exhibit10-1.htm


    Exhibit
10.1

     

    
      AMENDED AND RESTATED AGENCY
AGREEMENT

       

      This
Amended and Restated Agency Agreement (the "Agreement") is made
as of this 4th day of November, 2008 by and between a Joint Venture Composed of
Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC
(together, jointly and severely, the "Agent") and Circuit
City Stores, Inc., a Virginia corporation ("CCI"), Circuit City
Stores West Coast, Inc., a California corporation, and CCI's other direct and
indirect subsidiaries (collectively, "Merchant") with a
principal place of business at 9950 Mayland Drive, Richmond, Virginia
23233.

       

      RECITALS

       

      WHEREAS,
Merchant desires that Agent act as Merchant’s exclusive agent for the purpose of
conducting a sale (the "Sale") of all of the
Merchandise (as hereinafter defined) located in one hundred fifty-four (154)
retail store locations set forth on Exhibit 1 (each a
"Closing
Store," and  collectively the “Closing
Stores”).

       

      NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Agent and Merchant hereby agree as
follows:

       

      Section
1. Defined
Terms.  The terms set forth below are defined in the Sections
referenced of this Agreement:

       

      
        
          
            
              	
                      Defined Term

                    	
                      Section Reference

                    
	
                      Additional
      Stores

                    	
                      Section
      21

                    
	
                      Agency
      Account

                    	
                      Section
      7.2(a)

                    
	
                      Agency
      Documents

                    	
                      Section
      12.1(b)

                    
	
                      Agent

                    	
                      Preamble

                    
	
                      Agent
      Claim

                    	
                      Section
      13.5

                    
	
                      Agent
      Letter of Credit

                    	
                      Section
      3.3(b)

                    
	
                      Agent’s
      Fee

                    	
                      Section
      3.2

                    
	
                      Agent
      Indemnified Parties

                    	
                      Section
      14.1

                    
	
                      Agreement

                    	
                      Preamble

                    
	
                      Applicable
      Law

                    	
                      Section
      9.12

                    
	
                      Benefits
      Cap

                    	
                      Section
      4.1(b)

                    
	
                      Central
      Service Expenses

                    	
                      Section
      4.1

                    
	
                      Closing
      Stores

                    	
                      Recitals

                    
	
                      Cost
      File

                    	
                      Section
      5.3(a)

                    
	
                      Cost
      Value

                    	
                      Section
      5.3(a)

                    
	
                      Defective
      Merchandise

                    	
                      Section
      5.1(b)

                    
	
                      Designated
      Merchant Accounts

                    	
                      Section
      7.2(b)

                    
	
                      Discount

                    	
                      Section
      5.3

                    
	
                      Display
      Merchandise

                    	
                      Section
      5.1

                    
	
                      Estimated
      Guarantee Amount

                    	
                      Section
      3.3(a)

                    
	
                      Events
      of Default

                    	
                      Section
      15

                    
	
                      Excluded
      Defective

                      Merchandise

                    	
                      Section
      5.1

                    
	
                      Excluded
      Goods

                    	
                      Section
      5.1

                    
	
                      Expenses

                    	
                      Section
      4.1

                    
	
                      FF&E

                    	
                      Section
      5.1(b)

                    
	
                      Final
      Reconciliation

                    	
                      Section
      3.5(b)

                    
	
                      Gross
      Rings

                    	
                      Section
      3.4

                    
	
                      Guaranteed
      Amount

                    	
                      Section
      3.1(a)

                    
	
                      Guaranty
      Percentage

                    	
                      Section
      3.1(a)

                    
	
                      Layaway
      Inventory

                    	
                      Section
      9.3(c)

                    
	
                      Lender
      Agent

                    	
                      Bank
      of America, N.A., in its

                       capacity
      as agent under

                       Merchant's
      existing credit facility

                    
	
                      Merchandise

                    	
                      Section
      5.1(a)

                    
	
                      Merchant

                    	
                      Preamble

                    
	
                      Merchant
      Consignment Goods

                    	
                      Section
      5.2(a)

                    
	
                      Occupancy
      Expenses

                    	
                      Section
      4.1

                    
	
                      Payment
      Date

                    	
                      Section
      3.3(c)

                    
	
                      Permitted
      Installation Services

                      Pricing
      Adjustment

                    	
                      Section
      8.2

                      Section
      5.3(b)

                    
	
                      Proceeds

                    	
                      Section
      7.1

                    
	
                      Retail
      Price

                    	
                      Section
      5.3

                    
	
                      Recovery
      Amount

                    	
                      Section
      3.1(b)

                    
	
                      Refund

                    	
                      Section
      9.8

                    
	
                      Remaining
      Merchandise

                    	
                      Section
      3.2

                    
	
                      Reserve
      Inventory

                    	
                      Section
      9.3(c)

                    
	
                      Reserve
      & Layaway Inventory

                    	
                      Section
      9.3(c)

                    
	
                      Retained
      Employee

                    	
                      Section
      10.1

                    
	
                      Retainer

                    	
                      Section
      3.3(b)

                    
	
                      Retention
      Bonus

                    	
                      Section
      10.4

                    
	
                      Sale

                    	
                      Recitals

                    
	
                      Sale
      Commencement Date

                    	
                      Section
      6.1

                    
	
                      Sale
      Guidelines

                    	
                      Section
      9.1

                    
	
                      Sale
      Term

                    	
                      Section
      6.1

                    
	
                      Sale
      Termination Date

                    	
                      Section
      6.1

                    
	
                      Sales
      Taxes

                    	
                      Section
      9.4

                    
	
                      Supplies

                    	
                      Section
      9.5

                    
	
                      Vacation
      Benefits

                    	
                      Section
      4.1

                    
	
                      WARN
      Act

                      Weekly
      Sale Reconciliation

                    	
                      Section
      10.1

                      Section
      3.5(a)

                    


            

          

        

      

       

      Section
2. Appointment of
Agent.

       

      2.1           Appointment of
Agent.  Merchant hereby irrevocably appoints Agent, and Agent
hereby agrees to serve as Merchant’s exclusive agent for the limited purpose of
conducting the Sale and, to the extent designated by Merchant, disposing of
Merchant’s owned FF&E, in accordance with the terms and conditions of this
Agreement.

       

      Section
3. Guaranteed Amount and Other
Payments.

       

      3.1 Payments to
Merchant.

       

      (a) As a
guaranty of Agent’s performance hereunder, Agent guarantees to Merchant that the
Proceeds of the Sale shall equal or exceed seventy-two percent (72%) (the “Guaranty Percentage”)
of the aggregate Cost Value of the Merchandise included in the Sale (the “Guaranteed Amount”)
plus an amount sufficient to pay all Expenses.

       

      (b) To the
extent that Proceeds exceed the sum of (x) the Guaranteed Amount, (y) Expenses
of the Sale, and (z) three and one half percent (3.5%) of the aggregate Cost
Value of the Merchandise (the “Agent’s Fee”) (the
sum of (x), (y) and (z), the “Sharing Threshold”),
then all remaining Proceeds of the Sale above the Sharing Threshold shall be
shared fifty percent (50%) to Merchant and fifty percent (50%) to
Agent.  All amounts, if any, to be received by the Merchant from
Proceeds in excess of the Sharing Threshold shall be referred to as the “Recovery
Amount.”  The Agent shall pay to the Merchant the Guaranteed
Amount, the Recovery Amount, if any, in the manner and at the times specified in
Section 3.3 below.  The Guaranteed Amount and the Recovery Amount will
be calculated based upon the aggregate Cost Value of the Merchandise as
determined by the amount of Gross Rings, as adjusted for shrinkage per this
Agreement.

       

      (c) The
Guaranty Percentage has been fixed based upon the aggregate Cost Value of the
Merchandise, being not less than $190,000,000 (the “Merchandise
Threshold”), or in excess of $220,000,000 (the “Merchandise
Ceiling”).  To the extent that the aggregate Cost Value of the
Merchandise included in the Sale is less than the Merchandise Threshold, or in
excess of the Merchandise Ceiling, the Guaranty Percentage shall be adjusted in
accordance with Exhibit 3.1(c)
annexed hereto, as and where applicable.   In the event that the
aggregate Cost Value of the Merchandise in Merchant’s perpetual inventory file
is less than $197,500,000 as of the Sale Commencement Date, Merchant shall
deliver to the Stores (at Agent’s direction) additional goods of similar mix,
quality and assortment as set forth on Exhibit 12.1(n) to be included as
Merchandise with an aggregate Cost Value sufficient to remedy such shortfall,
which goods must be received at the Closing Stores designated by Agent no later
than the 7th day
after the Sale Commencement Date.

       

      3.2 Payments to
Agent.

       

      (a) The Agent
shall receive as its compensation for services rendered to the Merchant, the
Agent’s Fee, plus all remaining Proceeds of the Sale after payment of the
Guaranteed Amount, Expenses of the Sale, the Recovery Amount, if any, and all
other amounts payable to the Merchant from Proceeds hereunder.

       

      (b) Subject
to Merchant’s rights with respect to the Recovery Amount, all Merchandise
remaining, if any, at the Sale Termination Date (the “Remaining
Merchandise”) shall become the property of Agent, free and clear of all
liens, claims and encumbrances, provided, however, that Agent
shall use its best efforts to sell all of the Merchandise during the
Sale.  Any proceeds received from the sale of any Remaining
Merchandise shall be deemed Proceeds under this Agreement.

