Document:

FIRST AMENDMENT TO CREDIT AGREEMENT (SECOND LIEN)

	
FIRST AMENDMENT TO CREDIT AGREEMENT (SECOND LIEN)

	

	
          THIS FIRST AMENDMENT TO CREDIT AGREEMENT (SECOND LIEN) (the "Amendment"), dated as of February 11, 2013, is among ELIZABETH ARDEN, INC., a Florida corporation (the "Borrower"), and JPMORGAN CHASE BANK, N.A. (the "Bank").

	

	
RECITALS:

	

	
          A.     The Borrower and the Bank have entered into that certain Credit Agreement (Second Lien) dated as of June 12, 2012 (such agreement, as the same may be amended or otherwise modified, the "Agreement").

	

	
          B.     The Borrower has requested that the Bank amend certain provisions of the Agreement and the Bank has agreed to do so on and subject to the terms set forth herein.

	

	
          NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows effective as of the date hereof unless otherwise indicated:

	

	
ARTICLE I.

	

	
Definitions

	

	
          Section 1.1.    Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same meanings as in the Agreement, as amended hereby.

	

	
ARTICLE II.

	

	
Amendments

	

	
          Section 2.1    Amendment to Section 1.01 of the Agreement.  Each of the following definitions contained in Section 1.01 of the Agreement is amended in its entirety to read as follows:

	

	 	
          "Commitment" means the obligation of the Bank to make advances of funds to the Borrower under Section 2.01 hereto in the aggregate principal amount not to exceed $30,000,000 outstanding at any time.
	 
	

	 	
          "Loan" means, collectively, each of the advances made under Section 2.01 hereto.
	 
	

	 	
         "Termination Date" means June 12, 2014.
	 
	

	
          Section 2.2    Addition to Section 1.01 of the Agreement.  The following definition is added to Section 1.01 of the Agreement in proper alphabetical order and shall read as follows:

	

	 	
          "Commitment Fee Rate" means, as of any date referenced in Section 2.12, a rate equal to: (i) 0.375% if the average Unused Utilization for the calendar quarter then most recently ended is greater than 50% and (ii) 0.25% if the average Unused Utilization for the calendar quarter then most recently ended is equal to or less than 50%.  The term "Unused Utilization" means, as of any date, the percentage obtained by: (a) dividing (i) the difference of the Bank's Commitment minus outstanding principal amount of the Loan on such date by (ii) the Bank's Commitment and (b) multiplying the resulting
	 
	

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64226.001117 EMF_US 43696470v3

	 	
quotient by 100.  The Commitment Fee Rate shall be 0.375% for the period from February 11, 2013 until the first Domestic Business Day of the quarter following the day when the Compliance Certificate required in connection with the quarterly financial statements for the fiscal quarter ended March 31, 2013 is delivered.
	 
	

	
          Section 2.3.     Amendment to Section 2.01 of the Agreement.  Section 2.01 of the Agreement is amended in its entirety to read as follows:

	

	 	
          Section 2.01.  Commitments to Lend.  From the period from the Effective Date to but excluding the Termination Date, the Bank agrees, on the terms and conditions set forth in this Agreement, to make advances to the Borrower from time to time in amounts that will not result in the outstanding principal amount of the Loan exceeding the Bank's Commitment.  Within the foregoing limits, the Borrower may borrow under this subsection, repay, or, to the extent permitted by Section 2.08, prepay Loans and reborrow at any time prior to the Termination Date.  Each advance under the Loan shall be made in Dollars.  After giving effect to a payment of $30,000,000 by the Borrower on February 11, 2013, the outstanding principal amount of the Loan as of February 11, 2013 is $0.00.
	 
	

	
          Section 2.4.     Amendment to Section 2.02 of the Agreement.  Section 2.02 of the Agreement is amended in its entirety to read as follows:

	

	 	
          Section 2.02.   Notice of Borrowings.  Borrower shall give the Bank written notice ("Notice of Borrowing") not later than 11:00 a.m. (New York, New York time) on (a) the date of any Base Rate Borrowing or (b) three (3) LIBOR Business Days before any LIBOR Borrowing, specifying:
	 
	

	 	
          (i)    the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a LIBOR Business Day in the case of a LIBOR Borrowing;
	 
	

	 	
          (ii)    the aggregate amount of such Borrowing (which must be in a minimum amount of $500,000 or a larger multiple of $100,000);
	 
	

	 	
          (iii)    whether such advance under the Loan are to be Base Rate Borrowings or LIBOR Borrowings or any combination thereof; and
	 
	

	 	
          (iv)    in the case of a LIBOR Borrowing, the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period.
	 
