Unassociated Document


    ESCROW
AGREEMENT

     

    ESCROW AGREEMENT (“Agreement”)
is made the 27th day of
October, 2010 by and among Frederick’s of Hollywood Group Inc. (“Seller”) and
Dolce Vita Intimates LLC (“Purchaser”), and Graubard Miller (“Escrow
Agent”).  Each of Seller, Purchaser and Escrow Agent is sometimes
referred to herein as an “Escrow Party.”

     

    WITNESSETH

     

    WHEREAS, Purchaser has
purchased substantially all of the operating assets and assumed certain specific
liabilities associated with Seller’s Business  pursuant to that
certain Asset Purchase Agreement, dated the date hereof (the “Asset Purchase
Agreement”);

     

    WHEREAS, Purchaser has
deposited the sum of $250,000.00 of the Purchase Price with Escrow Agent, to be
held in escrow and distributed in accordance with the provisions of this
Agreement;

     

    WHEREAS, capitalized terms
used herein, unless otherwise defined herein, have the meanings ascribed to them
in the Asset Purchase Agreement; and

     

    NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the parties, intending
to be legally bound, hereby agree as follows:

     

    1.           Appointment of Escrow Agent;
Receipt of Escrow Funds.  Purchaser and Seller hereby appoint
Graubard Miller as Escrow Agent, and Graubard Miller agrees to serve as Escrow
Agent, hereunder.  Escrow Agent hereby acknowledges the receipt from
Purchaser of a wire transfer in the amount of TWO HUNDRED AND FIFTY THOUSAND
DOLLARS ($250,000.00), which constitute the “Escrow Funds,”  made in
accordance with the following instructions:

     

    
      
        
          
            	
                    Bank:

                  	
                    Deutche
      Bank for the Americas

                  
	
                    Address:

                  	
                    280
      Park Avenue

                    New
      York, New York 10017

                    Attention:  Daphne
      Cales

                  
	
                     
      

                  	 
      
	
                    For
      Credit To:

                  	
                    Graubard
      Miller Attorney Trust
Account

                  


          

        

      

    

    


    2.           Investment of Escrow
Funds.  The Escrow Funds shall be invested by Escrow Agent in
an interest bearing account in Deutsche Bank for the Americas, New York, New
York.

     

    3.           Disbursement of Escrow
Funds.  Escrow Agent shall hold, disburse and pay over the
Escrow Funds less the Expenses plus the Interest (each as hereinafter defined)
(“Total Escrow”) to Purchaser, a Purchaser Indemnitee or Seller as
follows:


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (a)           If
Purchaser claims that it is entitled to an adjustment to the Purchase Price
pursuant to Section 2.9 of the Asset Purchase Agreement (an “Adjustment”) or a
Purchaser Indemnitee has or claims to have incurred or suffered any Losses for
which it is or may be entitled to indemnification under Section 7.1(a) of
the Asset Purchase Agreement, Purchaser or such Purchaser Indemnitee, as the
case may be, may, promptly after the incurrence of such Adjustment or Loss, but
in no event later than January 10, 2011, deliver to Seller and, if Seller is not
the Indemnifying Party, the Indemnifying Party and Escrow Agent a
Certificate.  Each Certificate shall state, as appropriate, that
Purchaser is entitled to an Adjustment or that the Purchaser Indemnitee has paid
or anticipates it will incur Losses for which such Purchaser Indemnitee is
entitled to indemnification pursuant to the Asset Purchase Agreement, and
specify in reasonable detail (and have annexed thereto all supporting
documentation) each individual item of Adjustment or Loss included in the amount
so stated and in the case of a Loss, the date such item was paid or accrued, the
basis for any anticipated liability and the nature of the misrepresentation,
breach of warranty, breach of covenant or claim to which each such item is
related and the computation of the amount to which such Purchaser Indemnitee
claims to be entitled thereunder.

