Document:

EXHIBIT
10.7

         

    INTERCREDITOR
AGREEMENT

    

    INTERCREDITOR
AGREEMENT, dated as of July 30, 2010, among Wells Fargo Retail Finance II, LLC
(“Wells
Fargo”), in its capacity as arranger and administrative agent for the
Revolving Loan Secured Parties (in such capacity, the “Revolving Loan Agent”
as hereinafter further defined), and Hilco Brands, LLC, in its capacity as agent
for the Term Loan Secured Parties (in such capacity, “Term Loan Agent” as
hereinafter further defined).

    

    WITNESSETH

    

    WHEREAS,
Frederick’s of Hollywood Group Inc., a New York corporation (“Group”), FOH
Holdings, Inc., a Delaware corporation (the “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, the Parent, Frederick’s and Stores, individually, a “Borrower”, and
collectively, the “Borrowers”) have
entered into the Revolving Loan Agreement (as hereinafter defined) with the
Revolving Loan Agent and the Revolving Credit Lenders pursuant to which, among
other things, such Revolving Credit Lenders  (as hereinafter defined)
have made and from time to time may make loans and provide other financial
accommodations to Borrowers which are guaranteed by Guarantors and secured by
substantially all of the assets of Borrowers and Guarantors;

    

    WHEREAS,
Borrowers and Guarantors (as hereinafter defined) have entered into a secured
term loan facility with the Term Loan Agent and the Term Loan Lenders (as
hereinafter defined) pursuant to which such lenders have made term loans to
Borrowers which are guaranteed by Guarantors and secured by substantially all of
the assets of Borrowers and Guarantors;

    

    WHEREAS,
Revolving Loan Agent, the other Revolving Loan Secured Parties, Term Loan Agent
and the other Term Loan Secured Parties (as hereinafter defined) desire to enter
into this Agreement to (i) confirm the relative priority of the security
interests of Revolving Loan Agent and Term Loan Agent in the assets and
properties of Borrowers and Guarantors, (ii) provide for the orderly sharing
among them, in accordance with such priorities, of proceeds of such assets and
properties upon any foreclosure thereon or other disposition thereof and (iii)
address related matters;

    

    NOW,
THEREFORE, in consideration of the foregoing, the mutual covenants and
obligations herein set forth and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

    

    Section
1. Definitions;
Interpretation

    

    1.1 Definitions. As used
in this Agreement, the following terms have the meanings specified
below:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Agents” shall mean,
collectively, the Revolving Loan Agent and the Term Loan Agent, sometimes being
referred to herein individually as an “Agent”.

    

    “Agreement” shall mean
this Intercreditor Agreement, as amended, renewed, extended, supplemented or
otherwise modified from time to time in accordance with the terms
hereof.

    

    “Availability” shall
have the meaning given in the Revolving Loan Agreement as in effect on the date
hereof.

    

    “Bank Product
Obligations” shall mean Cash Management Obligations and Hedging
Obligations.

    

    “Bank Products” shall
have the meaning given in the Revolving Loan Agreement.

    

    “Bankruptcy Code”
shall mean the United States Bankruptcy Code, being Title 11 of the United
States Code, as the same now exists or may from time to time hereafter be
amended, modified, recodified or supplemented.

    

    “Bankruptcy Law” shall
mean the Bankruptcy Code and any similar Federal, state or foreign law for the
relief of debtors.

    

    “Borrowers” shall
mean, collectively, the following (together with their respective successors and
assigns): (a) Frederick’s of Hollywood Group Inc., a New York corporation; (b)
FOH Holdings, Inc., a Delaware corporation; (c) Frederick’s of Hollywood, Inc.,
a Delaware corporation; (d) Frederick’s of Hollywood Stores, Inc., a Nevada
corporation; (e) Hollywood Mail Order, LLC, a Nevada limited liability company;
and (d) any other Person that at any time after the date hereof becomes a
Borrower; each sometimes being referred to herein individually as a
“Borrower”.

    

    “Borrowing Base” shall
have the meaning given in the Revolving Loan Agreement.

    

    “Business Day” shall
mean any day other than a Saturday, Sunday or other day on which commercial
banks in Los Angeles, California and New York, New York are authorized or
required to close, except that, if a determination of a Business Day shall
relate to a LIBOR Rate Loan (as defined in the Revolving Loan Agreement), the
term “Business Day” also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.

    

    “Cash Management
Obligations” shall mean with respect to any Person, the obligations of
such Person to Wells Fargo or its Affiliates in connection with Bank Products
(other than Hedge Agreements).

    

    “Collateral” shall
mean, collectively, the Revolving Loan Priority Collateral and the Term Loan
Priority Collateral.

    

    “Default” shall have
the meaning given in the Revolving Loan Agreement.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

      

    “DIP Financing” shall
have the meaning set forth in Section 6.2
hereof.

    

    “Discharge of Revolving Loan
Debt” shall mean (a) the termination of the commitments of the Revolving
Credit Lenders and the financing arrangements provided by Revolving Loan Agent
and the other Revolving Credit Lenders to Grantors under the Revolving Loan
Documents that constitutes Maximum Priority Revolving Loan Debt, (b) the final
payment in full in cash (or other consideration acceptable to the Revolving
Credit Lenders in their sole discretion) of the Revolving Loan Debt (other than
the Revolving Loan Debt described in clause (c) of this definition) that
constitutes Maximum Priority Revolving Loan Debt, (c) payment in full in cash of
cash collateral, or at Revolving Loan Agent’s option, the delivery to Revolving
Loan Agent of a letter of credit payable to Revolving Loan Agent, in either case
as required under the terms of the Revolving Loan Agreement, in respect of
letters of credit issued under the Revolving Loan Documents, Bank Product
Obligations, continuing obligations of Revolving Loan Agent and Revolving Credit
Lenders under control agreements and other contingent Revolving Loan Debt that
constitutes Maximum Priority Revolving Loan Debt. If after receipt of any
payment of, or proceeds of Collateral applied to the payment of, the Maximum
Priority Revolving Loan Debt, Revolving Loan Agent or any other Revolving Loan
Secured Party is required to surrender or return such payment or proceeds to any
person for any reason, then the Revolving Loan Debt intended to be satisfied by
such payment or proceeds shall be reinstated and continue and this Agreement
shall continue in full force and effect as if such payment or proceeds had not
been received by such Revolving Loan Agent or other Revolving Loan Secured
Party, as the case may be, and no Discharge of Revolving Loan Debt shall be
deemed to have occurred.

    

    “Discharge of Term Loan
Debt” shall mean the final payment in full in cash of the Term Loan Debt
that constitutes Maximum Priority Term Loan Debt. If after receipt of any
payment of, or proceeds of Collateral applied to the payment of, the Maximum
Priority Term Loan Debt, Term Loan Agent or any other Term Loan Secured Party is
required to surrender or return such payment or proceeds to any person for any
reason, then the Term Loan Debt intended to be satisfied by such payment or
proceeds shall be reinstated and continue and this Agreement shall continue in
full force and effect as if such payment or proceeds had not been received by
such Term Loan Agent or other Term Loan Secured Party, as the case may be, and
no Discharge of Term Loan Debt shall be deemed to have occurred.

    

    “Dollar,” “Dollars” and the
symbol “$” each
means lawful money of the United States of America.

    

    “Domestic Subsidiary”
means each Subsidiary of a Borrower that is not a Foreign
Subsidiary.

    

    “Event of Default”
shall have the meaning given in the Revolving Loan Agreement.

    

    “Foreign Subsidiary”
means any Subsidiary of a Borrower that is organized under the law of a
jurisdiction other than the United States or any state or Governmental Authority
thereof.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    “Governmental
Authority” means any nation or government, any federal, state, city,
town, municipality, county, local or other political subdivision thereof or
thereto and any department, commission, board, bureau, instrumentality, agency
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to
government.

    

    “Grantors” shall mean,
collectively, Borrowers, Guarantors and each Subsidiary of Borrowers or
Guarantors that shall have created a Lien on its assets to secure any Revolving
Loan Debt or Term Loan Debt, together with their respective successors and
assigns; sometimes being referred to herein individually as a
“Grantor”.

    

    “Guarantors” shall
mean shall mean, collectively, (a) Fredericks.com, Inc., a Nevada corporation,
(b) each Domestic Subsidiary of Borrowers in existence on the date hereof, (d)
any other person that at any time after the date hereof becomes a party to a
guarantee in favor of Revolving Loan Agent or the Revolving Credit Lenders in
respect of any of the Revolving Loan Debt or Term Loan Agent or the Term Loan
Lenders in respect of any of the Term Loan Debt, and (d) their respective
successors and assigns; sometimes being referred to herein individually as a
“Guarantor”.

    

    “Hedge Agreements”
shall have the meaning given in the Revolving Loan Agreement.

    

    “Hedging Obligations”
shall mean, with respect to any Person, the obligations of such Person to Wells
Fargo or its Affiliates under Hedge Agreements.

    

    “Insolvency or Liquidation
Proceeding” shall mean (a) any voluntary or involuntary case or
proceeding under any Bankruptcy Law with respect to any Grantor, (b) any other
voluntary or involuntary insolvency, reorganization or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding with respect to any Grantor or with respect to any of their
respective assets, (c) any proceeding seeking the appointment of any trustee,
receiver, liquidator, custodian or other insolvency official with similar powers
with respect to such Person or any or all of its assets or properties, (d) any
liquidation, dissolution, reorganization or winding up of any Grantor whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (e) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of any Grantor.

    

    “Intellectual
Property” shall have the meaning set forth in Exhibit A
hereto.

    

    “Lien” shall mean any
mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, encumbrance (including, but not limited to, easements, rights
of way and the like), lien (statutory or otherwise), security agreement or
transfer intended as security, including without limitation, any conditional
sale or other title retention agreement, the interest of a lessor under a
capital lease or any financing lease having substantially the same economic
effect as any of the foregoing.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    “Maximum Priority Revolving
Loan Debt” shall mean, as of any date of determination, the sum of (a)
the lesser of (i) the Total Revolving Credit Commitment (as such term is defined
in the Revolving Loan Agreement) or (ii) the Borrowing Base, plus (b) twenty
(20%) percent of the lesser of (i) the amount of the Total Revolving Credit
Commitment then in effect or (ii) the Borrowing Base, plus (c) the amount of any
interest (including default interest) on such amount (and including, without
limitation, any interest which would accrue and become due but for the
commencement of Insolvency or Liquidation Proceeding, whether or not such
amounts are allowed or allowable in whole or in part in such case or similar
proceeding), plus (d) the Cash Management Obligations, plus (e) the Hedging
Obligations, plus (f) any fees, costs, expenses and indemnities payable under
any of the Revolving Loan Documents (and including, without limitation, any
fees, costs, expenses and indemnities which would accrue and become due but for
the commencement of Insolvency or Liquidation Proceeding, whether or not such
amounts are allowed or allowable in whole or in part in such case or similar
proceeding), minus (g) the aggregate amount of all permanent reductions of the
Total Revolving Credit Commitment made from and after the date hereof; provided,
that, the portion of the aggregate outstanding principal of loans and letters of
credit that are made or issued pursuant to the Revolving Loan Documents but that
are not made or issued intentionally or with actual knowledge that such loans
and letters of credit cause the aggregate principal amount of loans and letters
of credit to exceed the amount equal to the lesser of (i) the Total Revolving
Credit Commitment or (ii) the Borrowing Base, plus twenty (20%) percent of the
lesser of (i) the amount of the Total Revolving Credit Commitment then in effect
or (ii) the Borrowing Base, calculated at the time made or issued shall be
included, together with related interest, fees, indemnities, costs and expenses
arising under the Revolving Loan Documents, in the term Maximum Priority
Revolving Loan Debt, as used herein.

    

    “Maximum Priority Term Loan
Debt” shall mean, as of any date of determination, (a) the sum of (i) the
principal amount of up to $7,000,000, minus (ii) the aggregate amount of all
principal payments and prepayments of the Term Loan Debt received by Term Loan
Agent or the Term Loan Lenders plus (b) any amount of interest (including
default interest) on such amount (and including, without limitation, any
interest which would accrue and become due but for the commencement of
Insolvency or Liquidation Proceeding, whether or not such amounts are allowed or
allowable in whole or in part in such case or similar proceeding), plus (c) any
fees, costs, expenses and indemnities payable under any of the Term Loan
Documents (and including, without limitation, any fees, costs, expenses and
indemnities which would accrue and become due on such amounts but for the
commencement of Insolvency or Liquidation Proceeding, whether or not such
amounts are allowed or allowable in whole or in part in such case or similar
proceeding).

    

    “Person” or “person” shall mean
any individual, sole proprietorship, partnership, corporation (including,
without imitation, any corporation which elects subchapter S status under the
Internal Revenue Code of 1986, as amended), limited liability company, limited
liability partnership, business trust, unincorporated association, joint stock
company, trust, joint venture, or other entity or any government or any agency
or instrumentality or political subdivision thereof.

    

    “Pledged Collateral”
shall have the meaning set forth in Section 5.1
hereof.

    

    “Recovery” shall have
the meaning set forth in Section 6.8
hereof.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    “Revolving Credit
Lenders” shall mean, collectively, any person party to the Revolving Loan
Documents as lender (and including any other lender or group of lenders that at
any time refinances, replaces or succeeds to all or any portion of the Revolving
Loan Debt or is otherwise party to the Revolving Loan Documents as a lender);
sometimes being referred to herein individually as a “Revolving Credit
Lender”.

    

    “Revolving Loans”
shall have the meaning set forth in the Revolving Loan Agreement.

    

    “Revolving Loan Agent”
shall mean Wells Fargo Retail Finance II, LLC (as successor to Wells Fargo
Retail Finance, LLC), and its successors and assigns in its capacity as
administrative and collateral agent pursuant to the Revolving Loan Documents
acting for and on behalf of itself and the other Revolving Loan Secured Parties
and any successor or replacement agent.

    

    “Revolving Loan
Agreement” shall mean the Loan and Security Agreement, dated as of
January 28, 2008, by and among Grantors, Revolving Loan Agent and Revolving
Credit Lenders, as the same now exists or may hereafter be amended, amended and
restated, modified, supplemented, extended, renewed, restated, refinanced or
replaced.

    

    “Revolving Loan Debt”
shall mean all “Obligations” as such term is defined in the Revolving Loan
Agreement, including, without limitation, obligations, liabilities and
indebtedness of every kind, nature and description owing by any Grantor to
Revolving Loan Agent and any other Revolving Loan Secured Party, including
principal, interest, charges, fees, premiums, indemnities and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under any of the Revolving Loan Documents, whether now existing or
hereafter arising, whether arising before, during or after the initial or any
renewal term of the Revolving Loan Documents or after the commencement of any
case with respect to any Grantor under the Bankruptcy Code or any other
Insolvency or Liquidation Proceeding (and including, without limitation, any
principal, interest, fees, costs, expenses and other amounts, which would accrue
and become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case or similar
proceeding), whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or unliquidated,
secured or unsecured.

    

    “Revolving Loan
Documents” shall mean, collectively, the Revolving Loan Agreement and all
agreements, documents and instruments at any time executed and/or delivered by
any Grantor or any other person to, with or in favor of any Revolving Loan
Secured Party in connection therewith or related thereto, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated, refinanced, replaced or restructured (in whole or
in part and including any agreements with, to or in favor of any other lender or
group of lenders that any time refinances, replaces or succeeds to all or any
portion of the Revolving Loan Debt).

    

    “Revolving Loan Priority
Collateral” shall mean all of the collateral granted by Grantors pursuant
to the Revolving Loan Documents in favor of the Revolving Loan Agent to secure
the Revolving Loan Debt, other than the Term Loan Priority
Collateral.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    “Revolving Loan Secured
Parties” shall mean, collectively, (a) the Revolving Loan Agent, (b) the
Revolving Credit Lenders, (c) the issuing bank or banks of letters of credit or
similar instruments under the Revolving Loan Agreement, (d) each other person to
whom any of the Revolving Loan Debt (including Revolving Loan Debt constituting
Bank Product Obligations) is owed and (e) the successors, replacements and
assigns of each of the foregoing: sometimes being referred to herein
individually as a “Revolving Loan Secured
Party”.

    

    “Secured Parties”
shall mean, collectively, the Revolving Loan Secured Parties and the Term Loan
Secured Parties; sometimes being referred to herein individually as a “Secured
Party”.

    

    “Subsidiary” means any
“Subsidiary” of
Borrowers as defined in the Revolving Loan Agreement.

    

    “Term Loan Agent”
shall mean Hilco Brands, LLC, and its successors and assigns in its capacity as
agent pursuant to the Term Loan Documents acting for and on behalf of itself and
the other Term Loan Secured Parties and any successor or replacement
agent.

    

    “Term Loan Agreement”
shall mean the Financing Agreement, dated of even date herewith, by and among
Borrowers, Term Loan Agent and Term Loan Lenders, as the same now exists or may
hereafter be amended, amended and restated, modified, supplemented, extended,
renewed, restated, refinanced or replaced.

    

    “Term Loan Debt” shall
mean all “Obligations” as such term is defined in the Term Loan Agreement,
including, without limitation, obligations, liabilities and indebtedness of
every kind, nature and description owing by any Grantor to any Term Loan Secured
Party, including principal, interest, charges, fees, premiums, indemnities and
expenses, however evidenced, whether as principal, surety, endorser, guarantor
or otherwise, arising under any of the Term Loan Documents, whether now existing
or hereafter arising, whether arising before, during or after the initial or any
renewal term of the Term Loan Documents or after the commencement of any case
with respect to any Grantor under the Bankruptcy Code or any other Insolvency or
Liquidation Proceeding (and including, without limitation, any principal,
interest, fees, costs, expenses and other amounts, which would accrue and become
due but for the commencement of such case, whether or not such amounts are
allowed or allowable in whole or in part in such case or similar proceeding),
whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, secured or
unsecured.

    

    “Term Loan Documents”
shall mean, collectively, the Term Loan Agreement and all agreements, documents
and instruments at any time executed and/or delivered by any Grantor or any
other person to, with or in favor of any Term Loan Secured Party in connection
therewith or related thereto, as all of the foregoing now exist or may hereafter
be amended, modified, supplemented, extended, renewed, restated, refinanced,
replaced or restructured (in whole or in part and including any agreements with,
to or in favor of any other lender or group of lenders that at any time
refinances, replaces or succeeds to all or any portion of the Term Loan
Debt).

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “Term Loan Lenders”
shall mean, collectively, any person party to the Term Loan Documents as lender
(and including any other lender or group of lenders that at any time refinances,
replaces or succeeds to all or any portion of the Term Loan Debt or is otherwise
party to the Term Loan Documents as a lender); sometimes being referred to
herein individually as a “Term Loan Lender”.

     

    “Term Loan Priority
Collateral” shall have the meaning set forth in Exhibit A
hereto.

    

    “Term Loan Secured
Parties” shall mean, collectively, (a) the Term Loan Agent, (b) the Term
Loan Lenders, (c) each other person to whom any of the Term Loan Debt is owed
and (d) the successors, replacements and assigns of each of the foregoing;
sometimes being referred to herein individually as a “Term Loan Secured
Party”.

    

    “Third Party
Purchaser” shall have the meaning set forth in Section 8.1
hereof.

    

    “Triggering Event”
means the occurrence of any one of the following events: (a) the voluntary
acceleration of all or any portion of the Revolving Loan Debt, (b) the
intentional cessation, termination or suspension by Revolving Loan Agent or all
Revolving Credit Lenders in their commitment to provide revolving loans to
Grantors for a period of ten (10) consecutive Business Days, or (c) the exercise
of remedies by the Revolving Loan Agent or the Revolving Loan Secured Parties
against all or substantially all of the Revolving Loan Priority
Collateral.

