Exhibit 10.1

January 28, 2015

VIA EMAIL ONLY

Brian Lattman, President

Butterfly Retail Acquisition LLC

50 West 23rd Street – 10th Floor

New York, NY 10010

Office: 212-590-6351

Cell: 917-797-0353

E-mail: blattman@alloymerch.com

 

  Re: Letter Agreement For Acquired Assets

Dear Brian:

This letter (the “Letter Agreement”) sets forth the binding agreement of
Butterfly Retail Acquisition LLC, an affiliate of HRSH Acquisitions, LLC d/b/a
Alloy Apparel & Accessories, LLC (the “Purchaser”), dELiA*s, Inc. and its debtor
affiliates (collectively, the “Debtors” or “Merchant”), and a joint venture
comprising of Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners,
LLC (together, the “Agent”) with respect to the Acquired Assets (as defined
herein).

SECTION 1 - AGENT’S DESIGNATION RIGHTS.

1.1 All capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in Exhibit A attached hereto.

1.2 Reference is made to that certain Amended & Restated Agency Agreement, dated
December 22, 2014 (the “Agency Agreement”) between Merchant and the Agent, which
was approved in In re dELiA*s, Inc., et al., Case No. 14-23678(RDD) (Bankr.
S.D.N.Y.) (the “Chapter 11 Cases”) pursuant to the Final Order (A)(I) Approving
the Debtors’ Assumption of Agency Agreement, (II) Authorizing the Debtors to
Sell Certain Assets Through Store Closing Sales, (III) Authorizing the Debtors
to Abandon Unsold Property, (IV) Waiving Compliance With Contractual Store
Closing Sale Restrictions and Exempting the Debtors From Laws Restricting Store
Closing Sales, and (V) Granting Related Relief [Docket No. 98] entered on
December 24, 2014 (the “Agency Order”).

1.3 In accordance with Section 7.4 of the Agency Agreement, the Agent hereby
agrees to exercise its designation rights and designate Purchaser as the
purchaser, acquirer, assignee, transferee, licensee, and/or designee, as
applicable, of the Acquired Assets. Subject to the sale process set forth in
this Letter Agreement, including as set forth in sections 11 and 12 of this
Letter Agreement, this Letter Agreement shall constitute a Sale Notice (as
defined in the Agency Agreement) to Merchant in accordance with Section 7.4 of
the Agency Agreement and, within two (2) days following the execution of this
Letter Agreement, the Agent shall provide a Sale Notice to the Committee as
required by Section 7.4 of the Letter Agreement.

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SECTION 2 – ACQUIRED ASSETS.

2.1 Acquired Assets. Upon the terms and subject to the conditions set forth in
this Letter Agreement, the Agent agrees to direct the Merchant to transfer,
sell, convey, assign and deliver to Purchaser, or its designee, and, at the
Closing (as defined herein), the Merchant shall transfer, sell, convey, assign
and deliver to Purchaser, or its designee, the Acquired Assets, free and clear
of all liens, claims and encumbrances (collectively, the “Encumbrances”),
subject to the Permitted Encumbrances (as defined herein). “Acquired Assets”
shall mean the following:

 

  (a) All of the Merchant’s membership interests (the “Membership Interests”) in
dELiA*s Brand LLC (“D Brand”) pursuant to an assignment agreement substantially
in the form attached hereto as Exhibit B; and

 

  (b) All of the Merchant’s rights, title, and interests in and to the
Intellectual Property (but, with respect to any of the Merchant’s Intellectual
Property that is the subject of an executory contract, only to the extent such
executory contract is an Assumed Contract, as defined in Section 3.1(b) of this
Letter Agreement), including, without limitation, the Intellectual Property
identified on the list attached hereto as Schedule 2.1(b) (the “Acquired IP”)
pursuant to:

 

  (i) with respect to any Assumed Contract, an assignment agreement
substantially in the form attached hereto as Exhibit C;

 

  (ii) with respect to Acquired IP (other than the Assumed Contracts) and all of
the Merchant’s rights, title and interests in other assets of Merchant set forth
on the list attached hereto as Schedule 2.1(c) hereto (the “Other Assets”), a
bill of sale substantially in the form attached hereto as Exhibit D.

2.2 Without the prior written consent of the Purchaser, Agent shall not amend or
otherwise modify the definition of “Intellectual Property” or “Customer Lists”
contained in the Agency Agreement, or otherwise amend, modify or waive any other
provision contained in the Agency Agreement in a manner materially adverse to
the interests of the Purchaser hereunder or thereunder.

2.3 The form of the agreements attached hereto as Exhibits B, C, and D have been
agreed to by the Merchant, Agent and Purchaser as the definitive documents (the
“Definitive Documents”) with respect to the transactions contemplated by this
Letter Agreement in respect of the Acquired Assets and each shall be executed at
the Closing in the form attached hereto.

For purposes of this Letter Agreement, “Permitted Encumbrances” shall mean any
claim, lien or encumbrance on the Acquired Assets (i) in favor of JLP Daisy, LLC
to the extent set forth in that certain Master License Agreement, dated as of
February 24, 2003 (the “Master License Agreement”), between D Brand and JLP
Daisy LLC (“JLP”), (ii) to the extent set forth in that certain Limited
Liability Company Agreement of D Brand, dated as of February 24, 2003; and
(iii) created under any of the Assumed Contracts pursuant to the express terms
of such Assumed Contracts or existing under any of the Assumed Contracts solely
as a result of the failure of the Debtors to pay the amounts due and owing
thereunder.

 

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SECTION 3 – CONSIDERATION.

3.1 Consideration; Payment Amount. On the Funding Date (as defined herein), the
Purchaser shall pay Agent the “Payment Amount” which shall mean the sum of:

 

  (a) $2,500,000 in cash; and

 

  (b) to the extent Purchaser requests that the Merchant assume and assign to
Purchaser one or more contracts, which request may be made in Purchaser’s sole
discretion on or prior to the Funding Date (each such contract, an “Assumed
Contract” and, collectively, the “Assumed Contracts”), any and all Cure Amounts
associated with such Assumed Contracts.

3.2 Timing of Payment. The Payment Amount shall be paid by the Purchaser to the
Agent on the “Funding Date” which shall mean the later of

 

  (a) three (3) business days after entry of an order entered by the Bankruptcy
Court (the “Approval Order”) approving the sale, acquisition, assignment,
transfer, license, and/or designation of the Acquired Assets to the Purchaser
free and clear of all Encumbrances (other than Permitted Encumbrances) and
waiving any stay under Federal Rules of Bankruptcy Procedure 6004(h), 6006(d),
or otherwise, or fifteen (15) days if such order does not contain a provision
waiving any applicable stay;

 

  (b) satisfaction of the conditions precedent to the Purchaser’s obligation to
purchase the Acquired Assets as set forth in this Letter Agreement (the
“Conditions”); and

 

  (c) such other date as the Agent and Purchaser may agree in writing.

3.3 Agent shall retain all rights to all Asset Proceeds, as well as (i) the
Merchandise, the Proceeds, the Owned FF&E (to the extent not set forth on
Schedule 2.1(c) to this Letter Agreement), and all proceeds of the foregoing,
(ii) commissions in respect of the sale of Merchant Consignment Goods and Owned
DC FF&E, and (iii) all other amounts to be paid to Agent pursuant to the Agency
Agreement, and the Purchaser shall have no interest in or rights to any such
assets, amounts, or proceeds thereof.

3.4 The Purchaser is not assuming, nor shall it in any manner become liable for,
any debts, liabilities, obligations or expenses of any kind or nature whatsoever
of the Debtors or the Agent, whether existing on the date hereof or on the date
of entry of the Approval Order; provided, however, if the Closing occurs, the
Purchaser shall be responsible for the payment of the Cure Amounts associated
with the Assumed Contracts and all debts, liabilities, obligations or expenses
arising under the Assumed Contracts.

 

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SECTION 4 – CONDITIONS.

4.1 The Purchaser’s obligation to purchase the Acquired Assets and pay the
Payment Amount to the Agent on the Funding Date is subject to the following
Conditions:

 

  (a) approval by the Bankruptcy Court of the bidding procedures for the
Acquired Assets, in the form attached hereto as Exhibit E or in such other form
as is reasonably acceptable to the Purchaser and Merchant, in consultation with
the Committee and Lender (the “Bidding Procedures”). Notwithstanding the
foregoing or anything contained herein to the contrary, if the Bidding
Procedures (i) provide for the right to bid on assets (whether owned by the
Merchant,
D Brand or any other third party) in addition to, or otherwise modify the
description or scope of, the Acquired Assets or (ii) provide for any sharing of
the proceeds of the sale of any assets included within the Bidding Procedures
with any third party (other than any sharing arrangement by or among the Agent,
the Merchant and/or the official committee of unsecured creditors in the Chapter
11 Cases), then (y) the Purchaser shall have no obligation to consummate the
Closing and (z) the sale of any assets included within the modified Bidding
Procedures shall be deemed to constitute an Alternative Transaction (as defined
in Section 12) if a bid (other than the Purchaser’s bid) is received in
connection with such modified Bidding Procedures and such bid is “qualified”
and, as a result, the Purchaser shall be entitled to receive the Break Up Fee
and Expense Reimbursement (as each such term is defined in Section 12) if the
Closing does not occur; and

 

  (b) approval by the Bankruptcy Court of the Purchaser’s acquisition of the
Acquired Assets, free and clear of all Encumbrances (other than Permitted
Encumbrances), including any contract designated by the Purchaser as an Assumed
Contract, which Assumed Contracts shall include:

 

  (i) that certain Trademark License Agreement, dated as of February 24, 2003,
between D Brand and dELiA*s Corp. (the “Trademark License Agreement”); and

 

  (ii) that certain Amended and Restated Media Services Agreement (the “Media
Services Agreement”) by and between Merchant and Defy Media, LLC (f/k/a Alloy,
Inc.).

SECTION 5– TRANSITION SERVICES AGREEMENT.

5.1 The Agent shall use commercially reasonable good faith efforts to assist the
Purchaser with negotiations with Merchant, in consultation with the Committee
and Lender, in respect of a transition services agreement (the “Transition
Services Agreement”), on terms and conditions reasonably acceptable to the
Purchaser, that provides for the Purchaser’s use of the Distribution Centers in
connection with the Direct Business Platform for a period of no less than 30
days after the date of the Closing. The Purchaser hereby acknowledges that the
Agent has provided the Merchant with notice that the Agent is vacating and will
cease using the Distribution Centers on January 29, 2015.

 

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5.2 The Purchaser shall have no obligation to enter into the Transition Services
Agreement.

SECTION 6– APPROVAL ORDER AND CLOSING DATE.

6.1 The Approval Order or any subsequent order shall be in a form and substance
reasonably satisfactory to the Purchaser, Agent, and Merchant, in consultation
with the Committee and Lender.

6.2 The Purchaser agrees to accept and comply with the recommendations from the
Consumer Privacy Ombudsman appointed in the Chapter 11 Cases in respect of the
personally identifiable information in the Customer List.

