JUNIOR MANAGEMENT FEE SUBORDINATION AGREEMENT

          THIS JUNIOR MANAGEMENT FEE SUBORDINATION AGREEMENT (this “Agreement”)
is made and entered into this 10th day of November 2005, by and among Sunset
Holdings International, Ltd., a Delaware corporation (the “Manager”), Sunset
Brands, Inc., a Delaware corporation (the “Company”), and IBF Fund Liquidating
LLC, a Delaware limited liability company (the “Seller”).

          WHEREAS, pursuant to that certain Amended and Restated Acquisition
Agreement and Plan of Merger dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “Acquisition
Agreement”), by and among U.S. Mills, Inc. (“US Mills”), the Company, Seller and
USM Acquisition Sub, Inc., the Company will acquire US Mills by merger;

          WHEREAS, the Manager and the Company are parties to that certain
Management Services Agreement dated as of October 4, 2004 (as amended, modified
or supplemented from time to time as permitted hereunder or pursuant to the
Security Agreement, the “Management Agreement”), pursuant to which the Manager
has agreed to provide certain management and other services (“Management
Services”) to the Company and the Company has agreed to pay the Manager monthly
management fees of $43,333 as provided in Section 2 thereof (the “Management Fee
Provision”);

          WHEREAS, in order to induce Seller to enter into the Acquisition
Agreement, the parties hereto are required to, and hereby desire to, enter into
this Agreement;

          WHEREAS, Seller is willing to execute, deliver and perform under the
Acquisition Agreement and the other Acquisition Documents only upon the
condition that each of the Company and the Manager executes and delivers to
Seller this Agreement and agrees to perform and to comply with its obligations
hereunder; and

          WHEREAS, the Manager acknowledges and confirms that it is an Affiliate
of the Company and this Agreement is intended to be an inducement to the Seller
to execute and deliver the Acquisition Documents and perform its obligations
under the Acquisition Documents and Seller is relying upon this Agreement in
executing and delivering the Acquisition Documents and performing its
obligations thereunder.

          NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, the receipt and sufficiency of which
are hereby acknowledged, and as an inducement for the Seller to enter into the
Acquisition Documents and perform its obligations thereunder, the parties
hereto, intending to be legally bound hereby, do agree as follows:

          1. Definitions.

                    (a) Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Security Agreement or, to
the extent the same are used or

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defined therein, the meanings provided in Article 9 of the UCC in effect on the
date hereof. Whenever the context so requires, each reference to gender includes
the masculine and feminine, the singular number includes the plural and vice
versa. This Agreement shall mean such agreement as the same now exists or may
hereafter, in accordance with its terms, be amended, modified, supplemented,
extended, renewed, restated or replaced, from time to time. Unless otherwise
specified, all accounting terms not defined in the Security Agreement shall have
the meanings given to such terms in and shall be interpreted in accordance with
GAAP. References in this Agreement to any Person shall include such Person and
its successors and permitted assigns.

                    (b) As used in this Agreement, the following terms shall
have the meanings specified in this Section 1(b).

                    “Enforcement Action” shall mean any action, whether legal,
equitable, judicial, non-judicial or otherwise, to collect or receive any Fees
or to enforce or realize upon any Lien, security interest, restriction,
encumbrance, charge, claim, right or other interest in respect of the Fees now
or in the future existing, including, without limitation, any repossession,
foreclosure, public sale, private sale, collection, receipt, obtaining of a
receiver or action for retention of all or any part of the Fees or Seller
Collateral, or any acceleration of the Fees or the exercise or enforcement of
any other right, power or remedy with respect to the Management Fee Provision,
the Fees or Seller Collateral, in each case, in its capacity as Manager.

                    “Fees” means collectively any and all management and other
fees, all charges, expenses, and/or payments, all indemnification and insurance
payments under the Management Fee Provision and other amounts, penalties, late
charges, interest, advances, payables, covenants and duties of any kind at any
time owing, owed or payable by the Company to Manager, in each case, under or
pursuant to the Management Fee Provision or otherwise for management and/or
other services provided by the Manager to the Company pursuant to the Management
Agreement, excluding reasonable out-of-pocket expenses which are reimbursable by
the Company pursuant to the Management Fee Provision.

                    “Seller Collateral” means the “Collateral” as defined in the
Security Documents.

                    “Obligations” has the meaning ascribed to the term
“Obligations” in the Security Agreement, and all renewals or replacements
thereof.

          2. Subordination of the Fees.

                    (a) The Fees hereby are expressly subordinated in right of
payment, delivery and issuance and in right of remedies and action to the prior
performance and satisfaction and irrevocable and indefeasible payment in full in
cash of the Obligations (other than indemnity obligations under the Security
Documents that are not then due and payable or for which any events or claims
that would give rise thereto are not then pending) and termination of the
Security Documents and to the Seller’s right to take all actions and to pursue
all remedies under the Security Documents, at law, in equity and otherwise as
provided herein.

