Note Purchase Agreement dated as of July 31, 2008 among the Company, as issuer, and certain of its subsidiaries as guarantors, The Note Purchasers, Sankaty Advisors, LLC, as collateral agent and Crystal Capital Fund Management, L.P. as syndication agent

Exhibit 10.9

Note Purchase Agreement dated as of July 31, 2008

among the Company, as issuer, and certain of its subsidiaries

as guarantors, The Note Purchasers, Sankaty Advisors, LLC, as collateral agent

and Crystal Capital Fund Management, L.P. as syndication agent

EXECUTION

NOTE PURCHASE AGREEMENT

dated as of July 31, 2008

among

THE CHILDREN’S PLACE RETAIL STORES, INC., as Issuer

and

THE GUARANTORS LISTED HEREIN,

THE NOTE PURCHASERS LISTED HEREIN,

SANKATY ADVISORS, LLC, as Collateral Agent

and

CRYSTAL CAPITAL FUND MANAGEMENT, L.P., as Syndication Agent

$85,000,000 IN AGGREGATE PRINCIPAL AMOUNT

OF SENIOR SECURED SECOND LIEN NOTES DUE JULY 31, 2013

TABLE OF CONTENTS

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SCHEDULES AND EXHIBITS

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NOTE PURCHASE AGREEMENT

This NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of July     , 2008 and is entered into by and among The Children’s Place Retail Stores, Inc.  (the “Issuer”), a corporation incorporated under the laws of Delaware, as issuer, the parties listed as Guarantors on the signature pages hereto (the Guarantors and the Issuer being referred to collectively as the “Note Parties”, and each such Person a “Note Party”), Sankaty Advisors, LLC as Collateral Agent for the Note Purchasers, Crystal Capital Fund Management, L.P. as Syndication Agent for the Note Purchasers, and each Note Purchaser listed on Schedule I attached hereto (collectively, the “Note Purchasers”).

RECITALS

WHEREAS, the Issuer will issue to the Note Purchasers Senior Secured Second Lien Notes (the “Notes”) in the aggregate original principal amount of $85,000,000 in the form attached as Exhibit A hereto in order to finance the working capital, capital expenditures, certain obligations owed by the Issuer to third parties as a result of the Hoop bankruptcy, the repayment of the outstanding balance under the Issuer’s Existing Credit Agreement, and for general corporate purposes and fees and expenses in relation to the Issuer’s business.

WHEREAS, on or around the date hereof, the Issuer will enter into a revolving credit agreement with ▇▇▇▇▇ Fargo Retail Finance, LLC, the borrowings in respect of which are also to be used in order to finance the working capital, capital expenditures, certain obligations owed by the Issuer to third parties as a result of the Hoop bankruptcy, and for general corporate purposes and fees and expenses in relation to the Issuer’s business.

WHEREAS, pursuant to certain collateral documents dated on or around the date hereof, the Note Parties will grant in favor of the Collateral Agent, for the benefit of each of the Note Purchasers, liens in respect of the collateral described in the Collateral Documents, to secure the Note Parties’ obligations in respect of the Notes .

WHEREAS, in order to, among other things, govern the priority of the liens held by the Revolving Agent and the Collateral Agent, the Revolving Agent and the Collateral Agent will enter into that certain Intercreditor Agreement (as amended, modified or supplemented from time to time, the “Intercreditor Agreement”), in substantially the form attached as Exhibit B.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Note Parties and the Note Purchasers agree as follows:

SECTION 1.  DEFINITIONS.

1.1                                 Certain Defined Terms; Rules of Construction.  Capitalized terms used in this Agreement have the meanings set forth in Annex I hereto.  Except as otherwise explicitly specified to the contrary or unless the context clearly requires otherwise, (a) the capitalized term “Section” refers to sections of this Agreement, (b) the capitalized term “Exhibit” refers to exhibits to this Agreement, (c) the capitalized term “Schedules” refers to schedules to this Agreement, (d) references to a particular Section include all subsections thereof, (e) the word “including” shall be construed as “including without limitation”, (f) references to a particular statute or regulation include all rules and regulations thereunder and any successor statute, regulation or rules, in each

case as from time to time in effect, (g) references to a particular Person or entity include such Person’s or entity’s successors and assigns to the extent not prohibited by this Agreement, (h) references to “$”, “cash”, “dollars” or similar references means United States dollars, paid in cash or other immediately available funds.  References to “the date hereof” mean the date first set forth above and (i) any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).

1.2                                 Accounting Terms.  Unless otherwise specifically provided herein, any accounting term used in the Agreement shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP consistently applied using the Issuer’s historical accounting practices.  That certain items or computations are explicitly modified by the phrase “in accordance with GAAP” shall in no way be construed to limit the foregoing.  If any “Accounting Changes” (as defined below) occur and such changes result in a change in the calculation of the financial covenants, standards or terms used in the Agreement or any other Note Document, then the Issuer and the Note Purchasers agree to enter into negotiations in order to amend such provisions of the Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the financial condition of the Issuer and its Subsidiaries shall be the same after such Accounting Changes as if such Accounting Changes had not been made; provided, however, that the agreement of the Required Purchasers to any required amendments of such provisions shall be sufficient to bind all of the Note Purchasers.  “Accounting Changes” means (i) changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions), (ii) changes in accounting principles concurred in by the Issuer’s certified public accountants; and (iii) purchase accounting adjustments under FASB 141 or 142 and EITF 88-16, and the application of the accounting principles set forth in FASB 109, including the establishment of reserves pursuant thereto and any subsequent reversal (in whole or in part) of such reserves.  All such adjustments resulting from expenditures made subsequent to the Closing Date (including capitalization of costs and expenses or payment of pre-Closing Date liabilities) shall be treated as expenses in the period the expenditures are made and deducted as part of the calculation of EBITDA in such period.  If the Issuer and the Required Purchasers agree upon the required amendments, then after appropriate amendments have been executed and the underlying Accounting Change with respect thereto has been implemented, any reference to GAAP contained in the Agreement or in any other Note Document shall, only to the extent of such Accounting Change, refer to GAAP, consistently applied after giving effect to the implementation of such Accounting Change.  If the Issuer and the Required Purchasers cannot agree upon the required amendments within 30 days following the date of implementation of any Accounting Change, then all financial statements delivered and all calculations of financial covenants and other standards and terms in accordance with the Agreement and the other Note Documents shall be prepared, delivered and made without regard to the underlying Accounting Change.

SECTION 2.  PURCHASE AND SALE OF THE NOTES.

2.1                                 Purchase and Sale of the Notes.  Subject to the terms and conditions of this Agreement and on the basis of the representations and warranties set forth herein, the Issuer hereby agrees to sell to each Note Purchaser, and each such Note Purchaser agrees to purchase from the

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Issuer, at the Closing, a Note in the original principal amount and purchase price set forth on Schedule I.

2.2                                 The Closing.  The purchase and sale of the Notes will occur at a closing (the “Closing”) to be held on July     , 2008, at 10:00 a.m. (New York time), at the offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other date, time and/or location as may be agreed upon by the parties hereto.

2.3                                 Payment of Purchase Price.  At the Closing, against payment by the Note Purchasers by wire transfer of immediately available funds in the purchase price set forth on Schedule I, the Issuer will deliver Notes registered in the names of the Note Purchasers in the principal amounts set forth on Schedule I.

2.4                                 Use of Proceeds.  The proceeds of the sale by the Issuer of the Notes hereunder shall be used solely to provide financing for working capital; Capital Expenditures; expenses related to the Disney Store Termination Agreements; certain obligations owed by the Issuer to third parties as a result of the Hoop bankruptcy in an aggregate amount not to exceed $20,000,000 (net of receipts from Disney), as more fully described on Schedule 2.4 attached hereto; the repayment of the outstanding balance under the Issuer’s Existing Credit Agreement; and general corporate purposes and fees and expenses.

SECTION 3.  TERMS OF THE NOTES

3.1                                 Interest on the Notes.  The Notes shall bear interest at a rate equal to the respective Applicable Rate for such Notes on the unpaid principal amount thereof (and on any interest or other amount owing hereunder that is not paid when due, to the extent permitted by applicable law) from and including the Closing Date (or as applicable, a Supplemental Closing Date) until the principal amount shall have been paid in full.  During the pendency of any Event of Default, the interest rate on the Notes shall be increased by 2% per annum over the then Applicable Rate.

3.1.1.                                             Interest Payment Dates.  All accrued interest on the Notes shall be payable, in arrears, in cash, on the last Business Day of each month (each an “Interest Payment Date”).

3.1.2.                                             Calculation of Interest.  Interest on the Notes shall be computed on the basis of the actual number of days elapsed over a 360-day year.  In computing such interest, the date or dates of the making of the Notes shall be included and the date of payment shall be excluded.

3.2                            Payment of Notes.

3.2.1.                                             Payment at Maturity.  The entire principal amount of the Notes then outstanding, any accrued and unpaid interest on the Notes and all other Note Obligations (except for contingent obligations for which no demand has been made) shall be due and payable on, and shall be paid in full in cash on, the Maturity Date of the Notes.  The Issuer understands and acknowledges that it is obligated for the entire principal amount of the Notes issued by it, any accrued and unpaid interest on such Notes and all other Note Obligations.