6.3 Agent and Merchant shall use commercially reasonable good faith efforts to

 

  (a) obtain entry of the Approval Order or other order of the Bankruptcy Court,
acceptable to Agent, Merchant, and the Purchaser in each such party’s reasonable
discretion, approving the sale, acquisition, assignment, transfer, license,
and/or designation of the Acquired Assets to the Purchaser, and waiving any stay
under Federal Rules of Bankruptcy Procedure 6004(h), 6006(d), or otherwise, and

 

  (b) assist the Purchaser with closing the transactions contemplated by this
Letter Agreement in respect of the Acquired Assets (the “Closing”). Agent and
Merchant each hereby covenants that, from time to time after the Closing, at the
Purchaser’s reasonable request and without further consideration, Agent and
Merchant will do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, all such further acts, conveyances,
transfers, assignments, powers of attorney and assurances as reasonably may be
required more effectively to convey, transfer to and vest in the Purchaser, and
to put the Purchaser in possession of, any of the Acquired Assets; provided,
however, that Purchaser shall be responsible for preparing all documents and
other instruments at Purchaser’s sole cost and expense.

6.4 The Closing shall occur on the Funding Date (the “Closing Date”), which
shall occur no later than March 15, 2015 (the “Outside Closing Date”). If the
Funding Date does not occur by the Outside Closing Date due to the failure of
the Agent to satisfy certain of the Conditions, then the Purchaser may elect, in
its discretion, either to (i) terminate its obligations under this Letter
Agreement or (ii) extend the Outside Closing Date until the satisfaction of the
Conditions (or the waiver of such Conditions by the Purchaser).

6.5 Prior to the consummation of the sale of the Acquired Assets pursuant to the
Bidding Procedures, Merchant, in its capacity as a member of the Board of
Managers of D Brand and as the sole owner of the Membership Interests, shall not
cause D Brand to transfer or assign any of its assets.

 

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SECTION 7 – STORE CLOSING SALE.

7.1 If the Closing occurs, the Purchaser hereby agrees that Agent shall be
authorized to conduct, until the Sale Termination Date, the Sale at the Stores,
the Distribution Centers, and corporate offices and, until the Closing Date,
through the Direct Business Platform as a “sale on everything”, “everything must
go”, “store closing,” or “going out of business”.

7.2 Effective on the Closing Date, the Agent shall discontinue the sale of goods
through the Direct Business Platform; provided, however, until the Sale
Termination Date, Purchaser hereby irrevocably grants Agent the right and
otherwise authorizes Agent to reasonably promote the Sale at the Stores using
one or more reasonably sized banners located at the top of the landing page(s)
for the Direct Business Platform (including (without limitation) websites and
social media sites such as Facebook and Twitter) and utilize the functionality
of the Store locator feature, all of which shall be updated by the Purchaser at
the Agent’s expense, based on Agent’s reasonable requests and otherwise operated
and maintained by the Purchaser.

SECTION 8 – INTELLECTUAL PROPERTY LICENSE.

8.1 The Purchaser hereby grants to Agent, effective as of the Closing Date and
ending on the Sale Termination Date (or, in the case of Remaining Merchandise
and MOOS Inventory, once sold), an irrevocable, non-transferable, royalty free
license and right to use all Acquired IP and Customer Lists that constitute
Acquired Assets in connection with the Sale, subject to reasonable restrictions
requested by the Purchaser in order for the Purchaser to comply with its privacy
policy (as well as Merchant’s privacy policy) and applicable laws governing the
use and dissemination of confidential consumer personal data (including those
applicable to the Purchaser pursuant to Section 6.2 of this Letter Agreement).
Without limiting the generality of the foregoing, Agent shall be authorized to
use the Intellectual Property and Customer Lists included as Acquired Assets to
sell or otherwise dispose of the Merchandise (including (without limitation) the
Remaining Merchandise), the MOOS Inventory, Owned FF&E (to the extent not set
forth on Schedule 2.1(c) to this Letter Agreement), Excluded Goods, and Owned DC
FF&E and otherwise advertise and promote the Sale, including (without
limitation) the use of the trade names, logos, e-mail lists, customer lists, and
e-commerce sites (including (without limitation) websites and social media sites
such as Facebook and Twitter), all in accordance with the license to use such
Acquired Assets granted to the Agent by the Merchant under the Agency Agreement
subject to such reasonable quality control requirements mutually acceptable to
the Purchaser and Agent.

8.2 With respect to Remaining Merchandise and MOOS Inventory, the Purchaser
hereby grants the Agent the right to sell such Remaining Merchandise and MOOS
Inventory on a wholesale basis with all logos, tags, and other intellectual
property intact and grant purchasers thereof the right to sell such Remaining
Merchandise and MOOS Inventory with such logos, tags, and other intellectual
property intact and advertise the sale of such Remaining Merchandise and MOOS
Inventory as “Authentic dELiA*s Branded Goods”.

 

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8.3 All goodwill associated with use of the Acquired Assets shall inure to the
benefit of the Purchaser.

8.4 For the avoidance of doubt, “Intellectual Property” shall exclude software
licenses relating solely to the operation of the Debtors’ Stores.

8.5 To the extent the Transition Services Agreement, or any similar type of
agreement, transfers to the Purchaser any software that the Debtors still
require in order to conduct the wind down of their operations, the Purchaser
agrees that it will license such software back to the Debtors at no charge until
the closing of the Chapter 11 Cases or as otherwise agreed to in writing by the
Purchaser and the Debtors.

SECTION 9 – ACKNOWLEDGEMENT AS TO CONDITION.

9.1 EXCEPT AS EXPRESSLY SET FORTH BELOW IN THIS SECTION 9.1, THE PURCHASER
HEREBY ACKNOWLEDGES AND AGREES THAT NEITHER MERCHANT NOR AGENT MAKES ANY
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE ACQUIRED ASSETS OR ANY MATTER RELATING TO THE ACQUIRED ASSETS. WITHOUT IN
ANY WAY LIMITING THE FOREGOING, AGENT, ON BEHALF OF ITSELF AND MERCHANT, HEREBY
DISCLAIMS ANY WARRANTY (EXPRESS OR IMPLIED) OF MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE AS TO ANY ACQUIRED ASSET. MERCHANT AND AGENT, TO THE BEST
OF AGENT’S KNOWLEDGE, REPRESENT AND WARRANT THAT dELiA*s ASSETS CORP. OWNS ALL
OF THE OUTSTANDING MEMBERSHIP INTERESTS IN D BRAND AND THERE ARE NO OTHER
RIGHTS, OPTIONS OR WARRANTS TO PURCHASE MEMBERSHIP INTERESTS IN D BRAND.

9.2 THE PURCHASER FURTHER ACKNOWLEDGES THAT THE PURCHASER,

(a) HAS CONDUCTED INDEPENDENT DUE DILIGENCE IN RESPECT OF THE ACQUIRED ASSETS AS
THE PURCHASER DEEMED NECESSARY OR APPROPRIATE,

(b) HAS CONDUCTED AN INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL
AND OTHER CONDITIONS OF ACQUIRED ASSETS AND ALL SUCH OTHER MATTERS RELATING TO
OR AFFECTING THE ACQUIRED ASSETS AS THE PURCHASER DEEMED NECESSARY OR
APPROPRIATE, AND

(c) THAT IN PROCEEDING WITH THE PURCHASER’S ACQUISITION OF THE ASSETS, PURCHASER
IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT DUE DILIGENCE AND INDEPENDENT
INSPECTIONS AND INVESTIGATIONS.

9.3 ACCORDINGLY, EXCEPT FOR THE LIMITED REPRESENTATION SET FORTH IN SECTION 9.1
ABOVE, PURCHASER IS, AND AT CLOSING SHALL BE DEEMED TO BE, PURCHASING THE ASSETS
ON AN “AS IS” AND “WHERE IS” BASIS.

 

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SECTION 10 – CONFIDENTIALITY.

10.1 Except with regard to the existence of this Letter Agreement and the
identity of the parties hereto, each of Agent, the Purchaser and the Merchant,
on behalf of themselves and their respective officers, directors, employees,
agents, representatives, subsidiaries, and affiliates (collectively, the
“Representatives”), acknowledges and understands that the terms and conditions
of this Letter Agreement and its exhibits and schedules are confidential and
proprietary in nature, and each of the Agent, the Purchaser and the Merchant, on
behalf of itself and its respective Representatives, therefore covenants and
agrees to maintain strict confidentiality with respect to such terms, and that
neither Agent, the Purchaser, the Merchant nor their respective Representatives
will use such information for any purpose or disclose such information to any
person other than their respective Representatives, the official committee of
unsecured creditors in the Chapter 11 Cases, and the Debtors’ lender under their
postpetition financing credit facility, without the express consent of the other
party until such time as a motion is filed with the Bankruptcy Court to approve
the Bidding Procedures and sale of the Acquired Assets at which time the Agent
and Merchant may disclose the terms and conditions of this Letter Agreement.

10.2 Nothing in this Section 10 shall prohibit the disclosure or use of any
information (i) to the official committee of unsecured creditors in the Chapter
11 Cases, any lender to Agent or the Purchaser or to any investor in the
Purchaser, (ii) to the extent required by law or regulation, or (iii) to enforce
or defend any party’s rights in connection with any dispute under this Letter
Agreement.

SECTION 11 – EXCLUSIVITY.

11.1 In consideration of the sharing of confidential information and the
agreements contained herein, from the date hereof through the date on which the
Bankruptcy Court enters an order approving Bidding Procedures for the Acquired
Assets (the “Bidding Procedures Order”),

 

  (a) absent the written consent of the Agent, Merchant, and Purchaser, on
behalf of itself and its Representatives, Purchaser agrees that neither the
Purchaser nor its Representatives will solicit, negotiate or enter into any
agreement with any party (other than Agent, Merchant or their Representatives)
with respect to the transactions contemplated by this Letter Agreement; and

 

  (b) absent the written consent of the Agent, Merchant and Purchaser, on behalf
of itself and its Representatives, Agent and Merchant agree that neither Agent,
Merchant nor their Representatives will solicit, negotiate or enter into an
agreement with any party (other than the Purchaser or its Representatives) with
respect to the Acquired Assets.

 

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11.2 In consideration of the agreements contained herein, from the date hereof
through and including the date of entry of the Bidding Procedures Order, absent
the written consent of the Purchaser, the Agent shall not, on behalf of itself
or its Representatives,

 

  (a) exercise its designation rights in respect of the Acquired IP or other
Acquired Assets in favor of any party (other than the Purchaser);

 

  (b) fail to exercise the designation rights in favor of the Purchaser as
provided in Section 1 above;

 

  (c) negotiate or enter into any agreement with any party (other than the
Purchaser) regarding the assignment of all or any part of the Acquired Assets to
such party.

11.3 Following the entry of the Bidding Procedures Order, the Merchant and Agent
and their respective Representatives may solicit and negotiate with one or more
third parties for the purchase of the Acquired Assets pursuant to procedures
approved in the Bidding Procedures Order.

SECTION 12– BREAK UP FEE AND EXPENSE REIMBURSEMENT.

12.1 If an alternative transaction with respect to the Acquired Assets (an
“Alternative Transaction”) is consummated, the Purchaser shall be entitled to a
break up fee (the “Break Up Fee”) in the aggregate amount of 3% of the cash
portion of the Payment Amount and expense reimbursement for up to $50,000 in
reasonable and documented out of pocket expenses (the “Expense Reimbursement”).
The Break Up Fee and Expense Reimbursement shall be paid at the closing of, and
shall be a condition to the consummation of, the Alternative Transaction, and
the amounts used to pay the Break Up Fee and Expense Reimbursement shall not
constitute Asset Proceeds.

SECTION 13– INDEMNIFICATION.

