Document:

EXHIBIT 10.2

 

SECOND
AMENDMENT TO

CREDIT AND
SECURITY AGREEMENT

 

This
SECOND Amendment to Credit AND SECURITY Agreement (this
“Amendment”) is entered into as of May 23, 2013, by and among Frederick’s
of Hollywood Group Inc., a New York corporation (“Group”), FOH
Holdings, Inc., a Delaware corporation (“Parent”), Frederick’s
of Hollywood Inc., a Delaware corporation (“Frederick’s”), Frederick’s
of Hollywood Stores, Inc., a Nevada corporation (“Stores”), and Hollywood
Mail Order, LLC, a Nevada limited liability company (“Mail Order” and together with Group, Parent, Frederick’s
and Stores, each individually, a “Borrower”, and collectively, the “Borrowers”)
and SALUS CAPITAL PARTNERS, LLC (the “Lender”).

 

RECITALS

 

WHEREAS, Borrowers
and Lender are parties to that certain Credit and Security Agreement, dated as of May 31, 2012 (as amended, supplemented, modified
and in effect from time to time, the “Credit Agreement”; all capitalized terms used but not specifically defined
herein shall have the respective meanings provided for such terms in the Credit Agreement); and

 

WHEREAS, Borrowers
have requested that the Lender reallocate the Obligations outstanding under the Line of Credit by increasing the amount of the
FILO Advance from $9,000,000 to $14,000,000, and the Lender has agreed to do so on the terms and conditions set forth herein.

 

NOW, THEREFORE, in
consideration of the foregoing and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

1.           Amendments
to the Credit Agreement. As of the effective date of this Amendment, the Credit Agreement is hereby amended as follows:

 

Section 1.1 of the
Credit Agreement is hereby amended by deleting the defined term “Maximum FILO Amount” in its entirety and replacing
it with the following:

 

““Maximum
FILO Amount” means $14,000,000, less any amounts repaid by Borrowers pursuant to Section 2.1(h), Section 2.1(i),
and Section 2.7(c) of this Agreement; provided, however, that at any time following the occurrence of an Event
of Default, at the election of the Lender, the Maximum FILO Amount shall equal the lesser of (i) $14,000,000, and (ii) eighty-five
percent (85%) of the fair market value of Borrowers’ Intellectual Property Rights, based upon the most recent appraisal of
Borrowers’ Intellectual Property Rights received by Lender.”

 

    	 

    	 

    

 

2.           Increase
in FILO Advance. The Borrowers and the Lender acknowledge and agree that the modifications to the Credit Agreement contemplated
by this Amendment effect an increase in the portion of the Line of Credit attributable to the FILO Advance and a resulting decrease
in the portion of the Line of Credit attributable to the revolving portion of the Line of Credit, but no increase in the aggregate
Maximum Line of Credit. For the avoidance of doubt, from and after the effective date of this Amendment, the outstanding balance
of the Advances under the Credit Agreement which are effectively converted to a portion of the FILO Advance pursuant to this Amendment
shall bear interest at the rate contemplated by Section 2.4(b) of the Credit Agreement. Concurrently with the execution of this
Amendment the Borrowers shall pay to the Lender in cash the outstanding balance of PIK Interest under the Credit Agreement in the
amount of $226,330.56.

 

3.           Conditions
Precedent. The effectiveness of this Amendment is subject to the following conditions precedent (all documents to be in form
and substance satisfactory to Lender):

 

(a)             Lender
shall have received this Amendment executed by the Borrowers;

 

(b)             Lender
shall have received the Amendment to the Fee Letter executed by the Borrowers;

 

(c)             Lender
shall have received the resolutions of the board of directors or governing body of each of the Borrowers approving the execution
and delivery of this Amendment and the transactions contemplated hereby;

 

(d)             After
giving effect to this Amendment (i) all representations and warranties of the Borrowers set forth herein and in the Loan Documents
shall be true and correct in all material respects, (ii) no Event of Default or any other event which, upon the lapse of time,
service of notice, or both, which would constitute an Event of Default under any of the Loan Documents, shall have occurred and
be continuing, and (iii) Borrowers shall be in compliance with the Credit Agreement and the other Loan Documents; and Borrowers
shall have certified the foregoing matters to Lender; and

 

(e)             The
Borrowers shall pay to the Lender an amendment fee of $50,000.00, which fee shall be fully earned on the effective date of this
Amendment.

