Inc.	  	Registered	  	1,990,915	  	8/6/1996	  	N/A	
						
ROKK	  	American Recreation Products, Inc.	  	Registered	  	2,350,410	  	5/16/2000	  	N/A	
						
ROKK	  	American Recreation Products, Inc.	  	Registered	  	4,022,710	  	9/6/2011	  	N/A	
						
ROKK	  	American Recreation Products, Inc.	  	Registered	  	4,022,709	  	9/6/2011	  	N/A	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	Renewed	  	1,291,069	  	8/21/1984	  	N/A	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	Renewed	  	1,898,130	  	6/6/1995	  	N/A	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/241,670]	  	[filed 2/14/2011]	  	NO	
						
SLUMBERLOFT	  	American Recreation Products, Inc.	  	Registered	  	4,026,079	  	9/13/2011	  	N/A	
						
SLUMBERWICK	  	American Recreation Products, Inc.	  	Registered	  	4,026,073	  	9/13/2011	  	N/A	
 
15

											
SMARTSHADE	  	American Recreation Products, Inc.	  	Registered	  	3,611,201	  	4/28/2009	  	N/A	
						
SOLARON	  	American Recreation Products, Inc.	  	Registered	  	2,936,581	  	3/29/2005	  	N/A	
						
SORCERY	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/926,262]	  	[filed 2/2/2010]	  	YES	
						
SPORT SHOT	  	American Recreation Products, Inc.	  	Registered	  	3,758,644	  	3/9/2010	  	N/A	
						
STOW-N-GO	  	American Recreation Products, Inc.	  	Registered	  	3,886,406	  	12/7/2010	  	N/A	
						
STOW-N-GO	  	American Recreation Products, Inc.	  	Registered	  	3,994,932	  	7/12/2011	  	N/A	
						
SUN STOPPER	  	American Recreation Products, Inc.	  	Registered	  	1,559,870	  	10/10/1989	  	N/A	
						
[Swirl Start Design]	  	American Recreation Products, Inc.	  	Registered	  	3,527,386	  	1/8/2002	  	N/A	
						
TAIL R MADE	  	American Recreation Products, Inc.	  	Registered	  	3,099,461	  	5/30/2006	  	N/A	
						
THE CAMPING COMPANY	  	American Recreation Products, Inc.	  	Renewed	  	1,581,569	  	2/6/1990	  	N/A	
						
TRAVAFIL	  	American Recreation Products, Inc.	  	Registered	  	1,963,244	  	3/19/1996	  	N/A	
						
TRAVASAK	  	American Recreation Products, Inc.	  	Registered	  	1,373,848	  	12/3/1985	  	N/A	
						
TRAVASAK SLEEP SYSTEM (and Design)	  	American Recreation Products, Inc.	  	Renewed	  	1,627,202	  	12/11/1990	  	N/A	
						
U (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,837,464	  	8/24/2010	  	N/A	
						
U (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,837,450	  	8/24/2010	  	N/A	
						
U (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,837,452	  	8/24/2010	  	N/A	
 
16

											
U (and Design)	  	American Recreation Products, Inc.	  	Registered	  	3,837,497	  	8/24/2010	  	N/A	
						
ULLR	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/926,186]	  	[filed 2/2/2010]	  	YES	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Registered	  	3,837,442	  	8/24/2010	  	N/A	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Registered	  	3,837,440	  	8/24/2010	  	N/A	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Registered	  	3,859,595	  	10/12/2010	  	N/A	
						
ULTIMATE DIRECTION (and Design)	  	American Recreation Products, Inc.	  	Registered	  	1,559,824	  	10/10/1989	  	N/A	
						
UV ARMOR	  	American Recreation Products, Inc.	  	Registered	  	2,446,740	  	4/24/2001	  	N/A	
						
VERSAFLY	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/145,346]	  	[filed 10/5/2010]	  	YES	
						
WEATHER ARMOR	  	American Recreation Products, Inc.	  	Pending	  	[s/n 85/414,101]	  	[filed 9/2/2011]	  	NO	
						
WE FIT WHO YOU ARE	  	American Recreation Products, Inc.	  	Registered	  	3,852,303	  	9/28/2010	  	N/A	
						
WENZEL	  	American Recreation Products, Inc.	  	Renewed	  	1,010,087	  	5/6/1975	  	N/A	
						
WENZEL	  	American Recreation Products, Inc.	  	Renewed	  	1,935,918	  	11/14/1995	  	N/A	
						
YMIR	  	American Recreation Products, Inc.	  	Pending	  	[s/n 77/926,172]	  	[filed 2/2/2010]	  	YES	
						
BILLY GOAT	  	Royal Robbins, Inc.	  	Renewed	  	1,931,700	  	10/31/1995	  	N/A	
						
BLUEWATER SHORT	  	Royal Robbins, Inc.	  	Renewed	  	2,145,573	  	3/24/1998	  	N/A	
						
GO EVERYWHERE	  	Royal Robbins, Inc.	  	Registered	  	2,350,360	  	5/16/2000	  	N/A	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	Registered	  	2,428,613	  	2/13/2001	  	N/A	
						
[Strider Design]	  	Royal Robbins, Inc.	  	Renewed	  	1,303,905	  	11/6/1984	  	N/A	
						
[Walking Man Design]	  	Royal Robbins, Inc.	  	Registered	  	3,314,387	  	10/16/2007	  	N/A	
						
60/40 PARKA	  	Sierra Designs Acquisition Corporation	  	Renewed	  	1,034,882	  	3/2/1976	  	N/A	
 
17

											
CCT	  	Sierra Designs Acquisition Corporation	  	Pending	  	[s/n 85/413,896]	  	[filed 9/2/2011]	  	NO	
						
CORE COMFORT TECHNOLOGY	  	Sierra Designs Acquisition Corporation	  	Pending	  	[s/n 85/365,866]	  	[filed 7/7/2011]	  	NO	
						
DRIDOWN	  	Sierra Designs Acquisition Corporation	  	Pending	  	[s/n 85/433,221]	  	[filed 9/27/2011]	  	YES	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Renewed	  	1,086,407	  	2/28/1978	  	N/A	
						
SINCE 1986 THE ORIGINAL 60/40 PARKA SIERRA DESIGNS (and Design)	  	Sierra Designs Acquisition Corporation	  	Renewed	  	1,083,585	  	1/24/1978	  	N/A	
						
A+ (Stylized)	  	Kellwood Company	  	Registered	  	3,274,220	  	8/7/2007	  	N/A	
						
A+DAM	  	Kellwood Company	  	Registered	  	3,117,128	  	7/18/2006	  	N/A	
						
A+EVE	  	Kellwood Company	  	Registered	  	3,080,813	  	4/11/2006	  	N/A	
						
ADAM (Stylized)	  	Kellwood Company	  	Registered	  	3,974,085	  	6/7/2011	  	N/A	
						
ADAM (Stylized)	  	Kellwood Company	  	Registered	  	3,977,235	  	6/14/2011	  	N/A	
						
ADAM (Stylized)	  	Kellwood Company	  	Registered	  	3,974,103	  	6/7/2011	  	N/A	
						
ADAM (Stylized)	  	Kellwood Company	  	Registered	  	3,974,104	  	6/7/2011	  	N/A	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Registered	  	3,894,166	  	12/21/2010	  	N/A	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Pending	  	[s/n 77/740,172]	  	[filed 5/19/2009]	  	YES	
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	Registered	  	3,990,923	  	7/5/2011	  	N/A	
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 77/557,808]	  	[filed 8/28/2008]	  	YES	
						
BEAUTIFUL REBELLION	  	Kellwood Company	  	Pending	  	[85/267,376]	  	[filed 3/15/2011]	  	YES	
						
BEAUTIFUL REBELLION	  	Kellwood Company	  	Pending	  	[85/267,385]	  	[filed 3/15/2011]	  	YES	
						
BELIZA PETITES	  	Kellwood Company	  	Registered	  	3,013,979	  	11/8/2005	  	N/A	
						
BELIZA WOMAN	  	Kellwood Company	  	Registered	  	2,916,374	  	1/4/2005	  	N/A	
						
BICE	  	Kellwood Company	  	Renewed	  	1,807,628	  	11/30/1993	  	N/A	
						
BLK DNM	  	Kellwood Company	  	Pending	  	[s/n 85/376,441]	  	[filed 7/20/2011]	  	NO	
						
BLK DNM	  	Kellwood Company	  	Pending	  	[s/n 85/376,481]	  	[filed 7/20/2011]	  	YES	
						
BLK DNM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/298,020]	  	[filed 4/18/2011]	  	NO	
						
BLK DNM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/298.613]	  	[filed 4/19/2011]	  	YES	
						
BLK DNM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/298.750]	  	[filed 4/19/2011]	  	YES	
 
18

											
 BLOCK ISLAND (and Design)	  	Kellwood Company	  	Registered	  	1,457,502	  	9/15/1987	  	N/A	
						
BRIGGS NEW YORK	  	Kellwood Company	  	Registered	  	2,315,201	  	2/8/2000	  	N/A	
						
BRIGGS NEW YORK PERFECT FIT WAISTBAND	  	Kellwood Company	  	Pending	  	[s/n 85/043,048]	  	[filed 5/19/2010]	  	YES	
						
CABANA BY HOLLYWOULD	  	Kellwood Company	  	Pending	  	[s/n 78/801,438]	  	[filed 1/27/2006]	  	NO	
						
CARI DAVIS	  	Kellwood Company	  	Pending	  	[s/n 85/329,775]	  	[filed 5/25/2011]	  	YES	
						
CENE	  	Kellwood Company	  	Pending	  	[s/n 77/781,024]	  	[filed 7/14/2009]	  	YES	
						
CHAYA	  	Kellwood Company	  	Pending	  	[s/n 85/024,515]	  	[filed 4/27/2010]	  	YES	
						
CHIME	  	Kellwood Company	  	Registered	  	3,702,523	  	10/27/2009	  	N/A	
						
CHIME	  	Kellwood Company	  	Pending	  	[s/n 85/343,172]	  	[filed 6/10/2011]	  	YES	
						
CHIME	  	Kellwood Company	  	Pending	  	[s/n 85/343,183]	  	[filed 6/10/2011]	  	YES	
						
CHORD	  	Kellwood Company	  	Pending	  	[s/n 85/286,975]	  	[filed 4/5/2011]	  	YES	
						
CHORD	  	Kellwood Company	  	Pending	  	[s/n 85/287,016]	  	[filed 4/5/2011]	  	YES	
						
CITY BLUES	  	Kellwood Company	  	Registered	  	1,124,533	  	8/28/1979	  	N/A	
						
CITYWEAR	  	Kellwood Company	  	Renewed	  	1,871,395	  	1/3/1995	  	N/A	
						
COMPONENTS	  	Kellwood Company	  	Renewed	  	1,674,295	  	2/4/1992	  	N/A	
						
COMPONIX	  	Kellwood Company	  	Registered	  	4,016,078	  	8/23/2011	  	N/A	
						
CRICKET LANE	  	Kellwood Company	  	Registered	  	1,441,281	  	6/2/1987	  	N/A	
						
CROWNTUFT	  	Kellwood Company	  	Renewed	  	1,839,480	  	6/14/1994	  	N/A	
						
DAVID DART.	  	Kellwood Company	  	Registered	  	1,433,987	  	3/24/1987	  	N/A	
						
DAVID DART COLLECTIONS	  	Kellwood Company	  	Registered	  	1,991,895	  	8/6/1996	  	N/A	
						
DAVID DART SPORT	  	Kellwood Company	  	Registered	  	1,991,896	  	8/6/1996	  	N/A	
						
DEMOCRACY	  	Kellwood Company	  	Pending	  	[s/n 77/808,873]	  	[filed 8/20/2009]	  	NO	
						
DEMOCRACY DECLARATION OF JEAN DEPENDENCE	  	Kellwood Company	  	Registered	  	3,946,062	  	4/12/2011	  	N/A	
						
 DEMOCRACY THE FREEDOM JEANERATION	  	Kellwood Company	  	Registered	  	3,946,063	  	4/12/2011	  	N/A	
						
EASE SPORT	  	Kellwood Company	  	Renewed	  	1,675,206	  	2/11/1992	  	N/A	
						
EASE SPORT	  	Kellwood Company	  	Renewed	  	1,696,978	  	6/23/1992	  	N/A	
						
EC4U	  	Kellwood Company	  	Renewed	  	1,812,228	  	12/21/1993	  	N/A	
						
ENCHANTE SPORT	  	Kellwood Company	  	Renewed	  	1,676,871	  	2/25/1992	  	N/A	
						
FITS YOU. FITS YOUR LIFESTYLE.	  	Kellwood Company	  	Registered	  	3,788,790	  	5/11/2010	  	N/A	
						
FLATTER FIT	  	Kellwood Company	  	Registered	  	1,679,478	  	3/17/1992	  	N/A	
						
FLATTER STRETCH	  	Kellwood Company	  	Registered	  	1,758,446	  	3/16/1993	  	N/A	
						
FRANCISCA	  	Kellwood Company	  	Registered	  	1,499,692	  	8/9/1988	  	N/A	
						
FREEDOM TO CHANGE	  	Kellwood Company	  	Pending	  	[s/n 85/256,622]	  	[filed 3/3/2011]	  	YES	
						
FRITZI CALIFORNIA (and Design)	  	Kellwood Company	  	Renewed	  	1,775,315	  	6/8/1993	  	N/A	
						
HERBCRAFT (Stylized)	  	Kellwood Company	  	Renewed	  	1,646,911	  	6/4/1991	  	N/A	
						
HIP SOLUTION	  	Kellwood Company	  	Pending	  	[s/n 85/223,200]	  	[filed 1/21/2011]	  	YES	
 
19

											
 HOLLYWOULD	  	Kellwood Company	  	Registered	  	2,502,297	  	10/30/2001	  	N/A	
						
HOLLYWOULD	  	Kellwood Company	  	Pending	  	[s/n 77/948,515]	  	[filed 3/2/2010]	  	YES	
						
HOLLYWOULD (Stylized)	  	Kellwood Company	  	Registered	  	3,078,229	  	4/11/2006	  	N/A	
						
HOLLYWOULD CABANA	  	Kellwood Company	  	Pending	  	[s/n 78/801,440]	  	[filed 1/27/2006]	  	YES	
						
INDEX	  	Kellwood Company	  	Registered	  	3,108,223	  	6/20/2006	  	N/A	
						
IT’S HARD TO LOOK SEXY WHEN YOUR FEET HURT	  	Kellwood Company	  	Registered	  	3,274,268	  	8/7/2007	  	N/A	
						
 IVY WEAR	  	Kellwood Company	  	Renewed	  	1,775,319	  	6/8/1993	  	N/A	
						
JAX	  	Kellwood Company	  	Registered	  	1,813,819	  	12/28/1993	  	N/A	
						
JOLT	  	Kellwood Company	  	Registered	  	3,229,037	  	4/17/2007	  	N/A	
						
JOLT	  	Kellwood Company	  	Pending	  	[s/n 85/030,617]	  	[filed 5/5/2010]	  	YES	
						
JOLT	  	Kellwood Company	  	Pending	  	[s/n 85/050,418]	  	[filed 5/28/2010]	  	YES	
						
JOLT	  	Kellwood Company	  	Pending	  	[s/n 85/050,526]	  	[filed 5/28/2010]	  	YES	
						
JOLT	  	Kellwood Company	  	Pending	  	[s/n 85/050,646]	  	[filed 5/28/2010]	  	YES	
						
JOLT	  	Kellwood Company	  	Pending	  	[s/n 85/050,660]	  	[filed 5/28/2010]	  	YES	
						
JOLT	  	Kellwood Company	  	Pending	  	[s/n 85/222,977]	  	[filed 1/21/2011]	  	YES	
						
JUST MY FIT	  	Kellwood Company	  	Pending	  	[s/n 85/257,144]	  	[filed 3/3/2011]	  	YES	
						
K (and Design)	  	Kellwood Company	  	Registered	  	3,363,664	  	1/1/2008	  	N/A	
						
KISSABLE	  	Kellwood Company	  	Pending	  	[s/n 77/866,127]	  	[filed 11/5/2009]	  	YES	
						
KISS TO KISS	  	Kellwood Company	  	Pending	  	[s/n 77/863,377]	  	[filed 11/2/2009]	  	YES	
						
KISS TO KISS XX	  	Kellwood Company	  	Pending	  	[s/n 77/863,381]	  	[filed 11/2/2009]	  	YES	
						
K KORET (and Design)	  	Kellwood Company	  	Registered	  	3,321,642	  	10/23/2007	  	N/A	
						
K KORET (and Design)	  	Kellwood Company	  	Registered	  	3,332,623	  	11/6/2007	  	N/A	
						
KORAPEL	  	Kellwood Company	  	Registered	  	1,968,641	  	4/16/1996	  	N/A	
						
KORATRON	  	Kellwood Company	  	Registered	  	3,271,307	  	7/31/2007	  	N/A	
						
K WEAR BY KORET	  	Kellwood Company	  	Registered	  	2,366,995	  	7/11/2000	  	N/A	
						
KORET	  	Kellwood Company	  	Registered	  	2,570,640	  	5/21/2002	  	N/A	
						
KORET (Stylized)	  	Kellwood Company	  	Renewed	  	1,127,554	  	12/11/1979	  	N/A	
						
KORET CITY BLUES	  	Kellwood Company	  	Renewed	  	1,079,447	  	12/13/1977	  	N/A	
						
[Koret Pants Trade Design]	  	Kellwood Company	  	Registered	  	1,956,615	  	2/13/1996	  	N/A	
						
KORET SOLOS	  	Kellwood Company	  	Registered	  	2,825,465	  	2/8/2005	  	N/A	
						
KORET SPORT	  	Kellwood Company	  	Registered	  	3,357,043	  	12/18/2007	  	N/A	
						
KORETCOMPANY.COM	  	Kellwood Company	  	Registered	  	3,705,898	  	11/3/2009	  	N/A	
						
KURT THOMAS	  	Kellwood Company	  	Registered	  	3,995,293	  	7/12/2011	  	N/A	
						
KURT THOMAS	  	Kellwood Company	  	Pending	  	[s/n 85/332,272]	  	[filed 5/27/2011]	  	YES	
						
LAMB & FLAG	  	Kellwood Company	  	Pending	  	[s/n 85/214,193]	  	[filed 1/10/2011]	  	YES	
						
LAMB & FLAG	  	Kellwood Company	  	Pending	  	[s/n 85/214,355]	  	[filed 1/10/2011]	  	YES	
						
LAMB & FLAG	  	Kellwood Company	  	Pending	  	[s/n 85/214,368]	  	[filed 1/10/2011]	  	YES	
						
LAMB & FLAG	  	Kellwood Company	  	Pending	  	[s/n 85/214,379]	  	[filed 1/10/2011]	  	YES	
						
LAMB & FLAG	  	Kellwood Company	  	Pending	  	[s/n 85/214,419]	  	[filed 1/10/2011]	  	YES	
						
LAMB & FLAG	  	Kellwood Company	  	Pending	  	[s/n 85/214,430]	  	[filed 1/10/2011]	  	YES	
						
LAMB CHOP	  	Kellwood Company	  	Pending	  	[s/n 85/374,940]	  	[filed 7/19/2011]	  	YES	
 
20

											
LEGEND BLUE	  	Kellwood Company	  	Pending	  	[s/n 77/006,921]	  	[filed 9/25/2006]	  	YES	
						
LEGEND DENIM	  	Kellwood Company	  	Pending	  	[s/n 77/006,928]	  	[filed 9/25/2006]	  	YES	
						
LOVE ADAM	  	Kellwood Company	  	Pending	  	[s/n 85/150,827]	  	[filed 10/12/2010]	  	YES	
						
LOVE ADAM	  	Kellwood Company	  	Pending	  	[s/n 85/150,897]	  	[filed 10/12/2010]	  	YES	
						
LOVE ADAM	  	Kellwood Company	  	Pending	  	[s/n 85/150,940]	  	[filed 10/12/2010]	  	YES	
						
LOVE ADAM	  	Kellwood Company	  	Pending	  	[s/n 85/150,961]	  	[filed 10/12/2010]	  	YES	
						
LOVE ADAM	  	Kellwood Company	  	Pending	  	[s/n 85/152,460]	  	[filed 10/14/2010]	  	YES	
						
LOVE ADAM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/151,346]	  	[filed 10/13/2010]	  	YES	
						
LOVE ADAM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/151,400]	  	[filed 10/13/2010]	  	YES	
						
LOVE ADAM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/151,595]	  	[filed 10/13/2010]	  	YES	
						
LOVE ADAM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/151,618]	  	[filed 10/13/2010]	  	YES	
						
LOVE ADAM (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/152,471]	  	[filed 10/14/2010]	  	YES	
						
LXF (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/256,993]	  	[filed 3/3/2011]	  	YES	
						
LXF (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/257,016]	  	[filed 3/3/2011]	  	YES	
						
[LXF X Back Pocket Design]	  	Kellwood Company	  	Pending	  	[s/n 85/350,322]	  	[filed 6/20/2011]	  	YES	
						
MAGIC PANT	  	Kellwood Company	  	Registered	  	3,793,434	  	5/25/2010	  	N/A	
						
MAXIMO	  	Kellwood Company	  	Published	  	[s/n 78/321,681]	  	[filed 10/31/2003]	  	YES	
						
MELISSA HARPER	  	Kellwood Company	  	Pending	  	[s/n 85/334,383]	  	[filed 5/31/2011]	  	YES	
						
MELROSE	  	Kellwood Company	  	Pending	  	[s/n 85/188,646]	  	[filed 12/1/2010]	  	YES	
						
MELROSE	  	Kellwood Company	  	Registered	  	1,626,053	  	12/4/1990	  	N/A	
						
MEMOIR	  	Kellwood Company	  	Pending	  	[s/n 77/422,730]	  	[filed 3/14/2008]	  	YES	
						
MINIMIZE IT	  	Kellwood Company	  	Pending	  	[s/n 85/188,120]	  	[filed 12/1/2010]	  	YES	
						
MY MICHELLE	  	Kellwood Company	  	Pending	  	[85/294,452]	  	[filed 4/13/2011]	  	NO	
						
MY MICHELLE	  	Kellwood Company	  	Pending	  	[85/343,124]	  	[filed 6/10/2011]	  	YES	
						
MY MICHELLE	  	Kellwood Company	  	Pending	  	[85/343,130]	  	[filed 6/10/2011]	  	YES	
						
MY MICHELLE (Stylized)	  	Kellwood Company	  	Registered	  	1,442,190	  	6/9/1987	  	N/A	
						
NAPA VALLEY	  	Kellwood Company	  	Registered	  	1,769,366	  	5/4/1993	  	N/A	
						
NAPA VALLEY BLUES	  	Kellwood Company	  	Registered	  	3,173,885	  	11/21/2006	  	N/A	
						
ONIX	  	Kellwood Company	  	Pending	  	[s/n 85/261,489]	  	[filed 3/8/2011]	  	YES	
						
PANTOLOGY	  	Kellwood Company	  	Registered	  	2,853,619	  	6/15/2004	  	N/A	
						
PERFECT FIT WAISTBAND	  	Kellwood Company	  	Pending	  	[85/289,836]	  	[filed 4/8/2011]	  	YES	
						
PINK POODLE (and Design)	  	Kellwood Company	  	Registered	  	3,005,746	  	10/11/2005	  	N/A	
						
REBECCA TAYLOR	  	Kellwood Company	  	Registered	  	2,759,230	  	9/2/2003	  	N/A	
						
REBECCA TAYLOR	  	Kellwood Company	  	Registered	  	2,601,789	  	7/30/2002	  	N/A	
						
REBECCA TAYLOR	  	Kellwood Company	  	Registered	  	2,847,668	  	6/1/2004	  	N/A	
						
REBECCA TAYLOR	  	Kellwood Company	  	Registered	  	2,132,863	  	1/27/1998	  	N/A	
						
REBECCA TAYLOR	  	Kellwood Company	  	Registered	  	2,646,292	  	11/5/2002	  	N/A	
						
REBECCA TAYLOR	  	Kellwood Company	  	Registered	  	2,919,208	  	1/18/2005	  	N/A	
						
REBECCA TAYLOR	  	Kellwood Company	  	Pending	  	85/419,074	  	9/9/2011	  	NO	
 
21

											
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	Registered	  	2,596,950	  	7/23/2002	  	N/A	
						
REWIND	  	Kellwood Company	  	Registered	  	3,078,041	  	4/11/2006	  	N/A	
						
REWIND	  	Kellwood Company	  	Registered	  	3,694,153	  	10/6/2009	  	N/A	
						
REWIND	  	Kellwood Company	  	Pending	  	[s/n 85/051,396]	  	[filed 6/1/2010]	  	YES	
						
REWIND	  	Kellwood Company	  	Pending	  	[s/n 85/051,409]	  	[filed 6/1/2010]	  	YES	
						
REWIND	  	Kellwood Company	  	Pending	  	[s/n 85/051,726]	  	[filed 6/1/2010]	  	YES	
						
REWIND	  	Kellwood Company	  	Pending	  	[s/n 85/111,983]	  	[filed 6/1/2010]	  	YES	
						
R. L. RICHARD	  	Kellwood Company	  	Pending	  	[s/n 85/329,787]	  	[filed 5/25/2011]	  	YES	
						
ROBERT SCOTT LTD.	  	Kellwood Company	  	Renewed	  	1,260,999	  	12/13/1983	  	N/A	
						
SAG HARBOR	  	Kellwood Company	  	Renewed	  	1,224,369	  	1/18/1983	  	N/A	
						
SAG HARBOR	  	Kellwood Company	  	Registered	  	3,974,464	  	6/7/2011	  	N/A	
						
SAG HARBOR	  	Kellwood Company	  	Registered	  	3,974,467	  	6/7/2011	  	N/A	
						
SAG HARBOR	  	Kellwood Company	  	Registered	  	3,974,502	  	6/7/2011	  	N/A	
						
SAG HARBOR (and Design)	  	Kellwood Company	  	Registered	  	1,943,661	  	12/26/1995	  	N/A	
						
SAG HARBOR PERFECT FIT WAISTBAND	  	Kellwood Company	  	Pending	  	[s/n 85/043,063]	  	[filed 5/19/2010]	  	YES	
						
SAILMATES (and Design)	  	Kellwood Company	  	Renewed	  	1,684,501	  	4/281992	  	N/A	
						
SANGRIA	  	Kellwood Company	  	Registered	  	3,813,125	  	7/6/2010	  	N/A	
						
SEPARATE
IMPRESSIONS	  	Kellwood Company	  	Renewed	  	1,149,006	  	3/24/1981	  	N/A	
						
SEPARATE IMPRESSIONS BY KORET	  	Kellwood Company	  	Registered	  	2,134,688	  	2/3/1998	  	N/A	
						
SEQUIN HEARTS	  	Kellwood Company	  	Registered	  	3,635,709	  	6/9/2009	  	N/A	
						
SEQUIN HEARTS	  	Kellwood Company	  	Pending	  	[s/n 85/343,146]	  	[filed 6/10/2011]	  	YES	
						
SEQUIN HEARTS	  	Kellwood Company	  	Pending	  	[s/n 85/343,156]	  	[filed 6/10/2011]	  	YES	
						
SHOPKORET.COM	  	Kellwood Company	  	Registered	  	3,705,897	  	11/3/2009	  	N/A	
						
SIX-2-SIX	  	Kellwood Company	  	Pending	  	[s/n 85/930,548]	  	[filed 8/5/2011]	  	YES	
						
SKIRTOLOGY	  	Kellwood Company	  	Pending	  	[s/n 77/716,293]	  	[filed 4/17/2009]	  	YES	
						
SOLOS KORET	  	Kellwood Company	  	Registered	  	2,042,095	  	3/4/1997	  	N/A	
						
STRUCK	  	Kellwood Company	  	Pending	  	[s/n 77/863,359]	  	[filed 11/2/2009]	  	YES	
						
STRUCK BY JOLT	  	Kellwood Company	  	Pending	  	[s/n 77/863,373]	  	[filed 11/2/2009]	  	YES	
						
STRUCK BY STYLE	  	Kellwood Company	  	Registered	  	3,914,439	  	2/1/2011	  	N/A	
						
STUDIO EASE	  	Kellwood Company	  	Renewed	  	1,755,484	  	3/2/1993	  	N/A	
						
SUTTER PLACE	  	Kellwood Company	  	Registered	  	1,706,880	  	8/11/1992	  	N/A	
						
SUTTER PLACE and Design)	  	Kellwood Company	  	Registered	  	1,694,517	  	6/16/1992	  	N/A	
						
TAKARA	  	Kellwood Company	  	Registered	  	3,765,444	  	3/23/2010	  	N/A	
						
TAKARA	  	Kellwood Company	  	Pending	  	[s/n 85/343,191]	  	[filed 6/10/2011]	  	YES	
						
TAKARA	  	Kellwood Company	  	Pending	  	[s/n 85/343,201]	  	[filed 6/10/2011]	  	YES	
						
TARA JONES	  	Kellwood Company	  	Pending	  	[s/n 85/329,800]	  	[filed 5/25/2011]	  	YES	
						
THE CLOTHES I WEAR	  	Kellwood Company	  	Registered	  	3,974,503	  	6/7/2011	  	N/A	
 
22

											
THE EASY-FIT WAISTBAND	  	Kellwood Company	  	Pending	  	[s/n 85/223,256]	  	[filed 1/21/2011]	  	YES	
						
THE FITTING GUARANTEE	  	Kellwood Company	  	Registered	  	3,795,016	  	5/25/2010	  	N/A	
						
THE FLEXI-FIT
WAISTBAND	  	Kellwood Company	  	Registered	  	3,860,681	  	10/12/2010	  	N/A	
						
THE KORET PERFECT FIT	  	Kellwood Company	  	Registered	  	2,176,499	  	7/28/1998	  	N/A	
						
THE SLIMMING SOLUTION	  	Kellwood Company	  	Registered	  	3,613,889	  	4/28/2009	  	N/A	
						
THIN ICE	  	Kellwood Company	  	Renewed	  	1,804,570	  	11/16/1993	  	N/A	
						
VINCE	  	Kellwood Company	  	Registered	  	2,929,250	  	3/1/2005	  	N/A	
						
VINCE	  	Kellwood Company	  	Pending	  	[s/n 77/309,712]	  	[filed 10/22/2007]	  	YES	
						
VINCE	  	Kellwood Company	  	Registered	  	3,680,680	  	9/8/2009	  	N/A	
						
VINCE	  	Kellwood Company	  	Pending	  	[s/n 77/506,226]	  	[filed 6/24/2008]	  	YES	
						
VINCE	  	Kellwood Company	  	Pending	  	[s/n 85/164,464]	  	[filed 10/29/2010]	  	YES	
						
VINCE	  	Kellwood Company	  	Pending	  	[s/n 85/164,483]	  	[filed 10/29/2010]	  	YES	
						
VINCE	  	Kellwood Company	  	Registered	  	3,861,098	  	10/12/2010	  	N/A	
						
VINCE. (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/129,535]	  	[filed 9/14/2010]	  	YES	
						
VINCE. (Stylized)	  	Kellwood Company	  	Pending	  	[s/n 85/129,527]	  	[filed 9/14/2010]	  	YES	
						
VINCE. (Stylized)	  	Kellwood Company	  	Registered	  	3,954,984	  	5/3/2011	  	N/A	
						
VINCE. (Stylized)	  	Kellwood Company	  	Registered	  	3,954,985	  	5/3/2011	  	N/A	
						
VIOLETS & ROSES	  	Kellwood Company	  	Renewed	  	1,849,398	  	8/9/1994	  	N/A	
						
WAIST SOLUTION	  	Kellwood Company	  	Registered	  	3,999,806	  	7/19/2011	  	N/A	
						
WINGATE (Stylized)	  	Kellwood Company	  	Renewed	  	1,245,406	  	7/12/1983	  	N/A	
						
WIT AND WISDOM	  	Kellwood Company	  	Pending	  	[s/n 85/178,142]	  	3/22/2011	  	YES	
						
YOU BABES (and Design)	  	Kellwood Company	  	Renewed	  	1,790,493	  	8/31/1993	  	N/A	
						
[Bull Design]	  	Phat Fashions LLC	  	Registered	  	2,272,180	  	8/24/1999	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	3,735,330	  	1/5/2010	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	3,759,361	  	3/9/2010	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	3,624,700	  	5/19/2009	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	3,233,844	  	4/24/2007	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	3,240,184	  	5/8/2007	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	3,087,925	  	5/2/2006	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	2,440,358	  	4/3/2001	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	2,538,563	  	2/12/2002	  	N/A	
						
[Cat Design]	  	Phat Fashions LLC	  	Registered	  	3,037,296	  	1/3/2006	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered
(Virginia)	  	2649	  	10/28/2002	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,613,885	  	4/28/2009	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,701,862	  	10/27/2009	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Pending
(Allowed)	  	[s/n 76/477,035]	  	[filed 12/20/2002]	  	YES	
						
BABY PHAT	  	Phat Fashions LLC	  	Pending
(Allowed)	  	[s/n 77/646,849]	  	[filed 1/9/2009]	  	YES	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,591,599	  	3/17/2009	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,181,285	  	2/21/2006	  	N/A	
 
23

											
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,220,372	  	3/20/2007	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,386,191	  	1/24/2006	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	2,240,881	  	4/20/1999	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	2,538,494	  	2/12/2002	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	2,736,998	  	7/15/2003	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	2,811,059	  	2/3/2004	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,004,138	  	10/4/2005	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,051,588	  	1/24/2006	  	N/A	
						
BABY PHAT	  	Phat Fashions LLC	  	Registered	  	3,060,441	  	2/21/2006	  	N/A	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Registered	  	3,000,181	  	9/27/2005	  	N/A	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Registered	  	3,743,384	  	10/26/2009	  	N/A	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Registered	  	3,723,824	  	12/8/2009	  	N/A	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Registered	  	3,600,115	  	3/31/2009	  	N/A	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Registered	  	2,303,780	  	12/28/1999	  	N/A	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Registered	  	3,004,685	  	10/4/2005	  	N/A	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Registered (South Carolina)	  	SCO12501	  	6/28/2001	  	N/A	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Registered
(Virginia)	  	2650	  	10/2812002	  	N/A	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Registered	  	3,759,401	  	3/9/2010	  	N/A	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Registered	  	3,735,329	  	1/5/2010	  	N/A	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Registered	  	3,723,825	  	12/8/2009	  	N/A	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Registered	  	3,551,930	  	12/23/2008	  	N/A	
						
BABY PHAT (and Design)	  	Phat Fashions LLC	  	Registered	  	3,109,678	  	6/27/2006	  	N/A	
						
BABY PHAT (and Design)	  	Phat Fashions LLC	  	Registered	  	2,429,559	  	2/20/2001	  	N/A	
						
BABY PHAT (and Design)	  	Phat Fashions LLC	  	Registered	  	2,541,251	  	2/19/2002	  	N/A	
						
BABY PHAT (and Design)	  	Phat Fashions LLC	  	Registered	  	2,881,224	  	917/2004	  	N/A	
						
BABY PHAT (and Design)	  	Phat Fashions LLC	  	Registered	  	3,000,182	  	9/27/2005	  	N/A	
						
BABY PHAT (and Design)	  	Phat Fashions LLC	  	Registered	  	3,006,170	  	10/11/2005	  	N/A	
						
BABY PHAT GIRLZ	  	Phat Fashions LLC	  	Registered	  	3,149,054	  	9/26/2006	  	N/A	
						
