Exhibit 10.1

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is being made as of this 22th day
of March, 2007 between iPARTY CORP., a Delaware corporation (the “Company”) and
SAL PERISANO, an individual residing at 288 Huron Avenue, Cambridge,
Massachusetts (the  “Executive”).

W I T N E S S E T H:

 

WHEREAS, the Company and the Executive previously entered into an employment
agreement dated as of March 26, 2002, which agreement was amended and restated
as of March 14, 2004 (the “Prior Employment Agreement”); and

WHEREAS, the Company and the Executive desire to enter into a new Employment
Agreement with the Executive effective as of April 1, 2007.

NOW, THEREFORE, in consideration of the mutual premises and agreements contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:

1.             TERM OF EMPLOYMENT.

(A)           EXCEPT FOR EARLIER TERMINATION AS PROVIDED IN SECTION 11 HEREOF,
THE EXECUTIVE’S EMPLOYMENT UNDER THIS AGREEMENT SHALL BE FOR A PERIOD COMMENCING
ON APRIL 1, 2007 AND EXPIRING ON MARCH 31, 2010 (THE “EMPLOYMENT TERM”).

(B)           ON OR ABOUT SEPTEMBER 30, 2009 THE COMPANY SHALL PROVIDE THE
EXECUTIVE WITH WRITTEN NOTICE REGARDING WHETHER OR NOT THE COMPANY INTENDS TO
SEEK TO EXTEND THE EMPLOYMENT TERM.  A NOTICE WHICH STATES THAT THE COMPANY
INTENDS TO SEEK TO EXTEND THE EMPLOYMENT TERM IS REFERRED TO HEREIN AS A
“RENEWAL NOTICE” AND A NOTICE WHICH STATES THAT THE COMPANY DOES NOT INTEND TO
SEEK TO EXTEND THE EMPLOYMENT TERM IS REFERRED TO HEREIN AS A “NON-RENEWAL
NOTICE.”  IF THE COMPANY DELIVERS A NON-RENEWAL NOTICE, THE PERIOD OF TIME FROM
THE DATE OF THE DELIVERY OF THE NON-RENEWAL NOTICE TO THE EXPIRATION OF THE
EMPLOYMENT TERM IS REFERRED TO HEREIN AS THE “TRANSITION PERIOD.”  IF THE
COMPANY DELIVERS A RENEWAL NOTICE TO THE EXECUTIVE (I) THE EMPLOYMENT TERM SHALL
AUTOMATICALLY BE EXTENDED FOR A PERIOD OF SIX (6) MONTHS AND (II) THE COMPANY
AND THE EXECUTIVE SHALL SEEK TO NEGOTIATE THE TERMS OF A NEW, MUTUALLY AGREEABLE
EMPLOYMENT AGREEMENT.  SUCH SIX (6) MONTH EXTENSION PERIOD, IF (AND ONLY IF)
APPLICABLE, IS REFERRED TO HEREIN AS THE “EXTENSION PERIOD,” AND DURING THE
EXTENSION PERIOD, IF (AND ONLY IF) APPLICABLE, ALL REFERENCES HEREIN TO THE
EMPLOYMENT TERM SHALL INCLUDE THE EXTENSION PERIOD.

2.             DUTIES, RESPONSIBILITIES AND POSITIONS.

(A)           DURING THE EMPLOYMENT TERM, THE EXECUTIVE SHALL SERVE AS THE CHIEF
EXECUTIVE OFFICER OF THE COMPANY.  IN ADDITION, DURING THE EMPLOYMENT TERM, THE
COMPANY SHALL USE ITS BEST EFFORTS TO (I) CAUSE THE EXECUTIVE TO BE NOMINATED
FOR ELECTION TO THE BOARD OF DIRECTORS OF THE COMPANY (THE “BOARD”) AND (II)
SUBJECT TO A PERMITTED CHANGE (AS DEFINED BELOW) TO BE APPOINTED AS CHAIRMAN OF
THE BOARD.  DURING THE EMPLOYMENT TERM, THE EXECUTIVE SHALL PERFORM ALL DUTIES
AND ACCEPT ALL RESPONSIBILITIES INCIDENTAL TO SUCH POSITIONS OR AS MAY BE
ASSIGNED TO HIM BY THE BOARD, OR ANY COMMITTEE THEREOF, FROM TIME TO TIME AND
WHICH ARE

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NORMALLY ASSOCIATED WITH THE POSITIONS OF CHIEF EXECUTIVE OFFICER AND (SUBJECT
TO A PERMITTED CHANGE) CHAIRMAN OF THE BOARD.  ALL EMPLOYEES OF THE COMPANY
SHALL REPORT TO THE EXECUTIVE; PROVIDED, HOWEVER, THAT THE BOARD OR ANY
COMMITTEE THEREOF MAY DIRECT EMPLOYEES OF THE COMPANY TO REPORT DIRECTLY TO THE
BOARD OR ANY COMMITTEE THEREOF IN CONNECTION WITH ANY INTERNAL INVESTIGATIONS OR
REVIEWS COMMENCED BY THE BOARD OR ANY COMMITTEE THEREOF.  THE EXECUTIVE SHALL BE
SUBJECT AT ALL TIMES TO THE GENERAL SUPERVISION, ORDERS, ADVICE AND DIRECTION OF
THE BOARD.  THE EXECUTIVE SHALL ALSO COOPERATE FULLY WITH THE BOARD AND OTHER
EXECUTIVE OFFICERS OF THE COMPANY.

AS USED HEREIN, A “PERMITTED CHANGE” SHALL MEAN THE APPOINTMENT OF A PERSON
REASONABLY ACCEPTABLE TO THE EXECUTIVE (WHICH SUCH ACCEPTANCE SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED) AS CHAIRMAN OF THE BOARD (I) IN CONNECTION
WITH ANY MATERIAL ACQUISITION, FINANCING OR SIMILAR TRANSACTION WHICH INCREASES
THE SIZE AND SCOPE OF THE COMPANY’S BUSINESS OR (II) IN ORDER TO COMPLY WITH
GENERAL CORPORATE GOVERNANCE PRACTICES THEN BEING FOLLOWED BY COMPANIES OF
SIMILAR SIZE AND SCOPE.

(B)           UPON TERMINATION OF THE EXECUTIVE’S EMPLOYMENT FOR ANY REASON, THE
EXECUTIVE SHALL BE DEEMED TO HAVE RESIGNED AS A MEMBER OF THE BOARD AND FROM ANY
OTHER OFFICE OR OFFICES WITHIN THE COMPANY AND ANY SUBSIDIARY OF THE COMPANY
THAT THE EXECUTIVE MAY THEN HOLD.

(C)           DURING THE EMPLOYMENT TERM, THE EXECUTIVE SHALL DEVOTE
SUBSTANTIALLY ALL HIS FULL WORKING TIME, ENERGY AND EFFORTS TO THE BUSINESS OF
THE COMPANY; PROVIDED, HOWEVER, THAT THE EXECUTIVE SHALL BE ALLOWED, TO THE
EXTENT THAT SUCH ACTIVITIES DO NOT MATERIALLY INTERFERE WITH THE PERFORMANCE OF
HIS DUTIES AND RESPONSIBILITIES HEREUNDER, TO MANAGE HIS PERSONAL AND FAMILY
FINANCIAL AND LEGAL AFFAIRS AND TO SERVE ON CIVIC, NOT-FOR-PROFIT AND CHARITABLE
INDUSTRY BOARDS AND ADVISORY COMMITTEES.  THE EXECUTIVE SHALL ONLY SERVE ON
FOR-PROFIT CORPORATE BOARDS OF DIRECTORS AND ADVISORY COMMITTEES IF APPROVED IN
ADVANCE, IN WRITING, BY THE BOARD.

(D)           THE EXECUTIVE REPRESENTS TO THE COMPANY THAT (I) THE EXECUTIVE HAS
THE LEGAL CAPACITY TO EXECUTE AND PERFORM THIS AGREEMENT AND (II) THAT HE IS NOT
CURRENTLY SUBJECT TO OR BOUND BY ANY EMPLOYMENT AGREEMENT, NON-COMPETITION
COVENANT, NON-DISCLOSURE AGREEMENT OR OTHER AGREEMENT, COVENANT, UNDERSTANDING
OR RESTRICTION OF ANY NATURE WHATSOEVER WHICH WOULD PROHIBIT THE EXECUTIVE FROM
EXECUTING THIS AGREEMENT AND PERFORMING FULLY HIS DUTIES AND RESPONSIBILITIES
HEREUNDER, OR WHICH WOULD IN ANY MANNER, DIRECTLY OR INDIRECTLY, MATERIALLY
LIMIT THE DUTIES AND RESPONSIBILITIES WHICH IT IS NOW REASONABLY FORESEEABLE MAY
NOW OR IN THE FUTURE BE ASSIGNED TO THE EXECUTIVE BY THE BOARD.

(E)           THE EXECUTIVE SHALL AT ALL TIMES COMPLY IN ALL MATERIAL RESPECTS
WITH POLICIES AND PROCEDURES ADOPTED BY THE COMPANY APPLICABLE TO EXECUTIVES OF
THE COMPANY, INCLUDING WITHOUT LIMITATION, PROCEDURES AND POLICIES REGARDING
CONFLICTS OF INTEREST.