       

      3.3 Time of
Payments.

       

      (a) During
each week’s reconciliation as provided for in section 3.5 during the Sale Term,
all Proceeds of the Sale shall be deposited into the Designated Deposit
Accounts.  Proceeds shall be disbursed, on a weekly basis, as follows:
(i) first, to Merchant, to reimburse Merchant for Expenses paid by Merchant
during the previous week, (ii) second, to Agent, to reimburse Agent for Expenses
paid by Agent during the previous week, (iii) third, to Merchant, until the
Guaranteed Amount is paid in full, (iv) fourth, to Agent, until the Agent’s Fee
is paid in full, (v) fifth, to Merchant, in payment of the Recovery Amount, and
(vi) sixth, to Agent, the remainder.

       

      (b) Within
two (2) business days after the Sale Commencement Date, Merchant will fund an
Expense retainer in the amount of $1 million (the "Retainer") from
Proceeds of the Sale to secure payment of Expenses, which Retainer shall be held
until the earlier of (i) assumption of this Agreement in a chapter 11
proceeding, if any, and (ii) Final Reconciliation; provided, further, that in the
event this Agreement is assumed in a chapter 11 proceeding, if any, the Retainer
shall be applied in connection with next Weekly Sale Reconciliation occurring
thereafter to amounts owed to the Agent under this Agreement.

       

      (c) No later
than two (2) business days after execution hereof (the “Payment Date”), and
to secure payment of the unpaid portion of the Guaranteed Amount and Expenses
from Agent to Merchant hereunder, Agent shall deliver to Merchant an irrevocable
standby letter of credit, naming Merchant as beneficiary, substantially in the
form of Exhibit
3.3(b) attached hereto, in the original face amount equal to the
$30,000,000 (the “Agent Letter of
Credit”).  Agent shall use its best efforts to cause the Agent
Letter of Credit to be delivered no later than the Payment Date.  In
the event that Agent shall fail to pay to Merchant, any amount required to be
paid hereunder, Merchant shall be entitled to draw on the Agent Letter of Credit
to fund such amount following five (5) days’ written notice to Agent of the
Merchant's intention to do so.  The Agent Letter of Credit shall
expire no less than sixty days after Sale Termination; provided however; Merchant and
Agent agree that after payment of the unpaid portion of the Guaranteed Amount
pursuant to Section 3.3(a), the face amount of the Agent Letter of Credit shall
be reduced in an amount(s) to be agreed upon by Merchant and Agent, but in any
event not less than the sum of any and all amounts then due or to be due and
payable from Agent in connection with the Guaranteed Amount or
Expenses.  Unless the parties shall have mutually agreed that they
have completed the Final Reconciliation under this Agreement, then, at least
thirty (30) days prior to the initial or any subsequent expiry date,
Merchant shall
receive an amendment to the Agent Letter of Credit solely extending (or further
extending, as the case may be) the expiry date by at least sixty (60)
days.  If Merchant does not receive such
amendment to the Agent Letter of Credit no later than thirty (30) days before
the expiry date, then all amounts hereunder shall become immediately due and
payable and Merchant shall be permitted to draw under the Agent Letter of Credit
in payment of amounts owed and Merchant shall hold the balance
of the amount drawn under the Agent Letter of Credit as security for amounts
that may become due and payable to Merchant hereunder.  In addition,
Merchant has represented that its perpetual inventory file will show that the
aggregate Cost Value of the Merchandise is no less than $197,500,000 as of the
Sale Commencement Date.

       

      3.4 Gross
Rings.  During the Sale Term, Agent and Merchant shall keep a
strict count of register receipts and reports to determine the actual Cost Value
of the Merchandise sold by SKU.  All such records and reports shall be
made available to Agent and Merchant during regular business hours upon
reasonable notice.  Agent shall pay that portion of the Guaranteed
Amount calculated on the Gross Rings basis, to account for shrinkage, on the
basis of 101.75% of the aggregate Cost Value of Merchandise sold during the Sale
Term.

       

      3.5 Reconciliation

       

      (a) On each
Thursday during the Sale Term, commencing on the second Thursday after the Sale
Commencement Date, Agent and Merchant shall cooperate to jointly prepare a
reconciliation of the weekly Proceeds of the Sale, Expenses and any other Sale
related items that either party may reasonably request (the “Weekly Sale
Reconciliation”).

       

      (b) Within
thirty (30) days after the Sale Termination Date, Agent and Merchant shall
jointly prepare a final reconciliation of the Sale, including, without
limitation, a summary of Proceeds, Expenses, and any other accounting required
hereunder (the “Final
Reconciliation”) and deliver the same to each other.  Within
five (5) days of completion of the Final Reconciliation, Agent shall pay to
Merchant, or Merchant shall pay to Agent, as the case may be, any and all
amounts due the other pursuant to the Final Reconciliation.  During
the Sale Term, and until all of Agent’s obligations under this Agreement have
been satisfied, Merchant and Agent shall have reasonable access to Merchant’s
and Agent’s records with respect to Proceeds and Expenses to review and audit
such records.

       

      Section
4. Sale
Expenses.

       

      4.1 Expenses.  Agent
shall unconditionally be responsible for all Expenses incurred in conducting the
Sale.  As used herein, “Expenses” shall mean
Closing Store-level operating expenses of the Sale which arise during the Sale
Term (except in the case of (c) below, which may arise prior to the Sale
Commencement Date) at the Closing Stores limited to the following:

       

      
        	
                (a)  

              	
                all
      payroll (including SPIFS) for Retained Employees for actual days/hours
      worked in the conduct of the Sale and third party payroll processing
      fees;

              


      

       

      
        	
                (b)  

              	
                amounts
      payable including FICA, unemployment taxes, worker’s compensation,
      healthcare insurance benefits, and paid time-off benefits that accrue
      during the Sale for Retained Employees  in an amount not to
      exceed 20.4% of base payroll for each Retained Employee (the “Benefits
      Cap”);

              


      

       

      
        	
                (c)  

              	
                on-site
      supervision of the Stores, including base fees and bonuses of Agent’s
      field personnel, actual costs of temporary employees retained by Agent
      through third-party agencies during the Sale Term, travel to and from the
      Stores and incidental out-of-pocket and commercially reasonable travel
      expenses relating thereto (including reasonable and documented corporate
      travel to monitor and manage the
Sale)

              


      

       

      
        	
                (d)  

              	
                advertising
      and signage expenses (at Merchant’s contract rates, if
      available);

              


      

       

      
        	
                (e)  

              	
                local,
      leased line, satellite broadband connections and long distance telephone
      (including network connection charges such as T-1 lines) expenses incurred
      in the conduct of the Sale and not reflected in
  4.1(l);

              


      

       

      
        	
                (f)  

              	
                credit
      card, Telecheck and bank card fees, chargebacks, discounts, bad debt
      expense, check guarantee fees and any other bank charges relating to store
      operations;

              


      

       

      
        	
                (g)  

              	
                costs
      of all security services, including, without limitation, security systems,
      courier and guard service, building alarm service, alarm services
      maintenance and armored car
expenses;

              


      

       

      
        	
                (h)  

              	
                store
      cash theft and other store cash shortfalls in the
    registers;

              


      

       

      
        	
                (i)  

              	
                a
      pro-rata portion of Merchant’s property, casualty, general liability
      and/or other insurance premiums attributable to the Merchandise, which are
      not reflected in 4.1(l), and the incremental cost of Agent’s insurance
      necessary to fulfill Agent’s obligations as set forth in Section 12
      herein;

              


      

       

      
        	
                (j)  

              	
                costs
      of transfers of Merchandise initiated by Agent between the Closing Stores
      during the Sale Term, including freight and delivery
  costs;

              


      

       

      
        	
                (k)  

              	
                Retention
      Bonuses as described in Section 10.4
below;

              


      

       

      
        	
                (l)  

              	
                actual
      Occupancy Expenses for the Stores on a per location and per diem basis in
      an amount equal
      to the per Store per diem amount set forth on Exhibit
      4.1 hereto;

              


      

       

      
        	
                (m)  

              	
                Agent’s
      actual cost of capital, reasonable attorney’s fees, letter of credit fees,
      insurance costs and other transaction
costs;

              


      

       

      
        	
                (n)  

              	
                additional
      Supplies;

              


      

       

      
        	
                (o)  

              	
                the
      actual costs and expenses of providing such additional services that Agent
      in its sole discretion deems appropriate, not to exceed $100,000 unless
      agreed to by Merchant;

              


      

       

      
        	
                (p)  

              	
                the
      actual cost of delivering Merchandise to customers minus any reimbursement
      from customers, which reimbursement shall not constitute Proceeds
      hereunder;

              


      

       

      
        	
                (q)  

              	
                the
      actual cost of installing Merchandise for customers minus any
      reimbursement from customers, which reimbursement shall not constitute
      Proceeds hereunder;

              


      

       

      
        	
                (r)  

              	
                Central
      Services Expenses of $10,000 per week during the Sale
  Term;

              


      

       

      
        	
                (s)  

              	
                postage,
      courier and overnight mail charges to and from or among the Closing Stores
      and central office to the extent relating to the
  Sale;

              


         

      

      
        
          	
                  
                    (t)  

                  

                	
                  housekeeping,
      cleaning services and snow and trash removal;
  and

                


        

      

       

      
        
          	
                  
                    (u) 
      

                  

                	
                  all
      fees and charges required to comply with Applicable
  Laws.

