**JUNIOR MANAGEMENT FEE SUBORDINATION AGREEMENT**

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

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

**          WHEREAS**,the Manager and the Company are parties to that certain Management ServicesAgreement dated as of October 4, 2004 (as amended, modified or supplementedfrom time to time as permitted hereunder or pursuant to the Security Agreement,the “Management Agreement”), pursuant to which the Manager has agreed toprovide certain management and other services (“Management Services”) tothe Company and the Company has agreed to pay the Manager monthly managementfees of $43,333 as provided in Section 2 thereof (the “Management FeeProvision”);

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

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

**          WHEREAS**,the Manager acknowledges and confirms that it is an Affiliate of the Companyand this Agreement is intended to be an inducement to the Seller to execute anddeliver the Acquisition Documents and perform its obligations under theAcquisition Documents and Seller is relying upon this Agreement in executingand delivering the Acquisition Documents and performing its obligationsthereunder.

**          NOW,THEREFORE**, in consideration of the foregoing and ofthe mutual covenants and agreements set forth herein, the receipt andsufficiency of which are hereby acknowledged, and as an inducement for theSeller to enter into the Acquisition Documents and perform its obligationsthereunder, the parties hereto, intending to be legally bound hereby, do agreeas follows:

          1.Definitions.

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

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

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

                    “EnforcementAction” shall mean any action, whether legal, equitable, judicial,non-judicial or otherwise, to collect or receive any Fees or to enforce orrealize upon any Lien, security interest, restriction, encumbrance, charge,claim, right or other interest in respect of the Fees now or in the futureexisting, including, without limitation, any repossession, foreclosure, publicsale, private sale, collection, receipt, obtaining of a receiver or action forretention of all or any part of the Fees or Seller Collateral, or anyacceleration of the Fees or the exercise or enforcement of any other right,power or remedy with respect to the Management Fee Provision, the Fees orSeller 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 theManagement Fee Provision and other amounts, penalties, late charges, interest,advances, payables, covenants and duties of any kind at any time owing, owed orpayable by the Company to Manager, in each case, under or pursuant to theManagement Fee Provision or otherwise for management and/or other servicesprovided by the Manager to the Company pursuant to the Management Agreement,excluding reasonable out-of-pocket expenses which are reimbursable by theCompany pursuant to the Management Fee Provision.

                    “SellerCollateral” 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 andissuance and in right of remedies and action to the prior performance andsatisfaction and irrevocable and indefeasible payment in full in cash of theObligations (other than indemnity obligations under the Security Documents thatare not then due and payable or for which any events or claims that would giverise thereto are not then pending) and termination of the Security Documentsand to the Seller’s right to take all actions and to pursue all remedies underthe 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 FeeProvision or any of the Security Documents or any other document executed inconnection 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 assuch become due and payable on a monthly basis so long as, prior to andimmediately after making such payment, no Event of Default has occurred orwould result by or from any such payment.The Company and the Manager agree that any Fees accruing prior toNovember 1, 2007, shall not be payable by the Company to Manageruntil all Obligations have been indefeasibly paid in cash and the SecurityDocuments have been terminated.  TheCompany and the Manager covenant that upon the occurrence and during thecontinuation of an Event of Default, the Company’s ability to make and theManager’s right to receive, any amount or payment on or with respect to theFees or pursuant to the Management Fee Provision otherwise permitted under thisSection 2(b) shall immediately and automatically cease and terminate(but without prejudice to the continued accrual of such Fees) until the earlierof (i) the date upon which all of the Obligations (other than indemnityobligations under the Security Documents that are not then due and payable orfor which any events or claims that would give rise thereto are not thenpending) have been indefeasibly paid in full in cash and the Security Documentshave been terminated, and (ii) only in the case when payment is restricted bythe occurrence of an Event of Default,the date, if any, on which such Event of Default has been or waived bySeller in writing (each such period, a “Blockage Period”).  Any amount of payment on or with respect tothe Fees made during any Blockage Period or otherwise made in violation of thisAgreement that is received by any Manager shall be held by such Manager intrust for the Seller, and shall be turned over to the Seller, promptly forapplication 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 shallreceive or collect any such prohibited payment, delivery or issuance or shalltake any Enforcement Action that is prohibited by this Agreement, then, in eachsuch case (i) such payment, delivery or issuance shall be deemed to be theproperty of, segregated, received and held in trust for the benefit of theSeller, and shall be promptly paid over and delivered forthwith to the Seller, forapplication to the Obligations, and (ii) such Enforcement Actionvis 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 prohibitedpursuant to this Agreement, there shall be no payment of or with respect to theFees and accordingly the Manager shall not assert any remedies with respectthereto.