13.1 Agent shall indemnify and hold the Purchaser and its Representatives
harmless from and against all claims, demands, penalties, losses, liability or
damage, including, without limitation, reasonable attorneys’ fees and expenses,
asserted directly or indirectly against the Purchaser or its Representatives
resulting from, or in any way related to (i) Agent’s failure to perform under or
material breach of this Letter Agreement or the Agency Agreement or (ii) Agent’s
conduct in connection with the Merchandise, the Owned FF&E and the Assets (other
than the Acquired Assets) on or after the Sale Commencement Date.

13.2 The Purchaser shall indemnify and hold Agent and its Representatives
harmless from and against all claims, demands, penalties, losses, liability or
damage, including, without limitation, reasonable attorneys’ fees and expenses,
asserted directly or indirectly against Agent or its Representatives resulting
from, or in any way related to (i) the Purchaser’s failure to perform under or
material breach of this Letter Agreement, or (ii) the Purchaser’s conduct in
connection with the Acquired Assets on or after the Closing Date.

 

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13.3 Agent and the Purchaser shall each, as promptly as practical, provide the
other with notice of any claim, suit or demand that in any way relates to or
arises out of this Letter Agreement. Such notice shall set forth whether the
notifying party seeks, as of that time, indemnification from the other party for
such claim, suit or demand. Neither the Purchaser nor Agent shall compromise or
settle any claim, suit or demand for which indemnification is sought without the
prior written consent of the other party hereto.

SECTION 14 – MISCELLANEOUS.

14.1 This Agreement shall be governed by the laws of the state of New York that
apply to contracts made and performed entirely within such state. Any action,
suit or other proceeding (hereinafter, an “action”) with respect to this Letter
Agreement or any matter arising out of or in connection with this Letter
Agreement shall be brought exclusively in the state and federal courts sitting
in White Plains, New York. By execution and delivery of this Letter Agreement,
each party hereto hereby accepts for itself and in respect of its property,
generally and unconditionally, the sole and exclusive jurisdiction of the
aforesaid courts and appellate courts thereof.

14.2 EACH PARTY HERETO, FOR ITSELF AND ITS REPRESENTATIVES, HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THE ACTIONS OF THE PARTIES HERETO OR
THEIR RESPECTIVE REPRESENTATIVES PURSUANT TO THIS AGREEMENT OR IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

14.3 All notices and demands required and desired to be given by any party
hereto shall be in writing and shall be delivered personally, sent by overnight
courier service, prepaid or sent by United States registered or certified mail,
return receipt requested, postage prepaid and addressed as provided herein, or
any other address designated by such party which has been furnished in writing
in accordance with this provision. Notices shall be deemed given and served
(i) upon receipt or refusal, if delivered personally or by certified or
registered mail; or (ii) one business day after deposit with an overnight
courier service.

 

If to the Merchant:   

dELiA*s, Inc.

50 West 23rd Street

New York, New York 10010

Attn: Ryan A. Schreiber, Esq.

Telephone: (212) 590-6204

Facsimile: (212) 590-6500

Email: rschreiber@deliasinc.com

  

DLA Piper LLP (US)

1251 Avenue of the Americas, 25th Floor

New, York, New York 10020

Attn:  Gregg Galardi, Esq.

           Dienna Corrado, Esq.

Telephone: (212) 335-4640

Facsimile: (212) 884-8540

Email:gregg.galardi@dlapiper.com

           dienna.corrado@dlapiper.com

 

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If to the Agent:   

Gordon Brothers Retail Partners, LLC

Prudential Tower

800 Boylston Street

Boston, MA 02119

Attn: Michael Chartock

Telephone: 617.210.7116

Email: mchartock@gordonbrothers.com

  

Hilco Merchant Resources, LLC

5 Revere Drive, Suite 206

Northbrook, IL 60062

Attn: Ian S. Fredericks

Tel: 847.418.2075

Email: ifredericks@hilcotrading.com

If to the Purchaser:   

Butterfly Retail Acquisition LLC

50 West 23rd Street – 10th Floor

New York, NY 10010

Attn: Brian Lattman, President

Telephone: 212-590-6351

Email: blattman@alloymerch.com

  

Greenberg Traurig, P.A.

401 E. Las Olas Boulevard, Suite 2000

Fort Lauderdale, FL 33301

Attn: Mathew Hoffman, Esq.

Telephone: (954) 768-8203

Facsimile: (954) 759-5532

Email: hoffmanma@gtlaw.com

If to the Committee:    If to the Lender:

Kelley Drye & Warren LLP

101 Park Avenue

New York, NY 10178

Attn:   Robert L. LeHane, Esq.

           Gilbert R. Saydah, Jr., Esq.

Email: rlehane@kelleydrye.com

           gsaydah@kelleydrye.com

  

Choate Hall & Stewart, LLP

Two International Place

Boston, MA 02110

Attn:   John F. Ventola, Esq.

           Seth D. Mennillo, Esq.

Email: jventola@dchoate.com

           smennillo@choate.com

14.4 This Agreement may be signed in two or more counterparts, any one of which
need not contain the signature of more than one party, but all such counterparts
taken together will constitute one and the same agreement.

14.5 Each party acknowledges that monetary damages would be an inadequate remedy
for breach of its obligations under this Letter Agreement, and that any such
breach will result in immeasurable and irreparable harm to the other party.
Subject to Section 12 above (Break Up Fee and Expense Reimbursement), each party
shall be responsible for such party’s attorney’s and other professional’s fees,
costs, and expenses associated with this Letter Agreement and the transactions
contemplated hereby.

14.6 This Agreement shall be binding upon, and inure to the benefit of, the
Agent, the Purchaser, the Merchant and their respective successors and assigns.

14.7 Time is of the essence with respect to all dates and time periods in this
Letter Agreement.

14.8 This Letter Agreement shall not be construed more strictly against one
party than against the other, merely by virtue of the fact that it may have been
prepared primarily by counsel for one of the parties, it being recognized that
the Merchant, Agent, and Purchaser have contributed substantially and materially
to the preparation of this Letter Agreement.

 

11

--------------------------------------------------------------------------------

14.9 No change, modification or amendment shall be made to this Letter Agreement
unless set forth in writing and signed by all of the parties affected thereby.

14.10 As between the Merchant and Agent with respect to the “Sale” (as defined
in the Agency Agreement), to the extent there is a conflict or discrepancy
between the definitions set forth on Exhibit A to this Letter Agreement and the
definitions in the Agency Agreement, the Agency Agreement shall control in all
respects; provided, however, that the foregoing does not apply to the definition
of Asset Proceeds, which shall be as defined in this Letter Agreement and
Exhibit A.

[Signature page follows]

 

12

--------------------------------------------------------------------------------

Please sign where indicated below and return a copy of this Letter Agreement to
us. We look forward to working with your organization in connection with this
matter.

 

Very truly yours, HILCO MERCHANT RESOURCES, LLC

/s/ Ian Fredericks

By: Ian Fredericks Its: VP & Assistant General Counsel, Managing Member

GORDON BROTHERS RETAIL

PARTNERS, LLC

/s/ Michael Chartock

By: Michael Chartock Its: General Counsel

ACCEPTED, AGREED AND ACKNOWLEDGED THIS

     DAY OF January, 2015

 

BUTTERFLY RETAIL ACQUISITION LLC

/s/ Steven Russo

By: Steven Russo Its: Managing Member

ACCEPTED, AGREED AND ACKNOWLEDGED THIS

     DAY OF January, 2015

dELiA*s, INC., ON BEHALF OF ITSELF AND THE OTHER DEBTORS

/s/ Ryan Schreiber

By: Ryan Schreiber Its: President, General Counsel & Secretary

 

--------------------------------------------------------------------------------

SCHEDULE 2.1(b)

Acquired IP

All of Merchant’s right, title, and interest in and to the following:

 

  1. The Customer Lists, subject to section 7.9 of the Agency Agreement and such
other restrictions or limitations as may be imposed by the Bankruptcy Court or
the Consumer Privacy Ombudsman with respect to the transfer or maintenance of
Personally Identifiable Information.

 

  2. The mark “dELiA*s” for use in respect of specialty-branded retail stores,
an e-commerce business similar to the Direct Business Platform, and/or a direct
to consumer catalog business and such other uses that Merchant has to use the
mark “dELiA*s”.

 

  3. All other Intellectual Property (i) owned by, licensed to, and
transferrable by the Merchant to an unaffiliated third party and (ii) used in
connection with, or necessary for, the operation of Merchant’s specialty-branded
retail stores, the Direct Business Platform, and/or Merchant’s direct to
consumer catalog business.

 

  4. The Trademark License Agreement, dated as of February 24, 2003, by and
among dELiA*s Brand LLC, as Licensor, and Merchant, as Licensee, and the
Merchant’s interests in the trademarks listed on Exhibit 1 hereto.

 

  5. The Amended and Restated Media Services Agreement (the “Media Services
Agreement”) by and between Merchant and Defy Media, LLC (f/k/a Alloy, Inc.) and
all of the Merchant’s right, title and interest to the URL domain www.delias.com
and the URL subdomain “store.delias.com”.

 

  6. The URL domain name www.deliasinc.com, subject to Purchaser providing a
sublicense to Merchant for the right to use such domain name through June 30,
2015.

 

  7. Assumption and Assignment of executory contracts and unexpired personal
property leases necessary for the operation of the Direct Business Platform,
such as web and server hosting agreements, as specified by the Purchaser, in its
sole discretion.

 

  8. Permits associated with the operation of the Direct Business Platform, the
Stores, or the direct to consumer catalog business, but solely to the extent
transferrable.

--------------------------------------------------------------------------------

EXHIBIT 1 TO SCHEDULE 2.1(b)

 

TM Rights (Grouped by client)          Report Date: 12/5/2014       Page: 1
Client:    dELiA*s       50 West 23rd Street                        
New York, New York 10010               

ID

  

Country

  

Mark

  

Classes

  

App. #

  

App. Dt

  

Reg. #

  

Reg. Dt

  

Allow. Dt

  

