Exhibit 10.1

                                FOURTH AMENDMENT
                                       TO
                           LOAN AND SECURITY AGREEMENT

         This FOURTH AMENDMENT, dated as of January 17, 2006, (this "Amendment")
is an amendment to the Loan and Security Agreement, dated as of August 23, 2000,
by and between IPARTY RETAIL STORES CORP. (the "iParty Retail"), a Delaware
corporation, and IPARTY CORP. ("iParty Corp."), a Delaware corporation (iParty
Retail and iParty Corp. are collectively referred to as the "Borrowers") and
WELLS FARGO RETAIL FINANCE II, LLC, a Delaware limited liability company (the
"Lender"), as amended by that First Amendment to Loan and Security Agreement
dated as of May 23, 2002 by and between the Borrowers and the Lender, as amended
by that Second Amendment to Loan and Security Agreement dated as of January 2,
2004 by and between the Borrowers and the Lender, and as amended by that Third
Amendment to Loan and Security Agreement dated as of April 27, 2005 by and
between the Borrowers and the Lender (as amended from time to time, the "Loan
Agreement"). All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Loan Agreement.

          An Event of Default exists pursuant to Section 10-1 of the Loan
Agreement as a consequence of the fact that the principal balance of the Loan
Account exceeded Availability on January 12, 2006 (the "Existing Default"). The
Borrowers have requested that the Lender agree and the Lender has agreed (i) to
waive the Existing Default and (ii) to certain modifications of the Loan
Agreement on the terms and conditions contained herein.

         In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the undersigned hereby agrees as follows:

         1.       New Definitions. The following shall be added as new
                  definitions to Exhibit 3 of the Loan Agreement: "Amendment
                  Number Four" means that Fourth Amendment to the Loan
                  Agreement.

                  "Effective Date of Amendment Number Four" has that meaning
                  ascribed to it in Amendment Number Four to the Loan Agreement.

                  "Maximum Term Loan Amount" means $500,000, provided that such
                  amount shall automatically be reduced to zero ($0) dollars as
                  of the Term Loan Termination Date.

                  "Term Loan" is defined in Section 1-1A.

                  "Term Loan Interest Rate" is defined in Section 1-4A.

                  "Term Loan Maturity Date" shall mean October 31, 2006, or if
                  such day is not a Business Day, the next Business Day.

                  "Term Note" is defined in Section 1-2A.

                  "Term Loan Termination Date" shall mean the earliest to occur
                  of: (a) the Term Loan Maturity Date, (b) the occurrence of an
                  event described in Section 10-11 or (c) Lender's notice to the
                  Borrowers of the termination of this Agreement following the
                  occurrence of any Event of Default not described in Section
                  10-11.

         2. Borrowing Base.
            ---------------

                  The definition of "Borrowing Base" in Section 1.1 of the Loan
       Agreement shall be deleted in its entirety and the following definition
       shall be substituted therefor: "'Borrowing Base' means, as of any date of
       determination, the sum of

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                  (a)      (i) for the period between October 1st and June 30th,
                           the lesser of (x) 85% of the Net Retail Liquidation
                           Value of Acceptable Inventory and (y) 70% of the
                           value (at Cost) of Acceptable Inventory and

                           (ii) for the period between July 1st and September
                           30th, the lesser of (x) 90% of the Net Retail
                           Liquidation Value of Acceptable Inventory and (y) 75%
                           of the value (at Cost) of Acceptable Inventory,

                           plus

                  (b)      the lesser of (i) 85% of Eligible Credit Card
                           Receivables and (ii) $2,000,000,

                           plus

                  (c)      the principal balance of the Term Loan then extant or
                           in effect on such date, provided, that,
                           notwithstanding the foregoing, at no time shall the
                           Borrowing Base exceed 98% of the sum of the Net
                           Retail Liquidation Value of Acceptable Inventory plus
                           Eligible Credit Card Receivables."

         3. Term Loan.
            ----------

                  (a) The Loan Agreement shall be amended by adding a new
                      Article 1A which shall provide as follows:

       "ARTICLE IA - THE TERM LOAN

         1-1A. Commitment to Make Term Loan.
               -----------------------------

         (a) Subject to the satisfaction of the conditions precedent set forth
in Section 1-6A and subject to the terms and conditions and relying upon the
representations and warranties set forth herein and in the other Loan Document,
the Lender agrees to make a term loan to the Borrowers on the Effective Date of
Amendment Number Four, in the amount requested by the Borrowers not to exceed
the Maximum Term Loan Amount (the `Term Loan').

         (b) Subject to the satisfaction of the applicable terms and conditions
set forth herein, the Lender shall make the proceeds of the Term Loan available
to the Borrowers on the Effective Date of Amendment Number Four by transferring
immediately available funds equal to such proceeds to the Funding Account. All
obligations in respect of the Term Loan shall be deemed to be "Liabilities"
pursuant to the term of this Agreement.

