**Exhibit 10.2**

 

**MANAGEMENT AGREEMENT**

 

This MANAGEMENT AGREEMENT (this “Agreement”) is entered into asof October 31, 2006****by and among(i) Michaels Stores, Inc., a Delaware corporation (the “Company”), (ii)Bain Capital Partners, LLC (“Bain”), and (iii) Blackstone ManagementPartners V LLC (“Blackstone” and together with Bain, the “Managers”).

 

RECITALS

 

WHEREAS, Bain Paste Mergerco, Inc., a Delaware corporation (“BainMergerCo”), Blackstone Paste Mergerco, Inc., a Delaware corporation (“BlackstoneMergerCo” and, together with Bain MergerCo, “MergerCos”), Bain PasteFinco, LLC, a Delaware limited liability company (“Bain FinCo”),Blackstone Paste Finco, LLC, a Delaware limited liability company (“BlackstoneFinCo” and, together with Bain FinCo, “FinCos”; MergerCos andFinCos, collectively, the “Sponsor Entities”) have been formed for thepurpose of effectuating a leveraged recapitalization transaction (the “Transaction”)involving the Company pursuant to that certain Agreement and Plan of Merger,dated as of June 30, 2006 (as amended, the “Merger Agreement”), amongthe Sponsor Entities and the Company;

 

WHEREAS, it is contemplated that on or about the date hereof, as partof the Transaction, the MergerCos will be merged (the “Merger”) with andinto the Company on the terms and subject to the conditions of the MergerAgreement;

 

WHEREAS, in connection with the Merger and related transactions, theManagers provided advice, analysis and assistance, including without limitationwith respect to due diligence investigations and the structuring andnegotiation of senior and junior debt facilities, management employmentarrangements and other matters (the “Financial Advisory Services”); and

 

WHEREAS, the Company desires to retain the Managers to providemanagement, consulting and financial and other advisory services (“Services”)to the Company, and the Managers are willing to provide such services on theterms set forth below.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants containedherein, the parties hereto, intending to be legally bound, hereby agree asfollows:

 

# 1.                                         Services.Each of the Managers hereby agrees that it will provide the following Servicesto the Company:

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#### (a)                                  advice in connectionwith the negotiation and consummation of agreements, contracts, documents andinstruments necessary to provide the Company with financing on terms andconditions satisfactory to the Company;

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#### (b)                                 financial, managerialand operational advice in connection with day-to-day operations, including,without limitation, advice with respect to the development and 

 

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#### implementation of strategies for improving the operating, marketing andfinancial performance of the Company;

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#### (c)                                  advice in connectionwith financing, acquisition, disposition, merger, business combination andchange of control transactions involving the Company (however structured); and

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#### (d)                                 such other services(which may include financial and strategic planning and analysis, consultingservices, human resources and executive recruitment services and otherservices) as such Managers and the Company may from time to time agree to inwriting.

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Each of the Managers will devote, in its discretion, such time andefforts to the performance of services contemplated hereby as such Managerdeems reasonably necessary or appropriate; *provided,however,* that no minimum number of hours is required to be devotedby the Managers on a weekly, monthly, annual or other basis. The Companyacknowledges that the Managers’ services are not exclusive to the Company andthat each Manager will render similar services to other persons and entities. TheManagers and the Company understand that the Company may, at times, engage oneor more investment bankers or financial advisers to provide services inaddition to, but not in lieu of, services provided by the Managers under thisAgreement. In providing services to the Company, each Manager will act as anindependent contractor and it is expressly understood and agreed that thisAgreement is not intended to create, and does not create, any partnership,agency, joint venture or similar relationship and that no party has the rightor ability to contract for or on behalf of any other party or to effect anytransaction for the account of any other party.