ITU

17215    Australia    dELiA*s and Design    3, 25, 35    725,053    1/3/1997   
725,053    12/16/1997       No 17236    Brazil    dELiA*s and Design    25   
825,126,665    11/18/2002             No 17231    Brazil    DELIA’S    25   
825,126,657    11/18/2002             No 17184    Canada    dELiA*s and Design
      849,008    6/25/1997    506,959    1/22/1999       No 17185    Canada   
Delia’s 9 Point Design       851,637    7/29/1997    502,668    10/22/1998      
No 17234    China (People’s Republic Of)    DELIA’S    35    970087658   
8/21/1997    1,215,979    10/14/1998       No 17221    Hong Kong   
DELIA’S dELiA*s DELIA’S    35       8/20/1997    199902514    3/3/1999       No
      dELiA*S and Design                      17263    Japan    dELiA*s and
Design    25    1995-098373    9/26/1995    4,387,892    6/2/2000       No 17271
   Japan    dELiA*s and Design    3    1996-138473    12/10/1996    4,432,792   
11/17/2000       No 17273    Japan    dELiA*s and Design    16    1995-098372   
9/26/1995    4,097,175    12/26/1997       No 17265    Japan   
DELIA’S (STYLIZED) IN    16    1996-138474    12/10/1996    4,190,967   
9/25/1998       No       KATAKANA                      17272    Japan    DELIA’S
(STYLIZED) IN    25    1996-138475    12/10/1996    4,148,465    5/22/1998      
No       KATAKANA                      17266    Japan    Delia’s 9 Point Design
   16    1996-138477    12/10/1996    4,190,968    9/25/1998       No 17262   
Japan    Delia’s 9 Point Design    25    1996-138478    12/10/1996    4,125,846
   3/20/1998       No 17261    Japan    Delia’s 9 Point Design    3   
1996-138476    12/10/1996    4,161,941    7/3/1998       No 17210    New Zealand
   dELiA*s and Design    3, 25, 42    280,487    8/4/1997    280,487   
9/21/1998       No 17239    South Africa    DELIA’S    3    1997/11754   
8/5/1997    1997/11754    9/5/2000       No 17241    South Africa    DELIA’S   
42    1997/11756    8/5/1997    1997/11756    9/5/2000       No 17240    South
Africa    DELIA’S    25    1997/11755    8/5/1997    1997/11755    9/5/2000   
   No 17216    South Korea    dELiA*s and Design    3, 16, 25          40-577897
   3/18/2004       No 17217    United Kingdom    dELiA*s and Design    25, 35   
2,284,324    10/30/2001    2,284,324    5/3/2002       No 17213    United
Kingdom    dELiA*s and Design    3    2,144,536    9/9/1997    2,144,536   
6/14/2002       No 17214    United Kingdom    DELIA’S    3    2,144,538   
9/9/1997    2,144,538    9/6/2002       No 17174    United States    DAISY BY
DELIA’S    25    78/677,218    7/25/2005    3,636,800    6/9/2009       No 17258
   United States    dELiA*s and Design    3    86/315,549    6/20/2014         
   No 17181    United States    DELIA’S    18    74/644,799    3/10/1995   
2,076,125    7/1/1997       Yes 17186    United States    DELIA’S    25, 42   
74/505,280    3/28/1994    1,908,572    8/1/1995       No 17192    United States
   DELIA’S    18    78,215,932    2/18/2003    3,360,344    12/25/2007       Yes
17182    United States    DELIA’S    25    78/218,010    2/24/2003    3,265,620
   7/17/2007       Yes 17190    United States    DELIA’S    16, 18, 25   
78/211,546    2/6/2003    3,392,697    3/4/2008       Yes 17189    United States
   DELIA’S    42    75/976,281    2/12/1996    2,092,322    8/26/1997       Yes

--------------------------------------------------------------------------------

TM Rights (Grouped by client)       Report Date: 12/5/2014       Page: 2 17180
     United States    DELIA’S    25    74/644,800    3/10/1995    1,943,039   
12/19/1995            No 17179      United States    DELIA’S    25    74/644,797
   3/10/1995    1,997,643    8/27/1996       Yes 17178      United States   
DELIA’S    14    74/644,795    3/10/1995    2,011,083    10/22/1996       Yes
17193      United States    Delia’s 9 Point Design    3    75/976,254   
12/29/1995    2,104,334    10/7/1997       Yes 17197      United States   
Delia’s 9 Point Design    35    76/977,059    7/10/2002    2,907,137   
11/30/2004       No 17198      United States    DELIA’S POCKET DESIGN    25   
77/634,190    12/16/2008    3,884,488    11/30/2010       No 17194      United
States    MALLORY    25    77/901,675    12/28/2009    4,020,123    8/30/2011   
   Yes 17196      United States    STYLE GOSSIP    35    77/607,037    11/4/2008
   4,284,281    2/5/2013       No

--------------------------------------------------------------------------------

SCHEDULE 2.1(c)

 

ALLOY FF&E               

Item Level Summary

              

Description 1

  

Description 2

   Description 3    Description 4    Description 5    QTY   9th Floor MAC
Equipment               

I-Mac i5

   3.2 Ghz    32 GB    1TB    D25M20P0F8J4      1   

I-Mac i5

   3.4 Ghz    32 GB    1TB    D25MJ1VAF8JC      1   

I-Mac i5

   3.5 Ghz    24 GB    1TB    C02KDA2DDNCW      1   

I-Mac i5

   3.2 Ghz    24 GB    1TB    C02KD9WYDNCW      1   

I-Mac i5

   3.4 Ghz    32 GB    1TB    D25N42KDF8JC      1   

i-Mac-i5

   3.4 Ghz    32 GB    1TB    D25N42N1F8JC      1   

i-Mac-i5

   3.4 Ghz    32 GB    1TB    D25N42KGF8JC      1   

I-Mac i7

   3.4 Ghz    16 GB    1TB    D25KF0MHDNMP      1   

i-Mac-i5

   3.2 Ghz    24 GB    1TB    C02KDA3HDNCW      1   

I-Mac i5

   3.2 Ghz    16 GB    1TB    D25LJ0DAF8J9      1   

MacPro

   3.7 Ghz    32 GB    1TB    F5KMM0UUF9VN      1   

27” Thunderbolt Display

                 1   

27” Thunderbolt Display

                 1   

I-Mac i5

   3.2 Ghz    32 GB    1TB    D25M20MCF8J4      1   

I-Mac i5

   3.2 Ghz    32 GB    1TB    D25M206WF8J4      1   

I-Mac i5

   3.2 Ghz    32 GB    1TB    D25M2076F8J4      1   

I-Mac i5

   3.2 Ghz    24 GB    1TB    C02KDA3PDNCW      1   

MacPro5,1 In Poto Shop

   3.2 Ghz    16 GB    4TB    C07JF01MF4MC      1   

27” Thunderbolt Display

   in               1   

27” Thunderbolt Display

                 1   

MacBookPro5,1

   2.4 Ghz    4 GB    500 GB    W8848H2H1G0      1   

New Jersey Data Center

              

Hitachi SAN

   HUS 130               1   

APC Intellengent PDU

                 2   

Cisco UCS Chassis

                 1   

5 Processor Blades

                 1   

2 Fiber Modules

                 1   

HP Proliant Server

   Proliant DL-360               1   

HP Proliant Server

   Proliant DL-380               1   

HP Proliant Server

   Proliant DL-380 G7               1   

APC Intellengent PDU

                 2   

Cisco Firewalls

   ASA 5520 K9               2   

Cisco Switches

   Cisco 3750               4   

Cisco Routers

   Cisco 7206               2   

Baracuda mail Spam Firewall

   Baracuda FW 400               1   

Foundry Load Balancer

   Serveriron 4G ( not in use)               1   

IBM T60 Laptop

   T60               1   

APC Intellengent PDU

                 2   

Tripplite KVM

                 1   

HP Proliant Server

   Proliant DL-360 G7               1   

HP Proliant Server

   Proliant DL-380 G7               1   

HP Proliant Server

   Proliant DL-580 G7               1   

APC Intellengent PDU

                 2   

Apple Mac Mini + Fiber Channel

   Mac Mini (Mac File Server)               1   

HP Proliant Server

   Proliant DL-360 G5               1   

HP Proliant Server

   Proliant DL-380 G6               1   

HP Storage works Tape Library

   MSL4048               1   

HP Proliant Server

   Proliant DL-380e Gen8               1   

HP Proliant Server

   Proliant DL-580 G7               1   

Sun Netra 440

   Netra 400               2   

HP Proliant Server

   Proliant DL-380 G7               3   

HP Proliant Server

   Proliant DL-360 G5               4   

HP Proliant Server

   Proliant DL-320               1   

HP Proliant Server

   Proliant DL-360 G7               2   

HP Proliant Server

   Proliant DL-360 G6               1   

HP Proliant Server

   Proliant DL-360               4   

HP Proliant Server

   Proliant DL-120 G6               2   

Juniper Firewalls

   ISG-1000               2   

Juniper firewall

   Netscreen 204               1   

Foundry Load Balancer

   Serveriron 4G (not in use)               1   

Baracuda Load Balancer

   340 Load Balancer               1   

9th Floor IT Room

              

Palo Alto application firewall, model PA500, requires subsription

   IT    Firewall            1   

Ruckas Zone Director controller for access points, model 1100

   IT    Controller            2   

Cisco Small Business smart switch, model SG300

   IT    Switch            14   

Juniper Netscreen 50

   IT    Firewall            1   

Cisco core switch, model 6509e, year 2004

   IT    Switch            1   

Lucent phone switch, year 2000

   IT    Switch            1   

Cisco core switch, model 6506e, year 2004

   IT    Switch            2   

HP Proliant DL and ML Server 350 to 380, G4 to G8, assorted

   IT    Server            23   

Apple Promise VTrak 16TB E-Class E610F FC Raid; 16x 1TB SATA for MAC,

   IT    Storage system            1   

Baracuda mail gateway Firewall 400, requires subscription

   IT    Firewall            1   

Copmpaq, HP

   IT    Server rack            7   

Synology network attached storage,
24 TB, Raid 10, model DS 1813+

   IT    Storage system            1   

Tripp-Lite KVM

   IT    Switch            4   

HP tape drive model 4048, upgraded 3 years ago

   IT    Drive            1   

MSA 2000, expansion storage

   IT    Storage system            1   

of old SUN equipment with (1) Sunfire V215

   IT    Server Rack            1   

HP storage works fiber switch model 820Q

   IT    Switch            1   

HP Procurve 1800, 24G network switch

   IT    Switch            1   

Cisco 2900

   IT    Switch            5   

Cisco 2960s, 48 port

   IT    Switch            1   

Metro rack with casters

   MHE    Shelving            2   

Eaton Power, model 9355

   IT    UPS            1   

 

Page 1 to 2

--------------------------------------------------------------------------------

ALLOY FF&E

Item Level Summary

 

Description 1

   Description 2    Description 3    Description 4    Description 5    QTY  

Alloy Furniture List #1

              

Office chairs w/arms

                 38   

Office chairs no arms

                 3   

stack chairs w/arms

                 14   

stack chairs no arms

                 4   

Wicka chair

                 1   

cubical striaght

                 33   

L cubicle

                 4   

U cubicle

                 2   

office desk

                 1   

2 drawer lat. File

                 6   

2 drawer vert. file

                 1   

3 drawer vert. file

                 37   

4 drawer lat. File

                 1   

5 drawer lat. File

                 5   

2 shelf book shelf

                 1   

3 shelf book shelf

                 1   

4 shelf book shelf

                 1   

5 shelf book shelf

                 1   

2 door storage 30”

                 4   

2 door storage 42”

                 6   

combo cabinets

                 14   

Blueprint cabinets

                 2   

wood printer stand on rollers

                 1   

hat rack

                 1   

fans

                 6   

dorm ref.

                 2   

small ref.

                 1   

water cooler w/jugs

                 1   

plywood table on rollers

                 6   

wood table app. 30” X 48”

                 1   

folding table app. 30” X 72”

                 1   

small sq. table

                 1   

wicker room divider w/mirrow small

                 1   

shipping cases for clothes

                 5   

red duffal bag w/rollers

                 1   

printers

                 3   

PC’s not apple w/monitors

                 20   

Office Furniture List #2 Alloy

              

HP Laser JET 4250M printer

                 1   

Laserjet 8000N printer

                 1   

Laserjet 8100N printer

                 1   

The Judge Gretag macbeth

                 1   

Large breakroon Ref.

                 2   

conference room table

                 1   

3 drawer vert. files

                 15   

2 drawer lat. File

                 4   

combo storage/file cabinets

                 12   

L shape cub.

