Document:

Exhibit
10.1

EMPLOYMENT
AGREEMENT

 

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

W
I T N E S S E T H:

 

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

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

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

1.             Term
of Employment.

(a)           Except for earlier
termination as provided in Section 11 hereof, the Executive’s employment
under this Agreement shall be for a period commencing on April 1, 2007 and
expiring on March 31, 2010 (the “Employment Term”).

(b)           On or about
September 30, 2009 the Company shall provide the Executive with written notice
regarding whether or not the Company intends to seek to extend the Employment
Term.  A notice which states that the
Company intends to seek to extend the Employment Term is referred to herein as
a “Renewal Notice” and a notice which states that the Company does not
intend to seek to extend the Employment Term is referred to herein as a “Non-renewal
Notice.”  If the Company delivers a
Non-renewal Notice, the period of time from the date of the delivery of the
Non-renewal Notice to the expiration of the Employment Term is referred to
herein as the “Transition Period.” 
If the Company delivers a Renewal Notice to the Executive (i) the
Employment Term shall automatically be extended for a period of six (6) months
and (ii) the Company and the Executive shall seek to negotiate the terms of a
new, mutually agreeable employment agreement. 
Such six (6) month extension period, if (and only if) applicable, is
referred to herein as the “Extension Period,” and during the Extension
Period, if (and only if) applicable, all references herein to the Employment
Term shall include the Extension Period.

2.             Duties,
Responsibilities and Positions.

(a)           During
the Employment Term, the Executive shall serve as the Chief Executive Officer
of the Company.  In addition, during the
Employment Term, the Company shall use its best efforts to (i) cause the
Executive to be nominated for election to the Board of Directors of the Company
(the “Board”) and (ii) subject to a Permitted Change (as defined below)
to be appointed as Chairman of the Board. 
During the Employment Term, the Executive shall perform all duties and
accept all responsibilities incidental to such positions or as may be assigned
to him by the Board, or any committee thereof, from time to time and which are

normally associated with the positions of
Chief Executive Officer and (subject to a Permitted Change) Chairman of the
Board.  All employees of the Company
shall report to the Executive; provided, however, that the Board
or any committee thereof may direct employees of the Company to report directly
to the Board or any committee thereof in connection with any internal investigations
or reviews commenced by the Board or any committee thereof.  The Executive shall be subject at all times
to the general supervision, orders, advice and direction of the Board.  The Executive shall also cooperate fully with
the Board and other executive officers of the Company.

As used herein, a “Permitted Change”
shall mean the appointment of a person reasonably acceptable to the Executive
(which such acceptance shall not be unreasonably withheld or delayed) as
Chairman of the Board (i) in connection with any material acquisition,
financing or similar transaction which increases the size and scope of the
Company’s business or (ii) in order to comply with general corporate governance
practices then being followed by companies of similar size and scope.

(b)           Upon
termination of the Executive’s employment for any reason, the Executive shall
be deemed to have resigned as a member of the Board and from any other office
or offices within the Company and any subsidiary of the Company that the
Executive may then hold.

(c)           During
the Employment Term, the Executive shall devote substantially all his full
working time, energy and efforts to the business of the Company; provided,
however, that the Executive shall be allowed, to the extent that such
activities do not materially interfere with the performance of his duties and
responsibilities hereunder, to manage his personal and family financial and
legal affairs and to serve on civic, not-for-profit and charitable industry
boards and advisory committees.  The Executive
shall only serve on for-profit corporate boards of directors and advisory
committees if approved in advance, in writing, by the Board.

(d)           The
Executive represents to the Company that (i)
the Executive has the legal capacity to execute and perform this Agreement and
(ii) that he is not currently subject to or bound by any employment
agreement, non-competition covenant, non-disclosure agreement or other
agreement, covenant, understanding or restriction of any nature whatsoever
which would prohibit the Executive from executing this Agreement and performing
fully his duties and responsibilities hereunder, or which would in any manner,
directly or indirectly, materially limit the duties and responsibilities which
it is now reasonably foreseeable may now or in the future be assigned to the
Executive by the Board.

(e)           The
Executive shall at all times comply in all material respects with policies and
procedures adopted by the Company applicable to executives of the Company,
including without limitation, procedures and policies regarding conflicts of
interest.

3.             Compensation.  For all services rendered by the Executive in
any capacity during the Employment Term, including without limitation, services
as an officer, director, or member of any committee of the Company, or any
subsidiary, affiliate or division thereof, the Executive shall be compensated
as follows (subject, in each case, to the provisions of Section 11
below):

 2
 

(a)           Base
Salary.  During the Employment Term,
the Company shall pay to the Executive a base salary on an annualized basis
(the “Base Salary”) as follows: (i) for the period from April 1, 2007
through March 31, 2008, $312,500; (ii) for the period from April 1, 2008
through March 31, 2009, $325,000 and (iii) for the period from April 1, 2009
through March 31, 2010, $337,500.  The
term “Base Salary” as used in this Agreement shall refer to Base Salary in
effect for the applicable period set forth in the immediately preceding
sentence.  The Base Salary shall be
payable in accordance with the customary payroll practices of the Company. The
Base Salary paid to the Executive shall at all times be the highest salary paid
or payable by the Company to any of its employees.   If, during the Employment Term, the Company
consummates any material acquisitions or similar transactions which increase
the size and scope of the Company’s business, the Compensation Committee of the
Board shall convene as promptly as reasonably practicable for the purpose of
discussing whether or not it is appropriate to increase the Executive’s Base
Salary; provided, however, that no such increase shall be
required.

(b)           Bonus.  In addition to the Base Salary provided
herein, the Executive shall be entitled to participate in, and may receive
performance bonus payments under, such annual bonus plan or plans as the
Compensation Committee of the Board may establish from time to time for senior
executive officers of the Company.  Any
such performance bonus or bonuses shall be determined in the sole discretion of
the Compensation Committee of the Board. Without limiting the generality of the
foregoing, such performance bonus or bonuses, if paid, may be paid in stock,
stock options, restricted stock, cash, or any combination thereof.

(c)           Benefits.  During the Employment Term, the Executive
shall be entitled to participate in all employee benefit and equity plans and
fringe benefits and prerequisites generally provided to senior executives of
the Company, in each case subject to the eligibility requirements and other
terms and provisions of such plans and programs.  The Company may amend, modify or rescind any
employee benefit plan or program and change employee contribution amounts or
benefit costs without notice in its discretion.

4.             Stock Options
Matters.  On June 6, 2007,
provided the Executive is then employed by the Company, the Company will grant
the Executive stock options (the “Options”) for an aggregate of 375,000
shares of common stock of the Company, at an exercise price equal to the
closing price of the common stock on such date, pursuant to the Company’s
Amended and Restated 1998 Incentive and Nonqualified Stock Option Plan (the “Plan”).  The Options shall comprise incentive stock
options (to the extent permitted under applicable laws) and the balance shall
be non-qualified stock options and shall vest as follows: options for 125,000
shares shall vest on March 31, 2008, provided the Executive remains
continuously employed by the Company through March 31, 2008; options for an
additional 125,000 shares shall vest on March 31, 2009, provided the Executive
remains continuously employed by the Company through March 31, 2009; and
options for all remaining shares shall vest on March 31, 2010,  provided the Executive remains continuously
employed by the Company through March 31, 2010. 
The Options shall be subject to the terms of the Plan and the terms and
conditions of the Company’s standard form of option grant agreements to be
entered into between the Company and the Executive as a condition of grant of
the Options.

5.             Expenses; Vacations.  The Executive shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses
necessarily incurred in the performance of 

 3
 

his duties
hereunder, upon submission and approval of written statements and bills in
accordance with the then regular procedures of the Company.  The Executive shall be entitled to four weeks
paid vacation per calendar year, with such vacation to be scheduled and taken
in accordance with the Company’s standard vacation policies.  Up to two (2) weeks accrued but unused
vacation time may be carried forward from year to year; provided, however,
in no event shall more than an aggregate of six (6) weeks of unused vacation
time be accrued during the Employment Term.

6.              Representations and Warranties of the Company.  The Company represents and warrants to, and
agrees with, the Executive that (i) pursuant to the Delaware General
Corporation Law, the Company’s Certificate of Incorporation, as amended to date
(the “Charter”), provides for indemnification of officers and directors
of the Company and that so long as the Executive serves as an executive officer
of the Company, unless required by applicable law the Charter will not be
amended to limit such indemnification without the written consent of the
Executive and (ii) the Company maintains an officers and directors liability
insurance policy which insures the Executive (subject to the limitations
contained therein) and will maintain such a policy for so long as the Executive
serves as an executive officer of the Company.