BABY PHAT GIRLZ	  	Phat Fashions LLC	  	Registered	  	2,557,269	  	4/2/2002	  	N/A	
						
BABY PHAT GIRLZ	  	Phat Fashions LLC	  	Registered	  	2,867,090	  	7/27/2004	  	N/A	
 
24

											
BABY PHAT GODDESS	  	Phat Fashions LLC	  	Registered	  	3,512,917	  	10/7/2008	  	N/A	
						
BABY PHAT GODDESS (and Design)	  	Phat Fashions LLC	  	Registered	  	3,512,918	  	10/7/2008	  	N/A	
						
BABY PHAT GOLDEN GODDESS	  	Phat Fashions LLC	  	Registered	  	3,366,942	  	1/8/2008	  	N/A	
						
BABY PHAT GOLDEN GODDESS (and Design)	  	Phat Fashions LLC	  	Registered	  	3,374,112	  	1/22/2008	  	N/A	
						
BABY PHAT SEDUCTIVE GODDESS	  	Phat Fashions LLC	  	Registered	  	3860529	  	10/12/2010	  	N/A	
						
FROM THE RUNWAY TO THE PAVEMENT	  	Phat Fashions LLC	  	Pending	  	[s/n 85/377,034]	  	[filed 7/21/2011]	  	YES	
						
FROM THE RUNWAY TO THE PAVEMENT	  	Phat Fashions LLC	  	Pending	  	[s/n 85/377,055]	  	[filed 7/21/2011]	  	YES	
						
FROM THE RUNWAY TO THE PAVEMENT	  	Phat Fashions LLC	  	Pending	  	[s/n 85/377,068]	  	[filed 7/21/2011]	  	YES	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Registered
(Virginia)	  	2658	  	11/6/2002	  	N/A	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Registered	  	3,759,363	  	3/9/2010	  	N/A	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Registered	  	2,487,976	  	9/11/2001	  	N/A	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	Registered	  	3,690,698	  	9/29/2009	  	N/A	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	Registered	  	3,438,436	  	5/27/2008	  	N/A	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	Registered	  	3,451,492	  	6/17/2008	  	N/A	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	Registered	  	2,528,508	  	1/8/2002	  	N/A	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	Registered	  	2,610,656	  	8/20/2002	  	N/A	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	Registered	  	2,802,598	  	1/6/2004	  	N/A	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	Registered	  	3,018,211	  	11/22/2005	  	N/A	
						
P (and Leaf Design - Outline)	  	Phat Fashions LLC	  	Registered
(Virginia)	  	2656	  	10/28/2002	  	N/A	
						
P (and Leaf Design - Outline)	  	Phat Fashions LLC	  	Registered	  	3,823,257	  	7/20/2010	  	N/A	
						
P (and Leaf Design - Outline)	  	Phat Fashions LLC	  	Registered	  	3,759,362	  	3/9/2010	  	N/A	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Registered	  	3,812,223	  	6/29/2010	  	N/A	
						
P (Leaf and Shield Design - Black)	  	Phat Fashions LLC	  	Registered	  	3,085,753	  	4/25/2006	  	N/A	
						
P (Leaf and Shield Design - Black)	  	Phat Fashions LLC	  	Registered	  	3,018,212	  	11/22/2005	  	N/A	
						
P (Leaf and Shield Design - Black)	  	Phat Fashions LLC	  	Registered	  	3,021,315	  	11/29/2005	  	N/A	
 
25

											
P (Leaf and Shield Design - Black)	  	Phat Fashions LLC	  	Registered	  	2,600,979	  	7/30/2002	  	N/A	
						
PHAT	  	Phat Fashions LLC	  	Registered	  	3,117,467	  	7/18/2006	  	N/A	
						
PHAT	  	Phat Fashions LLC	  	Registered	  	2,372,748	  	8/1/2000	  	N/A	
						
PHAT CLASSIC	  	Phat Fashions LLC	  	Registered	  	3,640,322	  	6/15/2009	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered
(Virginia)	  	2651	  	10/28/2002	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	3,730,098	  	12/22/2009	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Pending
(Allowed)	  	[s/n 76/477,034]	  	[filed 12/20/2002]	  	YES	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	3,861,131	  	10/12/2010	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	3,256,767	  	6/26/2007	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	3,181,284	  	12/5/2006	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	3,220,371	  	3/20/2007	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	1,809,325	  	12/7/1993	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	2,415,455	  	12/26/2000	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	2,847,288	  	6/1/2004	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	2,867,117	  	7/27/2004	  	N/A	
						
PHAT FARM	  	Phat Fashions LLC	  	Registered	  	3,013,536	  	11/8/2005	  	N/A	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Registered	  	2,492,511	  	9/25/2001	  	N/A	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Registered	  	2,552,152	  	3/26/2002	  	N/A	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Registered	  	2,487,474	  	9/11/2001	  	N/A	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Registered	  	2,551,715	  	3/26/2002	  	N/A	
						
PHAT P FARM (and P Leaf Design)	  	Phat Fashions LLC	  	Registered
(Virginia)	  	2652	  	10/28/2002	  	N/A	
						
PHAT FARM (and Design)	  	Phat Fashions LLC	  	Registered	  	2,485,552	  	9/4/2001	  	N/A	
						
PHAT FARM (and P Leaf Design)	  	Phat Fashions LLC	  	Registered	  	3,116,645	  	7/18/2006	  	N/A	
						
PHAT FARM (and P Leaf Design)	  	Phat Fashions LLC	  	Registered	  	3,184,177	  	12/12/2006	  	N/A	
						
PHAT PREMIUM (and Design)	  	Phat Fashions LLC	  	Registered	  	4,006,503	  	8/2/2011	  	N/A	
						
PHAT PREMIUM (and Design)	  	Phat Fashions LLC	  	Pending	  	[s/n 77/479,992]	  	[filed 5/21/2008	  	YES	
						
PHAT PREMIUM (and Design)	  	Phat Fashions LLC	  	Pending	  	[s/n 77/479,984]	  	[filed 5/21/2008]	  	YES	
						
[Phat Premium Design]	  	Phat Fashions LLC	  	Registered	  	3,716,230	  	11/24/2009	  	N/A	
						
[Phat Premium Design]	  	Phat Fashions LLC	  	Registered	  	3,693,597	  	10/6/2009	  	N/A	
						
PHAT THREADS	  	Phat Fashions LLC	  	Registered	  	1,819,997	  	2/8/1994	  	N/A	
 
26

Obligors’ Domestic Copyrights:

2 Cats and Crown Design	  	Kellwood Company	  	Registered	  	VA 1-062-382	  	9/5/2000	
					
2 Cats Single Outline	  	Kellwood Company	  	Registered	  	VA 1-700-810	  	1/27/2010	
					
2 Cats Double Outline	  	Kellwood Company	  	Registered	  	VA 1-700-808	  	1/27/2010	
					
“Kaleidoscope” stripe (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-526	  	12/13/1996	
					
45182 (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-238	  	12/15/1997	
					
Abstract ethnic line work (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-85I-248	  	12/15/1997	
					
Allover conversational (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-247	  	12/15/1997	
					
Anchors away sweater (art reproduction)	  	Kellwood Company	  	Registered	  	VA-764-452	  	1/23/1996	
					
Ansaldi (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-659	  	12/13/1996	
					
Ansaldi engineered print (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-528	  	12/13/1996	
					
Batik garden large allow: no. 1CB (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-641	  	3/15/1996	
					
Batik garden small allow: no. 1CC (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-642	  	3/15/1996	
					
Batik garden stripe: no. 1CD (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-643	  	3/15/1996	
					
Bikini print: no. 1HB (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-625	  	3/15/1996	
					
Black & white fruit design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-662	  	12/13/1996	
					
C’est noir (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-529	  	12/13/1996	
					
CHO1O1 (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-240	  	12/15/1997	
					
CHO103 (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-239	  	12/15/1997	
					
Citrus collection, circle design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-667	  	12/13/1996	
					
Citrus collection, stripe design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-666	  	12/13/1996	
					
Coffee bean	  	Kellwood Company	  	Registered	  	VAu-697-036	  	1/18/2006	
					
Cuban stripe (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-246	  	12/15/1997	
					
Daily secretarial responsibilities	  	Kellwood Company	  	Registered	  	TX-336-181	  	9/27/1979	
 
27

									
Daisy vermicelli	  	Kellwood Company	  	Registered	  	VA-543-993	  	2/16/1993	
					
Diamond carpet (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-244	  	12/15/1997	
					
Farmer’s market sweater (art reproduction)	  	Kellwood Company	  	Registered	  	VA-764-450	  	1/23/1996	
					
Fashion mirrors (print on fabric)	  	Kellwood Company	  	Registered	  	VA-925-359	  	12/15/1997	
					
Five print (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-242	  	12/15/1997	
					
Floral flag: no. 1HD (print on fabric	  	Kellwood Company	  	Registered	  	VAu-355-624	  	3/15/1996	
					
Flowerpot: no. T1A (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-639	  	3/15/1996	
					
Fruit & geometric shapes design (print on fabric	  	Kellwood Company	  	Registered	  	VA-803-665	  	12/13/1996	
					
Geometric floral: no. 1HC (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-638	  	3/15/1996	
					
House print (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-237	  	12/15/1997	
					
House print (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-527	  	12/13/1996	
					
Ivory garden (print on fabric)	  	Kellwood Company	  	Registered	  	VA-1394481	  	3/6/2007	
					
Kaleidoscope, box design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-663	  	12/13/1996	
					
Kaleidoscope, circular design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-661	  	12/13/1996	
					
Kaleidoscope, diagonal line design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-664	  	12/13/1996	
					
Keying instructions for daily secretarial responsibilities	  	Kellwood Company	  	Registered	  	TX-336-182	  	9/27/1979	
					
Keying instructions for typing log	  	Kellwood Company	  	Registered	  	TX-336-179	  	9/27/1979	
					
Lace design	  	Kellwood Company	  	Registered	  	VAu-232-902	  	5/18/1992	
					
Large vegetable: no. I FC (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-636	  	3/15/1996	
					
Laudbag print: no. 1HA (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-644	  	3/15/1996	
					
Leaf border [no. B7B] (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-245	  	12/15/1997	
					
Madrid collection - large print (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-359-091	  	4/22/1996	
 
28

									
Madrid collection - small print (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-359-090	  	4/22/1996	
					
Medium vegetable: no. 1FB (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-635	  	3/15/1996	
					
Modern earth collection - circle design (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-359-093	  	4/22/1996	
					
Modern earth collection - square design (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-359-094	  	4/22/1996	
					
Modern earth collection - stripe design (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-359-092	  	4/22/1996	
					
Monotone floral: no. 11G (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-640	  	3/15/1996	
					
Moroccan city (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-243	  	12/15/1997	
					
New Orleans allover (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-251	  	12/15/1997	
					
New Orleans border (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-253	  	12/15/1997	
					
New Orleans helicopter view (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-252	  	12/15/1997	
					
New Orleans stripe (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-250	  	12/15/1997	
					
Paisley pattern	  	Kellwood Company	  	Registered	  	VAu-228-535	  	5/28/1992	
					
Pale floral, large flower design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-660	  	12/13/1996	
					
Pale flower collection - small flower design (print on fabric)	  	Kellwood Company	  	Registered	  	VA-803-530	  	12/13/1996	
					
People allover (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-255	  	12/15/1997	
					
People border (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-235	  	12/15/1997	
					
People border: no. 1AA (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-632	  	3/15/1996	
					
People large allow: no. 1AG (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-631	  	3/15/1996	
					
People small allow: no. 1AH (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-630	  	3/15/1996	
					
People stripe: no. 1AD(print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-629	  	3/15/1996	
 
29

									
Petit floral: no. 71B (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-637	  	3/15/1996	
					
Polka dot flower (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-236	  	12/15/1997	
					
Pots & pans: no. I DE (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-633	  	3/15/1996	
					
Pots and pans - large pots: no. IDC (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-627	  	3/15/1996	
					
Pots and pans - pots spaced: no. IDA (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-628	  	3/15/1996	
					
Pots and pans all over: no. 1 DB (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-626	  	3/15/1996	
					
Salon faces (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-256	  	12/15/1997	
					
Scribble print no. CH0104 (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-241	  	12/15/1997	
					
Small vegetable: no. 1FA (print on fabric)	  	Kellwood Company	  	Registered	  	VAu-355-634	  	3/15/1996	
					
Stripe jewel tone (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-249	  	12/15/1997	
					
Teresa (fabric design)	  	Kellwood Company	  	Registered	  	VA-491-939	  	2/13/1992	
					
The Markamatic system of computerized pattern grading and marking	  	Kellwood Company	  	Registered	  	TX-338-900	  	9/24/1979	
					
The Markamatic system of computerized pattern grading and marking	  	Kellwood Company	  	Registered	  	TXu-29-477	  	5/21/1979	
					
Typing log	  	Kellwood Company	  	Registered	  	TX-336-180	  	9/27/1979	
					
Urban safari (art reproduction - design for fabric)	  	Kellwood Company	  	Registered	  	VA-851-254	  	12/15/1997	
					
Victorian Shawl Collar	  	Kellwood Company	  	Registered	  	VA-557-133	  	4/23/1993	
					
Victorian tea sweater (art reproduction)	  	Kellwood Company	  	Registered	  	VA-764-451	  	1/16/1996	
					
[Jamaica allover: no. DD201] (print on fabric)	  	Kellwood Company	  	Registered	  	VA-898-685	  	5/15/1998	
					
[Water skin: no. DD166] (print on fabric)	  	Kellwood Company	  	Registered	  	VA-898-686	  	5/15/1998	
					
Allover print weekend: no. DD 177 (FBM) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-969	  	5/15/1998	
 
30

									
Aloha stamp: no. DD165 (FGQ) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-962	  	5/15/1998	
					
Beach chair: no. DD173 (FGU) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-957	  	5/15/1998	
					
Citrus village: no. DD203 (FDC) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-966	  	5/15/1998	
					
Cocktail print: no. DD 184 (EHP) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-959	  	5/15/1998	
					
Coffee society allover: no. DD 172 (FAC) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-953	  	5/15/1998	
					
Coffee stripe: no. DD193 (PAM) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-974	  	5/15/1998	
					
Excess baggage: no. DD192 (FIC) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-967	  	5/15/1998	
					
Floral border: no. DD221 (ZFA) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-954	  	5/15/1998	
					
Fossil leaf: no. DD191 (FIB) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-958	  	5/15/1998	
					
Friendly weekend: no. DD178 (ZCD) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-971	  	5/15/1998	
					
Girlfriend print: no. DD182 (GFK) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-973	  	5/15/1998	
					
Jamaica stripe: no. DD202 (FCD) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-970	  	5/15/1998	
					
Large skin print no. 502t (GHR) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-972	  	5/15/1998	
					
Mesh floral (HGA): no. DD223 (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-977	  	5/15/1998	
					
Paisley brown: no.
21188 (GHG) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-960	  	5/15/1998	
					
Paisley scroll breeze: no. 2124 (HOG) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-975	  	5/15/1998	
					
Seaside conversational: no. DD141 (EGP) (print on fabric	  	Kellwood Company	  	Registered	  	VA-965-964	  	5/15/1998	
					
Small baggage: no. DD207 (FIU) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-968	  	5/15/1998	
 
31

									
Small floral: no. DD146 (ECH) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-956	  	5/15/1998	
					
Sponge print: no. DD224 (HOE) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-976	  	5/15/1998	
					
Stipple print: no.
DD225 (HGF) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-961	  	5/15/1998	
					
Vertical stripe: no. DD176 (FLK) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-963	  	5/15/1998	
					
Water lily: no. 10043 (HGB) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-955	  	5/15/1998	
					
Watercolor skin print (print on fabric)	  	Kellwood Company	  	Registered	  	VA-965-965	  	5/15/1998	
					
Banded paisley: no. DD230 (HHE) (print on fabric)	  	Kellwood Company	  	Registered	  	VA-942-818	  	5/15/1998	
					
FHA/Large accessory: DOT DD161 (print on fabric)	  	Kellwood Company	  	Registered	  	VA-898-672	  	5/15/1998	
					
FSE/Commonflake: DD171 (print on fabric)	  	Kellwood Company	  	Registered	  	VA-898-671	  	5/15/1998	
					
“Baby Phat” and Cat Design	  	Phat Fashions, LLC	  	Registered	  	VA-852-101	  	11/25/1998	
					
Baby Phat Crown Badge	  	Phat Fashions, LLC	  	Registered	  	VA-0001622877	  	10/29/2007	
					
Baby Phat Crown Burst	  	Phat Fashions, LLC	  	Registered	  	VA-0001622872	  	10/29/2007	
					
“Money Moo” Art Reproduction	  	Phat Fashions, LLC	  	Registered	  	VA-0000984552	  	8/27/1999	
					
“Money Moo Fall, 1998” Design on Shirt	  	Phat Fashions, LLC	  	Registered	  	VA-0000983346	  	8/27/1999	
					
“Money Moo Fall, 1998” Design on Clothing	  	Phat Fashions, LLC	  	Registered	  	VAu-000480547	  	8/27/1999	
					
“Money Moo Spring, 1998” Design on Shirt	  	Phat Fashions, LLC	  	Registered	  	VA-0000983345	  	8/27/1999	
					
“Money Moo Spring, 1999” Design on Shirt	  	Phat Fashions, LLC	  	Registered	  	VA-0000983349	  	8/27/1999	
					
“Money Moo Spring, 2000” Art Reproduction	  	Phat Fashions, LLC	  	Registered	  	VAu-000468061	  	9/13/1999	
					
“Money Moo Spring, 2000” Design on Clothing	  	Phat Fashions, LLC	  	Registered	  	VAu-000480546	  	8/27/1999	
					
“Money Moo Winter, 1993” Design on Shirt	  	Phat Fashions, LLC	  	Registered	  	VA-0000983344	  	8/27/1999	
					
P Laurel Leaf and Shield Design	  	Phat Fashions, LLC	  	Registered	  	VA-0001628674	  	3/19/2008	
 
32

									
Falling man (computer graphic)	  	American Recreation Products, Inc.	  	Registered	  	VA-0001365455	  	7/14/2006	
					
Now I Lay Me Down To Sleep [Children characters on sleeping bags (girls)]	  	American Recreation Products, Inc.	  	Registered	  	VAu-14-198	  	9/24/1979	
					
Now I Lay Me Down To Sleep [Children characters on sleeping bags (boys)]	  	American Recreation Products, Inc.	  	Registered	  	VAu-16-817	  	9/24/1979	
Obligors’ License Agreements:
 
 	(a)	Trademark License Agreement by and between Global Brand Holdings, LLC and Kellwood Company dated May 7, 2003, as amended. (XOXO for Clothing)	
 
 	(b)	Amended and Restated License Agreement, effective as of February 1, 2003, and Agreement to Amend Employment Agreement and License Agreement, effective as of February 1, 2007, by and between David Meister and Kellwood Company. (DAVID MEISTER for Dresses and Gowns)	
 
 	(c)	Intellectual Property License Agreement by and between Zobha Licensing, LLC and Zobha, LLC dated July 26, 2011. (ZOBHA for Clothing)	
 
 	(d)	Intellectual Property License Agreement by and between Michael Boris Clothing Ltd. and Kellwood Company dated September 1, 2011. (MICHAEL BORIS for Clothing and Related Accessories)	
 
 	(e)	License Agreements by and between Rick Ridgeway Products, Inc. and American Recreation Products, Inc. dated June 19, 1984, May 1, 1989 as amended and extended from time to time including pursuant to that certain License Extension and Amendment, dated September 20, 2010. (RICK RIDGEWAY for Camping Goods)	
 
 	(f)	Agreement by and between Precise Imports Corporation d/b/a Wenger N.A. and American Recreation Products, Inc. dated October 9, 2002. (WENGER N.A. for Camping Goods)	
 
 	(g)	Trademark License Agreement by and between Serta, Inc. and American Recreation Products, Inc. (Wenzel) dated October 15, 2006 (SERTA for Camping Goods)	
 
 	(h)	Amended and Restated License Agreement by and between 5.11, Inc. and Royal Robbins, Inc. dated June 1, 2003. (Strap Pocket Trade Dress) (Royalty-Free)	
 
 	(i)	Howe Sierra Designs License Agreement by and between Robert Howe and American Recreation Products, Inc. (Sierra Designs) dated January 1, 1996. (CLIP-LOC Tent Pole Locking Fastener)	
 
 	(j)	Trademark License Agreement by and among Michael Johnson, Barbara Johnson and American Recreation Products, Inc., dated November 1, 1991 as amended November 1, 1991, August 16, 1993, November 1, 1994, July 1, 1998 and November 16, 1999. (Handy Cone Pop-Up Warning Marker)	
 
33

 	(k)	Patent License Agreement by and between Inkling Inc. and American Recreation Products, Inc. dated January 1, 2009. (Tent Poles)	
 
 	(l)	Royalty Agreement by and between Paul Fair a/k/a Hexhead and American Recreation Products, Inc. dated December 1, 2008. (Suspension System, Back Panel, or Bag)	
 
 	(m)	License Agreement, effective as of January 1, 2009, by and between Wenger Licensing LLC and American Recreation Products, Inc., as amended.	
Obligors’ Foreign Patents

Child Carrier with Kickstand	  	American Recreation Products, Inc.	  	Australia	  	Issued	  	699411	  	3/18/1999	
						
Child Carrier with Kickstand	  	American Recreation Products, Inc.	  	Canada	  	Issued	  	2175771	  	7/27/1999	
						
Heated Sleeping Bag	  	American Recreation Products, Inc.	  	Canada	  	Pending	  	[s/n 2,638,376]	  	[filed 7/29/2008]	
Obligors’ Foreign Trademarks

BABY PHAT	  	Phat Fashions LLC	  	Argentina	  	Pending	  	[s/n 3,045,665]	  	[filed 11/11/2010]	
						
PHAT FARM	  	Phat Fashions LLC	  	Argentina	  	Pending	  	[s/n 3,042,402]	  	[filed 10/29/2010]	
						
BABY PHAT	  	Phat Fashions LLC	  	Australia	  	Registered	  	774453	  	9/30/1998	
						
BABY PHAT & Design (Cat Logo)	  	Phat Fashions LLC	  	Australia	  	Registered	  	1,066,407	  	7/11/2005	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Australia	  	Registered	  	866004	  	2/14/2001	
						
PHAT FARM	  	Phat Fashions LLC	  	Australia	  	Registered	  	1,066,409	  	7/11/2005	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Australia	  	Registered	  	1,064,767	  	7/13/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Bahrain	  	Registered	  	44076	  	4/10/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Bahrain	  	Registered	  	44077	  	4/10/2005	
						
PHAT FARM	  	Phat Fashions LLC	  	Bahrain	  	Registered	  	44078	  	4/10/2005	
						
PHAT FARM	  	Phat Fashions LLC	  	Bahrain	  	Registered	  	44079	  	4/10/2005	
						
PHAT	  	Phat Fashions LLC	  	Benelux	  	Renewed	  	552164	  	4/27/1994	
						
PHAT FARM	  	Phat Fashions LLC	  	Benelux	  	Renewed	  	619587	  	11/3/1997	
						
BABY PHAT	  	Phat Fashions LLC	  	Bolivia	  	Registered	  	87321-C	  	7/16/2002	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Bolivia	  	Pending	  	[s/n 14480]	  	[filed 11/9/1999]	
						
PHAT FARM	  	Phat Fashions LLC	  	Bolivia	  	Registered	  	87438-C	  	7/18/2002	
						
BABY PHAT	  	Phat Fashions LLC	  	Brazil	  	Pending
(Suspended)	  	[s/n 821,880,675]	  	[filed 8/2/1999]	
						
BULL’S HEAD	  	Phat Fashions LLC	  	Brazil	  	Pending
(Suspended)	  	[s/n 821,346,326]	  	[filed 1/11/1999]	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Brazil	  	Registered	  	822,460,181	  	12/13/2005	
						
[Cat Design]	  	Phat Fashions LLC	  	Brazil	  	Pending	  	[s/n 830.448.829]	  	[filed 11/27/2009]	
 
34

											
[Cat Design]	  	Phat Fashions LLC	  	Brazil	  	Pending	  	[s/n 830.448.810]	  	[filed 11/27/2009]	
						
PHAT FARM	  	Phat Fashions LLC	  	Brazil	  	Pending (Suspended)	  	[s/n 821,346,300]	  	1/11/1999	
						
[Shaded Bull Design]	  	Phat Fashions LLC	  	Brazil	  	Registered	  	821,346,318	  	5/14/2002	
						
BABY PHAT	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	64975	  	5/12/2008	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	64976	  	5/12/2008	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	64977	  	5/12/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	62247	  	12/3/2007	
						
P (and Laurel Leaf Shield Design – White)	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	62248	  	12/3/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	76817	  	5/17/2011	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	76818	  	5/17/2011	
						
PHAT FARM P (and Triangle Design)	  	Phat Fashions LLC	  	Bulgaria	  	Registered	  	000447756	  	5/10/2003	
						
BABY PHAT	  	Phat Fashions LLC	  	Canada	  	Registered	  	760154	  	2/24/2010	
						
BABY PHAT	  	Phat Fashions LLC	  	Canada	  	Registered	  	557141	  	1/30/2002	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Canada	  	Registered	  	760461	  	2/26/2010	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Canada	  	Registered	  	761902	  	3/17/2010	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	762606	  	3/24/2010	
						
BABY PHAT GODDESS	  	Phat Fashions LLC	  	Canada	  	Registered	  	722944	  	9/4/2008	
						
BABY PHAT GODDESS (and Cat Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	772952	  	9/4/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	Canada	  	Registered	  	761903	  	3/17/2010	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Canada	  	Registered	  	586083	  	7/29/2003	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	585254	  	7/15/2003	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	703855	  	12/27/2007	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	761110	  	3/9/2010	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	635879	  	3/22/2005	
						
PHAT CLASSICS	  	Phat Fashions LLC	  	Canada	  	Pending	  	[s/n 1,379,625]	  	[filed 1/17/2008]	
						
PHAT FARM	  	Phat Fashions LLC	  	Canada	  	Registered	  	703853	  	12/27/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Canada	  	Registered	  	536709	  	11/6/2000	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Canada	  	Registered	  	578514	  	3/28/2003	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Canada	  	Registered	  	571500	  	11/29/2002	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	578443	  	3/27/2003	
						
PHAT FARM (and P Leaf Design)	  	Phat Fashions LLC	  	Canada	  	Registered	  	578524	  	3/28/2003	
						
BABY PHAT	  	Phat Fashions LLC	  	Chile	  	Registered	  	558,809	  	1/18/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Chile	  	Registered	  	558,818	  	1/18/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,924,866	  	3/28/2009	
						
BABY PHAT	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,924,867	  	2/14/2009	
 
35

											
BABY PHAT	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	1,358,532	  	1/28/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	6,553,521	  	6/21/2010	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	6,553,522	  	6/21/2010	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,596	  	12/14/2008	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,595	  	2/7/2009	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,708	  	5/28/2008	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Pending	  	[s/n 6,848,582]	  	[filed 7/18/2008]	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,597	  	5/28/2008	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Pending
(Suspended)	  	[s/n 4,518,709]	  	[filed 3/1/2005]	
						
[Cat Design]	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Pending	  	[s/n 6,848,581]	  	[filed 7/18/2008]	
						
[Cat Design]	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Pending
(Suspended)	  	[s/n 4,518,593]	  	[filed 3/1/2005]	
						
[Cat Design]	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,590	  	2/7/2009	
						
[Cat Design]	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,594	  	5/28/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,592	  	5/28/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,518,591	  	12/14/2008	
						
P (and Flag Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,924,863	  	5/21/2009	
						
P (and Laurel Leaf Shield Design – White)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	6,943,682	  	8/28/2010	
 
36

											
P (and Laurel Leaf Shield Design – White)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	6,943,683	  	8/28/2011	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Pending	  	[s/n 6,943,684]	  	[filed 9/8/2008]	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	6,943,685	  	8/28/2011	
						
P (and Leaf Design – Outline)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Pending	  	[s/n 4,924,856]	  	[filed 9/30/2005]	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,924,864	  	5/21/2009	
						
PF (Stylized)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,924,865	  	5/14/2009	
						
PHAT CLASSICS	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	6,515,514	  	1/17/2008	
						
PHAT FARM	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	4,681,384	  	1/28/2009	
						
PHAT FARM	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	1,310,594	  	9/7/1999	
						
PHAT FARM	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	1,305,776	  	8/21/1999	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	1,684,551	  	12/21/2001	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	1,660,889	  	11/7/2001	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	China (Peoples’ Republic)	  	Registered	  	1,668,145	  	11/21/2001	
						
BABY PHAT	  	Phat Fashions LLC	  	Colombia	  	Registered	  	235387	  	4/27/2001	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Colombia	  	Registered	  	259761	  	11/15/2002	
						
PHAT FARM	  	Phat Fashions LLC	  	Colombia	  	Registered	  	225901	  	4/13/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	Cyprus, Republic of	  	Pending	  	[s/n 71302]	  	[filed 4/14/2005]	
						
BABY PHAT	  	Phat Fashions LLC	  	Cyprus, Republic of	  	Pending	  	[s/n 71301]	  	[filed 4/14/2005]	
						
PHAT FARM	  	Phat Fashions LLC	  	Cyprus, Republic	  	Pending	  	[s/n 71303]	  	[filed 4/14/2005]	
						
PHAT FARM	  	Phat Fashions LLC	  	Cyprus, Republic of	  	Pending	  	[s/n 71304]	  	[filed 4/14/2005]	
 
37

											
PHAT	  	Phat Fashions LLC	  	Denmark	  	Renewed	  	4608/94	  	7/8/1994	
						
PHAT FARM	  	Phat Fashions LLC	  	Denmark	  	Registered	  	3388/99	  	9/15/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	Dominican Republic	  	Registered	  	107843	  	10/30/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	Dominican Republic	  	Registered	  	107837	  	10/30/1999	
						
PHAT FARM	  	Phat Fashions LLC	  	Dominican Republic	  	Registered	  	107842	  	10/30/1999	
						
PHAT FARM	  	Phat Fashions LLC	  	Dominican Republic	  	Registered	  	107838	  	10/30/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	Ecuador	  	Registered	  	3430-00	  	6/26/2000	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Ecuador	  	Registered	  	4070-00	  	6/29/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Ecuador	  	Registered	  	3432-00	  	6/26/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	Egypt	  	Registered	  	201585	  	9/8/2009	
						
BABY PHAT	  	Phat Fashions LLC	  	Egypt	  	Pending (Published)	  	[s/n 201586]	  	[filed 5/23/2007]	
						
PHAT FARM	  	Phat Fashions LLC	  	Egypt	  	Pending	  	[s/n 201587]	  	[filed 5/23/2007]	
						
PHAT FARM	  	Phat Fashions LLC	  	Egypt	  	Registered	  	201588	  	10/13/2009	
						
BABY PHAT	  	Phat Fashions LLC	  	El Salvador	  	Registered	  	144 Book 136	  	8/10/2001	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	El Salvador	  	Registered	  	89 Book 137	  	8/21/2001	
						
PHAT FARM	  	Phat Fashions LLC	  	El Salvador	  	Registered	  	50 Book 130	  	5/14/2001	
						
BABY PHAT	  	Phat Fashions LLC	  	European Community	  	Registered	  	000881524	  	10/13/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	European Community	  	Registered	  	004923553	  	3/29/2007	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	European Community	  	Pending (Opposed)	  	[s/n 004643342]	  	[filed 9/20/2005]	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	European Community	  	Registered	  	004923777	  	3/30/2007	
						
BABY PHAT GODDESS (and Cat Design)	  	Phat Fashions LLC	  	European Community	  	Registered	  	004923777	  	3/30/2007	
						
[Cat Design]	  	Phat Fashions LLC	  	European Community	  	Registered	  	004643375	  	8/2/2007	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	European Community	  	Registered	  	1,396,365	  	6/29/2001	
						
P (and Flag Design)	  	Phat Fashions LLC	  	European Community	  	Registered	  	004643417	  	8/2/2007	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	European Community	  	Registered	  	005264569	  	8/2/2007	
						
P (and Leaf Design – Outline)	  	Phat Fashions LLC	  	European Community	  	Registered	  	004643433	  	3/2/2007	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	European Community	  	Registered	  	004643326	  	3/2/2007	
						
PF (Stylized)	  	Phat Fashions LLC	  	European Community	  	Registered	  	004643292	  	4/17/2009	
						
PHAT CLASSICS	  	Phat Fashions LLC	  	European Community	  	Registered	  	006584049	  	1/20/2009	
 
38

											
PHAT FARM	  	Phat Fashions LLC	  	European Community	  	Registered	  	004479523	  	9/25/2006	
						
PHAT FARM	  	Phat Fashions LLC	  	European Community	  	Registered	  	881482	  	10/19/1999	
						
PHAT	  	Phat Fashions LLC	  	France	  	Registered	  	93/481938	  	8/31/1993	
						
PHAT FARM	  	Phat Fashions LLC	  	France	  	Registered	  	97/702680	  	11/4/1997	
						
PHAT FARM	  	Phat Fashions LLC	  	Germany	  	Registered	  	396.55.627	  	4/30/1997	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Germany	  	Registered	  	300.73.335	  	7/11/2001	
						
BABY PHAT	  	Phat Fashions LLC	  	Guatemala	  	Registered	  	104571	  	5/23/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Guatemala	  	Registered	  	104677	  	6/5/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	Honduras	  	Registered	  	99956	  	2/21/2007	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Honduras	  	Registered	  	79271	  	10/12/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Honduras	  	Registered	  	77400	  	6/14/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300498736	  	9/21/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	301048590	  	2/11/2008	
						
BABY PHAT	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	200215781	  	8/26/1998	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	301048608	  	2/11/2008	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300498727	  	9/21/2005	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	3004497944	  	9/20/2005	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	301048617	  	2/11/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300498718	  	9/21/2005	
						
[Cat Design]	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	301048626	  	2/11/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300497935	  	9/20/2005	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300497917	  	9/20/2005	
						
P (and Leaf Design – Outline)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300497908	  	9/20/2005	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300497926	  	9/20/2005	
						
PF (Stylized)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	300497890	  	9/20/2005	
						
PHAT	  	Phat Fashions LLC	  	Hong Kong	  	Renewed	  	3613/95	  	4/26/1993	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	3780/2002	  	9/22/2000	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	4218/2001	  	9/22/2000	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Hong Kong	  	Registered	  	6286/2002	  	9/22/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	India	  	Registered	  	1,275,909	  	1/17/2006	
						
PHAT FARM	  	Phat Fashions LLC	  	India	  	Registered	  	1,275,910	  	3/29/2008	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Indonesia	  	Pending	  	[s/n D00.2009.000675]	  	[filed 1/9/2009]	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Indonesia	  	Pending	  	[s/n
D00.2009.000676]	  	[filed 1/9/2009]	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	International Registration (Madrid Protocol)	  	Registered	  	IR 905391	  	3/3/2006	
 
39

											
BABY PHAT GODDESS (and Cat Design)	  	Phat Fashions LLC	  	International Registration (Madrid Protocol)	  	Registered	  	IR 882532	  	2/22/2006	
						
BABY PHAT	  	Phat Fashions LLC	  	Italy	  	Pending	  	[s/n RM2010C006923]	  	[filed 11/16/2010]	
						