	

	
          Section 2.5.    Amendment to Section 2.03 of the Agreement.  Section 2.03 of the Agreement is amended in its entirety to read as follows:

	

	 	
          Section 2.03.  Funding of Loan.  Not later than 1:00 p.m. (New York City time) on the date of an advance under the Loan, the Bank shall make such advance available to the Borrower by promptly crediting the amount thereof, in funds immediately available, by wire transfer, automated clearing house debit or interbank transfer to the Agent under the Revolving Credit Agreement for application as a prepayment of the amounts outstanding thereunder.
	 
	

	
          Section 2.6.    Amendment to Section 2.06(a) of the Agreement.  Clause (a) of Section 2.06 of the Agreement is amended in its entirety to read as follows:

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          (a)    Base Rate Borrowing.  Each Base Rate Borrowing shall bear interest on the outstanding principal amount thereof, for each day from the date such Borrowing is made until it becomes due or is converted to a Borrowing of another Type, at a rate per annum equal to the Base Rate for such day plus one and three-quarters percent (1.75%).  Such interest shall be payable monthly in arrears on the first Domestic Business Day of each month and, with respect to the principal amount of any Base Rate Borrowing converted to a LIBOR Borrowing, on the date such Base Rate Borrowing is so converted.
	 
	

	
          Section 2.7.     Amendment to Section 2.06(b) of the Agreement.  Clause (b) of Section 2.06 of the Agreement is amended in its entirety to read as follows:

	

	 	
          (b)    LIBOR Borrowing.  Each LIBOR Borrowing shall bear interest on the outstanding principal amount thereof, for each day during each Interest Period applicable thereto, at a rate per annum equal to the sum of the LIBOR Rate plus three and one- quarter percent (3.25%).  Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof.
	 
	

	
          Section 2.8.     Amendment to Section 2.08 of the Agreement.  Section 2.08 of the Agreement is amended in its entirety to read as follows:

	

	 	
          Section 2.08.    Prepayments.  Subject to the restrictions contained in Section 5.21(c) of the Revolving Credit Agreement, the Borrower may, upon at least one Domestic Business Day's notice (or, if such prepayment is made prior to noon, on the same day or in the case of a LIBOR Borrowings, two LIBOR Business Days' notice) to the Bank, prepay any Borrowing in whole at any time, or from time to time in part in amounts aggregating $1,000,000 or any larger multiple of $1,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.
	 
	
	
	

	
          Section 2.9.     Addition to Article II of the Agreement.   A new Section 2.12 is added to the Agreement immediately following Section 2.11 thereto and such new Section 2.12 shall read as follows:

	

	 	
          Section 2.12.    Commitment Fee.  The Borrower shall pay to the Bank a commitment fee at the applicable per annum Commitment Fee Rate.  Such commitment fee shall accrue from and including February 11, 2013 to, but excluding, the date on which the Bank's Commitment expires or terminates, on the daily average unused portion of the Bank's Commitment.  The Bank shall determine the Commitment Fee Rate applicable from time to time hereunder.  Accrued commitment fees under this Section shall be payable quarterly in arrears on (a) the third Domestic Business Day following the last day of March, June, September and December in each year, commencing on the first such date that occurs after February 11, 2013 and (b) the date on which the Bank's Commitment expires or terminates.  The Bank shall determine the amount of accrued fees payable hereunder on each payment date and notify the Borrower thereof.
	 
