Document:

Exhibit
10.53

CROSS
REIMBURSEMENT AND INDEMNITY AGREEMENT

THIS CROSS REIMBURSEMENT AND INDEMNITY AGREEMENT (this
“Agreement”) is made as of
December 1 , 2006 (the “Effective Date”)
between CHASE PARK PLAZA HOTEL, LLC, a Delaware limited liability company (“Hotel Owner”) and THE PRIVATE RESIDENCES,
LLC, a Delaware limited liability company (“Residences
Owner”).

RECITALS:

WHEREAS, Kingsdell L.P., a Delaware limited
partnership (“Kingsdell”) made a
certain Promissory Note in the amount of $55 million (the “Note”)
payable to the order of Massachusetts Mutual Life Insurance Company (“Mass Mutual”);

WHEREAS, the Note is secured by a Deed of Trust (the “Deed of Trust”) covering (i) the Chase Hotel (the “Hotel”), (ii) the basement, sub-basement,
floors 1 through 8, floor 16, a portion of floor 28, floor 29 and floor 30 of
the Park Plaza Tower (the “Hotel Expansion”)
and (iii) floors 9 through 15 (which does not contain a 13th floor) and floors 17 through 27 and a portion
of floor 28 of the Park Plaza Tower (the “Residences”);

WHEREAS, contemporaneously with the execution of this
Agreement (i) Kingsdell has contributed the Hotel and the Hotel Expansion to
Hotel Owner pursuant to the terms of that certain Contribution Agreement
between Kingsdell and Hotel Owner dated December 1, 2006 and (ii) Kingsdell has
contributed the Residences to Residences Owner
pursuant to the terms of that certain Contribution Agreement between Kingsdell
and Residences Owner dated December 1 , 2006;

WHEREAS, contemporaneously with the execution of this
Agreement, Hotel Owner and Residences Owner have each executed that certain
Loan Assumption Agreement (the “Assumption
Agreement”), pursuant to which each has agreed to be jointly and
severally liable under the Note for the loan
evidenced by the Note (the “Loan”);

WHEREAS, even though the Loan is cross-collateralized
and cross-defaulted and even though Hotel Owner and Residences Owner are
jointly and severally liable for the Loan pursuant to the terms of the
Assumption Agreement, Hotel Owner and Residences Owner desire to express among
themselves the division of the primary obligation with respect to the Loan and
related expenses;

WHEREAS, each party recognizes that it has the
obligation, upon a failure to pay by the other party of its allocated share of
the Loan and expenses, to pay the other party’s allocated share of the Loan and
expenses;

WHEREAS, as the inducement for Hotel Owner to enter
into the Assumption Agreement, Residences Owner has agreed to reimburse and/or
indemnify Hotel Owner for any payments made by Hotel Owner under the Note that are applied to Residences Owner’s share of the
Loan, any fees and expenses paid by Hotel Owner under the Note
that are applied to Residences Owner’s share of such fees or expenses, and any
losses incurred by Hotel Owner resulting from the failure of Residences Owner
to perform or to comply with any covenant or condition

 

required to be performed
or complied with by Residences Owner under the Note or the Deed of Trust; and

WHEREAS, as the inducement for Residences Owner to
enter into the Assumption Agreement, Hotel Owner has agreed to reimburse and/or
indemnify Residences Owner for any payments made by Residences Owner under the
Note that are applied to Hotel Owner’s share of the Loan, any fees and expenses
paid by Residences Owner under the Note that are applied to Hotel Owner’s share
of such fees and expenses, and any losses incurred by Residences Owner
resulting from the failure of Hotel Owner to perform or to comply with any
covenant or condition required to be performed or complied with by Hotel Owner
under the Note or the Deed of Trust.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises, Ten
Dollars ($10.00), and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:

1.             Recitals.  The foregoing recitals are incorporated into
this Agreement by this reference.

2.             Representations and Warranties.

A.            Hotel Owner hereby represents and warrants
to Residences Owner as follows:

(1)                                  Hotel Owner has been
duly organized and is validly existing as a limited liability company under the
laws of the State of Delaware with full power and authority to own its
properties and conduct its business as the same is now being conducted.