                


        

      

       

      There
will be no double payment of Expenses to the extent Expenses appear or are
contained in more than one Expense category.  Notwithstanding anything
herein to the contrary, to the extent that an Expense listed in Section 4.1 is
also included on Exhibit 4.1, then Exhibit 4.1 shall control and such Expense
shall not be double counted.

       

      As used
herein, the following terms have the following respective meanings:

       

      “Central Service
Expenses” means costs and expenses for Merchant’s central administrative
services necessary for the Sale, including, but not limited to, MIS services,
payroll processing, cash reconciliation, inventory processing and handling, and
data processing and reporting.

       

      “Excluded Benefits”
means, with respect to each Retained Employee, (i) the following benefits
arising or accruing prior to the Sale Commencement Date: (v) vacation days or
vacation pay, (w) sick days or sick leave or any other form of paid time off,
(x) maternity leave or other leaves of absence, termination or severance pay,
and (y) ERISA coverage and similar contributions and/or (ii) any benefits in
excess of the Benefits Cap, including any payments due under the Worker
Adjustment Retraining Notification Act (“WARN
Act”).

       

       “Occupancy Expenses”
means actual base rent, percentage rent, HVAC, utilities, CAM, storage costs,
real estate and use taxes, merchant’s association dues and expenses, personal
property leases (including, without limitation, point of sale equipment), cash
register maintenance, building maintenance, rental for furniture, fixtures and
other equipment, and building insurance relating to the Closing Stores limited
on a per diem, per Closing Store basis and limited to those amounts and
categories as described on Exhibit 4.1 attached
hereto.

       

      “Expenses”
shall not include: (i) Excluded Benefits; (ii) expenses associated with any of
Merchant’s distribution centers; (iii) any Occupancy Expenses in excess of the
amounts set forth on  Exhibit 4.1; (iv)
costs of transferring Merchandise from Merchant’s distribution centers to the
Stores, and (v) any other costs, expenses, or liabilities arising during the
Sale Term in connection with the Sale, other than the Expenses listed above, all
of which shall be paid by Merchant promptly when due during the Sale
Term.

       

      4.2 Payment of
Expenses.  All Expenses incurred during each week of the Sale
(i.e., Sunday
through Saturday) shall be paid by Agent to or on behalf of Merchant immediately
following the weekly Sale reconciliation by Merchant and Agent pursuant to
Sections 3.3 and 3.5, based upon invoices and other documentation reasonably
satisfactory to Agent.

       

      4.3 The Agent
shall be unconditionally responsible for the payment of all Expenses whether or
not there are sufficient Proceeds collected to pay such Expenses after the
payment of the Guaranteed Amount.

       

      Section
5. Merchandise.

       

      5.1 Merchandise Subject to this
Agreement.

       

      (a) For
purposes of this Agreement, “Merchandise” shall
mean: (i) all finished goods inventory that is owned by Merchant and located at
the Closing Stores as of the Sale Commencement Date, including, Display
Merchandise, and Defective Merchandise.  For the avoidance of doubt,
Merchandise shall include all Panasonic consignment goods on display in a
Closing Store.

       

      (b) Notwithstanding
the foregoing, “Merchandise” shall not include: (1) goods which belong to
sublessees, licensees or concessionaires of Merchant; (2) furnishings, trade
fixtures, equipment and improvements to real property that are located in the
Closing Store (collectively, “FF&E”); (3)
Return to Vendor (RTV)/to be repaired merchandise; (4) merchandise subject to
Manufacturer’s recall; (5) Bose branded merchandise; (6) Reserve & Lay
Inventory; (7) Department #111 Direct TV Receivers; (8) closed-box Panasonic
consignment goods; (9) Excluded Defective Merchandise, or (10) other goods held
by Merchant on memo, on consignment (other than Panasonic consignment goods on
display in a Closing Store), or as bailee ((1) though (10), collectively, “Excluded
Goods”).  As used in this Agreement the following terms have
the respective meanings set forth below:

       

      “Display Merchandise”
means those items of inventory used in the ordinary course of business as
displays or floor models, including inventory that has been removed from its
original packaging for the purpose of putting such item on display, but not
customarily sold or saleable by the Merchant.

       

      “Excluded Defective
Merchandise” means any non-saleable item of merchandise that is dented,
worn, shopworn, scratched, broken, faded mismatched, damaged, defective,
refurbished, incomplete, out of box, mismatched, scratched, discolored,
returned, missing power cords or other included components, repaired or
suffering from other damages or merchandise affected by other similar defects
rendering it otherwise not suitable or salable for its intended
purpose.

       

      “Defective
Merchandise” means any item of merchandise that is dented, worn,
scratched, broken, faded, mismatched, or merchandise affected by other similar
defects rendering it not first quality, but which is saleable by Agent during
the Sale Term.  Defective Merchandise does not include Display
Merchandise.

       

      5.2 Sale of Excluded
Goods.

       

      (a)           Merchant
shall retain all responsibility for Excluded Goods.  If the Merchant
elects at the beginning of the Sale Term, Agent shall accept all or a portion of
Excluded Goods, as directed by Merchant, for sale as “Merchant Consignment
Goods” at prices established by the Agent, except in the case of prices for
Reserve & Lay Inventory, which shall be established by
Merchant.  Agent shall retain 20% of the sale price for all sales of
Merchant Consignment Goods, and the Merchant shall receive 80% of the receipts
in respect of such sales; provided, however, that,
notwithstanding anything to the contrary herein, Merchant shall receive 80% of
the sale price for all sales of closed-box Panasonic consignment
goods.  Agent shall receive its share of the receipts of sales of
Merchant Consignment Goods on a weekly basis, immediately following the weekly
Sale reconciliation by Merchant and Agent pursuant to Section
3.5.  Except as expressly provided in this Section 5.2, the Agent
shall have no cost, expense or responsibility in connection with any goods not
included in Merchandise.

       

      (b)           Notwithstanding
anything to the contrary herein, Agent shall (i) process all Reserve Inventory
without compensation and (ii) process all Layaway Inventory with Merchant
retaining 90% of the proceeds from the sale of each item of Layaway Inventory
and Agent retaining 10% of such proceeds.  All returns or refunds
associated with Reserve & Layaway Inventory shall be processed in accordance
with sections 9.7 and 9.8, respectively.  By no later than Tuesday,
November 4, 2008, Merchant agrees to notify all Reserve & Layaway Inventory
customers that they must take delivery of all Reserve & Layaway Inventory by
no later than Saturday, November 22, 2008.

       

      5.3 Valuation.

       

      (a)           For
purposes of this Agreement, “Cost Value” shall
mean, with respect to each item of Merchandise, the standard cost (determined by
applicable merchant accounting unit for such item of Merchandise as reflected in
Merchant’s master cost file as of the Sale Commencement Date) (the "Cost
File”).  Cost is determined by the average cost method and
includes the cost of freight from the vendor to the Merchant’s distribution
centers, or in the case of direct shipments, the cost of freight from the vendor
to the Merchant’s stores.  In the case of import Merchandise, cost
includes duties, brokerage fees, drayage, and other associated costs that result
in a net landed cost.  Also included in the cost of inventory are
certain discounts and vendor allowances that are not a reimbursement of
specific, incremental and identifiable costs to promote vendors’
products.  With respect to some, and in certain instances all, items
of Merchandise, cost, as reflected in the Cost File, does not account for or
include certain volume discounts, advertising co-op allowances, or other
discounts, including, without limitation, cash discounts (each a "Discount"); provided. further, that the
Cost Value associated with any such item of Merchandise shall not be adjusted on
account of any Discount(s).  The Cost Value represents the stock
ledger cost, which includes a 5% load to protect inventory margin for internal
reporting and is reversed on the general ledger.

       

      (b)           To
the extent there is a difference between the Cost Value determined in accordance
with section 5.3(a) and Merchant’s “SKU Detail – Stores and Transfer Merch” as
set forth on Exhibit 5.3(b) with respect to an item of Merchandise, the Cost
Value for such item of Merchandise shall be adjusted to the “average cost” as
set forth on Exhibit 5.3(b).

       

      (c)           For
purposes of this Agreement, Retail Price shall mean, with respect to each item
of Merchandise, as of the Sale Commencement Date, the lower of (i) the lowest
ticketed, shelf marked, or rebate price, and (ii) the lowest register or file
price, except for minimum discretionary prices allowed to sales
persons.  The marked down Retail Price of open box or display
Merchandise will not be applied as the lowest Retail Price for other items of
the identical SKU.  If Merchant and Agent agree that any item is
clearly mismarked, then such mismarked price will not be utilized when
determining Retail Price and the actual price will prevail.  If the
Retail Price of an item of Merchandise is less than the Cost Value of such item
of Merchandise as determined under section 5.3(a) and (b), the Cost Value of all
such items of Merchandise shall be such Retail Price.

       

      (d)           Other
than Excluded Defective Merchandise, in lieu of any other adjustments to the
Cost Value of Merchandise under this Agreement (e.g., adjustments for
Defective Merchandise, clearance merchandise, and/or sample merchandise), the
aggregate Cost Value of the Merchandise shall be adjusted (i.e., reduced) by means of a
single global downward adjustment equal to one percent (1%) of the sum of the
aggregate Cost Value of the Merchandise.

       

      Section
6. Sale
Term.