 

4.           Representations,
Warranties. Borrowers represent that, after giving effect to this Amendment:

 

(a)             No
consent or approval of, or exemption by any Person is required to authorize, or is otherwise required in connection with the execution
and delivery of this Amendment which has not been obtained and which remains in full force and effect; and

 

(b)             As
of the date hereof, each of the representations and warranties of the Borrowers set forth in the Credit Agreement and the other
Loan Documents are true, correct and complete in all material respects, except to the extent such representations and warranties
speak as to an earlier date, in which case the same are true, correct and complete as to such earlier date; and no Default or Event
of Default exists under the Credit Agreement.

 

5.           Confirmation
of Security Interests. Borrowers hereby confirm the security interests and liens granted by Borrowers to Lender, in and to
the Collateral in accordance with the Credit Agreement and other Loan Documents as security for the Obligations.

 

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6.           Payment
of Lender Fees and Expenses. Borrowers agree to pay any and all fees and expenses, including reasonable counsel fees and disbursements,
incurred by Lender in connection with the preparation and execution of this Amendment and all documents, instruments and agreements
contemplated hereby.

 

7.           No
Other Modifications, Conflicts with Loan Documents, etc. This Amendment is intended to supplement and modify the Credit Agreement
and the rights and obligations of the parties under the Credit Agreement shall not in any way be vacated, modified or terminated
except as herein provided. All terms and conditions contained in each and every agreement or promissory note or other evidence
of indebtedness of Borrowers to the Lenders are incorporated herein by reference. If there is a conflict between any of the provisions
of the Credit Agreement and the provisions of this Amendment, then the provisions of this Amendment shall govern.

 

8.           Governing
Law. This Amendment shall be construed in accordance with the substantive laws (other than conflict laws) of the State of New
York.

 

9.           Full
Force and Effect. Except as expressly amended hereby, all terms and conditions of the Credit Agreement, and any and all Exhibits
annexed thereto and all other writings submitted by the Borrowers to the Lender pursuant thereto, shall remain unchanged and in
full force and effect.

 

10.         Counterparts.
This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which
shall be considered one and the same document. Delivery of an executed counterpart of a signature page of this document by facsimile
or by electronic mail or e-mail file attachment shall be effective as delivery of a manually executed counterpart of this document.

 

11.         RELEASE.
EACH BORROWER, TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT,
CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO
REPAY THE INDEBTEDNESS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER. EACH BORROWER HEREBY VOLUNTARILY
AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, AFFILIATES SUCCESSORS AND ASSIGNS, FROM
ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, ASSERTED OR UNASSERTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH BORROWERS MAY NOW OR HEREAFTER
(WHETHER OR NOT PRESENTLY SUSPECTED, CONTEMPLATED OR ANTICIPATED) HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS
AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS,
OR OTHERWISE, AND ARISING FROM ANY LOAN OR ADVANCE, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER
THE CREDIT AGREEMENT OR LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

 

[Signature Page Follows.]

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Second Amendment to the Credit and Security Agreement to be executed and delivered as of the
day and year first above written.

 

	 	BORROWERS:
	 	FREDERICK’S OF HOLLYWOOD GROUP INC.
	 	 	 
	 	By:	/s/ Thomas Rende
	 	 	Name:  Thomas Rende
	 	 	Title:  Chief Financial Officer

 

	 	FOH HOLDINGS, INC.
	 	 	 
	 	By:	/s/ Thomas Rende
	 	 	Name:  Thomas Rende
	 	 	Title:  Chief Financial Officer

 

	 	FREDERICK’S OF HOLLYWOOD, INC.
	 	 	 
	 	By:	/s/ Thomas Rende
	 	 	Name:  Thomas Rende
	 	 	Title:  Chief Financial Officer

 

	 	FREDERICK’S OF HOLLYWOOD STORES, INC.
	 	 	 