     

    (b)         In
the event that Seller shall object to the Adjustment or the amount thereof or
the Indemnifying Party shall object to the indemnification of Purchaser
Indemnitee in respect of any claim or claims specified in any Certificate,
Seller or the Indemnifying Party shall, within forty-five (45) days after
receipt by it of such Certificate, deliver to Purchaser or Purchaser Indemnitee
and Escrow Agent a notice of objection to such effect, specifying in reasonable
detail the basis for such objection, and Seller or the Indemnifying Party, on
the one hand, and Purchaser or the Purchaser Indemnitee, on the other hand,
shall, within the sixty (60) day period beginning on the date of receipt by
Seller or the Indemnified Party of such objection, attempt to agree upon the
rights of the respective parties with respect to each of such claims to which
Seller or the Indemnifying Party shall have so objected. If Seller or the
Indemnifying Party or Purchaser or the Purchaser Indemnitee shall reach
agreement on their respective rights with respect to any of such claims, they
shall promptly prepare and sign a memorandum setting forth such agreement and
shall deliver a copy of such memorandum to Escrow Agent. Should such parties be
unable to agree as to any particular item or items or amount or amounts within
such time period, then the they shall submit such dispute to a court of
competent jurisdiction as set forth in Section 8.9 of the Asset Purchase
Agreement.


    
      
         


      

      
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    (c)           Claims
for an Adjustment or Losses specified in any Certificate to which Seller or the
Indemnifying Party shall not object in writing within forty-five (45) days of
receipt of such Certificate, claims for an Adjustment or Losses covered by a
memorandum of agreement of the nature described in Section 3(b) hereunder, and
claims for an Adjustment or Losses the validity and amount of which have been
the subject of judicial determination as described in Section 3(b) hereunder or
that have been settled with the consent of the Indemnifying Party as described
in Section 7.3 of the Asset Purchase Agreement, are hereinafter referred to,
collectively, as “Agreed Claims.”  Within ten (10) Business Days after
receipt by Escrow Agent of a notice from the Escrow Parties of the determination
of the amount of any Agreed Claim pursuant to which the Purchaser or a Purchaser
Indemnitee is entitled to payment, Escrow Agent shall pay to the Purchaser or
Purchaser Indemnitee an amount equal to the Agreed Claim.

     

    (d)           On
January 11, 2011, Escrow Agent shall distribute to Seller the Total Escrow less
the sum of (i) any payments of Agreed Claims for which it has received notice
prior thereto and (ii) an amount equal to all claims for Adjustments and Losses
with respect to which it has received notice on or before January 10, 2011 and
have not been resolved (“Open Claims”).  Upon the resolution of an
Open Claim and receipt by Escrow Agent of notice thereof from the Escrow
Parties, Escrow Agent shall distribute to the Escrow Parties entitled thereto
the amount of such Open Claim in accordance with the resolution
thereof.

     

    4.           Interest; Tax
Liabilities. All interest earned on the Escrow Funds (“Interest”) shall
be held as Escrow Funds for the benefit of Seller, and Seller shall be solely
responsible for the reporting of the Interest on its applicable tax returns and
the payment of any tax liability attributable thereto.  Seller’s tax
identification number is 13-2643042.  Seller shall provide Escrow
Agent with a substitute Form W-9 on the date hereof and indicate thereon that it
is not subject to backup withholding on income earned on any amount received
hereunder.

     

    5.           Escrow Agent’s Duties and
Termination Thereof.

     

    (a)         Each
Escrow Party agrees that Escrow Agent’s duties hereunder shall be entirely
administrative and that Escrow Agent is acting solely to accommodate the parties
and that, provided Escrow Agent acts in good faith (including, at the option of
Escrow Agent, acting in accordance with the opinion of such counsel as Escrow
Agent may retain hereunder), Escrow Agent shall have no liability to any other
Escrow Party as the result of any action Escrow Agent may take or omit to take
hereunder.  As a condition to the disbursement of the Total Escrow or
any part thereof, Escrow Agent may require a receipt from each person receiving
the Total Escrow or any part thereof.  Upon the complete distribution
of the Total Escrow, this Agreement shall terminate and Escrow Agent shall be
discharged from any liability arising from its execution or performance of this
Agreement, and if so requested by Escrow Agent, each Escrow Party shall provide
to Escrow Agent a written release in form and content satisfactory to Escrow
Agent.


