Document:

ex10_1.htm

EXHIBIT 10.1

 

CONSENT AND FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

THIS CONSENT AND FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is executed and delivered as of May 31, 2012, by and among CONTINENTAL COMMERCIAL PRODUCTS, LLC, a Delaware limited liability company (“Continental”), GLIT/GEMTEX, LTD, a corporation formed under the laws of the Province of Ontario (“Glit/Gemtex”), 3254018 NOVA SCOTIA LIMITED, a company formed under the laws of the Province of Nova Scotia (“Nova Scotia Limited”; Nova Scotia Limited, Continental and Glit/Gemtex collectively, the “Borrowers”), KATY INDUSTRIES, INC., a Delaware corporation (“Holdings”), as a Loan Party, and THE PRIVATEBANK AND TRUST COMPANY (the “Lender”).

RECITALS

A.            The Borrowers, the other Loan Party, and Lender entered into a Loan and Security Agreement dated as of September 30, 2011 (as the same has been amended, is amended hereby and may further be amended, restated, supplemented or otherwise modified or extended from time to time, the “Loan Agreement”), pursuant to the terms of which the Lenders agreed to make certain loans and other financial accommodations to Borrowers subject to the terms and conditions thereof.

B.             The Borrowers and the other Loan Party have requested that Lender (i) consent to certain transactions discussed with Lender by Borrowers, which transactions shall be in form and substance acceptable to Lender in its sole discretion (such transactions collectively, the “Specified Transactions”) and (ii) amend the Loan Agreement in certain respects.

C.             Subject to satisfaction of the conditions set forth herein, Lender is willing to accommodate such requests subject to the terms and conditions set forth in this Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Borrowers, the other Loan Party and the Lender agree as follows:

1.             Defined Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to such terms in the Loan Agreement, as amended hereby.

2.             Amendments to Loan Agreement. On the First Amendment Effective Date (as defined herein), and in reliance upon the representations and warranties of the Loan Parties set forth in the Loan Documents and in this Amendment, the Loan Agreement is hereby amended as follows:

(a)            Notwithstanding anything set forth in the Loan Agreement or the other Loan Documents to the contrary, the parties hereto hereby acknowledge and agree that upon the satisfaction of the conditions precedent set forth in this Amendment:

(i)             The financial covenant set forth in Section 14.2 of the Loan Agreement shall not apply solely with respect to each of the trailing twelve (12) month periods ending on April 27, 2012, May 25, 2012, June 29, 2012, July 27, 2012, August 24, 2012, September 28, 2012 and October 26, 2012 (collectively, the “Excluded FCCR Periods”) and any compliance certificate delivered in accordance with Section 9.3 of the Loan Agreement with respect to any Excluded FCCR Period shall not be required to include a calculation of the financial covenant set forth in Section 14.2 of the Loan Agreement. For the avoidance of doubt, the Borrowers shall be required to comply with the financial covenant set forth in Section 14.2 of the Loan Agreement for the trailing twelve (12) month period ending on November 23, 2012 and all such periods thereafter;

  

  

  

(b)            Section 1.1 of the Loan Agreement is hereby amended by adding thereto the following defined terms and their respective definitions in the correct alphabetical order:

“Excluded FCCR Period” shall mean each of the trailing twelve (12) month periods ending on April 27, 2012, May 25, 2012, June 29, 2012, July 27, 2012, August 24, 2012, September 28, 2012 and October 26, 2012, in each case, with respect to which the Borrowers shall not be required to comply with the financial covenant set forth in Section 14.2 of the Loan Agreement. For the avoidance of doubt, the Borrowers shall be required to comply with the financial covenant set forth in Section 14.2 of the Loan Agreement for the trailing twelve (12) month period ending on November 23, 2012 and all such periods thereafter.

“First Amendment” shall mean that certain Consent and First Amendment to Loan and Security Agreement dated as of the First Amendment Effective Date by and among the Borrowers, the other Loan Party party thereto and Lender.

“First Amendment Effective Date” shall mean May 31, 2012

“Specified Transactions” shall mean those certain transactions discussed with Lender by Borrowers, which transactions shall be in form and substance acceptable to Lender in its sole discretion.

(c)            Section 1.1 of the Loan Agreement is hereby further amended by substituting the definition of the terms as set forth below in lieu of the current version of such definitions contained in Section 1.1 of the Loan Agreement:

“Applicable Margin” shall mean the margin set forth below with respect to Prime Rate Revolving Loans, LIBOR Rate Revolving Loans and Unused Line Fee as in effect from time to time, as applicable; provided, that the initial Applicable Margin shall be set at Level III until five (5) Business Days after receipt of Borrowers’ quarterly financial statements for the fiscal quarter ending on or around September 28, 2012 at which point Applicable Margin shall be adjusted based on Borrowers’ average Excess Availability for such fiscal quarter as shown in the compliance certificate delivered in connection with such financial statements; provided, Applicable Margin shall not be adjusted to Levels I or II unless such financial statements reflect a Fixed Charge Coverage Ratio of at least 1.25 to 1.00, calculated on a trailing twelve month basis. Thereafter, the Applicable Margin shall be adjusted five (5) Business Days after receipt of Borrowers’ quarterly financial statements based on Borrowers’ average Excess Availability for such fiscal quarter (provided that, if Borrowers fail to deliver applicable financial statements within the time period required by this Agreement, the Applicable Margin shall conclusively be presumed to be equal to the highest level set forth on the chart below from the date such financial statements were required to be delivered until five (5) Business Days after receipt of such financial statements), as set forth on the following chart:

  

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Level

	 	
Excess Availability

	 	
Prime Rate

Revolving Loans

Applicable Margin

	 	 	
LIBOR Rate

Revolving Loans

Applicable Margin

	 	 	
Unused Line Fee

Applicable Margin

	 
	  	 	  	 	 	 	 	 	 	 	 	 
	
I

	 	
> $10,000,000

	 	 	0.25	%	 	 	2.25	%	 	 	0.50	%
	
II

	 	
> $7,500,000 but < $10,000,000

	 	 	0.50	%	 	 	2.50	%	 	 	0.50	%
	
III

	 	
> $3,000,000 but < $7,500,000

	 	 	0.75	%	 	 	2.75	%	 	 	0.50	%
	
IV

	 	
< $3,000,000

	 	 	1.00	%	 	 	3.00	%	 	 	0.50	%

If, as a result of any restatement of or other adjustment to the financial statements of Borrowers or for any other reason, the Lender reasonably determines that (a) the Excess Availability as calculated by Borrowers as of any applicable date was inaccurate and (b) a proper calculation of the Excess Availability would have resulted in different pricing for any period, then (i) if the proper calculation of Excess Availability would have resulted in higher pricing for such period, Borrowers shall automatically and retroactively be obligated to pay to Lender promptly on demand by Lender, an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period (provided, that Lender makes any such demand for payment within forty-five (45) days of the payment in full of the Obligations (other than Hedging Obligations and unasserted contingent obligations)); and (ii) if the proper calculation of Excess Availability would have resulted in lower pricing for such period, Lender shall have no obligation to repay any interest or fees to Borrowers; provided that if, as a result of any restatement or other event a proper calculation of Excess Availability would have resulted in higher pricing for one or more periods and lower pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by Borrowers pursuant to clause (i) above shall be based upon the excess, if any, of the amount of interest and fees that should have been paid for all applicable periods over the amount of interest and fees paid for all such periods. Notwithstanding the foregoing, the Applicable Margin shall be automatically set at Level IV during all Excluded FCCR Periods, effective as of the commencement of each such Excluded FCCR Period, for the duration of each such Excluded FCCR Period; provided, that after the expiration of any such Excluded FCCR Period, the Applicable Margin shall be adjusted in accordance with the provisions set forth above.”

“EBITDA shall mean, with respect to any period, Holdings and its Subsidiaries’ (other than any Inactive Subsidiaries (subject to the last sentence in the definition thereof)) net income after taxes for such period (excluding any after-tax gains or losses on the Disco Sale and excluding other after-tax extraordinary gains or losses) plus interest expense, income tax expense, depreciation and amortization for such period, plus Management Fees which have been expensed in such period, plus costs, expenses and losses of up to $3,000,000 in the aggregate for all periods related to the Glit/Gemtex Restructuring or any Specified Transaction, plus or minus any other non-cash charges or gains which have been subtracted or added in calculating net income after taxes for such period, all on a consolidated basis. Notwithstanding the foregoing, for purposes of calculating EBITDA for any period ending on or prior to September 30, 2012 for use in the calculation of the ratio of EBITDA to Fixed Charges, EBITDA for such period shall equal the sum of (i) EBITDA for the period commencing on September 1, 2011 and ending on the last day of such measurement period (as determined in accordance with the calculation above based on financial statements delivered to Lender in accordance with the terms of this Agreement), plus (ii) costs, expenses, and losses relating to the settlement of the claim against a former subtenant of Continental at the Hazelwood, Missouri leased location leased by Continental in an amount not to exceed $650,000 in the aggregate for all periods, plus (iii) the sum of the respective amounts of EBITDA as set forth on Annex A attached hereto for each of the full calendar months occurring prior to September 1, 2011 and included in such period.”

  

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“Revolving Loan Availability shall mean an amount up to the sum of the following sublimits:

(i) up to eighty-five percent (85%) of the face amount (less maximum discounts, credits and allowances which may be taken by or granted to Account Debtors in connection therewith in the ordinary course of Borrowers’ business) of Borrowers’ Eligible Accounts; plus

(ii) (x) up to fifty-five percent (55%) of the lower of cost or market value of Borrowers’ Eligible Inventory, or, following a new appraisal by an appraiser reasonably acceptable to Lender or with the consent of the Lender in its sole discretion, (y) the lesser of (A) sixty-five percent (65%) of the lower of the cost of market value of Borrowers’ Eligible Inventory and (B) eighty-five percent (85%) of the appraised net orderly liquidation value (as determined by an appraiser reasonably acceptable to Lender) of Borrowers’ Eligible Inventory (provided, that the aggregate principal amount of all advances to Borrowers with respect to this clause (ii) shall not exceed $12,500,000); plus

(iii) during the first twenty-four (24) months following the Closing Date, up to eighty percent (80%) of the purchase price (exclusive of sales taxes, delivery charges and other “soft” costs related to such purchase) of Equipment to be purchased with the proceeds of such advances (or such advances may be used to repay Revolving Loans used to make such purchases), which Equipment is acceptable to Lender in its sole discretion (provided, that the aggregate principal amount of all advances to Borrowers with respect to this clause (iii) shall not exceed $2,500,000); minus

(iv) issued and outstanding Letters of Credit; minus

(v) $1,000,000; minus

(vi) an amount equal to the aggregate net cash proceeds received from all sales or other dispositions of Equipment or as a result of any damage or destruction of Equipment (other than any such sales or dispositions, or any damage or destruction, with respect to any Equipment of Glit/Gemtex or the California “Container” division of Continental), in each case, which occur after the First Amendment Effective Date; minus

(vii) an amount equal to fifty percent (50%) of the aggregate net cash proceeds received from all sales or other dispositions of Equipment of Glit/Gemtex or the California “Container” division of Continental, or as a result of any damage or destruction of any such Equipment, in each case, which occur after the First Amendment Effective Date; minus

  

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(viii) an amount equal to (x) the aggregate net cash proceeds received from all sales or other dispositions of Accounts, in each case, outside the ordinary course, which occur after the First Amendment Effective Date (other than any such sales or dispositions with respect to any Accounts of Glit/Gemtex or Accounts generated by the California “Container” division of Continental) less (y) the amount of Revolving Loan Availability attributable to such Accounts; minus

(ix) an amount equal to (x) the aggregate net cash proceeds from all sales or other dispositions of Inventory, in each case, outside the ordinary course, or as a result of any damage or destruction of Inventory (other than any such sales or dispositions, or any damage or destruction, with respect to any Inventory of Glit/Gemtex or the California “Container” division of Continental), in each case, which occur after the First Amendment Effective Date less (y) the amount of Revolving Loan Availability attributable to such Inventory;

provided, that the aggregate amount of all Eligible Accounts and Eligible Inventory of each of Glit/Gemtex and Nova Scotia included in clauses (i) and (ii) above for purposes of calculating the Revolving Loan Availability shall not in any event exceed $2,000,000.”

(d)            Section 2.1(c) of the Loan Agreement is hereby amended by adding the following language as the last sentence of such Section:

“Notwithstanding the foregoing, effective as of the First Amendment Effective Date, the Lender shall not have any obligation to make Capital Expenditure Loans.”

(e)            Section 2.5.2(a) of the Loan Agreement is hereby amended by adding the following language as the last sentence of such Section:

“Notwithstanding the foregoing, no borrowing shall be made as a LIBOR Loan during any Excluded FCCR Period.”

(f)            Section 2.5.3(a) of the Loan Agreement is hereby amended by deleting the “.” at the end of such Section and adding the following additional proviso at the end of such Section:

“; provided, further, that no Loans shall be converted into LIBOR Loans during any Excluded FCCR Period.”

(g)            Section 2.6.5 of the Loan Agreement is hereby deleted in its entirety and the following language is substituted in lieu thereof:

“2.6.5.     Mandatory Prepayments of the Loans.

Sales of Assets. Upon receipt of the net cash proceeds of the sale or other disposition of any Equipment, Inventory or Accounts of Borrowers (in the case of Inventory and Accounts, which sale or other disposition is outside the ordinary course (as determined by reference to Borrowers’ past practice prior to the First Amendment Effective Date)) which is subject to a security interest in favor of Lender or any owned real property of Borrowers which is subject to a negative pledge in favor of Lender, or if any of the Equipment, Inventory or real property is damaged, destroyed or taken by condemnation in whole or in part (other than the net cash proceeds in respect of the sale or other disposition of obsolete and worn-out Equipment during any fiscal year having an aggregate market value of not more than $400,000, provided that, in each case, such proceeds are used to acquire, within one hundred eighty (180) days of such disposition, replacement Equipment which is subject to a security interest in favor of Lender and further provided that from the period from such disposition until such replacement, Lender may institute a reserve in the Revolving Loan Availability in the amount of such net cash proceeds), the net cash proceeds thereof shall be paid by Borrowers to Lender as a mandatory prepayment of any outstanding Capital Expenditure Loans, such payment to be applied to the remaining scheduled amortization of the Capital Expenditure Loans in the inverse order of their maturities until repaid in full, and then against the other Obligations, as determined by Lender, in its sole discretion.

  

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Issuances of Equity Interests. Upon receipt by any Loan Party of the net cash proceeds of any issuance of stock or other equity interests, such net cash proceeds shall be paid by Borrowers to Lender as a mandatory prepayment of any outstanding Capital Expenditure Loans, such payment to be applied to the remaining scheduled amortization of the Capital Expenditure Loans in the inverse order of their maturities until repaid in full, and then against the other Obligations, as determined by Lender, in its sole discretion.”

(h)            Section 12 of the Loan Agreement is hereby amended by adding the following language as a new Section 12.14:

“12.14 Specified Transactions.

As soon as reasonably practicable but in any event no later than the date specified by Lender in its discussions with Borrowers with respect to the Specified Transactions, Borrowers shall take the actions and/or deliver to Lender the documents and/or deliverables, in each case, relating to the Specified Transactions as discussed with the Lender, which actions, documents and/or deliverables shall be in form and substance satisfactory to Lender in its sole discretion.”

(i)            Section 14.1 of the Loan Agreement is hereby deleted in its entirety and the following language is substituted in lieu thereof:

“14.1       Minimum EBITDA.

Effective as of April 26, 2012, Borrowers shall not permit EBITDA for the trailing twelve (12) month period ending on the last day of any fiscal month as set forth below to be less than the minimum amount set forth in the table below opposite such date:

	
Date

	 	
Minimum EBITDA

	 
	
April 27, 2012

	 	$	650,000	 
	
May 25, 2012

	 	$	650,000	 
	
June 29, 2012

	 	$	650,000	 
	
July 27, 2012

	 	$	650,000	 
	
August 24, 2012

	 	$	650,000	 
	
September 28, 2012

	 	$	100,000	 
	
October 26, 2012

	 	$	300,000”	 

  

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(j)            Section 14.2 of the Loan Agreement is hereby deleted in its entirety and the following language is substituted in lieu thereof:

“14.2       Fixed Charge Coverage.

Borrowers shall not permit the ratio of EBITDA to Fixed Charges to be less than 1.10 to 1.00 for the trailing twelve (12) month period ending on the last day of any fiscal month, commencing with the trailing twelve (12) month period ending on November 23, 2012; provided, that solely for purposes of calculating compliance with the financial covenant set forth in this Section during each such period, (i) solely with respect to the trailing twelve (12) month period ending on November 23, 2012, an amount up to $450,000 of Unfinanced Capital Expenditures incurred in the Fiscal Year ending December 31, 2012 during such period shall be deemed to be financed Capital Expenditures (and therefore not Unfinanced Capital Expenditures) and (ii) solely with respect to the trailing twelve (12) month period ending on December 31, 2012, an amount of up to $450,000 of Unfinanced Capital Expenditures incurred during such period shall be deemed to be financed Capital Expenditures (and therefore not Unfinanced Capital Expenditures).”

3.             Consent. Effective as of the date hereof, upon satisfaction of the conditions precedent set forth herein, and in reliance upon the representations and warranties of the Loan Parties set forth in the Loan Agreement and in this Amendment, and notwithstanding anything to the contrary contained in the Loan Agreement or any other Loan Document, the Lender hereby consents to the Specified Transactions; provided, that the foregoing consent is conditioned upon Borrowers’ compliance with Section 12.14 of the Loan Agreement (as amended by this Amendment).

4.             Conditions to Effectiveness of Amendment. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent:

(a)            delivery to Lender of this Amendment executed by each Loan Party and Lender.

(b)            The Borrowers shall have paid to Lender, a fully-earned, non-refundable closing fee of $50,000 on the date hereof.

(c)            No Default or Event of Default shall exist both before and after giving effect to this Amendment.

(d)            The representations and warranties contained in Section 5 hereof shall be true and correct in all material respects (without duplication of any materiality qualifier contained therein).

5.             Representations and Warranties. To induce the Agent and the Lenders to execute this Amendment, each Loan Party represents and warrants to the Lender as follows:

(a)            such Loan Party has all requisite power and authority to execute, deliver and perform this Amendment;

(b)            This Amendment and the Loan Agreement constitute legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally;

  

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(c)            The representations and warranties of each Loan Party in the Loan Agreement and the other Loan Documents are true and correct in all material respects (without duplication of any materiality qualifiers contained therein) as of the date hereof (except for representations and warranties that expressly relate to an earlier date which must be true and correct in all material respects (without duplication of any materiality qualifiers contained therein) as of such earlier date); and

(d)            no Default or Event of Default exists.

6.             Affirmation; Release of Claims. Except as expressly amended hereby, the Loan Agreement is and shall continue in full force and effect and each Loan Party hereby fully ratifies and reaffirms each Loan Document to which it is a party. Reference in any of this Amendment, the Loan Agreement and any other Loan Document to the Loan Agreement shall be a reference to the Loan Agreement as amended hereby and as further amended, restated, supplemented or extended from time to time. This Amendment shall constitute a Loan Document for purposes of the Loan Agreement and the other Loan Documents. Except as expressly set forth herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Loan Agreement or any of the other Loan Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, Lender reserves all rights, privileges and remedies under the Loan Documents. Except as amended hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force and effect. In consideration of the Lender’s agreements contained in this Amendment, each Loan Party hereby irrevocably releases and forever discharge the Lender and its affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person”) of and from any and all claims, suits, causes of action, investigations, proceedings, allegations, assertions or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Loan Party ever had or now has against Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of Lender or any other Released Person relating to the Loan Agreement or any other Loan Document on or prior to the date hereof.

7.             Counterparts; Electronic Signature. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which, when so executed and delivered, shall be deemed an original, but all of which counterparts together shall constitute but one agreement. Delivery of an executed signature page of this Amendment by facsimile transmission or emailed “.pdf” file or other similar file format shall be as effective as delivery of a manually executed counterpart hereof.

8.             Headings. The headings and captions of this Amendment are for convenience of reference only, and shall not govern the interpretation of any of the provisions of this Amendment.

9.             Further Assurances. Each Loan Party agrees to execute and deliver in form and substance satisfactory to Lender such further documents, instruments, amendments, financing statements and to take such further action, as may be necessary from time to time to perfect and maintain the liens and security interests created by the Loan Documents.

10.           APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS.

[Signature Pages Follow]

  

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.

	  	
BORROWERS:

	  
	  	  	  	  
	  	
CONTINENTAL COMMERCIAL PRODUCTS,

	  
	  	
LLC, a Delaware limited liability company

	  
	  	  	  	  
	  	
By:

	
/s/ James W. Shaffer

	  
	  	
Name: James W. Shaffer

	  
	  	
Title: Vice President and CFO

	  
	  	  	  	  
	  	
GLIT/GEMTEX, LTD., a corporation formed under

	  
	  	
the laws of the Province of Ontario

	  
	  	  	  	  
	  	
By:

	
/s/ James W. Shaffer

	  
	  	
Name: James W. Shaffer

	  
	  	
Title: Vice President and CFO

	  
	  	  	  	  
	  	
3254018 NOVA SCOTIA LIMITED, a company

	  
	  	
formed under the laws of the Province of Nova Scotia

	  
	  	  	  	  
	  	
By:

	
/s/ James W. Shaffer

	  
	  	
Name: James W. Shaffer

	  
	  	
Title: Vice President and CFO

	  
	  	  	  	  
	  	
OTHER LOAN PARTY:

	  
	  	  	  	  
	  	
KATY INDUSTRIES, INC., a Delaware corporation

	  
	  	  	  	  
	  	
By:

	
/s/ James W. Shaffer

	  
	  	
Name: James W. Shaffer

	  
	  	
Title: Vice President and CFO

	  

 

Signature Page to Consent and First Amendment to Loan and Security Agreement

 

  

 

  

 

	  	
THE PRIVATEBANK AND TRUST COMPANY, as Lender

	 
	  	  	  	 
	  	
By:

	
/s/ Douglas C. Colletti

	 
	  	
Name:  

	
Douglas C. Colletti

	 
	  	
Title:

	
Managing Director

	 

 

Signature Page to Consent and First Amendment to Loan and Security AgreementCREDIT
AND SECURITY AGREEMENT

 

dated
as of May 31, 2012

 

between

 

FREDERICK’S
OF HOLLYWOOD GROUP INC., FOH HOLDINGS, INC., FREDERICK’S OF HOLLYWOOD, INC., FREDERICK’S OF HOLLYWOOD STORES, INC.,
HOLLYWOOD MAIL ORDER, LLC,

as Borrowers

 

and

 

SALUS
CAPITAL PARTNERS, LLC,

as Lender

  

 

 

    	 

    	 

    

 

Table of Contents

 

	1.	DEFINITIONS	1
	 	 	 	 
	2.	AMOUNT AND TERMS OF THE LINE OF CREDIT	20
	 	 	 	 
	 	2.1	Line of Credit; Limitations on Borrowings; Termination Date; Use of Proceeds.	20
	 	2.2	Procedures for Advances.	22
	 	2.3	Collection of Accounts and Application to Obligations.	23
	 	2.4	Interest and Interest Related Matters.	24
	 	2.5	Fees; Fee Letter	25
	 	2.6	Interest Accrual; Principal and Interest Payments; Computation.	25
	 	2.7	Termination or Reduction of Line of Credit by Borrowers; Notice.	26
	 	2.8	Payments Free of Taxes	27
	 	2.9	Increased Costs.	27
	 	2.10	Survival	28
	 	2.11	Consolidated Credit Facility; Joint and Several Obligations	28
	 	2.12	Borrower Representative	28
	 	 	 	 
	3.	SECURITY INTEREST AND THE COLLATERAL AND LENDER’S RIGHTS CONCERNING THE COLLATERAL	29
	 	 	 	 
	 	3.1	Security Interest and the Collateral.	29
	 	3.2	Lender’s Rights Concerning the Collateral	30
	 	3.3	Power of Attorney	32
	 	3.4	Assignment of Insurance	33
	 	3.5	Borrowers’ Premises.	33
	 	3.6	License to Use Intellectual Property Rights	33
	 	3.7	Financing Statements.	34
	 	3.8	Collateral Related Matters	34
	 	3.9	Notices Regarding Disposition of Collateral	35
	 	 	 	 
	4.	CONDITIONS PRECEDENT	35
	 	 	 	 
	 	4.1	Conditions Precedent to Initial Advance	35
	 	4.2	Additional Conditions Precedent to All Line of Credit Usage	37
	 	 	 	 
	5.	REPRESENTATIONS AND WARRANTIES	38
	 	 	 	 
	 	5.1	Corporate Existence and Power Name; Chief Executive Office; Inventory and Equipment Locations; Identification Numbers	38
	 	5.2	Subsidiaries; Joint Ventures; Affiliates; Capitalization	38
	 	5.3	Authorization; No Conflict as to Law or Agreements	39
	 	5.4	Enforceable Obligations	39
	 	5.5	Financial Statements; No Material Adverse Effect	39
	 	5.6	Projections	39
	 	5.7	Litigation	40
	 	5.8	Intellectual Property Rights.	40

 

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	 	5.9	Taxes	41
	 	5.10	Title and Liens	41
	 	5.11	No Defaults	41
	 	5.12	Full Disclosure	41
	 	5.13	Labor Matters	41
	 	5.14	Rights to Payment	42
	 	5.15	Employee Benefit Plans.	42
	 	5.16	Environmental Matters.	42
	 	5.17	Solvency	43
	 	5.18	Material Agreements	43
	 	 	 	 
	6.	AFFIRMATIVE COVENANTS	44
	 	 	 	 
	 	6.1	Reporting Requirements	44
	 	6.2	Financial Covenants	47
	 	6.3	Preservation of Existence	47
	 	6.4	Books and Records	48
	 	6.5	Payment of Indebtedness and Charges.	48
	 	6.6	Compliance with Laws.	48
	 	6.7	Maintain Collateral; Defend Collateral.	49
	 	6.8	Protect Intellectual Property Rights	49
	 	6.9	Insurance	52
	 	6.10	Further Assurances	53
	 	 	 	 
	7.	NEGATIVE COVENANTS	53
	 	 	 	 
	 	7.1	Indebtedness	53
	 	7.2	Liens	54
	 	7.3	Investments	55
	 	7.4	Restricted Payments	56
	 	7.5	Transactions with Affiliates	56
	 	7.6	Sale of Assets	57
	 	7.7	Transfer of Intellectual Property Rights	57
	 	7.8	Mergers, Subsidiaries; Asset Acquisitions	57
	 	7.9	Sale and Leaseback	58
	 	7.10	Restrictions on Nature of Business	58
	 	7.11	Accounting; Fiscal Year	58
	 	7.12	Discounts	58
	 	7.13	Pension Plans	58
	 	7.14	Change to Place of Business; Premises	58
	 	7.15	Constituent Documents; Name Change	58
	 	7.16	Deposit Accounts	59
	 	7.17	Retail Stores	59
	 	7.18	Changes in Terms of Subordinated Debt	59
	 	 	 	 
	8.	EVENTS OF DEFAULT AND REMEDIES	59
	 	 	 	 
	 	8.1	Events of Default	59
	 	8.2	Rights and Remedies	62

 

    	ii

    	 

    

 

	 	8.3	Immediate Default and Acceleration	63
	 	 	 	 
	9.	MISCELLANEOUS	63
	 	 	 	 
	 	9.1	No Waiver; Cumulative Remedies	63
	 	9.2	Amendment; Consents and Waivers; Authentication	63
	 	9.3	Execution in Counterparts; Delivery of Counterparts	64
	 	9.4	Notices, Requests, and Communications	64
	 	9.5	Borrowers Information Reporting; Confidentiality	64
	 	9.6	Further Documents	65
	 	9.7	Costs and Expenses	66
	 	9.8	Indemnity	66
	 	9.9	Binding Effect; Assignment; Complete Agreement	67
	 	9.10	Sharing of Information	67
	 	9.11	Severability of Provisions	67
	 	9.12	Headings	67
	 	9.13	Definitional Terms and Rules of Interpretation	68
	 	9.14	Governing Law; Jurisdiction, Venue; Waiver of Jury Trial	68
	 	9.15	WAIVER OF JURY TRIAL AND DAMAGES	68

 

Exhibits

 

	Exhibit A:	Revolving Note
	Exhibit B:	Compliance Certificate
	Exhibit C:	Borrowing Base Certificate

 

Schedules

 

	Schedule 1:	Permitted Holders
	Schedule 4.1(i)	List of Deposit Accounts to be Subject to Control Agreements
	Schedule 5.1:	Trade Names; Chief Executive Office/Principal Place of Business; Other Inventory and Equipment Locations
	Schedule 5.2:	Capitalization Chart/Organizational Chart
	Schedule 5.7:	Litigation Matters
	Schedule 5.8:	Intellectual Property Matters
	Schedule 5.11	Default Matters
	Schedule 5.13:	Labor Matters
	Schedule 5.15:	Employee Benefit Plans
	Schedule 5.16:	Environmental Matters
	Schedule 5.18:	Material Contracts
	Schedule 7.1:	Indebtedness
	Schedule 7.2:	Permitted Liens
	Schedule 7.3:	Investments
	Schedule 7.16:	Deposit Accounts

 

    	iii

    	 

    

  

CREDIT AND
SECURITY AGREEMENT

 

This CREDIT AND SECURITY
AGREEMENT (this “Agreement”), dated as of May 31 2012, and is entered into 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
have requested that Lender provide them with a $24,000,000 revolving line of credit (as such line may be reduced as provided herein,
the “Line of Credit”), to be used by Borrowers for working capital and other lawful corporate purposes (including,
but not limited to, paying costs and expenses directly incurred in connection with this Agreement), and to repay certain indebtedness
of Borrowers outstanding on the date hereof. Lender is agreeable to meeting Borrowers’ request, provided that Borrowers agree
to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in
consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

1.            DEFINITIONS

 

Capitalized terms not
otherwise defined in this Agreement shall have the meanings set forth in this Section 1. All other terms contained in this
Agreement, unless otherwise indicated, shall have the meaning provided by the UCC to the extent such terms are defined therein.

 

“Account Funds”
is defined in Section 2.3(b) of this Agreement.

 

“Accounts”
shall have the meaning given it under the UCC.

 

“Advance”
and “Advances” means an advance or advances under the Line of Credit, and includes, without limitation, the
FILO Advance.

 

“Affiliate”
or “Affiliates” means any other Person controlled by, controlling, or under common control with any of the Borrowers,
including without limitation any Subsidiary of a Borrower. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (x) to vote 10% or more of the Capital Stock having ordinary voting power for the election of directors
of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the
management and policies of such Person whether by ownership of Capital Stock, contract or otherwise.

 

“Agreement”
means this Credit and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to
time.

 

    	1

    	 

    

 

“Applicable
Margin” means (i) with respect to Advances under the Line of Credit other than the FILO Advances, four percent (4.0%),
and (ii) with respect to the FILO Advance, eleven and one-half percent (11.5%).

 

“Availability”
means, on any date of determination, an amount equal to (i) the lesser of (A) the Maximum Line of Credit and (B) the Borrowing
Base, less (ii) the aggregate Line of Credit Usage as of such date, provided, that to the extent that Availability is determined
for purposes of the making of any Advance, Availability shall be determined as of the date of such Advance based upon the Advance
Request and based on the collateral report most recently submitted pursuant to Section 6.1(c) of this Agreement.

 

“Bank of America
Collection Account” means Account No. xxxxx maintained by Borrowers with Bank of America, N.A., which account which
receives funds from the Store Accounts maintained with Bank of America, N.A.

 

“Bankruptcy
Code” means title 11 of the United States Code.

 

“Borrowing
Base” means on any date of determination, an amount equal to the sum of:

 

(i)          ninety-five
percent (95%) of Eligible Credit Card Receivables, plus

 

(ii)         ninety
percent (90%) of Eligible Accounts, plus

 

(iii)        a
percentage, which is equal to the Inventory Advance Rate in effect at such time, of Eligible Inventory, plus

 

(iv)        the
Maximum FILO Amount, minus

 

(v)          Borrowing
Base Reserves then in effect.

 

“Borrowing
Base Reserves” means, as of any date of determination, an amount or a percentage of a specified category or item that
Lender establishes in its Permitted Discretion from time to time to reduce availability under the Borrowing Base to reflect (a) events,
conditions, contingencies or risks which adversely affect the assets or business of Borrowers, or any component of the Borrowing
Base, the Collateral or its value, or the enforceability, perfection or priority of Lender’s liens therein, or impediments
to Lender’s ability to realize upon the Collateral, or claims and liabilities that Lender determines will need to be satisfied
in connection with its realization upon the Collateral, (b) Lender’s judgment that any collateral report or financial
information relating to Borrowers and furnished to Lender may be incomplete, inaccurate or misleading in any material respect,
or (c) to reflect that a Default or Event of Default then exists. Without limiting the generality of the foregoing, Borrowing
Base Reserves may include (but are not limited to) reserves based on (i) rent based upon rent past due for more than thirty
(30) days for any leased Premises, (ii) rent in an amount equal to up to one month’s rent for each of Borrowers’ leased
locations in a Landlord Lien State for which Lender is not party to a landlord waiver in form and substance reasonably acceptable
to Lender; (iii) outstanding taxes and other governmental charges, including, without limitation, ad valorem, real estate,
personal property, sales and other taxes which Lender determines could have priority over the interests of Lender in the Collateral;
(iv) unpaid salaries, wages and benefits due employees of Borrowers; (v) liabilities for customer credits, customer deposits,
frequent shopper programs, fifty percent (50%) of gift cards and gift certificates issued no more than one year prior to the date
of determination and the like; (vi) warehousemen’s or bailee’s charges and other Permitted Liens which Lender
determines could have priority over the interests of Lender in the Collateral; (vii) freight forwarder’s charges, custom
broker’s charges, or other similar third party charges which Lender determines could have priority over the interests of
Lender in the Collateral; (viii) credit card chargebacks and customer disputes; (ix) accounts payable owed by Borrowers
with respect to consigned inventory (to the extent included in the Borrowing Base), and (x) held or post dated checks.

 

    	2

    	 

    

 

“Business
Day” means each day on which the Federal Reserve Bank of New York is open for business and, if such day relates to determination
of the LIBOR Rate, a day on which dealings are carried on in the London Interbank Eurodollar market.

 

“Business
Plan” is defined in Section 6.1(d) of this Agreement, and as used in this Agreement shall mean and refer
to the most recent Business Plan in effect for the then current fiscal period delivered by Borrowers and approved by Lender, and
as the same may be updated, modified or amended with Lender’s approval, as provided in Section 6.1(d) of this
Agreement.

 

“Capitalized
Lease” means, with respect to any Person, any lease of real or personal property by such Person as lessee which is required
under GAAP to be capitalized on the balance sheet of such Person.

 

“Capital Stock”
means all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents (regardless
of how designated) of or in a corporation, partnership, limited liability company or equivalent entity, whether voting or nonvoting,
including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11-1
of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of
1934), and including, without limitation stock or equity appreciation rights.

 

“Cash Management
Bank” means Wells Fargo Bank, National Association or any other financial institution reasonably acceptable to Lender.

 

“Change in
Law” means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect
of any law, rule, regulation or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation
or application thereof by any Governmental Authority, or (iii) the making or issuance of any request, guideline or directive (whether
or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary,
(x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder
or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign
regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless
of the date enacted, adopted or issued.

 

    	3

    	 

    

 

“Change of
Control” means each occurrence of any of the following:

 

(a)          Permitted
Holders fail to own and control, directly or indirectly, 51%, or more, of the Capital Stock of Group having the right to vote for
the election of members of the Board of Directors of Group;

 

(b)          the
acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d) and 14(d) of the Exchange Act),
other than Permitted Holders, of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 30% of the
Capital Stock of Group having the right to vote for the election of members of the Board of Directors of Group;

 

(c)          during
any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of Group
(together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders
of Group was approved by a vote of at least a majority the directors of Group then still in office who were either directors at
the beginning of such period, or whose election or nomination for election was previously approved) cease for any reason to constitute
a majority of the Board of Directors of Group;

 

(d)          the
Parent shall cease to have, directly or indirectly through one or more Loan Parties, beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of 100% of the aggregate voting power of the Capital Stock of each Borrower (other than Group) and each
Guarantor, free and clear of all Liens (other than Liens in favor of Lender);

 

(e)          Group
shall cease to have, directly or indirectly through one or more Loan Parties, beneficial ownership (as defined in Rule 13d-3 under
the Exchange Act) of 100% of the aggregate voting power of the Capital Stock of the Parent, free and clear of all Liens (other
than Liens in favor of Lender);

 

(f)          (i)
Group consolidates with or merges into another entity or conveys, transfers or leases all or substantially all of its property
and assets to any Person, or (ii) any Borrower consolidates with or merges into another entity or conveys, transfers or leases
all or substantially all of its property and assets to another Person, or (iii) any entity consolidates with or merges into any
other Borrower unless the Parent has beneficial ownership of one hundred percent (100%) of the aggregate voting power of all Capital
Stock of the resulting, surviving or transferee entity; and

 

(g) an individual holding
the office of Group’s Chief Executive Officer or Chief Financial Officer as of the Closing Date shall for any reason either
cease to hold such office or be actively engaged in the day-to-day management of Borrowers, unless a successor approved by Lender
in its Permitted Discretion is appointed within ninety (90) days of such cessation of such individual.

 

“Charges”
means all federal, state, county, city, municipal, local, foreign or other governmental taxes (including taxes owed to the Pension
Benefit Guaranty Corporation at the time due and payable), levies, assessments, charges, liens, claims or encumbrances upon or
arising on account of (a) the Collateral, (b) the Obligations, (c) the employees, payroll, income or gross receipts
of Borrowers, (d) Borrowers’ ownership or use of any properties or other assets, or (e) any other aspect of Borrowers’
business.

 

    	4

    	 

    

 

“Closing Date”
means the date of the making of the initial Advance hereunder or the date on which Lender sends Borrowers written notice that each
of the conditions precedent to the making of the initial Advance hereunder either has been satisfied or has been waived.

 

“Collateral”
means any property or other assets, now existing or hereafter acquired, real or personal, tangible or intangible, and whether owned
by, consigned to, or held by, or under the care, custody or control of Borrowers, including all money, cash, cash equivalents,
Accounts, Deposit Accounts and deposits, Investment Property, Inventory, Equipment, Fixtures, Goods, Chattel Paper, Documents,
Instruments, letters of credit, Letter of Credit Rights, Supporting Obligations, Commercial Tort Claims, books and records, real
property interests, leasehold estates in real property of Borrowers, as lessee, General Intangibles (including all Intellectual
Property, payment intangibles, contract rights, choses in action, and Software), and all of Borrowers’ other interests in
property of every kind and description, and the products, profits, rents of, dividends or distributions on, accessions to, and
all Proceeds (including tort claims, insurance claims and insurance proceeds) of any of the foregoing, regardless of whether the
Collateral, or any of it, is property as to which the UCC provides for the perfection of a security interest, and all rights and
remedies applicable to such property.

 

“Collection
Account” is defined in Section 2.3(a) of this Agreement.

 

“Compliance
Certificate” is defined in Section 6.1(a) of this Agreement and is in the form attached hereto as Exhibit
B.

 

“Confidential
Information” means all non-public, confidential or proprietary information of Borrowers disclosed to Lender prior to
or during the term of this Agreement by Borrowers or any of its officers, employees, agents or representatives, including, without
limitation, any trade secrets, research and development test results, marketing or business plans, strategies, forecasts, budgets,
projections, customer and supplier information, and any other analyses, computations or studies prepared by or for Borrowers.

 

“Constituent
Documents” means with respect to any Person, as applicable, that Person’s certificate of incorporation, articles
of incorporation, by-laws, certificate of formation, articles of organization, limited liability company agreement, management
agreement, operating agreement, shareholder agreement, partnership agreement or similar document or agreement governing such Person’s
existence, organization or management or concerning disposition of ownership interests of such Person or voting rights among owners
of such Person’s ownership interests.

 

    	5

    	 

    

 

“Contingent
Liability(ies)” means, with respect to any Person, any obligation of such Person guaranteeing any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including, without limitation, (i) the direct or indirect guaranty, endorsement (other
than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of a primary obligor, (ii) the obligation to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party or parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (B)
to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (C) to purchase
property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (D) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Liability”
shall not include any products warranties extended in the ordinary course of business. The amount of any Contingent Liability shall
be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent
Liability is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Liability) or, if not stated or determinable, the maximum reasonably anticipated
liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

 

“Control Agreement”
means each deposit account control agreement, securities account control agreement, or similar agreement executed by a financial
institution in favor of Lender with respect to any deposit account, securities account or other account of Borrowers, and pursuant
to which Lender has “control” of such account, as contemplated by Section 9-104 of the UCC, and which is reasonably
satisfactory to Lender in form and substance.

 

“Copyright
Security Agreement” means the Copyright Security Agreement executed by Borrowers in favor of Lender.