PHAT	  	Phat Fashions LLC	  	Italy	  	Renewed	  	00695475	  	5/3/1994	
						
BABY PHAT	  	Phat Fashions LLC	  	Japan	  	Registered	  	4692771	  	7/18/2003	
						
BABY PHAT	  	Phat Fashions LLC	  	Japan	  	Registered	  	4293397	  	7/9/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	Japan	  	Registered	  	5101609	  	12/28/2007	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Japan	  	Registered	  	5170939	  	10/3/2008	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Japan	  	Registered	  	4896783	  	9/22/2005	
						
[Cat Design]	  	Phat Fashions LLC	  	Japan	  	Registered	  	4896782	  	9/22/2005	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Japan	  	Registered	  	4980466	  	8/18/2006	
						
P (and Leaf Design – Outline)	  	Phat Fashions LLC	  	Japan	  	Registered	  	4980465	  	8/18/2006	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Japan	  	Registered	  	4980467	  	8/18/2006	
						
PF (Stylized)	  	Phat Fashions LLC	  	Japan	  	Registered	  	4980464	  	8/18/2006	
						
PHAT	  	Phat Fashions LLC	  	Japan	  	Renewed	  	3370202	  	9/11/1998	
						
PHAT CLASSICS	  	Phat Fashions LLC	  	Japan	  	Registered	  	5199837	  	1/23/2009	
						
PHAT FARM	  	Phat Fashions LLC	  	Japan	  	Registered	  	4660257	  	4/4/2003	
						
PHAT FARM	  	Phat Fashions LLC	  	Japan	  	Renewed	  	3234428	  	12/25/1996	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Japan	  	Registered	  	4510370	  	9/28/2001	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Japan	  	Registered	  	4510371	  	9/28/2001	
						
BABY PHAT	  	Phat Fashions LLC	  	Jordan	  	Registered	  	91564	  	4/10/2007	
						
BABY PHAT	  	Phat Fashions LLC	  	Jordan	  	Registered	  	91563	  	4/10/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Jordan	  	Registered	  	91566	  	4/10/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Jordan	  	Registered	  	91565	  	4/10/2007	
						
BABY PHAT	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	0458243	  	11/9/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	40-0678282	  	9/14/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	40-0664997	  	6/5/2006	
						
[Cat Design]	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	40-0664996	  	6/5/2006	
						
P (and Laurel Leaf Shield Design – White)	  	Phat Fashions LLC	  	Korea, Republilc of	  	Registered	  	40-0729668	  	11/30/2007	
						
PF (Stylized)	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	40-714764	  	6/26/2007	
						
PHAT	  	Phat Fashions LLC	  	Korea, Republic of	  	Renewed	  	315203	  	6/10/1995	
						
PHAT CLASSICS	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	790305	  	5/28/2009	
						
PHAT FARM	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	0458180	  	11/8/1999	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	503491	  	10/11/2001	
 
40

											
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	522951	  	6/14/2002	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Korea, Republic of	  	Registered	  	522952	  	6/14/2002	
						
BABY PHAT	  	Phat Fashions LLC	  	Kuwait	  	Registered	  	59255	  	5/28/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Kuwait	  	Registered	  	58934	  	5/28/2005	
						
PHAT FARM	  	Phat Fashions LLC	  	Kuwait	  	Registered	  	59465	  	7/16/2005	
						
PHAT FARM	  	Phat Fashions LLC	  	Kuwait	  	Registered	  	59256	  	5/28/2005	
						
PHAT FARM	  	Phat Fashions LLC	  	Kuwait	  	Registered	  	58935	  	5/28/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Lebanon	  	Registered	  	110636	  	4/17/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Lebanon	  	Registered	  	110637	  	4/17/2007	
						
BABY PHAT	  	Phat Fashions LLC	  	Macao	  	Registered	  	19197	  	2/9/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Macao	  	Registered	  	19203	  	2/9/2006	
						
[Cat Design]	  	Phat Fashions LLC	  	Macao	  	Registered	  	19202	  	2/9/2006	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Macao	  	Registered	  	19200	  	2/9/2006	
						
P (and Leaf Design – Outline)	  	Phat Fashions LLC	  	Macao	  	Registered	  	19201	  	2/9/2006	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Macao	  	Registered	  	19199	  	2/9/2006	
						
PF (Stylized)	  	Phat Fashions LLC	  	Macao	  	Registered	  	19198	  	2/9/2006	
						
PHAT FARM	  	Phat Fashions LLC	  	Macao	  	Registered	  	19196	  	2/9/2006	
						
BABY PHAT	  	Phat Fashions LLC	  	Mexico	  	Registered	  	910763	  	11/28/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Mexico	  	Registered	  	878711	  	4/27/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Mexico	  	Renewed	  	589794	  	8/20/1998	
						
BABY PHAT	  	Phat Fashions LLC	  	Mexico	  	Registered	  	1196685	  	1/14/2011	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Mexico	  	Registered	  	912979	  	12/8/2005	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Mexico	  	Registered	  	878135	  	4/26/2005	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Mexico	  	Registered	  	649991	  	11/16/1999	
						
[Cat Design]	  	Phat Fashions LLC	  	Mexico	  	Registered	  	1083925	  	2/12/2009	
						
[Cat Design]	  	Phat Fashions LLC	  	Mexico	  	Registered	  	1131983	  	11/26/2009	
						
[Cat Design	  	Phat Fashions LLC	  	Mexico	  	Pending	  	[s/n 911173]	  	[filed 2/2/2008]	
						
[Cat Design]	  	Phat Fashions LLC	  	Mexico	  	Registered	  	912980	  	12/8/2005	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Mexico	  	Registered	  	714315	  	4/4/2001	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	Mexico	  	Registered	  	869872	  	2/25/2005	
						
PHAT FARM	  	Phat Fashions LLC	  	Mexico	  	Renewed	  	618088	  	7/9/1998	
						
PHAT FARM	  	Phat Fashions LLC	  	Mexico	  	Registered	  	712288	  	3/19/2001	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Mexico	  	Registered	  	689044	  	9/22/2000	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Mexico	  	Registered	  	702461	  	9/22/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	New Zealand	  	Renewed	  	297097	  	8/24/1998	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	New Zealand	  	Registered	  	732424	  	7/11/2005	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	New Zealand	  	Renewed	  	602615	  	8/13/1999	
						
PHAT FARM	  	Phat Fashions LLC	  	New Zealand	  	Registered	  	297099	  	8/24/1998	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	New Zealand	  	Registered	  	623829	  	9/22/2000	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	New Zealand	  	Registered	  	623830	  	9/22/2000	
 
41

											
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	New Zealand	  	Registered	  	623831	  	9/22/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	Nicaragua	  	Registered	  	46047 C.C.	  	1/5/2001	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Nicaragua	  	Registered	  	46855 C.C.	  	2/1/2001	
						
PHAT FARM	  	Phat Fashions LLC	  	Nicaragua	  	Registered	  	46048 C.C.	  	1/5/2001	
						
BABY PHAT	  	Phat Fashions LLC	  	Norway	  	Registered	  	202429	  	4/17/2000	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Norway	  	Registered	  	237042	  	1/2/2007	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Norway	  	Registered	  	237043	  	1/2/2007	
						
[Cat Design]	  	Phat Fashions LLC	  	Norway	  	Registered	  	237045	  	1/2/2007	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Norway	  	Registered	  	237046	  	1/2/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Norway	  	Registered	  	202430	  	1/2/2007	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Norway	  	Registered	  	237044	  	1/2/2007	
						
BABY PHAT	  	Phat Fashions LLC	  	Oman	  	Registered	  	43811	  	1/30/2008	
						
BABY PHAT	  	Phat Fashions LLC	  	Oman	  	Registered	  	43810	  	11/11/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Oman	  	Registered	  	43812	  	11/11/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Oman	  	Registered	  	43813	  	1/30/2008	
						
BABY PHAT	  	Phat Fashions LLC	  	Panama	  	Registered	  	102243	  	8/13/1999	
						
PHAT FARM	  	Phat Fashions LLC	  	Panama	  	Registered	  	120122	  	3/20/2002	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Panama	  	Registered	  	112698	  	1/31/2001	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Panama	  	Registered	  	112699	  	1/31/2001	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Panama	  	Registered	  	112700	  	1/31/2001	
						
BABY PHAT	  	Phat Fashions LLC	  	Paraguay	  	Registered	  	222339	  	2/7/2000	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Paraguay	  	Registered	  	228175	  	8/31/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Paraguay	  	Registered	  	222338	  	2/7/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	Peru	  	Registered	  	058267	  	10/15/1999	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Peru	  	Registered	  	176049	  	5/23/2011	
						
[Cat Design]	  	Phat Fashions LLC	  	Peru	  	Registered	  	175423	  	3/31/2011	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Peru	  	Registered	  	66163	  	7/31/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Peru	  	Registered	  	058266	  	10/15/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	Philippines	  	Registered	  	42003005948	  	11/20/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Philippines	  	Registered	  	42003005947	  	11/20/2006	
						
PHAT FARM (Stylized and Leaf Design – Outline)	  	Phat Fashions LLC	  	Philippines	  	Registered	  	42003009309	  	11/22/2007	
						
BABY PHAT	  	Phat Fashions LLC	  	Qatar	  	Pending
(Published)	  	[s/n 44405]	  	[filed 4/25/2007]	
						
BABY PHAT	  	Phat Fashions LLC	  	Qatar	  	Pending
(Published)	  	[s/n 44404]	  	[filed 4/25/2007]	
						
PHAT FARM	  	Phat Fashions LLC	  	Qatar	  	Pending
(Published)	  	[s/n 44407]	  	[filed 4/25/2007]	
						
PHAT FARM	  	Phat Fashions LLC	  	Qatar	  	Pending
(Published)	  	[s/n 44406]	  	[filed 4/25/2007]	
 
42

											
BABY PHAT	  	Phat Fashions LLC	  	Romania	  	Registered	  	074184	  	1/11/2006	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Romania	  	Registered	  	074185	  	1/11/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Romania	  	Registered	  	074176	  	1/11/2006	
						
[Cat Design]	  	Phat Fashions LLC	  	Romania	  	Registered	  	074186	  	1/11/2006	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Romania	  	Registered	  	074175	  	1/11/2006	
						
PHAT FARM	  	Phat Fashions LLC	  	Romania	  	Registered	  	074173	  	1/11/2006	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Romania	  	Registered	  	074174	  	1/11/2006	
						
BABY PHAT	  	Phat Fashions LLC	  	Russian Federation	  	Registered	  	276912	  	10/21/2004	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Russian Federation	  	Registered	  	321362	  	2/19/2007	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Russian Federation	  	Registered	  	269478	  	5/31/2004	
						
[Cat Design]	  	Phat Fashions LLC	  	Russian Federation	  	Registered	  	322147	  	3/12/2007	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Russian Federation	  	Registered	  	322296	  	3/12/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Russian Federation	  	Registered	  	321364	  	2/19/2007	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Russian Federation	  	Registered	  	321363	  	3/7/2007	
						
BABY PHAT	  	Phat Fashions LLC	  	Saudi Arabia	  	Registered	  	996/75	  	6/19/2008	
						
BABY PHAT	  	Phat Fashions LLC	  	Saudi Arabia	  	Registered	  	955/10	  	11/10/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	Saudi Arabia	  	Registered	  	996/76	  	6/19/2008	
						
PHAT FARM	  	Phat Fashions LLC	  	Saudi Arabia	  	Pending	  	[s/n 109454]	  	[filed 9/18/2006]	
						
BABY PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01908]	  	[filed 2/11/2004]	
						
BABY PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01910]	  	[filed 2/11/2004]	
						
BABY PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01909]	  	[filed 2/11/2004]	
						
BABY PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01906]	  	[filed 2/11/2004]	
						
BABY PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01907]	  	[filed 2/11/2004]	
						
[Bull Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01934	  	8/19/2008	
						
[Bull Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01931	  	8/25/2008	
						
[Bull Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01932	  	8/25/2008	
						
[Bull Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01935	  	8/25/2008	
						
[Bull Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01933	  	8/25/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01942	  	8/13/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01944	  	8/13/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01941	  	8/13/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01945	  	8/13/2008	
						
[Cat Design]	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01943	  	8/13/2008	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01914	  	8/4/2008	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01911	  	8/4/2008	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01912	  	8/4/2008	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01915	  	8/4/2008	
 
43

											
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01913	  	8/4/2008	
						
P (and Flag Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01920	  	8/13/2008	
						
P (and Flag Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01919	  	8/19/2008	
						
P (and Flag Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01918	  	8/13/2008	
						
P (and Flag Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01916	  	8/4/2008	
						
P (and Flag Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01917	  	8/26/2008	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	South Africa	  	Pending (Published)	  	[s/n 2006/20283]	  	[filed 8/25/2006]	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01922	  	8/13/2008	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01925	  	8/25/2008	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01921	  	8/19/2008	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01924	  	8/19/2008	
						
P (and Leaf Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01923	  	8/19/2008	
						
P (Leaf and Shield Design – Black)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01927	  	8/19/2008	
						
P (Leaf and Shield Design – Black)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01926	  	8/19/2008	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01929	  	8/19/2008	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01928	  	8/19/2008	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01930	  	8/25/2008	
						
PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01896]	  	[filed 2/11/2004]	
						
PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01899]	  	[filed 2/11/2004]	
						
PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01898]	  	[filed 2/11/2004]	
						
PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01897]	  	[filed 2/11/2004]	
						
PHAT	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01900]	  	[filed 2/11/2004]	
						
PHAT FARM	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01901]	  	[filed 2/11/2004]	
						
PHAT FARM	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01904]	  	[filed 2/11/2004]	
						
PHAT FARM	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01903]	  	[filed 2/11/2004]	
						
PHAT FARM	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01902]	  	[filed 2/11/2004]	
						
PHAT FARM	  	Phat Fashions LLC	  	South Africa	  	Pending	  	[s/n 2004/01905]	  	[filed 2/11/2004]	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01937	  	12/2/2008	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01936	  	12/18/2008	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01939	  	12/18/2008	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01938	  	12/2/2008	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	South Africa	  	Registered	  	2004/01940	  	2/11/2004	
						
BABY PHAT	  	Phat Fashions LLC	  	Sweden	  	Registered	  	337019	  	5/5/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Sweden	  	Registered	  	331746	  	6/28/1999	
						
BABY PHAT	  	Phat Fashions LLC	  	Switzerland	  	Registered	  	470.895	  	10/19/1999	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Switzerland	  	Registered	  	543.074	  	2/23/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Switzerland	  	Registered	  	543.075	  	2/23/2006	
 
44

											
[Cat Design]	  	Phat Fashions LLC	  	Switzerland	  	Registered	  	543.076	  	2/23/2006	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Switzerland	  	Registered	  	473.602	  	11/26/1999	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Switzerland	  	Registered	  	543.073	  	2/23/2006	
						
PHAT FARM	  	Phat Fashions LLC	  	Switzerland	  	Renewed	  	452.818	  	1/7/1998	
						
BABY PHAT	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1213413	  	6/16/2006	
						
BABY PHAT	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1211505	  	6/1/2006	
						
BABY PHAT	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1252965	  	3/1/2007	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1213415	  	6/16/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1211507	  	6/1/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1346472	  	1/16/2009	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1252970	  	3/1/2007	
						
[Cat Design]	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1213414	  	6/16/2006	
						
[Cat Design]	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1211506	  	6/1/2006	
						
[Cat Design]	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1252969	  	3/1/2007	
						
P (and Flag Design)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1252967	  	3/1/2007	
						
P (Leaf and Shield Design – Outline)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1252966	  	3/1/2007	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1252968	  	3/1/2007	
						
PHAT	  	Phat Fashions LLC	  	Taiwan	  	Renewed	  	626361	  	1/1/1994	
						
PHAT CLASSICS	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1335278	  	11/1/2008	
						
PHAT FARM	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	1207765	  	5/1/2006	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	976977	  	12/16/2001	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	961537	  	9/16/2001	
						
PHAT FARM (and Crest Design)	  	Phat Fashions LLC	  	Taiwan	  	Registered	  	974471	  	9/15/2001	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Thailand	  	Registered	  	215635	  	3/23/2005	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Thailand	  	Registered	  	240010	  	2/24/2004	
						
PHAT FARM	  	Phat Fashions LLC	  	Thailand	  	Registered	  	179319	  	4/22/2002	
						
BABY PHAT	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2005/08321	  	3/11/2005	
						
BABY PHAT	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2002/14586	  	6/13/2002	
						
BABY PHAT (Stylized)	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2006/01384	  	1/18/2006	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2006/01500	  	1/19/2006	
						
[Cat Design]	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2006/01498	  	1/19/2006	
						
P (Leaf and Shield Design)	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2006/10383	  	1/18/2006	
						
PHAT	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2002/14585	  	6/13/2002	
						
PHAT FARM	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2005/08322	  	3/11/2005	
						
PHAT FARM	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2002/14794	  	6/17/2002	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	Turkey	  	Registered	  	2006/01499	  	1/19/2006	
						
BABY PHAT	  	Phat Fashions LLC	  	United Arab Emirates	  	Registered	  	58642	  	3/14/2006	
						
BABY PHAT	  	Phat Fashions LLC	  	United Arab Emirates	  	Registered	  	58641	  	3/14/2006	
 
45

											
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	United Arab Emirates	  	Registered	  	85293	  	11/26/2007	
						
P (and Laurel Leaf Shield Design)	  	Phat Fashions LLC	  	United Arab Emirates	  	Registered	  	84617	  	10/3/2007	
						
PHAT CLASSICS	  	Phat Fashions LLC	  	United Arab Emirates	  	Pending	  	[s/n 105511]	  	[filed 1/17/2008]	
						
PHAT FARM	  	Phat Fashions LLC	  	United Arab Emirates	  	Registered	  	81909	  	5/24/2007	
						
PHAT FARM	  	Phat Fashions LLC	  	United Arab Emirates	  	Registered	  	58640	  	3/14/2006	
						
PHAT FARM	  	Phat Fashions LLC	  	United Arab Emirates	  	Pending (Opposed)	  	[s/n 68628]	  	[filed 4/10/2005]	
						
BABY PHAT (and Cat Design)	  	Phat Fashions LLC	  	United Kingdom (Madrid Protocol)	  	Registered	  	IR 905391	  	3/3/2006	
						
PHAT	  	Phat Fashions LLC	  	United Kingdom	  	Renewed	  	1545530	  	8/19/1993	
						
PHAT FARM	  	Phat Fashions LLC	  	United Kingdom	  	Renewed	  	2150235	  	10/31/1997	
						
PHAT FARM (Stylized)	  	Phat Fashions LLC	  	United Kingdom	  	Registered	  	2246831	  	3/16/2001	
						
PHAT FARM & CREST DESIGN	  	Phat Fashions LLC	  	United Kingdom	  	Registered	  	2246832	  	3/16/2001	
						
BABY PHAT	  	Phat Fashions LLC	  	Uruguay	  	Registered	  	314.451	  	2/16/2000	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Uruguay	  	Registered	  	318.577	  	6/27/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Uruguay	  	Registered	  	314.449	  	2/16/2000	
						
BABY PHAT	  	Phat Fashions LLC	  	Venezuela	  	Registered	  	P-219.712	  	4/7/2000	
						
CLASSIC AMERICAN FLAVA	  	Phat Fashions LLC	  	Venezuela	  	Registered	  	P-224.647	  	9/5/2000	
						
PHAT FARM	  	Phat Fashions LLC	  	Venezuela	  	Registered	  	P-218.439	  	2/25/2000	
						
PHAT FARM (and P Leaf Design)	  	Phat Fashions LLC	  	Venezuela	  	Pending (Opposed)	  	[s/n 18151/02]	  	[filed 11/20/2002]	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[s/n 3048478]	  	[filed 11/24/2010]	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[s/n 3048479]	  	[filed 11/24/2010]	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[s/n 3048480]	  	[filed 11/24/2010]	
						
TIMBERWOLF	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[s/n 314484]	  	[filed 9/9/2011]	
						
TIMBERWOLF	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[s/n 314488]	  	[filed 9/9/2011]	
						
WENZEL	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[s/n 3048483]	  	[filed 11/24/2010]	
						
WENZEL	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[s/n 3048484]	  	[filed 11/24/2010]	
						
WENZEL	  	American Recreation Products, Inc.	  	Argentina	  	Pending	  	[S/n 3048486]	  	[filed 11/24/2010]	
 
46

											
KELTY	  	American Recreation Products, Inc.	  	Australia	  	Registered	  	705849	  	9/16/1998	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	Australia	  	Registered	  	705848	  	9/3/1997	
						
WENZEL	  	American Recreation Products, Inc.	  	Australia	  	Registered	  	705847	  	10/9/1997	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Brazil	  	Pending	  	[s/n 830.857.362]	  	[filed 11/29/2010]	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Brazil	  	Pending	  	[s/n 830.857.370]	  	[filed 11/29/2010]	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Brazil	  	Pending	  	[s/n 830.857.389]	  	[filed 11/29/2010]	
						
WENZEL	  	American Recreation Products, Inc.	  	Brazil	  	Pending	  	[s/n 830.857.397]	  	[filed 11/29/2010]	
						
WENZEL	  	American Recreation Products, Inc.	  	Brazil	  	Pending	  	[s/n 830.857.400]	  	[filed 11/29/2010]	
						
WENZEL	  	American Recreation Products, Inc.	  	Brazil	  	Pending	  	[s/n 830.857.419]	  	[filed 11/29/2010]	
						
EVEREST ELITE	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	307521	  	10/18/1985	
						
KELTY	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	256720	  	3/13/1981	
						
RIDGEWAY	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	313881	  	5/2/1986	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	302183	  	4/26/1985	
						
SOLAR SILK	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	324008	  	2/27/1987	
						
TRAVASAK	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	342713	  	7/15/1988	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	TMA804,571	  	8/16/2011	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	TMA804,572	  	8/16/2011	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	TMA804,570	  	8/16/2011	
						
U (and Design)	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	TMA804,569	  	8/16/2011	
						
U (and Design)	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	TMA804,568	  	8/16/2011	
						
U (and Design)	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	TMA804,567	  	8/16/2011	
						
U (and Design)	  	American Recreation Products, Inc.	  	Canada	  	Registered	  	TMA804,573	  	8/16/2011	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Chile	  	Pending	  	[s/n 931283]	  	[filed 11/29/2010]	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Chile	  	Pending	  	[s/n 931284]	  	[filed 11/29/2010]	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Chile	  	Pending	  	[s/n 931285]	  	[filed 11/29/2010]	
 
47

											
WENZEL	  	American Recreation Products, Inc.	  	Chile	  	Pending	  	[s/n 931286]	  	[filed 11/29/2010]	
						
WENZEL	  	American Recreation Products, Inc.	  	Chile	  	Pending	  	[s/n 931287]	  	[filed 11/29/2010]	
						
WENZEL	  	American Recreation Products, Inc.	  	Chile	  	Registered	  	827696	  	3/12/2008	
						
60/40 (and Design)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Pending	  	[s/n 6799523]	  	[filed 6/23/2008]	
						
60/40 (and Design)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Pending	  	[s/n 6799524]	  	[filed 6/23/2008]	
						
60/40 (and Design)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Pending	  	[s/n 9701491]	  	[filed 7/11/2011]	
						
HILLARY (Stylized)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	853597	  	7/7/1996	
						
HILLARY (Stylized)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	857508	  	7/21/1996	
						
KELTY	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Pending	  	[s/n 5712002]	  	[filed 11/9/2007]	
						
KELTY	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	5712319	  	10/7/2009	
						
KELTY	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Pending	  	[s/n 5712318]	  	[filed 11/9/2006]	
						
SLUMBERJACK (Stylized)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Pending	  	[s/n 8861757]	  	[filed 11/19/2010]	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	8388023	  	7/14/2011	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	8388022	  	7/14/2011	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	8388021	  	7/14/2011	
						
U (and Design)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Pending	  	[s/n 8388020]	  	[filed 6/12/2010]	
						
U (and Design)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	8388019	  	7/14/2011	
						
U (and Design)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	8388018	  	7/14/2011	
 
48

											
U (and Design)	  	American Recreation Products, Inc.	  	China (Peoples’ Republic)	  	Registered	  	8388017	  	7/14/2011	
						
KELTY (and Design)	  	American Recreation Products, Inc.	  	European Union	  	Registered	  	000525592	  	1/7/1999	
						
KELTY K.I.D.S. (and Design)	  	American Recreation Products, Inc.	  	European Union	  	Registered	  	000277202	  	11/14/1998	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	European Union	  	Pending	  	[s/n 9776832]	  	[filed 3/1/2011]	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	European Union	  	Pending	  	[s/n 009992711]	  	[filed 5/24/2011]	
						
U (and Design)	  	American Recreation Products, Inc.	  	European Union	  	Pending	  	[s/n 009992744]	  	[filed 5/24/2011]	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	France	  	Registered	  	10 3 745 414	  	10/29/2010	
						
U (and Design)	  	American Recreation Products, Inc.	  	France	  	Registered	  	10 3 745 418	  	10/29/2010	
						
AMERICAN RECREATION PRODUCTS, INC. (and Design)	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3193227	  	8/30/1996	
						
AMERICAN RECREATION PRODUCTS, INC. (and Design)	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3129837	  	3/29/1996	
						
BLACK SHEEP	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3271927	  	3/12/1997	
						
BLACK SHEEP	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4034652	  	7/25/1997	
						
BLACK SHEEP	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3275456	  	4/4/1997	
						
HILLARY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4009645	  	6/6/1997	
						
INSTA-BED	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4492840	  	7/19/2001	
						
KELTY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	1695599	  	6/21/1994	
						
KELTY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	1298058	  	9/5/1977	
						
KELTY (and Design)	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4064217	  	10/3/1997	
						
KELTY K.I.D.S. (and Design)	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4187525	  	9/11/1998	
						
RIDGEWAY BY KELTY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3271929	  	3/12/1997	
						
RIDGEWAY BY KELTY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	329837	  	4/25/1997	
						
RIDGEWAY BY KELTY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4034653	  	7/25/1997	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4462205	  	3/23/2001	
 
49

											
SLUMBERJACK	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4426332	  	10/20/2000	
						
SLUMBERJACK (Stylized)	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	2031865	  	3/30/1988	
						
THE AMERICAN CAMPING COMPANY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3232001	  	12/25/1996	
						
THE AMERICAN CAMPING COMPANY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3295608	  	4/25/1997	
						
THE AMERICAN CAMPING COMPANY	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3335339	  	7/25/1997	
						
TIMBERWOLF	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4137602	  	4/17/1998	
						
TIMBERWOLF	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	3329730	  	7/4/1997	
						
WENZEL	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4153760	  	6/5/1998	
						
WENZEL	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	4019795	  	6/27/1997	
						
WENZEL	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	2667850	  	5/31/1994	
						
WENZEL	  	American Recreation Products, Inc.	  	Japan	  	Registered	  	2698954	  	11/30/1994	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 32319]	  	[filed 6/18/2010]	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 32320]	  	[filed 6/18/2010]	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 32321]	  	[filed 6/18/2010]	
						
U (and Design)	  	American Recreation Products, Inc.	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 32322]	  	[filed 6/18/2010]	
						
U (and Design)	  	American Recreation Products, Inc.	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 32323]	  	[filed 6/18/2010]	
						
U (and Design)	  	American Recreation Products, Inc.	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 32324]	  	[filed 6/18/2010]	
						
U (and Design)	  	American Recreation Products, Inc.	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 32325]	  	[filed 6/18/2010]	
						
INSTA-BED	  	American Recreation Products, Inc.	  	Mexico	  	Registered	  	754062	  	6/28/2002	
						
KELTY	  	American Recreation Products, Inc.	  	Mexico	  	Registered	  	513572	  	1/4/1996	
						
SLUMBERJACK	  	American Recreation Products, Inc.	  	Mexico	  	Registered	  	505475	  	9/27/1995	
						
WENZEL	  	American Recreation Products, Inc.	  	Mexico	  	Registered	  	461095	  	5/19/1994	
						
WENZEL	  	American Recreation Products, Inc.	  	Mexico	  	Registered	  	513571	  	1/4/1996	
						
WENZEL	  	American Recreation Products, Inc.	  	Mexico	  	Registered	  	474983	  	9/27/1994	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Paraguay	  	Registered	  	230193	  	11/21/2000	
						
WENZEL (and Design)	  	American Recreation Products, Inc.	  	Peru	  	Registered	  	031020	  	11/20/1996	
 
50

											
WENZEL (and Design)	  	American Recreation Products, Inc.	  	Peru	  	Registered	  	031021	  	11/20/1996	
						
WENZEL (and Design)	  	American Recreation Products, Inc.	  	Peru	  	Registered	  	030706	  	11/7/1996	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Switzerland	  	Pending	  	[s/n 56094/2010]	  	[filed 6/14/2010]	
						
U (and Design)	  	American Recreation Products, Inc.	  	Switzerland	  	Registered	  	606.617	  	10/18/2010	
						
ULTIMATE DIRECTION	  	American Recreation Products, Inc.	  	Taiwan	  	Pending	  	[s/n 099028697]	  	[filed 6/10/2010]	
						
U (and Design)	  	American Recreation Products, Inc.	  	Taiwan	  	Pending	  	[s/n 099028698]	  	[filed 6/14/2010]	
						
HILLARY	  	American Recreation Products, Inc.	  	United Kingdom	  	Registered	  	B1571531	  	6/23/1995	
						
KELTY	  	American Recreation Products, Inc.	  	United Kingdom	  	Registered	  	1208640	  	9/25/1985	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Uruguay	  	Registered	  	279,025	  	9/7/1999	
						
ACADEMY BROADWAY (and Design)	  	American Recreation Products, Inc.	  	Uruguay	  	Registered	  	279024	  	9/7/1999	
						
ACADEMY BROADWAY	  	American Recreation Products, Inc.	  	Venezuela	  	Registered	  	7578-1995	  	12/7/2001	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Argentina	  	Pending	  	[s/n 2669608]	  	[filed 5/10/2006]	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Australia	  	Registered	  	B391379	  	3/6/1987	
						
ROYAL ROBBINS (and Label Design)	  	Royal Robbins, Inc.	  	Brazil	  	Registered	  	828268576	  	7/8/2008	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Canada	  	Registered	  	293108	  	7/20/1984	
						
GO EVERYWHERE	  	Royal Robbins, Inc.	  	Canada	  	Registered	  	548764	  	7/26/2001	
						
[Strider Design]	  	Royal Robbins, Inc.	  	Canada	  	Registered	  	683660	  	3/14/2007	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	Chile	  	Registered	  	767698	  	9/25/2006	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Chile	  	Registered	  	774250	  	12/12/2006	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	China, Peoples’ Republic of	  	Registered	  	1232575	  	12/21/1998	
						
[Strider Design]	  	Royal Robbins, Inc.	  	China, Peoples’ Republic of (Madridi Protocol)	  	Registered	  	IR 888802	  	4/18/2006	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	European Union	  	Registered	  	81208	  	2/3/1998	
						
[Strider Design]	  	Royal Robbins, Inc.	  	European Union	  	Registered	  	3975331	  	8/9/2004	
						
ROYAL ROBBINS (and Label Design)	  	Royal Robbins, Inc.	  	Guatemala	  	Registered	  	146695	  	1/23/2007	
 
51

											
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Hong Kong	  	Registered	  	B447/1990	  	2/28/1990	
						
[Strider Design]	  	Royal Robbins, Inc.	  	Hong Kong	  	Registered	  	300569593	  	1/23/2006	
						
[Strider Design]	  	Royal Robbins, Inc.	  	International Registration (Madrid Protocol)	  	Registered	  	IR 888802	  	4/18/2006	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	Israel	  	Registered	  	189974	  	5/7/2006	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Japan	  	Registered	  	2518250	  	3/31/1993	
						
[Strider Design]	  	Royal Robbins, Inc.	  	Japan (Madridi Protocol)	  	Registered	  	IR 888802	  	4/18/2006	
						
ROYAL ROBBINS (and Standing Man Design)	  	Royal Robbins, Inc.	  	Korea, Republic of	  	Registered	  	378085	  	10/13/1997	
						
[Walking Man Design]	  	Royal Robbins, Inc.	  	Korea, Republic of	  	Registered	  	438603	  	1/20/1999	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Mexico	  	Registered	  	928778	  	2/3/2006	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	New Zealand	  	Registered	  	147183	  	5/16/1983	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Norway	  	Registered	  	149757	  	3/26/1992	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	Russian Federation	  	Registered	  	348298	  	1/26/2007	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	Singapore	  	Registered	  	B4969/94	  	6/15/1994	
						
[Strider Design]	  	Royal Robbins, Inc.	  	Singapore (Madrid Protocol)	  	Registered	  	IR 888802	  	4/18/2006	
						
ROYAL ROBBINS (and Design)	  	Royal Robbins, Inc.	  	Switzerland	  	Registered	  	369979	  	2/13/1989	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	Taiwan	  	Registered	  	390215	  	2/1/1988	
						
[Strider Design]	  	Royal Robbins, Inc.	  	Taiwan	  	Registered	  	1236844	  	11/16/2006	
						
ROYAL ROBBINS	  	Royal Robbins, Inc.	  	Thailand	  	Registered	  	207665	  	4/23/2003	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Australia	  	Registered	  	706238	  	11/10/1998	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Austria	  	Registered	  	140704	  	2/28/1992	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Benelux	  	Registered	  	516313	  	2/8/1993	
						
60/40 (and Design)	  	Sierra Designs Acquisition Corporation	  	Canada	  	Registered	  	290234	  	4/27/1984	
						
60/40 PARKA	  	Sierra Designs Acquisition Corporation	  	Canada	  	Registered	  	289248	  	3/30/1994	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Canada	  	Registered	  	350009	  	1/13/1989	
 
52

											
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	China (Peoples’ Republic)	  	Registered	  	725224	  	1/14/1995	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	China (Peoples’ Republic)	  	Registered	  	739147	  	4/7/1995	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	China (Peoples’ Republic)	  	Registered	  	728981	  	2/7/1995	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	France	  	Registered	  	1737870	  	10/11/1991	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Germany	  	Registered	  	968545	  	3/9/1978	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Hong Kong	  	Registered	  	B08211	  	9/22/1993	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Hong Kong	  	Registered	  	B06287	  	9/22/1993	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Hong Kong	  	Registered	  	B06288	  	9/22/1993	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Italy	  	Registered	  	626900	  	6/21/1994	
						
60/40 (and Design)	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	5240505	  	6/19/2009	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	2239322	  	6/28/1990	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	2104325	  	1/23/1989	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	2079147	  	9/30/1988	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	4668978	  	5/2/2003	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Japan	  	Pending	  	[s/n 2011-000523]	  	[filed 1/6/2011]	
						
SIERRA DESIGNS (and SD Mountain Design)	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	4400435	  	7/14/2000	
						
SIERRA DESIGNS (and SD Mountain Design)	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	4571561	  	5/24/2002	
 
53

											
						
THE ORIGINAL 60/40 WORKS	  	Sierra Designs Acquisition Corporation	  	Japan	  	Registered	  	5101523	  	12/28/2007	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Norway	  	Registered	  	158580	  	8/19/1993	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Korea, Republic of	  	Registered	  	40-428802	  	11/9/1998	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Korea, Republic of	  	Registered	  	450679	  	7/9/1999	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Korea, Republic of	  	Registered	  	456248	  	10/8/1999	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	Switzerland	  	Registered	  	402002	  	7/26/1993	
						
SIERRA DESIGNS (and Design)	  	Sierra Designs Acquisition Corporation	  	Sweden	  	Registered	  	307371	  	12/29/1995	
						