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                    (b) Notwithstanding any other provision of this Agreement,
the Management Fee Provision or any of the Security Documents or any other
document executed in connection with any of the foregoing or evidencing or with
respect to any Fee, commencing on December 1, 2007, the Company may make
payments of the Fees as such become due and payable on a monthly basis so long
as, prior to and immediately after making such payment, no Event of Default has
occurred or would result by or from any such payment. The Company and the
Manager agree that any Fees accruing prior to November 1, 2007, shall not be
payable by the Company to Manager until all Obligations have been indefeasibly
paid in cash and the Security Documents have been terminated. The Company and
the Manager covenant that upon the occurrence and during the continuation of an
Event of Default, the Company’s ability to make and the Manager’s right to
receive, any amount or payment on or with respect to the Fees or pursuant to the
Management Fee Provision otherwise permitted under this Section 2(b) shall
immediately and automatically cease and terminate (but without prejudice to the
continued accrual of such Fees) until the earlier of (i) the date upon which all
of the Obligations (other than indemnity obligations under the Security
Documents that are not then due and payable or for which any events or claims
that would give rise thereto are not then pending) have been indefeasibly paid
in full in cash and the Security Documents have been terminated, and (ii) only
in the case when payment is restricted by the occurrence of an Event of Default,
the date, if any, on which such Event of Default has been or waived by Seller in
writing (each such period, a “Blockage Period”). Any amount of payment on or
with respect to the Fees made during any Blockage Period or otherwise made in
violation of this Agreement that is received by any Manager shall be held by
such Manager in trust for the Seller, and shall be turned over to the Seller,
promptly for application to the Obligations.

                    (c) Notwithstanding any other provision of this Agreement,
the Management Fee Provision, any Security Document or any other document
executed in connection with any of the foregoing in any event, excluding all the
Subordinated Loan Documents or evidencing or with respect to any Fee, the
Manager shall not take any Enforcement Action prior to the date upon which all
of the Obligations (other than indemnity obligations under the Security
Documents that are not then due and payable or for which any events or claims
that would give rise thereto are not then pending) have been indefeasibly paid
in full in cash and all of the Security Documents have been terminated.

                    (d) If the Company, in violation of this Agreement, shall
make any payment, delivery or issuance with respect to the Fees to Manager or
Manager shall receive or collect any such prohibited payment, delivery or
issuance or shall take any Enforcement Action that is prohibited by this
Agreement, then, in each such case (i) such payment, delivery or issuance shall
be deemed to be the property of, segregated, received and held in trust for the
benefit of the Seller, and shall be promptly paid over and delivered forthwith
to the Seller, for application to the Obligations, and (ii) such Enforcement
Action vis a vis Seller shall be null and void and of no force or effect.

                    (e) Manager hereby acknowledges that as long as the payment
of Fees is prohibited pursuant to this Agreement, there shall be no payment of
or with respect to the Fees and accordingly the Manager shall not assert any
remedies with respect thereto.

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                    (f) Notwithstanding anything to the contrary set forth
herein, to the extent any Fees are prohibited from being and are not paid as a
result of a Blockage Period, the Company may, provided that the Blockage Period
has terminated in accordance with the provisions of this Section 2(b), and no
other Blockage Period is then in effect, resume payment of regularly scheduled
payments of the Fees as such become due and payable to the Manager, and, after
the termination of such Blockage Period, the Company may pay to the Manager, and
the Manager may receive payments of any Fees accrued during any Blockage Period.

          3. Amendments to the Management Fee Provision; Other Management Fees.

                    (a) Each of the Manager and the Company agree not to modify,
change, restate, supplement or amend orally or by any course of dealing or in
any other manner the Management Fee Provision or to modify the method for
calculating any of the Fees in a manner adverse to Seller as determined by
Seller in its reasonable discretion without first obtaining the prior written
consent of the Seller. The Manager agrees that they are not and they shall not
provide any services under the Management Fee Provision, and Company agrees that
it shall not agree or become obligated to make any payments, deliveries or
issuances of any Fees to any of its Affiliates or any Affiliate of the Manager
under the Management Fee Provision or otherwise, unless such Person agrees in
writing, in form and substance satisfactory to the Seller, to be bound by the
terms of this Agreement with respect to any Management Services such Person
provides to Company and any management fees owing by Company to such Person.

                    (b) Each of the Manager and the Company agree not to enter
into any other agreement, document, or instrument relating to any management
fees payable by the Company to Manager, US Mills or any of their Affiliates
(other than the Management Agreement) and shall not be subject to any such
agreement, document or instrument without such agreement, document and
instrument being made subject to this Agreement or another subordination
agreement satisfactory to Seller.