 

“Credit Card
Agreements” means all agreements now or hereafter entered into by Borrowers with any Credit Card Issuer or any Credit
Card Processor, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

 

“Credit Card
and Account Funds” is defined in Section 2.3(b) of this Agreement.

 

“Credit Card
Collection Account” means any deposit account maintained by Borrowers for the purpose of collecting proceeds of Credit
Card Receivables, which is established and maintained at an institution reasonably satisfactory to Lender and subject to the Lender’s
first priority security interest and Lender’s exclusive control pursuant to a Control Agreement; provided that, notwithstanding
Lender’s exclusive control, the applicable Credit Card Processor may have rights to debit such deposit account for unpaid
processing fees, chargebacks and other amounts due under the applicable Credit Card Agreement.

 

“Credit Card
Issuer” means any Person who issues or whose members issue credit cards (but specifically excluding Borrowers or any
Affiliate of a Borrower as issuer of any proprietary or house credit card).

 

“Credit Card
Processor” means any servicing or processing agent that facilitates, services, processes or manages the credit authorization,
billing transfer and/or payment procedures with respect to Borrowers’ sales transactions involving credit card or debit card
purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.

 

    	6

    	 

    

 

“Credit Card
Receivables” means, collectively, (i) all present and future rights of Borrowers to payment from any Credit Card
Issuer or Credit Card Processor arising from the sale of goods or provision of services to customers who have purchased such goods
or services using a credit or debit card, and (ii) all present and future rights of Borrowers to payment from any Credit Card
Issuer or Credit Card Processor in connection with the sale or transfer of Accounts arising pursuant to the sale of goods or provision
of services to customers who have purchased such goods or services using a credit card or a debit card, including, but not limited
to, all amounts at any time due or to become due from any Credit Card Issuer or Credit Card Processor under the applicable Credit
Card Agreement(s) or otherwise.

 

“Daily One
Month LIBOR” means, for any day, the rate of interest equal to LIBOR then in effect for delivery for a one (1) month
period. When interest is determined in relation to Daily One Month LIBOR, each change in the interest rate shall become effective
on the Business Day that Lender determines that Daily One Month LIBOR has changed.

 

“Default”
means any event that, with the passage of time or notice or both, would, unless cured or waived, become an Event of Default.

 

“Default Period”
is defined in Section 2.4(c) of this Agreement.

 

“Default Rate”
is defined in Section 2.4(c) of this Agreement.

 

“Designated
Officer” means an individual holding any of the positions of Chief Executive Officer, Chief Financial Officer, President,
Vice President, Finance or Manager of Treasury of Group or Stores.

 

“Director”
means a director if a Borrower is a corporation, or a governor, or manager or managing member if a Borrower is a limited liability
company.

 

“Disqualified
Capital Stock” means, with respect to any Person, any Capital Stock of such Person that, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event or otherwise,
(i) matures or is mandatorily redeemable or subject to any mandatory repurchase requirement, pursuant to a sinking fund obligation
or otherwise, (ii) is redeemable or subject to any mandatory repurchase requirement at the sole option of the holder thereof,
or (iii) is convertible into or exchangeable for (whether at the option of the issuer or the holder thereof) (A) debt
securities or (B) any Capital Stock referred to in clause (i) or (ii) above, in each case under clause (i), (ii)
or (iii) above at any time on or prior to date that is 180 days following the Maturity Date; provided, however, that
only the portion of Capital Stock that so matures or is mandatorily redeemable or subject to any mandatory repurchase requirement,
is so redeemable at the option of the holder thereof, or is so convertible or exchangeable on or prior to such date shall be deemed
to be Disqualified Capital Stock.

 

“Distribution
Center Lease” means the lease agreement, dated as of September 25, 1998, between Cotton Fredericks, LLC, an Arizona limited
liability company, as successor to Ryan Companies US, Inc., a Minnesota corporation, as landlord, and Frederick’s, as tenant,
with respect to the distribution center of Frederick’s located in Phoenix, Arizona, as such lease may be amended, modified,
extended or renewed from time to time.

 

    	7

    	 

    

 

“Domain Names”
means fredericks.com or any other Internet domain name by which the customers of the Borrowers may access an Internet website through
which the Borrowers conduct business.

 

“EBITDA”
means, for any fiscal period, Borrowers’ net income (or loss) for such period, plus (a) without duplication and in
each case to the extent deducted in determining net income (or loss) for such period, the sum of (i) interest expense, (ii) income
tax expense, and (iii) depreciation and amortization expense, minus (b) without duplication and in each case to the extent
included in consolidated income (or loss) for such period, (i) interest income, and (ii) other non-cash income.

 

“Eligible
Accounts” means all unpaid Accounts of Borrowers arising from the sale of goods or the performance of services, net of
any credits and discounts, but excluding Credit Card Receivables and any Accounts having any of the following characteristics:

 

(a)          That
portion of Accounts (i) unpaid 110 days or more after the applicable due date, or (ii) requiring payment more than 60 days after
the applicable invoice date;

 

(b)          That
portion of Accounts related to goods or services with respect to which Borrowers have received notice of a claim or dispute, which
are subject to a claim of offset or a contra account, or which reflect a reserve for warranty claims or returns;

 

(c)          That
portion of Accounts not yet earned by the final delivery of goods or the final provision of services by Borrowers to the account
debtor, including with respect to both goods and services, progress billings, and that portion of Accounts for which an invoice
has not been sent to the applicable account debtor;

 

(d)          Accounts
constituting (i) proceeds of copyrightable material unless such copyrightable material shall have been registered with the
United States Copyright Office, or (ii) proceeds of patentable inventions unless such patentable inventions have been registered
with the United States Patent and Trademark Office;

 

(e)          Accounts
owed by any unit of government, whether foreign or domestic (except that there shall be included in Eligible Accounts that portion
of Accounts owed by such units of government for which Borrowers have provided evidence satisfactory to Lender that (i) Lender’s
Lien constitutes a perfected first priority Lien in such Accounts, and (ii) such Accounts may be enforced by Lender directly
against such unit of government under all applicable laws);

 

(f)          Accounts
denominated in any currency other than United States Dollars;

 

(g)          Accounts
owed by an account debtor located outside the United States or Canada which are not (i) backed by a bank letter of credit
naming Lender as beneficiary or assigned to Lender, in Lender’s possession or control, or with respect to which a Control
Agreement concerning the letter-of-credit rights is in effect, and reasonably acceptable to Lender, or (ii) covered by a foreign
receivables or credit insurance policy acceptable to Lender in its Permitted Discretion;

 

    	8

    	 

    

 

(h)          Accounts
owed by an account debtor that is insolvent or is the subject of bankruptcy on insolvency proceedings or that has gone out of business;

 

(i)          Accounts
owed by an Owner, Subsidiary, Affiliate, Officer or employee of any Borrower;

 

(j)          Accounts
not subject to a first priority, perfected security interest in favor of Lender or which are subject to any Lien in favor of any
Person other than Lender, except Permitted Liens;

 

(k)          Any
Account or portion thereof that has been restructured, extended, amended or modified;

 

(l)          That
portion of Accounts that constitutes advertising charges, finance charges, service charges or sales or excise taxes;

 

(m)          Accounts
owed by an account debtor, regardless of whether otherwise eligible, to the extent that the aggregate balance of such Accounts
exceeds $1,000,000, without the prior consent of Lender;

 

(n)          Accounts
owed by an account debtor, regardless of whether otherwise eligible, if twenty-five percent (25%) or more of the total amount of
Accounts due from such account debtor is ineligible under clauses (a), (b), or (k) above; and

 

(o)          Accounts,
or portions of Accounts, otherwise deemed ineligible by Lender in its Permitted Discretion.

 

“Eligible
Credit Card Receivables” means all Credit Card Receivables of Borrowers, but excluding any Credit Card Receivable having
any of the following characteristics:

 

(a)          Credit
Card Receivables that do not arise from the actual and bona fide sale and delivery of goods or provision of services by Borrowers
in the ordinary course of Borrowers’ business, which transaction is not completed in accordance with the terms and provisions
contained in any agreements binding on Borrowers or the other party or parties related thereto;

 

(b)          That
portion of Credit Card Receivables that are past due (beyond any stated applicable grace period, if any) pursuant to the terms
set forth in the Credit Card Agreement(s) with the applicable Credit Card Issuer or Credit Card Processor of the credit card or
debit card used in the purchase which give rise to such Credit Card Receivables;

 

(c)          Credit
Card Receivables that are unpaid more than (i) for all Credit Card Issuers other than American Express, three (3) Business
Days or more after the date of the sale of inventory or rendition of services giving rise to such Credit Card Receivable, and (ii) for
American Express, five (5) Business Days or more after the date of the sale of inventory or rendition of services giving rise to
such Credit Card Receivable;

 

(d)          Credit
Card Receivables arising from any transaction in which all material procedures required by the Credit Card Issuer and/or the Credit
Card Processor of the credit card or debit card used in the purchase which gave rise to such Credit Card Receivable shall not have
been followed by Borrowers, or Borrowers shall not have obtained all authorizations and approvals required by such Credit Card
Issuer or Credit Card Processor in connection with the sale giving rise to such Credit Card Receivable;

 

    	9

    	 

    

 

(e)          any
fact, event or occurrence exists which would impair the validity, enforceability or collectability of such Credit Card Receivable
in any material respect or reduce the amount payable or delay payment thereunder (other than for setoffs for fees and chargebacks
consistent with the practices of the applicable Credit Card Issuer or Credit Card Processor with Borrowers as of the date hereof
or as such practices may hereafter change as a result of changes to the policies of such Credit Card Issuer or Credit Card Processor
applicable to its customers generally and unrelated to the circumstances of Borrowers);

 

(f)          Credit
Card Receivables not subject to the first priority, valid and perfected security interest and Lien of Lender; and Credit Card Receivables
for which the Inventory that was sold giving rise to such Credit Card Receivables was at the time of the sale thereof, subject
to any security interest or Lien in favor or any Person other than Lender, except Permitted Liens;

 

(g)          Credit
Card Receivables owed by a Credit Card Issuer or Credit Card Processor deemed uncreditworthy by Lender in its Permitted Discretion
(such that in the good faith determination of Lender, such Credit Card Issuer or Credit Card Processor does not have, or could
reasonably be expected not to have, the financial ability to satisfy its outstanding obligations);

 

(h)          Credit
Card Receivables for which the Inventory that was sold giving rise to such Credit Card Receivables shall have been returned; and

 

(i)          Credit
Card Receivables or portions thereof otherwise deemed ineligible by Lender in its Permitted Discretion.

 

“Eligible
Inventory” means all Inventory of Borrowers, valued at the lower of cost or market in accordance with GAAP, but excluding
Inventory having any of the following characteristics:

 

(a)          Inventory
that is: (i) in-transit; (ii) located at any leased premises, warehouse, or other premises not subject to a collateral
access agreement, landlord’s waiver, bailee’s agreement, warehouseman’s agreement or similar agreement reasonably
acceptable to Lender, unless expressly approved by Lender in writing; (iii) not subject to Lender’s first priority perfected
security interest; (iv) covered by any negotiable or non-negotiable warehouse receipt, bill of lading or other document of
title which does not note Lender’s interest thereon; (v) on consignment from any consignor; or (vi) on consignment
to any consignee or subject to any bailment unless the consignee or bailee has executed an agreement with Lender in form and substance
reasonably satisfactory to Lender;

 

(b)          Supplies,
packaging or parts, or customer supplied parts or Inventory;

 

(c)          Inventory
consisting of raw materials or work-in-process;

 

    	10

    	 

    

 

(d)          Inventory
that is damaged, defective, contaminated, or not currently saleable in the normal course of Borrowers’ operations (including,
without limitation, Inventory of a type that has been discontinued by Borrowers and/or marked down and not sold consistent with
prior practices), Inventory consisting of special orders for individual customers outside of Borrowers’ ordinary course of
business, or the amount of any Inventory that has been reduced by shrinkage;

 

(e)          Inventory
that Borrowers have returned, have attempted to return, are in the process of returning or intend to return to the applicable vendor;

 

(f)          Inventory
manufactured, distributed or sold by Borrowers pursuant to a license unless the applicable licensor has agreed in writing to permit
Lender to exercise its rights and remedies against such Inventory;

 

(g)          Inventory
that is subject to a Lien in favor of any Person other than Lender, except Permitted Liens; and

 

(h)          Inventory
otherwise deemed ineligible by Lender in its Permitted Discretion except that Inventory that is slow moving shall not be deemed
ineligible solely for that reason.

 

“Environmental
Law” means any federal, state, local or other governmental statute, regulation, law or ordinance dealing with the protection
of human health and the environment.

 

“Equipment”
shall have the meaning given it under the UCC.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate”
means any trade or business (whether or not incorporated) that is a member of a group which includes Borrowers and which is treated
as a single employer under Section 414 of the IRC.

 

“Event of
Default” is defined in Section 8.1 of this Agreement.

 

“Excess Cash
Flow” means, with respect to any fiscal period for the Borrowers, determined on a consolidated basis and in accordance
with GAAP, (a) EBITDA, minus (b) the sum of (i) the cash portion of interest actually paid during such period, (ii) the cash portion
of income taxes paid during such period, and (iii) the cash portion of capital expenditures made during such period as and to the
extent contemplated by the Business Plan during such period.

 

“Excluded
Taxes” means, with respect to Lender or any other recipient of any payment to be made by or on account of any Obligation
hereunder, (a) income, net worth or franchise taxes imposed on (or measured by) its net income or net worth by the United States
of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located
or in which its lending office is located or in which it is taxable solely on account of some connection other than the execution,
delivery or performance of this Agreement or the receipt of income hereunder, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction in which a Borrower is located, and (c) any tax imposed
by the Foreign Account Tax Compliance Act.

 

    	11

    	 

    

 

“Fee Letter”
means the fee letter dated as of the Closing Date by and among the Borrowers and Lender.

 

“FILO Advance”
means a portion of the Line of Credit attributable to the Maximum FILO Amount. Notwithstanding fluctuations in the amount of the
outstanding Advances and/or the Maximum FILO Amount, the FILO Advance shall, at all times, be deemed to be the initial amounts
advanced by Lender under the Line of Credit and except as otherwise provided in this Agreement, the last amounts repaid by or for
the account of Borrowers under the Line of Credit.

 

“Flagship
Store Lease” means the lease agreement, dated as of March 2, 2005, between 6753 Hollywood Associates, LLC, a California
limited liability company, as landlord, and Frederick’s, as tenant, with respect to the Borrowers’ flagship retail
store located in Los Angeles, California, as such lease agreement may be amended, modified, extended or renewed from time to time.

 

“Funds
Transfer and Deposit Account Liability” means the liability of Borrowers owing to the Lender, arising out
of any indemnity by Lender to the Cash Management Bank or any of Borrowers’ other depository banks in connection with any
deposit, disbursement, cash management or other services afforded to Borrowers by any such bank.

 

“GAAP”
means generally accepted accounting principles, applied on a basis consistent with the accounting practices applied in the financial
statements described in Section 5.5 of this Agreement. Unless otherwise specifically provided herein, any accounting
term used in this Agreement shall have the meaning customarily given such term in accordance with GAAP, and all financial computations
hereunder shall be computed in accordance with GAAP consistently applied. That certain items or computations are explicitly modified
by the phrase “in accordance with GAAP” shall in no way be construed to limit the foregoing.

 

“General Intangibles”
shall have the meaning given it under the UCC.

 

“Goods”
means any “goods” as defined in the UCC, now owned or hereafter acquired by Borrowers, wherever located, including
embedded software to the extent included in “goods” as defined in the UCC.

 

“Governmental
Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national
bodies such as the European Union or the European Central Bank).

 

“Hazardous
Substances” means pollutants, contaminants, hazardous substances, hazardous wastes, or petroleum, and all other chemicals,
wastes, substances and materials listed in, regulated by or identified in any Environmental Law.

 

“Hosting Agent”
means any Person engaged to host or maintain any Website Collateral.

 

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“Hosting Agreement”
means any agreement between any Borrower and any Hosting Agent.

 

“Indebtedness”
means, with respect to any Person, (a) all obligations for borrowed money or with respect to deposits or advances of any kind,
(b) all obligations evidenced by bonds, debentures, notes or other similar instruments and all reimbursement or other obligations
in respect of letters of credit, bankers acceptances or other financial products, (c) all obligations of such Person upon
which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations as a lessee under leases considered Capitalized
Leases in accordance with GAAP, (f) all obligations to pay the deferred purchase price of assets, (g) all obligations
owing under any hedging, derivative, foreign exchange, or similar transaction, (h) all Contingent Liabilities, (i) all indebtedness
of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured
by) a Lien on any property owned or acquired by such Person, (j) all Disqualified Capital Stock issued by such Person, with the
amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, and (k) any obligation guaranteeing any obligation of any other
Person that constitutes Indebtedness under any of clauses (a) through (j).

 

“Indemnified
Liabilities” is defined in Section 9.8 of this Agreement.

 

“Indemnitee”
is defined in Section 9.8 of this Agreement.

 

“Intellectual
Property Rights” means all actual or prospective rights arising in connection with any intellectual property or other
proprietary rights, including without limitation all rights arising in connection with copyrights, patents, service marks, trade
dress, trade secrets, trademarks, trade names or mask works.

 

“Interest
Payment Date” is defined in Section 2.6(a) of this Agreement.

 

“Inventory”
shall have the meaning given it under the UCC.

 

“Inventory
Advance Rate” means, with respect to Eligible Inventory, an advance rate established by Lender from time to time in its
reasonable credit judgment in the amount of ninety-five percent (95%) (or such lesser percentage as Lender in its Permitted Discretion
may deem appropriate) of the Net Orderly Liquidation Value of such Eligible Inventory, based upon the most recent inventory appraisal
received by Lender.

 

“Investment
Property” shall have the meaning given it under the UCC.

 

“ISP”
means the International Standby Practices 1998 a publication by the International Chamber of Commerce, or any substitution therefor
or replacement thereof.”

 

“Landlord
Lien State” means any state or other jurisdiction under whose statutory or common law the rights of a landlord to or
in assets of that landlord’s tenant, for unpaid rent, may be senior to a perfected security interest in such assets.

 

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“Lender”
means Salus Capital Partners, LLC, together with its successors and assigns.

 

“Lender Expenses”
is defined in Section 9.7 of this Agreement.

 

“Lender’s
Loan Account” means the account maintained by the Lender which reflects Borrowers’ Indebtedness under the Line
of Credit.

 

“Licenses”
means (a) all license agreements and covenants not to sue with any other party with respect to any patent, trademark, or copyright,
along with any and all (i) renewals, extensions, supplements and continuations thereof, (ii) income, royalties, damages, claims
and payments now and hereafter due and/or payable to any Borrower with respect thereto, including, without limitation, the right
to recover any damages and payments for past, present and future breaches thereof, (iii) rights to sue for past, present and future
breaches thereof, and (iv) other rights to use, exploit or practice any or all of the patents, trademarks or copyrights throughout
the world, in each case whether now owned or hereafter acquired by any Borrower, and (b) the Hosting Agreement and any other agreement
relating to the Website Collateral or any Website, or both.

 

“Licensed
Intellectual Property” is defined in Section 5.8(b) of this Agreement.

 

“LIBOR Rate”
means the variable rate per annum reasonably determined by Lender utilizing www.bankrate.com (or such other electronic or other
quotation source(s) as Lender considers appropriate), to be the Daily One Month LIBOR Rate (being the rate offered on the London
Inter-Bank Market for U.S. Dollar deposits for delivery for a one month period). The applicable LIBOR Rate for any date for which
such rate is not published shall be the rate set forth for the last preceding date. If Lender determines (i) that any law has made
it unlawful, or that any Governmental Authority has asserted that it is unlawful for Lender to determine or charge interest rates
based upon the LIBOR Rate, or (ii) that adequate and reasonable means do not exist for determining the LIBOR Rate, or (iii) that
the LIBOR Rate does not adequately and fairly reflect the cost to Lender of funding amounts under the Line of Credit, then Lender
shall notify Borrowers and upon receipt of such notice, all interest rates hereunder shall thereafter be based upon the Prime Rate;
and in such event, Lender shall adjust the Applicable Margin for any portion of the Line of Credit bearing interest based upon
the LIBOR Rate so as to accurately reflect the change in reference rate to the Prime Rate.

 

“Lien”
means any security interest, mortgage, deed of trust, pledge, lien, charge, encumbrance, title retention agreement or analogous
instrument or device, including, without limitation, the interest of each lessor under any Capitalized Lease and the interest of
any bondsman under any payment or performance bond, in, of or on any assets or properties of a Person, whether now owned or subsequently
acquired and whether arising by agreement or operation of law.

 

“Line of Credit”
has the meaning set forth in the Recitals to this Agreement.

 

“Line of Credit
Usage” means, as of any date of determination, the outstanding principal balance of the Advances.

 

    	14

    	 

    

 

“Loan Documents”
means this Agreement, the Revolving Note, the Fee Letter, each Subordination Agreement, and the Security Documents, together with
every other agreement, note, document, contract or instrument to which any Borrower now or in the future may be a party and which
may be required by Lender in connection with, or as a condition to, the execution of this Agreement or the continued access to
credit hereunder.

 

“Material
Adverse Effect” means any of the following:

 

(a)          A
material adverse effect on the business, operations, results of operations, assets, liabilities or financial condition of Borrowers,
taken as a whole;

 

(b)          A
material adverse effect on the ability of Borrowers to collectively perform their obligations under the Loan Documents, or any
other document or agreement related to this Agreement;

 

(c)          A
material adverse effect on the ability of Lender to enforce the Obligations or to realize the intended benefits of the Security
Documents, including, without limitation, a material adverse effect on the validity or enforceability of any Loan Document or on
the status, existence, perfection, priority (subject to Permitted Liens) or enforceability of any Lien securing payment or performance
of the Obligations; or

 

(d)          A
material adverse deviation in Borrowers’ actual financial performance from Borrowers’ projected financial performance
as set forth in the then current Business Plan.

 

“Material
Contract” means (i) the Flagship Store Lease, the Distribution Center Lease, any other lease for real property involving
aggregate consideration payable by Borrowers in excess of $500,000 per annum, and any agreement evidencing or concerning Subordinated
Debt, (ii) each Material License, and (iii) with respect to any Person, (x) each contract or agreement to which such Person or
any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $250,000
or more in any calendar year (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary
and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business
upon less than sixty 60 days’ notice without penalty or premium) and (y) all other contracts or agreements material to the
business, operations, condition (financial or otherwise), performance or properties of a Borrower or Borrowers taken as a whole.

 

“Material
License” means each license or sublicense by a Borrower, as licensor, of any Owned Intellectual Property or Licensed
Intellectual Property which either (i) involves aggregate payments from the licensee of more than $100,000 per annum, or (ii) grants
to such licensee rights in any category which is part of Borrowers’ core business.

 

“Maturity
Date” means May 31, 2015.

 

“Maximum FILO
Amount” means $9,000,000, 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) $9,000,000, and (ii) seventy-five
percent (75%) of the value of Borrowers’ Intellectual Property Rights using the Relief from Royalty Method Value, based upon
the most recent appraisal of Borrowers’ Intellectual Property Rights received by Lender.

 

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“Maximum Line
of Credit” means $24,000,000.

 

“Multiemployer
Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which Borrowers or any ERISA Affiliate
contributes or is obligated to contribute.

 

“Net Orderly
Liquidation Value” or “NOLV” means the value of Eligible Inventory that is estimated to be recoverable
in an orderly liquidation of such Eligible Inventory, net of liquidation expenses; such value to be as determined from time to
time by Lender in its reasonable credit judgment or by a qualified appraisal company selected by Lender.

 

“Obligations”
means any and all debts, obligations and liabilities of Borrowers to Lender, whether or not such debts, obligations and liabilities
arise under or in respect of this Agreement or the other Loan Documents (including any Funds Transfer and Deposit Account Liability),
whether incurred in the past, present or future, whether voluntary or involuntary, direct or indirect, primary or secondary, and
however arising, and whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether
or not Borrowers may be liable thereunder individually or jointly with others, or whether recovery upon such Indebtedness may subsequently
become unenforceable.

 

“OFAC”
is defined in Section 6.6(b) of this Agreement.

 

“Off-the-Shelf
Software” is defined in Section 5.8(b) of this Agreement.

 

“Officer”
means with respect to any Person, an officer if such Person is a corporation, a manager or managing member if such Person is a
limited liability company, or a partner if such Person is a partnership.

 

“Operating
Account” is defined in Section 2.2(a) of this Agreement.

 

“Overadvance”
means the amount, if any, by which the sum of the aggregate Line of Credit Usage is in excess of the then-existing Borrowing Base.

 

“Owned Intellectual
Property” is defined in Section 5.8(a) of this Agreement.

 

“Owner”
means with respect to any Borrower, each Person having legal or beneficial title to an ownership interest in such Borrower or a
right to acquire such an interest.

 

“Pension Plan”
means a pension plan (as defined in Section 3(2) of ERISA) maintained for employees of Borrowers or any ERISA Affiliate and
covered by Title IV of ERISA.

 

“Permitted
Accounts” is defined in Section 7.16 of this Agreement.

 

“Permitted
Discretion” means a determination by Lender made in good faith and in the exercise of reasonable (from the perspective
of a secured asset-based lender) business judgment.

 

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“Permitted
Holder” means the shareholders of Group as of the Effective Date set forth in Schedule 1 attached hereto, and
any Affiliate of any such Person.

 

“Permitted
Lien” and “Permitted Liens” are defined in Section 7.2 of this Agreement.

 

“Person”
means any individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision of a governmental entity.

 

“PIK Interest”
is defined in Section 2.4(b) of this Agreement.

 

“Plan”
means an employee benefit plan (as defined in Section 3(3) of ERISA) maintained for employees of Borrowers or any ERISA Affiliate.

 

“Pledge Agreement”
means the Pledge Agreement executed by Group, Parent and Frederick’s in favor of Lender pursuant to which each of Group,
Parent and Frederick’s has pledged the Capital Stock of its Subsidiaries as security for the Obligations.

 

“Premises”
is defined in Section 3.5(a) of this Agreement.

 

“Prime Rate”
means the rate per annum which JP Morgan Chase Bank, N.A. announces from time to time as the JP Morgan Chase Prime Rate, as in
effect from time to time.

 

“Proceeds”
shall have the meaning given it under the UCC.

 

“Projections”
shall mean Borrowers’ projected financial statements, inclusive of a projected balance sheet, income statement and statement
of cash flows, each prepared on a month-by-month basis for the next succeeding fiscal year, and on a consolidated and consolidating
basis for Borrowers and each of their Subsidiaries.

 

“Relief from
Royalty Method Value” means, as of any date of determination, the value of Borrowers’ Owned Intellectual Property
based upon the relief from royalty valuation method, as determined by Lender based upon the most recent appraisal of such Owned
Intellectual Property performed by an appraiser satisfactory to Lender.

 

“Reportable
Event” means a reportable event (as defined in Section 4043 of ERISA), other than an event for which the 30-day
notice requirement under ERISA has been waived in regulations issued by the Pension Benefit Guaranty Corporation.

 

“Restricted
Payment” means (a) the declaration or payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of Capital Stock of any Borrower; (b) any payment on
account of the purchase, redemption, defeasance, sinking fund or other retirement of Capital Stock of any Borrower or any other
payment or distribution made in respect thereof, either directly or indirectly; (c) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire Capital Stock
of any Borrower now or hereafter outstanding; (d) any payment of a claim for the rescission of the purchase or sale of, or
for material damages arising from the purchase or sale of, any shares of Capital Stock of any Borrower or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for damages or rescission; (e) any payment, loan,
contribution, or other transfer of funds or other property to any stockholder of any Borrower other than payment of compensation
in the ordinary course of business to holders of Capital Stock who are employees, officers or directors of any Borrower; (f) any
payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to, any Subordinated
Debt; and (g) any payment of management fees, advisory fees, transaction fees or other fees of a similar nature by Borrowers
to any Affiliate or any holder of Capital Stock of any Borrower.

 

    	17

    	 

    

 

“Revolving
Note” is defined in Section 2.1(d) of this Agreement.

 

“Security
Documents” means this Agreement, the Trademark Security Agreement, Copyright Security Agreement, the Pledge Agreement,
each Control Agreement and any other document delivered to Lender from time to time to secure the Obligations.

 

“Software”
means all “software,” as such term is defined in the UCC, now owned or hereafter acquired by Borrowers, other
than software embedded in any category of Goods, including all computer programs and all supporting information provided in connection
with a transaction related to any program.

 

“Solvent”
means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person
is greater than the total amount of liabilities, including Contingent Liabilities, of such Person; (b) the present fair salable
value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person
on its debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is
not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of Contingent Liabilities at any time shall be computed as
the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can be reasonably
be expected to become an actual or matured liability.

 

“Store Account”
means any deposit account maintained by Borrowers for the purpose of collecting Proceeds of Inventory and other Collateral (other
than Credit Card Receivables).

 

“Subordinated
Creditor” means any Person now or in the future subordinating Indebtedness of Borrowers held by that Person to the payment
of the Obligations.

 

“Subordinated
Debt” means Indebtedness approved by Lender that is subordinated to the Obligations on terms and conditions acceptable
to Lender pursuant to a Subordination Agreement, including without limiting the generality of the foregoing, subordination of such
Indebtedness in right of payment to the prior payment in full of the Obligations, the subordination of the priority of any Lien
at any time securing such Indebtedness to Lender’s Liens in Borrowers’ assets and properties and, if applicable, the
subordination of the rights of the holder of such Indebtedness to enforce its junior Lien following a default under such subordinated
Indebtedness.

 

    	18

    	 

    

 

“Subordination
Agreement” means a subordination agreement executed by any Subordinated Creditor in favor of Lender relative to Subordinated
Debt, in form and substance satisfactory to Lender (if more than one, the “Subordination Agreements”).

 

“Subsidiary”
means, with respect to any Person, (a) any corporation of which an aggregate of more than 50% of the outstanding Capital Stock
having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the
time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries
of such Person, or with respect to which any such Person has the right to vote or designate more than 50% of such Capital Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company in which
such Person or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is a general partner or may exercise the powers of
a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of
any Borrower.

 

“Supporting
Obligations” means all “supporting obligations,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrowers, including letters of credit and guaranties issued in support of Accounts, Chattel Paper, Documents,
General Intangibles, Instruments, or Investment Property.

 

“Taxes”
means taxes, levies, imposts, deductions, Charges or withholdings, and all liabilities with respect thereto, provided, however,
that there shall be excluded from “Taxes” all Excluded Taxes.

 

“Termination
Date” is defined in Section 2.1(b) of this Agreement.

 

“Trademark
Security Agreement” means the Trademark Security Agreement executed by Borrowers in favor of Lender.

 

“UCC”
means the Uniform Commercial Code in effect in the state designated herein as the state whose laws shall govern this Agreement,
or in any other state whose laws are held to govern this Agreement or any portion of this Agreement or perfection of Lender’s
Lien in any portion of the Collateral.

 

“Website”
means an Internet website accessible through a Domain Name, as may be modified from time to time.

 

“Website Collateral”
means all data and content maintained by all Hosting Agents pursuant to the Hosting Agreement or any other similar agreement with
any other Person.

 

 

    	19

    	 

    

 

2.            AMOUNT
AND TERMS OF THE LINE OF CREDIT

 

2.1           Line
of Credit; Limitations on Borrowings; Termination Date; Use of Proceeds.

 

(a)            Line
of Credit and Limitations on Borrowing. Subject to the terms and conditions set forth in
this Agreement, Lender shall make Advances under the Line of Credit from time to time through the Termination Date in an
aggregate amount not to exceed at any time the lesser of (i) the Maximum Line of Credit, and (ii) the Borrowing Base.
Borrowers may periodically borrow, repay in whole or in part, and reborrow under the Line of Credit as provided in this
Agreement; provided, however, that amounts repaid by Borrowers on account of the FILO Advance may not be
reborrowed by Borrowers. Lender has no obligation to make any Advance (x) at any time that a Default or Event of Default has
occurred and is continuing, or (y) if an Overadvance has or would occur after giving effect to the requested
Advance.

 

(b)
          FILO Advance. Lender and
Borrowers acknowledge and agree that the FILO Advance constitutes a “first in last out” tranche of the aggregate
Advances made by Lender to Borrowers under this Agreement and, except as otherwise expressly provided herein, shall be the
last principal portion of Advances repaid hereunder. Except for amounts repaid under Sections 2.1(f)(ii), 2.1(h)
and 2(i) hereof, amounts repaid on account of the principal balance of the Advances by or on behalf of the Borrowers,
or proceeds realized upon Collateral, whether prior to or following the occurrence of an Event of Default, shall be applied
first, to reduce the principal balance of the Advances other than the FILO Advance, until paid in full, and then against the
FILO Advance.

 

(c)           Termination
Date. Borrowers may request Advances from the date that the conditions set forth in Section
4 hereof are satisfied until the date (the “Termination Date”) of the earliest to occur of (i) the
Maturity Date, (ii) the date Borrowers terminate the Line of Credit in accordance with Section 2.7 hereof, or (iii)
the date Lender terminates the Line of Credit following an Event of Default in accordance with the terms of this
Agreement.

 

(d)
          Use of Line of Credit Proceeds.
Borrowers shall use the proceeds of each Advance only (i) on the Closing Date, to repay in full all Indebtedness of Borrowers
secured by any of their assets (other than Indebtedness secured by Permitted Liens) outstanding on the date of this
Agreement, (ii) for payment of Lender Expenses, including without limitation, transaction fees and expenses incurred in
connection with the transactions contemplated by this Agreement, and (iii) general corporate purposes, to the extent not
violative of this Agreement.

 

(e)
          Revolving Note.
Borrowers’ obligation to repay the Advances and other Obligations, regardless of how initiated under Section 2.2
hereof, shall be evidenced by a revolving promissory note (as renewed, amended, restated, modified, substituted or replaced
from time to time, the “Revolving Note”) in substantially the form attached hereto as Exhibit
A.

 

    	20

    	 

    

 

(f)            Overadvances.

 

(i)          Lender
shall have no obligation to make any Advance if an Overadvance exists or would result from the making of such Advance. If at any
time the Line of Credit Usage exceeds the lesser of (A) the Maximum Line of Credit, or (b) the Borrowing Base, Borrowers shall
immediately repay the Advances in an amount sufficient to eliminate such excess, and if payment in full of the Advances is insufficient
to eliminate such excess, then Borrowers shall deliver cash to Lender in an amount equal to the remaining excess, unless Lender
otherwise consents to such Overadvance, in which event the Overadvance shall be temporarily permitted on such terms and conditions
as Lender in its sole discretion may deem appropriate, including, without limitation, the payment of additional fees or interest,
or both. Any amounts paid by Borrowers to Lender pursuant to this Section 2.1(f)(i) may be applied by Lender to repay Advances
or other amounts outstanding hereunder.

 

(ii)         If
at any time, the outstanding balance of the FILO Advance exceeds the Maximum FILO Amount, Borrowers shall immediately repay the
Advances in an amount sufficient to eliminate such excess, such amount to be applied by Lender to the outstanding balance of the
FILO Advance.

 

(g)          Mandatory
Prepayments upon Dispositions of Collateral Other than Intellectual Property. Immediately upon
receipt by Borrowers of any cash proceeds of any disposition of Collateral, other than Collateral consisting of Owned Intellectual
Property, Borrowers shall prepay the Line of Credit in an amount equal to 100% of the amount of such proceeds, net of (i) commissions
and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by
Borrowers in connection therewith (in each case, payable to non-Affiliates), and (ii) transfer taxes. Any such prepayment shall
be applied to the Obligations in accordance with Section 2.3(c) hereof. The provisions of this Section 2.1(g) shall
not apply to the disposition or transfer of obsolete, damaged and worn-out Equipment, provided that the proceeds thereof are used
within 120 days of such disposition to acquire replacement Equipment or other capital assets used or useful in Borrowers’
business. Nothing in this Section 2.1(g) shall be construed to constitute Lender’s consent to any transaction that
is prohibited or restricted by other provisions of this Agreement or the other Loan Documents.

 

(h)          Mandatory
Prepayments on Account of Dispositions of Owned Intellectual Property. Immediately upon receipt
by Borrowers of any cash proceeds of any disposition of Owned Intellectual Property, Borrowers shall prepay the Line of Credit
in an amount equal to 100% of the amount of such proceeds, net of (i) commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such transaction and payable by Borrowers in connection therewith (in each case,
payable to non-Affiliates), (ii) transfer taxes, and (iii) an appropriate reserve for income taxes in accordance with GAAP in connection
therewith. Nothing in this Section 2.1(h) shall be construed to constitute Lender’s consent to any transaction that
is prohibited or restricted by other provisions of this Agreement or the other Loan Documents. Any payment made by Borrowers pursuant
to this Section 2.1(h) shall be applied to the outstanding balance of the Advances with a corresponding permanent reduction
in both the Maximum FILO Amount and the Maximum Line of Credit.

 

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(i)          Mandatory
Prepayments for Excess Cash Flow. Within ten (10) days following delivery to Lender of Borrower’s
audited financial statements delivered pursuant to Section 6.1(a) hereof, commencing with the fiscal year ending July 27,
2013, Borrowers shall pay to Lender an amount equal to twenty-five percent (25%) of Borrowers’ Excess Cash Flow for the most
recent fiscal year covered by such financial statements; provided, however, that amounts payable by Borrowers pursuant
to this Section 2.1(i) shall be reduced by the amount of any prepayments made by Borrowers on account of the Line of Credit
during such fiscal year that resulted in a permanent reduction in the Maximum Line of Credit. Amounts paid by Borrowers pursuant
to this Section 2.1(i) shall be applied by Lender first, to the outstanding balance of the PIK Interest, until paid in full,
and then to prepay the outstanding balance of the Advances, with a corresponding permanent reduction in both the Maximum FILO Amount
and the Maximum Line of Credit.

 

2.2           Procedures
for Advances.

 

(a)          Advances
Credited to Operating Account. All Advances shall be credited to Borrowers’ demand deposit
Account No.  xxxxx maintained by Borrowers with the Cash Management Bank (the “Operating Account”) (which
account shall at all times be subject to a Control Agreement in favor of Lender), unless the parties agree to disburse to another
account with respect to which Lender will not unreasonably withhold agreement.

 

(b)          Advances
upon Borrowers’ Request. Borrowers may request one or more Advances on any Business Day
by delivery of an advance request to Lender (an “Advance Request”) no later than 1:30 p.m. (New York time),
on the Business Day on which Borrowers desire the Advance to be funded, which Advance Request shall specify the amount of the requested
Advance and the proposed date of funding of such Advance, and shall be accompanied by a Borrowing Base Certificate executed by
a Designated Officer. No request for an Advance will be deemed received until Lender acknowledges receipt. Borrowers shall repay
all Advances when due, even if the Person requesting the Advance on behalf of Borrowers lacked authorization.

 

(c)          Protective
Advances; Advances to Pay Obligations Due. Lender may initiate an Advance under the Line of Credit
in its Permitted Discretion at any time, with notice to Borrowers of such Advance promptly thereafter, without Borrowers’
compliance with any of the conditions of this Agreement, and (i) disburse the proceeds thereof directly to third Persons in order
to preserve or protect Lender’s interest in Collateral or to perform any of Borrowers’ obligations contemplated by
this Agreement, or (ii) apply the proceeds to the amount of any Obligations then due and payable to Lender.

 

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2.3           Collection
of Accounts and Application to Obligations.

 

(a)          Store
Accounts. Borrowers have granted a security interest to Lender in the Collateral,
including, without limitation, all Inventory, Credit Card Receivables and other Accounts. Except as otherwise set forth in Section
2.3(b) hereof with respect to Credit Card Receivables and other Accounts, and except for cash on hand maintained at store
locations in the ordinary course of Borrowers’ business and consistent with historical practices (but in an amount not
to exceed $1,000 for any store location at the beginning of any Business Day), or as otherwise agreed by Lender in writing,
all Proceeds of Inventory and other Collateral, upon receipt or collection, shall be deposited each Business Day into the
collection Account No. xxxxx  maintained by Borrowers with the Cash Management Bank (the “Collection
Account”), or into a Store Account for transfer not less than once during each business week (except to the extent
that Lender in its sole discretion agrees to less frequent transfers) from such Store Account to the Collection Account;
provided that all Proceeds of Inventory and other Collateral in the Bank of America Collection Account shall be deposited
each Business Day into the Collection Account. Funds so deposited are the Collateral of Lender, and may only be withdrawn
from Store Accounts for deposit to the Collection Account. Borrowers and/or Lender shall cause the transfer of all collected
funds in the Collection Account to be transferred by the Cash Management Bank to Lender on each Business Day for application
by the Lender to the outstanding balance of the Line of Credit Usage. In the event there are no Obligations outstanding under
the Line of Credit, Lender shall promptly transfer any excess funds to the Cash Management Bank for credit to the
Borrowers’ Operating Account. Until deposited into a Store Account or the Collection Account, Borrowers will hold all
such payments and Proceeds in trust for Lender without commingling with other funds or property. All deposits held in any
Store Account or the Collection Account shall constitute Proceeds of Collateral and shall not constitute payment of
Obligations.