7.             Developments.  All developments, including inventions,
whether patentable or otherwise, trade secrets, discoveries, improvements,
ideas and writings which relate to or may be useful in the business of the
Company, and which the Executive, either by himself or in conjunction with any
other person or persons, has conceived, made, developed, acquired or acquired
knowledge of while engaged in any activity on behalf of or while acting for the
Company during the course of his employment by the Company (the “Developments”),
shall, on and after the start of the Employment Term, become the sole and
exclusive property of the Company.  The
Executive hereby assigns, transfers and conveys, and agrees to so assign,
transfer and convey to the Company, all of his right, title and interest in and
to any and all such Developments and to disclose in writing to the Board, as
soon as practicable, all Developments that he believes in his good faith
judgment may be of material significance to the Company, and to reduce any such
Developments to writing at the request of Board if he has not already done
so.  At any time, and from time to time,
upon the request and at the expense of the Company, the Executive will execute
and deliver any and all instruments, documents and papers, give evidence and do
any and all other acts which, in the reasonable opinion of counsel for the
Company, are or may reasonably be necessary or desirable to document such
transfer or to enable the Company to file and prosecute applications for and to
acquire, maintain and enforce any and all patents, trademark registrations or
copyrights under United States or foreign law with respect to any such
Developments or to obtain any extension, validation, reissue, continuance or
renewal of any such patent, trademark or copyrights; provided only that any
such actions requested following termination of employment shall not
unreasonably interfere with Executive’s then employment, business or other
activities.  The Company will be
responsible for the preparation of any such instruments, documents and papers
and for the prosecution of any such proceedings and will reimburse the
Executive for all reasonable expenses incurred by him in compliance with the
provisions of this Section 7.  The
Developments shall not include any knowledge or information of any kind
acquired by or disclosed to the Executive while serving in his capacity as a
member of the board of directors of any non-Company entity, in his capacity as
a private investor, or in any other circumstance during which the Executive is
not or was not engaged in any activity on behalf of or acting for the
Company.  Furthermore, nothing herein
shall preclude Executive from

 4
 

utilizing
Developments applicable to retailing generally (whether from stores, via
catalog, via e-commerce or otherwise) following termination of employment,
subject always to the provisions of Section 8 below.

8.             Non-Competition
and Non-Solicitation.

(a)           Non-Competition.  The Executive agrees that the Executive will
not, during the “Restrictive Period”, as defined below, engage in, or otherwise
directly or indirectly be employed by, or act as a consultant or lender to, or
be a director, officer, employee, owner, co-venturer, member or partner of, or
use or expressly permit the Executive’s name to be used by (collectively an “Engagement
With”), any business, entity or organization which has a primary line of
business (i.e. representing more than 4.9% of its revenue) involving the sale
at retail, whether from store locations, and/or by or from direct mail,
catalogues and/or websites, of party goods and/or supplies anywhere in the
United States (a “Competing Entity”); provided, however,
that in each case the provisions of this Section 8(a) will not be deemed
breached merely because the Executive owns not more than five percent (5.0%) of
the outstanding common stock of a Competing Entity, if, at the time of its
acquisition by the Executive, such stock is listed on a national securities
exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter
market by a member of a national securities exchange; and provided, further,
however, that, subject to the provisions of Section 8(b), nothing
herein shall prevent the Executive from working for a business segment or
department of a Competing Entity, or a subsidiary, division or other entity
that controls or is controlled by a Competing Entity if (and only if), the
business segment or department of the Competing Entity for which the Executive
provides services, or the subsidiary, division or other entity by which the
Executive has an Engagement With (as the case may be), (1) does not itself
compete with the Company, and (2) the Executive does not provide any services,
advice, assistance and/or guidance to any business segment or department,
subsidiary, division, or other entity of the Competing Entity which competes
with the Company.  As used in this
Section the “Restrictive Period” shall be (i) the period the Executive
is employed by the Company and (ii) the period of one (1) year after the
Executive ceases to be employed by the Company for any reason, or, in the case
of the Executive’s Engagement With any Competing Entity that operates retail
stores which are located in any states where the Company has retail stores on
the date of the Executive’s cessation of employment, the period of eighteen
(18) months period after the Executive ceases to be employed by the Company for
any reason.

(b)           Non-Solicitation.
During the Restrictive Period, the Executive will not, either directly or
indirectly, (i) call on or solicit (for the purpose of diverting business from
the Company) any person, firm, corporation or other entity who or which at the
time of such termination was, or within one (1) year prior thereto had been, a
customer of the Company or (ii) solicit the employment of any person (other
than any family member) who was employed the Company on a full or part-time
basis at any time during the six (6) months prior to the termination of
Executive’s employment, unless such person prior to such solicitation of employment
was involuntarily discharged by the Company.

9.             Confidential
Information.  The Executive
recognizes and acknowledges that by reason of his employment by and service to
the Company, he has had and will have access to confidential information of the
Company and its affiliates, including without limitation, information and
knowledge pertaining to products and services offered, ideas, plans, trade

 5
 

secrets,
proprietary information, advertising, distribution and sales methods and
systems, sales and profit figures, customer and client lists, and relationships
between the Company and its customers, clients, suppliers and others who have
business dealings with the Company (collectively, “Confidential Information”).  The Executive acknowledges that such Confidential
Information is a valuable and unique asset and covenants that he will not,
either during or at any time after the end of the Employment Term, use or
disclose any such Confidential Information to any person or entity for any
reason whatsoever (except as his duties described herein may require) without
the prior authorization of the Board, unless such information is in or enters
the public domain through no fault of the Executive or is otherwise lawfully
known by third parties.  In the event the
Executive becomes or may become legally compelled to disclose any Confidential
Information (whether by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or other process or otherwise), the
Executive shall provide to the Board prompt prior written notice of such
requirement so that the Company may seek a protective order or other
appropriate remedy and/or waive compliance with the terms of this Section 9.  In the event that such protective order or
other remedy is not obtained, or that the Company waives compliance with the
provisions this Section 9, the Executive shall furnish only that portion
of the Confidential Information which it is advised by counsel is legally
required to be disclosed, and shall use his best efforts to insure that
confidential treatment shall be afforded such disclosed portion of the
Confidential Information.

10.           Equitable
Relief.

(a)           The
Executive acknowledges that the restrictions contained in Sections 7, 8, and
9 hereof are reasonable and necessary to protect the legitimate interests
of the Company, that the Company would not have entered into this Agreement in
the absence of such restrictions, and that any violation of any provision of
those Sections will result in irreparable injury to the Company.  The Executive represents that his experience
and capabilities are such that the restrictions contained in Section 8  hereof will not prevent the Executive from
obtaining employment or otherwise earning a living at the same general level of
economic benefit as is anticipated by this Agreement.  THE
EXECUTIVE FURTHER REPRESENTS AND ACKNOWLEDGES
THAT (i) HE HAS BEEN ADVISED BY THE COMPANY TO CONSULT HIS OWN LEGAL COUNSEL IN
RESPECT OF THIS AGREEMENT, (ii) THAT HE HAS HAD FULL OPPORTUNITY, PRIOR TO
EXECUTION OF THIS AGREEMENT, TO REVIEW THOROUGHLY THIS AGREEMENT WITH HIS
COUNSEL, AND (iii) HE HAS READ AND FULLY UNDERSTANDS THE TERMS AND PROVISIONS
OF THIS AGREEMENT.

(b)           The
Executive agrees that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages,
as well as an equitable accounting of all earnings, profits and other benefits
arising from any violation of Sections 7, 8, or 9 hereof, which rights
shall be cumulative and in addition to any other rights or remedies to which
the Company may be entitled.  In the
event that any of the provisions of Sections 7, 8, or 9 hereof should
ever be adjudicated to exceed the time, geographic, product or service, or
other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, product or service, or other limitations permitted by applicable
law.

(c)           The
Company and the Executive each irrevocably and 

 6
 

unconditionally (i) agree that any suit,
action or other legal proceeding arising out of this Agreement, including
without limitation, any action for preliminary or permanent injunctive relief
or other equitable relief, may be brought in the United States District Court
for the Eastern District of Massachusetts, or if such court does not have
jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in the Commonwealth of Massachusetts, (ii) consent to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (iii) waive any objection which such party may have to the
laying of venue of any such suit, action or proceeding in any such court.  The Company and the Executive each also
irrevocably and unconditionally consent to the service of any process,
pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 15 hereof.