3.2.2.                                             Voluntary Prepayments.  The  Notes may be prepaid at the Issuer’s option, at any time, and from time to time, in whole or in part (in a minimum amount and in

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increments of $1,000,000, or such lesser amount as is then outstanding), on 5 Business Days’ prior notice to the respective Note Purchasers whose Notes are to be prepaid; provided, that any such voluntary prepayment of Notes shall include the Applicable Premium on the amount so prepaid.

3.2.3.                                             Offer to Repurchase Upon a Change of Control.

3.2.3.1.                                     Condition to Issuer Action.  Not later than 5 Business Days prior to a Change of Control, the Issuer shall give to each holder of Notes written notice containing and constituting an offer to prepay Notes as described in Section 3.2.3.2, accompanied by the certificate described in Section 3.2.3.5.

3.2.3.2.                                     Offer to Prepay Notes.  Any offer to prepay Notes contemplated by Section 3.2.3.1 or Sections 3.2.4.1 through 3.2.4.3 shall be an offer by the Issuer to prepay, in accordance with and subject to this Section 3.2.3 the Notes (and in the case of Section 3.2.3.1, all, and not less than all, of the Notes) of the Issuer held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on the date specified in such offer (the “Proposed Prepayment Date”) that is not less than 30 days and not more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the first Business Day which is at least 45 days after the date of such offer).

3.2.3.3.                                     Acceptance; Rejection.  A holder of Notes may accept the offer to prepay made pursuant to this Section 3.2.3 by causing a notice of such acceptance to be delivered to the Issuer at least 10 days prior to the Proposed Prepayment Date.

3.2.3.4.                                     Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 3.2.3 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the date of prepayment plus the Applicable Premium if any.  All prepayments pursuant to this Section 3.2.3 are subject to the terms and conditions set forth in the Intercreditor Agreement and Section 3.2.4.5 and shall only be required to be made to the extent expressly permitted to be made pursuant to the terms and conditions of the Intercreditor Agreement.  The Issuer shall give the Collateral Agent prior written notice of making a mandatory prepayment pursuant to Section 2.05(d) of the Revolving Loan Agreement.

3.2.3.5.                                     Officer’s Certificate.  Each offer of the Issuer to prepay Notes pursuant to this Section 3.2.3 shall be accompanied by a certificate, executed by a senior financial officer of the Issuer and dated the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 3.2.3 (or 3.2.4.1 through 3.2.4.3 as applicable); (iii) the principal amount of each Note offered to be prepaid (which shall be 100% of the principal amount of such Note); (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) the amount of the Applicable Premium, if any (vi) that the conditions of this Section 3.2.3 have been fulfilled; and (vii) in reasonable detail, the nature and date of the Change of Control, if applicable.

3.2.4.                                             Other Mandatory Prepayments.

3.2.4.1.                                     Promptly upon the receipt by any Note Party of the proceeds of any voluntary or involuntary Disposition by any Note Party of property or assets (including casualty losses or condemnations but excluding Dispositions which qualify as Permitted Dispositions;

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provided, however, that to the extent that Permitted Dispositions (other than under clause (a), (c) or (d) of the definition of Permitted Dispositions), exceed $4,000,000 per Fiscal Year, then any such amount in excess of $4,000,000 per Fiscal Year shall not constitute Permitted Dispositions for the purposes of this Section 3.2.4), the Issuer shall make an offer to prepay the outstanding principal amount of the Note Obligations in accordance with Sections 3.2.3.2 through 3.2.3.5 (including, without limitation, to the payment of the Applicable Premium on the amount so prepaid) in an amount equal to 100% of the Net Cash Proceeds (including condemnation awards and payments in lieu thereof) received by such Person in connection with such Dispositions; provided that, so long as (A) no Default or Event of Default shall have occurred and is continuing, (B) the Issuer shall have given the Collateral Agent prior written notice of the Issuer’s intention to apply such monies to the costs of replacement of the properties or assets that are the subject of such Disposition and (C) the Note Parties complete such replacement, purchase, or construction within 180 days after the initial receipt of such monies, the Note Parties shall have the option to apply up to $5,000,000 per Fiscal Year (not to exceed $15,000,000 in the aggregate for all Fiscal Years without consent of the Required Purchasers and in no event shall such amount include Net Cash Proceeds from any sale and lease-back by any Note Party) of such monies to the costs of replacement of the property or assets that are the subject of such Disposition unless and to the extent that such applicable period shall have expired without such replacement, purchase or construction being made or completed, in which case, any such amounts shall be paid to the Collateral Agent and applied in accordance with Section 3.2.3.4.  Nothing contained in this Section 3.2.4.1 shall permit any Note Party to Dispose of any property or assets other than in accordance with Section 8.5.

3.2.4.2.                                     Promptly upon the receipt by any Note Party of any Extraordinary Receipts, the Issuer shall offer to prepay the outstanding principal amount of the Note Obligations in accordance with Sections 3.2.3.2 through 3.2.3.5 in an amount equal to 100% of the Net Cash Proceeds of such Extraordinary Receipts.

3.2.4.3.                                    Promptly upon the issuance or incurrence by any Note Party of any Indebtedness (other than Indebtedness permitted under Section 8.3), or any equity issuance by a Note Party, the Issuer shall offer to prepay the outstanding principal amount of the Note Obligations in accordance with Sections 3.2.3.2 through 3.2.3.5 (including, without limitation, to the payment of the Applicable Premium on the amount so prepaid) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such issuance or incurrence.  The provisions of this Section 3.2.4.3 shall not be deemed to be implied consent to any such issuance or incurrence otherwise prohibited by the terms and conditions of this Agreement.

3.2.4.4.                                    Within 10 days of the earlier of (A) delivery to the Note Purchasers of a certificate of a Responsible Officer of the Issuer containing the calculations for Excess Cash Flow for any measurement period ending on or after January 31, 2009, or (B) (i) delivery to the Note Purchasers of audited annual financial statements pursuant to Section 7.2.1, commencing with the delivery to the Note Purchasers of financial statements for Fiscal Year ended January 31, 2009 or, (ii) if such financial statements are not delivered to Note Purchasers on the date such reports are required to be delivered pursuant to Section 7.2.1, the date such reports are required to be delivered to the Note Purchasers pursuant to Section 7.2.1, the Note Parties shall prepay the outstanding principal amount of the Note Obligations in accordance with Section 3.3 in an amount equal to (X) with respect to such payment due in respect of Fiscal Year ended January 31, 2009, 50% of the aggregate Excess Cash Flow of the Note Parties for the Fiscal Year ending on January 31, 2009 and (Y) with respect to each payment due in respect of each Fiscal Year thereafter, 50% of the Excess Cash Flow of the Note Parties for such Fiscal Year; provided, that, the Note Parties shall be

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permitted to prepay an additional amount equal to 25% of the Excess Cash Flow of the Note Parties for each such Fiscal Year in clause (A) and (B), which prepayment, for the avoidance of doubt, shall not require the payment of any Applicable Premium.

3.2.4.5.                                     All prepayments pursuant to this Section 3.2.4 are subject to the terms and conditions set forth in the Intercreditor Agreement and shall only be required to be made to the extent expressly permitted to be made pursuant to the terms and conditions of the Intercreditor Agreement.  The Issuer shall give the Collateral Agent prior written notice of making a mandatory prepayment pursuant to Section 2.05(d) of the Revolving Loan Agreement.

3.2.4.6.                                     AHYDO.  Notwithstanding anything to the contrary contained in Section 3 above, if (1) the Notes remain outstanding after the fifth anniversary of the initial issuance thereof and (2) the aggregate amount of the accrued but unpaid interest on the Notes (including interest paid in kind and any amounts treated as interest for U.S. federal income tax purposes, such as “original issue discount”) as of any Testing Date occurring after such fifth anniversary exceeds an amount equal to the Maximum Accrual, then all such accrued but unpaid interest on the Notes (including any amounts treated as interest for federal income tax purposes, such as “original issue discount”) as of such time in excess of an amount equal to the Maximum Accrual shall be paid in cash by the Issuer (or its successors) to the holders thereof before the end of such Testing Date, it being the intent of the parties hereto that the deductibility of interest under the Notes shall not be limited or deferred by reason of Section 163(i) of the Code.  For these purposes, the “Maximum Accrual” is an amount equal to the product of such Notes’ issue price (as defined in Code Sections 1273(b) and 1274(a)) and their yield to maturity, and a “Testing Date” is any Interest Payment Date and the date on which any “accrual period” (within the meaning of Section 1272(a)(5) of the Code) closes.

3.3                            Prepayment Procedures.

3.3.1.                                             If fewer than all of the Notes are to be paid or prepaid, the Issuer shall pay or prepay the Notes on a pro rata basis.

3.3.2.                                             Upon surrender of a Note that is paid or prepaid in part, the Issuer shall, at the request of the applicable Note Purchaser, promptly execute and deliver to the holder (at the expense of the Issuer) a new Note equal in principal amount to the unpaid portion of the Note surrendered.