 

(b)          Payment
of Credit Card Receivables and Other Accounts. Borrowers shall instruct all account debtors other
than in respect of Credit Card Receivables to make payments in respect of such Accounts directly to the Collection Account or to
a Store Account for transfer to the Collection Account. Borrowers shall instruct all Credit Card Processors to make payments in
respect of Credit Card Receivables directly to a Credit Card Collection Account or the Collection Account. All payments and Proceeds
of Credit Card Receivables deposited into a Credit Card Collection Account shall be remitted each Business Day from such Credit
Card Collection Account to the Collection Account (except to the extent that Lender in its sole discretion agrees to less frequent
transfers or the proceeds of Credit Card Receivables are deposited directly to the Collection Account). If Borrowers receive a
payment or the Proceeds of Credit Card Receivables or other Accounts directly, Borrowers shall promptly deposit such payment or
Proceeds into the Collection Account or into a Store Account for transfer to the Collection Account. Funds so deposited (“Credit
Card and Account Funds” and, collectively with funds on deposit in the Store Accounts, “Account Funds”)
are the property of Lender, and may only be withdrawn from the Store Accounts, Credit Card Collection Accounts, or Collection Account
by direction of Lender. Until deposited into the Collection Account, Borrowers shall hold all such payments and Proceeds in trust
for Lender without commingling with other funds or property. All deposits held in any Credit Card Collection Account or the Collection
Account shall constitute Proceeds of Collateral and shall not constitute the payment of Obligations.

 

(c)          Application
of Payments to Obligations

 

(i)          Borrowers
and/or Lender shall cause all collected funds in the Collection Account to be transferred by the Cash Management Bank to the Lender’s
Loan Account on each Business Day for application to the Obligations. For purposes of calculating Availability under the Line of
Credit, collected funds transferred by the Cash Management Bank and deposited into Lender’s Loan Account shall be applied
to the outstanding balance of the Advances on the first Business Day following the Business Day of deposit to the Lender’s
Loan Account. Prior to the occurrence of an Event of Default, amounts applied to the outstanding balance of the Advances pursuant
to this Section 2.3(c) shall be applied first, to the balance of the Advances (excluding the FILO Advance), until paid in
full, and then to the balance of the FILO Advance.

 

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(ii)         Without
limiting the foregoing, at any time during a Default Period, Account Funds and any other proceeds of Collateral shall be applied
first, to Lender Expenses; second, to fees payable under Section 2.5 hereof and the Fee Letter; third, to other fees and
expenses otherwise payable hereunder; fourth, to interest on the outstanding Obligations; fifth, subject to the next succeeding
clause “sixth”, to the outstanding Line of Credit Usage; sixth, to the FILO Advance; and seventh, to any other outstanding
Obligations (including, without limitation, to cash collateralize any contingent or unliquidated Obligations).

 

2.4           Interest
and Interest Related Matters.

 

(a)          Interest
Rate Applicable to the Line of Credit. Except as otherwise provided in this Agreement, the unpaid
principal amount of each Advance (other than the FILO Advance) shall bear interest at a rate per annum equal to sum of (x) the
Prime Rate, plus (y) the Applicable Margin; provided, that the effective interest rate payable by Borrowers with
respect to such Advances shall at no time be less than seven percent (7.0%) per annum, which minimum interest rate will apply regardless
of fluctuations in the Prime Rate that would otherwise cause the interest rate applicable to such Advances to be less than such
minimum interest rate floor.

 

(b)          Interest
Rate Applicable to the FILO Advance. Except as otherwise provided in this Agreement, the unpaid
principal amount of the FILO Advance shall bear interest at a rate per annum equal to sum of (x) the LIBOR Rate, plus (y)
the Applicable Margin; provided, that the effective interest rate payable by Borrowers with respect to the FILO Advance
shall at no time be less than twelve percent (12.0%) per annum, which minimum interest rate will apply regardless of fluctuations
in the LIBOR Rate that would otherwise cause the interest rate applicable to the FILO Advance to be less than such minimum interest
rate floor. Unless Borrower elects a lesser amount, so long as no Event of Default has occurred and is continuing, a portion of
the interest payable on the FILO Advance equal to two and one-half percent (2.5%) per annum shall capitalized, compounded, and
added to the unpaid principal amount of the Obligations on each Interest Payment Date whereupon from and after such date such additional
amounts shall also accrue interest at the rate applicable to the FILO Advance (“PIK Interest”). Upon the occurrence
and continuance of an Event of Default, all PIK Interest shall be converted to cash interest and become immediately due and payable
upon demand by Lender. Unless sooner paid pursuant to Section 2.1(i) hereof, all PIK Interest shall be due and payable in
cash on the Termination Date. All PIK Interest shall constitute a portion of the Obligations, bear interest at the rate applicable
to the FILO Advance as provided above in this Section 2.4(b) but, for purposes of calculating Availability hereunder such
PIK Interest shall be deemed not to constitute Advances or Line of Credit Usage hereunder. 

 

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(c)          Default
Interest Rate. Commencing on the day an Event of Default occurs, through and including the date
identified by Lender in writing as the date that the Event of Default has been cured or waived (each such period a “Default
Period”), or during a time period specified in Section 2.7 hereof, or at any time following the Termination
Date, in Lender’s sole discretion and without waiving any of its other rights or remedies and without prior notice of its
application or any notice of retroactive application in the event that Lender does not impose the Default Rate on the first day
of any Default Period, the outstanding balance of the Obligations shall bear interest at a rate that is two percent (2.0)%) above
the applicable contractual rate set forth in Section 2.4(a) hereof for each Advance, or Section 2.4(b) for the
FILO Advance, as the case may be (the “Default Rate”). Lender shall promptly give written notice to Borrowers
of any imposition of the Default Rate.

 

(d)          Interest
Accrual on Payments Applied to Obligations. Payments received by Lender shall be applied to the
Obligations as provided in Section 2.3(c) hereof, but the principal amount paid down shall continue to accrue interest at
the applicable rate hereunder through the end of the first Business Day following the Business Day that such payment was applied
to the Obligations.

 

(e)          Usury.
No interest rate shall be effective which would result in a rate greater than the highest rate permitted by law. Payments in the
nature of interest described in or related to this Agreement that are later determined to be in excess of the limits imposed by
applicable usury law will be deemed to be a payment of principal, and the Obligations shall be reduced by that amount so that such
payments will not be deemed usurious.

 

2.5           Fees.
Borrowers shall pay to Lender fees in the amounts, and at the times, specified in the Fee Letter. All such fees shall be fully
earned, due and payable as provided in the Fee Letter.

 

2.6           Interest
Accrual; Principal and Interest Payments; Computation.

 

(a)          Interest
Payments and Interest Accrual. Accrued and unpaid interest on the outstanding balance of the
Advances shall be due and payable on the first day of each month (each an “Interest Payment Date”) and on the
Termination Date, and shall be paid or the date due by Lender initiating an Advance in the manner provided in Section 2.2(c)
hereof. Interest on each Advance shall accrue from the most recent date on which interest has been paid for such Advance or, if
no interest has been paid, from the date of such Advance to the Interest Payment Date.

 

(b)          Payment
of Advances. The principal amount of the Advances shall be paid from time to time as provided
in this Agreement, and all Obligations shall be fully due and payable on the Termination Date.

 

(c)          Payments
Due on Non Business Days. If any payment required to be made hereunder is due on a day which
is not a Business Day (including, without limitation, any Interest Payment Date or the Termination Date), such payment shall be
made on the next Business Day, and interest shall continue to accrue during that time period.

 

(d)          Computation
of Interest and Fees. Interest accruing on the unpaid principal amount of the Advances and all
fees payable under this Agreement shall be computed on the basis of the actual number of days elapsed in a year of 360 days.

 

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(e)          Liability
Records. Lender shall maintain accounting and bookkeeping records of all Advances and payments
under the Line of Credit and all other Obligations due to Lender pursuant to this Agreement in such form and content as Lender
in its Permitted Discretion deems appropriate. Lender’s calculation of current Obligations shall be presumed correct unless
proven otherwise by Borrowers. Upon Lender’s request, Borrowers shall admit and certify in writing the exact principal balance
of the Obligations that Borrowers then believe to be outstanding pursuant to this Agreement. Any billing statement or accounting
provided by Lender shall be conclusive and binding unless Borrowers notify Lender in a detailed notice of its intention to dispute
the billing statement or accounting within thirty (30) days of receipt.

 

2.7          Termination
or Reduction of Line of Credit by Borrowers; Notice.

 

(a)          Termination
by Borrower after Advance Notice. Borrowers may terminate the Line of Credit at any time prior
to the Maturity Date if Borrowers (i) deliver written notice to Lender of Borrowers’ intentions at least ninety (90)
days prior to the proposed Termination Date (or thirty (30) days prior to the proposed Termination Date in the event of a sale
of all or substantially all of the assets or Capital Stock of the Borrowers resulting in a Change of Control), (ii) pay Lender
the applicable termination fee set forth in paragraph 4 of the Fee Letter, and (iii) repay the Obligations in full on the
termination date indentified by Borrowers in such notice.

 

(b)          Termination
by Borrowers without Advance Notice. If Borrowers fail to deliver Lender timely notice of Borrowers’
intention to terminate the Line of Credit as provided in Section 2.7(a) hereof, Borrowers may nevertheless terminate
the Line of Credit and pay the Obligations in full if Borrowers (i) pay the applicable termination fee set forth in paragraph
4 of the Fee Letter, if any, and (ii) pay additional interest for each day that the notice was short of the required ninety
(90) days notice (or required thirty (30) days notice in the event of a sale of all or substantially all of the assets or Capital
Stock of the Borrowers resulting in a Change of Control), which interest shall be in an amount that is equal to the interest calculated
at the Default Rate based on Borrowers’ average borrowings under the Line of Credit for the two months prior to the date
that Lender receives notice from Borrowers giving it actual notice of Borrowers’ intention to terminate or reduce the Line
of Credit.

 

(c)          Reduction
of Line of Credit. Borrowers may at any time and from time to time prior to the Maturity Date
reduce the Maximum Line of Credit (in a minimum amount of $3,000,000 and increments of $1,000,000), upon not less than thirty (30)
days prior written notice specifying the proposed amount of reduction of the Maximum Line of Credit, and the effective date of
such reduction; provided, that on or before such date Borrowers shall have (i) repaid the outstanding balance of the
Advances such that the Line of Credit Usage shall not exceed the reduced amount of the Maximum Line of Credit (together with all
accrued but unpaid interest on such amount through the date of repayment including, to the extent that the Borrower is reducing
the Maximum FILO Amount, all accrued PIK Interest on the portion of the FILO Advance Amount so repaid), and (ii) paid to Lender
the applicable reduction fee payable under paragraph 4 of the Fee Letter relative to such reduction in the Maximum Line of Credit.
Any voluntary reduction by the Borrowers of the Maximum Line of Credit shall not reduce the Maximum FILO Amount unless and until
the Maximum Line of Credit is reduced to an amount less than the Maximum FILO Amount.

 

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2.8           Payments
Free of Taxes.

 

(a)          No
Withholding Taxes. Any and all payments by or on account of any Obligations of Borrowers hereunder
or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future Taxes.
If Borrowers shall be required by law to deduct any Taxes from or in respect of any sum payable under this Agreement (including
any payments made pursuant to Section 9.8 hereof) or under any other Loan Document, (i) the sum payable shall
be increased as much as shall be necessary so that after making all required deductions (including deductions applicable to additional
sums payable under this Section 2.8) Lender receives an amount equal to the sum it would have received had no such deductions
been made, (ii) Borrowers shall make such deductions, and (iii) Borrowers shall pay the full amount deducted to the relevant
taxing or other Governmental Authority in accordance with applicable law. Within thirty (30) days after the date of any payment
of Taxes, Borrowers shall furnish to Lender a certified copy of a receipt evidencing payment thereof.

 

(b)          Indemnity
by Borrowers. Borrowers shall indemnify Lender and within ten (10) days of demand therefor, pay
Lender for the full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts payable under this Section 2.8)
paid by Lender and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether
or not such Taxes were correctly or legally asserted.

 

2.9           Increased
Costs.

 

(a)          Increased
Costs Generally. If any Change in Law shall:

 

(i)          impose,
modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated in by Lender;

 

(ii)         subject
Lender to any tax of any kind whatsoever with respect to this Agreement or any Advance made by it, or change the basis of taxation
of payments to Lender in respect thereof; or

 

(iii)        impose
on Lender any other condition, cost or expense affecting this Agreement or any Advance made by Lender;

 

and the result of any of the foregoing
shall be to increase the cost to Lender of making or maintaining any Advances, or to reduce the amount of any sum received or receivable
by Lender hereunder (whether of principal, interest or any other amount) then, upon request of Lender, Borrowers shall pay to Lender
such additional amount or amounts as will compensate Lender for such additional costs incurred or reduction suffered.

 

(b)          Capital
Requirements. If Lender determines that any Change in Law affecting Lender regarding capital
requirements has or would have the effect of reducing the rate of return on Lender’s capital as a consequence of this Agreement,
including the Advances made by Lender hereunder, to a level below that which Lender could have achieved but for such Change in
Law (taking into consideration Lender’s policies with respect to capital adequacy), then from time to time Borrowers shall
pay to Lender such additional amount or amounts as will compensate Lender for any such reduction suffered.

 

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(c)          Certificates
for Reimbursement. Lender’s notice to Borrowers setting forth the amount or amounts necessary
to compensate Lender as specified in subsection (a) or (b) of this Section 2.9 in reasonable detail sufficient
to allow Borrowers to verify such calculation, and delivered to Borrowers shall be conclusive absent manifest error. Borrowers
shall pay Lender the amount shown as due in such notice to Borrowers within five (5) days after receipt thereof.

 

(d)          Delay
in Requests. Failure or delay on the part of Lender to demand compensation pursuant to the foregoing
provisions of this Section 2.9 shall not constitute a waiver of Lender’s right to demand such compensation, provided
that Borrowers shall not be required to compensate Lender pursuant to the foregoing provisions of this Section 2.9
for any increased costs incurred or reductions suffered more than six (6) months prior to the date that Lender notifies Borrowers
of the Change in Law giving rise to such increased costs or reductions and of Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six (6) month period
referred to above shall be extended to include the period of retroactive effect thereof).

 

2.10         Survival.
All of Borrowers’ obligations under Sections 2.8 and 2.9 shall survive termination of Lender’s obligation
to make any Advance and the repayment of all Obligations hereunder.

 

2.11         Consolidated
Credit Facility; Joint and Several Obligations. Each Borrower acknowledges that it is jointly
and severally liable for all of the Obligations. Each Borrower expressly understands, agrees and acknowledges that (i) Borrowers
are all affiliated entities by common ownership, (ii) each Borrower desires to have the availability of one common credit facility
instead of separate credit facilities, (iii) each Borrower has requested that Lender extend such a common credit facility to Borrowers
on the terms provided herein, (iv) Lender will be lending against, and relying on a Lien upon, all or substantially all of the
assets of Borrowers even though the proceeds of any particular Advance made hereunder may not be advanced directly to or on behalf
of a particular Borrower, (v) each Borrower will benefit by the making of Advances and the availability of a credit facility of
a size greater than each could independently warrant, and (vi) all of the representations, warranties, covenants, obligations,
conditions, agreements and other terms contained in the Loan Documents shall be applicable to and shall be binding upon each Borrower.

 

2.12         Borrower
Representative. Each Borrower hereby designates Group as its representative and agent on its
behalf (Group, in such capacity, “Borrower Representative”) for the purposes of requesting and giving instructions
with respect to disbursement of proceeds of the Advances, effecting repayment of the Advances, and giving and receiving all other
notices and consents under this Agreement or under any of the other Loan Documents and taking all other actions (including with
respect to compliance with covenants) on behalf of any Borrower or Borrowers under the Loan Documents. Group hereby accepts such
appointment. Lender may regard any notice or other communication pursuant to any Loan Document from Borrower Representative as
a notice or communication from all Borrowers, and may give any notice or communication required or permitted to be given to any
Borrower or Borrowers under the Loan Documents to Borrower Representative on behalf of such Borrower or Borrowers. Each Borrower
agrees that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against
such Borrower to the same extent as if the same had been made directly by such Borrower.

 

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3.            SECURITY
INTEREST AND THE COLLATERAL AND LENDER’S RIGHTS CONCERNING THE COLLATERAL

 

3.1           Security
Interest and the Collateral.

 

(a)          Grant
of Security Interest. Borrowers hereby pledge, assign and grant to Lender a Lien and security
interest in the Collateral, as security for the payment and performance of the Obligations.

 

(b)          Exclusions
from Collateral. Notwithstanding the foregoing, the term “Collateral” shall not include
any Borrower’s right, title or interest in, and such Borrower shall not be required to grant a Lien upon:

 

(i)          any
lease, license, contract or other agreement to which such Borrower is a party or any of such Borrower’s rights or interests
thereunder if and for so long as the valid grant of a Lien therein to Lender is prohibited as a matter of law or under the terms
of such lease, license, contract or other agreement (including where the violation of any such prohibition would result in the
termination of the applicable lease, license, contract or other agreement), and such prohibition has not been or is not waived
or the consent of the other party to such lease, license, contract or other agreement, has not been or is not otherwise obtained;
provided, that the exclusions set forth in this Section 3.1(b)(i) shall in no way be construed (A) to apply if
any described prohibition is unenforceable under applicable laws, including Section 9-406, 9-407 or 9-408 of the UCC, (B) to
apply after the cessation of any such prohibition, and upon the cessation of such prohibition, such property shall automatically
become part of the Collateral, (C) so as to limit, impair or otherwise affect Lender’s Lien upon such Borrower’s
rights or interests in or to monies due or to become due under any described lease, license, contract or other agreement (including
any Accounts), or (D) to limit, impair or otherwise affect Lender’s Lien upon any of such Borrower’s rights or
interest in and to any proceeds from the sale, license, lease or other disposition of any such lease, license, contract or other
agreement; and

 

(ii)         more
than 65% of the Capital Stock entitled to vote (within the meaning of Treasury Regulation Section 1.956-2(c)(2) promulgated
under the Internal Revenue Code) in any Subsidiary of any Borrower which is organized under the laws of any jurisdiction outside
the United States that constitutes a “controlled foreign corporation” under Section 957 of the Internal Revenue
Code of 1986, as amended from time to time.

 

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(c)          Further
Actions Required of Borrowers

 

(i)          Borrowers
shall defend the right, title and interest of Lender in and to the Collateral against the claims and demands of all Persons whomsoever,
and shall take all such actions requested by Lender in order to preserve, protect and enhance Lender’s Lien in any Collateral,
including, without limitation, (i) all actions necessary to grant Lender “control” of any Investment Property,
Deposit Accounts, Letter of Credit Rights or electronic Chattel Paper owned by Borrowers, with any agreements establishing control
to be in form and substance reasonably satisfactory to Lender, (ii) the delivery to Lender of all original Instruments, Chattel
Paper, negotiable Documents and certificated Capital Stock owned by Borrowers (in each case, accompanied by stock powers, allonges
or other instruments of transfer executed in blank) promptly after Borrowers receive same, (iii) notification to third parties
of Lender’s interest in Collateral at the request of Lender, (iv) preparation and delivery of all applications and other
relevant actions to note Lender’s Lien on any certificate of title, and (v) the institution of litigation against third parties
as shall be prudent in order to protect and preserve Borrowers’ and Lender’s respective and several interests in the
Collateral. If Borrowers retain possession of any Chattel Paper or Instruments with the consent of Lender, then such Chattel Paper
and Instruments shall be marked with the following legend: “THIS WRITING AND THE OBLIGATIONS EVIDENCED OR SECURED HEREBY
ARE SUBJECT TO THE LIEN OF SALUS CAPITAL PARTNERS, LLC.” Borrowers shall promptly notify Lender of any Commercial Tort Claim
acquired by them and unless otherwise consented to by Lender, Borrowers shall enter into a supplement to this Agreement granting
to Lender a Lien in such Commercial Tort Claim.

 

(ii)         Borrowers
shall execute and deliver, and record or have recorded, any and all agreements, instruments, documents and papers as the Lender
may reasonably request to evidence the Lender’s security interest in any copyright or trademark owned by Borrowers, including,
without limitation, any copyright or trademark registered outside of the United States, and Borrowers hereby constitute the Lender
as their attorney-in-fact to execute and file all such writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed.

 

3.2           Lender’s
Rights Concerning the Collateral

 

(a)          Account
Verification and Notifying Account Debtors and Other Obligors. During a Default Period, Lender
or its agents may (i) contact account debtors or any other Person obligated on the Collateral to verify Borrowers’ Accounts;
(ii) require Borrowers to send requests for verification of Accounts or send notices of assignment of Accounts to account
debtors or other Persons obligated on the Collateral; and (iii) deliver a notice to an account debtor or other Person obligated
on the Collateral that the amount due has been assigned to Lender for security and must be paid directly to Lender. Borrowers shall
join in giving such notice and shall execute the same upon Lender’s request. Once any such notice has been given to any account
debtor or other Person obligated on the Collateral, Borrowers shall not give any contrary instructions to such account debtor or
other Person without Lender’s prior written consent.

 

(b)          Collection
of Collateral. During any Default Period, Lender may, but need not, in Lender’s or in any
Borrower’s name, demand, sue for, collect or receive any money or property at any time payable or receivable on account of,
or securing, any Account, General Intangible, or other amount due, or grant any extension to, make any compromise or settlement
with or otherwise agree to waive, modify, amend or change the obligations (including, without limitation, collateral obligations)
of any account debtor or other obligor. Following the occurrence of an Event of Default, Lender shall have all rights of a secured
party under the UCC, applicable law and at equity.

 

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(c)          Performance
by Lender of Borrowers’ Obligations. If any Borrower fails to perform or observe any of
its obligations under this Agreement at any time, Lender may, but need not, perform or observe such obligations on behalf of such
Borrower and may, but need not, take any other actions which Lender may reasonably deem necessary to cure or correct such failure;
and Borrowers shall pay Lender upon demand, all resulting Lender Expenses, including without limitation, the amount of all out-of
pocket costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Lender in performing such obligations,
together with interest on all such amounts at the Default Rate.

 

(d)          Borrowers’
Continuing Obligation under Contracts. It is expressly agreed by each Borrower that it shall
remain liable under each of its contracts to observe and perform all the conditions and obligations to be observed and performed
by it thereunder, and Lender shall have no obligation or liability whatsoever to any Person under any contract (between such Borrower
and any Person other than Lender) by reason of or arising out of the execution, delivery or performance of this Agreement, and
Lender shall not be required or obligated in any manner (i) to perform or fulfill any of the obligations of such Borrower
thereunder, (ii) to make any payment or inquiry, or (iii) to take any action of any kind to collect or enforce any performance
or the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times under or pursuant
to any contract.

 

(e)           Access
and Inspections of the Collateral.

 

(i)          Borrowers
shall, with respect to each owned, leased, or controlled property or facility, during normal business hours and upon reasonable
advance notice (unless a Default or an Event of Default has occurred and is continuing, in which event no prior notice shall be
required and Lender shall have access at any and all times): (i) provide access to such facility or property to Lender and
any of its officers, employees and agents, as frequently as Lender reasonably determines to be appropriate, but subject to the
terms and provisions of any applicable leases; (ii) permit Lender and any of its officers, employees and agents to inspect,
audit and make extracts from Borrowers’ books and records; and (iii) permit Lender to inspect, review, evaluate and
make physical verifications, appraisals and examinations of the Inventory and other Collateral, all at Borrowers’ cost and
expense; provided, however, that unless an Event of Default has occurred and is continuing, Borrowers shall not be
responsible for the costs and expenses associated with more than two (2) such inspections in each twelve (12) month period following
the Closing Date. Borrowers shall make available to Lender and its advisors and representatives, as quickly as practicable under
the circumstances, originals or copies of Borrowers’ books and records and any other instruments and documents that Lender
may reasonably request. Borrowers shall deliver any document or instrument reasonably necessary for Lender, as it may from time
to time reasonably request, to obtain records from any service bureau or other Person that maintains records for Borrowers.

 

(ii)         Lender
shall have the right to have the Borrowers’ Intellectual Property Rights appraised by an appraiser satisfactory to Lender
at any time and from time to time; provided, however, that unless an Event of Default has occurred and is continuing,
Borrowers shall not be responsible for the costs and expenses associated with more than one (1) such appraisal in each eighteen
(18) month period following the Closing Date.

 

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(f)          Background
Investigations. Lender may obtain, from time to time at Borrowers’ cost and expense, background
investigations and verifications relative to Borrowers, its senior management employees and material holders of Capital Stock,
which investigations may include, without limitation, information regarding business affiliations, background verification, verification
of education and certifications, civil and criminal litigation histories, judgments, tax liens, bankruptcies, credit histories,
verification of information provided and other possible public records information available; provided, however,
with respect to any Person, unless a Default Period exists, Lender shall not conduct such investigations more frequently than once
in each twelve (12) month period following the Closing Date.

 

(g)          Authorization
to Borrowers’ Agents to Make Disclosures to Lender. Borrowers authorize all accountants
and other Persons acting as their agent to disclose and deliver to Lender’s employees, accountants, attorneys and other Persons
acting as its agent, at Borrowers’ expense, all financial information, books and records, work papers, management reports
and other information in their possession regarding Borrowers, their business and assets. Borrowers, at their own expense, shall
cause its independent certified public accountants to deliver to Lender the results of (i) any physical verifications of all
or any portion of the Inventory made or observed by such accountants and (ii) any verifications of Borrowers’ Accounts,
in each case when and if any such verifications are conducted. Lender shall be permitted to observe and consult with Borrowers
and Borrowers’ certified public accountants in the performance of these tasks.

 

3.3           Power
of Attorney.  Borrowers hereby irrevocably make, constitute, and appoint Lender (and any of Lender’s
officers, employees or agents designated by Lender) as Borrowers’ true and lawful attorney-in-fact, with power to: (a) sign
the name of Borrowers on any document to be executed, recorded or filed in order to perfect or continue perfected Lender’s
Lien upon the Collateral if Borrowers fail to do so promptly after request therefor by Lender; (b) sign any Borrower’s
name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts,
verifications of Accounts and notices to account debtors; (c) send requests for verification of Accounts; (d) endorse
any Borrower’s name on any checks, notices, acceptances, money orders, drafts, or other forms of payment or security that
may come into Lender’s possession; and (e) during any Default Period, (i) notify the post office authorities to
change the address for delivery of any Borrower’s mail to an address designated by Lender, to receive and open all mail addressed
to Borrowers, and to retain all mail relating to the Collateral and forward all other mail to Borrowers last known address, (ii) make,
settle, and adjust all claims under Borrowers’ policies of insurance and make all determinations and decisions with respect
to such policies of insurance, and (iii) settle and adjust disputes and claims respecting the Accounts directly with account
debtors, for amounts and upon terms which Lender determines to be reasonable, and Lender may cause to be executed and delivered
any documents and releases which Lender determines to be necessary. The appointment of Lender as Borrowers’ attorney-in-fact,
and each and every one of the rights and powers of Lender, being coupled with an interest, is irrevocable until the Termination
Date. NEITHER LENDER, NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO BORROWERS
FOR ANY ACT OR FAILURE TO ACT PURSUANT TO THE POWERS GRANTED UNDER THE POWER OF ATTORNEY HEREIN OR OTHERWISE, EXCEPT FOR ITS OR
THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

 

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3.4          Assignment
of Insurance. As additional security for the Obligations, Borrowers hereby assign to Lender all
rights of Borrowers under every policy of insurance covering the Collateral and all business records and other documents relating
thereto, and all monies (including, without limitation, all proceeds and refunds) that may be payable to Borrowers under any such
policy, and Borrowers hereby direct the issuer of each such policy to pay all such monies directly to Lender. During any Default
Period, Lender may (but need not), in Lender’s or any Borrower’s name, execute and deliver proofs of claim, receive
payment of proceeds and endorse checks and other instruments representing payment under any policy of insurance, and adjust, litigate,
compromise or release claims against the issuer of any policy. Any monies received under any insurance policy assigned to Lender,
other than liability insurance policies, or received as payment of any award or compensation for condemnation or taking by eminent
domain, shall be paid to Lender and, as determined by Lender in its Permitted Discretion, either be applied to prepayment of the
Obligations or on Borrowers’ reasonable request so long as no Event of Default has occurred and is continuing, disbursed
to Borrowers under staged payment terms reasonably satisfactory to Lender for application to the cost of repairs, replacements,
or restorations which shall be effected with reasonable promptness and shall be of a value at least equal to the value of the items
or property destroyed.

 

3.5          Borrowers’
Premises.

 

(a)          Lender’s
Right to Occupy Borrowers’ Premises. During any Default Period and without notice or consent,
Borrowers hereby grant to Lender the right to take exclusive possession of all locations where Borrowers conduct their business
or have any rights of possession, including without limitation the locations described on Schedule 5.1 attached hereto
(the “Premises”), until the earlier of (i) payment in full and discharge of the Obligations and termination
of the Line of Credit, or (ii) final sale or disposition of all items constituting Collateral and delivery of those items
to purchasers. During any Default Period, subject to any agreement with any applicable landlord, Lender may use the Premises to
store, process, manufacture, sell, use, and liquidate or otherwise dispose of items that are Collateral, and for any other incidental
purposes deemed appropriate by Lender in good faith.

 

(b)          Borrowers’
Obligation to Reimburse Lender. Lender shall not be obligated to pay rent or other compensation
for the possession or use of any Premises, but if Lender elects to pay rent or other compensation to the owner of any Premises
in order to have access to the Premises, then Borrowers shall promptly reimburse Lender all such amounts, as well as all taxes,
fees, charges and other expenses at any time payable by Lender with respect to the Premises by reason of the execution, delivery,
recordation, performance or enforcement of any terms of this Agreement, and all such amounts incurred or expended by Lender shall
constitute Obligations hereunder.

 

3.6          License
to Use Intellectual Property Rights. During any Default Period, Borrowers hereby grant to Lender
a non-exclusive, worldwide and royalty-free license to use or otherwise exploit all Intellectual Property Rights of Borrowers for
the purpose of selling, leasing or otherwise disposing of any or all Collateral during any Default Period.

 

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3.7           Financing
Statements.

 

(a)          Authorization
to File. Borrowers hereby (i) authorize Lender to file any financing statements, continuation
statements or amendments thereto that (A) indicate the Collateral as all assets of Borrowers or words of similar effect, regardless
of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction,
or as being of an equal or lesser scope or with greater detail, and (B) contain any other information required by Part 5
of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement, continuation statement
or amendment, including whether any Borrower is an organization, the type of organization and any organization identification number
issued to such Borrower, and in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted
collateral or timber to be cut, a sufficient description of real property to which the Collateral relates, (ii) agree to furnish
any such information to Lender promptly upon request by Lender, and (iii) ratify their authorization for Lender to have filed
any initial financial statements, or amendments thereto if filed prior to the Closing Date.

 

(b)          Amendments
to Financing Statements. Each Borrower acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing statement evidencing or perfecting Lender’s
Lien in the Collateral without the prior written consent of Lender and agrees that it will not do so without the prior written
consent of Lender, subject to such Borrower’s rights under Section 9-509(d)(2) of the UCC.

 

(c)          Termination.
Lender shall, at Borrowers’ expense, release or terminate any filings or other agreements that perfect the Lender’s
Lien in Collateral (provided that there are no suits, actions, proceedings or claims pending or threatened against any Indemnitee
under this Agreement with respect to any Indemnified Liabilities), upon Lender’s receipt of the following, in form and content
reasonably satisfactory to Lender: (i) payment in full in cash of all monetary Obligations and completed performance by Borrowers
with respect to their other monetary obligations under this Agreement, (ii) a release of all claims against Lender by Borrowers
relating to Lender’s performance and obligations under the Loan Documents, and (iii) an agreement by Borrowers and any
new lender to Borrowers to indemnify Lender for any payments received by Lender that are applied to the Obligations as a final
payoff that may subsequently be returned or otherwise not paid for any reason.

 

3.8           Collateral
Related Matters. This Agreement does not contemplate a sale of Accounts or Chattel Paper and,
as provided by law, Borrowers are entitled to any surplus and shall remain liable for any deficiency. Lender’s duty of care
with respect to Collateral in its possession (as imposed by law) will be deemed fulfilled if it exercises reasonable care in physically
keeping such Collateral, or in the case of Collateral in the custody or possession of a bailee or other third Person, exercises
reasonable care in the selection of the bailee or third Person, and Lender need not otherwise preserve, protect, insure or care
for such Collateral. Lender shall not be obligated to preserve rights Borrowers may have against prior parties, to liquidate the
Collateral at all or in any particular manner or order or apply the Proceeds of the Collateral in any particular order of application.
Lender has no obligation to clean up or prepare Collateral for sale. Borrowers waive any right they may have to require Lender
to pursue any third Person for any of the Obligations.

 

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3.9           Notices
Regarding Disposition of Collateral. If notice to Borrowers of any intended disposition of Collateral
or any other intended action is required by applicable law in a particular situation, such notice will be deemed commercially reasonable
if given in the manner specified in Section 8.4 hereof at least ten (10) calendar days before the date of intended
disposition or other action.

 

4.            CONDITIONS
PRECEDENT

 

4.1           Conditions
Precedent to Initial Advance. Lender’s obligation to consummate the transactions contemplated
by this Agreement and make the initial Advance hereunder shall be subject to the following conditions precedent (with each such
document, instrument or agreement required to be executed or delivered to be in form and substance satisfactory to Lender in its
Permitted Discretion):

 

(a)          Executed
Loan Documents.  Lender shall have received from each party hereto and thereto (other than Lender)
either (i) a counterpart of this Agreement and all other Loan Documents signed on behalf of such party or (ii) written
evidence (which may include telecopy or other electronic transmission of a signed signature page of this Agreement) that such party
has signed a counterpart of this Agreement and all other Loan Documents to which it is a party.

 

(b)          Constituent
Documents. Lender shall have received the Constituent Documents and such other documents and
certificates as Lender or its counsel may reasonably request relating to the organization, existence and good standing of each
Borrower.

 

(c)          Closing
Certificate. Lender shall have received a certificate certifying that, as of the Closing Date,
the representations and warranties made by Borrowers in the Loan Documents are true and correct as of the Closing Date and the
date of such initial Advance and that no Default or Event of Default exists.

 

(d)          Solvency
Certificate. Lender shall have received a certificate certifying that, as of the Closing Date,
and immediately after giving pro forma effect to the consummation of the transactions contemplated under this Agreement (including
the making of the initial Advance on the Closing Date), Borrowers and their Subsidiaries, on a consolidated basis, are Solvent.

 

(e)          Repayment
of Other Secured Indebtedness. All Indebtedness of Borrowers secured by any of their assets (other
than Indebtedness secured by Permitted Liens) outstanding on the date of this Agreement shall have been paid in full with the proceeds
of the initial Advance hereunder.

 

(f)          No
Default; No Material Adverse Effect. After giving effect to the consummation of the transactions
contemplated by this Agreement and the other Loan Documents on the Closing Date (including any Advance hereunder), no Default or
Event of Default shall exist. Lender shall be reasonably satisfied that there has been no change in the business or financial condition
of Borrowers since the date of Lender’s receipt of the most recent financial statement of Borrowers that has or could reasonably
be expected to have a Material Adverse Effect.

 

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(g)          Financial
Information. Lender shall have received and be reasonably satisfied with such financial statements
including, without limitation, income statements, balance sheets, statements of cash flow and other financial documentation as
Lender in its Permitted Discretion may require.

 

(h)          Business
Plan. Lender shall have received and shall have approved the Business Plan (such approval to
be granted or withheld in Lender’s sole discretion).

 

(i)          Control
Agreements. Lender shall have received Control Agreements with respect to each deposit account
of Borrowers so designated on Schedule 7.16 attached hereto. Lender shall have received evidence of the closure of any deposit
accounts previously maintained by Borrowers required by Lender.

 

(j)          Insurance.
Lender shall have received, and be satisfied with, evidence of Borrowers’ insurance coverage satisfying the requirements
of Section 6.9 hereof, together with such endorsements as are required by the Loan Documents.

 

(k)          Lender
Fees and Expenses. Borrowers shall have paid to Lender all fees and Lender Expenses invoiced
through the date of the initial Advance hereunder, including, without limitation, all reasonable legal expenses of Lender incurred
through the Closing Date.

 

(l)          Opinion
of Counsel. Lender shall have received a legal opinion addressed to Lender dated as of the Closing
Date, in form and substance reasonably satisfactory to Lender, from Graubard Miller, counsel to Borrowers.

 

(m)          Landlord’s
Agreements. Lender shall have received a collateral access agreement and landlord’s waiver
with respect to each leased Premises for which Lender requires such agreement, executed by Borrowers and the applicable landlord
with respect to any such lease, pursuant to which such landlord acknowledges Lender’s Lien in any Inventory and other assets
located at such Premises, and waives any Lien it may have in any such assets (if applicable), and which is otherwise in form and
substance reasonably satisfactory to Lender.

 

(n)          Warehousemen’s
Agreements. Lender shall have received a warehouseman’s agreement for each warehouse where
Inventory is stored, pursuant to which such warehouseman acknowledges Lender’s Lien in any Inventory or other assets of Borrowers
located at such warehouse and which is otherwise in form and substance reasonably satisfactory to Lender.

 

(o)          Good
Standing, Foreign Qualification. Lender shall have received evidence that each Borrower is in
good standing in the jurisdiction of its incorporation or formation, and is licensed or qualified to transact business in all jurisdictions
where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification
necessary or where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect.

 

(p)          Patriot
Act Compliance. Lender shall have received the Customer Identification Information Form and such
other forms and verification with respect to Borrowers as Lender may reasonably require in order to comply with the U.S.A. Patriot
Act.

 

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(q)          Field
Examinations. Lender shall have completed its “take-down” field examination
with results satisfactory to Lender in its sole discretion.

 

(r)          Opening
Availability. Borrowers shall demonstrate Availability of at least $2,500,000 as of the date
of the initial Advance and after giving effect to payment of (i) all amounts required to be paid on the Closing Date, including,
without limitation, all closing costs (including Lender Expenses billed on the Closing Date), and (ii) all trade payables more
than sixty (60) days past due and all book overdrafts.

 

(s)          Perfection
of Lender’s Liens. Lender shall have received the Security Documents, duly executed by
each applicable Borrower and each other party thereto (other than Lender), together with acknowledgments or verification statements
of all filings or recordations necessary to perfect Lender’s Lien in the Collateral, as well as lien searches and other evidence
reasonably satisfactory to Lender that Lender’s Lien is the only Lien upon the Collateral, except Permitted Liens. Lender
shall have received all other documents, instruments and agreements necessary to perfect the Lender’s Lien in the Collateral,
including original instruments and certificates evidencing any certificated securities being pledged under the Security Documents,
together with undated stock powers executed in blank, each duly executed by Borrowers.

 

(t)          Additional
Documents. There shall have been delivered to Lender such additional instruments and documents
as Lender or its counsel reasonably may require or request.

 

4.2           Additional
Conditions Precedent to All Line of Credit Usage.  Lender’s obligation to make any Advance
hereunder (including, without limitation, the initial Advance) shall be subject to the following further additional conditions
precedent:

 

(a)          No
Overadvance. Prior to and after giving effect to the requested Advance, no Overadvance exists
or will result from the making of such Advance.

 

(b)          Truth
and Accuracy of Representations and Warranties. Each of the representations and warranties set
forth in Section 5 hereof and elsewhere in the Loan Documents shall be true and correct in all material respects on
the date of such Advance, except to the extent that such representations and warranties relate solely to an earlier date (in which
case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes
in factual circumstances not prohibited under this Agreement or the other Loan Documents.

 

(c)          No
Default. No event has occurred and is continuing, or would result from the requested Advance
which is or would constitute a Default or Event of Default.

 

(d)          No
Material Adverse Effect. Since the Closing Date, in Lender’s reasonable determination,
there has not been a Material Adverse Effect.

 

The request by Borrowers
for, and the acceptance by Borrowers of, each Advance hereunder shall be deemed to be a representation and warranty by Borrowers
that the conditions specified in Section 4.1 and/or Section 4.2 have been satisfied at that time and after
giving effect to such Advance. The conditions set forth in this Section 4 are for the sole benefit of Lender and may
be waived by Lender, in whole or in part, without prejudice to Lender.

 

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5.            REPRESENTATIONS
AND WARRANTIES

 

To induce Lender to
enter into this Agreement, Borrowers make the representations and warranties described in this Section 5 and elsewhere
in the Loan Documents. Any request for an Advance will be deemed a representation by Borrowers that all such representations and
warranties are true, correct, and complete in all material respects (or in all respects with respect to any Advance on the Closing
Date) as of the time of the request, unless such representation or warranty relates exclusively to an earlier date (in which case
such representation and warranty shall have been true and correct on and as of such earlier date) and except for changes in factual
circumstances not prohibited under this Agreement and the other Loan Documents. Borrowers shall promptly deliver to Lender notice
of any change in circumstance that would affect the accuracy of any representation or warranty, unless the representation and warranty
specifically relates to an earlier date.