       

      6.1 Term.  The
Sale shall commence at the Closing Stores on November 5, 2008 (the “Sale Commencement
Date”).  Agent shall complete the Sale at the Closing Stores,
and shall vacate all of the Closing Store premises on or before December 31,
2008 (the “Sale
Termination Date”) unless the Sale and the Sale Termination Date are
extended by mutual agreement of Agent and Merchant following a commensurate
extension of the expiry date of the Agent Letter of Credit, provided that Agent
may terminate the Sale at any Closing Store location upon ten (10) days’ written
notice to Merchant.  The period for the Sale Commencement Date to the
Sale Termination Date shall be referred to herein as the “Sale
Term.”

       

      6.2 Vacating the Closing
Stores.  On the Sale Termination Date, Agent shall leave the
Closing Stores in “broom clean” condition (ordinary wear and tear
excepted).  Agent shall vacate the Closing Stores on or before the
Sale Termination Date, as provided for herein, at which time Agent shall
surrender and deliver the Closing Store premises and Closing Store keys to
Merchant.  Agent’s obligations to pay all Expenses, including
Occupancy Expenses, for each Closing Store shall continue until the later of (a)
the Sale Termination Date for each such Closing Store, or (b) the 7th day
of the calendar month in which the Sale Termination Date for each such Closing
Store occurs.  All assets of Merchant used by Agent in the conduct of
the Sale (e.g.
FF&E, supplies, etc.) shall be returned by Agent to Merchant or left at the
Closing Stores premises at the end of the Sale Term to the extent the same have
not been used in the conduct of the Sale or have not been otherwise disposed of
through no fault of Agent; provided, however, Agent shall
remove all unsold Merchandise at the end of the Sale Term at each of the Closing
Stores. Agent shall be responsible for all Occupancy Expenses (irrespective of
any per diem cap on Occupancy Expenses) for a Closing Store for which Merchant
is or becomes obligated resulting from Agent’s failure to vacate such Closing
Store in a timely manner.

       

      Section
7. Sale
Proceeds.

       

      7.1 Proceeds.  For
purposes of this Agreement, “Proceeds” shall mean
the aggregate of:  (a) the total amount (in U.S. dollars) of all sales
of Merchandise made under this Agreement, exclusive of Sales Taxes, and (b) any
proceeds of Merchant’s insurance for loss or damage to Merchandise or loss of
cash arising from events occurring during the Sale Term.

       

      7.2 Deposit of
Proceeds.  During the Sale Term, all Proceeds of the Sale
(including credit card Proceeds), shall be deposited on a daily basis into
Merchant’s existing accounts designated for the designated Closing Stores, but
also are segregated and designated solely for the deposit of Proceeds of the
Sale (including credit card Proceeds), and the disbursement of amounts payable
by Agent hereunder (the “Designated Merchant
Accounts”).

       

      7.3 Credit Card
Proceeds.  Agent shall have the right (but not the obligation)
to use Merchant’s credit card facilities (including Merchant’s credit card
terminals and processor(s), credit card processor coding, Merchant
identification number(s) and existing bank accounts) for credit card
Proceeds.  Merchant shall process credit card transactions on behalf
of Agent, applying customary practices and procedures.  Without
limiting the foregoing, Merchant shall cooperate with Agent to down-load data
from all credit card terminals each day during the Sale Term and to effect
settlement with Merchant’s credit card processor(s), and shall take such other
actions necessary to process credit card transactions on behalf of Agent under
Merchant’s Merchant identification number(s).  All credit card
Proceeds will constitute the property of Agent and shall be deposited into the
Designated Merchant Accounts.  Merchant shall not be responsible for
and Agent shall pay as an Expense hereunder, all credit card fees, charges, and
chargebacks related to the Sale, whether received during or after the Sale
Term.

       

      7.4 Petty Cash.  In
addition to the Guaranteed Amount, Agent shall purchase all cash in the Stores
on and as of the start of business on the Sale Commencement Date and shall
reimburse Merchant on a dollar for dollar basis therefor.

       

      Section
8. Sale of Warranties and
Installation Services

       

      8.1 Subject
to Merchant's approval, Agent shall be provided the right to sell warranties
during the Sale at full retail price.  The sale of warranties shall
not be included in the calculation of Proceeds; however, profits from the sale
of warranties shall be shared.  Merchant shall retain or Agent shall
remit (if deposited in Agent account) sufficient payment to cover cost of
service and related commissions after which payment will be shared 90% to
Merchant and 10% to Agent.

       

      8.2 In all
Closing Stores, Agent shall have the right to sell (i) home theater installation
services, and (ii) car mobile entertainment installation services during the
Sale Term ((i)-(ii) collectively, the “Permitted Installation
Services”).  The sale of all Permitted Installation Services shall be
at full Retail Price.  The sale of Permitted Installation Services
shall not be included in the calculation of Proceeds, however, profits from the
sale of Permitted Installation Services shall be shared.  All
Permitted Installation Services sales shall be discontinued no later than ten
(10) days prior to the closing date for such Closing Store and all work required
to complete the Permitted Installation Services shall be completed no later than
five (5) days prior to the closing date for such Closing
Store.  Merchant shall retain or Agent shall wire to Merchant (if
deposited in Agency Accounts) sufficient funds to cover the cost of the
Permitted Installation Services, after which all remaining funds generated from
the Permitted Installation Services shall be shared 90% to Merchant and 10% to
Agent.

       

      Section
9. Conduct of the
Sale.

       

      9.1 Rights of
Agent.  Agent shall be permitted and hereby is authorized to
conduct, advertise, post signs and otherwise promote the Sale consistent with
the sale guidelines attached hereto as Exhibit 2 (the “Sale Guidelines”). In
addition to any other rights granted to Agent hereunder, in conducting the Sale,
Agent, in the exercise of its sole discretion, shall have the right, limited
only by the Sale Guidelines:

       

      (a) subject
to section 9.10, conduct, to advertise, post signs, and otherwise promote,
including the use of banners, signwalkers, and a-frame signs, the Sale as a
"store closing", "sale on everything", "everything must go", or similar themed
sale, all in accordance with the Sale Guidelines and provided that such
advertising methods are not prohibited by Applicable Law;

       

      (b) to
establish and implement advertising and promotion programs consistent with the
Sale themes set forth above; provided, that
Merchant shall have the right to approve all such advertising and promotion in
advance, which approval shall not be unreasonably withheld or
delayed;

       

      (c) to
establish Closing Store hours which are consistent with the terms of applicable
leases;

       

      (d) to use
without charge during the Sale Term all FF&E, advertising materials,
computer hardware and software, existing supplies located at the Closing Stores,
intangible assets (including Merchant’s name, logo and tax identification
numbers), Closing Store keys, case keys, security codes, and safe and lock
combinations required to gain access to and operate the Closing Stores, and any
other assets of Merchant located at the Closing Stores (whether owned, leased,
or licensed);

       

      (e) to use,
subject to Section 4.1(r), Merchant’s central office facilities, central
administrative services and personnel to process payroll, perform MIS and
provide other central office services necessary for the Sale; provided, however, that in the
event that Agent expressly requests Merchant to provide services other than
those normally provided to the Closing Stores and relating to the sale of
merchandise by Merchant, Agent shall be responsible for the actual incremental
cost of such services as an Expense of the Sale; and

       

      (f) to
transfer Merchandise between and among the Closing Stores, the costs of which
shall be paid by Agent as an Expense of the Sale.

       

      9.2 Rights of
Merchant.  In addition to any other rights granted to or
retained by Merchant under this Agreement, Merchant reserves and shall have the
right to place signage at all Closing Stores on the day of the official store
closing announcement and such signage shall remain in place through the Sale
Commencement Date in size(s) and placement(s) mutually agreed to by Agent and
Merchant, which agreement shall not be unreasonably withheld by either
party.  The signage may, among things, notify customers of the
change in operation status at the Closing Stores, advise customers that a store
closing sale will be conducted at the Closing Stores, and identify other
Merchant store locations that will not be closing.

       

      9.3 Terms of Sales to
Customers.

       

      (a) Final/As is
Sales.  All sales of Merchandise will be “final sales” and “as
is”, and all advertisements and sales receipts will reflect the
same.  Agent shall clearly mark all receipts for Merchandise sold at
the Closing Stores in market locations in which there are ongoing stores so as
to distinguish such Merchandise from the Merchandise sold at Merchant’s ongoing
retail store locations.  Agent shall not warrant the Merchandise in
any manner, but will, to the extent legally permissible, pass on all
manufacturers’ warranties and, to the extent purchased, all warranties to
customers.  All sales will be made only for cash and nationally
recognized bank credit cards.

       

      (b) Gift
Certificates
and Rebates.  As directed by Merchant, Agent will accept
Merchant’s gift certificates and rebates issued by Merchant prior to the Sale
Commencement Date, and honor other customer programs, including but not limited
to all Customer Satisfaction Programs for items purchased prior to the
commencement of the Sale (including, but not limited to, acceptance of gift
certificates, rebates, honoring of customer deposits and warranties, and
granting of refunds for items purchased prior to the commencement of the Sale),
to the extent that such programs were in effect at the time the items were
purchased by such customers, provided that Agent shall be reimbursed by Merchant
in connection with the Weekly Sale Reconciliation contemplated under Section 3.5
hereof on a dollar for dollar basis for any such programs honored by
Agent.  Notwithstanding anything herein to the contrary, Agent shall
not be permitted to sell any Merchant or third party gift cards.

       

      (c) Future Delivery
Program.  Agent will honor (i) special order and other
inventory items for which the customer remitted payment in full to Merchant
prior to the Sale Commencement Date, but for which the customer has not taken
delivery or possession of such item ("Reserve Inventory")
and (ii) inventory items for which the customer has not remitted payment in full
to Merchant prior to the Sale Commencement Date and, as a result, has not taken
delivery or possession of such item ("Layaway Inventory",
and together with Reserve Inventory, "Reserve & Lay
Inventory").