3.3.3.                                             Each Note Purchaser agrees that before disposing of the Note held by it, or any part thereof (other than by granting participations therein), such Note Purchaser will make a notation thereon of all principal payments previously made thereon and of the date to which interest thereon has been paid and will notify the Issuer of the name and address of the transferee of that Note; provided, that the failure to make (or any error in the making of) a notation of the payments made under such Note or to notify the Issuer of the name and address of a transferee shall not limit or otherwise affect the obligation of the Issuer hereunder or under such Note.

3.3.4.                                             All payments or prepayments (whether voluntary or mandatory) shall include the payment of accrued and unpaid interest to, but not including, the date of such prepayment on the principal amount of the Notes so prepaid.

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3.3.5.                                             All prepayments pursuant to this Section 3.3 are subject to the terms and conditions set forth in the Intercreditor Agreement and shall only be required to be made to the extent expressly permitted to be made pursuant to the terms and conditions of the Intercreditor Agreement.  The Issuer shall give the Collateral Agent prior written notice of making a mandatory prepayment pursuant to Section 2.05(d) of the Revolving Loan Agreement.

3.4                            Taxes.

3.4.1.                                             Subject to Section 3.3.4, any and all payments by the Issuer hereunder or with respect to any Note or Note Guarantee shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings in any such case imposed by the United States or any political subdivision thereof, excluding taxes imposed or based on the recipient Note Purchaser’s overall net income, and franchise or capital taxes imposed on it in lieu of net income taxes (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the Notes being hereinafter referred to as “Taxes”).  If the Issuer or any Guarantor shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Note Purchaser, (i) the sum payable shall be increased as may be reasonably necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.4) such Note Purchaser receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Issuer or Guarantor shall make such deductions and (iii) the Issuer or Guarantor shall remit the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.  Within 30 days after the date of any payment of Taxes, the Issuer or Guarantor shall furnish to such Note Purchaser the original or certified copy of a receipt evidencing payment thereof.

3.4.2.                                             In addition, the Issuer and the Guarantors agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as “Other Taxes”).

3.4.3.                                             Each Note Purchaser of Notes organized under the laws of a jurisdiction outside the United States, prior to its receipt of any payment on the Notes, shall provide the Issuer with (i) Internal Revenue Service Form W-8ECI, W-8BEN, W-8EXP or W-8IMY, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Note Purchaser is entitled to benefits under an income tax treaty to which the United States is a party, which exempts the recipient from United States withholding tax on payments of interest or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the Internal Revenue Service, and (iii) any other form or certificate required by any taxing authority (including any certificate required by Sections 871(h) and 881(c) of the Code), certifying that such Note Purchaser is entitled to an exemption from United States withholding tax on interest payments made pursuant to this Agreement.

3.4.4.                                             For any period with respect to which a Note Purchaser has failed to provide the Issuer with the appropriate form pursuant to Section 3.4.3, such Note Purchaser shall not be entitled to any additional amounts or indemnification under this Section 3.4 with respect to Taxes imposed by the United States; provided, however, that should a Note Purchaser which is otherwise

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exempt from Taxes become subject to Taxes because of its failure to deliver a form required hereunder, the Issuer shall take such steps as such Note Purchaser shall reasonably request to assist such Note Purchaser to recover such Taxes.

3.4.5.                                             The Issuer and the Guarantors will indemnify each Note Purchaser for the full amount of Taxes or Other Taxes as provided in Sections 3.4.1 and 3.4.2 (to the extent not previously paid under Section 3.4.1 or 3.4.2 above) imposed on such Note Purchaser and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto.  Payment in respect of any such indemnification shall be made within 30 days from the date such Note Purchaser makes written demand therefor.

3.4.6.                                             In the event that the Issuer or a Guarantor makes an additional payment under Section 3.4.1, 3.4.2 or 3.4.5 for the account of any Note Purchaser and such Note Purchaser, in its sole opinion and absolute discretion, determines that it has finally and irrevocably received or been granted a credit against, or relief or remission from, or repayment of, any tax paid or payable by it in respect of or calculated with reference to the deduction or withholding giving rise to such additional payment, such Note Purchaser shall, to the extent that it determines that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment, pay to the Issuer or Guarantor, as applicable, such amount as such Note Purchaser shall, in its sole opinion, have determined is attributable to such deduction or withholding and will leave such Note Purchaser (after such payment) in no worse position than it would have been had the Issuer or Guarantor not been required to make such deduction or withholding.  Nothing contained herein shall (i) interfere with the right of a Note Purchaser to arrange its tax affairs in whatever manner it thinks fit or (ii) oblige any Note Purchaser to claim any tax credit or to disclose any information relating to its tax affairs or any computations in respect thereof or (iii) require any Note Purchaser to take or refrain from taking any action that would prejudice its ability to benefit from any other credits, reliefs, remissions or repayments to which it may be entitled.

3.4.7.                                             Without prejudice to the survival of any other agreement hereunder, the agreements and obligations contained in this Section 3.4 shall survive the payment in full of principal and interest under the Notes.

3.5                            Manner and Time of Payment.

3.5.1.                                             All payments with respect to any Notes shall be made pro rata to the Note Purchasers without defense, set off or counterclaim in same day funds and shall be made by wire transfer to the Note Purchasers’ respective accounts designated in Schedule II hereto (or such other account or address or to the attention of such other Person as the applicable Note Purchaser shall have specified by prior written notice to the Issuer) so as to be actually received not later than 3:00 p.m. (Boston time) on the date such payment is due; provided that funds received by such Note Purchasers after 3:00 p.m. (Boston time) shall be deemed to have been paid on the next succeeding Business Day.

3.5.2.                                             Whenever any payment to be made hereunder or under the Notes shall be stated to be due on a day which is not a Business Day, the payment shall be made on the next succeeding Business Day and such additional period shall be included in the computation of the payment of interest hereunder or under the Notes.

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SECTION 4.  REPRESENTATIONS AND WARRANTIES OF NOTE PURCHASERS.

In order to induce the Issuer to enter into this Agreement, each Note Purchaser individually (but not on behalf of any other Note Purchaser) represents and warrants for the benefit of the other Note Purchasers and the Issuer that, as of the Closing Date:

4.1                                 Legal Capacity; Due Authorization.  Such Note Purchaser has full legal capacity, power and authority to execute and deliver this Agreement and to perform its obligations hereunder and that this Agreement has been duly executed and delivered by such Note Purchaser and is the legal, valid and binding obligation of such Note Purchaser enforceable against it in accordance with the terms hereof.

4.2                                 Restrictions on Transfer.  Such Note Purchaser has been advised that the Notes have not been registered under the Securities Act or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available, and that the Notes may have to be held by such Note Purchaser for an indefinite period of time.  Such Note Purchaser is aware that the Issuer is not under any obligation to effect any such registration with respect to the Notes or to file for or comply with any exemption from registration.  Such Note Purchaser is purchasing the Notes to be acquired by such Note Purchaser hereunder for its own account and not with a view to, or for resale in connection with, the distribution thereof in violation of the Securities Act; provided, however, that except as provided in Section 10 of this Agreement, the disposition of such Note Purchaser’s property shall at all times be and remain in its control and sole discretion.

4.3                                 Accredited Investor, etc.  Such Note Purchaser has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment and to bear the economic risk of such investment for an indefinite period of time.  Such Note Purchaser (i) is an “accredited investor” as that term is defined in Regulation D under the Securities Act and (ii) has been represented by counsel in the purchase of the Notes to be purchased by it and is aware of the limitations of state and federal securities laws with respect to the disposition of the Notes.  Such Note Purchaser acknowledges that such Note Purchaser has had an opportunity to examine the financial and business affairs of the Issuer and the Note Parties and an opportunity to ask questions of and receive answers from the Issuer’s and the Note Parties’ management.

4.4                                 No Advertisement.  There has been no advertisement by such Note Purchaser of the Notes in printed public media, radio, television or telecommunications, including electronic display (for the avoidance of doubt, after the Closing Date the Note Purchasers may advertise entering into the transactions contemplated by this Agreement).

SECTION 5.  REPRESENTATIONS AND WARRANTIES OF THE NOTE PARTIES.

In order to induce each Note Purchaser to enter into this Agreement and to purchase the Notes to be purchased by such Note Purchaser hereunder, each Note Party represents and warrants to the Collateral Agent and each Note Purchaser that:

5.1                                 Existence, Qualification and Power.  Each Note Party and each Subsidiary thereof: (a) is a corporation, limited liability company, partnership or limited partnership, duly organized or formed, validly existing and, where applicable, in good standing under the Laws of the jurisdiction

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of its incorporation or organization; (b) has all requisite power and authority and all requisite governmental licenses, permits, authorizations, consents and approvals to (i) own or lease its assets and carry on its business as currently conducted or as proposed to be conducted and (ii) execute, deliver and perform its obligations under the Note Documents to which it is a party; and (c) is duly qualified and is licensed and, where applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.  Schedule 5.1 annexed hereto sets forth, as of the Closing Date, each Note Party’s name as it appears in official filings in its state of incorporation or organization and the name under which each Note Party conducts its business (if different), its state of incorporation or organization, organization type, organization number, if any, issued by its state of incorporation or organization, its federal employer identification number and the address of its chief executive office and principal place of business.