(2)                                  This Agreement has
been duly authorized, executed and delivered by Hotel Owner and is the legal,
valid and binding obligation of Hotel Owner enforceable in accordance with its
terms, except as limited by bankruptcy, moratorium, reorganization,
rehabilitation and other laws relating to or affecting enforcement of creditor’s
rights generally and except as enforceability is subject to judicial discretion
under general principles of equity and except as enforceability of indemnification
or contribution provisions to which this Agreement relates may be limited, in
whole or in part, by applicable securities laws or public policy.

B.            Residences Owner hereby represents and
warrants to Hotel Owner as follows:

(1)                                  Residences Owner has
been duly organized and is validly existing as a limited liability company
under the laws of the State of Delaware with full power and authority to own
its properties and conduct its business as the same is now being conducted.

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(2)                                  This Agreement has
been duly authorized, executed and delivered by Residences Owner and is the
legal, valid and binding obligation of Residences Owner enforceable in
accordance with its terms, except as limited by bankruptcy, moratorium,
reorganization, rehabilitation and other laws relating to or affecting
enforcement of creditor’s rights generally and except as enforceability is
subject to judicial discretion under general principles of equity and except as
enforceability of indemnification or contribution provisions to which this
Agreement relates may be limited, in whole or in part, by applicable securities
laws or public policy.

3.             Division of Loan.  It is the intent of Hotel Owner and
Residences Owner that a portion of the Loan is reflected between Hotel Owner
and Residences Owner as the primary obligation of Hotel Owner and a portion of
the Loan is reflected between Hotel Owner and Residences Owner as the primary
obligation of Residences Owner, although as to Mass Mutual, such parties are
jointly and severally liable.  The “Hotel Owner Share” of the Loan shall be
considered to be $55,000,000 and the “Residences
Owner Share” of the Loan shall be considered to be $0.00.

4.             Reimbursement.

A.            To the extent not prohibited by the Loan
Agreement, Residences Owner agrees to reimburse Hotel Owner, immediately upon
demand, for any and all payments made by Hotel Owner under the Note to the extent such payments are
applied to the Residences Owner Share of the Loan, whether such payments by
Hotel Owner are expended for interest on or principal of the Residences Owner
Share of the Loan or fees or expenses properly allocable to the Residences
Owner Share of the Loan, or otherwise, together with any costs and expenses
incurred in connection with the foregoing.

B.            To the extent not prohibited by the Note or
the Deed of Trust, Hotel Owner agrees to reimburse Residences Owner,
immediately upon demand, for any and all payments made by Residences Owner
under the Note to the extent such payments are applied to the Hotel Owner Share
of the Loan, whether such payments by Residences Owner are expended for
interest on or principal of the Hotel Owner Share of the Loan or fees or
expenses properly allocable to the Hotel Owner Share of the Loan, or otherwise,
together with any costs and expenses incurred in connection with the foregoing.

5.             Indemnity.

A.            Subject to the following provisions of this
Section 5, Hotel Owner agrees to indemnify and hold Residences Owner and its
general partners and their employees, agents and representatives harmless from
and against any and all losses, costs, damages, expenses and liabilities of
whatsoever nature or kind (including but not limited to, reasonable attorneys’
fees, litigation and court costs, amounts paid in settlement (by or with the
approval of Hotel Owner) and amounts paid to discharge judgments) directly or
indirectly resulting from, arising out of, or related to the failure of Hotel
Owner to perform or to comply with any covenant or condition required to be
performed or complied with by Hotel Owner under the Note or the Deed of Trust,
other than those covenants or conditions that are the primary responsibility of
Residences Owner.

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B.            Subject
to the following provisions of this Section 5, Residences Owner agrees to
indemnify and hold Hotel Owner and its general partners and their employees,
agents and representatives harmless from and against any and all losses, costs,
damages, expenses and liabilities of whatsoever nature or kind (including but
not limited to, reasonable attorneys’ fees, litigation and court costs, amounts
paid in settlement (by or with the approval of Residences Owner) and amounts
paid to discharge judgments) directly or indirectly resulting from, arising out
of, or related to the failure of Residences Owner to perform or to comply with
any covenant or condition required to be performed or complied with by
Residences Owner under the Note or the Deed
of Trust, other than those covenants or conditions that are the
primary responsibility of Hotel Owner.