3.             COMPENSATION.  FOR ALL SERVICES RENDERED BY THE EXECUTIVE IN ANY
CAPACITY DURING THE EMPLOYMENT TERM, INCLUDING WITHOUT LIMITATION, SERVICES AS
AN OFFICER, DIRECTOR, OR MEMBER OF ANY COMMITTEE OF THE COMPANY, OR ANY
SUBSIDIARY, AFFILIATE OR DIVISION THEREOF, THE EXECUTIVE SHALL BE COMPENSATED AS
FOLLOWS (SUBJECT, IN EACH CASE, TO THE PROVISIONS OF SECTION 11 BELOW):

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(A)           BASE SALARY.  DURING THE EMPLOYMENT TERM, THE COMPANY SHALL PAY TO
THE EXECUTIVE A BASE SALARY ON AN ANNUALIZED BASIS (THE “BASE SALARY”) AS
FOLLOWS: (I) FOR THE PERIOD FROM APRIL 1, 2007 THROUGH MARCH 31, 2008, $312,500;
(II) FOR THE PERIOD FROM APRIL 1, 2008 THROUGH MARCH 31, 2009, $325,000 AND
(III) FOR THE PERIOD FROM APRIL 1, 2009 THROUGH MARCH 31, 2010, $337,500.  THE
TERM “BASE SALARY” AS USED IN THIS AGREEMENT SHALL REFER TO BASE SALARY IN
EFFECT FOR THE APPLICABLE PERIOD SET FORTH IN THE IMMEDIATELY PRECEDING
SENTENCE.  THE BASE SALARY SHALL BE PAYABLE IN ACCORDANCE WITH THE CUSTOMARY
PAYROLL PRACTICES OF THE COMPANY. THE BASE SALARY PAID TO THE EXECUTIVE SHALL AT
ALL TIMES BE THE HIGHEST SALARY PAID OR PAYABLE BY THE COMPANY TO ANY OF ITS
EMPLOYEES.   IF, DURING THE EMPLOYMENT TERM, THE COMPANY CONSUMMATES ANY
MATERIAL ACQUISITIONS OR SIMILAR TRANSACTIONS WHICH INCREASE THE SIZE AND SCOPE
OF THE COMPANY’S BUSINESS, THE COMPENSATION COMMITTEE OF THE BOARD SHALL CONVENE
AS PROMPTLY AS REASONABLY PRACTICABLE FOR THE PURPOSE OF DISCUSSING WHETHER OR
NOT IT IS APPROPRIATE TO INCREASE THE EXECUTIVE’S BASE SALARY; PROVIDED,
HOWEVER, THAT NO SUCH INCREASE SHALL BE REQUIRED.

(B)           BONUS.  IN ADDITION TO THE BASE SALARY PROVIDED HEREIN, THE
EXECUTIVE SHALL BE ENTITLED TO PARTICIPATE IN, AND MAY RECEIVE PERFORMANCE BONUS
PAYMENTS UNDER, SUCH ANNUAL BONUS PLAN OR PLANS AS THE COMPENSATION COMMITTEE OF
THE BOARD MAY ESTABLISH FROM TIME TO TIME FOR SENIOR EXECUTIVE OFFICERS OF THE
COMPANY.  ANY SUCH PERFORMANCE BONUS OR BONUSES SHALL BE DETERMINED IN THE SOLE
DISCRETION OF THE COMPENSATION COMMITTEE OF THE BOARD. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, SUCH PERFORMANCE BONUS OR BONUSES, IF PAID, MAY BE
PAID IN STOCK, STOCK OPTIONS, RESTRICTED STOCK, CASH, OR ANY COMBINATION
THEREOF.

(C)           BENEFITS.  DURING THE EMPLOYMENT TERM, THE EXECUTIVE SHALL BE
ENTITLED TO PARTICIPATE IN ALL EMPLOYEE BENEFIT AND EQUITY PLANS AND FRINGE
BENEFITS AND PREREQUISITES GENERALLY PROVIDED TO SENIOR EXECUTIVES OF THE
COMPANY, IN EACH CASE SUBJECT TO THE ELIGIBILITY REQUIREMENTS AND OTHER TERMS
AND PROVISIONS OF SUCH PLANS AND PROGRAMS.  THE COMPANY MAY AMEND, MODIFY OR
RESCIND ANY EMPLOYEE BENEFIT PLAN OR PROGRAM AND CHANGE EMPLOYEE CONTRIBUTION
AMOUNTS OR BENEFIT COSTS WITHOUT NOTICE IN ITS DISCRETION.

4.             STOCK OPTIONS MATTERS.  ON JUNE 6, 2007, PROVIDED THE EXECUTIVE
IS THEN EMPLOYED BY THE COMPANY, THE COMPANY WILL GRANT THE EXECUTIVE STOCK
OPTIONS (THE “OPTIONS”) FOR AN AGGREGATE OF 375,000 SHARES OF COMMON STOCK OF
THE COMPANY, AT AN EXERCISE PRICE EQUAL TO THE CLOSING PRICE OF THE COMMON STOCK
ON SUCH DATE, PURSUANT TO THE COMPANY’S AMENDED AND RESTATED 1998 INCENTIVE AND
NONQUALIFIED STOCK OPTION PLAN (THE “PLAN”).  THE OPTIONS SHALL COMPRISE
INCENTIVE STOCK OPTIONS (TO THE EXTENT PERMITTED UNDER APPLICABLE LAWS) AND THE
BALANCE SHALL BE NON-QUALIFIED STOCK OPTIONS AND SHALL VEST AS FOLLOWS: OPTIONS
FOR 125,000 SHARES SHALL VEST ON MARCH 31, 2008, PROVIDED THE EXECUTIVE REMAINS
CONTINUOUSLY EMPLOYED BY THE COMPANY THROUGH MARCH 31, 2008; OPTIONS FOR AN
ADDITIONAL 125,000 SHARES SHALL VEST ON MARCH 31, 2009, PROVIDED THE EXECUTIVE
REMAINS CONTINUOUSLY EMPLOYED BY THE COMPANY THROUGH MARCH 31, 2009; AND OPTIONS
FOR ALL REMAINING SHARES SHALL VEST ON MARCH 31, 2010,  PROVIDED THE EXECUTIVE
REMAINS CONTINUOUSLY EMPLOYED BY THE COMPANY THROUGH MARCH 31, 2010.  THE
OPTIONS SHALL BE SUBJECT TO THE TERMS OF THE PLAN AND THE TERMS AND CONDITIONS
OF THE COMPANY’S STANDARD FORM OF OPTION GRANT AGREEMENTS TO BE ENTERED INTO
BETWEEN THE COMPANY AND THE EXECUTIVE AS A CONDITION OF GRANT OF THE OPTIONS.

5.             EXPENSES; VACATIONS.  THE EXECUTIVE SHALL BE ENTITLED TO
REIMBURSEMENT FOR REASONABLE TRAVEL AND OTHER OUT-OF-POCKET EXPENSES NECESSARILY
INCURRED IN THE PERFORMANCE OF

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HIS DUTIES HEREUNDER, UPON SUBMISSION AND APPROVAL OF WRITTEN STATEMENTS AND
BILLS IN ACCORDANCE WITH THE THEN REGULAR PROCEDURES OF THE COMPANY.  THE
EXECUTIVE SHALL BE ENTITLED TO FOUR WEEKS PAID VACATION PER CALENDAR YEAR, WITH
SUCH VACATION TO BE SCHEDULED AND TAKEN IN ACCORDANCE WITH THE COMPANY’S
STANDARD VACATION POLICIES.  UP TO TWO (2) WEEKS ACCRUED BUT UNUSED VACATION
TIME MAY BE CARRIED FORWARD FROM YEAR TO YEAR; PROVIDED, HOWEVER, IN NO EVENT
SHALL MORE THAN AN AGGREGATE OF SIX (6) WEEKS OF UNUSED VACATION TIME BE ACCRUED
DURING THE EMPLOYMENT TERM.

6.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  THE COMPANY
REPRESENTS AND WARRANTS TO, AND AGREES WITH, THE EXECUTIVE THAT (I) PURSUANT TO
THE DELAWARE GENERAL CORPORATION LAW, THE COMPANY’S CERTIFICATE OF
INCORPORATION, AS AMENDED TO DATE (THE “CHARTER”), PROVIDES FOR INDEMNIFICATION
OF OFFICERS AND DIRECTORS OF THE COMPANY AND THAT SO LONG AS THE EXECUTIVE
SERVES AS AN EXECUTIVE OFFICER OF THE COMPANY, UNLESS REQUIRED BY APPLICABLE LAW
THE CHARTER WILL NOT BE AMENDED TO LIMIT SUCH INDEMNIFICATION WITHOUT THE
WRITTEN CONSENT OF THE EXECUTIVE AND (II) THE COMPANY MAINTAINS AN OFFICERS AND
DIRECTORS LIABILITY INSURANCE POLICY WHICH INSURES THE EXECUTIVE (SUBJECT TO THE
LIMITATIONS CONTAINED THEREIN) AND WILL MAINTAIN SUCH A POLICY FOR SO LONG AS
THE EXECUTIVE SERVES AS AN EXECUTIVE OFFICER OF THE COMPANY.