5.2                                 Authorization; No Contravention.  The execution, delivery and performance by each Note Party of each Note Document to which such Person is, or is to be, a party has been duly authorized by all necessary corporate or other organizational action and does not and will not: (a) contravene the terms of any of such Person’s Governing Documents; (b) conflict in any material respect with, or result in any breach, termination, or contravention of, or constitute a default under, or require any payment to be made under (i) any Material Contract or any Material Indebtedness to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries, (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject, or (iii) any governmental licenses, permits, authorizations, consents and approvals, except in each case referred to in this clause (b), to the extent that any such conflict, breach, termination, contravention or default could not reasonably be expected to have a Material Adverse Effect; (c) result in or require the creation of any Lien upon any asset of any Note Party (other than Liens in favor of the Collateral Agent under the Collateral Documents); or (d) violate any Law.

5.3                                 Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Note Party of this Agreement or any other Note Document, except for (a) the perfection or maintenance of the Liens created under the Collateral Documents (having the priority set forth in the Intercreditor Agreement), or (b) such as have been obtained or made and are in full force and effect.

5.4                                 Binding Effect.  This Agreement has been, and each other Note Document, when delivered, will have been, duly executed and delivered by each Note Party that is party thereto.  This Agreement constitutes, and each other Note Document when so delivered will constitute, a legal, valid and binding obligation of such Note Party, enforceable against each Note Party that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

5.5                                 Financial Statements; No Material Adverse Effect.

5.5.1.                                             The audited consolidated, balance sheet of the Note Parties and their Subsidiaries as at February 2, 2008, and the audited statements of income and related cash flows of

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each such Persons for the Fiscal Year then ended (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Issuer and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all Material Indebtedness and other liabilities, direct or contingent, of the Issuer and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

5.5.2.                                             The unaudited Consolidated balance sheet of the Issuer and its Subsidiaries dated May, 2008, and the related Consolidated statements of income or operations, Shareholders’ Equity and cash flows for the Fiscal Month ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of the Issuer and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

5.5.3.                                             Projections for the Note Parties and their Subsidiaries for the five year period ended on or around January 31, 2012 (the “Projections”).  The Projections are based upon estimates and assumptions stated therein, all of which the Issuer believes to be reasonable and fair in light of reasonably foreseeable business conditions and current facts known to the Issuer and, as of the Closing Date, reflects the Issuer’s good faith and reasonable estimate of the future financial performance of the Note Parties and of the other information projected therein for the period set forth therein, it being recognized by the Note Purchasers that such projections as they relate to future events are not to be viewed as fact and that actual results during the period or periods covered by such Projections may differ from the projected results set forth therein.

5.5.4.                                             Since February 2, 2008, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

5.6                            Litigation.  Except as otherwise set forth in Schedule 5.6, there are no actions, suits, judgments, proceedings, claims or disputes pending or, to the knowledge of the Note Parties after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Note Party or any of its Subsidiaries or against any of its properties or revenues that (a) purport to affect or pertain to this Agreement or any other Note Document, or any of the transactions contemplated hereby, or (b) either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.7                            No Default.  No Note Party or any Subsidiary is in default under or with respect to, or party to, any Material Contract or any Material Indebtedness.  No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Note Document.

5.8                            Ownership of Property; Liens; Lease Agreements.

5.8.1.                                             Each of the Note Parties and each Subsidiary thereof has good record and marketable title in fee simple to all real property owned by such Person necessary or used in the

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ordinary conduct of its business, free and clear of all Liens, other than Permitted Encumbrances.  Each of the Note Parties and each Subsidiary thereof has valid leasehold interests in at least 95% of all the real property leased by such Person necessary or used in the ordinary conduct of its business, free and clear of all Liens, other than Permitted Encumbrances and, as to the remaining 5% of such leased property, there are no defaults under such leasehold interests, except for such defaults that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each of the Note Parties and each Subsidiary has good and marketable title to or a valid leasehold interest in all personal property and assets necessary or used in to the ordinary conduct of its business (excluding Intellectual Property) as currently conducted or as proposed to be conducted, free and clear of all Liens, other than Permitted Encumbrances, except for such defects in title and leasehold interests as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each of the Note Parties and each Subsidiary has good and marketable title to, valid leasehold interests in, or valid licenses to use, all Intellectual Property necessary or used in the ordinary conduct of its business as currently conducted or as proposed to be conducted, free and clear of all Liens, other than Permitted Encumbrances

5.8.2.                                             Schedule 5.8.2(1) sets forth the address (including street address, county and state) of all Real Estate that is owned by the Note Parties, together with a list of the holders of any mortgage or other Lien thereon as of the Closing Date.  Each Note Party and each of its Subsidiaries has good, marketable and insurable fee simple title to the real property owned by such Note Party or such Subsidiary, free and clear of all Liens, other than Permitted Encumbrances, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Schedule 5.8.2(2) sets forth the address (including street address, county and state) of all Leases of the Note Parties, together with a list of the lessor and its contact information with respect to each such Lease as of the Closing Date.  At least 95% of the aggregate number of Leases are in full force and effect as of the Closing Date and the Note Parties are not in default of the terms of such Leases. There is no current litigation, threatened litigation or material disputes in respect of any of the Leases; except, in each case, as could not reasonably be expected to have a Material Adverse Effect.  None of the Leases are part of a master lease agreement.

5.8.3.                                             Schedule 5.8.3 sets forth a complete and accurate list of all Liens on the property or assets of each Note Party and each of its Subsidiaries, showing as of the date hereof the lienholder thereof, the property or assets of such Note Party or such Subsidiary subject thereto and for each Lien that secures Indebtedness in excess of $1,000,000, the principal amount of the obligations secured thereby.  The property of each Note Party and each of its Subsidiaries is subject to no Liens, other than Liens set forth on Schedule 5.8.3, and Permitted Encumbrances; provided, that, the aggregate amount of Indebtedness secured by the Liens set forth on Schedule 5.8.3 shall not exceed $3,000,000.

5.8.4.                                             Schedule 5.8.4 sets forth a complete and accurate list of all Investments held by any Note Party or any Subsidiary of a Note Party on the date hereof, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.

5.8.5.                                             Schedule 5.8.5 sets forth a complete and accurate list of all Indebtedness of each Note Party or any Subsidiary of a Note Party as of the Closing Date, showing as of the Closing Date the amount, obligor or issuer and maturity thereof and Schedule T-1 sets forth a complete and accurate list of all letters of credit of the Note Parties.  As of the Closing Date, after giving effect to the transactions contemplated hereby, the Note Parties have no Indebtedness except for the Note Obligations, the Indebtedness set forth on Schedule 5.8.5 and Permitted Indebtedness.

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5.9                            Environmental Compliance.

5.9.1.                                             No Note Party or any Subsidiary thereof (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability, except in each case, as could not, individually or in the aggregate be expected to have a Material Adverse Effect.

5.9.2.                                             Except as otherwise set forth in Schedule 5.9, to the knowledge of the Note Parties, none of the properties currently or formerly owned or operated by any Note Party or any Subsidiary thereof is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such property; there are no and never have been any underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Note Party or any Subsidiary thereof or, to the best of the knowledge of the Note Parties, on any property formerly owned or operated by any Note Party or Subsidiary thereof; there is no asbestos or asbestos-containing material on any property currently owned or operated by any Note Party or Subsidiary thereof; and Hazardous Materials have not been released, discharged or disposed of on any property currently or formerly owned or operated by any Note Party or any Subsidiary thereof.

5.9.3.                                             Except as otherwise set forth on Schedule 5.9, no Note Party or any Subsidiary thereof is undertaking, and no Note Party or any Subsidiary thereof has completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Note Party or any Subsidiary thereof have been disposed of in a manner not reasonably expected to result in material liability to any Note Party or any Subsidiary thereof.

5.10                      Insurance.  The properties of the Note Parties and their Subsidiaries are insured with financially sound and reputable insurance companies which are not Affiliates of the Note Parties, in such amounts, with such deductibles and covering such risks (including, without limitation, workmen’s compensation, public liability, business interruption and property damage insurance) as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Note Parties or the applicable Subsidiary operates.  Schedule 5.10 sets forth a description of all insurance maintained by or on behalf of the Note Parties as of the Closing Date. Each insurance policy listed on Schedule 5.10 is in full force and effect and all premiums in respect thereof that are due and payable have been paid.

5.11                           Taxes.  The Note Parties and their Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings being diligently conducted, for which adequate reserves have been provided in accordance with GAAP, as to which Taxes no Lien has been filed and which

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contest effectively suspends the collection of the contested obligation and the enforcement of any Lien securing such obligation.  There is no proposed tax assessment against any Note Party or any Subsidiary that would, if made, have a Material Adverse Effect.  No Note Party or any Subsidiary thereof is a party to any tax sharing agreement.

5.12                      ERISA Compliance.

5.12.1.                                       Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service or an application for such a letter is currently being processed by the Internal Revenue Service with respect thereto and, to the best knowledge of the Issuer, nothing has occurred which would prevent, or cause the loss of, such qualification.  The Note Parties and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.  No Lien imposed under the Code or ERISA exists or, to the knowledge of the Issuer, is likely to arise on account of any Plan.