    
      
         


      

      
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    (b)         Escrow
Agent shall not be responsible or liable for the performance of any party under
the Asset Purchase Agreement, this Agreement or any other agreement, or for the
completeness, accuracy or correctness of any document or transaction between or
among any of the parties.  Escrow Agent shall have no obligation to
take any legal action in connection with this Agreement or towards its
enforcement or performance or to appear in, prosecute or defend any action or
legal proceeding in connection herewith.

     

    (c)         In
the event that Escrow Agent shall be uncertain as to its duties or rights
hereunder or shall receive instructions with respect to the Escrow Funds which,
in its sole opinion, are in conflict with either other instructions received by
it or any provision of this Agreement, it shall, without liability of any kind,
be entitled to hold the Escrow Funds pending the resolution of such uncertainty
to Escrow Agent’s sole satisfaction, by final order or judgment of a court of
competent jurisdiction, or Escrow Agent, at its option, may, in final
satisfaction of its duties hereunder, deposit the Escrow Funds with the clerk of
the Federal District Court in the Southern District of New York or with the
clerk of any other court of competent jurisdiction.

     

    (d)         Escrow
Agent undertakes to perform only such duties as are expressly set forth herein
and shall not be bound in any way by any other agreement (whether or not Escrow
Agent has knowledge thereof).

     

    6.           Reliance Upon
Documents.  Escrow Agent may rely upon and shall be protected
in acting or refraining from acting upon any written notice, document,
instrument, certificate, instruction or request furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the proper
party or parties.  Escrow Agent shall be entitled to any and all
proofs with respect to any and all facts and to any and all acknowledgements and
indemnification it desires before releasing from escrow and disbursing the Total
Escrow or any part thereof. Escrow Agent shall not be obligated to make any
inquiry as to the truth of the information in any such notice, document,
instrument, certificate, instruction or request or as to the authority,
capacity, existence or identity of any person purporting to have executed any
such notice, document, instrument, certificate, instruction or request or to
have made any such signature or purporting to give any such notice or
instructions.


    
      
         


      

      
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    7.           Retention of Counsel; Legal
Fees; Counsel.  If, in the sole opinion of Escrow Agent, it
requires counsel (which may include itself) in connection with this Agreement,
Escrow Agent shall retain such counsel, without notification to, or the approval
of, any of the parties to this Agreement.  Seller and Purchaser shall
be jointly and severally liable for the fees and expenses of such counsel in
accordance with Section 8 hereof.  In the event Escrow Agent retains
counsel because of a dispute between or among any of the parties to this
Agreement, upon resolution thereof, Escrow Agent and the prevailing party shall
be fully reimbursed by any other party for its share of said fees and expenses.
The participation of Graubard Miller as Escrow Agent is being undertaken as an
accommodation to the parties hereto, and shall in no way hinder or limit the
present or future ability of Graubard Miller to act as counsel to any Escrow
Party or any of their affiliates with respect to any matter including, but not
limited to, disputes between or among any of the parties to this Agreement with
regard to this Agreement or otherwise.  Without limitation on the
foregoing, the parties (i) recognize that Graubard Miller represents Seller with
regard to this Agreement, the Letter, the Asset Purchase Agreement and in other
matters and may continue to do so while serving as Escrow Agent, and (ii) waive
any conflicts that may arise from such representation.