 

# 2.                                       Paymentof Fees.

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#### (a)                                  The Company will payto the Managers (or such affiliates as they may respectively designate), inconsideration of the Managers providing the Financial Advisory Services, anaggregate transaction fee (the “Transaction Fee”) in the amount of$60,000,000, such fee being payable on the effective date of the Merger (the “ClosingDate”). The Transaction Fee shall be divided between the Managers asfollows:

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| Bain:       |   | $ | 30,000,000 |   |
|-------------|--------|---|------------|--------|
| Blackstone: |   | $ | 30,000,000 |   |

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#### (b)                                 During the Term, theCompany will pay to the Managers (or such affiliates as they may respectivelydesignate), an aggregate annual periodic fee (the “Periodic Fee”) of$12,000,000 in exchange for the ongoing Services provided by the Managers underthis Agreement, such fee being payable by the Company quarterly in advance onor before the start of each calendar quarter; *provided,however,* that the Company will pay the Periodic Fee for the periodfrom the date hereof through March 31, 2007 on the Closing Date. The PeriodicFee will be prorated for any partial period of less than three months, and willbe divided between the Managers in proportion to the Services that theyprovide, which Services will be provided pro rata in proportion to

 

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#### the respective direct and indirect ownership interests (*i.e.* relative beneficial share ownership)in the Company held at the time by the investment funds affiliated with eachsuch Manager (provided that, for purposes of this Agreement, (a) BainCapital Integral Investors 2006, LLC and BCIP TCV, LLC and their respectiveAffiliated Funds will be deemed to be investment funds affiliated with Bain;and (b) Blackstone Capital Partners V L.P., BCP V-S L.P., BlackstoneFamily Investment Partnership V L.P., Blackstone Family Investment PartnershipV-A L.P., Blackstone Participation Partnership V L.P. and BCP V Co-InvestorsL.P. and their respective Affiliated Funds will be deemed to be investmentfunds affiliated with Blackstone). In this Agreement, the term “AffiliatedFunds” shall mean, with respect to any specified investment fund, any otherinvestment fund that directly or indirectly controls, is controlled by or isunder common control with such specified fund or that has the same generalpartner or primary investment advisor as such specified fund (or a generalpartner or primary investment advisor that controls, is controlled by or isunder common control with the general partner or primary investment advisor ofsuch specified fund). Each Manager may elect in its sole discretion to defer thereceipt of all or a portion of its portion of the Periodic Fee.

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#### (c)                                  During the Term, theManagers will advise the Company in connection with financing, acquisition,disposition and change of control transactions involving the Company or any ofits direct or indirect subsidiaries (however structured), and the Company willpay to the Managers (or such affiliates as they may respectively designate) anaggregate fee (each a “Subsequent Fee”) in connection with each suchtransaction equal to one percent (1%) of the gross transaction value of suchtransaction. In the case of an Initial Public Offering or a Change of Control(as defined in the Stockholders Agreement, dated on or about the date hereof,among the Company and its stockholders (the “Stockholders Agreement”)),the Company shall pay, in addition to the fees payable above, a lump sum amountequal to the net present value (using a discount rate equal to the thenprevailing yield on U.S. Treasury Securities of like maturity) of the PeriodicFees that would have been payable to such Managers with respect to the periodfrom the date of such Initial Public Offering or Change of Control until thetenth anniversary of the closing of the Merger. Each such fee to be due andpayable at the closing of such transaction and in the case of financingtransactions, whether or not any such financing is actually committed or drawnupon. Each such fee will be divided between the Managers in proportion to theServices that they provide, which Services will be provided pro rata inproportion to the respective direct and indirect ownership interests (*i.e.* relative beneficial share ownership)in the Company held at the time by the investment funds affiliated with eachsuch Manager.

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Each payment made pursuant to this Section 2 will be paid by wiretransfer of immediately available federal funds to the accounts specified onSchedule 1 hereto, or to such other account(s) as the Managers may specifyto the Company in writing prior to such payment.