7.             DEVELOPMENTS.  ALL DEVELOPMENTS, INCLUDING INVENTIONS, WHETHER
PATENTABLE OR OTHERWISE, TRADE SECRETS, DISCOVERIES, IMPROVEMENTS, IDEAS AND
WRITINGS WHICH RELATE TO OR MAY BE USEFUL IN THE BUSINESS OF THE COMPANY, AND
WHICH THE EXECUTIVE, EITHER BY HIMSELF OR IN CONJUNCTION WITH ANY OTHER PERSON
OR PERSONS, HAS CONCEIVED, MADE, DEVELOPED, ACQUIRED OR ACQUIRED KNOWLEDGE OF
WHILE ENGAGED IN ANY ACTIVITY ON BEHALF OF OR WHILE ACTING FOR THE COMPANY
DURING THE COURSE OF HIS EMPLOYMENT BY THE COMPANY (THE “DEVELOPMENTS”), SHALL,
ON AND AFTER THE START OF THE EMPLOYMENT TERM, BECOME THE SOLE AND EXCLUSIVE
PROPERTY OF THE COMPANY.  THE EXECUTIVE HEREBY ASSIGNS, TRANSFERS AND CONVEYS,
AND AGREES TO SO ASSIGN, TRANSFER AND CONVEY TO THE COMPANY, ALL OF HIS RIGHT,
TITLE AND INTEREST IN AND TO ANY AND ALL SUCH DEVELOPMENTS AND TO DISCLOSE IN
WRITING TO THE BOARD, AS SOON AS PRACTICABLE, ALL DEVELOPMENTS THAT HE BELIEVES
IN HIS GOOD FAITH JUDGMENT MAY BE OF MATERIAL SIGNIFICANCE TO THE COMPANY, AND
TO REDUCE ANY SUCH DEVELOPMENTS TO WRITING AT THE REQUEST OF BOARD IF HE HAS NOT
ALREADY DONE SO.  AT ANY TIME, AND FROM TIME TO TIME, UPON THE REQUEST AND AT
THE EXPENSE OF THE COMPANY, THE EXECUTIVE WILL EXECUTE AND DELIVER ANY AND ALL
INSTRUMENTS, DOCUMENTS AND PAPERS, GIVE EVIDENCE AND DO ANY AND ALL OTHER ACTS
WHICH, IN THE REASONABLE OPINION OF COUNSEL FOR THE COMPANY, ARE OR MAY
REASONABLY BE NECESSARY OR DESIRABLE TO DOCUMENT SUCH TRANSFER OR TO ENABLE THE
COMPANY TO FILE AND PROSECUTE APPLICATIONS FOR AND TO ACQUIRE, MAINTAIN AND
ENFORCE ANY AND ALL PATENTS, TRADEMARK REGISTRATIONS OR COPYRIGHTS UNDER UNITED
STATES OR FOREIGN LAW WITH RESPECT TO ANY SUCH DEVELOPMENTS OR TO OBTAIN ANY
EXTENSION, VALIDATION, REISSUE, CONTINUANCE OR RENEWAL OF ANY SUCH PATENT,
TRADEMARK OR COPYRIGHTS; PROVIDED ONLY THAT ANY SUCH ACTIONS REQUESTED FOLLOWING
TERMINATION OF EMPLOYMENT SHALL NOT UNREASONABLY INTERFERE WITH EXECUTIVE’S THEN
EMPLOYMENT, BUSINESS OR OTHER ACTIVITIES.  THE COMPANY WILL BE RESPONSIBLE FOR
THE PREPARATION OF ANY SUCH INSTRUMENTS, DOCUMENTS AND PAPERS AND FOR THE
PROSECUTION OF ANY SUCH PROCEEDINGS AND WILL REIMBURSE THE EXECUTIVE FOR ALL
REASONABLE EXPENSES INCURRED BY HIM IN COMPLIANCE WITH THE PROVISIONS OF THIS
SECTION 7.  THE DEVELOPMENTS SHALL NOT INCLUDE ANY KNOWLEDGE OR INFORMATION OF
ANY KIND ACQUIRED BY OR DISCLOSED TO THE EXECUTIVE WHILE SERVING IN HIS CAPACITY
AS A MEMBER OF THE BOARD OF DIRECTORS OF ANY NON-COMPANY ENTITY, IN HIS CAPACITY
AS A PRIVATE INVESTOR, OR IN ANY OTHER CIRCUMSTANCE DURING WHICH THE EXECUTIVE
IS NOT OR WAS NOT ENGAGED IN ANY ACTIVITY ON BEHALF OF OR ACTING FOR THE
COMPANY.  FURTHERMORE, NOTHING HEREIN SHALL PRECLUDE EXECUTIVE FROM

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UTILIZING DEVELOPMENTS APPLICABLE TO RETAILING GENERALLY (WHETHER FROM STORES,
VIA CATALOG, VIA E-COMMERCE OR OTHERWISE) FOLLOWING TERMINATION OF EMPLOYMENT,
SUBJECT ALWAYS TO THE PROVISIONS OF SECTION 8 BELOW.

8.             NON-COMPETITION AND NON-SOLICITATION.

(A)           NON-COMPETITION.  THE EXECUTIVE AGREES THAT THE EXECUTIVE WILL
NOT, DURING THE “RESTRICTIVE PERIOD”, AS DEFINED BELOW, ENGAGE IN, OR OTHERWISE
DIRECTLY OR INDIRECTLY BE EMPLOYED BY, OR ACT AS A CONSULTANT OR LENDER TO, OR
BE A DIRECTOR, OFFICER, EMPLOYEE, OWNER, CO-VENTURER, MEMBER OR PARTNER OF, OR
USE OR EXPRESSLY PERMIT THE EXECUTIVE’S NAME TO BE USED BY (COLLECTIVELY AN
“ENGAGEMENT WITH”), ANY BUSINESS, ENTITY OR ORGANIZATION WHICH HAS A PRIMARY
LINE OF BUSINESS (I.E. REPRESENTING MORE THAN 4.9% OF ITS REVENUE) INVOLVING THE
SALE AT RETAIL, WHETHER FROM STORE LOCATIONS, AND/OR BY OR FROM DIRECT MAIL,
CATALOGUES AND/OR WEBSITES, OF PARTY GOODS AND/OR SUPPLIES ANYWHERE IN THE
UNITED STATES (A “COMPETING ENTITY”); PROVIDED, HOWEVER, THAT IN EACH CASE THE
PROVISIONS OF THIS SECTION 8(A) WILL NOT BE DEEMED BREACHED MERELY BECAUSE THE
EXECUTIVE OWNS NOT MORE THAN FIVE PERCENT (5.0%) OF THE OUTSTANDING COMMON STOCK
OF A COMPETING ENTITY, IF, AT THE TIME OF ITS ACQUISITION BY THE EXECUTIVE, SUCH
STOCK IS LISTED ON A NATIONAL SECURITIES EXCHANGE, IS REPORTED ON NASDAQ, OR IS
REGULARLY TRADED IN THE OVER-THE-COUNTER MARKET BY A MEMBER OF A NATIONAL
SECURITIES EXCHANGE; AND PROVIDED, FURTHER, HOWEVER, THAT, SUBJECT TO THE
PROVISIONS OF SECTION 8(B), NOTHING HEREIN SHALL PREVENT THE EXECUTIVE FROM
WORKING FOR A BUSINESS SEGMENT OR DEPARTMENT OF A COMPETING ENTITY, OR A
SUBSIDIARY, DIVISION OR OTHER ENTITY THAT CONTROLS OR IS CONTROLLED BY A
COMPETING ENTITY IF (AND ONLY IF), THE BUSINESS SEGMENT OR DEPARTMENT OF THE
COMPETING ENTITY FOR WHICH THE EXECUTIVE PROVIDES SERVICES, OR THE SUBSIDIARY,
DIVISION OR OTHER ENTITY BY WHICH THE EXECUTIVE HAS AN ENGAGEMENT WITH (AS THE
CASE MAY BE), (1) DOES NOT ITSELF COMPETE WITH THE COMPANY, AND (2) THE
EXECUTIVE DOES NOT PROVIDE ANY SERVICES, ADVICE, ASSISTANCE AND/OR GUIDANCE TO
ANY BUSINESS SEGMENT OR DEPARTMENT, SUBSIDIARY, DIVISION, OR OTHER ENTITY OF THE
COMPETING ENTITY WHICH COMPETES WITH THE COMPANY.  AS USED IN THIS SECTION THE
“RESTRICTIVE PERIOD” SHALL BE (I) THE PERIOD THE EXECUTIVE IS EMPLOYED BY THE
COMPANY AND (II) THE PERIOD OF ONE (1) YEAR AFTER THE EXECUTIVE CEASES TO BE
EMPLOYED BY THE COMPANY FOR ANY REASON, OR, IN THE CASE OF THE EXECUTIVE’S
ENGAGEMENT WITH ANY COMPETING ENTITY THAT OPERATES RETAIL STORES WHICH ARE
LOCATED IN ANY STATES WHERE THE COMPANY HAS RETAIL STORES ON THE DATE OF THE
EXECUTIVE’S CESSATION OF EMPLOYMENT, THE PERIOD OF EIGHTEEN (18) MONTHS PERIOD
AFTER THE EXECUTIVE CEASES TO BE EMPLOYED BY THE COMPANY FOR ANY REASON.

