Exhibit 10.14

                                PERFUMANIA, INC.

                        SUBORDINATED SECURED DEMAND NOTE



$5,000,000                                                         March 9, 2004


     FOR  VALUE  RECEIVED,   Perfumania,   Inc.,  a  Florida   corporation  (the
"Company"),  hereby  unconditionally  promises  to pay ON DEMAND to the order of
Stephen Nussdorf and Glenn Nussdorf (collectively, the "Holder"), in immediately
available funds, the principal amount of Five Million Dollars ($5,000,000),  and
to pay interest on the unpaid  principal  amount hereof at the rate set forth in
Section  4. All  amounts  owed  hereunder  shall be paid in lawful  money of the
United States of America.

     This Note is subject to the following terms and conditions:

     1. Security.  This  Note  and  the  amounts  payable  hereunder,  including
principal and accrued  interest,  is secured by that Security  Agreement between
the Holder and the Company dated as of the date hereof ("Security Agreement").

     2. Subordination.  This  Note and the amounts payable hereunder,  including
principal and accrued  interest  shall be  subordinate  and junior to the Senior
Bank Loans. For the purpose of this Note, "Senior Bank Loans" shall mean any and
all obligations,  liabilities and indebtedness of the Company to GMAC Commercial
Credit LLC (the "Senior Lender"), all obligations,  liabilities and indebtedness
in connection with the refinancing of the indebtedness to the Senior Lender.

     3. Prepayment.  The  outstanding  principal  balance  of this  Note  may be
prepaid  by the  Company at any time and from time to time,  without  premium or
penalty of any kind or nature whatsoever.

     4. Payments  of  Interest.  The  Company  shall  pay or cause to be paid to
Holder  interest  on the  unpaid  principal  amount  hereof  from  time  to time
outstanding  at a rate per annum equal to the then  current  Prime Rate plus one
percent quarterly in arrears on the last day of each calendar quarter commencing
on March 31,  2004 until this Note shall be paid in full.  As used  herein,  the
term "Prime  Rate" shall mean for each  calendar  month the prime rate listed in
the Wall Street Journal in the "Money Rates" column  published on the date which
is one Business Day (as defined  below) prior to the  beginning of such calendar
month for such  calendar  month.  If the Prime  Rate  cannot  be  determined  in
accordance with the preceding sentence,  then the Company will notify Holder and
instead  determine  the Prime Rate by using the rates  offered to prime banks by
Citibank,  N.A.  (but in all other  respects in  accordance  with the  preceding
sentence). Interest shall be calculated on the basis a 360 day year based on the
actual number of days elapsed.

     5. Payments. Any payment hereunder which is stated to be due on a day which
is not a Business  Day shall be made on the next  succeeding  Business  Day (and
interest shall accrue for such extension of time). "Business Day" shall mean any
day other  than a  Saturday  or  Sunday or a day on which  banks in New York are
authorized or required by law to be closed.

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     6. Default. The occurrence of any one or more of the following events shall
constitute an event of default (each an "Event of Default") hereunder:

     (i)   if the  Company  becomes  insolvent or  makes an  assignment for  the
benefit of creditors;

     (ii)  if there  shall be filed by or against the  Company any petition  for
any relief under the  bankruptcy  laws of the United  States now or hereafter in
effect or any  proceeding  shall be commenced  with respect to the Company under
any insolvency, readjustment of debt, reorganization,  dissolution,  liquidation
or  similar  law or  statute  of any  jurisdiction  now or  hereafter  in effect
(whether  at law or in  equity),  provided  that in the case of any  involuntary
filing or the  commencement  of any involuntary  proceeding  against the Company
such  proceeding or petition shall have continued  undismissed and unvacated for
30 days; or

     (iii) if any petition or application to any court or tribunal, at law or in
equity,  shall be filed by or against  the Company  for the  appointment  of any
receiver or Company for the Company or any material  part of the property of the
Company,  provided  that  in the  case of any  involuntary  filing  against  the
Company,  such  proceeding or appointment  shall have continued  undismissed and
unvacated for 30 days; or

     (iv) if the  Company  shall  fail for any  reason  to make any  payment  of
principal  and/or interest  hereunder within 10 business days after such payment
is due; or

     (v) if the  Company  shall  fail  for any  reason  to make any  payment  of
principal  and  interest  under any Senior Bank Loan,  within 30 days after such
payment is due.