 

5.1           Corporate
Existence and Power Name; Chief Executive Office; Inventory and Equipment Locations; Identification Numbers. 
Each Borrower is a corporation or limited liability company duly organized or formed, validly existing and in good standing under
the laws of the applicable state of incorporation or formation as described on Schedule 5.1 attached hereto, and is
licensed or qualified to transact business in all jurisdictions where the character of the property owned or leased or the nature
of the business transacted by it makes such licensing or qualification necessary, or where the failure to so qualify could have
a Material Adverse Effect. Each Borrower has all requisite power and authority to conduct its business as presently conducted and
as proposed to be conducted after the Closing Date, to own its properties, and to execute and deliver and to perform all of its
obligations under, this Agreement, the other Loan Documents and any other documents or agreements that it has entered into with
Lender related to this Agreement. During its existence, each Borrower has done business solely under the names set forth on Schedule 5.1
attached hereto in addition to its correct legal name. As the Closing Date, each Borrower’s chief executive office and principal
place of business is located at the address set forth on Schedule 5.1 attached hereto, and all of its records relating
to its business or the Collateral are kept at that location. As of the Closing Date, all Inventory and Equipment is located at
that location or at one of the other locations set forth on Schedule 5.1 attached hereto. As of the Closing Date, each
Borrower’s name, Federal Employer Identification Number and Organization Identification Number are correctly set forth at
the end of this Agreement next to Borrower’s signature.

 

5.2           Subsidiaries;
Joint Ventures; Affiliates; Capitalization.  As of the Closing Date, no Borrower has any Subsidiaries,
is engaged in any joint venture or partnership with any other Person, or is an Affiliate of any other Person, except in each case
as set forth on Schedule 5.2 attached hereto. The capitalization chart set forth on Schedule 5.2 attached
hereto constitutes a correct and complete list of all of the issued and outstanding Capital Stock of each Borrower and each of
its Subsidiaries, including without limitation, each record holder of Capital Stock of any of the Borrowers, and the amount and
percentage interest of Capital Stock of each Borrower owned by such Person on a fully diluted basis. As of the Closing Date, the
organizational chart on Schedule 5.2 attached hereto shows the ownership structure of each Borrower and each of its
Subsidiaries. Except as disclosed on Schedule 5.2 attached hereto, there are no outstanding rights to purchase options,
warrants or similar rights, or agreements pursuant to which any Borrower may be required to issue, sell, repurchase or redeem any
of its Capital Stock or any Capital Stock of its Subsidiaries.

 

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5.3           Authorization;
No Conflict as to Law or Agreements. The execution, delivery and performance by each Borrower
of this Agreement and the other Loan Documents, all borrowing under this Agreement, and the creation of Liens provided for therein:
(i) have been duly authorized by all necessary corporate action or limited liability company action on the part of each Borrower;
(ii) do not contravene any provision of any Borrower’s Constituent Documents; (iii) do not require the authorization,
consent or approval by, or registration, declaration or filing with, or notice to, any Governmental Authority, whether domestic
or foreign, or any other Person, except to the extent obtained, accomplished or given prior to the date of this Agreement; (iv) do
not violate any provision of any law, rule or regulation (including, without limitation, Regulation X of the Board of Governors
of the Federal Reserve System) or of any order, writ, injunction or decree presently in effect having applicability to any Borrower;
(v) do not result in a breach of or constitute a default or event of default under any indenture or loan or credit agreement
or any other material agreement, lease or instrument to which any Borrower is a party or by which it or its properties may be bound
or affected; or (vi) do not result in, or require, the creation or imposition of any Lien upon or with respect to any of the
property of any Borrower, other than the Lien in favor of Lender.

 

5.4           Enforceable
Obligations. This Agreement and the other Loan Documents have been duly executed and delivered
by each Borrower, and constitutes the legal, valid and binding obligation of such Borrower, enforceable against such Borrower in
accordance with its terms, subject to (a) bankruptcy, reorganization, insolvency, moratorium and/or similar laws of general application
relating to or affecting the rights and remedies of creditors and the obligations of debtors and (b) equitable principles of general
application including principles of commercial reasonableness, good faith and fair dealing (regardless of whether such equitable
principles are considered in an action or proceeding at law or in equity).

 

5.5           Financial
Statements; No Material Adverse Effect. Borrowers have furnished to Lender their audited financial
statements for the fiscal year ended July 30, 2011 and unaudited financial statements for the fiscal-year-to-date period ended
March 31, 2012, and those statements fairly present Borrowers’ financial condition as of such dates and the results of Borrowers’
operations and cash flows for the periods then ended, and were prepared in accordance with GAAP (subject, in the case of unaudited
financial statements to the absence of footnotes and ordinary year end adjustments). Since the date of Borrowers’ most recent
financial statements delivered to Lender, there has been no Material Adverse Effect.

 

5.6           Projections.
 The Business Plan delivered to Lender on April 4, 2012 and is, and each modified or subsequent
Business Plan delivered to Lender hereunder will be, on the date of its delivery, prepared by management of Borrowers in good faith,
based on reasonable assumptions, and believed by Borrowers to be achievable in light of the circumstances at such time (reflecting
Borrowers’ recent performance trends in a manner consistent with Borrowers’ historical practices). Upon the delivery
and acceptance of each modified or subsequent Business Plan in accordance with Section 6.1(d) hereof, such modified
or subsequent Business Plan shall be considered the “Business Plan” for the purposes of this Section 5.6
and for all purposes of this Agreement. All material assumptions on which each Business Plan is based are set forth therein or
have otherwise been delivered by Borrowers to Lender in writing.

 

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5.7           Litigation.
As of the Closing Date, except as disclosed on Schedule 5.7 attached hereto, there are no actions, suits or proceedings
pending or, to Borrowers’ knowledge, threatened against or affecting any Borrower or any of its Subsidiaries or the properties
of any Borrower or any of its Subsidiaries, before any court or Governmental Authority, commission, board, bureau or agency, domestic
or foreign, which, if determined adversely to such Borrower or any of its Subsidiaries, (i) would result in a judgment or
judgments against such Borrower or any of its Subsidiaries in an amount in excess of $200,000, or (ii) could reasonably be
expected to have a Material Adverse Effect.

 

5.8           Intellectual
Property Rights.

 

(a)          Owned
Intellectual Property. As of the Closing Date, set forth on Schedule 5.8(a) attached
hereto is a complete list of all patents, applications for patents, trademarks, applications to register trademarks, service marks,
applications to register service marks, mask works, trade dress, domain names, and copyrights of which any Borrower is the owner
of record (the “Owned Intellectual Property”). As of the Closing Date, except as set forth on Schedule 5.8(a)
attached hereto, (i) Borrowers own all of the Owned Intellectual Property free and clear of all restrictions (including, without
limitation, covenants not to sue any Person), court orders, injunctions, decrees, writs or Liens, whether by written agreement
or otherwise, (ii) no Person other than Borrowers own or has been granted any right in the Owned Intellectual Property (other
than the license granted to Lender under this Agreement), (iii) all Owned Intellectual Property is valid, subsisting and enforceable,
and (iv) Borrowers have taken all commercially reasonable action necessary to maintain and protect all items of Owned Intellectual
Property that are necessary for Borrowers’ business as presently conducted or as Borrowers reasonably foresee conducting
it.

 

(b)          Intellectual
Property Rights Licensed from Others. As of the Closing Date, set forth on Schedule 5.8(b)
attached hereto is a complete list of all agreements under which Borrowers have licensed Intellectual Property Rights from another
Person (“Licensed Intellectual Property”) other than readily available, non-negotiated licenses of computer
software and other intellectual property used solely for performing accounting, word processing and similar administrative tasks
(“Off-the-shelf Software”) and a summary of any ongoing payments Borrowers are obligated to make with respect
to Licensed Intellectual Property. As of the Closing Date, except as set forth on Schedule 5.8(b) attached hereto,
Borrowers’ licenses to use the Licensed Intellectual Property are free and clear of all restrictions, Liens, court orders,
injunctions, decrees, or writs, whether agreed to in a written agreement or otherwise. As of the Closing Date, except as disclosed
on Schedule 5.8(b) attached hereto, Borrowers are not contractually obligated to make royalty payments of a material
nature, or pay fees to any owner of, licensor of, or other claimant to, any Intellectual Property Rights.

 

(c)          Other
Intellectual Property Needed for Business. Except for Off-the-shelf Software, the Owned Intellectual
Property and the Licensed Intellectual Property constitute all Intellectual Property Rights used or necessary to conduct Borrower’s
business as it is presently conducted or as Borrowers reasonably foresee conducting it.

 

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(d)          Infringement.
As of the Closing Date, except as disclosed on Schedule 5.8(d) attached hereto, Borrowers have no knowledge of, and
have not received notice either orally in writing alleging, any Infringement of another Person’s Intellectual Property Rights
(including, without limitation, any claim set forth in writing that Borrowers must license or refrain from using the Intellectual
Property Rights of any Person) nor, to Borrowers’ knowledge, is there any threatened claim or any reasonable basis for any
such claim, in either case, that could reasonably be expected to have a Material Adverse Effect.

 

5.9           Taxes.
Borrowers and their Subsidiaries have paid or caused to be paid to the proper authorities when due all federal, state and local
taxes required to be withheld by each of them. Borrowers and their Subsidiaries have filed all federal, state and local tax returns
which to the knowledge of the Designated Officers of Borrowers or any Subsidiary, as the case may be, are required to be filed,
and Borrowers and their Subsidiaries have paid or caused to be paid to the respective taxing authorities all taxes as shown on
those returns or on any assessment received by any of them to the extent such taxes have become due, except to the extent the same
are currently being contested in good faith by appropriate proceedings and for which Borrowers have set aside on their books adequate
reserves in accordance with GAAP.

 

5.10         Title
and Liens. Borrowers have good and absolute title to all Collateral free and clear of all Liens,
other than Permitted Liens. None of the Collateral is or will become a fixture on real estate, unless a sufficient fixture filing
has been filed with respect to such Collateral. No financing statement naming a Borrower as debtor is on file in any office except
to perfect Permitted Liens. The Liens granted to Lender pursuant to this Agreement and the other Loan Documents will at all times
be fully perfected first priority Liens (subject only to Permitted Liens) in and to the Collateral described therein.

 

5.11         No
Defaults. Except as set forth on Schedule 5.11 attached hereto, each Borrower is in compliance
with all provisions of all agreements, instruments, decrees and orders to which it is a party or by which it or its property is
bound or affected, the breach or default of which could reasonably be expected to have a Material Adverse Effect.

 

5.12         Full
Disclosure. All financial and other information provided to Lender by or on behalf of Borrowers
in connection with this Agreement (i) is true and correct in all material respects, and (ii) does not omit any material
fact that would cause such information to be misleading.

 

5.13         Labor
Matters.  As of the Closing Date, except as set forth on Schedule 5.13 attached hereto:
(a) no strikes or other material labor disputes against any Borrower or any of its Subsidiaries are pending or, to any Borrower’s
knowledge, threatened; (b) hours worked by and payment made to any Borrower’s or any of its Subsidiaries’ employees
comply with the Fair Labor Standards Act and each other federal, state, local or foreign law applicable to such matters; (c) all
payments due from any Borrower or any of its Subsidiaries for employee health and welfare insurance have been paid or accrued as
a liability on the books of such Borrower or such Subsidiary; (d) no Borrower nor any of its Subsidiaries is a party to or
bound by any collective bargaining agreement, management agreement, consulting agreement, employment agreement, bonus, restricted
stock, stock option, or stock appreciation plan or agreement or any similar plan, agreement or arrangement; (e) there is no
organizing activity involving any Borrower or any of its Subsidiaries pending or, to any Borrower’s knowledge, threatened
by any labor union or group of employees; (f) there are no representation proceedings pending or, to any Borrower’s
knowledge, threatened with the National Labor Relations Board, and no labor organization or group of employees of any Borrower
or any of its Subsidiaries has made a pending demand for recognition; and (g) there are no material complaints or charges
against any Borrower or any of its Subsidiaries pending or, to any Borrower’s knowledge, threatened to be filed with any
Governmental Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment or termination
of employment by any Borrower or any of its Subsidiaries of any individual, in each case, which could reasonably be expected to
have a Material Adverse Effect.

 

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5.14         Rights
to Payment. Each right to payment and each instrument, document, Chattel Paper and other agreement
in excess of $10,000 constituting or evidencing Collateral is (or, in the case of all future Collateral, will be when arising or
issued) the valid, genuine and legally enforceable obligation of the account debtor or other obligor named in that instrument,
subject to no defense, setoff or counterclaim.

 

5.15         Employee
Benefit Plans.

 

(a)          Maintenance
and Contributions to Plans. As of the Closing Date, except as disclosed on Schedule 5.15
attached hereto, no Borrower nor any ERISA Affiliate (i) maintains or has maintained any Pension Plan, (ii) contributes
or has contributed to any Multiemployer Plan, or (iii) provides or has provided post-retirement medical or insurance benefits
to employees or former employees (other than benefits required under Section 601 of ERISA, Section 4980B of the IRC,
or applicable state law).

 

(b)          Knowledge
of Plan Noncompliance with Applicable Law. Except as disclosed on Schedule 5.15 attached
hereto, no Borrower nor any ERISA Affiliate has (i) knowledge that any Borrower or any ERISA Affiliate is not in full compliance
with the requirements of ERISA, the IRC, or applicable state law with respect to any Plan, (ii) knowledge that a Reportable
Event occurred or continues to exist in connection with any Pension Plan, or (iii) sponsored a Plan that it intends to maintain
as qualified under the IRC that is not so qualified, and no fact or circumstance exists which may have an adverse effect on such
Plan’s tax qualified status.

 

(c)          Funding
Deficiencies and Other Liabilities. No Borrower nor any ERISA Affiliate has liability for any
(i) accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the IRC) under any Plan,
whether or not waived, (ii) withdrawal, partial withdrawal, reorganization or other event under any Multiemployer Plan under
Section 01 or 43 of ERISA, or (iii) event or circumstance which could result in financial obligation to the Pension Benefit
Guaranty Corporation, the Internal Revenue Service, the Department of Labor or any participant in connection with any Plan (other
than routine claims for benefits under the Plan).

 

5.16         Environmental
Matters.

 

(a)          Hazardous
Substances on Premises.  As of the Closing Date, except as disclosed on Schedule 5.16
attached hereto, there are not present in, on or under the Premises any Hazardous Substances in such form or quantity as to create
any material liability or obligation for any Borrower, any of its Subsidiaries, or Lender under the common law of any jurisdiction
or under any Environmental Law, and, to the knowledge of any Borrower, no Hazardous Substances have ever been stored, buried, spilled,
leaked, discharged, emitted or released in, on or under the Premises in such a way as to create a material liability.

 

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(b)          Disposal
of Hazardous Substances. Except as disclosed on Schedule 5.16 attached hereto, no
Borrower or any of its Subsidiaries has disposed of Hazardous Substances in such a manner as to create any material liability under
any Environmental Law.

 

(c)          Claims
and Proceedings with Respect to Environmental Law Compliance. Except as disclosed on Schedule 5.16
attached hereto, to the knowledge of the Borrowers, there have not existed in the past, nor are there any threatened or impending
requests, claims, notices, investigations, demands, administrative proceedings, hearings or litigation relating in any way to any
Premises or any Borrower or any of its Subsidiaries, alleging liability under, violation of, or noncompliance with any Environmental
Law or any license, permit or other authorization issued pursuant to such an Environmental Law that could reasonably expected to
have a Material Adverse Effect.

 

(d)          Compliance
with Environmental Law; Permits and Authorizations. Except as disclosed on Schedule 5.16
attached hereto, each Borrower and each of its Subsidiaries (i) conducts its business at all times in compliance with applicable
Environmental Laws, except where failure to do so would not have a Material Adverse Effect, (ii) possesses valid licenses,
permits and other authorizations required under all applicable Environmental Laws for the lawful and efficient operation of its
business, none of which are scheduled to expire, or subject to withdrawal, or material limitation within the next twelve (12) months,
except for such permits the absence of which could not reasonably be expected to have a Material Adverse Effect, and (iii) has
not been denied insurance on grounds related to potential environmental liability.

 

(e)          Status
of Premises. Except as disclosed on Schedule 5.16 attached hereto, to Borrowers’
knowledge, no Premises is and or ever has been listed on the National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System or any similar federal, state or local list, schedule, log, inventory or database.

 

(f)          Environmental
Audits, Reports, Permits and Licenses. Borrowers have delivered to Lender all material environmental
assessments, audits, reports, permits, licenses and other documents describing or relating in any way to the Premises or Borrowers’
business.

 

5.17         Solvency.
Before and after giving effect to the consummation of the transactions contemplated under this Agreement (including the making
of the initial Advance hereunder), Borrowers and their Subsidiaries, on a consolidated basis, are Solvent.

 

5.18         Material
Agreements. Borrowers have made available to Lender or its counsel accurate and complete copies
(or summaries) of all of the Material Contracts which they are subject, each of which is listed on Schedule 5.18 attached
hereto. Except as set forth on Schedule 5.18 attached hereto, Borrowers are not aware that any such Material Contract
has been terminated or is not in full force and effect, or of any default or event of default that has occurred and continues to
exist under any such Material Contract. Borrowers maintain in effect all licenses, permits and governmental approvals, the absence
of which could reasonably be expected to have a Material Adverse Effect.

 

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6.            AFFIRMATIVE
COVENANTS

 

So long as the Line
of Credit has not been terminated and any Obligations remain unpaid, Borrowers shall comply with each of the following covenants:

 

6.1           Reporting
Requirements. Borrowers shall deliver to Lender the following information, compiled where applicable
using GAAP, consistently applied, and all in form and content reasonably acceptable to Lender:

 

(a)          Annual
Financial Statements. As soon as available and in any event within one-hundred and twenty (120)
days after each fiscal year end, Borrowers’ audited financial statements prepared by an independent certified public accountant
reasonably acceptable to Lender (as of the Closing Date, CBIZ MHM, LLC is deemed to be an acceptable certified public accountant),
which shall include Borrowers’ balance sheets, income statements, and statements of cash flows prepared on a consolidated
and consolidating basis to include Borrowers and their Subsidiaries. Borrowers’ audited annual financial statements shall
be accompanied by the unqualified opinion of such accountant and a certificate in the form of Exhibit B
attached hereto (the “Compliance Certificate”) that is signed by a Designated Officer. Each Compliance Certificate
that accompanies an annual financial statement shall also be accompanied by copies of all management letters prepared by Borrowers’
accountants.

 

(b)          Monthly
Financial Statements. As soon as available and in any event within (i) thirty (30) days after
the end of each of the first two fiscal monthly periods in each fiscal quarterly period, (ii) forty-five (45) days after the end
of the last fiscal monthly period in each of the first three fiscal quarterly periods, and (iii) ninety (90) days after the end
of the last fiscal monthly period in each fiscal year, Borrowers’ internally prepared monthly financial statements which
shall include Borrowers’ balance sheet, income statement and statement of cash flows prepared for the monthly period then
ended and for the year-to-date period then ended and stating in comparative form the figures for the corresponding date and periods
in the prior fiscal year, and if requested by Lender, prepared on a consolidated and consolidating basis to include Borrowers and
their Subsidiaries. Borrowers’ monthly financial statements shall be accompanied by a Compliance Certificate signed by a
Designated Officer.

 

(c)          Collateral
Reports. No later than fifteen (15) days after each fiscal month end (or more frequently if Lender
shall request it), Borrowers shall provide Lender with (i) a detailed aging of Borrowers’ accounts payable, (ii) a
detailed inventory report (including an inventory certification report and inventory aging report), and (iii) a calculation
of Borrowers’ Accounts, Eligible Accounts, Credit Card Receivables, Eligible Credit Card Receivables, Inventory and Eligible
Inventory as of the end of that month (or shorter time period requested by Lender), which agings and calculations are to be submitted
electronically to Lender. In addition, no later than Wednesday of each week (or more frequently if Lender shall reasonably request
it), Borrowers shall provide Lender with a weekly stock ledger report as of the close of business on Saturday of the immediately
preceding week.

 

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(d)          Projections
and Cash Flow Forecasts. No later than (i) thirty (30) days prior to each fiscal year end,
drafts of Borrowers’ Projections, and (ii) forty-five (45) days after each fiscal year end, final versions of Borrowers’
Projections, each certified by a Designated Officer as having been prepared in good faith, based upon reasonable assumptions, and
reflecting recent performance trends in a manner consistent with Borrowers’ historical practices, and believed by Borrowers
and the Designated Officers to be achievable in light of the circumstances at such time, and accompanied by a statement of assumptions
and supporting schedules and information, all of which shall be reasonably acceptable to Lender. Lender shall, within ten (10)
Business Days following receipt of Borrowers’ Projections delivered pursuant to the foregoing clause (ii), inform Borrowers
whether such Projections are acceptable to Lender (which approval shall be granted or withheld in Lender’s sole discretion)
and, to the extent approved by Lender, such Projections shall be deemed to be Borrowers’ current “Business Plan”
for all purposes of this Agreement. Borrowers will promptly notify Lender in writing of any material liability, disbursement, or
other matter or circumstance which causes or could reasonably be expected to cause a material deviation in Borrowers’ actual
financial performance from Borrowers’ projected performance as set forth in the Business Plan, including, without limitation,
any fact or circumstance which causes, or reasonably could be expected to cause, any assumption on which the Business Plan is based
to no longer be true, correct or accurate in any material respect.

 

(e)          Borrowing
Base Certificates; Supplemental Reports.  Weekly, or on each day that Borrowers request an Advance,
or more frequently if Lender reasonably requests, Lender’s standard form of Borrowing Base Certificate in substantially
the form attached hereto as Exhibit C, together with a sales report and a roll-forward
report of Inventory (at retail and at cost and including sales discounts, markdowns and ineligibles), and reports of Accounts
and Credit Card Receivables and collections thereof.

 

(f)          Litigation.
Promptly upon discovery by a Designated Officer, notice of any litigation commenced or threatened against Borrowers or any Subsidiary
that (i) seeks damages in excess of $200,000, (ii) seeks injunctive relief that could reasonably be expected to result
in a Material Adverse Effect, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets or against Borrower
or any ERISA Affiliate in connection with any Plan, (iv) alleges criminal misconduct by Borrowers or any of the Designated
Officers, (v) alleges the violation of any Environmental Law or seeks remedies in connection with any Environmental Law that
could reasonably be expected to result in a Material Adverse Effect, or (vi) which, if adversely determined, could have a
Material Adverse Effect.

 

(g)          Intellectual
Property. With respect to any Borrower and each of its Subsidiaries, (i) no later than thirty
(30) days before any such Person acquires material Intellectual Property Rights, notice to Lender of such Person’s intention
to acquire such rights; (ii) except for transfers permitted under Section 7.7 hereof, no later than thirty (30)
days before any such Person disposes of material Intellectual Property Rights, notice to Lender of such Person’s intention
to dispose of such rights, along with copies of all proposed documents and agreements concerning the disposal of such rights as
requested by Lender; (iii) promptly upon discovery, notice to Lender of (A) any Infringement of any Intellectual Property
Rights necessary for Borrowers’ and its Subsidiaries’ business by any Person, (B) claims that Borrowers or any
Subsidiary is infringing upon or violating another Person’s Intellectual Property Rights, and (C) any threatened cancellation,
termination or material limitation of Borrowers’ or any of its Subsidiaries’ Intellectual Property Rights; and (iv) promptly
upon receipt, copies of all registrations and filings with respect to Borrowers’ and its Subsidiaries’ Intellectual
Property Rights.

 

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(h)          Defaults.
No later than two (2) Business Days after any Designated Officer learns of the occurrence of any Default or Event of Default, notice
to Lender of such Default or Event of Default and the steps being taken by Borrowers to cure the Default.

 

(i)          Disputes.
Promptly upon discovery by a Designated Officer, notice to Lender of (i) any dispute, claim or return of goods, which singly
or in the aggregate is or could reasonably be expected to be material to the business operations of Borrowers; and (ii) credit
memos in excess of $25,000 not previously reported in Section 6.1(e) hereof.

 

(j)          Changes
in Officers and Directors. Promptly following occurrence, notice to Lender of any change in the
persons constituting Borrowers’ Officers and Directors.

 

(k)          Collateral.
Promptly upon discovery by a Designated Officer, notice to Lender of any loss of or material damage to the Collateral or of any
substantial adverse change in the Collateral or the prospect of payment of any material Accounts.

 

(l)          SEC
Filings, Reports to Holders of Indebtedness and Capital Stock. Promptly after the sending or
filing thereof, copies of all statements, reports and other information Group or any other Borrower sends to any holders of its
Indebtedness, its Capital Stock or files with the SEC or any national (domestic or foreign) securities exchange (including if and
when filed by any Borrower, Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports) provided that
the Borrowers may redact confidential information contained in any such statement, report or other information if it provides a
summary of the nature of the information redacted to Lender.

 

(m)          Violations
of Law. No later than two (2) Business Days after discovery by a Designated Officer, notice to
Lender of any violation by Borrowers or any of their Subsidiaries of any law, rule or regulation, which violation could reasonably
expected to have a Material Adverse Effect, identifying such violation in reasonable detail and the steps being taken by Borrowers
relative thereto.

 

(n)          Pension
Plans. (i) Promptly upon discovery by a Designated Officer, and in any event within thirty
(30) days after any Borrower knows or has reason to know that any Reportable Event with respect to any Pension Plan has occurred,
written notice to Lender of the Reportable Event in detail and the actions which Borrowers propose to take to correct the deficiency,
together with a copy of any related notice sent to the Pension Benefit Guaranty Corporation; (ii) promptly upon discovery
by a Designated Officer, and in any event within ten (10) days after Borrowers fail to make a required quarterly Pension Plan contribution
under Section 412(m) of the IRC, written notice to Lender notifying Lender of the failure in detail and the actions that Borrowers
will take to cure the failure, together with a copy of any related notice sent to the Pension Benefit Guaranty Corporation; and
(iii) promptly upon discovery by a Designated Officer, and in any event within ten (10) days after Borrowers know or have
reason to know that they may be liable or may be reasonably expected to have liability for any withdrawal, partial withdrawal,
reorganization or other event under any Multiemployer Plan under Sections 4201 or 4243 of ERISA, written notice to Lender notifying
Lender of the details of the event and the actions that Borrowers proposes to take in response.

 

    	46

    	 

    

 

(o)          Leases.
(i) Promptly upon receipt thereof, copies of any material amendment to the terms of any lease of real property; (ii) promptly upon
receipt from any landlord, notice of a breach of a lease by any Borrower or Subsidiary; (iii) promptly upon receipt from any landlord,
notice of legal action of any landlord to evict any Borrower or Subsidiary from any Premises or to terminate or limit the right
of any Borrower or Subsidiary to use, possess or lease any Premises; (iv) promptly upon receipt from any landlord, any cancellation
or termination of any lease for any Premises; and (v) promptly upon entering into any new lease or establishment of any new Premises,
or upon Borrowers’ obtaining knowledge of the transfer of ownership by an existing landlord of any Premises leased by any
Borrower or Subsidiary at which any Borrower or Subsidiary maintains any material amount of Inventory, notice to Lender of the
establishment of such new Premises, including the location, identity of and contact information for any new landlord and, if requested
by Lender, a copy of such new lease.

 

(p)          Casualty
Notices. Promptly upon discovery by a Designated Officer, notice to Lender identifying any loss,
damage, or destruction to the Collateral in the amount of $100,000 or more, whether or not covered by insurance.

 

(q)          Material
Indebtedness. Promptly upon receipt thereof, copies of all material written notices given or
received by Borrowers with respect to any Indebtedness for borrowed money in an amount in excess of $100,000 or any Subordinated
Debt (including, without limitation, notice of the occurrence of any default relating to such Indebtedness), and, within two (2)
Business Days after Borrowers obtain knowledge of any matured or unmatured event of default with respect to any such Indebtedness
or Subordinated Debt, notice to Lender identifying such event of default.

 

(r)          Tax
Returns. No later than twenty (20) days after Borrowers’ state and federal income tax returns
are required to be filed (including any applicable extension requests), certification as to such filing by a Designated Officer
and, upon request of Lender, copies of all filed returns all related schedules and copies of any extension requests, (and copies
of any extension requests); and

 

(s)          Other
Reports. From time to time, with reasonable promptness, all material inventory reports, collection
reports, deposit records, equipment schedules, and such other materials, reports, records or information as Lender may reasonably
request.

 

6.2           Financial
Covenants. Borrowers agree to comply with the financial covenants described below, each of which
shall be calculated using GAAP, consistently applied, except to the extent otherwise provided below.

 

(a)          Minimum
Excess Availability. Borrowers shall at all times maintain Availability of no less than $1,500,000.

 

6.3           Preservation
of Existence. Each Borrower shall, and shall cause each Subsidiary to, preserve and maintain
its existence and all of its rights, privileges and franchises necessary or desirable in the normal conduct of its business, and
shall conduct its business in an orderly, efficient and regular manner.

 

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6.4           Books
and Records. Each Borrower shall, and shall cause each Subsidiary to, keep complete and accurate
books and records with respect to the Collateral, its business, financial condition and any other matters that Lender may request,
all in accordance with GAAP and on a basis consistent with the financial statements delivered pursuant to Section 5.5
hereof.

 

6.5           Payment
of Indebtedness and Charges.

 

(a)          Payment
of Indebtedness and Charges. Subject to Section 6.5(b) hereof, each Borrower shall,
and shall cause each Subsidiary to, pay and discharge or cause to be paid and discharged promptly (i) all Charges payable
by it, (ii) all Taxes imposed upon it, its income and profits, or any of its property (real, personal or mixed), and including
social security and unemployment withholding taxes with respect to its employees, (iii) all lawful claims for labor, materials,
supplies and services or otherwise, (iv) all storage or rental charges payable to landlords, warehousemen and bailees, in
each case, before any thereof shall become past due, and (v) all Indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement evidencing such Indebtedness

 

(b)          Contest
of Indebtedness and Charges. Each Borrower and its Subsidiaries may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges, Taxes, Indebtedness or claims described in Section 6.5(a)
hereof; provided, that (i) adequate reserves with respect to such contest are maintained on the books of such Borrower or
such Subsidiary, in accordance with GAAP, (ii) no Lien shall be imposed to secure payment of such Charges, Taxes or Indebtedness
(other than statutory Liens securing payments to landlords, warehousemen or bailees) that is superior to any of the Liens securing
payment of the Obligations and such contest is maintained and prosecuted continuously and with diligence and operates to suspend
collection or enforcement of such Charges, Taxes or Indebtedness, (iii) no material portion of the Collateral becomes subject
to forfeiture or loss as a result of such contest, and (iv) such Borrower or such Subsidiary shall promptly pay or discharge
such contested Charges, Taxes, Indebtedness or claims and all additional charges, interest, penalties and expenses, if any, and
shall deliver to Lender evidence reasonably acceptable to Lender of such compliance, payment or discharge, if such contest is terminated
or discontinued adversely to such Borrower or the conditions set forth in this Section 6.5(b) are no longer met.

 

6.6           Compliance
with Laws.

 

(a)          Compliance
with Applicable Law; Use of Collateral. Each Borrower shall, and shall cause each Subsidiary
to, (i) comply with the requirements of all applicable laws and regulations, the non-compliance with which could reasonably
be expected to have a Material Adverse Effect, and (ii) use and keep the Collateral, and request that others use and keep
the Collateral (if applicable), only for lawful purposes, without violation of any applicable federal, state or local law, statute
or ordinance the non-compliance with which could reasonably be expected to have a Material Adverse Effect.

 

(b)          Compliance
with Federal Regulatory Laws.  Each Borrower shall, and shall cause each Subsidiary to, (i) prohibit
any Person that is an Officer or Director from being listed on the Specially Designated Nationals and Blocked Person List or other
similar lists maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or
included in any Executive Orders, (ii) not permit the proceeds of the Line of Credit or any other financial accommodation
extended by Lender to be used in a manner that violates any foreign asset control regulations of OFAC or other applicable law,
(iii) comply with all applicable Bank Secrecy Act laws and regulations, as amended from time to time, and (iv) otherwise
comply with the USA Patriot Act and Lender’s related policies and procedures.

 

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(c)          Compliance
with Environmental Laws. Each Borrower shall, and shall cause each Subsidiary to, (i) comply
with the requirements of applicable Environmental Laws and obtain and comply with all permits, licenses and similar approvals required
under such by Environmental Laws, and (ii) not generate, use, transport, treat, store or dispose of any Hazardous Substances
in such a manner as to create any material liability or obligation under the common law of any jurisdiction or any Environmental
Law.

 

6.7           Maintain
Collateral; Defend Collateral.

 

(a)          Maintain
Collateral. Each Borrower shall, and shall cause each Subsidiary to, keep and maintain the Collateral
and all of its other properties necessary or useful in its business in good condition, repair and working order (normal wear and
tear excepted); provided, that any Borrowers may discontinue the operation and maintenance of any properties if Borrowers believes
that such discontinuance is desirable to the conduct of its business and not disadvantageous in any material respect to Lender.

 

(b)          Defend
Collateral. Each Borrower shall, and shall cause each Subsidiary to, defend the Collateral against
all Liens, claims and demands of all third Persons claiming any interest in the Collateral, and keep all Collateral free and clear
of all Liens, except Permitted Liens.

 

6.8           Protect
Intellectual Property Rights.

 

(a)          Each
Borrower (either itself or through licensees) will, and will cause each licensee thereof to, take all action necessary to maintain
all of the Intellectual Property Rights in full force and effect, including, without limitation, using the proper statutory notices
and markings and using the Trademarks on each applicable trademark class of goods in order to so maintain the Trademarks in full
force, free from any claim of abandonment for non-use, and no Borrower will (nor permit any licensee thereof to) take any act or
knowingly omit to take any act whereby any Intellectual Property Rights may be abandoned or cancelled or otherwise become invalidated;
provided, however, that so long as no Event of Default has occurred and is continuing, no Borrower shall have any
obligation to use or to maintain any Intellectual Property Rights (i) that relate solely to any product or work, that has been,
or is in the process of being, discontinued, abandoned or terminated, (ii) that are being replaced with Intellectual Property Rights
substantially similar to the Intellectual Property Rights that may be abandoned, cancelled or otherwise become invalid, so long
as the failure to use or maintain such Intellectual Property Rights does not materially adversely affect the validity of such replacement
Intellectual Property Rights and so long as such replacement Intellectual Property Rights are subject to the Lien and security
interest created by this Agreement or (iii) that are substantially the same as other Intellectual Property Rights that are in full
force and effect, so long as the failure to use or maintain such Intellectual Property Rights could not reasonably be expected
to have a Material Adverse Effect or on the validity of such replacement Intellectual Property Rights and so long as such other
Intellectual Property Rights are subject to the Lien and security interest created by this Agreement.

 

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(b)          If
any Intellectual Property Rights are infringed, misappropriated, diluted or otherwise violated in any material respect by a third
party, Borrowers shall (i) upon learning of such infringement, misappropriation, dilution or other violation, promptly notify the
Lender and (ii) to the extent Borrowers shall deem appropriate under the circumstances, promptly sue for infringement, misappropriation,
dilution or other violation, seek injunctive relief where appropriate and recover any and all damages for such infringement, misappropriation,
dilution or other violation, or take such other actions as Borrowers shall deem appropriate under the circumstances to protect
such Intellectual Property Rights.

 

(c)          The
Borrowers shall furnish to the Lender from time to time (but, unless an Event of Default has occurred and is continuing, no more
frequently than quarterly) statements and schedules further identifying and describing the Owned Intellectual Property and Licensed
Intellectual Property and such other reports in connection with the Owned Intellectual Property and Licensed Intellectual Property
as the Lender may reasonably request, all in reasonable detail and promptly upon request of the Lender. Following receipt by the
Lender of any such statements, schedules or reports, Borrowers shall modify this Agreement by amending Schedule 5.8(a) and
Schedule 5.8(b), as the case may be, to include any Owned Intellectual Property and Licensed Intellectual Property which
become part of the Collateral under this Agreement, and shall execute and authenticate such documents and do such acts as shall
be necessary or, in the judgment of the Lender, desirable to subject such Owned Intellectual Property and Licensed Intellectual
Property to the Lien and security interest created by this Agreement.

 

(d)          The
Borrowers will cause to be taken all necessary and appropriate steps in any proceeding before the United States Patent and Trademark
Office and the United States Copyright Office or any similar office or agency in the United States or any other country or political
subdivision thereof to maintain each registration of the Owned Intellectual Property, including, without limitation, filing of
renewals, affidavits or declarations of use, affidavits or declarations of incontestability, opposition, interference and cancellation
proceedings, and payment of maintenance fees, filing fees, taxes and/or other governmental fees. Notwithstanding anything herein
to the contrary, upon the occurrence and during the continuance of an Event of Default, the Borrowers may not abandon or otherwise
permit any Intellectual Property Right to become invalid without the prior written consent of the Lender, and if any Intellectual
Property Right is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the Borrowers
will take such action as the Lender shall deem appropriate under the circumstances to protect such Intellectual Property Right.

 

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(e)          The
Borrowers shall apply for registration of Owned Intellectual Property to the extent it deems necessary or advisable in its reasonable
business judgment as such Owned Intellectual Property is created, adopted or used and diligently prosecute such applications; provided,
however, that in no event shall any Borrower, either itself or through any agent, employee, licensee or designee, file an
application for the registration of any Owned Intellectual Property unless it gives the Lender prior written notice thereof in
accordance with Section 6.1(g) hereof. The Borrowers shall take such actions as the Lender may request from time to time
to perfect or continue the perfection of the Lender’s Lien and security interest in the Owned Intellectual Property. Upon
request of the Lender, the Borrowers, as appropriate, shall execute, authenticate and deliver any and all agreements, instruments,
documents and papers as the Lender may reasonably request to evidence the Lender’s Lien and security interest hereunder in
such Owned Intellectual Property and the General Intangibles of Borrowers relating thereto or represented thereby, and each Borrower
hereby appoints the Lender as its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed, and such power (being coupled with an interest) shall
be irrevocable until the termination of the Line of Credit, the repayment or satisfaction of all of the Obligations in full and
the termination of each of the Loan Documents. Upon request of the Lender, Borrowers shall provide the Lender with copies of all
filings made with respect to any of the Owned Intellectual Property with the United States Patent and Trademark Office, the United
States Copyright Office, and any similar office or agency of the United States or any country or any political subdivision thereof.

 

(f)          The
Borrowers will (i) maintain their Websites in continuous operation, providing at least the current level of functionality with
respect to Borrowers’ business operations, (ii) maintain the Website Collateral and related Equipment at the Hosting Agent’s
premises and, notwithstanding anything herein to the contrary, obtain the Lender’s prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed, prior to any removal from or change in such location, (iii) permit the Lender,
and cause the Hosting Agent to permit the Lender, to inspect such Website Collateral and related Equipment at any time, (iv) promptly
upon request by the Lender, cause the administrative contact for the Domain Names to be changed to a person designated by the Lender,
and not permit any other change or revision in such information without the prior written consent of the Lender, which consent
shall not be unreasonably withheld, conditioned or delayed, (v) maintain with the records of the applicable domain name registrar
a billing contact who has a position within a Borrower and has actual responsibility for taking whatever action is necessary for
the maintenance of such Domain Names, (vi) pay all fees and charges required for the maintenance of such Domain Names at least
thirty (30) days before any such fee or charge is due, and (vii) not obtain any license, whether of Software or Intellectual Property
Rights, for use in connection with any of the Websites, without the prior written consent of the Lender, which consent shall not
be unreasonably withheld, conditioned or delayed. The Borrowers shall furnish to the Lender, promptly upon request, (A) a waiver
and consent agreement executed by the Hosting Agent in connection with the Website Collateral, such waiver and consent to be in
such form and upon such terms as are reasonably acceptable to the Lender, and (B) an executed Registrant Name Change Agreement
(or such other document required by the applicable domain name registrar in connection with the change of registrant for a Domain
Name) providing for the naming of the Lender as registrant for each of the Domain Names, to be held in escrow by the Lender until
the occurrence of an Event of Default.

 

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(g)          The
Borrowers will promptly notify the Lender in writing if Borrowers reasonably believe that: (i) any party to a License other than
a Borrower is in breach or default of any material obligations under such License; or (ii) Borrowers have a material claim against
any other party to a License; or (ii) any party to a License has a claim against any Borrower which, if adversely determined against
such Borrower, could result in a Material Adverse Effect. Upon the occurrence and during the continuance of any such breach or
default under any License by any party thereto other than any Borrower, (A) Borrowers will, promptly after obtaining knowledge
thereof, give the Lender written notice of the nature and duration thereof, specifying what action, if any, it has taken and proposes
to take with respect thereto, (B) no Borrower will, without the prior written consent of the Lender, declare or waive any such
breach or default or affirmatively consent to the cure thereof or exercise any of its remedies in respect thereof, and (C) Borrowers
will, upon written instructions from the Lender and at Borrowers’ expense, take such action as the Lender may deem necessary
or advisable in respect thereof. In any matter described in the first sentence of this paragraph, Borrowers will, at their expense,
promptly deliver to the Lender a copy of each notice or other communication received by them by which any other party to any License
purports to exercise any of its rights or affect any of its obligations thereunder, together with a copy of any reply by Borrowers
thereto. Each Borrower will exercise promptly and diligently each and every right which it may have under each License (other than
any right of termination) and will duly perform and observe in all respects all of its obligations under each License and will
take all actions necessary to maintain the Licenses in full force and effect. 