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                    (f)Notwithstanding anything to the contrary set forth herein, to the extent anyFees are prohibited from being and are not paid as a result of a BlockagePeriod, the Company may, provided that the Blockage Period has terminated inaccordance with the provisions of this Section 2(b), and no otherBlockage Period is then in effect, resume payment of regularly scheduledpayments of the Fees as such become due and payable to the Manager, and, afterthe 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 mannerthe Management Fee Provision or to modify the method for calculating any of theFees in a manner adverse to Seller as determined by Seller in its reasonablediscretion without first obtaining the prior written consent of the Seller.  The Manager agrees that they are not andthey shall not provide any services under the Management Fee Provision, andCompany agrees that it shall not agree or become obligated to make anypayments, deliveries or issuances of any Fees to any of its Affiliates or any Affiliateof the Manager under the Management Fee Provision or otherwise, unless suchPerson agrees in writing, in form and substance satisfactory to the Seller, tobe bound by the terms of this Agreement with respect to any Management Servicessuch Person provides to Company and any management fees owing by Company tosuch Person.

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

          4.No Liens.  Until full performanceand indefeasible and irrevocable payment in full in cash of the Obligations(other than indemnity obligations under the Security Documents that are notthen due and payable or for which any events or claims that would give risethereto are not then pending) and termination of the Security Documents, theManager 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 assecurity for the Fees, or any part thereof, and, if and to the extent that anysuch Lien or security interest at any time exists in favor of Manager, suchLiens and security interests hereby are subordinated to all Liens, securityinterests, restrictions, encumbrances, charges and interests, now or hereafterexisting, for the benefit of or in favor of the Seller and/or any of itsAffiliates or its successors or assigns granted or given by the Company or USMills or any Guarantor or any of its or their Affiliates, successors or assignsto secure the Obligations, or any part thereof, notwithstanding the date ororder of attachment, creation, effectiveness or perfection of any of theforegoing or the provision of any applicable law or otherwise.  Manager and the Company represents that asof 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 securityinterest in any asset or property of the Company as security for the Fees orany part thereof other with respect to the security interest granted toCapitalSource Finance LLC pursuant to the 

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Management FeeSubordination Agreement dated as of the date hereof among Manager, the Companyand CapitalSource Finance LLC.

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

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

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

                    (c)it is not a party to or subject to or bound by any agreement, document, orinstrument conflicting with this Agreement or the Management Fee Provision (andall agreements ancillary thereto) or otherwise relating to the Fees other thanthe Management Fee Provision and shall not be subject to any such agreement,document or instrument without such agreement, document and instrument beingmade subject to this Agreement or another subordination agreement satisfactoryto 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 toManager  or any of its affiliates (otherthan the Management Agreement) and shall not be subject to any such agreement,document or instrument without such agreement, document and instrument beingmade subject to this Agreement or another subordination agreement satisfactoryto Seller; 