                  Remedies Upon Default; Default Interest.

     (i) If any Event of Default  shall  occur for any  reason,  then and in any
such  event,  in  addition  to all  rights  and  remedies  of the  Holder  under
applicable law or otherwise, all such rights and remedies being cumulative,  not
exclusive and enforceable  alternatively,  successively  and  concurrently,  the
Holder may, at its option,  declare any or all amounts  owing under this Note to
be due and payable,  whereupon the then unpaid balance hereof, together with all
accrued and unpaid interest thereon, shall forthwith become due and payable.

     (ii)  Upon the  occurrence  of an Event of  Default,  or upon the  maturity
hereof (by demand, acceleration or otherwise), the principal and any accrued but
unpaid  interest  owing on said  principal  sum (the  "Obligations")  shall bear
interest  from the date of  occurrence of such Event of Default or such maturity
until collection (including any period of time occurring after judgment), at the
"Default  Rate," being the lower of (A) the highest  rate allowed by  applicable
law, or (B) a simple interest rate per annum equal to 3% above the Prime Rate in
effect on the date of maturity (acceleration or otherwise). All default interest
charges  (X) shall be in  addition  to,  and not in lieu of,  any  other  remedy
available to Holder;  (Y) shall be added to the  Obligations  and secured by the
Security Agreement,  and (Z) shall not be construed as an agreement or privilege
to extend  the date of the  payment of the  Obligations,  nor as a waiver of any
other  right or remedy  accruing  to Holder by reason of the  occurrence  of any
Event of Default.

     7.  Lost,  Stolen,  Mutilated  or  Destroyed  Note.  If this Note  shall be
mutilated, lost, stolen, or destroyed, the Company shall execute and deliver, in
exchange and substitution  for and upon  cancellation of a mutilated Note, or in
lieu of or in substitution for a lost, stolen, or

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<PAGE>

destroyed  Note, a new Note for the principal  amount of this Note so mutilated,
lost,  stolen, or destroyed but only upon receipt of evidence (which may consist
of a signed affidavit of the Holder) of such loss, theft, or destruction of such
Note, and of the ownership  thereof,  and indemnity all reasonably  satisfactory
tothe Company.

     8. Other Matters

     (a) Sale of Note; Assignment. This Note is negotiable, and this Note may be
sold,  assigned,  transferred or conveyed,  by pledge or otherwise,  without the
prior written consent of the Company.

     (b) Modification;  Waiver. This Note may be amended, modified,  superseded,
canceled,  renewed or extended,  and the terms  hereof may be waived,  only by a
written  instrument  signed by the  Company  and the  Holder.  Any waiver by the
Company  or the  Holder of a breach  of any  provision  of this  Note  shall not
operate as or be construed to be a waiver of any other breach of such  provision
or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or
more  occasions  shall not be  considered  a waiver or deprive that party of the
right  thereafter to insist upon strict adherence to that term or any other term
of this Note. No delay on the part of any party in exercising  any right,  power
or privilege  hereunder  shall operate as a waiver thereof or hereof,  nor shall
any waiver on the part of any party of any right,  power or privilege  hereunder
preclude  any other or  further  exercise  hereof or the  exercise  of any other
right, power or privilege  hereunder.  Any waiver must be in writing. The rights
and remedies  provided herein are cumulative and are not exclusive of any rights
or remedies which any party may otherwise have at law or in equity.