          4. No Liens. Until full performance and indefeasible and irrevocable
payment in full in cash of the Obligations (other than indemnity obligations
under the Security Documents that are not then due and payable or for which any
events or claims that would give rise thereto are not then pending) and
termination of the Security Documents, the Manager shall not seek to obtain, and
shall not take, accept, obtain or have, any Lien or security interest in any
asset or property of the Company as security for the Fees, or any part thereof,
and, if and to the extent that any such Lien or security interest at any time
exists in favor of Manager, such Liens and security interests hereby are
subordinated to all Liens, security interests, restrictions, encumbrances,
charges and interests, now or hereafter existing, for the benefit of or in favor
of the Seller and/or any of its Affiliates or its successors or assigns granted
or given by the Company or US Mills or any Guarantor or any of its or their
Affiliates, successors or assigns to secure the Obligations, or any part
thereof, notwithstanding the date or order of attachment, creation,
effectiveness or perfection of any of the foregoing or the provision of any
applicable law or otherwise. Manager and the Company represents that as of the
date hereof the Manager does not have and have not taken or accepted, and the
Company has not granted or given to Manager, any Lien or security interest in
any asset or property of the Company as security for the Fees or any part
thereof other with respect to the security interest granted to CapitalSource
Finance LLC pursuant to the

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Management Fee Subordination Agreement dated as of the date hereof among
Manager, the Company and CapitalSource Finance LLC.

          5. Representations and Warranties of Company and the Manager. Each of
the Company and the Manager represent and warrant to Seller that:

                    (a) it has not relied and will not rely on any
representation or information of any nature made by or received from the Seller
in deciding to execute this Agreement;

                    (b) all terms and provisions relating to the Fees,
including, without limitation, the computation of the Fees, are set forth solely
in the Management Fee Provision, and there are no other amounts, payment or
other obligations owing to the Manager by or from the Company;

                    (c) it is not a party to or subject to or bound by any
agreement, document, or instrument conflicting with this Agreement or the
Management Fee Provision (and all agreements ancillary thereto) or otherwise
relating to the Fees other than the Management Fee Provision and shall not be
subject to any such agreement, document or instrument without such agreement,
document and instrument being made subject to this Agreement or another
subordination agreement satisfactory to Seller;

                    (d) it is not a party to or subject to or bound by any other
agreement, document, or instrument relating to any management fees payable by
the Company to Manager or any of its affiliates (other than the Management
Agreement) and shall not be subject to any such agreement, document or
instrument without such agreement, document and instrument being made subject to
this Agreement or another subordination agreement satisfactory to Seller;

                    (e) (i) the execution, delivery and performance by it of
this Agreement have been duly and validly authorized by all necessary actions
and pursuant to all necessary consents required therefor; (ii) this Agreement
has been duly executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of creditors’
rights generally and to the effect of general principles of equity which may
limit the availability of remedies (whether in a proceeding at law or in
equity); and (iii) no approval, consent, authorization of, filing registration
or qualification with, or other action by, it or any other Person or
Governmental Authority is or will be necessary to permit the valid execution,
delivery and performance of this Agreement by it or the consummation of the
transactions contemplated hereby;

                    (f) the execution, delivery and performance by it of this
Agreement do not (i) conflict with or violate any provision of any applicable
law, statute, rule, regulation, ordinance, license or tariff or any judgment,
decree or order of any court or other Governmental Authority binding on or
applicable to it or any of its properties or assets; or (ii) if applicable,
conflict with or violate any provision of its certificate of incorporation or
formation, by-laws, partnership agreement, limited liability company agreement
or similar documents or any agreement by and between it and its shareholders or
equity owners;

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                    (g) (i) it is not in default in the performance, observance
or fulfillment of any obligation, covenant or condition contained in any
agreement, document or instrument to which it is a party or to which any of its
properties or assets are subject, which default, if not remedied within any
applicable grace or cure period, would interfere with the validity of this
Agreement or its right to enter into this Agreement or ability to perform its
obligations hereunder; and (ii) there is no action, suit, proceeding or
investigation pending or, to its knowledge, threatened against it that questions
or could reasonably be expected to prevent the validity of this Agreement or the
right of such Person to enter into this Agreement or to consummate the
transactions contemplated hereby;

                    (h) it is not a party to any judgment, order or decree or
any agreement, document or instrument, or subject to any restriction, which
would materially adversely affect its ability to execute and deliver, or perform
under, this Agreement;

                    (i) the Management Fee Provision is in full force and effect
and has not been amended, modified, terminated or supplemented, and constitutes
the legal, valid and binding obligation of the Company and Manager, enforceable
against the Company and Manager in accordance with its terms subject to the
effect of any applicable bankruptcy, moratorium, insolvency, reorganization or
other similar law affecting the enforceability of creditors’ rights generally
and to the effect of general principles of equity which may limit the
availability of equitable remedies (whether in a proceeding at law or in
equity); and

                    (j) Manager is a corporation duly formed, validly existing
and in good standing under the laws of its state of formation and it has all
requisite power and authority to execute, deliver and perform this Agreement and
is not under any legal restriction, limitation or disability that would prevent
it from doing any of the foregoing.