 

3.                                       Term.This Agreement will continue in full force and effect until December 31, 2016; *provided* that this Agreement shall beautomatically extended each December 31 thereafter for an additional yearunless the Company or both of the Managers provide written notice of 

 

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their desire not to automatically extend the term of this Agreement tothe other parties hereto at least 90 days prior to such December 31; and *provided further, however,* that (a) theManagers may, if both agree to do so, cause this Agreement to terminate at anytime and (b) this Agreement will terminate automatically immediately priorto an Initial Public Offering or a Change of Control (each as defined in theStockholder Agreement) unless the Company and the Managers determine otherwise(the period on and after the date hereof through the termination hereof beingreferred to herein as the “Term”); and *providedfurther*, that each of (x) Sections 4, 5 and 8 (whether inrespect of or relating to services rendered during or after the Term) will allsurvive any termination of this Agreement to the maximum extent permitted underapplicable law and (y) any and all accrued and unpaid obligations of theCompany owed under Section 2 will be paid promptly upon anytermination of this Agreement. At the end of the Term, all obligations of theManagers under this Agreement will terminate and any subsequent servicesrendered by the Managers to the Company will be separately compensated.

 

4.                                       Expenses; Indemnification.

 

#### (a)                                  Expenses. The Company will pay on demand all Reimbursable Expenses. As usedherein, “Reimbursable Expenses” means all (i) expenses incurred oraccrued prior to the Closing Date by the Managers or their affiliates inconnection with this Agreement, the Transaction******orany related transactions, consisting of their respective out-of-pocket expensesfor travel and other incidentals in connection with such transactions(including, without limitation, all air travel (by first class on a commercialairline or by charter, as determined by the Managers) and other travel relatedexpenses) and the out-of-pocket expenses and the fees and charges of (A) Ropes& Gray LLP, counsel, (B) Deloitte & Touche LLP, accounting firm(C) Bain & Company, industry consultants, (D) Marsh, insurancespecialists, and (E) any other consultants or advisors, appraisal or valuationfirms, information or exchange agents, or other entities retained by theManagers in connection with such transactions, (ii) reasonableout-of-pocket expenses incurred from and after the Closing Date relating totheir affiliated funds’ investment in, the operations of, or the servicesprovided by the Managers to, the Company or any of their affiliates from timeto time (including, without limitation, all air travel (by first class on acommercial airline or by charter, as determined by the Managing Directors ofthe Managers) and other reasonable travel related expenses),(iii) reasonable out-of-pocket legal expenses incurred by the Managers ortheir affiliates from and after Closing Date in connection with the enforcementof rights or taking of actions under this Agreement, under the Company’scertificate of incorporation and bylaws, or under any subscription agreements,stockholders agreements, registration rights agreements, voting agreements orsimilar agreements entered into with the Company in connection with investmentsin the Company and/or its subsidiaries (subject to any applicable limitationson expense reimbursement rights expressly set forth in such agreements) and(iv) expenses incurred from and after the Closing Date by the Managers andtheir affiliates which the Managers agree are properly allocable to the Companyunder this Agreement.

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#### (b)                                 Indemnity and Liability. The Company hereby indemnifies and agreesto exonerate and hold each of the Managers, each Affiliated Fund, and each oftheir 

 