5.12.2.                                       There are no pending or, to the best knowledge of the Issuer, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan.  To the best knowledge of the Issuer, there has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan.

5.12.3.                                       Except as could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate: (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither any Note Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither any Note Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither any Note Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

5.13                      Subsidiaries; Equity Interests.  The Note Parties have no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, which Schedule sets forth the legal name, jurisdiction of incorporation or formation and authorized Equity Interests of each such Subsidiary, listed by class, and setting forth the number and percentage of the outstanding Equity Interests of each such class owned directly or indirectly by the applicable Note Party.  All of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Note Party (or a Subsidiary of a Note Party) in the amounts specified on Part (a) of Schedule 5.13, free and clear of all Liens except for those created under the Security Documents and the Collateral Documents.  The Note Parties have no equity investments in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13.  Part (c) of Schedule 5.13 is a complete and accurate description of the authorized Equity Interests of each Note Party, by class, and a description of the number of shares of each such class that are issued and outstanding.  All of the outstanding Equity Interests in the Note Parties have been validly issued, and are fully paid and non-assessable and, other than with respect to the Issuer, are owned in the amounts specified on Part (c) of Schedule 5.13, free and clear of all Liens except for those created under the

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Security Documents and the Collateral Documents.  Except as set forth in Schedule 5.13, there are no subscriptions, options, warrants, or calls relating to any shares of any Note Party’s Equity Interests, including any right of conversion or exchange under any outstanding security or other instrument.  No Note Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security convertible into or exchangeable for any of its Equity Interests.  The copies of the Governing Documents of each Note Party and each amendment thereto provided pursuant to Section 6.3 are true and correct copies of each such document, each of which is valid and in full force and effect.

5.14                      Margin Regulations; Investment Company Act.

5.14.1.                                       No Note Party is engaged or will be engaged, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.  None of the proceeds from the sale of the Notes shall be used directly or indirectly for the purpose of purchasing or carrying any margin stock, for the purpose of reducing or retiring any Indebtedness that was originally incurred to purchase or carry any margin stock or for any other purpose that might cause any of the sale of the Notes to be considered a “purpose credit” within the meaning of Regulations T, U, or X issued by the FRB.

5.14.2.                                       None of the Note Parties, any Person Controlling any Note Party, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.15                      Disclosure.  Each Note Party has disclosed to the Collateral Agent and the Note Purchasers all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Note Party to the Collateral Agent or any Note Purchasers in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Note Document (in each case, as modified or supplemented by other information so furnished), contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Note Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

5.16                      Compliance with Laws.  Each of the Note Parties and each Subsidiary is in compliance in all respects with the requirements of all applicable Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.17                      Intellectual Property; Licenses, Etc.  Each Note Party owns, or holds licenses in, all Intellectual Property, trade names, patent rights and other authorizations that are necessary to the conduct of its business as currently conducted and as proposed to be conducted, and attached hereto

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as Schedule 5.17 is a true, correct, and complete listing of all material patents, patent applications, trademarks, trademark applications, copyrights, and copyright registrations as to which a Note Party is the owner or is an exclusive licensee.  To the best knowledge of the Issuer after reasonable inquiry, (i) there is no action, proceeding, claim or complaint pending or, threatened in writing to be brought against any Note Party which might jeopardize any of such Person’s interest in any of the foregoing licenses, patents, copyrights, trademarks, trade names, designs or applications, except those which are not, in the aggregate, material to the Note Parties’ financial condition, results of operations or business and (ii) no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Note Party or any Subsidiary infringes upon any rights held by any other Person.

5.18                      Labor Matters.  There are no strikes, lockouts, slowdowns or other material labor disputes against any Note Party or any Subsidiary thereof pending or, to the knowledge of any Note Party, threatened which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 5.18(1), the hours worked by and payments made to employees of the Note Parties comply with the Fair Labor Standards Act and any other applicable federal, state, local or foreign Law dealing with such matters, except for any noncompliance which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 5.18(2), no Note Party or any of its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state Law.  All payments due from any Note Party and its Subsidiaries, or for which any claim may be made against any Note Party, on account of wages and employee health and welfare insurance and other benefits, have been paid or properly accrued in accordance with GAAP as a liability on the books of such Note Party. Except as set forth on Schedule 5.18(3), no Note Party or any Subsidiary is a party to or bound by (i) any collective bargaining agreement, or (ii) management agreement, employment agreement, bonus, restricted stock, stock option, or stock appreciation plan or agreement or any similar plan, agreement or arrangement, in each case in this clause (ii), imposing commitments on such Note Party or Subsidiary under such agreement in excess of $3,000,000 per year. There are no representation proceedings pending or, to any Note Party’s knowledge, threatened to be filed with the National Labor Relations Board, and no labor organization or group of employees of any Note Party or any Subsidiary has made a pending demand for recognition. There are no complaints, unfair labor practice charges, grievances, arbitrations, unfair employment practices charges or any other claims or complaints against any Note Party or any Subsidiary pending or, to the knowledge of any Note Party, threatened to be filed with any Governmental Authority or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment or termination of employment of any employee of any Note Party or any of its Subsidiaries which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.  The consummation of the transactions contemplated by the Note Documents will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any Note Party or any of its Subsidiaries is bound.  Each Note Party and its Subsidiaries are in material compliance with all requirements pursuant to employment standards, labor relations, health and safety, workers compensation and human rights laws, immigration laws and other applicable employment legislation.  To the knowledge of the Note Parties, no officer or director of any Note Party who is party to an employment agreement with such Note Party is in violation of any term of any employment contract or proprietary information agreement with such Note Party; and to the knowledge of the Note Parties, the execution of the employment agreements and the continued employment by the Note Parties of the such persons, will not result in any such violation.

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Schedule 5.18(4) sets forth the names and titles of each officer and director of each Note Party who is party to an employment agreement.

5.19         Collateral Documents.  The Collateral Documents are effective to create in favor of the Collateral Agent for the benefit of the Note Purchasers a legal, valid and enforceable security interest in the Collateral, and the Collateral Documents constitute, or will upon the filing of financing statements and/or the obtaining of “control”, in each case with respect to the relevant Collateral as required under the applicable Uniform Commercial Code, the creation of a fully perfected Lien on, and security interest in, all right, title and interest of the Note Parties thereunder in such Collateral, in each case prior and superior in right to any other Person, except for (a) with respect to the Revolving Lenders Priority Collateral (as defined in the Intercreditor Agreement) only, Liens securing the obligations of the Issuer with respect to the Revolving Loan Documents, and (b) other Permitted Encumbrances having priority under applicable Law.

5.20         Solvency.  After giving effect to the transactions contemplated by this Agreement, each Note Party on a Consolidated basis are Solvent. No transfer of property has been or will be made by any Note Party and no obligation has been or will be incurred by any Note Party in connection with the transactions contemplated by this Agreement or the other Note Documents with the intent to hinder, delay, or defraud either present or future creditors of any Note Party.

5.21         Deposit Accounts; Credit Card Arrangements.

5.21.1.             Annexed hereto as Schedule 5.21.1 is a list of all DDAs maintained by the Note Parties as of the Closing Date, which Schedule includes, with respect to each DDA (i) the name and address of the depository; (ii) the account number(s) maintained with such depository; (iii) a contact person at such depository, and (iv) the identification of each blocked account bank.

5.21.2.             Annexed hereto as Schedule 5.21.2 is a list describing all arrangements as of the Closing Date to which any Note Party is a party with respect to the processing and/or payment to such Note Party of the proceeds of any credit card charges for sales made by such Note Party.

5.22         Brokers.  Other than those set forth on Schedule 5.22, no broker or finder brought about the obtaining, making or closing of the Notes or transactions contemplated by the Note Documents, and no Note Party or Affiliate thereof has any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.  Each Note Party hereby jointly and severally indemnifies each Credit Party against, and agrees that such Person will hold each such Credit Party harmless from, any claim, demand or liability, including reasonable attorneys’ fees, for any broker’s, finder’s or placement fee or commission incurred by such indemnifying party or the Issuer or its Affiliates or a representative of such Person.

5.23         Customer and Trade Relations.  There exists no actual or, to the knowledge of any Note Party, threatened, termination or cancellation of, or any material adverse modification or change in the business relationship of any Note Party with any customer or supplier which represents over 5% of annual purchase or supply commitments of the Note Parties.

5.24         Material Contracts.  No Note Party is in default under any contract, lease or commitment to which such Person is a party or by which such Person is bound,  under contracts, leases or commitments which are not, individually or in the aggregate, material to such Person’s financial condition, results of operations or business.  Set forth on Schedule 5.24 is a description of

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all Material Contracts of the Note Parties, showing the parties and principal subject matter thereof and amendments and modifications thereto; provided, however, that the Issuer may amend Schedule 5.24 to add additional Material Contracts so long as such amendment occurs by written notice to the Collateral Agent not less than 5 days after the date on which such Note Party enters into such Material Contract after the Closing Date.  Except for matters which, either individually or in the aggregate, could not reasonably be expected to either result in a Material Adverse Effect or expose the Note Parties to liabilities greater than $5,000,000, each Material Contract (other than those that have expired at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against the applicable Note Party or its Subsidiaries and, to the best of the Issuer’s knowledge, each other Person that is a party thereto in accordance with its terms, (b)  is not in default due to the action or inaction of any Note Party or its Subsidiaries and (c) the consummation of the financing arrangements contemplated hereunder, will not constitute or create a default or create a right of termination under any Material Contract.