    

    “Uniform Commercial
Code” or “UCC” means the
Uniform Commercial Code as from time to time in effect in the State of New
York.

    

    “Wells Fargo” shall
have the meaning set forth in the preamble hereof.

    

    1.2 Terms
Generally.  The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”.  The word “will” shall
be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented, refinanced, replaced or otherwise modified
as set forth herein, (b) any reference herein to any Person shall be construed
to include such Person’s successors and assigns, and as to Borrowers, any
Guarantor or any other Grantor shall be deemed to include a receiver, trustee or
debtor-in-possession on behalf of any of such person or on behalf of any such
successor or assign, (c) the words “herein”, “hereof’ and “hereunder”, and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Sections and Exhibits shall be construed to refer to Sections and Exhibits of
this Agreement except as otherwise set forth herein and (e) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

      

    Section
2. Lien
Priorities.

    

    2.1 Acknowledgment of
Liens.

    

    (a)
Revolving Loan Agent, on behalf of itself and each Revolving Credit Secured
Party, hereby acknowledges that Term Loan Agent, acting for and on behalf of
itself and the Term Loan Secured Parties, has been granted Liens upon all of the
Collateral pursuant to the Term Loan Documents to secure the Term Loan
Debt.

    

    (b) Term
Loan Agent, on behalf of itself and each other Term Loan Secured Party, hereby
acknowledges that Revolving Loan Agent, acting for and on behalf of itself and
the Revolving Loan Secured Parties, has been granted Liens upon all of the
Collateral pursuant to the Revolving Loan Documents to secure the Revolving Loan
Debt.

    

    2.2 Relative
Priorities.

    

    (a)
Notwithstanding the date, manner or order of grant, attachment or perfection of
any Liens granted to the Revolving Loan Agent or the Revolving Loan Secured
Parties or the Term Loan Agent or the Term Loan Secured Parties and
notwithstanding any provision of the UCC, or any other applicable law
or any provisions of the Revolving Loan Documents or the Term Loan Documents or
any other circumstance whatsoever:

    

    (i) The
Term Loan Agent, for itself and on behalf of the other Term Loan Secured
Parties, hereby agrees that: (A) any Lien on the Revolving Loan Priority
Collateral securing the Revolving Loan Debt (other than the amount thereof that
exceeds the Maximum Priority Revolving Loan Debt) now or hereafter held by or
for the benefit or on behalf of any Revolving Loan Secured Party or any agent or
trustee therefor shall be senior in right, priority, operation, effect and in
all other respects to any Lien on the Revolving Loan Priority Collateral
securing the Term Loan Debt now or hereafter held by or for the benefit or on
behalf of any Term Loan Secured Party or any agent or trustee therefor; and (B)
any Lien on the Revolving Loan Priority Collateral securing any of the Term Loan
Debt now or hereafter held by or for the benefit or on behalf of any Term Loan
Secured Party or any agent or trustee therefor regardless of how acquired,
whether by grant, statute, operation of law, subrogation or otherwise, shall be
junior and subordinate in all respects to all Liens on the Revolving Loan
Priority Collateral securing any Revolving Loan Debt (other than the amount
thereof that exceeds the Maximum Priority Revolving Loan Debt).

    

    (ii) The
Revolving Loan Agent, for itself and on behalf of the other Revolving Loan
Secured Parties, hereby agrees that: (A) any Lien on the Term Loan Priority
Collateral securing the Term Loan Debt (other than the amount thereof that
exceeds the Maximum Priority Term Loan Debt) now or hereafter held by or for the
benefit or on behalf of any Term Loan Secured Party or any agent or trustee
therefor shall be senior in right, priority, operation, effect and in all other
respects to any Lien on the Term Loan Priority Collateral securing the Revolving
Loan Debt now or hereafter held by or for the benefit or on behalf of any
Revolving Loan Secured Party or any agent or trustee therefor; and (B) any Lien
on the Term Loan Priority Collateral securing the Revolving Loan Debt now or
hereafter held by or for the benefit or on behalf of any Revolving Loan Secured
Party or any agent or trustee therefor regardless of how acquired, whether by
grant, statute, operation of law, subrogation or otherwise, shall be junior and
subordinate in all respects to all Liens on the Term Loan Priority Collateral
securing any Term Loan Debt (other than the amount thereof that exceeds the
Maximum Priority Term Loan Debt).

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    (iii) The
Revolving Loan Agent, for itself and on behalf of the other Revolving Loan
Secured Parties, hereby agrees that: (A) any Lien on the Revolving Loan Priority
Collateral securing the Term Loan Debt now or hereafter held by or for the
benefit or on behalf of any Term Loan Secured Party or any agent or trustee
therefor shall be senior in right, priority, operation, effect and in all other
respects to any Lien on the Revolving Loan Priority Collateral to the extent
securing Revolving Loan Debt in excess of the Maximum Priority Revolving Loan
Debt now or hereafter held by or for the benefit or on behalf of any Revolving
Loan Secured Party or any agent or trustee therefor; and (B) any Lien on the
Revolving Loan Priority Collateral securing any of the Revolving Loan Debt in
excess of the Maximum Priority Revolving Loan Debt now or hereafter held by or
for the benefit or on behalf of any Revolving Loan Secured Party or any agent or
trustee therefore regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Revolving Loan Priority Collateral securing any
Term Loan Debt.

    

    (iv) The
Term Loan Agent, for itself and on behalf of the other Term Loan Secured
Parties, hereby agrees that: (A) any Lien on the Term Loan Priority Collateral
securing the Revolving Loan Debt now or hereafter held by or for the benefit or
on behalf of any Revolving Loan Secured Party or any agent or trustee therefor
shall be senior in right, priority, operation, effect and in all other respects
to any Lien on the Term Loan Priority Collateral to the extent securing the
principal amount of any Term Loan Debt in excess of the Maximum Priority Term
Loan Debt now or hereafter held by or for the benefit or on behalf of any Term
Loan Secured Party or any agent or trustee therefor; and (B) any Lien on the
Term Loan Priority Collateral securing any of the Term Loan Debt in excess of
the Maximum Priority Term Loan Debt now or hereafter held by or for the benefit
or on behalf of any Term Loan Secured Party or any agent or trustee therefor
regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all
Liens on the Term Loan Priority Collateral securing any Revolving Loan
Debt.

    

    (b) As
between Revolving Loan Secured Parties and Term Loan Secured Parties, the terms
of this Agreement, including the priorities set forth above, shall govern even
if part or all of the Revolving Loan Debt or Term Loan Debt or the Liens
securing payment and performance thereof are not perfected or are subordinated,
avoided, disallowed, set aside or otherwise invalidated in any judicial
proceeding or otherwise.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    2.3 Prohibition on Contesting
Liens. Each of the Revolving Loan Agent, for itself and on behalf of the
other Revolving Loan Secured Parties, and the Term Loan Agent, for itself and on
behalf of the other Term Loan Secured Parties, agrees that it shall not (and
hereby waives any right to) contest or support any other Person in contesting,
in any proceeding (including any Insolvency or Liquidation Proceeding), the
perfection, priority, validity or enforceability of a Lien held by or for the
benefit or on behalf of any Revolving Loan Secured Party in any Collateral or by
or on behalf of any Term Loan Secured Party in any Collateral, as the case may
be; provided
that nothing in this Agreement shall be construed to prevent or impair the
rights of any Revolving Loan Secured Party or Term Loan Secured Party (a) to
enforce this Agreement or (b) to vote any claim that the Revolving Loan Secured
Parties or the Term Loan Secured Parties may have in an Insolvency or
Liquidation Proceeding to accept or reject any plan or partial or complete
liquidation, reorganization, arrangement, composition or extension; provided, that,
notwithstanding any inconsistency between the terms of any such plan and the
terms of this Agreement, the terms of this Agreement shall govern and
control.

    

    2.4 Similar Liens and
Agreements. The parties hereto agree, subject to the other provisions of
this Agreement, upon request by the Revolving Loan Agent or the Term Loan Agent,
as the case may be, to advise the other from time to time of the Collateral for
which such party has taken steps to perfect its Liens and to identify the
parties obligated under the Revolving Loan Documents or Term Loan Documents, as
the case may be.

    

    Section
3. Enforcement.

    

    3.1 Exercise of Rights and
Remedies.

    

    (a) The
Term Loan Agent, for itself and on behalf of the other Term Loan Secured
Parties:

    

    (i) will
not, so long as the Discharge of Revolving Loan Debt has not occurred, enforce
or exercise, or seek to enforce or exercise, any rights or remedies (including
any right of setoff or notification of account debtors) with respect to any
Revolving Loan Priority Collateral (including the enforcement of any right under
any lockbox agreement, account control agreement, landlord waiver or bailee’s
letter or any similar agreement or arrangement to which the Term Loan Agent or
any other Term Loan Secured Party is a party) or commence or join with any
Person (other than Revolving Loan Agent with its consent) in commencing, or
filing a petition for, any action or proceeding with respect to such rights or
remedies (including any foreclosure action or proceeding or any Insolvency or
Liquidation Proceeding;

    

    (ii) will
not contest, protest or object to any foreclosure action or proceeding brought
by the Revolving Loan Agent or any other Revolving Loan Secured Party, or any
other enforcement or exercise by any Revolving Loan Secured Party of any rights
or remedies relating to the Revolving Loan Priority Collateral under the
Revolving Loan Documents or otherwise, so long as the Liens of Term Loan Agent
attach to the proceeds thereof subject to the relative priorities set forth in
Section 2.1 and
such actions or proceedings are being pursued in good faith;

    

    (iii)
will not object to the forbearance by the Revolving Loan Agent or the other
Revolving Loan Secured Parties from commencing or pursuing any foreclosure
action or proceeding or any other enforcement or exercise of any rights or
remedies with respect to any of the Revolving Loan Priority
Collateral;

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    (iv) will
not, so long as the Discharge of Revolving Loan Debt has not occurred, take or
receive any Revolving Loan Priority Collateral, or any proceeds thereof or
payment with respect thereto, in connection with the exercise of any right or
remedy (including any right of setoff) with respect to any Revolving Loan
Priority Collateral or in connection with any insurance policy award in respect
of any Revolving Loan Priority Collateral;

    

    (v)
agrees that no covenant, agreement or restriction contained in any Term Loan
Document shall be deemed to restrict in any way the rights and remedies of the
Revolving Loan Agent or the other Revolving Loan Secured Parties with respect to
the Revolving Loan Priority Collateral as set forth in this Agreement and the
Revolving Loan Documents; provided, however, that,
nothing in this Agreement shall be construed as a waiver of any existing or
future default under the Term Loan Documents;

    

    (vi) will
not object to the manner in which the Revolving Loan Agent or any other
Revolving Loan Secured Party may seek to enforce or collect the Revolving Loan
Debt or the Liens of such Revolving Loan Secured Party, regardless of whether
any action or failure to act by or on behalf of the Revolving Loan Agent or any
other Revolving Loan Secured Party is, or could be, adverse to the interests of
the Term Loan Secured Parties, to the extent that such actions do not violate
the terms of this Agreement and will not assert, and hereby waive, to the
fullest extent permitted by law, any right to demand, request, plead or
otherwise assert or claim the benefit of any marshalling, appraisal, valuation
or other similar right that may be available under applicable law with respect
to the Revolving Loan Priority Collateral or any other rights a junior secured
creditor may have under applicable law with respect to the matters described in
this clause (vi); and

    

    (vii)
will not attempt, directly or indirectly, whether by judicial proceeding or
otherwise, to challenge or question the validity or enforceability of any
Revolving Loan Debt or any Lien of Revolving Loan Agent or this Agreement, or
the validity or enforceability of the priorities, rights or obligations
established by this Agreement.

    

    (b) The
Revolving Loan Agent, for itself and on behalf of the other Revolving Loan
Secured Parties:

    

    (i) will
not, so long as the Discharge of Term Loan Debt has not occurred, enforce or
exercise, or seek to enforce or exercise, any rights or remedies with respect to
any Term Loan Priority Collateral or commence or join with any Person (other
than Term Loan Agent with its consent) in commencing, or filing a petition for,
any action or proceeding with respect to such rights or remedies (including any
foreclosure action or proceeding);

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    (ii) will
not contest, protest or object to any foreclosure action or proceeding brought
by the Term Loan Agent or any other Term Loan Secured Party, or any other
enforcement or exercise by any Term Loan Secured Party of any rights or remedies
relating to the Term Loan Priority Collateral under the Term Loan Documents or
otherwise, so long as the Liens of Revolving Loan Agent attach to the proceeds
thereof subject to the relative priorities set forth in Section 2.1 hereof
and such actions or proceedings are being pursued in good faith;

    

    (iii)
will not object to the forbearance by the Term Loan Agent or the other Term Loan
Secured Parties from commencing or pursuing any foreclosure action or proceeding
or any other enforcement or exercise of any rights or remedies with respect to
any of the Term Loan Priority Collateral;

    

    (iv) will
not, so long as the Discharge of the Term Loan Debt has not occurred, take or
receive any Term Loan Priority Collateral, or any proceeds thereof or payment
with respect thereto, in connection with the exercise of any right or remedy
(including any right of setoff) with respect to any Term Loan Priority
Collateral or in connection with any insurance policy award or any condemnation
award (or deed in lieu of condemnation);

    

    (v)
agrees that no covenant, agreement or restriction contained in any Revolving
Loan Document shall be deemed to restrict in any way the rights and remedies of
the Term Loan Agent or the other Term Loan Secured Parties with respect to the
Term Loan Priority Collateral as set forth in this Agreement and the Term Loan
Documents; provided, however, that nothing
in this Agreement shall be construed as a waiver of any existing or future
Default under the Revolving Loan Documents;

    

    (vi) will
not object to the manner in which the Term Loan Agent or any other Term Loan
Secured Party may seek to enforce or collect the Term Loan Debt or the Liens of
such Term Loan Secured Party, regardless of whether any action or failure to act
by or on behalf of the Term Loan Agent or any other Term Loan Secured Party is,
or could be, adverse to the interests of the Revolving Loan Secured Parties, to
the extent that such actions do not violate the terms of this Agreement and will
not assert, and hereby waive, to the fullest extent permitted by law, any right
to demand, request, plead or otherwise assert or claim the benefit of any
marshalling, appraisal, valuation or other similar right that may be available
under applicable law with respect to the Term Loan Priority Collateral or any
other rights a junior secured creditor may have under applicable law with
respect to the matters described in this clause (vi); and

    

    (vii)
will not attempt, directly or indirectly, whether by judicial proceeding or
otherwise, to challenge or question the validity or enforceability of any Term
Loan Debt or any Lien of Term Loan Agent or this Agreement, or the validity or
enforceability of the priorities, rights or obligations established by this
Agreement.

    

    (c)
Notwithstanding anything to the contrary contained in this Agreement, the Term
Loan Agent and any other Term Loan Secured Party may:

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    (i) join
(but not control) any foreclosure or judicial lien enforcement proceeding with
respect to the Revolving Loan Priority Collateral initiated by Revolving Loan
Agent, so long as such action would not and would not reasonably be expected to
delay or interfere in any respect with the exercise by Revolving Loan Agent of
its rights with respect to the Revolving Loan Priority Collateral;

    

    (ii) file
a claim or statement of interest with respect to the Term Loan Debt; provided that an
Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor;

    

    (iii)
take any action (not adverse to the priority status of the Liens on the
Revolving Loan Priority Collateral securing the Revolving Loan Debt or the
rights of any Revolving Loan Secured Party to exercise remedies in respect
thereof) in order to create or perfect the Liens held by the Term Loan Agent on
the Revolving Loan Priority Collateral;

    

    (iv) file
any necessary responsive or defensive pleadings in opposition to any motion,
claim, adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Term Loan Secured
Parties, including any claims secured by the Revolving Loan Priority Collateral,
if any, in each case, to the extent that such actions do not violate the terms
of this Agreement;

    

    (v) file
any proof of claim, make other filings in any Insolvency or Liquidation
Proceeding of any Grantor, but in each case not in a manner which is
inconsistent with the terms of this Agreement;

    

    (vi) vote
on any plan of reorganization; provided, that,
notwithstanding any inconsistency between the terms of any such plan and the
terms of this Agreement, the terms of this Agreement shall govern and control;
and

    

    (vii)
present bids (including, without limitation, credit bids) for and purchase
Revolving Loan Priority Collateral at any private, public or judicial
foreclosure upon or other disposition of Revolving Loan Priority Collateral
initiated by any Person (including, without limitation, any disposition thereof
pursuant to Section 363 of the Bankruptcy Code).

    

    (d)
Notwithstanding anything to the contrary contained in this Agreement, the
Revolving Loan Agent and any other Revolving Loan Secured Party
may:

    

    (i) join
(but not control) any foreclosure or judicial lien enforcement proceeding with
respect to the Term Loan Priority Collateral initiated by Term Loan Agent, so
long as such action would not and would not reasonably be expected to delay or
interfere in any respect with the exercise by Term Loan Agent of its rights with
respect to the Term Loan Priority Collateral;

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    (ii) file
a claim or statement of interest with respect to the Revolving Loan Debt; provided that an
Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor;

    

    (iii)
take any action (not adverse to the priority status of the Liens on the Term
Loan Priority Collateral securing the Term Loan Debt or the rights of any Term
Loan Secured Party to exercise remedies in respect thereof) in order to create
or perfect the Liens held by the Revolving Loan Agent on the Term Loan Priority
Collateral;

    

    (iv) file
any necessary responsive or defensive pleadings in opposition to any motion,
claim, adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Revolving Loan Secured
Parties, including any claims secured by the Term Loan Priority Collateral, if
any, in each case, to the extent that such actions do not violate the terms of
this Agreement;

    

    (v) file
any proof of claim, make other filings in any Insolvency or Liquidation
Proceeding of any Grantor, but in each case not in a manner which is
inconsistent with the terms of this Agreement;

    

    (vi) vote
on any plan of reorganization; provided, that,
notwithstanding any inconsistency between the terms of any such plan and the
terms of this Agreement, the terms of this Agreement shall govern and
control;

    

    (vii)
present bids (including, without limitation, credit bids) for and purchase Term
Loan Priority Collateral at any private, public or judicial foreclosure upon or
other disposition of Term Loan Priority Collateral initiated by any Person
(including, without limitation, any disposition thereof pursuant to Section 363
of the Bankruptcy Code).

    

    3.2 Rights As Unsecured
Creditors. Notwithstanding anything to the contrary in this Agreement,
either Agent or the Secured Parties on whose behalf such Agent acts, may
exercise any and all rights and remedies available to an unsecured creditor
against any Grantor in accordance with the terms of the Revolving Loan Documents
and the Term Loan Documents, respectively and applicable law.  For
purposes hereof, the rights of an unsecured creditor do not include a creditor
that holds a judgment lien.  Subject to the payment conditions of
Section
4.1(e),  no other provision in this Agreement shall prohibit
the receipt by either Agent or any of the other Secured Parties of the required
payments of principal, interest, fees and other amounts so long as such receipt
is not the direct or indirect result of the exercise by such Agent or any other
Secured Party of foreclosure rights or other remedies as a secured creditor or
enforcement in contravention of this Agreement of any Lien held by any of them
or any other act in contravention of this Agreement.