       

      9.4 Sales
Taxes.  During the Sale Term, all sales, excise, gross receipts
and other taxes attributable to sales of Merchandise as indicated on Merchant’s
point of sale equipment (other than taxes on income) payable to any taxing
authority having jurisdiction (collectively, “Sales Taxes”) shall
be added to the sales price of Merchandise and collected by Agent, on Merchant’s
behalf, and deposited into Merchant’s existing accounts, trust accounts or other
accounts, as designated by Merchant; provided, further, that to the
extent the Merchandise is sold on a tax-exempt basis, e.g., sold on a wholesale
basis, Agent shall complete all applicable forms, including, without limitation,
resale certificates, and provide all completed forms to Merchant in connection
with the Final Reconciliation.  Provided that Agent has collected all
Sales Taxes during the Sale and remitted the proceeds thereof to Merchant,
Merchant shall promptly pay all Sales Taxes and file all applicable reports and
documents required by the applicable taxing authorities.  Merchant
will be given access to the computation of gross receipts for verification of
all such Sales Tax collections. If Agent fails to
perform its responsibilities in accordance with this Section 9.4, and provided
Merchant complies with its obligations in accordance with this Section 9.4,
Agent shall indemnify and hold harmless Merchant from and against any and all
costs including, but not limited to, reasonable attorneys’ fees, assessments,
fines or penalties which Merchant sustains or incurs as a result or consequence
of the failure by Agent to collect Sales Taxes and/or, to the extent Agent is
required hereunder to prepare reports and other documents, the failure by Agent
to promptly deliver any and all reports and other documents required to enable
Merchant to file any requisite returns with such taxing
authorities.

       

      9.5 Tax
Consequences.  Without limiting the generality of Section 9.4
hereof, it is hereby understood and agreed for all tax purposes that because
Agent is conducting the Sale solely as agent for the Merchant, all payments
contemplated by and among the parties to this Agreement (including the payment
by the Agent of the Guaranteed Amount) do not represent the sale of tangible
personal property and, accordingly, are not subject to the Sales
Taxes.

       

      9.6 Supplies.  Agent
shall have the right to use all existing supplies (e.g. boxes, bags, twine)
located at the Closing Stores at no charge to Agent.  In the event
that additional supplies are required in any of the Closing Stores during the
Sale, Merchant agrees to promptly provide the same to Agent.  Supplies
have not been since October 15, 2008 and shall not be prior to the Sale
Commencement Date, transferred by Merchant to or from the Closing Stores so as
to alter the mix or quantity of supplies at the Closing Stores from that
existing on such date, other than in the ordinary course of
business.

       

      9.7 Returns of
Merchandise.  Unless otherwise instructed by Merchant, Agent is
directed to accept all returns at all Closing Stores in accordance with
Merchant's return policies in effect on the Sale Commencement
Date.  Any returned merchandise that is saleable as first-quality
merchandise shall be included in Merchandise and returned to the sales
floor.  For purposes of the calculation of the Guaranteed Amount the
Merchandise shall be valued at the Cost Value applicable to such
item.  The aggregate Cost Value of the Merchandise shall be increased
by the Cost Value multiplied by the inverse of the prevailing discount for that
particular category at the time of the return of any returned Merchandise
included in Merchandise, and the Guaranteed Amount shall be adjusted
accordingly.  Any increases in payment on account of the Guaranteed
Amount as a result of returned Merchandise shall be paid by Agent pursuant to
Section 3.3 hereof.  Notwithstanding anything to the contrary in
applicable return policies, Agent shall not accept returns of merchandise where
the customer contemplates repurchasing the same item so as to take advantage of
the sale price being offered by Agent.

       

      9.8 Refunds.  If
required by Merchant's return policies in effect on the Sale Commencement Date,
Agent shall reimburse customers for returned merchandise in the same tender as
such item was purchased (the "Refund").  Merchant
shall promptly reimburse Agent in cash for any Refunds Agent is required to
issue to customers in respect of any returned Merchandise as part of the Weekly
Sale Reconciliation.  Any returned merchandise not included in
Merchandise shall be disposed of by Agent in accordance with instructions
received from Merchant or, in the absence of such instructions, returned to
Merchant at the end of the Sale Term.  Merchant and Agent shall
jointly track returns of merchandise for purposes of determining any increase or
decrease to the Guaranteed Amount, or any amounts owed by Merchant to Agent as a
result of Agent accepting such returns or issuing Refunds.

       

      9.9 Force
Majeure.  If any casualty or act of God or act of terrorism
prevents or substantially inhibits the conduct of business in the ordinary
course at any Closing Store, then such Closing Store and the remaining
Merchandise located at such Closing Store shall be eliminated from the Sale and
considered to be deleted from this Agreement as of the date of such event, and
Agent and Merchant shall have no further rights or obligations hereunder with
respect thereto; provided, however, that (i) the
proceeds of any insurance attributable to such Merchandise or business
interruption shall constitute Proceeds hereunder, and (ii) the Guaranteed Amount
shall be reduced to account for any Merchandise eliminated from the Sale that is
not the subject of insurance proceeds.

       

      9.10 Limitations on
Advertising and
Conduct of Sale.  Notwithstanding
anything in this Agreement or in the Sale Guidelines to the contrary, the
Agent shall not be permitted and expressly agrees not to conduct, advertise,
post signs or otherwise promote the Sale as a "going-out-of-business
sale".

       

      9.11 Customer Transition to
Ongoing Stores.  During the Sale, Agent shall develop and
recommend to Merchant the use of transitional marketing materials in the Closing
Stores to direct customers to Merchant’s ongoing stores, which transitional
marketing materials will include, at Merchant’s option, signage in the Stores,
flyers and pamphlets distributed to customers at time of sale, and include
transition language on sales receipts.

       

      9.12 Compliance with Applicable
Law.  Agent shall comply with all federal, state and local
laws, rules, regulations and ordinances ("Applicable Law")
applicable to them in connection with the transactions contemplated by this
Agreement, and shall obtain all necessary consents and permits, required by law,
necessary to fulfill obligations hereunder so as not to violate any
law.  For the avoidance of doubt and without limiting the generality
of the foregoing, Applicable Law includes, without limitation, all public health
and safety laws, rules, regulations and ordinances, tax, labor, employment,
environmental, and consumer protection laws, rules, regulations and ordinances,
including consumer laws, rules, regulations and ordinances governing deceptive
practices and false advertising, and "going out of business," "store closing,"
similar inventory liquidation sales, or bulk sales laws, rules, regulations and
ordinances.

       

      Section
10. Employee
Matters.

       

      10.1 Merchant’s
Employees.  Agent may use Merchant’s employees in the conduct
of the Sale to the extent Agent in its sole discretion deems expedient, and
Agent may select and schedule the number and type of Merchant’s employees
required for the Sale.  Agent shall identify any such employees
(including, without limitation, Merchant’s District Managers in Closing Markets
used by Agent in connection with the Sale) to be used in connection with the
Sale (each such employee, a “Retained Employee”)
prior to the Sale Commencement Date.  Retained Employees shall at all
times remain employees of Merchant, and shall not be considered or deemed to be
employees of Agent.  Merchant and Agent agree that nothing contained
in this Agreement and none of Agent’s actions taken in respect of the Sale shall
be deemed to constitute an assumption by Agent of any of Merchant’s obligations
relating to any of Merchant’s employees including, without limitation, payroll,
benefits, Worker Adjustment Retraining Notification Act (“WARN Act”) claims and
other termination type claims and obligations, or any other amounts required to
be paid by statute or law; nor shall Agent become liable under any collective
bargaining or employment agreement or be deemed a joint or successor employer
with respect to such employees; provided, however, that nothing herein shall
affect Agent's obligations to pay the Expenses of the Sale  Merchant
shall not, without Agent’s prior written consent, raise the salary or wages or
increase the benefits for, or pay any bonuses or make any other extraordinary
payments to, any of its employees in anticipation of the Sale or prior to the
Sale Termination Date.  Merchant has not terminated and shall not
during the Sale Term terminate any employee benefits or benefit
programs.

       

      10.2 Termination of
Employees.  Agent may in its discretion stop using any Retained
Employee at any time during the Sale.  In the event that Agent
determines to stop using any Retained Employee, Agent will notify Merchant at
least ten (10) days prior thereto, except for termination “for cause” (such as
dishonesty, fraud or breach of employee duties), in which event no prior notice
to Merchant shall be required, provided Agent shall notify Merchant as soon as
practicable after such event.  From and after October 31, 2008, and
until the Sale Termination Date, Merchant shall not transfer or dismiss
employees of the Closing Stores except “for cause” without Agent’s prior
consent.

       

      10.3 Payroll
Matters.  During the Sale Term, Merchant shall process and pay
the base payroll and all related payroll taxes, worker’s compensation and
benefits for all Retained Employees, and any additional hires, in accordance
with its usual and customary procedures.  Agent’s own employees,
independent contractors and temporary employees retained by Agent through third
party agencies will not be deemed Retained Employees at any time during the
Sale.  Notwithstanding anything in this Agreement to the contrary, to
the extent the Proceeds are insufficient, Agent shall fund, in advance, all
payroll and related expenses for Retained Employees at least two (2) business
days prior to the date that such payments are due by the Merchant.