     (c)  Notices.  Any  notice  required  or  permitted  to be given  hereunder
("Notices") shall be in writing and delivered personally or mailed by registered
or certified mail, postage prepaid and return receipt  requested,  or by fax, as
follows:  (i) if to the Company:  251 International  Parkway,  Sunrise,  Florida
33325,  Attn: Chief Financial Officer,  fax no. (954) 335-9179,  with a copy to:
Akerman  Senterfitt,  One Southeast  Third Avenue,  28th Floor,  Miami,  Florida
33131-1714. Attn: Alan Aronson, fax no. 305 374 5095; and (ii) if to the Holder:
2090 Ninth Avenue,  Ronkonkoma,  New York 11779,  Attn:  Michael  Katz,  fax no.
631-439-2262,  with copy to Edwards & Angell,  LLP, 750  Lexington  Avenue,  New
York, New York,  10022 Attn:  Patricia Kantor,  fax no. (212) 408-4844,  or such
other address as the either party hereto may designate by Notice to the other.

     (d)  Severability.  If any provision of this Note is invalid,  illegal,  or
unenforceable,  the  balance  of this Note shall  remain in  effect,  and if any
provision is inapplicable to any person or circumstance,  it shall  nevertheless
remain applicable to all other persons and  circumstances.  The rate of interest
on this Note is subject to any limitations imposed by applicable usury laws.

     (e)  Headings.  The  headings  in this Note are solely for  convenience  of
reference and shall be given no effect in the construction or  interpretation of
this Note.

     (f)  Governing  Law.  This Note shall be governed by and  construed  in all
respects  under  the laws of the  State of  Florida,  without  reference  to its
conflict of laws, rules or principles.

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<PAGE>

     (g) Saving Clause. This Note is subject to the express condition that at no
time shall the Company be obligated or required to pay interest on the principal
balance due  hereunder at a rate which could  subject  Holder to either civil or
criminal  liability as a result of being in excess of the maximum  interest rate
which the  Company is  permitted  by law to  contract or agree to pay. If by the
terms of this Note,  the  Company is at any time  required or  obligated  to pay
interest on the  principal  balance due  hereunder,  at a rate in excess of such
maximum  rate,  the interest rate shall be deemed to be  immediately  reduced to
such maximum rate and all previous  payments in excess of the maximum rate shall
be deemed to have been  payments in reduction of principal and not on account of
the interest due hereunder notwithstanding the other provisions hereof.

     IN WITNESS WHEREOF,  the Company has caused this Note to be executed on its
behalf by the undersigned officer thereunto duly authorized.


                                         PERFUMANIA, INC.

                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

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                               SECURITY AGREEMENT


     SECURITY  AGREEMENT (the  "Agreement") made and entered into as of March 9,
2004, by and between  Perfumania,  Inc., a Florida corporation  ("Debtor"),  and
Stephen Nussdorf and Glenn Nussdorf (collectively "Secured Party").



                                 R E C I T A L S

        A.    Debtor has executed a  Subordinated  Secured  Demand  Note of even
              date herewith, payable to the order of the Secured Party.

        B.    As a  condition  precedent to  Secured  Party's  acceptance of the
              Note,  Grantor  grants  the  security interests and undertakes the
              obligations contemplated by this Agreement.


     NOW,  THEREFORE,  in  consideration  of the premises and to induce  Secured
Party to accept the Note in partial satisfaction of certain obligations owing by
Debtor to Secured  Party,  and for other good and  valuable  consideration,  the
receipt and adequacy of which are hereby  acknowledged,  Grantor  hereby  agrees
with Secured Party as follows:

     9. Grant of Security Interest.  As security for the payment and performance
when due of the Obligations, Debtor does hereby assign and transfer unto Secured
Party, and does hereby grant to Secured Party a continuing security interest in,
all of Debtor's right, title and interest in, to and under all of the following,
whether  now  existing  or  hereafter  acquired:  all  of  Debtor's  assets  and
properties,  whether  tangible  or  intangible,  including  without  limitation,
Debtor's  Accounts,  Inventory,  Goods,  General  Intangibles,   Chattel  Paper,
Documents and  Instruments,  and all Proceeds and products of any and all of the
foregoing (collectively, the "Collateral").