C.            Each indemnified
person shall give prompt notice to the indemnifying party of any action
commenced against the indemnified person in respect of which indemnity may be
sought hereunder, but failure to so notify the indemnifying party shall not
relieve it from any liability that it may have otherwise than on account of
this indemnity agreement, except to the extent of loss caused by such failure
of notification.

D.            Subject to the terms
and provision of the remainder of this Section 5, if any claim for
indemnification by the indemnified person arises out of a claim for monetary
damages by a person other than the indemnified person, the indemnifying party
shall undertake to conduct any proceedings or negotiations in connection
therewith that are necessary to defend the indemnified person and shall take all
such steps or proceedings as the indemnifying party in good faith deems
necessary to settle or defeat any such claims, and to employ counsel to contest
any such claims; provided, however, that the indemnifying party shall
reasonably consider the advice of the indemnified person as to the defense of
such claims, and the indemnified person shall have the right to participate, at
its own expense, in such defense, but control of such litigation and settlement
shall remain with the indemnifying party. 
The indemnified person shall provide all reasonable cooperation in
connection with any such defense by the indemnifying party.  Reasonable counsel and auditor fees, filing
fees and court fees of all proceedings, contests or lawsuits with respect to
any such claim or asserted liability shall be borne by the indemnifying party,
unless the indemnified person shall be culpable (by judicial determination or
acknowledgment) of a standard of conduct as to which it shall not be entitled
to indemnification hereunder in which case the indemnified person shall bear
all such fees and expenses with respect to itself.  If an indemnified person reasonably
determines that a conflict of interest exists between such indemnified person
and the indemnifying party as to such claims, or if any such claim is made
hereunder and the indemnifying party does not undertake the defense thereof,
such indemnified person shall be entitled to control such litigation and
settlement and all the costs thereof, and shall be entitled to indemnity with respect
thereto pursuant to the terms of this Section 5; provided, however, that all of
such indemnified persons as to whom no conflict of interest exists among them
shall be entitled to the payment of the fees and expenses of only one firm of
attorneys for any one action or proceeding as counsel to all of them.  To the extent that the indemnifying party
undertakes the defense of such claim, the indemnified persons shall be entitled
to indemnity hereunder only to the extent that such defense is unsuccessful as
determined by a final judgment of a court of competent jurisdiction, or by
written acknowledgment of the parties.

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6.             Other Agreements.

A.            The parties hereto
recognize that Hotel Owner and Residences Owner may enter into other agreements
(the “Other Agreements”) in the
future with Mass Mutual pursuant to which (i) Hotel Owner and Residences Owner
are jointly and severally liable or (ii) Hotel Owner or Residences Owner
guaranties the obligations of the other, but pursuant to which Hotel Owner has
the primary obligation for a portion of the obligations stated in the agreement
and Residences Owner has the primary obligation for the remainder of the
obligations stated in the agreement or Hotel Owner or Residences Owner has the
primary obligation for the obligations stated in the agreement and the other
party has liability as a guarantor (the “Other
Obligations”).  Hotel Owner
and Residences Owner hereby agree to reimburse each other and indemnify each
other with respect to their respective shares of such agreements pursuant to
the principles described in Sections 4 and 5 above.

B.            The parties hereto
acknowledge that the rights of contribution, reimbursement and indemnification
hereunder shall constitute assets in favor of the other party to which such
contribution, reimbursement and indemnification is owing.

C.            This Agreement shall
become effective on the Effective Date and shall continue in full force and
effect and may not be terminated or otherwise revoked by any party until (i)
all of the obligations described in the Note and the Deed of Trust (the “Obligations”) shall have been indefeasibly
paid in full (in lawful money of the United States of America) and discharged
and the Note and the financing arrangements evidenced and governed by the Note
shall have been terminated, (ii) all of the Other Obligations arising under the
Other Agreements shall have been indefeasibly paid in full (in lawful money of
the United States of America) and discharged and such Other Agreements shall
have been terminated and (iii) both Hotel Owner and Residences Owner agree to
terminate this Agreement.  Each party has
a right to waive its contribution, indemnity and reimbursement right against
the other party hereto to the extent that after giving effect to such waiver
such party would remain solvent.

