SECOND AMENDMENT TO AMENDED AND RESTATED FINANCING AGREEMENT

This SECOND AMENDMENT TO AMENDED AND RESTATED FINANCING AGREEMENT (this “Amendment”) is entered into as of September 21, 2009, 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”), 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”).

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 so amended, the “Financing Agreement”);

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

C.         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 .  Upon the 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 amending and restating the following defined terms (and related definitions) therein to read in their entirety as follows:

(A) up to and including the first date on which the Borrower shall have repaid, following the Bridge Period, not less than $2,000,000 in aggregate principal amount of Revolving Loans:

(i) with respect to the initial $2,000,000 in outstanding Revolving Loans, a rate equal to ten percent 10.0% per annum, and

(ii) with respect to outstanding Revolving Loans in excess thereof, maintained as (a) Base Rate Loans, a rate equal to one and three-quarters percent (1.75%) per annum, and (b) LIBOR Rate Loans, a rate equal to three percent (3.00%) per annum; and

(B) thereafter: with respect to outstanding Revolving Loans maintained as (a) Base Rate Loans, a rate equal to one and three-quarters percent (1.75%) per annum, and (b) LIBOR Rate Loans, a rate equal to three percent (3.00%) per annum.”

(i) the sum of

(A) Prior to the Recapitalization Event, ninety percent (90%), and  after the Recapitalization Event, eighty five percent (85%), of the Eligible Credit Card Accounts at such time,

(B) Prior to the Recapitalization Event, ninety percent (90%), and  after the Recapitalization Event, eighty five percent (85%), of the Eligible Wal-Mart Account Receivables at such time,

(C) Prior to the Recapitalization Event, eighty five percent (85%), and after the Recapitalization Event, eighty percent (80%), of the Other Eligible Account Receivables at such time,

(D) Prior to the Recapitalization Event, one hundred percent (100%), and after the Recapitalization Event, eighty-five percent (85%) of the Net Retail Liquidation Value of Eligible Warehouse Liquid Inventory, provided that at no time shall the amount attributable to Eligible In Transit Inventory pursuant to paragraphs (D, (E) and (F), exceed $15,000,000 in the aggregate,

(E)  Prior to the Recapitalization Event, ninety percent (90%), and after the Recapitalization Event, eighty-five percent (85%), of the then current Net Retail Liquidation Value of Eligible Retail Inventory, provided that at no time shall the amount attributable to Eligible In Transit Inventory pursuant to paragraphs (D, (E) and (F), exceed $15,000,000 in the aggregate,

(F) The lesser of (x) sixty percent (60%) of Eligible Wholesale Inventory, which shall include inventory supported by documentary Letters of Credit (in such form as acceptable to the Agent in its sole discretion), or (y) prior to the Recapitalization Event, eighty five percent (85%), and after the Recapitalization Event, eighty percent (80%) of the then current Net Retail Liquidation Value of Eligible Wholesale Inventory, which shall include inventory supported by documentary Letters of Credit (in such form as acceptable to the Agent in its sole discretion),  provided that at no time shall the amount attributable to Eligible In Transit Inventory pursuant to paragraphs (D, (E) and (F), exceed $15,000,000 in the aggregate, and

(G) during the Bridge Period, $2,000,000,

(ii) minus , the sum of (A) Required Minimum Availability Reserve, (B) Availability Reserves and (C) without duplication, such other Reserves as the Agent may deem appropriate in the exercise of its reasonable business judgment based upon the lending practices of the Agent, which may include, without limitation reserves for freight and duty with respect to outstanding Letters of Credit; provided that the Agent shall have the right to have the Inventory reappraised by an independent appraiser selected by the Agent from time to time for the purpose of redetermining the advance rates of the Eligible Inventory and, as a result, the Borrowing Base.