	 	By:	/s/ Thomas Rende
	 	 	Name:  Thomas Rende
	 	 	Title:  Chief Financial Officer

 

	 	HOLLYWOOD MAIL ORDER, LLC
	 	 	 
	 	By:	/s/ Thomas Rende
	 	 	Name:  Thomas Rende
	 	 	Title:  Chief Financial Officer

 

	 	LENDER:
	 	SALUS CAPITAL PARTNERS, LLC
	 	 	 
	 	By:	/s/ Kyle Shonak
	 	 	Name:  Kyle Shonak
	 	 	Title:  Senior Vice President

 

[Second Amendment to Credit and Security
Agreement]EXHIBIT 10.3

 

 

May 23, 2013

 

Frederick’s of Hollywood Group Inc.

and each of the other Borrowers referenced below

6255 Sunset Boulevard, 6th Floor

Hollywood, CA 9008

Attention: Thomas Rende

 

		Re:	Amendment to Fee Letter

 

Ladies and Gentlemen:

 

Reference is made to (i) that certain Credit
and Security Agreement, dated as of May 31, 2012, by and among Frederick’s of Hollywood Group Inc., a New York corporation
(“Group”), FOH Holdings, Inc., a Delaware corporation (“Parent”), Frederick’s of Hollywood,
Inc., a Delaware corporation (“Frederick’s”), Frederick’s of Hollywood Stores, Inc., a Nevada corporation
(“Stores”), and Hollywood Mail Order, LLC, a Nevada limited liability company (“Mail Order”
and together with Group, Parent, Frederick’s and Stores, each individually, a “Borrower”, and collectively,
the “Borrowers”), and Salus Capital Partners, LLC (the “Lender”) (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), and (ii) that certain
fee letter, dated as of May 31, 2012 between the Borrowers and Lender (as the same may be amended, restated, supplemented or otherwise
modified from time to time the “Fee Letter”). Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Credit Agreement or Fee Letter, as applicable.

 

On the date hereof, the Borrowers and Lender
are entering into that certain Second Amendment to Credit and Security Agreement and in connection therewith, the Monitoring Fee
shall be increased from $4,500 per month to $12,500 per month.

 

Except as expressly amended hereby, all
terms and conditions of the Fee Letter shall remain unchanged and in full force and effect.

 

THIS AMENDMENT TO FEE LETTER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. This Amendment to Fee Letter may be executed
in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement.
Delivery of an executed counterpart of a signature page of this Amendment to Fee Letter by electronic transmission shall be equally
effective as delivery of a manually executed counterpart of this Amendment to Fee Letter.

 

If the foregoing correctly sets forth our
understanding, please indicate your acceptance of the terms hereof by returning to us an executed counterpart hereof, whereupon
this Amendment to Fee Letter shall become a binding agreement between us.

 

    	 

    	 

    

 

	 	Very truly yours,
	 	 
	 	SALUS CAPITAL PARTNERS, LLC
	 	 	 
	 	By:	/s/ Kyle C. Shonak
	 	 	Name:  Kyle C. Shonak
	 	 	Title:  Senior Vice President

 

Acknowledged and Agreed:

 

	FREDERICK’S OF HOLLYWOOD GROUP INC.	 
	 	 
	By:  	/s/ Thomas Rende	 
	 	Name:  Thomas Rende	 
	 	Title:  Chief Financial Officer	 

 

	FOH HOLDINGS, INC.	 
	 	 
	By:	/s/ Thomas Rende	 
	 	Name:  Thomas Rende	 
	 	Title:  Chief Financial Officer	 

 

	FREDERICK’S OF HOLLYWOOD, INC.	 
	 	 
	By:	/s/ Thomas Rende	 
	 	Name:  Thomas Rende	 
	 	Title:  Chief Financial Officer	 

 

	FREDERICK’S OF HOLLYWOOD STORES, INC.	 
	 	 
	By:	/s/ Thomas Rende	 
	 	Name:  Thomas Rende	 
	 	Title:  Chief Financial Officer	 

 

	HOLLYWOOD MAIL ORDER, LLC	 
	 	 
	By:	/s/ Thomas Rende	 
	 	Name:  Thomas Rende	 
	 	Title:  Chief Financial Officer	 

 

[Signature Page to
Amendment to Fee Letter]

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