	

	
          Section 2.10.     Amendment to Section 3.02 of the Agreement.  Section 3.02 of the Agreement is amended in its entirety to read as follows:

	

	 	
          Section 3.02    Advances under the Loan.  The obligation of the Bank to make any advance under the Loan is subject to the satisfaction of the following additional conditions:
	 

FIRST AMENDMENT TO CREDIT AGREEMENT (SECOND LIEN), Page 3

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          (a)    receipt by the Bank of a Notice of Borrowing as required by Section 2.02;
	 
	

	 	
          (b)    after giving effect to such advance under the Loan, the aggregate principal amount of the Loan outstanding shall not exceed the Commitment;
	 
	
	
	

	 	
          (c)    the fact that, immediately before and after such advance under the Loan is made, no Default shall have occurred and be continuing; and
	 
	

	 	
          (d)    the fact that the representations and warranties of the Borrower contained in this Agreement and the other Loan Documents shall be true in all material respects (which materiality exception will not apply to representations and warranties qualified by materiality standards) on and as of the date such advance under the Loan is made.
	 
	

	
The request to make the Loan shall be deemed to be a representation and warranty by the Borrower on the date of the Loan is made as to the facts specified in clauses (b), (c) and (d) of this Section.

	

	
ARTICLE III.

	

	
Conditions Precedent

	

	
          Section 3.1.    Conditions.  The effectiveness of Article II of this Amendment is subject to the satisfaction of the following conditions precedent (the date upon which such conditions precedent are satisfied, the "Effective Date"):

	

	 	
          (a)    The Bank shall have received this Amendment duly executed by the Borrower;
	 
	

	 	
          (b)    The Bank shall have received all fees due and payable pursuant to Section 8.03 of the Agreement to the extent invoiced at least two (2) Business Days prior to the Effective Date;
	 
	

	 	
          (c)    The representations and warranties contained herein and in all other Loan Documents, as amended hereby, shall be true and correct in all material respects (which materiality exception will not apply to representations qualified by materiality standards) as of the date hereof as if made on the date hereof, except for such representations and warranties limited by their terms to an earlier date (which representations and warranties shall be true and correct in all material respects as of such earlier date); and
	 
	

	 	
          (d)    No Default shall exist.
	 
	

	
ARTICLE IV.

	

	
Miscellaneous

	

	
          Section 4.1.    Ratifications.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement, and the other Loan Documents are ratified and confirmed and shall continue in full force and effect.  The Borrower and the Bank agree that the Agreement as amended hereby and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms.

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          Section 4.2    Representations and Warranties.  The Borrower hereby represents and warrants to the Bank as follows:  (a) no Default exists and (b) the representations and warranties set forth in the Loan Documents are true and correct in all material respects (which materiality exception will not apply to representations qualified by materiality standards) on and as of the date hereof with the same effect as though made on and as of such date except with respect to any representations and warranties limited by their terms to an earlier date (which representations and warranties are true and correct in all material respects as of such earlier date).

	

	
          Section 4.3.    Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other Loan Document including any Loan Document furnished in connection with this Amendment shall survive the execution and delivery of this Amendment, and no investigation by the Bank or any closing shall affect the representations and warranties or the right of the Bank to rely upon them.

	

	
          Section 4.4.    Reference to Agreement.  Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference to the Agreement as amended hereby.

	

	
          Section 4.5.    Expenses of Bank.  To the extent set forth in Section 8.03 of the Agreement, the Borrower agrees to pay on demand all reasonable costs and expenses incurred by the Bank in connection with the preparation, negotiation, and execution of this Amendment, including without limitation, the reasonable costs and fees of the Bank's legal counsel provided it sends an invoice to the Borrower beforehand and addresses reasonable questions

	

	
          Section 4.6.    Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

	

	
          Section 4.7.    Applicable Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York other than those conflict of law provisions that would defer to the substantive laws of another jurisdiction.  This governing law election has been made by the parties in reliance (at least in part) on Section 5-1401 of the General Obligations Law of the State of New York, as amended (as and to the extent applicable), and other applicable law.

	

	
          Section 4.8.    Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of the Bank, the Borrower, and their respective successors and assigns, except the Borrower may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Bank.  Any assignment in violation of this Section 4.8 shall be void.

	

	
          Section 4.9.    Effectiveness; Counterparts.  This Amendment shall become effective when the Bank shall have received this Amendment duly executed by the Borrower and the Bank.  This Amendment may be executed in one or more counterparts and on telecopy or other electronic counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic communication shall be effective as delivery of a manually executed counterpart of this Amendment.