    

    3.3 Release of Second Priority
Liens.

    

    (a)
Notwithstanding anything to the contrary contained in any of the Revolving Loan
Documents or Term Loan Documents, as applicable, only the Agent that, in
accordance with the terms of this Agreement, has the senior Lien in any
Collateral shall have the right to restrict or permit, or approve or disapprove,
the sale, transfer or other disposition of such Collateral. The Agent that, in
accordance with the terms of this Agreement, has the junior Lien on any
Collateral shall:

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    (i)           be
deemed to have automatically and without further action released and terminated
any Liens it may have on such Collateral to the extent such Collateral is sold
or otherwise disposed of either by the Agent that, in accordance with the terms
of this Agreement, has the senior Lien on such Collateral, any agent of such
Agent, or any Grantor with the consent of such Agent, provided, that the Liens
of the Agent with such senior Lien on the Collateral so sold or disposed of are
released at the same time, and the net proceeds of such sale or disposition are
applied in accordance with Section 4.1
hereof,

    

    (ii)           be
deemed to have authorized the Agent that, in accordance with the terms of this
Agreement, has the senior Lien on such Collateral to file UCC amendments and
terminations covering the Collateral so sold or otherwise disposed of with
respect to the UCC financing statements between any Grantor and the Agent with
such junior Lien thereon to evidence such release and termination,

    

    (iii)           promptly
upon the request of the Agent that, in accordance with the terms of this
Agreement, has the senior Lien thereon, execute and deliver such other release
documents and confirmations of the authorization to file UCC amendments and
terminations provided for herein, in each case as the Agent that, in accordance
with the terms of this Agreement, has the senior Lien thereon may reasonably
require in connection with such sale or other disposition by such Agent, such
Agent’s agents or any Grantor with the consent of such Agent to evidence and
effectuate such termination and release, without representation, warranty or
recourse, express or implied; provided, that, any
such release or UCC amendment or termination by or on behalf of the Agent with
the junior Lien thereon shall not extend to or otherwise affect any of the
rights, if any, of such Agent with the junior Lien to the proceeds from any such
sale or other disposition of Collateral upon the payment and satisfaction in
full of the Revolving Loan Debt or the Term Loan Debt, as the case may be,
whichever is secured by the senior Lien on such Collateral; and

    

    (iv)           be
deemed to have consented under the Revolving Loan Documents or the Term Loan
Documents, as applicable, of the Agent with such junior Lien thereon and the
Secured Parties for whom such Agent is acting to such sale or other disposition,
provided, that, nothing in this Agreement shall be construed as a waiver of any
existing or future default under the Revolving Loan Documents or the Term Loan
Documents.

    

    (b) Each
Agent, for itself and on behalf of the other Secured Parties for whom such Agent
is acting, hereby irrevocably constitutes and appoints the other Agent and any
officer or agent of such Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Agent with the junior lien or such holder or in the Agent’s
own name, from time to time in such Agent’s (holding the senior lien)
discretion, for the purpose of carrying out the terms of this Section 3.3, to take
any and all appropriate action and to execute any and all documents and
instruments which may be reasonably necessary to accomplish the purposes of this
Section 3.3,
including any UCC termination statements, endorsements or other instruments of
transfer or release, without representation, warranty or recourse, express or
implied. Nothing contained in this Agreement shall be construed to modify the
obligation of the Agent with the senior lien to act in a commercially reasonable
manner in the exercise of its rights to sell, lease, license, exchange, transfer
or otherwise dispose of any Collateral.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    3.4 Insurance and Condemnation
Awards.

    

    (a) So
long as the Discharge of Revolving Loan Debt has not occurred, the Revolving
Loan Agent and the other Revolving Loan Secured Parties shall have the sole and
exclusive right, subject to the rights of Grantors under the Revolving Loan
Documents, to settle and adjust claims in respect of the Revolving Loan Priority
Collateral under policies of insurance and to approve any award granted in any
condemnation or similar proceeding, or any deed in lieu of condemnation in
respect of the Revolving Loan Priority Collateral. So long as the Discharge of
Revolving Loan Debt has not occurred, all proceeds of any such policy and any
such award, or any payments with respect to a deed in lieu of condemnation with
respect to any of the Revolving Loan Priority Collateral, shall be paid in
accordance with Section 4.1 hereof.
Until the Discharge of Revolving Loan Debt, if the Term Loan Agent or any other
Term Loan Secured Party shall, at any time, receive any proceeds of any such
insurance policy or any such award or payment, it shall pay such proceeds over
to the Revolving Loan Agent in accordance with the terms of Section 4.2
hereof.

    

    (b) So
long as the Discharge of Term Loan Debt has not occurred, the Term Loan Agent
and the other Term Loan Secured Parties shall have the sole and exclusive right,
subject to the rights of Grantors under the Term Loan Documents, to settle and
adjust claims in respect of the Term Loan Priority Collateral under policies of
insurance and to approve any award granted in any condemnation or similar
proceeding, or any deed in lieu of condemnation in respect of the Term Loan
Priority Collateral. So long as the Discharge of Term Loan Debt has not
occurred, all proceeds of any such policy and any such award, or any payments
with respect to a deed in lieu of condemnation with respect to any of the Term
Loan Priority Collateral, shall be paid in accordance with Section 4.1 hereof.
Until the Discharge of Revolving Loan Debt, if the Revolving Loan Agent or any
other Revolving Loan Secured Party shall, at any time, receive any proceeds of
any such insurance policy or any such award or payment, it shall pay such
proceeds over to the Revolving Loan Agent in accordance with the terms of Section 4.2
hereof.

    

    (c) To
the extent that an insured loss covers both Revolving Loan Priority Collateral
and Term Loan Priority Collateral, then Revolving Loan Agent and Term Loan Agent
will work jointly and in good faith to collect, adjust or settle any claims or
amounts under the insurance policy.  The parties hereto agree that any
business interruption insurance and/or loss profits or similar type of insurance
is Revolving Loan Priority Collateral.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    Section
4. Payments.

    

    4.1 Application of
Proceeds.

    

    (a) The
Revolving Loan Priority Collateral or proceeds thereof received in connection
with the sale or other disposition of, or collection on, such Revolving Loan
Priority Collateral, shall be applied in the following order of
priority:

    

    (i) first, to the
Revolving Loan Debt (other than the amount thereof in excess of the Maximum
Priority Revolving Loan Debt) and for cash collateral as required under the
Revolving Loan Documents, and in such order as specified in the applicable
Revolving Loan Documents until the Discharge of Revolving Loan Debt has
occurred;

    

    (ii)
second, to the
Term Loan Debt (other than the amount thereof in excess of the Maximum Priority
Term Loan Debt) in such order as specified in the applicable Term Loan Documents
until the Discharge of Term Loan Debt has occurred;

    

    (iii)
third, to the
Revolving Loan Debt in excess of the Maximum Priority Revolving Loan Debt until
the Discharge of Revolving Loan Debt has occurred; and

    

    (iv)
fourth, to the
Term Loan Debt in excess of the Maximum Priority Term Loan Debt.

    

    (b) The
Term Loan Priority Collateral or proceeds thereof received in connection with
the sale or other disposition of, or collection on, such Term Loan Priority
Collateral, shall be applied in the following order of priority:

    

    (i) first, to the Term
Loan Debt (other than the amount thereof in excess of the Maximum Priority Term
Loan Debt) and for cash collateral as required under the Term Loan Documents,
and in such order as specified in the applicable Term Loan Documents until the
Discharge of Term Loan Debt has occurred;

    

    (ii)
second, to the
Revolving Loan Debt (other than the amount thereof in excess of the Maximum
Priority Revolving Loan Debt) in such order as specified in the applicable
Revolving Loan Documents until the Discharge of Revolving Loan Debt has
occurred;

    

    (iii)
third, to the
Term Loan Debt in excess of the Maximum Priority Term Loan Debt until the
Discharge of Term Loan Debt has occurred; and

    

    (iv)
fourth, to the
Revolving Loan Debt in excess of the Maximum Priority Revolving Loan
Debt.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    (c) Upon
the Discharge of Revolving Loan Debt and the termination of the commitments of
the Revolving Loan Credit Lenders and the financing arrangements provided by
Revolving Credit Lenders to Grantors under the Revolving Loan Documents, to the
extent permitted under applicable law and without risk of legal liability to
Revolving Loan Agent or any other Revolving Loan Secured Party, the Revolving
Loan Agent shall deliver to the Term Loan Agent, without representation or
recourse, any proceeds of Collateral held by it at such time in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct, to be applied by the Term Loan Agent to the
Term Loan Debt in such order as specified in the relevant Term Loan Documents.
Upon the Discharge of Term Loan Debt and the termination of the commitments of
the Term Loan Lenders and the financing arrangements provided by Term Loan
Lenders to Grantors under the Term Loan Documents, to the extent permitted under
applicable law and without risk of legal liability to Term Loan Agent or any
other Term Loan Secured Party, the Term Loan Agent shall deliver to the
Revolving Loan Agent, without representation or recourse, any proceeds of
Collateral held by it at such time in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct, to be applied by the Revolving Loan Agent to the Revolving Loan Debt in
such order as specified in the relevant Revolving Loan Documents.

    

    (d) The
foregoing provisions of this Agreement are intended solely to govern the
respective lien priorities as between the Term Loan Agent and the Revolving Loan
Agent and shall not impose on Revolving Loan Agent or any other Revolving Loan
Secured Party any obligations in respect of the disposition of proceeds of
foreclosure on any Collateral which would conflict with prior perfected claims
therein in favor of any other person or any order or decree of any court or
other governmental authority or any applicable law.

    

    (e)
Notwithstanding anything to the contrary contained herein or in any of the Term
Loan Documents, Borrowers and Guarantors shall not, directly or indirectly, make
any prepayments of principal in respect of the Term Loan Debt; provided, that, the
Borrowers may make prepayments of principal in respect of the Term Loan Debt in
a minimum amount of $1,000,000 per each prepayment so long as the following
conditions are satisfied, as determined by the Revolving Loan
Agent:

    

    (i) Each
of the Term Loan Agent and the Revolving Loan Agent shall have received not less
than ten (10) Business Days’ prior written notice of the intent to make such
prepayment or payment, which notice shall specify the date of such prepayment or
payment and the amount intended to be prepaid or repaid;

    

    (ii) at
all times for the period thirty (30) days prior to the date such prepayment or
payment is made, actual Availability shall be greater than $5,000,000 and on the
date of and for six (6) months after giving effect to any such prepayment or
payment, pro forma Availability shall be greater than $5,000,000;

    

    (iii)
Each of the Term Loan Agent and the Revolving Loan Agent shall have received a
Pro Forma Compliance Certificate (as defined in the Revolving Loan Agreement)
demonstrating that for all times for the period thirty (30) days prior to the
date such prepayment or payment is made, actual Availability shall be greater
than $5,000,000 and on the date of and for six (6) months after giving effect to
any such payment or prepayment, pro forma Availability shall be greater than
$5,000,000;

    

    (iv) as
of the date of such prepayment or payment and after giving effect thereto on a
pro forma basis, no Default or Event of Default under the Revolving Loan
Agreement shall exist or have occurred and be continuing; and

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    

    (v) as of
the date of such prepayment or payment and after giving effect thereto on a pro
forma basis, no default or event of default under the Term Loan Agreement shall
exist or have occurred and be continuing.

    

    4.2 Payments
Over.

    

    (a) So
long as the Discharge of Revolving Loan Debt has not occurred, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor, the Term Loan Agent agrees, for itself and on behalf of the other Term
Loan Secured Parties, that any Revolving Loan Priority Collateral or proceeds
thereof or payment with respect thereto received by the Term Loan Agent or any
other Term Loan Secured Party (including any right of set-off) with respect to
the Revolving Loan Priority Collateral, and including in connection with any
insurance policy claim, shall be segregated and held in trust and promptly
transferred or paid over to the Revolving Loan Agent for the benefit of the
Revolving Loan Secured Parties in the same form as received, with any necessary
endorsements or assignments or as a court of competent jurisdiction may
otherwise direct. The Revolving Loan Agent is hereby authorized to make any such
endorsements or assignments, without any representation, warranty or recourse,
express or implied, as agent for the Term Loan Agent. This authorization is
coupled with an interest and is irrevocable.

    

    (b) So
long as the Discharge of Term Loan Debt has not occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor, the Revolving Loan Agent agrees, for itself and on behalf of the other
Revolving Loan Secured Parties, that any Term Loan Priority Collateral or
proceeds thereof or payment with respect thereto received by the Revolving Loan
Agent or any other Revolving Loan Secured Party (including any right of set-off)
with respect to the Term Loan Priority Collateral, and including in connection
with any insurance policy claim or any condemnation award (or deed in lieu- of
condemnation), shall be segregated and held in trust and promptly transferred or
paid over to the Term Loan Agent for the benefit of the Term Loan Secured
Parties in the same form as received, with any necessary endorsements or
assignments or as a court of competent jurisdiction may otherwise direct. The
Term Loan Agent is hereby authorized to make any such endorsements or
assignments, without any representation, warranty or recourse, express or
implied, as agent for the Revolving Loan Agent. This authorization is coupled
with an interest and is irrevocable.

    

    Section
5. Bailee for
Perfection; Collateral Access Agreements.

    

    5.1 Each Agent as
Bailee.

    

    (a) Each
Agent agrees to hold any Collateral that is in the possession or control of such
Agent (or its agents or bailees), to the extent that possession or control
thereof is necessary to perfect a Lien thereon under the Uniform Commercial Code
(such Collateral being referred to herein as the “Pledged Collateral”), as
bailee and agent for and on behalf of the other Agent solely for the purpose of
perfecting the security interest granted to the other Agent in such Pledged
Collateral (including, but not limited to, any securities or any deposit
accounts or securities accounts, if any) pursuant to the Revolving Loan
Documents or Term Loan Documents, as applicable, subject to the terms and
conditions of this Section
5.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    (b) Until
the Discharge of Revolving Loan Debt has occurred, the Revolving Loan Agent
shall be entitled to deal with the Pledged Collateral constituting Revolving
Loan Priority Collateral in accordance with the terms of the Revolving Loan
Documents. The rights of the Term Loan Agent to such Pledged Collateral shall at
all times be subject to the terms of this Agreement and to the Revolving Loan
Agent’s rights under the Revolving Loan Documents. Until the Discharge of Term
Loan Debt has occurred, the Term Loan Agent shall be entitled to deal with the
Pledged Collateral constituting Term Loan Priority Collateral in accordance with
the terms of the Term Loan Documents. The rights of the Revolving Loan Agent to
such Pledged Collateral shall at all times be subject to the terms of this
Agreement and to the Term Loan Agent’s rights under the Term Loan
Documents.

    

    (c) Each
Agent shall have no obligation whatsoever to the other Agent or any other
Secured Party to assure that the Pledged Collateral is genuine or owned by any
of the Grantors or to preserve rights or benefits of any Person except as
expressly set forth in this Section 5. The duties
or responsibilities of each Agent under this Section 5 shall be
limited solely to holding the Pledged Collateral as bailee and agent for and on
behalf of the other Agent for purposes of perfecting the Lien held by the other
Agent.

    

    (d) Each
Agent shall not have by reason of the Revolving Loan Documents, the Term Loan
Documents or this Agreement or any other document a fiduciary relationship in
respect of the other Agent or any of the other Secured Parties and shall not
have any liability to the other Agent or any other Secured Party in connection
with its holding the Pledged Collateral, other than for its gross negligence or
willful misconduct as determined by a final, non-appealable order of a court of
competent jurisdiction.

    

    5.2 Transfer of Pledged
Collateral.

    

    (a) Upon
the Discharge of Revolving Loan Debt, to the extent permitted under applicable
law, upon the request of the Term Loan Agent, the Revolving Loan Agent shall,
without recourse or warranty, transfer the possession and control of the Pledged
Collateral, if any, then in its possession or control to Term Loan Agent, except
in the event and to the extent (i) Revolving Loan Agent or any other Revolving
Loan Secured Party has retained or otherwise acquired such Collateral in full or
partial satisfaction of any of the Revolving Loan Debt, (ii) such Collateral is
sold or otherwise disposed of by Revolving Loan Agent or any other Revolving
Loan Secured Party or by a Grantor as provided herein or (iii) it is otherwise
required by any order of any court or other governmental authority or applicable
law or would result in the risk of liability of Revolving Loan Secured Party to
any third party. The foregoing provision shall not impose on Revolving Loan
Agent or any other Revolving Loan Secured Party any obligations which would
conflict with prior perfected claims therein in favor of any other person or any
order or decree of any court or other governmental authority or any applicable
law. In connection with any transfer described herein to Term Loan Agent, the
Revolving Loan Agent agrees to take reasonable actions in its power (with all
costs and expenses in connection therewith to be for the account of the Term
Loan Agent and to be paid by Borrowers) as shall be reasonably requested by the
Term Loan Agent to permit the Term Loan Agent to obtain, for the benefit of the
Term Loan Secured Parties, a first priority security interest in the Pledged
Collateral.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    (b) Upon
the Discharge of Term Loan Debt, to the extent permitted under applicable law,
upon the request of the Revolving Loan Agent, the Term Loan Agent shall, without
recourse or warranty, transfer the possession and control of the Pledged
Collateral, if any, then in its possession or control to Revolving Loan Agent,
except in the event and to the extent (i) Term Loan Agent or any other Term Loan
Secured Party has retained or otherwise acquired such Collateral in full or
partial satisfaction of any of the Term Loan Debt, (ii) such Collateral is sold
or otherwise disposed of by Term Loan Agent or any other Term Loan Secured Party
or by a Grantor as provided herein or (iii) it is otherwise required by any
order of any court or other governmental authority or applicable law or would
result in the risk of liability of Term Loan Secured Party to any third party.
The foregoing provision shall not impose on Term Loan Agent or any other Term
Loan Secured Party any obligations which would conflict with prior perfected
claims therein in favor of any other person or any order or decree of any court
or other governmental authority or any applicable law. In connection with any
transfer described herein to Revolving Loan Agent, the Term Loan Agent agrees to
take reasonable actions in its power (with all costs and expenses in connection
therewith to be for the account of the Revolving Loan Agent and to be paid by
Borrowers) as shall be reasonably requested by the Revolving Loan Agent to
permit the Revolving Loan Agent to obtain, for the benefit of the Revolving Loan
Secured Parties, a first priority security interest in the Pledged
Collateral.

    

    5.3 Deposit Accounts; Collateral
Access Agreements. In the case of any deposit accounts subject to Deposit
Account Control Agreements (as such term is defined in the Revolving Loan
Documents) or any rights with respect to Collateral obtained by the Revolving
Loan Agent pursuant to Collateral Access Agreements (as such term is defined in
the Revolving Loan Agreement), after the event of the Discharge of the Revolving
Loan Debt, and to the extent that the Term Loan Debt remains outstanding, the
Revolving Loan Agent agrees, at the request of the Term Loan Agent and at the
expense of Grantors, to (a) with respect to deposit accounts, promptly deliver
written notice to the bank at which deposit accounts are maintained that (i)
such account(s) remain subject to a Lien in favor of the Term Loan Agent and the
Revolving Loan Agent is no longer the “Agent” or “Lender Representative” as the
case may be or otherwise entitled to act under such agreement and (ii) from the
date of the notice and at all times thereafter until the Discharge of Term Loan
Debt or the Term Loan Agent instructs the bank at which the deposit account is
maintained otherwise, that the Term Loan Agent is to be deemed the “Agent” for
all purposes in connection with such agreement and that the bank is to follow
the directions of the Term Loan Agent for all purposes in connection with such
deposit accounts, and (b) with respect to Collateral Access Agreements, promptly
deliver written notice to the Person party to the applicable Collateral Access
Agreement that (i) the Collateral located at such location remains subject to a
Lien in favor of the Term Loan Agent, and (ii) from the date of the notice and
at all times thereafter until the Term Loan Agent instructs such party
otherwise, the Term Loan Agent is to be deemed the “Agent” for all purposes in
connection with such agreement.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    Section
6. Insolvency or
Liquidation Proceedings

    

    6.1 General
Applicability. This Agreement shall be applicable both before and after
the institution of any Insolvency or Liquidation Proceeding involving Borrowers
or any other Grantor, including, without limitation, the filing of any petition
by or against Borrowers or any other Grantor under the Bankruptcy Code or under
any other Bankruptcy Law and all converted or subsequent cases in respect
thereof, and all references herein to Borrowers or any Grantor shall be deemed
to apply to the trustee for Borrowers or such Grantor and Borrowers or such
Grantor as debtor-in-possession. The relative rights of the Revolving Loan
Secured Parties and the Term Loan Secured Parties in or to any distributions
from or in respect of any Collateral or proceeds of Collateral shall continue
after the institution of any Insolvency or Liquidation Proceeding involving
Borrowers or any other Grantor, including, without limitation, the filing of any
petition by or against Borrowers or any other Grantor under the Bankruptcy Code
or under any other Bankruptcy Law and all converted cases and subsequent cases,
on the same basis as prior to the date of such institution, subject to any court
order approving the financing of, or use of cash collateral by, Borrowers or any
other Grantor as debtor-in-possession, or any other court order affecting the
rights and interests of the parties hereto not in conflict with this Agreement.
This Agreement shall constitute a subordination agreement for the purposes of
Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency
or Liquidation Proceeding in accordance with its terms.