     10. Representations, Warranties and Covenants of Debtor. Debtor represents,
warrants and covenants as follows:

     (a) No Liens. Debtor is, and as to Collateral acquired by it after the date
hereof  will be, the owner of such  Collateral  free from any Liens,  other than
Permitted Liens,  and Debtor shall defend the Collateral  against all claims and
demands of all persons at any time  claiming  the same of any  interest  therein
adverse to Secured Party.  Debtor will, at its own expense,  take such action as
may be necessary  duly to discharge any such Lien if the same shall arise at any
time.

     (b) Chief Executive Office;  Records.  The chief executive office of Debtor
is located at 251  International  Parkway,  Sunrise,  Florida.  The originals or
copies of all documents evidencing the Collateral and the account and records of
Debtor  relating  thereto  are,  and will  continue  to be,  maintained  at, and
controlled  and  directed  from,  such  chief  executive  office  or at such new
locations as Debtor may establish in accordance  with this Section 2(b).  Debtor
shall not establish a new location for such chief executive  office until it has
given to Secured Party not less than thirty (30) days' prior  written  notice of
its intention so to do, describing such new


<PAGE>

location and providing such other information in connection therewith as Secured
Party may reasonably request.

     (c) Further Actions.  Upon written request from Secured Party,  Debtor will
provide  Secured  Party with copies of such lists of and reports with respect to
the  Collateral  as Debtor  furnishes  from time to time to the holder(s) of any
Senior  Lien.  In  addition,  Debtor  will,  upon the request of Secured  Party,
execute and/or deliver to Secured Party from time to time such instruments,  and
take such further steps  relating to the  Collateral  and the property or rights
covered  by the  security  interest  hereby  granted,  which  Secured  Party may
reasonable  request to  establish  and  maintain a valid,  enforceable  security
interest in the Collateral as provided herein or to perfect, preserve or protect
its security  interest in the  Collateral,  all in  accordance  with the Uniform
Commercial  Code or any other relevant law. Debtor  authorizes  Secured Party to
file any such financing statements without the signature of Debtor.

     11. Remedies Upon Occurrence of Event of Default.

     (a) Remedies:  Obtaining the Collateral Upon Default. Subject to the rights
of the holder(s) of any Senior Lien, Debtor agrees that, if any Event of Default
shall have occurred and be continuing,  then and in every such case,  subject to
any mandatory  requirements of applicable law then in effect,  Secured Party, in
addition to any rights now or hereafter  existing  under  applicable  law, shall
have all rights as a secured creditor under the Uniform Commercial Code and may:
(i) personally,  or by agents or attorneys, take possession of the Collateral or
any part thereof, from Debtor or any other person who then has possession of any
part thereof with or without  notice or process of law, and for that purpose may
enter upon Debtor's  premises  where any of the Collateral is located and remove
the same;  and (ii) instruct the obligor or obligors on any  instrument or other
obligation constituting the Collateral to make any payment required by the terms
of such  instrument  directly  to  Secured  Party;  and  (iii)  sell,  assign or
otherwise  liquidate,  or direct Debtor to sell, assign or otherwise  liquidate,
any or all of the  Collateral  or any part thereof,  and take  possession of the
proceeds of any such sale or liquidation.

     (b)  Remedies;  Disposition  of  Collateral.  Subject  to the rights of the
holder(s)  of any Senior  Lien,  any  Collateral  repossessed  by Secured  Party
pursuant to Section 3(a), and any other Collateral whether or not so repossessed
by Secured Party, may be sold,  assigned,  leased or otherwise disposed of under
one or more contracts or as an entirety,  and without the necessity of gathering
at the place of sale the property to be sold, and in general in such manner,  at
such time or times,  at such place or places and on such terms as Secured  Party
may, in compliance with any mandatory  requirements of applicable law, determine
to be commercially  reasonable.  Any such  disposition  which shall be a private
sale or other private  proceeding  permitted by such requirements  shall be made
upon not less than 10 days'  written  notice to  Debtor  specifying  the time at
which such  disposition  is to be made.  Any such  disposition  which shall be a
public sale permitted by such  requirements  shall be made upon not less than 10
days' written  notice to Debtor  specifying the time and place of such sale and,
in the absence of applicable  requirements  of law,  shall be by public  auction
after  publication  of notice of such action not less than 10 days prior thereto
in accordance with applicable law.