     

    8.           Indemnification.  Seller
and Purchaser, jointly and severally, hereby indemnifies Escrow Agent, its
members, agents and employees (collectively the “Escrow Indemnified Parties”)
against, and holds them harmless from, and shall pay and reimburse Escrow Agent
for, any and all loss, liability, cost, damage and expense, including, without
limitation, costs of investigation and counsel fees and expenses which any of
the Escrow Indemnified Parties may suffer or incur by reason of any action,
claim or proceeding brought against any of the Escrow Indemnified Parties,
arising out of or relating in any way to this Agreement or the Letter, or any
transaction to which this Agreement or the Letter relates, other than any
action, claim or proceeding resulting from the bad faith of such Escrow
Indemnified Party.  The provisions of this paragraph shall survive the
termination of this Agreement.

     

    9.           Escrow Agent’s Fees and
Expenses. Escrow Agent shall not be entitled to compensation for its
services hereunder, but Purchaser shall reimburse Escrow Agent, upon demand, for
its costs incurred acting hereunder, including but not limited to bank fees
(“Expenses”). Escrow Agent shall have a lien on the Total Escrow for payment of
its Expenses.  Any outstanding Expenses which are not paid prior to
the earlier of release of any Escrow Funds or thirty (30) days after the invoice
date may be deducted from the Escrow Funds.


    
      
         


      

      
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    10.         Resignation of Escrow
Agent.  Without liability to any Escrow Party, Escrow Agent at
any time may resign and be discharged from its duties or obligations hereunder
by giving notice in writing of such resignation, specifying the date when such
resignation shall take effect, which date shall be at least ten (10) days after
the date of such notice.  In the event Escrow Agent delivers a notice
of resignation, its only duty shall be to hold and dispose of the Total Escrow
in accordance with the original provisions of this Agreement until a successor
Escrow Agent shall be appointed by Seller and Purchaser within the time period
specified above.  A written notice of the name and address of such
successor escrow agent shall be given to Escrow Agent by Seller and Purchaser,
whereupon Escrow Agent’s only duty shall be to turn over to the successor escrow
agent the Total Escrow, in accordance with the written instructions jointly
signed by Seller and Purchaser. In the event that a
successor escrow agent shall not have been appointed and Escrow Agent shall not
have turned over to the successor escrow agent the Total Escrow within the time
period specified above, Escrow Agent may deposit the Total Escrow with the clerk
of the federal district court in the Southern District of New York or with the
clerk of any other court of competent jurisdiction, at which time Escrow Agent’s
duties hereunder shall terminate.  Provided Escrow Agent shall have
acted in good faith, and upon the execution and delivery by Escrow Agent of any
documents necessary to substitute a successor escrow agent as the holder of the
Total Escrow, Escrow Agent shall, upon its resignation, receive a written
release from Seller and Purchaser and successor escrow agent, in form and
content satisfactory to Escrow Agent.

     

    11.         Notices.  All
notices and other communications hereinafter shall be in writing and be deemed
to have been duly given if delivered personally, by recognized overnight courier
service or by telecopy (confirmed by first class mail).  Notices and
requests shall be, in the case of those by hand delivery, deemed to have been
given when delivered to any officer of the party to whom it is addressed; in the
case of those by overnight courier, deemed to have been given when deposited
with the overnight courier; and in the case of a telecopy, when
confirmed.  Notices shall be provided to addresses and facsimiles set
forth below:

     

    
      
        	
                If to Seller:

              
	 
      
	
                Frederick’s
      of Hollywood Group Inc.

              
	
                1115
      Broadway

              
	
                New
      York, New York 10010

              
	
                Attention:           

              	
                Marci
      J. Frankenthaler, General Counsel

              
	
                Facsimile:

              	
                212-798-4893

              
	
                Email:

              	
                marcif@fohgroup.com

              
	 
      	 
      
	
                With
      a copy (which shall not constitute notice) to:

              
	 
      
	
                Graubard
      Miller

              
	
                405
      Lexington Avenue, 19th Floor

              
	
                New
      York, New York 10174

              
	
                Attention:

              	
                David
      Alan Miller, Esq.

              
	
                Facsimile:

              	
                212-818-8881

              
	
                Email:

              	
                dmiller@graubard.com

              


      

    

    



    
      
         


      

      
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                  If to Escrow Agent:

                
	 
      
	
                  Graubard
      Miller

                
	
                  405
      Lexington Avenue, 19th Floor

                
	
                  New
      York, New York 10174

                
	
                  Attention:

                	
                  David
      Alan Miller, Esq.