    

    6.2 Bankruptcy Financing.
If any Grantor becomes subject to any Insolvency or Liquidation Proceeding,
until the Discharge of Revolving Loan Debt has occurred, the Term Loan Agent,
for itself and on behalf of the other Term Loan Secured Parties, agrees
that:

    

    (a) each
Term Loan Secured Party will raise no objection to, nor support any other Person
objecting to, and will be deemed to have consented to, the use of any Revolving
Loan Priority Collateral constituting cash collateral under Section 363 of the
Bankruptcy Code, or any comparable provision of any other Bankruptcy Law or any
post-petition financing, provided by Revolving Loan Agent or any Person approved
by Revolving Loan Agent (which agrees to be bound by Section 8 hereof)
under Section 364 of the Bankruptcy Code, or any comparable provision of any
other Bankruptcy Law (a “DIP Financing”), will
not request or accept adequate protection or any other relief in connection with
the use of such cash collateral or such DIP Financing except as set forth in the
proviso immediately below and will subordinate (and will be deemed hereunder to
have subordinated) the Liens granted to Term Loan Secured Parties to such DIP
Financing on the same terms as such Liens are subordinated to the Liens granted
to Revolving Loan Agent hereunder (and such subordination will not alter in any
manner the terms of this Agreement), to any adequate protection provided to the
Revolving Loan Secured Parties and to any “carve out” agreed to by the Revolving
Loan Agent, provided
that:

    

    (i) the
Revolving Loan Agent does not oppose or object to such use of cash collateral or
DIP Financing,

    

    (ii) the
aggregate principal amount of such DIP Financing, together with the Revolving
Loan Debt as of such date, does not exceed the Maximum Priority Revolving Loan
Debt,

    

    (iii) the
Liens granted to the Revolving Loan Secured Parties or such other person in
connection with such DIP Financing are subject to this Agreement and considered
to be Liens of Revolving Loan Agent for purposes hereof,

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    

    (iv) the
Term Loan Agent retains a Lien on the Revolving Loan Priority Collateral
(including proceeds thereof) with the same priority relative to the Liens of
Revolving Loan Agent as existed prior to such Insolvency or Liquidation
Proceeding,

    

    (v) the
Term Loan Agent receives replacement Liens on all post-petition assets of any
Grantor in which any of the Revolving Loan Agent obtains a replacement Lien, or
which secure the DIP Financing, with the same priority relative to the Liens of
Revolving Loan Agent as existed prior to such Insolvency or Liquidation
Proceeding, and

    

    (vi) the
Term Loan Secured Parties may oppose or object to such use of Cash Collateral or
DIP Financing on the same bases as an unsecured creditor, so long as such
opposition or objection is not based on the Term Loan Secured Parties’ status as
secured creditors and in connection with such opposition or objection, the Term
Loan Secured Parties affirmatively state that the Term Loan Secured Parties are
undersecured secured creditors.

    

    (b) No
Term Loan Secured Party shall, directly or indirectly, provide, or seek to
provide, DIP Financing without the prior written consent of the Revolving Loan
Agent.

    

    6.3 Relief from the Automatic
Stay.

    

    (a) The
Term Loan Agent, for itself and on behalf of the other Term Loan Secured
Parties, agrees that, so long as the Discharge of Revolving Loan Debt has not
occurred, no Term Loan Secured Party shall, without the prior written consent of
the Revolving Loan Agent, seek or request relief from or modification of the
automatic stay or any other stay in any Insolvency or Liquidation Proceeding in
respect of any part of the Revolving Loan Priority Collateral, any proceeds
thereof or any Lien thereon securing any of the Term Loan Debt. Notwithstanding
anything to the contrary set forth in this Agreement, no Grantor waives or shall
be deemed to have waived any rights under Section 362 of the Bankruptcy
Code.

    

    (b) The
Revolving Loan Agent, for itself and on behalf of the other Revolving Loan
Secured Parties, agrees that, so long as the Discharge of Term Loan Debt has not
occurred, no Revolving Loan Secured Party shall, without the prior written
consent of the Term Loan Agent, seek or request relief from or modification of
the automatic stay or any other stay in any Insolvency or Liquidation Proceeding
in respect of any part of the Term Loan Priority Collateral, any proceeds
thereof or any Lien thereon securing any of the Revolving Loan
Debt.  Notwithstanding anything to the contrary set forth in this
Agreement, no Grantor waives or shall be deemed to have waived any rights under
Section 362 of the Bankruptcy Code.

    

    6.4
[Reserved]

    

    6.5 Reorganization
Securities. If, in any Insolvency or Liquidation Proceeding, debt
obligations of any reorganized Grantor secured by Liens upon any property of
such reorganized Grantor are distributed, pursuant to a plan of reorganization,
on account of both the Revolving Loan Debt and the Term Loan Debt, then, to the
extent the debt obligations distributed on account of the Revolving Loan Debt
and on account of the Term Loan Debt are secured by Liens upon the same assets
or property, the provisions of this Agreement will survive the distribution of
such debt obligations pursuant to such plan and will apply with like effect to
the Liens securing such debt obligations.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    

    6.6 Separate Classes.
Each of the parties hereto irrevocably acknowledges and agrees that (a) the
claims and interests of the Revolving Loan Secured Parties and the Term Loan
Secured Parties are not “substantially similar” within the meaning of Section
1122 of the Bankruptcy Code, or any comparable provision of any other Bankruptcy
Law, (b) the grants of the Liens to secure the Revolving Loan Debt and the
grants of the Liens to secure the Term Loan Debt constitute two separate and
distinct grants of Liens, (c) the Revolving Loan Secured Parties’ rights in the
Collateral are fundamentally different from the Term Loan Secured Parties’
rights in the Collateral and (d) as a result of the foregoing, among other
things, the Revolving Loan Debt and the Term Loan Debt must be separately
classified in any plan of reorganization proposed or adopted in any Insolvency
or Liquidation Proceeding.

    

    6.7 Asset
Dispositions.

    

    (a) Until
the Discharge of Revolving Loan Debt has occurred, the Term Loan Agent, for
itself and on behalf of the other Term Loan Secured Parties, agrees that, in the
event of any Insolvency or Liquidation Proceeding, the Term Loan Secured Parties
will not object or oppose (or support any Person in objecting or opposing) a
motion to any sale, lease, license, exchange, transfer or other disposition of
any Revolving Loan Priority Collateral free and clear of the Liens of Term Loan
Agent and the other Term Loan Secured Parties or other claims under Section 363
of the Bankruptcy Code, or any comparable provision of any Bankruptcy Law and
shall be deemed to have consented to any such any sale, lease, license,
exchange, transfer or other disposition of any Revolving Loan Priority
Collateral under Section 363(f) of the Bankruptcy Code that has been consented
to by the Revolving Loan Agent; provided, that, the
proceeds of such sale, lease, license, exchange, transfer or other disposition
of any Collateral to be applied to the Revolving Loan Debt or the Term Loan Debt
are applied in accordance with Sections 4.1 and
4.2
hereof.

    

    (b) Until
the Discharge of Term Loan Debt has occurred, the Revolving Loan Agent, for
itself and on behalf of the other Revolving Loan Secured Parties, agrees that,
in the event of any Insolvency or Liquidation Proceeding, the Revolving Loan
Secured Parties will not object or oppose (or support any Person in objecting or
opposing) a motion to any sale, lease, license, exchange, transfer or other
disposition of any Term Loan Priority Collateral free and clear of the Liens of
Revolving Loan Agent and the other Revolving Loan Secured Parties or other
claims under Section 363 of the Bankruptcy Code, or any comparable provision of
any Bankruptcy Law and shall be deemed to have consented to any such any sale,
lease, license, exchange, transfer or other disposition of any Term Loan
Priority Collateral under Section 363(f) of the Bankruptcy Code that has been
consented to by the Term Loan Agent; provided, that, the
proceeds of such sale, lease, license, exchange, transfer or other disposition
of any Collateral to be applied to the Revolving Loan Debt or the Term Loan Debt
are applied in accordance with Sections 4.1 and
4.2
hereof.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    

    (c) The Revolving Loan Agent agrees
that it will not object to Borrowers’ retention of Hilco Brands, LLC for
purposes of liquidating or otherwise disposing of any or all Inventory that
constitutes Revolving Loan Priority Collateral in connection with a “going out
of business” or similar store closing sale, provided, that, such sale or
disposition will, in the sole opinion of the Revolving Loan Agent (i) result in
an acceptable recovery for the Revolving Credit Lenders on account of such
Inventory, (ii) be pursuant to a written agreement that contains terms and
conditions satisfactory to the Revolving Loan Agent, and (iii) is permitted
pursuant to the terms of the Revolving Loan Agreement or otherwise consented to
by the Revolving Loan Agent and Revolving Credit Lenders.

    

    6.8 Avoidance Issues. If
any Revolving Loan Secured Party or Term Loan Secured Party is required on any
date in any Insolvency or Liquidation Proceeding or otherwise to turn over or
otherwise pay to the estate of any Grantor any amount (a “Recovery”), then the
Revolving Loan Debt or the Term Loan Debt, as the case may be shall be
reinstated on such date to the extent of such Recovery. If this Agreement shall
have been terminated prior to such Recovery, this Agreement shall be reinstated
in full force and effect, and such prior termination shall not diminish,
release, discharge, impair or otherwise affect the obligations of the parties
hereto from such date of reinstatement.

    

    6.9 Certain Waivers as to
Section 1111(b)(2) of Bankruptcy Code. The Term Loan Agent, for itself
and on behalf of the other Term Loan Secured Parties, waives any claim any Term
Loan Secured Party may hereafter have against any Revolving Loan Secured Party
arising out of the election by any Revolving Loan Secured Party of the
application of Section 1111 (b)(2) of the Bankruptcy Code, or any comparable
provision of any other Bankruptcy Law. The Revolving Loan Agent, for itself and
on behalf of the other Revolving Loan Secured Parties, waives any claim any
Revolving Loan Secured Party may hereafter have against any Term Loan Secured
Party arising out of the election by any Term Loan Secured Party of the
application of Section 1111(b)(2) of the Bankruptcy Code or any comparable
provision of any other Bankruptcy Law.

    

    6.10
Other Bankruptcy
Laws. In the event that an Insolvency of Liquidation Proceeding is filed
in a jurisdiction other than the United States or is governed by any Bankruptcy
Law other than the Bankruptcy Code, each reference in this Agreement to a
section of the Bankruptcy Code shall be deemed to refer to the substantially
similar or corresponding provision of the Bankruptcy Law applicable to such
Insolvency or Liquidation Proceeding, or in the absence of any specific similar
or corresponding provision of the Bankruptcy Law, such other general Bankruptcy
Law as may be applied in order to achieve substantially the same result as would
be achieved under each applicable section of the Bankruptcy Code.

    

    Section
7. Term Loan Lenders’
Purchase Option

    

    7.1 Exercise of Option.
On or after the occurrence and during the continuance of a Triggering Event, the
Term Loan Secured Parties shall have the option at any time, within ten (10)
days of the occurrence of such Triggering Event and upon five (5) Business Days’
prior written notice by Term Loan Agent to Revolving Loan Agent, to purchase all
(but not less than all) of the Revolving Loan Debt from the Revolving Loan
Secured Parties.  Such notice from Term Loan Agent to Revolving Loan
Agent shall be irrevocable.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    

    7.2 Purchase and Sale. On
the date specified by Term Loan Agent in such notice (which shall not be less
than five (5) Business Days, nor more than fifteen (15) Business Days, after the
receipt by Revolving Loan Agent of the notice from Term Loan Agent of its
election to exercise such option), Revolving Loan Secured Parties shall, subject
to any required approval of any court or other regulatory or governmental
authority then in effect, if any, sell to Term Loan Secured Parties, and Term
Loan Secured Parties shall purchase from Revolving Loan Secured Parties, all of
the Revolving Loan Debt. Notwithstanding anything to the contrary contained
herein, in connection with any such purchase and sale, Revolving Loan Secured
Parties shall retain all rights under the Revolving Loan Documents to be
indemnified or held harmless by Grantors in accordance with the terms
thereof.

    

    7.3 Payment of Purchase
Price.

    

    (a) Upon
the date of such purchase and sale, Term Loan Secured Parties shall (i) pay to
Revolving Loan Agent for the account of the Revolving Loan Secured Parties as
the purchase price therefor the full amount of all of the Revolving Loan Debt
then outstanding and unpaid (including principal, interest, fees and expenses,
including reasonable attorneys’ fees and legal expenses), (ii) furnish cash
collateral to Revolving Loan Agent in such amounts as Revolving Loan Agent
determines is reasonably necessary to secure Revolving Loan Secured Parties in
connection with any issued and outstanding letters of credit, banker’s
acceptances or similar instruments or guarantees or indemnities in respect
thereof issued under the Revolving Loan Documents (but not in any event in an
amount greater than one hundred five (105%) percent of the aggregate undrawn
face amount of such letters of credit, banker’s acceptances or similar
instruments or guarantees or indemnities in respect thereof), (iii) agree to
reimburse Revolving Loan Secured Parties for any loss, cost, damage or expense
(including reasonable attorneys’ fees and legal expenses) in connection with any
commissions, fees, costs or expenses related to any issued and outstanding
letters of credit, banker’s acceptances or similar instruments as described
above and any checks or other payments provisionally credited to the Revolving
Loan Debt, and/or as to which Revolving Loan Secured Parties have not yet
received final payment, and (iv) agree to reimburse Revolving Loan Secured
Parties in respect of indemnification obligations of Grantors under the
Revolving Loan Documents as to matters or circumstances known to Revolving Loan
Secured Parties and disclosed in writing to Term Loan Agent (unless such
disclosure is not permitted under applicable law) at the time of the purchase
and sale which would reasonably be expected to result in any loss, cost, damage
or expense (including reasonable attorneys’ fees and legal expenses) to
Revolving Loan Secured Parties; provided, that, in no
event shall the Term Loan Secured Parties have any liability under this clause
(iv) for amounts in excess of the proceeds of Collateral received by the Term
Loan Secured Parties.

    

    (b) Such
purchase price and cash collateral shall be remitted by wire transfer in federal
funds to such bank account of Revolving Loan Agent as Revolving Loan Agent may
designate in writing to Term Loan Agent for such purpose. Interest shall be
calculated to but excluding the Business Day on which such purchase and sale
shall occur if the amounts so paid by Term Loan Secured Parties to the bank
account designated by Revolving Loan Agent are received in such bank account
prior to 2:00 p.m., New York City time and interest shall be calculated to and
including such Business Day if the amounts so paid by Term Loan Secured Parties
to the bank account designated by Revolving Loan Agent are received in such bank
account later than 2:00 p.m., New York City time.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    

    (c) In
the event that any one or more Term Loan Secured Parties exercises and
consummates the purchase option set forth in this Section 7 and upon
the receipt by Revolving Loan Agent of all amounts payable pursuant to Section 7.3(a)
hereof, (i) the Term Loan Secured Parties shall have the right, but not the
obligation, to require the Revolving Loan Agent to immediately resign in its
capacity as Revolving Loan Agent under the Revolving Loan Documents and (ii)
Revolving Loan Agent may immediately resign in its capacity as Revolving Loan
Agent under the Revolving Loan Documents.

    

    7.4 Representations Upon
Purchase and Sale. Such purchase shall be expressly made without
representation or warranty of any kind by Revolving Loan Secured Parties as to
the Revolving Loan Debt, the Collateral or otherwise and without recourse to
Revolving Loan Secured Parties, except that each Revolving Loan Secured Party
shall represent and warrant, severally, as to it: (a) the amount of the
Revolving Loan Debt being purchased from it are as reflected in the books and
records of such Revolving Loan Secured Party (but without representation or
warranty as to the collectability, validity or enforceability thereof), (b) that
such Revolving Loan Secured Party owns the Revolving Loan Debt being sold by it
free and clear of any liens or encumbrances and (c) such Revolving Loan Secured
Party has the right to assign the Revolving Loan Debt being sold by it and the
assignment is duly authorized.

    

    Section
8. Use of Term Loan
Priority Collateral

    

    8.1 Use Rights of Revolving Loan
Agent. In connection with any enforcement action by the Revolving Loan
Agent or any other sale, disposition or liquidation of Revolving Loan Priority
Collateral (including, without limitation, during any “going out of business” or
similar sale or disposition of Revolving Loan Priority Collateral) conducted by,
at the request or with the consent of the Revolving Loan Agent, the Term Loan
Agent hereby grants to the Revolving Loan Agent and any Person designated by the
Revolving Loan Agent (including, without limitation, any Grantor or their
agents) a non-exclusive, irrevocable royalty free license with respect to any
intellectual property comprising the Term Loan Collateral necessary to realize
upon any Revolving Loan Priority Collateral for the purpose of effecting such
realization.  Notwithstanding anything to the contrary contained
herein, any purchaser or assignee of Revolving Loan Priority Collateral pursuant
to the exercise by Revolving Loan Agent of any of its rights or remedies with
respect thereto shall have the right to sell or otherwise dispose of any such
Revolving Loan Priority Collateral to which any such Intellectual Property is
affixed.   The rights granted pursuant to this Section 8.1 to the
Revolving Loan Agent, or its designee, shall terminate upon the first to occur
of (i) one hundred and eighty (180) days from the date that the Term Loan Agent
shall acquire control or possession of any of the Term Loan Priority Collateral
or shall, through the exercise of remedies under the Term Loan Documents or
otherwise, sell any of the Term Loan Priority Collateral to any third party (a
“Third Party
Purchaser”), or (ii) the date upon which all of the Revolving Loan Debt
is paid in full.  The grant of such license shall extend to property
existing as of the date of such grant and to any “augmented inventory” as such
term is generally used in connection with “going out of business”
sales.  The Term Loan Agent shall require as a condition of such sale
to the Third Party Purchaser that the Third Party Purchaser agree to permit the
Revolving Loan Agent to use the Term Loan Priority Collateral in accordance with
the terms of this Section 8.1.  The time period set forth in this
Section 8.1 shall be tolled during the pendency of any proceeding of a Grantor
under the U.S. Bankruptcy Code or other proceedings to the extent that the
Revolving Loan Agent is stayed or otherwise prevented from enforcing its rights
against the Revolving Loan Priority Collateral.  Notwithstanding
anything to the contrary contained herein, any purchaser or assignee of
Revolving Loan Priority Collateral in connection with the sale or disposition of
Revolving Loan Priority Collateral conducted by Revolving Loan Agent or its
designee shall have the right to sell or otherwise dispose of any such Revolving
Loan Priority Collateral to which any such Term Loan Priority Collateral is
affixed.

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    

    Section
9. Reliance; Waivers;
etc.