       

      10.4 Employee Retention
Bonuses.  Agent shall have the right to elect to pay, as an
Expense, retention bonuses (each a “Retention Bonus”)
(which bonuses shall be inclusive of payroll taxes but as to which no benefits
shall be payable), up to a maximum of 10% of base payroll, to certain Retained
Employees who do not voluntarily leave employment and are not terminated “for
cause”.  Subject only to limitation of 10% of base payroll, the actual
amount to be paid to each such Retained Employee shall be in an amount to be
determined by Agent, and shall be payable within thirty (30) days after the Sale
Termination Date, and shall be processed through Merchant’s payroll
system.  Agent shall provide Merchant with a copy of Agent’s Retention
Bonus plan within two (2) business days after the Sale Commencement Date.
 

       

      Section
11. Conditions
Precedent.  The willingness of Agent and Merchant to enter into
the transactions contemplated under this Agreement are directly conditioned upon
the satisfaction of the following conditions at the time or during the time
periods indicated, unless specifically waived in writing by the applicable
party:

       

      (a) All
representations and warranties of Merchant and Agent hereunder shall be true and
correct in all material respects and no Event of Default (as defined herein)
shall have occurred at and as of the date hereof and as of the Sale Commencement
Date.

       

      (b) Merchant
shall have provided Agent reasonable access to all pricing and cost files, and
all other documents relative to the price, mix and quantities of inventory
located at the Closing Stores.

       

      (c) Agent
shall have obtained, in the name of and with the reasonable assistance of
Merchant, all permits and licenses necessary to conduct the Sale.

       

      (d) Merchant
shall have obtained any necessary consent to the Sale from its secured lenders,
and provided Agent with the security described in Section 17
hereof.

       

      Section
12. Representations and
Warranties.

       

      12.1 Merchant’s Representations,
Warranties Covenant, and Agreements.  Merchant hereby
represents, warrants, covenants, and agrees in favor of Agent as
follows:

       

      (a) Merchant:
(i) is a entity duly organized, validly existing and in good standing under the
laws of the state of its organization stated above; (ii) has all requisite power
and authority to own, lease and operate its assets and properties and to carry
on its business as presently conducted; and (iii) is and during the Sale Term
will continue to be duly authorized to do business and in good standing in each
jurisdiction where the nature of its business or properties requires such
qualification, including the jurisdiction in which the Closing Stores are
located.

       

      (b) Merchant
has the right, power and authority to execute and deliver this Agreement and
each other document and agreement contemplated hereby (collectively, together
with this Agreement, the “Agency Documents”)
and to perform fully its obligations thereunder.  Merchant has taken
all necessary actions required to authorize the execution, delivery and
performance of the Agency Documents, and no further consent or approval is
required for Merchant to enter into and deliver the Agency Documents, to perform
its obligations thereunder, and to consummate the Sale.  Each of the
Agency Documents has been duly executed and delivered by Merchant and
constitutes the legal, valid and binding obligation of Merchant enforceable in
accordance with its terms.  No court order or decree of any federal,
state or local governmental authority or regulatory body is in effect that would
prevent or impair, or is required for Merchant’s consummation of, the
transactions contemplated by this Agreement, and no consent of any third party
which has not been obtained is required therefor.  No contract or
other agreement to which Merchant is a party or by which Merchant is otherwise
bound will prevent or impair the Agent conducting the Sale or any other
transactions contemplated by this Agreement, except to the extent the Agent
conducts the Sale contrary to the provisions of any governing Closing Store
lease.

       

      (c) Merchant
owns and will own at all times during the Sale Term, good and marketable title
to all of the Merchandise (other than consigned Merchandise).

       

      (d) Merchant
has and will maintain its pricing files in the ordinary course of business, and
prices charged to the public for goods (whether in-Closing Store, by
advertisement or otherwise) are the same in all material respects as set forth
in such pricing files for the periods indicated therein.  All pricing
files and records requested by Agent relative to the Merchandise have been and
will continue to be made available to Agent.  All pricing files and
records are and shall continue to be true and accurate in all material respects
as to the actual Cost Value of the Merchandise.  Merchant’s price
files reflect hard markdowns taken by Merchant on items of Merchandise but do
not reflect point-of-sale or other temporary promotional activity.

       

      (e) Merchant
shall ticket or mark all items of inventory received at the Closing Stores prior
to and after the Sale Commencement Date in a manner consistent with similar
inventory located at the Closing Stores and in accordance with Merchant’s
historic practices and policies relative to pricing and marking
inventory.  Merchant has taken hard markdowns consistent with the
margins represented in the due diligence materials provided by Merchant to
Agent.

       

      (f) Merchant
covenants to continue to operate the Closing Stores in the ordinary course of
business from the October 31, 2008, to the Sale Commencement Date, in that (i)
Merchant shall continue selling inventory during such period at customary
prices, (ii) Merchant shall not promote or advertise any sales or in-store
promotions (including POS promotions) to the public except for Merchant’s
historic and customary promotions for all of its locations, (iii) Merchant shall
not return inventory to vendors and, shall not transfer Merchandise or Supplies
between or among Closing Stores, except for receipt of goods in the ordinary
course of business from Merchant’s vendor’s; (iv) Merchant shall not make any
management personnel moves or changes at the Closing Stores without Agent’s
prior consent (which consent will not be unreasonably withheld), (v) Merchant
shall continue to handle Return to Vendor, to be repaired and damaged
merchandise in the ordinary course, and (vi) Merchant will continue to replenish
inventory in the ordinary course of Merchant’s business through the Sale
Commencement Date.  Except as previously disclosed to Agent or
provided for herein, Merchant has not and shall not purchase or transfer to or
from the Closing Stores any inventory outside the ordinary course in
anticipation of the Sale.

       

      (g) No
action, arbitration, suit, notice, or legal, administrative or other proceeding
before any court or governmental body has been instituted by or against
Merchant, or has been settled or resolved, or to Merchant’s knowledge, is
threatened against or affects Merchant, relative to Merchant’s business or
properties and that questions the validity of this Agreement or that, if
adversely determined, would adversely affect the conduct of the
Sale.

       

      (h) To the
best of Merchant’s knowledge, all Merchandise is in compliance with all
applicable federal, state, or local product safety laws, rules and
standards.  Merchant shall provide Agent with its historic policies
and practices regarding product recalls prior to the Sale Commencement
Date.

       

      (i) No event
of default or event which with the giving of notice, the passage of time, or
both has occurred on the part of Merchant under any Closing Store lease,
reciprocal easement agreement or similar agreement relating to the occupancy of
the Closing Stores.  Throughout the Sale Term, Agent shall have the
right to the uninterrupted use and occupancy of, and peaceful and quiet
possession of the Closing Stores, the assets currently located at the Closing
Stores, and the services provided at the Closing Stores.  Merchant
shall throughout the Sale Term maintain in good working order, condition and
repair, at its sole expense (except to the extent such amounts are included in
Occupancy Expenses), all cash registers, heating systems, air conditioning
systems, elevators, escalators, Closing Store alarm systems, and all other
mechanical devices used in the ordinary course of operation of the Closing
Stores.

       

      (j) Merchant
has paid and will continue to pay throughout the Sale Term, (i) all self-insured
or Merchant funded employee benefit programs for employees, including health and
medical benefits and insurance and all proper claims made or to be made in
accordance with such programs, (ii) all casualty, liability, workers’
compensation and other insurance premiums, (iii) all utilities provided to the
Closing Stores, and (iv) all applicable taxes.

       

      (k) Merchant
has not and shall not throughout the Sale Term take any actions the result of
which is to increase the cost of operating the Sale, including, without
limitation, increasing salaries or other amounts payable to
employees.

       

      (l) Except as
provided herein and may subsequently be agreed to by the parties or as may be
approved by a court presiding over a chapter 11 proceeding, if any, during the
Sale Term, Merchant shall not promote sales at any of its stores included in the
same market as any Closing Store outside the ordinary course of
business.

       

      (m) As of the
Sale Commencement Date, the Cost Value as a percentage of Retail Price (the
“Cost Factor”)
with respect to the Merchandise shall not be greater than sixty-eight and
seven-tenths percent (68.7%) for such Merchandise (the “Cost Factor
Threshold”).  To the extent that the Cost Factor Threshold
exceeds the Cost Factor, the Guaranty Percentage shall be adjusted as set forth
on Exhibit 12.1(m) or another remedy mutually agreed upon by Merchant and
Agent.

       

      (n) As of the
Sale Commencement Date, the assortment and mix of the Merchandise, by category,
shall not be materially different than as set forth on Exhibit 12.1(n), and the
aggregate Cost Value of the Merchandise consisting of music/video shall not be
in excess of 20% of the aggregate Cost Value of the Merchandise.  To
the extent that the aggregate Cost Value of the Merchandise consisting of
music/video is in excess of 20% of the aggregate Cost Value of the Merchandise,
the Guaranty Percentage shall be adjusted as set forth on Exhibit 12.1(n) or
another remedy mutually agreed upon by Merchant and Agent.

       

      12.2 Agent’s Representations and
Warranties.  Agent hereby represents, warrants and covenants in
favor of Merchant as follows:

       

      (a) Each
member of Agent: (i) is validly existing and in good standing under the laws of
the state of its organization; (ii) has all requisite power and authority to
consummate the transactions contemplated hereby; and (iii) is and during the
Sale Term will continue to be, duly authorized and qualified to do business and
in good standing in each jurisdiction where the nature of its business or
properties requires such qualification.

