**SECTION 2. ACKNOWLEDGMENTS**     2.1. **Acknowledgment of Obligations.**Each Borrower hereby acknowledges, confirms and agreesthat as of the close of business on December 22, 2009, (a) Borrowers are indebted to Lenders inrespect of the Revolving Credit Loans (including Swingline Loans) in the principal amount of$52,271,348.09, and (b) Borrowers are indebted to Lenders in respect of the LC Obligations in theprincipal amount of $1,275,000.00. Each Borrower hereby acknowledges, confirms and agrees that allsuch Loans and LC Obligations, together with interest accrued and accruing thereon, and all fees,costs, expenses and other charges now or hereafter payable by any Borrower to Lenders, areunconditionally owing by Borrowers to Lenders, without offset, defense or counterclaim of any kind,nature or description whatsoever.     2.2. **Acknowledgment of Security Interests.**Each Borrower hereby acknowledges, confirms andagrees that Agent has and shall continue to have valid, enforceable and perfected first-priorityliens upon and security interests in the Collateral heretofore granted to Agent, for the benefit ofAgent and Lenders, pursuant to the Loan Agreement and the Loan Documents or otherwise granted to orheld by Agent, for the benefit of Agent and Lenders, subject only to Permitted Liens and the termsof the Secured Bond Intercreditor Agreement.     2.3. **Binding Effect of Documents.**Each Borrower hereby acknowledges, confirms and agreesthat: (a) each of the Loan Agreement and the Loan Documents to which it is a party has been dulyexecuted and delivered to Agent by such Borrower, and each is and shall remain in full force andeffect as of the date hereof except as modified pursuant hereto, (b) the agreements and obligationsof such Borrower contained in such documents and in this Agreement constitute the legal, valid andbinding Obligations of such Borrower, enforceable against it in accordance with their respectiveterms, and such Borrower has no valid defense to the enforcement of such Obligations, and (c) Agentand Lenders are and shall be entitled to the rights, remedies and benefits provided for under theLoan Agreement and the Loan Documents and applicable law.     2.4. **Acknowledgment of Default.**Each Borrower hereby acknowledges and agrees that theoccurrence of the Specified Defaults would entitle Agent and Lenders to exercise their rights andremedies under the Loan Agreement and the Loan Documents, applicable law or otherwise. EachBorrower represents and warrants that as of the date hereof, no Events of Default exist other thanthose which would correspond to the Specified Defaults. Each Borrower hereby acknowledges andagrees that, except as otherwise expressly set forth herein, with the occurrence of the SpecifiedDefaults (i) Agent and Lenders would have the exercisable right to declare the Obligations to beimmediately due and payable under the terms of the Loan Agreement and the Loan Documents, and (ii)Lenders would no longer obligated to make any disbursements of Revolving Credit Loans.     2.5. **Expiration of Forbearance.**Upon the expiration or termination of the Forbearance Period,the agreement of Agent and Lenders to forbear shall automatically and without further actionterminate and be of no force and effect, it being expressly agreed that the effect of suchtermination would be to permit Agent and Lenders to exercise immediately all rights and remediesunder the Loan Agreement and the Loan Documents and applicable law that are available based on theoccurrence of the Specified Defaults, including, but not limited to, (i) ceasing to make anyfurther Loans or issuing any further Letters of Credit or LC Guaranties and (ii) accelerating all
 

 
of the Obligations under the Loan Agreement and the Loan Documents; in each case without anyfurther notice to any Borrower, passage of time or forbearance of any kind.     2.6. **No Waivers; Reservation of Rights**.          (a) Agent and Lenders have not waived (by the terms of the Forbearance Agreement orotherwise), are not by this Agreement waiving, and have no intention of waiving, any Events ofDefault which may be continuing on the date hereof or any Events of Default which may occur afterthe date hereof (whether the same or similar to the Specified Defaults or otherwise), and Agentand Lenders have not agreed to forbear with respect to any of their rights or remedies concerningany Events of Default (other than, during the Forbearance Period, the Specified Defaults to theextent expressly set forth in the Forbearance Agreement) occurring at any time.          (b) Subject to Section 3.2 of the Forbearance Agreement (solely with respect to theSpecified Defaults), Agent and Lenders reserve the right, in their discretion, to exercise any orall of their rights and remedies under the Loan Agreement and the Loan Documents as a result ofany other Events of Default occurring at any time. Agent and Lenders have not waived any of suchrights or remedies, and nothing in this Agreement, and no delay on their part in exercising anysuch rights or remedies, shall be construed as a waiver of any such rights or remedies.     2.7. **Additional Events of Default.**The parties hereto acknowledge, confirm and agree that anymisrepresentation by any Borrower, or any failure of any Borrower to comply with the covenants,conditions and agreements contained in the Forbearance Agreement, this Agreement, the LoanAgreement and the Loan Documents or in any other agreement, document or instrument at any timeexecuted and/or delivered by any Borrower with, to or in favor of Agent or any Lenders shallconstitute an Event of Default under the Loan Agreement and the Loan Documents. In the event anyPerson, other than Agent or Lenders, shall at any time exercise for any reason (including, withoutlimitation, by reason of any Specified Default, any other present or future Event of Default, orotherwise) any of its rights or remedies against any Borrower or any obligor providing creditsupport for any Borrower’s obligations to such other Person, or against any Borrower’s or suchobligor’s properties or assets, such event shall constitute an Event of Default under theForbearance Agreement and an Event of Default under the Loan Agreement.     2.8. **Inventory Appraisals; Existing Reserves**. The extension of the Forbearance Periodimplemented in this Agreement by amending the definition of “Forbearance Period” in the ForbearanceAgreement pursuant to Section 3.1 below shall have the effect of extending the provisions ofSection 6 of the Forbearance Agreement that are applicable until the end of the Forbearance Periodthrough the end of the Forbearance Period as extended by this Agreement; provided, thateffective as of the date hereof and continuing for the remainder of the Forbearance Period, the netorderly liquidation percentage of each category and type of Eligible Inventory will be determinedby reference to the New Sector3 Appraisal (as defined in the Forbearance Agreement).
 

 
**SECTION 3. MODIFICATIONS TO FORBEARANCE AGREEMENT**     Subject to the conditions set forth herein, the Forbearance Agreement is amended as follows:     3.1. Section 1.2 of the Forbearance Agreement is amended by amending and restating thedefinition of the term “Forbearance Period” set forth therein in its entirety as follows:     (b) “Forbearance Period” means the period commencing on the date hereof andending on the date which is the earliest of (i) January 15, 2010; (ii) theoccurrence or existence of any Event of Default other than the Specified Defaults;or (iii) the occurrence of any Termination Event.     3.2. Section 5.1(a) of the Forbearance Agreement is amended and restated in its entirety asfollows:     (a) Borrowers shall, from and after December 23, 2009, continue to use theircommercially reasonable efforts to pursue a restructuring of the Secured Bonds andSubordinated Bonds on terms and conditions acceptable to Borrowers and the Lendersthat would occur no later than January 30, 2010. In furtherance of the foregoing,Borrowers shall diligently pursue in good faith the negotiation and completion of aterm sheet and lock-up agreement in respect of a restructuring of the Secured Bondsand Subordinated Bonds, each reasonably satisfactory to Lenders in form and content,no later than January 15, 2010. In addition, Borrowers shall pursue preparation ofdocumentation regarding the potential restructuring of the Secured Bonds andSubordinated Bonds, and shall provide the Lenders with weekly oral updates of theprogress in respect of such restructuring of the Secured Bonds and SubordinatedBonds.     3.3. Section 5.1(d) of the Forbearance Agreement is amended and restated in its entirety asfollows:     (d) Borrowers shall not permit EBITDA (as calculated in accordance with Exhibit8.3 of the Loan Agreement) for each period set forth below to be less than theapplicable amount set forth below for such period:     **Period** **EBITDA**The one-month period ending December 31, 2009  ($2,000,000)     3.4. Except as modified pursuant to this Section 3, no other changes or modifications to theForbearance Agreement are intended or implied and in all other respects the Forbearance Agreementis hereby specifically ratified, restated and confirmed by all parties hereto as of the effectivedate hereof.