5.25         Casualty.  Neither the businesses nor the properties of any Note Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.26         Anti-Terrorism Laws.

5.26.1.             General Anti-Terrorism Laws.  To the knowledge of the Note Parties, after reasonable inquiry, none of the Note Parties nor any direct or indirect investor in any Note Party (other than the Note Purchasers or any direct or indirect investors in the Note Purchasers), is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

5.26.2.             Blocked Persons.  To the knowledge of the Note Parties, after reasonable inquiry, none of the Note Parties nor any direct or indirect investor in any Note Party (other than the Note Purchasers or any direct or indirect investors in the Note Purchasers), or their respective agents acting or benefiting in any capacity in connection with the transactions hereunder, is any of the following (each a “Blocked Person”):

5.26.2.1.          a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

5.26.2.2.          a Person owned or controlled  by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

5.26.2.3.          a Person or entity with which any Note Purchaser is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

5.26.2.4.          a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224;

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5.26.2.5.          a Person or entity that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list; or

5.26.2.6.          a person or entity who is affiliated or associated with a person or entity listed above.

5.26.3.             Executive Order No. 13224.  To the best knowledge of the Note Parties, after reasonable inquiry, none of the Note Parties nor, to the knowledge of the Note Parties, any of its or their agents acting in any capacity in connection with the transactions hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.

5.27         Valid Issuance of the Notes.  The Notes, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly authorized and issued and free of restrictions on transfer, other than restrictions imposed under this Agreement and applicable securities laws.  Based in part upon the representations of the Note Purchasers in Section 4, the Notes will be issued in compliance with all United States securities laws.

5.28         Private Placement.  Assuming the truth and accuracy of the Note Purchasers’ representations set forth in Section 4.3 of this Agreement, the initial offer, sale and issuance of the Notes to the Note Purchasers as contemplated by this Agreement is exempt from the prospectus and registration requirements of the Securities Act.  Neither the Issuer nor any authorized agent acting on its behalf of it will take any action hereafter that would cause the loss of such exemption.

5.29         Transition Services Agreement.  No changes have been made to the Transition Services Agreement or the Asset Purchase Agreement.

5.30         New Headquarters.  All liabilities relating to the New Headquarters have been fully disclosed to the Note Purchasers and it is reasonably expected that future liability will not exceed $2,000,000.  For the avoidance of doubt, Capital Expenditures incurred after the Closing Date shall not be considered liabilities for purposes of this Section 5.30.

5.31         Stock Options. All liabilities relating to the Stock Options have been fully disclosed to the Note Purchasers.

5.32         License Agreements.  The Note Parties (as applicable) are in compliance with the terms and conditions of the License Agreements and there is no current litigation, threatened litigation or material disputes in respect of any of the License Agreements.

5.33         Hoop Expenses.  Schedule 5.33 correctly sets forth the cash costs actually incurred by the Note Parties and an estimate of reasonable projected cash costs of the Note Parties relating to the Hoop bankruptcy proceedings and the Hoop Sale.

5.34         Product Recall.  There has been no material product recall of any of the products of the Note Parties.

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SECTION 6.  CLOSING CONDITIONS.

The obligation of each Note Purchaser to purchase and pay for the Notes provided for hereunder is subject to the satisfaction or waiver by the Note Purchasers of the following conditions, each as of the Closing Date:

6.1           Representations and Warranties; No Default.  All representations and warranties of the Note Parties contained in this Agreement shall be true and correct in all material respects, and there shall exist no Default or Event of Default under any of the Note Documents or any other material agreement to which any Note Party is a party as of the Closing Date, after giving effect to the transactions contemplated hereby.

6.2           Use of Proceeds.  The proceeds from the issuance of the Notes shall be used for the purposes set forth in Section 2.4.

6.3           Delivery of Documents.  The Note Purchasers shall have received the following items, each of which shall be in form and substance reasonably satisfactory to the Note Purchasers and, unless otherwise noted, dated the Closing Date:

6.3.1.               Duly executed copies of this Agreement, the other Note Documents to which any Note Party is a party, and the Notes issued in the names of the respective Note Purchasers as set forth on Schedule I.

6.3.2.               Duly executed copies of the release agreement, settlement agreement, settlement order and other documents related to the termination of the Issuer’s agreements with the Disney Store, including any modifications or amendments thereof (the “Disney Store Termination Agreements”), which shall each be in a form acceptable to the Note Purchasers in their sole discretion.

6.3.3.               Duly executed copies of the Revolving Loan Documents.

6.3.4.               Resolutions of the board of directors or other equivalent governing body of each Note Party, approving the transactions contemplated by this Agreement and each other Note Document to which such Note Party is a party, and approving and authorizing the execution, delivery and performance of this Agreement and each of the other Note Documents to which it is a party and approving and authorizing, as applicable, the issuance and sale of the Notes, the execution, delivery and payment of the Notes, in each case, certified as of the Closing Date by such party’s Secretary or an Assistant Secretary or other equivalent officer as being in full force and effect without modification or amendment.

6.3.5.               A certificate of the Secretary or an Assistant Secretary or other equivalent officer of each Note Party, dated the Closing Date, as to the incumbency and signature of the officers of each Note Party executing this Agreement, any certificate or other documents to be delivered by it pursuant hereto, together with evidence of the incumbency of such Secretary or Assistant Secretary or other equivalent officer;

6.3.6.               A copy of a certificate of the Secretary of State, Registrar or similar Governmental Authority of the jurisdiction of organization of each Note Party, dated as of a recent

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date prior to the Closing Date, and certifying that (i) if applicable, each Note Party has paid all franchise taxes due as of the date of such certificate, and (ii) each Note Party is duly organized and (to the extent applicable in its jurisdiction of organization) in good standing under the laws of the jurisdiction of its organization.

6.3.7.               A certificate of each Note Party signed on its behalf by an officer or manager duly authorized, dated the Closing Date (the statements made in which certificate shall be true on and as of such date) listing all Governing Documents of such Persons, including any amendments thereto, certifying that (i) such copies are true and correct copies of the (A) Governing Documents and all amendments thereto, (B) its bylaws as in effect on the Closing Date (which shall be reasonably satisfactory to the Note Purchasers in all respects), (C) a good standing certificate with respect to such Person issued by the Secretary of State of the jurisdiction of its organization, (ii) there has not been any proceeding for the dissolution or liquidation of such Person, (iii) the representations and warranties of the Note Parties contained in this Agreement are true in all respects as of the Closing Date (except to the extent that such representation or warranty expressly relates to an earlier date and except for representations and warranties that are not qualified by materiality, which are true in all material respects), (iv) no event has occurred and is continuing or would result from the transactions contemplated under this Agreements, that constitutes a Default or an Event of Default, (v) the Note Parties on a consolidated basis are Solvent, (vi) such Person is in compliance with all terms of this Agreement as of the Closing Date (except for representations and warranties in Section 5 that are not qualified by materiality, which are true in all material respects), (vii) the conditions specified in Section 6 have been fulfilled in all respects (except as expressly waived in writing by the Collateral Agent) and (viii) such Person is duly qualified and in good standing as a foreign corporation in each state or other jurisdiction and has filed all annual reports required to be filed to the date of such certificate, except to the extent such failure to be duly qualified and in good standing as a foreign corporation could not reasonably, individually or in the aggregate, be expected to have a Material Adverse Effect.

6.3.8.               [Reserved]

6.3.9.               A favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special counsel to the Note Parties, addressed to the Note Purchasers covering such matters as are typical to financings and such other matters as the Note Purchasers shall reasonably request, and in form and substance satisfactory to the Note Purchasers.

6.3.10.             A favorable opinion of Stroock & Stroock & ▇▇▇▇▇ LLP, special counsel to the Note Parties, addressed to the Note Purchasers covering such matters as are typical to financings and such other matters as the Note Purchasers shall reasonably request, and in form and substance satisfactory to the Note Purchasers.

6.3.11.             [Reserved]

6.3.12.             A favorable opinion of McGuireWoods LLP, Virginia counsel to the Note Parties, addressed to the Note Purchasers covering such matters as the Note Purchasers shall reasonably request, and in form and substance satisfactory to the Note Purchasers.

6.3.13.             The Note Purchasers shall have received a copy of the Projections, and such are in form and substance satisfactory to the Note Purchasers.

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6.3.14.             The Note Purchasers shall have received written instructions from the Issuer directing the application of proceeds of the Notes made pursuant to this Agreement.

6.3.15.             All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the Transactions shall be reasonably satisfactory in form and substance to the Note Purchasers and their counsel.

6.3.16.             A letter from the Note Parties to their independent auditors authorizing the independent certified public accountants of the Note Parties to communicate with the Collateral Agent.