          The foregoing representations and warranties (i) are made by each of
the Company and Manager with the knowledge and intention that the Seller will
rely thereon and (ii) shall survive the execution and delivery of this
Agreement.

          6. Covenants. Until full performance and indefeasible and irrevocable
payment in full in cash of the Obligations (other than indemnity obligations
under the Security Documents that are not then due and payable or for which any
events or claims that would give rise thereto are not then pending) and
termination of the Security Documents, except as specifically and expressly
permitted in this Agreement:

                    (a) Manager shall not commence or join with any other Person
in commencing any Enforcement Action or any bankruptcy, reorganization,
receivership or similar proceeding in connection with Company or US Mills or any
of its or their assets or properties or the Fees, Management Fee Provision or
Seller Collateral, or any part thereof;

                    (b) Manager and the Company shall take all necessary and
appropriate actions to ensure that this Agreement and the provisions hereof
remain enforceable against Manager and the Company, as applicable;

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                    (c) neither of the Manager nor the Company, shall do or
cause or permit to be done, or enter into or make or become a party to any
agreement (oral or written), arrangement or commitment to do or cause to be
done, any of the things prohibited by this Agreement or that conflicts with this
Agreement or that would prevent it from complying herewith and/or performing
hereunder;

                    (d) Manager and the Company each shall take or cause to be
taken such further actions, to obtain such consents and approvals and to duly
execute, deliver and file or cause to be executed, delivered and filed such
further agreements, assignments, instructions, documents and instruments as may
be necessary or as may be requested by the Seller in its reasonable discretion
in order to fully effectuate the purposes, terms and conditions of this
Agreement, whether before, at or after the performance of the transactions
contemplated hereby or the occurrence of a Default or Event of Default; and

                    (e) Manager shall not (i) sell, lease, transfer, pledge,
encumber, restrict, assign or otherwise dispose of its rights under the
Management Fee Provision or any interest therein to any Person unless such
Person agrees, in a writing in form and substance satisfactory to Seller, to be
bound by the terms of this Agreement or another subordination agreement, with
respect to such payments, deliveries and issuances and amounts owing to it by
the Company under the Management Fee Provision, or (ii) create, incur, assume or
suffer to exist any Lien in Manager’s or its respective Affiliates’ favor on the
Seller Collateral or any other property or asset of the Company with respect to
the Fees.

          7. Security Agreement; Acknowledgment and Consent.

                    (a) Manager acknowledges and confirms receipt of a copy of
the Security Agreement and hereby acknowledges and agrees not to challenge the
validity or enforceability of any terms and provisions of the Security Agreement
and the execution, delivery and performance by Company of the Security Agreement
and other Security Documents, including, without limitation, the creation of the
Obligations and the granting of security interests by the Company pursuant
thereto and the rights of Seller to assign and participate any part of the
Obligations pursuant and subject to Section 12.2 of the Security Agreement.

                    (b) Manager acknowledges and agrees that the Seller shall
have, subject to the Security Documents, unconditional power and discretion,
without notice to or consent from the Manager, to make any change, modification
or amendment at any time to any of the Security Documents, Promissory Notes
and/or Obligations and to deal in any manner with the Security Documents,
Promissory Notes and/or Obligations and any security or guaranties therefor,
including, without limitation, the release, surrender, extension, renewal,
acceleration, compromise or substitution thereof without affecting, impairing,
or discharging, in whole or in part, the obligations of the Manager hereunder.
Without limiting the foregoing, Manager acknowledges that the Seller may,
subject to the Security Documents, administer the Security Documents and
Obligations in any manner it sees fit and may take and do any and all actions
(or refrain therefrom) with respect to the Security Documents and/or
Obligations, including, without limitation, release any or all Seller Collateral
for the Obligations, release any guarantor of the Obligations, extend the time
for payment of the Obligations, or any part thereof, change the

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interest rate on the Obligations under the Security Documents, reduce or
increase the amount of the Obligations under the Security Documents, accelerate
the Obligations, make any amendment, or modification whatsoever of any of the
terms or conditions of the Security Documents, extend, in whole or in part, by
renewal or otherwise, the time for the payment of any principal or interest or
any other amount pursuant to the Promissory Notes or for the performance of any
term or condition of the Security Documents, settle, release, substitute,
modify, impair or exercise, or fail or refuse to exercise, any claims, rights,
or remedies, of any kind or nature, which the Seller may at any time have
against the Company or with respect to any Seller Collateral or Lien held by the
Seller at any time, whether under any Security Document or otherwise, and
collect and retain or liquidate any property or assets subject to such lien, or
foreclose on any of the Seller Collateral, take additional collateral, obtain
additional guarantors, accept a deed in lieu of foreclosure, exercise any and
all powers, rights and remedies and/or take or fail to take any other action
with respect to the Obligations.