       

      (b) Agent has
the right, power and authority to execute and deliver each of the Agency
Documents to which it is a party and to perform fully its obligations
thereunder.  Agent has taken all necessary actions required to
authorize the execution, delivery, and performance of the Agency Documents, and
no further consent or approval is required on the part of Agent for Agent to
enter into and deliver the Agency Documents and to perform its obligations
thereunder.  Each of the Agency Documents has been duly executed and
delivered by Agent and constitutes the legal, valid and binding obligation of
Agent enforceable in accordance with its terms.  No court order or
decree of any federal, state or local governmental authority or regulatory body
is in effect that would prevent or impair or is required for Agent’s
consummation of the transactions contemplated by this Agreement, and no consent
of any third party which has not been obtained is required
therefor.  No contract or other agreement to which Agent is a party or
by which Agent is otherwise bound will prevent or impair the consummation of the
transactions contemplated by this Agreement.

       

      (c) No action, arbitration, suit, notice,
or legal administrative or other proceeding before any court or governmental
body has been instituted by or against Agent, or has been settled or resolved,
or to Agent’s knowledge, has been threatened against or affects Agent, which
questions the validity of this Agreement or any action taken or to be taken by
Agent in connection with this Agreement, or which if adversely determined, would
have a material adverse effect upon Agent’s ability to perform its obligations
under this Agreement.

       

      Section
13. Insurance.

       

      13.1 Merchant’s Liability
Insurance.  Merchant shall continue at its cost and expense
(subject to payment of the Expenses by Agent) until the Sale Termination Date,
in such amounts as it currently has in effect, all of its liability insurance
policies including, but not limited to, products liability, comprehensive public
liability, auto liability and umbrella liability insurance, covering injuries to
persons and property in, or in connection with Merchant’s operation of the
Closing Stores, and shall cause Agent to be named an additional named insured
with respect to all such policies.  Prior to the Sale Commencement
Date, Merchant shall deliver to Agent certificates evidencing such insurance
setting forth the duration thereof and naming Agent as an additional named
insured, in form reasonably satisfactory to Agent.  All such policies
shall require at least thirty (30) days’ prior notice to Agent of cancellation,
non-renewal or material change.  In the event of a claim under any
such policies, Merchant shall be responsible for the payment of all deductibles,
retention’s or self-insured amounts thereunder, unless it is determined that
liability arose by reason of the wrongful acts or omissions or negligence of
Agent, or Agent’s employees, independent contractors or agents (other than
Merchant’s employees).

       

      13.2 Merchant’s Casualty
Insurance.  Merchant will provide throughout the Sale Term at
its expense (subject to payment of the Expenses by Agent) fire, flood, theft and
extended coverage casualty insurance consistent with Merchant's customary
practices prior to the Sale Commencement Date.  In the event of a loss
to the Merchandise on or after the Sale Commencement Date, the proceeds of such
insurance attributable to the Merchandise plus any self insurance amounts and
the amount of any deductible (which amounts shall be paid by Merchant), shall
constitute Proceeds hereunder and shall be paid to Agent.  Prior to
the Sale Commencement Date, Merchant shall deliver to Agent certificates
evidencing such insurance setting forth the duration thereof, in form and
substance reasonably satisfactory to Agent.  All such policies shall
require at least thirty (30) days prior notice to Agent of cancellation,
non-renewal or material change.  Merchant shall not make any change in
the amount of any deductibles or self-insurance amounts prior to the Sale
Termination Date without Agent’s prior written consent.

       

      13.3 Worker’s Compensation
Insurance.  Merchant shall at all times during the Sale Term,
at its cost (but subject to payment of the Expenses by Agent), maintain in full
force and effect worker’s compensation insurance (including employer liability
insurance) covering all Retained Employees in compliance with all statutory
requirements.  Prior to the Sale Commencement Date, Merchant shall
deliver to Agent a certificate of its insurance broker or carrier evidencing
such insurance.

       

      13.4 Agent’s
Insurance.  Agent shall maintain, in such amounts as it
currently has in effect, comprehensive public liability and automobile liability
insurance policies covering injuries to persons and property in or in connection
with Agent’s agency at the Closing Stores, and shall cause Merchant to be named
an additional insured with respect to such policies. Prior to the Sale
Commencement Date, Agent shall deliver to Merchant certificates evidencing such
insurance policies, setting forth the duration thereof and naming Merchant as an
additional insured, in form and substance reasonable satisfactory to
Merchant.  In the event of a claim under such policies, Agent shall be
responsible for the payment of all deductibles, retentions or self-insured
amounts thereunder, to the extent said claim arises from or relates to the
alleged acts or omissions of Agent or Agent’s employees, agents or independent
contractors).

       

      13.5 Risk of
Loss.  Without limiting any other provision of this Agreement,
Merchant acknowledges that Agent is conducting the Sale on behalf of Merchant
solely in the capacity of an agent, and that in such capacity (i) Agent shall
not be deemed to be in possession or control of the Closing Stores or the assets
located therein or associated therewith, or of Merchant’s employees located at
the Closing Stores, and (ii) except as expressly provided in this Agreement,
Agent does not assume any of Merchant’s obligations or liabilities with respect
to any of the foregoing.  Merchant and Agent agree that Merchant shall
bear all responsibility for liability claims of customers, employees and other
persons arising from events occurring at the Closing Stores during and after the
Sale Term, except to the extent any such claim arises directly from the acts or
omissions of Agent, or its supervisors or employees located at the Closing
Stores (an “Agent Claim”).  In the event of any such liability claim
other than an Agent Claim, Merchant shall administer such claim and shall
present such claim to Merchant’s liability insurance carrier in accordance with
Merchant’s historic policies and procedures, and shall provide a copy of the
initial documentation relating to such claim to Agent.  To the extent
that Merchant and Agent agree that a claim constitutes an Agent Claim, Agent
shall administer such claim and shall present such claim to its liability
insurance carrier, and shall provide a copy of the initial documentation
relating to such claim to Merchant.  In the event that Merchant and
Agent cannot agree whether a claim constitutes an Agent Claim, each party shall
present the claim to its own liability insurance carrier, and a copy of the
initial claim documentation shall be delivered to the other party.

       

      Section
14. Indemnification.

       

      14.1 Merchant
Indemnification.  Merchant shall indemnify and hold Agent and
its officers, directors, employees, agents and independent contractors
(collectively, “Agent
Indemnified Parties”) harmless from and against all claims, demands,
penalties, losses, liability or damage, including, without limitation,
reasonable attorneys’ fees and expenses, directly or indirectly asserted
against, resulting from, or related to:

       

      (a) Merchant’s
material breach of or failure to comply with any of its agreements, covenants,
representations or warranties contained in any Agency Document;

       

      (b) any
failure of Merchant to pay to its employees any wages, salaries or benefits due
to such employees during the Sale Term;

       

      (c) subject
to Agent’s compliance with its obligations under Section 9.4 hereof, any failure
by Merchant to pay any Sales Taxes to the proper taxing authorities or to
properly file with any taxing authorities any reports or documents required by
applicable law to be filed in respect thereof;

       

      (d) any
consumer warranty or products liability claims relating to
Merchandise;

       

      (e) any
liability or other claims asserted by customers, any of Merchant’s employees, or
any other person against any Agent Indemnified Party (including, without
limitation, claims by employees arising under collective bargaining agreements,
worker’s compensation or under the WARN Act), except for Agent Claims;
and

       

      (f) the
negligence or willful misconduct of Merchant or any of its officers, directors,
employees, agents or representatives.

       

      14.2 Agent
Indemnification.  Agent shall indemnify and hold Merchant and
its officers, directors, employees, agents and representatives harmless from and
against all claims, demands, penalties, losses, liability or damage, including,
without limitation, reasonable attorneys’ fees and expenses, directly or
indirectly asserted against, resulting from, or related to:

       

      (a) Agent’s
material breach of or failure to comply with any of its agreements, covenants,
representations or warranties contained in any Agency Document;

       

      (b) any
harassment or any other unlawful, tortious or otherwise actionable treatment of
any employees or agents of Merchant by Agent or any of its
representatives;

       

      (c) any
claims by any party engaged by Agent as an employee or independent contractor
arising out of such employment;

       

      (d) any Agent
Claims;

       

      (e) any
breach of or default under any and all applicable Closing Store leases arising
or resulting from or related Agent's conduct of the Sale which is not in
accordance with this Agreement or the Sale Guidelines at any and all Closing
Stores; and

       

      (f) the
negligence or willful misconduct of Agent or any of its officer, directors,
employees, agents or representatives.

       

      Section
15. Defaults.  The
following shall constitute “Events of Default”
hereunder:

       

      (a) Merchant’s
or Agent’s failure to perform any of their respective material obligations
hereunder, which failure shall continue uncured seven (7) days after receipt of
written notice thereof to the defaulting party; or

       

      (b) Any
representation or warranty made by Merchant or Agent proves untrue in any
material respect as of the date made and throughout the Sale Term;
or

       

      (c) The Sale
is terminated or materially interrupted or impaired at the Closing Stores for
any reason other than (i) an Event of Default by Agent, or (ii) any other
material breach or action by Agent not authorized hereunder.

       

      In the
event of an Event of Default, the non-defaulting party may, in its discretion,
elect to terminate this Agreement upon seven (7) business days’ written notice
to the other party.