 

(h)          No
Borrower will enter into any Material License without the prior written consent of the Lender (which consent shall be granted or
denied in Lender’s reasonable discretion and no later than three (3) Business Days following written request therefor by
Borrowers (any such request to be accompanied by a summary in reasonable detail of the applicable proposed license arrangement).
No Borrower will, without the prior written consent of the Lender, cancel, terminate, amend or otherwise modify in any respect,
or waive any provision of, any Material License. If any Material License is subject to renewal, Borrowers shall give the Lender
written notice of its intentions regarding such renewal at least ninety (90) days prior to the renewal date.

 

6.9           Insurance.

 

(a)          Maintain
Insurance. Each Borrower shall, and shall cause each Subsidiary to, at all times, maintain policies
of insurance with insurers, in such amounts and on such terms reasonably acceptable to Lender including, as applicable and without
limitation, business interruption insurance, hazard coverage on an “all risks” basis for all tangible Collateral, products
liability and general liability insurance. Such policies of insurance (or the loss payable and additional insured endorsements
delivered to Lender) shall contain provisions pursuant to which the insurer agrees to provide no less than thirty (30) days prior
written notice to Lender in the event of any non-renewal, cancellation or amendment of any such insurance policy. Borrowers shall
deliver to Lender, in form and substance reasonably satisfactory to Lender, endorsements to (i) all casualty insurance naming
Lender as loss payee, and (ii) all general liability and other liability policies naming Lender as additional insured. If
Borrowers at any time shall fail to obtain or maintain any of the policies of insurance required above or to pay all premiums relating
thereto, Lender may at any time thereafter obtain and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Lender deems advisable. Lender shall have no obligation to obtain insurance for Borrowers or pay
any premiums therefor. By doing so, Lender shall not be deemed to have waived any Default or Event of Default arising from Borrowers’
failure to maintain such insurance or pay any premiums therefor and shall have no liability to Borrowers for failing to do so.
All sums so disbursed by Lender, including premiums, reasonable attorneys’ fees, court costs and other charges related thereto,
shall be payable on demand by Borrowers to Lender in accordance with Section 3.2(c) hereof.

 

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(b)          Change
in Risk Profile. Lender reserves the right at any time upon any change in Borrowers’ risk
profile (including any change in the product mix maintained by Borrowers or any laws affecting the potential liability of Borrowers)
to require additional forms and limits of insurance to, in the opinion of Lender, adequately protect Lender’s interests in
all or any portion of the Collateral and to ensure that Borrowers are protected by insurance in amounts and with coverage customary
for its industry and geographic region. If reasonably requested by Lender, Borrowers shall deliver to Lender from time to time
a report of a reputable insurance broker reasonably satisfactory to Lender, with respect to its insurance policies.

 

6.10         Further
Assurances. Each Borrower shall, and shall cause each Subsidiary to, at Borrowers’ expense
and upon the reasonable request of Lender, duly execute and deliver, or cause to be duly executed and delivered, to Lender such
further instruments and do and cause to be done such further acts as may be necessary or proper in the reasonable opinion of Lender
to carry out more effectively the provisions and purposes of this Agreement and the other Loan Documents.

 

7.            NEGATIVE
COVENANTS

 

So long as the Obligations
remain unpaid, or the Line of Credit has not been terminated, Borrowers shall comply with each of the following covenants:

 

7.1           Indebtedness.
No Borrower shall, or permit any Subsidiary to, incur, create, assume or permit to exist any Indebtedness or liability on account
of deposits or letters of credit issued on its behalf, or advances or any Indebtedness for borrowed money of any kind, whether
or not evidenced by an instrument, except:

 

(a)          the
Obligations described in this Agreement and the other Loan Documents;

 

(b)          Indebtedness
in existence as of the date of this Agreement and described in Schedule 7.1 attached hereto;

 

(c)          Indebtedness
in respect of Capitalized Leases and/or purchase money Indebtedness incurred in connection with the acquisition of Equipment and
other capital assets in an aggregate amount outstanding at any time not to exceed $1,000,000;

 

(d)          (i)
from the Closing Date through the date thirty (30) days thereafter, unsecured Indebtedness consisting of trade payables arising
in the ordinary course of business, and (ii) following the date thirty (30) days after the Closing Date, unsecured Indebtedness
consisting of trade payables arising in the ordinary course of business and not more than sixty (60) days past due or such other
time period consistent with historical practices;

 

(e)          unsecured
Contingent Liabilities arising by endorsement of instruments or deposit or collection in the ordinary course of business;

 

(f)          unsecured
intercompany debt owing by any Borrower to another Borrower, or from a Borrower to a Subsidiary, provided that all such intercompany
Indebtedness shall be subordinated to the Obligations on terms satisfactory to the Lender in its sole discretion;

 

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(g)          Indebtedness
incurred by Borrowers arising from agreements providing for indemnification, adjustment of purchase price or similar obligations
(including, Indebtedness consisting of the deferred purchase price of property acquired in a permitted acquisition, or from guaranties
or letters of credit, surety bonds or performance bonds securing the performance of Borrower or any such Subsidiary pursuant to
such agreements), in connection with acquisitions or dispositions of any business, assets or Subsidiary of Borrowers permitted
under this Agreement, not to exceed $1,200,000 at any time, provided all such Indebtedness shall be unsecured and subordinated
in right of payment to the payment in full of the Obligations.

 

(h)          refinancings
of amounts set forth in clauses (b) or (c) above so long as the principal amount thereof is not increased, the weighted average
life to mature is not shortened, if secured, no additional collateral therefor shall be granted and, if the Indebtedness being
refinanced is subordinated to the Obligations, the replacement Indebtedness shall be subordinated on the same terms as such Indebtedness
being so refinanced; and

 

(i)          Subordinated
Debt (provided that such Indebtedness is subject at all times to a Subordination Agreement) and other unsecured Indebtedness of
Borrowers, in an aggregate principal amount at any time outstanding not to exceed $1,000,000.

 

7.2           Liens.
No Borrower shall, or permit any Subsidiary to, create, incur or suffer to exist any Lien upon any of its assets, including, without
limitation, licenses of patents, trademarks and other Intellectual Property Rights, as security for any Indebtedness or obligations,
with the exception of the following (each a “Permitted Lien” and collectively, “Permitted Liens”):

 

(a)          the
Liens in favor of Lender created by this Agreement and the other Loan Documents;

 

(b)          Liens
in existence on the date of this Agreement that are described in Schedule 7.2 attached hereto securing Indebtedness
permitted under Section 7.1(b) and Section 7.1(g) hereof;

 

(c)          Liens
on fixed or capital assets acquired, constructed or improved by Borrowers or a Subsidiary; provided, that (i) such Liens secured
Indebtedness permitted under Section 7.1(c) hereof; (ii) such Liens and the Indebtedness secured thereby are incurred
prior to or within ninety (90) days after such acquisition or completion of such construction or improvement; (iii) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets; and (iv) such
Liens shall not apply to any other property or assets of Borrowers or such Subsidiary;

 

(d)          Liens
for taxes, assessments or other governmental charges not delinquent or being properly contested by appropriate proceedings and
for which proper reserves have been established and that do not have priority over Lender’s Liens in the Collateral;

 

(e)          deposits
or pledges to secure bids, tenders, contracts, leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of business;

 

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(f)          pledges
or deposits to secure payment of worker’s compensation, unemployment insurance and similar obligations and deposits or indemnities
to secure public or statutory obligations for similar purposes and pledges or deposits to secure the performance of bids, tenders,
trade contracts (other than for borrowed money), leases (other than Capitalized Leases), utility purchase obligations, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course
of business;

 

(g)          Liens
imposed by law, such as carriers, warehouseman’s and mechanic’s liens and other similar Liens arising in the ordinary
course of business which secure payment of obligations which are not past due or which are being contested in good faith and by
appropriate proceedings and Liens securing judgments (including pre-judgment attachments) so long as such Liens do not result in
an Event of Default;

 

(h)          Liens
consisting of bankers’ liens and rights of setoff, in each case, arising by operation of law, and Liens on documents presented
in letter of credit drawings;

 

(i)          any
interest or title of a lessor or sublessor under any lease of real estate permitted hereunder;

 

(j)          in
the case of real property, covenants, restrictions, rights, easements and minor irregularities in title which do not materially
interfere with such Person’s business or operations as presently conducted; and

 

(k)          Liens
securing the Subordinated Debt as in effect as of the date of this Agreement, which Liens are subject in all respects to the Subordination
Agreement.

 

7.3          Investments.
No Borrower shall, or permit any Subsidiary to, make or permit to exist any loans or advances to, or make any investment or acquire
any interest whatsoever in, any Person or Affiliate, including without limitation any partnership or joint venture, nor purchase
or hold beneficially any stock or other securities or evidence of Indebtedness of any Person or Affiliate (collectively, the “Investments”),
except:

 

(a)          (i) Investments
in direct obligations of the United States of America or any of its political subdivisions whose obligations constitute the full
faith and credit obligations of the United States of America and have a maturity of one year or less, (ii) commercial paper
issued by U.S. corporations rated “A 1” or “A 2” by Standard & Poor’s Ratings Services
or “P 1” or “P 2” by Moody’s Investors Service, (iii) certificates of deposit, bankers’
acceptances or time deposits having a maturity of one year or less issued by members of the Federal Reserve System having deposits
in excess of $500,000,000 (which certificates of deposit, bankers’ acceptances or time deposits are fully insured by the
Federal Deposit Insurance Corporation) or (iv) money market funds that (x) comply with the criteria set forth in the
Securities and Exchange Commission’s Rule 2a-7 under the Investment Company Act of 1940, (y) are rated “AAA”
by Standard & Poor’s Ratings Services and “Aaa” by Moody’s Investors Service and (z) have portfolio
assets of at least $5,000,000,000;

 

(b)          Investments
consisting of travel advances or loans to Borrowers’ Officers and employees not exceeding at any one time $10,000 for any
single advance or loan, and an aggregate of $50,000 for all such loans and advances;

 

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(c)          Checking
and deposit accounts with banks used in the ordinary course of business;

 

(d)          Investments
(i) in any securities received in the ordinary course of business consistent with past practices in satisfaction or partial satisfaction
thereof from financially troubled account debtors and (ii) deposits, prepayments and other credits to suppliers made in the ordinary
course of business;

 

(e)          Prepaid
rent not exceeding one month or security deposits securing performance under leases of real or personal property; and

 

(f)          Current
Investments in Subsidiaries in existence on the date of this Agreement which are identified in Schedule 7.3 attached
hereto and Investments made after the Closing Date in any Subsidiary of a Borrower that become a Borrower hereunder.

 

7.4          Restricted
Payments. No Borrower shall, or permit any Subsidiary to make, any Restricted Payment, except:

 

(a)          dividends
and distributions payable solely in shares of Capital Stock and conversions of a class or series of Capital Stock into shares of
another class or series of Capital Stock (in each case other than Disqualified Capital Stock);

 

(b)          any
Subsidiary may declare and pay dividends or make other distributions in respect of its Capital Stock to a parent Borrower (other
than Disqualified Capital Stock);

 

(c)          So
long as no Default or Event of Default has occurred or would result from such payment, repurchases of Capital Stock by any Borrower
from its former employees, directors, or consultants under the terms of applicable repurchase agreements at the original issuance
price of such Capital Stock of such Borrower; provided, that such Borrower shall not repurchase Capital Stock of such Borrower
under this clause (c) in an aggregate amount greater than $250,000 in any fiscal year; and

 

(d)          So
long as no Default or Event of Default has occurred or would result from such payment, payments on account of Subordinated Debt
specifically permitted under the applicable Subordination Agreement.

 

7.5          Transactions
with Affiliates. No Borrower shall, or permit any Subsidiary to enter into or permit to exist
any transaction with any Affiliate of any Borrower or any of its Subsidiaries except for:

 

(a)          any
Affiliate who is an individual may serve as a director, officer, manager, member, employee or consultant of a Borrower or Subsidiary
of a Borrower, receive reasonable compensation for his or her services in such capacity;

 

(b)          transactions
(other than the payment of management, consulting, monitoring, or advisory fees) between any Borrower or any of its Subsidiaries,
on the one hand, and any Affiliate of any Borrower or any of its Subsidiaries, on the other hand, so long as such transactions
(i) are fully disclosed to Lender prior to the consummation thereof, if they involve one or more payments by any Borrower or any
of its Subsidiaries in excess of $100,000 for any single transaction or series of related transactions, and (ii) are no less favorable,
taken as a whole, to any Borrowers or any of its Subsidiaries, as applicable, than would be obtained in an arm’s length transaction
with a non-Affiliate; and

 

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(c)          transactions
permitted by Section 7.4 hereof.

 

7.6          Sale
of Assets. No Borrower shall, or permit any Subsidiary to sell, lease, assign, transfer or otherwise
dispose of (i) the Capital Stock of any Borrower or any Subsidiary, (ii) all or a substantial part of its assets (and,
for purposes of this Section 7.6, without limiting the generality of the foregoing, the sale or transfer (including
by way of a transaction with a liquidator in any one or a series of transactions occurring over a period of twelve (12) months)
of twenty (20) or more retail store locations or all or substantially all of the Inventory located therein shall be deemed a “substantial
part” of Borrowers’ assets, or (iii) any Collateral, any interest in Collateral (whether in one transaction
or in a series of transactions) or any other assets to any other Person, except:

 

(a)          the
sale of Inventory in the ordinary course of business; and

 

(b)          the
disposition or transfer of obsolete, damaged and worn-out Equipment, provided that the proceeds thereof are used to acquire replacement
Equipment or other capital assets used or useful in Borrower’s business; and

 

(c)          transactions
permitted under Section 7.7 hereof.

 

7.7          Transfer
of Intellectual Property Rights. No Borrower shall, or permit any Subsidiary to, transfer any
part of its ownership interest in any Owned Intellectual Property Rights, or permit its rights as licensee of Licensed Intellectual
Property to lapse, or license any other Person to use any of Borrowers’ Intellectual Property Rights except (i) as set forth
in Section 6.8(h) hereof, and (ii) any Borrower and its Subsidiaries may transfer such rights or permit them to lapse if
such Borrower has reasonably determined that such Intellectual Property Rights are no longer required or useful in its business
or the business of the applicable Subsidiary.

 

7.8          Mergers,
Subsidiaries; Asset Acquisitions. No Borrower shall, or permit any Subsidiary to, directly or
indirectly, by operation of law or otherwise, (i) form or acquire any Subsidiary, unless, upon the formation or acquisition
of such Subsidiary (x) such Subsidiary joins this Agreement as a Borrower or enters into a guaranty of the Obligations, and
in each case, grants in favor of Lender a first priority Lien in all or substantially all of the assets of such Subsidiary, and
(y) the applicable Borrower or Subsidiary delivers a pledge agreement in favor of Lender with respect to all of the Capital Stock
of such Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially all of the assets or Capital Stock
of, or otherwise combine with or acquire, any Person, provided, that (A) any Subsidiary may merge (x) into any Subsidiary
or (y) into a Borrower, so long as such Borrower shall be the surviving entity in such transaction; and (B) any Borrower
may merge into any other Borrower.

 

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7.9           Sale
and Leaseback. No Borrower shall, or permit any Subsidiary to, enter into any arrangement, directly
or indirectly, with any other Person pursuant to which such Borrower shall sell or transfer any real or personal property, whether
owned now or acquired in the future, and then rent or lease all or part of such property or any other property which such Borrower
intends to use for substantially the same purpose or purposes as the property being sold or transferred.

 

7.10         Restrictions
on Nature of Business. No Borrower shall, or permit any Subsidiary to, engage in any line of
business materially different from that presently engaged in by such Borrower and its Subsidiaries or substantially related thereto
and as reflected in the Business Plan, and will not purchase, lease or otherwise acquire assets not related to their business.

 

7.11         Accounting;
Fiscal Year. No Borrower shall, or permit any Subsidiary to, adopt any material change in accounting
principles except as required by GAAP. No Borrower shall change its fiscal year.

 

7.12         Discounts.
No Borrower shall, or permit any Subsidiary to, grant any discount, credit or allowance to any customer, or accept any return of
goods sold, except in the ordinary course of business and consistent with historical practices. No Borrower shall, and shall not
permit any Subsidiary to, modify, amend, subordinate, cancel or terminate any Account, except in the ordinary course of business
and consistent with historical practices.

 

7.13         Pension
Plans. No Borrower shall, or permit any ERISA Affiliate to (a) adopt, create, assume or
become party to any Pension Plan, (b) become obligated to contribute to any Multiemployer Plan, (c) incur any obligation
to provide post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required
by law), or (d) amend any Plan in a manner that would materially increase its funding obligations.

 

7.14         Change
to Place of Business; Premises. No Borrower shall, or permit any Subsidiary to, change the location
of its chief executive office, principal place of business, corporate offices or warehouses or locations at which Collateral is
held or stored, or the location of its records concerning the Collateral, in each case, without providing Lender thirty (30) days
prior written notice and delivering to Lender a duly executed collateral access agreement, landlord’s waiver or warehouseman’s
agreement, as applicable, in form and substance satisfactory to Lender.

 

7.15         Constituent
Documents; Name Change. No Borrower shall, or permit any Subsidiary to, amend its Constituent
Documents in a manner adverse to Lender. No Borrower shall, and shall not permit any Subsidiary to, (a) change its name as
it appears in official filings in the state of its incorporation or formation, (b) change its entity type, (c) change
its organization identification number, if any, issued by its state of incorporation or formation, or (d) change its state
of incorporation or organization, in each case without at least thirty (30) days prior written notice to Lender and after Lender’s
written acknowledgment that any reasonable action requested by Lender in connection therewith, including to continue the perfection
of the Liens in favor of Lender in any Collateral, has been completed or taken.

 

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7.16         Deposit
Accounts. No Borrower shall, or permit any Subsidiary to, open or maintain any deposit account,
securities account, or investment account without the consent of Lender, except for (i) the Collection Account, the Credit Card
Collection Account and Operating Account, each of which shall at all times be subject to a Control Agreement in form and substance
reasonably satisfactory to Lender, (ii) the Store Accounts and other deposit accounts existing as of the Closing Date and described
on Schedule 7.16 attached hereto, and (iii) any additional deposit accounts as may be established from time to time in connection
with the opening of new retail store locations as permitted under this Agreement (collectively, “Permitted Accounts”),
provided that Borrowers shall notify Lender of the opening of any new account in accordance with clause (iii) above and provide
an updated Schedule 7.16 reflecting any new accounts.

 

7.17         Retail
Stores.

 

(a)          No
Borrower shall, or permit any Subsidiary to, open or commit to open, any location at which it maintains, offers for sale or stores
any Collateral (or intends to maintain, offer for sale or store any Collateral) unless (i) such location opening is provided for
in the Business Plan then in effect, and is in the ordinary course of business, and (ii) such Borrower shall have provided Lender
at least thirty (30) days’ prior written notice of such commitment or opening.

 

(b)          No
Borrower shall, or permit any Subsidiary to, close or commit to close, any location at which it maintains, offers for sale or stores
any Collateral unless (i) such location closing is provided for in the Business Plan then in effect, and is in the ordinary course
of business, (ii) such Borrower shall have provided Lender at least thirty (30) days’ prior written notice of such closing,
and (iii) Lender has consented in advance, in writing to the manner and methods employed in connection with such location closing,
including, without limitation, the terms of engagement of any third party as agent, consultant or otherwise proposed to be employed
in connection therewith; provided, however, that if Borrowers shall be unable to renegotiate, re-new or otherwise
come to acceptable terms with any landlord for a store, then Borrowers shall be permitted to close such store upon prior notice
thereof to Lender, and provided, further that Borrowers shall in no event be permitted to close more than two (2) stores per fiscal
monthly period and five (5) stores per fiscal year other than in accordance with the Business Plan.

 

7.18         Changes
in Terms of Subordinated Debt. Without the prior written consent of Lender, no Borrower shall
effect or permit any modification or amendment to any Subordinated Debt, or any document, instrument or agreement evidencing or
governing such Subordinated Debt, except for modifications and amendments that (i) do not violate the terms of the applicable Subordination
Agreement, (ii) are not adverse to Borrowers or Lender and (iii) do not create any material additional obligation of Borrowers.

 

8.            EVENTS
OF DEFAULT AND REMEDIES

 

8.1           Events
of Default. An “Event of Default” means any of the following:

 

(a)          Borrowers
fails to pay the amount of any Obligations on the date that it becomes due and payable;

 

(b)          Borrowers
fail to observe or perform any covenant or agreement of Borrowers set forth in Section 3.2(e) or Section 7 hereof;

 

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(c)          Borrowers
fail to observe or perform any covenant or agreement of Borrowers set forth in (i) any of clauses (e) through (q) or clause (s)
of Section 6.1, Section 6.2, Section 6.3, or Section 6.9 of this Agreement, or (ii) clauses (a), (b), (c), (d) or (r) of Section
6.1 of this Agreement, and such failure, if capable of being remedied, shall remain unremedied for two (2) Business Days after
the earlier of (A) the date upon which a Designated Officer obtains knowledge of such failure, or (B) the date upon which
Borrowers have received notice of such failure from Lender, or (iii) any other covenant or agreement contained in Section 6 or
elsewhere in this Agreement or in any other Loan Document, and such failure, if capable of being remedied, shall remain unremedied
for fifteen (15) days after the earlier of (A) the date upon which a Designated Officer obtains knowledge of such failure,
or (B) the date upon which Borrowers have received notice of such failure from Lender;

 

(d)          An
Overadvance arises as the result of any reduction in the Borrowing Base, or arises in any manner or on terms not otherwise approved
of in advance by Lender in writing, and Borrower shall fail to eliminate such Overadvance in full within one (1) Business Day after
the earlier of (i) the date upon which a Designated Officer obtains knowledge of such failure or (ii) the date upon which
Borrowers have received notice of such failure from Lender;

 

(e)          Any
representation or warranty made by Borrowers in this Agreement or any other Loan Document, or in any agreement, certificate, instrument
or financial statement or other statement delivered to Lender in connection with this Agreement is untrue or misleading in any
material respect when made or deemed made;

 

(f)          A
Change of Control shall occur;

 

(g)          Any
Borrower become insolvent or admits an inability to pay its debts as they mature, or any Borrower make an assignment for the benefit
of creditors; or any Borrower applies for or consents to the appointment of a receiver, trustee, or similar officer for the benefit
of such Borrower, or for any of its properties; or any receiver, trustee or similar officer is appointed without the application
or consent of such Borrower and such case or proceeding shall continue undismissed or unstayed for a period of forty-five (45)
consecutive days; or any judgment, writ, warrant of attachment or execution or similar process is issued or levied against a substantial
part of the property of such Borrower;

 

(h)          Any
Borrower files a petition under any chapter of the United States Bankruptcy Code or under the laws of any other jurisdiction naming
such Borrower as debtor; or such Borrower institutes (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, debt arrangement, dissolution, liquidation or similar proceeding under the laws of any jurisdiction; or any such
petition is instituted against such Borrower, or any such proceeding is instituted (by petition, application or otherwise) against
such Borrower and such case or proceeding shall continue undismissed or unstayed for a period of forty-five (45) consecutive calendar
days;

 

(i)          A
final, non-appealable arbitration award, judgment, or decree or order for the payment of money in an amount in excess of $200,000
which is not insured, is entered against any Borrower that is not immediately stayed or appealed;

 

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(j)          Any
Borrower is in default with respect to any bond, debenture, note or other evidence of material Indebtedness issued by such Borrower,
or under any instrument under which any such evidence of Indebtedness has been issued or by which it is governed, or under any
material lease or other contract having an aggregate outstanding amount of more than $200,000, and all applicable grace periods,
if any, have expired, regardless of whether such default has been waived by the holder of such Indebtedness;

 

(k)          Any
Borrower liquidates, dissolves, terminates or suspends its business operations or otherwise fails to operate its business in the
ordinary course, or merges with another Person in a transaction which is not permitted under this Agreement; or sells or attempts
to sell all or substantially all of its assets;

 

(l)          Borrowers
fail to pay any obligation owed to Lender or its Affiliates that is unrelated to the Line of Credit or this Agreement as the same
becomes due and payable;

 

(m)          Any
Borrower engages in any act prohibited by any Subordination Agreement, or makes any payment on account of Subordinated Indebtedness
(as defined in the applicable Subordination Agreement) that the applicable Subordinated Creditor was not contractually entitled
to receive under this Agreement and/or applicable Subordination Agreement;

 

(n)          Any
event or circumstance occurs that Lender in good faith believes may impair the prospect of payment of all or part of the Obligations,
or Borrowers’ ability to perform any of their material obligations under any of the Loan Documents, or any other document
or agreement described in or related to this Agreement or the Obligations, or there occurs any Material Adverse Effect;

 

(o)          Any
Director, Officer, or Owner of at least 20% of the issued and outstanding Capital Stock of any Borrower is indicted for a felony
offence under state or federal law, or any Borrower hires an Officer or appoints a Director who has been convicted of any such
felony offense, or a Person becomes an Owner of at least 20% of the issued and outstanding Capital Stock of such Borrower who has
been convicted of any such felony offense;

 

(p)          Any
Reportable Event, which Lender in good faith believes to constitute sufficient grounds for termination of any Pension Plan or for
the appointment of a trustee to administer any Pension Plan, has occurred and is continuing thirty (30) days after Borrowers give
Lender notice of the Reportable Event; or a trustee is appointed by an appropriate court to administer any Pension Plan; or the
Pension Benefit Guaranty Corporation institutes proceedings to terminate or appoint a trustee to administer any Pension Plan; or
any Borrower or any ERISA Affiliate files for a distress termination of any Pension Plan under Title IV of ERISA; or Borrower or
any ERISA Affiliate fails to make any quarterly Pension Plan contribution required under Section 412(m) of the IRC, which
Lender in good faith believes may, either by itself or in combination with other failures, result in the imposition of a Lien on
such Borrower’s assets in favor of the Pension Plan; or any withdrawal, partial withdrawal, reorganization or other event
occurs with respect to a Multiemployer Plan which could reasonably be expected to result in a material liability by Borrower to
the Multiemployer Plan under Title IV of ERISA;

 

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(q)          Any
casualty, loss or other event occurs, whether or not insured or insurable, as a result of which revenue-producing activities cease
or are substantially curtailed at any facility or facilities of Borrowers generating more than twenty percent (20%) of Borrowers’
revenues for Borrowers’ fiscal year preceding such event and such cessation or curtailment continues for more than thirty
(30) days.

 

8.2           Rights
and Remedies. During any Default Period, Lender may in its sole discretion exercise any or all
of the following rights and remedies:

 

(a)          Lender
may terminate the Line of Credit and decline to make Advances;

 

(b)          Lender
may declare the Obligations to be immediately due and payable and accelerate payment of the Revolving Note, and the Obligations
shall immediately become due and payable, without presentment, notice of dishonor, protest or further notice of any kind, all of
which Borrower hereby expressly waives;

 

(c)          Lender
may, without notice to Borrowers, set off and apply any monies owing by Lender to Borrowers to payment of the Obligations;

 

(d)          Lender
may exercise and enforce any rights and remedies available upon default to a secured party under the UCC, including, without limitation,
the right to take possession of Collateral (without posting a bond or other form of security, which Borrowers hereby waive), to
proceed with or without judicial process (without a prior hearing or notice of hearing, which Borrowers hereby waive), and to sell,
lease or otherwise dispose of Collateral for cash or on credit (with or without giving warranties as to condition, fitness, merchantability
or title to Collateral, and in the event of a credit sale in such manner and at such places (including Borrowers’ Premises)
as Lender determines is commercially reasonable, including, conducting one or more going out of business or liquidation sales,
in Lender’s own right or by one or more agents or contractors, which sales may be conducted upon any Premises owned, leased,
or occupied by Borrowers. To the extent permitted by applicable law, Lender and any such agent or contractor, in conjunction with
any such sale, may augment Borrowers’ inventory with other goods (all of which other goods shall remain the sole property
of Lender or such agent or contractor). Borrowers will upon Lender’s demand assemble the Collateral and make it available
to Lender or its agents or representatives at any place designated by Lender which is reasonably convenient to both parties. Borrowers’
Obligations to Lender shall be reduced only to the extent that payments are actually received by Lender;

 

(e)          Without
notice to or demand upon Borrowers, make such payments and do such acts as Lender considers necessary or reasonable to protect
its Lien in the Collateral. Borrowers authorize Lender or its agents to enter any premises where the Collateral is located, to
take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any Lien that in
Lender’s determination appears to conflict with Lender’s Lien and to pay all expenses incurred in connection therewith
and to charge Borrowers’ loan account therefor. With respect to any of Borrowers’ owned or leased Premises, Borrowers
hereby grant Lender a license to enter into possession of such Premises and to occupy the same, without charge, in order to exercise
any of Lender’s rights or remedies provided herein, at law, in equity, or otherwise;

 

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(f)          Lender
may exercise and enforce any of its rights and remedies under any of the Loan Documents and any other document or agreement described
in or related to this Agreement or the Obligations, or at law or in equity;

 

(g)          Lender
may for any reason apply for the appointment of a receiver for the Collateral (to which appointment Borrowers hereby consent) without
the necessity of posting a bond or other form of security (which Borrower hereby waives); and

 

(h)          Lender
may exercise any other rights and remedies available to it by law or agreement.

 

8.3           Immediate
Default and Acceleration. Following the occurrence of an Event of Default described in Section 8.1(g)
hereof or Section 8.1(h) hereof, the Line of Credit shall immediately terminate and all of the Obligations shall immediately
become due and payable without presentment, demand, protest or notice of any kind.

 

9.            MISCELLANEOUS

 

9.1           No
Waiver; Cumulative Remedies. No delay or any single or partial exercise by Lender of any right,
power or remedy under the Loan Documents, or under any other document or agreement described in or related to this Agreement, shall
constitute a waiver of any other right, power or remedy under the Loan Documents or granted by Borrowers to Lender under other
agreements or documents that are unrelated to the Loan Documents. No notice to or demand on Borrowers in any circumstance shall
entitle Borrowers to any additional notice or demand in any other circumstances. The remedies provided in the Loan Documents or
in any other document or agreement described in or related to this Agreement or the Obligations are cumulative and not exclusive
of any remedies provided by law. Lender may comply with applicable law in connection with any disposition of Collateral, and such
compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

 

9.2           Amendment;
Consents and Waivers; Authentication. No amendment or modification of any Loan Documents, or
any other document or agreement described in or related to this Agreement, or consent to or waiver of any Event of Default, or
consent to or waiver of the application of any covenant or representation set forth in any of the Loan Documents or any other document
or agreement described in or related to this Agreement or the Obligations, or any release of Lender’s Lien in any Collateral,
shall be effective unless it has been agreed to by Lender in writing that: (a) specifically states that it is intended to
amend or modify specific Loan Documents, or any other document or agreement described in or related to this Agreement or the Obligations,
or waive any Event of Default or the application of any covenant or representation of any terms of specific Loan Documents, or
any other document or agreement described in or related to this Agreement or the Obligations, or is intended to release Lender’s
Lien in specific Collateral; and (b) is executed by an authorized employee of each party, or by an authorized employee of Lender
with respect to a consent or waiver. The terms of an amendment, consent or waiver memorialized in writing shall be effective only
to the extent, and in the specific instance, and for the limited purpose to which Lender has agreed.

 

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9.3           Execution
in Counterparts; Delivery of Counterparts. This Agreement and all other Loan Documents, or any
other document or agreement described in or related to this Agreement or the Obligations, and any amendment or modification to
any such document or agreement may be executed by the parties in any number of counterparts, each of which, once executed and delivered
in accordance with the terms of this Section 9.3, will be deemed an original, and all such counterparts, taken together,
shall constitute one and the same instrument. Delivery by fax or by electronic mail or e-mail file attachment of any counterpart
to any Loan Document executed by an authorized signature will be deemed the equivalent of the delivery of the original instrument.
Borrowers shall send the original counterpart to Lender by first class U.S. mail or by overnight courier, but any party’s
failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement
or the other Loan Documents, or any other document or agreement described in or related to this Agreement or the Obligations.

 

9.4           Notices,
Requests, and Communications. Except as otherwise expressly provided in this Agreement:

 

(a)          Delivery
of Notices, Requests and Communications. Any notice, request, demand, or other communication
by any party that is required under the Loan Documents, or any other document or agreement described in or related to this Agreement,
shall be in writing and shall be delivered (i) in person, (ii) by first class U.S. mail, (iii) by overnight courier
of national reputation, (iv) by fax, or (v) may be delivered by electronic mail and confirmed by delivery via overnight
courier or postal service; provided, however, that requests for Advances shall not require any confirmation delivery.

 

(b)          Addresses
for Delivery. Delivery of any notice under this Section 9.4 shall be made to the
appropriate address set forth on the signature pages of this Agreement (which any party may modify by notifying the other party
in writing).

 

(c)          Date
of Receipt. Each notice sent pursuant to the terms of this Section 9.4 will be deemed
to have been received on (i) the date of delivery if delivered in person, (ii) the date two (2) Business Days after deposit
in the mail if sent by mail, (iii) the date one (1) Business Day after delivery to the courier if sent by overnight courier,
(iv) the date of transmission if sent by fax, or (v) the date of transmission if sent by electronic mail; except that
any request for an Advance or any other notice, request, demand or other communication from Borrowers required under Section 2
hereof, and any request for an accounting under Section 9-210 of the UCC, will not be deemed to have been received until actual
receipt by Lender on a Business Day by an authorized employee of Lender.

 

9.5           Borrowers
Information Reporting; Confidentiality. Except as otherwise expressly provided in this Agreement:

 

(a)          Delivery
of Borrowers’ Information Records. Any information that Borrowers are required to deliver
under Section 6.1 hereof may be delivered to Lender (i) in person, or (ii) by first class U.S. mail, (iii) by
overnight courier of national reputation, (iv) by fax, or (v) by electronic mail.

 

(b)          Addresses
for Delivery. Delivery of any notice to Lender under this Section 9.5 shall be made
to the appropriate address set forth on the signature pages of this Agreement (which Lender may modify by notice sent to Borrowers).

 

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(c)          Date
of Receipt. Each notice sent pursuant to this Section 9.5 will be deemed to have
been received on (i) the date of delivery if delivered in person to an authorized employee of Lender, (ii) the date two
(2) Business Days after deposit in the mail if sent by mail, (iii) the date one (1) Business Day after delivery to the courier
if sent by overnight courier, (iv) the date of transmission if sent by fax, or (v) the date of transmission, if sent
by electronic mail.

 

(d)          Authentication
of Borrowers’ Information Records. Borrowers shall execute any notice delivered (i) in
person, or by U.S. mail, overnight courier, or fax, by the signature of the Officer or employee of Borrowers who prepared the notice;
or (ii) sent via electronic mail, by the signature of the Officer or employee of Borrowers who prepared the notice by any file
format signature that is acceptable to Lender, or by a separate certification signed and sent by fax.

 

(e)          Certification
of Borrowers Information Records. Any notice executed and delivered to Lender under this Section 9.5
will be deemed to have been certified as materially true, correct, and complete by Borrowers and each Officer or employee of Borrowers
who prepared and executed the notice on behalf of Borrowers, and may be legally relied upon by Lender without regard to method
of delivery or transmission.

 

(f)          Confidentiality
of Borrowers Information Records Sent by Unencrypted E-mail. Each Borrower acknowledges that
if it sends an e-mail or an e-mail file attachment, there is a risk that such e-mail or an e-mail file attachment may be received
by unauthorized Persons, and that by so doing it will be deemed to have accepted this risk and the consequences of any such unauthorized
disclosure.

 

(g)          Publicity.
Subject to Borrowers’ consent, which shall not be unreasonably withheld or conditioned, Lender may at its expense, publicize
or otherwise advertise by press release, so called ‘tombstone” advertising or otherwise Lender’s financing transaction
with Borrowers and Borrowers consent to use of their names, logos or other trademarks in connection with the same; provided that
if Borrowers do not respond to Lender’s request for consent within two (2) Business Days, then Borrowers shall deemed to
have consented to such press release.

 

9.6           Further
Documents. Borrowers will from time to time execute, deliver, endorse and authorize the filing
of any instruments, documents, conveyances, assignments, security agreements, financing statements, control agreements and other
agreements that Lender may reasonably request in order to secure, protect, perfect or enforce the Lender’s Liens in the Collateral
or Lender’s rights under the Loan Documents, or any other document or agreement described in or related to this Agreement
or the Obligations (but any failure to request or assure that Borrowers execute, deliver, endorse or authorize the filing of any
such item shall not affect or impair the validity, sufficiency or enforceability of the Loan Documents, or any other document or
agreement described in or related to this Agreement or the Obligations, and the Lender’s Lien in the Collateral, regardless
of whether any such item was or was not executed, delivered or endorsed in a similar context or on a prior occasion).

 

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9.7           Costs
and Expenses. Borrowers shall pay on demand all costs and expenses, whether accruing prior to
or after Borrowers’ commencement of any insolvency proceeding (whether commenced under the Bankruptcy Code or otherwise)
incurred by Lender in connection with the Obligations, this Agreement, the Loan Documents, any other document or agreement described
in or related to this Agreement or the Obligations, and the transactions contemplated by this Agreement, including, without limitation,
all such costs, expenses and fees incurred in connection with the underwriting (including, without limitation, field examinations,
appraisals including, without limitation, the appraisal of the Owned Intellectual Property being conducted by Consensus Advisors,
consulting fees, background investigations and other fees and out-of-pocket expenses incurred by Lender in connection therewith),
the negotiation, preparation, execution, delivery, amendment, administration, performance, collection and enforcement of the Obligations
and all such documents and agreements, and the creation, perfection, protection, satisfaction, foreclosure or enforcement of Lender’s
Liens in the Collateral, including, without limitation, Lender’s fees and expenses (including reasonable attorneys’
fees and expenses) incurred in terminating, enforcing (including attorneys’ fees and expenses incurred in connection with
a “workout,” a “restructuring,” or an insolvency proceeding, whether commenced under the Bankruptcy Code
or otherwise), or in otherwise exercising rights or remedies under the Loan Documents, or defending the Loan Documents and any
interest in the Collateral, including without limitation, in connection with any action to avoid or subordinate any Lien of Lender
or payment made in connection with the Loan Documents or the Collateral in connection with any insolvency proceeding or otherwise,
and further including, without limitation, reasonable attorneys’ fees and expenses incurred by Lender in connection with
any of the foregoing (collectively, “Lender Expenses”). Borrowers agree that any and all sales taxes, duties
or other taxes or impositions charged with respect to goods and services provided by third party vendors engaged by Lender and/or
Borrowers in connection with the Obligations, this Agreement or the transactions contemplated hereby and included in Lender Expenses
shall be the exclusive obligation of the Borrowers and Lender shall have no responsibility or obligation with respect thereto.
Prior to the date of this Agreement, Lender received from Borrowers the sum of $10,000 toward payment of the fees and expenses
incurred by Lender in connection with the underwriting, due diligence and documentation of the transactions contemplated hereby,
and Lender agrees to return to Borrowers any unused amount on the Closing Date.

 

9.8           Indemnity.
In addition to its obligation to pay Lender Expenses under the terms of this Agreement and any other indemnification provisions
contained herein or in any other Loan Document, Borrowers shall indemnify, defend and hold harmless Lender, its parent, subsidiaries,
any of their respective affiliates and successors, and all of their present and future Officers, Directors, employees, attorneys
and agents (each an “Indemnitee”) from and against any of the following (collectively, “Indemnified
Liabilities”):

 

(a)          Any
and all transfer taxes, documentary taxes, assessments or charges made by any Governmental Authority by reason of the execution
and delivery of the Loan Documents, or any other document or agreement described in or related to this Agreement or any Advance
or extension of credit hereunder;

 

(b)          Any
claims, loss or damage to which any Indemnitee may be subjected if any representation or warranty contained herein proves to be
incorrect in any respect or as a result of any violation of the covenants contained in Section 6.6 hereof; and

 

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(c)          
Any and all other reasonable out-of-pocket liabilities, losses, damages, penalties, judgments, suits, claims, costs and expenses
of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel) in connection
with this Agreement, the other Loan Documents, the Obligations, and any other investigative, administrative or judicial proceedings,
whether or not such Indemnitee shall be designated a party to such proceedings, which may be imposed on, incurred by or asserted
against any such Indemnitee, in any manner related to or arising out of or in connection with the Line of Credit and the Loan Documents,
or any other document or agreement described in or related to this Agreement, or the use or intended use of the proceeds of an
Advance or other extension of credit hereunder, with the exception of any Indemnified Liability determined by a court of competent
jurisdiction to have been caused by the gross negligence or willful misconduct of an Indemnitee.