7.             Notices.  Notices, reports, and payments hereunder
shall be in writing, shall be given by personal service or by mailing, and
shall be deemed to be given and received on the date indicated on an
acknowledgement of receipt to be retained by the sender.  Notices, reports, and payments hereunder
shall be addressed to Hotel Owner or Residences Owner at its principal office
or to such other address as either party may specify in a written notice to the
other party in accordance with this Section 7.

8.             Severability.  If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be
held to be invalid or unenforceable by any court or authority having
jurisdiction thereover, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and in force to the fullest
extent permitted by law.

9.             No
Waiver of Default.  The failure of
either party to declare any default immediately upon occurrence thereof, or
delay in taking any action in connection therewith, shall not waive such
default, but either party shall have the right to declare any such default at
any

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time and take such action as might be lawful or authorized hereunder,
either in law or at equity.  The failure
by either party to insist upon the strict performance of any one of the terms
or conditions of this Agreement or to exercise any right, remedy or election
herein contained or permitted by law shall not constitute or be construed as a
waiver or relinquishment for the future of such term, condition, right, remedy
or election, but the same shall continue and remain in full force and
effect.  All rights and remedies that
either party may have at law, in equity or otherwise for any breach of any term
or condition of this Agreement, shall be distinct, separate and cumulate rights
and remedies, whether or not exercised by such party.

10.           Merger.  This Agreement contains the entire agreement
between the parties hereto with respect to the matters herein contained.  No requirement, obligation, remedy or
provision of this Agreement shall be deemed to have been waived unless
expressly waived in writing, and any such waiver shall not affect the right to
enforce any provision thereafter.

11.           Governing
Law.  Unless superseded by federal
law, this agreement shall be construed under the laws of the State of Missouri.

12.           Attorney’s
Fees.  Should either party hereto
employ an attorney to enforce any of the provisions hereof or to protect its
interest in any manner arising under this Agreement, or to recover damages for
the breach of this Agreement, the nonprevailing party in any such action agrees
to pay to the prevailing party all reasonable costs, damages and expenses
(including court costs and reasonable attorney’s fees) expended or incurred in
connection therewith.

13.           Successors
and Assigns.  This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
permitted successors and assigns. 
Neither party hereto may assign this Agreement without obtaining the
other’s prior written consent.

14.           Amendments.  This Agreement may be amended only by a
written instrument signed by both parties and only with the written consent of
the Agent and the approval of the parties to the Other Agreements.

15.           Counterparts.  This Agreement may be executed in
counterparts, with each executed counterpart constituting an original and all
counterparts together constituting one agreement.

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

	
  

  	
  CHASE PARK PLAZA HOTEL, LLC

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Kingsdell L.P.,

  
	
   

  	
   

  	
  a Delaware limited partnership,

  
	
   

  	
   

  	
  Authorized Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  IFC, Inc.,

  
	
   

  	
   

  	
   

  	
  a Missouri corporation,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ James L. Smith

  	
   

  
	
   

  	
   

  	
   

  	
  James L. Smith,
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  THE PRIVATE RESIDENCES, LLC

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Kingsdell L.P.,

  
	
   

  	
   

  	
  a Delaware limited partnership,

  
	
   

  	
   

  	
  Authorized Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  IFC, Inc.,

  
	
   

  	
   

  	
   

  	
  a Missouri corporation,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ James L. Smith

  	
   

  
	
   

  	
   

  	
   

  	
  James L. Smith,
  President

  
	
   

  	
   

  	
   

  

 

 

 7Exhibit
10.1

FIRST
AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT TO
CREDIT AGREEMENT (this “First Amendment”),
dated as of January 19, 2007, among MICHAELS STORES, INC., a Delaware
corporation (the “Borrower”), the
lenders party to the Credit Agreement referred to below from time to time (the “Lenders”), DEUTSCHE BANK AG NEW YORK BRANCH, as
Administrative Agent (in such capacity, the “Administrative
Agent”), JPMORGAN CHASE BANK, N.A., as Syndication Agent, and BANK
OF AMERICA, N.A. and CREDIT SUISSE, as Co-Documentation Agents.  Unless otherwise defined herein, capitalized
terms used herein and defined in the Credit Agreement are used herein as
therein defined.