         (c) The proceeds of the Term Loans shall be used by the Borrowers
solely for working capital, Capital Expenditures, and other purposes permitted
by this Agreement.

         1-2A     The Term Note.
                   -------------

         The obligation to repay the Term Loan, with interest as provided
herein, shall be evidenced by a Note (the `Term Note') in and substance
reasonably acceptable to the Lender, executed by the Borrowers. Neither the
original nor a copy of the Term Note shall be required, however, to establish or
prove any Liability. In the event that the Term Note is ever lost, mutilated, or
destroyed, the Borrowers shall execute a replacement thereof and deliver such
replacement to the Lender.

         1-3A     Payment of the Principal of the Term Loan.
                  -----------------------------------------

         (a) The Borrowers may repay all or any portion of the principal balance
of the Term Loan, without penalty, prior to the repayment in full of all other
Liabilities under the Revolving Credit, cash collateralization of all L/Cs, and
the termination of any obligation, under the Revolving Credit, of the Lender to
make loans or to provide financial accommodations pursuant to this Agreement.

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         (b) The Borrowers shall repay the then entire balance of the Term Loan
and all accrued and unpaid interest thereon on the Term Loan Termination Date.

         (c) Any amounts repaid by the Borrowers on account of the Term Loan may
not be reborrowed by the Borrowers.

         1-4A     Interest on the Term Loan.
                  --------------------------

         (a) Subject to Section 1-4A(b), the unpaid principal balance of the
Term Loan shall bear interest, until repaid, at a per annum rate equal to Base
plus 1.25% (the "Term Loan Interest Rate"), payable monthly in arrears, on the
first Business Day of each month and on the Term Loan Maturity Date.

         (b) Following the occurrence of any Event of Default (and whether or
not the Term Loan is accelerated), at the discretion of the Lender, interest
shall accrue and shall be payable on the unpaid balance of the Term Loan at the
aggregate of the Term Loan Interest Rate plus two percent (2%) per annum.

         1-5A     Payments on Account of the Term Loan.
                  -------------------------------------

         The Borrowers authorize the Lender to determine and to pay over
directly to the Lender any and all amounts due and payable from time to time
under or on account of the Term Loan as advances under the Revolving Credit, it
being understood, however, that the authorization of the Lender provided in this
Section 1-5A shall not excuse the Borrowers from fulfilling their obligations to
the Lender on account of the Term Loan nor place any obligation on the Lender to
do so.

         1-6A     Conditions Precedent To The Making Of The Term Loan.
                  ----------------------------------------------------

         The obligation of the Lender to make the Term Loan is subject to the
following conditions precedent:

         (a) Representations and Warranties. All representations and warranties
contained in this Agreement and the other Loan Documents or otherwise made in
writing in connection herewith or therewith shall be true and correct in all
material respects on and as of the date of the making of the Term Loan hereunder
with the same effect as if made on and as of such date, other than
representations and warranties that relate solely to an earlier date.

         (b) No Default. On the date of the making of the Term Loan hereunder
and after giving effect to the Amendment Number Four, the Borrowers shall be in
compliance with all the terms and provisions set forth in this Agreement and in
the other Loan Documents to be observed or performed and no Default or Event of
Default shall have occurred and be continuing.

          (c) Amendment Number Four. The Effective Date of Amendment Number Four
shall have occurred.

         (d) Term Note. Lender shall have received the Term Note, in form and
         substance reasonably acceptable to Lender, duly executed by the
         Borrowers.

         (e) Resolutions. Receipt by Lender of a copy of the resolutions of the
         Borrowers, certified as of the date of the Term Loan by an Executive
         Officer thereof, respectively, authorizing Amendment Number Four.

         (f) Officer's Certificate. Receipt by Lender of a certificate of an
         Executive Officer of the Borrowers, certifying the names and true
         signatures of the representatives of the Borrowers authorized to sign
         the Term Note, together with evidence of the incumbency of such
         authorized officers.

         (g) Other Documents. Receipt by Lender of such other documents and
         instruments as the Lender may reasonably request.

         4. Interest. Section 1-8(a) of the Loan Agreement shall be deleted in
its entirety and the following shall be substituted therefor: "(a) The unpaid

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principal balance of the Revolving Credit shall bear interest, until repaid
(calculated based upon a 360-day year and actual days elapsed), at an annual
rate equal to the aggregate of Base plus three-quarters of one percent (0.75%)
per annum, provided, that upon the payment of the Term Loan in full, the unpaid
principal balance of the Revolving Credit shall bear interest, until repaid
(calculated based upon a 360-day year and actual days elapsed), at an annual
rate equal to the aggregate of Base plus one-half of one percent (0.50%) per
annum, provided, further that in no event shall interest be in excess of the
maximum rate permitted by applicable law."