     (c) Application of Proceeds.  Subject to the rights of the holder(s) of any
Senior  Lien,  the  proceeds  of any  Collateral  disposed  of by Secured  Party
pursuant to Section 3(b) shall be applied as follows:  first,  to the payment of
any and all expenses and fees (including reasonable attorneys' fees) incurred by
Secured Party in obtaining, taking possession of, removing, insuring,

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<PAGE>

repairing,  storing and  disposing of  Collateral;  next,  to the payment of the
Obligations  in the following  order of priority:  (i) all interest  accrued and
unpaid;  (ii) the  principal  amount  owing on the  Note;  and  (iii)  all other
Obligations  then owing; and any surplus then remaining shall be paid to Debtor,
subject, however, to the rights of the holder of any then existing Lien of which
Secured Party has actual notice.

     (d) Remedies  Cumulative.  No failure or delay on the part of Secured Party
in exercising any right,  power or privilege  hereunder and no course of dealing
between  Debtor and Secured  Party or the holder of the Note shall  operate as a
waiver thereof;  nor shall any single or partial exercise of any right, power or
privilege  hereunder  preclude  any other or  further  exercise  thereof  or the
exercise of any other right,  power or privilege  hereunder or  thereunder.  The
rights,  powers and remedies  herein  expressly  provided are cumulative and not
exclusive of any rights,  powers or remedies which Secured Party would otherwise
have.

     (e) Power of Attorney. Debtor hereby constitutes and appoints Secured Party
its true and lawful  attorney,  with full power after the occurrence of an Event
of  Default  and for so long as the  same  shall be  continuing  (in the name of
Debtor or  otherwise),  to act,  require,  demand,  receive,  compound  and give
acquittance for any and all monies and claims for monies due or to become due to
Debtor  under or arising out of the  Collateral,  to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take any
action or institute any proceedings which Secured Party may deem to be necessary
or advisable in the premises,  which  appointment as attorney is coupled with an
interest.

     12. Indemnity. Debtor agrees to indemnify, reimburse and hold Secured Party
harmless  from  any  and  all  losses,  damages,  penalties,   claims,  actions,
judgments,   suits,  costs,  expenses  or  disbursements  (including  reasonable
attorneys'  fees and  expenses)  which may be imposed  on,  asserted  against or
incurred by Secured  Party in  connection  with the  creation,  preservation  or
protection  of  Secured  Party's  Liens  on,  and  security   interest  in,  the
Collateral,  including,  without limitation, in connection with the recording or
filing of instruments and documents in public  offices,  payment or discharge of
any taxes or Liens upon or in respect of the Collateral,  premiums for insurance
with  respect  to the  Collateral  and all other  fees,  costs and  expenses  in
connection with protecting, maintaining or preserving the Collateral and Secured
Party's interest therein, whether through judicial proceedings or otherwise. The
indemnity  obligations  of Debtor  contained in this Section 4 shall  constitute
Obligations  secured  by the  Collateral  and shall  continue  in full force and
effect  notwithstanding  the  full  payment  of the  Note  and all of the  other
Obligations.

     13.  Definitions.  The  following  terms  shall  have  the  meaning  herein
specified  unless the context  otherwise  requires.  Such  definitions  shall be
equally applicable to the singular and plural forms of the terms defined.

     "Accounts," "Chattel Paper," "Documents,"  "Goods," "General  Intangibles,"
"Instruments,"  "Inventory" and "Proceeds"  shall have the meanings  assigned to
such terms in the Uniform Commercial Code.