    

    9.1 Reliance.

    

    (a) The
consent by the Revolving Loan Secured Parties to the execution and delivery of
the Term Loan Documents and the grant to the Term Loan Agent on behalf of the
Term Loan Secured Parties of a Lien on the Collateral and all loans and other
extensions of credit made or deemed made on and after the date hereof by the
Revolving Loan Secured Parties to any Grantor shall be deemed to have been given
and made in reliance upon this Agreement.

    

    (b) The
consent by the Term Loan Secured Parties to the execution and delivery of the
Revolving Loan Documents and the grant to the Revolving Loan Agent on behalf of
the Revolving Loan Secured Parties of a Lien on the Collateral and all loans and
other extensions of credit made or deemed made on and after the date hereof by
the Term Loan Secured Parties to any Grantor shall be deemed to have been given
and made in reliance upon this Agreement.

    

    9.2 No Warranties or
Liability.

    

    (a) The
Term Loan Agent, for itself and on behalf of the other Term Loan Secured
Parties, acknowledges and agrees that each of the Revolving Loan Agent and the
other Revolving Loan Secured Parties have made no express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectability or enforceability of any of the Revolving
Loan Documents, the ownership of any Collateral or the perfection or priority of
any Liens thereon. The Term Loan Agent agrees, for itself and on behalf of the
other Term Loan Secured Parties, that the Revolving Loan Secured Parties will be
entitled to manage and supervise their respective loans and extensions of credit
under the Revolving Loan Documents in accordance with law and as they may
otherwise, in their sole discretion, deem appropriate, and the Revolving Loan
Secured Parties may manage their loans and extensions of credit without regard
to any rights or interests that the Term Loan Agent or any of the other Term
Loan Secured Parties have in the Collateral or otherwise, except as otherwise
provided in
this Agreement. Neither the Revolving Loan Agent nor any of the other Revolving
Loan Secured Parties shall have any duty to the Term Loan Agent or any of the
other Term Loan Secured Parties to act or refrain from acting in a manner which
allows, or results in, the occurrence or continuance of an event of default or
default under any agreements with any Grantor (including the Term Loan
Documents), regardless of any knowledge thereof which they may have or be
charged with.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    

    (b) The
Revolving Loan Agent, for itself and on behalf of the other Revolving Loan
Secured Parties, acknowledges and agrees that each of the Term Loan Agent and
the other Term Loan Secured Parties have made no express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectability or enforceability of any of the Term Loan
Documents, the ownership of any Collateral or the perfection or priority of any
Liens thereon. The Revolving Loan Agent agrees, for itself and on behalf of the
other Revolving Loan Secured Parties, that the Term Loan Secured Parties will be
entitled to manage and supervise their respective loans and extensions of credit
under the Term Loan Documents in accordance with law and as they may otherwise,
in their sole discretion, deem appropriate, and the Term Loan Secured Parties
may manage their loans and extensions of credit without regard to any rights or
interests that the Revolving Loan Agent or any of the other Revolving Loan
Secured Parties have in the Collateral or otherwise, except as otherwise
provided in this Agreement. Neither the Term Loan Agent nor any of the other
Term Loan Secured Parties shall have any duty to the Revolving Loan Agent or any
of the other Revolving Loan Secured Parties to act or refrain from acting in a
manner which allows, or results in, the occurrence or continuance of an event of
default or default under any agreements with any Grantor (including the
Revolving Loan Documents), regardless of any knowledge thereof which they may
have or be charged with.

    

    9.3 No Waiver of Lien
Priorities

    

    (a) No
right of the Revolving Loan Agent or any of the other Revolving Loan Secured
Parties to enforce any provision of this Agreement or any of the Revolving Loan
Documents shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any Grantor or by any act or failure to act by
Revolving Loan Agent or any other Revolving Loan Secured Party, or by any
noncompliance by any Person with the terms, provisions and covenants of this
Agreement, any of the Revolving Loan Documents or any of the Term Loan
Documents, regardless of any knowledge thereof which the Revolving Loan Agent or
any of the other Revolving Loan Secured Parties may have or be otherwise charged
with.

    

    (b) No
right of the Term Loan Agent or any of the other Term Loan Secured Parties to
enforce any provision of this Agreement or any of the Term Loan Documents shall
at any time in any way be prejudiced or impaired by any act or failure to act on
the part of any Grantor or by any act or failure to act by Term Loan Agent or
any other Term Loan Secured Party, or by any noncompliance by any Person with
the terms, provisions and covenants of this Agreement, any of the Term Loan
Documents or any of the Revolving Loan Documents, regardless of any knowledge
thereof which the Term Loan Agent or any of the other Term Loan Secured Parties
may have or be otherwise charged with.

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    

    (c)
Without in any way limiting the generality of the foregoing paragraph (but
subject to the rights of the Grantors under the Revolving Loan Documents), the
Revolving Loan Agent and any of the other Revolving Loan Secured Parties may, at
any time and from time to time, without the consent of, or notice to, the Term
Loan Agent or any other Term Loan Secured Party, without incurring any
liabilities to the Term Loan Agent or any other Term Loan Secured Party and
without impairing or releasing the Lien priorities and other benefits provided
in this Agreement (even if any right of subrogation or other right or remedy of
the Term Loan Agent or any other Term Loan Secured Party is affected, impaired
or extinguished thereby) do, subject to Section 10.4(b)
hereof, any one or more of the following:

    

    (i)
change the manner, place or terms of payment or change or extend the time of
payment of, or amend, renew, exchange, increase or alter, the terms of any of
the Revolving Loan Debt or any Lien on any Collateral or guaranty thereof or any
liability of any Grantor, or any liability incurred directly or indirectly in
respect thereof (including any increase in or extension of the Revolving Loan
Debt, without any restriction as to the amount, tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange, extend, modify or
supplement in any manner any Liens held by the Revolving Loan Agent or any of
the other Revolving Loan Secured Parties, the Revolving Loan Debt or any of the
Revolving Loan Documents;

    

    (ii)
sell, exchange, release, surrender, realize upon, enforce or otherwise deal with
in any manner and in any order any part of the Revolving Loan Priority
Collateral or any liability of any Grantor to the Revolving Loan Agent or any of
the other Revolving Loan Secured Parties, or any liability incurred directly or
indirectly in respect thereof in accordance with the terms hereof;
and

    

    (iii)
exercise or delay in or refrain from exercising any right or remedy against any
Grantor or any other Person, elect any remedy and otherwise deal freely with any
Grantor or any Revolving Loan Priority Collateral and any security and any
guarantor or any liability of any Grantor to any of the Revolving Loan Secured
Parties or any liability incurred directly or indirectly in respect
thereof.

    

    (d)
Without in any way limiting the generality of the foregoing paragraph (but
subject to the rights of the Grantors under the Term Loan Documents), the Term
Loan Agent and any of the other Term Loan Secured Parties may, at any time and
from time to time, without the consent of, or notice to, the Revolving Loan
Agent or any other Revolving Loan Secured Party, without incurring any
liabilities to the Revolving Loan Agent or any other Revolving Loan Secured
Party and without impairing or releasing the Lien priorities and other benefits
provided in this Agreement (even if any right of subrogation or other right or
remedy of the Revolving Loan Agent or any other Revolving Loan Secured Party is
affected, impaired or extinguished thereby) do, subject to Section 10.4(b)
hereof, any one or more of the following:

    

    (i)
change the manner, place or terms of payment or change or extend the time of
payment of, or amend, renew, exchange, increase or alter, the terms of any of
the Term Loan Debt or any Lien on any Collateral or guaranty thereof or any
liability of any Grantor, or any liability incurred directly or indirectly in
respect thereof (including any increase in or extension of the Term Loan Debt,
without any restriction as to the amount, tenor or terms of any such increase or
extension) or otherwise amend, renew, exchange, extend, modify or supplement in
any manner any Liens held by the Term Loan Agent or any of the other Term Loan
Secured Parties, the Term Loan Debt or any of the Term Loan
Documents;

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    

    (ii)
sell, exchange, release, surrender, realize upon, enforce or otherwise deal with
in any manner and in any order any part of the Term Loan Priority Collateral or
any liability of any Grantor to the Term Loan Agent or any of the other Term
Loan Secured Parties, or any liability incurred directly or indirectly in
respect thereof in accordance with the terms hereof; and

    

    (iii)
exercise or delay in or refrain from exercising any right or remedy against any
Grantor or any other Person, elect any remedy and otherwise deal freely with any
Grantor or any Term Loan Priority Collateral and any security and any guarantor
or any liability of any Grantor to any of the Term Loan Secured Parties or any
liability incurred directly or indirectly in respect thereof.

    

    (e) The
Term Loan Agent agrees not to assert and hereby waives, to the fullest extent
permitted by law, any right to demand, request, plead or otherwise assert or
otherwise claim the benefit of, any marshalling, appraisal, valuation or other
similar right that may otherwise be available under applicable law with respect
to the Revolving Loan Priority Collateral or any other similar rights a junior
secured creditor may have under applicable law.

    

    (f) The
Revolving Loan Agent agrees not to assert and hereby waives, to the fullest
extent permitted by law, any right to demand, request, plead or otherwise assert
or otherwise claim the benefit of, any marshalling, appraisal, valuation or
other similar right that may otherwise be available under applicable law with
respect to the Term Loan Priority Collateral or any other similar rights a
junior secured creditor may have under applicable law.

    

    Section
10. Miscellaneous.

    

    10.1
Conflicts. In
the event of any conflict between the provisions of this Agreement and the
provisions of the Revolving Loan Documents or the Term Loan Documents, the
provisions of this Agreement shall govern.

    

    10.2
Continuing Nature of
this Agreement; Severability. This Agreement shall continue to be
effective until the Discharge of Revolving Loan Debt shall have occurred or the
final payment in full in cash of the Term Loan Debt and the termination and
release by each Term Loan Secured Party of any Liens to secure the Term Loan
Debt. This is a continuing agreement of lien subordination and the Revolving
Loan Secured Parties may continue, at any time and without notice to the Term
Loan Agent or any other Term Loan Secured Party, to extend credit and other
financial accommodations and lend monies to or for the benefit of any Grantor
constituting Revolving Loan Debt in reliance hereof. The Term Loan Agent, for
itself and on behalf of the Term Loan Secured Parties, hereby waives any right
it may have under applicable law to revoke this Agreement or any of the
provisions of this Agreement. The Revolving Loan Agent, for itself and on behalf
of the Revolving Loan Secured Parties, hereby waives any right it may have under
applicable law to revoke this Agreement or any of the provisions of this
Agreement. The terms of this Agreement shall survive, and shall continue in full
force and effect, in any Insolvency or Liquidation Proceeding. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall
not invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    

    10.3
When Discharge of Debt
Deemed to Not Have Occurred.

    

    (a) If
substantially contemporaneously with the Discharge of Revolving Loan Debt,
Borrowers refinances indebtedness outstanding under the Revolving Loan Documents
in a manner which does not contravene the terms of Section 10.4(b)
hereof, then after written notice to Term Loan Agent, (i) the indebtedness and
other obligations arising pursuant to such refinancing of the then outstanding
indebtedness under the Revolving Loan Documents shall automatically be treated
as Revolving Loan Debt for all purposes of this Agreement, including for
purposes of the Lien priorities and rights in respect of Collateral set forth
herein, (ii) the credit agreement and the other loan documents evidencing such
new indebtedness shall automatically be treated as the Revolving Loan Agreement
and the Revolving Loan Documents for all purposes of this Agreement and (iii)
the administrative agent under the new Revolving Loan Agreement shall be deemed
to be the Revolving Loan Agent for all purposes of this Agreement. Upon receipt
of notice of such refinancing (including the identity of the new Revolving Loan
Agent), the Term Loan Agent shall promptly enter into such documents and
agreements (including amendments or supplements to this Agreement) as Borrowers
or the new Revolving Loan Agent may reasonably request in order to provide to
the new Revolving Loan Agent the rights of the Revolving Loan Agent contemplated
hereby.

    

    (b) If
substantially contemporaneously with the Discharge of Term Loan Debt, Borrowers
refinances indebtedness outstanding under the Term Loan Documents in a manner
which does not contravene the terms of Section 10.4(b)
hereof, then after written notice to Term Loan Agent, (i) the indebtedness and
other obligations arising pursuant to such refinancing of the then outstanding
indebtedness under the Term Loan Documents shall automatically be treated as
Term Loan Debt for all purposes of this Agreement, including for purposes of the
Lien priorities and rights in respect of Collateral set forth herein, (ii) the
credit agreement and the other loan documents evidencing such new indebtedness
shall automatically be treated as the Term Loan Agreement and the Term Loan
Documents for all purposes of this Agreement and (iii) the administrative agent
under the new Term Loan Agreement shall be deemed to be the Term Loan Agent for
all purposes of this Agreement. Upon receipt of notice of such refinancing
(including the identity of the new Term Loan Agent), the Term Loan Agent shall
promptly enter into such documents and agreements (including amendments or
supplements to this Agreement) as Borrowers or the new Term Loan Agent may
reasonably request in order to provide to the new Term Loan Agent the rights of
the Term Loan Agent contemplated hereby.

    

    10.4 Amendments; Waivers;
Assignments.

    

    (a) No
amendment, modification or waiver of any of the provisions of this Agreement by
the Term Loan Agent or the Revolving Loan Agent shall be deemed to be made
unless the same shall be in writing signed on behalf of the party making the
same or its authorized agent and each waiver, if any, shall be a waiver only
with respect to the specific instance involved and shall in no way impair the
rights of the parties making such waiver or the obligations of the other parties
to such party in any other respect or at any other time.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    

    (b) The
Revolving Loan Agent shall not agree to any amendment, modification,
refinancing, waiver or supplement to the Revolving Loan Documents,
that

    

    (i)
increases the Revolving Loan Debt to an amount in excess of the Maximum Priority
Revolving Loan Debt;

    

    (ii)
increases the interest rate (including by changing the pricing grid, imposing or
increasing a rate floor or otherwise) or any scheduled recurring fee by more
than 2.00% per annum;

    

    (iii)
directly prohibits or restricts the payment of principal of, interest on, or
other amounts payable with respect to the Term Loan Debt, except for any such
prohibitions or restrictions expressly provided for in this Agreement and the
Revolving Loan Agreement (as in effect on the date hereof); or

    

    (iv)
subordinates the Liens of the Revolving Loan Agent to liens in favor or any
other Person, other than in connection with an Insolvency or Liquidation
Proceeding as provided in this Agreement.

    

    (c)           The
Term Loan Agent shall not agree to any amendment, modification, refinancing,
waiver or supplement to the Term Loan Documents, that

    

    (i)
increases the Term Loan Debt to an amount in excess of the Maximum Priority Term
Loan Debt;

    

    (ii)
increases the interest rate (including by changing the pricing grid, imposing or
increasing a rate floor or otherwise) or any scheduled recurring fee by more
than 2.00% per annum;

    

    (iii)
directly prohibits or restricts the payment of principal of, interest on, or
other amounts payable with respect to the Revolving Loan Debt, except for any
such prohibitions or restrictions expressly provided for in this Agreement and
the Term Loan Agreement (as in effect on the date hereof);

    

    (iv) (A)
alters (other than to extend) the amortization schedule, interest or fee payment
dates or maturity date (in each case, as in effect on the date hereof) for the
Term Loan Debt, (B) confers any additional rights on the Term Loan Secured
Parties that would be adverse to the Revolving Loan Secured Parties, (C) imposes
any greater monetary obligation or modifies any existing covenant to cause such
existing covenant to be materially more stringent or restrictive on any of the
Borrowers or Guarantors or imposes an additional covenant that is materially
more stringent or restrictive on any of the Borrowers or Guarantors other than
those provided in the Term Loan Documents as of the date of this Agreement, (D)
changes or amends any other term of any Term Loan Document if such change or
amendment would result in an Event of Default under the Revolving Loan
Documents, or increase the obligations of any Borrower or Guarantor, or
otherwise contravene the provisions of this Agreement or (E) add to the Term
Loan Priority Collateral; or

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    

    (v)
subordinates the Liens of the Term Loan Agent to liens in favor or any other
Person, other than in connection with an Insolvency or Liquidation Proceeding as
provided in this Agreement.

    

    (d)           Neither
the Term Loan Agent nor the Term Loan Lenders shall assign or transfer all or
any portion of their rights and obligations under the Term Loan Agreement
without the prior written consent of the Revolving Loan Agent, with such consent
not to be unreasonably withheld or delayed, and any such assignment or transfer
without the Revolving Loan Agent’s prior written consent shall be null and
void.  Notwithstanding anything to the contrary in this Section
10.4(d), (i) the Term Loan Agent and the Term Loan Lenders shall have the
ability to assign or transfer all or any portion of their rights and obligations
under the Term Loan Agreement without the prior written consent of the Revolving
Loan Agent so long as such assignment or transfer is solely to an Affiliate (as
defined in the Revolving Loan Agreement) of Hilco Brands, LLC and (ii) Infinity
FS Finance I, LLC shall have the ability to assign or transfer all or any
portion of its rights and obligations under the Term Loan Agreement without the
prior written consent of the Revolving Loan Agent so long as such assignment or
transfer is solely to an Affiliate (as defined in the Revolving Loan Agreement)
of Infinity FS Finance I, LLC.   Any assignment or transfer of
all or any portion of the Term Loan Agent’s or a Term Loan Lender’s rights and
obligations under the Term Loan Agreement shall be null and void if in
contravention of the terms of this Section 10.4(d).

    

    10.5
Subrogation.

    

    (a) The
Term Loan Agent, for itself and on behalf of the Term Loan Secured Parties,
hereby agrees not to assert any rights of subrogation it may acquire as a result
of any payment hereunder until the Discharge of Revolving Loan Debt has
occurred.

    

    (b) The
Revolving Loan Agent, for itself and on behalf of the Revolving Loan Secured
Parties, hereby agrees not to assert any rights of subrogation it may acquire as
a result of any payment hereunder until the Discharge of Term Loan Debt has
occurred.

    

    10.6
Consent to
Jurisdiction; Waivers. The parties hereto consent to the jurisdiction of
any state or federal court located in New York, New York, and consent that all
service of process may be made by registered mail directed to such party as
provided in Section
10.7 hereof for such party. Service so made shall be deemed to be
completed three (3) days after the same shall be posted as aforesaid. The
parties hereto waive any objection to any action instituted hereunder based on
forum non conveniens, and any objection to the venue of any action instituted
hereunder. Each of the parties hereto waives any right it may have to trial by
jury in respect of any litigation based on, or arising out of, under or in
connection with this Agreement or any other Loan Document, or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto.

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    

    10.7
Notices. All
notices to the Term Loan Secured Parties and the Revolving Loan Secured Parties
permitted or required under this Agreement may be sent to the Term Loan Agent
and the Revolving Loan Agent, respectively. Unless otherwise specifically
provided herein, any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, electronically
mailed or sent by courier service, facsimile transmission or U.S. mail and shall
be deemed to have been given when delivered in person or by courier service,
upon receipt of a facsimile transmission or electronic mail or four (4) Business
Days after deposit in the U.S. mail (registered or certified, with postage
prepaid and properly addressed). For the purposes hereof, the addresses of the
parties hereto shall be as set forth below, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties.

    

    Term Loan
Agent:

    

    Hilco
Brands, LLC

    5 Revere
Drive

    Northbrook,
IL   60062

    Attention:  Eric
Kaup, General Counsel

    

    with copy
to (which shall not constitute notice):

    

    Fox
Rothschild LLP

    200
Market Street

    20th
Floor

    Philadelphia,
PA 19103

    Attention:  Stephen
M. Cohen, Esquire

    Telephone
No.:  215-299-2744

    Facsimile
No.:  215-299-2150

     

    Revolving
Loan Agent:

    

    Wells
Fargo Retail Finance II, LLC

    One
Boston Place

    18th
Floor

    Boston,
MA 02108

    Attention:  Joseph
Burt

    Telephone:
No.  617-854-7279

    Facsimile
No.:  866-617-3988

    

    Each
Grantor:

    

    c/o Wells
Fargo Retail Finance II, LLC

    One
Boston Place

    18th
Floor

    Boston,
MA 02108

    Attention:  Joseph
Burt

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    Telephone
No.:  617-854-7279

    Facsimile
No.:  866-617-3988

    

    with a
copy to (which shall not constitute notice):

    Proskauer
Rose LLP

    One
International Place

    Boston,
MA 02110

    Attention:  Peter
J. Antoszyk, Esq.