 

 
**SECTION 4. BOND PAYMENTS**     For the avoidance of doubt, it is agreed and understood that no cash payments in respect ofthe Secured Bonds or the Subordinated Bonds shall be made by Borrowers at any time during theForbearance Period.**SECTION 5. FORBEARANCE EXTENSION FEE.**     Borrowers agree to pay to the Agent, for the ratable benefit of the Lenders in accordance withtheir respective Revolving Loan Percentages as of the date hereof, a forbearance extension fee inthe aggregate amount of $50,000 (the “Forbearance Extension Fee”). The ForbearanceExtension Fee shall be due and payable, fully earned and non-refundable as of the date of thisAgreement.**SECTION 6. REPRESENTATIONS AND WARRANTIES**     Each Borrower hereby represents, warrants and covenants as follows:     6.1. **Representations in the Loan Agreement and the Loan Documents.**Each of therepresentations and warranties made by or on behalf of each Borrower to Agent or any Lender in theLoan Agreement, the Forbearance Agreement or any of the Loan Documents was true and correct whenmade, and is, except for the Specified Defaults, true and correct on and as of the date of thisAgreement with the same full force and effect as if each of such representations and warranties hadbeen made by each Borrower on the date hereof and in this Agreement.     6.2. **Binding Effect of Documents.**This Agreement has been duly authorized, executed anddelivered to Agent and Lenders by each Borrower, is enforceable in accordance with its terms and isin full force and effect.     6.3. **No Conflict.**The execution, delivery and performance of this Agreement by each Borrowerwill not violate any requirement of law or contractual obligation of any Borrower and will notresult in, or require, the creation or imposition of any Lien on any of their respective propertiesor revenues.**SECTION 7. CONDITIONS TO EFFECTIVENESS OF CERTAIN PROVISIONS OF THIS AGREEMENT**     The effectiveness of the terms and provisions of Section 3 of this Agreement shall be subjectto the receipt by Agent of each of the following, in form and substance satisfactory to Agent andLenders:          (a) an original of this Agreement, duly authorized, executed and delivered by each Borrower;and          (b) an original of the Consent and Reaffirmation attached as Exhibit B hereto, dulyauthorized, executed and delivered by each Guarantor.
 

 
**SECTION 8. MISCELLANEOUS**     8.1. **Effect of this Agreement.**Except as modified pursuant hereto, no other changes ormodifications to the Loan Agreement and the Loan Documents (including the Forbearance Agreement)are intended or implied and in all other respects the Loan Agreement and the other Loan Documents(including the Forbearance Agreement) are hereby specifically ratified, restated and confirmed byall parties hereto as of the effective date hereof. To the extent of conflict between the terms ofthis Agreement, the Loan Agreement and the other Loan Documents (including the ForbearanceAgreement), the terms of this Agreement shall control. The Loan Agreement, the ForbearanceAgreement and this Agreement shall be read and construed as one agreement.     8.2. **Costs and Expenses.**Each Borrower absolutely and unconditionally agrees to pay to Agent,within 15 days of demand by Agent at any time, whether or not all or any of the transactionscontemplated by this Agreement are consummated: all fees and disbursements of any counsel to Agentor any Lender in connection with the preparation, negotiation, execution or delivery of thisAgreement and any agreements contemplated hereby and expenses which shall at any time be incurredor sustained by Agent, any Lender, or any of their respective directors, officers, employees oragents as a consequence of or in any way in connection with the preparation, negotiation,execution, or delivery of this Agreement and any agreements contemplated hereby. Each Borrowerhereby agrees that Borrowers’ joint and several obligation under Section 2.8 of the LoanAgreement for the reimbursement of out-of-pocket expenses of Agent or any Lender in connection withany attempt to enforce rights of Agent or any Lender under the Loan Agreement or any of the otherLoan Documents shall include the obligation to reimburse Agent and Lenders for collection fees,costs and expenses arising after entry of any judgment in respect of the amounts due to Lenders.     8.3. **Further Assurances**. At Borrowers’ expense, the parties hereto shall execute and deliversuch additional documents and take such further action as may be necessary or desirable toeffectuate the provisions and purposes of this Agreement.     