SIERRA DESIGNS (and Design)	  	Sierra Designs Acquisition Corporation	  	Taiwan	  	Registered	  	787614	  	12/1/1997	
						
SIERRA DESIGNS (and Design)	  	Sierra Designs Acquisition Corporation	  	Taiwan	  	Registered	  	798901	  	3/16/1998	
						
SIERRA DESIGNS (and Design)	  	Sierra Designs Acquisition Corporation	  	Taiwan	  	Registered	  	781058	  	11/16/1997	
						
SIERRA DESIGNS (and Design)	  	Sierra Designs Acquisition Corporation	  	Taiwan	  	Registered	  	783459	  	12/1/1997	
						
SIERRA DESIGNS	  	Sierra Designs Acquisition Corporation	  	United Kingdom	  	Registered	  	1407370	  	11/5/1989	
						
A+DAM	  	Kellwood Company	  	Australia	  	Registered	  	1091542	  	8/2/2007	
						
A+EVE	  	Kellwood Company	  	Australia	  	Registered	  	1091541	  	9/18/2006	
						
ADAM (Stylized)	  	Kellwood Company	  	Australia	  	Pending	  	[s/n 1413623]	  	[filed 3/10/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Australia	  	Pending	  	[s/n 1413625]	  	[filed 3/10/2011]	
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	Australia (Madrid Protocol)	  	Registered	  	IR 1091541	  	9/18/2006	
						
KORET OF
CALIFORNIA	  	Kellwood Company	  	Australia	  	Registered	  	B227511	  	1/24/1972	
						
LAMB & FLAG	  	Kellwood Company	  	Australia	  	Pending	  	[s/n 1412552]	  	[filed 3/4/2011]	
						
LAMB & FLAG	  	Kellwood Company	  	Australia	  	Pending	  	[s/n 1412554]	  	[filed 3/4/2011]	
						
LXF STYLIZED	  	Kellwood Company	  	Australia	  	Pending	  	[s/n 1412559]	  	[filed 3/4/2011]	
 
54

											
						
LXF STYLIZED	  	Kellwood Company	  	Australia	  	Pending	  	[s/n 1412562]	  	[filed 3/4/2011]	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	Australia	  	Registered	  	871138	  	3/30/2001	
						
SAG HARBOR	  	Kellwood Company	  	Australia	  	Registered	  	883369	  	5/9/2002	
						
VINCE	  	Kellwood Company	  	Australia (Madrid Protocol)	  	Registered	  	IR 960474	  	4/9/2008	
						
KELLWOOD	  	Kellwood Company	  	Benelux	  	Registered	  	302436	  	8/26/1971	
						
[Kellwood Design]	  	Kellwood Company	  	Benelux	  	Registered	  	302440	  	8/26/1971	
						
VINCE	  	Kellwood Company	  	Brazil	  	Pending	  	[s/n 829702130]	  	[filed 4/28/2008]	
						
VINCE	  	Kellwood Company	  	Brazil	  	Pending	  	[s/n 829702130]	  	[filed 4/28/2008]	
						
VINCE	  	Kellwood Company	  	Brazil	  	Pending	  	[s/n 829702148]	  	[filed 4/28/2008]	
						
62 EAST (and Design)	  	Kellwood Company	  	Canada	  	Registered	  	341472	  	6/10/1988	
						
A+DAM (Stylized)	  	Kellwood Company	  	Canada	  	Registered	  	682135	  	2/22/2007	
						
A+EVE (Stylized)	  	Kellwood Company	  	Canada	  	Registered	  	682136	  	2/22/2007	
						
ADAM (Stylized)	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1416261]	  	[filed 2/22/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1416660]	  	[filed 2/24/2011]	
						
COMPONIX	  	Kellwood Company	  	Canada	  	Registered	  	357281	  	6/16/1989	
						
COMPONIX (and Design)	  	Kellwood Company	  	Canada	  	Registered	  	357282	  	6/16/1989	
						
DEMOCRACY	  	Kellwood Company	  	Canada	  	Registered	  	498407	  	8/6/1998	
						
FLATTER-FIT	  	Kellwood Company	  	Canada	  	Registered	  	265799	  	1/15/1982	
						
FRANCISCA	  	Kellwood Company	  	Canada	  	Registered	  	352755	  	3/3/1989	
						
IVY	  	Kellwood Company	  	Canada	  	Registered	  	410249	  	4/2/1993	
						
IVY COLLECTIBLES	  	Kellwood Company	  	Canada	  	Registered	  	496334	  	6/17/1998	
						
JAX	  	Kellwood Company	  	Canada	  	Registered	  	404350	  	10/30/1992	
						
JAX COUNTRY	  	Kellwood Company	  	Canada	  	Registered	  	560222	  	4/15/2002	
						
JAX SEPARATES	  	Kellwood Company	  	Canada	  	Registered	  	486099	  	11/24/1999	
						
JAXSPORT	  	Kellwood Company	  	Canada	  	Registered	  	287384	  	1/27/1984	
						
JOLT	  	Kellwood Company	  	Canada	  	Registered	  	772114	  	7/16/2010	
						
K (and Design)	  	Kellwood Company	  	Canada	  	Registered	  	692492	  	7/20/2007	
						
[Kellwood Design]	  	Kellwood Company	  	Canada	  	Registered	  	282036	  	8/5/1983	
						
KORET	  	Kellwood Company	  	Canada	  	Registered	  	308890	  	11/29/1985	
						
KORET CITY BLUES	  	Kellwood Company	  	Canada	  	Registered	  	233999	  	6/29/1979	
						
KORET OF CALIFORNIA	  	Kellwood Company	  	Canada	  	Registered	  	364805	  	2/2/1990	
						
L.A. INTIMATES	  	Kellwood Company	  	Canada	  	Registered	  	481279	  	8/22/1997	
						
LAMB & FLAG	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1518457]	  	[filed 3/9/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1518462]	  	[filed 3/9/2011]	
						
NAPA GOLF BY NAPA VALLEY	  	Kellwood Company	  	Canada	  	Registered	  	559562	  	3/21/2002	
						
NORTHERN ISLES	  	Kellwood Company	  	Canada	  	Registered	  	323433	  	2/6/1997	
						
NOTABLES	  	Kellwood Company	  	Canada	  	Registered	  	335068	  	12/11/1997	
						
PILAR (and Design)	  	Kellwood Company	  	Canada	  	Registered	  	306990	  	9/13/1985	
						
PROPHECY (and Design)	  	Kellwood Company	  	Canada	  	Registered	  	274161	  	11/26/1982	
						
REBECCA TAYLOR	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1539601]	  	[filed 8/26/2011]	
						
REBECCA TAYLOR	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1539602]	  	[filed 8/26/2011]	
						
SAG HARBOR	  	Kellwood Company	  	Canada	  	Registered	  	432321	  	8/26/1994	
 
55

											
						
SEQUIN HEARTS	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1529519]	  	[filed 5/27/2011]	
						
STUDIO JAX	  	Kellwood Company	  	Canada	  	Registered	  	560318	  	4/17/2002	
						
SUGAR PLUM	  	Kellwood Company	  	Canada	  	Registered	  	439102	  	2/10/1995	
						
THE SLIMMING SOLUTION	  	Kellwood Company	  	Canada	  	Pending	  	[s/n 1432326]	  	[3/25/2009]	
						
VINCE	  	Kellwood Company	  	Canada	  	Registered	  	658558	  	2/9/2006	
						
[2 Cats Outline Design]	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 5880282]	  	[filed 1/31/2007]	
						
A+EVE (Stylized)	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 4763031]	  	[filed 7/6/2005]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 9222801]	  	[filed 3/17/2011]	
						
ADAM (Stylized)	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 9222802]	  	[filed 3/17/2011]	
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	China (Peoples’ Republic) (Madrid Protocol)	  	Registered	  	IR 980424	  	8/28/2008	
						
IVY	  	Kellwood Company	  	China (Peoples’ Republic)	  	Registered	  	520723	  	5/20/1990	
						
LAMB & FLAG	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 9199565]	  	[filed 3/11/2011]	
						
LAMB & FLAG	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 9222799]	  	[filed 3/17/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 9199566]	  	[filed 3/11/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 9222800]	  	[filed 3/17/2011]	
						
REBECCA TAYLOR (Stylized)	  	Kellwood Company	  	China (Peoples’ Republic)	  	Registered	  	1501114	  	1/7/2001	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 5880280]	  	[filed 1/31/2007]	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 5880281]	  	[filed 1/31/2007]	
						
VINCE	  	Kellwood Company	  	China (Peoples’ Republic)	  	Registered	  	3448663	  	3/6/2005	
						
VINCE	  	Kellwood Company	  	China (Peoples’ Republic)	  	Pending	  	[s/n 8249979]	  	[filed 4/28/2010]	
 
56

											
						
KORET	  	Kellwood Company	  	Denmark	  	Registered	  	VR-199208126	  	8/28/1992	
						
[2 Cats Outline Design]	  	Kellwood Company	  	European Union	  	Registered	  	8968398	  	10/27/2010	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	European Union	  	Pending	  	[s/n 009763566]	  	[filed 2/24/2011]	
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	European Union	  	Pending	  	[s/n 6709281]	  	[filed 2/28/2008]	
						
ADAM (Stylized)	  	Kellwood Company	  	European Union	  	Pending	  	[s/n 009763665]	  	[filed 2/24/2011]	
						
BLK DNM	  	Kellwood Company	  	European Union	  	Pending	  	[s/n 010166957]	  	[filed 8/1/2011]	
						
LAMB & FLAG	  	Kellwood Company	  	European Union	  	Pending	  	[s/n 009805474]	  	[filed 3/11/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	European Union	  	Pending	  	[s/n 009787623]	  	[filed 3/11/2011]	
						
REBECCA TAYLOR	  	Kellwood Company	  	European Union	  	Registered	  	8968042	  	10/27/2010	
						
VINCE	  	Kellwood Company	  	European Union	  	Registered	  	2996700	  	10/6/2004	
						
KELLWOOD	  	Kellwood Company	  	France	  	Registered	  	1485999	  	8/31/1988	
						
KORET	  	Kellwood Company	  	France	  	Registered	  	92413996	  	9/25/1992	
						
REBECCA TAYLOR	  	Kellwood Company	  	France	  	Registered	  	013089168	  	3/16/2001	
						
REBECCA TAYLOR	  	Kellwood Company	  	Honduras	  	Registered	  	115.689	  	4/4/2011	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	Honduras	  	Registered	  	115.512	  	3/22/3011	
						
[2 Cats Outline Design]	  	Kellwood Company	  	Hong Kong	  	Pending	  	[s/n 301712240]	  	[filed 9/10/2010]	
						
ADAM (Stylized)	  	Kellwood Company	  	Hong Kong	  	Pending	  	[s/n 301856683]	  	[filed 3/11/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Hong Kong	  	Pending	  	[s/n 301856692]	  	[filed 3/11/2011]	
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	Hong Kong	  	Registered	  	301189936	  	8/27/2008	
						
KORET	  	Kellwood Company	  	Hong Kong	  	Registered	  	06261971	  	5/11/1971	
						
REBECCA TAYLOR	  	Kellwood Company	  	Hong Kong	  	Pending	  	[s/n 301712259]	  	[filed 9/10/2010]	
						
REBECCA TAYLOR (Stylized)	  	Kellwood Company	  	Hong Kong	  	Registered	  	200016533	  	12/18/2000	
						
VINCE	  	Kellwood Company	  	Hong Kong	  	Registered	  	10246	  	8/18/2003	
						
[2 Cats Outline Design]	  	Kellwood Company	  	India	  	Pending	  	[s/n 2000143]	  	[filed 7/28/2010]	
						
REBECCA TAYLOR	  	Kellwood Company	  	India	  	Pending	  	[s/n 1955003]	  	[filed 4/23/2010]	
						
ADAM (Stylized)	  	Kellwood Company	  	Indonesia	  	Pending	  	[s/n
D002011010018]	  	[filed 3/16/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Indonesia	  	Pending	  	[s/n
D002011010017]	  	[filed 3/16/2011]	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	Indonesia	  	Pending	  	[s/n
D002007012132]	  	[filed 4/19/2007]	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	Indonesia	  	Registered	  	IDM000183663	  	4/19/2007	
 
57

											
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	International Registration (Madrid Protocol)	  	Registered	  	IR 980424	  	8/28/2008	
						
VINCE	  	Kellwood Company	  	International Registration (Madrid Protocol)	  	Registered	  	IR 960474	  	4/9/2008	
						
KELLWOOD	  	Kellwood Company	  	Italy	  	Registered	  	993782	  	2/17/1986	
						
KELLWOOD (and Design)	  	Kellwood Company	  	Italy	  	Registered	  	1001904	  	10/7/1986	
						
[Kellwood Design]	  	Kellwood Company	  	Italy	  	Registered	  	993783	  	2/17/1986	
						
A+DAM (Stylized)	  	Kellwood Company	  	Japan	  	Registered	  	1933160	  	3/3/2006	
						
A+EVE (Stylized)	  	Kellwood Company	  	Japan	  	Registered	  	4978034	  	8/11/2006	
						
ADAM (Stylized)	  	Kellwood Company	  	Japan	  	Pending	  	[s/n 2011-017834]	  	[filed 3/11/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Japan	  	Pending	  	[s/n 2011-017835]	  	[filed 3/11/2011]	
						
ADAM ADAM LIPPES (Stylized)	  	Kellwood Company	  	Japan (Madrid Protocol)	  	Registered	  	IR 980424	  	8/28/2008	
						
CITY BLUES	  	Kellwood Company	  	Japan	  	Registered	  	2676694	  	6/29/1994	
						
DAVID DART	  	Kellwood Company	  	Japan	  	Registered	  	4040959	  	8/8/1997	
						
DAVID DART COLLECTION	  	Kellwood Company	  	Japan	  	Registered	  	4000907	  	5/16/1997	
						
DAVID DART DRESS	  	Kellwood Company	  	Japan	  	Registered	  	4056565	  	9/12/1997	
						
DAVID DART KNITWEAR	  	Kellwood Company	  	Japan	  	Registered	  	4054220	  	9/5/1997	
						
DAVID DART SPORT	  	Kellwood Company	  	Japan	  	Registered	  	4000908	  	5/16/1997	
						
DD (Stylized)	  	Kellwood Company	  	Japan	  	Registered	  	4048075	  	8/22/1997	
						
KELLWOOD	  	Kellwood Company	  	Japan	  	Registered	  	3369850	  	7/17/1988	
						
LAMB & FLAG	  	Kellwood Company	  	Japan	  	Pending	  	[s/n 2011-017429]	  	[filed 3/10/2011]	
						
LAMB & FLAG	  	Kellwood Company	  	Japan	  	Pending	  	[s/n 2011-017430]	  	[filed 3/10/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	Japan	  	Pending	  	[s/n 2011-017433]	  	[filed 3/10/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	Japan	  	Pending	  	[s/n 2011-017434]	  	[filed 3/10/2011]	
						
REBECCA TAYLOR	  	Kellwood Company	  	Japan	  	Registered	  	4384845	  	5/19/2000	
						
REBECCA TAYLOR	  	Kellwood Company	  	Japan	  	Registered	  	4365303	  	3/3/2000	
						
REBECCA TAYLOR (Stylized)	  	Kellwood Company	  	Japan	  	Registered	  	4277435	  	5/28/1999	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	Japan	  	Registered	  	4669747	  	5/9/2003	
						
SAG HARBOR (and Design)	  	Kellwood Company	  	Japan	  	Registered	  	4048077	  	8/22/1997	
						
VINCE	  	Kellwood Company	  	Japan	  	Registered	  	161/2003	  	10/17/2003	
						
[2 Cats Outline Design]	  	Kellwood Company	  	Korea, Republic of	  	Registered	  	40-085247	  	6/9/2011	
						
ADAM (Stylized)	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2011- 12227]	  	[filed 3/10/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2011- 12228]	  	[filed 3/10/2011]	
						
VINCE	  	Kellwood Company	  	Korea, Republic of	  	Registered	  	45-0032755	  	10/26/2010	
 
58

											
						
VINCE	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 53052]	  	[filed 10/15/2010]	
						
VINCE	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 53053]	  	[filed 10/15/2010]	
						
VINCE	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 53054]	  	[filed 10/15/2010]	
						
VINCE	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2010- 53055]	  	[filed 10/15/2010]	
						
VINCE	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2011- 21472]	  	[filed 4/20/2011]	
						
VINCE	  	Kellwood Company	  	Korea, Republic of	  	Pending	  	[s/n 40-2011- 11189]	  	[filed 4/20/2011]	
						
ADAM (Stylized)	  	Kellwood Company	  	Kuwait	  	Pending	  	[s/n 119156]	  	[filed 3/17/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Kuwait	  	Pending	  	[s/n 119157]	  	[filed 3/17/2011]	
						
HOLLYWOULD	  	Kellwood Company	  	Kuwait	  	Registered	  	74981	  	2/11/2008	
						
HOLLYWOULD	  	Kellwood Company	  	Kuwait	  	Pending	  	[s/n 92088]	  	[filed 2/12/2008]	
						
ADAM (Stylized)	  	Kellwood Company	  	Lebanon	  	Registered	  	134721	  	4/4/2011	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Lebanon	  	Registered	  	134713	  	4/4/2011	
						
ADAM (Stylized)	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1163951]	  	[filed 3/17/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1163954]	  	[filed 3/17/2011]	
						
CASCADE BLUES	  	Kellwood Company	  	Mexico	  	Registered	  	447095	  	11/24/1993	
						
DARE TO DRESS	  	Kellwood Company	  	Mexico	  	Registered	  	475904	  	10/4/1994	
						
DEMOCRACY	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1195680]	  	[filed 7/18/2011]	
						
HOLLYWOULD	  	Kellwood Company	  	Mexico	  	Registered	  	1042306	  	5/28/2008	
						
JOLT	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1192046]	  	[filed 7/5/2011]	
						
L.A. INTIMATES	  	Kellwood Company	  	Mexico	  	Registered	  	461094	  	5/19/1994	
						
MY MICHELLE	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1195685]	  	[filed 7/18/2011]	
						
OPTIONS MELROSE (Stylized)	  	Kellwood Company	  	Mexico	  	Registered	  	489831	  	4/27/1995	
						
PROPHECY	  	Kellwood Company	  	Mexico	  	Registered	  	462470	  	6/2/1994	
						
RADCLIFFE	  	Kellwood Company	  	Mexico	  	Registered	  	447097	  	11/24/1993	
						
REBECCA TAYLOR	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1204222]	  	[filed 8/18/2011]	
						
REBECCA TAYLOR	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1204223]	  	[filed 8/18/2011]	
						
REBECCA TAYLOR	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1204224]	  	[filed 8/18/2011]	
						
REBECCA TAYLOR	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1204225]	  	[filed 8/18/2011]	
						
REBECCA TAYLOR	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1204226]	  	[filed 8/18/2011]	
						
SAG HARBOR	  	Kellwood Company	  	Mexico	  	Registered	  	447096	  	11/24/1993	
						
SEQUIN HEARTS	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1195691]	  	[filed 7/18/2011]	
						
VINCE	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1204218]	  	[filed 8/18/2011]	
						
VINCE	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1204219]	  	[filed 8/18/2011]	
						
VINCE	  	Kellwood Company	  	Mexico	  	Pending	  	[s/n 1209933]	  	[filed 9/8/2011]	
						
STUDIO EASE	  	Kellwood Company	  	Mexico	  	Registered	  	475902	  	10/4/1994	
						
A+ (Stylized)	  	Kellwood Company	  	New Zealand	  	Registered	  	740645	  	6/22/2006	
						
A+DAM (Stylized)	  	Kellwood Company	  	New Zealand	  	Registered	  	740643	  	7/13/2006	
						
A+EVE (Stylized)	  	Kellwood Company	  	New Zealand	  	Registered	  	740644	  	6/22/2006	
						
ADAMPLUSEVE	  	Kellwood Company	  	New Zealand	  	Registered	  	740646	  	6/22/2006	
						
KORET OF CALIFORNIA	  	Kellwood Company	  	New Zealand	  	Registered	  	B89744	  	9/30/1982	
						
REBECCA TAYLOR (and 2 Cats & Crown)	  	Kellwood Company	  	New Zealand	  	Registered	  	634234	  	9/20/2001	
 
59

											
						
ADAM (Stylized)	  	Kellwood Company	  	Pakistan	  	Pending	  	[s/n 298265]	  	[filed 3/17/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Pakistan	  	Pending	  	[s/n 298266]	  	[filed 3/17/2011]	
						
LAMB & FLAG	  	Kellwood Company	  	Puerto Rico	  	Pending	  	[s/n 76583]	  	[filed 6/2/2011]	
						
LAMB & FLAG	  	Kellwood Company	  	Puerto Rico	  	Pending	  	[s/n 76580]	  	[filed 6/2/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	Puerto Rico	  	Pending	  	[s/n 76588]	  	[filed 6/2/2011]	
						
LXF (Stylized)	  	Kellwood Company	  	Puerto Rico	  	Pending	  	[s/n 76587]	  	[filed 6/2/2011]	
						
ADAM (Stylized)	  	Kellwood Company	  	Russia, Federation of	  	Pending	  	[s/n 2011707467]	  	[filed 3/16/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Russia, Federation of	  	Pending	  	[s/n 2011707468]	  	[filed 3/16/2011]	
						
VINCE	  	Kellwood Company	  	Russia, Federation of (Madrid Protocol)	  	Registered	  	IR 960474	  	4/9/2008	
						
REBECCA TAYLOR	  	Kellwood Company	  	Singapore	  	Registered	  	T9913558G	  	11/25/1999	
						
VINCE	  	Kellwood Company	  	Singapore
(Madrid
Protocol)	  	Registered	  	IR 960474	  	4/9/2008	
						
KORET	  	Kellwood Company	  	South Africa	  	Registered	  	199205858	  	3/24/1994	
						
KELLWOOD	  	Kellwood Company	  	Spain	  	Registered	  	1025125	  	10/20/1983	
						
KORET	  	Kellwood Company	  	Sweden	  	Registered	  	923487	  	11/13/1992	
						
ADAM (Stylized)	  	Kellwood Company	  	Switzerland	  	Registered	  	615.892	  	3/10/2011	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Switzerland	  	Pending	  	[s/n 52895/2011]	  	[filed 3/10/2011]	
						
KORET	  	Kellwood Company	  	Switzerland	  	Registered	  	397035	  	12/31/1992	
						
VINCE	  	Kellwood Company	  	Switzerland
(Madrid
Protocol)	  	Registered	  	IR 960474	  	4/9/2008	
						
C.E.O. (and Design)	  	Kellwood Company	  	Taiwan	  	Registered	  	699023	  	8/16/1995	
						
REBECCA TAYLOR	  	Kellwood Company	  	Taiwan	  	Registered	  	00931776	  	2/16/2001	
						
VINCE	  	Kellwood Company	  	Taiwan	  	Registered	  	1377063	  	9/1/2009	
						
VINCE	  	Kellwood Company	  	Thailand	  	Pending	  	[s/n 692936]	  	[filed 4/18/2008]	
						
VINCE	  	Kellwood Company	  	Thailand	  	Registered	  	315178	  	5/19/2010	
						
VINCE	  	Kellwood Company	  	Thailand	  	Registered	  	43665	  	8/19/2009	
						
ADAM (Stylized)	  	Kellwood Company	  	Turkey	  	Pending	  	[s/n 2011-G-
62172]	  	[filed 3/11/2011]	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	Turkey	  	Pending	  	[s/n 2011-G- 62178]	  	[filed 3/11/2011]	
						
VINCE	  	Kellwood Company	  	Turkey
(Madrid
Protocol)	  	Registered	  	IR 960474	  	4/9/2008	
						
ADAM ADAM LIPPES	  	Kellwood Company	  	United Arab Emirates	  	Pending	  	[s/n 156663]	  	[filed 5/3/2011]	
						
ADAM (Stylized)	  	Kellwood Company	  	United Arab Emirates	  	Pending	  	[s/n 156662]	  	[filed 5/3/2011]	
						
HOLLYWOULD	  	Kellwood Company	  	United Arab Emirates	  	Pending	  	[s/n 106747]	  	[filed 2/6/2008]	
						
KORET	  	Kellwood Company	  	United
Kingdom	  	Registered	  	930800	  	8/6/1969	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	United
Kingdom	  	Registered	  	2257664	  	6/15/2001	
						
REBECCA TAYLOR (and 2 Cats & Crown Design)	  	Kellwood Company	  	Venezuela	  	Pending	  	[s/n 918409]	  	[filed 6/8/2009]	
 
60

											
Obligors’ Foreign Copyrights:	
						
Title	  	Owner	  	Country	  	Status in
Copyright Office	  	Federal Registration
Number	  	Registration
Date	
						
2 Cats Single Outline	  	Kellwood Company	  	China (Peoples’ Republic)	  	Registered	  	2010-F-028905	  	7/5/2010	
						
2 Cats Double Outline	  	Kellwood Company	  	China (Peoples’ Republic)	  	Registered	  	2010-F-028906	  	7/5/2010	
						
2 Cats Double Outline	  	Kellwood Company	  	Korea, Republic of	  	Registered	  	C-2010-005063	  		
 
61

SCHEDULE 8.1.14
Environmental Matters
EPA v. Kellwood, et al. - Under an Administrative Order on Consent with the EPA, Kellwood is obligated to perform a remedial investigation and feasibility study of contaminated soil and ground-water in New Haven, Missouri.
EPA v. Kellwood, et al. - The EPA has identified ARP as one of seventy three principal parties responsible for the dumping of 111,000 gallons of an unknown toxic substance causing soil and groundwater contamination. To date, no remediation plan has been developed or implemented.

SCHEDULE 8.1.15
Restrictive Agreements
 
1.	$120,590,000 Second Priority Senior Secured PIK Notes due 2014, Indenture dated as of July 23, 2009.	
 
2.	$130,500,000 Debentures due October 15, 2017, Indenture dated as of September 30, 1997.	
 
3.	$200,000 of 3.5% Convertible Senior Debentures due June 15, 2034, Indenture dated as of June 22, 2004.	

SCHEDULE 8.1.16
Litigation
 
1.	See Schedule 8.1.14	
 
2.	New York Tax Appeal - The New York Division of Taxation issued a Notice of Deficiency dated October 11, 2005 which asserted additional taxes due. Kellwood appealed the Division’s decision. On March 27, 2008, the appeals judge ruled against Kellwood. Kellwood has appealed this decision to the next level of appeals. On September 23, 2011, Kellwood received notice that the Tribunal upheld the judge’s decision. The state assessment is approximately [on file with the Company]. Additionally, amended city returns will be filed with additional tax due in the amount of [on file with the Company]. This will result in total state and city tax, interest and penalties of approximately [on file with the Company].	
 
3.	Sunday Players and Daryl Washington v. Kellwood Company (Menswear) - Contract dispute in the Southern District of New York stemming from a license agreement entered into in November 2003. Original complaint sought damages in excess of [on file with the Company] but the court issued an order on 3/26/09 dismissing seven of the nine counts of the complaint filed by Sunday Players against Kellwood, including the claim for punitive damages. Plaintiff filed second amended complaint on 5/26/09 but it is substantially limited due to the previously dismissed claims. Plaintiffs retained an expert who estimated that Plaintiffs’ damages could be as much as approximately [on file with the Company]. Kellwood’s expert filed a report rebuffing the methods used by Plaintiffs’ expert to calculate damages. In or around July of 2011, both parties submitted motions to exclude the testimony of the other party’s expert, and these motions are still before the Court. No hearing date has been set.	

Schedule 8.1.18
Pension Plans
 
1.	There are 8 Executive Death Benefit Agreements with retired Kellwood executives whereby Kellwood has agreed to pay a named beneficiary an amount at the executive’s death. The amount paid is based upon the executive’s salary at retirement. The total of all these obligations payable on the executives’ deaths is approximately $8 million.	

SCHEDULE 8.1.20
Labor Contracts
None

SCHEDULE 8.1.27
Insurance
See attached Exhibit 8.1.27

																									
Line of
Coverage/
Description	 	Carrier	 	Policy
Period	 	Policy Number	 	Limit	 	Deductible/SIR/or
Quota Share %	 	Received
from
Carrier	 	 	Sent to
the client	 	 	Comments	 	Premium	 	
As of 10/14/11	 		 		 		 		 		 				 				 		 				
PROPERTY/DIC	 		 		 		 		 		 				 				 		 				
Global Property	 	ACE American Ins Co	 	12/21/10-11	 	PGLN05099869	 	$25,000,000	 	100%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Axis Insurance Company	 	12/21/10-11	 	RNG756876	 	$75M excess of $25M	 	6.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Lexington Insurance Company	 	12/21/10-11	 	25031354	 	$75M excess of $25M	 	45%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Allianz Global Risk US Ins Co	 	12/21/10-11	 	CLP3012057	 	$75M excess of $25M	 	33.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Zurich Insurance Co	 	12/21/10-11	 	XPP485675300	 	$75M excess of $25M	 	15.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Lloyds of Londor	 	12/21/10-11	 	DP811510	 	$400m excess of $100M	 	20%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Munich Re	 	12/21/10-11	 	78A3XP000010704	 	$400m excess of $100M	 	20%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Swiss Re	 	12/21/10-11	 	31373559	 	$400m excess of $100M	 	11.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Allianz Global Risk US Ins Co	 	12/21/10-11	 	CLP3012057	 	$400m excess of $100M	 	33.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Zurich Insurance Co	 	12/21/10-11	 	XPP485675300	 	$400m excess of $100M	 	15.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Munich Re	 	12/21/10-11	 	78A3XP000010704	 	$250M excess of $250M	 	20.00%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Lancashire Insurance Co.	 	12/21/10-11	 	DP814610	 	$250M excess of $250M	 	15%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Lloyds of Londor	 	12/21/10-11	 	DP811510	 	$250M excess of $250M	 	5%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Swiss Re	 	12/21/10-11	 	31373559	 	$250M excess of $250M	 	11.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Allianz Global Risk US Ins Co	 	12/21/10-11	 	CLP3012057	 	$250M excess of $250M	 	33.33%	 	 	N/A	  	 	 	N/A	  	 		 				
Global Property	 	Zurich Insurance Co	 	12/21/10-11	 	XPP485675300	 	$250M excess of $250M	 	15.33%	 	 	N/A	  	 	 	N/A	  	 		 				
DIC/EQ	 	Western Re	 	12/21/10-11	 	REP2010186	 	$30M excess of $50M	 	66.67%	 	 	N/A	  	 	 	N/A	  	 		 				
										
Property	 		 		 		 		 		 				 				 		 				
Cargo	 	STARR Indemnity & Liab	 	6/1/11-12	 	CCH0148US11	 	$15,000,000
$1,500,000 Any One Steamer or Aircraft
Any one Vessel, On Deck with an On Deck bill of Lading
$ 2,000,000 Any One Truck or Rail Shipment, global inland transit
$150,000 Any One Barge or Tow
$250,000 Any One Unnamed Warehouse/Storage Location
$500,000 Unnamed Storage/Processing loc.
$25,000 Any One Package, Mail or Parcel Post
$10,000 Any One Salesperson’s Samples
$10,000,000 Any one occurrence and in the annual aggregate for California Quake	 	$25,000	 	 	7/14/2011	  	 	 	7/14/2011	  	 		 	$	29,212.00	  	
										
LIABILITY	 		 		 		 		 		 				 				 		 				
General Liability	 	Liberty Mutual Fire Insurance Co	 	2/1/11-12	 	TB2641443491021	 	$2 m per occurrence $2 m prod agg $4 m gen agg	 	$100,000	 	 	4/19/2011	  	 	 	7/20/2011	  	 		 	$	97,504.00	  	
General Liability - Hawthorne Properties	 	Liberty Mutual Fire Insurance Co	 	2/1/11-12	 	TB2641443491061	 	$1m per occurrencce $2m gen agg	 	Guaranteed Cost	 	 	4/19/2011	  	 	 	6/14/2011	  	 		 	$	500.00	  	
Pollution Liability	 	ACE	 	10/23/07-12	 	PPLG2389497A001	 	$10,000,000	 	$50,000	 	 	N/A	  	 	 	N/A	  	 		 	 	TBD	  	
										
AUTO	 		 		 		 		 		 				 				 		 				
Business Auto (AOS)	 	Liberty Mutual Fire Insurance Co	 	2/1/11-12	 	AS2641443491051	 	$2,000,000 CSL	 	Guaranteed Cost	 	 	4/19/2011	  	 	 	6/14/2011	  	 		 	$	20,100.00	  	
										
WORKERS’ COMP	 		 		 		 		 		 				 				 		 				
Workers’ Comp	 	Liberty Mutual Dire Insurance Co	 	2/1/11-12	 	WC2641443491011	 	Statutory WC / $1M/$1M/$1M Employer’s Liability	 	Guaranteed Cost	 	 	4/21/2011	  	 	 	7/20/2011	  	 	Premium does not include
$7,200 for 132a Endt	 	$	1,011,589.00	  	
										
EXCESS	 		 		 		 		 		 				 				 		 				
Umbrella	 	St. Paul Fire & Marine	 	2/1/11-12	 	QK08500268	 	$25,000,000	 	$10,000 SIR	 	 	2/14/2011	  	 	 	7/20/2011	  	 		 	$	38,900.00	  	
First Excess	 	Chubb	 	2/1/11-12	 	79763690	 	$25,000,000 excess of $25,000,000	 		 	 	2/14/2011	  	 	 	6/14/2011	  	 		 	$	31,512.00	  	
Second Excess	 	Fireman’s Fund	 	2/1/11-12	 	SHX00057551855	 	$50,000,000 excess of $50,000,000	 		 	 	3/3/2011	  	 	 	6/14/2011	  	 		 	$	25,501.00	  	
										
FINPRO	 		 		 		 		 		 				 				 		 				
Directors & Officers and EPL	 	National Union Fire Ins Co (Chartis)	 	2/20/11-12	 	15714209	 	$15m Agg ($15m shared with EPL / $10M shared with D&O)	 	$250,000	 	 	4/12/2011	  	 	 	5/10/2011	  	 		 	$	115,595.00	  	
Excess D&O and EPL	 	Zurich American Insurance Company	 	2/20/11-12	 	DOC475595600	 	$10m x $15m	 		 				 	 	6/8/2011	  	 		 	$	69,889.00	  	
Fiduciary Liability	 	Federal Insurance Company (Chubb)	 	2/20/11-12	 	81701944	 	$15,000,000	 	$50,000	 	 	3/3/2011	  	 	 	4/12/2011	  	 		 	$	35,000.00	  	
Excess Fiduciary Liability	 	National Union Fire Ins Co (Chartis)	 	2/20/11-12	 	15714253	 	$10,000,000	 	$15,000,000	 	 	4/8/2011	  	 	 	5/3/2011	  	 		 	$	19,830.00	  	
Crime	 	Federal Insurance Company (Chubb)	 	2/20/11-12	 	81702551	 	$15,000,000	 	$250,000	 	 	3/3/2011	  	 	 	5/3/2011	  	 		 	$	68,848.00	  	
Network Security/Privacy Liability	 	Beazley / Lloyd’s	 	7/1/11-12	 	W10C8B100201	 	$5,000,000	 	$250,000	 	 	4/18/2011	  	 	 	4/18/2011	  	 		 	$	47,250.00	  	
Special Crime	 	AIG	 	2/20/11-12	 	11362255	 	$25,000,000	 	$25,000	 	 	4/15/2011	  	 	 	4/15/2011	  	 		 	$	28,449.00	  	
D&O Runoff	 	AIG	 	2/20/08-14	 	259-34-35	 	$15,000,000	 	$400,000/$1,000,000	 	 	n/a	  	 	 	n/a	  	 		 				
Excess D&O Runoff	 	Chubb	 	2/20/08-14	 	8170-2201	 	$15 x $15	 		 	 	n/a	  	 	 	n/a	  	 		 				
Second Excess D&O Runoff	 	Travelers	 	2/20/08-14	 	512CM1750	 	$10 x $30	 		 	 	n/a	  	 	 	n/a	  	 		 				
Third Excess D&O Runoff	 	Hartford	 	2/20/08-14	 	00DA0212840-07	 	$10 x $40	 		 	 	n/a	  	 	 	n/a	  	 		 				
Excess D&O Side A only	 	AIG	 	2/20/08-14	 	1437391	 	$10 x $50	 		 	 	n/a	  	 	 	n/a	  	 		 				
FOREIGN	 		 		 		 		 		 				 				 		 				
Foreign Voluntary WC	 	Liberty Insurance Underiters	 	2/1/11-12	 	WC7F41443491041	 		 		 	 	4/19/2011	  	 	 	TBD	  	 		 	$	3,000.00	  	
International Liability	 	Liberty Insurance Underiters	 	2/1/11-12	 	LC7F41443491031	 	$2 m per occurrence $2 m prod agg $2 m gen agg	 		 	 	4/18/2011	  	 	 	7/20/2011	  	 		 	$	5,500.00	  	
Canadian GL	 	Liberty Mutual Fire Ins Co	 	2/1/11-12	 	KE1641443492011	 	$2 m per occurrence $2 m prod agg $2 m gen agg	 		 	 	4/19/2011	  	 	 	7/20/2011	  	 		 	 	9885 CAD	  	
Hong Kong WC	 	Royal & Sun Alliance Insurance (Kong Kong) Ltd.	 	2/24/11-12	 	BDCLE11000081	 	$100,000,000 HKD any one accident or disease	 		 	 	4/7/2011	  	 	 	4/7/2011	  	 	Premium is Estimated in US
Dollars	 	$	2,700.00	  	
Hong Kong Public & Products Liability	 	Royal & Sun Alliance Insurance (Kong Kong) Ltd.	 	2/1/11-12	 	BDCLC11000027	 	$1M per accident $2M per policy period	 		 	 	5/9/2011	  	 	 	5/9/2011	  	 	Premium is Estimated in US
Dollars	 	$	2,500.00	  	
FOREIGN	 		 		 		 		 		 				 				 		 				
Canadian GL (Pollution)	 	XL Europe / Indian Harbor	 	1/7/2003-13	 	PEC00013431	 	$10,000,000 (combined)	 	$500,000 (combined)	 	 	n/a	  	 	 	n/a	  	 		 				
Pollution E&O	 	XL Europe	 	1/7/2003-13	 	LPA0300008	 	$10,000,000 (combined)	 	$500,000 (combined)	 	 	n/a	  	 	 	n/a	  	 		 				

SCHEDULE 8.1.29
Material Contracts
1. Lease of Kellwood’s Distribution Center in City of Industry, CA pursuant to a lease agreement dated as of December 11, 2009 between LBA/Met Partners II-Company V, LLC as lessor and Kellwood Company as lessee.
2. Purchase Agreement dated as of January 4, 2011 among Meow, Inc., Kellwood Company, the Persons identified as Sellers therein, the other Transferred Companies (as defined therein) and Elizabeth Bugdaycay, as representative for the Sellers.
3. Agreement for Purchase and Sale of Assets dated as of September 27, 2006 among Newkell IV, Inc., Kellwood Company, CRL Group, LLC, Rea Laccone, Christopher LaPolice and John Paul Richard, Inc.
4. Notes and debentures due in 2014 and 2017 as more fully described on Schedule 8.1.15.