                    (e)(i) the execution, delivery and performance by it of this Agreement have beenduly and validly authorized by all necessary actions and pursuant to allnecessary consents required therefor; (ii) this Agreement has been dulyexecuted and delivered by it and constitutes its legal, valid and bindingobligation, enforceable against it in accordance with its terms, subject to theeffect of any applicable bankruptcy, moratorium, insolvency, reorganization orother similar law affecting the enforceability of creditors’ rights generallyand to the effect of general principles of equity which may limit theavailability of remedies (whether in a proceeding at law or in equity); and(iii) no approval, consent, authorization of, filing registration orqualification with, or other action by, it or any other Person or GovernmentalAuthority is or will be necessary to permit the valid execution, delivery andperformance of this Agreement by it or the consummation of the transactionscontemplated 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 orderof any court or other Governmental Authority binding on or applicable to it orany of its properties or assets; or (ii) if applicable, conflict with orviolate any provision of its certificate of incorporation or formation,by-laws, partnership agreement, limited liability company agreement or similardocuments or any agreement by and between it and its shareholders or equityowners; 

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

                    (h)it is not a party to any judgment, order or decree or any agreement, documentor instrument, or subject to any restriction, which would materially adverselyaffect 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 beenamended, modified, terminated or supplemented, and constitutes the legal, validand binding obligation of the Company and Manager, enforceable against theCompany and Manager in accordance with its terms subject to the effect of anyapplicable bankruptcy, moratorium, insolvency, reorganization or other similarlaw affecting the enforceability of creditors’ rights generally and to theeffect of general principles of equity which may limit the availability ofequitable remedies (whether in a proceeding at law or in equity); and

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

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

          6.Covenants.  Until fullperformance and indefeasible and irrevocable payment in full in cash of theObligations (other than indemnity obligations under the Security Documents thatare not then due and payable or for which any events or claims that would giverise 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 anyEnforcement Action or any bankruptcy, reorganization, receivership or similarproceeding in connection with Company or US Mills or any of its or their assetsor properties or the Fees, Management Fee Provision or Seller Collateral, orany part thereof; 

                    (b)Manager and the Company shall take all necessary and appropriate actions toensure that this Agreement and the provisions hereof remain enforceable againstManager 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 thingsprohibited by this Agreement or that conflicts with this Agreement or thatwould prevent it from complying herewith and/or performing hereunder;

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

                    (e)Manager shall not (i) sell, lease, transfer, pledge, encumber, restrict, assignor otherwise dispose of its rights under the Management Fee Provision or anyinterest therein to any Person unless such Person agrees, in a writing in formand substance satisfactory to Seller, to be bound by the terms of thisAgreement or another subordination agreement, with respect to such payments,deliveries and issuances and amounts owing to it by the Company under theManagement Fee Provision, or (ii) create, incur, assume or suffer to exist anyLien in Manager’s or its respective Affiliates’ favor on the Seller Collateralor 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 Agreementand hereby acknowledges and agrees not to challenge the validity orenforceability of any terms and provisions of the Security Agreement and theexecution, delivery and performance by Company of the Security Agreement andother Security Documents, including, without limitation, the creation of theObligations and the granting of security interests by the Company pursuantthereto and the rights of Seller to assign and participate any part of theObligations pursuant and subject to Section 12.2 of the SecurityAgreement.

                    (b)Manager acknowledges and agrees that the Seller shall have, subject to theSecurity Documents, unconditional power and discretion, without notice to orconsent from the Manager, to make any change, modification or amendment at anytime to any of the Security Documents, Promissory Notes and/or Obligations andto deal in any manner with the Security Documents, Promissory Notes and/orObligations and any security or guaranties therefor, including, withoutlimitation, the release, surrender, extension, renewal, acceleration,compromise or substitution thereof without affecting, impairing, ordischarging, in whole or in part, the obligations of the Managerhereunder.  Without limiting theforegoing, Manager acknowledges that the Seller may, subject to the SecurityDocuments, administer the Security Documents and Obligations in any manner itsees fit and may take and do any and all actions (or refrain therefrom) withrespect to the Security Documents and/or Obligations, including, withoutlimitation, release any or all Seller Collateral for the Obligations, releaseany guarantor of the Obligations, extend the time for payment of theObligations, or any part thereof, change the 