(d)           The
Executive agrees that he will provide a copy of Sections 7, 8, and 9 of
this Agreement to any for-profit business or enterprise (i) which he may
directly or indirectly own, manage, operate, finance, join, participate in the
ownership, management, operation, financing, control or control of, or (ii)
with which he may be connected with as an officer, director, employee, partner,
principal, agent, representative, or consultant, or in connection with which he
may use or expressly permit his name to be used; provided, however,
that this provision shall not apply in respect of Section 8 of this
Agreement after expiration of the time periods set forth therein.

11.           Termination.

(a)           Cause.  Notwithstanding anything herein contained, if
on or after the date hereof and prior to the end of the Employment Term, the
Executive is terminated “For Cause” (as defined below) then the Company
shall have the right to give notice of termination of the Executive’s services
hereunder as of a date to be specified in such notice, and the Employment Term
shall terminate on the date so specified. 
Termination “For Cause” shall mean the Executive shall (i) be
charged with the commission of a felony crime; (ii) commit any act or omit to
take any action in bad faith and to the detriment of the Company; (iii)
intentionally fail to follow any commercially reasonable and lawful direction
of the Board and continue to fail to follow such direction within ten (10) days
of written notification of same; (iv) commit an act of fraud against the
Company; (v) knowingly provide materially false information concerning the
Company to the Board, any governmental body, any regulatory agency, any lender
or other financing source of the Company, or any shareholder of the Company; or
(vi) breach any term of this Agreement and fail to correct such breach within
ten (10) days after written notice of commission thereof.  In the event that this Agreement is
terminated “For Cause” pursuant to this Section 11(a), then the
Executive shall be entitled to receive only the Base Salary at the rate
provided in Section 3(a) to the date on which termination shall take effect,
any accrued vacation and unpaid expenses as contemplated under Section 5,
and (iii) any performance bonus earned and unpaid for any prior plan periods
and, if applicable under any performance bonus plan for the year of
termination, the amount, if any, earned thereunder to the date of termination
(collectively, “Accrued Bonus Payments”).

(b)           Disability.  In the event of the Disability of the
Executive, as defined below, then Executive or the Company may terminate the
Executive’s employment hereunder upon thirty (30) days’ written notice to the
other.  In the event of termination as a
result of Executive’s Disability, no further compensation shall be payable to
the Executive, except that the Company shall pay or provide: (i) any accrued
and unpaid Base Salary as

 7
 

contemplated under Section 3(a) up to
the effective date of termination of employment, (ii) any accrued vacation and
unpaid expenses as contemplated under Section 5, (iii) any Accrued Bonus
Payments, (iv) the Executive’s benefits set forth in Section 3(c), or
comparable benefits, for a period of one (1) year from such date of termination
and (v) make severance payments to the Executive for a period of one (1) year
following his date of termination in an amount equal to the rate of Base Salary
in effect at the date of termination less the total amount of disability
benefits, if any, payable to Executive under any disability plan or policy
maintained by the Company.

As used hereunder, “Disability” shall
mean (A) the inability of the Executive to engage in any substantial gainful
employment activity on behalf of the Company, with or without reasonable
accommodation, as that term is defined under applicable state or federal law,
by reason of any medically determinable physical or mental impairment (1) that
can be expected to result in death or to last for a continuous period of not
less than 12 months; or (2) that can be expected to result in death or to last
for a continuous period of not less than 12 months and the Executive is
receiving income replacement benefits for a period of not less than three (3)
months under an accident and health plan covering the Company’s employees; or
(B) the Executive shall be determined to be totally disabled  by the U.S. Social Security Administration (“SSA”).  A determination of Disability (other than a
determination by the SSA) shall be made by a physician satisfactory to both the
Executive and the Company; provided, that, if the Executive and
the Company do not agree on a physician, the Executive and the Company shall
each select a physician and these two together shall select a third physician,
whose determination as to disability shall be binding on all the parties to
this Agreement.

(c)           Death.  In the event that the Executive shall die,
then his employment shall terminate on the date of his death, and no further
compensation shall be payable to the Executive, except for any accrued and
unpaid Base Salary as contemplated under Section 3(a), any accrued
vacation and unpaid expenses as contemplated under Section 5, any Accrued
Bonus Payments and as may otherwise be provided under any insurance policy or
similar instrument.

(d)           Expiration.  This Agreement shall automatically terminate
upon the expiration of the Employment Term and upon such expiration, the
following payment provisions shall apply:

(i)            In the event that
the Company delivers a Non-renewal Notice, upon expiration of the Employment
Term, no further compensation shall be payable to the Executive, except for (1)
any accrued and unpaid Base Salary though the effective date of such
termination as contemplated under Section 3(a), (2) any accrued vacation
and unpaid expenses as contemplated under Section 5, and (3) any Accrued
Bonus Payments.  In addition, subject to
the provisions of Section 11(i) hereof and the Executive’s compliance
(and continued compliance) with the provisions of Sections 7, 8 and 9
hereof, (Y) the Company shall pay to the Executive a severance payment equal to
six (6) months salary at the Base Salary then in effect, payable in six (6)
equal monthly installments and (Z) for such six (6) month period, the Executive
shall be entitled to continue to receive his then current health, life and
disability insurance benefits or, in the case of health insurance benefits,
payment by the Company of applicable “COBRA” payments.

 8
 

(ii)           In the event that
the Company delivers a Renewal Notice, upon expiration of the Extension Period
no further compensation shall be payable to the Executive, except for (1) any
accrued and unpaid Base Salary though the effective date of such termination as
contemplated under Section 3(a), (2) any accrued vacation and unpaid
expenses as contemplated under Section 5, and (3) any Accrued Bonus
Payments.  For the avoidance of doubt,
the termination of this Agreement upon the expiration of the Extension Period
shall not be deemed a termination without cause pursuant to Section 11(e)
and the Executive shall not be entitled to receive any severance or similar
payment or benefit provided for in Section 11(e) upon expiration of the
Extension Period.

(e)           Termination
Without Cause.  In the event that the
Company terminates the Executive for any reason other than as provided under Section
11(a), 11(b), 11(c) or 11(d), then the Executive’s employment shall
terminate upon thirty (30) days’ written notice to the Executive and, the
Company shall be obligated to pay to the Executive Base Salary earned, but not
yet paid to the Executive, prior to the date of such termination in accordance
with Section 3(a), and reimburse the Executive for any accrued vacation
and unpaid expenses incurred by the Executive through the date of termination
in accordance with Section 5, and any Accrued Bonus Payments.  In addition, subject to the provisions of Section
11(i) hereof and the Executive’s compliance (and continued compliance) with
the provisions of Sections 7, 8 and 9 hereof, (i) the Company shall pay
to the Executive a severance payment equal to twelve (12) months salary at the
Base Salary then in effect, payable in twelve (12) equal monthly installments
and (ii) for such twelve (12) month period, the Executive shall be entitled to
continue to receive his then current health, life and disability insurance
benefits or, in the case of health insurance benefits, payment by the Company
of applicable “COBRA” payments (collectively (i) and (ii) are called the “Severance
Payments”).

(f)            Change
of Control. Subject to the provisions of Sections 11(i) and 11(j),
in the event that Company shall terminate this Agreement and the Executive’s
employment hereunder pursuant to the provisions of Section 11(e) within
thirteen (13) months following a Change in Control (as defined below) or the
Executive shall terminate this Agreement and the Executive’s employment
hereunder for Good Reason (as defined in Section 11(h)) within thirteen
(13)  months
following a Change in Control, then, in lieu of (and not in addition to) the
amounts to be paid (and benefits to be provided) by the Company pursuant to Section
11(e) or Section 11(h), the Company shall have no further
obligations under this Agreement to the Executive other than the obligation to:
(i) pay to the Executive Base Salary earned, but not yet paid to the Executive,
prior to the date of such termination in accordance with Section 3(a),
(ii) reimburse the Executive for any accrued vacation and unpaid expenses
incurred by the Executive through the date of termination in accordance with Section
5, and pay any Accrued Bonus Payments and (iii) subject to the provisions
of Sections 11(i) and 11(j), pay to the Executive a lump sum amount
equal to the product of (1) the Executive’s Base Salary then in effect and (2)
a fraction, the numerator of which is the number of days remaining from the
date the termination occurred through the end of the Employment Term, but,
subject to the provisions of Section 11(j), in no event less than 912,
and the denominator of which is 365. In addition, for the twelve (12) month
period following the date of such termination, the Executive shall be entitled
to continue to receive his then current health, life and disability insurance
benefits or, in the case of health insurance benefits, payment by the Company
of applicable “COBRA” payments.