SCHEDULE 9.2.1
Existing Indebtedness
Outstanding Principal as of
the Closing Date
Amount in Dollars)

DEBTOR	  	O/S
AMOUNT	 	  	MATURITY
DATE	  	CREDITOR	
				
SENIOR DEBT	  				  		  		
Kellwood Company	  	$	86,953,000	  	  	10/15/2017	  	Public Debentures	
Kellwood Company	  	 	200,000	  	  	6/15/2034	  	Public Senior Convertible	

Total Senior Debt	  	$	87,115,300	  	  		  		
Revolving credit agreement dated as of September 1, 2010 between American Recreation Products, Inc. (“ARP”) and Canadian Recreation Products, Inc. (“CRP”). As of April 30, 2011 the balance of the note payable to CRP from ARP was $1,567,083.25.

Schedule 9.2.2
Existing Liens

Meow Inc.	  		  		  		  		
					
Filing Number	  	Filing
Date	  	Type of
Filing	  	Secured Party	  	Collateral Description	
					
200612140989759	  	12/14/06	  	UCC-1	  	Wells Fargo Financial Leasing Inc	  	Operating lease of certain Xerox equipment	
					
200804185424171	  	04/18/08	  	UCC-1	  	Rosenthal & Rosenthal, Inc.	  		
					
201101050008798	  	01/05/11	  	UCC-3	  		  	Accounts (excepting only for those Accounts which were resold by Secured Party to Debtor) evidenced by invoices dated on or before 12/31/2010, any Goods which by sale resulted in such Accounts, IP rights necessary to allow Secured Party to collect on such Accounts or to dispose of any such Goods and Proceeds of any such Accounts or Goods	
					
200805070325808	  	05/07/08	  	UCC-1	  	General Electric Capital Corporation	  	Operating lease of certain equipment from General Electric Capital Corporation	
	
 American Recreation Products, Inc.	
					
Filing Number	  	Filing Date	  	Type of
Filing	  	Secured Party	  	Collateral Description	
					
20091373445	  	04/30/09	  	UCC-1	  	Document & Network Technologies, Inc.	  	Operating lease of certain Toshiba equipment	
	
Kellwood Company	
					
Filing Number	  	Filing Date	  	Type of
Filing	  	Secured Party	  	Collateral Description	
					
30690795	  	03/03/03	  	UCC-1	  	Toshiba America Information	  	Operating lease of certain Toshiba equipment	
					
20073789822	  	10/09/07	  	UCC-3	  		  	Continuation	
					
33170423	  	12/03/03	  	UCC-1	  	Toshiba America Information	  	Operating lease of certain Toshiba equipment	
					
20082595005	  	07/29/08	  	UCC-3	  		  	Continuation	
					
42219691	  	08/06/04	  	UCC-1	  	Dell Financial Services, L.P.	  	Operating lease of certain Dell equipment	
					
20092417001	  	07/28/09	  	UCC-3	  		  	Continuation	
					
20092483029	  	08/04/09	  	UCC-3	  		  	Amend to change Secured Party name to: Dell Financial Services L.L.C.	
					
42219709	  	08/06/04	  	UCC-1	  	Dell Financial Services, L.P.	  	Operating lease of certain Dell equipment	
					
20092417019	  	07/28/09	  	UCC-3	  		  	Continuation	
					
20092483078	  	08/04/09	  	UCC-3	  		  	Amend to change Secured Party name to: Dell Financial Services L.L.C	
					
54025624	  	12/27/05	  	UCC-1	  	Canon Financial Services, Inc.	  	Operating lease of certain Canon equipment	
					
62261055	  	06/30/06	  	UCC-1	  	IOS Capital	  	Operating lease of specific equipment leased from IOS Capital	
					
63173572	  	09/14/06	  	UCC-1	  	IOS Capital	  	Operating lease of specific equipment leased from IOS Capital	
					
63816360	  	11/01/06	  	UCC-1	  	Canon Financial Services	  	Operating lease of certain Canon equipment	

									
20080767812	  	03/04/08	  	UCC-1	  	Ikon Financial Svcs	  	Operating lease of certain equipment leased from IOS Capital	
					
20081298668	  	04/14/08	  	UCC-3	  		  	Amended collateral description	
					
20100621221	  	02/24/10	  	UCC-1	  	Canon Financial Services	  	Operating lease of certain Canon equipment	
					
09-7215410685	  	11/27/09	  	UCC-1	  	Sensormatic
Electronics
Corporation	  	Operating lease of certain equipment leased from Sensormatic Electronics Corporation	
					
10-72196888	  	01/13/10	  	UCC-3	  		  	Amend to change Secured Party name to: ADT Security Services, Inc. - Sensormatic Division	
 
71

SCHEDULE 9.2.5
Investments
None.
 
72

SCHEDULE 9.2.17
Existing Affiliate Transactions
[on file with the Company]

EXHIBIT A
to
Term Loan Agreement
TERM [A]/[B] NOTE

[Date]	  	 	$                                          New York	  	
KELLWOOD COMPANY , a Delaware corporation (“ Borrower Representative ”), each of the other Borrowers signatory hereto (collectively with Borrower Representative, the “ Borrowers ”), for value received, hereby unconditionally promise to pay, on a joint and several basis, to the order of                     (“ Lender ”), the principal sum of                     DOLLARS ($         ), together with all accrued and unpaid interest thereon. Terms used herein but not defined herein shall have the meaning given to them in the Term Loan Agreement dated as of October 19, 2011, among Borrowers, the lenders from time to time party thereto (each a “ Lender ” and collectively, the “ Lenders ”) and Cerberus Business Finance, LLC, solely in its capacity as collateral agent for each Lender (the “ Collateral Agent ”), as such agreement may be amended, modified, renewed or extended from time to time (“ Term Loan Agreement ”).
Principal of and interest on this Note from time to time outstanding shall be due and payable as provided in the Term Loan Agreement. This Note is issued pursuant to and evidences certain Term [A]/[B] Loans under the Term Loan Agreement, to which reference is made for a statement of the rights and obligations of Lender and the duties and obligations of Borrowers. The Term Loan Agreement contains provisions for acceleration of the maturity of this Note upon the happening of certain stated events, and for the borrowing and prepayment of amounts upon specified terms and conditions.
Time is of the essence of this Note. Each Borrower and all endorsers, sureties and guarantors of this Note hereby severally waive demand, presentment for payment, protest, notice of protest, notice of intention to accelerate the maturity of this Note, diligence in collecting, the bringing of any suit against any party, and any notice of or defense on account of any extensions, renewals, partial payments, or changes in any manner of or in this Note or in any of its terms, provisions and covenants, or any releases or substitutions of any security, or any delay, indulgence or other act of any trustee or any holder hereof, whether before or after maturity. Borrowers jointly and severally agree to pay, and to save the holder of this Note harmless against, any liability for the payment of all costs and expenses (including without limitation reasonable attorneys’ fees) if this Note is collected by or through an attorney-at-law.
In no contingency or event whatsoever shall the amount paid or agreed to be paid to the holder of this Note for the use, forbearance or detention of money advanced hereunder exceed the highest lawful rate permitted under Applicable Law. If any such excess amount is inadvertently paid by Borrowers or inadvertently received by the holder of this Note, such excess shall be returned to Borrowers or credited as a payment of principal, in accordance with the
 
A-1

Term Loan Agreement. It is the intent hereof that Borrowers not pay or contract to pay, and that holder of this Note not receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by Borrowers under Applicable Law.
The construction, interpretation and enforcement of this Note shall be governed by the laws of the State of New York, without giving effect to any conflict of law principles (but giving effect to federal laws relating to national banks).
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
 
A-2

IN WITNESS WHEREOF , this Note is executed as of the date set forth above.

BORROWERS :	
	
KELLWOOD COMPANY	
KWD HOLDINGS, INC.	
KELLWOOD FINANCIAL RESOURCES, INC.	
(formerly known as Newkell, Inc.)	
PHAT FASHIONS LLC	
PHAT LICENSING LLC	
ZOHBA, LLC	
MEOW INC.	
BETH’S BOUTIQUE, LLC	
		
By:	 	 	
Name:	
Title:	
	
AMERICAN RECREATION PRODUCTS, INC.	
SIERRA DESIGNS ACQUISITION CORPORATION	
ROYAL ROBBINS, INC.	
		
By:	 	 	
Name:	
Title:	
 
A-3

EXHIBIT B
to
Term Loan Agreement
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“ Assignment Agreement ”) is entered into as of                  , 20     between                     (“ Assignor ”) and                      (“ Assignee ”). Reference is made to the agreement described in Item 2 of Annex I annexed hereto (as amended, restated, modified or otherwise supplemented from time to time, the “ Term Loan Agreement ”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Term Loan Agreement.
1. In accordance with the terms and conditions of Section 12.3 of the Term Loan Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Term Loan Agreement and the other Loan Documents as of the Effective Date (as defined below) with respect to the Obligations owing to the Assignor, and the Assignor’s portion of the Loans as specified on Annex I .
2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Term Loan Agreement and the other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Term Loan Agreement and the other Loan Documents furnished pursuant thereto; and (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Obligor or any of their Subsidiaries or the performance or observance by any Obligor of any of its obligations under the Term Loan Agreement or any other Loan Document furnished pursuant thereto.
3. The Assignee (a) confirms that it has received copies of the Term Loan Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance upon the Collateral Agent, the Assignor, or any other Lender, based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Term Loan Agreement and the other Loan Documents; (c) confirms that it complies with the criteria set forth in Section 12.3 of the Term Loan Agreement necessary to acquire the interests being

assigned and to become a Lender; (d) appoints and authorizes the Collateral Agent to take such action as the Collateral Agent on its behalf and to exercise such powers under the Term Loan Agreement and the other Loan Documents as are delegated to the Collateral Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (e) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Term Loan Agreement and the other Loan Documents are required to be performed by it as a Lender; and (f) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Term Loan Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty.
4. Following the execution of this Assignment Agreement by the Assignor and the Assignee, it will be delivered by the Assignor to the Collateral Agent for recording by the Collateral Agent. The effective date of this Assignment Agreement (the “ Effective Date ”) shall be the latest of (a) the date of the execution hereof by the Assignor and the Assignee, (b) the date this Assignment Agreement has been accepted by the Collateral Agent and recorded in the Register, (c) the date of receipt by the Collateral Agent of a processing and recordation fee in the amount of $5,000, (d) the settlement date specified on Annex I , and (e) the receipt by Assignor of the Purchase Price specified in Annex I .
5. As of the Effective Date (a) the Assignee shall be a party to the Term Loan Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from its obligations under the Term Loan Agreement and the other Loan Documents.
6. Upon recording by the Collateral Agent, from and after the Effective Date, the Collateral Agent shall make all payments under the Term Loan Agreement and the other Loan Documents in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and commitment fees (if applicable) with respect thereto) to the Assignee. The Assignor and the Assignee shall make all appropriate adjustments in payments under the Term Loan Agreement and the other Loan Documents for periods prior to the Effective Date directly between themselves on the Effective Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
8. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED UPON OR ARISING OUT OF THIS ASSIGNMENT AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

9. This Assignment Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Assignment Agreement by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart.
[Remainder of page left intentionally blank.]

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed and delivered by their respective officers thereunto duly authorized, as of the date first above written.

[ASSIGNOR]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	 	Date:	
	
[ASSIGNEE]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	 	Date:	

ACCEPTED AND CONSENTED TO this      day
of              , 201    

CERBERUS BUSINESS FINANCE, LLC,
as Collateral Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	

ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
 
1.	Borrower: Kellwood Company, a Delaware corporation (“ Kellwood ”, and together with its Domestic Subsidiaries from to time to time party to the Term Loan Agreement, and each other Person joined as a party to the Term Loan Agreement as a “Borrower” in accordance with the terms thereof, and all of their respective permitted successors and assigns, collectively, “ Borrower ”).	
 
2.	Name and Date of Term Loan Agreement: Term Loan Agreement (as from time to time amended, supplemented or otherwise modified in accordance with the terms thereof, the “ Term Loan Agreement ”) dated as of October 19, 2011 among the Borrowers the financial institutions which are now or which hereafter become a party thereto (collectively, the “ Lenders ” and individually a “ Lender ”) and Cerberus Business Finance, LLC (“ Cerberus ”), as Collateral Agent for each Lender (Cerberus, in such capacity, the “ Collateral Agent ”).	

3.      Amount of Commitments and Term Loans:	 	                          	 		
 
4.      Purchase Price:	 	 

5.      Settlement Date:	 	 

6.	Notice and Payment Instructions, etc.	

Assignee:	 		  	Assignor:	  		

 	 		  	 	  		
 	 		  	 	  		
Attn:	 	 	 		  	Attn:	  	 	  		
Fax No.:	 	 	 		  	Fax No.:	  	 	  		

Bank Name:	 		  	Bank Name:	
ABA Number:	 		  	ABA Number:	
Account Name:	 		  	Account Name:	
Account Number:	 		  	Account Number:	
Sub-Account Name:	 		  	Sub-Account Name:	
Sub-Account Number:	 		  	Sub-Account Number:	
Reference:	 		  	Reference:	
Attn:	 		  	Attn:	

EXHIBIT C
FORM OF LIBOR NOTICE
[LETTERHEAD OF BORROWER REPRESENTATIVE]
Cerberus Business Finance, LLC, as Collateral Agent
under the below-referenced Term Loan Agreement
Ladies and Gentlemen:
Reference is made to the Term Loan Agreement, dated as of October 19, 2011 (as the same may be amended, supplemented or otherwise modified from time to time, the “ Term Loan Agreement ”), among Kellwood Company, a Delaware corporation (“ Borrower Representative ”) and its Domestic Subsidiaries from time to time a party thereto (each a “ Borrower ” and collectively with Borrower Representative, “ Borrowers ”), other Obligors (as defined therein) party thereto, the lenders from time to time party thereto (each a “ Lender ” and collectively, the “ Lenders ”) and Cerberus Business Finance, LLC, solely in its capacity as collateral agent for each Lender (the “ Collateral Agent ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Term Loan Agreement.
This LIBOR Notice represents the Borrower Representative’s request to [convert into] [continue as] [LIBOR Rate Loans] [Reference Rate Loans] $         1 of the outstanding principal amount of the Loans (the “ Requested Loan ”)[, and is a written confirmation of the telephonic notice of such election previously given to the Collateral Agent].
[Such Requested LIBOR Rate Loan will have an Interest Period of [one] [two] [three] month(s), commencing on                     .]
[This LIBOR Notice further confirms the Borrowers’ acceptance, for purposes of determining the rate of interest based on the LIBOR Rate under the Term Loan Agreement, of the LIBOR Rate as determined pursuant to the Term Loan Agreement.]
[Remainder of page left intentionally blank; signature page to follow]

1  	In the case of a continuation of a LIBOR Rate Loan, the aggregate principal amount of such LIBOR Rate Loan shall not be less than $500,000 and in multiples of $100,000 in excess thereof. In addition, the Borrowers shall not have more than three (3) LIBOR Rate Loans in effect at any time.	

									
Dated:	 	 	 		 		 		
				
	 		 		 	KELLWOOD COMPANY,	
	 		 		 	as Borrower Representative	
					
	 		 		 	By:	 	 	
	 		 		 	Name:	 		
	 		 		 	Title:	 		

EXHIBIT D
Form of
COMPLIANCE CERTIFICATE
 
TO:	Cerberus Business Finance, LLC , as Collateral Agent	
The undersigned [Chief Financial Officer][Vice President Finance][Controller] of Kellwood Company, a Delaware corporation (the “ Borrower Representative ”) certifies that, based on an examination sufficient to permit the undersigned to make this certification (in his/her official capacity), under the terms and conditions of the Term Loan Agreement dated as of October 19, 2011 among the Borrower Representative and its Domestic Subsidiaries from time to time a party thereto (each a “ Borrower ” and collectively with Borrower Representative, “ Borrowers ”), other Obligors (as defined therein) party thereto, the lenders from time to time party thereto (each a “ Lender ” and collectively, the “ Lenders ”) and Cerberus Business Finance, LLC, solely in its capacity as collateral agent for each Lender (the “ Collateral Agent ”) (as amended, restated, supplemented or otherwise modified from time to time, the “ Term Loan Agreement ”), (i) Borrowers are in complete compliance for the period ending                      with all required covenants set forth in the Term Loan Agreement, except as may be noted below, (ii) all representations and warranties in the Term Loan Agreement are true and correct in all material respects on and as of this date, (iii) no Default or Event of Default exists, and (iv) the most recent financial statements provided to Collateral Agent include all adjustments necessary for a fair presentation of the consolidated financial position and results of operations of the Borrowers for the period presented and otherwise comply with the requirements and restrictions imposed by Section 9.1.2 of the Term Loan Agreement. Without limiting the foregoing, the undersigned certifies that the Borrowers are in compliance with the requirements or restrictions imposed by Section 9.2.24, except as may be set forth below, and attached hereto as Schedule A are covenant calculations which show such compliance (or non- compliance). Capitalized terms used in this Certificate which are not defined herein shall have the meanings set forth in the Term Loan Agreement. Nothing herein limits or modifies any of the terms or provisions of the Term Loan Agreement.
Compliance status is indicated by circling Yes/No under “Complies” column.

Financial Covenant	  	Required	  	Actual	  	Complies	
				
Section 9.2.24(a) - Leverage Ratio	  	    :1.00 or lower	  		  	Yes             No	
				
Section 9.2.24(b) - Fixed Charge Coverage Ratio	  	    :1.00 or lower	  		  	Yes             No	

Comments Regarding Exceptions:	 	 	  		

			
Sincerely,	 		

			
		
T ITLE :	 	[C HIEF F INANCIAL O FFICER ][V ICE P RESIDENT F INANCE ][ CONTROLLER ]	

Date	 		

Schedule A to Compliance Certificate
Covenant Calculations
(Include calculations of Leverage Ratio and Fixed Charge Coverage Ratio (including each subcomponent of each such calculation), as well as each ratio).

EXHIBIT E
Joinder to Term Loan Agreement
The undersigned,                     , hereby joins in the execution of that certain Term Loan Agreement dated as of October 19, 2011 (the “ Term Loan Agreement ”) among Kellwood Company, certain of its Domestic Subsidiaries, and each other Domestic Subsidiary that becomes a Borrower thereunder after the date and pursuant to the terms thereof, the financial institutions party thereto from time to time as Lenders and Cerberus Business Finance, LLC, as collateral agent for the Lenders. All capitalized terms not defined herein shall have the meaning assigned to them in the Term Loan Agreement.
By executing this Joinder, the undersigned hereby agrees that it is a Borrower under the Term Loan Agreement and agrees to be bound by all of the terms and provisions thereunder. The undersigned further acknowledges and agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to the Collateral Agent and the Lenders the prompt payment and performance of all Obligations under the Loan Documents. Concurrently with the execution hereof, the undersigned shall execute and deliver a joinder to the Security Agreement and take such other actions as the Collateral Agent shall require to evidence and perfect a Lien in favor of the Collateral Agent (for the benefit of the Lenders) on the Collateral as contemplated by Section 9.1.9 of the Term Loan Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder this      day of             ,         .

[NEW BORROWER]	
		
By:	 	 	
Title	 	 	

Exhibit 10.63
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “ Agreement ”) is made and entered into as of [            ], 2013 between Vince Holding Corp., a Delaware corporation (the “ Company ”), and [                    ] (“ Indemnitee ”).
WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the “ Board ”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The bylaws of the Company (the “ Bylaws ”) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“ DGCL ”). The Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers of the Company and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity; Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he or she be so indemnified as herein provided; and

WHEREAS, Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by Sun Capital Partners, Inc. (“ Sun Capital ”) or affiliates of Sun Capital which Indemnitee and Sun Capital intend to be secondary to the primary obligation of the Company to indemnify Indemnitee and advance expenses as provided herein, with the Company’s acknowledgement and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve on the Board.
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director or officer from and after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee . The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings other than Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided , however , if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law,
 
2

as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 1(c) and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
2. Additional Indemnity . In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.
3. Contribution .
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not, without the Indemnitee’s prior written consent, enter into any such settlement of any action, suit or proceeding (in whole or in part) unless such settlement (i) provides for a full and final release of all claims asserted against Indemnitee and (ii) does not impose any Expense, judgment, fine, penalty or limitation on Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided , however , that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the
 
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relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding, and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
4. Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked to) respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
5. Advancement of Expenses . Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.
6. Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity
 
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that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (1) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum, (2) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (3) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company; provided , however , that if a Change in Control has occurred, the determination with respect to Indemnitee’s entitlement to indemnification shall be made by Independent Counsel. For purposes hereof, Disinterested Directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought by Indemnitee.
(c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section 6(c) . If a Change in Control has not occurred, the Independent Counsel shall be selected by the Board (including a vote of a majority of the Disinterested Directors if obtainable), and the Company shall give written notice to the Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within 10 days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided , however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If a Change in Control has occurred, the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and approved by the Board (which approval shall not be unreasonably withheld). If (i) an
 
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Independent Counsel is to make the determination of entitlement pursuant to this Section 6 , and (ii) within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the court or by such other Person as the court shall designate, and the Person with respect to whom all objections are so resolved or the Person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the Person making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f) If the Person empowered or selected under this Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not
 
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materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided , however , that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the Person making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided , further , that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g) Indemnitee shall cooperate with the Person making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such Person upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the Person making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
 
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7. Remedies of Indemnitee .
(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification, contribution or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Except as set forth herein, the provisions of Delaware law (without regard to its conflict-of-law rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b) . In any judicial proceeding or arbitration commenced pursuant to this Section 7 , Indemnitee shall be presumed to be entitled to indemnification under this Agreement and the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 6(b) of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 7 , Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 5 until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).
(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7 , seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.
 
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(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation .
(a) The rights of indemnification and to receive advancement of expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the certificate of incorporation of the Company (the “ Charter ”), the Bylaws, any agreement, a vote of stockholders, a resolution of directors or otherwise, of the Company. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company shall obtain and maintain in effect during the entire period for which the Company is obligated to indemnify Indemnitee under this Agreement, one or more policies of insurance with reputable insurance companies to provide the directors and officers of the Company with coverage for losses from wrongful acts and omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement. Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such officer or director under such policy or
 
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policies. In all such insurance policies, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and officers. At the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
(c) The Company hereby acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by Sun Capital and certain affiliates that, directly or indirectly, (i) are controlled by, (ii) control or (iii) are under common control with, Sun Capital (collectively, the “ Fund Indemnitors ”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Charter or Bylaws of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Section 8(c) .
(d) Except as provided in Section 8(c) above, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee (other than against the Fund Indemnitors), who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) Except as provided in Section 8(c) above, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) Except as provided in Section 8(c) above, the Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by
 
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any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
9. Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; provided, that the foregoing shall not affect the rights of Indemnitee or the Fund Indemnitors set forth in Section 8(c) above; or
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as hereinafter defined), or similar provisions of state statutory law or common law; or
(c) for reimbursement to the Company of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company in each case as required under the Exchange Act; or
(d) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Company has joined in or the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, or (iii) the Proceeding is one to enforce Indemnitee’s rights under this Agreement.
10. Non–Disclosure of Payments . Except as expressly required by the securities laws of the United States of America, neither party shall disclose any payments under this Agreement unless prior approval of the other party is obtained. If any payment information must be disclosed, the Company shall afford the Indemnitee an opportunity to review all such disclosures and, if requested, to explain in such statement any mitigating circumstances regarding the events to be reported.
11. Duration of Agreement . All agreements and obligations of the Company contained herein shall continue upon the later of (i) ten (10) years after the date that Indemnitee shall have ceased to serve as a director or officer of the Company or a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company, and (ii) one (1) year after the final termination of any Proceeding (including any rights of appeal thereto) in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 7 of this Agreement relating thereto (including any rights of
 
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appeal of any Section 7 Proceeding. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.
12. Security . To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.
13. Definitions . For purposes of this Agreement:
(a) “ Beneficial Owner ” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided , however , that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(b) “ Change in Control ” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party . Any Person (as defined below), other than Sun Capital and its affiliates and other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the Beneficial Owner (as defined above), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities;
(ii) Change in Board of Directors . During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Section 13(b)(i) , 13(b)(iii) or 13(b)(iv) ) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
 
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(iii) Corporate Transactions . The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; and
(iv) Liquidation . The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, or, if such approval is not required, the decision by the Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions.
(c) “ Corporate Status ” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company, any direct or indirect subsidiary of the Company, or of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise that such person is or was serving at the express written request of the Company.
(d) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) “ Enterprise ” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.
(g) “ Expenses ” shall include all reasonable court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. In addition, Expenses shall include the fees and expenses of counsel employed by the Indemnitee; provided that in no event shall the Company be liable for the fees and expenses of more than one counsel (in addition to any local counsel) for all Indemnitees in connection with any one action or separate but similar or related actions arising out of the same general allegations or
 
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circumstances; provided , however , that if any Indemnitee shall have reasonably concluded (based on the advice of counsel) that its representation by counsel for the Indemnitees creates a conflict of interest for such counsel, the Company shall be liable for the fees and expenses of a separate counsel for such Indemnitee. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(h) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) “ Person ” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided , however , that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(j) “ Proceeding ” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.
 
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14. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the fullest extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws.
15. Enforcement and Binding Effect .
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer or key employee of the Company.
(b) Without limiting any of the rights of Indemnitee under the Charter or Bylaws of the Company as they may be amended from time to time, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The indemnification and advancement of expenses provided by, or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise at the Company’s request, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(d) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(e) The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and
 
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difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not he precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the court, and the Company hereby waives any such requirement of such a bond or undertaking.
16. Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
17. Notice By Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.
18. Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:
(a) To Indemnitee at the address set forth below Indemnitee’s signature hereto.
(b) To the Company at:
Vince Holding Corp.
[ — ]
Attention: [Chief Executive Officer]
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
 
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19. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
20. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
21. Usage of Pronouns . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.
22. Governing Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict-of-laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) generally and unconditionally consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum. The foregoing consent to jurisdiction shall not constitute general consent to service of process in the state for any purpose except as provided above, and shall not be deemed to confer rights on any Person other than the parties to this Agreement.
[T HE R EMAINDER OF T HIS P AGE I S I NTENTIONALLY L EFT B LANK .]
 
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IN WITNESS WHEREOF , the parties hereto have executed this Agreement on and as of the day and year first written above.

VINCE HOLDING CORP.	
		
By:	 	 	
Name:	 		
Title:	 		
	
INDEMNITEE	

Name:	
	
Address:	

 	

S IGNATURE P AGE TO
I NDEMNIFICATION A GREEMENT

Exhibit 10.64
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “ Agreement ”) is made and entered into as of [            ], 2013 between Vince Holding Corp., a Delaware corporation (the “ Company ”), and [                    ] (“ Indemnitee ”).
WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the “ Board ”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The bylaws of the Company (the “ Bylaws ”) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“ DGCL ”). The Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers of the Company and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS, Indemnitee may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity; Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he or she be so indemnified as herein provided; and

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director or officer from and after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee . The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings other than Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided , however , if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 1(c) and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
 
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2. Additional Indemnity . In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful.
3. Contribution .
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not, without the Indemnitee’s prior written consent, enter into any such settlement of any action, suit or proceeding (in whole or in part) unless such settlement (i) provides for a full and final release of all claims asserted against Indemnitee and (ii) does not impose any Expense, judgment, fine, penalty or limitation on Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided , however , that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who
 
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are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding, and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
4. Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked to) respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
5. Advancement of Expenses . Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.
6. Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
 
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(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (1) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum, (2) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (3) if there are no Disinterested Directors, or if the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company; provided , however , that if a Change in Control has occurred, the determination with respect to Indemnitee’s entitlement to indemnification shall be made by Independent Counsel. For purposes hereof, Disinterested Directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought by Indemnitee.
(c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section 6(c) . If a Change in Control has not occurred, the Independent Counsel shall be selected by the Board (including a vote of a majority of the Disinterested Directors if obtainable), and the Company shall give written notice to the Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within 10 days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided , however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If a Change in Control has occurred, the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and approved by the Board (which approval shall not be unreasonably withheld). If (i) an Independent Counsel is to make the determination of entitlement pursuant to this Section 6 , and (ii) within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall
 
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have been made by Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the court or by such other Person as the court shall designate, and the Person with respect to whom all objections are so resolved or the Person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the Person making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f) If the Person empowered or selected under this Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided , however , that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the Person making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and
 
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provided , further , that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g) Indemnitee shall cooperate with the Person making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such Person upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the Person making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
7. Remedies of Indemnitee .
(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this
 
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Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification, contribution or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Except as set forth herein, the provisions of Delaware law (without regard to its conflict-of-law rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b) . In any judicial proceeding or arbitration commenced pursuant to this Section 7 , Indemnitee shall be presumed to be entitled to indemnification under this Agreement and the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 6(b) of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 7 , Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 5 until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).
(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7 , seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this
 
8

Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation .
(a) The rights of indemnification and to receive advancement of expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the certificate of incorporation of the Company (the “ Charter ”), the Bylaws, any agreement, a vote of stockholders, a resolution of directors or otherwise, of the Company. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Company shall obtain and maintain in effect during the entire period for which the Company is obligated to indemnify Indemnitee under this Agreement, one or more policies of insurance with reputable insurance companies to provide the directors and officers of the Company with coverage for losses from wrongful acts and omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement. Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such officer or director under such policy or policies. In all such insurance policies, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and officers. At the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in
 
9

the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
9. Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as hereinafter defined), or similar provisions of state statutory law or common law; or
(c) for reimbursement to the Company of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company in each case as required under the Exchange Act; or
(d) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Company has joined in or the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, or (iii) the Proceeding is one to enforce Indemnitee’s rights under this Agreement.
10. Non–Disclosure of Payments . Except as expressly required by the securities laws of the United States of America, neither party shall disclose any payments under this Agreement unless prior approval of the other party is obtained. If any payment information must be disclosed, the Company shall afford the Indemnitee an opportunity to review all such disclosures and, if requested, to explain in such statement any mitigating circumstances regarding the events to be reported.
11. Duration of Agreement . All agreements and obligations of the Company contained herein shall continue upon the later of (i) ten (10) years after the date that Indemnitee shall have ceased to serve as a director or officer of the Company or a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company, and (ii) one (1) year after the final termination of any Proceeding (including any rights of appeal thereto) in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 7 of this Agreement relating thereto (including any rights of appeal of any Section 7 Proceeding. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any
 
10

direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.
12. Security . To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.
13. Definitions . For purposes of this Agreement:
(a) “ Beneficial Owner ” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided , however , that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.
(b) “ Change in Control ” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party . Any Person (as defined below), other than Sun Capital Partners, Inc. and its affiliates and other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the Beneficial Owner (as defined above), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities;
(ii) Change in Board of Directors . During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Section 13(b)(i) , 13(b)(iii) or 13(b)(iv) ) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
(iii) Corporate Transactions . The effective date of a merger or consolidation of the Company with any other entity,
 
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other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; and
(iv) Liquidation . The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, or, if such approval is not required, the decision by the Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions.
(c) “ Corporate Status ” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company, any direct or indirect subsidiary of the Company, or of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise that such person is or was serving at the express written request of the Company.
(d) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(e) “ Enterprise ” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.
(f) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.
(g) “ Expenses ” shall include all reasonable court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. In addition, Expenses shall include the fees and expenses of counsel employed by the Indemnitee; provided that in no event shall the Company be liable for the fees and expenses of more than one counsel (in addition to any local counsel) for all Indemnitees in connection with any one action or separate but similar or related actions arising out of the same general allegations or circumstances; provided , however , that if any Indemnitee shall have reasonably concluded (based on the advice of counsel) that its representation by counsel for the Indemnitees creates a
 
12

conflict of interest for such counsel, the Company shall be liable for the fees and expenses of a separate counsel for such Indemnitee. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(h) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) “ Person ” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided , however , that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(j) “ Proceeding ” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.
14. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation,
 
13

each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the fullest extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws.
15. Enforcement and Binding Effect .
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer or key employee of the Company.
(b) Without limiting any of the rights of Indemnitee under the Charter or Bylaws of the Company as they may be amended from time to time, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The indemnification and advancement of expenses provided by, or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise at the Company’s request, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(d) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(e) The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual
 
14

damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not he precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the court, and the Company hereby waives any such requirement of such a bond or undertaking.
16. Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
17. Notice By Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.
18. Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:
(a) To Indemnitee at the address set forth below Indemnitee’s signature hereto.
(b) To the Company at:
Vince Holding Corp.
[ — ]
Attention: [Chief Executive Officer]
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
19. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
 
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20. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
21. Usage of Pronouns . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.
22. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict-of-laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) generally and unconditionally consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum. The foregoing consent to jurisdiction shall not constitute general consent to service of process in the state for any purpose except as provided above, and shall not be deemed to confer rights on any Person other than the parties to this Agreement.
[T HE R EMAINDER OF T HIS P AGE I S I NTENTIONALLY L EFT B LANK .]
 