 

If
any investigative, judicial or administrative proceeding described in this Section 9.8 is brought against any Indemnitee,
upon the Indemnitee’s request, Borrowers, or counsel designated by Borrowers and reasonably satisfactory to the Indemnitee,
will resist and defend the action, suit or proceeding to the extent and in the manner directed by the Indemnitee, at Borrowers’
sole cost and expense. Each Indemnitee will use its best efforts to cooperate in the defense of any such action, suit or proceeding
at the expense of Borrowers. If this agreement to indemnify is held to be unenforceable because it violates any law or public policy,
Borrowers shall nevertheless make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
to the extent permissible under applicable law. Borrowers’ obligations under this Section 9.8 shall survive the
termination of this Agreement and the discharge of Borrowers’ other obligations under this Agreement.

 

9.9           Binding
Effect; Assignment; Complete Agreement. The Loan Documents and any other document or agreement
described in or related to this Agreement or the Obligations, shall be binding upon and inure to the benefit of Borrowers and Lender
and their respective successors and assigns, except that no Borrower shall have the right to assign its rights under this Agreement
or any interest in this Agreement without Lender’s prior written consent. To the extent permitted by law, each Borrower waives
and will not assert against any assignee any claims, defenses or set-offs which such Borrower could assert against Lender. This
Agreement, together with the Loan Documents, or any other document or agreement described in or related to this Agreement, comprises
the complete and integrated agreement of the parties on the subject matter of this Agreement and supersedes all prior agreements,
whether oral or written. To the extent that any provision of this Agreement contradicts other provisions of the Loan Documents
other than this Agreement, or any other document or agreement described in or related to this Agreement, this Agreement shall control.

 

9.10         Sharing
of Information. Lender shall hold all Confidential Information obtained from Borrowers in accordance
with Lender’s customary procedures for handling confidential information of such nature. Lender may share any Confidential
Information that it may have regarding Borrowers and their Affiliates with its accountants, lawyers, and other advisors, and each
direct and indirect subsidiary of Lender.

 

9.11         Severability
of Provisions. Any provision of this Agreement which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without invalidating the remaining terms of this Agreement.

 

9.12         Headings.
Section and subsection headings in this Agreement are included for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose.

 

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9.13         Definitional
Terms and Rules of Interpretation. All accounting terms not otherwise defined in this Agreement
shall have the meanings given them in accordance with GAAP. Unless the context clearly requires otherwise, the word “or”
has the inclusive meaning represented by the phrase “and/or”. Reference to any agreement (including, without
limitation, the Loan Documents), document or instrument means the agreement, document or instrument as amended or supplemented,
subject to any restrictions on amendment contained therein (and, if applicable, in accordance with the terms of this Agreement
and the other Loan Documents). Unless otherwise specified, any reference to a statute or regulation means that statute or regulation
as amended or supplemented from time to time, and any corresponding provisions of successor statutes or regulations.

 

9.14         Governing
Law; Jurisdiction, Venue; Waiver of Jury Trial. The Loan Documents (other than real estate related
documents, if any) shall be governed by and construed in accordance with the substantive laws (other than conflict laws) of the
State of New York. The parties to this Agreement (a) consent to the personal jurisdiction of the state and federal courts located
in the State of New York in connection with any controversy related to this Agreement; (b) waive any argument that venue in any
such forum is not convenient; (c) agree that any litigation initiated by Lender or Borrowers in connection with this Agreement
or the other Loan Documents may be venued in either the state courts located in the City of New York, Borough of Manhattan or federal
courts for the Southern District of New York; and (d) agree that a final judgment in any such suit, action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

9.15         WAIVER
OF JURY TRIAL AND DAMAGES. BORROWERS AND LENDER WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR IN EQUITY OR IN ANY OTHER
PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. BORROWERS WAIVE ANY RIGHTS TO RECOVER SPECIAL,
CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN. BORROWERS REPRESENT THAT THEY HAVE REVIEWED THESE WAIVERS AND
KNOWINGLY AND VOLUNTARILY WAIVES SUCH RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

[Remainder of page intentionally left blank;
signatures begin on following page.]

 

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IN WITNESS WHEREOF,
each of the parties hereto has executed this Agreement under seal through its authorized officer on the date set forth above.

 

	 	BORROWERS:
	 	 
	Frederick’s of Hollywood Group Inc.	FREDERICK’S OF HOLLYWOOD
	6255 Sunset Boulevard, 6th Floor	GROUP INC.
	Hollywood, CA 9008	 	 
	Attention:  Thomas Rende, Chief Financial	By:	s/ Thomas Rende
	Officer	 	Thomas Rende
	E-Mail:  tom.rende@fredericks.com	 	Chief Financial Officer
	Facsimile:  (323) 464-4219	 	 
	State Organizational ID No.:  None	 
	Federal Employee ID No.:  13-5651322	 
	 	 
	FOH Holdings, Inc.	FOH HOLDINGS, INC.
	6255 Sunset Boulevard, 6th Floor	 	 
	Hollywood CA  90028	By:	s/ Thomas Rende
	Attention:  Thomas Rende, Chief Financial	 	Thomas Rende
	Officer	 	Chief Financial Officer
	E-Mail:  tom.rende@fredericks.com	 	 
	Facsimile:  (323) 464-4219	 
	State Organizational ID No.:  2749384	 
	Federal Employee ID No.:  36-4155442	 
	 	 
	Frederick’s of Hollywood, Inc.	FREDERICK’S OF HOLLYWOOD, INC.
	6255 Sunset Boulevard, 6th Floor	 	 
	Hollywood CA 90028	By:	s/ Thomas Rende 
	Attention:   Thomas Rende, Chief Financial	 	Thomas Rende
	Officer	 	Chief Financial Officer
	E-Mail:  tom.rende@fredericks.com	 	 
	Facsimile:  (323) 464-4219	 
	State Organizational ID No.:  0580404	 
	Federal Employee ID No.:  95-2666265	 
	 	 
	Frederick’s of Hollywood Stores, Inc.	FREDERICK’S OF HOLLYWOOD
	6255 Sunset Boulevard, 6th Floor	STORES, INC.
	Hollywood CA  90028	 	 
	Attention:   Thomas Rende, Chief Financial	By:	s/ Thomas Rende  
	Officer	 	Thomas Rende
	E-Mail:  tom.rende@fredericks.com	 	Chief Financial Officer
	Facsimile:  (323) 464-4219	 	 
	State Organizational ID No.:  C16109-98	 
	Federal Employee ID No.:  95-4698882	 

 

    	 

    	 

    

 

	Hollywood Mail Order, LLC	HOLLYWOOD MAIL ORDER, LLC
	6255 Sunset Boulevard, 6th Floor	 	 
	Hollywood CA  90028	By:	s/ Thomas Rende 
	Attention:   Thomas Rende, Chief Financial	 	Thomas Rende
	Officer	 	Chief Financial Officer
	E-Mail:  tom.rende@fredericks.com	 	 
	Facsimile:  (323) 464-4219	 
	State Organizational ID No.:  LLC5354-99	 
	Federal Employee ID No.:  95-4755205	 
	 	 
	With a copy to:	 
	 	 
	Graubard Miller	 
	The Chrysler Building	 
	405 Lexington Avenue	 
	New York, NY 10174	 
	Attention:  David Alan Miller, Esq.	 
	E-Mail:  dmiller@graubard.com	 
	Facsimile:  (212) 818-81	 
	 	 
	 	LENDER:
	 	 
	Salus Capital Partners, LLC	SALUS CAPITAL PARTNERS, LLC
	197 First Avenue, Suite 250	 	 
	Needham, MA 02494	By:	s/ Kyle C. Shonak
	Attention:  Daniel F. O’Rourke	 	Kyle C. Shonak
	E-Mail:  dorourke@saluscapital.com	 	Senior Vice President
	Facsimile:  (781) 459-0058	 	 
	 	 
	With a copy to:	 
	 	 
	Greenberg Traurig, LLP	 
	One International Place, 20th Floor	 
	Boston, MA  02110	 
	Attention:  Jeffrey M. Wolf, Esq.	 
	E-Mail:  wolfje@gtlaw.com	 
	Facsimile:  (617) 310-6001	 

 

    	 

    	 

    

  

Exhibit A

 

FORM
OF REVOLVING NOTE

 

See Exhibit 10.2 to Current Report

 

    	 

    	 	

    

 

 

Exhibit B

 

form
of COMPLIANCE CERTIFICATE

 

	To:	Salus Capital Partners, LLC
	Date:	[_________, 20__]
	Subject:	Financial Statements

 

In accordance with
our Credit and Security Agreement dated as of May 31, 2012 (as amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), attached are the financial statements of 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”) dated [_______________, 20[__] (the “Reporting Date”)
and the year-to-date period then ended (the “Current Financials”). All capitalized terms used in this certificate
have the meanings given to such terms in the Credit Agreement.

 

A.           Preparation
and Accuracy of Financial Statements. I certify that the Current Financials have been prepared in accordance with GAAP [subject
to the absence of footnotes and year-end audit adjustments], and fairly present Borrowers’ financial condition as of the
Reporting Date and that the undersigned is the Chief Financial Officer of Borrowers and is duly authorized to execute and deliver
this Compliance Certificate.

 

B.           Name
of Borrowers; Merger and Consolidation. I certify that:

 

(Check one)

 

		 ̈	No Borrower has, since the date of the Credit Agreement, changed its name or jurisdiction of organization,
nor has any Borrower consolidated or merged with another Person.

 

		 ̈	A Borrower has, since the date of the Credit Agreement, either changed its name or jurisdiction
of organization, or both, or has consolidated or merged with another Person, which change, consolidation or merger:  ̈was
consented to in advance by Lender in writing, and/or ̈ is more fully described in
the statement of facts attached to this Certificate.

 

C.           Events
of Default. I certify that:

 

(Check one)

 

		 ̈	I have no knowledge of the occurrence of a Default or Event of Default under the Credit Agreement,
except as previously reported to Lender in writing.

 

    	B-1

    	 

    

 

		 ̈	I have knowledge of a Default or Event of Default under the Credit Agreement not previously reported
to Lender in writing, as more fully described in the statement of facts attached to this Certificate, and further, I acknowledge
that Lender may under the terms of the Credit Agreement impose the Default Rate at any time during the resulting Default Period.

 

D.           Litigation
Matters. I certify that:

 

(Check one)

 

		 ̈	I have no knowledge of any material adverse change to the litigation exposure of any Borrower or
any of its Affiliates.

 

		 ̈	I have knowledge of material adverse changes to the litigation exposure of any Borrower not previously
disclosed in Schedule 5.7 attached to the Credit Agreement, as more fully described in the statement of facts attached to
this Certificate.

 

E.           Financial
Covenants. I further certify that:

 

(Check and complete
each of the following)

 

1.          Minimum
Excess Availability. Pursuant to Section 6.2(a) of the Credit Agreement, at all times during the period covered by the
Current Financials and as at the date of this Certificate, Borrowers maintained Availability of no less than $[______] which  ̈
satisfies  ̈ does not satisfy the requirement that Availability at all times be no
less $1,500,000.

 

F.           Business
Plan. I certify that:

 

(Check one)

 

		 ̈	As of the Reporting Date, there has not been any materially adverse actual deviation in performance
from Borrowers’ projected performance as set forth in the Business Plan and the Current Financials.

 

		 ̈	As of the Reporting Date, there has been a materially adverse actual deviation in performance from
Borrowers’ projected performance as set forth in the Business Plan and the Current Financials as more fully described in
the statement of facts attached to this Certificate.

 

	 	 
	 	Chief Financial Officer

 

    	B-2

    	 

    

 

 

Exhibit C

 

form
of BORROWING BASE CERTIFICATE

 

 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	Frederick's
    of Hollywood  - Borrowing Base	Date:	 
	 	 	 	 	 	 	 		Certificate
    #:	 
	 	 	 	 	 	 	 	 	 	 
	Pursuant
    to the Credit and Security Agreement dated as of May 31, 2012 as amended from time to time (the "Loan Agreement")
    between Frederick's of Hollywood Group, Inc.
    ("Borrower") and Salus Capital Partners, LLC or an affiliate or designee ("Lender"), the undersigned hereby
    (a) certifies that the signer is authorized to execute this certificate, (b) certifies that the signer has personal knowledge
    of the facts set forth herein, (c) certifies that the contents of this Borrowing Base Certificate are true, correct and complete
    (inclusive of all Indebtedness including all Bank Products) and have been computed in a manner consistent with the terms and
    conditions of the Loan Agreement, and (d) represents and warrants that: (i) there is not in existence any Default or Event
    of Default, (ii) all representations and warranties contained in the Loan Agreement and other loan documents are true and
    correct in all material respects as of the date hereof, and (iii) in addition to, and not in limitation of the foregoing:
    (A) all sales, payroll and withholding taxes payable to date have been paid when due subject to any applicable grace periods,
    (B) Borrower is in compliance with all material terms of all leases or other agreements pursuant to which it occupies real
    estate and has not been notified that it is in default of any such leases or agreements, and (C) none of the insurance policies
    which Borrower is required to maintain under the Loan Agreement are set to expire earlier than ninety (90) days after the
    date hereof. The Borrower understands and agrees that the Lender will rely upon the representations and warranties set forth
    herein and upon the truth and accuracy of information contained herein in making any advance or other financial accommodation
    under the Loan Agreement.
	I.	Accounts
    Receivable	 	 	 	 	 	 	 
	 	Third
    Party Credit Card	 	 	 	balance
    as of:	 	 	 $                                   
    -  
	 	Available
    Credit Card A/R (A x advance rate)	 	 	 	advance
    rate:	 	95.00%	 $                                   
    -  
	 	(not
    more than 5 business days old for AmEx, all others 3 business days old - each net of fees)	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	TOTAL
    Accounts Receivable Availability (B)	 	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	II.	Inventory	 	 	 	 	 	 	 	COST
	 	 	Inventory
    Available for Sale (per Stock Ledger report)	 	balance
    as of:	 	 	 $                                   
    -  
	 	 	Less:	Ineligibles	 	 	 	 	 $                                   
    -  
	 	 	Net
    Eligible Inventory (D - E)	 	 	 	 	 	 	 $                                   
    -  
	 	 	Plus:	Eligible
    In-transit Inventory (if applicable)	 	 	 $                                   
    -  
	 	 	Total
    Eligible Inventory (F + G)	 	 	NOLV	 	LTV	 	 $         
                              -  
	 	 	Inventory
    Advance Rate	 	 	0.00%	x	95.00%	 	 
	 	TOTAL
    Inventory Availability (H x I)	 	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	III.	Intellectual
    Property Assets	 	 	 	 	 	 	 
	 	IP
    Appraised Value	 	 	 	 	 	 	 
	 	Available
    IP Assets (K x advance rate)	 	 	 	advance
    rate:	 	75.00%	 $                                   
    -  
	 	 	Less:	Cash
    Flow Recapture	 	 	 	                                      
    -  
	 	TOTAL
    IP Availability (L - M)	 	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	IV.	Reserves	 	 	 	 	 	 	 	 
	 	 	Gift
    Cards < 12 months	50%	x	 	balance
    as of:	 	 	 $                                   
    -  
	 	 	Customer
    Deposits < 12 months	100%	x	 	balance
    as of:	 	 	 $                                   
    -  
	 	 	EAGB
    Liability	 	 	 	 	 	 	 
	 	 	Landlord
    Lien Reserves (PA, VA, TX, WA stores - 1 month)	 	 	 	 	 
	 	 	Reserve
    for Personal Property Tax in TX	 	per
    Field Exam dtd:	 	 	 	 
	 	 	Reserve
    for Texas Sales Tax	 	 	per
    Field Exam dtd:	 	 	 	 
	 	Total
    Reserves	 	 	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	 	TOTAL
    Borrowing Base Availability for Borrowings (C + J + N - U)	 	 	 	 	 $                                   
    -  
	 	 	 	Suppressed
    Availability (V - X)	 	 	 	 $                                   
    -  
	 	NET
    Available Borrowing Base (C + J + N - U) - NOT TO EXCEED $24MM	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	V.	Availability
    Calculation	 	 	 	 	 	 	 
	 	 	Beginning
    Principal Balance	 	 	 	balance
    as of:	 	 	 
	 	 	 	Advances	 	 	 	 	 $                                   
    -  
	 	 	 	Fees	 	 	 	 	 	 
	 	 	 	Adjustments	 	 	 	 	 $                                   
    -  
	 	 	 	Collections	 	 	 	 	 
	 	 	Loan
    Balance Prior to Today's Request	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	 	NET
    Availability Prior to Today's Request (X - Y)	 	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	 	 	Funding
    Request	 	 	 	 	 	 	 
	 	 	 	WFB
    Operating Account # xxxxxx1804	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Today's
    Total Funding Request	 	 	 	 	 	 	 $                       
    -  
	 	 	 	 	 	 	 	 	 	 
	 	Outstanding
    Revolving Loan Balance (Y + AA)	 	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	 	Outstanding
    FILO Loan Balance	 	 	 	 	 	 	 
	 	 	 	Memo
    - PIK Interest to date:	 	 	 	 	Memo
    - FILO Balance + PIK	 
	 	 	 	 	 	 	 	 	 	 
	VI.	Total
    Loan Outstandings (BB + CC)	 	 	 	 	 	 	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	VII.	Total
    Availability / (Shortfall) (line X - DD) Min Excess of $1.5MM at all times	 	Total
    Avail to Net Avail BB (DD / X)	#DIV/0!	 $                                   
    -  
	 	 	 	 	 	 	 	 	 	 
	VIII.	Maximum
    Total Outstandings per Loan Agreement	 	 	 	 	 	 	 $                 
    24,000,000
	 	 	 	 	 	 	 	 	 	 
	 	ACH
    Exposure:	 	 $      
    -  	 	 	 	EAR
    (DD / A + H + K)	#DIV/0!
	 	 	 	 	 	 	 	 	 	 
	 	MTD
    SALES ACT TY:	 	 	 	 	CURRENT
    MO SALES PLAN:	 	 
	 	MTD
    SALES ACT PY:	 	#DIV/0!	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	Prepared
    by:	 	 	 	 	 	 	 	 
	 	 	 	Name/Title	 	Authorized
    Signature	 	 

   

    	 

    	 	

    

 

 

EXECUTION VERSION

 

Schedule 1.1

Permitted Holders

 

Fursa Master Rediscovered Opportunities Fund L.P.

c/o Fursa Alternative Strategies LLC

21 Greene Avenue

Amityville, New York 11701

 

Fursa Capital Partners LP

c/o Fursa Alternative Strategies

21 Greene Avenue

Amityville, New York 11701

 

Arsenal Group, LLC (formerly Fursa Master Global Event Driven
Fund LP)

21 Greene Avenue

Amityville, New York 11701

 

Scotia Capital (USA) Inc.

One Liberty Plaza

165 Broadway

New York, NY 10006

 

Blackfriars Master Vehicle LLC – Series 2

c/o Fursa Alternative Strategies

21 Greene Avenue

Amityville, New York 11701

 

Tokarz Investments, LLC

287 Bowman Avenue

Purchase, New York 10577

 

TTG Apparel, LLC

287 Bowman Avenue

Purchase, New York 10577

 

    	1

    	 

    
 

 

 

Schedule 4.1(i)

List of Deposit Accounts to be Subject
to Control Agreements

 

See Schedule 7.16

 

 

 

 

 

    	2

    	 

    

 

 

Schedule 5.1

Corporate Existence and Power Name;
Chief Executive Office; Inventory and Equipment Locations; Identification Numbers

 

	Name/Chief Place of Business	Other Names Under Which Borrower has Conducted Business	Jurisdiction of Incorporation/Formation	Organizational ID	FEIN
	
        FREDERICK’S OF HOLLYWOOD GROUP INC.

        6255 Sunset Boulevard

        6th Floor

        Hollywood, CA 90028

         
	Movie Star, Inc.	New York	None	13-5651322
	
        FOH HOLDINGS, INC.

        6255 Sunset Boulevard

        6th Floor

        Hollywood, CA 90028

         
	 	Delaware	2749384	36-4155442
	
        FREDERICK'S OF HOLLYWOOD, INC.

        6255 Sunset Boulevard

        6th Floor

        Hollywood, CA 90028

         
	 	Delaware	0580404	95-2666265
	
        FREDERICK’S OF HOLLYWOOD STORES, INC.

        6255 Sunset Boulevard

        6th Floor

        Hollywood, CA 90028

         
	 	Nevada	C16109-98	95-4698882
	
        HOLLYWOOD MAIL ORDER, LLC

        6255 Sunset Boulevard

        6th Floor

        Hollywood, CA 90028

         

         
	 	Nevada	LLC5354-99	95-4755205

 

    	3

    	 

    
 

 

	
         

        Count
	Name	Store #	Address	City	State	Contains Inventory & Equipment	Contains Books & Records
	1	Flagship Hollywood	10	6751 Hollywood Blvd	Hollywood	CA 	Yes	 
	2	Lakewood Center	24	12/13 Lakewood Center Mall	Lakewood	CA 	Yes	 
	3	Topanga Plaza	25	6600 Topanga Canyon Blvd, SP 2044	Canoga Park	CA	Yes	 
	4	Inland Center Mall	27	500 Inland Center Dr, SP 332	San Bernardino	CA  	Yes	 
	5	Crossroads Mall	56	H2042 Crossroads Mall	Oklahoma City	OK 	Yes	 
	6	Southridge Mall	58	5300 S. 76th St.	Greendale	WI 	Yes	 
	7	Northeast Mall	60	1101 Melbourne Dr, Ste 2256	Hurst	TX 	Yes	 
	8	
        Del Amo

        Fashion Square
	62	3525 Carson St, Sp. #29	Torrance	CA	Yes	 
	9	Irving Mall	65	2409 Irving Mall	Irving	TX 	Yes	 
	10	Woodfield Mall	69	Woodfield Mall, Sp.E-111A	Schaumburg	IL 	Yes	 
	11	Sunrise Mall	75	5957 Sunrise Mall	Citrus Heights	CA  	Yes	 
	12	Town East Mall	77	2154 Town East Mall	Mesquite	TX	Yes	 
	13	Westminster Mall	105	1081 Westminster Mall	Westminster	CA	Yes	 
	14	Southlake Mall	109	2233 Southlake Mall	Merrillville	IN	Yes	 
	15	Metro Center	111	9617  North Metro Parkway West	Phoenix	AZ	Yes	 
	16	St. Clair Square	113	240 St. Clair Square	Fairview Heights	IL	Yes	 
	17	University Square	116	2147 University Square Mall	Tampa	FL	Yes	 
	18	
        The Plaza at

        West Covina
	119	657 Plaza Dr.	West Covina	CA 	Yes	 
	19	Towne East Square	125	7700 E. Kellogg	Wichita	KS 	Yes	 
	20	Woodland Hills	132	7021 S. Memorial	Tulsa	OK	Yes	 
	21	Coronado Center	135	6600 Menaul Blvd NE, Sp. B-005	Albuquerque	NM	Yes	 
	22	Vancouver Mall	139	8700 NE Vancouver Mall Dr.	Vancouver	WA 	Yes	 
	23	Southlake Mall	140	1227 Southlake Mall	Morrow	GA	Yes	 
	24	Woburn Mall	143	300 Mishawum Rd.	Woburn	MA	Yes	 
	25	Ingram Park	146	6301 North West Loop 410	San Antonio	TX	Yes	 
	26	
        Pearlridge

        Shopping Center
	160	
98-1005 Moanalua Rd, Sp. 109	Aiea	HI	Yes	 
	27	Crossroads	161	6650 S Westnedge Ave. Space 210	Kalamazoo	MI	Yes	 
	28	The Meadows	163	4300 Meadows Ln., Sp.2307	Las Vegas	NV	Yes	 
	29	Chicago Ridge Mall	168	300 Chicago Ridge Mall	Chicago Ridge	IL	Yes	 
	30	
        Holyoke Mall

        at Ingleside
	169	50 Holyoke St, Box 10212 Space F-379	Holyoke	MA	Yes	 
	31	Lynnhaven Parkway	170	701 Lynnhaven Pkwy, Sp E17	Virginia Beach	VA	Yes	 
	32	Barton Creek Square	171	2901 Capitol of Texas Hwy, Sp A13	Austin	TX	Yes	 
	33	Brea Mall	174	2062 Brea Mall	Brea	CA	Yes	 
	34	Broadway Mall	178	602 Broadway Mall	Hicksville	NY	Yes	 
	35	King of Prussia Plaza	190	160 N. Gulph Rd. Suite 2039	King of Prussia	PA 	Yes	 
	36	Crossgates Mall	197	120 Washington Ave., Ext.	Albany	N Y	Yes	 

 

 

    	4

    	 

    

 

 

	Count	Name	Store #	Address	City	State	Contains Inventory & Equipment	Contains Books & Records
	37	Arden Fair	198	1689 Arden Way, Sp.2192	Sacramento	CA	Yes	 
	38	Montclair Plaza	200	2142 Montclair Plaza Ln. Sp. #2142	Montclair	CA	Yes	 
	39	Parkdale Mall	203	200 Parkdale Mall, Unit H-800	Beaumont	TX	Yes	 
	40	Mall of Victor Valley	211	14400 Bear Valley Rd, Sp.321	Victorville	CA	Yes	 
	41	Governor's Square	212	2801 Guthrie Hwy, Sp 430	Clarksville	TN	Yes	 
	42	
        Eastridge Shopping

        Center
	213	2200 Eastridge Loop Space 1016	San Jose	CA	Yes	 
	43	Mission Valley	214	1640 Camino Del Rio North, #155	San Diego	CA	Yes	 
	44	Plaza Bonita	215	3030 Plaza Bonita Rd., #2280	National City	CA	Yes	 
	45	Plaza Camino Real	216	2525 El Camino Real, Sp. 246	Carlsbad	CA	Yes	 
	46	Coddingtown Center	225	278 Coddington Center Sp. E-1	Santa Rosa	CA	Yes	 
	47	Melbourne Square	226	1700 W. New Haven Ave, #473	Melbourne	FL	Yes	 
	48	
        Northridge Fashion

        Center
	227	9301 Tampa Ave, Sp 194	Northridge	CA	Yes	 
	49	Mall at Weberstown	230	4950 Pacific Ave, Sp 235	Stockton	CA	Yes	 
	50	Walden Galleria	231	I-90 & Walden Ave, #G209	Buffalo	NY	Yes	 
	51	Chico Mall	232	1950 E. 20th St, Sp G-711	Chico	CA	Yes	 
	52	Solano Mall	237	1350 Travis Blvd.	Fairfield	CA	Yes	 
	53	Lakeland Square Mall	238	3800 N. Highway 98, Rm 182	Lakeland	FL	Yes	 
	54	Emerald Square Mall	245	999 S. Washington St.	N. Attleborough	MA	Yes	 
	55	Cordova Mall	246	5100 N. 9th Ave, Sp F607	Pensacola	FL	Yes	 
	56	Greendale Mall	247	7 Neponset St., Ste. 264	Worcester	MA	Yes	 
	57	Town Center at Cobb	248	400 Ernest W. Barrett Pkwy, #253	Kennesaw	GA	Yes	 
	58	
        Stonewood Shopping

        Center
	251	261 Stonewood Str., Sp. B35	Downey	CA	Yes	 
	59	Parkway Plaza	257	815 Parkway Plaza	El Cajon	CA	Yes	 
	60	Antelope Valley Mall	263	1233 West Avenue "P", Sp.323	Palmdale	CA	Yes	 
	61	Parks at Arlington	266	3811 S. Cooper, Sp.1010 Box #150145	Arlington	TX 	Yes	 
	62	Marley Station	270	7900 Ritchie Hwy, Sp. B105	Glen Burnie	MD	Yes	 
	63	Northwoods Mall	273	2150 Northwoods Blvd.	N. Charleston	SC	Yes	 
	64	Mid-Rivers Mall	275	2320 Mid Rivers Mall	St. Peters	MO 	Yes	 
	65	Stoneridge Mall	280	1204 Stoneridge Mall Rd., Sp. 235	Pleasanton	CA 	Yes	 
	66	Lloyd Center	284	947 Lloyd Center, Sp.C-108	Portland	OR 	Yes	 
	67	Glendale Galleria	286	1306 Glendale Galleria	Glendale	CA	Yes	 
	68	Galleria at Tyler	288	1220 Galleria @ Tyler, Sp.G2	Riverside	CA	Yes	 
	69	Crystal Mall	293	850 Hartford Turnpike, Sp. P222	Waterford	CT 	Yes	 
	70	
        Mall at Rockingham

        Park
	296	99 Rockingham Park Blvd, Ste. 2321	Salem	NH	Yes	 
	71	
        Miami International

        Mall
	297	1455 NW 107th Ave, Sp.876A	Miami	FL	Yes	 
	72	Clackamas Town Center	298	2201-12000 SE 82nd Ave, Sp E-213	Portland	OR	Yes	 
	73	Staten Island Mall	300	2655 Richmond Ave, Sp.1140	Staten Island	NY	Yes	 

 

 

    	5

    	 

    

 

 

	Count	Name	Store #	Address	City	State	Contains Inventory & Equipment	Contains Books & Records
	74	Orlando Fashion Square	301	3201 E. Colonial Dr., Sp.M4	Orlando	FL	Yes	 
	75	
        Valley Plaza

        Shopping Center
	303	2701 Ming Ave, Sp. 151	Bakersfield	CA  	Yes	 
	76	Rosedale Center	304	306 Rosedale Center, Sp.S-24	Roseville	MN 	Yes	 
	77	Newport Center	308	30 Mall Dr. W, Sp.  B11/B12	Jersey City	NJ	Yes	 
	78	
        The Fashion Center

        at Pentagon
	310	1100 S. Hayes St, Sp.Y-6	Arlington	VA	Yes	 
	79	Orange Park Mall	312	1910 Wells Rd, Sp. H16	Orange Park	FL	Yes	 
	80	Tucson Mall	317	4500 N. Oracle Rd, Sp.274	Tuscon	AZ	Yes	 
	81	Fairlane Town Center	320	18900 Michigan Ave, Sp.M306	Dearborn	MI	Yes	 
	82	Fairfield Commons	321	2727 Fairfield Commons	Beaver Creek	OH	Yes	 
	83	Hulen Mall	323	4800 S. Hulen Str., Sp. 242	Fort Worth	TX 	Yes	 
	84	Northgate Mall	326	9647 Colerain Ave, Sp.48	Cincinnati	OH	Yes	 
	85	Parmatown Mall	329	7795 W. Ridgewood Dr.	Parma	OH	Yes	 
	86	Sunrise Mall	335	1155 Sunrise Mall Space 1025	Massapequa	NY	Yes	 
	87	Lakeline Mall	337	11200 Lakeline Mall Dr., Sp. M17	Cedar Park	TX	Yes	 
	88	The Block	342	20 City Blvd. West Bldg. G4, Ste. 610	Orange	CA	Yes	 
	89	Sun Valley	350	264 Sun Valley Mall, Space D128	Concord	CA	Yes	 
	90	Arizona Mills	351	5000 Arizona Mills Circle Space 224	Temple	AZ	Yes	 
	91	The Boulevard Mall	352	3680 Maryland Parkway Sp., 146	Las Vegas	NV	Yes	 
	92	Discover Mills	357	5900 Sugarloaf Pkwy Sp. 458	Lawrenceville	GA	Yes	 
	93	Ontario Mills	358	One Mills Circle Space #523	Ontario	CA	Yes	 
	94	Katy Mills	362	5000 Katy Circle, Space 161	Katy	Texas 	Yes	 
	95	Fashion Show Mall	363	3200 Las Vegas Blvd. Space 2320	Las Vegas	NV	Yes	 
	96	Oakridge Mall	364	925 Blossom Hill Rd. Sp. 1553	San Jose	CA	Yes	 
	97	
        Westfield Shoppingtown

        Santa Anita
	365	400 South Baldwin Ave Suite #706-L	Arcadia	CA	Yes	 
	98	Irvine Spectrum	366	83 Fortune Dr #235	Irvine	CA	Yes	 
	99	The Shops at La Cantera	367	15900 La Cantera Pkwy., Bldg. 11, Ste . 11095	San Antonio	TX	Yes	 
	100	Memorial City Mall	368	852 Memorial City Way	Houston	TX 	Yes	 
	101	Citrus Park	369	8021 Citrus Park Town Center	Tampa	FL	Yes	 
	102	Westfield Brandon	370	355 Brandon Town Center	Brandon	FL	Yes	 
	103	The Shops at Tanforan	371	1150 El Camino Real Suite 101	San Bruno	CA	Yes	 
	104	Westfield Countryside	372	27001 US Highway 19 North, Suite 1063	Clearwater	FL	Yes	 
	105	
        The Promenade Shops

        at Dos Lagos
	375	2785 Cabot Drive Suite #152	Corona	CA  	Yes	 
	106	Coastland Center	377	1900 North Tamiani Trail, Space #J-9	Naples	FL	Yes	 
	107	Miracle Mile	379	3663 Las Vegas Blvd., Space H125A	Las Vegas	NV 	Yes	 
	108	Westfield Culver City	380	6000 Sepulveda Blvd. Suite #1430	Culver City	CA  	Yes	 
	109	Coral Square	381	9133 W. Atlantic Blvd., Space 9553	Coral Springs	FL	Yes	 
	110	Mandalay Bay	382	3930 Las Vegas Blvd South, Sp #104	Las Vegas	NV	Yes	 

 

    	6

    	 

    

 

 

	Count	Name	Store #	Address	City	State	Contains Inventory & Equipment	Contains Books & Records
	111	Edison Mall	383	4125 Cleveland Ave., Space 1700	Fort Myers	FL	Yes	 
	112	Seminole Town Center	384	200 Towne Center Circle, Space B-3	Sanford	FL	Yes	 
	113	Main Place	385	2800 N. Main Street, Space 610	Santa Ana	CA	Yes	 
	114	Galleria at Roseville	386	1151 Galleria Blvd., Space 257B	Roseville	CA	Yes	 
	115	Fresno Fashion Fair	387	601 East Shaw Ave.	Fresno	CA	Yes	 
	116	Horton Plaza	388	324 Horton Plaza, Space N219	San Diego	CA	Yes	 
	117	Mall of America	390	60 East Broadway, Space N275	Bloomington	MN 	Yes	 
	 	 	 	 	 	 	 	 
	 	Great Lakes Crossing (1)	356	4044 Baldwin Road	Auburn Hills	MI	Yes	 
	 	 	 	 	 	 	 	 
	 	Other	 	 	 	 	 	 
	 	Hollywood office	N/A	6255 Sunset Boulevard, 6th Floor	Hollywood	 CA	Yes	Yes
	 	New York office	N/A	8 West 38th Street, Suite 802	New York	NY	 	Yes
	 	Phoenix Operations Center	N/A	5005 S 40th St.	Phoenix	AZ	Yes	Yes

 

		(1)	Lease was terminated on 1/31/12 and store was closed. However, inventory is in storage at that location and monthly storage
fees are paid.

 

    	7

    	 

    
 

 

Schedule 5.2

Subsidiaries; Joint Ventures; Affiliates;
Capitalization

 

	Frederick’s of Hollywood Group Inc. (publicly traded parent company – NYSE MKT: FOH)	Incorporated:	New York, April 10, 1935
	 	Authorized Stock:	200,000,000 Common, $.01 par value
	 	 	10,000,000 Preferred, $.01 par value,  (125,000 designated as Series A Preferred
	 	Issued Stock (a/o 05/23/12):	
        38,964,891 Common

        50,000 Series A Preferred

	 	Qualified as Foreign Entity:	PA – (in the process of withdrawing  qualification)
	 	 	 
	 	Shares reserved for issuance	 
	 	Shares issuable upon conversion of Series A Preferred stock	4,761,905
	 	Shares issuable upon exercise of stock options granted and outstanding	2,673,591
	 	Shares in the form of stock options and other equity awards available for grant	3,119,045
	 	Shares issuable upon exercise of outstanding warrants	5,543,670
	 	Total shares reserved for issuance	16,098,211
	 	 	 
	 	 	 
	FOH Holdings, Inc.	Incorporated:	Delaware, May 9, 1997
	 	Authorized Stock:	100 Common Shares, $.01 par value
	 	Issued Stock:	100 Common Shares
	 	Sole Shareholder:	Frederick’s of Hollywood Group Inc.
	 	Qualified as Foreign Entity:	None
	 	 	 
	Frederick’s of Hollywood, Inc.	Incorporated:	Delaware, March 1, 1962
	 	Authorized Stock:	3,000 Common Shares, $0.01 par value
	 	Issued Stock:	1,000 Common Shares
	 	Sole Shareholder:	FOH Holdings, Inc.
	 	Qualified as Foreign Entity:	CA
	 	 	 
	Frederick’s of Hollywood Stores, Inc.	Incorporated:	Nevada, July 8, 1998
	 	Authorized Stock:	1,000 common shares, $0.01 par value
	 	Issued Stock:	100 common shares
	 	Sole Shareholder:	Frederick’s of Hollywood, Inc.
	 	Qualified as Foreign Entity:	AZ, CA, CT, FL, GA, HI, IL, IN, KS, KY, LA, MA, MD, MI, MN, MO, NC, NH, NJ, NM, NY, OH, OK, OR, PA, SC, TN, TX, VA, WA, WI
	 	 	 
	Hollywood Mail Order, LLC	Formation:	Nevada, July 20, 1999
	 	Manager:	FOH Holdings, Inc.
	 	Membership Interest:	Frederick’s of Hollywood, Inc.  (100%)
	 	Qualified as Foreign Entity:	AZ, CA, NH, OR

 

    	8

    	 

    

 

Warrants 

 

		·	Series A Warrant, dated March 16, 2010, to purchase an aggregate of 1,162,820 shares of common stock
of Frederick’s of Hollywood Group Inc. issued to the purchasers party to the Securities Purchase Agreement, dated as of March
16, 2010, between Frederick’s of Hollywood Group Inc. and each of the purchasers

 

		·	Series B Warrant, dated March 16, 2010, to purchase an aggregate of 1,162,820 shares
of common stock of Frederick’s of Hollywood Group Inc. issued to the purchasers party to the Securities Purchase Agreement,
dated as of March 16, 2010, between Frederick’s of Hollywood Group Inc. and each of the purchasers

 

		·	Series B Warrant, dated March 16, 2010, to purchase 218,029 shares of common stock of Frederick’s
of Hollywood Group Inc. issued to Avalon Securities Ltd.

 

		·	Three year Warrants, dated May 18, 2010, to purchase an aggregate of 500,000 shares of common
stock of Frederick’s of Hollywood Group Inc. issued to Fursa Master Rediscovered Opportunities Fund L.P., Fursa Capital
Partners LP, Fursa Master Global Event Driven Fund L.P. and Blackfriars Master Vehicle LLC – Series 2

 

		·	Five year Warrants, dated May 18, 2010, to purchase an aggregate of 500,000 shares of common
stock of Frederick’s of Hollywood Group Inc. issued to Fursa Master Rediscovered Opportunities Fund L.P., Fursa Capital
Partners LP, Fursa Master Global Event Driven Fund L.P. and Blackfriars Master Vehicle LLC – Series 2

 

		·	Seven year Warrants, dated May 18, 2010, to purchase an aggregate of 500,000 shares of common
stock of Frederick’s of Hollywood Group Inc. issued to Fursa Master Rediscovered Opportunities Fund L.P., Fursa Capital
Partners LP, Fursa Master Global Event Driven Fund L.P. and Blackfriars Master Vehicle LLC – Series 2

 

		·	Three year Warrants, dated May 23, 2012, to purchase an aggregate of 500,000 shares of common stock of Frederick’s of
Hollywood Group Inc. issued to TTG Apparel, LLC

 

		·	Five year Warrants, dated May 23, 2012, to purchase an aggregate of 500,000 shares of common stock of Frederick’s of
Hollywood Group Inc. issued to TTG Apparel, LLC

 

		·	Seven year Warrants, dated May 23, 2012, to purchase an aggregate of 500,000 shares of common stock of Frederick’s of
Hollywood Group Inc. issued to TTG Apparel, LLC

 

Stock Options

 

		·	Options to purchase the following number of shares of common stock are currently outstanding under the following equity plans:

 

	Plan Name	Outstanding options to Purchase Shares of common stock
	1988 Amended and Restated Non-Qualified Stock Option Plan	632,500
	2000 Plan Performance Equity Plan	591,750
	2003 Employee Equity Incentive Plan	62,341
	2010 Long-Term Incentive Equity Plan	1,387,000

 

    	9

    	 

    
 

 

Schedule 5.7

Litigation 

 

 

Michelle Weber, on behalf of herself and all others similarly
situated v. Frederick’s of Hollywood, Inc., Case No. CGC-12-517909. On February 2, 2012, a former California store
employee filed a purported class action lawsuit in the California Superior Court, County of San Francisco, naming Frederick’s
of Hollywood, Inc. (“Frederick’s) as a defendant. The complaint alleges, among other things, violations of the California
Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California’s
Unfair Competition Law. The complaint seeks, among other relief, collective and class certification of the lawsuit (the class being
defined as all California retail store hourly employees), unspecified damages, costs and expenses, including attorneys’ fees,
and such other relief as the Court might find just and proper. An answer to the Plaintiff’s first amended complaint was filed
on April 5, 2012. The case is in the discovery phase.