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#### respectiveformer, current or future, direct or indirect directors, officers, employees,agents, advisors or affiliates, each former, current or future, direct orindirect holder of any equity interests or securities of the Manager or anyAffiliated Fund (whether such holder is a limited or general partner, member,stockholder or otherwise), each former, current or future assignee of the Manageror any Affiliated Fund and each former, current or future director, officer,employee, agent, advisor, general or limited partner, manager, member,stockholder, affiliate, controlling person, representative or assignee of anyof the foregoing (each such person or entity, a “Related Person”)(collectively, the “Indemnitees”), each of whom is an intended thirdparty beneficiary of this Agreement, free and harmless from and against any andall actions, causes of action, suits, claims, liabilities, damages and costsand expenses in connection therewith (including reasonable attorneys’ fees andexpenses) incurred by the Indemnitees or any of them before or after the dateof this Agreement (collectively, the “Indemnified Liabilities”), as aresult of, arising out of, or in any way relating to (i) this Agreement, theTransaction, any transaction to which the Company is a party, or any othercircumstances with respect to the Company or (ii) operations of, orservices provided by the Managers to, the Company, or any of their affiliatesfrom time to time (including but not limited to any indemnification obligationsassumed or incurred by any Indemnitee to or on behalf of the Company, or any ofits accountants or other representatives, agents or affiliates) except for anysuch Indemnified Liabilities arising from such Indemnitee’s gross negligence orwillful misconduct. If and to the extent that the foregoing undertaking may beunavailable or unenforceable for any reason, the Company hereby agrees to makethe maximum contribution to the payment and satisfaction of each of theIndemnified Liabilities that is permissible under applicable law. For purposesof this Section 4(b), “gross negligence or willful misconduct” will bedeemed to have occurred only if so found in a final non-appealable judgment ofa court of competent jurisdiction to such effect, in which case to the extentany of the foregoing limitations is so determined to apply to any Indemnitee asto any previously advanced indemnity payments made by the Company, then suchpayments shall be promptly repaid by such Indemnitee to the Company. The rightsof any Indemnitee to indemnification hereunder will be in addition to any otherrights any such person may have under any other agreement or instrumentreferenced above or any other agreement or instrument to which such Indemniteeis or becomes a party or is or otherwise becomes a beneficiary or under law orregulation. If the Indemnitees related to a Manager are similarly situated withrespect to their interests in connection with a matter that may be anIndemnified Liability and such Indemnified Liability is not based on aThird-Party Claim, the Indemnitees may enforce their rights pursuant to thisSection 4(b) with respect to such matter only with the consent of such Manager.In this Agreement, “Person” means any individual or corporation,association, partnership, limited liability company, joint venture, joint stockor other company, business trust, trust, organization, or other entity of anykind. A “Third-Party Claim” means any (i) claim brought by a Personother than the Company, the Managers or any indemnified Person related to aManager and (ii) any derivative claim brought in the name of the Company thatis initiated by a Person other than a Manager or any indemnified Person relatedto a Manager.

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# 5.                                       Disclaimer and Limitation of Liability;Opportunities.

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#### (a)                                  Disclaimer; Standard of Care. None of the Managers make anyrepresentations or warranties, express or implied, in respect of the servicesto be provided by any Manager hereunder. In no event will any of the Managersor any of the Indemnitees be liable to the Company or any of its affiliates forany act, alleged act, omission or alleged omission that does not constitutegross negligence or willful misconduct of such Manager as determined by afinal, non-appealable determination of a court of competent jurisdiction.

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#### (b)                                 Freedom to Pursue Opportunities. In recognition that the Managers and theirrespective Indemnitees currently have, and will in the future have or willconsider acquiring, investments in numerous companies with respect to which theManagers or their respective Indemnitees may serve as an advisor, a director orin some other capacity, and in recognition that the Managers and theirrespective Indemnitees have myriad duties to various investors and partners,and in anticipation that the Company, on the one hand and the Managers (or oneor more affiliates, associated investment funds or portfolio companies, orclients of the Managers), on the other hand, may engage in the same or similaractivities or lines of business and have an interest in the same areas ofcorporate opportunities, and in recognition of the benefits to be derived bythe Company hereunder and in recognition of the difficulties that may confrontany advisor who desires and endeavors fully to satisfy such advisor’s duties indetermining the full scope of such duties in any particular situation, theprovisions of this Section 5(b) are set forth to regulate, define and guide theconduct of certain affairs of the Company as they may involve the Managers. Exceptas the Managers may otherwise agree in writing after the date hereof:

 

(i)             TheManagers and their respective Indemnitees will have the right:  (A) to directly or indirectly engage inany business (including, without limitation, any business activities or linesof business that are the same as or similar to those pursued by, or competitivewith, the Company and its subsidiaries) or invest, own or deal in securities ofany other Person so engaged in any business, (B) to directly or indirectly dobusiness with any client or customer of the Company and its subsidiaries, (C)to take any other action that the Managers believes in good faith is necessaryto or appropriate to fulfill its obligations as described in the first sentenceof this Section 5(b), and (D) not to present potential transactions, matters orbusiness opportunities to the Company or any of their subsidiaries, and to pursue,directly or indirectly, any such opportunity for itself, and to direct any suchopportunity to another person.