    Telephone
No.:  617-526-9749

    Facsimile
No.:  617-526-98

    

    10.8
Consent to
Jurisdiction; Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE SUPREME COURT OF
THE STATE OF NEW YORK IN NEW YORK COUNTY AND THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT.

    

    10.9
Governing Law.
The validity, construction and effect of this Agreement shall be governed by the
internal laws of the State of New York but excluding any principles of conflict
of laws or any other rule of law that would result in the application of the law
of any jurisdiction other than the laws of the State of New York.

    

    10.10
Binding on Successors
and Assigns. This Agreement shall be binding upon the Revolving Loan
Agent, the other Revolving Loan Secured Parties, the Term Loan Agent and the
other Term Loan Secured Parties, and their respective successors and
assigns.

    

    10.11
Section Titles; Time
Periods. The section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of this Agreement.

    

    10.12
Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be an original and all of which shall together constitute one and the same
document.

    

    10.13
Authorization.
By its signature, each Person executing this Agreement on behalf of a party
hereto represents and warrants to the other parties hereto that it is duly
authorized to execute this Agreement.

    

    10.14
No Third Party
Beneficiaries. This Agreement and the rights and benefits hereof shall
inure to the benefit of each of the parties hereto and their respective
successors and assigns and shall inure to the benefit of each of the holders of
Revolving Loan Debt and Term Loan Debt. No other Person (including without
limitation, any Borrower, Guarantor or any of their respective creditors) shall
have or be entitled to assert rights or benefits hereunder.

    

    [REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.

    

    
      
        
          	 
      	
                  REVOLVING LOAN
      AGENT:

                
	 
      	 
      
	 
      	
                  WELLS
      FARGO RETAIL FINANCE II, LLC, as

                
	 
      	
                  Revolving
      Loan Agent

                
	 
      	 
      
	 
      	
                  By: 

                	
                  /s/ Joseph Burt

                
	 
      	
                  Name:  Joseph
      Burt

                
	 
      	
                  Title:
      Director

                

        

      

    

     

    [Signature
Page Intercreditor Agreement]

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  TERM LOAN
      AGENT:

                
	 
      	 
      
	 
      	
                  HILCO
      BRANDS, LLC, as

                
	 
      	
                  Term
      Loan Agent

                
	 
      	 
      
	 
      	
                  By: 

                	
                  /s/ Benjamin Nortman

                
	 
      	
                  Name:
      Benjamin Nortman

                
	 
      	
                  Title:
      Managing Director

                

        

      

    

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    
 

    Each of
the undersigned Borrowers and Guarantors hereby acknowledges and agrees that:
(i) although it has signed this acknowledgement, it is not a party to the
Intercreditor Agreement, and does not, and will not, receive any right, benefit,
priority or interest under or because of the existence of the Intercreditor
Agreement, (ii) it will execute and deliver such additional documents and take
such additional action as may be necessary or desirable in the reasonable
opinion of either of the Revolving Loan Agent or the Term Loan Agent to
effectuate the provisions and purposes of the Intercreditor Agreement, and (iii)
it will cause any party that becomes a Borrower or Guarantor under the Revolving
Loan Documents or the Term Loan Documents to deliver a similar acknowledgment to
this Agreement.

    

    
      
        
          
            
              	 
      	
                      BORROWERS:

                    
	 
      	 
      
	 
      	
                      FREDERICK’S
      OF HOLLYWOOD GROUP INC.

                    
	 
      	 
      
	 
      	
                      By: 

                    	
                      /s/ Thomas Rende

                    
	 
      	
                      Name:
      Thomas Rende

                    
	 
      	
                      Title:
      Chief Financial Officer

                    
	 
      	 
      
	 
      	
                      FOH
      HOLDINGS, INC.

                    
	 
      	 
      
	 
      	
                      By: 

                    	
                      /s/ Thomas Rende

                    
	 
      	
                      Name:
      Thomas Rende

                    
	 
      	
                      Title:
      Chief Financial Officer

                    
	 
      	 
      
	 
      	
                      FREDERICK’S
      OF HOLLYWOOD, INC.

                    
	 
      	 
      
	 
      	
                      By: 

                    	
                      /s/ Thomas Rende

                    
	 
      	
                      Name:
      Thomas Rende

                    
	 
      	
                      Title:
      Chief Financial Officer

                    
	 
      	 
      
	 
      	
                      FREDERICK’S
      OF HOLLYWOOD STORES, INC.

                    
	 
      	 
      
	 
      	
                      By: 

                    	
                      /s/ Thomas Rende

                    
	 
      	
                      Name:
      Thomas Rende

                    
	 
      	
                      Title:
      Chief Financial Officer

                    
	 
      	 
      
	 
      	
                      HOLLYWOOD
      MAIL ORDER, LLC

                    
	 
      	 
      
	 
      	
                      By:
      FOH Holdings, Inc., its Manager

                    
	 
      	 
      
	 
      	
                      By: 

                    	
                      /s/ Thomas Rende

                    
	 
      	
                      Name:
      Thomas Rende

                    
	 
      	
                      Title:
      Chief Financial
Officer

                    

            

          

        

      

    

    

    [Signature
Page Intercreditor Agreement]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  GUARANTORS:

                
	 
      	 
      
	 
      	
                  FREDERICKS.COM,
      INC.

                
	 
      	 
      
	 
      	
                  By: 

                	
                  /s/ Thomas Rende

                
	 
      	
                  Name:
      Thomas Rende

                
	 
      	
                  Title:
      Chief Financial Officer

                

        

      

    

    

    [Signature
Page Intercreditor Agreement]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    EXHIBIT
A

    TO

    INTERCREDITOR
AGREEMENT

    

    Term
Loan Priority Collateral

     

    The term
“Term Loan Priority Collateral” shall mean all of the following property now
owned or at any time hereafter acquired by any Grantor, in which such Grantor
now has or at any time in the future may acquire any right, title or
interests:

    

    (a)           all
Intellectual Property;

    

    (b)           all
instruments arising in connection with or directly related to Intellectual
Property;

    

    (c)           all
documents arising in connection with or directly related to Intellectual
Property; and

    

    (d)           all
products and Proceeds of the foregoing, in any form, including insurance
proceeds and all claims against third parties for loss or damage to or
destruction of or other involuntary conversion of any kind or nature of any or
all of the other Term Loan Priority Collateral.

    

    For
purposes of this Exhibit A, the
following terms shall have the meanings given to them below:

    

    “Copyright Licenses”
means all licenses, contracts or other agreements, whether written or oral,
naming Grantor as licensee or licensor and providing for the grant of any right
to use or sell any works covered by any copyright.

     

    “Copyrights” means all
domestic and foreign copyrights, whether registered or unregistered, including,
without limitation, all copyright rights throughout the universe (whether now or
hereafter arising) in any and all media (whether now or hereafter developed), in
and to all original works of authorship fixed in any tangible medium of
expression, now or hereafter owned, acquired, created or used by Grantor, all
applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), all reissues and extensions
or renewals thereof, all income, royalties, damages and payments now and
hereafter due or payable or both with respect to the foregoing, including,
without limitation, damages and payments for past, present or future
infringements or misappropriations thereof, all rights to sue for past, present
and future infringements or misappropriations thereof, and all other rights
corresponding thereto throughout the world.

    

    “Customer Records”
means all customer lists, formulae, Website Collateral and other Records (as
defined in the UCC) of Grantor relating to the distribution of products and
services in connection with which any of such Trademarks are
used.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    “Hosting Agreement”
means any agreement between Grantor and/or any other Borrower and any Hosting
Agent.

     

    “Intellectual
Property” means the Copyrights, the Patents, the Trademarks and the
Licenses.

    

    “Licenses” means (a)
the Copyright Licenses, the Trademark Licenses and the Patent Licenses, and all
other 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
Grantor 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 Grantor or any other Borrower, and (b) the Hosting Agreement and any
other agreement relating to the Website Collateral or any Website, or
both.

     

    “Patent Licenses”
means all licenses, contracts or other agreements, whether written or oral,
naming Grantor as licensee or licensor and providing for the grant of any right
to manufacture, use or sell any invention covered by any Patent.

     

    “Patents” means all
domestic and foreign letters patent, design patents, utility patents, industrial
designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how, formulae, rights of
publicity and other general intangibles of like nature, now hereafter owned,
acquired or used by Grantor (including, without limitation, all domestic and
foreign letters patent, design patents, utility patents, industrial designs,
inventions, trade secrets, ideas, concepts, methods, techniques, processes,
proprietary information, technology, know-how and formulae), all applications,
registrations and recordings thereof (including, without limitation,
applications, registrations and recordings in the United States Patent and
Trademark Office, or in any similar office or agency of the United States or any
other country or any political subdivision thereof), all reissues, divisions,
continuations, continuations-in–part, extensions, renewals and reexaminations
thereof, all income, royalties, damages and payments now and hereafter due or
payable or both with respect to the foregoing, including, without limitation,
damages and payments for past, present or future infringements or
misappropriations thereof, all rights to sue for past, present and future
infringements or misappropriations thereof, and all other rights corresponding
thereto throughout the world.

    

    “Proceeds” means as
defined in Article 9 of the UCC.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    “Trademark Licenses”
means all licenses, contracts or other agreements, whether written or oral,
naming Grantor as licensor or licensee and providing for the grant of any right
concerning any Trademark, together with any goodwill connected with and
symbolized by any such trademark licenses, contracts or agreements and the right
to prepare for sale or lease and sell or lease any and all Inventory (as defined
in the UCC) now or hereafter owned by Grantor and now or hereafter covered by
such licenses.

     

    “Trademarks” means all
domestic and foreign trademarks, service marks, collective marks, certification
marks, trade names, corporate names, business names, d/b/a’s, fictitious names,
alternate names, Domain Names and other Internet domain names, trade dress,
trade styles, designs, logos and other source or business identifiers and all
general intangibles of like nature, now or hereafter owned, adopted, created,
acquired or used by Grantor (including, without limitation, all domestic and
foreign trademarks, service marks, collective marks, certification marks, trade
names, corporate names, business names, d/b/a’s, fictitious names, alternate
names, Internet domain names, trade dress, trade styles, designs, logos and
other source or business identifiers), all applications, registrations and
recordings thereof (including, without limitation, applications, registrations
and recordings in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any other
country or any political subdivision thereof), and all reissues, extensions or
renewals thereof, together with the entire product lines and goodwill of the
business connected with and symbolized by the foregoing, all income, royalties,
damages and payments now and hereafter due or payable or both with respect to
the foregoing, including, without limitation, damages and payments for past,
present or future infringements or misappropriations thereof, all rights to sue
for past, present and future infringements or misappropriations thereof, and all
other rights corresponding thereto throughout the world, and all Customer
Records.

     

    “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.EXHIBIT
10.8

      

    FOURTH AMENDMENT
TO

    AMENDED AND RESTATED
FINANCING AGREEMENT

    

    This
FOURTH AMENDMENT TO AMENDED AND RESTATED FINANCING AGREEMENT (this “Amendment”)
is entered into as of July 30, 2010, by and among Frederick’s of Hollywood Group
Inc., a New York corporation (“Group”), FOH Holdings, Inc., a Delaware
corporation (the “Parent”), Frederick’s of Hollywood, Inc., a Delaware
corporation (“Frederick’s”), Frederick’s of Hollywood Stores, Inc., a
Nevada corporation (“Stores”), Hollywood Mail Order, LLC, a Nevada limited
liability company (“Mail Order” and collectively with Group, the Parent,
Frederick’s and Stores, individually, a “Borrower”, and collectively, the
“Borrowers”), Fredericks.com, Inc., a Nevada corporation (the “Existing
Guarantor”), and Wells Fargo Retail Finance II, LLC, a Delaware limited
liability company, in its capacity as Lender and as arranger and agent for the
Lenders (in such capacity, the “Agent”).

     

    RECITALS

    

    A.           WHEREAS,
the Borrowers, the Lenders and the Agent are parties to that certain Amended and
Restated Financing Agreement, dated as of January 28, 2008, as amended by that
certain First Amendment to Amended and Restated Financing Agreement, dated as of
September 9, 2008, as further amended by that certain Second Amendment to
Amended and Restated Financing Agreement, dated as of September 21, 2009, and as
further amended by that certain Third Amendment to Amended and Restated
Financing Agreement, dated as of October 23, 2009 (as so amended, the “Financing
Agreement”);

     

    B.           WHEREAS,
Group executed that certain Security Agreement, dated as of January 28, 2008, in
favor of the Agent (the “2008 Security Agreement”);

     

    C.           WHEREAS,
the Borrowers (other than Group) and the Existing Guarantor executed that
certain Security Agreement, dated as of January 7, 2003, in favor of the Agent
(the “2003 Security Agreement”, and together with the 2008 Security Agreement,
each a “Security Agreement” and, collectively, the “Security
Agreements”);

     

    D.           WHEREAS,
the Borrowers have requested that the Agent and the Lenders agree to certain
further amendments to the Financing Agreement and the Security Agreements;
and

     

    E.           WHEREAS,
the Agent and the Lenders are willing to agree to such amendments upon the terms
and subject to the conditions set forth herein.

     

    NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
contained, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Agent, the Lenders and the Borrowers agree as
follows:

     

    1.           Definitions.  Unless
otherwise defined herein, initial capitalized terms have the meanings given to
them in the Financing Agreement.

     

    2.           Amendments to Financing
Agreement.  Upon the Fourth Amendment Effective Date (as
hereinafter defined) the Financing Agreement is hereby amended as
follows:

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    a.)           Section
1.01 of the Financing Agreement is amended by adding the following new defined
terms (and corresponding definitions) in appropriate alphabetical order
therein:

     

    
      	
               
      

            	
              (i)

            	
              ““Fourth Amendment
      Effective Date” means as defined in that certain Fourth Amendment
      to Amended and Restated Financing Agreement, dated as of July 30, 2010,
      among the Borrowers, the Existing Guarantor, and the
    Agent.”

            

    

     

    
      	
               
      

            	
              (ii)

            	
              ““Pro Forma Compliance
      Certificate” means a Compliance Certificate prepared by the
      Borrower on a pro forma basis, certifying that the Borrower has the
      requisite Availability after giving effect to the subject
      transaction.”

            

    

     

    
      	
               
      

            	
              (iii)

            	
              ““Restricted
      Payment” as the meaning set forth in Section
    7.02(i).”

            

    

     

    
      	
               
      

            	
              (iv)

            	
              ““SEC Documents”
      as the meaning set forth in Section
5.02(m).”

            

    

     

    
      	
               
      

            	
              (v)

            	
              ““Term Loan””
      shall mean the loans made to the Borrowers by the lending parties party
      to, and pursuant to the terms of, the Term Loan
  Agreement.”

            

    

     

    
      	
               
      

            	
              (vi)

            	
              ““Term Loan
      Agent” means Hilco Brands, LLC, in its capacity as agent under the
      Term Loan Agreement, or any successor
thereto.”

            

    

     

    
      	
               
      

            	
              (vii)

            	
              ““Term Loan
      Agreement” means the Financing Agreement dated as of July 30, 2010,
      by and among the Borrowers, the Term Loan Agent, and the lending parties
      from time to time party thereto, as amended and modified from time to time
      in accordance with the terms of the Term Loan Intercreditor
      Agreement.”

            

    

     

    
      	
               
      

            	
              (viii)

            	
              ““Term Loan
      Intercreditor Agreement” means the Intercreditor Agreement, dated
      as of July 30, 2010, by and between the Agent and the Term Loan
      Agent.”

            

    

     

     
b.)         The definition
of “Permitted Indebtedness” in Section 1.01 of the Financing Agreement is
amended by (i) deleting the word “and” at the end of clause (e), (ii) deleting
the “.” at the end of clause (f) and substituting “;” in lieu thereof and (iii)
by adding the following new clauses thereto as follows:

     

    “(g)          Indebtedness
owing to the Term Loan Agent under the Term Loan Agreement; and

     

    (h)           
Capitalized Lease Obligations to the extent permitted under Section
7.02(g).”

     

     
c.)          The
definition of “Permitted Liens” in Section 1.01 of the Financing Agreement is
amended by (i) deleting the word “and” at the end of clause (g), (ii) deleting
the “.” at the end of clause (h) and substituting “; and” in lieu thereof, and
(iii) by adding the following new clause thereto as follows:

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “(i)           a
first Lien in favor of the Term Loan Agent in respect of the Intellectual
Property (as defined in the Term Loan Intercreditor Agreement) of the Loan
Parties and a Lien on all other Collateral, which Lien on all other Collateral
shall at all times be subordinated to the Lien of the Agent pursuant to the
terms of the Term Loan Intercreditor Agreement.”

     

    d.)           Section
1.01 of the Financing Agreement is amended by amending and restating the
following defined terms therein to read as follows:

     

    
      	
               
      

            	
              (i)

            	
              ““Affiliate”
      means, as to any Person, any other Person that directly or indirectly
      through one or more intermediaries, controls, is controlled by, or is
      under common control with, such Person including all Executive Officers
      and/or directors, partners, or limited liability company managers (or
      persons who serve in similar capacities) of such Person.  For
      purposes of this definition, “control” of a Person means the power,
      directly or indirectly, either to (i) vote 10% or more of the Capital
      Stock having ordinary voting power for the election of directors of such
      Person or (ii) direct or cause the direction of the management and
      policies of such Person whether by contract or
      otherwise.  Notwithstanding anything herein to the contrary, in
      no event shall the Agent or any Lender be considered an “Affiliate” of any
      Loan Party.”

            

    

     

    
      	
               
      

            	
              (ii)

            	
              ““Capital Stock”
      means (i) with respect to any Person that is a corporation, any and all
      shares, interests, participations or other equivalents including options,
      warrants or other derivative instruments (however designated and whether
      or not voting) of corporate stock, and (ii) with respect to any Person
      that is not a corporation, any and all partnership, membership or other
      equity interests of such Person including options, warrants or other
      derivative instruments.”

            

    

     

    
      	
               
      

            	
              (iii)

            	
              ““Collateral”
      means (i) all of the Property and assets and all interests therein
      and proceeds thereof now owned or hereafter acquired by any Person upon
      which a Lien is granted or purported to be granted by such Person as
      security for all or any part of the Obligations, and (ii) all
      “Collateral” as defined in the Security
  Agreement.”