(B)           NON-SOLICITATION. DURING THE RESTRICTIVE PERIOD, THE EXECUTIVE
WILL NOT, EITHER DIRECTLY OR INDIRECTLY, (I) CALL ON OR SOLICIT (FOR THE PURPOSE
OF DIVERTING BUSINESS FROM THE COMPANY) ANY PERSON, FIRM, CORPORATION OR OTHER
ENTITY WHO OR WHICH AT THE TIME OF SUCH TERMINATION WAS, OR WITHIN ONE (1) YEAR
PRIOR THERETO HAD BEEN, A CUSTOMER OF THE COMPANY OR (II) SOLICIT THE EMPLOYMENT
OF ANY PERSON (OTHER THAN ANY FAMILY MEMBER) WHO WAS EMPLOYED THE COMPANY ON A
FULL OR PART-TIME BASIS AT ANY TIME DURING THE SIX (6) MONTHS PRIOR TO THE
TERMINATION OF EXECUTIVE’S EMPLOYMENT, UNLESS SUCH PERSON PRIOR TO SUCH
SOLICITATION OF EMPLOYMENT WAS INVOLUNTARILY DISCHARGED BY THE COMPANY.

9.             CONFIDENTIAL INFORMATION.  THE EXECUTIVE RECOGNIZES AND
ACKNOWLEDGES THAT BY REASON OF HIS EMPLOYMENT BY AND SERVICE TO THE COMPANY, HE
HAS HAD AND WILL HAVE ACCESS TO CONFIDENTIAL INFORMATION OF THE COMPANY AND ITS
AFFILIATES, INCLUDING WITHOUT LIMITATION, INFORMATION AND KNOWLEDGE PERTAINING
TO PRODUCTS AND SERVICES OFFERED, IDEAS, PLANS, TRADE

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SECRETS, PROPRIETARY INFORMATION, ADVERTISING, DISTRIBUTION AND SALES METHODS
AND SYSTEMS, SALES AND PROFIT FIGURES, CUSTOMER AND CLIENT LISTS, AND
RELATIONSHIPS BETWEEN THE COMPANY AND ITS CUSTOMERS, CLIENTS, SUPPLIERS AND
OTHERS WHO HAVE BUSINESS DEALINGS WITH THE COMPANY (COLLECTIVELY, “CONFIDENTIAL
INFORMATION”).  THE EXECUTIVE ACKNOWLEDGES THAT SUCH CONFIDENTIAL INFORMATION IS
A VALUABLE AND UNIQUE ASSET AND COVENANTS THAT HE WILL NOT, EITHER DURING OR AT
ANY TIME AFTER THE END OF THE EMPLOYMENT TERM, USE OR DISCLOSE ANY SUCH
CONFIDENTIAL INFORMATION TO ANY PERSON OR ENTITY FOR ANY REASON WHATSOEVER
(EXCEPT AS HIS DUTIES DESCRIBED HEREIN MAY REQUIRE) WITHOUT THE PRIOR
AUTHORIZATION OF THE BOARD, UNLESS SUCH INFORMATION IS IN OR ENTERS THE PUBLIC
DOMAIN THROUGH NO FAULT OF THE EXECUTIVE OR IS OTHERWISE LAWFULLY KNOWN BY THIRD
PARTIES.  IN THE EVENT THE EXECUTIVE BECOMES OR MAY BECOME LEGALLY COMPELLED TO
DISCLOSE ANY CONFIDENTIAL INFORMATION (WHETHER BY DEPOSITION, INTERROGATORY,
REQUEST FOR DOCUMENTS, SUBPOENA, CIVIL INVESTIGATIVE DEMAND OR OTHER PROCESS OR
OTHERWISE), THE EXECUTIVE SHALL PROVIDE TO THE BOARD PROMPT PRIOR WRITTEN NOTICE
OF SUCH REQUIREMENT SO THAT THE COMPANY MAY SEEK A PROTECTIVE ORDER OR OTHER
APPROPRIATE REMEDY AND/OR WAIVE COMPLIANCE WITH THE TERMS OF THIS SECTION 9.  IN
THE EVENT THAT SUCH PROTECTIVE ORDER OR OTHER REMEDY IS NOT OBTAINED, OR THAT
THE COMPANY WAIVES COMPLIANCE WITH THE PROVISIONS THIS SECTION 9, THE EXECUTIVE
SHALL FURNISH ONLY THAT PORTION OF THE CONFIDENTIAL INFORMATION WHICH IT IS
ADVISED BY COUNSEL IS LEGALLY REQUIRED TO BE DISCLOSED, AND SHALL USE HIS BEST
EFFORTS TO INSURE THAT CONFIDENTIAL TREATMENT SHALL BE AFFORDED SUCH DISCLOSED
PORTION OF THE CONFIDENTIAL INFORMATION.

10.           EQUITABLE RELIEF.

(A)           THE EXECUTIVE ACKNOWLEDGES THAT THE RESTRICTIONS CONTAINED IN
SECTIONS 7, 8, AND 9 HEREOF ARE REASONABLE AND NECESSARY TO PROTECT THE
LEGITIMATE INTERESTS OF THE COMPANY, THAT THE COMPANY WOULD NOT HAVE ENTERED
INTO THIS AGREEMENT IN THE ABSENCE OF SUCH RESTRICTIONS, AND THAT ANY VIOLATION
OF ANY PROVISION OF THOSE SECTIONS WILL RESULT IN IRREPARABLE INJURY TO THE
COMPANY.  THE EXECUTIVE REPRESENTS THAT HIS EXPERIENCE AND CAPABILITIES ARE SUCH
THAT THE RESTRICTIONS CONTAINED IN SECTION 8  HEREOF WILL NOT PREVENT THE
EXECUTIVE FROM OBTAINING EMPLOYMENT OR OTHERWISE EARNING A LIVING AT THE SAME
GENERAL LEVEL OF ECONOMIC BENEFIT AS IS ANTICIPATED BY THIS AGREEMENT.  THE
EXECUTIVE FURTHER REPRESENTS AND ACKNOWLEDGES THAT (I) HE HAS BEEN ADVISED BY
THE COMPANY TO CONSULT HIS OWN LEGAL COUNSEL IN RESPECT OF THIS AGREEMENT, (II)
THAT HE HAS HAD FULL OPPORTUNITY, PRIOR TO EXECUTION OF THIS AGREEMENT, TO
REVIEW THOROUGHLY THIS AGREEMENT WITH HIS COUNSEL, AND (III) HE HAS READ AND
FULLY UNDERSTANDS THE TERMS AND PROVISIONS OF THIS AGREEMENT.

(B)           THE EXECUTIVE AGREES THAT THE COMPANY SHALL BE ENTITLED TO
PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF, WITHOUT THE NECESSITY OF PROVING
ACTUAL DAMAGES, AS WELL AS AN EQUITABLE ACCOUNTING OF ALL EARNINGS, PROFITS AND
OTHER BENEFITS ARISING FROM ANY VIOLATION OF SECTIONS 7, 8, OR 9 HEREOF, WHICH
RIGHTS SHALL BE CUMULATIVE AND IN ADDITION TO ANY OTHER RIGHTS OR REMEDIES TO
WHICH THE COMPANY MAY BE ENTITLED.  IN THE EVENT THAT ANY OF THE PROVISIONS OF
SECTIONS 7, 8, OR 9 HEREOF SHOULD EVER BE ADJUDICATED TO EXCEED THE TIME,
GEOGRAPHIC, PRODUCT OR SERVICE, OR OTHER LIMITATIONS PERMITTED BY APPLICABLE LAW
IN ANY JURISDICTION, THEN SUCH PROVISIONS SHALL BE DEEMED REFORMED IN SUCH
JURISDICTION TO THE MAXIMUM TIME, GEOGRAPHIC, PRODUCT OR SERVICE, OR OTHER
LIMITATIONS PERMITTED BY APPLICABLE LAW.

(C)           THE COMPANY AND THE EXECUTIVE EACH IRREVOCABLY AND

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UNCONDITIONALLY (I) AGREE THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING
ARISING OUT OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, ANY ACTION FOR
PRELIMINARY OR PERMANENT INJUNCTIVE RELIEF OR OTHER EQUITABLE RELIEF, MAY BE
BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF
MASSACHUSETTS, OR IF SUCH COURT DOES NOT HAVE JURISDICTION OR WILL NOT ACCEPT
JURISDICTION, IN ANY COURT OF GENERAL JURISDICTION IN THE COMMONWEALTH OF
MASSACHUSETTS, (II) CONSENT TO THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT
IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND (III) WAIVE ANY OBJECTION WHICH SUCH
PARTY MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY SUCH COURT.  THE COMPANY AND THE EXECUTIVE EACH ALSO IRREVOCABLY AND
UNCONDITIONALLY CONSENT TO THE SERVICE OF ANY PROCESS, PLEADINGS, NOTICES OR
OTHER PAPERS IN A MANNER PERMITTED BY THE NOTICE PROVISIONS OF SECTION 15
HEREOF.