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interest rateon the Obligations under the Security Documents, reduce or increase the amountof the Obligations under the Security Documents, accelerate the Obligations,make any amendment, or modification whatsoever of any of the terms orconditions of the Security Documents, extend, in whole or in part, by renewalor otherwise, the time for the payment of any principal or interest or anyother amount pursuant to the Promissory Notes or for the performance of anyterm 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 haveagainst the Company or with respect to any Seller Collateral or Lien held bythe Seller at any time, whether under any Security Document or otherwise, andcollect and retain or liquidate any property or assets subject to such lien, orforeclose on any of the Seller Collateral, take additional collateral, obtainadditional guarantors, accept a deed in lieu of foreclosure, exercise any andall powers, rights and remedies and/or take or fail to take any other actionwith respect to the Obligations.  

          8.Insolvency Proceedings.  If thereshall occur any receivership, insolvency, assignment for the benefit of creditors,bankruptcy (voluntary or involuntary) or reorganization (whether or notpursuant to bankruptcy or other insolvency laws), sale of all or substantiallyall the assets of, or the, dissolution, liquidation or any other marshaling ofthe assets and liabilities of, the Company (each, an “Insolvency Event”)(i) the Seller shall be entitled to receive indefeasible and irrevocablepayment in full in cash and full performance and satisfaction of allObligations (including any interest and fees thereon accruing at the contractrate after the commencement of any such proceedings or Insolvency Event) thenoutstanding (other than indemnity obligations under the Security Documents thatare not then due and payable or for which any events or claims that would giverise thereto are not then pending) before Manager or any of its Subsidiaries orAffiliates shall be entitled to receive any payment or distribution, whether incash, securities or other property, in respect of any amounts due with respectto the Fees at the time outstanding, and (ii) any payment or distribution,whether in cash, securities or other property payable or deliverable in respectof the amounts due under or with respect to the Fees shall be paid ordelivered, to the extent of the unpaid balance of the Obligations, forapplication to the payment thereof, directly to the Seller.  In the event of any proceedings inconnection with an Insolvency Event, Seller shall be entitled to rely upon thisAgreement, which the parties acknowledge is enforceable in accordance with itsterms upon the occurrence of any Insolvency Event, and shall have the right toprove, as part of its claims on account of the Obligations, its claimshereunder in any such proceeding, so as to establish its rights hereunder andto receive directly from any receiver, trustee or other court officer orcustodian distributions of any sort which would otherwise be payable on accountof the Seller Collateral or Obligations.

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

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this Agreementin executing and delivering the Acquisition Documents and performing itsobligations thereunder.

          10.Rights of the Seller Regarding Collateral.  In addition to the provisions set forth in this Agreement and inthe Security Documents, upon the occurrence of an Event of Default the Sellershall have the right to exercise any and all other rights and remedies providedfor herein or in any Security Document, under the UCC or at law or equitygenerally, including, without limitation, the right (a) to foreclose itssecurity interests and Liens, and (b) to realize upon or to take possession ofor 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 rightsupon 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 notthen due and payable or for which any events or claims that would give risethereto are not then pending) owing to Seller under the Security Documents havebeen indefeasibly paid in full due to payments or distributions to Seller onaccount of this Agreement, then and to that extent, the Manager shall becomesubrogated to the rights of Seller under the Security Documents to receivepayment of the remaining Obligations from the Company, if any.  The Company agrees that no such payments ordistributions directed to Seller on account of this Agreement shall be deemedby the Company, whether in connection with its other creditors or otherwise, tobe a payment by the Company on account of the Fees.