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          Section 4.10.Effect of Waiver.  No consent or waiver, express or implied, by the Bank to or for any breach of or deviation from any covenant, condition or duty by the Borrower shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty. 

	

	
          Section 4.11.Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

	

	
          Section 4.12. ENTIRE AGREEMENT.  THIS AMENDMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

	 
	
Executed as of the date first written above.

	 

	
ELIZABETH ARDEN, INC., as the Borrower

	
	

	
By:
	
/s/Marcey Becker

	
	
	

	 	
Marcey Becker, Senior Vice President, Finance 

  &Corporate Development

	 	 
	
JPMORGAN CHASE BANK, N.A. (formerly 

JPMorgan Chase Bank), as the Bank

	
	

	
By:
	
/s/ Christy L. West

	
	
	

	 	
Christ L. West, Authorized Officer

FIRST AMENDMENT TO CREDIT AGREEMENT (SECOND LIEN), Page 6

64226.001117 EMF_US 43696470v3March 19, 2013

Kathleen Widmer

913 N. Pennsylvania Avenue

Yardley, PA 19067

	 	
Re:    Elizabeth Arden, Inc. ("Arden")

          2013 Retention Payment

Dear Kathy:

          We are delighted that you have decided to stay at Elizabeth Arden to continue to execute on our important growth objectives, and we look forward to your contribution and commitment to the Company's success in the years to come.  This letter will set out the details of our understanding regarding the retention payment of $635,893.05 that we will make to you before the end of this month (the "Retention Payment").

          As an incentive to encourage you to remain at Arden during the global roll-out of the Elizabeth Arden brand repositioning as well as during the next five-year phase of Arden's strategic business plan, and to ensure the availability of your talents to Arden's efforts during such time, Arden will pay you a lump sum cash Retention Payment by March 31, 2013 in the amount of $635,893.05, less applicable withholdings and deductions.

          In return, you agree that prior to July 1, 2018, you will not, directly or indirectly (other than after the occurrence of a Change of Control):

	 	
(a)
	
be employed or engaged as a consultant by any consumer products or beauty company that develops, manufactures, distributes, sells, markets or licenses fragrances, or mass-market or department store-sold cosmetics or mass-market or department store-sold skin care products in the United States (each such company, a "Competitor"), or

	

	 	
(b)
	
solicit, induce, recruit or encourage any Arden employees to leave their employment with Arden or to perform services for a Competitor.

          In addition, if you voluntarily leave your employment with Arden (other than after the occurrence of a Change of Control) or are terminated by Arden for Cause prior to July 1, 2018 or fail to comply with the commitments in the preceding paragraph, in addition to all other remedies

Kathleen Widmer

March 19, 2013

Page 2 of 4

available to us, you agree that you will forfeit and reimburse Arden for the full gross amount of the Retention Payment (i.e., $635,893.05).  The terms "Change of Control" and "Cause" are each defined in Appendix A.

          Further, if Arden terminates your employment prior to July 1, 2018, under circumstances giving rise to severance or separation payments under our policies or practices regarding severance (other than after the occurrence of a Change of Control), you agree that any severance or separation payment payable to you will be reduced by the gross amount of the Retention Payment that you will already have received in March 2013.

          Please note that this letter agreement and the Retention Payment are not intended to constitute an employment agreement between you and Arden, and you will continue to be considered an employee "at will," meaning that Arden or you may end the employment relationship at any time, subject to compliance with the promises included in this letter agreement.

          This agreement is governed by the laws of the State of Florida without giving effect to any conflict of law provisions of the State of Florida or any other jurisdiction.  We agree that any disputes arising under this agreement will be litigated in the federal or state courts located in Broward County, Florida, and that we each irrevocably submit to the personal and exclusive jurisdiction of such courts.  We each agree that venue would be proper in any of such courts and waive any objection on the basis of improper or inconvenient forum.  We each agree not to seek a jury trial in any action or court proceeding arising under this agreement. You agree that the mailing by certified or registered mail, return receipt requested, to the last home address that we have on file for you of any process or summons will constitute valid and lawful service of process against you, without the necessity for service by any other means.  If any of the terms of this agreement is declared unenforceable, such term shall be deemed severable, such that all other provisions, terms and clauses of this agreement shall remain valid and binding upon both parties.