8.4. **Successors and Assigns.**This Agreement shall be binding upon and inure to the benefit ofeach of the parties hereto and their respective successors and assigns.     8.5. **Survival of Representations, Warranties and Covenants.**All representations, warranties,covenants and releases of each Borrower made in this Agreement or any other document furnished inconnection with this Agreement shall survive the execution and delivery of this Agreement and theForbearance Period, and no investigation by Agent or any Lender, or any closing, shall affect therepresentations and warranties or the right of Agent and Lenders to rely upon them.     8.6. **Release.**          (a) In consideration of the agreements of Agent and Lenders contained herein and for othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,each Borrower and each Guarantor executing a Consent and Reaffirmation attached hereto, on behalfof itself and its successors and assigns, and its present and former
 

 
members, shareholders, affiliates, subsidiaries, divisions, predecessors,directors, officers, attorneys, employees, agents, legal representatives and otherrepresentatives (each Borrower, each Guarantor and all such other Persons being hereinafterreferred to collectively as the “Releasing Parties” and individually as a “ReleasingParty”, hereby absolutely, unconditionally and irrevocably releases, remises and foreverdischarges Agent, each Lender, and each of their respective successors and assigns, and theirrespective present and former shareholders, affiliates, subsidiaries, divisions, predecessors,directors, officers, attorneys, employees, agents, legal representatives and otherrepresentatives (Agent, Lenders and all such other Persons being hereinafter referred tocollectively as the “Releasees” and individually as a “Releasee”), of and fromall demands, actions, causes of action, suits, damages and any and all other claims,counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a“Claim” and collectively, “Claims”) of every kind and nature, known or unknown,suspected or unsuspected, at law or in equity, which any Borrower or any of its successors,assigns, or other legal representatives may now or hereafter own, hold, have or claim to haveagainst the Releasees or any of them for, upon, or by reason of any circumstance, action, causeor thing whatsoever which arises at any time on or prior to the date of this Agreement,including, without limitation, for or on account of, or in relation to, or in any way inconnection with this Agreement, the Loan Agreement, any of the Loan Documents or any of thetransactions hereunder or thereunder.          (b) Each Borrower and each Guarantor understands, acknowledges and agrees that the releaseset forth above may be pleaded as a full and complete defense to any Claim and may be used as abasis for an injunction against any action, suit or other proceeding which may be instituted,prosecuted or attempted in breach of the provisions of such release.          (c) Each Borrower and each Guarantor agrees that no fact, event, circumstance, evidence ortransaction which could now be asserted or which may hereafter be discovered shall affect in anymanner the final, absolute and unconditional nature of the release set forth above.     8.7. **Covenant Not to Sue.**Each of the Releasing Parties hereby absolutely, unconditionallyand irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (atlaw, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claimreleased, remised and discharged by any Releasing Party pursuant to Section 8.6 above. If anyReleasing Party violates the foregoing covenant, each Borrower, for itself and its successors andassigns, and its present and former members, shareholders, affiliates, subsidiaries, divisions,predecessors, directors, officers, attorneys, employees, agents, legal representatives and otherrepresentatives, agrees to pay, in addition to such other damages as any Releasee may sustain as aresult of such violation, all attorneys’ fees and costs incurred by any Releasee as a result ofsuch violation.     8.8. **Severability.**Any provision of this Agreement held by a court of competent jurisdictionto be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement.     8.9. **Reviewed by Attorneys.**Each Borrower and each Guarantor represents and warrants to Agentand Lenders that it (a) understands fully the terms of this Agreement and the consequences of theexecution and delivery of this Agreement, (b) has been afforded an
 

 