(D)           THE EXECUTIVE AGREES THAT HE WILL PROVIDE A COPY OF SECTIONS 7, 8,
AND 9 OF THIS AGREEMENT TO ANY FOR-PROFIT BUSINESS OR ENTERPRISE (I) WHICH HE
MAY DIRECTLY OR INDIRECTLY OWN, MANAGE, OPERATE, FINANCE, JOIN, PARTICIPATE IN
THE OWNERSHIP, MANAGEMENT, OPERATION, FINANCING, CONTROL OR CONTROL OF, OR (II)
WITH WHICH HE MAY BE CONNECTED WITH AS AN OFFICER, DIRECTOR, EMPLOYEE, PARTNER,
PRINCIPAL, AGENT, REPRESENTATIVE, OR CONSULTANT, OR IN CONNECTION WITH WHICH HE
MAY USE OR EXPRESSLY PERMIT HIS NAME TO BE USED; PROVIDED, HOWEVER, THAT THIS
PROVISION SHALL NOT APPLY IN RESPECT OF SECTION 8 OF THIS AGREEMENT AFTER
EXPIRATION OF THE TIME PERIODS SET FORTH THEREIN.

11.           TERMINATION.

(A)           CAUSE.  NOTWITHSTANDING ANYTHING HEREIN CONTAINED, IF ON OR AFTER
THE DATE HEREOF AND PRIOR TO THE END OF THE EMPLOYMENT TERM, THE EXECUTIVE IS
TERMINATED “FOR CAUSE” (AS DEFINED BELOW) THEN THE COMPANY SHALL HAVE THE RIGHT
TO GIVE NOTICE OF TERMINATION OF THE EXECUTIVE’S SERVICES HEREUNDER AS OF A DATE
TO BE SPECIFIED IN SUCH NOTICE, AND THE EMPLOYMENT TERM SHALL TERMINATE ON THE
DATE SO SPECIFIED.  TERMINATION “FOR CAUSE” SHALL MEAN THE EXECUTIVE SHALL (I)
BE CHARGED WITH THE COMMISSION OF A FELONY CRIME; (II) COMMIT ANY ACT OR OMIT TO
TAKE ANY ACTION IN BAD FAITH AND TO THE DETRIMENT OF THE COMPANY; (III)
INTENTIONALLY FAIL TO FOLLOW ANY COMMERCIALLY REASONABLE AND LAWFUL DIRECTION OF
THE BOARD AND CONTINUE TO FAIL TO FOLLOW SUCH DIRECTION WITHIN TEN (10) DAYS OF
WRITTEN NOTIFICATION OF SAME; (IV) COMMIT AN ACT OF FRAUD AGAINST THE COMPANY;
(V) KNOWINGLY PROVIDE MATERIALLY FALSE INFORMATION CONCERNING THE COMPANY TO THE
BOARD, ANY GOVERNMENTAL BODY, ANY REGULATORY AGENCY, ANY LENDER OR OTHER
FINANCING SOURCE OF THE COMPANY, OR ANY SHAREHOLDER OF THE COMPANY; OR (VI)
BREACH ANY TERM OF THIS AGREEMENT AND FAIL TO CORRECT SUCH BREACH WITHIN TEN
(10) DAYS AFTER WRITTEN NOTICE OF COMMISSION THEREOF.  IN THE EVENT THAT THIS
AGREEMENT IS TERMINATED “FOR CAUSE” PURSUANT TO THIS SECTION 11(A), THEN THE
EXECUTIVE SHALL BE ENTITLED TO RECEIVE ONLY THE BASE SALARY AT THE RATE PROVIDED
IN SECTION 3(A) TO THE DATE ON WHICH TERMINATION SHALL TAKE EFFECT, ANY ACCRUED
VACATION AND UNPAID EXPENSES AS CONTEMPLATED UNDER SECTION 5, AND (III) ANY
PERFORMANCE BONUS EARNED AND UNPAID FOR ANY PRIOR PLAN PERIODS AND, IF
APPLICABLE UNDER ANY PERFORMANCE BONUS PLAN FOR THE YEAR OF TERMINATION, THE
AMOUNT, IF ANY, EARNED THEREUNDER TO THE DATE OF TERMINATION (COLLECTIVELY,
“ACCRUED BONUS PAYMENTS”).

(B)           DISABILITY.  IN THE EVENT OF THE DISABILITY OF THE EXECUTIVE, AS
DEFINED BELOW, THEN EXECUTIVE OR THE COMPANY MAY TERMINATE THE EXECUTIVE’S
EMPLOYMENT HEREUNDER UPON THIRTY (30) DAYS’ WRITTEN NOTICE TO THE OTHER.  IN THE
EVENT OF TERMINATION AS A RESULT OF EXECUTIVE’S DISABILITY, NO FURTHER
COMPENSATION SHALL BE PAYABLE TO THE EXECUTIVE, EXCEPT THAT THE COMPANY SHALL
PAY OR PROVIDE: (I) ANY ACCRUED AND UNPAID BASE SALARY AS

7

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CONTEMPLATED UNDER SECTION 3(A) UP TO THE EFFECTIVE DATE OF TERMINATION OF
EMPLOYMENT, (II) ANY ACCRUED VACATION AND UNPAID EXPENSES AS CONTEMPLATED UNDER
SECTION 5, (III) ANY ACCRUED BONUS PAYMENTS, (IV) THE EXECUTIVE’S BENEFITS SET
FORTH IN SECTION 3(C), OR COMPARABLE BENEFITS, FOR A PERIOD OF ONE (1) YEAR FROM
SUCH DATE OF TERMINATION AND (V) MAKE SEVERANCE PAYMENTS TO THE EXECUTIVE FOR A
PERIOD OF ONE (1) YEAR FOLLOWING HIS DATE OF TERMINATION IN AN AMOUNT EQUAL TO
THE RATE OF BASE SALARY IN EFFECT AT THE DATE OF TERMINATION LESS THE TOTAL
AMOUNT OF DISABILITY BENEFITS, IF ANY, PAYABLE TO EXECUTIVE UNDER ANY DISABILITY
PLAN OR POLICY MAINTAINED BY THE COMPANY.

AS USED HEREUNDER, “DISABILITY” SHALL MEAN (A) THE INABILITY OF THE EXECUTIVE TO
ENGAGE IN ANY SUBSTANTIAL GAINFUL EMPLOYMENT ACTIVITY ON BEHALF OF THE COMPANY,
WITH OR WITHOUT REASONABLE ACCOMMODATION, AS THAT TERM IS DEFINED UNDER
APPLICABLE STATE OR FEDERAL LAW, BY REASON OF ANY MEDICALLY DETERMINABLE
PHYSICAL OR MENTAL IMPAIRMENT (1) THAT CAN BE EXPECTED TO RESULT IN DEATH OR TO
LAST FOR A CONTINUOUS PERIOD OF NOT LESS THAN 12 MONTHS; OR (2) THAT CAN BE
EXPECTED TO RESULT IN DEATH OR TO LAST FOR A CONTINUOUS PERIOD OF NOT LESS THAN
12 MONTHS AND THE EXECUTIVE IS RECEIVING INCOME REPLACEMENT BENEFITS FOR A
PERIOD OF NOT LESS THAN THREE (3) MONTHS UNDER AN ACCIDENT AND HEALTH PLAN
COVERING THE COMPANY’S EMPLOYEES; OR (B) THE EXECUTIVE SHALL BE DETERMINED TO BE
TOTALLY DISABLED  BY THE U.S. SOCIAL SECURITY ADMINISTRATION (“SSA”).  A
DETERMINATION OF DISABILITY (OTHER THAN A DETERMINATION BY THE SSA) SHALL BE
MADE BY A PHYSICIAN SATISFACTORY TO BOTH THE EXECUTIVE AND THE COMPANY;
PROVIDED, THAT, IF THE EXECUTIVE AND THE COMPANY DO NOT AGREE ON A PHYSICIAN,
THE EXECUTIVE AND THE COMPANY SHALL EACH SELECT A PHYSICIAN AND THESE TWO
TOGETHER SHALL SELECT A THIRD PHYSICIAN, WHOSE DETERMINATION AS TO DISABILITY
SHALL BE BINDING ON ALL THE PARTIES TO THIS AGREEMENT.

(C)           DEATH.  IN THE EVENT THAT THE EXECUTIVE SHALL DIE, THEN HIS
EMPLOYMENT SHALL TERMINATE ON THE DATE OF HIS DEATH, AND NO FURTHER COMPENSATION
SHALL BE PAYABLE TO THE EXECUTIVE, EXCEPT FOR ANY ACCRUED AND UNPAID BASE SALARY
AS CONTEMPLATED UNDER SECTION 3(A), ANY ACCRUED VACATION AND UNPAID EXPENSES AS
CONTEMPLATED UNDER SECTION 5, ANY ACCRUED BONUS PAYMENTS AND AS MAY OTHERWISE BE
PROVIDED UNDER ANY INSURANCE POLICY OR SIMILAR INSTRUMENT.