          Again, we look forward to your continued contributions to Arden's future success.  If the foregoing accurately reflects our mutual understanding regarding the Retention Payment, please sign the enclosed copy of this letter in the space provided below.

	
Sincerely,

	

	
/s/ Lita Cunningham

	
Lita Cunningham

	
Senior Vice President,

	
Global Human Resources

	

	
Agreed and Accepted:

	

	
/s/ Kathleen Widmer

	
Kathleen Widmer

	
Date: Mar 25, 2013

	
Attachment:  Appendix A

Kathleen Widmer

March 19, 2013

Page 3 of 4

Appendix A

"Cause," "Change of Control" and Related Definitions

	
The capitalized terms referenced above shall have the following meanings:

	

	
"Cause" shall mean: (a) any violation by you of Arden's Code of Business Conduct or any other material Arden policy applicable to you, including, but not limited to, confidentiality provisions; (b) your commission of an intentional act of fraud, embezzlement, theft or dishonesty against Arden; (c) your conviction of (or pleading by you of nolo contendere to) any crime which constitutes a felony, or a misdemeanor involving moral turpitude, or which, in the reasonable opinion of Arden, has caused material embarrassment to Arden; (d) the gross neglect or willful failure by you to perform your duties and responsibility in all material respects, if such breach of duty is not cured within 10 days after receipt of written notice thereof to you by Arden or its Board of Directors (the "Board"); or (e) your failure to obey the reasonable and lawful orders or instructions of the Chief Executive Officer or the Board, unless such failure is cured within 10 days after receipt of written notice thereof to you by Arden or the Board.  For purposes of clause (d), no act, or failure to act, on your part shall be deemed "willful" unless done, or omitted to be done, by you other than in good faith and without reasonable belief that such act, or failure to act, was in the best interest of Arden.

	

	
"Change of Control" shall mean the occurrence of any of the following events:

	

	
(i)    The consummation of any transaction or series of transactions (including, without limitation, any merger or consolidation) the result of which is that any "person" (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of (a) 35% or more of the voting interests of Arden and (b) more of the voting interests of Arden than are, in the aggregate, beneficially owned by the Principals and their Affiliates at the time of such consummation; or

	

	
(ii)    during any period of two (2) consecutive years, the individuals who at the beginning of such period constitute Arden's Board of Directors or any individuals who would be Continuing Directors cease for any reason (other than due to death or voluntary resignation) to constitute at least a majority thereof; or

	

	
(iii)    Arden's Board of Directors shall approve a sale, lease, transfer, conveyance or other disposition of all or substantially all of the assets of Arden, and such transaction shall have been consummated; or

	

	
(iv)    Arden's Board of Directors shall approve any merger, consolidation, or like business combination or reorganization of Arden, the consummation of which would result in the occurrence of any event described in clause (i) above, and such transaction shall have been consummated.

 

Kathleen Widmer

March 19, 2013

Page 4 of 4

	
Related Definitions

	

	
"Affiliate" shall mean any person, limited liability company, corporation, partnership, association or any other entity controlling, controlled by or under common control with a person.  "Control" shall mean the ownership of greater than fifty (50%) of the voting interests of such person or any other such arrangement as constitutes the possession, directly or indirectly, of power to direct or cause the direction of management or policies of any such person, corporation or entity, through ownership of voting securities, by contract or otherwise.

	

	
"Continuing Directors" shall mean (x) the directors of Arden in office as of the date of this letter (the "Effective Date") and (y) any successor to any such director and any additional director, in each case, who after the Effective Date was nominated or selected by a majority of the Continuing Directors (or the Nominating and Corporate Governance Committee of the Board of Directors of Arden consisting of Continuing Directors) in office at the time of his or her nomination or selection.

	

	
"Principals" shall mean William Tatham, E. Scott Beattie, J. W. Nevil Thomas, Fred Berens, Richard C. W. Mauran, Maura J. Clark, and A. Salman Amin.

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