          12.Rights and Remedies.  The Sellershall have the right in its sole discretion to determine which rights and/orremedies 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’srights, Liens or remedies under any Security Document or this Agreement,applicable law or equity.  Theenumeration of any rights and remedies in this Agreement or any SecurityDocument is not intended to be exhaustive, and all rights and remedies of theSeller described in this Agreement and the Security Documents are cumulativeand are not alternative to or exclusive of any other rights or remedies whichthe Seller otherwise may have.  Thepartial or complete exercise of any right or remedy shall not preclude anyother 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 provisionof any Security Document or this Agreement, or single or partial exercise ofany such provision, or delay, failure or omission on the Seller’s part inenforcing any such provision shall affect the obligations of Manager or theCompany hereunder, or operate as a waiver of such provision or preclude anyother or further exercise of such provision.No waiver by the Seller of any one or more defaults by any other partyin the performance of any of the provisions of any Security Document or thisAgreement 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 limitedsolely to the express terms and provisions of such waiver.  

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

                    (c)The Manager hereby waives and agrees not to assert against the Seller anyrights which a guarantor or surety could exercise (provided that the Managerhas not assumed and is not hereby assuming the status of guarantor or suretywith respect to the Obligations), and nothing in this Agreement shallconstitute or be construed as making the Manager, the Seller a guarantor orsurety.  

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

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

          15.Entire Agreement.  This Agreementconstitutes the entire agreement between the Manager, the Company and theSeller with respect to the subject matter hereof, and supersedes all prioragreements and understandings, if any, relating to the subject matterhereof.  Any promises, representations,warranties or guarantees not herein contained and hereinafter made with respectto the subject matter hereof shall have no force and effect unless in writingsigned by the parties hereto.  Eachparty hereto acknowledges that it has been advised by counsel in connectionwith the negotiation and execution of this Agreement and is not relying uponoral representations or statements inconsistent with the terms and provisionshereof.

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

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          17.Notices.  Any notice or requestunder this Agreement shall be given to any party hereto at such party’s addressset forth beneath its signature on the signature page hereto, or at such otheraddress as such party may hereafter specify in a notice given in the mannerrequired under this Section 17.Any such notice or request shall be given only by, and shall be deemedto have been received upon (each, a “Receipt”):  (a) registered or certified mail,return receipt requested, on the date on which such notice or request isreceived as indicated in such return receipt, (b) delivery by a nationallyrecognized overnight courier, one (1) Business Day after deposit with suchcourier, or (c) facsimile or electronic transmission, in each case upontelephone or further electronic communication from the recipient acknowledgingreceipt (whether automatic or manual from recipient), as applicable.

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

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

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

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extentexpressly provided in the Security Agreement) and all future Managers andholders of the Promissory Notes, any of the Obligations or any of the SellerCollateral and each of their respective successors and permitted assigns, and(b) shall be binding upon and enforceable against the Seller, the Managerand the Company and their respective heirs, administrators, executors,successors and permitted assigns.  TheManager and the Company shall not assign, delegate or transfer this Agreementor any of its rights or obligations hereunder without the prior written consentof the Seller. The Seller shall not assign, delegate or transfer this Agreementor any of its rights or obligations hereunder to a Person other than anAffiliate without the prior written consent of the Seller.  Nothing contained in this Agreement or anyother Security Document shall be construed as a delegation to the Seller of theCompany’s duty of performance.  THEMANAGER ACKNOWLEDGES AND AGREES THAT THE SELLER AT ANY TIME AND FROM TIME TOTIME MAY (I) DIVIDE AND REISSUE (WITHOUT ANY SUBSTANTIVE CHANGES OTHER THANTHOSE RESULTING FROM SUCH DIVISION) THE PROMISSORY NOTES, AND/OR (II) PURSUANTAND SUBJECT TO THE TERMS OF THE SECURITY DOCUMENTS, SELL, ASSIGN OR GRANTPARTICIPATING INTERESTS IN OR TRANSFER SUBJECT TO SECTION 12.2 OF THESECURITY AGREEMENT ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER THISAGREEMENT, ANY PROMISSORY NOTE, THE OBLIGATIONS, THE SELLER COLLATERAL AND/ORTHE OTHER SECURITY DOCUMENTS TO ONE OR MORE OTHER PERSONS, IN EACH CASE ON THETERMS AND CONDITIONS IN THE SECURITY AGREEMENT.  The terms “the Seller” in this Agreement includes Transferees andsuccessors and assigns, each of which shall have all rights and benefits of theSeller hereunder.  Each Transferee (tothe extent provided in the Security Agreement) shall have all of the rights andbenefits with respect to the Obligations, Promissory Notes, Seller Collateral,this Agreement and/or Security Documents held by it as fully as if the originalholder thereof.  Notwithstanding anyother provision of this Agreement or any Security Document or any otherdocument executed in connection with any of the foregoing or evidencing or withrespect to any Fee, the Seller may disclose to any Transferee all information,reports, financial statements, certificates and documents obtained under anyprovision of this Agreement; provided, that Transferees shall be subjectto the confidentiality provisions contained in the Security Agreement that areapplicable to Seller.  