 9
 

As used in this Agreement, “Change in Control” shall mean the occurrence of any one of the following
events:

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

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

(iii)          the Company executes an agreement of
sale, merger or consolidation which contemplates that (x) after the effective
date provided for in such agreement, all or substantially all of the business
and/or assets of the Company shall be owned, leased or otherwise controlled by
another Person and (y) individuals who are directors of the Company when such
agreement is executed shall not constitute at least 1⁄2 of the board of directors
of the survivor or successor entity immediately after the effective date
provided for in such agreement; provided, however, that for
purposes of this paragraph (iii), if such agreement requires as a condition
precedent approval by the Company’s shareholders of the agreement or
transaction, a Change of Control shall not be deemed to have taken place unless
and until such approval is secured (but upon any such approval, a Change of
Control shall be deemed to have occurred on the effective date of such
agreement).

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

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

(g)           Termination
by Executive.  In the event that the
Executive desires to resign voluntarily as Chief Executive Officer, the
Executive covenants to provide the Company with not less than ninety (90) days
written notice of any such voluntary resignation; and further the Executive
covenants to cooperate in good faith in order to facilitate a smooth transfer
of authority during the period from notice of resignation to the date of
termination.  In the event that the
Executive’s employment is terminated by the Executive pursuant to this Section
11(g), then the Executive shall be entitled to receive an amount payable in
a lump sum 

 10
 

within ten (10) business days following the
date of termination, equal to the sum of any accrued and unpaid Base Salary as
contemplated by Section 3(a), any accrued and unpaid expenses as
contemplated by Section 5 and any Accrued Bonus Payments.

(h)           Good
Reason.  The Executive may, upon
thirty (30) days written notice, terminate his employment with the Company for “Good
Reason”.  “Good Reason” shall mean
any material breach by the Company of its obligations hereunder which are not
cured within ten (10) days following receipt of written notice from the
Executive detailing such breach.  The
parties agree that a material breach shall mean (x) any material reduction in
the Executive’s duties, authority, reporting relationships or responsibilities
(whether or not accompanied by a title change) not consented to by the
Executive, other than a Permitted Change, and (y) the relocation of the
principal executive offices of the Company a distance of more than 35 miles
from its current location no consented to by the Executive.  Notwithstanding the foregoing or anything to
the contrary contained herein, the Executive shall not be entitled to terminate
his employment for “Good Reason” (1) in connection with a Permitted Change, or
(2) at any time during the Extension Period or the Transition Period, for any
reason.  In the event that the Executive
terminates this Agreement for Good Reason, the Company shall be obligated to
pay to the Executive Base Salary earned, but not yet paid to the Executive,
prior to the date of such termination in accordance with Section 3(a),
reimburse the Executive for any accrued vacation and unpaid expenses incurred
by the Executive through the date of termination in accordance with Section
5 and pay any Accrued Bonus Payments. 
In addition, subject to the provisions of Section 11(i) hereof,
and the Executive’s compliance (and continued compliance) with the provisions
of Sections 7, 8 and 9 hereof, the Company shall pay and provide to the
Executive the Severance Payments.

(i)            Release.  Notwithstanding anything to the contrary
contained in this Agreement, the Executive (or his estate) shall not be
entitled to receive the payments and benefits set forth in this Section 11
(other than Base Salary through the effective date of termination in accordance
with Section 3(a) hereof and reimbursement of expenses in accordance
with Section 5) prior to (i) the execution and delivery by the Executive
to the Company of a  valid and fully
effective general release and nondisparagement agreement (in form and substance
reasonably satisfactory to the Company) of all claims, including but not
limited to the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, which the Executive might have at such time against the
Company and (ii) the resignation of the Executive from all positions of any
nature which the Executive may then have held with the Company and any
subsidiary of the Company.

(j)            Limitation
as to Amounts Payable. 
Notwithstanding any provision of this Agreement to the contrary
(including without limitation the provisions of Section 11(f)), if all
or any portion of the amounts to be paid to the Executive under this Agreement
otherwise would be a “parachute payment,” as defined in section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the “Code”) and the
Treasury Regulations thereunder, the aggregate present value of the total
amounts to be paid to the Executive under this Agreement shall be limited to an
amount that is less than three times the Executive’s “annualized includible
compensation for the base period,” as defined in section 280G(d) of the Code
and any Treasury Regulations thereunder; provided, however, that
in no event shall the amount payable under this Agreement be reduced pursuant
to this Section 11(j) to less than the maximum amount that may be paid
to the Executive without causing any portion of such amount to become
nondeductible 

 11
 

under section 280G of the Code and subject to the excise tax imposed by
section 4999 of the Code.  The
determination of the Executive’s “annualized includible compensation for the
base period” and the deductibility of payments made pursuant to this Agreement
shall be made by the independent outside accounting firm regularly retained by
the Company.  For purposes of this Section
11(j), “present value” shall be determined in accordance with section 280G
of the Code and the Treasury Regulations thereunder.

(k)          
Coordination with Section 409A of the Code.  Notwithstanding anything to the contrary set
forth in this Section 11, in the event that the Executive is determined to be a
“key employee” as defined by Section 416(i) of the Code (without regard to
paragraph 5), to the extent necessary to comply with Section 409A of the Code
and the Treasury Regulations thereunder,  any payments or distributions due the Executive under this
Agreement as a result of or following any separation from service shall not be
made before the date which is 6 months after the date of separation from
service (or if earlier, the date of death of the Executive).

12.           Survival.
Except as otherwise provided in this Agreement, notwithstanding the termination
of this Agreement or the Executive’s employment for any reason, the Executive’s
obligations under Sections 2(b), 7, 8, and 9 hereof shall survive and
remain in full force and effect for the periods therein provided, and the
provisions for equitable relief against the Executive in Section 10
hereof shall continue in force, along with the provisions of Sections 11(k)
through 20 hereof.  In addition, the
obligations of the Company set forth in Section 11 shall survive any
termination (as applicable) and shall remain in full force and effect until
such obligations are satisfied in full (subject, as applicable, to the
Executive’s compliance with the provisions of Section11(i)).

13.           Assignment.  All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, executors, administrators, legal representatives, successors
and assigns of the parties hereto, except that the duties and responsibilities
of the Executive hereunder are of a personal nature and shall not be assignable
or delegatable in whole or in part by the Executive.

14.           Modification.  This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.

15.           Notices.  All notices and other communications required
or permitted hereunder or necessary or convenient in connection herewith shall
be in writing and shall be deemed to have been given when hand delivered or
three (3) days after being mailed by registered or certified mail, as follows
(provided that notice of change of address shall be deemed given only when
received):

If
to the Company:

 

iParty
Corp.

270
Bridge Street

 12
 

Suite
301

Dedham,
MA 02026

Attn:
Corporate Secretary

 

With
a required copy to:

 

Chairman
of the Compensation Committee

of
the Board of Directors

c/o
iParty Corp.

270
Bridge Street

Dedham,
MA 02026

 

If
to the Executive:

 

Sal
Perisano

288
Huron Avenue

Cambridge, MA 02138

16.           Remedies
Cumulative; No Waiver.  No
remedy conferred upon the Company by this Agreement is intended to be exclusive
of any other remedy, and each and every such remedy shall be cumulative and
shall be in addition to any other remedy given hereunder or now or hereafter
existing at law or in equity.  No delay
or omission by the Company in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the Company from time to time
and as often as may be deemed expedient or necessary by the Company in its sole
discretion.

17.           Binding
Effect.  The Executive’s
rights and obligations under this Agreement shall not be transferable by
assignment or otherwise, such rights shall not be subject to encumbrance or the
claims of the Executive’s creditors, and any attempt to do any of the foregoing
shall be void.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the Executive and
his heirs and personal representatives, and shall be binding upon and inure to
the benefit of the Company and its successors and those who are its assigns
under Section 13.

18.           Entire
Agreement; Contents of Agreement.

(a)           Effective
as of April 1, 2007, this Agreement supersedes all prior agreements in their
entirety, including without limitation the Prior Employment Agreement, and sets
forth the entire understanding among the parties hereto with respect to the
subject matter hereof.  This Agreement
cannot be changed, modified, extended or terminated except upon written
amendment executed by the Executive and approved by the Board and executed on
behalf of the Company by a duly authorized officer.  The Executive acknowledges that the effect of
this provision is that no oral modifications of any nature whatsoever to this
Agreement shall be permitted.

(b)           The
Executive acknowledges that from time to time, the Company 

 13
 

may establish, maintain and distribute
manuals or handbooks or personnel policy manuals, and officers or other
representatives of the Company may make written or oral statements relating to
personnel policies and procedures.  Such
manuals, handbooks and statements are intended only for general guidance.  No policies, procedures or statements of any
nature by or on behalf of the Company (whether written or oral, and whether or
not contained in any manual or handbook or personnel policy manual), and no
acts or practices of any nature, shall be construed to modify this Agreement or
to create express or implied obligations of any nature to the Executive.