          8. Insolvency Proceedings. If there shall occur any receivership,
insolvency, assignment for the benefit of creditors, bankruptcy (voluntary or
involuntary) or reorganization (whether or not pursuant to bankruptcy or other
insolvency laws), sale of all or substantially all the assets of, or the,
dissolution, liquidation or any other marshaling of the assets and liabilities
of, the Company (each, an “Insolvency Event”) (i) the Seller shall be entitled
to receive indefeasible and irrevocable payment in full in cash and full
performance and satisfaction of all Obligations (including any interest and fees
thereon accruing at the contract rate after the commencement of any such
proceedings or Insolvency Event) then outstanding (other than indemnity
obligations under the Security Documents that are not then due and payable or
for which any events or claims that would give rise thereto are not then
pending) before Manager or any of its Subsidiaries or Affiliates shall be
entitled to receive any payment or distribution, whether in cash, securities or
other property, in respect of any amounts due with respect to the Fees at the
time outstanding, and (ii) any payment or distribution, whether in cash,
securities or other property payable or deliverable in respect of the amounts
due under or with respect to the Fees shall be paid or delivered, to the extent
of the unpaid balance of the Obligations, for application to the payment
thereof, directly to the Seller. In the event of any proceedings in connection
with an Insolvency Event, Seller shall be entitled to rely upon this Agreement,
which the parties acknowledge is enforceable in accordance with its terms upon
the occurrence of any Insolvency Event, and shall have the right to prove, as
part of its claims on account of the Obligations, its claims hereunder in any
such proceeding, so as to establish its rights hereunder and to receive directly
from any receiver, trustee or other court officer or custodian distributions of
any sort which would otherwise be payable on account of the Seller Collateral or
Obligations.

          9. Reliance. Manager, by its acceptance hereof, acknowledges and
agrees, that (a) one of its affiliates, the Company, as the sole owner of US
Mills, will benefit from the execution, delivery and performance by the Seller
of the Acquisition Documents, (b) execution, delivery and performance by the
Seller of the Acquisition Documents constitutes valuable consideration to one of
its affiliates, the Company, as the sole equity owner of US Mills, (c) this
Agreement is intended to be an inducement to the Seller to execute and deliver
the Acquisition Documents and perform its obligations under the Acquisition
Documents whether the Obligations under the Acquisition Documents were created
or existed before or after the creation or existence of the Fees, and (d) the
Seller is relying on the subordination and other provisions of

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this Agreement in executing and delivering the Acquisition Documents and
performing its obligations thereunder.

          10. Rights of the Seller Regarding Collateral. In addition to the
provisions set forth in this Agreement and in the Security Documents, upon the
occurrence of an Event of Default the Seller shall have the right to exercise
any and all other rights and remedies provided for herein or in any Security
Document, under the UCC or at law or equity generally, including, without
limitation, the right (a) to foreclose its security interests and Liens, and (b)
to realize upon or to take possession of or sell any of the Seller Collateral
with or without judicial process.

          11. No Third Party Beneficiary; Subrogation. This Agreement is not
intended to benefit or confer any rights upon any third party other than
successors and permitted assigns. After and to the extent that all Obligations
(other than indemnity obligations under the Security Documents that are not then
due and payable or for which any events or claims that would give rise thereto
are not then pending) owing to Seller under the Security Documents have been
indefeasibly paid in full due to payments or distributions to Seller on account
of this Agreement, then and to that extent, the Manager shall become subrogated
to the rights of Seller under the Security Documents to receive payment of the
remaining Obligations from the Company, if any. The Company agrees that no such
payments or distributions directed to Seller on account of this Agreement shall
be deemed by the Company, whether in connection with its other creditors or
otherwise, to be a payment by the Company on account of the Fees.

          12. Rights and Remedies. The Seller shall have the right in its sole
discretion to determine which rights and/or remedies the Seller may at any time
pursue, relinquish, subordinate or modify, and such determination will not in
any way modify or affect any of the Seller’s rights, Liens or remedies under any
Security Document or this Agreement, applicable law or equity. The enumeration
of any rights and remedies in this Agreement or any Security Document is not
intended to be exhaustive, and all rights and remedies of the Seller described
in this Agreement and the Security Documents are cumulative and are not
alternative to or exclusive of any other rights or remedies which the Seller
otherwise may have. The partial or complete exercise of any right or remedy
shall not preclude any other further exercise of such or any other right or
remedy.

          13. [Intentionally Deleted]

          14. Waiver.

                    (a) No course of action or dealing, renewal, release or
extension of any provision of any Security Document or this Agreement, or single
or partial exercise of any such provision, or delay, failure or omission on the
Seller’s part in enforcing any such provision shall affect the obligations of
Manager or the Company hereunder, or operate as a waiver of such provision or
preclude any other or further exercise of such provision. No waiver by the
Seller of any one or more defaults by any other party in the performance of any
of the provisions of any Security Document or this Agreement shall operate or be
construed as a waiver of any future default, whether of a like or different
nature, and each such waiver shall be limited solely to the express terms and
provisions of such waiver.