 

    	10

    	 

    
 

 

 

Schedule 5.8(a)

 

Owned Intellectual Property

 

Trademarks

 

 

	FREDERICK’S OF HOLLYWOOD

TRADEMARK STATUS REPORT

	Mark	SN
                                                                                                                                   or

        Reg.
        No.
	Filed
    or Issued Date	Exp.
    Date	Int’l
    Class	First
                                                                                                                                   Use

        Date
	Decl.
                                                                                                                                   of
                                                                                                                                   Use

        Due/Filed
	Owner	Description
    of Goods	Status
	California
	
         

        FREDERICK’S
	
        Reg. No.

        (CA) 4368 Renewal No. 7565
	Issued 4/30/1976	4/30/16	35	
        4/1947

        3/1946
	N/A	Frederick's of Hollywood	Retail sales of wearing apparel and accessories, toilet preparations, watches, books.	Next renewal due by 4/30/16.
	United
    States
	BOUDOIR CAFÉ	
        SN

        85/299,302
	Filed 4/19/2011	 	3	
        1/1/03

        1/1/03
	 	Frederick's of Hollywood	
        Body butter, body creams; body glitter, body lotions; massage
        oils; non-medicated lip care preparations.

         
	
        Application pending. Mark published 2/28/12. Awaiting Notice
        of Allowance.

         

	CORSETINI	
        SN

        85/029,166
	Filed 5/3/2010	 	3, 25	ITU	 	Frederick's of Hollywood	
        3-Bath oil; body cream; body lotion; body oil; body powder;
        fragrances; perfumes and colognes; shower and bath gel; sun care lotions.

         

        25–Bathing suits; bras; cover-ups; lingerie; panties,
        shorts and briefs; swimwear.

         
	
        Application pending.

        Notice of Allowance issued; Statement of Use or further Ext.
        of Time to File SOU due 5/30/12.

	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

    	11

    	 

    

 

	
        F (Stylized)

        
	Reg. No. 3,532,435	Issued 11/11/2008	11/11/18	3, 18, 21, 25	
        3-

        11/1/03

        11/1/03

         

        18-10/1/04

        10/1/04

         

        21-11/1/03

        11/2/03

         

        25-

        3/1/02

        3/1/03
	
        11/12/13

        -

        11/11/14
	Frederick's of Hollywood	
        3-Bubble bath, body oil, body beads, body glitter; body;
        bath power, face powder, talcum powder, perfume, cologne, toilet water, essential oils for personal use, hand cream, body cream,
        face cream, face cleanser.

         

        18-Toiletry cases of imitations leather.

         

        21-Non-metal decorative boxes, namely, soap boxes and
        ceramic boxes for hair care accessories.

         

        25-Body shapers, body suits, bustiers, camisoles, dresses,
        foundation garments, garter belts, lingerie, loungewear, negligees, night gowns, night shirts, pajamas, panties, pantyhose, sleepwear,
        stockings, tap pants, teddies, underpants.
	Decl. of Continued Use & Incontestability due between 11/11/13 - 11/11/14.
	
        F (Stylized)

        
	Reg. No. 3,076,474	Issued 4/4/2006	4/4/16	(3), 4, (25), 35	
        6/2000

        6/2000
	
        Filed

        4/3/12
	Frederick's of Hollywood	
        (Dropped –Class 3 –Toilet water and body
        lotion (covered by ‘435 Reg.)

         

        4–Candles.

         

        (Dropped – Class 25 -Clothing, namely, bras, breast
        enhancers and push-up pads (covered by ‘435 Reg.)

         

        35-Retail store, mail order catalogue services, and computerized
        on-line retail store services in the fields of clothing, accessories, personal care products, gifts, stationery, furnishings, household
        products and linens.

         
	
        Decl. of Continued Use & Incontestability filed 4/3/12 for
        Classes 4 and 35, remaining classes 3 and 25 covered by ‘435 Reg. Rec’d notice of acceptance.

        Renewal due between 4/5/15 – 4/4/16.

 

 

 

 

 

 

 

 

    	12

    	 

    

 

 

 

 

	FREDERICK’S	Reg. No. 1,055,867	Issued 1/11/1977	1/11/17	3	3/1946	Filed	Frederick's of Hollywood	
        Breast cream, perfume, skin lotion, nail enamel, nail polish,
        shaving cream, face wrinkle cream, and body massage cream.

         
	Next renewal due by 1/11/17.
	FREDERICK’S	Reg. No. 1,058,525	Issued 2/8/1977	2/8/17	25	3/1946	Filed	Frederick's of Hollywood	
        Aprons, gowns, lingerie, blouses, boas, bodyshirts, bodysuits,
        boots, brassieres, briefers, chemises, coats, coveralls, corsets, culottes, dresses (women's and [girls']), dusters, foundation
        garments, fur capes, fur coats, fur neck pieces, fur pieces, garter belts, garters, girdles, half slips, hosiery, housecoats, jackets,
        jerseys, jumpsuits, nightgowns, pajamas, panties, pant sets, pantsuits, panty hose, paste-on bras, peignoir sets, petticoats, playsuits,
        robes, shirts (men's [and boys']), shoes, shorts, skirts, slacks, slippers, slips, stoles, suits, sweaters, swimsuits, theatrical
        clothes, undershorts, and waist cinchers.

         
	Next renewal due by 2/8/17.
	FREDERICK’S	
        Reg. No. 1,052,485

         
	Issued 11/9/1976	11/9/16TM	26	3/1946	Filed	Frederick's of Hollywood	Hairpieces and wigs.	Next renewal due by 11/9/16.
	FREDERICK’S	Reg. No. 1,051,548	Issued 10/26/1976	10/26/16	42	1946	Filed	Frederick's of Hollywood	
        Retail store and mail order services in the fields of clothing,
        personal items, cosmetics and toiletries, pharmaceuticals and exercising equipment and aids.

         
	Next renewal due by 10/26/16. 

 

 

    	13

    	 

    

 

	
        FREDERICK’S

        (Stylized)

        
	Reg. No. 664,746	Issued 7/22/1958	7/22/18	25	1946	Filed	Frederick's of Hollywood	Women's and girls' dresses, brassieres, corsets, girdles, foundation garments, slips, panties, garter belts, slippers, hosiery, nightgowns, pajamas, robes, chemises, men's under shorts, and pajamas.	Next renewal due by 7/22/18.
	FREDERICK’S OF HOLLYWOOD	Reg. No. 1,674,329	Issued 2/4/1992	2/4/22	25	1946	Filed	Frederick's of Hollywood	Gowns, lingerie, blouses, boas, bodyshirts, bodysuits, boots, brassieres, briefers, chemises, coats, corsets, culottes, dresses (women's and girls), dusters, foundation garments, garter belts, garters, girdles, half slips, hosiery, jackets, jerseys, jumpsuits, nightgowns, pajamas, panties, pantsuits, panty hose, paste-on bras, peignoir sets, playsuits, robes, shirts, shorts, shoes, skirts, slacks, slippers, slips, stoles, suits, sweaters, swimsuits, undershorts, and waist cinchers.	Next renewal due by 2/4/22.
	
        FREDERICK’S OF HOLLYWOOD

        (Stylized)

         

        
	Reg. No. 3,405,857	Issued 4/1/2008	4/1/18	3, 4, 14, 18, 28	
        3-

        6/1/05

         

        4-

        1/1/05

         

        14-9/1/05

         

        18-7/1/05

         

        28-1/1/05
	
        3/31/13

        -

        4/1/14
	Frederick's of Hollywood	
        3-Personal care products, namely, nail polish, nail polish
        remover, nail stencils, hard artificial nails, fragrant body splash, hand lotion, face lotion, hand soap, face soap, hair shampoo,
        hair conditioner, hair styling gel, hair spray, hair dyes, hair rinses, perfume, cologne, toilet water, and essential oils for
        personal use, mascara, blush, eye shadow, lip stick, lip gloss, make-up powder and make-up foundation, make-up remover, eye cream,
        hand cream, body cream, face cream, cosmetic astringent for the face, face cleanser, bath oil, bath beads, face powder, bath powder,
        talcum powder, non-medicated blemish stick, shaving cream, deodorant, potpourri, scented beads, body suntan lotion, face suntan
        lotion, body sunless tanning lotion, face sunless tanning lotion, body pre-sun tanning lotion, face pre-sun tanning lotion, body
        after sun tanning lotion and face after sun tanning lotion, laundry care products, namely, dryer fabric softener sheets; home fragrance
        products, namely, potpourri, room fragrancing gels and toilet soaps; washing compounds for use with lingerie.

         

        4–Candles.

         

        14-Jewelry, horological and chronometric instruments,
        namely, watches and clocks.

         

        18-Handbags, wallets, purses, coin purses, tote bags,
        briefcases, attaché, shoulder bags, and toiletry cases made of leather and imitations of leather, sport bags, luggage.

         

        28-Sporting goods, namely golf balls, tennis balls, baseballs,
        and toys namely plush, stuffed animals and dolls; playing cards.

         
	Decl. of Continued Use & Incontestability due between 3/31/13 - 4/1/14.

 

 

 

 

    	14

    	 

    
 

 

	
        FREDERICK’S OF HOLLYWOOD

        (Stylized)

         

        
	Reg. No. 2,932,489	Issued 3/15/2005	3/15/15	3, 9, 25, 35	7/1999	Filed	Frederick's of Hollywood	
        3-Personal care products, namely shower gel, bubble bath,
        body lotion, body soap, body glitter, body powder, and home fragrance products, namely sachets and room fragrancing sprays.

         

        9-Sunglasses.

         

        25-Clothing, namely, bathrobes, beach cover-ups, beachwear,
        belts, blazers, blouses, body shapers, body suits, boxer shorts, bras, bustiers, camisoles, caps, coats, dresses, [footwear,] foundation
        garments, garter belts, girdles, gloves, gowns, halter tops, hats, headbands, hosiery, jackets, jeans, jogging suits, knee highs,
        knit shirts, knit tops, leotards, lingerie, loungewear, mittens, negligees, night gowns, night shirts, pajamas, panties, pants,
        pantyhose, sarongs, scarves, shirts, shorts, skirts, slacks, sleepwear, slips, socks, stockings, suits, sweat pants, sweat shirts,
        sweat shorts, sweat suits, sweaters, swim wear, t-shirts, tank tops, tap pants, teddies, ties, tights, underpants, undershirts,
        underwear and vests.

         

        35-etail store, mail order catalogue and computerized
        on-line retail store services in the fields of clothing, accessories, personal care products, gifts, stationery, furnishings, household
        products and linens.
	Next renewal due by 3/15/15.
	FREDERICK’S OF HOLLYWOOD	Reg. No. 1,627,771	Issued 12/11/1990	12/11/20	42	3/1946	Filed	Frederick's of Hollywood	
        Retail store and mail order services in the fields of clothing,
        personal items, cosmetics and toiletries, (pharmaceuticals and exercising equipment and aids).

         
	Next renewal due by 12/11/20.

 

 

 

    	15

    	 

    

 

 

	
        FREDERICKS.

        COM
	Reg. No. 2,403,596	Issued 11/14/2000	11/14/20	35	8/11/95	Filed	Frederick's of Hollywood	Computerized online retail store services featuring clothing, lingerie, undergarments, accessories for men and women, hairpieces and wigs, loungewear, activewear, hosiery, slippers, shoes, boots, swimwear and beachwear.	Next renewal due by 11/14/20.
	
        GET CHEEKY & Design

         

        
	Reg. No. 3,416,487	Issued 4/29/2008	4/29/18	25	
        7/2002

        7/2002
	
        4/30/13

        -

        4/29/14
	Frederick's of Hollywood	Clothing, namely women's panties, bras, underwear and lingerie.	Decl. of Cont. Use & Incontestability due between 4/30/13 – 4/29/14.
	
        HOLLYWOOD ICON BY FREDERICK’S OF HOLLYWOOD

        

         
	Reg. No. 3,935,638	Issued 3/22/2011	3/22/21	25	
        8/1/10

        8/1/10
	
        3/23/16

        –

        3/22/17
	Frederick's of Hollywood	Lingerie, namely, slips, bras, panties, teddies, gowns, robes and chemises, corsets, dresses, slacks, tops, skirts and shapewear, namely, control shorts, control briefs, control slips and waist cinchers.	Decl. of Cont. Use & Incontestability due between 3/23/16 – 3/22/17.
	PREMIERE LINE BY FREDERICK’S OF HOLLYWOOD	Reg. No. 3,456,537	Issued 7/1/2008	7/1/18	25	
        12/1/06

        12/1/06
	
        7/2/13

        -

        7/1/14
	Frederick's of Hollywood	
        Lingerie, lingerie accessories, namely, brassieres, adhesive
        bras, foundation garments, breast enhancer bras, shorts and panties.

         
	Decl. of Cont. Use & Incontestability due between 7/2/13 – 7/1/14.
	REAL SHAPES	Reg. No. 1,585,795	Issued 3/6/1990	3/5/20	25	5/1/89	3/5/10	Frederick's of Hollywood Group Inc.	
        Panties and coordinating tops, namely, halters, tank tops, unconstructed
        bra-like

        tops and teddies
	Next renewal due by 3/5/20.
	SEDUCTION BY FREDERICK’S OF HOLLYWOOD	Reg. No. 3,858,916	Issued 10/12/2010	10/12/20	25	
        3/1/05

        3/1/05
	
        10/13/15

        -

        10/12/16
	Frederick's of Hollywood	Lingerie, bras, bustiers, garter belts, garters, thongs, underwear.	Decl. of Cont. Use & Incontestability due between 10/13/15 - 10/12/16.	 
	
        THE HOLLYWOOD EXXTREME CLEAVAGE & Design

        
	Reg. No. 3,164,722	Issued 10/31/2006	10/31/16	25	
        9/2003

        9/2003
	
        11/1/11

        /

        10/31/12
	Frederick's of Hollywood	Clothing, namely bras.	Decl. of Cont. Use & Incontestability due by 10/31/12.
	THE ORIGINAL SEX SYMBOL	Reg. No. 3,156,626	Issued 10/17/2006	10/17/16	35	
        6/2003

        6/2003
	
        10/18/11

        -

        10/17/12
	Frederick's of Hollywood	
        Retail store, mail order catalogue and computerized on-line
        retail store services in the fields of clothing, accessories, personal care products, gifts, stationery, furnishings, household
        products and linens.

         
	Decl. of Continued Use & Incontestability due by 10/17/12.

 

 

 

 

    	16

    	 

    

 

	
 International
	AUSTRALIA
	
        FREDERICK’S OF HOLLYWOOD (Graphic)

         

        
	Reg. No. 1111916	Issued 5/5/2006	5/5/16	25, 35	N/A	N/A	Frederick's of Hollywood	
        25–Clothing, namely, bathrobes, beach cover-ups,
        beachwear, belts, blazers, blouses, body shapers, body suits, boxer shorts, bras, bustiers, camisoles, caps, coats, dresses, foundation
        garments, garter belts, girdles, gloves, gowns, halter tops, hats, headbands, hosiery, jackets, jeans, jogging suits, knee highs,
        knit shirts, knit tops, leotards, lingerie, loungewear, mittens, negligees, night gowns, night shirts, pajamas, panties, pants,
        pantyhose, sarongs, scarves, shirts, shorts, skirts, slacks, sleepwear, slips, socks, stockings, suits, sweat pants, sweat shirts,
        sweat shorts, sweat suits, sweaters, swim wear, t-shirts, tank tops, tap pants, teddies, ties, tights, underpants, undershirts,
        underwear and vests.

         

        35-Retail store, mail order catalogue and computerized
        on-line retail store services in the fields of clothing, accessories, personal care products, gifts, stationery, furnishings, household
        products and linens.

         
	Renewal due by 5/5/16.
	BAHRAIN
		
        App. No. 85722

         

        Reg. No.

        85722
	Filed 3/28/2011	 	25	 	N/A	Frederick's of Hollywood	
        Clothing, apparel, underwear, swim wear, lingerie, sleepwear,
        hosiery, shoes, ready to wear apparel, bras, panties, corsets, shapewear, camisoles, babydolls, chemises, bralettes, teddies, bustiers,
        bridal lingerie, pajamas, gowns, robes, footwear, flats, heels, platforms, slippers, boots, shoe solutions, stockings, thigh highs,
        pantyhose, body stockings, garters and garter belts.

         
	Application pending.  Application approved, registration numbers issued – registration certificates to issue in 3-5 months, after opposition period.

 

 

 

    	17

    	 

    

 

 

		
        App. No. 85723

         

        Reg. No.

        85723
	Filed 3/28/2011	 	35	 	N/A	Frederick's of Hollywood	
        Retail store services and wholesale, catalog, and online sales
        services featuring clothing, lingerie, undergarments, accessories, loungewear, activewear, hosiery, slippers, shoes, boots, and
        swimwear, and distribution of related advertising services.

         
	Application pending.  Application approved, registration numbers issued – registration certificates to issue in 3-5 months, after opposition period.
	CANADA
	FREDERICK’S	Reg. No. 259,265	Issued 5/29/1981	5/29/26	N/A	 	N/A	Frederick's of Hollywood	
        Aprons, gowns, lingerie, blouses, boas, bodyshirts, bodysuits,
        boots, brassieres, briefers, chemises, coats, coveralls, corsets, culottes, dresses, (women's and girls'), dusters, foundation
        garments, fur capes, fur coats, fur neck pieces, fur pieces, garter belts, garters, girdles, half slips, hosiery, housecoats, jackets,
        jerseys, jumpsuits, nightgowns, pajamas, panties, pant sets, pantsuits, pantyhose, paste-on bras, peignoir sets, petticoats, playsuits,
        robes, shirts (men's and boys') shoes, shorts, skirts, slacks, slippers, slips, stoles, suits, sweaters, swimsuits, theatrical
        clothes, under shorts, and waist cinchers.

        - Aprons, gowns, lingerie, blouses, boas, bodyshirts, bodysuits, boots, brassieres, briefers, chemises, coats, coveralls, corsets,
        culottes, dresses, (women's and girls'), dusters, foundation garments, garter belts, garters, girdles, half slips, hosiery, housecoats,
        jackets, jerseys, jumpsuits, nightgowns, pajamas, panties, pant-sets, pantsuits, pantyhose, paste-on bras, peignoir sets, petticoats,
        playsuits, robes, shirts, (men's and boys') shoes, shorts, skirts, slacks, slippers, slips, stoles, suits, sweaters, swimsuits,
        theatrical clothes, under shorts, and waist cinchers.

        - Hairpieces and wigs.

        - Breast cream, perfume, skin lotion, nail enamel, nail polish, shaving cream, face wrinkle cream and body massage cream.

        SERVICES: Retail store and mail order services in the fields of clothing, personal items, cosmetics and toiletries, pharmaceuticals
        and exercising equipment and aids.

         
	Next renewal due by 5/29/26.

 

 

 

    	18

    	 

    

 

 

 

	FREDERICK’S OF HOLLYWOOD	Reg. No. 425,958	Issued 4/15/1994	4/15/24	N/A	 	N/A	Frederick's of Hollywood	
        Aprons, gowns, lingerie, blouses, boas, bodyshirts, bodysuits,
        boots, brassieres, briefers, chemises, coats, coveralls, corsets, culottes, dresses (women's and girls), dusters, foundation garments,
        fur capes, fur coats, fur neck pieces, fur pieces, garter belts, garters, girdles, half slips, hosiery, housecoats, jackets, jerseys,
        jumpsuits, nightgowns, pajamas, panties, pant sets, pantsuits, panty hose, paste-on bras, peignoir sets, petticoats, playsuits,
        robes, shirts, shorts, shoes, skirts, slacks, slippers, slips, stoles, suits, sweaters, swimsuits, theatrical clothes, undershorts,
        and waist clinchers.

        - Gowns, lingerie, blouses, bodyshirts, bodysuits, boots, brassieres, briefers, chemises, coats, coveralls, corsets, dresses (women's
        and girls), dusters, foundation garments, garter belts, garters, girdles, half slips, hosiery, housecoats, jackets, jerseys, jumpsuits,
        nightgowns, pajamas, panties, pantsuits, panty hose, paste-on bras, peignoir sets, petticoats, playsuits, robes, shirts, shorts,
        shoes, skirts, slacks, slippers, slips, suits, sweaters, swimsuits, theatrical clothes, undershorts, and waist clinchers.

        SERVICES: Retail store and mail order services in the fields
        of clothing, personal items, cosmetics and toiletries, pharmaceuticals and exercising equipment and aids.

        - Retail store and mail order services in the fields of clothing.

         
	Next renewal due by 4/15/24.
	CHINA
	
        FREDERICK’S OF HOLLYWOOD (Graphic)

        
	Reg. No. 5342299	Issued 3/7/2010	3/6/20	35	 	N/A	Frederick's of Hollywood	
        Mail order catalogue and computerized on-line retail store services
        and advertising in the fields of clothing, accessories, personal care products, gifts, stationery, furnishings, household products
        and linens.

         
	Renewal due by 3/6/20.

 

 

 

    	19

    	 

    
 

 

	
        FREDERICK’S OF HOLLYWOOD (Graphic)

        
	Filing No. 5342300	5/11/2006	 	25	 	N/A	Frederick's of Hollywood	Clothing.	
        Office Action received. Application not allowed. Trademark Agent
        recommends re-filing of application to get another review, at this time can add classes 3 (fragrance) and 14 (jewelry), as well
        as swimwear to new application.

         

	EUROPEAN UNION
	
        FREDERICK’S OF HOLLYWOOD (Graphic)

         

        
	Reg. No. 005058979	Reg. Date 4/17/2007	5/4/16	3, 25, 35	N/A	N/A	Frederick's of Hollywood	
        3-Personal care products, namely, nail polish, nail polish
        remover, nail stencils, hard artificial nails, fragrant body splash, hand lotion, face lotion, hand soap, face soap, hair shampoo,
        hair conditioner, hair styling gel, hair spray, hair dyes, hair rinses, perfume, cologne, toilet water, and essential oils for
        personal use, mascara, blush, eye shadow, lip stick, lip gloss, make-up powder and make-up foundation, make-up remover, eye cream,
        hand cream, body cream, face cream, cosmetic astringent for the face, face cleanser, bath oil, bath beads, face powder, bath powder,
        talcum powder, non-medicated blemish stick, shaving cream, deodorant, potpourri, scented beads, body suntan lotion, face suntan
        lotion, body sunless tanning lotion, face sunless tanning lotion, body pre-sun tanning lotion, face pre-sun tanning lotion, body
        after sun tanning lotion and face after sun tanning lotion, laundry care products, namely, dryer fabric softener sheets; home fragrance
        products, namely, potpourri, room fragrancing gels and toilet soaps; washing compounds for use with lingerie.

         

        25–Clothing, namely, bathrobes, beach cover-ups,
        beachwear, belts, blazers, blouses, body shapers, body suits, boxer shorts, bras, bustiers, camisoles, caps, coats, dresses, foundation
        garments, garter belts, girdles, gloves, gowns, halter tops, hats, headbands, hosiery, jackets, jeans, jogging suits, knee highs,
        knit shirts, knit tops, leotards, lingerie, loungewear, mittens, negligees, night gowns, night shirts, pajamas, panties, pants,
        pantyhose, sarongs, scarves, shirts, shorts, skirts, slacks, sleepwear, slips, socks, stockings, suits, sweat pants, sweat shirts,
        sweat shorts, sweat suits, sweaters, swim wear, t-shirts, tank tops, tap pants, teddies, ties, tights, underpants, undershirts,
        underwear and vests.

        35-Retail store, mail order catalogue and computerized
        on-line retail store services in the fields of clothing, accessories, personal care products, gifts, stationery, furnishings, household
        products and linens.
	Renewal due by 5/4/16.

 

 

 

    	20

    	 

    
 

 

	FRANCE
	
         

        FREDERICK’S
	Reg. No. 1490760	Issued 9/27/1968	9/30/18	25	 	N/A	Frederick's of Hollywood	Clothing.	Next renewal due by 9/30/18.
	KOREA
	
         

        FOH
	
        App. No.

        45-2010-0002133

         

        Reg. No. 45-0037611
	
        Filed 5/20/2010

         

         

        Reg. Date

        12/23/2011
	12/23/21	3, 25, 35	N/A	N/A	Frederick's of Hollywood	
        3–Perfumes and colognes; bath oil; body cream;
        body lotion; body oil; body powder; shower and bath gel; sun care lotions; fragrances for personal use [Perfume].

         

        25–Clothing, apparel, underwear, swim wear, lingerie,
        sleepwear, hosiery, shoes, ready to wear apparel, bras, panties, corsets, shapewear, camisoles, babydolls, chemises, bralettes,
        teddies, bustiers, bridal lingerie, pajamas, gowns, robes, footwear, flats, heels, platforms, slippers, boots, stockings, pantyhose,
        body stockings, garters and garter belts.

         

        35–Retail store services and wholesale, catalog,
        and online sales services featuring clothing, lingerie, undergarments, accessories, loungewear, activewear, hosiery, slippers,
        shoes, boots, and swimwear, and distribution of related advertising services.

         
	
        Renewal due by 12/23/21.

         

        Non-use for 3 consecutive years leaves registration subject
        to cancellation by 3rd party.

	
        FREDERICK’S OF HOLLYWOOD Logo

        

         
	
        App. No.

        40-2011-0016703

         

        Reg. No. 40-0879711
	
        Filed 3/31/2011

         

         

        Reg. Date

        9/8/2011
	9/8/21	3	N/A	N/A	Frederick's of Hollywood	
        3–Fragrances; perfumes and colognes; bath oil;
        body cream; body lotion; body oil; body powder; shower and bath gel; sun care lotions.

         
	
        Renewal due by 9/8/21.

         

        Non-use for 3 consecutive years leaves registration subject
        to cancellation by 3rd party.

	
        FREDERICK’S OF HOLLYWOOD Logo

        
	
        App. No.

        45-2010-0002484

         

        Reg. No.

        45-0038470
	
        Filed 6/14/2010

         

         

        Reg. Date

        2/16/2012
	2/16/22	25, 35	N/A	N/A	Frederick's of Hollywood	
        25–Shoes, footwear, flats, heels, platforms, slippers,
        boots.

        35–Catalog, services featuring clothing, lingerie,
        undergarments, accessories, loungewear, activewear, hosiery, slippers, shoes, boots, and swimwear; retail store services and wholesale,
        and online sales services featuring slippers, shoes, boots, distribution of related advertising services.

         
	
        Renewal due by 2/16/22.

         

        Products reduced due to conflicting registrations (cancellation
        actions pending).

        (Application originally was for classes 3, 25 & 35 –
        class 3 was divided out.)

         

        Non-use for 3 consecutive years leaves registration subject
        to cancellation by 3rd party.

	KUWAIT
		App. No. 119023	Filed 3/13/2011	 	25	 	N/A	Frederick's of Hollywood	Clothing, apparel, underwear, swim wear, lingerie, sleepwear, hosiery, shoes, ready to wear apparel, bras, panties, corsets, shapewear, camisoles, babydolls, chemises, bralettes, teddies, bustiers, bridal lingerie, pajamas, gowns, robes, footwear, flats, heels, platforms, slippers, boots, shoe solutions, stockings, thigh highs, pantyhose, body stockings, garters and garter belts.	Application pending.  Notified by the Registrar that application would be accepted provided applicant agrees not to use any part of the mark separately.  Foreign counsel filed compliance with such requirement on or about 2/15/12 and will pay publication and registration fees.

 

  

 

 

    	21

    	 

    

 

		App. No. 119024	Filed 3/13/2011	 	35	 	N/A	Frederick's of Hollywood	Retail store services and wholesale, catalog, and online sales services featuring clothing, lingerie, undergarments, accessories, loungewear, activewear, hosiery, slippers, shoes, boots, and swimwear, and distribution of related advertising services.	Application pending.  Notified by the Registrar that application would be accepted provided applicant agrees not to use any part of the mark separately.  Foreign counsel filed compliance with such requirement on or about 2/15/12 and will pay publication and registration fees.
	OMAN
		App. No. 67442	Filed 3/14/2011	 	25	 	N/A	Frederick's of Hollywood	
        Clothing, apparel, underwear, swim wear, lingerie, sleepwear,
        hosiery, shoes, ready to wear apparel, bras, panties, corsets, shapewear, camisoles, babydolls, chemises, bralettes, teddies, bustiers,
        bridal lingerie, pajamas, gowns, robes, footwear, flats, heels, platforms, slippers, boots, shoe solutions, stockings, thigh highs,
        pantyhose, body stockings, garters and garter belts.

         
	Application pending.  Rec’d notice - mark to publish on 11/19/11, if no opposition filed within 3 months of publication, mark will issue.  No notice of opposition received to date. Registration should issue in next few months.
		App. No. 67443	Filed 3/15/2011	 	35	 	N/A	Frederick's of Hollywood	
        Retail store services and wholesale, catalog, and online sales
        services featuring clothing, lingerie, undergarments, accessories, loungewear, activewear, hosiery, slippers, shoes, boots, and
        swimwear, and distribution of related advertising services.

         
	Application pending.  Rec’d notice - mark to publish on 11/19/11, if no opposition filed within 3 months of publication, mark will issue.  No notice of opposition received to date. Registration should issue in next few months.
	
 QATAR
		App. No. 67106	Filed 3/14/2011	 	25	 	N/A	Frederick's of Hollywood	
        Clothing, apparel, underwear, swim wear, lingerie, sleepwear,
        hosiery, shoes, ready to wear apparel, bras, panties, corsets, shapewear, camisoles, babydolls, chemises, bralettes, teddies, bustiers,
        bridal lingerie, pajamas, gowns, robes, footwear, flats, heels, platforms, slippers, boots, shoe solutions, stockings, thigh highs,
        pantyhose, body stockings, garters and garter belts.

         
	Application pending. Foreign trademark counsel advises, as of 3-19-12, that examination will be completed in 4-5 months due to trademark office backlog.

 

 

    	22

    	 

    

 

 

		App. No. 67107	Filed 3/14/2011	 	35	 	N/A	Frederick's of Hollywood	
        Retail store services and wholesale, catalog, and online sales
        services featuring clothing, lingerie, undergarments, accessories, loungewear, activewear, hosiery, slippers, shoes, boots, and
        swimwear, and distribution of related advertising services.

         

         
	Application pending.  Foreign trademark counsel advises, as of 3-19-12, that examination will be completed in 4-5 months due to trademark office backlog.
	SAUDI ARABIA
		Reg. No. 1188/45	Reg. Date 8/28/2010	5/2/19	25	 	N/A	Frederick's of Hollywood	Clothing, footwear, headgear.	Renewal due by 5/2/19.
	
        

         
	Reg. No. 1188/46	Reg. Date 8/28/2010	5/2/19	35	 	N/A	Frederick's of Hollywood	
        Advertising: business management; business administration office
        functions; the bringing together, for the benefit of others, of a variety of goods, enabling customers to conveniently view and
        purchase those goods in a store, and from a general merchandise catalogue by mail order or by means of telecommunications; provision
        of information to customers, and advice and assistance in the selection of goods brought together as above.

         
	Renewal due by 5/2/19.

 

 

 

    	23

    	 

    

 

 

	TAIWAN
	
        FREDERICK’S OF HOLLYWOOD

        
	Reg. No. 533294	Issued 9/1/1991	8/31/21	 	 	N/A	Frederick's of Hollywood	Panty hose.	Renewed 2011. Next renewal due 8/31/21.
	
        FREDERICK’S OF HOLLYWOOD

         
	Reg. No. 536453	Issued 10/1/1991	9/30/21	 	 	N/A	Frederick's of Hollywood	Shirts, swim suits, and underwear.	Renewed 2011. Next renewal due 9/30/21.
	UNITED ARAB EMIRATES
		App. No. 154866	Filed 3/24/2011	 	25	 	N/A	Frederick's of Hollywood	Clothing, apparel, underwear, swim wear, lingerie, sleepwear, hosiery, shoes, ready to wear apparel, bras, panties, corsets, shapewear, camisoles, babydolls, chemises, bralettes, teddies, bustiers, bridal lingerie, pajamas, gowns, robes, footwear, flats, heels, platforms, slippers, boots, shoe solutions, stockings, thigh highs, pantyhose, body stockings, garters and garter belts.	Application pending.  Rec’d notice on 2/21/12 - mark has been approved to publish.

 

 

    	24

    	 

    

 

		App. No. 154867	Filed 3/24/2011	 	35	 	N/A	Frederick's of Hollywood	
        Retail store services and wholesale, catalog, and online sales
        services featuring clothing, lingerie, undergarments, accessories, loungewear, activewear, hosiery, slippers, shoes, boots, and
        swimwear, and distribution of related advertising services.

         
	Application pending.  Rec’d notice on 2/21/12 - mark has been approved to publish.
	YEMEN
		
        App. No. 55015

         

        Reg. No.

        42996
	
        Filed 3/14/2011

         

        Reg. Date

        3/18/2012
	3/14/21	25	 	N/A	Frederick's of Hollywood	
        Clothing, apparel, underwear, swim wear, lingerie, sleepwear,
        hosiery, shoes, ready to wear apparel, bras, panties, corsets, shapewear, camisoles, babydolls, chemises, bralettes, teddies, bustiers,
        bridal lingerie, pajamas, gowns, robes, footwear, flats, heels, platforms, slippers, boots, shoe solutions, stockings, thigh highs,
        pantyhose, body stockings, garters and garter belts.

         
	
        Registration issued.

        Renewal due 3/14/21.

		
        App. No. 55016

         

        Reg. No.

        42997
	
        Filed 3/14/2011

         

        Reg. Date

        3/18/2012
	3/14/21	35	 	N/A	Frederick's of Hollywood	
        Retail store services and wholesale, catalog, and online sales
        services featuring clothing, lingerie, undergarments, accessories, loungewear, activewear, hosiery, slippers, shoes, boots, and
        swimwear, and distribution of related advertising services.

         
	
        Registration issued.

        Renewal due 3/14/21.

 

 

 

    	25

    	 

    

 

Copyrights

 

 

	1.	CLASS:	TX (Textual Works)
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature)
	 	STATUS:	Registered
	 	REGISTRATION DATE:	March 26, 1991
	 	REGISTRATION NUMBER:	TX-3-055-731
	 	CREATED:	1991
	 	PUBLICATION DATE:	February 25, 1991
	 	NEW MATTER:	New textual and pictorial material and compilation of previous publication material.
	 	NOTES:	Catalog
	 	PREVIOUS REGISTRATION:	Prev. reg.
	 	 	 
	2.	CLASS:	TX (Textual Works)
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature)
	 	STATUS:	Registered
	 	REGISTRATION DATE:	May 29, 1987
	 	REGISTRATION NUMBER:	TX-2-083-789
	 	PUBLICATION DATE:	December 1, 1986
	 	NEW MATTER:	compilation and additions
	 	REGISTRATION DEPOSIT:	61 p.
	 	 	 
	3.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	May 20, 1991
	 	REGISTRATION NUMBER:	TX-3-068-104
	 	ISSUE:	Vol. 59, Issue No. 334
	 	PUBLICATION DATE:	June 6, 1988
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242.
	 	MISCELLANEOUS:	Issue ti.:  Summer fashion sale.
	 	 	 
	4.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	April 15, 1991
	 	REGISTRATION NUMBER:	TX-3-083-055
	 	ISSUE:	Vol. No. 73, issue no. 362
	 	PUBLICATION DATE:	March 25, 1991
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood.
	 	NOTES:	Frequency unknown. Subtitle on later issues:  An Intimate Experience.  Description based on:  Vol. 34, issue no. 242.
	 	 	 
	5.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	January 27, 1992
	 	REGISTRATION NUMBER:	TX-3-229-421
	 	ISSUE:	Vol. 76, issue no. 369
	 	PUBLICATION DATE:	November 25, 1991
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Subtitle on later issues:  An Intimate Experience.  Description based on:  Vol. 34, issue no. 242
	 	 	 

 

    	26

    	 

    
 

 

 

	6.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	July 24, 1992
	 	REGISTRATION NUMBER:	TX-3-353-063
	 	ISSUE:	Vol. 79, issue no. 373
	 	PUBLICATION DATE:	March 30, 1992
	 	NEW MATTER:	additions and compilation.
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency varies. Subtitle on later issues:  An Intimate Experience Description based on:  Vol. 34, issue no. 242
	 	 	 
	7.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	December 14, 1992
	 	REGISTRATION NUMBER:	TX-3-445-761
	 	ISSUE:	Vol. 81, issue no. 378
	 	PUBLICATION DATE:	August 10, 1992
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency varies. Subtitle on later issues:  An Intimate Experience Description based on:  Vol. 34, issue no. 242
	 	 	 
	8.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	February 9, 1993
	 	REGISTRATION NUMBER:	TX-3-468-373
	 	ISSUE:	Vol. 81, issue no. 379
	 	PUBLICATION DATE:	September 14, 1992
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood:  Frederick’s Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets
	 	NOTES:	Frequency varies.  Subtitle on later issues:  An Intimate Experience.  Description based on:  Vol. 34, issue no. 242
	 	 	 
	9.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	January 11, 1993
	 	REGISTRATION NUMBER:	TX-3-458-894
	 	ISSUE:	Vol. 82, no. 380
	 	PUBLICATION DATE:	October 29; 1992
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets
	 	NOTES:	Frequency varies.  Subtitle on later issues: An. Intimate Experience Description based on: Vol. 34, issue no. 242
	 	 	 
	10.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	March 22, 1993
	 	REGISTRATION NUMBER:	TX-3-504-897
	 	ISSUE:	Vol. 83, no. 381
	 	PUBLICATION DATE:	February 25, 1993
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	ISSN NUMBER:	0162.0401 = Frets
	 	NOTES:	Frequency varies. Subtitle on later issues:  An Intimate Experience.  Description based on:  Vol. 34, issue no. 242
	 	 	 

 

 

    	27

    	 

    

  

 

	11.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	April 23, 1993
	 	REGISTRATION NUMBER:	TX-3-589-965
	 	ISSUE:	Vol. 84; issue no. 383
	 	PUBLICATION DATE:	April 5, 1993
	 	NEW MATTER:	additions and compilation
	 	PUBLICATION DATE:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency varies. Subtitle on later issues:  An Intimate Experience.  Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	(C.O. corres.)
	 	 	 
	12.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	September 8, 1993
	 	REGISTRATION NUMBER:	TX-M40-936
	 	ISSUE:	Vol. 84, issue no. 384
	 	PUBLICATION DATE:	May 10, 1993
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets
	 	NOTES:	Frequency varies. Subtitle on later issues:  An Intimate Experience.  Description based on: Vol. 34, issue no. 242
	 	 	 
	13.	CLASS:	TX (Textual Works)
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature)
	 	STATUS:	Registered
	 	REGISTRATION DATE:	August 9, 1990
	 	REGISTRATION NUMBER:	TX-2-894-818
	 	PUBLICATION DATE:	November 27, 1989
	 	NOTES:	Catalog
	 	 	 

 

    	28

    	 

    
 

	14.	CLASS:	TX (Textual Works).
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature)
	 	STATUS:	Registered
	 	REGISTRATION DATE:	August 9, 1990
	 	REGISTRATION NUMBER:	TX-2-894-819
	 	CREATED:	1989
	 	PUBLICATION DATE:	June 4, 1990
	 	NOTES:	Catalog
	 	 	 
	15.	CLASS:	TX (Textual Works)
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature)
	 	STATUS:	Registered
	 	REGISTRATION DATE:	August 9, 1990
	 	REGISTRATION NUMBER:	TX-2-894-820
	 	PUBLICATION DATE:	July 9, 1990
	 	NOTES:	Catalog
	 	 	 
	16.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature)
	 	STATUS:	Registered
	 	REGISTRATION DATE:	December 17, 1990
	 	REGISTRATION NUMBER:	TX-2-973-520
	 	PUBLICATION DATE:	November 26, 1990
	 	NEW MATTER:	additions and compilation
	 	NOTES:	Catalog
	 	 	 
	 	 	 
	17.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	June 1, 1987
	 	REGISTRATION NUMBER:	TX-2-095-037
	 	ISSUE:	Vol. 51, issue no. 317
	 	PUBLICATION DATE:	August 11, 1986
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.: Spectacular! 40th anniversary of beauty and fashion
	 	 	 

 

 

    	29

    	 

    

 

 

	18.	APPLICATION TITLE:	Summer fashion sale.
	 	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	March 7, 1988
	 	REGISTRATION NUMBER:	TX-2-277-414
	 	ISSUE:	Vol. no. 54, issue no. 325
	 	PUBLICATION DATE:	July 13, 1987
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Version no. 7500
	 	 	 
	 	 	 
	 	 	 
	19.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	March 7, 1988
	 	REGISTRATION NUMBER:	TX-2-282-497
	 	ISSUE:	Vol. no. 55, issue no. 326
	 	PUBLICATION DATE:	August 10, 1987
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Version no. 7600. Issue ti.: Frederick’s of Hollywood, an Intimate Experience.
	 	 	 