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (iv)

            	
              ““Indebtedness”
      means, without duplication, with respect to any Person, (i) all
      indebtedness of such Person for borrowed money; (ii) all obligations
      of such Person for the deferred purchase price of property or services
      other than, subject to (iii) below, trade payables, payables to vendors or
      other account payables incurred in the ordinary course of such Person’s
      business; (iii) trade payables, payables to vendors or other accounts
      payable incurred in the ordinary course of such Person’s business which,
      for periods commencing after January 29, 2011, are past due for more than
      90 days after the date such payable was created; (iv) all
      obligations of such Person evidenced by bonds, debentures, notes or other
      similar instruments or upon which interest payments are customarily made;
      (v) all obligations and liabilities of such Person created or arising
      under any conditional sales or other title retention agreement with
      respect to property used and/or acquired by such Person, even though the
      rights and remedies of the lessor, seller and/or lender thereunder are
      limited to repossession or sale of such property; (vi) all Capitalized
      Lease Obligations of such Person; (vii) all obligations and
      liabilities, contingent or otherwise, of such Person, in respect of
      letters of credit, acceptances and similar facilities; (viii) all
      obligations and liabilities, calculated on a basis reasonably satisfactory
      to the Agent and in accordance with accepted practice, of such Person
      under Derivatives; (ix) all Contingent Obligations; (x) liabilities
      incurred under Title IV of ERISA with respect to any plan (other than
      a Multiemployer Plan) covered by Title IV of ERISA and maintained for
      employees of such Person or any of its ERISA Affiliates;
      (xi) withdrawal liability incurred under ERISA by such Person or any
      of its ERISA Affiliates to any Multiemployer Plan; (xii) all other
      items which, in accordance with GAAP, would be included as liabilities on
      the liability side of the balance sheet of such Person; and
      (xiii) all obligations referred to in clauses (i) through (xii)
      of this definition of another Person secured by (or for which the holder
      of such Indebtedness has an existing right, contingent or otherwise, to be
      secured by) a Lien upon property owned by such Person, even though such
      Person has not assumed or become liable for the payment of such
      Indebtedness.  The Indebtedness of any Person shall include the
      Indebtedness of any partnership of or joint venture in which such Person
      is a general partner or a joint
venturer.”

            

    

     

    
      	
               
      

            	
              (v)

            	
              ““Material
      Contract” means (i) the Catalog Publishing Contract, the Flagship
      Store Lease, the Distribution Center Lease and any Subordinated Loan
      Document, (ii) 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 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 of the Loan
      Parties taken as a whole, (iii) the Acquisition Documents, (iv) any
      agreements which involve, relate to or otherwise cover, the license, sale,
      acquisition, disposition or development of any of the Borrowers’
      Intellectual Property or rights pertaining thereto, and (v) any employment
      or consulting agreement or other agreement with an Executive Officer which
      provides for base and bonus compensation, fringe benefits, severance
      benefits, Change of Control payments, parachute payments,  or
      other payments, on a fixed or contingent basis,  that could
      result in the payment to such Executive Officer of an amount in excess of
      $200,000 in any consecutive twelve (12) month
  period.”

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (vi)

            	
              ““Permitted
      Holder” means the shareholders of the Group as of the Fourth
      Amendment Effective Date set forth on Schedule 1.01(D), and any Affiliate
      of any such Person.”

            

    

     

    
      	
               
      

            	
              (vii)

            	
              ““Permitted Priority
      Liens” means all Permitted Liens other than any
      Permitted Liens on Inventory, Accounts Receivable or any proceeds of the
      foregoing.”

            

    

     

    
      	
               
      

            	
              (viii)

            	
              ““Required Minimum
      Availability Reserve” means
$2,000,000.”

            

    

     

    
      	
               
      

            	
              (ix)

            	
              ““SEC” means the
      United States Securities and Exchange Commission or any other similar or
      successor agency of the Federal government administering the Securities
      Act.”

            

    

     

    e.)           Section
1.01 of the Financing Agreement is amended by deleting the defined terms “Bridge
Facility Effective Date”, “Bridge Period”, “Commitment Increase” and “Commitment
Increase Date” in their entirety and such deleted defined terms shall no longer
have any meaning or effect with respect to any provision of the Financing
Agreement.

     

    f.)           Section
1.01 of the Financing Agreement is amended by deleting clause (a) of the defined
term “Change of Control” in its entirety and “Intentionally Deleted;” shall be
substituted in lieu thereof.

     

    g.)           Section
2.01(c) of the Financing Agreement is deleted in its entirety and “Intentionally
Deleted.” shall be substituted in lieu thereof.

     

    h.)           Section
2.05(a) of the Financing Agreement is amended by amending and restating the
parenthetical “(but in no event shall the Total Revolving Credit Commitment be
less than $25,000,000)” in the second sentence thereof to read as follows: “(but
in no event shall the Total Revolving Credit Commitment be less than
$20,000,000)”.

     

    i.)           Section
2.05(a) of the Financing Agreement is amended by deleting the penultimate
sentence therein in its entirety.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    j.)           Section
5.02 of the Financing Agreement is amended by adding the following new clauses
thereto as follows:

     

    “(h)        Term Loan
Agreement.  No “Default” or “Event of Default” as defined in
the Term Loan Agreement shall have occurred and be continuing
thereunder.

     

    (i)           Foreign Corrupt
Practices.  Neither the Group nor any of the Borrowers, nor to
the knowledge of the Group, any director, officer, agent, employee or other
Person acting on behalf of Group or any of the Borrowers  has, in the
course of its actions for, or on behalf of, Group or any of the Borrowers (i)
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.

     

    (j)           Sarbanes-Oxley
Act.  Group is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the
Fourth Amendment Effective Date, and any and all applicable rules and
regulations promulgated by the SEC thereunder that are effective as of the
Fourth Amendment Effective Date.

     

    (k)           Internal Accounting and
Disclosure Controls.  Group maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the Exchange Act)
designed to ensure that are effective in ensuring that information required to
be disclosed by  Group  in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms of the SEC, including,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by Group in the reports that it files or furnishes
under the 1934 Act is accumulated and communicated to Group's management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure.

     

    (l)           Off Balance Sheet
Arrangements.  There is no transaction, arrangement, or other
relationship between Group and an unconsolidated or other off balance sheet
entity that is required to be disclosed by Group in its 1934 Act filings and is
not so disclosed or that otherwise would be reasonably likely to have a Material
Adverse Effect.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (m)           SEC Documents; Financial
Statements.  Except as disclosed in Schedule 5.02(m),
during the two (2) years prior to the Fourth Amendment Effective Date, Group has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the
Exchange Act (all of the foregoing filed prior to the Fourth Amendment Effective
Date and all exhibits included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”).  As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, other
than as may have been subsequently restated or amended in an amended or
subsequent report.  As of their respective dates, the consolidated
financial statements of Group included in the SEC Documents complied as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.  Such
financial statements have been prepared in accordance with GAAP, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the consolidated
financial position of Group as of the dates thereof and the consolidated
results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit
adjustments).  No other information provided by or on behalf of Group
to  the Agent which is not included in the SEC Documents, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.”

     

    k.)           Section
6.01(e) of the Financing Agreement is amended and restated in its entirety to
read as follows:

     

    “(e)         Subsidiaries.  Schedule
6.01(e) is a complete and correct description of the name, jurisdiction of
incorporation and ownership of the outstanding Capital Stock of such
Subsidiaries of Group in existence on the Fourth Amendment Effective
Date.  All of the issued and outstanding Capital Stock of such
Subsidiaries has been validly issued and are fully paid and nonassessable, and
the holders thereof are not entitled to any preemptive, first refusal or other
similar rights.  Except as indicated on such Schedule, all such
Capital Stock is owned by Group or one or more of its wholly-owned Subsidiaries,
free and clear of all Liens. Schedule 6.01(e) identifies all Domestic
Subsidiaries and Foreign Subsidiaries, and includes a brief description of the
nature and type of business conducted by the Foreign Subsidiaries and certain
financial information.”

     

    l.)           Section
6.01(l) of the Financing Agreement is amended and restated in its entirety to
read as follows:

     

    “(l)         Nature of
Business.  None of the Loan Parties is engaged in any business
other than developing, producing and selling specialty apparel and related
products, and entering into licensing arrangements in connection
therewith.”

     

    m.)           Section
6.01(v) of the Financing Agreement is amended and restated in its entirety to
read as follows:

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “(v)           Intellectual
Property.  Each Loan Party owns or licenses or otherwise has
the right to use all licenses, permits, trademarks, trademark applications,
patents, patent applications, service marks, trade names, copyrights, copyright
applications, franchises, authorizations and other intellectual property rights
that are necessary for the operations of its businesses, without infringement
upon or conflict with the rights of any other Person with respect thereto,
except for such infringements and conflicts which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.  Set forth on Schedule 6.01(v) is a complete and accurate
list as of the Effective Date of all trademarks, trademark applications, trade
names, material licenses, permits, patents, patent applications, service marks,
copyrights, copyright applications, franchises, authorizations and other
intellectual property rights of each Loan Party.  No slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Loan Party infringes
upon or conflicts with any rights owned by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened, except for
such infringements and conflicts which could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.  To the
best knowledge of each Loan Party, no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or
proposed, which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect on any license, permit, trademark, trademark
application, patent, patent application, service mark, trade name, copyright,
copyright application, franchise, authorization and/or other intellectual
property right owned or used by any of the Loan Parties in or in connection with
its business.  As of the Fourth Amendment Effective Date, no
Intellectual Property material to the operation of the business of the Borrowers
or any Affiliate of the Borrowers is owned by any Person not a Loan
Party.”

     

    n.)           Section
6.01 of the Financing Agreement is amended by adding the following new clauses
thereto as follows:

     

    “(gg)                 Transactions with
Affiliates.  Except (i) as set forth on Schedule 6.01(gg),
(ii) transactions that are necessary or desirable for the prudent operation
of its business, are for fair consideration and on terms no less favorable to
the Loan Parties or their Subsidiaries than would be obtainable in a comparable
arm’s length transaction with a Person that is not an Affiliate thereof, have
been approved by the audit committee of the Board of Directors of Group and
involve the payment to the Affiliate of not more than $100,000 in any Fiscal
Year or (iii) transactions with another Loan Party, none of the Loan Parties nor
any of their Subsidiaries have entered into, or are parties to, any transaction
or series of transactions (including, without limitation, the purchase, sale,
lease, transfer or exchange of property or assets of any kind or the rendering
of services of any kind) with any Affiliate.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (hh)                 Equity
Capitalization.  As of the Fourth Amendment Effective Date, the
authorized, issued and outstanding capital stock of Group and shares reserved
for issuance is set forth on Schedule 6.01(hh). All of such shares set forth on
Schedule 6.01(hh) have been, or upon issuance will be, validly issued and are
fully paid and non-assessable.  Except as disclosed in Schedule
6.01(hh): (i) none of Group’s share capital is subject to preemptive rights or
any other similar rights or any liens or encumbrances suffered or permitted by
Group; (ii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
share capital of Group or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which Group or any of its Subsidiaries is or
may become bound to issue additional share capital of Group or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any share capital of Group
or any of its Subsidiaries; (iii) there are no outstanding debt securities,
notes, credit agreements, credit facilities or other agreements, documents or
instruments evidencing Indebtedness of Group or any of its Subsidiaries or by
which Group or any of its Subsidiaries is or may become bound; (iv) there are no
financing statements securing obligations in any material amounts, either singly
or in the aggregate, filed in connection with Group or any of its Subsidiaries;
(v) there are no agreements or arrangements under which Group or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the Securities Act of 1933, as amended (the “1933 Act”) and for which Group or
any of its Subsidiaries is or could be subject to financial penalties for
failure to either timely file or have declared effective by the SEC, a
registration statement under the 1933 Act; (vi) there are no outstanding
securities or instruments of Group or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which Group or any of its Subsidiaries is or
may become bound to redeem a security of Group or any of its Subsidiaries;
(vii)  Group and its Subsidiaries have no liabilities or obligations
required to be disclosed in the SEC Documents but not so disclosed in the SEC
Documents, other than those incurred in the ordinary course of Group's or its
Subsidiaries' respective businesses and which, individually or in the aggregate,
do not or would not have a Material Adverse Effect; and (viii) neither Group nor
any of its Subsidiaries have received or are currently subject to any comment
letters issued by the SEC.”

     

    o.)           Section
7.01(b)(i) of the Financing Agreement is amended by deleting the phrase
“forty-five (45)” in its entirety and the phrase “thirty (30)” shall be
substituted in lieu thereof.

     

    p.)           Section
7.01(b)(iii) of the Financing Agreement is amended and restated in its entirety
to read as follows:

     

    “(iii)   as
soon as available, but in any event within thirty (30) days prior to the start
of each of Group’s Fiscal Years, copies of the Borrowers’ business plan, in form
and substance (including as to scope and underlying assumptions and including
all anticipated Capital Expenditures, store openings, and store closings during
the covered period) satisfactory to the Agent, in its Permitted Discretion (the
“Business Plan”), for the forthcoming year, month by month, certified by the
chief financial officer of Group as being such officer’s good faith best
estimate of the financial performance of Group and its Subsidiaries during the
period covered thereby (it being understood that (A) such information will be
prepared by Group in good faith based upon assumptions believed to be reasonable
at the time and based upon the best information then reasonably available to
Group, and (B) Agent may in its Permitted Discretion, but shall not be under any
obligation to, revise financial covenants set forth in Section 7.02 as a result
of its review of such business plans and/or create or expand Reserves), and to
the extent Borrowers’ results of operations during the period covered by the
Business Plan materially deviate from the Business Plan for the period
covered.”

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    q.)           Section
7.01(b) of the Financing Agreement is amended by adding the following new clause
thereto as follows:

     

    “(xv)     as
soon as available, but in any event within forty-five (45) days after the end of
each quarter during each of Group’s Fiscal Years:

     

    (A)           a
company prepared consolidated balance sheet, income statement, and statement of
cash flow covering Group’s and its Subsidiaries’ operations during the previous
month; and

     

    (B)           a
certificate signed by the chief financial officer of Group to the effect
that:

     

     
(1)           the
financial statements delivered hereunder have been reviewed by an independent
certified public accountant reasonably acceptable to the Agent, and have been
prepared in accordance with GAAP (except for the lack of footnotes and being
subject to year-end audit adjustments) and fairly present in all material
respects the financial condition of Group and its Subsidiaries;

     

     
(2)           the
representations and warranties of the Borrowers contained in this Agreement and
the other Loan Documents are true and correct in all material respects on and as
of the date of such certificate, as though made on and as of such date (except
to the extent that any such representations and warranties expressly relate
solely to an earlier date, in which case such representations and warranties
were true and correct in all material respects on such earlier date);
and

     

     
(3)           there does
not exist any condition or event that constitutes a Default or Event of Default
(or, to the extent of any non-compliance, describing such non-compliance as to
which he or she may have knowledge and what action the Borrowers have taken, are
taking, or propose to take with respect thereto).”

     

    r.)           Section
7.01(b) of the Financing Agreement is amended by amending and restating the
first sentence in the final paragraph thereof to read in its entirety as
follows:

     

    “In
addition to the financial statements referred to in clauses (i), (ii) and (xv)
above, the Borrowers agree to deliver financial statements prepared on both a
consolidated and consolidating basis.”

     

    s.)           Section
7.01(g) of the Financing Agreement is amended and restated in its entirety to
read as follows:

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    “(g)                  
 Inspection
Rights.  Permit, and cause each of their Subsidiaries to
permit, the Agent or representatives thereof at any time and from time to time
during normal business hours, in the absence of a continuing Event of Default
upon reasonable notice and if an Event of Default exists without notice, and at
the expense of the Borrowers, to examine and make copies of and abstracts from
their corporate and other records, board of directors’ meeting minutes and
accompanying materials, and books of account, to visit and inspect their
properties, to verify materials, leases, notes, accounts receivable, deposit
accounts and other assets of the Loan Parties and their Subsidiaries, to conduct
audits, physical counts, valuations, appraisals, environmental assessments or
examinations and to discuss their affairs, finances and accounts with any of the
directors, officers, managerial employees, independent accountants or other
representatives thereof.  The Borrowers agree to pay the reasonable
fees, cost and expenses of such audits, counts, valuations, appraisals,
assessments or examinations including without limitation, travel
expenses.”

     

    t.)          
Section 7.01(m) of the Financing Agreement is amended and restated in its
entirety to read as follows:

     

    “(m)   Change in Collateral;
Collateral Records.  (i)  Give the Agent not less
than fifteen (15) days’ prior written notice of any change in the location
of any Collateral (excluding such changes that are in the ordinary course of
business but including, without limitation, the execution and delivery of any
lease of real property), other than to locations set forth on
Schedule 1.01(B) and the retail locations set forth on Schedule 1.01(E) and
with respect to which the Agent has fully perfected its Liens thereon,
(ii) advise the Agent promptly, in sufficient detail, of any material
adverse change relating to the type, quantity or quality of the Collateral or
the Lien granted thereon and (iii) execute and deliver and cause each of their
Subsidiaries to execute and deliver, to the Agent for the benefit of the Lenders
from time to time, solely for the Agent’s convenience in maintaining a record of
Collateral, such written statements and schedules as the Agent may reasonably
require, designating, identifying or describing the Collateral.”

     

    u.)           Section
7.01(t) of the Financing Agreement is amended by (i) deleting the “or” at
the end of subsection (D), (ii) deleting the “and” at the end of subsection (E)
and substituting “or” in lieu thereof, and (iii) adding the following new
clause thereto as follows:

     

    “(F)        any
claim or action is asserted, threatened, instituted, or filed with respect to
any material portion of the Collateral; and”

     

    v.)           Section
7.01 of the Financing Agreement is amended by adding the following new clauses
thereto as follows:

     

    
      	
               
      

            	
              “(y)

            	
              Pro Forma Compliance
      Certificate.  The Borrowers shall provide the Agent with
      any Pro Forma Compliance Certificate that is required to be delivered
      pursuant to the terms of either the Term Loan Agreement or the Term Loan
      Intercreditor Agreement.

            

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (z)

            	
              Application of Term
      Loan Agreement Proceeds.  The Borrowers shall use the
      proceeds of the Term Loan, net of all costs, expenses and fees incurred by
      the Borrowers in connection with the closing of the Term Loan (which
      proceeds, in any event, shall be at least $6,600,000), for the purpose of
      (i) first, paying in full in cash the Bridge Loan Facility provided under
      the Financing Agreement and (ii) second, at the option of the Borrowers
      either (1) prepaying the Revolving Loans or (2) immediately depositing one
      hundred percent (100%) of the balance of the proceeds of the Term Loan
      into a separate deposit account selected by the Agent, which deposit
      account shall cash collateralize the Obligations and be subject to a
      Control Agreement (which shall be entered into and executed by and among
      the applicable Borrowers, the depositary bank and the Agent and delivered
      to the Agent within two (2) Business Days after the Borrowers’ receipt
      from the Agent of the initial draft of such Control Agreement), over which
      the Agent shall have full dominion and control and a perfected, first
      priority security interest.  If the Borrowers elect to deposit
      such Term Loan proceeds into a deposit account, so long as no Default or
      Event of Default has occurred and is continuing, the Borrowers may at any
      time direct the Agent to apply such Term Loan proceeds towards prepaying
      the outstanding principal of the Revolving Loans, and for no other
      purpose.  At anytime after a Default or Event of Default has
      occurred and is continuing, the Agent shall have the sole discretion and
      ability, without notice to, or the consent of, the Borrowers, to apply
      such Term Loan proceeds to prepay the outstanding principal of the
      Revolving Loans.”

            

    

     

    w.)           The
preamble to Section 7.02(d) of the Financing Agreement is amended and restated
in its entirety to read as follows:

     

    “(d)                
Fundamental
Changes.    Create any Domestic Subsidiary that does
not simultaneously become a Loan Party and execute a joinder to this Agreement,
or wind-up, liquidate or dissolve (or permit or suffer any thereof) or merge,
consolidate or amalgamate with any Person, convey, sell, lease or sublease,
transfer or otherwise dispose of, whether in one transaction or a series of
related transactions, all or any part of their business, including any units or
divisions thereof and including a conveyance, sale, lease or sublease, transfer
or other disposition of any property or assets, whether now owned or hereafter
acquired, or (agree to do any of the foregoing) or purchase or otherwise
acquire, whether in one transaction or a series of related transactions, all or
substantially all of the assets of any Person (or any division thereof) (or
agree to do any of the foregoing), or permit any of their Subsidiaries to do any
of the foregoing; provided, however,
that”

     

    x.)           Section
7.02(g) of the Financing Agreement is amended by deleting the number “$500,000”
in its entirety and the number “$1,000,000” shall be substituted in lieu
thereof.