       

      Section
16. Fixtures.  If
a request to sell all or a portion of the Excluded Merchandise is not made in
accordance with section 5.2, upon request of Merchant at any time prior to the
Sale Termination Date, Agent shall use its best efforts to sell Merchant’s owned
FF&E.  Agent shall be entitled to twenty percent (20%) of the net
proceeds from the sale of the FF&E; provided however, Merchant may
elect to receive, in lieu of net proceeds and Agent’s commission, a lump sum
payment, on a per Store basis, in an amount to be determined between Merchant
and Agent.  Agent shall have the right to abandon any unsold FF&E
upon termination of the Sale.

       

      Section
17. Security
Interest.

       

      17.1 In
consideration of Agent’s services and agreements hereunder (including, without
limitation, Agent's agreement to advance certain Expenses), to secure all of
Merchant's obligations to Agent hereunder, Merchant hereby grants to Agent a
valid and perfected security interest in and lien upon all of Merchant's now
owned or hereafter acquired (i)(a) Inventory (as defined in the Commercial Code
of Virginia) located in the continental United States and (b) all FF&E, and
(ii) all Proceeds (as defined in the Commercial Code of Virginia) of the
foregoing property, including, without limitation, proceeds of all insurance
policies insuring the foregoing property.  Merchant shall execute all
documents and take all other actions as are reasonably required to perfect and
maintain such security interest and lien.  The security interest and lien
granted herein shall be junior in priority only to (x) the Lender Agent's
security interests and liens and (y) any security interests and liens hereafter
granted by Merchant in connection with any other financing facility in an amount
not to exceed the lesser of (i) the amount granted under such financing facility
and (ii) $75 million; provided, further, that, in
connection with any such financing facility, Agent hereby agrees to execute all
documents and take all other actions as reasonably required to memorialize the
subordination agreement set forth in this section 17.1.  To the extent that
an Event of Default  occurs and is not cured, Agent's damages shall accrue
interest at the rate of 1.25% per month from and after the date that the Event
of Default occurred

       

      17.2 Upon the
earlier of (i) entry of a final, non-appealable order of a U.S. bankruptcy court
in a chapter 11 proceeding of the Merchant, if any, approving assumption of this
Agreement and payment of any monetary cure amounts due and payable
hereunder in cash or other immediately available funds, and (ii) two (2) days
following payment by Merchant of all amounts due to Agent hereunder in cash or
other immediately available funds, Agent agrees it shall release all security
interests and liens granted under this Agreement. Agent shall execute all
documents and take all other actions as are reasonably required to release such
security interests and liens.

       

      17.3 Merchant
agrees that, in the event a  a chapter 11 proceeding is filed by or
against it, Merchant shall file a motion on the first day of such
proceeding seeking to assume its rights and obligations under this Agreement
pursuant to section 365 of title 11, United States Code, and use its
commercially reasonable best efforts to obtain prompt approval of such motion by
the U.S. bankruptcy court. 

       

      Section
18. Merchant’s Right to
Monitor.  Merchant shall have the right to monitor the Sale and
activities attendant thereto and to be present in the Stores during the hours
when the Stores are open for business, provided that Merchant’s presence does
not unreasonably disrupt the conduct of the Sale.  Merchant shall also
have a right of access to the Stores at any time in the event of an emergency
situation, and shall promptly notify Agent of such emergency.

       

      Section
19. Reporting. If
requested, Agent shall furnish Merchant with reports no more regularly than
weekly.  Such reports shall reflect the progress of the Sale,
including, without limitation, the Proceeds received to date, and such other
information regarding the Sale as Merchant reasonably requests.  Agent
shall maintain and provide to Merchant sales records to permit calculation of
and compliance with any percentage rent obligations under Closing Store
leases.

       

      Section
20. Agent.  All
references to "Agent" in this Agreement shall mean each of Hilco Merchant
Resources, LLC and Gordon Brothers Retail Partners, LLC, jointly and
severally.

       

      Section
21. Miscellaneous.

       

      21.1 Notices.  All
notices and communications provided for pursuant to this Agreement shall be in
writing, and sent by hand, by facsimile, or a recognized overnight delivery
service, as follows:

       

       

      
        
          	
                   
      

                	
                  If
      to Agent:  

                	
                  HILCO
      MERCHANT RESOURCES, LLC

                


        

        
          	
                   
      

                	
                  5
      Revere Drive, Suite 206

                


        

        
          	
                   
      

                	
                  Northbrook,
      IL 60062

                


        

        
          	
                   
      

                	
                  Attn:
      Eric Kaup

                


        

        
          	
                   
      

                	
                  Tel:
      847-849-2966

                


        

        
          	
                   
      

                	
                  Fax:
      847-897-0766

                


        

        
          	
                   
      

                	
                  Email:  ekaup@hilcotrading.com

                


        

        
          
          

           

        

      

      - and -

      


      GORDON BROTHERS RETAIL

      PARTNERS, LLC

      101 Huntington Avenue, 10th
Floor

      Boston, MA 02199

      Attention: Rafael Klotz

      Tel: (617) 422-6246

      Fax: (617) 531-7929

      Email: rklotz@gordonbrothers.com

      


      
        	
                 
      

              	
                If
      to Merchant:

              	
                Circuit
      City Stores, Inc.

              


      

      9950
Mayland Drive

      Richmond,
Virginia 23233

      Attn:  Reggie
Hedgebeth

                 Deborah
Miller

      Phone:  (804)
486-4000

      Fax:  (804)
486-4877

      


      
        	
                 
      

              	
                With
      copies to:

              	
                Skadden,
      Arps, Slate, Meagher & Flom LLP

              


      

      
        	
                 
      

              	
                One
      Rodney Square

              


      

      
        	
                 
      

              	
                P.O.
      Box 636

              


      

      
        	
                 
      

              	
                Wilmington,
      DE 19899

              


      

      
        	
                 
      

              	
                Attn.:  Gregg
      M. Galardi

              


      

      
        	
                 
      

              	
                Ian
      S. Fredericks

              


      

      
        	
                 
      

              	
                Phone:  (302)
      651-3000

              


      

      
        	
                 
      

              	
                Fax:  (302)
      651-3001

              


      

       

      21.2 Governing
Law.  This Agreement shall be governed and construed in
accordance with the laws of the State of Virginia without regard to conflicts of
laws principles thereof.

       

      21.3 Entire
Agreement.  This Agreement contains the entire agreement
between the parties hereto with respect to the transactions contemplated hereby
and supersedes and cancels all prior agreements, including, but not limited to,
all proposals, letters of intent or representations, written or oral, with
respect thereto.

       

      21.4 Amendments.  This
Agreement may not be modified except in a written instrument executed by each of
the parties hereto along with the written consent of the Lender Agent, which
consent shall not be unreasonably withheld or delayed.

       

      21.5 No
Waiver.  No consent or waiver by any party, express or implied,
to or of any breach or default by the other in the performance of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such other party of the
same or any other obligation of such party.  Failure on the part of
any party to complain of any act or failure to act by the other party or to
declare the other party in default, irrespective of how long such failure
continues, shall not constitute a waiver by such party of its rights
hereunder.

       

      21.6 Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon Agent and Merchant, and their respective successors and
assigns.  The parties hereto acknowledge that Lender Agent is a third
party beneficiary of the Agreement.

       

      21.7 Execution in
Counterparts.  This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one agreement.  This Agreement may be
executed by facsimile, and such facsimile signature shall be treated as an
original signature hereunder.

       

      21.8 Section
Headings.  The headings of sections of this Agreement are
inserted for convenience only and shall not be considered for the purpose of
determining the meaning or legal effect of any provisions hereof.

       

      21.9 Survival.  All
representations, warranties, covenants and agreements made by the parties hereto
shall be continuing, shall be considered to have been relied upon by the parties
and shall survive the execution, delivery and performance of this
Agreement.

       

      IN
WITNESS WHEREOF, Agent and Merchant hereby execute this Agreement by their duly
authorized representatives as of the day and year first written
above.

       

      A
JOINT VENTURE COMPOSED OF

      HILCO
MERCHANT RESOURCES, LLC

      AND
GORDON BROTHERS RETAIL PARTNERS, LLC

      


      


                     
By: HILCO MERCHANT RESOURCES, LLC

      


      


      ___________________________________

                                                                                     
By:

                                                                                     
Name:

                                                                                     
Its:

      


      


      By:
GORDON BROTHERS RETAIL PARTNERS, LLC

      


      


      ___________________________________

      By:

      Name:

      Its:

      


      


      CIRCUIT
CITY STORES, INC.

      


      


      


      ___________________________________

      By:  _______________________________

      Its:  _______________________________

      


      


      CIRCUIT
CITY STORES WEST COAST, INC.

      


      


      


      ___________________________________

      By:  _______________________________

      Its:  _______________________________

       

       

      
        


        


        
          
             

          

          
             

            
              

            

          

          
             

          

        

        EXHIBITS

        


        


        [The
following exhibits to the Agency Agreement have been omitted:

         

        Exhibit 1
– Store List

         

        Exhibit 2
– Circuit City Sale Guidelines

         

        Exhibit 3.1(c)
– Merchandise Threshold Schedule

        


        Exhibit
3.3(b) – Form of Agent Letter of Credit

         

        Exhibit
4.1 – Per Diem Occupancy Schedule

        


        Exhibit
5.3(b) – Inventory Summary

         

        Exhibit 12.1(m)
– Cost Factor

         

        Exhibit 12.1(n)
– Store Entertainment Threshold

         

        The
Company will furnish supplementally any of the above exhibits to the Securities
and Exchange Commission upon request.]