          Notwithstandingthe foregoing, Section 12.2 of the Security Agreement with respectto successors and assigns is hereby incorporated herein by this reference withthe same effect as though set forth in its entirety herein and made applicablehereto.  In the event that any of theprovisions 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 PARTYTO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANYCLAIM OR CAUSE OF ACTION ARISING HEREUNDER OR IN ANY WAY CONNECTED WITH ORINCIDENTAL TO THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THETRANSACTIONS 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 ORCAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A 

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

          22.Survival; Termination.  It is theexpress intention and agreement of the parties hereto that all covenants,representations, warranties and waivers and indemnities made by the Managerand/or the Company herein shall survive the execution, delivery and terminationof this Agreement until all Obligations (other than indemnity obligations underthe Security Documents that are not then due and payable or for which anyevents or claims that would give rise thereto are not then pending) areperformed in full and indefeasibly paid in full in cash.  This Agreement shall automatically terminateupon full performance and indefeasible payment in full in cash of allObligations (other than indemnity obligations under the Security Documents thatare not then due and payable or for which any events or claims that would giverise thereto are not then pending) and termination of the Security Documents.  Notwithstanding any other provision of thisAgreement or any Security Document or any other document executed in connectionwith any of the foregoing or evidencing or with respect to any Fee, notermination of this Agreement shall affect the Seller’s  rights or any of the Obligations existing asof the effective date of such termination until the Obligations (other thanindemnity obligations under the Security Documents that are not then due andpayable or for which any events or claims that would give rise thereto are not thenpending) have been fully performed and indefeasibly paid in cash in full.

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

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

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          25.Approvals and Duties.  Unlessexpressly provided herein to the contrary, any approval, consent, waiver orsatisfaction of the Seller with respect to any matter that is subject of thisAgreement or the Management Fee Provision may be granted or withheld by theSeller in its sole and absolute discretion.Other than the Seller’s duty of reasonable care with respect to theSeller Collateral, the Seller shall have no responsibility for or obligation orduty with respect to any of the Seller Collateral or any matter or proceedingarising out of or relating thereto, including, without limitation, anyobligation or duty to collect any sums due in respect thereof or to protect orpreserve 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 mannerthe 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.  Sellerhereby acknowledges and agrees that, notwithstanding anything to the contraryin this Agreement, as between Seller, the Company and US Mills, nothing in thisAgreement shall give or be deemed to give Seller any greater rights than suchperson has under the Security Agreement and the other Security Documents.

***[REMAINDER OF PAGE INTENTIONALLYLEFT BLANK; SIGNATURE PAGE FOLLOWS]***

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          INWITNESS WHEREOF, each of the parties hereto has duly executed this JuniorManagement Fee Subordination Agreement as of the date first written above.

 

 

 

 

**SELLER:**

 

 

 

**IBF FUND LIQUIDATING LLC**

 

 

 

By:

/s/ Arthur J. Steinberg

 

 

 

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

 

 

 

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