                 3   

striaght cube desk

                 12   

Nice sled chairs

                 10   

vented back office chair w/arms w/rollers

                 2   

office chairs w/arms w/rollers

                 14   

3 shelf book shelf

                 1   

folding chairs

                 2   

A-frame board

                 1   

speaker set

                 1   

NEC VE281X projector

                 1   

Rolling Garment Rack

                 35   

Cutting Tables

                 2   

Superior Model Forms

                 6   

9th Floor Photo Studio

              

Mathews tripod with casters

                 7   

Mathews tripod with turtle base

                 8   

Avenger roller stand, model A5012

                 1   

Reel EFX Fan ll, varibeam

                 1   

Manfrotto Auto Pole, assorted

                 2   

Assorted wood riser

                 10   

Heavy duty tripod with casters

                 2   

Folding table, assorted size

                 3   

SPT portable air conditioner

                 2   

Jiffy steamer

                 1   

Round table, 30“x36”

                 4   

Residential Refrigerator

                 1   

Black Auto Pole

                 3   

Mark 5 111

                 1   

 

Page 2 of 2

--------------------------------------------------------------------------------

EXHIBIT A

Definitions

“3PL” means a third party logistics company designated by the Agent, which shall
be reasonably acceptable to the Merchant, Lender and the Committee.

“3PL Expenses” means the documents costs and expenses of the 3PL for the 3PL
Services.

“3PL Services” means the 3PL’s responsibilities for picking up the MOOS
Inventory from the Merchant, receiving the MOOS Inventory at the 3PL’s facility,
processing, counting, sorting, and refurbishing the MOOS Inventory, and shipping
the MOOS Inventory to buyers.

“Additional Agent Merchandise” means additional merchandise procured by the
Agent which is of like kind and no lesser quality to the Merchandise located in
the Stores that the Agent is entitled to include in the Sale.

“Aged Merchandise” means items of Merchandise located in the Stores and the
Distribution Center Merchandise (but not Direct Business Merchandise) for which
the “Style Last Receipt Date” was on or before May 31, 2014 as reflected on the
applicable Cost File.

“Allocation Schedule” means the allocation schedule of Distribution Center
Merchandise and In-Transit Merchandise that has been mutually agreed upon by
Merchant and Agent.

“Applicable General Laws” means applicable federal, state and local laws,
regulations and ordinances, including, without limitation, all laws and
regulations relating to advertising, permitting, privacy, consumer protection,
occupational health and safety and the environment, together with all applicable
statutes, rules, regulations and orders of, and applicable restrictions imposed
by, governmental authorities.

“Assets” means the Membership Interests and the Merchant’s rights, title and
interests in and to the Intellectual Property.

“Asset Proceeds” means all cash and non-cash consideration received by Merchant
or Agent from the sale or other disposition of the Assets, which for the
avoidance of doubt shall exclude Proceeds, MOOS Proceeds, FF&E Proceeds and the
“Break Up Fee” (as defined in the Letter Agreement to which this is attached)
and “Expense Reimbursement” (as defined in the Letter Agreement to which this is
attached).

“Central Service Expenses” means costs and expenses for Merchant’s Central
Services.

“Central Services” means those Merchant central administrative services
necessary for the conduct and support of the Sale, including, but not limited
to, use or and access to Merchant’s: (i) inventory control system, (ii) payroll
system, (iii ) accounting system, (iv) office facilities, (v) central MIS and
POS services, (vi) cash reconciliation, (vii) central administrative services
and personnel to process and perform sales audit, banking, and other normal
course administrative services customarily provided to or for the benefit of
operating the Distribution Centers and/or the Stores, (viii) such other central
office services reasonably necessary for the Sale, and (ix) use by Agent
reasonably sized offices located at Merchant’s central office facility to effect
the Sale.

“Closing Locations” means the Distribution Center and the Stores.

--------------------------------------------------------------------------------

“Committee” means the official committee of unsecured creditors appointed in the
Chapter 11 Cases.

“Cost Value” means, with respect to each item of Merchandise, other than the
Additional Agent Merchandise, the lower of (i)(x) the lower of the Merchant’s
actual cost of such item and (y) the cost of such item as reflected in the SKU
for such item of Merchandise as reflected on (1) Merchant’s inventory cost file
attributable to the Merchandise (other than the Direct Business Merchandise)
identified on Exhibit 5.3(a)(1) to the Agency Agreement; and (2) Merchant’s
inventory cost file attributable to the Direct Business Merchandise identified
on Exhibit 5.3(a)(2); to the Agency Agreement and (ii) the Retail Price.

“Cure Amounts” means, with respect to each assumed contract acquired as part of
the Acquired Assets, the amount required to cure pre-Petition Date monetary
defaults or compensate a counterparty for actual pre-Petition Date pecuniary
loss, as required by Bankruptcy Code sections 365(b)(1)(A) and (B).

“Customer Lists” means any and all lists of current and past customers of
Merchant and/or any business of Merchant, including any and all information
relating in any way to the use of such lists for or by Merchant and/or any
business of Merchant, including (x) personal information, such as name, address,
telephone number, email address, website and any other database information and
(y) customer purchase history at a transaction level (including with respect to
dollar amounts, dates, and items purchased) but excluding from the foregoing any
credit card numbers or related customer payment source or financial information
prohibited by law.

“Defective Merchandise” means any item of Merchandise identified and agreed upon
by Merchant and Agent (with each party acting reasonably) as defective in that
it is damaged, defective, scratched, soiled, ripped, torn, stained, faded,
discolored, dented, out of box (if normally sold as new in-the-box), missing
pieces, mismatched, mis-mated or near-sized, parts, items typically sold as a
set which are incomplete, or gift with purchase items, or otherwise affected by
other similar defenses rendering it not first quality.

“Direct Business Merchandise” means those items of inventory identified on
Exhibit 5.2(b)(2) to the Agency Agreement that are located in Merchant’s
Distribution Center on the Sale Commencement Date, which have been ear-marked
and/or ticketed in the ordinary course of business for sale through the Direct
Business Platform.

“Direct Business Platform” means the Merchant’s e-commerce based direct business
platform.

“Distribution Center” means the Merchant’s distribution center at 348 Poplar
Street, Hanover, PA 17331.

“Distribution Center Expenses” means an amount up to (i) $25,000 per week
(prorated for partial weeks) in respect of Merchant’s provision of Distribution
Center Services during the period of the Sale (during which the Agent is
utilizing the Distribution Centers , in each case for the period commencing on
the Sale Commencement Date and concluding on the earliest to occur of (x) the
Sale Termination Date or (y) the Vacate Date for the applicable Distribution
Center; plus (ii) incremental costs and expenses associated with Additional
Agent Merchandise, including, without limitation, the receipt, tagging,
processing and/or transfer of the Additional Agent Merchandise from the
Distribution Centers to the Stores.

“Distribution Center Merchandise” means those items of inventory identified on
Exhibit 5.2(b)(1) to the Agency Agreement that are located in Merchant’s
Distribution Center on the Sale Commencement Date that do not constitute Direct
Business Merchandise.

 

2

--------------------------------------------------------------------------------

“Distribution Center Services” means those services customarily performed by
Merchant in operating and maintaining the Distribution Centers in the ordinary
course of business and in the course of receiving and distributing goods and
supplies to the Stores, including, but not limited to, with respect to
(i) payroll and related employee benefits of all Distribution Centers employees;
(ii) rent and other occupancy costs and expenses associated with the
Distribution Centers; (iii) the handling, receiving, in-take, storage, ticketing
and processing of any Merchandise, Distribution Center Merchandise, In-Transit
Merchandise, or Additional Agent Merchandise at the Distribution Centers;
(iv) any required supplies in connection with the foregoing; (v) any Central
Services required to operate and maintain the Distribution Centers during the
Sale Term applicable thereto; and (vi) costs and expenses of moving,
transferring, or consolidating Merchandise or Additional Agent Merchandise
between the Distribution Centers and the Stores. Merchant hereby covenants and
agrees to provide the Distribution Center Services throughout the Sale Term and,
except as provided and solely to the extent set forth in section 4.1(v) of the
Agency Agreement, Merchant shall be responsible for the payment of all costs and
expenses associated with the Distribution Centers and the Distribution Center
Services.

“Excluded Defective Merchandise” means (a) any item of Defective Merchandise
that is not saleable in the ordinary course because it is so damaged or
defective that it cannot reasonably be used or sold for its intended purpose,
(b) any item of Defective Merchandise for which the parties cannot mutually
agree upon a Cost Value, and/or (c) packaway merchandise.

“Excluded Goods” means all goods not included as “Merchandise.”

“Excluded Benefits” means (i) the following benefits arising, accruing or
attributable to the period prior to, during, or after the Sale Term:
(w) vacation days or vacation pay, (x) sick days or sick leave or any other form
of paid time off, (y) maternity leave or other leaves of absence and (z) ERISA
coverage and similar contributions and/or (ii) any other benefits in excess of
the Benefits Cap, including, without limitation, any payments due under the WARN
Act.

“Excluded Price Adjustments” means the following discounts or price adjustments
offered by the Merchant by any means: (i) point of sale discounts or similar
adjustments regardless of duration; (ii) employee discounts; (iii) member or
customer appreciation points or coupons; (iv) multi-unit purchase discounts;
(v) adjustments for damaged, defective or “as-is”” items; (vi) coupons
(Merchant’s or competitors’) or similar type coupons/promotions, “groupons”,
catalog, website, or circular prices, or “buy one get one” type discounts, or
similar type discounts or promotions; (vii) customer savings pass discounts or
“bounce back” coupons, or discounts for future purchases based on dollar value
of past purchases; (viii) obvious ticketing or marking errors; (ix) instant
(in-store) or mail in rebates; or (x) similar customer specific, temporary, or
employee non-product specific discounts or pricing accommodations.

“Expenses” shall mean the Store-level (and where expressly applicable,
Distribution Center-level) operating expenses of the Sale which arise during the
Sale Term and are attributable to the Sale, limited to the following (to the
extent set forth in Exhibit 4.1 to the Agency Agreement):

 

  a) actual Occupancy Expenses for the Stores (that are in operation of each
such date) on aggregate per diem basis in an amount up to the aggregate per diem
amount; plus (ii) the portion of any percentage rent obligations allocable to
the sale of Merchandise during the Sale, plus (iii) the portion of any
percentage rent obligations attributable to the sale of Additional Agent
Merchandise during the Sale;

 

  b)

actual wages and commissions for all Store-level Retained Employees used in
conducting the Sale; provided that, Agent shall only be obligated to pay 50% of
the payroll wages for

 

3

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  Store-level Retained Employees used during the Inventory Taking, and Merchant
shall pay the remaining 50% of the wages for Retained Employees used during the
Inventory Taking;

 

  c) actual amounts payable by Merchant for benefits for Retained Employees
(including payroll taxes, FICA, unemployment taxes, workers’ compensation and
health care insurance benefits, but excluding Excluded Benefits) for Store-level
Retained Employees used in the Sale, in an amount up to sixteen percent
(16.0%) of base payroll (including commissions) for all Retained Employees in
the Stores (the “Benefits Cap”);

 

  d) Retention Bonuses for Retained Employees;

 

  e) all costs and expenses associated with Agent’s on-site supervision of the
Closing Locations, including but not limited to any and all fees, wages,
bonuses, deferred compensation, taxes, and third party payroll costs and
expenses of Agent’s field personnel, travel to, from or between the Closing
Locations, and all out-of-pocket and commercially reasonable expenses relating
thereto;

 

  f) all signage, banners, sign walkers, and in-Store signs that are produced
for the Sale (inclusive of the Signage Costs);

 

  g) promotional costs including, without limitation, email blasts, television,
and any other advertising and/or direct mail attributable to the Sale and
ordered or requested by Agent;

 

  h) the costs and expenses of obtaining additional supplies used at the Stores
as may be required by Agent in the conduct of the Sale;