19.           Headings.  The headings in this Agreement are solely for
the convenience of reference and shall be given no effect in the construction
or interpretation of this Agreement.

20.           Counterparts;
Governing Law.  This Agreement
may be executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.  It shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without giving
effect to the rules governing the conflicts of laws.

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

	
  

  	
   

  	
  iPARTY CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ PATRICK FARRELL

  	
   

  
	
   

  	
   

  	
  Name:   Patrick Farrell

  
	
   

  	
   

  	
  Title:     President and
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ SAL PERISANO

  	
   

  
	
   

  	
   

  	
  Sal Perisano

  
						

 

 14Exhibit
10.2

EMPLOYMENT
AGREEMENT

 

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

W
I T N E S S E T H:

 

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

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

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

1.             Term
of Employment.

(a)           Except
for earlier termination as provided in Section 11 hereof, the Executive’s
employment under this Agreement shall be for a period commencing on April 1,
2007 and expiring on March 31, 2010 (the “Employment Term”).

(b)           On
or about September 30, 2009 the Company shall provide the Executive with
written notice regarding whether or not the Company intends to seek to extend
the Employment Term.  A notice which
states that the Company intends to seek to extend the Employment Term is
referred to herein as a “Renewal Notice” and a notice which states that
the Company does not intend to seek to extend the Employment Term is referred
to herein as a “Non-renewal Notice.” 
If the Company delivers a Non-renewal Notice, the period of time from
the date of the delivery of the Non-renewal Notice to the expiration of the
Employment Term is referred to herein as the “Transition Period.”  If the Company delivers a Renewal Notice to
the Executive (i) the Employment Term shall automatically be extended for a
period of six (6) months and (ii) the Company and the Executive shall seek to
negotiate the terms of a new, mutually agreeable employment agreement.  Such six (6) month extension period, if (and
only if) applicable, is referred to herein as the “Extension Period,”
and during the Extension Period, if (and only if) applicable, all references
herein to the Employment Term shall include the Extension Period.

2.             Duties,
Responsibilities and Positions.

(a)           During
the Employment Term, the Executive shall serve as Senior Vice President—Merchandising
of the Company and perform all duties and accept all responsibilities
incidental to such position, as may be assigned to her from time to time.  The Executive shall be subject at all times
to the general supervision, orders, advice and direction of the Chief Executive
Officer of the Company.  The Executive
shall also cooperate fully with the Board of Directors of the Company (the “Board”)
and other executive officers of the Company.

(b)           Upon
termination of the Executive’s employment for any reason, the Executive shall
be deemed to have resigned from any other office or offices within the Company
and any subsidiary of the Company that the Executive may then hold.

(c)           During
the Employment Term, the Executive shall devote substantially all her full
working time, energy and efforts to the business of the Company; provided,
however, that the Executive shall be allowed, to the extent that such
activities do not materially interfere with the performance of her duties and
responsibilities hereunder, to manage her personal and family financial and
legal affairs and to serve on civic, not-for-profit and charitable industry
boards and advisory committees.  The
Executive shall only serve on for-profit corporate boards of directors and
advisory committees if approved in advance, in writing, by the Chief Executive
Officer or the Board.

(d)           The
Executive represents to the Company that 
(i) the Executive has the legal
capacity to execute and perform this Agreement and (ii) that she is not
currently subject to or bound by any employment agreement, non-competition
covenant, non-disclosure agreement or other agreement, covenant, understanding
or restriction of any nature whatsoever which would prohibit the Executive from
executing this Agreement and performing fully her duties and responsibilities
hereunder, or which would in any manner, directly or indirectly, materially
limit the duties and responsibilities which it is now reasonably foreseeable
may now or in the future be assigned to the Executive by the Chief Executive
Officer or the Board.

(e)           The
Executive shall at all times comply in all material respects with policies and
procedures adopted by the Company applicable to executives of the Company,
including without limitation, procedures and policies regarding conflicts of
interest.

3.             Compensation.  For all services rendered by the Executive in
any capacity during the Employment Term, including without limitation, services
as an officer, director, or member of any committee of the Company, or any
subsidiary, affiliate or division thereof, the Executive shall be compensated
as follows (subject, in each case, to the provisions of Section 11
below):

(a)           Base
Salary.  During the Employment Term,
the Company shall pay to the Executive a base salary on an annualized basis
(the “Base Salary”) as follows: (i) for the period from April 1, 2007
through March 31, 2008, $187,500; (ii) for the period from April 1, 2008
through March 31, 2009, $195,000; and (iii) for the period from April 1, 2009
through March 31, 2010, $202,500.  The
term “Base Salary” as used in this Agreement shall refer to Base Salary in
effect for the applicable period set forth in the immediately preceding
sentence.  The Base Salary shall be
payable in accordance with the customary payroll practices of the Company. If,
during the Employment Term, the Company consummates any material acquisitions
or similar transactions which increase the size and scope of the Company’s business,
the Compensation Committee of the Board shall convene as promptly as reasonably
practicable for the purpose of discussing whether or not it is appropriate to
increase the Executive’s Base Salary; provided, however, that no
such increase shall be required.

(b)           Bonus.  In addition to the Base Salary provided
herein, the Executive shall be entitled to participate in, and may receive
performance bonus payments under, 

 2
 

such annual bonus plan or plans as the
Compensation Committee of the Board may establish from time to time for senior
executive officers of the Company.  Any
such performance bonus or bonuses shall be determined in the sole discretion of
the Compensation Committee of the Board. Without limiting the generality of the
foregoing, such performance bonus or bonuses, if paid, may be paid in stock,
stock options, restricted stock, cash, or any combination thereof.

(c)           Benefits.  During the Employment Term, the Executive
shall be entitled to participate in all employee benefit and equity plans and
fringe benefits and prerequisites generally provided to senior executives of
the Company, in each case subject to the eligibility requirements and other
terms and provisions of such plans and programs.  The Company may amend, modify or rescind any
employee benefit plan or program and change employee contribution amounts or
benefit costs without notice in its discretion.

4.             Stock Options
Matters.  On June 6, 2007,
provided the Executive is then employed by the Company, the Company will grant
the Executive Incentive Stock Options (the “Options”) for an aggregate
of 150,000 shares of common stock of the Company, at an exercise price equal to
the closing price of the common stock on such date, pursuant to the Company’s
Amended and Restated 1998 Incentive and Nonqualified Stock Option Plan (the “Plan”).  The Options shall vest as follows: options
for 50,000 shares shall vest on March 31, 2008, provided the Executive remains
continuously employed by the Company through March 31, 2008; options for an
additional 50,000 shares shall vest on March 31, 2009, provided the Executive
remains continuously employed by the Company through March 31, 2009; and
options for the final 50,000 shares shall vest on March 31, 2010, provided the
Executive remains continuously employed by the Company through March 31,
2010.  The Options shall be subject to
the terms of the Plan and the terms and conditions of the Company’s standard
form of option grant agreement to be entered into between the Company and the
Executive as a condition to the grant of the options.

5.             Expenses; Vacations.  The Executive shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses
necessarily incurred in the performance of her duties hereunder, upon
submission and approval of written statements and bills in accordance with the
then regular procedures of the Company. 
The Executive shall be entitled to four weeks paid vacation per calendar
year, with such vacation to be scheduled and taken in accordance with the
Company’s standard vacation policies.  Up
to two (2) weeks accrued but unused vacation time may be carried forward from
year to year; provided, however, in no event shall more than an
aggregate of six (6) weeks of unused vacation time be accrued during the
Employment Term.

6.             Representations
and Warranties of the Company. 
The Company represents and warrants to, and agrees with, the Executive
that (i) pursuant to the Delaware General Corporation Law, the Company’s
Certificate of Incorporation, as amended to date (the “Charter”),
provides for indemnification of officers and directors of the Company and that
so long as the Executive serves as an executive officer of the Company, unless
required by applicable law the Charter will not be amended to limit such
indemnification without the written consent of the Executive and (ii) the
Company maintains an officers and directors liability insurance policy which
insures the Executive (subject to the limitations contained therein) and will
maintain such a policy for so long as the Executive serves as an executive
officer of the Company.

