EXHIBIT 10.3


PROMISSORY NOTE


 


	$5,000,000	October 10, 2013


 


FOR VALUE RECEIVED,
the undersigned, Frederick’s of Hollywood Group Inc., a New York corporation (“Group”), FOH Holdings,
Inc., a Delaware corporation (“Parent”), Frederick’s of Hollywood Inc., a Delaware corporation (“Frederick’s”),
Frederick’s of Hollywood Stores, Inc., a Nevada corporation (“Stores”), and Hollywood Mail Order, LLC,
a Nevada limited liability company (“Mail Order” and together with Group, Parent, Frederick’s and Stores,
individually, each individually a “Borrower”, and collectively, the “Borrowers”), hereby
jointly and severally promise to pay to the order of Salus Capital Partners, LLC (“Lender”), on the Initial
Tranche A-2 Advance Repayment Date described in the Credit and Security Agreement, dated as May 31, 2012 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”) and entered into between Borrowers,
Lender and the other lenders party thereto, at Lender’s office at 197 First Avenue, Suite 250, Needham, MA 02494, or at any
other place designated at any time by the Lender, in lawful money of the United States of America and in immediately available
funds, the principal sum of FIVE MILLION AND NO/100 DOLLARS ($5,000,000) or the aggregate unpaid principal amount of the Tranche
A-2 Advance (as defined in the Credit Agreement), whichever is less, on such date or dates as are required by the Credit Agreement,
and to pay interest on the unpaid principal amount from time to time outstanding hereunder, in like money, at such office at the
rates and at such times as are set forth in the Credit Agreement. This Note may be prepaid only in accordance with the Credit Agreement.


 


This Note is subject
to the terms of the Credit Agreement, which provides, among other things, for the acceleration of this Note. This Note is secured,
among other things, by the Credit Agreement and the Security Documents as defined in the Credit Agreement, and by any other security
agreements, mortgages, deeds of trust, assignments or other instruments or agreements that may subsequently be given for good and
valuable consideration as security for this Note.


 


Presentment or other
demand for payment, notice of dishonor and protest are expressly waived.


 


THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (OTHER THAN CONFLICT LAWS) OF THE STATE OF NEW YORK.


 


[SIGNATURES APPEAR ON FOLLOWING PAGE]


 




    	 



    	 



    

 


IN WITNESS WHEREOF, each of the
Borrowers has caused this Note to be executed and delivered by its duly authorized officer on the date first above written.


 


	 	FREDERICK’S OF HOLLYWOOD GROUP INC.
	 	 
	 	By:	/s/ Thomas Rende
	 	 	Thomas Rende
	 	 	Chief Financial Officer
	 	 
	 	FOH HOLDINGS, INC.
	 	 
	 	By:	/s/ Thomas Rende
	 	 	Thomas Rende
	 	 	Chief Financial Officer
	 	 
	 	FREDERICK’S OF HOLLYWOOD, INC.
	 	 
	 	By:	/s/ Thomas Rende
	 	 	Thomas Rende
	 	 	Chief Financial Officer
	 	 
	 	FREDERICK’S OF HOLLYWOOD STORES, INC.
	 	 
	 	By:	 /s/ Thomas Rende
	 	 	Thomas Rende
	 	 	Chief Financial Officer
	 	 
	 	HOLLYWOOD MAIL ORDER, LLC
	 	 
	 	By:	/s/ Thomas Rende
	 	 	Thomas Rende
	 	 	Chief Financial Officer


 


[Tranche A-2 Advance Note]