 

  i) postage/overnight delivery/courier charges to and from or among the Stores
to the extent relating to the Sale;

 

  j) credit card and bank card fees, chargebacks, and discounts attributable to
the Sale at the Stores;

 

  k) any and all costs of moving, transferring, or consolidating Merchandise
and/or Additional Agent Merchandise and/or Direct Business Merchandise (to the
extent such goods are included in the Sale and Agent elects to transfer Direct
Business Merchandise to the Stores) between and among the Stores;

 

  l) a pro rata portion for the Sale Term of Merchant’s premiums in respect of
general liability, casualty, property, inventory, and other insurance policies
attributable to the Merchandise and Additional Agent Merchandise;

 

  m) third-party payroll processing fees for the Stores and the Direct Business
Platform;

 

  n) armored car service and security personnel;

 

  o) actual cost of Agent’s capital, reasonable and documented legal expenses,
letter of credit fees and insurance;

 

  p) cost of transferring the Distribution Center Merchandise to the Stores up
to an aggregate amount of $100,000;

 

4

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  q) Agent’s 50% of the third party fees and costs of the Inventory Taking;

 

  r) actual Central Service Expenses in an amount equal to $10,000 per week
(pro-rated for partial weeks) for the Sale Term (payable to Merchant) in respect
of the cost of Merchant providing Central Services;

 

  s) Store cash thefts and other Store cash shortfalls in registers;

 

  t) actual costs and expenses associated with operating the Direct Business
Platform in an amount up to $45,000 per week (prorated for partial weeks);

 

  u) actual Distribution Center Expenses (prorated for partial weeks);

 

  v) actual costs and expenses of postage, overnight delivery or other shipping
charges related to the delivery of Merchandise and Additional Agent Merchandise
to the consumers;

 

  w) any costs and expenses incurred in connection with the acquisition
(including costs of goods), shipping, delivery, processing and transfer of any
Additional Agent Merchandise;

 

  x) costs and expenses associated with temporary labor requested or obtained by
Agent for purposes of the Sale;

 

  y) All costs and expenses incurred by Agent in order to comply with Applicable
General Laws and/or Liquidation Sale Laws unless and until entry of the Agency
Order; and

 

  z) the actual costs and expenses of Agent providing such additional services
as the Agent reasonably deems appropriate for the Sale.

“Final Inventory Report” means the final report of the aggregate Cost Value of
the Merchandise counted by the Inventory Taking Service following the completion
of the Inventory Taking, after review, reconciliation and mutual written
verification thereof by Agent and Merchant, in consultation with Lender.

“Gross Rings” gross register receipts less applicable Sales Taxes but excluding
any prevailing discounts for the Gross Rings Period.

“Gross Rings Period” means, if the Sale commences prior to the completion of the
Inventory Taking at any Store or the Distribution Centers, the period from the
Sale Commencement Date until the Inventory Date for such Store.

“Guaranteed Amount” means an amount equal to ninety-one percent (91%) (the
“Guaranty Percentage”) of the aggregate Cost Value of Merchandise.

“In-Transit Merchandise” means items of inventory purchased by Merchant prior to
the date of the Agency Agreement, which goods are either subject to a Letter of
Credit issued by Merchant and cannot be cancelled as of the date of this
Agreement, and/or are already in transit to Merchant from the vendor as of the
Sale Commencement Date.

“Intellectual Property” means any and all worldwide rights in and to all
tangible and intangible intellectual property assets of Merchant (whether
arising under statutory or common law, contract, or

 

5

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otherwise), which include without limitation all of the following items owned by
Merchant, for which Merchant is a licensee, sub-licensee, licensor, sub
licensor, assignee, assignor, or in which Merchant has an interest or right (and
Schedule 1 to the Agency Agreement lists all issued or registered Intellectual
Property and applications therefor owned by Merchant): (a) inventions,
discoveries, processes, designs, techniques, developments and related
improvements whether or not patentable; (b) patents, patent applications,
industrial design registrations and applications therefor, divisions,
divisionals, continuations, continuations-in-part, reissues, substitutes,
renewals, registrations, confirmations, re-examinations, extensions and any
provisional applications, or any such patents or patent applications, and any
foreign or international equivalent of any of the foregoing; (c) trademarks
(whether registered, unregistered or pending), trade dress, service marks,
service names, trade names, brand names, product names, logos, domain names,
internet rights (including, without limitation IP Addresses and AS numbers),
corporate names, fictitious names, other names, symbols (including business
symbols), slogans, translations of any of any of the foregoing and any foreign
or international equivalent of any of the foregoing and all goodwill associated
therewith and (to the extent transferable by law) any applications and/or
registrations in connection with the foregoing and all advertising and marketing
collateral including any of the foregoing; (d) work specifications, databases
and artwork; (e) technical, scientific and other know-how and information
(including promotional material), trade secrets, confidential information,
methods, processes, practices, formulas, designs, patterns, assembly procedures,
specifications owned or used by Merchant; (f) rights associated with works of
authorship including copyrights, moral rights, design rights, rights in
databases, copyright applications, copyright registrations, rights existing
under any copyright laws and rights to prepare derivative works; (g) work for
hire; (h) any and all rights of Merchant to the name “dELiA*s” or any derivation
thereof, (i) Merchant’s entire customer list and database (including all
Customer Lists), and all assets used or useful by Merchant in the conduct of its
catalog business and its business over the internet and/or in any other
electronic medium, including (without limitation) any websites, social media
sites and accounts (including the content contained therein, user names and
passwords), diagrams, drawings, domain names, and all advertising and marketing
materials and collateral (including all physical, digital, or electronic imagery
and design files), samples, product catalogs, product designs and specifications
(including tech specifications) vendor and merchandise supplier data and
information, (j) software used in the operation of the Direct Business Platform,
(k) all goodwill, rights and contracts (including all licenses and sublicenses
granted or obtained with respect thereto) related to the foregoing, (k) the
right to sue for infringement and other remedies against infringement of any of
the foregoing, and (l) rights to protection of interests in the foregoing under
the laws of all jurisdictions.

“Inventory Taking” means the SKU-level and Retail Price physical inventory of
the Merchandise located at the Stores caused by the Merchant and Agent to be
taken which shall count Distribution Center in accordance with the Agency
Agreement.

“Inventory Taking Service” means RGIS or another independent inventory taking
service mutually acceptable to the Merchant and Agent to conduct the Inventory
Taking.

“Lender” means Salus Capital Partners, LLC, in its capacity as administrative
agent and collateral agent.

“Letter of Credit” means an irrevocable standby letter of credit, substantially
in the form attached to the Agency Agreement nan original stated amount equal to
the aggregate of (x) twenty percent (20%) of the estimated Guaranteed Amount and
MOOS Guaranteed Amount (based upon Merchant’s books and records maintained in
the ordinary course as of the date immediately preceding the Payment Date), and
(y) three (3) weeks’ estimated Expenses.

“Liquidation Sale Laws” means applicable laws, rules and regulations in respect
of “going out of business,” “store closing” or similar-themed sales.

 

6

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“Membership Interests” means all of Merchant’s rights, title, and interests in
and to the ownership interests in dELiA*s Brand, LLC.

“Merchandise” means all new, first quality (other than as expressly set forth
below), finished goods inventory that is owned by Merchant and customarily sold
to customers in the ordinary course of Merchant’s business, including, but not
limited to, (i) Merchandise subject to Gross Rings; (ii) Merchandise located in
the Stores on the Sale Commencement Date (other than Direct Business
Merchandise); (iii) Direct Business Merchandise; (iv) Distribution Center
Merchandise received in the Stores on or before January 10, 2015 (the “Receipt
Deadline”) in accordance with the Allocation Schedule; (v) In-Transit
Merchandise received at the Stores on or before the Receipt Deadline in
accordance with the Allocation Schedule, (vi) Aged Merchandise; (vii) Defective
Merchandise (to the extent Merchant and Agent can mutually agree on the Cost
Value applicable thereto). Notwithstanding the foregoing, “Merchandise” shall
not include (i) goods that belong to sublessees, licensees, or concessionaires
of Merchant; (ii) goods held by Merchant on memo, on consignment, or as bailee;
(iii) Excluded Defective Merchandise; (iv) Additional Agent Merchandise;
(v) MOOS Inventory; and (vi) furnishings, trade fixtures furniture, and
equipment and improvements to real property that are located in the Closing
Locations or the corporate offices; (vi) if applicable, Distribution Center
Merchandise that is not received at the Stores on or before the Receipt
Deadline; and/or (vii) In-Transit Merchandise that is not received at the Stores
on or before to the Receipt Deadline.

“Merchant Consignment Goods” Excluded Goods that, if Merchant so elects at the
beginning of the Sale Term, Agent shall accept those goods not included as
“Merchandise” and identified by Merchant for sale as “Merchant Consignment
Goods.”

“MOOS Inventory” means those goods referenced in the file “MOOS Inventory.xlsx”,
which file was provided by Merchant to Agent by email on December 17, 2014 at
9:36 a.m. CT, and located at the “hilton annex” facility as of the Sale
Commencement Date.

“MOOS Guaranteed Amount” means an amount equal to thirty-six percent (36%) of
the aggregate Cost Value of the MOOS Inventory, plus payment of the 3PL
Expenses.

“MOOS Proceeds” means the proceeds from the sale of the MOOS Inventory.

“Occupancy Expenses” means rent, percentage rent, common-area maintenance,
landlord promotional fees, real estate and use taxes, HVAC, utilities,
telecom/telephone charges, point-of-sale systems maintenance, store security
systems, routine repairs and maintenance, taxes and licenses, costs of all
local, long-distance, and international telephone, satellite broadband
connections, T-1 lines, broadband internet, and other telecommunications
services, trash removal (to the extent excluded as a fixed charge component of
lease obligation), snow removal, and ordinary course third-party cleanings, pest
control services, plus any percentage rent obligations incurred by Merchant
under applicable leases or occupancy agreements that are allocable to the sales
as part of the Sale during the Sale Term of: (x) Merchandise and (y) Additional
Agent Merchandise included in the Sale.

“Owned DC FF&E” means furniture, fixtures and equipment (including, but not
limited to, machinery, rolling stock, office equipment, conveyors, racking, and
personal property (other than computers, servers, and hardware used or utilized
in connection with or associated with the Direct Business Platform) owned by
Merchant and located at the Distribution Center.

“Owned FF&E” means the items in the file entitled “FF&E Assets” provided by
Merchant to Agent (exclusive in all instances of Owned DC FF&E referenced in
such file).

 

7

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“Petition Date” shall mean December 7, 2014 which is the date the Chapter 11
Cases were commenced.

“Proceeds” means the aggregate of (i) the total amount (in dollars) of all sales
of Merchandise in the Stores and/or through the Direct Business Platform;
(ii) all service revenue received by Merchant from the Stores and/or through the
Direct Business Platform (if applicable), in each case during the Sale Term and
exclusive of Sales Taxes; (iii) the total amount (in dollars) of all sales of
Additional Agent Merchandise (exclusive of Sales Taxes); (iv) all proceeds of
Merchant’s insurance for loss or damage to Merchandise arising from events
occurring during the Sale Term relating to the Merchandise and Additional Agent
Merchandise; (v) all amounts received from customers or other third parties on
account of postage, overnight delivery or other shipping charges related to the
delivery of Merchandise and Additional Agent Merchandise to the consumers; and
(vi) any and all proceeds received by Agent from the disposition of Remaining
Merchandise.