 3
 

7.             Developments.  All developments, including inventions,
whether patentable or otherwise, trade secrets, discoveries, improvements,
ideas and writings which relate to or may be useful in the business of the
Company, and which the Executive, either by herself or in conjunction with any
other person or persons, has conceived, made, developed, acquired or acquired
knowledge of while engaged in any activity on behalf of or while acting for the
Company during the course of her employment by the Company (the “Developments”),
shall, on and after the start of the Employment Term, become the sole and
exclusive property of the Company.  The
Executive hereby assigns, transfers and conveys, and agrees to so assign, transfer
and convey to the Company, all of her right, title and interest in and to any
and all such Developments and to disclose in writing to the Board, as soon as
practicable, all Developments that she believes in her good faith judgment may
be of material significance to the Company, and to reduce any such Developments
to writing at the request of Board if she has not already done so.  At any time, and from time to time, upon the
request and at the expense of the Company, the Executive will execute and deliver
any and all instruments, documents and papers, give evidence and do any and all
other acts which, in the reasonable opinion of counsel for the Company, are or
may reasonably be necessary or desirable to document such transfer or to enable
the Company to file and prosecute applications for and to acquire, maintain and
enforce any and all patents, trademark registrations or copyrights under United
States or foreign law with respect to any such Developments or to obtain any
extension, validation, reissue, continuance or renewal of any such patent,
trademark or copyrights; provided only that any such actions requested
following termination of employment shall not unreasonably interfere with
Executive’s then employment, business or other activities.  The Company will be responsible for the
preparation of any such instruments, documents and papers and for the
prosecution of any such proceedings and will reimburse the Executive for all
reasonable expenses incurred by her in compliance with the provisions of this Section
7.  The Developments shall not
include any knowledge or information of any kind acquired by or disclosed to
the Executive while serving in her capacity as a member of the board of
directors of any non-Company entity, in her capacity as a private investor, or
in any other circumstance during which the Executive is not or was not engaged
in any activity on behalf of or acting for the Company.  Furthermore, nothing herein shall preclude
Executive from utilizing Developments applicable to retailing generally
(whether from stores, via catalog, via e-commerce or otherwise) following
termination of employment, subject always to the provisions of Section 8
below.

8.             Non-Competition
and Non-Solicitation.

(a)           Non-Competition.  The Executive agrees that the Executive will
not, during the “Restrictive Period”, as defined below, engage in, or otherwise
directly or indirectly be employed by, or act as a consultant or lender to, or
be a director, officer, employee, owner, co-venturer, member or partner of, or
use or expressly permit the Executive’s name to be used by (collectively an “Engagement
With”), any business, entity or organization which has a primary line of
business (i.e. representing more than 4.9% of its revenue) involving the sale
at retail, whether from store locations, and/or by or from direct mail,
catalogues and/or websites, of party goods and/or supplies anywhere in the
United States (a “Competing Entity”); provided, however,
that in each case the provisions of this Section 8(a) will not be deemed
breached merely because the Executive owns not more than five percent (5.0%) of
the outstanding common stock of a Competing Entity, if, at the time of its
acquisition by the Executive, such

 4
 

stock is listed on a national securities exchange, is reported on NASDAQ,
or is regularly traded in the over-the-counter market by a member of a national
securities exchange; and provided, further, however, that,
subject to the provisions of Section 8(b), nothing herein shall prevent
the Executive from working for a business segment or department of a Competing
Entity, or a subsidiary, division or other entity that controls or is
controlled by a Competing Entity if (and only if), the business segment or
department of the Competing Entity for which the Executive provides services,
or the subsidiary, division or other entity by which the Executive has an
Engagement With (as the case may be), (1) does not itself compete with the
Company, and (2) the Executive does not provide any services, advice,
assistance and/or guidance to any business segment or department, subsidiary,
division, or other entity of the Competing Entity which competes with the
Company.  As used in this Section the “Restrictive
Period” shall be (i) the period the Executive is employed by the Company
and (ii) the period of one (1) year after the Executive ceases to be employed
by the Company for any reason, or, in the case of the Executive’s Engagement
With any Competing Entity that operates retail stores which are located in any
states where the Company has retail stores on the date of the Executive’s
cessation of employment, the period of eighteen (18) months period after the
Executive ceases to be employed by the Company for any reason.

(b)           Non-Solicitation.
During the Restrictive Period, the Executive will not, either directly or
indirectly, (i) call on or solicit (for the purpose of diverting business from
the Company) any person, firm, corporation or other entity who or which at the
time of such termination was, or within one (1) year prior thereto had been, a
customer of the Company or (ii) solicit the employment of any person (other
than any family member) who was employed the Company on a full or part-time
basis at any time during the six (6) months prior to the termination of
Executive’s employment, unless such person prior to such solicitation of
employment was involuntarily discharged by the Company.

9.             Confidential
Information.  The Executive
recognizes and acknowledges that by reason of her employment by and service to
the Company, she has had and will have access to confidential information of
the Company and its affiliates, including without limitation, information and
knowledge pertaining to products and services offered, ideas, plans, trade
secrets, proprietary information, advertising, distribution and sales methods
and systems, sales and profit figures, customer and client lists, and
relationships between the Company and its customers, clients, suppliers and
others who have business dealings with the Company (collectively, “Confidential
Information”).  The Executive
acknowledges that such Confidential Information is a valuable and unique asset
and covenants that she will not, either during or at any time after the end of
the Employment Term, use or disclose any such Confidential Information to any
person or entity for any reason whatsoever (except as her duties described
herein may require) without the prior authorization of the Board, unless such
information is in or enters the public domain through no fault of the Executive
or is otherwise lawfully known by third parties.  In the event the Executive becomes or may
become legally compelled to disclose any Confidential Information (whether by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or other process or otherwise), the Executive shall provide to the Board
prompt prior written notice of such requirement so that the Company may seek a
protective order or other appropriate remedy and/or waive compliance with the
terms of this Section 9.  In the
event that such protective order or other remedy is not obtained, or that the

 5
 

Company waives
compliance with the provisions this Section 9, the Executive shall
furnish only that portion of the Confidential Information which it is advised
by counsel is legally required to be disclosed, and shall use her best efforts
to insure that confidential treatment shall be afforded such disclosed portion
of the Confidential Information.

10.           Equitable
Relief.

(a)           The
Executive acknowledges that the restrictions contained in Sections 7, 8 and
9 hereof are reasonable and necessary to protect the legitimate interests
of the Company, that the Company would not have entered into this Agreement in
the absence of such restrictions, and that any violation of any provision of
those Sections will result in irreparable injury to the Company.  The Executive represents that her experience
and capabilities are such that the restrictions contained in Section 8
hereof will not prevent the Executive from obtaining employment or otherwise
earning a living at the same general level of economic benefit as is
anticipated by this Agreement.  THE  EXECUTIVE FURTHER
REPRESENTS AND ACKNOWLEDGES THAT (i) SHE HAS BEEN ADVISED BY THE COMPANY TO
CONSULT HER OWN LEGAL COUNSEL IN RESPECT OF THIS AGREEMENT, (ii) THAT SHE HAS
HAD FULL OPPORTUNITY, PRIOR TO EXECUTION OF THIS AGREEMENT, TO REVIEW
THOROUGHLY THIS AGREEMENT WITH HER COUNSEL, AND (iii) SHE HAS READ AND FULLY
UNDERSTANDS THE TERMS AND PROVISIONS OF THIS AGREEMENT.

(b)           The
Executive agrees that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages,
as well as an equitable accounting of all earnings, profits and other benefits
arising from any violation of Sections 7, 8 or 9 hereof, which rights
shall be cumulative and in addition to any other rights or remedies to which
the Company may be entitled.  In the
event that any of the provisions of Sections 7, 8 or 9 hereof should
ever be adjudicated to exceed the time, geographic, product or service, or
other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, product or service, or other limitations permitted by applicable
law.

(c)           The
Company and the Executive each irrevocably and unconditionally (i) agree that
any suit, action or other legal proceeding arising out of this Agreement,
including without limitation, any action for preliminary or permanent
injunctive relief or other equitable relief, may be brought in the United
States District Court for the Eastern District of Massachusetts, or if such
court does not have jurisdiction or will not accept jurisdiction, in any court
of general jurisdiction in the Commonwealth of Massachusetts, (ii) consent to
the non-exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (iii) waive any objection which such party may have to the
laying of venue of any such suit, action or proceeding in any such court.  The Company and the Executive each also
irrevocably and unconditionally consent to the service of any process,
pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 15 hereof.

(d)           The
Executive agrees that she will provide a copy of Sections 7, 8 and 9 of
this Agreement to any for-profit business or enterprise (i) which she may
directly or indirectly own, manage, operate, finance, join, participate in the
ownership, management, 

 6
 

operation, financing, control or control of,
or (ii) with which she may be connected with as an officer, director, employee,
partner, principal, agent, representative, or consultant, or in connection with
which she may use or expressly permit her name to be used; provided, however,
that this provision shall not apply in respect of Section 8 of this
Agreement after expiration of the time periods set forth therein.