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                    (b) Notwithstanding any other provision of any Security
Document or this Agreement or any other document executed in connection with any
of the foregoing or evidencing or with respect to any Fee, by completing the
Closing, the Seller does not waive any breach of any representation or warranty
under any Security Document or this Agreement, and all of the Seller’s claims
and rights resulting therefrom are specifically reserved.

                    (c) The Manager hereby waives and agrees not to assert
against the Seller any rights which a guarantor or surety could exercise
(provided that the Manager has not assumed and is not hereby assuming the status
of guarantor or surety with respect to the Obligations), and nothing in this
Agreement shall constitute or be construed as making the Manager, the Seller a
guarantor or surety.

                    (d) The Manager waives any and all claims against the Seller
for the failure of the Seller or any other person to exercise diligence or
reasonable care in the preservation, protection, enforcement, sale or other
treatment of all or any part of the Seller Collateral, or based upon any other
action taken or omitted to be taken with respect to the Obligations or Seller
Collateral by the Seller. The Manager agrees that the Seller have no duties of
any nature whatsoever arising out of this Agreement or the transactions
contemplated hereby to the Manager except as set forth in this Agreement,
whether express or implied, by virtue of this Agreement operation of law or
otherwise.

                    (e) The Manager hereby irrevocably waives and agrees not to
assert any right of setoff, recoupment, counterclaim, defense, demand,
presentment, protest and/or deduction under contract, at law or in equity or
otherwise which may now exist or may hereafter arise as a result of the
existence of the Fees owing by the Company or its Affiliates or its or their
successors or assigns to the Manager whether direct or indirect, absolute or
contingent, secured or unsecured or due or to become due, and all defenses with
respect to any and all instruments and all notices and demands of any
description, and the pleading of any statute of limitations as a defense to any
demand. The Manager waives any rights they may have under applicable law or
assert the doctrine of marshalling or otherwise to require the Seller or the
Seller to marshal any property of the Company or US Mills for the benefit of the
Manager.

          15. Entire Agreement. This Agreement constitutes the entire agreement
between the Manager, the Company and the Seller with respect to the subject
matter hereof, and supersedes all prior agreements and understandings, if any,
relating to the subject matter hereof. Any promises, representations, warranties
or guarantees not herein contained and hereinafter made with respect to the
subject matter hereof shall have no force and effect unless in writing signed by
the parties hereto. Each party hereto acknowledges that it has been advised by
counsel in connection with the negotiation and execution of this Agreement and
is not relying upon oral representations or statements inconsistent with the
terms and provisions hereof.

          16. Amendment. No provision of this Agreement may be changed,
modified, amended, restated, waived, supplemented, discharged, canceled or
terminated orally or by any course of dealing or in any other manner other than
by a written agreement signed by the Manager, the Seller and the Company.

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          17. Notices. Any notice or request under this Agreement shall be given
to any party hereto at such party’s address set forth beneath its signature on
the signature page hereto, or at such other address as such party may hereafter
specify in a notice given in the manner required under this Section 17. Any such
notice or request shall be given only by, and shall be deemed to have been
received upon (each, a “Receipt”): (a) registered or certified mail, return
receipt requested, on the date on which such notice or request is received as
indicated in such return receipt, (b) delivery by a nationally recognized
overnight courier, one (1) Business Day after deposit with such courier, or (c)
facsimile or electronic transmission, in each case upon telephone or further
electronic communication from the recipient acknowledging receipt (whether
automatic or manual from recipient), as applicable.

          18. Governing Law; Jurisdiction; Construction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York without giving effect to its choice of law provisions. Any judicial
proceeding against the Manager or the Company with respect to any of the Fees or
the Management Fee Provision, any of the Security Documents or this Agreement
may be brought in any federal or state court of competent jurisdiction located
in the State of New York. By execution and delivery of this Agreement, the
Manager and the Company each (a) accepts the non-exclusive jurisdiction of the
aforesaid courts and irrevocably agrees to be bound by any judgment rendered
thereby, (b) waives personal service of process, (c) agrees that service of
process upon it may be made by certified or registered mail, return receipt
requested, pursuant to Section 17 hereof, and (d) waives any objection to
jurisdiction and venue of any action instituted hereunder and agrees not to
assert any defense based on lack of jurisdiction, venue, convenience or forum
non conveniens. Nothing shall affect the right of the Manager, the Company, the
Seller to serve process in any manner permitted by law or shall limit the right
of the Seller to bring proceedings against the Manager or Company in the courts
of any other jurisdiction having jurisdiction. Any judicial proceedings against
the Seller, involving, directly or indirectly, the Fees and/or the Management
Fee Provision, Security Documents or this Agreement shall be brought only in a
federal or state court located in the State of New York. Each of the Seller, the
Manager and the Company acknowledges that it participated in the negotiation and
drafting of this Agreement and that, accordingly, it shall not move or petition
a court construing this Agreement to construe it more stringently against one
party than against any other.