“Remaining Merchandise” means all Merchandise and Additional Agent Merchandise
remaining at the conclusion of the Sale.

“Retail Price” means, with respect to each item of Merchandise, the lowest of
the lowest ticketed price, determined as of the Sale Commencement Date, “Style
Chain Current Retail” as reflected on the Cost File other file price, marked
price, shelf price, hang-tag price, stickered price, PLU price, or other
hard-marked price, excluding Excluded Price Adjustments; provided, however,
that, with respect to Aged Merchandise, the “Retail Price” shall be the lower of
(x) the Retail Price as determined in accordance with the sentence to which this
proviso is attached; or (y) the original retail price for such item of Aged
Merchandise, multiplied by (y) fifty percent (50%).

“Retained Employee” means any such Store employee identified by the Agent to be
used in connection with the Sale.

“Retention Bonuses” means retention bonuses paid to Retained Employees.

“Returned Merchandise” means returns of Merchandise sold by Merchant prior to
the Sale Commencement Date in accordance with Merchant’s return policies in
effect at the time of purchase (to the extent presented in accordance with the
foregoing terms) and returned during the first thirty (30) days of the Sale.

“Sale” means with respect to the Merchandise and Owned FF&E, a “sale on
everything”, “everything must go”, or similarly themed sale, “store closing” or
“going-out-of-business” sale.

“Sale Commencement Date” means the Sale commenced at each of the Stores on
December 4, 2014.

“Sale Termination Date” means the earlier of (i) April 15, 2015; and (ii) the
date that is 120 twenty days after entry of an order for relief in Merchant’s
bankruptcy case.

“Sales Taxes” means during the Sale Term, all sales, excise, gross receipts, and
other taxes attributable to sales of Merchandise, Additional Agent Merchandise,
Merchant Consignment Goods, and/or Owned FF&E as indicated on Merchant’s point
of sale equipment (other than taxes on income, but specifically including,
without limitation, gross receipts taxes) payable to any taxing authority having
jurisdiction

“Sale Term” means the period beginning on the Sale Commencement Date through and
including the Sale Termination Date

 

8

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“Stores” means the Merchant’s retail store location(s) identified on Exhibit A-1
attached to the Agency Agreement.

“Vacate Date” means the date on which Agent shall vacate any Store or
Distribution Center.

 

9

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EXHIBIT B

Form Assignment Agreement for Membership Interests

--------------------------------------------------------------------------------

ASSIGNMENT OF MEMBERSHIP INTERESTS

This Assignment of Membership Interests (this “Assignment”) is made and entered
into this [    ] day of [        ], 2015, by and between dELiA*s Assets Corp., a
Delaware corporation (“Assignor”), and Butterfly Retail Acquisition LLC, a New
York limited liability company, (hereinafter, “Assignee”), collectively termed
the “Parties.”

RECITALS

WHEREAS, dELiA*s, Inc. and its affiliates, including Assignor, are debtors and
debtors in possession (collectively, the “Debtors”) in In re dELiA*s, Inc., et
al., Case No. 14-23678 (RDD) pending before the United States Bankruptcy Court
for the Southern District of New York (the “Bankruptcy Court”);

WHEREAS, dELiA*s Brand LLC (“Brand”), a Delaware Limited Company, was formed by
filing a Certificate of Formation with the Secretary of State of the State of
Delaware on February 5, 2003 and is governed by that certain Limited Liability
Company Agreement, dated as of February 24, 2003 of Brand (the “LLC Agreement”),
true and correct copies of which are attached hereto as Exhibits A and B,
respectively.

WHEREAS, Assignor holds all of the issued and outstanding membership interests
in Brand (the “Membership Interests”) and desires to assign one hundred percent
(100%) of the Membership Interests to Assignee (the “Assigned Interest”).

WHEREAS, the Debtors entered into an Amended & Restated Agency Agreement, dated
December 22, 2014 (the “Agency Agreement”) with a joint venture comprising of
Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC
(together, the “Agent”), which Agency Agreement was approved by the Bankruptcy
Court pursuant to the Final Order (A)(I) Approving the Debtors’ Assumption of
Agency Agreement, (II) Authorizing the Debtors to Sell Certain Assets Through
Store Closing Sales, (III) Authorizing the Debtors to Abandon Unsold Property,
(IV) Waiving Compliance With Contractual Store Closing Sale Restrictions and
Exempting the Debtors From Laws Restricting Store Closing Sales, and
(V) Granting Related Relief [Docket No. 98] entered on December 24, 2014 (the
“Agency Order”).

WHEREAS, the Agent has been granted designation rights under the Agency
Agreement which apply to the Membership Interests;

WHEREAS, subject to the approval of the Bankruptcy Court and upon the direction
of the Debtors, Assignor desires to sell, assign, convey and transfer all of its
right, title and interest in and to the Assigned Interests, subject to the terms
and conditions set forth herein and pursuant to the terms and conditions of that
certain letter agreement, dated January [    ], 2015 between the Debtors, the
Agent, and the Assignee (hereinafter, the “Letter Agreement”), which is
incorporated herein by reference; and

WHEREAS, Assignee desires to purchase and accept such assignment, conveyance,
and transfer on the conditions set forth herein and in the Letter Agreement.

--------------------------------------------------------------------------------

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and the Assignee agree as
follows:

Section 1. The Effective Date. The consummation of the transaction contemplated
hereunder (the “Effective Date”) shall take place, subject to the payment of the
Payment Amount pursuant to the terms of the Letter Agreement and Assignor’s
delivery of the Assigned Interest pursuant to this Agreement.

Section 2. Assignment. Assignor hereby transfers and assigns to Assignee,
effective as of the date hereof, the Membership Interests, which collectively
constitute the Assigned Interest.

Section 3. Consideration. In consideration for said assignment, Assignor has
been paid the amount specified in the Letter Agreement.

Section 4. Bankruptcy Court Approval. The Parties hereby acknowledge and agree
that this Agreement, and the Effective Date contemplated hereunder, is subject
to the review and approval of the Bankruptcy Court. Assignor shall use all
commercially reasonable efforts to obtain the Bankruptcy Court’s approval of
this Agreement and the assignment as contemplated herein. This Agreement shall
have no force and effect unless and until the Bankruptcy Court enters an order
in form consistent with the terms and conditions of this Agreement and the
Letter Agreement (the “Order”), which Order shall be either final and
non-appealable, or which Order shall not be stayed. The Order shall contain the
protections of Bankruptcy Code section 363(m), approving the terms and
conditions of this Agreement.

Section 5. Acceptance. Effective as of the Effective Date, Assignee hereby
acquires the Assigned Interest and, in consideration therefor, agrees as of such
effective date to become a substituted member of the Company in place of
Assignor with respect to the Assigned Interest, and agrees to be bound by all of
the terms and provisions of the LLC Agreement.

Section 6. Effect of Assignment. With respect to the Assigned Interest, from and
after the Effective Date, (i) Assignee shall be the sole and exclusive owner of
the Assigned Interest in accordance with this Assignment, (ii) such ownership
shall hereby be deemed evidenced by this Assignment and this Assignment shall be
included in the books and records of the Company, (iii) Assignor shall cease to
have any right, title or interest in or to the Assigned Interest, and
(iv) Assignor shall cease to have any rights as a member of the Company and
waives any restrictions on transfer of the Assigned Interest in the LLC
Agreement.

Section 7. Terms of the Letter Agreement. This Assignment is made, delivered and
accepted pursuant to and subject to the terms and provisions of the Letter
Agreement (including Section 9.1 thereof), which shall survive the delivery of
this Assignment as provided in the Letter Agreement. If there is a conflict
between the terms of this Assignment and the Letter Agreement, the terms of the
Letter Agreement shall control.

Section 8. Counterparts. This Assignment may be executed in a number of
identical counterparts, each of which for all purposes is to be deemed an
original, and all of which constitute, collectively, one agreement. In addition,
this Assignment may be executed in a number of counterparts, any one of which
may contain the execution of either Assignor or Assignee, and all of such
counterparts

 

2

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taken together shall constitute one completely executed original agreement.
Delivery of an executed counterpart signature page by facsimile is as effective
as executing and delivering this Assignment in the presence of the other parties
to this Assignment. This Assignment is effective upon delivery of one executed
counterpart from each party to the other party hereto.

Section 9. Successors and Assigns. This Assignment shall be binding upon the
parties hereto and their respective permitted successors and assigns.

Section 10. Governing Law. This Assignment shall be governed by the laws of the
State of Delaware, without regard to any principles of conflict of laws that
would require the application of the laws of any other jurisdiction.

IN WITNESS WHEREOF, the duly authorized signatory of each party hereto has
executed this Agreement.

 

ASSIGNOR: dELiA*s ASSETS CORP. By:  

 

Name:   Title:   ASSIGNEE: BUTTERFLY RETAIL ACQUISITION LLC By:  

 

Name:   Title:  

 

ACKNOWLEDGED WITH RESPECT TO THE DESIGNATION TO ASSIGNEE: HILCO MERCHANT
RESOURCES, LLC By:  

 

Name:   Title:   GORDON BROTHERS RETAIL PARTNERS, LLC By:  

 

Name:   Title:  

 

3

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Exhibit A to Assignment of Membership Interests

Certificate of Formation

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Exhibit B to Assignment of Membership Interests

Limited Liability Company Agreement

--------------------------------------------------------------------------------

EXHIBIT C

Form Assignment Agreement for Intellectual Property

--------------------------------------------------------------------------------

SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT (hereinafter called “Agreement”),
made this     day of February, 2015, by and dELiA*s, Inc. and certain of its
affiliates, as debtors and debtors in possession (collectively, the “Debtors” or
“Assignor”), and Butterfly Retail Acquisition LLC, a New York limited liability
company (hereinafter, “Assignee”), collectively termed the “Parties.”

RECITALS:

WHEREAS, the Debtors’ Chapter 11 bankruptcy cases are being jointly administered
under In re dELiA*s, Inc., et al., Case No. 14-23678 (RDD) pending before the
United States Bankruptcy Court for the Southern District of New York (the
“Bankruptcy Court”);

WHEREAS, the Debtors entered into an Amended & Restated Agency Agreement, dated
December 22, 2014 (the “Agency Agreement”) with a joint venture comprising of
Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC
(together, the “Agent”), which Agency Agreement was approved by the Bankruptcy
Court pursuant to the Final Order (A)(I) Approving the Debtors’ Assumption of
Agency Agreement, (II) Authorizing the Debtors to Sell Certain Assets Through
Store Closing Sales, (III) Authorizing the Debtors to Abandon Unsold Property,
(IV) Waiving Compliance With Contractual Store Closing Sale Restrictions and
Exempting the Debtors From Laws Restricting Store Closing Sales, and
(V) Granting Related Relief [Docket No. 98] entered on December 24, 2014 (the
“Agency Order”).

WHEREAS, the Agent has been granted certain designation rights under the Agency
Agreement which apply to certain assets described in Exhibit A (said assets are
hereinafter referred to as the “Assets”);

WHEREAS, subject to the approval of the Bankruptcy Court, Assignor desires to
sell, assign, convey and transfer all of its right, title and interest in and to
the Assets on the terms and conditions herein and pursuant to that certain
letter agreement, dated January [    ], 2015 between the Debtors, the Agent, and
the Assignee (hereinafter, the “Letter Agreement”), which is incorporated herein
by reference;

WHEREAS, Assignee desires to purchase and accept such assignment, conveyance,
and transfer on, subject to the terms and conditions set forth herein and in the
Letter Agreement.