 

(ii)          TheManagers and their respective Indemnitees will have no duty (contractual orotherwise) to communicate or present any corporate opportunities to the Companyor any of its affiliates or to refrain from any actions specified in Section5(b)(i), and the Company, on its own behalf and on behalf of its affiliates,hereby renounce and waive any right to require the Managers or any of their Indemniteesto act in a manner inconsistent with the provisions of this Section 5(b).

 

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(iii)       TheManagers and their Indemnitees will not be liable to the Company or any of itsaffiliates for breach of any duty (contractual or otherwise) by reason of anyactivities or omissions of the types referred to in this Section 5(b) orof any such person’s participation therein.

 

#### (c)                                  Limitation of Liability*.*In no event will the Managers or any of theirIndemnitees be liable to the Company or any of its affiliates for any indirect,special, incidental or consequential damages, including, without limitation,lost profits or savings, whether or not such damages are foreseeable, or forany third party claims (whether based in contract, tort or otherwise), relatingto the services to be provided by the Managers hereunder.

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# 6.                                         Assignment, etc. Except as provided below, no party heretohas the right to assign this Agreement without the prior written consent ofeach of the other parties. Notwithstanding the foregoing, (a) a Manager mayassign all or part of its rights and obligations hereunder to any affiliate ofsuch Manager that provides services similar to those called for by thisAgreement, in which event such Manager will be released of all of its rightsand obligations hereunder and (b) the provisions hereof for the benefit ofIndemnitees other than the Managers themselves shall also inure to the benefitof such other Indemnitees and their successors and assigns.

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# 7.                                      Amendments and Waivers. No amendment or waiver of any term,provision or condition of this Agreement will be effective, unless in writingand executed by the Managers and the Company (or their respective successors); *provided*, that a Manager may individually agree to waive orreduce any fee to which it is entitled pursuant to this Agreement, and, unlessotherwise directed by such Manager, such waived portion shall revert to theCompany. No waiver on any one occasion will extend to or effect or be construedas a waiver of any right or remedy on any future occasion. No course of dealingof any person nor any delay or omission in exercising any right or remedy willconstitute an amendment of this Agreement or a waiver of any right or remedy ofany party hereto.

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# 8.                                         Governing Law; Jurisdiction.

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#### (a)                                  Choice of Law. This Agreement and all matters arisingunder or related to this Agreement will be governed by and construed inaccordance with the laws of the State of New York.

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#### (b)                                 Consent to Jurisdiction. Each of the parties agrees that allactions, suits or proceedings arising out of, based upon or relating to thisAgreement or the subject matter hereof will be brought and maintainedexclusively in the federal and state courts of the State of New York, City ofNew York, County of New York. Each of the parties hereto by execution hereof(i) hereby irrevocably submits to the jurisdiction of the federal andstate courts in the State of New York, City of New York, County of New York forthe purpose of any action, suit or proceeding arising out of or based upon thisAgreement or the subject matter hereof and (ii) hereby waives to the extent notprohibited by applicable law, and agrees not to assert, by way of motion, as adefense or otherwise, in any such action, suit or proceeding, any claim 

 