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IN WITNESS WHEREOF , the parties hereto have executed this Agreement on and as of the day and year first written above.

VINCE HOLDING CORP.	
		
By:	 	 	
Name:	 		
Title:	 		
	
INDEMNITEE	

Name:	 		
		
Address:	 		

 	

S IGNATURE P AGE TO
I NDEMNIFICATION A GREEMENT

Exhibit 10.65
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of [    ], 2013 (this “ Escrow Agreement ”), is by and among Vince Intermediate Holding, LLC, a Delaware limited liability company (“ Vince ”), Kellwood Company, LLC, a Delaware limited liability company (formerly known as Kellwood Company, “ Kellwood ”), and U.S. Bank National Association , a national banking association, as Escrow Agent hereunder (“ Escrow Agent ”).
BACKGROUND
A. In anticipation of the initial public offering (the “ IPO ”) of Vince Holding Corp., a Delaware corporation (formerly known as Apparel Holding Corp., the “ Issuer ”) and Vince’s direct parent company, Kellwood has commenced a tender offer (the “ Tender Offer ”) to purchase all of its 7.625% Debentures due 2017 (the “ 7.625% Notes ”);
B. the IPO was consummated on the date hereof and in connection therewith: (i) the Issuer transferred the net proceeds from the IPO to Vince; (ii) using such proceeds, along with borrowings under its new term loan facility, Vince repaid the $[        ] million promissory note, dated as of the date hereof (the “ Kellwood Note Receivable ”), to Kellwood; (iii) in accordance with the terms of that certain Transfer Agreement, dated as of the date hereof (the “ Transfer Agreement ”), by and between Vince and Kellwood, (A) Kellwood used a portion of such proceeds from the repayment of the Kellwood Note Receivable to repay, repurchase or discharge certain of its indebtedness; and (B) Kellwood intends to use up to $[        ] of such proceeds to repurchase the 2017 Notes in the Tender Offer (the “ Escrow Funds ”);
C. the Escrow Funds represent an amount equal to the face value of the 7.625% Notes issued and outstanding on the date hereof plus accrued and unpaid interest thereon through [            ], 2013, which is the anticipated closing date of the Tender Offer, and are to be held solely for the benefit of Kellwood;
D. Escrow Agent has agreed to accept, hold, and disburse the funds deposited with it and the earnings thereon in accordance with the terms of this Escrow Agreement;
E. Vince and Kellwood have agreed to appoint the Representatives (as defined below) to represent them for all purposes in connection with the funds to be deposited with the Escrow Agent and this Escrow Agreement; and

F. in order to establish the escrow of funds and to affect the provisions of the Transfer Agreement and other agreements made by Kellwood and Vince in connection with the IPO, the parties hereto have entered into this Escrow Agreement.
STATEMENT OF AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
1. Definitions . The following terms shall have the following meanings when used herein:
“ Escrow Funds ” shall mean the funds deposited with Escrow Agent pursuant to Section 3 of this Agreement, together with any interest and other income thereon.
“ Escrow Period ” shall mean the period commencing on the date hereof and ending on the applicable termination date set forth on Schedule A hereto.
“ Joint Written Direction ” shall mean a written direction executed by the Representatives and directing Escrow Agent to disburse all or a portion of the Escrow Funds or to take or refrain from taking an action pursuant to this Escrow Agreement.
“ Kellwood Representative ” shall mean the persons so designated on Schedule A hereto or any other person designated in a writing signed by Kellwood and delivered to Escrow Agent and any Vince Representative in accordance with the notice provisions of this Escrow Agreement, to act as its representative under this Escrow Agreement.
“ Representatives ” shall mean the Kellwood Representatives and the Vince Representatives. Unless the context otherwise requires, references in this Escrow Agreement to “the Representatives” shall refer to one of each of the Kellwood Representatives and the Vince Representatives.
“ Vince Representative ” shall mean the persons so designated on Schedule A hereto or any other person designated in a writing signed by Vince and delivered to Escrow Agent and any Kellwood Representative in accordance with the notice provisions of this Escrow Agreement, to act as its representative under this Escrow Agreement.
2. Appointment of and Acceptance by Escrow Agent . Vince and Kellwood hereby appoint Escrow Agent to serve as escrow agent hereunder. Escrow Agent hereby accepts such appointment and, upon receipt by wire transfer of the Escrow Funds in accordance with Section 3 below, agrees to hold, invest and disburse the Escrow Funds in accordance with this Escrow Agreement.
 
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3. Deposit of Escrow Funds. Simultaneously with the execution and delivery of this Escrow Agreement, Kellwood will transfer the Escrow Funds in the amount set forth on Schedule A hereto to Escrow Agent, by wire transfer of immediately available funds, to the account of the Escrow Agent referenced on Schedule A hereto.
4. Disbursements of Escrow Funds . Escrow Agent shall disburse Escrow Funds at any time and from time to time, upon receipt of, and in accordance with, a Joint Written Direction. Such Joint Written Direction shall contain wiring instructions or an address to which a check shall be sent. Upon the expiration of the Escrow Period, Escrow Agent shall distribute, as promptly as practicable, the Escrow Funds in the manner described on Schedule A , without any further instruction or direction from the Representatives.
All disbursements of funds from the Escrow Funds shall be subject to the fees and claims of Escrow Agent and the Indemnified Parties (as defined below) pursuant to Section 10 and Section 11 below.
5. Suspension of Performance; Disbursement Into Court . If, at any time, (i) there shall exist any dispute between Vince, Kellwood or the Representatives with respect to the holding or disposition of all or any portion of the Escrow Funds or any other obligations of Escrow Agent hereunder, (ii) Escrow Agent is unable to determine, to Escrow Agent’s sole satisfaction, the proper disposition of all or any portion of the Escrow Funds or Escrow Agent’s proper actions with respect to its obligations hereunder, or (iii) the Representatives have not within 30 days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 7 hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent may, in its sole discretion, take either or both of the following actions:
a. suspend the performance of any of its obligations (including without limitation any disbursement obligations) under this Escrow Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow Agent shall have been appointed (as the case may be).
b. petition (by means of an interpleader action or any other appropriate method) any court of competent jurisdiction in any venue convenient to Escrow Agent, for instructions with respect to such dispute or uncertainty, and to the extent required or permitted by law, pay into such court, for holding and disposition in accordance with the instructions of such court, all Escrow Funds, after deduction and payment to Escrow Agent of all fees and expenses (including court costs and attorneys’ fees) payable to, incurred by, or expected to be incurred by Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder.
 
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Escrow Agent shall have no liability to Vince, Kellwood, their respective stockholders or members or any other person with respect to any such suspension of performance or disbursement into court, specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of the Escrow Funds or any delay in or with respect to any other action required or requested of Escrow Agent.
6. Investment of Funds. The Escrow Agent is herein directed and instructed to initially invest and reinvest the Escrow Funds in the investment indicated on Schedule B hereto. With the execution of this document, the parties hereto acknowledge receipt of prospectuses and/or disclosure materials associated with the investment vehicle, either through means of hardcopy or via access to the website associated with the investment selected by the parties to this Escrow Agreement. Vince and Kellwood may provide instructions changing the investment of the Escrow Funds (subject to applicable minimum investment requirements) by furnishing a Joint Written Direction to the Escrow Agent; provided, however, that such investments are consistent with the Escrow Agent’s investment criteria and that no investment or reinvestment may be made except in the following:
[TO COME]
If Escrow Agent has not received joint written instructions at any time that an investment decision must be made, Escrow Agent shall invest the Escrow Funds, or such portion thereof as to which no joint written instructions have been received, in U.S. Bank Money Market Deposit Account, as identified on Schedule B, and described in clause (c) above. Each of the foregoing investments shall be made in the name of Escrow Agent. Notwithstanding anything to the contrary contained herein, Escrow Agent may, without notice to the Representatives, sell or liquidate any of the foregoing investments at any time if the proceeds thereof are required for any disbursement of Escrow Funds permitted or required hereunder. All investment earnings shall
 
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become part of the Escrow Funds and investment losses shall be charged against the Escrow Funds. Escrow Agent shall not be liable or responsible for loss in the value of any investment made pursuant to this Escrow Agreement, or for any loss, cost or penalty resulting from any sale or liquidation of the Escrow Funds. With respect to any Escrow Funds received by Escrow Agent after ten o’clock, New York City time, Escrow Agent shall not be required to invest such funds or to effect any investment instruction until the next day upon which the Escrow Agent is open for business.
All entities entitled to receive interest on the Escrow Funds shall provide Escrow Agent with a W-9 or W-8 IRS tax form prior to the disbursement of interest and Escrow Agent will file the appropriate 1099 or 1042-S forms, whichever are applicable. A statement of citizenship will be provided if requested by Escrow Agent.
7. Resignation of Escrow Agent . Escrow Agent may resign and be discharged from the performance of its duties hereunder at any time by giving ten (10) days prior written notice to Vince and Kellwood specifying a date when such resignation shall take effect. Upon any such notice of resignation, the Representatives jointly shall appoint a successor Escrow Agent hereunder prior to the effective date of such resignation. The retiring Escrow Agent shall transmit all records pertaining to the Escrow Funds and shall pay all Escrow Funds to the successor Escrow Agent, after making copies of such records as the retiring Escrow Agent deems advisable and after deduction and payment to the retiring Escrow Agent of all fees and expenses (including court costs and attorneys’ fees) payable to, incurred by, or expected to be incurred by the retiring Escrow Agent in connection with the performance of its duties and the exercise of its rights hereunder. After any retiring Escrow Agent’s resignation, the provisions of this Escrow Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Escrow Agent under this Escrow Agreement. Any corporation or association into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all of the escrow business of the Escrow Agent’s corporate trust line of business may be transferred, shall be the Escrow Agent under this Escrow Agreement without further act.
8. Liability of Escrow Agent . The Escrow Agent undertakes to perform only such duties as are expressly set forth herein and no duties shall be implied. The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement other than this Escrow Agreement. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of any loss to Vince or Kellwood. Escrow Agent’s sole responsibility shall be for the safekeeping and disbursement of the Escrow Funds in accordance with the terms of this Escrow Agreement. Escrow Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein. Escrow Agent may rely upon any notice, instruction, request or other instrument, not only as to its due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein, which Escrow Agent shall believe to be genuine and to have been signed or presented by the person or parties purporting to sign the same. In
 
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no event shall Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages (including, but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. Escrow Agent shall not be obligated to take any legal action or commence any proceeding in connection with the Escrow Funds, any account in which Escrow Funds are deposited, this Escrow Agreement or the Underlying Agreement, or to appear in, prosecute or defend any such legal action or proceeding. Escrow Agent shall not be responsible or liable in any manner for the performance by any party of their respective obligations under the Underlying Agreement nor shall Escrow Agent be responsible or liable in any manner for the failure of any party to honor any of the provisions of this Escrow Agreement. Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, or relating to any dispute involving any party hereto, and shall incur no liability and shall be fully indemnified from any liability whatsoever in acting in accordance with the opinion or instruction of such counsel. Vince and Kellwood, jointly and severally, shall promptly pay, upon demand, the reasonable fees and expenses of any such counsel.
The Escrow Agent is authorized, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Escrow Funds, without determination by the Escrow Agent of such court’s jurisdiction in the matter. If any portion of the Escrow Funds is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised in writing by outside legal counsel selected by it is binding upon it without the need for appeal or other action; and if the Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.
9. Indemnification of Escrow Agent . From and at all times after the date of this Escrow Agreement, Vince and Kellwood, jointly and severally, shall, to the fullest extent permitted by law, defend, indemnify and hold harmless Escrow Agent and each director, officer, employee, attorney, agent and affiliate of Escrow Agent (collectively, the “ Indemnified Parties ”) against any and all actions, claims (whether or not valid), losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable attorneys’ fees, costs and expenses) incurred by or asserted against any of the Indemnified Parties from and after the date hereof, whether direct, indirect or consequential, as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including without limitation Vince or Kellwood, whether threatened or initiated, asserting a claim for any legal or equitable remedy against any person under any statute or regulation, including, but not limited to, any federal or state securities laws, or under any common law or equitable cause
 
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or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Escrow Agreement or any transactions contemplated herein, whether or not any such Indemnified Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however , that no Indemnified Party shall have the right to be indemnified hereunder for any liability finally determined by a court of competent jurisdiction, subject to no further appeal, to have resulted solely from the gross negligence or willful misconduct of such Indemnified Party. Each Indemnified Party shall, in its sole discretion, have the right to select and employ separate counsel with respect to any action or claim brought or asserted against it, and the reasonable fees of such counsel shall be paid upon demand by Vince and Kellwood jointly and severally. The obligations of Vince and Kellwood under this Section 9 shall survive any termination of this Escrow Agreement and the resignation or removal of Escrow Agent.
The parties agree that neither the payment by Vince or Kellwood of any claim by Escrow Agent for indemnification hereunder nor the disbursement of any amounts to Escrow Agent from the Escrow Funds in respect of a claim by Escrow Agent for indemnification shall impair, limit, modify, or affect, as between Vince and Kellwood, the respective rights and obligations of Vince, on the one hand, and Kellwood, on the other hand, under the Transfer Agreement.
10. Compensation to Escrow Agent .
a. Fees and Expenses . Kellwood shall compensate Escrow Agent for its services hereunder in accordance with Schedule A attached hereto and, in addition, shall reimburse Escrow Agent for all of its reasonable out-of-pocket expenses, including attorneys’ fees, travel expenses, telephone and facsimile transmission costs, postage (including express mail and overnight delivery charges), copying charges and the like. The additional provisions and information set forth on Schedule A are hereby incorporated by this reference, and form a part of this Escrow Agreement. All of the compensation and reimbursement obligations set forth in this Section 10 shall be payable by Kellwood upon demand by Escrow Agent. The obligations of Kellwood under this Section 10 shall survive any termination of this Escrow Agreement and the resignation or removal of Escrow Agent.
b. Disbursements from Escrow Funds to Pay Escrow Agent . The Escrow Agent is authorized to, and may, disburse to itself from the Escrow Funds, from time to time, the amount of any compensation and reimbursement of out-of-pocket expenses due and payable hereunder (including any amount to which Escrow Agent is entitled to seek indemnification pursuant to Section 9 hereof). Escrow Agent shall notify the Representatives of any disbursement from the Escrow Funds to itself in respect of any compensation or reimbursement hereunder and shall furnish to the Representatives copies of all related invoices and other statements.
c. Security and Offset . Vince, Kellwood and the Representatives hereby grant to Escrow Agent and the Indemnified Parties a security interest in and lien upon the Escrow Funds to secure all obligations hereunder, and Escrow Agent and the Indemnified Parties shall have the right to offset the amount of any compensation or reimbursement due any of them hereunder (including
 
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any claim for indemnification pursuant to Section 9 hereof) against the Escrow Funds. If for any reason the Escrow Funds available to Escrow Agent and the Indemnified Parties pursuant to such security interest or right of offset are insufficient to cover such compensation and reimbursement, Vince and Kellwood shall promptly pay such amounts to Escrow Agent and the Indemnified Parties upon receipt of an itemized invoice.
11. Representations and Warranties; Legal Opinions . Each of Vince and Kellwood respectively makes the following representations and warranties to Escrow Agent as of the date hereof:
(i) It has full legal right, power and authority to enter into and perform all of its respective obligations under this Escrow Agreement.
(b) The execution, delivery and performance of this Escrow Agreement is in accordance with the terms of the Transfer Agreement, and the consummation of the transactions contemplated hereby do not and will not violate, conflict with or cause a default under any other agreement to which it is a party.
(c) This Escrow Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding agreement, enforceable against it in accordance with the terms hereof, subject to the due authorization, execution and delivery of this Agreement by the other parties hereto and except as may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws affecting creditors’ rights generally and limitations on the availability of equitable remedies.
12. IMPORTANT INFORMATION FOR OPENING AN ACCOUNT .
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
For a non-individual person such as a business entity, a charity, a Trust, or other legal entity, we ask for documentation to verify its formation and existence as a legal entity. We may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.
Vince and Kellwood acknowledge that a portion of the identifying information set forth on Schedule A is being requested by the Escrow Agent in connection with the USA Patriot Act, Pub.L.107-56 (the “ Act ”), and Vince and Kellwood agree to provide any additional information reasonably requested by the Escrow Agent in connection with the Act or any similar legislation or regulation to which Escrow Agent is subject, in a timely manner. Vince and Kellwood each represent that all identifying information set forth on Schedule A , including without limitation, its Taxpayer
 
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Identification Number assigned by the Internal Revenue Service or any other taxing authority, is true and complete on the date hereof and will be true and complete at the time of any disbursement of the Escrow Funds (after giving effect to any updated Taxpayer Identification Number provided by any Representative on behalf of Kellwood or Vince, as applicable, and in accordance with Section 14.
14. Notice . All notices, approvals, consents, requests, and other communications hereunder shall be in writing and shall be deemed to have been given when the writing is delivered if given or delivered by hand, overnight delivery service, facsimile transmitter (with confirmed receipt) or other electronic transmission to the address, facsimile number or email address set forth on Schedule A hereto, or to such other address as each party may designate for itself by like notice, and shall be deemed to have been given on the date deposited in the mail, if mailed, by first-class, registered or certified mail, postage prepaid, addressed as set forth on Schedule A hereto, or to such other address as each party may designate for itself by like notice.
15. Amendment or Waiver . This Escrow Agreement may be changed, waived, discharged or terminated only by a writing signed by the Representatives and Escrow Agent. No delay or omission by any party in exercising any right with respect hereto shall operate as a waiver. A waiver on any one occasion shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion.
16. Severability . To the extent any provision of this Escrow Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Escrow Agreement.
17. Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Escrow Agreement shall be governed by the internal Law of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware.
18. Entire Agreement . This Escrow Agreement constitutes the entire agreement between the parties relating to the holding, investment and disbursement of the Escrow Funds and sets forth in their entirety the obligations and duties of the Escrow Agent with respect to the Escrow Funds.
19. Binding Effect . All of the terms of this Escrow Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of Vince, Kellwood and Escrow Agent.
 
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20. Execution in Counterparts . This Escrow Agreement and any Joint Written Direction may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement or direction. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.
21. Termination. Upon the first to occur of the termination of the Escrow Period, the disbursement of all amounts in the Escrow Funds pursuant to Joint Written Directions or the disbursement of all amounts in the Escrow Funds into court pursuant to Section 5 or Section 8 hereof, this Escrow Agreement shall terminate , Escrow Agent shall be released from its obligations hereunder and Escrow Agent shall have no further liability with respect to the Escrow Funds, this Escrow Agreement, or any action or refusal to take action hereunder, to Vince and Kellwood, their respective stockholders or members, the Representatives, or any other person.
22. Dealings . The Escrow Agent and any stockholder, director, officer or employee of the Escrow Agent may buy, sell, and deal in any of the securities of Vince or Kellwood and become financially interested in any transaction in which Vince or Kellwood may be interested, and contract and lend money to Vince or Kellwood and otherwise act as fully and freely as though it were not Escrow Agent under this Escrow Agreement. Nothing herein shall preclude the Escrow Agent from acting in any other capacity for Vince or Kellwood or for any other entity.
23. Brokerage Confirmations . The parties acknowledge that to the extent regulations of the Comptroller of Currency or other applicable regulatory entity grant a right to receive brokerage confirmations of security transactions of the escrow, the parties waive receipt of such confirmations, to the extent permitted by law. The Escrow Agent shall furnish a statement of security transactions on its regular monthly reports.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed as of the date first above written.

VINCE INTERMEDIATE HOLDING, LLC	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
KELLWOOD COMPANY, LLC	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
	
U.S. BANK NATIONAL ASSOCIATION
as Escrow Agent	
		
By:	 	 	
Name:	 	 	
Title:	 	 	
[Signature Page to Escrow Agreement]

SCHEDULE A

1.	  	Escrow Funds .	  		
			
	  	Escrow Funds amount:	  	$	
			
2.	  	Escrow Account .	  		
		
	  	U.S. Bank National Association	
	  	[ABA#	
	  	ATTN:	
	  	Re: [Account Name, #]]	  		
			
3.	  	Escrow Agent Fees .	  		
			
	  	Acceptance Fee:	  	$             	
	  	Annual Escrow Fee:	  	$	
	  	Out-of-Pocket Expenses:	  	$	
	  	[Transactional Costs]:	  	$	
	  	[Other Fees/Attorney, etc.]:	  	$	
			
	  	Extraordinary Services Fees	  	Billed at market hourly rates	
			
	  	        TOTAL	  	$	
The Acceptance Fee and the Annual Escrow Fee are payable upon execution of the escrow documents. In the event the escrow is not funded, the Acceptance Fee and all related expenses, including attorneys’ fees, remain due and payable, and if paid, will not be refunded. Annual fees cover a full year in advance, or any part thereof, and thus are not pro-rated in the year of termination.
The fees quoted in this schedule apply to services ordinarily rendered in the administration of an Escrow Account and are subject to reasonable adjustment based on final review of documents, or when the Escrow Agent is called upon to undertake unusual duties or responsibilities, or as changes in law, procedures, or the cost of doing business demand. Services in addition to and not contemplated in this Escrow Agreement, including, but not limited to, document amendments and revisions, non-standard cash and/or investment transactions, calculations, notices and reports, and legal fees, will be billed as extraordinary services fees.
Unless otherwise indicated, the above fees relate to the establishment of one escrow account. Additional sub-accounts governed by the same Escrow Agreement may incur an additional charge. Transaction costs include charges for wire transfers, checks, internal transfers and securities transactions.

3.	  	Taxpayer Identification Numbers .	  		  		
					
	  	Vince:	  	 	  		  		
					
	  	Kellwood:            	  	 	  		  		
 
A-1

4.	Termination and Disbursement . Unless earlier terminated by the provisions of the Escrow Agreement, the Escrow Period will terminate on the first to occur of (i) the closing of the Tender Offer and (iii) [            ], 2014. Any Escrow Funds remaining on such date shall be distributed 100% to Kellwood without further instruction from either Kellwood or Vince.	
 
5.	Investment Instructions	
List specific investment instructions on Schedule B.
 
6.	Representatives .	
Each of the following persons is hereby designated and appointed as a Vince Representative under the Escrow Agreement:

 	 		 	 	
Kevin Kelly	 		 	Specimen signature	

Jay Dubiner	 		 	Specimen signature	
Each of the following persons is hereby designated and appointed as a Kellwood Representative under the Escrow Agreement:

 	 		 	 	
Brandi Wilson	 		 	Specimen signature	

Keith Grypp	 		 	Specimen signature	
 
7.	Representative Information . The following information should be provided to Escrow Agent separately by each Representative and any future Representative:	
 
 	1.	Date of Birth	
 	2.	Address	
 	3.	Mailing Address, if different	
 	4.	Social Security Number	
 
A-2

8.	Notice Addresses .	

If to Vince at:	  	Vince Intermediate Holding, LLC	
	  	1441 Broadway—6th Floor	
	  	New York, New York 10018	
	  	ATTN: Jay Dubiner	
	  	Facsimile: [                            ]	
	  	Telephone: (212) 515-2650	
	  	E-mail: Jdubiner@vince.com	
		
If to Kellwood at:	  	Kellwood Company, LLC	
	  	600 Kellwood Parkway	
	  	St. Louis, Missouri 63017	
	  	ATTN: Keith Grypp	
	  	Facsimile: (314) 576-3388	
	  	Telephone: (314) 576-3425	
	  	E-mail: keith.grypp@kellwood.com	
			
If to the Escrow	  		  		
Agent at:	  	U.S. Bank National Association, as Escrow Agent	

							
	  	ATTENTION:	  	 	  		
							
	  	Facsimile:	  	 	  		
 
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SCHEDULE B
[INVESTMENT DIRECTION]
 
A-4

Exhibit 10.66
Privileged & Confidential
VINCE HOLDING CORP.

2013 OMNIBUS INCENTIVE PLAN

ARTICLE I
PURPOSE
The purpose of this Vince Holding Corp. 2013 Omnibus Incentive Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer Eligible Individuals cash and stock-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders. The Plan is effective as of the date set forth in Article XV.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms shall have the following meanings:
2.1 “ Affiliate ” means each of the following: (a) any Subsidiary; (b) any Parent; (c) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its Affiliates; (d) any trade or business (including, without limitation, a partnership or limited liability company) which directly or indirectly controls 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) of the Company; and (e) any other entity in which the Company or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Committee; provided that, unless otherwise determined by the Committee, the Common Stock subject to any Award constitutes “service recipient stock” for purposes of Section 409A of the Code or otherwise does not subject the Award to Section 409A of the Code.
2.2 “ Award ” means any award under the Plan of any Stock Option, Stock Appreciation Right, Restricted Stock, Performance Award, Other Stock-Based Award or Other Cash-Based Award. All Awards shall be granted by, confirmed by, and subject to the terms of, a written agreement executed by the Company and the Participant.
2.3 “ Award Agreement ” means the written or electronic agreement setting forth the terms and conditions applicable to an Award.
2.4 “ Board ” means the Board of Directors of the Company.
2.5 “ Cause ” means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination of Employment or Termination of Consultancy, the following: (a) in the case where there is no employment agreement, consulting

agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define “cause” (or words of like import)), termination due to a Participant’s insubordination, dishonesty, fraud, incompetence, moral turpitude, willful misconduct, refusal to perform the Participant’s duties or responsibilities for any reason other than illness or incapacity or materially unsatisfactory performance of the Participant’s duties for the Company or an Affiliate, as determined by the Committee in its good faith discretion; or (b) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreement under which the definition of “cause” only applies on occurrence of a change in control, such definition of “cause” shall not apply until a change in control actually takes place and then only with regard to a termination thereafter. With respect to a Participant’s Termination of Directorship, “cause” means an act or failure to act that constitutes cause for removal of a director under applicable Delaware law.
2.6 “ Change in Control ” has the meaning set forth in 11.2.
2.7 “ Change in Control Price ” has the meaning set forth in Section 11.1.
2.8 “ Code ” means the Internal Revenue Code of 1986, as amended. Any reference to any section of the Code shall also be a reference to any successor provision and any treasury regulation promulgated thereunder.
2.9 “ Committee ” means any committee of the Board duly authorized by the Board to administer the Plan. If no committee is duly authorized by the Board to administer the Plan, the term “Committee” shall be deemed to refer to the Board for all purposes under the Plan.
2.10 “ Common Stock ” means the common stock, $0.01 par value per share, of the Company.
2.11 “ Company ” means Vince Holding Corp., a Delaware corporation, and its successors by operation of law.
2.12 “ Consultant ” means any natural person or entity who is an advisor or consultant to the Company or its Affiliates.
2.13 “ Disability ” means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination, a permanent and total disability as defined in Section 22(e)(3) of the Code. A Disability shall only be deemed to occur at the time of the determination by the Committee of the Disability. Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.
2.14 “ Effective Date ” means the effective date of the Plan as defined in Article XV.
2.15 “ Eligible Employees ” means each employee of the Company or an Affiliate.
 
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2.16 “ Eligible Individual ” means an Eligible Employee, Non-Employee Director or Consultant who is designated by the Committee in its discretion as eligible to receive Awards subject to the conditions set forth herein.
2.17 “ Exchange Act ” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of the Exchange Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.18 “ Fair Market Value ” means, for purposes of the Plan, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, as of any date and except as provided below, the last sales price reported for the Common Stock on the applicable date: (a) as reported on the principal national securities exchange in the United States on which it is then traded or (b) if the Common Stock is not traded, listed or otherwise reported or quoted, the Committee shall determine in good faith the Fair Market Value in whatever manner it considers appropriate taking into account the requirements of Section 409A of the Code. For purposes of any Award granted in connection with the Registration Date, the Fair Market value shall be the price as determined by the Committee. For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Committee or, if not a day on which the applicable market is open, the next day that it is open.
2.19 “ Family Member ” means “family member” as defined in Section A.1.(a)(5) of the general instructions of Form S-8.
2.20 “ Incentive Stock Option ” means any Stock Option awarded to an Eligible Employee of the Company, its Subsidiaries and its Parents (if any) under the Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.
2.21 “ Lead Underwriter ” has the meaning set forth in Section 14.20.
2.22 “ Lock-Up Period ” has the meaning set forth in Section 14.20.
2.23 “ Non-Employee Director ” means a director or a member of the Board or the board of directors of any Affiliate who is not an active employee of the Company or any Affiliate.
2.24 “ Non-Qualified Stock Option ” means any Stock Option awarded under the Plan that is not an Incentive Stock Option.
2.25 “ Non-Tandem Stock Appreciation Right ” shall mean the right to receive an amount in cash and/or stock equal to the difference between (x) the Fair Market Value of a share of Common Stock on the date such right is exercised, and (y) the aggregate exercise price of such right, otherwise than on surrender of a Stock Option.
2.26 “ Other Cash-Based Award ” means an Award granted pursuant to Section 10.3 of the Plan and payable in cash at such time or times and subject to such terms and conditions as determined by the Committee in its sole discretion.
 
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2.27 “ Other Stock-Based Award ” means an Award under Article X of the Plan that is valued in whole or in part by reference to, or is payable in or otherwise based on, Common Stock, including, without limitation, an Award valued by reference to an Affiliate.
2.28 “ Parent ” means any parent corporation of the Company within the meaning of Section 424(e) of the Code.
2.29 “ Participant ” means an Eligible Individual to whom an Award has been granted pursuant to the Plan.
2.30 “ Performance Award ” means an Award granted to a Participant pursuant to Article IX hereof contingent upon achieving certain Performance Goals.
2.31 “ Performance Goals ” means goals established by the Committee as contingencies for Awards to vest and/or become exercisable or distributable based on one or more of the performance goals set forth in Exhibit A hereto.
2.32 “ Performance Period ” means the designated period during which the Performance Goals must be satisfied with respect to the Award to which the Performance Goals relate.
2.33 “ Plan ” means this Vince Holding Corp. 2013 Omnibus Incentive Plan, as amended from time to time.
2.34 “ Proceeding ” has the meaning set forth in Section 14.9.
2.35 “ Reference Stock Option ” has the meaning set forth in Section 7.1.
2.36 “ Registration Date ” means the date on which the Company sells its Common Stock in a bona fide, firm commitment underwriting pursuant to a registration statement under the Securities Act.
2.37 “ Reorganization ” has the meaning set forth in Section 4.2(b)(ii).
2.38 “ Restricted Stock ” means an Award of shares of Common Stock under the Plan that is subject to restrictions under Article VIII.
2.39 “ Restriction Period ” has the meaning set forth in Section 8.3(a) with respect to Restricted Stock.
2.40 “ Rule 16b-3 ” means Rule 16b-3 under Section 16(b) of the Exchange Act as then in effect or any successor provision.
2.41 “ Section 162(m) of the Code ” means the exception for performance-based compensation under Section 162(m) of the Code and any applicable treasury regulations thereunder.
 
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2.42 “ Section 409A of the Code ” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable treasury regulations and other official guidance thereunder.
2.43 “ Securities Act ” means the Securities Act of 1933, as amended and all rules and regulations promulgated thereunder. Reference to a specific section of the Securities Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.44 “ Stock Appreciation Right ” shall mean the right pursuant to an Award granted under Article VII.
2.45 “ Stock Option ” or “ Option ” means any option to purchase shares of Common Stock granted to Eligible Individuals pursuant to Article VI.
2.46 “ Subsidiary ” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.
2.47 “ Tandem Stock Appreciation Right ” shall mean the right to surrender to the Company all (or a portion) of a Stock Option in exchange for an amount in cash and/or stock equal to the difference between (i) the Fair Market Value on the date such Stock Option (or such portion thereof) is surrendered, of the Common Stock covered by such Stock Option (or such portion thereof), and (ii) the aggregate exercise price of such Stock Option (or such portion thereof).
2.48 “ Ten Percent Stockholder ” means a person owning stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, its Subsidiaries or its Parent.
2.49 “ Termination ” means a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.
2.50 “ Termination of Consultancy ” means: (a) that the Consultant is no longer acting as a consultant to the Company or an Affiliate; or (b) when an entity which is retaining a Participant as a Consultant ceases to be an Affiliate unless the Participant otherwise is, or thereupon becomes, a Consultant to the Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that a Consultant becomes an Eligible Employee or a Non-Employee Director upon the termination of such Consultant’s consultancy, unless otherwise determined by the Committee, in its sole discretion, no Termination of Consultancy shall be deemed to occur until such time as such Consultant is no longer a Consultant, an Eligible Employee or a Non-Employee Director. Notwithstanding the foregoing, the Committee may otherwise define Termination of Consultancy in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Consultancy thereafter, provided that any such change to the definition of the term “Termination of Consultancy” does not subject the applicable Award to Section 409A of the Code.
 
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2.51 “ Termination of Directorship ” means that the Non-Employee Director has ceased to be a director of the Company; except that if a Non-Employee Director becomes an Eligible Employee or a Consultant upon the termination of such Non-Employee Director’s directorship, such Non-Employee Director’s ceasing to be a director of the Company shall not be treated as a Termination of Directorship unless and until the Participant has a Termination of Employment or Termination of Consultancy, as the case may be.
2.52 “ Termination of Employment ” means: (a) a termination of employment (for reasons other than a military or personal leave of absence granted by the Company) of a Participant from the Company and its Affiliates; or (b) when an entity which is employing a Participant ceases to be an Affiliate, unless the Participant otherwise is, or thereupon becomes, employed by the Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that an Eligible Employee becomes a Consultant or a Non-Employee Director upon the termination of such Eligible Employee’s employment, unless otherwise determined by the Committee, in its sole discretion, no Termination of Employment shall be deemed to occur until such time as such Eligible Employee is no longer an Eligible Employee, a Consultant or a Non-Employee Director. Notwithstanding the foregoing, the Committee may otherwise define Termination of Employment in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Employment thereafter, provided that any such change to the definition of the term “Termination of Employment” does not subject the applicable Award to Section 409A of the Code.
2.53 “ Transfer ” means: (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance of equity in any entity), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in any entity) whether for value or for no value and whether voluntarily or involuntarily (including by operation of law). “Transferred” and “Transferable” shall have a correlative meaning.
2.54 “ Transition Period ” means the period beginning with the Registration Date and ending as of the earlier of: (i) the date of the first annual meeting of stockholders of the Company at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Registration Date occurs; and (ii) the expiration of the “reliance period” under Treasury Regulation Section 1.162-27(f)(2).
ARTICLE III
ADMINISTRATION
3.1 The Committee . The Plan shall be administered and interpreted by the Committee. To the extent required by applicable law, rule or regulation, it is intended that each member of the Committee shall qualify as (a) a “non-employee director” under Rule 16b-3, (b) an “outside director” under Section 162(m) of the Code and (c) an “independent director” under the rules of any national securities exchange or national securities association, as applicable. If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee prior to such determination shall be valid despite such failure to qualify.
 