     "Event  of  Default"  shall  mean the  occurrence  of any of the  following
events:  (a) a  "Default"  (as such  term is  defined  in the Note)  shall  have
occurred and be continuing,  (b) any  representation  or warranty made by Debtor
herein shall prove to have been false or  incorrect  in any material  respect at
the time made; or (c) Debtor shall fail to perform or observe any other covenant

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<PAGE>

or agreement to be performed or observed by it hereunder and such failure shall
continue  unremedied  for a  period of  thirty (30)  days after  written  notice
thereof from Secured Party to Debtor.

     "Lien" shall mean any mortgage, pledge, lien, charge,  encumbrance,  lease,
exercise of rights, security interest or claim of any nature whatsoever.

     "Note" shall mean the Subordinated  Secured Note of Debtor to Secured Party
dated the date hereof, in the original  principal amount of Five Million Dollars
($5,000,000).

     "Obligations"  shall mean: (a) the  indebtedness of Debtor to Secured Party
pursuant to the Note;  (b) all sums  advanced by Secured  Party to preserve  the
Collateral or its security  interest in the Collateral;  and (c) in the event of
any  proceeding  for the collection or enforcement of the Note or this Agreement
after an Event of Default shall have occurred and be continuing,  the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any exercise by Secured Party of
its rights hereunder.

     "Permitted  Liens"  shall  mean (i) the  Lien  created  hereby  in favor of
Secured Party,  (ii) the first priority security interest in favor of any Senior
Lender and a second priority  security  interest in favor of Parlux  Fragrances,
Inc. (collectively, "Senior Liens"), (iii) Liens for taxes either not yet due or
being  contested in good faith (and for the payment of which  adequate  reserves
have been  provided)  by  appropriate  proceedings  diligently  pursued and (iv)
materialmen's, mechanics', workmen's, landlord's, employees' or other like Liens
arising in the  ordinary  course of business for amounts the payment of which is
either  not yet  delinquent  or is being  contested  in good  faith (and for the
payment  of  which   adequate   reserves  have  been  provided)  by  appropriate
proceedings diligently pursued.

     "Senior Lender" shall mean GMAC  Commercial  Finance LLC and any other bank
or lending institution that extends credit to Debtor on or after the date hereof
in connection with the  refinancing of Debtor's  indebtedness to GMAC Commercial
Finance LLC or any other Senior Lender.

     "Uniform  Commercial  Code"  shall mean the Uniform  Commercial  Code as in
effect on the date  hereof in the State of Florida  and in any other  applicable
jurisdiction.

     14. Miscellaneous.

     (a) Governing  Law.  This  Agreement  and its  validity,  construction  and
performance  shall be governed in all respects by the internal laws of the State
of Florida  (without  reference to the conflict of laws provisions or principles
thereof).

     (b) Binding  Effect;  Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
assigns;  but  neither  this  Agreement  nor  any of  the  rights,  benefits  or
obligations  hereunder shall be assigned,  by operation of law or otherwise,  by
either  party  hereto  without  the prior  written  consent of the other  party.
Nothing in this  Agreement,  express or implied,  is intended to confer upon any
person other than the parties hereto and their respective  permitted  successors
and assigns, any rights, benefits or obligations hereunder.

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<PAGE>

     (c) Amendment;  Waiver.  This Agreement  shall not be changed,  modified or
amended in any respect  except by the mutual  written  agreement  of the parties
hereto.  Any  provision of this  Agreement may be waived in writing by the party
which is entitled to the benefits  thereof.  No waiver of any  provision of this
Agreement shall be deemed to or shall constitute a waiver of any other provision
hereof  (whether  or not  similar),  nor  shall  any such  waiver  constitute  a
continuing waiver.