(D)           EXPIRATION.  THIS AGREEMENT SHALL AUTOMATICALLY TERMINATE UPON THE
EXPIRATION OF THE EMPLOYMENT TERM AND UPON SUCH EXPIRATION, THE FOLLOWING
PAYMENT PROVISIONS SHALL APPLY:

(I)            IN THE EVENT THAT THE COMPANY DELIVERS A NON-RENEWAL NOTICE, UPON
EXPIRATION OF THE EMPLOYMENT TERM, NO FURTHER COMPENSATION SHALL BE PAYABLE TO
THE EXECUTIVE, EXCEPT FOR (1) ANY ACCRUED AND UNPAID BASE SALARY THOUGH THE
EFFECTIVE DATE OF SUCH TERMINATION AS CONTEMPLATED UNDER SECTION 3(A), (2) ANY
ACCRUED VACATION AND UNPAID EXPENSES AS CONTEMPLATED UNDER SECTION 5, AND (3)
ANY ACCRUED BONUS PAYMENTS.  IN ADDITION, SUBJECT TO THE PROVISIONS OF SECTION
11(I) HEREOF AND THE EXECUTIVE’S COMPLIANCE (AND CONTINUED COMPLIANCE) WITH THE
PROVISIONS OF SECTIONS 7, 8 AND 9 HEREOF, (Y) THE COMPANY SHALL PAY TO THE
EXECUTIVE A SEVERANCE PAYMENT EQUAL TO SIX (6) MONTHS SALARY AT THE BASE SALARY
THEN IN EFFECT, PAYABLE IN SIX (6) EQUAL MONTHLY INSTALLMENTS AND (Z) FOR SUCH
SIX (6) MONTH PERIOD, THE EXECUTIVE SHALL BE ENTITLED TO CONTINUE TO RECEIVE HIS
THEN CURRENT HEALTH, LIFE AND DISABILITY INSURANCE BENEFITS OR, IN THE CASE OF
HEALTH INSURANCE BENEFITS, PAYMENT BY THE COMPANY OF APPLICABLE “COBRA”
PAYMENTS.

8

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(II)           IN THE EVENT THAT THE COMPANY DELIVERS A RENEWAL NOTICE, UPON
EXPIRATION OF THE EXTENSION PERIOD NO FURTHER COMPENSATION SHALL BE PAYABLE TO
THE EXECUTIVE, EXCEPT FOR (1) ANY ACCRUED AND UNPAID BASE SALARY THOUGH THE
EFFECTIVE DATE OF SUCH TERMINATION AS CONTEMPLATED UNDER SECTION 3(A), (2) ANY
ACCRUED VACATION AND UNPAID EXPENSES AS CONTEMPLATED UNDER SECTION 5, AND (3)
ANY ACCRUED BONUS PAYMENTS.  FOR THE AVOIDANCE OF DOUBT, THE TERMINATION OF THIS
AGREEMENT UPON THE EXPIRATION OF THE EXTENSION PERIOD SHALL NOT BE DEEMED A
TERMINATION WITHOUT CAUSE PURSUANT TO SECTION 11(E) AND THE EXECUTIVE SHALL NOT
BE ENTITLED TO RECEIVE ANY SEVERANCE OR SIMILAR PAYMENT OR BENEFIT PROVIDED FOR
IN SECTION 11(E) UPON EXPIRATION OF THE EXTENSION PERIOD.

(E)           TERMINATION WITHOUT CAUSE.  IN THE EVENT THAT THE COMPANY
TERMINATES THE EXECUTIVE FOR ANY REASON OTHER THAN AS PROVIDED UNDER SECTION
11(A), 11(B), 11(C) OR 11(D), THEN THE EXECUTIVE’S EMPLOYMENT SHALL TERMINATE
UPON THIRTY (30) DAYS’ WRITTEN NOTICE TO THE EXECUTIVE AND, THE COMPANY SHALL BE
OBLIGATED TO PAY TO THE EXECUTIVE BASE SALARY EARNED, BUT NOT YET PAID TO THE
EXECUTIVE, PRIOR TO THE DATE OF SUCH TERMINATION IN ACCORDANCE WITH SECTION
3(A), AND REIMBURSE THE EXECUTIVE FOR ANY ACCRUED VACATION AND UNPAID EXPENSES
INCURRED BY THE EXECUTIVE THROUGH THE DATE OF TERMINATION IN ACCORDANCE WITH
SECTION 5, AND ANY ACCRUED BONUS PAYMENTS.  IN ADDITION, SUBJECT TO THE
PROVISIONS OF SECTION 11(I) HEREOF AND THE EXECUTIVE’S COMPLIANCE (AND CONTINUED
COMPLIANCE) WITH THE PROVISIONS OF SECTIONS 7, 8 AND 9 HEREOF, (I) THE COMPANY
SHALL PAY TO THE EXECUTIVE A SEVERANCE PAYMENT EQUAL TO TWELVE (12) MONTHS
SALARY AT THE BASE SALARY THEN IN EFFECT, PAYABLE IN TWELVE (12) EQUAL MONTHLY
INSTALLMENTS AND (II) FOR SUCH TWELVE (12) MONTH PERIOD, THE EXECUTIVE SHALL BE
ENTITLED TO CONTINUE TO RECEIVE HIS THEN CURRENT HEALTH, LIFE AND DISABILITY
INSURANCE BENEFITS OR, IN THE CASE OF HEALTH INSURANCE BENEFITS, PAYMENT BY THE
COMPANY OF APPLICABLE “COBRA” PAYMENTS (COLLECTIVELY (I) AND (II) ARE CALLED THE
“SEVERANCE PAYMENTS”).

(F)            CHANGE OF CONTROL. SUBJECT TO THE PROVISIONS OF SECTIONS 11(I)
AND 11(J), IN THE EVENT THAT COMPANY SHALL TERMINATE THIS AGREEMENT AND THE
EXECUTIVE’S EMPLOYMENT HEREUNDER PURSUANT TO THE PROVISIONS OF SECTION 11(E)
WITHIN THIRTEEN (13) MONTHS FOLLOWING A CHANGE IN CONTROL (AS DEFINED BELOW) OR
THE EXECUTIVE SHALL TERMINATE THIS AGREEMENT AND THE EXECUTIVE’S EMPLOYMENT
HEREUNDER FOR GOOD REASON (AS DEFINED IN SECTION 11(H)) WITHIN THIRTEEN (13)
MONTHS FOLLOWING A CHANGE IN CONTROL, THEN, IN LIEU OF (AND NOT IN ADDITION TO)
THE AMOUNTS TO BE PAID (AND BENEFITS TO BE PROVIDED) BY THE COMPANY PURSUANT TO
SECTION 11(E) OR SECTION 11(H), THE COMPANY SHALL HAVE NO FURTHER OBLIGATIONS
UNDER THIS AGREEMENT TO THE EXECUTIVE OTHER THAN THE OBLIGATION TO: (I) PAY TO
THE EXECUTIVE BASE SALARY EARNED, BUT NOT YET PAID TO THE EXECUTIVE, PRIOR TO
THE DATE OF SUCH TERMINATION IN ACCORDANCE WITH SECTION 3(A), (II) REIMBURSE THE
EXECUTIVE FOR ANY ACCRUED VACATION AND UNPAID EXPENSES INCURRED BY THE EXECUTIVE
THROUGH THE DATE OF TERMINATION IN ACCORDANCE WITH SECTION 5, AND PAY ANY
ACCRUED BONUS PAYMENTS AND (III) SUBJECT TO THE PROVISIONS OF SECTIONS 11(I) AND
11(J), PAY TO THE EXECUTIVE A LUMP SUM AMOUNT EQUAL TO THE PRODUCT OF (1) THE
EXECUTIVE’S BASE SALARY THEN IN EFFECT AND (2) A FRACTION, THE NUMERATOR OF
WHICH IS THE NUMBER OF DAYS REMAINING FROM THE DATE THE TERMINATION OCCURRED
THROUGH THE END OF THE EMPLOYMENT TERM, BUT, SUBJECT TO THE PROVISIONS OF
SECTION 11(J), IN NO EVENT LESS THAN 912, AND THE DENOMINATOR OF WHICH IS 365.
IN ADDITION, FOR THE TWELVE (12) MONTH PERIOD FOLLOWING THE DATE OF SUCH
TERMINATION, THE EXECUTIVE SHALL BE ENTITLED TO CONTINUE TO RECEIVE HIS THEN
CURRENT HEALTH, LIFE AND DISABILITY INSURANCE BENEFITS OR, IN THE CASE OF HEALTH
INSURANCE BENEFITS, PAYMENT BY THE COMPANY OF APPLICABLE “COBRA” PAYMENTS.