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3.2 Grants of Awards . The Committee shall have full authority to grant, pursuant to the terms of the Plan, to Eligible Individuals: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Performance Awards; (v) Other Stock-Based Awards; and (vi) Other Cash-Based Awards. In particular, the Committee shall have the authority:
(a)	to select the Eligible Individuals to whom Awards may from time to time be granted hereunder;	
(b) to determine whether and to what extent Awards, or any combination thereof, are to be granted hereunder to one or more Eligible Individuals;
(c) to determine the number of shares of Common Stock to be covered by each Award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including, but not limited to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture restrictions or waiver thereof, regarding any Award and the shares of Common Stock relating thereto, based on such factors, if any, as the Committee shall determine, in its sole discretion);
(e) to determine the amount of cash to be covered by each Award granted hereunder;
(f) to determine whether, to what extent and under what circumstances grants of Options and other Awards under the Plan are to operate on a tandem basis and/or in conjunction with or apart from other awards made by the Company outside of the Plan;
(g) to determine whether and under what circumstances a Stock Option may be settled in cash, Common Stock and/or Restricted Stock under Section 6.4(d);
(h) to determine whether a Stock Option is an Incentive Stock Option or Non-Qualified Stock Option;
(i) to determine whether to require a Participant, as a condition of the granting of any Award, to not sell or otherwise dispose of shares acquired pursuant to the exercise of, or otherwise subject to, an Award for a period of time as determined by the Committee, in its sole discretion, following the date of the acquisition of such shares; and
(j) to modify, extend or renew an Award, subject to Article XII and Section 6.4(l), provided, however, that such action does not subject the Award to Section 409A of the Code without the consent of the Participant.
3.3 Guidelines . Subject to Article XII hereof, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of the Plan and any Award issued
 
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under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate the purpose and intent of the Plan. The Committee may adopt special guidelines and provisions for persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply with applicable tax and securities laws of such domestic or foreign jurisdictions. Notwithstanding the foregoing, no action of the Committee under this Section 3.3 shall impair the rights of any Participant without the Participant’s consent. To the extent applicable, the Plan is intended to comply with the requirements of Rule 16b-3, and with respect to Awards intended to be “performance-based,” the provisions of Section 162(m) of the Code, and the Plan shall be limited, construed and interpreted in a manner so as to comply therewith.
3.4 Decisions Final . Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company, the Board or the Committee (or any of its members) arising out of or in connection with the Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors and assigns.
3.5 Procedures . If the Committee is appointed, the Board shall designate one of the members of the Committee as chairman and the Committee shall hold meetings, subject to the By-Laws of the Company, at such times and places as it shall deem advisable, including, without limitation, by telephone conference or by written consent to the extent permitted by applicable law. A majority of the Committee members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by all of the Committee members in accordance with the By-Laws of the Company, shall be fully effective as if it had been made by a vote at a meeting duly called and held. The Committee shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable.
3.6 Designation of Consultants/Liability .
(a) The Committee may designate employees of the Company and professional advisors to assist the Committee in the administration of the Plan and (to the extent permitted by applicable law and applicable exchange rules) may grant authority to officers to grant Awards and/or execute agreements or other documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by the Committee or the Board in the engagement of any such counsel, consultant or agent shall be paid by the Company. The Committee, its members and any person designated pursuant to sub-section (a) above shall not be liable for any action or determination made in good faith with respect to the Plan. To the maximum extent permitted by applicable law, no officer of the Company or member or former member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it.
 
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3.7 Indemnification . To the maximum extent permitted by applicable law and the Certificate of Incorporation and By-Laws of the Company and to the extent not covered by insurance directly insuring such person, each officer or employee of the Company or any Affiliate and member or former member of the Committee or the Board shall be indemnified and held harmless by the Company against any cost or expense (including reasonable fees of counsel reasonably acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising out of any act or omission to act in connection with the administration of the Plan, except to the extent arising out of such officer’s, employee’s, member’s or former member’s own fraud or bad faith. Such indemnification shall be in addition to any right of indemnification the employees, officers, directors or members or former officers, directors or members may have under applicable law or under the Certificate of Incorporation or By-Laws of the Company or any Affiliate. Notwithstanding anything else herein, this indemnification will not apply to the actions or determinations made by an individual with regard to Awards granted to such individual under the Plan.
ARTICLE IV
SHARE LIMITATION
4.1 Shares . (a) The aggregate number of shares of Common Stock that may be issued or used for reference purposes or with respect to which Awards may be granted under the Plan shall not exceed [ — ] shares (subject to any increase or decrease pursuant to Section 4.2), which may be either authorized and unissued Common Stock or Common Stock held in or acquired for the treasury of the Company or both. The maximum number of shares of Common Stock with respect to which Incentive Stock Options may be granted under the Plan shall be [ — ] shares. With respect to Stock Appreciation Rights settled in Common Stock, upon settlement, only the number of shares of Common Stock delivered to a Participant (based on the difference between the Fair Market Value of the shares of Common Stock subject to such Stock Appreciation Right on the date such Stock Appreciation Right is exercised and the exercise price of each Stock Appreciation Right on the date such Stock Appreciation Right was awarded) shall count against the aggregate and individual share limitations set forth under Sections 4.1(a) and 4.1(b). If any Option, Stock Appreciation Right or Other Stock-Based Awards granted under the Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of shares of Common Stock underlying any unexercised Award shall again be available for the purpose of Awards under the Plan. If any shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock awarded under the Plan to a Participant are forfeited for any reason, the number of forfeited shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock shall again be available for purposes of Awards under the Plan. If a Tandem Stock Appreciation Right or a Limited Stock Appreciation Right is granted in tandem with an Option, such grant shall only apply once against the maximum number of shares of Common Stock which may be issued under the Plan. Any Award under the Plan settled in cash shall not be counted against the foregoing maximum share limitations. The maximum number of shares of Common Stock which may be granted under the Plan during any fiscal year of the Company to any Non-Employee Director shall be [ — ] shares
 
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(which shall be subject to any further increase or decrease pursuant to Section 4.2). The maximum value of any cash payment made pursuant to an Award which may be granted under the Plan with respect to any fiscal year of the Company to any Non-Employee Director shall be $ [ — ] .
(b) Individual Participant Limitations . To the extent required by Section 162(m) of the Code for Awards under the Plan to qualify as “performance-based compensation,” the following individual Participant limitations shall only apply after the expiration of the Transition Period:
(i) The maximum number of shares of Common Stock subject to any Award of Stock Options, or Stock Appreciation Rights, or shares of Restricted Stock, or Other Stock-Based Awards for which the grant of such Award or the lapse of the relevant Restriction Period is subject to the attainment of Performance Goals in accordance with Section 8.3(a)(ii) which may be granted under the Plan during any fiscal year of the Company to any Participant shall be [ — ] shares per type of Award (which shall be subject to any further increase or decrease pursuant to Section 4.2), provided that the maximum number of shares of Common Stock for all types of Awards does not exceed [ — ] shares (which shall be subject to any further increase or decrease pursuant to Section 4.2) during any fiscal year of the Company. If a Tandem Stock Appreciation Right is granted or a Limited Stock Appreciation Right is granted in tandem with a Stock Option, it shall apply against the Participant’s individual share limitations for both Stock Appreciation Rights and Stock Options.
(ii) There are no annual individual share limitations applicable to Participants on Restricted Stock or Other Stock-Based Awards for which the grant, vesting or payment (as applicable) of any such Award is not subject to the attainment of Performance Goals.
(iii) The maximum number of shares of Common Stock subject to any Performance Award which may be granted under the Plan during any fiscal year of the Company to any Participant shall be [ — ] shares (which shall be subject to any further increase or decrease pursuant to Section 4.2) with respect to any fiscal year of the Company.
(iv) The maximum value of a cash payment made under a Performance Award which may be granted under the Plan with respect to any fiscal year of the Company to any Participant shall be $ [ — ] .
(v) The individual Participant limitations set forth in this Section 4.1(b) (other than Section 4.1(b)(iii)) shall be cumulative; that is, to the extent that shares of Common Stock for which Awards are permitted to be granted to a Participant during a fiscal year are not covered by an Award to such Participant in a fiscal year, the number of shares of Common Stock available for Awards to such Participant shall automatically increase in the subsequent fiscal years during the term of the Plan until used.
4.2 Changes .
(a) The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger or consolidation of the Company or any Affiliate,
 
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(iii) any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, (iv) the dissolution or liquidation of the Company or any Affiliate, (v) any sale or transfer of all or part of the assets or business of the Company or any Affiliate or (vi) any other corporate act or proceeding.
(b) Subject to the provisions of Section 11.1:
(i) If the Company at any time subdivides (by any split, recapitalization or otherwise) the outstanding Common Stock into a greater number of shares of Common Stock, or combines (by reverse split, combination or otherwise) its outstanding Common Stock into a lesser number of shares of Common Stock, then the respective exercise prices for outstanding Awards that provide for a Participant-elected exercise and the number of shares of Common Stock covered by outstanding Awards shall be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.
(ii) Excepting transactions covered by Section 4.2(b)(i), if the Company effects any merger, consolidation, statutory exchange, spin-off, reorganization, sale or transfer of all or substantially all the Company’s assets or business, or other corporate transaction or event in such a manner that the Company’s outstanding shares of Common Stock are converted into the right to receive (or the holders of Common Stock are entitled to receive in exchange therefor), either immediately or upon liquidation of the Company, securities or other property of the Company or other entity (each, a “ Reorganization ” ), then, subject to the provisions of Section 11.1, (A) the aggregate number or kind of securities that thereafter may be issued under the Plan, (B) the number or kind of securities or other property (including cash) to be issued pursuant to Awards granted under the Plan (including as a result of the assumption of the Plan and the obligations hereunder by a successor entity, as applicable), or (C) the purchase price thereof, shall be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.
(iii) If there shall occur any change in the capital structure of the Company other than those covered by Section 4.2(b)(i) or 4.2(b)(ii), including by reason of any extraordinary dividend (whether cash or equity), any conversion, any adjustment, or any issuance of any class of securities convertible or exercisable into, or exercisable for, any class of equity securities of the Company, then the Committee may adjust any Award and make such other adjustments to the Plan to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan. For the avoidance of doubt, in the case of any “equity restructuring” (within the meaning of the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards Codification Topic 718, Stock Compensation), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring.
(iv) Any such adjustment determined by the Committee pursuant to this Section 4.2(b) shall be final, binding and conclusive on the Company and all Participants and their respective heirs, executors, administrators, successors and permitted assigns. Any adjustment to, or assumption or substitution of, an Award under this Section 4.2(b) shall be intended to comply with the requirements of Section 409A of the Code and Treasury Regulation
 
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§1.424-1 (and any amendments thereto), to the extent applicable. Except as expressly provided in this Section 4.2 or in the applicable Award Agreement, a Participant shall have no additional rights under the Plan by reason of any transaction or event described in this Section 4.2.
(v) Fractional shares of Common Stock resulting from any adjustment in Awards pursuant to Section 4.2(a) or this Section 4.2(b) shall be aggregated until, and eliminated at, the time of exercise or payment by rounding-down. No cash settlements shall be required with respect to fractional shares eliminated by rounding. Notice of any adjustment shall be given by the Committee to each Participant whose Award has been adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.
4.3 Minimum Purchase Price . Notwithstanding any provision of the Plan to the contrary, if authorized but previously unissued shares of Common Stock are issued under the Plan, such shares shall not be issued for a consideration that is less than as permitted under applicable law.
ARTICLE V
ELIGIBILITY
5.1 General Eligibility . All current and prospective Eligible Individuals are eligible to be granted Awards. Eligibility for the grant of Awards and actual participation in the Plan shall be determined by the Committee in its sole discretion.
5.2 Incentive Stock Options . Notwithstanding the foregoing, only Eligible Employees of the Company, its Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock Options under the Plan. Eligibility for the grant of an Incentive Stock Option and actual participation in the Plan shall be determined by the Committee in its sole discretion.
5.3 General Requirement . The vesting and exercise of Awards granted to a prospective Eligible Individual are conditioned upon such individual actually becoming an Eligible Employee, Consultant or Non-Employee Director, respectively.
ARTICLE VI
STOCK OPTIONS
6.1 Options . Stock Options may be granted alone or in addition to other Awards granted under the Plan. Each Stock Option granted under the Plan shall be of one of two types: (a) an Incentive Stock Option or (b) a Non-Qualified Stock Option.
6.2 Grants . The Committee shall have the authority to grant to any Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock Options. The Committee shall have the authority to grant any Consultant or Non-Employee Director one or more Non-Qualified Stock Options. To the extent that any Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Stock Option or the portion thereof which does not so qualify shall constitute a separate Non-Qualified Stock Option.
 
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6.3 Incentive Stock Options . Notwithstanding anything in the Plan to the contrary, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of the Participants affected, to disqualify any Incentive Stock Option under such Section 422.
6.4 Terms of Options . Options granted under the Plan shall be subject to the following terms and conditions and shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) Exercise Price . The exercise price per share of Common Stock subject to a Stock Option shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Stock Option shall not be less than 100% (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110%) of the Fair Market Value of the Common Stock at the time of grant.
(b) Stock Option Term . The term of each Stock Option shall be fixed by the Committee, provided that no Stock Option shall be exercisable more than 10 years after the date the Option is granted; and provided further that the term of an Incentive Stock Option granted to a Ten Percent Stockholder shall not exceed five years.
(c) Exercisability . Unless otherwise provided by the Committee in accordance with the provisions of this Section 6.4, Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant. If the Committee provides, in its discretion, that any Stock Option is exercisable subject to certain limitations (including, without limitation, that such Stock Option is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after the time of grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such Stock Option may be exercised), based on such factors, if any, as the Committee shall determine, in its sole discretion.
(d) Method of Exercise . Subject to whatever installment exercise and waiting period provisions apply under Section 6.4(c), to the extent vested, Stock Options may be exercised in whole or in part at any time during the Option term, by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased. Such notice shall be accompanied by payment in full of the purchase price as follows: (i) in cash or by check, bank draft or money order payable to the order of the Company; (ii) solely to the extent permitted by applicable law, if the Common Stock is traded on a national securities exchange, and the Committee authorizes, through a procedure whereby the Participant delivers irrevocable instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Company an amount equal to the purchase price; or (iii) on such other terms and conditions as may be acceptable to the Committee (including, without limitation, having the Company withhold shares of Common Stock issuable upon exercise of the Stock Option, or by payment in full or in part in the form of Common Stock owned by the Participant, based on the Fair Market Value of the Common Stock on the payment date as determined by the Committee). No shares of Common Stock shall be issued until payment therefor, as provided herein, has been made or provided for.
 
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(e) Non-Transferability of Options . No Stock Option shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Participant’s lifetime, only by the Participant. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, at the time of grant or thereafter that a Non-Qualified Stock Option that is otherwise not Transferable pursuant to this Section is Transferable to a Family Member in whole or in part and in such circumstances, and under such conditions, as specified by the Committee. A Non-Qualified Stock Option that is Transferred to a Family Member pursuant to the preceding sentence (i) may not be subsequently Transferred other than by will or by the laws of descent and distribution and (ii) remains subject to the terms of the Plan and the applicable Award Agreement. Any shares of Common Stock acquired upon the exercise of a Non-Qualified Stock Option by a permissible transferee of a Non-Qualified Stock Option or a permissible transferee pursuant to a Transfer after the exercise of the Non-Qualified Stock Option shall be subject to the terms of the Plan and the applicable Award Agreement.
(f) Termination by Death or Disability . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by reason of death or Disability, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant (or in the case of the Participant’s death, by the legal representative of the Participant’s estate) at any time within a period of one (1) year from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options; provided, however, that, in the event of a Participant’s Termination by reason of Disability, if the Participant dies within such exercise period, all unexercised Stock Options held by such Participant shall thereafter be exercisable, to the extent to which they were exercisable at the time of death, for a period of one (1) year from the date of such death, but in no event beyond the expiration of the stated term of such Stock Options.
(g) Involuntary Termination Without Cause . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by involuntary termination by the Company without Cause, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of ninety (90) days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.
(h) Voluntary Resignation . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is voluntary (other than a voluntary termination described in Section 6.4(i)(y) hereof), all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of thirty (30) days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.
(i) Termination for Cause . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination (x) is for Cause or (y) is a voluntary Termination (as provided in Section 6.4(h)) after
 
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the occurrence of an event that would be grounds for a Termination for Cause, all Stock Options, whether vested or not vested, that are held by such Participant shall thereupon terminate and expire as of the date of such Termination.
(j) Unvested Stock Options . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, Stock Options that are not vested as of the date of a Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.
(k) Incentive Stock Option Limitations . To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year under the Plan and/or any other stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. In addition, if an Eligible Employee does not remain employed by the Company, any Subsidiary or any Parent at all times from the time an Incentive Stock Option is granted until three months prior to the date of exercise thereof (or such other period as required by applicable law), such Stock Option shall be treated as a Non-Qualified Stock Option. Should any provision of the Plan not be necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may amend the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.
(l) Form, Modification, Extension and Renewal of Stock Options . Subject to the terms and conditions and within the limitations of the Plan, Stock Options shall be evidenced by such form of agreement or grant as is approved by the Committee, and the Committee may (i) modify, extend or renew outstanding Stock Options granted under the Plan (provided that the rights of a Participant are not reduced without such Participant’s consent and provided further that such action does not subject the Stock Options to Section 409A of the Code without the consent of the Participant), and (ii) accept the surrender of outstanding Stock Options (to the extent not theretofore exercised) and authorize the granting of new Stock Options in substitution therefor (to the extent not theretofore exercised). Notwithstanding the foregoing, an outstanding Option may not be modified to reduce the exercise price thereof nor may a new Option at a lower price be substituted for a surrendered Option (other than adjustments or substitutions in accordance with Section 4.2), unless such action is approved by the stockholders of the Company.
(m) Deferred Delivery of Common Stock . The Committee may in its discretion permit Participants to defer delivery of Common Stock acquired pursuant to a Participant’s exercise of an Option in accordance with the terms and conditions established by the Committee in the applicable Award Agreement, which shall be intended to comply with the requirements of Section 409A of the Code.
(n) Early Exercise . The Committee may provide that a Stock Option include a provision whereby the Participant may elect at any time before the Participant’s Termination to exercise the Stock Option as to any part or all of the shares of Common Stock subject to the Stock Option prior to the full vesting of the Stock Option and such shares shall be subject to the provisions of Article VIII and be treated as Restricted Stock. Unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Committee determines to be appropriate.
 
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(o) Other Terms and Conditions . The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Non-Qualified Stock Option on a cashless basis on the last day of the term of such Option if the Participant has failed to exercise the Non-Qualified Stock Option as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Non-Qualified Stock Option exceeds the exercise price of such Non-Qualified Stock Option on the date of expiration of such Option, subject to Section 14.4. Stock Options may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.
ARTICLE VII
STOCK APPRECIATION RIGHTS
7.1 Tandem Stock Appreciation Rights . Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option (a “ Reference Stock Option ”) granted under the Plan (“ Tandem Stock Appreciation Rights ”). In the case of a Non-Qualified Stock Option, such rights may be granted either at or after the time of the grant of such Reference Stock Option. In the case of an Incentive Stock Option, such rights may be granted only at the time of the grant of such Reference Stock Option.
7.2 Terms and Conditions of Tandem Stock Appreciation Rights . Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, and the following:
(a) Exercise Price . The exercise price per share of Common Stock subject to a Tandem Stock Appreciation Right shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.
(b) Term . A Tandem Stock Appreciation Right or applicable portion thereof granted with respect to a Reference Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the Reference Stock Option, except that, unless otherwise determined by the Committee, in its sole discretion, at the time of grant, a Tandem Stock Appreciation Right granted with respect to less than the full number of shares covered by the Reference Stock Option shall not be reduced until, and then only to the extent that the exercise or termination of the Reference Stock Option causes, the number of shares covered by the Tandem Stock Appreciation Right to exceed the number of shares remaining available and unexercised under the Reference Stock Option.
(c) Exercisability . Tandem Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Reference Stock Options to which they relate shall be exercisable in accordance with the provisions of Article VI, and shall be subject to the provisions of Section 6.4(c).
 
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(d) Method of Exercise . A Tandem Stock Appreciation Right may be exercised by the Participant by surrendering the applicable portion of the Reference Stock Option. Upon such exercise and surrender, the Participant shall be entitled to receive an amount determined in the manner prescribed in this Section 7.2. Stock Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent that the related Tandem Stock Appreciation Rights have been exercised.
(e) Payment . Upon the exercise of a Tandem Stock Appreciation Right, a Participant shall be entitled to receive up to, but no more than, an amount in cash and/or Common Stock (as chosen by the Committee in its sole discretion) equal in value to the excess of the Fair Market Value of one share of Common Stock over the Option exercise price per share specified in the Reference Stock Option agreement multiplied by the number of shares of Common Stock in respect of which the Tandem Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment.
(f) Deemed Exercise of Reference Stock Option . Upon the exercise of a Tandem Stock Appreciation Right, the Reference Stock Option or part thereof to which such Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Article IV of the Plan on the number of shares of Common Stock to be issued under the Plan.
(g) Non-Transferability . Tandem Stock Appreciation Rights shall be Transferable only when and to the extent that the underlying Stock Option would be Transferable under Section 6.4(e) of the Plan.
7.3 Non-Tandem Stock Appreciation Rights . Non-Tandem Stock Appreciation Rights may also be granted without reference to any Stock Options granted under the Plan.
7.4 Terms and Conditions of Non-Tandem Stock Appreciation Rights . Non-Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, and the following:
(a) Exercise Price . The exercise price per share of Common Stock subject to a Non-Tandem Stock Appreciation Right shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Non-Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.
(b) Term . The term of each Non-Tandem Stock Appreciation Right shall be fixed by the Committee, but shall not be greater than 10 years after the date the right is granted.
(c) Exercisability . Unless otherwise provided by the Committee in accordance with the provisions of this Section 7.4, Non-Tandem Stock Appreciation Rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant. If the Committee provides, in its discretion, that any such right is exercisable subject to certain limitations (including, without limitation, that it is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after grant in whole or in part (including,
 
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without limitation, waiver of the installment exercise provisions or acceleration of the time at which such right may be exercised), based on such factors, if any, as the Committee shall determine, in its sole discretion.
(d) Method of Exercise . Subject to whatever installment exercise and waiting period provisions apply under Section 7.4(c), Non-Tandem Stock Appreciation Rights may be exercised in whole or in part at any time in accordance with the applicable Award Agreement, by giving written notice of exercise to the Company specifying the number of Non-Tandem Stock Appreciation Rights to be exercised.
(e) Payment . Upon the exercise of a Non-Tandem Stock Appreciation Right a Participant shall be entitled to receive, for each right exercised, up to, but no more than, an amount in cash and/or Common Stock (as chosen by the Committee in its sole discretion) equal in value to the excess of the Fair Market Value of one share of Common Stock on the date that the right is exercised over the Fair Market Value of one share of Common Stock on the date that the right was awarded to the Participant.
(f) Termination . Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, subject to the provisions of the applicable Award Agreement and the Plan, upon a Participant’s Termination for any reason, Non-Tandem Stock Appreciation Rights will remain exercisable following a Participant’s Termination on the same basis as Stock Options would be exercisable following a Participant’s Termination in accordance with the provisions of Sections 6.4(f) through 6.4(j).
(g) Non-Transferability . No Non-Tandem Stock Appreciation Rights shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all such rights shall be exercisable, during the Participant’s lifetime, only by the Participant.
7.5 Limited Stock Appreciation Rights . The Committee may, in its sole discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a general Stock Appreciation Right or as a “Limited Stock Appreciation Right.” Limited Stock Appreciation Rights may be exercised only upon the occurrence of a Change in Control or such other event as the Committee may, in its sole discretion, designate at the time of grant or thereafter. Upon the exercise of Limited Stock Appreciation Rights, except as otherwise provided in an Award Agreement, the Participant shall receive in cash and/or Common Stock, as determined by the Committee, an amount equal to the amount (i) set forth in Section 7.2(e) with respect to Tandem Stock Appreciation Rights, or (ii) set forth in Section 7.4(e) with respect to Non-Tandem Stock Appreciation Rights.
7.6 Other Terms and Conditions . The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Stock Appreciation Right on a cashless basis on the last day of the term of such Stock Appreciation Right if the Participant has failed to exercise the Stock Appreciation Right as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Stock Appreciation Right exceeds the exercise price of such Stock Appreciation Right on the date of expiration of such Stock Appreciation Right, subject to Section 14.4. Stock Appreciation Rights may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee
 
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shall deem appropriate. Notwithstanding the foregoing, an outstanding Stock Appreciation Right may not be modified to reduce the exercise price thereof nor may a new Stock Appreciation Right at a lower price be substituted for a surrendered Stock Appreciation Right (other than adjustments or substitutions in accordance with Section 4.2), unless such action is approved by the stockholders of the Company.
ARTICLE VIII
RESTRICTED STOCK
8.1 Awards of Restricted Stock . Shares of Restricted Stock may be issued either alone or in addition to other Awards granted under the Plan. The Committee shall determine the Eligible Individuals, to whom, and the time or times at which, grants of Restricted Stock shall be made, the number of shares to be awarded, the price (if any) to be paid by the Participant (subject to Section 8.2), the time or times within which such Awards may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards.
The Committee may condition the grant or vesting of Restricted Stock upon the attainment of specified performance targets (including, the Performance Goals) or such other factor as the Committee may determine in its sole discretion, including to comply with the requirements of Section 162(m) of the Code.
8.2 Awards and Certificates . Eligible Individuals selected to receive Restricted Stock shall not have any right with respect to such Award, unless and until such Participant has delivered a fully executed copy of the agreement evidencing the Award to the Company, to the extent required by the Committee, and has otherwise complied with the applicable terms and conditions of such Award. Further, such Award shall be subject to the following conditions:
(a) Purchase Price . The purchase price of Restricted Stock shall be fixed by the Committee. Subject to Section 4.3, the purchase price for shares of Restricted Stock may be zero to the extent permitted by applicable law, and, to the extent not so permitted, such purchase price may not be less than par value.
(b) Acceptance . Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the grant date, by executing a Restricted Stock agreement and by paying whatever price (if any) the Committee has designated thereunder.
(c) Legend . Each Participant receiving Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, unless the Committee elects to use another system, such as book entries by the transfer agent, as evidencing ownership of shares of Restricted Stock. Such certificate shall be registered in the name of such Participant, and shall, in addition to such legends required by applicable securities laws, bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:
“The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge of the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of
 
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the Vince Holding Corp. (the “Company”) 2013 Omnibus Incentive Plan (the “Plan”) and an Agreement entered into between the registered owner and the Company dated                     . Copies of such Plan and Agreement are on file at the principal office of the Company.”
(d) Custody . If stock certificates are issued in respect of shares of Restricted Stock, the Committee may require that any stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any grant of Restricted Stock, the Participant shall have delivered a duly signed stock power or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate by the Company, which would permit transfer to the Company of all or a portion of the shares subject to the Restricted Stock Award in the event that such Award is forfeited in whole or part.
8.3 Restrictions and Conditions . The shares of Restricted Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions:
(a) Restriction Period . (i) The Participant shall not be permitted to Transfer shares of Restricted Stock awarded under the Plan during the period or periods set by the Committee (the “ Restriction Period ”) commencing on the date of such Award, as set forth in the Restricted Stock Award Agreement and such agreement shall set forth a vesting schedule and any event that would accelerate vesting of the shares of Restricted Stock. Within these limits, based on service, attainment of Performance Goals pursuant to Section 8.3(a)(ii) and/or such other factors or criteria as the Committee may determine in its sole discretion, the Committee may condition the grant or provide for the lapse of such restrictions in installments in whole or in part, or may accelerate the vesting of all or any part of any Restricted Stock and/or waive the deferral limitations for all or any part of any Restricted Stock.
(ii) If the grant of shares of Restricted Stock or the lapse of restrictions is based on the attainment of Performance Goals, the Committee shall establish the objective Performance Goals and the applicable vesting percentage of the Restricted Stock applicable to each Participant or class of Participants in writing prior to the beginning of the applicable fiscal year or at such later date as otherwise determined by the Committee and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances. With regard to a Restricted Stock Award that is intended to comply with Section 162(m) of the Code, to the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect.
(b) Rights as a Stockholder . Except as provided in Section 8.3(a) and this Section 8.3(b) or as otherwise determined by the Committee in an Award Agreement, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a holder of shares of Common Stock of the Company, including, without limitation, the right to receive dividends, the right to vote such shares and, subject to and conditioned upon the full vesting of
 
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shares of Restricted Stock, the right to tender such shares. The Committee may, in its sole discretion, determine at the time of grant that the payment of dividends shall be deferred until, and conditioned upon, the expiration of the applicable Restriction Period.
(c) Termination . Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the relevant Restriction Period, all Restricted Stock still subject to restriction will be forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.
(d) Lapse of Restrictions . If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the certificates, if any, for such shares shall be delivered to the Participant. All legends shall be removed from said certificates at the time of delivery to the Participant, except as otherwise required by applicable law or other limitations imposed by the Committee.
ARTICLE IX
PERFORMANCE AWARDS
9.1 Performance Awards . The Committee may grant a Performance Award to a Participant payable upon the attainment of specific Performance Goals. The Committee may grant Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, as well as Performance Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code. If the Performance Award is payable in shares of Restricted Stock, such shares shall be transferable to the Participant only upon attainment of the relevant Performance Goal in accordance with Article VIII. If the Performance Award is payable in cash, it may be paid upon the attainment of the relevant Performance Goals either in cash or in shares of Restricted Stock (based on the then current Fair Market Value of such shares), as determined by the Committee, in its sole and absolute discretion. Each Performance Award shall be evidenced by an Award Agreement in such form that is not inconsistent with the Plan and that the Committee may from time to time approve.
With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall condition the right to payment of any Performance Award upon the attainment of objective Performance Goals established pursuant to Section 9.2(c).
9.2 Terms and Conditions . Performance Awards awarded pursuant to this Article IX shall be subject to the following terms and conditions:
(a) Earning of Performance Award . At the expiration of the applicable Performance Period, the Committee shall determine the extent to which the Performance Goals established pursuant to Section 9.2(c) are achieved and the percentage of each Performance Award that has been earned.
(b) Non-Transferability . Subject to the applicable provisions of the Award Agreement and the Plan, Performance Awards may not be Transferred during the Performance Period.
 
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(c) Objective Performance Goals, Formulae or Standards . With respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the earning of Performance Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances. To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.
(d) Dividends . Unless otherwise determined by the Committee at the time of grant, amounts equal to dividends declared during the Performance Period with respect to the number of shares of Common Stock covered by a Performance Award will not be paid to the Participant.
(e) Payment . Following the Committee’s determination in accordance with Section 9.2(a), the Company shall settle Performance Awards, in such form (including, without limitation, in shares of Common Stock or in cash) as determined by the Committee, in an amount equal to such Participant’s earned Performance Awards. Notwithstanding the foregoing, the Committee may, in its sole discretion, award an amount less than the earned Performance Awards and/or subject the payment of all or part of any Performance Award to additional vesting, forfeiture and deferral conditions as it deems appropriate.
(f) Termination . Subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the Performance Period for a given Performance Award, the Performance Award in question will vest or be forfeited in accordance with the terms and conditions established by the Committee at grant.
(g) Accelerated Vesting . Based on service, performance and/or such other factors or criteria, if any, as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Performance Award.
ARTICLE X
OTHER STOCK-BASED AND CASH-BASED AWARDS
10.1 Other Stock-Based Awards . The Committee is authorized to grant to Eligible Individuals Other Stock-Based Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to shares of Common Stock, including but not limited to, shares of Common Stock awarded purely as a bonus and not subject to restrictions or conditions, shares of Common Stock in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company or an Affiliate, stock equivalent units, restricted stock units, and Awards valued by reference to book value of shares of Common Stock. Other Stock-Based Awards may be granted either alone or in addition to or in tandem with other Awards granted under the Plan.
 
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Subject to the provisions of the Plan, the Committee shall have authority to determine the Eligible Individuals, to whom, and the time or times at which, such Awards shall be made, the number of shares of Common Stock to be awarded pursuant to such Awards, and all other conditions of the Awards. The Committee may also provide for the grant of Common Stock under such Awards upon the completion of a specified Performance Period.
The Committee may condition the grant or vesting of Other Stock-Based Awards upon the attainment of specified Performance Goals as the Committee may determine, in its sole discretion; provided that to the extent that such Other Stock-Based Awards are intended to comply with Section 162(m) of the Code, the Committee shall establish the objective Performance Goals for the grant or vesting of such Other Stock-Based Awards based on a Performance Period applicable to each Participant or class of Participants in writing prior to the beginning of the applicable Performance Period or at such later date as permitted under Section 162(m) of the Code and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent permitted under Section 162(m) of the Code, provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances. To the extent that any such provision would create impermissible discretion under Section 162(m) of the Code or otherwise violate Section 162(m) of the Code, such provision shall be of no force or effect, with respect to Performance Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.
10.2 Terms and Conditions . Other Stock-Based Awards made pursuant to this Article X shall be subject to the following terms and conditions:
(a) Non-Transferability . Subject to the applicable provisions of the Award Agreement and the Plan, shares of Common Stock subject to Awards made under this Article X may not be Transferred prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.
(b) Dividends . Unless otherwise determined by the Committee at the time of Award, subject to the provisions of the Award Agreement and the Plan, the recipient of an Award under this Article X shall not be entitled to receive, currently or on a deferred basis, dividends or dividend equivalents in respect of the number of shares of Common Stock covered by the Award.
(c) Vesting . Any Award under this Article X and any Common Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee, in its sole discretion.
(d) Price . Common Stock issued on a bonus basis under this Article X may be issued for no cash consideration. Common Stock purchased pursuant to a purchase right awarded under this Article X shall be priced, as determined by the Committee in its sole discretion.
 