11.           Termination.

(a)           Cause.  Notwithstanding anything herein contained, if
on or after the date hereof and prior to the end of the Employment Term, the
Executive is terminated “For Cause” (as defined below) then the Company
shall have the right to give notice of termination of the Executive’s services
hereunder as of a date to be specified in such notice, and the Employment Term
shall terminate on the date so specified. 
Termination “For Cause” shall mean the Executive shall (i) be
charged with the commission of a felony crime; (ii) commit any act or omit to
take any action in bad faith and to the detriment of the Company; (iii)
intentionally fail to follow any commercially reasonable and lawful direction
of the Chief Executive Officer or the Board and continue to fail to follow such
direction within ten (10) days of written notification of same; (iv) commit an
act of fraud against the Company; (v) knowingly provide materially false
information concerning the Company to the Board, any governmental body, any
regulatory agency, any lender or other financing source of the Company, or any
shareholder of the Company; or (vi) breach any term of this Agreement and fail
to correct such breach within ten (10) days after written notice of commission
thereof.  In the event that this
Agreement is terminated “For Cause” pursuant to this Section 11(a), then
the Executive shall be entitled to receive only the Base Salary at the rate
provided in Section 3(a) to the date on which termination shall take
effect, any accrued vacation and unpaid expenses as contemplated under Section
5, and (iii) any performance bonus earned and unpaid for any prior plan
periods and, if applicable under any performance bonus plan for the year of
termination, the amount, if any, earned thereunder to the date of termination
(collectively, “Accrued Bonus Payments”).

(b)           Disability.  In the event of the Disability of the
Executive, as defined below, then Executive or the Company may terminate the
Executive’s employment hereunder upon thirty (30) days’ written notice to the
other.  In the event of termination as a
result of Executive’s Disability, no further compensation shall be payable to
the Executive, except that the Company shall pay or provide: (i) any accrued
and unpaid Base Salary as contemplated under Section 3(a) up to the
effective date of termination of employment, (ii) any accrued vacation and
unpaid expenses as contemplated under Section 5, (iii) any Accrued Bonus
Payments, (iv) the Executive’s benefits set forth in Section 3(c), or
comparable benefits, for a period of six (6) months from such date of
termination and (v) make severance payments to the Executive for a period of
six (6) months following her date of termination in an amount equal to the Base
Salary, as in effect as of such date of termination less the total amount of
disability benefits, if any, payable to the Executive under any disability plan
or policy maintained by the Company.

As used hereunder, “Disability” shall
mean (A) the inability of the Executive to engage in any substantial gainful
employment activity on behalf of the Company, with or without reasonable
accommodation, as that term is defined under applicable state or federal law,
by reason of any medically determinable physical or mental impairment (1) that
can be expected to

 7
 

result in death or to last for a continuous period of not less than 12
months; or (2) that can be expected to result in death or to last for a
continuous period of not less than 12 months and the Executive is receiving
income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering the Company’s employees; or (B) the
Executive shall be determined to be totally disabled  by the U.S. Social Security Administration (“SSA”).  A determination of Disability (other than a
determination by the SSA) shall be made by a physician satisfactory to both the
Executive and the Company; provided, that, if the Executive and
the Company do not agree on a physician, the Executive and the Company shall
each select a physician and these two together shall select a third physician,
whose determination as to disability shall be binding on all the parties to
this Agreement.

(c)           Death.  In the event that the Executive shall die,
then her employment shall terminate on the date of her death, and no further
compensation shall be payable to the Executive, except for any accrued and
unpaid Base Salary as contemplated under Section 3(a), any accrued
vacation and unpaid expenses as contemplated under Section 5, any
Accrued Bonus Payments and as may otherwise be provided under any insurance
policy or similar instrument.

(d)           Expiration.  This Agreement shall automatically terminate
upon the expiration of the Employment Term and upon such expiration, the
following payment provisions shall apply:

(i)            In the event that
the Company delivers a Non-renewal Notice, upon expiration of the Employment
Term, no further compensation shall be payable to the Executive, except for (1)
any accrued and unpaid Base Salary though the effective date of such
termination as contemplated under Section 3(a), (2) any accrued vacation
and unpaid expenses as contemplated under Section 5, and (3) any Accrued
Bonus Payments.  In addition, subject to
the provisions of Section 11(i) hereof and the Executive’s compliance
(and continued compliance) with the provisions of Sections 7, 8 and 9
hereof, (Y) the Company shall pay to the Executive a severance payment equal to
six (6) months salary at the Base Salary then in effect, payable in six (6)
equal monthly installments and (Z) for such six (6) month period, the Executive
shall be entitled to continue to receive her then current health, life and
disability insurance benefits or, in the case of health insurance benefits,
payment by the Company of applicable “COBRA” payments.

(ii)           In the event that
the Company delivers a Renewal Notice, upon expiration of the Extension Period
no further compensation shall be payable to the Executive, except for (1) any
accrued and unpaid Base Salary though the effective date of such termination as
contemplated under Section 3(a), (2) any accrued vacation and unpaid
expenses as contemplated under Section 5, and (3) any Accrued Bonus Payments.  For the avoidance of doubt, the termination
of this Agreement upon the expiration of the Extension Period shall not be
deemed a termination without cause pursuant to Section 11(e) and the
Executive shall not be entitled to receive any severance or similar payment or
benefit provided for in Section 11(e) upon expiration of the Extension
Period.

(e)           Termination
Without Cause.  In the event that the
Company

 8
 

terminates the Executive for any reason other
than as provided under Section 11(a), 11(b), 11(c) or 11(d), then the
Executive’s employment shall terminate upon thirty (30) days’ written notice to
the Executive and, the Company shall be obligated to pay to the Executive Base
Salary earned, but not yet paid to the Executive, prior to the date of such termination
in accordance with Section 3(a), and reimburse the Executive for any
accrued vacation and unpaid expenses incurred by the Executive through the date
of termination in accordance with Section 5, and any Accrued Bonus
Payments.  In addition, subject to the
provisions of Section 11(i) hereof and the Executive’s compliance (and
continued compliance) with the provisions of Sections 7, 8 and 9 hereof,
(i) the Company shall pay to the Executive a severance payment equal to twelve
(12) months salary at the Base Salary as then in effect, payable in twelve (12)
equal monthly installments and (ii) for such twelve (12) month period, the
Executive shall be entitled to continue to receive her then current health,
life and disability insurance benefits or, in the case of health insurance
benefits, payment by the Company of applicable “COBRA” payments (collectively
(i) and (ii) are called the “Severance Payments”).

(f)            Change
of Control. Subject to the provisions of Sections 11(i) and 11(j),
in the event that Company shall terminate this Agreement and the Executive’s
employment hereunder pursuant to the provisions of Section 11(e) within
thirteen (13) months following a Change in Control (as defined below) or the
Executive shall terminate this Agreement and the Executive’s employment
hereunder for Good Reason (as defined in Section 11(h)) within thirteen
(13)  months
following a Change in Control, then, in lieu of (and not in addition to) the
amounts to be paid (and benefits to be provided) by the Company pursuant to Section
11(e) or Section 11(h), the Company shall have no further
obligations under this Agreement to the Executive other than the obligation to:
(i) pay to the Executive Base Salary earned, but not yet paid to the Executive,
prior to the date of such termination in accordance with Section 3(a),
(ii) reimburse the Executive for any accrued vacation and unpaid expenses
incurred by the Executive through the date of termination in accordance with Section
5, and pay any Accrued Bonus Payments and (iii)  subject to the provisions of Sections
11(i) and 11(j), pay to the Executive a lump sum amount equal to eighteen
(18) months of the Executive’s Base Salary, as then in effect. In addition, for
the twelve (12) month period following the date of such termination, the
Executive shall be entitled to continue to receive her then current health,
life and disability insurance benefits or, in the case of health insurance
benefits, payment by the Company of applicable “COBRA” payments.

As used in this Agreement, “Change
in Control” shall mean the occurrence
of any one of the following events:

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

 9
 

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

(iii)          the Company executes an agreement of
sale, merger or consolidation which contemplates that (x) after the effective
date provided for in such agreement, all or substantially all of the business
and/or assets of the Company shall be owned, leased or otherwise controlled by
another Person and (y) individuals who are directors of the Company when such
agreement is executed shall not constitute at least 1⁄2 of the board of directors
of the survivor or successor entity immediately after the effective date
provided for in such agreement; provided, however, that for
purposes of this paragraph (iii), if such agreement requires as a condition
precedent approval by the Company’s shareholders of the agreement or
transaction, a Change of Control shall not be deemed to have taken place unless
and until such approval is secured (but upon any such approval, a Change of
Control shall be deemed to have occurred on the effective date of such
agreement).