     (d)  Notices.  Any  notice  required  or  permitted  to be given  hereunder
("Notices") shall be in writing and delivered personally or mailed by registered
or certified mail, postage prepaid and return receipt  requested,  or by fax, as
follows:  (i) if to the Company:  251 International  Parkway,  Sunrise,  Florida
33325,  Attn: Chief Financial Officer,  fax no. (954) 335-9179,  with a copy to:
Akerman  Senterfitt,  One Southeast  Third Avenue,  28th Floor,  Miami,  Florida
33131-1714. Attn: Alan Aronson, fax no. 305 374 5095; and (ii) if to the Secured
Party: 2090 Ninth Avenue,  Ronkonkoma,  New York 11779,  Attn: Michael Katz, fax
no. 631-439-2262,  with copy to Edwards & Angell, LLP, 750 Lexington Avenue, New
York, New York,  10022 Attn:  Patricia Kantor,  fax no. (212) 408-4844,  or such
other address as the either party hereto may designate by Notice to the other.

     (e)  Obligations  Absolute.  The  obligations of Debtor  hereunder shall be
absolute and  unconditional  and shall  remain in full force and effect  without
regard to,  and shall not be  released,  suspended,  discharged,  terminated  or
otherwise  affected by, any  circumstance or occurrence  whatsoever,  including,
without  limitation:  any renewal,  extension,  amendment or modification of, or
addition or  supplement  to or deletion  from,  the Note,  or any  assignment or
transfer thereof; any waiver, consent, extension,  indulgence or other action or
inaction  under or in respect of the Note or this  Agreement  or any exercise or
non-exercise of any right, remedy, power or privilege under or in respect hereof
or the Note;  the  furnishing  of  additional  security to Secured  Party or any
acceptance thereof or the sale, exchange,  release,  surrender or realization of
or upon any  security  by Secured  Party;  or any  invalidity,  irregularity  or
unenforceability of all or part of the Obligations or of any security therefor.

     (f) Debtor's Duties. It is expressly  agreed,  anything herein contained to
the contrary notwithstanding,  that Debtor shall remain liable to perform all of
the  obligations  assumed by it with respect to the Collateral and Secured Party
shall not have any obligations or liabilities  with respect to any Collateral by
reason of or arising out of this Agreement,  nor shall Secured Party be required
or  obligated  in any manner to perform or  fulfill  any of the  obligations  of
Debtor under or with respect to any Collateral.

     (g)  Severability.  Any  term or  provision  of  this  Agreement  which  is
prohibited or unenforceable in any jurisdiction  shall, as to such  jurisdiction
only, be ineffective only to the extent of such prohibition or  unenforceability
without  invalidating the remaining  provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.

     (h) Headings. The captions,  headings and titles herein are for convenience
of  reference   only  and  shall  not  effect  the   construction,   meaning  or
interpretation of this Agreement or any term or provision hereof.

     (i) Counterparts.  This Agreement may be executed through the use of one or
more  counterparts,  each of which shall be deemed an original  and all of which
shall be considered one and the same agreement, notwithstanding that all parties
are not signatories to the same counterpart.

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<PAGE>

     (j) Entire  Agreement.  This  Agreement  merges and  supersedes any and all
prior   agreements,    understandings,    discussions,   assurances,   promises,
representations  or  warranties  among the parties  with  respect to the subject
matter hereof,  and contains the entire agreement among the parties with respect
to the subject matter hereof.

     (k) Termination; Release. When all Obligations have been paid in full, this
Agreement  shall  terminate,  and Secured  Party,  at the request and expense of
Debtor,  will  execute and deliver to Debtor the proper  instruments  (including
Uniform Commercial Code termination  statements on form UCC-3) acknowledging the
termination  of this  Agreement,  and will duly assign,  transfer and deliver to
Debtor (without recourse and without any representation or warranty) such of the
Collateral as may be in possession of Secured Party and has not theretofore been
sold or otherwise applied or released pursuant to this Agreement.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed  by their  duly  authorized  officers  all as of the day and year first
written above.

                                     PERFUMANIA, INC.


                                     By:
                                        ----------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                             -----------------------------------


                                     -------------------------------------------
                                     Stephen Nussdorf


                                     -------------------------------------------
                                     Glenn Nussdorf




                                       6