          19. Severability; Captions; Counterparts; Facsimile Signature. If any
provision of this Agreement is adjudicated to be invalid under applicable laws
or regulations, such provision shall be inapplicable to the extent of such
invalidity without affecting the validity or enforceability of the remainder of
this Agreement which shall be given effect so far as possible. The captions in
this Agreement are intended for convenience and reference only and shall not
affect the meaning or interpretation of this Agreement. This Agreement may be
executed in one or more counterparts (which taken together, as applicable, shall
constitute one and the same instrument) and by facsimile transmission, which
facsimile signatures shall be considered original executed counterparts. Each
party to this Agreement agrees that it will be bound by its own facsimile
signature and that it accepts the facsimile signature of each other party.

          20. Successors and Assigns; Participations; New Sellers. This
Agreement (a) shall inure to the benefit of, and may be enforced by, the
Manager, the Seller, Transferees (to the

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extent expressly provided in the Security Agreement) and all future Managers and
holders of the Promissory Notes, any of the Obligations or any of the Seller
Collateral and each of their respective successors and permitted assigns, and
(b) shall be binding upon and enforceable against the Seller, the Manager and
the Company and their respective heirs, administrators, executors, successors
and permitted assigns. The Manager and the Company shall not assign, delegate or
transfer this Agreement or any of its rights or obligations hereunder without
the prior written consent of the Seller. The Seller shall not assign, delegate
or transfer this Agreement or any of its rights or obligations hereunder to a
Person other than an Affiliate without the prior written consent of the Seller.
Nothing contained in this Agreement or any other Security Document shall be
construed as a delegation to the Seller of the Company’s duty of performance.
THE MANAGER ACKNOWLEDGES AND AGREES THAT THE SELLER AT ANY TIME AND FROM TIME TO
TIME MAY (I) DIVIDE AND REISSUE (WITHOUT ANY SUBSTANTIVE CHANGES OTHER THAN
THOSE RESULTING FROM SUCH DIVISION) THE PROMISSORY NOTES, AND/OR (II) PURSUANT
AND SUBJECT TO THE TERMS OF THE SECURITY DOCUMENTS, SELL, ASSIGN OR GRANT
PARTICIPATING INTERESTS IN OR TRANSFER SUBJECT TO SECTION 12.2 OF THE SECURITY
AGREEMENT ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT, ANY
PROMISSORY NOTE, THE OBLIGATIONS, THE SELLER COLLATERAL AND/OR THE OTHER
SECURITY DOCUMENTS TO ONE OR MORE OTHER PERSONS, IN EACH CASE ON THE TERMS AND
CONDITIONS IN THE SECURITY AGREEMENT. The terms “the Seller” in this Agreement
includes Transferees and successors and assigns, each of which shall have all
rights and benefits of the Seller hereunder. Each Transferee (to the extent
provided in the Security Agreement) shall have all of the rights and benefits
with respect to the Obligations, Promissory Notes, Seller Collateral, this
Agreement and/or Security Documents held by it as fully as if the original
holder thereof. Notwithstanding any other provision of this Agreement or any
Security Document or any other document executed in connection with any of the
foregoing or evidencing or with respect to any Fee, the Seller may disclose to
any Transferee all information, reports, financial statements, certificates and
documents obtained under any provision of this Agreement; provided, that
Transferees shall be subject to the confidentiality provisions contained in the
Security Agreement that are applicable to Seller.

          Notwithstanding the foregoing, Section 12.2 of the Security Agreement
with respect to successors and assigns is hereby incorporated herein by this
reference with the same effect as though set forth in its entirety herein and
made applicable hereto. In the event that any of the provisions of Section 12.2
of the Security Agreement conflict with this Section 20, Section 12.2 of the
Security Agreement shall govern.

          21. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
ARISING HEREUNDER OR IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF
THE PARTIES WITH RESPECT HERETO OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A

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JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE
PARTIES TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY.

          22. Survival; Termination. It is the express intention and agreement
of the parties hereto that all covenants, representations, warranties and
waivers and indemnities made by the Manager and/or the Company herein shall
survive the execution, delivery and termination of this Agreement until all
Obligations (other than indemnity obligations under the Security Documents that
are not then due and payable or for which any events or claims that would give
rise thereto are not then pending) are performed in full and indefeasibly paid
in full in cash. This Agreement shall automatically terminate upon full
performance and indefeasible payment in full in cash of all Obligations (other
than indemnity obligations under the Security Documents that are not then due
and payable or for which any events or claims that would give rise thereto are
not then pending) and termination of the Security Documents. Notwithstanding any
other provision of this Agreement or any Security Document or any other document
executed in connection with any of the foregoing or evidencing or with respect
to any Fee, no termination of this Agreement shall affect the Seller’s rights or
any of the Obligations existing as of the effective date of such termination
until the Obligations (other than indemnity obligations under the Security
Documents that are not then due and payable or for which any events or claims
that would give rise thereto are not then pending) have been fully performed and
indefeasibly paid in cash in full.