6.3.17.             Certificate of insurance for each Note Party, copies of the property, casualty, liability and business interruption insurance policies for each Note Party (if any) and copies of  liability insurance policies for each Note Party (if any) as required pursuant to Section 7.9.

6.3.18.             Each applicable Note Party shall have duly authorized, executed and delivered such other certificates, instruments, agreements and other documents and papers reasonably requested by the Note Purchasers in connection with the transactions contemplated hereby in form and substance satisfactory to such Note Purchasers.

6.3.19.         A duly executed intellectual property security agreement dated the Closing Date and signed by each Note Party which owns licenses, trademarks, or copyrights, in form and substance reasonably satisfactory to the Purchasers, together with all instruments, documents and agreements executed pursuant thereto.

6.3.20.         As soon as practicable and not later than 30 days after the closing date, the Issuer shall make commercially reasonable efforts to obtain a duly executed landlord consent from each landlord that executed such a consent in favor of the Revolving Agent permitting the Collateral Agent to remove the personal property of the Note Parties from each relevant location owned by such landlord, reasonably satisfactory in form and substance to the Collateral Agent, in its sole discretion.

6.4           Corporate/Capital Structure.  The Note Purchasers shall be satisfied with the ownership, corporate and legal structure and capitalization of the Note Parties, including, without limitation, the terms and conditions of any Capital Stock, options, warrants or other securities issued by the Note Parties and any agreements related thereto.

6.5           Authorizations, Consents and Approvals.  Each Note Party shall have received any and all necessary authorizations, consents and approvals and shall have made any and all filings and shall have satisfied all applicable waiting periods necessary in connection with the consummation of the Transactions and the other transactions contemplated by this Agreement and the other Note Documents.

6.6           No Material Adverse Effect.  Nothing shall have occurred (and the Note Purchasers shall not be aware of any facts or conditions not previously known) which the Note Purchasers shall, in their sole discretion, determine has or could be reasonably expected to have, a Material Adverse Effect.  There shall not have occurred any fact, circumstance, change, effect or occurrence or event of default that has a Material Adverse Effect.

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6.7           Litigation.  There shall exist no action, suit, investigation, litigation or proceeding affecting the Note Parties or any of its properties pending or, to any Note Parties’ knowledge threatened, before any court, governmental agency or arbitrator that, in the determination of the Note Purchasers, (i) purports to affect the legality, validity or enforceability of this Agreement, the Notes, or any other Note Document or the transactions contemplated hereby and thereby or (ii) purports to restrain, enjoin or otherwise prohibit or impose material adverse limitations on the consummation of the Transactions.  No order, judgment or decree of any court, arbitrator or governmental body shall enjoin or restrain the Note Purchasers from acquiring the Notes or from making the loans evidenced by the Notes.

6.8           Disclosure.  All factual information furnished by or on behalf of the Note Parties and their parent companies in writing to the Note Purchasers or the Collateral Agent (including this Agreement and any exhibits, schedules or certificates made or delivered in connection herewith (other than any proposed budgets and projections)), taken as a whole, are true and correct in all material respects as of the date on which they were dated or certified and do not omit to state a material fact necessary to make the statements herein or therein, when taken as a whole, not misleading in any material respect, in light of the circumstances under which they were made, which has not been corrected or amended prior to the execution of this Agreement.

6.9           Due Diligence.  The Note Purchasers shall have completed their business, legal, and collateral due diligence, including but not limited to (a) a review of any Material Contracts, (b) a review of an appraisal of the Issuer’s intellectual property reflecting a net orderly liquidation value of $40,000,000, in each case, the results of which, shall be satisfactory to Note Purchasers in their sole discretion;

6.10         Hoop Bankruptcy.  The Note Purchasers shall be satisfied with the terms and implementation of the bankruptcy proceeding of Hoop and, in particular, with any amounts to be funded by the Issuer and with any retained liability of the Issuer;

6.11         Transition Services Agreement and HOOP Sale.  The Note Purchasers shall, in their sole discretion, be satisfied with the terms of the Transition Services Agreement and the Hoop Sale;

6.12         New Headquarters.  The Note Parties shall have fully disclosed to the Note Purchasers all liabilities relating to the New Headquarters and the Note Purchasers shall be satisfied, in their sole discretion, that no other liabilities exist or are expected to arise in respect of same;

6.13         Stock Options.  The Note Parties shall have fully disclosed to the Note Purchasers all liabilities relating to the Stock Options and all such liabilities could not reasonably be expected to have a Material Adverse Effect;

6.14         Other Fees and Expenses.  On the Closing Date, all reasonable expenses of the Note Purchasers (including, without limitation, reasonable legal fees and expenses) incurred in connection with the negotiation and execution of this Agreement and the other Note Documents shall have been paid by the Issuer.

6.15         Ancillary Documents.  Each applicable Note Party shall have delivered to the Collateral Agent any side letters or agreements relating to the Transactions not previously disclosed to the Collateral Agent between the Note Parties or their Affiliates and any of the Revolving

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Lenders, any Affiliates of the foregoing or any other third party (other than any fee letters relating to the fees payable under the Revolving Loan Debt).

6.16         Senior Credit.  All of the closing conditions set forth in the Revolving Loan Agreement shall have been satisfied (other than the consummation of the purchase and sale of the Notes) and the transactions contemplated thereby have been consummated concurrently with the consummation of the purchase of the Notes.  The terms, commitment amount and availability at closing of the Revolving Loan Debt shall be in form and substance satisfactory to the Note Purchasers.

6.17         Closing Date Total Leverage Ratio.  The Note Parties and their Subsidiaries shall have a Closing Date Total Leverage Ratio (as defined in Schedule 7.16(b)) that is not greater than 2.5 to 1.00.

6.18         Existing Indebtedness.  After giving effect to the transactions contemplated by this Agreement, none of the Note Parties shall have outstanding any Indebtedness, other than the Note Obligations, the Indebtedness set forth on Schedule 5.8.5 and Permitted Indebtedness.

6.19         Perfection of Security.  Each Note Party shall have duly authorized, executed, acknowledged and delivered such security agreements, notices, memoranda of intellectual property security interests and other instruments as the Note Purchasers may have reasonably requested, and shall have authorized the filing of financing statements, all in order to perfect the Liens purported or required pursuant to this Agreement, the Security Agreement or any other Note Document to be created in the Collateral and hereby agrees to pay or shall have paid all filing or recording fees or taxes required to be paid in connection with the filing, registration or recordation thereof, including any recording, mortgage, documentary, transfer or intangible taxes.

6.20         Monitoring Fee.  The Collateral Agent shall have received the Monitoring Fee payable on the Closing Date.

SECTION 7.  AFFIRMATIVE COVENANTS

Until payment in full of the Note Obligations, the Note Parties shall, and (except in the case of the covenants set forth in Sections 7.2, 7.3, and 7.5) cause each Subsidiary to:

7.1           Payment of Note Obligations.  Subject to the terms and conditions of the Intercreditor Agreement, duly and punctually pay the principal, interest and any other amounts owing under this Agreement and the Notes when due under the terms of this Agreement, and each Note Party will observe and comply with all other requirements applicable to it pursuant to this Agreement and the other Note Documents.

7.2           Financial Statements.  Deliver to the Collateral Agent, in form and detail satisfactory to the Collateral Agent:

7.2.1.               as soon as available, but in any event within ninety (90) days after the end of each Fiscal Year of the Issuer (commencing with the Fiscal Year ending in January 2009), a Consolidated and consolidating balance sheet of the Issuer and its Subsidiaries as at the end of such Fiscal Year, the related Consolidated and consolidating statements of income or operations and Shareholders’ Equity and the related Consolidated statement of cash flows (with consolidating

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reconciliation of cash from the balance sheet to the statement of cash flows that is reasonably acceptable to the Collateral Agent) for such Fiscal Year, setting forth in each case in, but only with respect to the Consolidated statements, comparative form the figures for (i) the previous Fiscal Year and (ii) such period set forth in the projections delivered pursuant to Section 7.2.3, all in reasonable detail and prepared in accordance with GAAP, such Consolidated, and where relevant consolidating statements to be audited and accompanied by (a) a report and unqualified opinion of BDO ▇▇▇▇▇▇▇, LLP or another public accounting firm of nationally recognized standing reasonably acceptable to the Collateral Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit or any qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would cause any noncompliance with the provisions of Section 7.16; (b) an opinion of such public accounting firm independently assessing the Note Parties’ internal controls over financial reporting in accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard ▇▇. ▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇ expressing a conclusion that contains no statement that there is a material weakness in such internal controls, except for such material weaknesses as to which the Collateral Agent does not object and (c) as to statements not covered by an audit, certification by a Responsible Officer of the Issuer to the effect that such statements are fairly stated in all material respects when considered in relation to the Consolidated and consolidating financial statements of the Issuer and its Subsidiaries;