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#### thatit is not subject personally to the jurisdiction of the above-named courts,that it is immune from extraterritorial injunctive relief or other injunctiverelief, that its property is exempt or immune from attachment or execution,that any such action, suit or proceeding may not be brought or maintained inone of the above-named courts, that any such action, suit or proceeding broughtor maintained in one of the above-named courts should be dismissed on groundsof forumnonconveniens, should be transferred to anycourt other than one of the above-named courts, should be stayed by virtue ofthe pendency of any other action, suit or proceeding in any court other thanone of the above-named courts, or that this Agreement or the subject matterhereof may not be enforced in or by any of the above-named courts. Notwithstandingthe foregoing, to the extent that any party hereto is or becomes a party in anylitigation in connection with which it may assert indemnification rights setforth in this Agreement, the court in which such litigation is being heard willbe deemed to be included in clause (i) above. Each of the parties hereto herebyconsents to service of process in any such suit, action or proceeding in anymanner permitted by the laws of the State of New York, agrees that service ofprocess by registered or certified mail, return receipt requested, at theaddress specified in or pursuant to Section 10 is reasonably calculated to giveactual notice and waives and agrees not to assert by way of motion, as adefense or otherwise, in any such action, suit or proceeding any claim thatservice of process made in accordance with Section 10 does not constitute goodand sufficient service of process. The provisions of this Section 8 will notrestrict the ability of any party to enforce in any court any judgment obtainedin a court included in clause (i) above.

 

#### (c)                                  Waiver of Jury Trial. To the extent not prohibited by applicablelaw that cannot be waived, each of the parties hereto hereby waives, andcovenants that it will not assert (whether as plaintiff, defendant, orotherwise), any right to trial by jury in any forum in respect of any issue,claim, demand, cause of action, action, suit or proceeding arising out of,based upon or relating to this Agreement or the subject matter hereof, in eachcase whether now existing or hereafter arising and whether in contract or tortor otherwise. Each of the parties hereto acknowledges that it has been informedby each other party that the provisions of this Section 8(c) constitute amaterial inducement upon which such party is relying and will rely in enteringinto this Agreement and the transactions contemplated hereby. Any of theparties hereto may file an original counterpart or a copy of this Agreementwith any court as written evidence of the consent of each of the parties heretoto the waiver of its right to trial by jury.

 

# 9.                                         Entire Agreement. This Agreement contains the entireunderstanding of the parties with respect to the subject matter hereof andsupersedes any prior communication or agreement with respect thereto.

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# 10.                                   Notice. All notices, demands, and communications required or permitted underthis Agreement will be in writing and will be effective if served upon suchother party and such other party’s copied persons as specified below to theaddress set forth for it below (or to such other address as such party willhave specified by notice to each other party) if (i) delivered personally, (ii)sent and received by facsimile or (iii) sent by certified or registered mail orby 

 

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Federal Express, DHL, UPS orany other comparably reputable overnight courier service, postage prepaid, tothe appropriate address as follows:

 

Ifto the Company, to it at:

 

Michaels Stores, Inc.

8000 Bent Branch Drive

Irving, TX 75261

Facsimile: (972) 409-1901

Attention:                 General Counsel

ChiefFinancial Officer

 

withcopies to:

 

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Facsimile: (617) 951-7050

Attention:                 David C. Chapin

WilliamM. Shields

R.Newcomb Stillwell

 

Ifto Bain, to:

 

BainCapital Partners, LLC

111Huntington Avenue

Boston,MA 02199

Facsimile:  (617) 516-2010

Attention:  Matthew S. Levin

 

withcopies to:

 

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Facsimile: (617) 951-7050

Attention:                 David C. Chapin

WilliamM. Shields

R.Newcomb Stillwell

 

Ifto Blackstone, to:

 

BlackstoneManagement Partners V LLC

345Park Avenue, 31st FloorNew York, NY 10154

Facsimile:  (212) 583-5712

Attention:  Robert L. Friedman

 

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withcopies to:

 

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Facsimile: (617) 951-7050

Attention:                 David C. Chapin

WilliamM. Shields

R.Newcomb Stillwell

 

Unlessotherwise specified herein, such notices or other communications will be deemedeffective, (a) on the date received, if personally delivered or sent byfacsimile during normal business hours, (b) on the business day after beingreceived if sent by facsimile other than during normal business hours, (c) onebusiness day after being sent by Federal Express, DHL or UPS or othercomparably reputable delivery service and (d) five business days after beingsent by registered or certified mail. Each of the parties hereto shall beentitled to specify a different address by giving notice as aforesaid to eachof the other parties hereto.

 

# 11.                                   Severability. If in any judicial or arbitral proceedingsa court****or arbitrator refuses to enforce anyprovision of this Agreement, then such unenforceable provision will be deemedeliminated from this Agreement for the purpose of such proceedings to theextent necessary to permit the remaining provisions to be enforced, and theparties hereto shall negotiate in good faith to seek to enter into substituteprovisions incorporating, as nearly as possible, the purpose, intent and effectof such unenforceable provision. To the full extent, however, that the provisionsof any applicable law may be waived, they are hereby waived to the end thatthis Agreement be deemed to be a valid and binding agreement enforceable inaccordance with its terms, and in the event that any provision hereof is foundto be invalid or unenforceable, such provision will be construed by limiting itso as to be valid and enforceable to the maximum extent consistent with andpossible under applicable law.

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# 12.                                   Miscellaneous

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# (a)                                  Counterparts. This Agreement may be executed in anynumber of counterparts and by each of the parties hereto in separatecounterparts, each of which when so executed will be deemed to be an originaland all of which together will constitute one and the same agreement.

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# (b)                                 Interpretation. The headings contained in this Agreementare for convenience of reference only and will not in any way affect themeaning or interpretation hereof. As used herein the word “including” shall bedeemed to mean “including without limitation”. This Agreement reflects themutual intent of the parties and no rule of construction against the draftingparty shall apply.

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[*The remainder of this page is intentionally leftblank. Signatures follow.*]

 

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**IN WITNESS WHEREOF**, each of the parties has caused this Agreement to be executed on itsbehalf as an instrument under seal as of the date first above written by itsofficer or representative thereunto duly authorized.

 
| *THE  COMPANY:* | **MICHAELS  STORES, INC.**                               |
|-----------------|----------------------------------------------------------|
|            |                                                     |
|            |                                                     |
|            |  /s/  Jeffrey N. Boyer                              |   |
|            | Name:  Jeffrey N. Boyer                                  |
|            | Title:   President and Chief Financial Officer |
|            |                                                     |
|            |                                                     |
| *BAIN:*         | **BAIN  CAPITAL PARTNERS, LLC**                          |
| * *        | ** **                                               |
|            |                                                     |
|            | /s/  Matthew S. Levin                                    |   |
|            | Name:  Matthew S. Levin                                  |
|            | Title:  Managing Director                                |
|            |                                                     |
|            |                                                     |
| *BLACKSTONE:*   | **BLACKSTONE  MANAGEMENT PARTNERS V LLC**                |
| * *        | ** **                                               |
|            |                                                     |
|            | /s/  Michael Chae                                        |   |
|            | Name:  Michael Chae                                      |
|            | Title:  Managing Director                                |

 

*[Management Agreement]*

 

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Schedule 1 to

Management Agreement

 

***Wire Transfer Instructions forBain Capital Partners, LLC***

 
| Bank:               | Citibank,  NA-New York          |
|---------------------|---------------------------------|
| ABA  #:             | 021-000-089                     |
| For:                | Brown  Brothers Harriman-Boston |
| Acct  #:            | 09250276                        |
| To  Further Credit: | Bain  Capital Partners, LLC     |
| Acct  #:            | 612541-3                        |

 

***Wire Transfer Instructions forBlackstone Management Partners V LLC***

 
| Bank:    | JP  Morgan Chase                      |
|----------|---------------------------------------|
| ABA  #:  | 021-000-021                           |
| For:     | Blackstone  Management Partners V LLC |
| Acct  #: | 066-650739                            |

 

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