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

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

(g)           Termination
by Executive.  In the event that the
Executive desires to resign voluntarily as Senior Vice President—Merchandising,
the Executive covenants to provide the Company with not less than ninety (90)
days written notice of any such voluntary resignation; and further the
Executive covenants to cooperate in good faith in order to facilitate a smooth
transfer of authority during the period from notice of resignation to the date
of termination.  In the event that the
Executive’s employment is terminated by the Executive pursuant to this Section
11(g), then the Executive shall be entitled to receive an amount payable in
a lump sum within ten (10) business days following the date of termination,
equal to the sum of any accrued and unpaid Base Salary as contemplated by Section
3(a), and any accrued vacation and unpaid expenses as contemplated by Section
5 and any Accrued Bonus Payments.

(h)           Good
Reason.  The Executive may, upon
thirty (30) days written notice, terminate her employment with the Company for “Good
Reason”.  “Good Reason” shall mean
any material breach by the Company of its obligations hereunder which are not
cured within ten (10) days following receipt of written notice from the
Executive detailing such breach.  The
parties agree that a material breach shall mean (x) any material reduction in
the Executive’s duties, authority, reporting relationships or responsibilities
(whether or not accompanied by a title change) not consented to by the
Executive, and (y) the relocation of the principal executive offices of the
Company a distance of more than 35 miles from its current location not consented

 10
 

to by the Executive. 
Notwithstanding the foregoing or anything to the contrary contained
herein, the Executive shall not be entitled to terminate her employment for “Good
Reason” at any time during the Extension Period or the Transition Period, for
any reason.  In the event that the
Executive terminates this Agreement for Good Reason, the Company shall be
obligated to pay to the Executive Base Salary earned, but not yet paid to the
Executive, prior to the date of such termination in accordance with Section
3(a), reimburse the Executive for any accrued vacation and unpaid expenses
incurred by the Executive through the date of termination in accordance with Section
5 and pay any Accrued Bonus Payments. 
In addition, subject to the provisions of Section 11(i) hereof,
and the Executive’s compliance (and continued compliance) with the provisions
of Sections 7, 8 and 9 hereof, the Company shall pay and provide to the
Executive the Severance Payments.

(i)            Release.  Notwithstanding anything to the contrary
contained in this Agreement, the Executive (or her estate) shall not be
entitled to receive the payments and benefits set forth in this Section 11
(other than Base Salary through the effective date of termination in accordance
with Section 3(a) hereof and reimbursement of expenses in accordance
with Section 5) prior to (i) the execution and delivery by the Executive
to the Company of a  valid and fully
effective general release and nondisparagement agreement (in form and substance
reasonably satisfactory to the Company) of all claims, including but not
limited to the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, which the Executive might have at such time against the
Company and (ii) the resignation of the Executive from all positions of any
nature which the Executive may then have held with the Company and any
subsidiary of the Company.

(j)            Limitation
as to Amounts Payable. 
Notwithstanding any provision of this Agreement to the contrary
(including without limitation the provisions of Section 11(f)), if all
or any portion of the amounts to be paid to the Executive under this Agreement
otherwise would be a “parachute payment,” as defined in section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the “Code”) and the
Treasury Regulations thereunder, the aggregate present value of the total
amounts to be paid to the Executive under this Agreement shall be limited to an
amount that is less than three times the Executive’s “annualized includible
compensation for the base period,” as defined in section 280G(d) of the Code
and any Treasury Regulations thereunder; provided, however, that
in no event shall the amount payable under this Agreement be reduced pursuant
to this Section 11(j) to less than the maximum amount that may be paid
to the Executive without causing any portion of such amount to become
nondeductible under section 280G of the Code and subject to the excise tax
imposed by section 4999 of the Code.  The
determination of the Executive’s “annualized includible compensation for the
base period” and the deductibility of payments made pursuant to this Agreement
shall be made by the independent outside accounting firm regularly retained by
the Company.  For purposes of this Section
11(j), “present value” shall be determined in accordance with section 280G
of the Code and the Treasury Regulations thereunder.

(k)          
Coordination with Section 409A of the Code.  Notwithstanding anything to the contrary set
forth in this Section 11, in the event that the Executive is determined to be a
“key employee” as defined by Section 416(i) of the Code (without regard to
paragraph 5), to the extent necessary to comply with the provision of Section
409A of the Code, and the Treasury Regulations thereunder,  any payments or distributions due the Executive under this 

 11
 

Agreement as a result of or following any separation from service shall
not be made before the date which is 6 months after the date of separation from
service (or if earlier, the date of death of the Executive).

12.           Survival.
Except as otherwise provided in this Agreement, notwithstanding the termination
of this Agreement or the Executive’s employment for any reason, the Executive’s
obligations under Sections 2(b), 7, 8 and 9 hereof shall survive and
remain in full force and effect for the periods therein provided, and the
provisions for equitable relief against the Executive in Section 10
hereof shall continue in force, along with the provisions of Sections 12
through 20 hereof.  In addition, the
obligations of the Company set forth in Section 11 shall survive any
termination (as applicable) and shall remain in full force and effect until
such obligations are satisfied in full (subject, as applicable, to the
Executive’s compliance with the provisions of Section11(i)).

13.           Assignment.  All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto, except that the duties and
responsibilities of the Executive hereunder are of a personal nature and shall
not be assignable or delegatable in whole or in part by the Executive.

14.           Modification.  This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.

15.           Notices.  All notices and other communications required
or permitted hereunder or necessary or convenient in connection herewith shall
be in writing and shall be deemed to have been given when hand delivered or
three (3) days after being mailed by registered or certified mail, as follows
(provided that notice of change of address shall be deemed given only when
received):

If
to the Company:

 

iParty
Corp.

270
Bridge Street

Suite
301

Dedham,
MA 02026

Attn:
Corporate Secretary

 

With
a required copy to:

 

Chairman
of the Compensation Committee

of
the Board of Directors

c/o
iParty Corp.

270
Bridge Street

Dedham,
MA 02026

 12
 

If
to the Executive:

 

Dorice
Dionne

288
Huron Avenue

Cambridge, MA 02138

16.           Remedies
Cumulative; No Waiver.  No
remedy conferred upon the Company by this Agreement is intended to be exclusive
of any other remedy, and each and every such remedy shall be cumulative and
shall be in addition to any other remedy given hereunder or now or hereafter
existing at law or in equity.  No delay
or omission by the Company in exercising any right, remedy or power hereunder
or existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the Company from time to time
and as often as may be deemed expedient or necessary by the Company in its sole
discretion.

17.           Binding
Effect.  The Executive’s
rights and obligations under this Agreement shall not be transferable by
assignment or otherwise, such rights shall not be subject to encumbrance or the
claims of the Executive’s creditors, and any attempt to do any of the foregoing
shall be void.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the Executive and
her heirs and personal representatives, and shall be binding upon and inure to
the benefit of the Company and its successors and those who are its assigns
under Section 13.

18.           Entire
Agreement; Contents of Agreement.

(a)           Effective
April 1, 2007, this Agreement supersedes all prior agreements in their
entirety, including without limitation the Prior Employment Agreement, and sets
forth the entire understanding among the parties hereto with respect to the
subject matter hereof.  This Agreement
cannot be changed, modified, extended or terminated except upon written
amendment executed by the Executive and approved by the Board and executed on
behalf of the Company by a duly authorized officer.  The Executive acknowledges that the effect of
this provision is that no oral modifications of any nature whatsoever to this
Agreement shall be permitted.

(b)           The
Executive acknowledges that from time to time, the Company may establish,
maintain and distribute manuals or handbooks or personnel policy manuals, and
officers or other representatives of the Company may make written or oral
statements relating to personnel policies and procedures.  Such manuals, handbooks and statements are
intended only for general guidance.  No
policies, procedures or statements of any nature by or on behalf of the Company
(whether written or oral, and whether or not contained in any manual or
handbook or personnel policy manual), and no acts or practices of any nature,
shall be construed to modify this Agreement or to create express or implied
obligations of any nature to the Executive.

19.           Headings.  The headings in this Agreement are solely for
the convenience of reference and shall be given no effect in the construction
or interpretation of this Agreement.

 13
 

20.           Counterparts;
Governing Law.  This Agreement
may be executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  It shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts,
without giving effect to the rules governing the conflicts of laws.

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

	
  

  	
   

  	
  iPARTY CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
  /s/ PATRICK
  FARRELL

  	
   

  
	
   

  	
   

  	
  Name:  Patrick Farrell

  
	
   

  	
   

  	
  Title:    President
  and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ DORICE
  DIONNE

  	
   

  
	
   

  	
   

  	
  Dorice Dionne

  

 

 14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]