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10.3 Other Cash-Based Awards . The Committee may from time to time grant Other Cash-Based Awards to Eligible Individuals in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by applicable law, as it shall determine in its sole discretion. Other Cash-Based Awards may be granted subject to the satisfaction of vesting conditions or may be awarded purely as a bonus and not subject to restrictions or conditions, and if subject to vesting conditions, the Committee may accelerate the vesting of such Awards at any time in its sole discretion. The grant of an Other Cash-Based Award shall not require a segregation of any of the Company’s assets for satisfaction of the Company’s payment obligation thereunder.
ARTICLE XI
CHANGE IN CONTROL PROVISIONS
11.1 Benefits . In the event of a Change in Control of the Company (as defined below), and except as otherwise provided by the Committee in an Award Agreement, a Participant’s unvested Awards shall not vest automatically and a Participant’s Awards shall be treated in accordance with one or more of the following methods as determined by the Committee:
(a) Awards, whether or not then vested, shall be continued, assumed, or have new rights substituted therefor, as determined by the Committee in a manner consistent with the requirements of Section 409A of the Code, and restrictions to which shares of Restricted Stock or any other Award granted prior to the Change in Control are subject shall not lapse upon a Change in Control and the Restricted Stock or other Award shall, where appropriate in the sole discretion of the Committee, receive the same distribution as other Common Stock on such terms as determined by the Committee; provided that the Committee may decide to award additional Restricted Stock or other Awards in lieu of any cash distribution. Notwithstanding anything to the contrary herein, for purposes of Incentive Stock Options, any assumed or substituted Stock Option shall comply with the requirements of Treasury Regulation Section 1.424-1 (and any amendment thereto).
(b) The Committee, in its sole discretion, may provide for the purchase of any Awards by the Company or an Affiliate for an amount of cash equal to the excess (if any) of the Change in Control Price (as defined below) of the shares of Common Stock covered by such Awards, over the aggregate exercise price of such Awards. For purposes hereof, “ Change in Control Price ” shall mean the highest price per share of Common Stock paid in any transaction related to a Change in Control of the Company.
(c) The Committee may, in its sole discretion, terminate all outstanding and unexercised Stock Options, Stock Appreciation Rights, or any Other Stock-Based Award that provides for a Participant elected exercise, effective as of the date of the Change in Control, by delivering notice of termination to each Participant at least ten (10) days prior to the date of consummation of the Change in Control, in which case during the period from the date on which such notice of termination is delivered to the consummation of the Change in Control, each such Participant shall have the right to exercise in full all of such Participant’s Awards that are then outstanding (without regard to any limitations on exercisability otherwise contained in the Award Agreements), but any such exercise shall be contingent on the occurrence of the Change in Control, and, provided that, if the Change in Control does not take place within a specified period after giving such notice for any reason whatsoever, the notice and exercise pursuant thereto shall be null and void.
 
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(d) Notwithstanding any other provision herein to the contrary, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time.
11.2 Change in Control . Unless otherwise determined by the Committee in the at the time of grant, a “Change in Control” shall be deemed to occur if:
(a) any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, Sun Capital Partners, Inc. or its affiliates, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company), becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;
(b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraph (a), (c), or (d) of this Section 11.2 or a director whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board;
(c) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in Section 11.2(a)) acquires more than 50% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control of the Company; or
(d) a complete liquidation or dissolution of the Company or the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets other than the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale.
Notwithstanding the foregoing, with respect to any Award that is characterized as “nonqualified deferred compensation” within the meaning of Section 409A of the Code, an event shall not be considered to be a Change in Control under the Plan for purposes of payment of such Award
 
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unless such event is also a “change in ownership,” a “change in effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code.
11.3 Initial Public Offering not a Change in Control . Notwithstanding the foregoing, for purposes of the Plan, the occurrence of the Registration Date or any change in the composition of the Board within one year following the Registration Date shall not be considered a Change in Control.
ARTICLE XII
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of the Plan, the Board may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan (including any amendment deemed necessary to ensure that the Company may comply with any regulatory requirement referred to in Article XIV or Section 409A of the Code), or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or specifically provided herein, the rights of a Participant with respect to Awards granted prior to such amendment, suspension or termination, may not be impaired without the consent of such Participant and, provided further, that without the approval of the holders of the Company’s Common Stock entitled to vote in accordance with applicable law, no amendment may be made that would (i) increase the aggregate number of shares of Common Stock that may be issued under the Plan (except by operation of Section 4.2); (ii) increase the maximum individual Participant limitations for a fiscal year under Section 4.1(b) (except by operation of Section 4.2); (iii) change the classification of individuals eligible to receive Awards under the Plan; (iv) decrease the minimum option price of any Stock Option or Stock Appreciation Right; (v) extend the maximum option period under Section 6.4; (vi) alter the Performance Goals for Restricted Stock, Performance Awards or Other Stock-Based Awards as set forth in Exhibit A hereto; (vii) award any Stock Option or Stock Appreciation Right in replacement of a canceled Stock Option or Stock Appreciation Right with a higher exercise price than the replacement award; or (viii) require stockholder approval in order for the Plan to continue to comply with the applicable provisions of Section 162(m) of the Code or, to the extent applicable to Incentive Stock Options, Section 422 of the Code. In no event may the Plan be amended without the approval of the stockholders of the Company in accordance with the applicable laws of the State of Delaware to increase the aggregate number of shares of Common Stock that may be issued under the Plan, decrease the minimum exercise price of any Award, or to make any other amendment that would require stockholder approval under Financial Industry Regulatory Authority (FINRA) rules and regulations or the rules of any exchange or system on which the Company’s securities are listed or traded at the request of the Company. Notwithstanding anything herein to the contrary, the Board may amend the Plan or any Award Agreement at any time without a Participant’s consent to comply with applicable law including Section 409A of the Code. The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Article IV or as otherwise specifically provided herein, no such amendment or other action by the Committee shall impair the rights of any holder without the holder’s consent.
 
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ARTICLE XIII
UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payment as to which a Participant has a fixed and vested interest but which are not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any right that is greater than those of a general unsecured creditor of the Company.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Legend . The Committee may require each person receiving shares of Common Stock pursuant to a Stock Option or other Award under the Plan to represent to and agree with the Company in writing that the Participant is acquiring the shares without a view to distribution thereof. In addition to any legend required by the Plan, the certificates for such shares may include any legend that the Committee deems appropriate to reflect any restrictions on Transfer. All certificates for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed or any national securities exchange system upon whose system the Common Stock is then quoted, any applicable federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
14.2 Other Plans . Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.
14.3 No Right to Employment/Directorship/Consultancy . Neither the Plan nor the grant of any Option or other Award hereunder shall give any Participant or other employee, Consultant or Non-Employee Director any right with respect to continuance of employment, consultancy or directorship by the Company or any Affiliate, nor shall there be a limitation in any way on the right of the Company or any Affiliate by which an employee is employed or a Consultant or Non-Employee Director is retained to terminate such employment, consultancy or directorship at any time.
14.4 Withholding of Taxes . The Company shall have the right to deduct from any payment to be made pursuant to the Plan, or to otherwise require, prior to the issuance or delivery of shares of Common Stock or the payment of any cash hereunder, payment by the Participant of, any federal, state or local taxes required by law to be withheld. Upon the vesting of Restricted Stock (or other Award that is taxable upon vesting), or upon making an election under Section 83(b) of the Code, a Participant shall pay all required withholding to the Company. Any minimum statutorily required withholding obligation with regard to any Participant may be satisfied, subject to the consent of the Committee, by reducing the number of shares of Common Stock otherwise deliverable or by delivering shares of Common Stock already owned. Any fraction of a share of Common Stock required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.
 
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14.5 No Assignment of Benefits . No Award or other benefit payable under the Plan shall, except as otherwise specifically provided by law or permitted by the Committee, be Transferable in any manner, and any attempt to Transfer any such benefit shall be void, and any such benefit shall not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled to such benefit, nor shall it be subject to attachment or legal process for or against such person.
14.6 Listing and Other Conditions .
(a) Unless otherwise determined by the Committee, as long as the Common Stock is listed on a national securities exchange or system sponsored by a national securities association, the issuance of shares of Common Stock pursuant to an Award shall be conditioned upon such shares being listed on such exchange or system. The Company shall have no obligation to issue such shares unless and until such shares are so listed, and the right to exercise any Option or other Award with respect to such shares shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to an Option or other Award is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise, with respect to shares of Common Stock or Awards, and the right to exercise any Option or other Award shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company.
(c) Upon termination of any period of suspension under this Section 14.6, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all shares available before such suspension and as to shares which would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award.
(d) A Participant shall be required to supply the Company with certificates, representations and information that the Company requests and otherwise cooperate with the Company in obtaining any listing, registration, qualification, exemption, consent or approval the Company deems necessary or appropriate.
14.7 Stockholders Agreement and Other Requirements . Notwithstanding anything herein to the contrary, as a condition to the receipt of shares of Common Stock pursuant to an Award under the Plan, to the extent required by the Committee, the Participant shall execute and deliver a stockholder’s agreement or such other documentation that shall set forth certain restrictions on transferability of the shares of Common Stock acquired upon exercise or purchase, and such other terms as the Board or Committee shall from time to time establish. Such stockholder’s agreement or other documentation shall apply to the Common Stock acquired under the Plan and covered by such stockholder’s agreement or other documentation. The Company may require, as a condition of exercise, the Participant to become a party to any other existing stockholder agreement (or other agreement).
 
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14.8 Governing Law . The Plan and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).
14.9 Jurisdiction; Waiver of Jury Trial . Any suit, action or proceeding with respect to the Plan or any Award Agreement, or any judgment entered by any court of competent jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Delaware or the United States District Court for the District of Delaware and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, the Company and each Participant shall irrevocably and unconditionally (a) submit in any proceeding relating to the Plan or any Award Agreement, or for the recognition and enforcement of any judgment in respect thereof (a “ Proceeding ”), to the exclusive jurisdiction of the courts of the State of Delaware, the court of the United States of America for the District of Delaware, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and determined in such Delaware State court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Company and each Participant may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) waive all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to the Plan or any Award Agreement, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, in the case of a Participant, at the Participant’s address shown in the books and records of the Company or, in the case of the Company, at the Company’s principal offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of the State of Delaware.
14.10 Construction . Wherever any words are used in the Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply.
14.11 Other Benefits . No Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefit under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.
14.12 Costs . The Company shall bear all expenses associated with administering the Plan, including expenses of issuing Common Stock pursuant to Awards hereunder.
 
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14.13 No Right to Same Benefits . The provisions of Awards need not be the same with respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.
14.14 Death/Disability . The Committee may in its discretion require the transferee of a Participant to supply it with written notice of the Participant’s death or Disability and to supply it with a copy of the will (in the case of the Participant’s death) or such other evidence as the Committee deems necessary to establish the validity of the transfer of an Award. The Committee may also require that the agreement of the transferee to be bound by all of the terms and conditions of the Plan.
14.15 Section 16(b) of the Exchange Act . All elections and transactions under the Plan by persons subject to Section 16 of the Exchange Act involving shares of Common Stock are intended to comply with any applicable exemptive condition under Rule 16b-3. The Committee may establish and adopt written administrative guidelines, designed to facilitate compliance with Section 16(b) of the Exchange Act, as it may deem necessary or proper for the administration and operation of the Plan and the transaction of business thereunder.
14.16 Section 409A of the Code . The Plan is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. Notwithstanding anything herein to the contrary, any provision in the Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision shall be null and void. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee or the Company and, in the event that any amount or benefit under the Plan becomes subject to penalties under Section 409A of the Code, responsibility for payment of such penalties shall rest solely with the affected Participants and not with the Company. Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A of the Code) as a result of such employee’s separation from service (other than a payment that is not subject to Section 409A of the Code) shall be delayed for the first six (6) months following such separation from service (or, if earlier, the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) upon expiration of such delay period.
14.17 Successor and Assigns . The Plan shall be binding on all successors and permitted assigns of a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate.
 
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14.18 Severability of Provisions . If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included.
14.19 Payments to Minors, Etc . Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipt thereof shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Committee, the Board, the Company, its Affiliates and their employees, agents and representatives with respect thereto.
14.20 Lock-Up Agreement . As a condition to the grant of an Award, if requested by the Company and the lead underwriter of any public offering of the Common Stock (the “ Lead Underwriter ” ), a Participant shall irrevocably agree not to sell, contract to sell, grant any option to purchase, transfer the economic risk of ownership in, make any short sale of, pledge or otherwise transfer or dispose of, any interest in any Common Stock or any securities convertible into, derivative of, or exchangeable or exercisable for, or any other rights to purchase or acquire Common Stock (except Common Stock included in such public offering or acquired on the public market after such offering) during such period of time following the effective date of a registration statement of the Company filed under the Securities Act that the Lead Underwriter shall specify (the “ Lock-Up Period ”). The Participant shall further agree to sign such documents as may be requested by the Lead Underwriter to effect the foregoing and agree that the Company may impose stop-transfer instructions with respect to Common Stock acquired pursuant to an Award until the end of such Lock-Up Period.
14.21 Headings and Captions . The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.
14.22 Section 162(m) of the Code . Notwithstanding any other provision of the Plan to the contrary, (i) prior to the Registration Date and during the Transition Period, the provisions of the Plan requiring compliance with Section 162(m) of the Code for Awards intended to qualify as “performance-based compensation” shall only apply to the extent required by Section 162(m) of the Code, and (ii) the provisions of the Plan requiring compliance with Section 162(m) of the Code shall not apply to Awards granted under the Plan that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code.
14.23 Post-Transition Period . Following the Transition Period, any Award granted under the Plan that is intended to be “performance-based compensation” under Section 162(m) of the Code, shall be subject to the approval of the material terms of the Plan by a majority of the stockholders of the Company in accordance with Section 162(m) of the Code.
14.24 Company Recoupment of Awards . A Participant’s rights with respect to any Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with a Participant, or (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.
 
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ARTICLE XV
EFFECTIVE DATE OF PLAN
The Plan shall become effective on [ — ] , 2013, which is the date of its adoption by the Board, subject to the approval of the Plan by the stockholders of the Company in accordance with the requirements of the laws of the State of Delaware.
ARTICLE XVI
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the earlier of the date that the Plan is adopted or the date of stockholder approval, but Awards granted prior to such tenth anniversary may extend beyond that date; provided that no Award (other than a Stock Option or Stock Appreciation Right) that is intended to be “performance-based compensation” under Section 162(m) of the Code shall be granted on or after the fifth anniversary of the stockholder approval of the Plan unless the Performance Goals are re-approved (or other designated Performance Goals are approved) by the stockholders no later than the first stockholder meeting that occurs in the fifth year following the year in which stockholders approve the Performance Goals.
ARTICLE XVII
NAME OF PLAN
The Plan shall be known as the “Vince Holding Corp. 2013 Omnibus Incentive Plan.”
 
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EXHIBIT A
PERFORMANCE GOALS
To the extent permitted under Section 162(m) of the Code, performance goals established for purposes of Awards intended to be “performance-based compensation” under Section 162(m) of the Code, shall be based on the attainment of certain target levels of, or a specified increase or decrease (as applicable) in one or more of the following performance goals:
 
 	•	 	earnings per share;	
 
 	•	 	operating income;	
 
 	•	 	gross income;	
 
 	•	 	net income (before or after taxes);	
 
 	•	 	cash flow;	
 
 	•	 	gross profit;	
 
 	•	 	gross profit return on investment;	
 
 	•	 	gross margin return on investment;	
 
 	•	 	gross margin;	
 
 	•	 	operating margin;	
 
 	•	 	working capital;	
 
 	•	 	earnings before interest and taxes;	
 
 	•	 	earnings before interest, tax, depreciation and amortization;	
 
 	•	 	return on equity;	
 
 	•	 	return on assets;	
 
 	•	 	return on capital;	
 
 	•	 	return on invested capital;	
 
 	•	 	net revenues;	
 
 	•	 	gross revenues;	
 
 	•	 	revenue growth;	
 
 	•	 	annual recurring revenues;	
 
 	•	 	recurring revenues;	
 
 	•	 	license revenues;	
 
 	•	 	sales or market share;	
 
 	•	 	total shareholder return;	
 
 	•	 	economic value added;	
 
 	•	 	specified objectives with regard to limiting the level of increase in all or a portion of the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee in its sole discretion;	
 
 	•	 	the fair market value of a share of Common Stock;	
 
 	•	 	the growth in the value of an investment in the Common Stock assuming the reinvestment of dividends; or	
 
 	•	 	reduction in operating expenses.	
 
A-1

With respect to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, the Committee may, in its sole discretion, also exclude, or adjust to reflect, the impact of an event or occurrence that the Committee determines should be appropriately excluded or adjusted, including:
(a) restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges as described in Accounting Standards Codification 225-20, “Extraordinary and Unusual Items,” and/or management’s discussion and analysis of financial condition and results of operations appearing or incorporated by reference in the Company’s Form 10-K for the applicable year;
(b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; or
(c) a change in tax law or accounting standards required by generally accepted accounting principles.
Performance goals may also be based upon individual participant performance goals, as determined by the Committee, in its sole discretion. In addition, Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code may be based on the performance goals set forth herein or on such other performance goals as determined by the Committee in its sole discretion.
In addition, such performance goals may be based upon the attainment of specified levels of Company (or subsidiary, division, other operational unit, administrative department or product category of the Company) performance under one or more of the measures described above relative to the performance of other corporations. With respect to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, to the extent permitted under Section 162(m) of the Code, but only to the extent permitted under Section 162(m) of the Code (including, without limitation, compliance with any requirements for stockholder approval), the Committee may also:
(a) designate additional business criteria on which the performance goals may be based; or
(b) adjust, modify or amend the aforementioned business criteria.
 
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Exhibit 10.67
VINCE HOLDING CORP.
2013 EMPLOYEE STOCK PURCHASE PLAN
Article I
Purpose and Scope of the Plan
1.1 Purpose. This Vince Holding Corp. 2013 Employee Stock Purchase Plan is intended to encourage employee participation in the ownership and economic progress of the Company.
1.2 Definitions. Unless the context clearly indicates otherwise, the following terms have the meaning set forth below:
“ Board of Directors ” or “ Board ” shall mean the Board of Directors of the Company.
“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with any applicable regulations issued thereunder.
“ Committee ” shall mean the Board, or a committee designated by the Board to administer the Plan, which Committee shall administer the Plan as provided in Section 1.3 hereof.
“ Company ” shall mean Vince Holding Corp., a corporation organized under the laws of the State of Delaware, or any successor corporation.
“ Compensation ” shall mean the fixed salary or base hourly wage paid by the Company or a Designated Subsidiary to an Employee as reported by the Company to the United States government (or other applicable government) for income tax purposes, including an Employee’s portion of salary deferral contributions pursuant to Section 401(k) of the Code and any amount excludable pursuant to Section 125 of the Code, but excluding any commissions, bonus, fee, overtime pay, severance pay, expenses, stock option or other equity incentive income, or other special payment or any credit or benefit under any employee plan maintained by the Company.
“ Continuous Service ” shall mean the period of time, uninterrupted by a termination of employment (other than a termination as a result of a transfer of employment among the Company or a Designated Subsidiary), that an Employee has been employed by the Company or a Designated Subsidiary (or any combination of the foregoing) immediately preceding an Option Period. Such period of time shall include any approved leave of absence.
“ Designated Subsidiary ” shall mean any subsidiary of the Company that has been designated by the Committee to participate in the Plan.
“ Employee ” shall mean any full-time or part-time employee of the Company or a Designated Subsidiary who customarily works for the Company or Designated Subsidiary, as the case may be, for a minimum of twenty (20) hours per week.
“ Exercise Date ” shall mean the last business day of each Option Period.
“ Fair Market Value ” of a share of Stock means the fair market value of such Stock determined by such methods or procedures as shall be established from time to time by the Committee. Unless otherwise determined by the Committee in good faith, the per share Fair Market Value as of a particular date shall mean (i) the closing price per share of Stock on the national securities exchange on which the Stock is principally traded, for the last preceding date on which there was a sale of such Stock on such exchange,

or (ii) if the shares of Stock are then traded in an over-the-counter market, the average of the closing bid and asked prices for the shares of Stock in such over-the-counter market for the last preceding date on which there was a sale of such Stock in such market, or (iii) if the shares of Stock are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall determine.
“ Option Period ” or “ Period ” shall mean such duration (not to exceed twenty-seven (27) months) as shall be determined by the Committee prior to the beginning of such Option Period. Unless the Committee determines otherwise before the beginning of the Option Period, Option Periods shall commence at six (6)-month intervals on each [April 1] and [October 1] (or the next business day, if such date is not a business day) over the term of the Plan, and each Option Period shall last for six (6) months, ending on [March 31] or [September 30] , as the case may be (or the next business day, if such date is not a business day). Accordingly, unless the Committee determines otherwise, two separate Option Periods shall commence in each calendar year during which the Plan remains in existence. Notwithstanding the foregoing, the initial Option Period shall not commence until the date first specifically authorized by the Committee, subject to the Company’s prior registration of the Stock on Form S-1.
“ Option Price ” shall mean the purchase price of a share of Stock hereunder as provided in Section 3.1 hereof.
“ Participant ” shall mean any Employee who (i) is eligible to participate in the Plan under Section 2.1 hereof and (ii) elects to participate.
“ Plan ” shall mean the Company’s 2013 Employee Stock Purchase Plan, as the same may be amended from time to time.
“ Plan Account ” or “ Account ” shall mean an account established and maintained in the name of each Participant.
“ Plan Manager ” shall mean any Employee appointed pursuant to Section 1.3 hereof.
“ Stock ” means shares of the common stock, par value $0.01 per share, of the Company.
1.3 Administration of Plan. Subject to oversight by the Board of Directors or the Board’s Compensation Committee, the Committee shall have the authority to administer the Plan and to make and adopt rules and regulations not inconsistent with the provisions of the Plan or the Code. Its interpretations and decisions in respect of the Plan shall, subject to the aforesaid, be final and conclusive. The Committee shall have the authority to appoint an Employee as Plan Manager and to delegate to the Plan Manager such authority with respect to the administration of the Plan as the Committee, in its sole discretion, deems advisable from time to time.
1.4 Effective Date of Plan. The Plan shall become effective on the date established for that purpose by the Committee, if, prior to that date, the Plan (i) has been adopted by the Board of Directors of the Company and (ii) has been approved by an affirmative vote of a majority of the shares of the Company’s Stock present, in person or by proxy and entitled to vote on the proposal, at a meeting at which a quorum is present; provided , however , that such stockholder approval occurs on a date no later than twelve (12) months following the date the Plan is so adopted.
1.5 Termination of Plan. The Plan shall continue in effect through and including [September 30, 2023 ], unless terminated prior thereto pursuant to Section 4.3 hereof, or by the Board of Directors or the Compensation Committee of the Board, each of which shall have the right to terminate the Plan at any
 
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time. Upon any such termination, the balance, if any, in each Participant’s Account shall be refunded to him, or otherwise disposed of in accordance with the policies and procedures prescribed by the Committee in cases where such a refund may not be possible.
Article II
Participation
2.1 Eligibility. Participation in the Plan is limited to Employees who meet the requirements of this Section 2.1 . Each Employee who, on the start date of an Option Period, will have at least ninety (90) days of Continuous Service may become a Participant by completing the enrollment procedures prescribed by, or on behalf of, the Committee or the Plan Manager, as revised from time to time. No Employee may participate in the Plan if such Employee, immediately after the end of an Option Period, would be deemed for purposes of Section 423(b)(3) of the Code to possess five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary. The Committee may, prior to the commencement of an Option Period, exclude from participation any Employee who, at the time of the commencement of the Option Period, is a highly compensated employee (within the meaning of Section 414(q) of the Code) or is an officer of the Company subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934; provided that such exclusion is applied in an identical manner to all such highly compensated employees or officers of the Company and each Designated Subsidiary whose employees are Participants under the Plan.
2.2 Payroll Deductions. Payment for shares of Stock purchased hereunder shall be made by authorized payroll deductions from each payment of Compensation in accordance with instructions received from a Participant. Such deductions shall be expressed as a whole number percentage which shall be at least one percent (1%) but not more than ten percent (10%). A Participant may not increase the deduction during an Option Period; provided that no more than once per Option Period, a Participant may decrease the deduction. Notwithstanding the foregoing, a Participant may change the percentage deduction for any subsequent Option Period by filing notice thereof with the Company prior to the date on which such Option Period commences. Any amount remaining in a Participant’s Account after the purchase of Stock shall be refunded without interest; provided that any amounts remaining in a Participant’s Account that were insufficient to acquire a full share of Stock shall be carried forward to the next Option Period, unless the Participant has withdrawn from the Plan prior to the commencement of such Option Period. Any Participant who discontinues payroll deductions during an Option Period may again become a Participant for a subsequent Option Period upon completion of the enrollment procedures prescribed by, or on behalf of, the Committee or the Plan Manager, as revised from time to time. Amounts deducted from a Participant’s Compensation pursuant to this Section 2.2 shall be credited to such Participant’s Account. A Participant may not make any additional payments into such Account.
Article III
Purchase of Shares
3.1 Option Price. The Option Price per share of the Stock sold to Participants hereunder shall be ninety-five percent (95%) of the lesser of (a) the Fair Market Value of such share on the Exercise Date of an Option Period or (b) the Fair Market Value of such share on the first day of the applicable Option Period (or, in each case, such greater percentage as is determined by the Committee in advance of an Option Period), but in no event shall the Option Price per share be less than the par value of the Stock.
3.2 Purchase of Shares. On each Exercise Date, the amount in a Participant’s Account shall be charged with the aggregate Option Price of the largest number of whole shares of Stock that can be purchased with such amount. Unless otherwise provided by the Committee, the number of shares of Stock purchased by each Participant on the Exercise Date shall be deposited into an account established in
 
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the Participant’s name with the stock brokerage or other financial services firm designated by the Committee. The balance, if any, in such Account shall be carried forward to the next succeeding Option Period; provided that any payroll deductions accumulated in a Participant’s Account that are not applied toward the purchase of shares on an Exercise Date due to limitations imposed by this Plan shall be returned to the Participant.
3.3 Limitations on Purchase.
3.3.1 Notwithstanding any provisions of the Plan to the contrary, no Employee shall be granted an option under the Plan if, immediately after the grant, such Employee’s right to purchase shares under all employee stock purchase plans (as described in Section 423 of the Code) of the Company and any subsidiary of the Company would accrue at a rate per Option Period which exceeds the lesser of: (a) twenty-five thousand dollars ($25,000) or (b) an amount equal to ten percent (10%) of the Employee’s annualized base salary in effect at the start of such Option Period, in each case, of the Fair Market Value of such shares (determined at the time such option is granted); provided , however , that for any calendar year in which such option would be outstanding at any time, an Employee’s right to purchase shares under all employee stock purchase plans (as described in Section 423 of the Code) of the Company and any subsidiary of the Company may not accrue at a rate which exceeds twenty-five thousand dollars ($25,000) in the aggregate (as determined at the time such option is granted).
3.3.2 To the extent necessary to comply with Section 423(b)(8) of the Code and the limitations on purchase in this Section 3.3 , a Participant’s payroll deductions may be decreased to zero percent (0%) during any Option Period which is scheduled to end during any calendar year, such that the aggregate of all payroll deductions accumulated with respect to such Option Period and any other Option Period ending within the same calendar year is no greater than twenty-five thousand dollars ($25,000). Payroll deductions shall re-commence at the rate provided for by the Participant’s prior election at the beginning of the first Option Period which is scheduled to end in the following calendar year, unless suspended by the Participant pursuant to Section 2.2 of the Plan. Subject to the limits imposed under this Section 3.3 , the maximum number of shares of Stock that may be purchased by each Participant in any Option Period shall be [X] shares.
3.4 Transferability of Rights. Rights to purchase shares hereunder shall be exercisable only by the Participant. Such rights shall not be transferable.
Article IV
Provisions Relation to Common Stock
4.1 Stock Reserved; Delivery of Stock. A maximum of [X] shares of Stock may be purchased under the Plan, of which up to [X] shares of Stock may be purchased under the Plan per Option Period (in each case, subject to adjustment in accordance with Section 4.2 hereof). Subject to the limitation in the preceding sentence, as determined by the Committee in its sole discretion, any shares of Stock purchased under the Plan may be either newly issued shares, existing treasury shares, or new purchases in the open market.
4.2 Adjustment for Changes in Stock. In the event that adjustments are made in the number of outstanding shares of Stock or such shares are exchanged for a different class of stock of the Company or for shares of stock of any other corporation by reason of merger, consolidation, stock dividend, stock split or otherwise or an extraordinary cash dividend is paid in respect of the Stock, the Committee may make appropriate adjustments in (i) the number and class of shares or other securities that may be reserved for purchase, or purchased, hereunder, and (ii) the Option Price. All such adjustments shall be made in the sole discretion of the Committee, and its decision shall be binding and conclusive. The existence of the
 
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Plan and any options granted hereunder shall not affect in any way the right or power of the Board of Directors or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company or a subsidiary, any issue of debt, preferred or prior preference stock ahead of or affecting Stock, the authorization or issuance of additional shares of Stock, the dissolution or liquidation of the Company or any subsidiary, any sale or transfer of all or part of the Company’s or a subsidiary’s assets or business or any other corporate act or proceeding. The Board of Directors may at any time terminate an Option Period then in progress and provide, in its discretion, that Participants’ then outstanding Account balances shall be used to purchase shares pursuant to Article III or returned to the applicable Participants.
4.3 Insufficient Shares. If the aggregate funds available for the purchase of Stock on any Exercise Date would cause an issuance of shares in excess of the number provided for in Section 4.1 hereof, (i) the Committee shall proportionately reduce the number of shares which would otherwise be purchased by each Participant in order to eliminate such excess and (ii) the Plan shall automatically terminate immediately after such Exercise Date.
4.4 Confirmation. Confirmation of each purchase of Stock hereunder shall be made available to the Participant in either written or electronic format. A record of purchases shall be maintained by appropriate entries on the books of the Company. Unless otherwise determined by the Committee, shares of Stock delivered to a Participant hereunder may not be assigned, transferred, pledged or otherwise disposed of in any way by the Participant during the six (6) month period following such delivery to the Participant (other than by will or the laws of descent and distribution) and the shares of Stock shall bear an appropriate legend substantially in the following form:
“The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge of the shares of stock represented hereby are subject to the terms and conditions of the Vince Holding Corp. 2013 Employee Stock Purchase Plan (the “Plan”), including, without limitation, the restriction that the shares may not be assigned, transferred, pledged or otherwise disposed of in any way during the six (6) month period following the date of delivery of such shares. A copy of the Plan is on file at the principal office of Vince Holding Corp.”
4.5 Rights as Shareholders. The shares of Stock purchased by a Participant on an Exercise Date shall, for all purposes, be deemed to have been issued and sold as of the close of business on such Exercise Date. Prior to that time, none of the rights or privileges of a shareholder of the Company shall exist with respect to such shares.
Article V
Termination of Participation
5.1 Voluntary Withdrawal. A Participant may withdraw from the Plan at any time by filing notice of withdrawal prior to the close of business on the date immediately preceding the applicable Exercise Date. Upon withdrawal, the entire amount, if any, in a Participant’s Account shall be refunded to him without interest. Any Participant who withdraws from the Plan may again become a Participant in accordance with Section 2.1 hereof.
5.2 Termination of Eligibility. If a Participant ceases to be eligible under Section 2.1 hereof for any reason, the dollar amount and the number of unissued shares in such Participant’s Account will be refunded or distributed to the Participant, or in the case of death, the Participant’s designated beneficiary or estate, or otherwise disposed of in accordance with policies and procedures prescribed by the Committee in cases where such a refund or distribution may not be possible.
 
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Article VI
General Provisions
6.1 Notices. Any notice which a Participant files pursuant to the Plan shall be made on forms prescribed by the Committee and shall be effective only when received by the Company.
6.2 Condition of Employment. Neither the creation of the Plan nor participation therein shall be deemed to create any right of continued employment or in any way affect the right of the Company or a Designated Subsidiary to terminate an Employee.
6.3 Withholding of Taxes. Each Participant shall, no later than the date as of which the value of an option under the Plan and/or shares of Stock first becomes includible in the income of the Participant for income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any taxes of any kind required by law to be withheld with respect to such option or shares of Stock. The obligations of the Company under the Plan shall be conditioned upon the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. In particular, to the extent a Participant is subject to taxation under U.S. Federal income tax law, if the Participant makes a disposition, within the meaning of Section 424(c) of the Code of any share or shares of Stock issued to the Participant pursuant to the Participant’s exercise of an option, and such disposition occurs within the two-year period commencing on the day after the first date of the Option Period or within the one-year period commencing on the day after the Exercise Date, the Participant shall, within ten (10) days of such disposition, notify the Company thereof and thereafter immediately deliver to the Company any amount of Federal, state or local income taxes and other amounts which the Company informs the Participant the Company may be required to withhold.
6.4 Amendment of the Plan. The Board of Directors or the Board’s Compensation Committee may at any time, or from time to time, amend the Plan in any respect, except that, without approval of the shareholders, no amendment may (a) increase the aggregate number of shares reserved under the Plan other than as provided in Section 4.2 hereof, (b) materially increase the benefits accruing to Participants or materially modify the requirements as to eligibility for participation in the Plan. Any amendment of the Plan must be made in accordance with applicable provisions of the Code and/or any regulations issued thereunder, any other applicable law or regulations, and the requirements of the principal exchange upon which the Stock is listed. The Plan may not be amended in any way that will cause rights issued under the Plan to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code or any successor thereto. To the extent necessary to comply with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, Section 423 of the Code, or any other applicable law or regulation, the Company shall obtain shareholder approval of any such amendment.
6.5 Application of Funds. All funds received by the Company by reason of purchases of Stock hereunder may be used for any corporate purpose.
6.6 Legal Restrictions. The Company shall not be obligated to sell shares of Stock hereunder if counsel to the Company determines that such sale would violate any applicable law or regulation.
6.7 Gender. Whenever used herein, use of any gender shall be applicable to both genders.
 
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6.8 Conditions Upon Issuance of Shares.
6.8.1 If at any time the Committee shall determine, in its discretion, that the listing, registration and/or qualification of shares of Stock upon any securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of shares of Stock hereunder, no option may be exercised or paid in whole or in part unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee.
6.8.2 If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Stock pursuant to an option is or may be in the circumstances unlawful, contravene the requirements of any stock exchange, or result in the imposition of excise taxes on the Company or any subsidiary under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act of 1933, as amended, or otherwise with respect to shares of Stock or options and the right to exercise any option shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company or any subsidiary.
6.8.3 The Committee, in its absolute discretion, may impose such restrictions on the ownership and transferability of the shares of Stock purchasable or otherwise receivable by any person under any option as it deems appropriate. The certificates evidencing such shares may include any legend that the Committee deems appropriate to reflect any such restrictions.
6.9 Governing Law. The Plan and all rights and obligations thereunder shall be constructed and enforced in accordance with the laws of the State of Delaware and any applicable provisions of the Code and the related regulations.
6.10 Jurisdiction: Waiver of Jury Trial. Any suit, action or proceeding with respect to the Plan or any agreement, or any judgment entered by any court of competent jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Delaware or the United States District Court for the District of Delaware and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, the Company and each eligible Employee shall irrevocably and unconditionally (a) submit in any proceeding relating to the Plan or any agreement, or for the recognition and enforcement of any judgment in respect thereof (a “ Proceeding ”), to the exclusive jurisdiction of the courts of the State of Delaware, the court of the United States of America for the District of Delaware, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and determined in such Delaware State court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Company and each eligible Employee may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE PLAN OR ANY AGREEMENT, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, in the case of an eligible Employee, at the eligible Employee’s address shown in the books and records of the Company or, in the case of the Company, at the Company’s principal offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of the State of Delaware.
 
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6.11 Unfunded Status of Plan. The Plan shall be an unfunded plan. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Stock or make payments, provided that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.
 
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of Apparel Holding Corp. of our report dated July 11, 2013, except for the effects of the discontinued operations discussed in Note 4 to the consolidated financial statements as to which the date is September 24, 2013, relating to the consolidated financial statements and financial statement schedules of Apparel Holding Corp., which appears in such Registration Statement. We also consent to the reference to us under the headings “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
St. Louis, Missouri
October 30, 2013

Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of Apparel Holding Corp. of our report dated July 11, 2013 relating to the financial statements of Vince, LLC, which appears in such Registration Statement. We also consent to the reference to us under the headings “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
St. Louis, Missouri
October 30, 2013