opportunity to discuss this Agreement with, and have this Agreement reviewed by, such attorneys and otherpersons as such Borrower or such Guarantor may wish, and (c) has entered into this Agreement andexecuted and delivered all documents in connection herewith of its own free will and accord andwithout threat, duress or other coercion of any kind by any Person. The parties hereto acknowledgeand agree that neither this Agreement nor the other documents executed pursuant hereto shall beconstrued more favorably in favor of one than the other based upon which party drafted the same, itbeing acknowledged that all parties hereto contributed substantially to the negotiation andpreparation of this Agreement and the other documents executed pursuant hereto or in connectionherewith.     8.10. **Disgorgement**. If Agent or any Lender is, for any reason, compelled by a court or othertribunal of competent jurisdiction to surrender or disgorge any payment, interest or otherconsideration described hereunder to any person because the same is determined to be void orvoidable as a preference, fraudulent conveyance, impermissible set-off or for any other reason,such indebtedness or part thereof intended to be satisfied by virtue of such payment, interest orother consideration shall be revived and continue as if such payment, interest or otherconsideration had not been received by Agent or such Lender, and the Borrowers shall be liable to,and shall indemnify, defend and hold Agent or such Lender harmless for, the amount of such paymentor interest surrendered or disgorged. The provisions of this Section 8.10 shall survive executionand delivery of this Agreement and the documents, agreements and instruments to be executed ordelivered herewith.     8.11. **Relationship**. Each Borrower agrees that the relationship between Agent and suchBorrower and between each Lender and Borrower is that of creditor and debtor and not that ofpartners or joint venturers. This Agreement does not constitute a partnership agreement, or anyother association between Agent and any Borrower or between any Lender and any Borrower. EachBorrower acknowledges that Agent and each Lender have acted at all times only as a creditor to suchBorrower within the normal and usual scope of the activities normally undertaken by a creditor andin no event has Agent or any Lender attempted to exercise any control over such Borrower or itsbusiness or affairs.     8.12. **Governing Law: Consent to Jurisdiction and Venue.**EXCEPT AS OTHERWISE EXPRESSLY PROVIDEDIN THE LOAN AGREEMENT AND ANY OF THE LOAN DOCUMENTS, THIS AGREEMENT, THE LOAN AGREEMENT AND THELOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BEGOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS,WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH BORROWER HEREBY CONSENTS AND AGREES THAT THESTATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, ILLINOIS SHALL HAVE EXCLUSIVE JURISDICTION TO HEARAND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND AGENT OR ANY LENDER PERTAINING TO THISAGREEMENT OR THE LOAN AGREEMENT OR THE LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TOTHIS AGREEMENT OR THE LOAN AGREEMENT OR ANY OF THE LOAN DOCUMENTS; PROVIDED, THAT NOTHINGIN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHERLEGAL ACTION IN
 

 
ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHERSECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUITCOMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASEDUPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUMNONCONVENIENSAND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BYSUCH COURT. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS ISSUED IN ANY SUCHACTION OR SUIT AND AGREES THAT SERVICE OF SUCH PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAILADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH IN THE LOAN AGREEMENT AND THAT SERVICE SO MADESHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH BORROWER’S ACTUAL RECEIPT THEREOF OR THREE (3)DAYS AFTER THE SAME HAS BEEN POSTED.     8.13. **Mutual Waiver of Jury Trial.**THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY INANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT,OR OTHERWISE BETWEEN AGENT OR ANY LENDER AND ANY BORROWER ARISING OUT OF, CONNECTED WITH, RELATEDOR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THELOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.     8.14. **Counterparts.**This Agreement may be executed in any number of counterparts, but all ofsuch counterparts shall together constitute but one and the same agreement.
 

 
     IN WITNESS WHEREOF, this Agreement is executed and delivered as of the day and year firstabove written.      **BORROWERS:**