EXHIBIT 10.1

THIRD MORTGAGE NOTE MODIFICATION AGREEMENT

AND DECLARATION OF NO SET-OFF

THIS AGREEMENT, made this 18th day of March, 2008, by and between dELiA*s
DISTRIBUTION COMPANY, a Delaware corporation (the “Maker”) and MANUFACTURERS AND
TRADERS TRUST COMPANY, a New York banking corporation, successor in interest to
Allfirst Bank (the “Payee”) to modify the Mortgage Note dated August 6, 1999
(the “Note”), which was given in connection with that certain Open-End
Construction/Permanent Loan Mortgage and Security Agreement also dated August 6,
1999 (the “Mortgage”) to secure payment of an original principal indebtedness of
Five Million Three Hundred Twenty Thousand Dollars ($5,320,000.00), said
Mortgage having been recorded in York County Record Book 1373, Page 6314, as a
lien on and against the Mortgaged Property, as therein described and defined
(the “Mortgaged Property”)

W I T N E S S E T H :

WHEREAS, on August 6, 1999, Maker made, executed and delivered to Payee a
Mortgage Note in the principal amount of Five Million Three Hundred Twenty
Thousand Dollars ($5,320,000.00), which Mortgage Note, together with the
Modification Agreement made effective as of May 1, 2001, and the Extension to
Modification Agreement dated July 28, 2003, the Mortgage Note Modification
Agreement and Declaration of No Set-Off dated April 19, 2004 and the Second
Mortgage Note Modification Agreement and Declaration of No Set-Off dated
August 22, 2006 (as modified, the “Note”) is incorporated herein by reference
thereto and made a part hereof; and

WHEREAS, Maker is indebted under the Note to Payee for monies advanced to or on
behalf of Maker by Payee under and subject to the terms of the Note and related
documents and instruments (the “Related Contracts”); and

WHEREAS, the outstanding principal balance of the Note as of March 18, 2008, is
$2,384,395.34, together with interest thereon accrued and accruing; and

WHEREAS, the parties hereto have agreed to change certain repayment provisions
and extend the maturity date of the Note; and

WHEREAS, Maker has no defense, charge, defalcation, counterclaim, plea, demand
or set-off against the Note or any document or instrument related thereto or
associated therewith, and acknowledges and agrees that said Mortgage is now and
shall remain as a valid first lien on and against the Mortgaged Property; and

WHEREAS, the parties hereto desire to formalize their agreement for this
modification of the Note and Mortgage.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto covenant and agree as follows:

1. That the introductory clauses set forth above are incorporated herein by
reference and made a part hereof.

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2. That the Note be and hereby is amended to substitute “September 30, 2009” for
“September 30, 2008” appearing therein as and for the Maturity Date. Principal
and interest shall continue to be due and payable in consecutive monthly
installments on the sixth (6th) day of each month (the “Payment Due Date”),
which installments shall be increased or decreased by Payee each September
during the remaining term of the Note to reflect any change(s) in the effective
interest rate, with any such adjustment(s) to be effective with the payment due
on the Payment Due Date in October, and shall be first applied to interest on
the outstanding principal balance hereof and the balance to the payment of the
outstanding principal balance hereof based on an agreed fifteen (15) year
amortization until principal and interest are fully paid, except that the final
installment, unless sooner paid, shall now be due and payable on or before
September 30, 2009.

3. That the Note as amended is secured, among other things, by said Mortgage
covering all that certain tract of land and improvements thereon situate partly
in Penn Township and partly in the Borough of Hanover, York County,
Pennsylvania.

4. That it is understood and agreed by the parties hereto that this Agreement
does not constitute the creation of a new debt or the extinguishment of the debt
evidenced by the Note as amended and Mortgage, nor does it in anywise affect or
impair the lien of the Mortgage, which the parties hereby acknowledge to be a
valid and subsisting lien on the Mortgaged Property, or any additional and other
security provided by Maker to Bank, and the lien of said Mortgage, as well as
any such additional and other security, is agreed to have continued in force and
effect from the date thereof, unaffected and unimpaired by this Agreement and
the same shall so continue until fully satisfied.

5. That in all other respects, the Note and the Related Contracts shall remain
in full force and effect, and without limiting the generality of the foregoing,
all warrants of attorney therein are ratified and confirmed and incorporated
herein by reference.

6. That any and all reference to the Mortgage Note dated August 6, 1999, in
writings of the same or subsequent date shall be deemed to be or to have been
made and to refer to the Mortgage Note dated August 6, 1999, as amended and
modified from time to time.

IN WITNESS WHEREOF, this Modification Agreement has been duly executed as of the
day and year first above written.

 

        MAKER: ATTEST:     dELiA*s DISTRIBUTION COMPANY

/s/ David Diamond

    By:  

/s/ Walter Killough

Title: Assistant Secretary     Title:   Chief Operating Officer     PAYEE:    
MANUFACTURERS AND TRADERS TRUST COMPANY     By:  

/s/ Keith A. Mummert

      Keith A. Mummert, Vice President

 

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