          23. Expenses. The Company shall pay to the Seller all costs and
expenses incurred by the Seller, and/or its Affiliates in accordance with the
terms of the Security Agreement. Without limiting the foregoing, the Manager
shall pay the reasonable attorneys’ fees and expenses (including in-house legal
expenses) incurred by the Seller, or any of its Affiliates in any effort to
enforce this Agreement against Manager or to recover any Fees received by
Manager in violation of this Agreement. If the Seller or any of its Affiliates
uses in-house counsel for any of the foregoing, the Company and/or Manager, as
applicable, expressly agrees that its obligations hereunder include reasonable
charges for such work commensurate with the fees that would otherwise be charged
by outside legal counsel selected by the Seller or such Affiliate in its sole
discretion for the work performed.

          24. Confidentiality and Publicity. Seller reserves the right to review
and approve all materials that the Manager or any of its respective Affiliates
prepares that contain the Seller’s name or describe or refer to this Agreement,
any of the terms hereof or thereof or any of the transactions contemplated
hereby or thereby. Except to the extent disclosure is required by applicable law
or regulations, the Manager shall not, and shall not permit any of its
respective Affiliates to, use the Seller’s name (or the name of any of the
Seller’s Affiliates) in connection with any of its business operations,
provided, that Manager may disclose the Sellers’ names, the aggregate principal
amount of the Promissory Notes outstanding and other principal terms of such
Promissory Notes to its shareholders and other equity owners so long as the
Manager inform Persons of the confidential nature of such information and such
Persons agree in writing not to disclose the same to any other Person and to be
bound by the confidentiality provisions of this Agreement. Nothing contained in
this Agreement is intended to permit or authorize any party hereto or any of
their Affiliates to contract on behalf of any other party hereto.

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          25. Approvals and Duties. Unless expressly provided herein to the
contrary, any approval, consent, waiver or satisfaction of the Seller with
respect to any matter that is subject of this Agreement or the Management Fee
Provision may be granted or withheld by the Seller in its sole and absolute
discretion. Other than the Seller’s duty of reasonable care with respect to the
Seller Collateral, the Seller shall have no responsibility for or obligation or
duty with respect to any of the Seller Collateral or any matter or proceeding
arising out of or relating thereto, including, without limitation, any
obligation or duty to collect any sums due in respect thereof or to protect or
preserve any rights pertaining thereto.

          26. Legend. Until the termination of this Agreement according to its
terms, the Management Fee Provision at all times shall contain in a conspicuous
manner the following legend:

“This agreement and the rights and obligations evidenced hereby are subordinate
in the manner and to the extent set forth in that certain Junior Management Fee
Subordination Agreement (the “Subordination Agreement”) dated as of November
 10, 2005 among Sunset Holdings International, Ltd., Sunset Brands, Inc. and IBF
Fund Liquidating LLC, as Seller, to certain indebtedness described in the
Subordination Agreement, and each holder of this instrument, by its acceptance
hereof, shall be bound by the provisions of the Subordination Agreement.”

          27. Security Agreement. Seller hereby acknowledges and agrees that,
notwithstanding anything to the contrary in this Agreement, as between Seller,
the Company and US Mills, nothing in this Agreement shall give or be deemed to
give Seller any greater rights than such person has under the Security Agreement
and the other Security Documents.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

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          IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Junior Management Fee Subordination Agreement as of the date first written
above.

 

 

 

 

SELLER:

 

 

 

IBF FUND LIQUIDATING LLC

 

 

 

By:

/s/ Arthur J. Steinberg

 

 

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Name:

Arthur J. Steinberg

 

Title:

Manager

 

 

 

c/o Kaye Scholer LLP

 

425 Park Avenue

 

New York, NY 10022

 

Attention: Arthur J. Steinberg, Esq., Manager

 

Telephone: (212) 836-8564

 

FAX: (212) 836-6157

 

 

 

COMPANY:

 

 

 

SUNSET BRANDS, INC.

 

 

 

By:

/s/ Todd Sanders

 

 

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Name:

Todd Sanders

 

Title:

President & CEO

 

 

 

Sunset Brands, Inc.

 

10990 Wilshire Blvd.

 

Suite 1220

 

Los Angeles, CA 90024

 

Attention: President

 

Telephone: (310) 478-4600

 

Facsimile: (310) 478-4601

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MANAGER:

 

 

 

SUNSET HOLDINGS INTERNATIONAL, LTD.

 

 

 

By:

/s/ Todd Sanders

 

 

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

 

Name: 

Todd Sanders

 

Title:

Chairman & CEO

 

 

 

 

Sunset Holdings International, Ltd.

 

10990 Wilshire Blvd.

 

Suite 1220

 

Los Angeles, CA 90024

 

Attention: President

 

Telephone: (310) 478-4600

 

Facsimile: (310) 478-4601

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