9

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AS USED IN THIS AGREEMENT, “CHANGE IN CONTROL” SHALL MEAN THE OCCURRENCE OF ANY
ONE OF THE FOLLOWING EVENTS:

(i)            any Person other than an employee benefit plan of the Company or
of any wholly-owned subsidiary of the Company becomes the owner of 40% or more
of the combined voting power of the Company’s then outstanding voting securities
and thereafter individuals who were not directors of the Company prior to the
date such Person became a 40% owner are elected as directors pursuant to an
arrangement or understanding with, or upon the request of or nomination by, such
Person and constitute at least 1/2 of the Board; provided, however, such
acquisition of ownership shall not constitute a Change of Control if the
Executive or an Executive Related Party is the Person or a member of a group
constituting the Person acquiring such ownership; or

(ii)           there occurs any solicitation or series of solicitations of
proxies by or on behalf of any Person other than the Board and thereafter
individuals who were not directors of the Company prior to the commencement of
such solicitation or series of solicitations are elected as directors pursuant
to an arrangement or understanding with, or upon the request of or nomination
by, such Person and constitute at least 1/2 of the Board of Directors; or

(iii)          the Company executes an agreement of sale, merger or
consolidation which contemplates that (x) after the effective date provided for
in such agreement, all or substantially all of the business and/or assets of the
Company shall be owned, leased or otherwise controlled by another Person and (y)
individuals who are directors of the Company when such agreement is executed
shall not constitute at least ½ of the board of directors of the survivor or
successor entity immediately after the effective date provided for in such
agreement; provided, however, that for purposes of this paragraph (iii), if such
agreement requires as a condition precedent approval by the Company’s
shareholders of the agreement or transaction, a Change of Control shall not be
deemed to have taken place unless and until such approval is secured (but upon
any such approval, a Change of Control shall be deemed to have occurred on the
effective date of such agreement).

“Executive Related Party” shall mean any Affiliate or Associate of the Executive
other than the Company or a Subsidiary of the Company.  The terms “Affiliate”
and “Associate” shall have the meanings ascribed thereto in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (the term
“registrant” in the definition of “Associate” meaning, in this case, the
Company).

“Person” shall have the meaning used in Section 13(d) of the Exchange Act, as in
effect on the date hereof.

(G)           TERMINATION BY EXECUTIVE.  IN THE EVENT THAT THE EXECUTIVE DESIRES
TO RESIGN VOLUNTARILY AS CHIEF EXECUTIVE OFFICER, THE EXECUTIVE COVENANTS TO
PROVIDE THE COMPANY WITH NOT LESS THAN NINETY (90) DAYS WRITTEN NOTICE OF ANY
SUCH VOLUNTARY RESIGNATION; AND FURTHER THE EXECUTIVE COVENANTS TO COOPERATE IN
GOOD FAITH IN ORDER TO FACILITATE A SMOOTH TRANSFER OF AUTHORITY DURING THE
PERIOD FROM NOTICE OF RESIGNATION TO THE DATE OF TERMINATION.  IN THE EVENT THAT
THE EXECUTIVE’S EMPLOYMENT IS TERMINATED BY THE EXECUTIVE PURSUANT TO THIS
SECTION 11(G), THEN THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE AN AMOUNT PAYABLE
IN A LUMP SUM

10

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WITHIN TEN (10) BUSINESS DAYS FOLLOWING THE DATE OF TERMINATION, EQUAL TO THE
SUM OF ANY ACCRUED AND UNPAID BASE SALARY AS CONTEMPLATED BY SECTION 3(A), ANY
ACCRUED AND UNPAID EXPENSES AS CONTEMPLATED BY SECTION 5 AND ANY ACCRUED BONUS
PAYMENTS.

(H)           GOOD REASON.  THE EXECUTIVE MAY, UPON THIRTY (30) DAYS WRITTEN
NOTICE, TERMINATE HIS EMPLOYMENT WITH THE COMPANY FOR “GOOD REASON”.  “GOOD
REASON” SHALL MEAN ANY MATERIAL BREACH BY THE COMPANY OF ITS OBLIGATIONS
HEREUNDER WHICH ARE NOT CURED WITHIN TEN (10) DAYS FOLLOWING RECEIPT OF WRITTEN
NOTICE FROM THE EXECUTIVE DETAILING SUCH BREACH.  THE PARTIES AGREE THAT A
MATERIAL BREACH SHALL MEAN (X) ANY MATERIAL REDUCTION IN THE EXECUTIVE’S DUTIES,
AUTHORITY, REPORTING RELATIONSHIPS OR RESPONSIBILITIES (WHETHER OR NOT
ACCOMPANIED BY A TITLE CHANGE) NOT CONSENTED TO BY THE EXECUTIVE, OTHER THAN A
PERMITTED CHANGE, AND (Y) THE RELOCATION OF THE PRINCIPAL EXECUTIVE OFFICES OF
THE COMPANY A DISTANCE OF MORE THAN 35 MILES FROM ITS CURRENT LOCATION NO
CONSENTED TO BY THE EXECUTIVE.  NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE
CONTRARY CONTAINED HEREIN, THE EXECUTIVE SHALL NOT BE ENTITLED TO TERMINATE HIS
EMPLOYMENT FOR “GOOD REASON” (1) IN CONNECTION WITH A PERMITTED CHANGE, OR (2)
AT ANY TIME DURING THE EXTENSION PERIOD OR THE TRANSITION PERIOD, FOR ANY
REASON.  IN THE EVENT THAT THE EXECUTIVE TERMINATES THIS AGREEMENT FOR GOOD
REASON, THE COMPANY SHALL BE OBLIGATED TO PAY TO THE EXECUTIVE BASE SALARY
EARNED, BUT NOT YET PAID TO THE EXECUTIVE, PRIOR TO THE DATE OF SUCH TERMINATION
IN ACCORDANCE WITH SECTION 3(A), REIMBURSE THE EXECUTIVE FOR ANY ACCRUED
VACATION AND UNPAID EXPENSES INCURRED BY THE EXECUTIVE THROUGH THE DATE OF
TERMINATION IN ACCORDANCE WITH SECTION 5 AND PAY ANY ACCRUED BONUS PAYMENTS.  IN
ADDITION, SUBJECT TO THE PROVISIONS OF SECTION 11(I) HEREOF, AND THE EXECUTIVE’S
COMPLIANCE (AND CONTINUED COMPLIANCE) WITH THE PROVISIONS OF SECTIONS 7, 8 AND 9
HEREOF, THE COMPANY SHALL PAY AND PROVIDE TO THE EXECUTIVE THE SEVERANCE
PAYMENTS.

(I)            RELEASE.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS AGREEMENT, THE EXECUTIVE (OR HIS ESTATE) SHALL NOT BE ENTITLED TO RECEIVE
THE PAYMENTS AND BENEFITS SET FORTH IN THIS SECTION 11 (OTHER THAN BASE SALARY
THROUGH THE EFFECTIVE DATE OF TERMINATION IN ACCORDANCE WITH SECTION 3(A) HEREOF
AND REIMBURSEMENT OF EXPENSES IN ACCORDANCE WITH SECTION 5) PRIOR TO (I) THE
EXECUTION AND DELIVERY BY THE EXECUTIVE TO THE COMPANY OF A  VALID AND FULLY
EFFECTIVE GENERAL RELEASE AND NONDISPARAGEMENT AGREEMENT (IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY) OF ALL CLAIMS, INCLUDING BUT NOT LIMITED
TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT, TITLE VII OF THE CIVIL RIGHTS ACT
OF 1964, WHICH THE EXECUTIVE MIGHT HAVE AT SUCH TIME AGAINST THE COMPANY AND
(II) THE RESIGNATION OF THE EXECUTIVE FROM ALL POSITIONS OF ANY NATURE WHICH THE
EXECUTIVE MAY THEN HAVE HELD WITH THE COMPANY AND ANY SUBSIDIARY OF THE COMPANY.

(J)            LIMITATION AS TO AMOUNTS PAYABLE.  NOTWITHSTANDING ANY PROVISION
OF THIS AGREEMENT TO THE CONTRARY (INCLUDING WITHOUT LIMITATION THE PROVISIONS
OF SECTION 11(F)), IF ALL OR ANY PORTION OF THE AMOUNTS TO BE PAID TO THE
EXECUTIVE UNDER THIS AGREEMENT OTHERWISE WOULD BE A “PARACHUTE PAYMENT,” AS
DEFINED IN SECTION 280G(B)(2) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE “CODE”) AND THE TREASURY REGULATIONS THEREUNDER, THE AGGREGATE PRESENT
VALUE OF THE TOTAL AMOUNTS TO BE PAID TO THE EXECUTIVE UNDER THIS AGREEMENT
SHALL BE LIMITED TO AN AMOUNT THAT IS LESS THAN THREE TIMES THE EXECUTIVE’S
“ANNUALIZED INCLUDIBLE COMPENSATION FOR THE BASE PERIOD,” AS DEFINED IN SECTION
280G(D) OF THE CODE AND ANY TREASURY REGULATIONS THEREUNDER; PROVIDED, HOWEVER,
THAT IN NO EVENT SHALL THE AMOUNT PAYABLE UNDER THIS AGREEMENT BE REDUCED
PURSUANT TO THIS SECTION 11(J) TO LESS THAN THE MAXIMUM AMOUNT THAT MAY BE PAID
TO THE EXECUTIVE WITHOUT CAUSING ANY PORTION OF SUCH AMOUNT TO BECOME
NONDEDUCTIBLE

11

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UNDER SECTION 280G OF THE CODE AND SUBJECT TO THE EXCISE TAX IMPOSED BY SECTION
4999 OF THE CODE.  THE DETERMINATION OF THE EXECUTIVE’S “ANNUALIZED INCLUDIBLE
COMPENSATION FOR THE BASE PERIOD” AND THE DEDUCTIBILITY OF PAYMENTS MADE
PURSUANT TO THIS AGREEMENT SHALL BE MADE BY THE INDEPENDENT OUTSIDE ACCOUNTING
FIRM REGULARLY RETAINED BY THE COMPANY.  FOR PURPOSES OF THIS SECTION 11(J),
“PRESENT VALUE” SHALL BE DETERMINED IN ACCORDANCE WITH SECTION 280G OF THE CODE
AND THE TREASURY REGULATIONS THEREUNDER.