NOW, THEREFORE, in consideration of the consideration referenced herein, the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby reciprocally acknowledged, Assignor
and Assignee agree as set forth below.1

1. Defined Terms. All initially capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Letter Agreement.

2. The Effective Date. The date the consummation of the transaction contemplated
hereunder shall take place (the “Effective Date”), subject to the payment of the
Payment Amount pursuant to the terms of the Letter Agreement and Assignor’s
delivery of the Assets pursuant to this Agreement.

 

 

1  Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Letter Agreement.

--------------------------------------------------------------------------------

3. Assumption by the Debtors and Assignment to Assignee. As of the Effective
Date, pursuant to sections 363 and 365 of the Bankruptcy Code, the Debtors
hereby assume all of their rights, title and interests in the Assets and,
pursuant to the designation rights granted to Assignor under the Agency
Agreement, hereby direct the Assignor to assign all of the Debtors’ rights,
title, interest, and obligations with respect to the Assets free and clear of
all liens, claims and encumbrances (other than the Permitted Encumbrances).
Assignee, as and from the Effective Date, hereby accepts the assignment and
assumes and agrees to make all of the payments and perform all of the covenants,
conditions and agreements with respect to the Assets.

4. The Consideration. In consideration for said assignment, Assignor has been
paid the amount specified in the Letter Agreement.

5. Bankruptcy Court Approval. The Parties hereby acknowledge and agree that this
Agreement, and the Effective Date contemplated hereunder, is subject to the
review and approval of the Bankruptcy Court. Assignor shall use all commercially
reasonable efforts to obtain the Bankruptcy Court’s approval of this Agreement
and the assumption and assignment as contemplated herein. This Agreement shall
have no force and effect unless and until the Bankruptcy Court enters an order
in form consistent with the terms and conditions of this Agreement and the
Letter Agreement (the “Order”), which Order shall be either final and
non-appealable, or which Order shall not be stayed pursuant to Bankruptcy Rules
6004(h) and 6006(d). The Order shall contain the protections of Bankruptcy Code
section 363(m), approving the terms and conditions of this Agreement.

6. Terms of the Letter Agreement. This Agreement is made, delivered and accepted
pursuant to and subject to the terms and provisions of the Letter Agreement,
which shall survive the delivery of this Agreement as provided in the Letter
Agreement. If there is a conflict between the terms of this Agreement and the
Letter Agreement, the terms of the Letter Agreement shall control.

7. Successors. This Agreement shall be binding upon the Parties hereto and their
respective permitted successors and assigns.

8. Counterparts. This Agreement may be executed in a number of identical
counterparts, each of which for all purposes is to be deemed an original, and
all of which constitute, collectively, one agreement. In addition, this
Agreement may be executed in a number of counterparts, any one of which may
contain the execution of either Assignor or Assignee, and all of such
counterparts taken together shall constitute one completely executed original
agreement. Delivery of an executed counterpart signature page by facsimile is as
effective as executing and delivering this Assignment in the presence of the
other parties to this Assignment. This Agreement is effective upon delivery of
one executed counterpart from each party to the other party hereto.

9. Applicable Law. The performance and interpretation of this Agreement shall be
controlled by the laws of the State of New York. The Bankruptcy Court retains
jurisdiction to hear and determine any and all disputes by and among the Parties
concerning the interpretation and enforcement of this Agreement and the Letter
Agreement, provided, however, in the event the Bankruptcy Court abstains from
exercising or declines to exercise such jurisdiction, or is without jurisdiction
with respect to any matter concerning this Agreement, such abstention, refusal
or lack of jurisdiction shall have no effect upon, and shall not control,
prohibit or limit the exercise of jurisdiction of any other court having
competent jurisdiction with respect to any such matter.

 

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IN WITNESS WHEREOF, the duly authorized signatory of each party hereto has
executed this Agreement.

 

ASSIGNOR dELiA*s, INC., on behalf of itself and its affiliated Debtors By:  

 

Name:   Title:   ASSIGNEE: BUTTERFLY RETAIL ACQUISITION LLC By:  

 

Name:   Title:  

 

ACKNOWLEDGED WITH RESPECT TO THE DESIGNATION TO ASSIGNEE: HILCO MERCHANT
RESOURCES, LLC By:  

 

Name:   Title:   GORDON BROTHERS RETAIL PARTNERS, LLC By:  

 

Name:   Title:  

 

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EXHIBIT A TO SALE, ASSUMPTION AND ASSIGNMENT AGREEMENT

Assets Consisting of Assumed Contracts

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EXHIBIT D

Form Bill of Sale for Acquired IP (other than Assumed Contracts) and Other
Assets

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BILL OF SALE

This Bill of Sale (this “Bill of Sale”) is executed and delivered this [    ] of
February, 2015, by and dELiA*s, Inc. and certain of its affiliates, as debtors
and debtors in possession (collectively, the “Debtors” or “Seller”), and
Butterfly Retail Acquisition LLC, a New York limited liability company
(hereinafter, “Purchaser”), collectively termed the “Parties.”

RECITALS:

WHEREAS, the Debtors’ Chapter 11 bankruptcy cases are being jointly administered
under In re dELiA*s, Inc., et al., Case No. 14-23678 (RDD) pending before the
United States Bankruptcy Court for the Southern District of New York (the
“Bankruptcy Court”);

WHEREAS, the Debtors entered into an Amended & Restated Agency Agreement, dated
December 22, 2014 (the “Agency Agreement”) with a joint venture comprising of
Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC
(together, the “Agent”), which Agency Agreement was approved by the Bankruptcy
Court pursuant to the Final Order (A)(I) Approving the Debtors’ Assumption of
Agency Agreement, (II) Authorizing the Debtors to Sell Certain Assets Through
Store Closing Sales, (III) Authorizing the Debtors to Abandon Unsold Property,
(IV) Waiving Compliance With Contractual Store Closing Sale Restrictions and
Exempting the Debtors From Laws Restricting Store Closing Sales, and
(V) Granting Related Relief [Docket No. 98] entered on December 24, 2014 (the
“Agency Order”).

WHEREAS, the Agent has been granted certain designation rights under the Agency
Agreement which apply to, among other assets, certain intellectual property set
forth on Exhibit A attached hereto (the “Sold IP”), and certain assets described
on Exhibit B attached hereto (the “Fixed Assets”);

WHEREAS, subject to the approval of the Bankruptcy Court, Seller desires to
sell, assign, convey and transfer all of its right, title and interest in and to
the Sold IP and the Fixed Assets on the terms and conditions herein and pursuant
to that certain letter agreement, dated January [    ], 2015 between the
Debtors, the Agent, and the Purchaser (hereinafter, the “Letter Agreement”),
which is incorporated herein by reference;2 and

WHEREAS, Purchaser desires to purchase and accept such assignment, conveyance,
and transfer on the conditions set forth herein and in the Letter Agreement.

NOW, THEREFORE, in consideration of the consideration referenced herein, the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby reciprocally acknowledged, Seller and
Purchaser agree as set forth below.

 

 

2  The Sold IP consists of the Acquired IP (as defined in the Letter Agreement)
other than the Assumed Contracts (as defined in the Letter Agreement), which
Assumed Contracts are being assigned to Purchaser pursuant to the Letter
Agreement and pursuant to that certain Sale, Assumption and Assignment
Agreement, dated as of even date hereof.

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1. Defined Terms. All initially capitalized terms used but not otherwise defined
herein have the meaning given them in the Letter Agreement.

2. The Effective Date. The consummation of the transaction contemplated
hereunder (the “Effective Date”) shall take place, subject to the payment of the
Payment Amount pursuant to the terms of the Letter Agreement and Seller’s
delivery of the Sold IP and the Fixed Assets pursuant to this Bill of Sale.

3. Transfer of Sold IP and Fixed Assets. As of the Effective Date, pursuant to
section 363 of the Bankruptcy Code, the Seller hereby sells, conveys, transfers,
assigns, and delivers to Purchaser all of the right, title, and interest of
Seller in and to the Sold IP and Fixed Assets free and clear of all liens,
claims and encumbrances (other than the Permitted Encumbrances). Purchaser
hereby purchases and accepts such conveyance, transfer, assignment, and delivery
of the Sold IP and the Fixed Assets.

4. The Consideration. In consideration for said sale, Seller has been paid the
amount specified in the Letter Agreement.

5. Bankruptcy Court Approval. The Parties hereby acknowledge and agree that this
Bill of Sale, and the Effective Date contemplated hereunder, is subject to the
review and approval of the Bankruptcy Court. Seller shall use all commercially
reasonable efforts to obtain the Bankruptcy Court’s approval of this Bill of
Sale and the purchase and sale contemplated herein. This Bill of Sale shall have
no force and effect unless and until the Bankruptcy Court enters an order in
form consistent with the terms and conditions of this Bill of Sale and the
Letter Agreement (the “Order”), which Order shall be either final and
non-appealable, or which Order shall not be stayed pursuant to Bankruptcy Rules
6004(h) and 6006(d). The Order shall contain the protections of Bankruptcy Code
section 363(m), approving the terms and conditions of this Bill of Sale.

6. Terms of the Letter Agreement. This Bill of Sale is made, delivered and
accepted pursuant to and subject to the terms and provisions of the Letter
Agreement, which shall survive the delivery of this Bill of Sale as provided in
the Letter Agreement. If there is a conflict between the terms of this Bill of
Sale and the Letter Agreement, the terms of the Letter Agreement shall control.

7. Successors. This Bill of Sale shall be binding upon the Parties hereto and
their respective permitted successors and assigns.

8. Counterparts. This Bill of Sale may be executed in a number of identical
counterparts, each of which for all purposes is to be deemed an original, and
all of which constitute, collectively, one agreement. In addition, this Bill of
Sale may be executed in a number of counterparts, any one of which may contain
the execution of either Seller or Purchaser, and all of such counterparts taken
together shall constitute one completely executed original agreement. Delivery
of an executed counterpart signature page by facsimile is as effective as
executing and delivering this Bill of Sale in the presence of the other parties
to this Bill of Sale. This Bill of Sale is effective upon delivery of one
executed counterpart from each party to the other party hereto.

 

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9. Applicable Law. The performance and interpretation of this Bill of Sale shall
be controlled by the laws of the State of New York. The Bankruptcy Court retains
jurisdiction to hear and determine any and all disputes by and among the Parties
concerning the interpretation and enforcement of this Bill of Sale and the
Letter Agreement; provided, however, in the event the Bankruptcy Court abstains
from exercising or declines to exercise such jurisdiction, or is without
jurisdiction with respect to any matter concerning this Bill of Sale, such
abstention, refusal or lack of jurisdiction shall have no effect upon, and shall
not control, prohibit or limit the exercise of jurisdiction of any other court
having competent jurisdiction with respect to any such matter.

IN WITNESS WHEREOF, the undersigned hereby execute this Bill of Sale as of the
day and year first above written.

 

SELLER: dELiA*s, INC., on behalf of itself and its affiliated Debtors By:  
Name:   Title:   PURCHASER: BUTTERFLY RETAIL ACQUISITION LLC By:  

 

Name:   Title:  

 

ACKNOWLEDGED WITH RESPECT TO THE DESIGNATION TO SELLER: HILCO MERCHANT
RESOURCES, LLC By:  

 

Name:   Title:   GORDON BROTHERS RETAIL PARTNERS, LLC By:  

 

Name:   Title:  

 

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