     

    y.)           Section
7.02(i) of the Financing Agreement is amended by amending and restating clause
(vi) thereof to read in its entirety as follows:

     

    “(vi)   pay or prepay any
Indebtedness in respect of the Subordinated Loan Agreement or in respect of the
Term Loan Agreement, except to the extent such payment is then permitted
pursuant to the terms of the Subordination Agreement or the Term Loan
Intercreditor Agreement, as applicable; or (vii) make any  payments to
an Executive Officer on account of a Change of Control, severance or bonus
arrangement (collectively or individually, a “Restricted Payment”) if at the
time of such Restricted Payment a Default or Event of Default has then occurred
and is continuing.”

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    z.)           Section
7.02(k) of the Financing Agreement is amended and restated in its entirety to
read as follows:

     

    “(k)        
       Transactions with
Affiliates.  Except (i) as set forth on Schedule 7.02(k),
(ii) transactions that are necessary or desirable for the prudent operation
of its business, are for fair consideration and on terms no less favorable to
the Loan Parties or their Subsidiaries than would be obtainable in a comparable
arm’s length transaction with a Person that is not an Affiliate thereof, have
been approved by the audit committee of the Board of Directors of Group and
involve the payment to the Affiliate of not more than $100,000 in any Fiscal
Year or (iii) transactions with another Loan Party, enter into, renew,
extend or be a party to, or permit any of their Subsidiaries to enter into,
renew, extend or be a party to any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease, transfer or exchange
of property or assets of any kind or the rendering of services of any kind) with
any Affiliate.”

     

    aa.)           Section
7.02(m) of the Financing Agreement is amended by adding the following sentence
to the end thereof:

     

    “With
respect to Group only, issue or sell or enter into any agreement or arrangement
for the issuance and sale of any shares of its Capital Stock or any securities
convertible into or exchangeable for its Capital Stock, unless the use of
proceeds related thereto remains consistent with the most recent Business Plan
of Group.”

     

    bb.)           Section
9.01(c) of the Financing Agreement is amended by amending and restating clause
(i) to read in its entirety as follows:

     

    “(i) paragraphs
(b)(vi), (c), (e), (g), (i), (p), (q), (s), (x), (y) or (z) of Section 7.01, or
clauses (i)(C), (i)(D) or (i)(E) of paragraph (t) of Section 7.01, or Section
7.02, or any Loan Party shall fail to perform or comply with any negative
covenant contained in Section 6 of any Pledge Agreement to which it is a
party or in Section 5 of any Security Agreement to which it is a
party,”

     

    cc.)           Section
9.01(i) of the Financing Agreement is amended and restated in its entirety to
read as follows:

     

    “(i)         any
Security Agreement, any Pledge Agreement or any other security document, after
delivery thereof pursuant hereto, shall for any reason fail or cease to create a
valid and perfected (to the extent that Agent or the Lenders have taken steps to
effect perfection) and, except to the extent permitted by the terms hereof or
thereof, first priority Lien in all Collateral (other than Intellectual
Property) and a second priority Lien in any Intellectual Property (subject to
Permitted Liens) in favor of the Agent for the benefit of the Lenders on any
Collateral purported to be covered thereby;”

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    dd.)           Section
9.01 of the Financing Agreement is amended by (i) deleting the word “and” at the
end of clause (u), (ii) deleting the “.” at the end of clause (v) and
substituting “;” in lieu thereof and (iii) by adding the following new clauses
thereto as follows:

     

    “(w)        any
“Event of Default” (as defined in the Term Loan Agreement or the Term Loan
Intercreditor Agreement) shall occur (without giving effect to any
waivers);

     

    (x)           the
suspension from trading or failure of the common stock of Group to be listed on
an Eligible Market for a period of five (5) consecutive trading days or for more
than an aggregate of ten (10) trading days in any 365-day
period.  “Eligible Market” means The New York Stock Exchange, Inc.,
the NYSE Amex Exchange, The NASDAQ Global Select Market, The NASDAQ Global
Market or The NASDAQ Capital Market, OTC Bulletin Board or the Pink Sheets, or
any market that is a successor to any of the foregoing;

     

    (y)                
   any payment of principal (whether scheduled or optional) of
Indebtedness under the Term Loan Agreement that is not permitted by the terms of
the Term Loan Intercreditor Agreement; and

     

    (z)                  
 any provision of the Term Loan Intercreditor Agreement shall at any time
for any reason (other than pursuant to the express terms thereof) cease to be
valid and binding on or enforceable against the parties thereto, or the validity
or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by any party thereto for any reason.”

     

    ee.)           Article
XII of the Financing Agreement is amended by adding the following new Section
thereto as follows:

     

    “Section
12.24   Term Loan Intercreditor
Agreement.   Notwithstanding anything herein to the
contrary, the exercise of any right or remedy by the Agent or the Lenders
hereunder with respect to any Collateral is subject to the provisions of the
Term Loan Intercreditor Agreement.”

     

    ff.)           Schedule
1.01(C) of the Financing Agreement is deleted in its entirety and the Schedule
1.01(C) attached as Exhibit A to this Agreement shall be substituted in lieu
thereof.

     

    gg.)           Schedule
1.01(D) of the Financing Agreement is deleted in its entirety and the Schedule
1.01(D) attached as Exhibit B to this Agreement shall be substituted in lieu
thereof.

     

    3.           Amendments to Security
Agreements.  Upon the Fourth Amendment Effective Date (as
hereinafter defined) each Security Agreement is hereby amended as
follows:

     

    a.)           Section
1 of each Security Agreement is amended by adding the defined term “Customer
Records” (and corresponding definitions) in appropriate alphabetical order
therein:

     

    
      	
               
      

            	
              (i)

            	
              ““Customer
      Records” means all customer lists, formulae, Website Collateral and
      other Records of each Grantor and the other Borrowers relating to the
      distribution of products and services in connection with which any of such
      Trademarks are used.”

            

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    b.)           Section
1 of each Security Agreement is amended by amending and restating the following
defined terms therein to read as follows:

     

    
      	
               
      

            	
              (i)

            	
              ““Patents” means
      all domestic and foreign letters patent, design patents, utility patents,
      industrial designs, inventions, trade secrets, ideas, concepts, methods,
      techniques, processes, proprietary information, technology, know-how,
      formulae, rights of publicity and other general intangibles of like
      nature, now hereafter owned, acquired or used by each Grantor or any other
      Borrower (including, without limitation, all domestic and foreign letters
      patent, design patents, utility patents, industrial designs, inventions,
      trade secrets, ideas, concepts, methods, techniques, processes,
      proprietary information, technology, know-how and formulae described in
      Schedule II hereto), all applications, registrations and recordings
      thereof (including, without limitation, applications, registrations and
      recordings in the United States Patent and Trademark Office, or in any
      similar office or agency of the United States or any other country or any
      political subdivision thereof), all reissues, divisions, continuations,
      continuations-in–part, extensions, renewals and reexaminations thereof,
      all income, royalties, damages and payments now and hereafter due or
      payable or both with respect to the foregoing, including, without
      limitation, damages and payments for past, present or future infringements
      or misappropriations thereof, all rights to sue for past, present and
      future infringements or misappropriations thereof, and all other rights
      corresponding thereto throughout the
world.”

            

    

     

    
      	
               
      

            	
              (ii)

            	
              ““Trademarks”
      means all domestic and foreign trademarks, service marks, collective
      marks, certification marks, trade names, corporate names, business names,
      d/b/a’s, fictitious names, alternate names, Domain Names and other
      Internet domain names, trade dress, trade styles, designs, logos and other
      source or business identifiers and all general intangibles of like nature,
      now or hereafter owned, adopted, created, acquired or used by each Grantor
      or any other Borrower (including, without limitation, all domestic and
      foreign trademarks, service marks, collective marks, certification marks,
      trade names, corporate names, business names, d/b/a’s, fictitious names,
      alternate names, Internet domain names, trade dress, trade styles,
      designs, logos and other source or business identifiers described in
      Schedule II hereto), all applications, registrations and recordings
      thereof (including, without limitation, applications, registrations and
      recordings in the United States Patent and Trademark Office or in any
      similar office or agency of the United States, any state thereof or any
      other country or any political subdivision thereof), and all reissues,
      extensions or renewals thereof, together with the entire product lines and
      goodwill of the business connected with and symbolized by the foregoing,
      all income, royalties, damages and payments now and hereafter due or
      payable or both with respect to the foregoing, including, without
      limitation, damages and payments for past, present or future infringements
      or misappropriations thereof, all rights to sue for past, present and
      future infringements or misappropriations thereof, and all other rights
      corresponding thereto throughout the world, and all Customer
      Records.”

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    c.)           The
first paragraph of Section 3 of each Security Agreement is amended and restated
to read in its entirety to read as follows:

     

    “Section
3.                             Security for
Obligations.  This Agreement is intended to grant to the Agent,
on behalf of the Lenders, a first priority lien on and security interest in all
of each Grantor’s Collateral (excluding Intellectual Property and Licenses), and
a second priority lien on and security interest in all of the Intellectual
Property and Licenses as continuing collateral security for all of the following
obligations, in each case subject to Permitted Liens, whether now existing or
hereafter incurred (the “Obligations”):”

     

    4.           Conditions to
Effectiveness.  This Amendment shall become effective upon the
satisfaction (or waiver by the Agent) of each of the following conditions (the
first date on which said conditions have been so satisfied (or so waived), the
“Fourth Amendment Effective Date”):

     

    a.)           The
Agent shall have received the following, each in form and substance satisfactory
to the Agent, and, unless indicated otherwise, dated as of the date
hereof:

     

    
      	
               
      

            	
              (i)

            	
              This
      Amendment, duly executed by the Borrowers, the Agent and the Lenders,
      together with all Schedules referenced therein;
  and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      Term Loan Intercreditor Agreement, duly executed by the Agent and the Term
      Loan Agent.

            

    

     

    b.)           On
the Fourth Amendment Effective Date, no Default or Event of Default shall
exist.

     

    c.)           The
Borrowers shall have paid all reasonable fees, costs and expenses of the Agent
and the Lenders in connection with this Amendment, including, without
limitation, the fees and expenses of Proskauer Rose LLP.

     

    If the
Fourth Amendment Effective Date shall not have occurred by the close of business
(New York time) on August 1, 2010 (or such later time as the Agent consents to
in writing), this Amendment shall be deemed rescinded, null and
void.

     

    5.           Consent and
Waiver.  Except as expressly stated herein, nothing herein
shall be deemed to constitute a waiver of compliance with, or other modification
of, any term or condition contained in the Financing Agreement, the Security
Agreements or any other Loan Document and nothing contained herein shall
constitute a course of conduct or dealing among the parties
hereto.  Except as expressly stated herein, the Agent and the Lenders
reserve all rights, privileges and remedies under the Loan
Documents.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    6.           Representations.  In
order to induce the Agent and the Lenders to execute this Amendment, the
Borrowers hereby represent, warrant and covenant to the Agent and the Lenders
that as of the date hereof and as of the Fourth Amendment Effective Date (which
representations, warranties and covenants shall survive execution and delivery
of this Amendment):

     

    a.)           the
Borrowers are duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of formation;

     

    b.)           the
Borrowers have the power and authority to execute, deliver and perform their
obligations under this Amendment;

     

    c.)           the
execution, delivery and performance by the Borrowers of this Amendment has been
duly authorized by all necessary action and does not and will not require any
registration with, consent or approval of, notice to or action by, any other
Person;

     

    d.)           this
Amendment constitutes the legal, valid and binding obligation of the Borrowers,
enforceable against the Borrowers in accordance with its terms;

     

    e.)           no
Default or Event of Default exists; and

     

    f.)           by
its signature below, each of the Borrowers agrees that it shall constitute an
immediate Event of Default if any representation or warranty made in this Section 6 is untrue
or incorrect in any material respect on and as of the Fourth Amendment Effective
Date, in each case after giving effect to this Amendment.

     

    7.           Counterparts.  This
Amendment may be executed by the parties hereto in any number of separate
counterparts, each of which when so executed, shall be deemed an original and
all said counterparts when taken together shall be deemed to constitute but one
and the same instrument.

     

    8.           Successors and
Assigns.  This Amendment shall be binding upon and inure to the
benefit of the Borrowers and their successors and permitted assigns, and the
Lenders and the Agent and their successors and permitted assigns.

     

    9.           Further
Assurance.  The Borrowers hereby agree from time to time, as
and when requested by the Agent, to execute and deliver or cause to be executed
and delivered, all such documents, instruments and agreements and to take or
cause to be taken such further or other action as the Agent may reasonably deem
necessary or desirable in order to carry out the intent and purposes of this
Amendment.

     

    10.          GOVERNING
LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
ITS CONFLICT OF LAWS PROVISIONS OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    11.           Severability.  Wherever
possible, each provision of this Amendment shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Amendment shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Amendment.

     

    12.           Reaffirmation.  Each
Borrower hereby ratifies and reaffirms all of its payment and performance
obligations, contingent or otherwise, under each of the Loan Documents to which
it is a party (after giving effect hereto).  Each Borrower hereby
acknowledges that, except as expressly modified herein, each of the Loan
Documents, remains in full force and effect and is hereby ratified and
reaffirmed.

     

    13.           Acknowledgment of Rights;
Release of Claims.  Each Borrower hereby acknowledges that:
(a) it has no defenses, claims or set-offs to the enforcement by the Agent
or the Lenders of the liabilities, obligations and agreements of the Borrowers
under the Financing Agreement, the Security Agreements or other Loan Documents
on the date hereof; and (b) to its knowledge, the Agent and the Lenders
have fully performed all undertakings and obligations owed to it as of the date
hereof.  In consideration of the Agent and the Lenders entering into
this Amendment, each Borrower hereby irrevocably releases and forever discharges
the Agent, the Lenders and their respective Affiliates, and each such Person’s
respective directors, officers, employees, agents, attorneys and representatives
(each, a “Released
Person”) of and from all damages, losses, claims, demands, liabilities,
obligations, actions or causes of action whatsoever which such Borrower may now
have or claim to have against any Released Person for or because of any matter
or thing done, omitted or suffered to be done or omitted by any of the Released
Persons prior to and including the date hereof and on account of or in any way
concerning, arising out of or founded upon the Financing Agreement, the Security
Agreements or any other Loan Document, whether presently known or unknown and of
every nature and extent whatsoever.  This Section 13 shall
survive the termination of the Financing Agreement, the Security Agreements and
payment in full of the Obligations thereunder.

     

    [Signature
Pages Follow]

    
      
         

      

      
        18

        
          

        

      

      
         

      

    
 

    IN WITNESS WHEREOF, the parties hereto
have caused this Fourth Amendment to Amended and Restated Financing Agreement to
be duly executed by their respective duly authorized officers as of the date
first written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                BORROWERS:

                              
	 
      	 
      
	 
      	
                                FREDERICK’S
      OF HOLLYWOOD GROUP INC.

                              
	 
      	 
      
	 
      	
                                By: 

                              	
                                /s/ Thomas Rende

                              
	 
      	 
      	
                                Name:  Thomas
      Rende

                              
	 
      	 
      	
                                Title:  Chief
      Financial Officer

                              
	 
      	 
      
	 
      	
                                FOH
      HOLDINGS, INC.

                              
	 	 	 
	 
      	
                                By: 

                              	
                                /s/ Thomas Rende

                              
	 
      	 
      	
                                Name:  Thomas
      Rende

                              
	 
      	 
      	
                                Title:  Chief
      Financial Officer

                              
	 
      	 
      	 
      
	 
      	
                                FREDERICK’S
      OF HOLLYWOOD, INC.

                              
	 	 	 
	 
      	
                                By: 

                              	
                                /s/ Thomas Rende

                              
	 
      	 
      	
                                Name:  Thomas
      Rende

                              
	 
      	 
      	
                                Title:  Chief
      Financial Officer

                              
	 
      	 
      	 
      
	 
      	
                                FREDERICK’S
      OF HOLLYWOOD STORES, INC.

                              
	 	 	 
	 
      	
                                By: 

                              	
                                /s/ Thomas Rende

                              
	 
      	 
      	
                                Name:  Thomas
      Rende

                              
	 
      	 
      	
                                Title:  Chief
      Financial Officer

                              
	 
      	 
      	 
      
	 
      	
                                HOLLYWOOD
      MAIL ORDER, LLC

                              
	 
      	 
      	 
      
	 
      	
                                By:
      FOH Holdings, Inc., its Manager

                              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                By: 

                              	
                                /s/ Thomas Rende

                              
	 
      	 
      	 
      	
                                Name:  Thomas
      Rende

                              
	 
      	 
      	 
      	
                                Title:  Chief
      Financial
Officer

                              

                      

                    

                  

                

              

            

          

        

      

    

    

    [Signature
Page of Fourth Amendment to Amended and Restated Financing
Agreement]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	 
      	
                      EXISTING
      GUARANTOR:

                    
	 
      	 
      
	 
      	
                      FREDERICKS.COM,
      INC.

                    
	 	 	 
	 
      	
                      By: 

                    	
                      /s/ Thomas Rende

                    
	 
      	 
      	
                      Name:
      Thomas Rende

                    
	 
      	 
      	
                      Title:
      Chief Financial
Officer

                    

            

          

        

      

    

    

    [Signature
Page of Fourth Amendment to Amended and Restated Financing
Agreement]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    AGENT

                  
	 
      
	
                    WELLS
      FARGO RETAIL FINANCE II, LLC

                  
	 
      
	
                    By: 

                  	
                    /s/ Joseph Burt

                  
	 
      	
                    Name:
      Joseph Burt

                  
	 
      	
                    Title:
      Director

                  
	 
      
	
                    LENDER

                  
	 
      
	
                    WELLS
      FARGO RETAIL FINANCE II, LLC

                  
	 
      
	
                    By: 

                  	
                    /s/ Joseph Burt

                  
	 
      	
                    Name:
      Joseph Burt

                  
	 
      	
                    Title:
      Director

                  

          

        

      

    

    

    [Signature
Page of Fourth Amendment to Amended and Restated Financing
Agreement]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Exhibit A to Fourth
Amendment

    

    Schedule
1.01(C)

     

    Lenders and Lenders’
Commitments

     

    
      
        
          
            	
                    Lender

                  	 	
                    Revolving Credit Commitment

                  	 	 	
                    Percentage

                  	 
	
                    Wells
      Fargo Retail Finance II, LLC

                  	 	$	20,000,000	 	 	 	100.00	%
	
                    Total

                  	 	$	20,000,000	 	 	 	100.00	%

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit B to Fourth
Amendment

    

    Schedule
1.01(D)

     

    Permitted
Holders

    

    Fursa
Master Rediscovered Opportunities Fund L.P.

    Attn:
William F. Harley, Chief Investment Officer

    c/o Fursa
Alternative Strategies LLC

    25 Smith
Street

    Farmingdale,
NY 11735

     

    Fursa
Capital Partners LP

    Attn:
William F. Harley, Chief Investment Officer

    c/o Fursa
Alternative Strategies

    25 Smith
Street

    Farmingdale,
NY 11735

     

    Fursa
Master Global Event Driven Fund LP

    Attn:
William F. Harley, Chief Investment Officer

    c/o Fursa
Alternative Strategies

    25 Smith
Street

    Farmingdale,
NY 11735

     

    Scotia
Capital (USA) Inc.

    One
Liberty Plaza

    165
Broadway

    New York,
NY 10006

    

    Blackfriars
Master Vehicle LLC – Series 2

    Attn:
William F. Harley, Chief Investment Officer

    c/o Fursa
Alternative Strategies

    25 Smith
Street

    Farmingdale,
NY 11735

     

    Tokarz
Investments, LLC

    287
Bowman Avenue

    Purchase,
New York 10577

    

    TTG
Apparel, LLC

    287
Bowman Avenue

    Purchase,
New York 10577

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]