(K)           COORDINATION WITH SECTION 409A OF THE CODE.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY SET FORTH IN THIS SECTION 11, IN THE EVENT THAT THE
EXECUTIVE IS DETERMINED TO BE A “KEY EMPLOYEE” AS DEFINED BY SECTION 416(I) OF
THE CODE (WITHOUT REGARD TO PARAGRAPH 5), TO THE EXTENT NECESSARY TO COMPLY WITH
SECTION 409A OF THE CODE AND THE TREASURY REGULATIONS THEREUNDER, ANY PAYMENTS
OR DISTRIBUTIONS DUE THE EXECUTIVE UNDER THIS AGREEMENT AS A RESULT OF OR
FOLLOWING ANY SEPARATION FROM SERVICE SHALL NOT BE MADE BEFORE THE DATE WHICH IS
6 MONTHS AFTER THE DATE OF SEPARATION FROM SERVICE (OR IF EARLIER, THE DATE OF
DEATH OF THE EXECUTIVE).

12.           SURVIVAL. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT,
NOTWITHSTANDING THE TERMINATION OF THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT
FOR ANY REASON, THE EXECUTIVE’S OBLIGATIONS UNDER SECTIONS 2(B), 7, 8, AND 9
HEREOF SHALL SURVIVE AND REMAIN IN FULL FORCE AND EFFECT FOR THE PERIODS THEREIN
PROVIDED, AND THE PROVISIONS FOR EQUITABLE RELIEF AGAINST THE EXECUTIVE IN
SECTION 10 HEREOF SHALL CONTINUE IN FORCE, ALONG WITH THE PROVISIONS OF SECTIONS
11(K) THROUGH 20 HEREOF.  IN ADDITION, THE OBLIGATIONS OF THE COMPANY SET FORTH
IN SECTION 11 SHALL SURVIVE ANY TERMINATION (AS APPLICABLE) AND SHALL REMAIN IN
FULL FORCE AND EFFECT UNTIL SUCH OBLIGATIONS ARE SATISFIED IN FULL (SUBJECT, AS
APPLICABLE, TO THE EXECUTIVE’S COMPLIANCE WITH THE PROVISIONS OF SECTION11(I)).

13.           ASSIGNMENT.  ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY THE
RESPECTIVE HEIRS, EXECUTORS, ADMINISTRATORS, LEGAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE PARTIES HERETO, EXCEPT THAT THE DUTIES AND RESPONSIBILITIES
OF THE EXECUTIVE HEREUNDER ARE OF A PERSONAL NATURE AND SHALL NOT BE ASSIGNABLE
OR DELEGATABLE IN WHOLE OR IN PART BY THE EXECUTIVE.

14.           MODIFICATION.  THIS AGREEMENT SETS FORTH THE ENTIRE UNDERSTANDING
OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, SUPERSEDES ALL
EXISTING AGREEMENTS BETWEEN THEM CONCERNING SUCH SUBJECT MATTER, AND MAY BE
MODIFIED ONLY BY A WRITTEN INSTRUMENT DULY EXECUTED BY EACH PARTY.

15.           NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS REQUIRED OR
PERMITTED HEREUNDER OR NECESSARY OR CONVENIENT IN CONNECTION HEREWITH SHALL BE
IN WRITING AND SHALL BE DEEMED TO HAVE BEEN GIVEN WHEN HAND DELIVERED OR THREE
(3) DAYS AFTER BEING MAILED BY REGISTERED OR CERTIFIED MAIL, AS FOLLOWS
(PROVIDED THAT NOTICE OF CHANGE OF ADDRESS SHALL BE DEEMED GIVEN ONLY WHEN
RECEIVED):

If to the Company:

 

iParty Corp.

270 Bridge Street

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Suite 301

Dedham, MA 02026

Attn: Corporate Secretary

 

With a required copy to:

 

Chairman of the Compensation Committee

of the Board of Directors

c/o iParty Corp.

270 Bridge Street

Dedham, MA 02026

 

If to the Executive:

 

Sal Perisano

288 Huron Avenue

Cambridge, MA 02138

16.           REMEDIES CUMULATIVE; NO WAIVER.  NO REMEDY CONFERRED UPON THE
COMPANY BY THIS AGREEMENT IS INTENDED TO BE EXCLUSIVE OF ANY OTHER REMEDY, AND
EACH AND EVERY SUCH REMEDY SHALL BE CUMULATIVE AND SHALL BE IN ADDITION TO ANY
OTHER REMEDY GIVEN HEREUNDER OR NOW OR HEREAFTER EXISTING AT LAW OR IN EQUITY. 
NO DELAY OR OMISSION BY THE COMPANY IN EXERCISING ANY RIGHT, REMEDY OR POWER
HEREUNDER OR EXISTING AT LAW OR IN EQUITY SHALL BE CONSTRUED AS A WAIVER
THEREOF, AND ANY SUCH RIGHT, REMEDY OR POWER MAY BE EXERCISED BY THE COMPANY
FROM TIME TO TIME AND AS OFTEN AS MAY BE DEEMED EXPEDIENT OR NECESSARY BY THE
COMPANY IN ITS SOLE DISCRETION.

17.           BINDING EFFECT.  THE EXECUTIVE’S RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT SHALL NOT BE TRANSFERABLE BY ASSIGNMENT OR OTHERWISE, SUCH RIGHTS
SHALL NOT BE SUBJECT TO ENCUMBRANCE OR THE CLAIMS OF THE EXECUTIVE’S CREDITORS,
AND ANY ATTEMPT TO DO ANY OF THE FOREGOING SHALL BE VOID.  THE PROVISIONS OF
THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE EXECUTIVE
AND HIS HEIRS AND PERSONAL REPRESENTATIVES, AND SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE COMPANY AND ITS SUCCESSORS AND THOSE WHO ARE ITS ASSIGNS
UNDER SECTION 13.

18.           ENTIRE AGREEMENT; CONTENTS OF AGREEMENT.

(A)           EFFECTIVE AS OF APRIL 1, 2007, THIS AGREEMENT SUPERSEDES ALL PRIOR
AGREEMENTS IN THEIR ENTIRETY, INCLUDING WITHOUT LIMITATION THE PRIOR EMPLOYMENT
AGREEMENT, AND SETS FORTH THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF.  THIS AGREEMENT CANNOT BE CHANGED,
MODIFIED, EXTENDED OR TERMINATED EXCEPT UPON WRITTEN AMENDMENT EXECUTED BY THE
EXECUTIVE AND APPROVED BY THE BOARD AND EXECUTED ON BEHALF OF THE COMPANY BY A
DULY AUTHORIZED OFFICER.  THE EXECUTIVE ACKNOWLEDGES THAT THE EFFECT OF THIS
PROVISION IS THAT NO ORAL MODIFICATIONS OF ANY NATURE WHATSOEVER TO THIS
AGREEMENT SHALL BE PERMITTED.

(B)           THE EXECUTIVE ACKNOWLEDGES THAT FROM TIME TO TIME, THE COMPANY

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MAY ESTABLISH, MAINTAIN AND DISTRIBUTE MANUALS OR HANDBOOKS OR PERSONNEL POLICY
MANUALS, AND OFFICERS OR OTHER REPRESENTATIVES OF THE COMPANY MAY MAKE WRITTEN
OR ORAL STATEMENTS RELATING TO PERSONNEL POLICIES AND PROCEDURES.  SUCH MANUALS,
HANDBOOKS AND STATEMENTS ARE INTENDED ONLY FOR GENERAL GUIDANCE.  NO POLICIES,
PROCEDURES OR STATEMENTS OF ANY NATURE BY OR ON BEHALF OF THE COMPANY (WHETHER
WRITTEN OR ORAL, AND WHETHER OR NOT CONTAINED IN ANY MANUAL OR HANDBOOK OR
PERSONNEL POLICY MANUAL), AND NO ACTS OR PRACTICES OF ANY NATURE, SHALL BE
CONSTRUED TO MODIFY THIS AGREEMENT OR TO CREATE EXPRESS OR IMPLIED OBLIGATIONS
OF ANY NATURE TO THE EXECUTIVE.

19.           HEADINGS.  THE HEADINGS IN THIS AGREEMENT ARE SOLELY FOR THE
CONVENIENCE OF REFERENCE AND SHALL BE GIVEN NO EFFECT IN THE CONSTRUCTION OR
INTERPRETATION OF THIS AGREEMENT.

20.           COUNTERPARTS; GOVERNING LAW.  THIS AGREEMENT MAY BE EXECUTED IN
ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL
OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.  IT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, WITHOUT GIVING EFFECT TO THE RULES GOVERNING THE CONFLICTS OF
LAWS.

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

 

iPARTY CORP.

 

 

 

 

 

 

 

 

By:

/s/ PATRICK FARRELL

 

 

 

Name:   Patrick Farrell

 

 

Title:     President and CFO

 

 

 

 

 

 

 

 

/s/ SAL PERISANO

 

 

 

Sal Perisano

 

14

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