                
	
                  Facsimile:

                	
                  212-818-8881

                
	
                  Email:

                	
                  dmiller@graubard.com

                
	 
      
	
                  If to Purchaser:

                
	 
      
	
                  Dolce
      Vita Intimates LLC

                
	
                  1000
      First Street

                
	
                  Harrison,
      New Jersey 07029

                
	
                  Attention:           

                	
                  Jack
      Thekkekara, President

                
	
                  Facsimile:

                	
                  (973)
      482-8485

                
	
                  Email:

                	
                  jackt@dolcevitaintimates.com

                
	 
      
	
                  With
      a copy to:

                
	 
      
	
                  Hahn
      & Hessen LLP

                
	
                  488
      Madison Avenue

                
	
                  New
      York, New York 10022

                
	
                  Facsimile:

                	
                  (212)
      478-7400

                
	
                  Attention:

                	
                  James
      Kardon, Esq.

                


        

      

    

    


    12.         Integration;
Amendment.  This Agreement represents the entire agreement
among the parties hereto with respect to the subject hereof and may only be
amended or supplemented in a writing and signed by all the parties
hereto.  Except as set forth in this Agreement, no party relies upon
any representation or other statement made in connection with this Agreement or
the subject matter hereof.

     

    13.         Applicable
Law.  This Agreement shall be construed and enforced in
accordance with the law of the State of New York, without application of the
principles of conflicts of laws.

     

    14.         Binding Effect;
Authority.  This Agreement, and the rights and obligations of
the parties hereunder, shall be binding upon and shall inure to the benefit of
the parties hereto.  Any assignment or transfer by any party of its
rights under this Agreement or with respect to the Escrow Funds shall be void as
against Escrow Agent unless written notice thereof shall be given to Escrow
Agent.  Each corporate party represents and warrants that it (i) has
the requisite corporate power and authority to execute, deliver and perform the
Agreement and to incur the obligations herein and therein and (ii) has been
authorized by all necessary corporate action to execute, deliver and perform the
Agreement.


    
      
         


      

      
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    15.         Construction.  All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as the context may require.  The
headings in this Agreement are for convenience of reference only and shall not
define or limit the provisions thereof.

     

    16.         Counterparts.  This
Agreement may be executed in counterparts and when each party has signed and
delivered at least one such counterpart, each counterpart shall be deemed an
original and, when taken together with the other signed counterparts, shall
constitute one agreement which shall be binding upon and effective as to all
parties.

     

    17.         No Third Party
Beneficiaries.  A person who is not a party to this Agreement
has no rights hereunder and no right to enforce any term of this
Agreement.  For the avoidance of doubt, the parties hereto may agree
to terminate this Agreement or vary any of its terms without the consent of any
third party.


    
      
         


      

      
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    IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first set forth
above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Graubard
      Miller, as Escrow Agent

                                	 
      	
                                  FREDERICK’S
      OF HOLLYWOOD GROUP INC.

                                
	 
      	 
      	 
      
	
                                  By: 

                                	
                                  /s/ Jeffrey Gallant

                                	 
      	
                                  By: 

                                	
                                  /s/ Thomas Rende

                                
	Name:  Jeffrey
      Gallant	 
      	Name:  Thomas
      Rende
	Title:    Partner	Title:    Chief
      Financial Officer
	 
      	 
      	 
      
	 
      	 
      	
                                  DOLCE
      VITA INTIMATES LLC

                                
	 
      	 
      	 
      
	 
      	 
      	
                                  By:

                                	
                                  /s/ Jack Thekkekara

                                
	 
      	 
      	Name:  Jack
      Thekkekara
	 
      	 
      	Title:    Managing
      Member


                        

                      

                    

                  

                

              

            

          

        

      

    

    


    Signature
Page to Escrow Agreement