	20.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	August 18, 1988
	 	REGISTRATION NUMBER:	TX-2-374-563
	 	ISSUE:	Vol. no. 51, issue no. 318
	 	PUBLICATION DATE:	September 15;1986
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Version no. 6700. Issue ti.: Christmas magic.
	 	 	 
	21.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	September 9, 1988
	 	REGISTRATION NUMBER:	TX-2-364-387
	 	ISSUE:	Vol. no. 51, issue no. 319
	 	PUBLICATION DATE:	October 20, 1986
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Version no. 6800. Issue ti.: Christmas as special as you!
	 	 	 

 

 

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	22.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	March 29, 1989
	 	REGISTRATION NUMBER:	TX-2-525-172
	 	ISSUE:	Vol. 60, issue no. 338
	 	PUBLICATION DATE:	October 17, 1988
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Version no. 8800.  Issue ti.: Happy holidays!
	 	 	 
	23.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	March 29, 1989
	 	REGISTRATION NUMBER:	TX-2-675-429, TX-2-533-225
	 	ISSUE:	Vol. 61, issue no. 339
	 	PUBLICATION DATE:	November 28, 1988
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood:  Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Version no. 9100.  Issue ti.: Sale.
	 	 	 
	24.	APPLICATION TITLE:	Happy Holidays!
	 	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	October 31, 1989
	 	REGISTRATION NUMBER:	TX-2-675-597
	 	ISSUE:	Vol. no. 60, issue no. 338 
	 	PUBLICATION DATE:	October 17, 1988 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242

 

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	25.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	September 22, 1988  
	 	REGISTRATION NUMBER:	TX-2-759-322  
	 	ISSUE:	Vol. 60, no. 337  
	 	PUBLICATION DATE:	September 12, 1988   
	 	NEW MATTER:	additions and compilation  
	 	PUB FREQUENCY:	Other  
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood  
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	 	 
	26.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	October 18, 1989 
	 	REGISTRATION NUMBER:	TX-2-727-721 
	 	ISSUE:	Vol. 62, no. 340 
	 	PUBLICATION DATE:	January 16, 1989 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34; issue no. 242
	 	MISCELLANEOUS:	(C. O. corres.)
	 	 	 
	27.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	August 9, 1990 
	 	REGISTRATION NUMBER:	TX-2-883-506 
	 	ISSUE:	Vol. 65, no. 348 
	 	PUBLICATION DATE:	October 16, 1989 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34; issue no. 242
	 	 	 
	28.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	April 11, 1978
	 	REGISTRATION NUMBER:	TX-48-091
	 	ISSUE:	Vol. 32, issue no. 217
	 	PUBLICATION DATE:	December 5, 1977
	 	IN NOTICE YEAR:	1978
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 32; issue no. 217, December 5, 1977
	 	MISCELLANEOUS:	Issue ti.: Save.
	 	 	 

 

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	29.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	July 24,1978 
	 	REGISTRATION NUMBER:	TX-72-624 
	 	ISSUE:	Vol. 32, no. 218 
	 	PUBLICATION DATE:	January 20, 1978 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 32, issue no. 217, December 5, 1977. 
	 	MISCELLANEOUS:	Issue ti.: The Label makes the difference.
	 	 	 
	 	 	 
	30.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	December 4, 1978 
	 	REGISTRATION NUMBER:	TX-205-088 
	 	ISSUE:	Vol. 32, issue no. 226 
	 	PUBLICATION DATE:	September 15, 1978 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 32, issue no. 217, December 5, 1977. 
	 	MISCELLANEOUS:	Issue ti.: Be wildly romantic!!!
	 	 	 
	31.	APPLICATION TITLE:	Frederick’s on sale. 
	 	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	March 7, 1979 
	 	REGISTRATION NUMBER:	TX-203-347 
	 	ISSUE:	Vol. 33, no. 228
	 	PUBLICATION DATE:	December 5, 1978 
	 	NEW MATTER:	editorial comment and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0016-0520 = Freedom at issue. 
	 	NOTES:	Frequency unknown. Description based on: Vol. 32, issue no. 217, December 5, 1977.
	 	 	 
	32.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	March 8, 1979 
	 	REGISTRATION NUMBER:	TX-204-564 
	 	ISSUE:	Vol. 33, no. 229
	 	PUBLICATION DATE:	January 18, 1979
	 	NEW MATTER:	editorial comment and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0016-0520 = Freedom at issue. 
	 	NOTES:	Frequency unknown. Description based on: Vol. 32, issue no. 217, December 5, 1977.
	 	 	 

 

 

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	33.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	November 1, 1979
	 	REGISTRATION NUMBER:	TX-356-662 
	 	ISSUE:	Vol. 33, no. 233
	 	PUBLICATION DATE:	June 6, 1979
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 32, issue no. 217, December 5, 1977.
	 	MISCELLANEOUS:	Issue ti.:  Better buy now! Save now, save now
	 	 	 
	34.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	October 29, 1979
	 	REGISTRATION NUMBER:	TX-354-315 
	 	ISSUE:	Vol. 33, issue no. 235
	 	PUBLICATION DATE:	August 1, 1979
	 	NEW MATTER:	editorial comment and compilation
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0016-0520 = Freedom at issue.
	 	NOTES:	Frequency unknown. Description based on: Vol. 32, issue no. 217, December 5, 1977.
	 	MISCELLANEOUS:	Issue ti.:  How to get your man and keep him!
	 	 	 
	35.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	July 15, 1983
	 	REGISTRATION NUMBER:	TX-1-152-466 
	 	ISSUE:	Vol. 36, issue no. 266
	 	PUBLICATION DATE:	additions and compilations
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.:  Sale, sale, sale, buy now!: It’s worth every thrill.
	 	 	 
	36.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	September 29, 1983
	 	REGISTRATION NUMBER:	TX-1-237-999 
	 	ISSUE:	Vol. 40, issue no. 279
	 	PUBLICATION DATE:	September 15, 1983
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.:  Fall fantasies for you and your lover.  (C. O. corres.)
	 	 	 

 

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	37.	APPLICATION TITLE:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire.
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	July 2, 1984 
	 	REGISTRATION NUMBER:	TX-1-380-803 
	 	ISSUE:	Vol. 38, issue no. 276 
	 	PUBLICATION DATE:	June 10, 1983 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.: Sultry summer savings!
	 	 	 
	38.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	December 2, 1985 
	 	REGISTRATION NUMBER:	TX-1-706-524 
	 	ISSUE:	Vol. 38, issue no. 291 
	 	PUBLICATION DATE:	September 17, 1984 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.: The Glamour of Hollywood holidays is yours! : catalog no. 4601.
	 	 	 
	39.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	December 2, 1985 
	 	REGISTRATION NUMBER:	TX-1-733-066 
	 	ISSUE:	Vol. 40, issue no. 298 
	 	PUBLICATION DATE:	January 18, 1985 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.: Sizzling sexy.
	 	 	 
	40.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	December 2, 1985 
	 	REGISTRATION NUMBER:	TX-1-713-998 
	 	ISSUE:	Vol. 42, issue no. 301 
	 	PUBLICATION DATE:	June 10, 1985 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.: Sale-a-brate : catalog no. 5401.
	 	 	 

 

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	41.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	May 30, 1986 
	 	REGISTRATION NUMBER:	TX-1-846-894 
	 	ISSUE:	Vol. 47, no. 310
	 	PUBLICATION DATE:	December 9, 1985
	 	NEW MATTER:	additions and compilation
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	 	 
	42.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	May 30;1986 
	 	REGISTRATION NUMBER:	TX-1-838-969 
	 	ISSUE:	Vol. 48, issue no. 311 
	 	PUBLICATION DATE:	January 20, 1986 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242  Issue ti.: The Best kept secrets of sex appeal.
	 	 	 
	43.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	December 4, 1978 
	 	REGISTRATION NUMBER:	TX-485-679 
	 	ISSUE:	Vol. 32, issue no. 224 
	 	PUBLICATION DATE:	August 1, 1978 
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 32, issue no. 217, December 5, 1977. 
	 	MISCELLANEOUS:	Issue ti.: Action! Take, love! thrills! ecstasy! (C.O. corres.)
	 	 	 

 

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	44.	APPLICATION TITLE:	Break out .. . the news . now! 
	 	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	October 5, 1979 
	 	REGISTRATION NUMBER:	TX-396-541 
	 	ISSUE:	Vol. 33, issue no. 231 
	 	ISSUE DATE:	July 10, 1979 
	 	PUBLICATION DATE:	April 11, 1979 
	 	NEW MATTER:	photos and artwork 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown.  Description based on:  Vol. 32, issue no. 217, December 5, 1977. 
	 	MISCELLANEOUS:	(C.O. corres.)
	 	 	 
	45.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	November 30;1979 
	 	REGISTRATION NUMBER:	TX-419-642 
	 	ISSUE:	Vol. 33, issue no. 237 
	 	PUBLICATION DATE:	September 21, 1979 
	 	NEW MATTER:	photos and artwork 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown.  Description based on: Vol. 32, issue no. 217, December 5, 1977. 
	 	MISCELLANEOUS:	Issue ti.: Frederick’s special report, how to do it for the holidays.  (C.O. corres.)
	 	 	 
	46.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	July 16, 1980
	 	REGISTRATION NUMBER:	TX-509-248
	 	ISSUE:	Vol. 34, issue no. 239
	 	PUBLICATION DATE:	December 5, 1979
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood:  Frederick’s of Hollywood
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.: Better buy now! : Sale, more for less.
	 	 	 
	47.	CLASS:	TX (Textual Works)
	 	REGISTRATION DATE:	July 18, 1980
	 	REGISTRATION NUMBER:	TX-511-877
	 	ISSUE:	Vol. 34, issue no. 240
	 	PUBLICATION DATE:	January 21, 1980
	 	NEW MATTER:	photos and artwork
	 	PUB FREQUENCY:	Other
	 	IMPRINT:	Hollywood:  Frederick’s of Hollywood
	 	ISSN NUMBER:	0162-0401 = Frets
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242
	 	MISCELLANEOUS:	Issue ti.: Summer love : how to get it by spring.
	 	 	 

 

 

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	48.	 CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	December 29, 1980 
	 	REGISTRATION NUMBER:	TX-646-970 
	 	ISSUE:	Vol. 34, issue no. 248 
	 	PUBLICATION DATE:	September 23, 1980 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242 
	 	MISCELLANEOUS:	Issue ti.: Follow me, surrender to Frederick’s.
	 	 	 
	49.	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	March 5, 1981 
	 	REGISTRATION NUMBER:	TX-641-660 
	 	ISSUE:	Vol. 35, issue no. 251
	 	PUBLICATION DATE:	January 23, 1981 
	 	NEW MATTER:	photos and artwork 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242 
	 	MISCELLANEOUS:	Issue ti.: I’ve got my man! You deserve yours!
	 	 	 
	50.	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	June 8, 1981 
	 	REGISTRATION NUMBER:	TX-707-738 
	 	ISSUE:	Vol. 35, issue no. 253 
	 	PUBLICATION DATE:	June 5, 1981 
	 	NEW MATTER:	photos and artwork 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown.  Description based on: Vol. 34, issue no. 242 
	 	MISCELLANEOUS:	Issue ti.: Show off now!
	 	 	 
	51.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	October 22, 1981 
	 	REGISTRATION NUMBER:	TX-852-256 
	 	ISSUE:	Vol. 35, issue no. 255 
	 	PUBLICATION DATE:	June 5, 1981 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242 
	 	MISCELLANEOUS:	(C.O. corres.)
	 	 	 
	52.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	March 17, 1982 
	 	REGISTRATION NUMBER:	TX-895-688 
	 	ISSUE:	Vol. 35, issue no. 257 
	 	PUBLICATION DATE:	August 1, 1981 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown.  Description based on: Vol. 34, issue no. 242 
	 	MISCELLANEOUS:	Issue ti.: Just imagine, a new sexier you! (C.O. corres.)
	 	 	 

 

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	53.	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	March 17, 1982 
	 	REGISTRATION NUMBER:	TX-872-313 
	 	ISSUE:	Vol. 35, issue no. 259 
	 	PUBLICATION DATE:	September 15, 1981 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	IMPRINT:	Hollywood: Frederick’s of Hollywood 
	 	ISSN NUMBER:	0162-0401 = Frets 
	 	NOTES:	Frequency unknown. Description based on: Vol. 34, issue no. 242 
	 	MISCELLANEOUS:	Issue ti.: Don’t miss it.
	 	 	 
	54.	PARTY OF THE FIRST:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood. 
	 	PARTY OF THE SECOND:	Crédit Agricole Indosuez 
	 	DOCUMENT TYPE:	Assignment of Copyright 
	 	REGISTRATION DATE:	1990 
	 	EXECUTED:	September 29, 1997 
	 	RECORDED DATE:	October 9, 1997
	 	NOTES:	Frederick’s of Hollywood: grab bag special sale (catalog) and 131 other titles. Subsidiary intellectual property security agreement.
	 	MICROFILM:	V003405 P125
	 	 	 
	55.	APPLICATION TIME:	Intimate details by Frederick’s of Hollywood. 
	 	APPLICATION AUTHOR:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood. 
	 	CLASS:	TX (Textual Works) 
	 	REGISTRATION DATE:	October 24, 1990 
	 	ISSUE:	Vol. 1, issue no. 1 
	 	PUBLICATION DATE:	September 19, 1990 
	 	NEW MATTER:	additions and compilation 
	 	PUB FREQUENCY:	Other 
	 	NOTES:	Frequency unknown.
	56.	OWNER:	Private Moments, Inc. 
	 	APPLICATION AUTHOR:	New textual and pictorial material; Private Moments, employer for hire. 
	 	CLASS:	TX (Textual Works) 
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature) 
	 	STATUS:	Registered 
	 	REGISTRATION DATE:	September 23, 1982 
	 	REGISTRATION NUMBER:	TX-1-085-885 
	 	PUBLICATION DATE:	September 17, 1982 
	 	NEW MATTER:	“new textual and pictorial material.” 
	 	REGISTRATION DEPOSIT:	23 p. 
	 	IMPRINT:	Los Angeles: Private Moments, c1982. 
	 	MISCELLANEOUS:	C.O. corres.

 

    	39

    	 

    
 

 

	57.	CLASS:	TX (Textual Works) 
	 	RETRIEVAL CODE:	B (Monographic Works of a Non-dramatic Literary Nature) 
	 	STATUS:	Registered 
	 	REGISTRATION DATE:	June 1, 1987 
	 	PUBLICATION DATE:	February 23, 1987
	 	NEW MATTER:	additions and compilation
	58.	PARTY OF THE FIRST:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood.
	 	PARTY OF THE SECOND:	Hollywood Mail Order Corporation d.b.a. Frederick’s of Hollywood
	 	DOCUMENT TYPE:	Assignment of Copyright
	 	REGISTRATION DATE:	1987
	 	EXECUTED:	September 29, 1997
	 	RECORDED DATE:	October 9, 1997
	 	NOTES:	Frederick’s of Hollywood: grab bag special sale (catalog) and 131 other titles.  Subsidiary intellectual property security agreement.
	 	MICROFILM:	V003405 P125

 

Domain Names

 

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    	42

    	 

    

 

 

		(i)	See Schedule 7.2 for Liens to which Owned Intellectual Property is subject.

 

 

		(ii)	License Agreements of Owned Intellectual Property

 

		1.	License Agreement, dated as of June 3, 2010, by and between Frederick’s of Hollywood, Inc., as Licensor, and Silver Moon
Creations, Inc., as Licensee

 

		2.	License Agreement, dated as of June 17, 2010, by and between Frederick’s of Hollywood, Inc., as Licensor, and Pacific
Group NY, LLC – Mystery House Costumes, as Licensee

 

		3.	License Agreement, dated as of July 6, 2010, by and between Frederick’s of Hollywood, Inc., as Licensor, and Roffe Accessories,
Inc., as Licensee

 

		4.	License Agreement, dated as of October 26, 2010, by and between Frederick’s of Hollywood, Inc. as Licensor, and Lady
Sandra Home Fashions Inc., as Licensee *

 

		5.	Master Development Agreement, dated as of March 3, 2011, by and between Frederick’s of Hollywood Inc., as Licensor, and
Safeer Establishment, as subsidiary of Emirates Associated Business Group, as Licensee

 

 

__________________

		*	The Licensee is currently in default under the License Agreement.  Frederick’s of Hollywood, Inc. intends to terminate
the License Agreement and take legal action against the Licensee as necessary to enforce its rights under the License Agreement.

 

 

    	43

    	 

    

  

 

Schedule 5.8(b)

Intellectual Property Rights Licensed
from Others

 

 

		1.	End user Software License and Maintenance Agreement, dated
February 24, 2005, between ANTUSA, Inc. and Fredrick’s of Hollywood, Inc.

 

		2.	Software License Agreement, dated as of March 10, 1986,
as amended, between Island Pacific, Inc. and Frederick’s of Hollywood, Inc., amended July 23, 2006

 

		3.	Software Product License Agreement, dated as of September
23, 2003, as amended, between Island Pacific, Inc. and Frederick’s of Hollywood, Inc.

 

		4.	Software License Agreement, dated as of May 31, 1988, between
Micros Retail, Inc. (formerly Commercialware, Inc.) and Frederick’s of Hollywood, Inc.

 

		5.	Software License/Hardware Purchase Agreement (Tradewinds
POS), dated June 23, 1999, between Datavantage, Inc. (a successor to STR, Inc. and a subsidiary of Micros Systems, Inc.) and Frederick’s
of Hollywood Stores, Inc.

 

		6.	Licensed Program Maintenance Agreement (Tradewinds POS),
dated June 23, 1999, as amended, between Datavantage, Inc. (a successor to STR, Inc. and a subsidiary of Micros Systems, Inc.)
and Frederick’s of Hollywood Stores, Inc.

 

		7.	Master Subscription Agreement, dated as of June 17, 2008,
between Demandware, Inc. and Frederick’s of Hollywood, Inc., as amended by Amendment No.1 dated September 1, 2010 and Amendment
No. 2 dated April 1, 2011 between Demandware, Inc. and Frederick’s of Hollywood, Inc.

 

		8.	Allocation 1 License Agreement, dated November 10, 2004,
between Lauzau Associates and Frederick’s of Hollywood

 

		9.	Master Software License and Service Agreement, dated March
10, 2010, between Nubridges, Inc. and Frederick’s of Hollywood, Inc.

 

		10.	Maintenance Agreement, dated June 14, 2004, between Direct
Tech, Inc. and Frederick’s of Hollywood, Inc., as amended by Addendum One, dated August 1, 2009 and Addendum Two, dated
September 13, 2011

 

		11.	Software License and Services Agreement, dated June 30,
2004 between Egain Communications Corporation and Frederick’s of Hollywood

 

		12.	Purchase Authorization Software Service Agreement, dated
December 2, 2010, between Adobe Systems Incorporated and Frederick’s of Hollywood, Inc.

 

		13.	Master Services Agreement (ClearEdge and ChannelView Applications),
dated as of December 23, 2005, between DoubleClick Inc., including its Abacus and Data Management Solutions Divisions (now a division
of Epsilon Targeting), and Frederick’s of Hollywood, Inc., as amended by Amendment No.1 dated March 5, 2009 between Epsilon
Data Management, LLC and Frederick’s of Hollywood

 

 

 

 

    	44

    	 

    
 

 

Schedule 5.8(d)

Infringement

 

None

 

 

    	45

    	 

    

 

Schedule 5.11

Defaults

 

Notice to Frederick’s of Hollywood, Inc. of Pending Draw
of Letter of Credit, dated May 24, 2012, from USA Sunset Media Management, LLC, as authorized agent for the tenant-in-common owners
(“Agent”) under that certain Lease Agreement dated August 19, 2004, as amended (“Lease”), with respect
to the premises located at 6255 Sunset Blvd, Suites 600/702 and 718/724, Hollywood, CA. The Notice states that Frederick’s
nonpayment of past due rent is an Event of Default under the Lease, and, accordingly, the Agent, on behalf of the Landlord, is
entitled to (i) collect late fees and default interest and (ii) on or before the close of business on May 31, 2012, to draw upon
a letter of credit in an amount equal to past due rent, late fees and default interest charges in the aggregate amount of $176,234.06.

 

    	46

    	 

    
 

 

 

Schedule 5.13

Labor Matters

 

(b) Frederick’s has been named in a class action law suit
for alleged labor violations see Schedule 5.7

 

(d) Group is a party to the following consulting, employment,
restricted stock, stock option and equity related agreements:

 

Consulting Agreements

 

		1.	Independent Contractor, Consultant and/or Freelance Agreement, dated as of December 20, 2011, by and between Frederick’s
of Hollywood, Inc., and Garrett Larson

 

Employment Agreements

 

		2.	Employment Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch, dated
as of June 29, 2010

 

		3.	Employment Agreement between Frederick’s of Hollywood Group Inc. and Donald Jones, dated as of September 8, 2011 and
amendment thereto, dated as of February 9, 2012

 

		4.	Employment Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende, dated as
of June 1, 2010

 

		5.	Employment Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler,
dated as of June 24, 2010.

 

		6.	Employment Agreement between Frederick’s of Hollywood Group Inc. and Saul Pomerantz, dated
as of December 18, 2009. We are currently paying severance under this agreement.

 

		7.	Transitional Services, Separation Agreement and General Release, by and between Frederick’s
of Hollywood Group Inc. and Linda LoRe, dated as of August 19, 2011

 

Restricted Stock Agreements

 

		8.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch,
dated as of June 29, 2010

 

		9.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch,
dated as of January 12, 2011

 

		10.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch,
dated as of January 11, 2012

 

		11.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Donald Jones, dated as of September 8, 2011

 

		12.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Donald Jones, dated as of January 12, 2012

 

		13.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende, dated
as of June 1, 2010

 

		14.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende, dated as of January 12, 2011

 

    	47

    	 

    
 

 

		15.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende, dated as of January 11, 2012

 

		16.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler, dated as of June 24,
2010

 

		17.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler, dated as of January 12,
2011

 

		18.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler, dated as of January 11,
2012

 

		19.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Dan Klink, dated as of January 12, 2011

 

		20.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Dan Klink, dated as of January 11, 2012

 

		21.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Michaelee Stack, dated as of January 12, 2011

 

		22.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Michaelee Stack, dated as of January 11, 2012

 

		23.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Wanda Anesh, dated as of January 12, 2011

 

		24.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and John Eisel, dated January 12, 2011

 

		25.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and John Eisel, dated January 11, 2012

 

		26.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and William Harley, dated January 12, 2011

 

		27.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and William Harley, dated January 11, 2012

 

		28.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Performance Enhancement Partners, LLC, dated
January 12, 2011

 

		29.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Performance Enhancement Partners, LLC, dated
January 11, 2012

 

		30.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Sagebrush Group Inc., dated January 12, 2011

 

		31.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Sagebrush Group Inc., dated January 11, 2012

 

Stock
Option Agreements

 

		32.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch,
dated as of January 29, 2009

 

		33	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch, dated as of June 29, 2010

 

 

    	48

    	 

    

 

		34.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch, dated
as of January 12, 2011

 

		35.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch, dated
as of January 11, 2012

 

		36.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Donald Jones, dated as of September 8, 2011

 

		37.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Donald Jones, dated as of January 11, 2012

 

		38.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende, dated December 10, 2004

 

		39.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende
dated October 13, 2006

 

		40.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende, dated January 28, 2008

 

		41.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende, dated
June 1, 2010

 

		42.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende dated as of January 12, 2011

 

		43.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas Rende dated as of January 11, 2012

 

		44.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler,
dated June 2, 2008

 

		45.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler,
dated June 24, 2010

 

		46.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler,
dated January 12, 2011

 

		47.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Marci Frankenthaler,
dated January 11, 2012

 

		48.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and John Eisel, dated December
6, 2004

 

		49.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Michael Salberg, dated
December 6, 2004

 

		50.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Joel Simon, dated December
6, 2004

 

		51.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Peter Cole, dated January
28, 2008

 

		52.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Tina Kelly, dated October
13, 2006.

 

    	49

    	 

    

 

 

		53.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Albin Zila,
dated October 13, 2006.

 

		54.	Stock Option Agreement between Fredrick’s of Hollywood Group Inc. and Albin Zila, dated March
10, 2008

 

		55.	Stock Option Agreement between Fredrick’s of Hollywood Group Inc. and Richard Morin, dated
September 24, 2008

 

		56.	Stock Option Agreement between Fredrick’s of Hollywood Group Inc. and Tracy Ryhan, dated September
24, 2008

 

		57.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Milton J. Walters,
dated December 8, 2006

 

		58.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Saul Pomerantz, dated
January 28, 2008

 

		59.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Dan Klink, dated July
1, 2010

 

		60.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Dan Klink, dated January
12, 2011

 

		61.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Dan Klink, dated January
11, 2012

 

		62.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Michaelee Stack, dated
January 12, 2011

 

		63.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Michaelee Stack, dated
January 11, 2012

 

		64.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Marianne Johns, dated
April 30, 2007

 

		65.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Wanda Anesh, dated
April 30, 2007

 

		66.	Stock Option Agreement between Fredrick’s of Hollywood Group Inc. and Wanda Anesh, dated October
15, 2007

 

		67.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Wanda Anesh, dated
January 12, 2011

 

		68.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and John Eisel, dated January
12, 2011

 

		69.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and John Eisel, dated January
11, 2012

 

		70.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and William Harley, dated
January 12, 2011

 

		71.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and William Harley, dated
January 11, 2012

 

		72.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Performance Enhancement
Partners, LLC, dated January 12, 2011

 

    	50

    	 

    

 

 

		73.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Performance Enhancement
Partners, LLC, dated January 11, 2012

 

		74.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Sagebrush Group Inc.,
dated January 12, 2011

 

		75.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Sagebrush Group Inc.,
dated January 11, 2012

 

Equity
Related Plans

 

		76.	1988 Amended and Restated Non-Qualified Stock Option Plan.

 

		77.	2000 Performance Equity Plan

 

		78.	2003 Employee Equity Incentive Plan

 

		79.	2010 Long-Term Incentive Equity Plan

 

		80.	Non-Employee Director Compensation Plan effective January 1, 2005

 

		81.	Annual Incentive Bonus Plan, effective June 29, 2010

 

    	51

    	 

    

 

 

Schedule 5.15

Employee Benefit Plans

 

		(a)	Maintenance and Contribution to Plans :

 

Frederick’s of Hollywood Group Inc.,
401k Retirement Savings Plan

 

		(b)	Knowledge of Plan Noncompliance with Applicable
Law :

 

None

 

 

    	52

    	 

    

 

 

 

Schedule 5.16

Environmental Matters

 

 

None

    	53

    	 

    
 

Schedule 5.18 

Material Agreements

 

A.Agreements Involving Aggregate Consideration of
$250,000 or More in Any Calendar Year

 

Service Agreements

 

		1.	Select Merchant Payment Instrument Processing Agreement, dated as of November 22, 2011, between JPMorgan
Chase Bank, N.A., Paymentech, LLC and Frederick’s of Hollywood Stores, Inc.

 

		2.	Printing Agreement, dated as of April 1, 2010, between Hollywood Mail Order, LLC and World Color (USA)
Corp.

 

		3.	Business Service Agreement, dated June 26, 2009, between Frederick’s of Hollywood, Inc. and
Verizon Business Network Services, Inc., and amendment thereto, dated July 7, 2009.

 

IT Related Agreements

 

		4.	Master Subscription Agreement, dated as of June 17, 2008, between Demandware, Inc. and Frederick’s
of Hollywood, Inc., as amended by Amendment No.1 dated September 1, 2010 and Amendment No. 2 dated April 1, 2011 between Demandware,
Inc. and Frederick’s of Hollywood, Inc.

 

		5.	Client Services Agreement, dated as of June 17, 2008, between Demandware, Inc. and Frederick’s
of Hollywood, Inc.

 

Marketing Agreements

 

		6.	Master Services Agreement (ClearEdge and ChannelView Applications), dated as of December 23, 2005,
between DoubleClick Inc., including its Abacus and Data Management Solutions Divisions (now a division of Epsilon Targeting), and
Frederick’s of Hollywood, Inc., as amended by Amendment No.1 dated March 5, 2009 between Epsilon Data Management, LLC and
Frederick’s of Hollywood.

 

		7.	Paid Search Work Order, dated September 14, 2009, between Frederick’s of Hollywood, Inc. and
Range Online Media, Inc.

 

Real Property Lease Agreements

 

		8.	Lease Agreement by and between WXI, Sun Real Estate Limited Partnership, as landlord, and Frederick’s
of Hollywood, Inc., as tenant, dated August 19, 2004, for corporate headquarter premises located at 6255 Sunset Boulevard, Los
Angeles, CA 90028, and First Amendment dated July 20, 2007, between USA Sunset Media LLC, as successor in interest to landlord,
and tenant.

 

		9.	Lease Agreement by and between Ryan Companies USA Inc., as landlord, and Frederick’s of Hollywood,
Inc., as tenant, dated September 25, 1998 for Distribution Center premises at 5005 S. 40th Street, Phoenix, AZ 85040,
as amended by First Amendment dated August 1, 1999, Second Amendment dated January 12, 2000, Third Amendment dated February 15,
2002, Fourth Amendment dated May 9, 2005, Fifth Amendment dated December 27, 2007, between Cotton Fredericks, LLC as successor
in interest to Ryan Companies USA Inc., as landlord and Frederick’s of Hollywood Inc., as tenant and Sixth Amendment dated
May 8, 2012.

 

		10.	Lease Agreement by and between Hollywood Associates LLC, as landlord, and Frederick’s of Hollywood
Stores Inc., as tenant, dated March 2, 2005 for Flagship Store at 6751 Hollywood Boulevard, Los Angeles, CA 90028.

 

 

    	54

    	 

    

 

Financing Agreements 

 

		11.	Engagement letter, dated as of May 3, 2012, between Frederick’s of Hollywood Group Inc. and Allen & Company LLC

 

		B.	Other Contracts Material to the Business

 

IT Related Agreements

 

		12.	Software License Agreement, dated as of March 10, 1986, as amended, between Island Pacific, Inc. and Frederick’s of Hollywood,
Inc., amended July 23, 2006

 

		13.	Software Support Agreement, dated as of July 1, 2003, as amended, between Island Pacific, Inc. and Frederick’s of Hollywood,
Inc.

 

		14.	Software Product License Agreement, dated as of September 23, 2003, as amended, between Island Pacific, Inc. and Frederick’s
of Hollywood, Inc.

 

		15.	Software License Agreement, dated as of May 31, 1988, between Micros Retail, Inc. (formerly Commercialware, Inc.) and Frederick’s
of Hollywood, Inc.

 

		16.	Software Maintenance Agreement, dated as of December 5, 1995 between Micros Retail, Inc. (formerly Commercialware, Inc.) and
Frederick’s of Hollywood, Inc.

 

		17.	Software License/Hardware Purchase Agreement (Tradewinds POS), dated June 23, 1999, between Datavantage, Inc. (a successor
to STR, Inc. and a subsidiary of Micros Systems, Inc.) and Frederick’s of Hollywood Stores, Inc.

 

		18.	Licensed Program Maintenance Agreement (Tradewinds POS), dated June 23, 1999, as amended, between Datavantage, Inc. (a successor
to STR, Inc. and a subsidiary of Micros Systems, Inc.) and Frederick’s of Hollywood Stores, Inc.

 

		19.	Help Desk Services Agreement (Tradewinds POS), dated July 31, 2002, as amended, between Datavantage, Inc. (a successor to STR,
Inc. and a subsidiary of Micros Systems, Inc.) and Frederick’s of Hollywood Stores, Inc.

 

Insurance Policies

 

		20.	Hartford Fire Insurance Company Commercial Package Policy No. 31UUNZS4985, held by Company for Commercial Property with limits
of $75,000 (blanket business personal property)

 

		21.	Hartford Fire Insurance Company Commercial Package Policy No. 31UUNZS4985, held by Company for Commercial General Liability
with an aggregate limit of $2,000,000

 

		22.	Hartford Fire Insurance Company Commercial Package Policy No. 31UUNZS4985, held by Company for Commercial Automobile with a
limit of liability of $1,000,000

 

		23.	Federal Insurance Company Excess Liability Policy No. 79816813, held by Company with a limit of $20,000,000

 

		24.	Illinois National Insurance Company Directors and Officers Liability Policy No. 019108484, held by
Company with a limit of $10,000,000

 

		25.	XL Speciality Insurance Company Excess Directors and Officers Liability Policy No. ELU12561512, held
by Company with a limit of $5,000,000

 

		26.	Illinois National Insurance Company Employment Practices Liability Policy No. 01541666 held by Company
with a limit of $10,000,000

 

    	55

    	 

    
 

 

		27.	Federal Insurance Company Commercial Property Coverage Policy No. 35960090 held by Company with a
limit of $74,856,779 (blanket personal property excluding FL), and $15,533,873 (blanket business interruption and extra expense
excluding FL) and a limit of $8,596,928 (blanket personal property FL locations only), and $1,808,148 (blanket business interruption
and extra expense FL locations only)

 

		28.	St. Paul Fire and Marine Crime Coverage Policy No. CR06800010 with a limit of $1,000,000

 

		29.	Illinois National Insurance Company Internet Liability Policy No. 035053656, held by Company with
a limit of $3,000,000

 

		30.	Hartford Casualty Insurance Company Workers Compensation (excludes Hawaii) Policy No. 31WBIV5908,
held by Company with a limit of $1,000,000

 

		31.	Hartford Casualty Insurance Company Workers Compensation (Hawaii only) Policy No. 31WBIV5142, held
by Company with a limit of $1,000,000

 

		32.	Illinois National Insurance Company Fiduciary/Pension Trust Liability Policy No. 047666479, held by
Company with a limit of $4,000,000

 

		33.	Hartford Casualty Insurance Company Commercial Umbrella Policy No. 31RHUZ3839, held by Company with
a limit of $10,000,000

 

		34.	St Paul Travelers Insurance Company Pension Bond, Policy No. 10485278, held by company with a limit of $700,000

 

Equity Related Plans

 

		35.	1988 Amended and Restated Non-Qualified Stock Option Plan.

 

		36.	2000 Performance Equity Plan

 

		37.	2003 Employee Equity Incentive Plan

 

		38.	2010 Long-Term Incentive Equity Plan

 

		39.	Non-Employee Director Compensation Plan effective January 1, 2005

 

		40.	Annual Incentive Bonus Plan, effective June 29, 2010

 

C.Agreements relating to the License, Sale,
acquisition, disposition or development of any Intellectual Property rights

 

		41.	Master Development Agreement, dated as of March 3, 2011, between Frederick’s of Hollywood Inc., as Licensor, and Safeer
Establishment, a subsidiary of Emirates Associated Business Group, as Developer

 

D.Executive
Employment and Related Agreements 

 

		42.	Employment Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch, dated
as of June 29, 2010

 

		43.	Stock Option Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch,
dated as of January 29, 2009

 

		44.	Restricted Stock Agreement between Frederick’s of Hollywood Group Inc. and Thomas J. Lynch,
dated as of January 29, 2009

 

		45.	Transitional Services, Separation Agreement and General
Release by and between Linda LoRe and Frederick’s of Hollywood Group Inc., dated August 19, 2011

 

 

    	56

    	 

    

 

Schedule 7.1

Indebtedness

 

		1.	Frederick’s of Hollywood, Inc. has $620,000 of outstanding standby letters of credit, No. NZS322100, with Wells Fargo
Bank, National Association, with an expiration date of March 20, 2014, pursuant to Section 6 of Lease Agreement by and between
WXI, Sun Real Estate Limited Partnership, as landlord, and Frederick’s of Hollywood, Inc., as tenant, dated August 19, 2004.
However, notice was given to Wells Fargo not to renew. See Schedule 5.11

 

 

		2.	Business Service Agreement, dated June 26, 2009, between Frederick’s of Hollywood, Inc. and Verizon Business Network
Services, Inc., and amendment thereto, dated July 7, 2009

 

 

    	57

    	 

    

 

 

 

 

Schedule 7.2

 

Permitted Liens

 

	DEBTOR	SECURED 
 PARTY/creditor	STATE	UCC or filing
 NUMBEr	FILING 
 DATE	collateral	additional filing information
	Frederick’s of Hollywood Group Inc.	Verizon Credit Inc.	NY	200907205660035	7/20/09	Cisco data equipment.	Lessee/Lessor
	Frederick’s of Hollywood, Inc.	Raymond Leasing Corporation	DE	20110877517	3/9/11	Raymond Leasing Corporation	Equipment.
	Frederick’s of Hollywood, Inc.	Raymond Leasing Corporation	DE	20112240623	6/10/11	Raymond Leasing Corporation	Equipment.
	Frederick’s of Hollywood, Inc.	Raymond Leasing Corporation	DE	20112793167	7/20/11	Raymond Leasing Corporation	Equipment.

 

 

    	58

    	 

    
 

 

 

Schedule 7.3

Investments

None

 

 

 

    	59

    	 

    
 

 

Schedule 7.16

Deposit Accounts

 

	Store
    #	Account
    Name	Account#	Accounts
    to Stay Temporarily Open	Bank
    Name	Bank
    Address	City,
    State, Zip Code	 
	 	Wells
    Fargo Bank	 	 	 	 	 	 
	 	Fredericks of Hollywood, Inc. -
    Concentration Account	XXXXXXXXXX	 	Wells Fargo Bank	PO BOX 63020	San Francisco, CA  94163	*
	 	Hollywood Mail Order, LLC	 	XXXXXXXXXX	Wells Fargo Bank	PO BOX 63020	San Francisco, CA  94163	 
	 	Fredericks of Hollywood Payroll
    Account	XXXXXXXXXX	 	Wells Fargo Bank	PO BOX 63021	San Francisco, CA  94164	****
	 	WF Retail Finance, LLC Frederick's
    of Hollywood	 	XXXXXXXXXX	Wells Fargo Bank	PO BOX 63022	San Francisco, CA  94165	 
	 	Fredericks of Hollywood Accounts
    Payable	XXXXXXXXXX	 	Wells Fargo Bank	PO BOX 63023	San Francisco, CA  94166	****
	 	Fredericks of Hollywood Refund Account	XXXXXXXXXX	 	Wells Fargo Bank	PO BOX 63024	San Francisco, CA  94167	****
	 	WF Retail Finance, LLC Concentration
    Account	 	XXXXXXXXXX	Wells Fargo Bank	PO BOX 63025	San Francisco, CA  94168	 
	 	WF Retail Finance, LLC Chase Merchant
    Card	 	XXXXXXXXXX	Wells Fargo Bank	PO BOX 63026	San Francisco, CA  94169	 
	 	WF Retail Finance, LLC Payment Tech
    merchant Card	 	XXXXXXXXXX	Wells Fargo Bank	PO BOX 63027	San Francisco, CA  94170	 
	 	Fredericks of Hollywood Controlled
    Disbursement	XXXXXXXXXX	 	Wells Fargo Bank	PO BOX 63028	San Francisco, CA  94171	****
	 	 	 	 	 	 	 	 
	 	Concentration
    Accounts	 	 	 	 	 	 
	 	Frederick's of Hollywood, Inc.	XXXXXXXXXX	 	Bank of America	Customer Connection	Dallas, TX  75283-2406	**
	 	Frederick's of Hollywood Stores
    Inc.	XXXXXXXXXX	 	Chase Commercial Banking	300 S. Grand Ave.,   Suite
    350	Los Angeles, CA 90071	*
	 	 	 	 	 	 	 	 
	 	Independent
    Banks	 	 	 	 	 	 
	160	Fredericks of Hollywood	XXXXXXXXXX	 	Bank of Hawaii	98-211 Palimomi Street	Aiea, HI 96701	***
	342	Fredericks of Hollywood Stores	XXXXXXXXXX	 	Citibank	PO BOX 226526	Dallas, TX  75260	***
	326	Fredericks of Hollywood Stores Inc 
    #326	XXXXXXXXXX	 	Fifth Third Bank	PO BOX 630900	Cincinnati, OH  45263-0900	***
	367	FOH Stores Inc	XXXXXXXXXX	 	IBC	130 East Travis Street	San Antonio, TX  78205	***
	293	Fredericks of Hollywood Store 293	XXXXXXXXXX	 	People's United Bank	716 Broad Street EXT	Waterford, CT  06385	***
	113	Fredericks of Hollywood	XXXXXXXXXX	 	Regions Bank	10950 Lincoln Trail	Fairview Heights, IL  62208	***
	 	 	 	 	 	 	 	 

 

* Control
Agreement is required under the terms of the agreement.

** No
Control Agreement is required under the terms of the agreement unless account is comprised of more than 25 store branches after
December 31, 2012.

*** Control
Agreement is not required for this account or any banking relationship with less than 10 store branches.

****
No Control Agreement is required as this represents a disbursement account.

 

    	60

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