7.2.2.               as soon as available, but in any event within thirty (30) days after the end of each Fiscal Month of each Fiscal Year of the Issuer (except with respect to the last Fiscal Month of each Fiscal Quarter, with respect to which the applicable period for delivery shall be forty-five (45) days rather than thirty (30) days), a Consolidated and consolidating balance sheet of the Issuer and its Subsidiaries as at the end of such Fiscal Month, the related Consolidated and consolidating statements of income or operations (and with respect to the last Fiscal Month of each Fiscal Quarter, Shareholders’ Equity) and the related Consolidated statement of cash flows (with consolidating reconciliation of cash from the balance sheet to the statement of cash flows that is reasonably acceptable to the Collateral Agent) for such Fiscal Month, and for the portion of the Fiscal Year then ended, setting forth in each case in, but only with respect to the Consolidated statements, comparative form the figures for (i) such period set forth in the projections delivered pursuant to Section 7.2.3 hereof, (ii) the corresponding Fiscal Month of the previous Fiscal Year, and (iii) the corresponding portion of the previous Fiscal Year, all in reasonable detail, such Consolidated, and where relevant consolidating statements to be certified by a Responsible Officer of the Issuer as fairly presenting the financial condition, results of operations and cash flows of the Issuer and its Subsidiaries as of the end of such Fiscal Month in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes;

7.2.3.               as soon as available, but in any event (i) on or before January 31^st of each Fiscal Year of the Issuer, a preliminary month-by-month business plan for the following Fiscal Year prepared by management of the Issuer and reviewed by the board of directors of the Issuer, and (ii) on or before March 1^st of each Fiscal Year of the Issuer, a final month-by-month business plan for such Fiscal Year prepared by management of the Issuer (which final business plan shall be approved by the board of directors of the Issuer by March 31st of such Fiscal Year), in each case the form of which shall be substantially similar to the business plan for the Fiscal Year ended on or about January 31, 2009 and the substance of which shall be reasonably satisfactory to the Collateral Agent, for such Fiscal Year; provided that, if the Issuer delivers a business plan that is not reasonably

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satisfactory to the Collateral Agent, but that otherwise complies with this Section 7.2.3, this Section 7.2.3 shall be deemed to be satisfied to the extent that the Issuer delivers a business plan reasonably satisfactory to the Collateral Agent on or before March 31 of such Fiscal Year.

7.3           Certificates; Other Information.  Deliver to the Collateral Agent, in form and detail satisfactory to the Collateral Agent:

7.3.1.               concurrently with the delivery of the financial statements referred to in Section 7.2.1, a certificate of its public accounting firm, to the extent permitted by its internal policies, certifying such financial statements and stating that, in making the examination necessary for their certification of such financial statements, such public accounting firm has not obtained any knowledge of the existence of any Event of Default under Section 9 or, if any such Event of Default shall exist, stating the nature and status of such event;

7.3.2.               concurrently with the delivery of the financial statements referred to in Section 7.2.2, (i) a duly completed Compliance Certificate signed by a Responsible Officer of the Issuer, which shall include a certification as to the amount, if any, of rent under any Leases and any Taxes that have not been timely paid, and (ii) a copy of management’s analysis with respect to such financial statements, which analysis shall be consistent with the analysis previously provided by the Issuer under the Existing Credit Agreement.  In the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Issuer shall also provide a statement of reconciliation conforming such financial statements to GAAP;

7.3.3.               concurrently with the filing thereof (or upon the request of the Collateral Agent or its auditors, appraisers, accountants, consultants or other representatives), copies of each of the Issuer’s federal income tax returns, and any amendments thereto;

7.3.4.               promptly upon receipt, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Note Party by its public accounting firm in connection with the accounts or books of the Note Parties or any Subsidiary, or any audit of any of them, in each case to the extent permitted by the policies of its public accounting firm at such time;

7.3.5.               promptly after the same are available, copies of each annual report, proxy or financial statement, or other document, report or communication sent to the stockholders of the Note Parties, and copies of all annual, regular, periodic and special reports and registration statements which any Note Party may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 or with any national securities exchange, and in any case not otherwise required to be delivered to the Collateral Agent pursuant hereto;

7.3.6.               the financial and collateral reports described on Schedule 7.3 hereto, at the times set forth in such Schedule;

7.3.7.               promptly after the furnishing thereof, (i) copies of any statement or report furnished to any holder of debt securities of any Note Party or any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or similar agreement and (ii) copies of all notices and other communications received or delivered by a Note Party with respect to the Revolving Loan Documents (i) which indicate a breach or default of any such document, or (ii) which constitute a notice under Section 6.03 (Notices) of the Revolving Loan Agreement (to the extent not otherwise

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already provided to the Collateral Agent), in each case not otherwise required to be furnished to the Note Purchasers pursuant to Section 7.2 or any other clause of this Section 7.3;

7.3.8.               as soon as available, but in any event within 30 days after the end of each Fiscal Year of the Note Parties (or upon the request of the Collateral Agent or its auditors, appraisers, accountants, consultants or other representatives), (i) a certificate executed by an authorized officer of the Issuer certifying the existence and adequacy of the property and casualty insurance program carried by the Note Parties and their Subsidiaries, and (ii) a written summary of said program identifying the name of each insurer, the number of each policy and expiration date of each policy, the amounts and types of each coverage, and a list of exclusions and deductibles for each policy;

7.3.9.               promptly, and in any event within five Business Days after receipt thereof by any Note Party or any Subsidiary thereof, copies of each notice or other correspondence received from any Governmental Authority (including, without limitation, the SEC (or comparable agency in any applicable non-U.S. jurisdiction)) concerning any proceeding with, or investigation or possible investigation or other inquiry by such Governmental Authority regarding financial or other operational results of any Note Party or any Subsidiary thereof or any other matter which, if adversely determined, could reasonably be expected to have a Material Adverse Effect;

7.3.10.             as soon as available and in any event within 90 days after the end of each Fiscal Year,  computations by the Note Parties demonstrating, as of the end of such Fiscal Year, compliance with Sections 7.16, inclusive, and setting forth the amount of the available basket under Section 3.2.4.1 and computations supporting adjustments to or use of the same during such period;

7.3.11.             (i) as soon as available and in any event within 45 days after the end of each Fiscal Quarter, computations by the Issuer demonstrating, as of the end of such quarter, compliance with Section 7.16 (such computation including, during such time period, any asset sales under Section 8.5 or the application Net Cash Proceeds), and setting forth the amount of the available basket under Section 3.2.4.1 and computations supporting any adjustments to or use of the same during such period and (ii) as soon as available and in any event with 30 days after the end of each of the Fiscal Months ending November 30 and December 31, computations by the Issuer demonstrating, as of the end of such Fiscal Month, compliance with Section 3.1 of Schedule 7.16;

7.3.12.             on the first Wednesday of each Fiscal Month (or, if such day is not a Business Day, on the next succeeding Business Day), a copy of the most recently prepared borrowing base certificate in the form delivered pursuant to Section 6.02(c) of the Revolving Loan Agreement;

7.3.13.             within 30 days after the end of each Fiscal Month, a report setting forth the monthly sales figures on a store-by-store basis for such Fiscal Month and, as to each store, a year-over-year comparison percentage with respect to the relevant portion of the previous Fiscal Year, and (y) within 45 days after the end of each Fiscal Quarter, a report setting forth the quarterly contributions analysis broken down on a store-by-store basis;

7.3.14.             upon request by any Note Purchaser, a report of revenue derived from the Licensing Agreements;

7.3.15.             copies of any physical inventories conducted under Section 6.15 of the Revolving Loan Agreement;

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7.3.16.             upon request by any Note Purchaser, copies of any reports delivered to the Revolving Lenders pursuant to the Revolving Loan Agreement; and

7.3.17.             promptly, such additional information regarding the business affairs, financial condition or operations of any Note Party or any Subsidiary, or compliance with the terms of the Note Documents, as the Collateral Agent or any Note Purchaser may from time to time reasonably request.

Financial statements required to be delivered pursuant to Section 7.3.5 (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Issuer posts such documents, or provides a link thereto on the Issuer’s website on the Internet at the website address listed in Section 13.7; or (ii) on which such documents are posted on the Issuer’s behalf on ▇▇▇▇▇ or another Internet or intranet website, if any, to which each Note Purchaser and the Collateral Agent have access (whether a commercial, third-party website or whether sponsored by the Collateral Agent); provided that: (i) the Issuer shall deliver paper copies of such documents to the Collateral Agent or any Note Purchaser that requests the Issuer to deliver such paper copies until a written request to cease delivering paper copies is given by the Collateral Agent or such Note Purchaser and (ii) the Issuer shall notify the Collateral Agent and each Note Purchaser (by facsimile or electronic mail) of the posting of any such documents and provide to the Collateral Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in every instance, the Issuer shall be required to provide paper copies of the Compliance Certificates required by Section 7.3.2 to the Collateral Agent.  The Collateral Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Note Parties with any such request for delivery, and each Note Purchaser shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

7.4           Other Information; Audit.  From time to time at reasonable intervals upon request of the Collateral Agent, furnish to the Collateral Agent and such Note Purchaser such other information regarding the business, assets, financial condition, or income of the Note Parties (i) as the Collateral Agent may reasonably request, including copies of all tax returns, licenses, agreements, leases and instruments to which any of the Note Parties is party, and (ii) copies of any information delivered to the Revolving Agent as furnished to under Section 6.14 (Information Regarding the Collateral) of the Revolving Loan Agreement.

7.5           Notices.  Promptly notify the Collateral Agent: