Document:

Ratification Agreement

 Exhibit 10.1 
 RATIFICATION AND AMENDMENT AGREEMENT 
 This RATIFICATION AND AMENDMENT
AGREEMENT (this “Ratification Agreement”), dated as of December 15, 2011, is by and among Wells Fargo Bank, N.A., in its capacity as agent (in such capacity, “Agent”) acting for and on behalf of
the financial institutions from time to time party to the Loan Agreement (as defined below) as lenders (collectively with Agent, the “Lenders”), the Lenders, RoomStore Inc., a Virginia corporation, as Debtor and
Debtor-in-Possession (“Borrower” or “Debtor”), and Mattress Discounters Group, LLC, a Virginia limited liability company (“Guarantor”). 

W I T N E S S E T H: 

WHEREAS, Borrower has commenced a case under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for
the Eastern District of Virginia, and Borrower has retained possession of its assets and is authorized under the Bankruptcy Code (as defined below) to continue the operation of its businesses as a debtor-in-possession; 

WHEREAS, prior to the commencement of the Chapter 11 Case (as defined below), Agent and Lenders made loans and advances and provided
other financial or credit accommodations to Borrower secured by substantially all assets and properties of Borrower as set forth in the Existing Loan Documents (as defined below); 

WHEREAS, the Bankruptcy Court (as defined below) has entered a Financing Order (defined below) pursuant to which Agent and Lenders may
make post-petition loans and advances, and provide other financial accommodations, to Borrower secured by substantially all the assets and properties of Borrower as set forth in the Financing Order and the Loan Documents (as defined below);

 WHEREAS, the Financing Order provides that as a condition to the making of such post-petition loans, advances and other
financial accommodations, Borrower shall execute and deliver this Ratification Agreement; 
 WHEREAS, in order to induce Agent
and Lenders to make such post-petition loans and advances to Borrower, and in consideration of the agreements and covenants of Agent and Lenders contained in this Ratification Agreement, Guarantor has agreed to guarantee the prompt payment and
performance of all Liabilities and to secure such guarantee by granting to Agent, for the benefit of itself and Lenders, a security interest in and lien upon substantially all assets of Guarantor as set forth in the Guarantor Documents (as defined
below); 
 NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Agent, Lenders, Borrower and Guarantor mutually covenant, warrant and agree as follows: 

 1. DEFINITIONS. 

1.1 Additional Definitions. As used herein, the following terms shall have the respective meanings given to them below and the
Loan Agreement and the other Loan Documents shall be deemed and are hereby amended to include, in addition and not in limitation, each of the following definitions: 
 (a) “Bankruptcy Court” shall mean the United States Bankruptcy Court or the United States District Court for the Eastern District of Virginia. 

(b) “Chapter 11 Case” shall mean the Chapter 11 case of Borrower which is being administered under the
Bankruptcy Code and is pending in the Bankruptcy Court. 
 (c) “Bankruptcy Code” shall
mean the United States Bankruptcy Code, being Title 11 of the United States Code as enacted in 1978, as the same has heretofore been or may hereafter be amended, recodified, modified or supplemented, together with all rules, regulations and
interpretations thereunder or related thereto. 
 (d) “Existing Defaults” shall mean
collectively, (i) any Event of Default under Section 10.6(e)(ii) of the Loan Agreement due to the occurrence prior to the Petition Date of any event of default under any Lease, (ii) any Event of Default under Section 10.6(e)(i) of the
Loan Agreement due to the occurrence prior to the Petition Date of a default under more than five (5) Leases of retail stores, (iii) any Event of Default under Section 10.11 of the Loan Agreement due to any failure of Borrower prior
to the Petition Date to generally pay its debts as they mature, (iv) any Event of Default arising under Section 10.10 or 10.11 of the Loan Agreement solely as a result of the commencement of the Chapter 11 Case and (v) any Event of
Default existing as of the Petition Date under the Loan Agreement. 
 (e) “Existing Loan
Documents” shall mean the Loan Documents (as defined in the Existing Loan Agreement), in each instance, as in effect immediately prior to the Petition Date. 

(f) “Existing Loan Agreement” shall mean the Loan and Security Agreement, dated as of May 27,
2010, by and among Borrower, Agent and Lenders, as in effect immediately prior to the Petition Date. 
 (g)
“Financing Order” shall mean the Interim Financing Order and, as applicable, the Permanent Financing Order. 
 (h) “Guarantor” shall mean Mattress Discounters Group, LLC, a Virginia limited liability company, together with its successors and assigns. 

(i) “Guarantor Documents” shall mean, collectively, (i) the Guarantee, dated on or about the
date of the Ratification Agreement, by Guarantor in favor of Agent and Lenders with respect to all Liabilities of Borrower, and (ii) the General Security Agreement, dated on or about the date of the Ratification Agreement, by Guarantor in favor
of Agent and Lenders, in each instance, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 

  
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 (j) “Interim Financing Order” shall mean an Order of
the Bankruptcy Court, in form and substance satisfactory to Agent, authorizing the granting of credit by Agent and Lenders to Borrower on an emergency or interim basis pursuant to Section 364 of the Bankruptcy Code in accordance with the terms
of the Ratification Agreement and the other Loan Documents. 
 (k) “MDG Collateral” shall
mean the Collateral as such term is defined in the Guarantor Documents. 
 (l) “Permanent Financing
Order” shall mean an Order of the Bankruptcy Court, in form and substance satisfactory to Agent, authorizing the granting of credit by Agent and Lenders to Borrower on a permanent basis pursuant to Section 364 of the Bankruptcy
Code in accordance with the terms of the Ratification Agreement and the other Loan Documents. 
 (m)
“Petition Date” shall mean the date of the commencement of the Chapter 11 Case. 
 (n)
“Post-Petition Collateral” shall mean, collectively, all now existing and hereafter acquired real and personal property of Borrower’s estate, wherever located, of any kind, nature or description, including
any such property in which a lien is granted to Agent and Lenders pursuant to the Loan Documents, the Financing Order or any other order entered or issued by the Bankruptcy Court, and shall include, without limitation: 

(i) all of the Pre-Petition Collateral; 
 (ii) all Accounts; 
 (iii) all General Intangibles, including, without
limitation, all intellectual property; 
 (iv) all goods, including, without limitation, all Inventory and all Equipment;

 (v) all Real Property and fixtures; 
 (vi) all Leaseholds; 
 (vii) all Chattel Paper, including, without limitation,
all tangible and electronic chattel paper; 
 (viii) all instruments, including, without limitation, all promissory notes;

 (ix) all documents; 
 (x) all deposit accounts; 

  
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 (xi) all letters of credit, banker’s acceptances and similar instruments and including
all letter-of-credit rights; 
 (xii) all supporting obligations and all present and future liens, security interests, rights,
remedies, title and interest in, to and in respect of Receivables and other Collateral, including, without limitation, (A) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit and credit and other
insurance related to the Collateral, (B) rights of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, (C) goods described in invoices, documents, contracts
or instruments with respect to, or otherwise representing or evidencing, Receivables or other Collateral, including returned, repossessed and reclaimed goods, and (D) deposits by and property of account debtors or other persons securing the
obligations of account debtors; 
 (xiii) all (A) investment property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements, commodity contracts or commodity accounts) and (B) monies, credit balances, deposits and other property of Borrower now or hereafter held or received by or in transit to Agent, any
Lender or their respective Affiliates or at any other depository or other institution from or for the account of Borrower, whether for safekeeping, pledge, custody, transmission, collection or otherwise; 

(xiv) all commercial tort claims; 
 (xv) all claims, rights, interests, assets and properties (recovered by or on behalf of Borrower or any trustee of Borrower (whether in the Chapter 11 Case or any subsequent case to which the Chapter 11
Case is converted), including, without limitation, all property recovered as a result of transfers or obligations avoided or actions maintained or taken pursuant to Sections 544, 545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code;

 (xvi) all books, records, and information relating to the Collateral and/or to the operation of the Borrower’s
business, and all rights of access to such books, records, and information, and all property in which such books, records, and information are stored, recorded, and maintained; and 

(xvii) all products and proceeds of the foregoing, in any form, including insurance proceeds and all claims against third parties for
loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the other Collateral. 
 Notwithstanding the foregoing, the “Post-Petition Collateral” shall not include the real property located at 1008 Highway 501, Myrtle Beach, South Carolina.

 (o) “Post-Petition Liabilities” shall mean all Liabilities (as defined in the Existing Loan
Agreement) arising on or after the Petition Date, and whether arising on or after the conversion or dismissal of the Chapter 11 Case, or before, during and after the confirmation of any plan of reorganization in the Chapter 11 Case, and whether
arising under or related to this Ratification Agreement, the Loan Agreement, the other Loan Documents, a Financing Order, by operation of law or otherwise, and whether incurred by Borrower as principal, surety, endorser, guarantor or otherwise and
including, without limitation, all principal, interest, financing charges, letter of credit fees, unused line fees, servicing fees, line increase fees, debtor-in-possession facility fees, early termination fees, other fees, commissions, costs,
expenses and attorneys’, accountants’ and consultants’ fees and expenses incurred in connection with any of the foregoing. 

  
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 (p) “Pre-Petition Collateral” shall mean,
collectively, (i) all “Collateral” as such term is defined in the Existing Loan Agreement as in effect immediately prior to the Petition Date and (ii) all other security for the Pre-Petition Liabilities as provided in the
Existing Loan Agreement and the other Existing Loan Documents immediately prior to the Petition Date. 
 (q)
“Pre-Petition Liabilities” shall mean all Liabilities (as such term is defined in the Existing Loan Agreement) arising at any time before the Petition Date, whether incurred by Borrower as principal, surety,
endorser, guarantor or otherwise and including, without limitation, all principal, interest, financing charges, letter of credit fees, unused line fees, servicing fees, line increase fees, early termination fees, other fees, commissions, costs,
expenses and attorneys’, accountants’ and consultants’ fees and expenses incurred in connection with any of the foregoing. 
 (r) “Ratification Agreement” shall mean this Ratification and Amendment Agreement by and among Borrower, Guarantor, Agent and Lenders, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 
 (s) “Special
Availability” shall mean $2,250,000; provided, that, (i) the Special Availability shall be reduced by $100,000 per week, commencing January 2, 2012 and on the Monday of each of the next eleven
(11) weeks thereafter, with the final such reduction under this clause (i) on Monday March 19, 2012 and (ii) from and after March 26, 2012, the Special Availability shall be $1,000,000. 

1.2 Amendments to Definitions. 
 (a) Budget. The definition of “Budget” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“Budget” shall mean the initial budget annexed as Exhibit A to the Ratification
Agreement, together with any subsequent or amended budget(s) thereto delivered to Agent and Lenders, in form and substance satisfactory to Agent, in accordance with the terms and conditions of the Ratification Agreement. 

(b) Test Period. The definition of “Test Period” in the Loan Agreement is hereby deleted in
its entirety and the following substituted therefor: 
 “Test Period” shall mean each
one week period covered by the Budget. 

  
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 (c) Base Margin. The definition of “Base Margin”
in the Loan Agreement is hereby amended to delete the reference to “Two Percent (2.0%)” and substitute “Three Percent (3.0%)” therefor. 
 (d) Borrowing Base. The definition of “Borrowing Base” in the Loan Agreement is hereby amended by deleting the period at the end of subsection (d) of such
definition and replacing it with the following: 
 “; plus (e) an amount equal to the Special
Availability, minus, without duplication, any Reserves maintained by Agent with respect to the MDG Collateral.” 
 (e)
Credit Card Advance Rate. The definition of “Credit Card Advance Rate” in the Loan Agreement is hereby amended to delete the reference to “eighty-five (85%) percent” and substitute
“ninety (90%) percent” therefor. 
 (f) Material Budget Deviation. The definition of
“Material Budget Deviation” in the Loan Agreement is hereby deleted in its entirety and replaced with the following: 
 “Material Budget Deviation” shall mean, with respect to any Test Period, if (i) the actual aggregate cash disbursements of Borrower during such Test Period
exceed one hundred ten (110%) percent of the projected aggregate cash disbursements during such Test Period as reflected in the Budget, (ii) the actual aggregate cash receipts of Borrowers during such Test Period are less than ninety
(90%) percent of the projected aggregate cash receipts during such Test Period as reflected in the Budget or (iii) the actual aggregate value (calculated at the lower of Cost or market) of the Eligible Inventory received by Borrower during
such Test Period is less than ninety (90%) percent of the value (calculated at the lower of Cost or market) of the Eligible Inventory projected to be received by Borrower during such Test Period as reflected in the Budget.” 

(g) Collateral. All references to the term “Collateral” in the Loan Agreement or the other
Loan Documents, or any other term referring to the security for the Pre-Petition Liabilities, shall be deemed, and each such reference is hereby amended to mean, collectively, the Pre-Petition Collateral, the Post-Petition Collateral and the MDG
Collateral. 
 (h) Loan Documents. All references to the term “Loan Documents” in
the Loan Agreement or the other Loan Documents shall be deemed, and each such reference is hereby amended, to include, in addition and not in limitation, this Ratification Agreement, the Guarantor Documents, the Financing Order and all of the
Existing Loan Documents, as ratified, assumed and adopted by Borrower pursuant to the terms hereof, as each of the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 

(i) Loan Agreement. All references to the term “Loan Agreement” in the Loan Agreement or
the other Loan Documents shall be deemed, and each such reference is hereby amended, to mean the Existing Loan Agreement, as amended by this Ratification Agreement and as ratified, assumed and adopted by Borrower pursuant to the terms hereof, as the
same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 

  
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 (j) Liabilities. All references to the term
“Liabilities” in the Loan Agreement, this Ratification Agreement or the other Loan Documents shall be deemed, and each such reference is hereby amended, to mean both the Pre-Petition Liabilities and the
Post-Petition Liabilities. 
 1.3 Interpretation. 

(a) For purposes of this Ratification Agreement, unless otherwise defined or amended herein, including, but not limited to, those terms
used or defined in the recitals hereto, all terms used herein shall have the respective meanings assigned to such terms in the Loan Agreement. 
 (b) All references to any term in the singular shall include the plural and all references to any term in the plural shall include the singular unless the context of such usage requires otherwise.

 (c) All terms not specifically defined herein which are defined in the Uniform Commercial Code, as in effect in the State of
New York as of the date hereof, shall have the meaning set forth therein, except that the term “Lien” or “lien” shall have the meaning set forth in § 101(37) of the Bankruptcy Code. 

2. ACKNOWLEDGMENT. 
 2.1 Pre-Petition Liabilities. Each of Borrower and Guarantor hereby acknowledges, confirms and agrees that, as of December 12,2011, Borrower is indebted to Agent and Lenders in respect of all
Pre-Petition Liabilities in the aggregate principal amount of not less than $5,697,765.65, consisting of (a) Revolving Credit Loans made pursuant to the Existing Loan Documents in the aggregate principal amount of not less than $4,252,765.65,
together with interest accrued and accruing thereon, and (b) L/Cs in an undrawn stated amount of not less than $1,445,000.00, together with interest accrued and accruing thereon, and all costs, expenses, fees (including attorneys’ fees and
legal expenses) and (c) other charges now or hereafter owed by Borrower to Agent and Lenders, all of which are unconditionally owing by Borrower to Agent and Lenders, without offset, defense or counterclaim of any kind, nature and description
whatsoever. 
 2.2 Acknowledgment of Security Interests. Each of Borrower and Guarantor hereby acknowledges, confirms
and agrees that Agent, for the benefit of itself and the Lenders and Bank Product Providers, has and shall continue to have valid, enforceable and perfected first priority and senior security interests in and liens upon all Pre-Petition Collateral
heretofore granted to Agent, for the benefit of itself and Lenders and Bank Product Providers, pursuant to the Existing Loan Documents as in effect immediately prior to the Petition Date to secure all of the Liabilities. Each of Borrower and
Guarantor hereby acknowledges, confirms and agrees that, subject to entry of the Interim Financing Order, Agent, for the benefit of itself and the Bank Product Providers, has and shall continue to have valid and enforceable first priority and senior
security interests in and liens upon all Post-Petition Collateral granted to Agent, for the benefit of itself and the Lenders and Bank Product Providers, under the Financing Order or hereunder or under any of the other Loan Documents or otherwise
granted to or held by Agent, for the benefit of itself and Lenders and Bank Product Providers, in each case, subject only to liens or encumbrances expressly permitted by the Loan Agreement and any other liens or encumbrances expressly permitted by
the Financing Order that may have priority over the liens in favor of Agent, Lenders and Bank Product Providers. 

  
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 2.3 Binding Effect of Documents. Borrower hereby acknowledges, confirms and agrees
that: (a) each of the Existing Loan Documents to which it is a party was duly executed and delivered to Agent and Lenders by Borrower and each is in full force and effect as of the date hereof, (b) the agreements and obligations of
Borrower contained in the Existing Loan Documents constitute the legal, valid and binding obligations of Borrower enforceable against it in accordance with the terms thereof, and Borrower has no valid defense, offset or counterclaim to the
enforcement of such obligations, and (c) Agent and Lenders are and shall be entitled to all of the rights, remedies and benefits provided for in the Loan Documents and the Financing Order. 

3. EXISTING DEFAULTS. 
 3.1 Acknowledgement of Existing Defaults. Each of Borrower and Guarantor hereby acknowledges, confirms and agrees that (a) each Existing Default has occurred and is continuing, (b) each
Existing Default constitutes an Event of Default under the Loan Documents and (c) in the absence of this Agreement, the occurrence of the Existing Defaults would entitle Agent and Lenders to, subject to the Bankruptcy Code and other applicable
law, exercise their rights and remedies under the Loan Documents, applicable law and otherwise, including, without limitation, their right to declare all Liabilities to be immediately due and payable. 

3.2 Forbearance. In reliance upon the representations, warranties and covenants of Borrower and Guarantor contained in this
Agreement, and as an inducement for and in consideration of Guarantor executing and delivering the Guarantor Documents, Agent and Lenders shall, subject to the terms and conditions of this Agreement, forbear until the Termination Date from
exercising their rights and remedies under the Loan Documents or applicable law due to the occurrence of any Existing Defaults, including, among other things, (i) such rights and remedies with respect to Borrower’s equity interests in
Guarantor, (ii) the right to increase the rate of interest pursuant to Section 2.11 (e), (iii) the right to terminate any Dollar Commitments, the obligations of each Lender to make Revolving Credit Loans, the obligation of the
SwingLine Lender to make SwingLine Loans or the right of the Borrower to obtain L/Cs, and (iv) the right to refuse, pursuant to Section 2.4(b), to honor a borrowing request. 

3.3 Effect of Termination Date. Upon the Termination Date, all Liabilities shall be immediately due and payable and the agreement
of Agent and Lenders to forbear with respect to the Existing Defaults shall automatically and without further action terminate and be of no force and effect. The effect of such termination will be to permit Agent and Lenders to, subject to the terms
of the Financing Order, exercise all of their rights and remedies under the Loan Documents, the Financing Order, applicable law or otherwise with respect to the Existing Defaults or any other Event of Default which shall exist or shall have occurred
and be continuing at such time. 

  
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 3.4 No Waiver. Agent and Lenders have not waived, are not by this Agreement waiving
and have no intention of waiving the Existing Defaults, or any other Event of Default that has occurred as of the date hereof, that may be continuing as of the date hereof or that may occur after the date hereof, whether the same or similar to the
Existing Defaults. Subject to Section 3.2 above, Agent and Lenders reserve the right to exercise any or all of their rights and remedies under the Loan Documents, the Financing Order or otherwise as a result of any Event of Default that may be
continuing on the date hereof or that may occur after the date hereof. Agent and Lenders have not waived any of such rights or remedies and nothing in this Agreement, or any delay on their part in exercising any such rights or remedies, should be
construed as a waiver of any such rights or remedies. 
 4. ADOPTION AND RATIFICATION 

Borrower hereby (a) ratifies, assumes, adopts and agrees to be bound by all of the Existing Loan Documents to which it is a party
and (b) agrees to pay all of the Pre-Petition Liabilities in accordance with the terms of such Existing Loan Documents, as amended by this Ratification Agreement, and in accordance with the Financing Order. All of the Existing Loan Documents
are hereby incorporated herein by reference and hereby are and shall be deemed adopted and assumed in full by Borrower, as Debtor and Debtor-in-Possession, and considered as agreements between Borrower, on the one hand, and Agent and Lenders, on the
other hand. 
 5. GRANT OF SECURITY INTEREST. 
 As collateral security for the prompt performance, observance and payment in full of all of the Liabilities (including the Pre-Petition Liabilities and the Post-Petition Liabilities), Borrower, as Debtor
and Debtor-in-Possession, hereby grants, pledges and assigns to Agent, for the benefit of itself and the Lenders and Bank Product Providers, and also confirms, reaffirms and restates the prior grant to Agent, Lenders and Bank Product Providers of,
continuing security interests in and liens upon, and rights of setoff against, all of the Collateral. Notwithstanding the foregoing or anything to the contrary in the Loan Documents, the Collateral shall not include the real property located at 1008
Highway 501, Myrtle Beach, South Carolina. 
 Agent agrees to discuss in good faith with Borrower any proposal that Borrower may
submit to Agent with respect to (i) an amendment to the Loan Agreement providing Borrower additional Availability under the Borrowing Base on account of Borrower’s pledged equity interest in Creative Distribution Services, LLC
(“CDS”), (ii) a secured credit facility for CDS, or (iii) Agent releasing its lien and pledge upon the shares of CDS in consideration for the equity of CDS being sold and the proceeds of the sale being
paid to Borrower to be used as working capital. 

  
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 6. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. 

In addition to the continuing representations, warranties and covenants heretofore and hereafter made by Borrower and Guarantor to Agent
and Lenders, whether pursuant to the Loan Documents or otherwise, and not in limitation thereof, each of Borrower and Guarantor hereby represents, warrants and covenants to Agent and Lenders the following (which shall survive the execution and
delivery of this Ratification Agreement), the truth and accuracy of which, or compliance with, to the extent such compliance does not violate the terms and provisions of the Bankruptcy Code, shall be a continuing condition of the making of Revolving
Credit Loans by Agent and Lenders: 
 6.1 Financing Order. The Interim Financing Order (and, following the expiration of
the Interim Financing Period defined therein, the Permanent Financing Order) has been duly entered, is valid, subsisting and continuing and has not been vacated, modified, reversed on appeal, or vacated or modified by any order of the Bankruptcy
Court (other than as consented to by Agent) and is not subject to any pending appeal or stay. 
 6.2 Use of Proceeds.
All Revolving Credit Loans and L/Cs provided by Agent or any Lender to Borrower pursuant to the Financing Orders, the Loan Agreement or otherwise, shall be used by Borrower for general operating and working capital purposes in the ordinary
course of business of Borrower and in accordance with the Budget pursuant to this Ratification Agreement. Unless authorized by the Bankruptcy Court and approved by Agent in writing, no portion of any administrative expense claim or other claim
relating to the Chapter 11 Case shall be paid with the proceeds of such Revolving Credit Loans or L/Cs provided by Agent and Lenders to Borrower, other than those administrative expense claims and other claims relating to the Chapter 11 Case
directly attributable to the operation of the business of Borrower in the ordinary course of such business in accordance with the Loan Documents. The payment of allowed fees and expenses of retained professionals entitled to compensation from the
Debtor’s estate pursuant to an order of the Bankruptcy Court shall not require the approval or consent of Agent; provided, that, (i) payment of such any such allowed fees and expenses from the Collateral or the proceeds of any Revolving
Credit Loans or L/Cs shall be subject to the Budget, the Financing Order and the Loan Documents and (ii) other than with respect to the Carve-Out (as defined in the Financing Order) as and to the extent provided in the Financing Order,
Agent and Lenders shall have no obligation to pay, or to ensure that Borrower has the Availability to pay, any such allowed fees and expenses. 
 6.3 Borrowing Base Certificate. Notwithstanding anything to the contrary in the Loan Documents, Borrower shall deliver to Agent, on a daily basis, an updated Borrowing Base Certificate. 

6.4 Budget. 
 (a) Borrower has prepared and delivered to Agent and Lenders an initial thirteen (13) week Budget. The initial Budget has been thoroughly reviewed by the Borrower and its management, approved by the
Consultant (as defined below), and sets forth for the periods covered thereby: (i) projected weekly operating cash receipts, (ii) projected weekly operating cash disbursements, and (iii) projected aggregate weekly value (calculated at
the lower of Cost or market) of Eligible Inventory (collectively, the “Projected Information”). The Borrower represents that the Budget is achievable in accordance with the terms of the Loan Documents and the Financing Order
and will allow the Borrower to operate at all times during the Chapter 11 Case without the accrual of unpaid administrative expenses. 

  
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 (b) In addition to the initial Budget, by no later than 5:00 p.m. (Eastern time) on the
Tuesday of each week, Borrower shall furnish to Agent and Lenders, in form and substance satisfactory to Agent, (i) a report that sets forth for the immediately preceding week a comparison of the actual cash receipts, cash disbursements and
value of Eligible Inventory to the Projected Information for such weekly periods set forth in the Budget on a cumulative, weekly roll-forward basis, together with a certification from the chief financial officer of the Borrower that no Material
Budget Deviation has occurred and (ii) a subsequent thirteen (13) week Budget, which subsequent Budget(s) shall be approved by the Consultant (as defined below). 
 (c) Each of Borrower and Guarantor hereby confirms, acknowledges and agrees that (i) the occurrence of any Material Budget Deviation shall constitute an additional Event of Default under the Loan
Documents, (ii) any failure of Borrower to deliver any reports with respect to the Budget as required above shall constitute an additional Event of Default under the Loan Documents, and (iii) Agent and Lenders are relying upon the
Borrower’s delivery of, and compliance with, the Budget in determining to enter into this Ratification Agreement. 
 6.5
Consultant. Borrower shall continue to retain, on terms and conditions reasonably acceptable to Agent and at the sole cost and expense of Borrower, FTI Consulting, Inc. or such other business consultant as is reasonably acceptable to Agent
(the “Consultant”) to, among other things, advise Borrower in connection with the management and operation of its business. Borrower hereby agrees to (a) deliver to Agent, or cause to be delivered to Agent, copies of all
budgets, records, projections, financial information, reports and other information prepared, produced and/or delivered by or to the Consultant with respect to the Collateral or the financial condition, business or operation of Borrower and
(b) cause the Consultant to consult with Agent on a regular basis as requested by Agent. 
 6.6 Sale
Milestones—Initial Sale. 
 (a) Bid Packages. On or before December 16,2011, the Borrower shall
(i) file with the Bankruptcy Court a motion, in form and substance reasonably satisfactory to Agent, seeking authority to sell the inventory in certain retail store locations (the “Closing Stores”) on terms and
conditions reasonably acceptable to Agent (the “GOB Sales”) and (b) simultaneously distribute bid packages to nationally recognized retail inventory liquidation firms with respect to the inventory in the Closing Stores.
Such bid packages shall require the submission, not later than December 21,2011, of bids to conduct the GOB Sales. 
 (b)
Discussion of Bids. Borrower shall discuss all bids received with Agent and, in consultation with Agent, Borrower may select a “stalking horse” bidder prior to the auction with respect to the GOB Sales. 

(c) Auction. Not later than January 4,2012, Borrower shall auction the right to conduct the GOB Sales to the highest and
best bidder (the “Liquidator”). 
 (d) GOB Sale Order. Not later than January 5, 2012,
Borrower shall obtain the entry of an Order of the Bankruptcy Court, in form and substance reasonably satisfactory to Agent, approving the Liquidator and authorizing the consummation of the GOB Sales on terms and conditions acceptable to Agent,
including that all GOB Sales be in cash and contain no financing contingencies (the “GOB Sale Order”). 

  
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 (e) GOB Sales. Not later than January 6,2012, Borrower shall commence all GOB
Sales in accordance with the GOB Sale Order and otherwise on terms and conditions acceptable to Agent. 
 (f) Extension of
Lease Rejection Period. Not later than January 20, 2012, Borrower shall obtain from the Bankruptcy Court an Order, in form and substance reasonably satisfactory to Agent, extending the time period for Borrower to assume or reject
Borrower’s unexpired leases of nonresidential real estate from the initial 120 day time period (the “120 Day Period”) to not less than 210 days (the “210 Day Period”) pursuant to
Section 365(d)(4) of the Bankruptcy Code. 
 6.7 Reorganization/Emergence Process. In the event that Borrower has
not, on or before the close of business on April I, 2012, repaid in full in cash all Liabilities or filed with the Bankruptcy Court a plan of liquidation or reorganization in form and substance reasonably satisfactory to Agent, Borrower shall:

 (a) If Borrower obtains a further extension of the 210 Day Period for each of its unexpired leases of nonresidential real
estate, the deadlines set forth below shall be extended automatically by the duration of such extension. 
 (b) Sale
Motion. Not later than April 2, 2012, Borrower shall file with the Bankruptcy Court a motion, in form and substance satisfactory to Agent, seeking approval, on terms and conditions acceptable to Agent, of (i) an auction, and subsequent
assignment and assumption, of the Leases for each of Borrower’s store locations, (ii) for an auction sale of the Fixtures located at such store locations and (iii) for the sale by the liquidator, as described below, of the remaining
assets and properties (other than Leases and Fixtures but including Inventory and intellectual property) of Borrower (the “Other Assets”). 
 (c) Bid Package. Simultaneously with the filing of such motion, Borrower shall distribute bid packages to nationally recognized retail inventory liquidation firms with respect to the Other Assets.
Such bid packages shall require the submission, not later than April 6, 2012, of bids to conduct the sales of the Other Assets. 
 (d) Discussion of Bids. Borrower shall discuss all bids received with Agent and, in consultation with Agent, Borrower may select a “stalking horse” bidder prior to the auction with
respect to the Other Assets. 
 (e) Auction. Not later than April 9, 2012, Borrower shall auction the right to
conduct the sales of the Other Assets to the highest and best bidder (the “Second Liquidator”). 
 (f)
Other Asset Sale Order. Not later than April 10, 2012, Borrower shall obtain the entry of an Order of the Bankruptcy Court, in form and substance satisfactory to Agent, approving the Second Liquidator with respect to the Other Assets and
authorizing the sale of the Other Assets on terms and conditions acceptable to Agent (the “Other Asset Sale Order”). 

  
 12 

 (g) Sale of Other Assets. Not later than April 12, 2012, Borrower shall
commence the sale of the Other Assets in accordance with the Other Asset Sale Order and otherwise on terms and conditions acceptable to Agent. 
 (h) Auction Order. Not later than April 16, 2012, Borrower shall obtain the entry of an Order of the Bankruptcy Court, in form and substance satisfactory to Agent, authorizing Borrower to
conduct an auction sale, on terms and conditions acceptable to Agent, with respect to the Leases and Fixtures (the “Auction Order”). 
 (i) Auction. Not later than April 27, 2012, Borrower shall hold an auction for the sale of the Leases and Fixtures to the highest and best bidder in accordance with the Auction Order.

 (j) Lease/Fixture Sale Order. Not later than April 30, 2012, Borrower shall obtain the entry of an Order of the
Bankruptcy Court, in form and substance satisfactory to Agent, approving the results of the auction, authorizing the sale of the Fixtures, and assignment and assumption of the Leases, to the highest and best bidder (the “Lease and Fixture
Sale Order”). 
 (k) Sale of Leases and Fixtures. Not later May 10, 2012, Borrower shall consummate
the sale of the Fixtures, and assignment and assumption of the Leases, in accordance with the terms of the Lease and Fixture Sale Order and otherwise on terms and conditions acceptable to Agent. 

6.8 Cash Management. 
 (a) Continuation of Existing Arrangements. Borrower shall continue to maintain, at its expense, deposit accounts with Wells Fargo Bank, National Association and the other banks satisfactory to
Agent into which Borrower shall promptly either cause all amounts on deposit in the Store Accounts of Borrower to be sent as provided in Section 7.4 of the Loan Agreement or shall itself deposit or cause to be deposited all proceeds of
Collateral, including all proceeds from sales of Inventory, all amounts payable to Borrower from Credit Card Issuers and Credit Card Processors and all other proceeds of Collateral. 

(b) Control Agreements. At any time a Default or an Event of Default shall exist or have occurred and be continuing, promptly
upon Agent’s request, Borrower shall deliver, or cause to be delivered, to Agent a Control Agreement duly authorized, executed and delivered by Borrower and such banks where a Store Account is maintained as Agent shall specify. Without limiting
any other rights or remedies of Agent or Lenders, Agent may, at its option, instruct the depository banks at which the Blocked Accounts are maintained to transfer all available funds received or deposited into the Blocked Accounts to the
Concentration Account at any time. 
 (c) Ratification. To the extent Agent deems it necessary in its reasonable
discretion and upon Agent’s request, Borrower shall promptly provide Agent with evidence, in form and substance satisfactory to Agent, that any Control Agreements and Blocked Accounts have been ratified and amended by the parties thereto, or
their respective successors in interest, in form and substance satisfactory to Agent, to reflect the commencement of the Chapter 11 Case, that Borrower, as Debtor and Debtor-in-Possession, is the successor in interest to Borrower, that the
Liabilities include both the Pre-Petition Liabilities and the Post-Petition Liabilities and that the Collateral includes both the Pre-Petition Collateral and the Post-Petition Collateral. 

  
 13 

 6.9 Bankruptcy Reporting. Borrower shall provide Agent with copies of all financial
reports, schedules and other materials and information at any time furnished by or on behalf of Borrower to the Bankruptcy Court, or the United States Trustee or to any creditors’ committee appointed in the Chapter 11 Case, in each instance,
concurrently with the delivery thereof to the Bankruptcy Court, United States Trustee or creditors’ committee, as applicable. 
 6.10 Guarantor Reporting. In addition to all financial reports required to be delivered by Borrower under the Loan Documents, Guarantor shall deliver to Agent, within twenty (20) days after
the end of each fiscal month, monthly financial statements, all in a form reasonably acceptable to Agent and fairly presenting the financial position and the results of the operations of Guarantor as of the end of and through such fiscal month,
certified as such by the chief financial officer or a member, manager, or other officer or representative of Guarantor. 
 7.
AMENDMENTS. 
 7.1 Minimum Availability. Section 5.12 of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor: 
 “5.12 The Borrower shall not permit Excess Availability
at any time to be less than the amount (stated in Dollars) equal to $1,000,000. The Agent may determine the Borrower’s compliance with such covenant based upon financial reports and statements provided by the Borrower to the Agent (whether or
not such financial reports and statements are required to be furnished pursuant to this Agreement) as well as by reference to interim financial and collateral information provided to, or developed by, the Agent.” 

7.2 Reserves. Agent shall be permitted to establish and maintain, in addition to and not in limitation of all other Reserves,
(a) the Carve-Out Reserve provided for in Section 2.4 of the Financing Order, (b) Reserves to reflect the value of Inventory at leased locations with respect to which the lease therefor has not been assumed at least forty-five
(45) days prior to the expiration of the applicable period to assume or reject the leases at such locations or as to which there has been filed a landlord’s motion to compel the assumption or rejection of the lease, (c) Reserves to
reflect the amount of any senior liens or claims in or against the Collateral that, in Agent’s reasonable determination, have priority over the liens and claims of Agent and Lenders, (d) Reserves to reflect the amount of priority or
administrative expense claims that, in Agent’s reasonable determination, require payment during the Chapter 11 Case, (e) Reserves with respect to the MDG Collateral and (f) Availability Reserves to reflect Bank Products;
provided, that, (i) if Agent so elects, Agent may choose to no longer maintain an Availability Reserve with respect to Bank Products and instead require Borrower to prefund in full all amounts that may be payable in respect of
such Bank Products requested by Borrower from time to 

  
 14 

 
time as a condition precedent to Agent making such services available to Borrower and (ii) the amount of the Reserve established in respect of the Carve-Out (as defined in the Financing
Order) shall be equal to $75,000 on the Petition Date and shall increase weekly to $500,000, as follows: 
  

			
	Date	  	Carve-Out Reserve
	 December 12, 2011
	  	$75,000
	 December 19, 2011
	  	$150,000
	 December 26, 2011
	  	$225,000
	 January 2, 2011
	  	$300,000
	 January 9, 2011
	  	$375,000
	 January 16, 2011
	  	$450,000
	 January 23, 2011 and after
	  	$500,000

 7.3 LIBOR Loans. Notwithstanding anything to the contrary in the Loan Documents, all outstanding
Revolving Credit Loans, and any future Revolving Credit Loans, shall constitute Base Margin Loans. Borrower shall not request, and Agent and Lenders shall have no obligation to provide, any LIBOR Loans. 

7.4 Letter of Credit Fees. Sections 2.18(b)(i) and (ii) of the Loan Agreement are hereby deleted in their entirety and
replaced with the following: 
 “(i) For each standby L/C: Three (3.0%) percent per annum, of the Stated Amount of
such standby L/C, payable quarterly in arrears, on the first day of each month. 
 (ii) For each documentary L/C: Two and
One-Half (2.5%) percent per annum of the weighted average of the Stated Amount of such documentary L/C outstanding at any time during the period since the then most recent payment of such fee, payable quarterly in arrears, on the first day of
each month, and on the End Date.” 
 7.5 Appraisals and Audits. Notwithstanding anything to the contrary contained
in the Loan Documents, Agent shall have the right to (a) obtain such number of appraisals of the Inventory and Real Property of Borrower and Guarantor as Agent reasonably determines is necessary or appropriate and (b) conduct such number
of commercial finance audits of the books and records of Borrower and Guarantor as Agent reasonably determines is necessary or appropriate, in each instance, at the cost and expense of Borrower. 

7.6 Limits and Sublimits. Notwithstanding anything to the contrary in the Loan Documents, all limits and sublimits set forth in
the Loan Agreement, and any formula or other provision to which a limit or sublimit may apply, shall be determined on an aggregate basis considering together both the Pre-Petition Liabilities and the Post-Petition Liabilities. 

7.7 Payments. Notwithstanding anything to the contrary in the Loan Documents, Agent may, in its discretion, apply any such
payments or proceeds first to the Pre-Petition Liabilities until such Pre-Petition Liabilities are paid and satisfied in full. 

  
 15 

 7.8 Sale of Assets, Consolidation, Merger, Disabilities, Etc. Notwithstanding
anything to the contrary contained in the Loan Documents, Borrower shall not directly or indirectly sell, transfer, lease, encumber, return or otherwise dispose of any portion of the Collateral, or any other assets of Borrower, including, without
limitation, assume, reject or assign any leasehold interest or enter into any agreement to return Inventory to vendor, whether pursuant to section 546 of the Bankruptcy Code or otherwise, without the prior written consent of Agent (and no such
consent shall be implied, from any other action, inaction or acquiescence by Agent or any Lender), except for (i) sales of Borrower’s Inventory and (ii) returns of damaged, defective, or otherwise unsalable inventory, each in the
ordinary course of its business. 
 7.9 Additional Events of Default. The occurrence or existence of anyone or more of
the following events shall constitute an additional “Event of Default” under the Loan Documents: 
 (a) any failure
of Borrower or Guarantor to comply with the terms and conditions of the Ratification Agreement, or any breach by Borrower or Guarantor of any representation or warranty made by such Borrower or Guarantor in the Ratification Agreement; 

(b) any failure of Borrower to repay in full, in cash, all Liabilities on or before the Termination Date; 

(c) the occurrence of any condition or event which permits Agent or Lenders to exercise any of the remedies set forth in the Financing
Order, including, without limitation, any “Event of Default” (as defined in the Financing Order); 
 (d) the
termination or non-renewal of the Loan Documents as provided for in the Financing Order; 
 (e) any Borrower or Guarantor
suspends or discontinues or is enjoined by any court or governmental agency from continuing to conduct all or any material part of its business, or a trustee, receiver or custodian is appointed for any Borrower or Guarantor, or any of their
respective properties; 
 (f) any act, condition or event occurring after the Petition Date that has or would reasonably be
expected to cause a Material Adverse Change or have a Material Adverse Effect upon the assets of Borrower or Guarantor, or the Collateral or the rights and remedies of Agent and Lenders under the Loan Documents or the Financing Order; 

(g) conversion of the Chapter 11 Case to a Chapter 7 case under the Bankruptcy Code; 

(h) dismissal of the Chapter 11 Case or any subsequent Chapter 7 case either voluntarily or involuntarily; 

(i) the grant of a lien on or other interest in any property of any Borrower or Guarantor, other than a lien or encumbrance permitted by
the Financing Order or expressly permitted by the Loan Agreement, which is superior to or ranks in parity with Agent’s and Lenders’ security interest in or lien upon the Collateral; 

  
 16 

 (j) the grant of an administrative expense claim in the Chapter 11 Case, other than such
administrative expense claim permitted by the Financing Order or the Ratification Agreement, which is superior to or ranks in parity with Agent’s and Lenders’ Superpriority Claim (as defined in the Financing Order); 

(k) the Financing Order shall be modified, reversed, revoked, remanded, stayed, rescinded, vacated or amended on appeal or by the
Bankruptcy Court without the prior written consent of Agent (and no such consent shall be implied from any other authorization or acquiescence by Agent or any Lender); 
 (1) the appointment of a trustee pursuant to Sections 1104(a)(l) or 1104(a)(2) of the Bankruptcy Code; 
 (m) the appointment of an examiner with special powers pursuant to Section 11 04(a) of the Bankruptcy Code; 
 (n) the filing of a plan of reorganization or liquidation by or on behalf of Borrower in the Chapter 11 Case, to which Agent has not consented in writing, which does not provide for payment in full in
cash of all Liabilities on the effective date thereof in accordance with the terms and conditions contained in the Loan Documents; and 
 (o) the confirmation of any plan of reorganization or liquidation in the Chapter 11 Case, to which Agent has not consented to in writing, which does not provide for payment in full in cash of all
Liabilities on the effective date thereof in accordance with the terms and conditions of the Loan Documents. 
 7.10
Termination Date. The definition of “Termination Date” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“Termination Date” shall mean the earliest to occur of (a) December 31,
2012; (b) the date set as the Termination Date in a notice by the Agent to Borrower on account of the occurrence of any Event of Default (other than the Existing Defaults); (c) the effective date of a plan of reorganization or liquidation
of Borrower in the Chapter 11 Case; (d) the last termination date set forth in the Interim Financing Order, unless the Permanent Financing Order has been entered prior to such date, and in such event, then the last termination date set forth in
the Permanent Financing Order; (e) the scheduled Maturity Date and (f) payment in full in cash of all Liabilities, and cash collateralization of all contingent and continuing Liabilities in accordance with the Ratification Agreement, after
notice by Borrower to Agent of Borrower’s intent to terminate this Agreement.” 

  
 17 

 7.11 Repayment in Full. 

(a) If, upon repayment of the Liabilities and termination of the Financing agreements, any L/Cs remain outstanding, the Borrower
shall deposit in an account with the Agent, in the name of the Agent and for the benefit of the applicable Lenders (such account, the “Cash Collateral Account”), an amount in cash equal to 105% of the aggregate undrawn Stated
Amount of the outstanding L/Cs as of such date plus the amount of any fees and expenses payable under the Loan Agreement with respect to such L/Cs through the end of the latest expiration date of such L/Cs and any accrued and unpaid interest
thereon (the “L/C Exposure”). Such deposit shall be held by the Agent as collateral for the payment and performance of the Liabilities with respect to such L/Cs, all of which shall survive such termination. The Agent shall
have exclusive dominion and control, including the exclusive right of withdrawal, over such Cash Collateral Account. Other than any interest earned on the investment of such deposit, which investments shall be in direct short term obligations of, or
short term obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, such deposit shall not bear interest. Interest or profits, if any, on such investments shall accumulate in the Cash
Collateral Account. Moneys in such Cash Collateral Account shall be applied by the Agent to reimburse the Issuer for L/C disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held as cash collateral for the
satisfaction of the Liabilities of Borrower for the L/C Exposure at such time. Within three Business Days following the expiration of all outstanding L/Cs and the payment of all L/C Exposure, any amount remaining on deposit in the Cash Collateral
Account shall be returned to the Borrower (or transferred to such Person as the Borrower directs). 
 (b) In connection with
any repayment of all Liabilities, including on the Termination Date, Borrower shall (i) repay in full all Liabilities, including principal, interest, fees (subject to any reduction of the Additional Closing Fee as set forth below) and expenses
(including reasonable legal fees and expenses), (ii) remit to Agent cash collateral for outstanding L/Cs in the amount and manner described above, (iii) to the extent Borrower seeks to continue its “P Card” program with Agent,
Borrower shall remit to Agent additional cash collateral in the amount of 100% of the P Card limit, and (iv) remit to Agent additional cash collateral in the amount of $50,000 as collateral security for all other continuing and contingent
Liabilities, including, without limitation, the obligation of Borrower to indemnify and reimburse Agent for all fees, costs and expenses (including reasonable legal fees and expenses) incurred in the event any official committee of unsecured
creditors appointed in the Chapter 11 Case or other party in interest contests, challenges or disputes the liens, claims or security interests of Agent and Lenders, or otherwise asserts a claim or cause of action against Agent and Lenders relative
to the Chapter 11 Case, the Loan Documents or the financing arrangements among Agent, Lenders and Borrower. The cash collateral to be remitted to Agent pursuant to the foregoing clause (iv) shall be held by Agent until the later of
(x) expiration of the period in which to assert an Objection (as defined in the Financing Order) in accordance with the Financing Order or (y) ninety (90) days from the date of the payoff. 

8. DIP FACILITY FEE. 
 Borrower shall pay to Agent, for the account of Lenders, a debtor-in-possession financing facility fee, which fee is fully earned as of and payable as follows: 

8.1 $150,000 on the date of this Agreement; 
 8.2 $130,000 on December 31, 2011 (the “Additional Closing Fee”), provided, however, that if the Borrower’s Obligations are repaid in full and the
Loan Documents terminated, in each instance on terms and conditions reasonably satisfactory to Agent, on or before December 31, 2011, no Additional Closing Fee shall be earned or payable. 

  
 18 

 9. RELEASE. 
 9.1 Release of Pre-Petition Claims. 
 (a) Upon the earlier of (i) the entry
of the Permanent Financing Order and (ii) the entry of an Order extending the term of the Interim Financing Order beyond thirty (30) calendar days after the date of the Interim Financing Order, in consideration of the agreements of Agent
and Lenders contained herein and the making of any Revolving Credit Loans by Agent and Lenders, the Borrower, pursuant to the Loan Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
on behalf of itself and its respective successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent, each Lender, each Bank Product Provider and their
respective successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees and other representatives (Agent, each Lender, each Bank Product Provider and
all such other parties being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits,
covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a
“Pre-Petition Released Claim” and collectively, “Pre-Petition Released Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, that
Borrower or Guarantor or any of their respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any nature, cause or thing
whatsoever which arises at any time on or prior to the day and date of this Agreement for or on account of, or in relation to, or in any way in connection with the Loan Agreement, as amended and supplemented through the date hereof, and the other
Loan Documents. 
 (b) Upon the earlier of (i) the entry of the Permanent Financing Order and (ii) the entry of an
Order extending the term of the Interim Financing Order beyond thirty (30) calendar days after the date of the Interim Financing Order, each of Borrower and Guarantor, on behalf of itself and its successors, assigns, and other legal
representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Pre-Petition Released
Claim released, remised and discharged by the Borrower and Guarantor pursuant to this Ratification Agreement. If Borrower or Guarantor violates the foregoing covenant, Borrower agrees to pay, in addition to such other damages as any Releasee may
sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation. 

  
 19 

 9.2 Termination Agreement. Upon (a) the receipt by Agent, on behalf of itself
and the other Lenders, of payment in full of all Liabilities in cash or other immediately available funds, plus cash collateral or other collateral security acceptable to Agent to secure any Liabilities that survive or continue beyond the
termination of the Loan Documents consistent with the provisions of section 7.11 hereof, and (b) the termination of the Loan Documents (the “Payment Date”), in consideration of the agreements of Agent and Lenders
contained herein and the making of any Revolving Credit Loans by Agent and Lenders, Borrower and Guarantor each hereby covenant and agree to execute and deliver in favor of Agent and Lenders a valid and binding termination and release agreement (the
“Termination Agreement”), in form and substance reasonably satisfactory to Agent, provided that any releases of the Releasees set forth in the Termination Agreement shall apply only to claims or causes of action for or on
account of, or in relation to, or in any way in connection with the Loan Agreement, as amended and supplemented through the date hereof, and the other Loan Documents. If any Borrower or Guarantor violates such covenant, Borrower and Guarantor agree
that the breaching Borrower or Guarantor shall pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation. Upon
occurrence of the Payment Date and execution of the Termination Agreement by Borrower and Guarantor, Agent shall promptly execute and file or record, as applicable, all UCC termination statements, lien releases, and other instruments necessary to
release all security interests in, liens on, and pledges of any assets of Borrower and Guarantor, including but not limited to the Pre-Petition Collateral, the Post-Petition Collateral, and the MDG Collateral. 

9.3 Releases Generally. 
 (a) Each Borrower and Guarantor understands, acknowledges and agrees that the releases set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against
any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such releases. 
 (b) Each Borrower and Guarantor agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final and
unconditional nature of the releases set forth in Section 9.1 hereof and, when made, Section 9.2 hereof. 
 10.
CONDITIONS PRECEDENT. 
 The effectiveness of this Ratification Agreement, and Agent’s and Lenders’ obligation
to extend to Borrower further Revolving Credit Loans, advances or other financial accommodations hereunder, shall be subject to satisfaction, as determined by Agent, of the following conditions precedent (which, with respect to further Revolving
Credit Loans and other financial accommodations, shall be continuing conditions precedent): 
 10.1 the receipt by Agent of an
original (or electronic copy) of this Ratification Agreement, duly authorized, executed and delivered by Borrower, Guarantor and Lenders; 
 10.2 the receipt by Agent of the Guarantor Documents, duly authorized, executed and delivered by Guarantor; 
 10.3 the Bankruptcy Court shall have entered the Financing Order on terms and conditions acceptable to Agent; 
 10.4 Borrower and Guarantor shall furnish to Agent and Lenders all financial information, projections, budgets, business plans, cash flows and such other information as Agent and Lenders shall reasonably
request from time to time; 

  
 20 

 10.5 no trustee, examiner or receiver or the like shall have been appointed or designated
with respect to any Borrower or Guarantor, as Debtor and Debtor-in-Possession, or its respective business, properties and assets and no motion or proceeding shall be pending seeking such relief; 

10.6 satisfactory review by counsel for Agent of legal issues attendant to the post-petition financing transactions contemplated
hereunder; 
 10.7 other than the voluntary commencement of the Chapter 11 Case, no material impairment of the priority of
Agent’s and Lenders’ security interests in the Collateral shall have occurred from the date of the latest field examinations of Agent and Lenders to the Petition Date; and 

10.8 no Event of Default (other than an Existing Default) shall have occurred or be existing under any of the Loan Documents. 

11. MISCELLANEOUS. 
 11.1 Amendments and Waivers. Neither this Ratification Agreement nor any other instrument or document referred to herein or therein may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. 
 11.2 Further Assurances. Each Borrower and Guarantor shall, at its expense, at any time or times duly execute and deliver, or shall use its best efforts to cause to be duly executed and delivered,
such further agreements, instruments and documents, including, without limitation, additional security agreements, collateral assignments, UCC financing statements or amendments or continuations thereof, landlord’s or mortgagee’s waivers
of liens and consents to the exercise by Agent and Lenders of all the rights and remedies hereunder, under any of the other Loan Documents, any Financing Order or applicable law with respect to the Collateral, and do or use its best efforts to cause
to be done such further acts as may be reasonably necessary or proper in Agent’s opinion to evidence, perfect, maintain and enforce the security interests of Agent and Lenders, and the priority thereof, in the Collateral and to otherwise
effectuate the provisions or purposes of this Ratification Agreement, any of the other Loan Documents or the Financing Order. 

11.3 Headings. The headings used herein are for convenience only and do not constitute matters to be considered in interpreting
this Ratification Agreement. 
 11.4 Counterparts. This Ratification Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Ratification Agreement by electronic mail (PDF), telefacsimile or other method
of electronic transmission shall have the same force and effect as the delivery of an original executed counterpart of this Ratification Agreement. In making proof of this Ratification Agreement, it shall not be necessary to produce or account for
more than one counterpart thereof signed by each of the parties thereto. 

  
 21 

 11.5 Additional Events of Default. The parties hereto acknowledge, confirm and agree
that the failure of any Borrower or Guarantor to comply with any of the covenants, conditions and agreements contained herein or in any other agreement, document or instrument at any time executed by such Borrower or Guarantor in connection herewith
shall constitute an Event of Default under the Loan Documents. 
 11.6 Costs and Expenses. In addition to all other fees
and expenses payable by the Borrower or Guarantor to Agent and Lenders under the Loan Documents, the Borrower shall reimburse Agent and Lenders for all costs and expenses, including reasonable legal fees and expenses, incurred by Agent or any Lender
in the structuring, negotiation, arrangement or preparation of this Ratification Agreement, the Guarantor Documents, the Financing Order, the Loan Documents and the agreements, documents and/or instruments to be executed in connection herewith or
contemplated hereby. Agent shall provide Borrower, the Office of the United States Trustee, and any statutory committee appointed in the Chapter 11 Case with copies of invoices for all such fees and expenses, redacted as necessary to remove any
attorney-client privileged information. Borrower, Guarantor, the Office of the United States Trustee, and any statutory committee appointed in the Chapter 11 Case shall have the right to object to reimbursement by the Debtor of any such fees and
expenses within seven (7) days of receipt of such invoices therefor. Any such fees and expenses not objected to within such seven (7) day period shall be added to the Post-Petition Liabilities and shall be payable in accordance with the
terms of the Loan Documents. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
 22 

 IN WITNESS WHEREOF, the parties hereto have caused this Ratification Agreement to be duly
executed as of the day and year first above written. 
  

									
	AGENT	 		 	BORROWER
			
	WELLS FARGO BANK, N.A.	 		 	 ROOMSTORE, INC.
 as
Debtor and Debtor-in Possession

					
	By:	 	 	 		 	By:	 	 
					
	Title:	 	 	 		 	Title:	 	 
			
	LENDERS	 		 	 GUARANTOR

Effective only from and after the date hereof

			
	WELLS FARGO BANK, N.A.	 		 	MATTRESS DISCOUNTERS GROUP, LLC
					
	By:	 	 	 		 	By:	 	/s/ Raymond T. Bojanowski
					
	Title:	 	 	 		 	Title:	 	MANAGER - CEO
					
		 		 		 	By:	 	 
					
		 		 		 	Title:	 	 
					
		 		 		 	By:	 	 
					
		 		 		 	Title:	 	 

 Signature page to Ratification Agreement

 IN WlTNESS WHEREOF, the parties hereto have caused this Ratification Agreement to be duly
executed as of the day and year first above written. 
  

									
	AGENT	 		 	BORROWER
			
	WELLS FARGO BANK, N.A.	 		 	 ROOMSTORE, INC.
 as
Debtor and Debtor-in Possession

					
	By:	 	/s/ Connie Liu	 		 	By:	 	 
					
	Title:	 	Vice President	 		 	Title:	 	 
			
	LENDERS	 		 	 GUARANTOR

Effective only from and after the date hereof

			
	WELLS FARGO BANK, N.A.	 		 	MATTRESS DISCOUNTERS GROUP, LLC
					
	By:	 	/s/ Connie Liu	 		 	By:	 	 
					
	Title:	 	Vice President	 		 	Title:	 	 
					
		 		 		 	By:	 	 
					
		 		 		 	Title:	 	 
					
		 		 		 	By:	 	 
					
		 		 		 	Title:	 	 

 Signature page to Ratification Agreement 

 IN WITNESS WHEREOF, the parties hereto have caused this Ratification Agreement to be duly
executed as of the day and year first above written. 
  

									
	AGENT	 		 	BORROWER
			
	WELLS FARGO BANK, N.A.	 		 	 ROOMSTORE, INC.
 as
Debtor and Debtor-in Possession

					
	By:	 	 	 		 	By:	 	/s/ Steve Giordano
					
	Title:	 	 	 		 	Title:	 	CEO
			
	LENDERS	 		 	 GUARANTOR

Effective only from and after the date hereof

			
	WELLS FARGO BANK, N.A.	 		 	MATTRESS DISCOUNTERS GROUP, LLC
					
	By:	 	 	 		 	By:	 	 
					
	Title:	 	 	 		 	Title:	 	 
					
		 		 		 	By:	 	/s/ Steven Gidumal
					
		 		 		 	Title:	 	Manager
					
		 		 		 	By:	 	/s/ Brian Bertonneau
					
		 		 		 	Title:	 	Manager

 Signature page to Ratification Agreement 

 IN WITNESS WHEREOF, the parties hereto have caused this Ratification Agreement to be duly
executed as of the day and year first above written. 
  

									
	AGENT	 		 	BORROWER
			
	WELLS FARGO BANK, N.A.	 		 	 ROOMSTORE, INC.
 as
Debtor and Debtor-in Possession

					
	By:	 	 	 		 	By:	 	 
					
	Title:	 	 	 		 	Title:	 	 
			
	LENDERS	 		 	 GUARANTOR

Effective only from and after the date hereof

			
	WELLS FARGO BANK, N.A.	 		 	MATTRESS DISCOUNTERS GROUP, LLC
					
	By:	 	 	 		 	By:	 	 /s/ Raymond J. Bojanowski

					
	Title:	 	 	 		 	Title:	 	 Manager - CEO

					
		 		 		 	By:	 	 
					
		 		 		 	Title:	 	 
					
		 		 		 	By:	 	 
					
		 		 		 	Title:	 	 

 Signature page to Ratification Agreement 

 EXHIBIT A 
 [Budget] 

																																																									
	 RoomStore
 Weekly DIP Cash Flow
 ($ in 000’s)
	 
	 	  	CH 11	 	 	 	 
	 	  	December	 	 	January	 	 	February	 	 	March	 	 	Subtotal	 
	Week Ending	  	Week 1
Forecast
18-Dec	 	 	Week 2
Forecast
25-Dec	 	 	Week 3
Forecast
1-Jan	 	 	Week 4
Forecast
8-Jan	 	 	Week 5
Forecast
15-Jan	 	 	Week 6
Forecast
22-Jan	 	 	Week 7
Forecast
29-Jan	 	 	Week 8
Forecast
5-Feb	 	 	Week 9
Forecast
12-Feb	 	 	Week 10
Forecast
19-Feb	 	 	Week 11
Forecast
26-Feb	 	 	Week 12
Forecast
4-Mar	 	 	Week 13
Forecast
11-Mar	 	 	Forecast
13 Wks	 
	 I. Cash Flows
	  				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Operating Receipts
	  				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Sales Receipt
	  	 	1,587	  	 	 	1,872	  	 	 	2,387	  	 	 	3,688	  	 	 	3,090	  	 	 	3,208	  	 	 	2,457	  	 	 	2,835	  	 	 	2,368	  	 	 	3,044	  	 	 	4,414	  	 	 	3,393	  	 	 	3,016	  	 	 	37,358	  
	 Sale of Closing Store Inventory
	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	2,312	  	 	 	—  	  	 	 	—  	  	 	 	257	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	2,569	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Subtotal
	  	 	1,587	  	 	 	1,872	  	 	 	2,387	  	 	 	6,000	  	 	 	3,090	  	 	 	3,208	  	 	 	2,714	  	 	 	2,835	  	 	 	2,368	  	 	 	3,044	  	 	 	4,414	  	 	 	3,393	  	 	 	3,016	  	 	 	39,927	  
	 Operating Disbursements
	  				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Merchandise
	  	 	1,000	  	 	 	1,000	  	 	 	1,250	  	 	 	1,000	  	 	 	1,250	  	 	 	1,250	  	 	 	1,250	  	 	 	750	  	 	 	750	  	 	 	1,250	  	 	 	1,250	  	 	 	1,350	  	 	 	1,350	  	 	 	14,700	  
	 Non Merchandise
	  	 	846	  	 	 	846	  	 	 	760	  	 	 	674	  	 	 	674	  	 	 	674	  	 	 	674	  	 	 	560	  	 	 	560	  	 	 	560	  	 	 	560	  	 	 	560	  	 	 	560	  	 	 	8,508	  
	 Rent
	  	 	1,000	  	 	 	427	  	 	 	—  	  	 	 	1,247	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	588	  	 	 	500	  	 	 	—  	  	 	 	—  	  	 	 	588	  	 	 	600	  	 	 	5,050	  
	 Payroll
	  	 	1,205	  	 	 	—  	  	 	 	1,068	  	 	 	—  	  	 	 	884	  	 	 	—  	  	 	 	884	  	 	 	—  	  	 	 	884	  	 	 	—  	  	 	 	884	  	 	 	—  	  	 	 	884	  	 	 	6,693	  
	 Health Insurance Funding
	  	 	158	  	 	 	158	  	 	 	—  	  	 	 	158	  	 	 	158	  	 	 	158	  	 	 	—  	  	 	 	158	  	 	 	158	  	 	 	158	  	 	 	158	  	 	 	—  	  	 	 	100	  	 	 	1,524	  
	 Advertising
	  	 	200	  	 	 	—  	  	 	 	200	  	 	 	200	  	 	 	200	  	 	 	200	  	 	 	200	  	 	 	—  	  	 	 	250	  	 	 	250	  	 	 	200	  	 	 	—  	  	 	 	200	  	 	 	2,100	  
	 Sales Tax
	  	 	—  	  	 	 	776	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	527	  	 	 	200	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	758	  	 	 	—  	  	 	 	—  	  	 	 	2,261	  
	 Reserve for Chase Payments
	  	 	33	  	 	 	27	  	 	 	79	  	 	 	58	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	197	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Subtotal
	  	 	4,443	  	 	 	3,234	  	 	 	3,357	  	 	 	3,336	  	 	 	3,166	  	 	 	2,809	  	 	 	3,208	  	 	 	2,056	  	 	 	3,202	  	 	 	2,218	  	 	 	3,810	  	 	 	2,498	  	 	 	3,694	  	 	 	41,032	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating Cash Flow
	  	 	(2,855	) 	 	 	(1,363	) 	 	 	(970	) 	 	 	2,667	  	 	 	(76	) 	 	 	399	  	 	 	(494	) 	 	 	779	  	 	 	(834	) 	 	 	826	  	 	 	604	  	 	 	895	  	 	 	(678	) 	 	 	(1,105	) 
	 Non-Operating Receipts
	  	 	—  	  	 	 	250	  	 	 	325	  	 	 	—  	  	 	 	200	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	250	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1,025	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Receipts
	  	 	1,587	  	 	 	2,122	  	 	 	2,712	  	 	 	6,000	  	 	 	3,290	  	 	 	3,208	  	 	 	2,714	  	 	 	2,835	  	 	 	2,368	  	 	 	3,294	  	 	 	4,414	  	 	 	3,393	  	 	 	3,016	  	 	 	40,952	  
	 Bankruptcy Expenditures
	  				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Bankruptcy Payments
	  				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Professional Fees
	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	200	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	200	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	200	  	 	 	—  	  	 	 	600	  
	 Freight and Insurance
	  	 	225	  	 	 	200	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	425	  
	 Utility Deposits
	  	 	—  	  	 	 	—  	  	 	 	100	  	 	 	100	  	 	 	—  	  	 	 	100	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	300	  
	 Severance
	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	250	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	250	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Subtotal
	  	 	225	  	 	 	200	  	 	 	100	  	 	 	300	  	 	 	—  	  	 	 	350	  	 	 	—  	  	 	 	200	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	200	  	 	 	—  	  	 	 	1,575	  
	 Financing Expenses
	  	 	150	  	 	 	—  	  	 	 	172	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	36	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	34	  	 	 	—  	  	 	 	393	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Bankruptcy Disbursements
	  	 	375	  	 	 	200	  	 	 	272	  	 	 	300	  	 	 	—  	  	 	 	350	  	 	 	—  	  	 	 	236	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	234	  	 	 	—  	  	 	 	1,968	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Disbursements
	  	 	4,818	  	 	 	3,434	  	 	 	3,629	  	 	 	3,636	  	 	 	3,166	  	 	 	3,159	  	 	 	3,208	  	 	 	2,292	  	 	 	3,202	  	 	 	2,218	  	 	 	3,810	  	 	 	2,732	  	 	 	3,694	  	 	 	43,000	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Cash Flow
	  	 	(3,230	) 	 	 	(1,313	) 	 	 	(917	) 	 	 	2,364	  	 	 	124	  	 	 	49	  	 	 	(494	) 	 	 	543	  	 	 	(834	) 	 	 	1,076	  	 	 	604	  	 	 	661	  	 	 	(678	) 	 	 	(2,048	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 II. Loan Balance
	  				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Beginning Revolver
	  	 	—  	  	 	 	7,591	  	 	 	8,904	  	 	 	9,821	  	 	 	7,457	  	 	 	7,334	  	 	 	7,285	  	 	 	7,779	  	 	 	7,236	  	 	 	8,070	  	 	 	6,995	  	 	 	6,391	  	 	 	5,730	  	 	 	—  	  
	 Draw/(Paydown)
	  	 	7,591	  	 	 	1,313	  	 	 	917	  	 	 	(2,364	) 	 	 	(124	) 	 	 	(49	) 	 	 	494	  	 	 	(543	) 	 	 	834	  	 	 	(1,076	) 	 	 	(604	) 	 	 	(661	) 	 	 	678	  	 	 	—  	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Ending Revolver
	  	 	7,591	  	 	 	8,904	  	 	 	9,821	  	 	 	7,457	  	 	 	7,334	  	 	 	7,285	  	 	 	7,779	  	 	 	7,236	  	 	 	8,070	  	 	 	6,995	  	 	 	6,391	  	 	 	5,730	  	 	 	6,409	  	 	 	6,409	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 III. Borrowing Base
	  				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Borrowing Base (less Reserves)
	  	 	13,023	  	 	 	12,736	  	 	 	12,802	  	 	 	10,731	  	 	 	10,900	  	 	 	10,977	  	 	 	11,265	  	 	 	11,589	  	 	 	11,583	  	 	 	11,761	  	 	 	11,658	  	 	 	11,325	  	 	 	11,233	  	 	 	11,233	  
	 less: Documentary L/Cs
	  	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 	 	 	(1,445	) 
	 less: Minimum Availability
	  	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 	 	 	(1,000	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Borrowing Base
	  	 	10,578	  	 	 	10,291	  	 	 	10,357	  	 	 	8,286	  	 	 	8,455	  	 	 	8,532	  	 	 	8,821	  	 	 	9,144	  	 	 	9,138	  	 	 	9,316	  	 	 	9,213	  	 	 	8,790	  	 	 	8,788	  	 	 	8,788	  
	 Loan Balance
	  	 	7,591	  	 	 	8,904	  	 	 	9,821	  	 	 	7,457	  	 	 	7,334	  	 	 	7,285	  	 	 	7,779	  	 	 	7,236	  	 	 	8,070	  	 	 	6,995	  	 	 	6,391	  	 	 	5,730	  	 	 	6,409	  	 	 	6,409	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Bank Availability
	  	 	2,987	  	 	 	1,387	  	 	 	536	  	 	 	828	  	 	 	1,121	  	 	 	1,247	  	 	 	1,042	  	 	 	1,908	  	 	 	1,068	  	 	 	2,321	  	 	 	2,822	  	 	 	3,060	  	 	 	2,380	  	 	 	2,380Third Amendment to Loan and Security Agreement and First Amendment

 Exhibit 10.2 
 THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT 
 AND FIRST AMENDMENT TO
RATIFICATION AGREEMENT 
 This THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FIRST AMENDMENT TO RATIFICATION AGREEMENT
(this “Agreement”), dated as of February 6, 2012, is made by and among Salus Capital Partners, LLC (as assignee of Wells Fargo Bank, N.A.), in its capacity as agent (in such capacity, “Agent”)
acting for and on behalf of itself and the lenders from time to time party to the Loan Agreement (as defined below) (collectively with Agent, the “Lenders”), the Lenders, and RoomStore Inc., a Virginia corporation, as Debtor
and Debtor-in-Possession (“Borrower” or “Debtor” and collectively with Agent and Lenders, the “Parties”). 

W I T N E S S E T H: 

WHEREAS, on the Petition Date, Borrower commenced its chapter 11 bankruptcy case (the “Chapter 11
Case”) in the United States Bankruptcy Court for the Eastern District of Virginia (the “Bankruptcy Court”), and Borrower retained possession of its assets and is authorized under title 11 of chapter
11 of the United States Code (the “Bankruptcy Code”) to continue the operation of its businesses as a debtor-in-possession; and 
 WHEREAS, prior to the commencement of the Chapter 11 Case, Wells Fargo Bank, N.A. (“Wells Fargo”), as successor by merger to Wells Fargo Retail Finance, LLC, made
loans and advances and provided other financial or credit accommodations to Borrower secured by substantially all assets and properties of Borrower as set forth in the Pre-Petition Loan Documents (as defined below); and 

WHEREAS, the Bankruptcy Court entered the Interim Order (A) Authorizing Debtor To Obtain Interim Post-Petition Financing and
Grant Security Interests and Superpriority Administrative Expense Status Pursuant to 11 U.S.C. §§ 105 and 364(c); (B) Authorizing the Use of Cash Collateral; (C) Modifying the Automatic Stay Pursuant to 11 U.S.C. § 362;
(D) Authorizing Debtor To Enter Into Agreements With Wells Fargo Bank, N.A., in Its Capacity as Agent; and (E) Scheduling a Final Hearing Pursuant to Bankruptcy Rule 4001 (the “Interim Financing
Order”) [Docket No. 53], pursuant to which Wells Fargo made post-petition loans and advances and provided other financial accommodations to Borrower, which advances and other financial accommodations were secured by substantially
all the assets and properties of Borrower as set forth in the Interim Financing Order; and 
 WHEREAS, in connection with the
Interim Financing Order, Borrower entered into the Ratification Agreement (as defined below), which modified the terms of the Pre-Petition Loan Documents (as defined below); and 

WHEREAS, the Bankruptcy Court entered the Final Order (A) Authorizing Debtor To Obtain Interim Post-Petition Financing and Grant
Security Interests and Superpriority Administrative Expense Status Pursuant to 11 U.S.C. §§ 105 and 364(c); (B) Authorizing the Use of Cash Collateral; (C) Modifying the Automatic Stay Pursuant to 11 U.S.C. § 362; and
(D) Authorizing Debtor To Enter Into Agreements With Wells Fargo Bank, N.A., in Its Capacity as Agent; (the “Final Financing Order”) [Docket No. 222] on January 5, 2012, as affirmed and modified by the
Supplemental Order (defined below); and 

  

					
	BOS 46,869,300v9	 		 	

 WHEREAS, Wells Fargo, as both agent and lender, has assigned to Salus Capital Partners, LLC
all of its right, title, and interest in to, and under the Loan Documents, such that Salus Capital Partners, LLC is the sole Lender and the Agent under the Loan Documents and the Pre-Petition Loan Documents; and 

WHEREAS, the Borrower, the Agent and the Lenders desire to amend the terms and conditions of the Loan Documents in accordance with the
terms and conditions set forth herein. 
 NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Agent, Lenders, and Borrower mutually covenant, warrant and agree as follows: 

1. DEFINITIONS. 
 1.1 Additional Definitions. As used herein, the following terms shall have the respective meanings given to them below, and the Loan Agreement and the other Loan Documents shall be deemed and are
hereby amended to include, in addition and not in limitation, each of the following definitions: 
 (a)
“Cash Collateral Advances” shall mean the Revolving Credit Loans in the aggregate principal amount of $1,517,250, the proceeds of which were paid to Wells Fargo as cash collateral for contingent obligations
related to certain standby letters of credit issued by Wells Fargo for the account of Borrower. 
 (b)
“CDS” shall mean Creative Distribution Services, LLC. 
 (c)
“Collateral” shall have the meaning set forth in section 2.1.1 of the Final Financing Order (as defined below).2 
 (d) “Guarantor Documents” shall mean that certain General Security Agreement and that certain Guaranty
executed on December 15, 2011 by MDG (as defined below) in favor of Wells Fargo, each as assigned by Wells Fargo to Agent and Lenders on January 20, 2011. 
 (e) “MDG” shall mean Mattress Discounters Group, LLC, which is also referred to in the Loan Documents as the “Guarantor.” 

(f) “MDG Advance Amount” shall mean, as of any date, the lesser of (i) $2,500,000 and
(ii) the product of (x) the trailing twelve-month EBITDA of MDG, multiplied by (y) 65%, multiplied by (z) 4.0; provided that if at any time (1) any of the Guarantor Documents shall not be in full force and effect,
effective to grant in favor of Agent, for the benefit of the 
  

	2 	 As provided in footnote 2 to the Final Financing Order, the liens granted to Agent and Lenders pursuant thereto (a) extend to the proceeds, if
any, of the Debtors’ leasehold interests in real property, but do not extend to any such leasehold interests themselves and (b) do not extend to avoidance power actions brought under Sections 542, 545, 547, 548, 549, or 550 of the
Bankruptcy Code. 

  

					
	BOS 46,869,300v9	 	2	 	

 Lenders, a valid and effective first priority lien on all or substantially all of the assets of MDG (subject
to the limitations set forth in the Guarantor Documents), or (2) MDG or any other party shall terminate the effectiveness or enforceability of any of the Guarantor Documents, the MDG Advance Amount shall be zero. 

(g) “MDG/CDS Advances” shall mean any Revolving Credit Loans attributable to the MDG Advance
Amount and the Pledged CDS Equity Amount. The principal amount of all Revolving Credit Loans outstanding at any time shall constitute MDG/CDS Advances up to the MDG/CDS Advance Ceiling (as defined below), provided that any outstanding Cash
Collateral Advances shall not constitute MDG/CDS Advances. 
 (h) “MDG/CDS Advance Ceiling” shall mean
the sum of the MDG Advance Amount and the Pledged CDS Equity Amount (as defined below). 
 (i)
“Obligations”: Includes, without limitation, the following: 
 (a) All and each of the
following, whether now existing or hereafter arising under this Agreement or under any of the other Loan Documents: 
 (i) All
Liabilities. 
 (ii) Any and all direct and indirect liabilities, debts, and obligations of the Borrower to the Agent or the
Lenders, each of every kind, nature, and description. 
 (iii) Each obligation to repay any loan, advance, indebtedness, note,
obligation, overdraft, or amount now or hereafter owing by the Borrower to the Agent or the Lenders (including all future advances whether or not made pursuant to a commitment by the Agent or the Lenders), whether or not any of such are liquidated,
unliquidated, primary, secondary, secured, unsecured, direct, indirect, absolute, contingent, or of any other type, nature, or description, or by reason of any cause of action which the Agent or the Lenders, may hold against the Borrower.

 (iv) All notes and other obligations of the Borrower now or hereafter assigned to or held by the Agent or the Lenders, each
of every kind, nature, and description. 
 (v) All interest, fees, and charges and other amounts which may be charged by the
Agent or the Lenders, to the Borrower and/or which may be due from the Borrower to the Agent or the Lenders, from time to time. 
 (vi) All costs and expenses incurred or paid by the Agent or the Lenders, in respect of any agreement between the Borrower and the Agent or the Lenders, or instrument 

  

					
	BOS 46,869,300v9	 	3	 	

 furnished by the Borrower to the Agent or Lenders (including, without limitation, Costs of
Collection, attorneys’ reasonable fees, including reasonable fees and expenses of Lenders’ Special Counsel, and all court and litigation costs and expenses). 
 (vii) Any and all covenants of the Borrower to or with the Agent or the Lenders, and any and all obligations of the Borrower to act or to refrain from acting in accordance with any agreement between the
Borrower and the Agent or the Lenders, or instrument furnished by the Borrower to the Agent or the Lenders. 
 (viii) Each of
the foregoing as if each reference to “Agent,” were to each Affiliate of the Agent and each of the foregoing as if each reference to “Lenders,” were to each Affiliate of the Lenders. 

(b) Any and all direct or indirect liabilities, debts, and obligations of the Borrower to the Agent or the Lenders or any
Affiliate of the Agent or Affiliate of the Lenders, each of every kind, nature, and description owing on account of any service or accommodation provided to, or for the account of the Borrower, in each case pursuant to this or any other Loan
Document, including Bank Product Obligations and the issuances of L/C’s. 
 (j) “Pledged CDS
Equity” shall mean the thirty-one percent (31%) membership interest in CDS owned by Borrower and pledged to Agent, for the benefit of the Lenders, pursuant to the terms of the Pledge Agreement, dated as of May 27, 2010
by Borrower in favor of Agent. 
 (k) “Pledged CDS Equity Amount” shall mean $500,000;
provided that if at any time (i) Agent, for the benefit of the Lenders, shall not hold a perfected first-priority pledge of all of Borrower’s membership interests in CDS (constituting not less than 31% of the total membership
interests in CDS), or (ii) if CDS shall be subject to any proceeding under the Bankruptcy Code or any other state or federal insolvency proceeding, the Pledged CDS Equity Amount shall be deemed to be zero. 

(l) “Pledged MDG Equity” shall mean the sixty-five percent (65%) membership interest in MDG
owned by Borrower and pledged to Agent, for the benefit of the Lenders, pursuant to the terms of the Pledge Agreement, dated as of May 27, 2010 by Borrower in favor of Agent. 

(m) “Pre-Petition Loan Documents” shall mean the Loan Documents (as defined in the Pre-Petition
Loan Agreement), as amended prior to the Petition Date, in each instance as in effect immediately prior to the Petition Date. 

(n) “Pre-Petition Loan Agreement” shall mean the Loan and Security Agreement, dated as of
May 27, 2010, by and among Borrower, Agent, and Lenders, as amended 

  

					
	BOS 46,869,300v9	 	4	 	

 by Amendment No. 1 to Loan and Security Agreement dated as of September 23, 2011, by and
among Wells Fargo (as agent and sole lender) and the Borrower, and as in effect immediately prior to the Petition Date. 
 (o)
“Pre-Petition Liabilities” shall mean all Obligations arising at any time before the Petition Date, whether incurred by Borrower as principal, surety, endorser, guarantor or otherwise and including, without limitation, all
principal, interest, financing charges, letter of credit fees, unused line fees, servicing fees, line increase fees, early termination fees, other fees, commissions, costs, expenses and attorneys’, accountants’, and consultants’ fees
and expenses incurred in connection with any of the foregoing. 
 (p) “Post-Petition
Liabilities” shall mean all Obligations arising on or after the Petition Date, and whether arising on or after the conversion or dismissal of the Chapter 11 Case, or before, during, and after the confirmation of any plan of
reorganization in the Chapter 11 Case, and whether arising under or related to the Loan Agreement, the other Loan Documents, the Final Financing Order, by operation of law, or otherwise, and whether incurred by Borrower as principal, surety,
endorser, guarantor, or otherwise and including, without limitation, all principal, interest, financing charges, letter of credit fees, unused line fees, servicing fees, line increase fees, debtor-in-possession facility fees, early termination fees,
other fees, commissions, costs, expenses, and attorneys’, accountants’, and consultants’ fees and expenses incurred in connection with any of the foregoing. 
 (q) “Ratification Agreement” shall mean that certain Ratification and Amendment Agreement dated as of December 14, 2011, by and among Borrower, Guarantor,
Agent, and Lenders. 
 (r) “Supplemental Order” shall mean an order of the Bankruptcy
Court (i) approving the terms, conditions, and amendments to the Loan Documents set forth in this Agreement, (ii) authorizing the Parties to enter into this Agreement, and (iii) supplementing and/or modifying the Final Financing Order
(as defined below), as applicable. 
 (s) “Third Amendment” shall mean this Agreement.

 (t) “Third Amendment Effective Date” shall mean the date of entry by the Bankruptcy
Court of the Supplemental Order. 
 1.2 Amendments to Definitions. 

(a) Appraised Inventory Net Liquidation Value. The definition of “Appraised Inventory Net Liquidation
Value” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “Appraised Inventory Net Liquidation Value”: The product of (a) the Cost of Eligible Inventory (net of Inventory Reserves) multiplied by (b) that percentage,
determined by the Agent from the then most recent appraisal of Borrower’s Inventory obtained by the Agent, to reflect the 

  

					
	BOS 46,869,300v9	 	5	 	

 
appraiser’s estimate of the net realization on Cost of the Liquidation of the Borrower’s Inventory. Agent and Lenders acknowledge and agree that as of the Third Amendment Effective Date
(and without limiting the right of the Agent to obtain any new appraisal of Borrower’s Inventory), the percentages contemplated by the forgoing clause (b) shall be as set forth below for the months indicated: 

 

			
	 Month
	  	Percentage
	 January 2012
	  	67.00%
	 February 2012
	  	69.20%
	 March 2012
	  	66.10%
	 April 2012
	  	66.90%
	 May 2012
	  	67.70%

 (b) Appraised Real Property Net Liquidation Value. The definition of
“Appraised Real Property Net Liquidation Value” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“Appraised Real Property Net Liquidation Value”: $4,700,000 as of the Third Amendment
Effective Date, which amount may be adjusted upward or downward as determined by the Agent based upon receipt of the most recent appraisal of such Real Property obtained by the Agent, to reflect the appraiser’s estimate of the net realization
of the Liquidation of such Real Property. 
 (c) Availability Reserves. The definition of
“Availability Reserves” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“Availability Reserves”: Such reserves as the Agent from time to time determines in the
Agent’s reasonable discretion as being appropriate to reflect the impediments to the Agent’s ability to realize upon the Collateral. Without limiting the generality of the foregoing, Availability Reserves may include (but are not limited
to) reserves based on the following: 
 (i) Rent for any location in a Landlord State if a Collateral
Access Agreement has not been received by the Agent (which shall be one (1) month’s rent for any such location). 
 (ii) Customer Credit Liabilities. 
 (iii) Taxes and other
governmental charges, including, ad valorem, personal property, and other taxes which in each case might have priority over the Collateral Interests of the Agent in the Collateral, in each case unless being contested in good faith and for which
adequate cash reserves for the payment thereof have been established. 

  

					
	BOS 46,869,300v9	 	6	 	

 (iv) Bank Product Obligations. 

(v) Payables that are past the Borrower’s normal trade terms. 

As of the Third Amendment Effective Date, Agent and Lenders acknowledge and agree that “Availability Reserves”
include the following, provided that the foregoing shall not in any way limit the ability of the Agent at any time to impose additional Availability Reserves or modify existing Availability Reserves in Agent’s reasonable credit judgment:

  

													
	 Description
	  	Amount	 	  	Reserve Factor	 	 	Reserve Amount	 
	Merchandise Credits	  				  				 			
	Gift Certificates	  	$	35,234	  	  	 	50	% 	 	$	17,617	  
	Customer Deposits	  	$	3,470,168	  	  	 	50	% 	 	$	1,735,084	  
	Landlord Liens	  	$	401,432	  	  	 	1 month	  	 	$	401,432	  
	Self-Insured Medical Claims	  	$	474,600	  	  	 	2 months	  	 	$	949,200	  
	Texas Sales Tax	  	$	304,624	  	  	 	1 month	  	 	$	304,624	  
	Texas Property Tax	  	$	468,414	  	  	 	1 year	  	 	$	468,414	  
	Professional Fee Carve-Out	  	$	500,000	  	  	$	75,000/week	  	 	$	500,000	  
	Wells Fargo Purchase Card	  	$	15,000	  	  	 	Credit Limit	  	 	$	15,000	  

 (d) Bank Product Obligations. The definition of “Bank Product
Obligations” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “Bank Product Obligations”: All obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Borrower or its Subsidiaries to Bank Product
Providers pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such
amounts that Borrower is obligated to reimburse to Lender as a result of Lender purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to Borrower or its Subsidiaries pursuant to
the Bank Product Agreements. 
 (e) Bank Product Providers. The definition of “Bank Product
Providers” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “Bank Product Providers”: Wells Fargo Bank, N.A. and any other bank satisfactory to Agent and Borrower that from time to time either provides
Bank Products to the Borrower or its Subsidiaries. 
 (f) Bank Products. The definition of “Bank
Products” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “Bank Products”: Any service or facility extended to the Borrower or its Subsidiaries by a Bank Product Provider, including: (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) Hedge Agreements. 

  

					
	BOS 46,869,300v9	 	7	 	

 (g) Base. The definition of “Base” in the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor: 
 “Base”: The
rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its “prime rate” in effect in New York, New York, each change in “Base” to be effective from and including the date such change is
publicly announced as being effective. 
 (h) Base Margin. The definition of “Base Margin” in
the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“Base Margin”: Three percent (3.0%). 

(i) Borrowing Base. The definition of “Borrowing Base” in the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor: 
 (i) The face amount of Eligible Credit Card
Receivables (including Borrower’s private label credit card receivables, so long as such credit card program remains available for new sales) multiplied by the Credit Card Advance Rate (less associated Receivables Reserves); 

Plus 
 (ii) The lesser of (x) the Appraised Inventory Net Liquidation Value of Eligible Inventory multiplied by (1) from the Third Amendment Effective Date through the date two months
thereafter, 95%, and (2) thereafter, 92% (less Inventory Reserves); and (y) 70% of the value of Eligible Inventory (calculated at the lower of Cost or market value); 

Plus 
 (iii) The Appraised Real Property Net Liquidation Value of all Eligible Real Property multiplied by the Real Property Advance Rate (less any Real Property Reserves); 

Plus 
 (iv) the MDG Advance Amount; 
 Plus 

(v) the Pledged CDS Equity Amount; 

Minus 
 (vi) Any Availability Reserves established by Agent. 

  

					
	BOS 46,869,300v9	 	8	 	

 (j) Budget. The definition of Budget is hereby deleted in its entirety and replaced
with the following: 
 “Budget”: The budget attached to the Third Amendment as Exhibit
A and the Supplemental Order, as amended and supplemented from time to time in accordance with the Loan Documents and Final Financing Order. 
 (k) Cost. The definition of “Cost” in the Loan Agreement is hereby deleted in its entirety and replaced with the following: 

“Cost”: The lower of 

(a) the calculated cost of purchases, based upon the Borrower’s accounting practices, on an average cost basis,
known to the Agent, which practices are in effect on the Third Amendment Effective Date, as such calculated cost is determined from invoices received by the Borrower, the Borrower’s purchase journal, or the Borrower’s stock ledger, as
applicable; and 
 (b) the cost equivalent of the lowest ticketed or promoted price at which the subject
Inventory is offered to the public, after all mark-downs (whether or not such price is then reflected on the Borrower’s accounting system), determined in accordance with the Borrower’s historic business practices; 

provided that “Cost” does not include Inventory capitalization costs or other non-purchase price
charges (such as UNICAP) used in the Borrower’s calculation of cost of goods sold. 
 (l) Eligible Real Property.
The definition of “Eligible Real Property” in the Loan Agreement is hereby deleted in its entirety and replaced with the following: 
 “Eligible Real Property”: The Domestic Distribution Center, provided that Agent has a perfected security interest, lien, mortgage, deed of trust, or collateral assignment
that is prior and superior to all claims and all Encumbrances (other than Permitted Encumbrances, subject to the Agent’s rights to establish Reserves therefor in accordance with the terms of this Agreement). 

(m) Interest Payment Date. The definition of “Interest Payment Date” in the Loan Agreement is hereby
deleted in its entirety and replaced with the following: 
 “Interest Payment
Date”: the first day of each month and the Termination Date. 
 (n) Issuer. The definition of
“Issuer” in the Loan Agreement is hereby deleted in its entirety and replaced with the following: 
 “Issuer”: The issuer of any L/C, including Sovereign Bank or any other commercial bank approved by Agent and acceptable to Borrower. 

  

					
	BOS 46,869,300v9	 	9	 	

 (o) Material Budget Deviation. The definition of “Material
Budget Deviation” in the Loan Agreement is hereby deleted in its entirety and replaced with the following: 
 “Material Budget Deviation” shall mean, with respect to any Test Period, if (i) the inventory receipts of Borrower during such Test Period are less than eighty
percent (80%) of the projected inventory receipts during such Test Period as reflected in the Budget, (ii) any line item expense (excluding line items within the “Bankruptcy Costs” category in the Budget and as further detailed
on a schedule attached to each submission) during such Test Period exceeds one hundred fifteen percent (115%) of the projected line item expense during such Test Period as reflected in the Budget, or (iii) aggregate cash disbursements by
Borrower during such Test Period exceed one hundred ten percent (110%) of the projected aggregate disbursements during such Test Period as reflected in the Budget. 
 (p) Maturity Date. The definition of “Maturity Date” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:

 “Maturity Date”: June 12, 2013, or, if such day is not a Business Day, the next
succeeding Business Day. 
 (q) Permitted Encumbrances. The definition of “Permitted
Encumbrances” in the Loan Agreement is hereby amended by adding a new subsections (m) and (n) as follows: 
 “(m) Liens in favor of Wells Fargo on Borrower’s cash held by Wells Fargo as cash collateral for letters of credit issued by Wells Fargo for the account of Borrower. 

(n) Liens in favor of Wells Fargo on Borrower’s cash held by Wells Fargo as cash collateral for the P-card reserves
and general reserve (as described in Assignment Agreement).” 
 (r) Real Property Advance Rate. The definition of
“Real Property Advance Rate” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “Real Property Advance Rate”: Seventy percent (70%). 
 (s) Revolving Credit Loan Ceiling. The definition of “Revolving Credit Loan Ceiling” in the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor: 
 “Revolving Credit Loan Ceiling”: Fifteen Million
Dollars ($15,000,000). 

  

					
	BOS 46,869,300v9	 	10	 	

 (t) Termination Date. The definition of “Termination
Date” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “Termination Date”: The earliest to occur of (a) the Maturity Date; (b) the date set as the Termination Date in a notice by the Agent to Borrower on
account of the occurrence of any Event of Default (other than the Existing Defaults) or the occurrence of an event of default as specified under the Final Financing Order; (c) the effective date of a plan of reorganization or liquidation of
Borrower in the Chapter 11 Case; (d) closing of a sale of all or substantially all of the assets of the Borrower; and (e) payment in full in cash of all Liabilities, and cash collateralization of all contingent and continuing Liabilities
in accordance with the Loan Documents, after notice by Borrower to Agent of Borrower’s intent to terminate this Agreement. 
 (u) Test Period. The definition of “Test Period” in the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“Test Period” shall mean each three-week period ending on Sunday of each week
covered by the Budget; provided that, until the third full Budget week after January 20, 2012, Budget compliance testing using forecast weeks ending January 29, 2012 through February 12, 2012 shall proceed under the Loan
Documents and the Final Financing Order without giving effect to the Third Amendment or the Supplemental Order; provided, however, that during any Test Period, including but not limited to forecast weeks 1 through 3, “Budget” shall
have the meaning ascribed thereto in the Third Amendment. 
 (v) Loan Documents. All references to the term
“Loan Documents” in the Loan Agreement or the other Loan Documents shall be deemed, and each such reference is hereby amended, to include, in addition and not in limitation, this Agreement, the Ratification Agreement, the
Supplemental Order, the Final Financing Order and all of the Pre-Petition Loan Documents, as ratified, assumed, and adopted by Borrower pursuant to the terms hereof, as each of the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated, or replaced. 
 (w) Loan Agreement. All references to the term “Loan
Agreement” in the Loan Agreement or the other Loan Documents shall be deemed, and each such reference is hereby amended, to mean the Pre-Petition Loan Agreement, as amended by the Ratification Agreement and this Agreement and as
ratified, assumed and adopted by Borrower pursuant to the terms hereof, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 

(x) Liabilities. All references to the term “Liabilities” in the Loan Agreement, this Agreement or the
other Loan Documents shall be deemed, and each such reference is hereby amended, to mean both the Pre-Petition Liabilities and the Post-Petition Liabilities. 

  

					
	BOS 46,869,300v9	 	11	 	

 1.3 Deleted Definitions. 

The following definitions shall be deleted in their entirety from the Loan Agreement: “Arrangement Fee”,
“Eastern Division”, “Eastern Division Appraised Inventory Liquidation Value”, “Eastern Division Borrowing Base”, “Eastern Division
Inventory Advance Rate”, “Factored Receivables”, “Federal Funds Rate”, “Fee Letter”, “IT
Trigger Date”, “Western Division”, “Western Division Appraised Inventory Liquidation Value”, “Western Division Borrowing Base”
and “Western Division Inventory Advance Rate” and such definitions and references thereto shall no longer be applicable to the Loan Agreement. 

1.4 Interpretation. 
 (a) For purposes of this Agreement, unless otherwise defined or amended herein, including, but not limited to, those terms used or defined in the recitals hereto, all terms used herein shall have the
respective meanings assigned to such terms in the Loan Agreement. 
 (b) All references to any term in the singular shall
include the plural and all references to any term in the plural shall include the singular unless the context of such usage requires otherwise. 
 (c) All terms not specifically defined herein or in the Loan Agreement that are defined in the Uniform Commercial Code, as in effect in the State of New York as of the date hereof, shall have the meaning
set forth therein, except that the term “Lien” or “lien” shall have the meaning set forth in § 101(37) of the Bankruptcy Code. 
 2. ACKNOWLEDGMENT. 
 2.1 Pre-Petition Liabilities and Post-Petition
Liabilities. 
 (a) Borrower hereby acknowledges, confirms and agrees that, as of January 20, 2012, (i) all
Pre-Petition Liabilities have been paid in full and all Revolving Credit Loans and other obligations under the Loan Documents constitute Post-Petition Liabilities and (ii) prior to giving effect to the Assignment Agreement, Borrower was
indebted to Wells Fargo, pursuant to the terms of the Loan Documents in respect of all Post-Petition Liabilities in the aggregate principal amount of not less than $4,357,280.00, consisting of (i) Revolving Credit Loans made pursuant to the
Loan Documents (which include the Cash Collateral Advances), together with interest accrued and accruing thereon, and (ii) other charges now or hereafter owed by Borrower to Agent and Lenders in respect thereof, all of which are unconditionally
owing by Borrower to Agent and Lenders, without offset, defense, or counterclaim of any kind, nature, and description whatsoever. 

  

					
	BOS 46,869,300v9	 	12	 	

 (b) Borrower hereby acknowledges, confirms and agrees that, as of the February 3,
2012, Borrower was indebted to Agent and Lenders in respect of all Post-Petition Liabilities in the aggregate principal amount of not less than $6,126,857.95 in respect of all Post-Petition Liabilities, consisting of (i) Revolving Credit Loans
made pursuant to the Loan Documents, together with interest accrued and accruing thereon, and (ii) other charges now or hereafter owed by Borrower to Agent and Lenders in respect thereof, all of which are unconditionally owing by Borrower to
Agent and Lenders, without offset, defense, or counterclaim of any kind, nature, and description whatsoever. 
 2.2
Acknowledgment of Security Interests. 
 Borrower hereby acknowledges, confirms, and agrees that Agent, for the benefit
of itself and the Lenders, has and shall continue to have valid, enforceable, and perfected first-priority and senior security interests in and liens upon all of the Collateral, for the benefit of itself and Lenders, pursuant to the Loan Documents,
Assignment Agreement, and Final Financing Order, to secure all of the Liabilities, subject only to Permitted Encumbrances and any other liens or encumbrances expressly permitted by the Final Financing Order that may have priority over the liens in
favor of Agent and Lenders. 
 2.3 Binding Effect of Documents. 

Borrower hereby acknowledges, confirms, and agrees that (a) each of the Loan Documents to which it is a party was duly executed and
delivered to Agent and Lenders by Borrower and each is in full force and effect as of the date hereof, (b) the agreements and obligations of Borrower contained in the Loan Documents constitute the legal, valid, and binding obligations of
Borrower enforceable against it in accordance with the terms thereof, and Borrower has no valid defense, offset, or counterclaim to the enforcement of such obligations, and (c) Agent and Lenders are and shall be entitled to all of the rights,
remedies, and benefits provided for in the Loan Documents and the Final Financing Order. 
 3. ADOPTION AND RATIFICATION

 Borrower hereby (a) ratifies, assumes, adopts, and agrees to be bound by all of the Loan Documents to which it is a
party, consistent with the terms thereof (as may be amended by this Agreement and the Supplemental Order) and (b) agrees to pay all of the Liabilities in accordance with the terms of such Loan Documents, as amended by this Agreement, and in
accordance with the Final Financing Order. 
 4. GRANT OF SECURITY INTEREST. 

As collateral security for the prompt performance, observance and payment in full of all of the Liabilities, Borrower, as debtor and
debtor-in-possession, hereby confirms, reaffirms, and restates Borrower’s prior grant to Agent, for the benefit of itself and Lenders, of continuing security interests in and liens upon, and rights of setoff against, all of the Collateral.

  

					
	BOS 46,869,300v9	 	13	 	

 5. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. 

In addition to the continuing representations, warranties, and covenants heretofore and hereafter made by Borrower to Agent and Lenders,
whether pursuant to the Loan Documents, the Final Financing Order, or otherwise, and not in limitation thereof, Borrower hereby represents, warrants, and covenants to Agent and Lenders the following (which shall survive the execution and delivery of
this Agreement), the truth and accuracy of which, or compliance with, to the extent such compliance does not violate the terms and provisions of the Bankruptcy Code, shall be a continuing condition of the making of Revolving Credit Loans and
facilitating Letters of Credit by Agent and Lenders: 
 5.1 Orders. 

The Final Financing Order and the Supplemental Order have been duly entered, are valid, subsisting, and continuing and have not been
vacated, modified, reversed on appeal, or vacated or modified by any order of the Bankruptcy Court (other than as consented to by Agent) and are not subject to any pending appeal or stay. 

5.2 Use of Proceeds. 
 All Revolving Credit Loans and L/Cs provided or procured by Agent or any Lender to Borrower pursuant to the Loan Documents, the Final Financing Order, or otherwise, shall be used by Borrower for general
operating and working capital purposes in the ordinary course of business of Borrower and in accordance with the Budget and the Loan Documents. Unless authorized by the Bankruptcy Court and approved by Agent in writing, no portion of any
administrative expense claim or other claim relating to the Chapter 11 Case shall be paid with the proceeds of such Revolving Credit Loans or L/Cs provided or facilitated by Agent and Lenders to or for Borrower, other than those administrative
expense claims, and other claims relating to the Chapter 11 Case directly attributable to the operation of the business of Borrower in the ordinary course of such business in accordance with the Budget, the Loan Documents, the Final Financing Order,
and any other order entered by the Bankruptcy Court in the Chapter 11 Case. The payment of allowed fees and expenses of professionals retained pursuant to an order of the Bankruptcy Court and entitled to compensation from the Debtor’s estate
pursuant to an order of the Bankruptcy Court shall not require the approval or consent of Agent; provided that (i) payment of any such allowed fees and expenses from the Collateral or the proceeds of any Revolving Credit Loans or L/ Cs
shall be subject to the Budget, the Final Financing Order, and the Loan Documents and (ii) other than with respect to the Carve-Out (as defined in the Final Financing Order) as and to the extent provided in the Final Financing Order, Agent and
Lenders shall have no obligation to pay, or to ensure that Borrower has the Availability to pay, any such allowed fees and expenses. 
 5.3 Reorganization/Emergence Process. 
 In the event that Borrower has not,
on or before the close of business on April 15, 2012, repaid in full in cash all Liabilities or filed with the Bankruptcy Court a plan of liquidation or reorganization in form and substance reasonably satisfactory to Agent, Borrower shall:

  

					
	BOS 46,869,300v9	 	14	 	

 (a) If Borrower obtains a further extension of the 210-day period for any of its
unexpired leases of nonresidential real estate (the “Extended Leases”), then for each Extended Lease: (i) each of the deadlines set forth below shall be extended automatically by the duration of such
extension; (ii) the terms Fixtures and Other Assets shall not refer to the Borrower’s assets and properties at the corresponding store location during the period of the extension of the deadlines provided in
(i) above; and (iii) Other Assets shall not refer to the Borrower’s intellectual property until such time as the extension of the deadlines provided in (i) above shall have run for each of the Extended Leases.

 (b) Sale Motion. Not later than April 16, 2012, Borrower shall file with the Bankruptcy Court a motion, in form
and substance satisfactory to Agent, seeking approval, on terms and conditions acceptable to Agent, of (i) an auction, and subsequent assignment and assumption, of the Leases for each of Borrower’s store locations, (ii) for an auction
sale of the Fixtures located at such store locations and (iii) for the sale by the liquidator, as described below, of the remaining assets and properties (other than Leases and Fixtures but including Inventory and intellectual property) of
Borrower (the “Other Assets”). 
 (c) Bid Package. Simultaneously with the filing
of such motion, Borrower shall distribute bid packages to nationally recognized retail inventory liquidation firms with respect to the Other Assets. Such bid packages shall require the submission, not later than April 20, 2012, of bids to
conduct the sales of the Other Assets. 
 (d) Discussion of Bids. Borrower shall discuss all bids received with Agent
and, in consultation with Agent and the Committee, Borrower may select a “stalking horse” bidder prior to the auction with respect to the Other Assets. 
 (e) Auction. Not later than April 23, 2012, Borrower shall auction the right to conduct the sales of the Other Assets to the highest and best bidder (the “Second
Liquidator”). 
 (f) Other Asset Sale Order. Not later than April 24, 2012, Borrower shall obtain the
entry of an Order of the Bankruptcy Court, in form and substance satisfactory to Agent, approving the Second Liquidator with respect to the Other Assets and authorizing the sale of the Other Assets on terms and conditions acceptable to Agent (the
“Other Asset Sale Order”). 
 (g) Sale of Other Assets. Not later than
April 26, 2012, Borrower shall commence the sale of the Other Assets in accordance with the Other Asset Sale Order and otherwise on terms and conditions acceptable to Agent. 

(h) Auction Order. Not later than April 30, 2012, Borrower shall obtain the entry of an Order of the Bankruptcy Court, in
form and substance satisfactory to Agent, authorizing Borrower to conduct an auction sale, on terms and conditions acceptable to Agent, with respect to the Leases and Fixtures (the “Auction Order”). 

(i) Auction. Not later than May 11, 2012, Borrower shall hold an auction for the sale of the Leases and Fixtures to the
highest and best bidder in accordance with the Auction Order. 
 (j) Lease/Fixture Sale Order. Not later than
May 14, 2012, Borrower shall obtain the entry of an Order of the Bankruptcy Court, in form and substance satisfactory to Agent, approving the results of the auction, authorizing the sale of the Fixtures, and assignment and assumption of the
Leases, to the highest and best bidder (the “Lease and Fixture Sale Order”). 

  

					
	BOS 46,869,300v9	 	15	 	

 (k) Sale of Leases and Fixtures. Not later than May 24, 2012, Borrower shall
consummate the sale of the Fixtures, and assignment and assumption of the Leases, in accordance with the terms of the Lease and Fixture Sale Order and otherwise on terms and conditions acceptable to Agent. 

5.4 Bankruptcy Reporting. 
 Borrower shall provide Agent with copies of all financial reports, schedules, and other materials and information at any time furnished by or on behalf of Borrower to the Bankruptcy Court, the United
States Trustee, or any creditors’ committee appointed in the Chapter 11 Case, in each instance concurrently with the delivery thereof to the Bankruptcy Court, United States Trustee, or creditors’ committee, as applicable. Subject to
execution by MDG and Ray Bojanowski (individually and on behalf of MDG) of a nondisclosure agreement acceptable to Borrower, Borrower shall provide to MDG and Ray Bojanowski copies of all financial reports delivered to Agent under Section 5.8
of the Loan Agreement simultaneously with their provision to Agent. 
 6. AMENDMENTS. 

6.1 Revolving Credit Loan Requests. 
 Section 2.5 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “(a) Requests for loans and advances under the Revolving Credit may be requested by the Borrower in such manner as may from time to time be reasonably acceptable to the Agent. 

(b) The Borrower may request that the Agent cause the issuance of L/C’s for the account of the Borrower as provided
in Section 2.18. 
 (c) Agent may rely on any request for a loan or advance, or other financial
accommodation under the Revolving Credit that the Agent, in good faith, believes to have been made by a Person duly authorized to act on behalf of the Borrower and may decline to make any such requested loan or advance, or issuance, or to provide
any such financial accommodation, pending the Agent’s being furnished with such documentation concerning that Person’s authority to act as may be reasonably satisfactory to the Agent. 

  

					
	BOS 46,869,300v9	 	16	 	

 (d) A request by the Borrower for a loan or advance or other financial
accommodation under the Revolving Credit shall be irrevocable and shall constitute certification by the Borrower that as of the date of such request, each of the following is true and correct: 

(i) Each representation, not relating to a specific date, that is made herein or in any of the Loan Documents is
then true and correct in all material respects as of and as if made on the date of such request (except (A) to the extent of changes resulting from transactions contemplated or permitted by this Agreement or the other Loan Documents and changes
occurring in the ordinary course of business and (B) to the extent that such representations and warranties expressly relate to an earlier date). 
 (ii) Neither a Default nor an Event of Default exists. 
 (e) If,
at any time or from time to time, a Default or Event of Default exists and is continuing, Agent may suspend the Revolving Credit immediately, in which event neither the Agent nor the Lenders shall be obligated during such suspension to make any
additional loans or advances or to provide any additional financial accommodation hereunder or to seek the issuance of any L/C.” 
 6.2 The Loan Account. 
 Section 2.8 of the Loan Agreement is hereby
amended by adding a new subsection (g) as follows: 
 “(g) Collections and payments received by Agent
shall be applied to the Obligations on the first Business Day following the Business Day of receipt of such payment.” 

6.3 Payment of the Loan Account. 
 Section 2.10 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “2.10 LOAN ACCOUNT AND MANDATORY PREPAYMENTS 
 (a) Subject to
Section 2.13 hereof, the Borrower may repay all or any portion of the principal balance of the Loan Account from time to time until the Termination Date. 
 (b) The Borrower, without notice or demand from the Agent, shall pay the Agent that amount, from time to time, that is necessary so that there is no Overloan, including, without limitation, a Permissible
Overloan, outstanding. 
 (c) The Borrower shall repay the then entire unpaid balance of the Revolving Credit
and all other Liabilities on the Termination Date. 

  

					
	BOS 46,869,300v9	 	17	 	

 (d) The Agent shall endeavor to cause payments, pursuant to Sections 2.10(a)
and 2.10(b), to be applied in accordance with Section 7.5(a) of this Agreement. 
 (e) In the event that
Borrower sells all or any portion of its interest in the Pledged MDG Equity or the Pledged CDS Equity, or Borrower receives dividends or distributions on account of the Pledged MDG Equity or the Pledged CDS Equity outside of the ordinary course of
business, the entire amount of the net proceeds of such sales, dividends, or distributions shall be applied to reduce the balance of the Revolving Credit and the Revolving Credit Loan Ceiling shall be permanently reduced by an amount equal to
(i) in the case of a sale of the Pledged MDG Equity or the Pledged CDS Equity, a pro rata percentage of the MDG Advance Amount or the Pledged CDS Equity Amount, based upon the portion of the Pledged MDG Equity or Pledged CDS Equity sold, as
applicable, or (ii) in the case of dividends or distributions on account of the Pledged MDG Equity or the Pledged CDS Equity outside of the ordinary course of business, an amount to be agreed upon by the parties.” 

6.4 Interest on Revolving Credit Loans. 
 Section 2.11 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “2.11 INTEREST ON REVOLVING CREDIT LOANS AND MDG/CDS ADVANCES. 
 (a) Except as set forth in Section 2.11(b) and 2.11(c), each Revolving Credit Loan shall bear interest at a per annum rate equal to the greater of (x) the Base Rate plus the Base Rate Margin and
(y) five and one-half percent (5.5%), as determined based upon a 360-day year and actual days elapsed. 
 (b) MDG/CDS
Advances shall bear interest (i) for the period from the Third Amendment Effective Date until ninety (90) days after the Third Amendment Effective Date, at thirteen percent (13%) per annum, and (ii) thereafter, a percentage
determined with reference to the grid set forth below based upon average Availability during the most recently completed fiscal quarter: 
  

			
	 Availability
	  	Interest Rate for
MDG/CDS Advances
	 $5,000,000 or greater
	  	9.50%
	 Less than $5,000,000 but more than $3,000,000
	  	11.0%
	 $3,000,000 or less
	  	13.0%

 Following the date ninety (90) days after the Third Amendment Effective Date, the
interest rate for MDG/CDS Advances shall be set as of the first day of each fiscal quarter of the Borrower based upon the average Availability for the 

  

					
	BOS 46,869,300v9	 	18	 	

 
immediately preceding fiscal quarter. The principal amount of all Revolving Credit Loans outstanding at any time shall constitute MDG/CDS Advances up to the MDG/CDS Advance Ceiling,
provided that any outstanding Cash Collateral Advances shall not constitute MDG/CDS Advances. 
 (c) Cash
Collateral Advances shall bear interest at three percent (3.0%) per annum. 
 (d) Accrued and unpaid
interest on the outstanding principal balance of the Revolving Credit Loans (including the MDG/CDS Advances and the Cash Collateral Advances) shall be due and payable on each Interest Payment Date. 

(e) Following the occurrence and during the continuance of any Event of Default or at any time following the Termination
Date, in Agent’s sole discretion, all Revolving Credit Loans (including the MDG/CDS Advances and the Cash Collateral Advances) shall bear interest at a rate that is two percent (2.0%) above the applicable rate set forth above.”

 6.5 Unused Line Fee. 
 Section 2.12 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “2.12 UNUSED LINE FEE. 
 In addition to any other fee to be paid by the
Borrower on account of the Revolving Credit, the Borrower shall pay the Agent, for the benefit of the Lenders, an “Unused Line Fee.” The Unused Line Fee shall equal Three Quarters of One Percent (0.75%) per annum of the average difference
between the Revolving Credit Loan Ceiling and the sum of (i) the unpaid principal balance of the Loan Account and (ii) the Stated Amount of issued and undrawn L/Cs. The Unused Line Fee shall be payable monthly in arrears on the first day
of each month, and on the Termination Date.” 
 6.6 Early Termination Fee. 

Section 2.13 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“2.13 EARLY TERMINATION OR EXIT FEES. 
 (a) If (i) the Revolving Credit is terminated or permanently reduced for any reason (including by the Agent and Lenders following the occurrence and continuance of an Event of Default, or upon the
Termination Date, or if Borrower elects to terminate the Revolving Credit or reduce the Revolving Credit Ceiling on a date prior to the Maturity Date), (ii) the Obligations are paid in full on the Maturity Date or otherwise and this Agreement
is terminated, or (iii) this Agreement is converted into an exit credit facility upon Borrower’s emergence 

  

					
	BOS 46,869,300v9	 	19	 	

 
from the Chapter 11 Case with the consent of the Agent and Lenders (it being understood that any such consent shall be granted in the sole discretion of Agent and Lenders and there being no
commitment on the part of Agent and Lenders to do so), then Borrower shall pay to Agent, for the benefit of the Lenders, a fee in an amount equal to three-quarters of one percent (0.75%) of the then effective Revolving Credit Loan Ceiling (or in the
case of a reduction of the Revolving Credit Loan Ceiling, three-quarters of one percent (0.75%) of the amount by which the Revolving Credit Loan Ceiling is to be reduced). The fee payable by the Borrower pursuant to this Section 2.13(a) shall
be fully earned and due and payable upon the date of the occurrence of any event described in the foregoing clauses (i), (ii), or (iii), and upon the occurrence of any such event, no portion of the fee payable under this Section 2.13(a) shall
be subject to refund, rebate, or abatement in whole or part. 
 (b) In addition to the fee described in Section 2.13(a), if
either (i) Lenders offer to provide exit financing in connection with Borrower’s reorganization and emergence from the Chapter 11 Case (it being understood that any such financing shall be offered in the sole discretion of Agent and
Lenders and there being no commitment on the part of Agent and Lenders to do so) or (ii) Borrower voluntarily terminates this Agreement for any reason (including repayment of the Obligations under this Agreement with the proceeds of an
alternative debtor-in-possession credit facility or exit facility), then Borrower shall pay to Agent, for the benefit of the Lenders, an additional fee in an amount equal to three-quarters of one percent (0.75%) of the then effective Revolving
Credit Loan Ceiling. The fee payable by Borrower pursuant to this Section 2.13(b) shall be fully earned and due and payable upon the date of the occurrence of any event described in the foregoing clauses (i) and (ii), and upon the
occurrence of any such event no portion of such fee shall be subject to refund, rebate, or abatement in whole or part.” 

6.7 Arrangement Fee. 
 Section 2.14 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
 “2.14 CLOSING FEE AND COLLATERAL MONITORING FEE 
 (a) Borrower shall pay to
Agent, for the benefit of the Lenders, a “Closing Fee” in the amount of $150,000, which Closing Fee is fully earned and due and payable on the Third Amendment Effective Date. No portion of the Closing Fee shall be subject to refund,
rebate, or abatement in whole or part. 
 (b) From and after the Third Amendment Effective Date, Borrower shall pay to Agent
collateral monitoring fees at the rate of $5,000 per month, which fees shall be fully earned through the Maturity Date and shall be payable monthly in advance, on the first day of each month following the Third Amendment Effective Date.”

  

					
	BOS 46,869,300v9	 	20	 	

 6.8 Concerning Fess. 

Section 2.15(b) of the Loan Agreement is hereby deleted in its entirety and replaced with the following: 

“(b) In connection with an increase in the Revolving Credit Loan Ceiling requested by the Borrower which increases the Revolving
Credit Loan Ceiling to an amount in excess of $15,000,000, Agent reserves the right to negotiate with the Borrower for the assessment of additional fees, including fees for the benefit of the Agent.” 

6.9 Procedures for Issuance of L/C’S. 
 Sections 2.17(b)(i) of the Loan Agreement is hereby deleted in its entirety and replaced with the following: 
 “ (i) The aggregate Stated Amount of all L/C’s then outstanding (giving effect to the L/C whose issuance is requested), does not exceed Two Million ($2,000,000) Dollars;” 

6.10 Letter of Credit Fees. 
 Sections 2.18(b)(i), (ii), and (iii) of the Loan Agreement are hereby deleted in their entirety and replaced with the following: 

“(i) For each standby L/C: Three percent (3.0%) per annum of the Stated Amount of such standby L/C, payable monthly in
arrears, on the first day of each month. 
 (ii) For each documentary L/C: Three percent (3.0%) per annum of the weighted
average of the Stated Amount of such documentary L/ C outstanding at any time during the period since the then most recent payment of such fee, payable monthly in arrears, on the first day of each month, and on the End Date. 

(iii) Notwithstanding Subsections (i) and (ii), following the occurrence of any Event of Default (and whether or not the Agent
exercises the Agent’s rights on account thereof), the above fees, at the option of the Agent, shall be two percent (2%) per annum above the applicable rates above.” 

6.11 Additional Covenants. 
 Section 4.29 of the Loan Agreement, which was previously reserved, is hereby replaced with the following: 

  

					
	BOS 46,869,300v9	 	21	 	

 “4.29 ADDITIONAL COVENANTS. 

The Borrower shall not, without the prior written consent of the Agent, except as expressly permitted in this Agreement, any other Loan
Documents, or the Final Financing Order and as contemplated by the Budget, do any of the following: 
 (a) conduct any
liquidation of its inventory and/or fixtures and equipment (excluding any store-closing sales conducted pursuant to that certain Order Approving Entry Into Agency Agreement and Sale Procedures and Authorizing the Debtor and the Agent To Conduct the
Sale entered by the Bankruptcy Court in the Chapter 11 Case (the “Sale Order”) [Docket No. 223], provided that Borrower shall not designate any Additional Closing Stores (as that term is used in paragraph
22 of the Sale Order) without the prior written consent of Agent; 
 (b) sell all or any portion of the Pledged CDS Equity or
Pledged MDG Equity; provided, however, that the Agent’s consent shall not be required for (i) a sale of the Pledged MDG Equity pursuant to the terms and conditions of that certain Buy-Sell Agreement for Mattress Discounters Group,
LLC dated as of January 8, 2010 (the “Buy-Sell Agreement”) or (ii) a sale of the Pledged MDG Equity to a third party for not less than fair market value, so long as, in either case, the full net proceeds of such sale are
immediately delivered to Agent for application to the balance of the Revolving Credit pursuant to the terms of Section 2.10(e) hereof, provided further that nothing herein shall modify or amend the Buy-Sell Agreement; 

(c) make payments on account of Indebtedness secured by pre-petition liens; 

(d) terminate its private-label credit card program; or 
 (e) permit MDG to effectuate any recapitalization or amendment of the operating agreement of MDG that would have the effect of altering the economic rights of the Pledged MDG Equity (other than
pursuant to the Buy-Sell Agreement), provided, however, that nothing herein shall modify or amend any of the Guarantor Documents.” 
 6.12 Financial Reports. Section 5.8 of the Loan Agreement is hereby amended by adding a new subsection (c) as follows: 

“(c) Monthly, within thirty (30) days following the end of each fiscal month of the Borrower, the Borrower
shall furnish the Agent with the following: 
 (i) A copy of each of the monthly financial statements of MDG and CDS, which
shall include, at a minimum (with comparative information for the same month in the then prior fiscal year) a balance sheet, income statement, statement of changes in shareholders’ equity, and cash flows and, in the case of MDG, accompanied by
a certification from MDG as to EBITDA for such monthly period and the twelve-month period then ended; and 
 (ii) A report of
the cash balances for CDS.” 

  

					
	BOS 46,869,300v9	 	22	 	

 6.13 Minimum Availability. 

Section 5.12 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 

“5.12 The Borrower shall not permit Excess Availability at any time to be less than the amount equal to $750,000. The Agent may
determine the Borrower’s compliance with such covenant based upon financial reports and statements provided by the Borrower to the Agent (whether or not such financial reports and statements are required to be furnished pursuant to this
Agreement) as well as by reference to interim financial and collateral information provided to, or developed by, the Agent.” 
 6.14 The Concentration Account, Blocked, Operating Accounts and Investment Accounts. Section 7.3(a) of the Loan Agreement is hereby amended by deleting subsection (a) in its entirety and
the following substituted therefor: 
 “(a) The following deposit accounts have been or will be established (and are so
referred to herein): 
 (i) The “Concentration Account”: The deposit account no.
4122025331 with Wells Fargo Bank, N.A. or any other bank satisfactory to the Agent, into which Borrower shall deposit, or cause to be deposited, proceeds of Collateral and from which the Borrower shall not make disbursements. 

(ii) The “Blocked Account(s)”: Each deposit account now existing or hereafter established by the
Borrower with (A) JP Morgan Chase, (B) Wells Fargo Bank, N.A. and (C) any other banks satisfactory to the Agent, into which Borrower shall deposit, or cause to be deposited, proceeds of Collateral and from which the Borrower shall not
make disbursements. 
 (iii) The “Operating Account”: The deposit account no 4122025349 with
Wells Fargo Bank, N.A. or another deposit account hereafter established by the Borrower with any bank satisfactory to Agent), from which disbursements may be made and into which advances under the Revolving Credit may be deposited.” 

6.15 The Concentration Account, Blocked, Operating Accounts and Investment Accounts. Section 7.3(e) of the Loan Agreement is
hereby amended by deleting subsection (a) in its entirety and the following substituted therefor: 
 “(e)
Notwithstanding anything to the contrary contained in this Section 7.3 or elsewhere in this Agreement, each Blocked Account Agreement (other than any Control Agreement in respect of any Investment Account) shall provide (except as the Agent may
otherwise agree in writing) that all amounts in the applicable Blocked Account shall be remitted to the Concentration Account or such other account as the Agent may specify. On each Business Day, the Borrower shall cause all funds in the
Concentration Account to be remitted to an account specified by Agent.” 

  

					
	BOS 46,869,300v9	 	23	 	

 6.16 SwingLine Loans. 

Notwithstanding anything to the contrary in the Loan Documents, no outstanding Revolving Credit Loans, and no future Revolving Credit
Loans, shall constitute SwingLine Loans. Borrower shall not request, and Agent and Lenders shall have no obligation to provide, any SwingLine Loans. 
 6.17 Appraisals and Audits. 
 Notwithstanding anything to the contrary
contained in the Loan Documents, Agent shall have the right to (a) obtain such number of appraisals of the Inventory and Real Property of Borrower and Guarantor as Agent reasonably determines is necessary or appropriate and (b) conduct
such number of commercial finance audits of the books and records of Borrower and Guarantor as Agent reasonably determines is necessary or appropriate, in each instance, at the cost and expense of Borrower. 

6.18 Sale of Assets, Consolidation, Merger, Disabilities, Etc. 

Notwithstanding anything to the contrary contained in the Loan Documents, Borrower shall not directly or indirectly sell, transfer,
lease, encumber, return, or otherwise dispose of any portion of the Collateral, or any other assets of Borrower, including, without limitation, assume, reject, or assign any leasehold interest or enter into any agreement to return Inventory to
vendors, whether pursuant to section 546 of the Bankruptcy Code or otherwise, without the prior written consent (electronic mail is sufficient) of Agent (and no such consent shall be implied, from any other action, inaction or acquiescence by Agent
or any Lender), except for (i) sales of Borrower’s Inventory, (ii) returns of damaged, defective, or otherwise unsalable inventory, each in the ordinary course of its business, and (iii) the sale of the Pledged MDG Equity
in accordance with the terms and conditions of Section 4.29(b) of the Loan Agreement, as amended hereby. 
 6.19
Additional Events of Default. 
 The occurrence or existence of any one or more of the following events shall constitute
an additional “Event of Default” under the Loan Documents: 
 (a) any failure of Borrower to comply with the terms
and conditions of this Agreement, or any breach by Borrower of any representation or warranty made by Borrower in this Agreement; 
 (b) any failure of Borrower to repay in full, in cash, all Liabilities on or before the Termination Date; 
 (c) the occurrence of any condition or event which permits Agent or Lenders to exercise any of the remedies set forth in the Final Financing Order, including, without limitation, any “Event of
Default” (as defined in the Final Financing Order); 

  

					
	BOS 46,869,300v9	 	24	 	

 (d) the grant of a lien on or other interest in any property of any Borrower or Guarantor,
other than a lien or encumbrance permitted by the Final Financing Order or expressly permitted by the Loan Agreement, that is superior to or ranks in parity with Agent’s and Lenders’ security interest in or lien upon the Collateral;

 (e) the grant of an administrative expense claim in the Chapter 11 Case, other than such administrative expense claims
permitted by the Final Financing Order, that is superior to or ranks in parity with Agent’s and Lenders’ Superpriority Claim (as defined in the Final Financing Order); 

(f) any material portion of the Collateral becomes subject to surcharge or marshalling; 

(g) the entry of an order by the Bankruptcy Court granting relief from or modifying the automatic stay of Section 362 of the
Bankruptcy Code to allow any creditor to execute upon or enforce a lien on any Collateral having a value in a material amount as reasonably determined by the Lender or which would have a Material Adverse Effect; 

(h) the Borrower (1) obtains or seeks approval to obtain additional financing under Section 364(c) or (d) of the
Bankruptcy Code (unless such financing is proposed to refinance and pay the obligations in full in cash under the debtor-in-possession facility with the termination of all related lending commitments thereunder), (2) grants or seeks approval to
grant any lien (other than Permitted Encumbrances) upon or affecting any cash collateral under Section 363(c) of the Bankruptcy Code without the prior written consent of the Agent and Lenders, or (3) files any action or challenge against
the Agent or Lenders under the debtor-in-possession facility; 
 (i) the Final Financing Order or the Supplemental Order shall
be modified, reversed, revoked, remanded, stayed, rescinded, vacated, or amended on appeal or by the Bankruptcy Court without the prior written consent of Agent (and no such consent shall be implied from any other authorization or acquiescence by
Agent or any Lender); 
 (j) the filing of a plan of reorganization or liquidation by or on behalf of Borrower in the Chapter
11 Case, to which Agent has not consented in writing (electronic mail being sufficient), that does not provide for payment in full in cash of all Liabilities on the effective date thereof in accordance with the terms and conditions of the Loan
Documents; 
 (k) the confirmation of any plan of reorganization or liquidation in the Chapter 11 Case, to which Agent has not
consented to in writing, that does not provide for payment in full in cash of all Liabilities on the effective date thereof in accordance with the terms and conditions of the Loan Documents; 

(l) any actual or asserted impairment of any guarantee or security document or security interests granted to Agent for the benefit of
the Lenders; 
 (m) any reportable event as described under ERISA, which Agent in good faith believes to constitute sufficient
grounds for termination of any Employee Benefit Plan or for the appointment of a trustee to administer any Employee Benefit Plan, has occurred and is continuing thirty (30) days after Borrower gives notice to Agent of such reportable event; or
a 

  

					
	BOS 46,869,300v9	 	25	 	

 
trustee is appointed by an appropriate court to administer any Employee Benefit Plan; or the Pension Benefit Guaranty Corporation institutes proceedings to terminate or appoint a trustee to
administer any Employee Benefit Plan; or Borrower or any ERISA Affiliate files for a distress termination of any Employee Benefit Plan under Title IV of ERISA; or Borrower or any ERISA Affiliate fails to make any quarterly Employee Benefit Plan
contribution required under Section 412(m) of the Internal Revenue Code of 1986, as amended from time to time), which Agent in good faith believes may, either by itself or in combination with other failures, result in the imposition of a Lien
on Borrower’s assets in favor of the Employee Benefit Plan; or any withdrawal, partial withdrawal, reorganization or other event occurs with respect to a Employee Benefit Plan which could reasonably be expected to result in a material liability
by Borrower to the Employee Benefit Plan under Title IV of ERISA; 
 (n) The Board of Managers of MDG shall adopt any
resolutions that have a material adverse effect on the economic value of MDG; and 
 (o) Any of the Guarantor Documents shall
not be in full force and effect, effective to guaranty the Obligations and grant in favor of Agent, for the benefit of the Lenders, a valid and effective first priority lien on all or substantially all of the assets of MDG (in each case, subject to
the limitations set forth in the Guarantor Documents). 
 6.20 Reserves. 

Agent shall be permitted to establish and maintain, in addition to and not in limitation of all other Reserves, (a) the Carve-Out
Expenses Reserve provided for in Section 2.3 of the Final Financing Order, (b) Reserves to reflect the value of Inventory at leased locations with respect to which the lease therefor has not been assumed at least forty-five (45) days
prior to the expiration of the applicable period to assume or reject the leases at such locations or as to which there has been filed a landlord’s motion to compel the assumption or rejection of the lease, (c) Reserves to reflect the
amount of any senior liens or claims in or against the Collateral that, in Agent’s reasonable determination, have priority over the liens and claims of Agent and Lenders, (d) Reserves to reflect the amount of priority or administrative
expense claims that, in Agent’s reasonable determination, require payment during the Chapter 11 Case, and (e) Availability Reserves to reflect Bank Product Obligations, to the extent such Bank Product Obligations are not fully cash
collateralized. The amount of the Reserve established in respect of the Carve-Out (as defined in the Final Financing Order) shall be equal to $500,000. 
 6.21 Repayment in Full. 
 (a) If, upon repayment of the Liabilities and
termination of the Loan Documents, any L/Cs remain outstanding, the Borrower shall deposit in an account with the Agent, in the name of the Agent and for the benefit of the applicable Lenders (such account, the “Cash Collateral
Account”), an amount in cash equal to 105% of the aggregate undrawn Stated Amount of the outstanding L/Cs as of such date plus the amount of any fees and expenses payable under the Loan Agreement with respect to such L/Cs through the
end of the latest expiration date of such L/Cs and any accrued and unpaid interest thereon (the “L/C Exposure”). Such deposit shall be held 

  

					
	BOS 46,869,300v9	 	26	 	

 
by the Agent as collateral for the payment and performance of the Liabilities with respect to such L/Cs, all of which shall survive such termination. The Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such Cash Collateral Account. Other than any interest earned on the investment of such deposit, which investments shall be in direct short term obligations of, or short term obligations the
principal of and interest on which are unconditionally guaranteed by, the United States of America, such deposit shall not bear interest. Interest or profits, if any, on such investments shall accumulate in the Cash Collateral Account. Moneys in
such Cash Collateral Account shall be applied by the Agent to reimburse the Issuer for L/C disbursements for which the Issuer has not been reimbursed and, to the extent not so applied, shall be held as cash collateral for the satisfaction of the
Liabilities of Borrower for the L/C Exposure at such time. Within three (3) Business Days following the expiration of each outstanding L/C and the payment of all L/C Exposure related thereto, the amount remaining on deposit in the Cash
Collateral Account with respect to such L/C shall be returned to the Borrower (or transferred to such Person as the Borrower directs). 
 (b) In connection with any repayment of all Liabilities, including on the Termination Date, Borrower shall (i) repay in full all Liabilities, including principal, interest, fees, and expenses
(including actual and reasonable legal fees and expenses) and (ii) remit to Agent cash collateral for outstanding L/Cs in the amount and manner described above. 
 6.22 Amendment to Exhibit 2.21(a). 
 Exhibit 2.21(a), entitled
“Commitments.” shall be deleted in its entirety and replaced with the new Exhibit 2.21(a) attached to this Agreement. 

7. WAIVER OF DIP FACILITY FEE. 
 Upon payment of the Closing Fee contemplated by Section 2.14(a) of the Loan Agreement (as modified by this Agreement), Agent and Lenders hereby unconditionally and forever waive the
debtor-in-possession financing facility fee in the amount of $130,000 that was originally due on December 31, 2011, as set forth in section 8.2 of the Ratification Agreement. 

8. RELEASE. 
 8.1 Release of Pre-Petition Claims. 
 Borrower hereby confirms, reaffirms,
and restates the releases set forth in Section 9.1 of the Ratification Agreement as of the Third Amendment Effective Date, and acknowledges that such releases shall fully inure to the benefit of Agent and Lenders (each as a
successor-in-interest to Wells Fargo) and their respective successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, and other representatives.

  

					
	BOS 46,869,300v9	 	27	 	

 8.2 Releases Generally. 

(a) Borrower understands, acknowledges, and agrees that the releases set forth in the Ratification Agreement and reaffirmed above as of
the Third Amendment Effective Date, may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit, or other proceeding that may be instituted, prosecuted, or attempted in breach of the provisions
of such releases. 
 (b) Borrower agrees that no fact, event, circumstance, evidence, or transaction that could now be asserted
or that may hereafter be discovered shall affect in any manner the final and unconditional nature of the releases set forth in the Ratification Agreement and reaffirmed above and, when made, Section 8.2 hereof. 

9. CONDITIONS PRECEDENT. 
 The effectiveness of this Agreement, and Agent’s and Lenders’ obligation to extend to Borrower further Revolving Credit Loans, advances, or other financial accommodations hereunder, shall be
subject to satisfaction, as determined by Agent, of the following conditions precedent (which, with respect to further Revolving Credit Loans and other financial accommodations, shall be continuing conditions precedent): 

 

	 	9.1	the receipt by Agent of an original (or electronic copy) of this Agreement, duly authorized, executed, and delivered by Borrower and Lenders; 

 

	 	9.2	the Bankruptcy Court shall have entered the Supplemental Order on terms and conditions acceptable to Agent; 

 

	 	9.3	Borrower shall furnish to Agent and Lenders all financial information, projections, budgets, business plans, cash flows, and such other information as Agent and Lenders
shall reasonably request from time to time; 

  

	 	9.4	no trustee, examiner, or receiver or the like shall have been appointed or designated with respect to Borrower, as debtor and debtor-in- possession, or its respective
business, properties, and assets and no motion or proceeding shall be pending seeking such relief; 

  

	 	9.5	satisfactory review by counsel for Agent of legal issues attendant to the post-petition financing transactions contemplated hereunder; 

 

	 	9.6	other than the voluntary commencement of the Chapter 11 Case, no material impairment of the priority of Agent’s and Lenders’ security interests in the
Collateral shall have occurred from the date of the latest field examinations of Agent and Lenders to the Petition Date; and 

  

	 	9.7	no Event of Default (other than an Existing Default) shall have occurred or be existing under any of the Loan Documents. 

  

					
	BOS 46,869,300v9	 	28	 	

 10. MISCELLANEOUS. 

10.1 Amendments and Waivers. 
 Neither this Ratification Agreement nor any other instrument or document referred to herein or therein may be changed, waived, discharged, or terminated orally, but only by an instrument in writing signed
by the party against whom enforcement of the change, waiver, discharge, or termination is sought. 
 10.2 Further
Assurances. 
 Borrower shall, at its expense, at any time or times duly execute and deliver, or shall use its best efforts
to cause to be duly executed and delivered, such further agreements, instruments, and documents, including, without limitation, additional security agreements, collateral assignments, UCC financing statements or amendments or continuations thereof,
landlord’s or mortgagee’s waivers of liens and consents to the exercise by Agent and Lenders of all the rights and remedies hereunder, under any of the other Loan Documents, the Final Financing Order, or applicable law with respect to the
Collateral, and do or use its best efforts to cause to be done such further acts as may be reasonably necessary or proper in Agent’s opinion to evidence, perfect, maintain, and enforce the security interests of Agent and Lenders, and the
priority thereof, in the Collateral and to otherwise effectuate the provisions or purposes of this Agreement, any of the other Loan Documents, or the Final Financing Order. 
 10.3 Headings. 
 The headings used herein are for convenience only and do
not constitute matters to be considered in interpreting this Agreement. 
 10.4 Counterparts. 

This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by electronic mail (PDF), telefacsimile, or other method of electronic transmission shall have the same force and effect as the delivery of an original
executed counterpart of this Agreement. In making proof of this Agreement, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the Parties. 

10.5 Additional Events of Default. 
 The Parties acknowledge, confirm, and agree that the failure of Borrower or Guarantor to comply with any of the covenants, conditions, and agreements contained herein or in any other agreement, document,
or instrument at any time executed by such Borrower or Guarantor in connection herewith shall constitute an Event of Default under the Loan Documents. 

  

					
	BOS 46,869,300v9	 	29	 	

 10.6 Costs and Expenses. 

In addition to all other fees and expenses payable by the Borrower or Guarantor to Agent and Lenders under the Loan Documents, the
Borrower shall reimburse Agent and Lenders for all costs and expenses, including reasonable actual and reasonable legal fees and expenses, incurred by Agent or any Lender in the structuring, negotiation, arrangement, or preparation of this
Agreement, the Supplemental Order, the Loan Documents, and the agreements, documents, and/or instruments to be executed in connection herewith or contemplated hereby. Agent shall provide Borrower, the Office of the United States Trustee, and any
statutory committee appointed in the Chapter 11 Case with copies of invoices for all such fees and expenses, redacted as necessary to remove any attorney-client privileged information. Borrower, the Office of the United States Trustee, and any
statutory committee appointed in the Chapter 11 Case shall have the right to object to reimbursement by the Debtor of any such fees and expenses within seven (7) days of receipt of such invoices therefor. Any such fees and expenses not objected
to within such seven (7) day period shall be added to the Post-Petition Liabilities and shall be payable in accordance with the terms of the Loan Documents. 
 [SIGNATURE PAGE FOLLOWS] 

  

					
	BOS 46,869,300v9	 	30	 	

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day
and year first above written. 
  

			
	SALUS CAPITAL PARTNERS, LLC
		
	By:  	 	/s/ Kyle Shonak
		 	Name:
		 	Title:

  

			
	ROOMSTORE, INC.
		
	By:  	 	/s/ Lewis M. Brubaker, Jr.
		 	Name:
		 	Title:

 [Signature Page to Third Amendment to Loan and Security Agreement and First Amendment to
Ratification Agreement] 

  

					
	BOS 46,869,300v9	 		 	

 EXHIBIT 2.21(a) 
 Commitments 
  

									
	 Lender
	  	Dollar Commitment	 	  	Percentage Commitment	 
	 Salus Capital Partners, LLC
	  	$	15,000,000	  	  	 	100	% 
	 Total:
	  	$	15,000,000	  	  	 	100	% 

  

					
	BOS 46,869,300v9

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