         5. Exhibits. The following Exhibits to the Loan Agreement are hereby
stricken and replaced by the correspondingly identified Exhibits attached
hereto: Exhibits 5-4 [Locations]; 5-5 [Encumbrances and Liens]; 5-6
[Indebtedness]; 5-9 [Leases] and 9-10 [Business Plan].

         6. Waiver of Existing Default. The Borrowers acknowledge that the
Existing Default is extant. Effective as of the Effective Date of Amendment
Number Four, the Lender waives the Existing Default. The waiver contained herein
is only of the Existing Default and no other default which exists or, with the
passage of time or the giving of notice, may presently exist or may exist at any
time in the future.

         7. Fees. In consideration of the Lender's willingness to enter into
this Amendment, the Lender shall have earned as of the date hereof a closing fee
in the amount of $10,000, which fee shall be payable as of the Effective Date of
Amendment Number Four. The Lender shall be authorized to charge the Loan Account
for the amount of such fee.

         8. Acknowledgement of Liabilities by Borrowers. The Borrowers confirm
and agree that (a) all representations and warranties contained in the Loan
Agreement and in the other Loan Documents are on the date hereof true and
correct in all material respects, and (b) they are unconditionally liable for
the punctual and full payment of all Liabilities, including, without limitation,
all reasonable charges, fees, expenses and costs (including attorneys' fees and
expenses) under the Loan Documents, and that the Borrowers have no defenses,
counterclaims or setoffs with respect to full, complete and timely payment of
all Liabilities.

         9. Ratification of Financing. The Borrowers confirm that the Loan
Agreement and the Loan Documents remain in full force and effect without
amendment or modification of any kind, except for the amendments explicitly set
forth herein. This Amendment shall be deemed to be one of the Loan Documents
and, together with the other Loan Documents, constitute the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior dealings, correspondence, conversations or communications between the
parties with respect to the subject matter hereof. This Amendment shall be
considered a Loan Document and, without in any way limiting the application of
other provisions of the Loan Agreement, this Amendment shall governed by the
provisions of Articles 14-2, 14-3, 14-4, 14-7, 14-8, 14-9, 14-10, 14-14 of the
Loan Agreement. No further amendment to the Loan Agreement shall be made except
by a writing signed by all parties to the Loan Agreement.

         10. Representations, Warranties and Covenants. The Borrowers, jointly
and severally, represents, warrants and covenants with and to the Lender as
follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof, the truth and accuracy of, or
compliance with each, together with the representations, warranties and
covenants in the other Loan Agreements, begin continuing condition of the making
or providing any loans or L/Cs by the Lender to Borrowers:

         (a) This Amendment has been duly authorized, executed and delivered by
all necessary action of the Borrowers, and is in full force and effect, and the
agreements and obligations of the Borrowers contained here constitute legal,
valid and binding obligations of the Borrowers enforceable against the
Borrowers, jointly and severally, in accordance with its terms.

         (b) After giving effect to this Amendment, there is no Event of Default
under the Loan Agreement or any of the Loan Documents.

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         11. Conditions Precedent. This Amendment shall become effective (the
"Effective Date of the Amendment Number Four") upon satisfaction of each of the
following conditions precedent or waiver of such conditions by the Lender:

         (a) Receipt by Lender of this Amendment duly executed by the Borrowers
and Lender.

         (b) All representations and warranties contained herein shall be true
and correct in all material respects.

         (c) After giving effect to this Amendment, no Default or Event of
Default shall have occurred and be continuing.

         (d) Receipt by Lender of  an updated appraisal, in form and substance
acceptable to Lender in its sole discretion.

         (e) Receipt by Lender of such other documents as the Lender may
reasonably request.

         12. Miscellaneous. Section and paragraph headings herein are included
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose. This Amendment shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts.

         13. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof and
submissible into evidence and all of which together shall be deemed to be a
single instrument. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto. Delivery of an executed counterpart of this Amendment by
telefacsimile or other electronic method of transmission shall have the same
force and effect as delivery of an original executed counterpart of this
Amendment.

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their authorized officers as of the day and
year first above written.

                                    WELLS FARGO RETAIL FINANCE II, LLC
                                    (the "Lender")


                                    By: /s/ Lynn Whitmore
                                        -----------------
                                    Name: Lynn Whitmore
                                    Title: Vice President
BORROWER:

IPARTY RETAIL STORES CORP.

By: /s/ Patrick Farrell
    -------------------
    Name:  Patrick Farrell
    Title: President & CFO

IPARTY CORP.

By: /s/ Patrick Farrell
    --------------------
    Name:  Patrick Farrell
    Title: President & CFO