WI T N E S
S E T H :

WHEREAS, the
Borrower, the Lenders, the Administrative Agent, the Syndication Agent and the
Co-Documentation Agents have entered into a Credit Agreement, dated as of
October 31, 2006 (the “Credit Agreement”);
and

WHEREAS, subject
to the terms and conditions set forth below, the parties hereto wish to amend
certain provisions of the Credit Agreement as provided herein;

NOW, THEREFORE, it is
agreed;

A.                                   Amendments
to the Credit Agreement

1.                                       Section
1.01 of the Credit Agreement is hereby amended by (i) deleting the definitions
of “Applicable Rate”, “Borrowing”, “Commitment”, “Loan”
and “Pro Rata Share”
appearing therein in their entirety and (ii) inserting in appropriate
alphabetical order the following new definitions:

“Additional New Loans” has the meaning specified in Section
2.01(b).

“Applicable Rate” means a percentage per annum equal to (i)
in the case of Eurocurrency Rate Loans, 2.75% and (ii) in the case of Base Rate
Loans, 1.75%, less, in each case the sum of (i)
if (but only if) the Consolidated Total Leverage Ratio as set forth in the most
recent Compliance Certificate received by the Administrative Agent pursuant to
Section 6.02(b) is less than 5.50 to 1.00, 0.25% and
(ii) if (but only if) the Moody’s Applicable Corporate Rating then most
recently published is B1 or higher (with at least a stable outlook),
0.25%.  Any increase or decrease in the
Applicable Rate resulting from a change in the Consolidated Total Leverage
Ratio or the Moody’s Applicable Corporate Rating shall become effective as of
the first Business Day immediately following the date a Compliance Certificate
is delivered pursuant to Section 6.02(b) or the then

most recent Moody’s
Applicable Corporate Rating is published, as the case may be; provided that at the option of the Administrative Agent or
the Required Lenders, no deduction shall apply (x) in the case of clause (i)
above, as of the first Business Day after the date on which a Compliance
Certificate was required to have been delivered but was not delivered, and
shall continue not to apply to and including the date on which a subsequent
Compliance Certificate is actually delivered (with any deduction as otherwise
determined in accordance with this definition to apply thereafter), (y) in the
case of clause (ii) above, as of the first Business Day after the date on which
Moody’s ceases to maintain or publish a Moody’s Applicable Corporate Rating (of
any level), and shall continue not to apply to and including the date on which
a new Moody’s Applicable Corporate Rating is so published (with any deduction
as otherwise determined in accordance with this definition to apply
thereafter), and (z) in the case of clauses (i) and (ii) above, as of the first
Business Day after an Event of Default under Section 8.01(a), (f) or (g)
shall have occurred and be continuing, and shall continue not to apply to but
excluding the date on which such Event of Default is cured or waived (with any
deduction as otherwise determined in accordance with this definition to apply
thereafter).  It is understood and agreed
that the “Applicable Rate” (as defined herein immediately prior to giving
effect to the First Amendment Effective Date) shall apply for all periods prior
to the First Amendment Effective Date and the “Applicable Rate” (as defined
herein immediately after giving effect to the First Amendment Effective Date)
shall apply for all periods on and after the First Amendment Effective Date.

“Borrowing” means a borrowing consisting of simultaneous
Loans of the same Type and, in the case of Eurocurrency Rate Loans, having the
same Interest Period made by each of the Lenders pursuant to Section 2.01; provided
that the term “Borrowing” shall include the consolidated “borrowing” of New
Loans pursuant to the simultaneous conversion of Original Loans by way of the
Loan Conversion and the incurrence of Additional New Loans on the First
Amendment Effective Date on the terms provided in Sections 2.01(b) and (c).

“Commitment” means, as to each Lender, its Original
Commitment and/or its New Commitment.

“Converting Lenders” has the meaning specified in Section
2.01(b).

“Converted New Loans” has the meaning provided in Section
2.01(b).

“First Amendment” means the First Amendment to this
Agreement, dated as of January 19, 2007.

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“First Amendment Effective Date” has the
meaning provided in the First Amendment.

“Loan” means (a) the making of an
Original Loan by a Lender to the Borrower pursuant to Section 2.01(a), (b) the
making of an Additional New Loan by a Lender to the Borrower pursuant to
Section 2.01(c), or (c) the conversion of an Original Loan to a Converted New
Loan by a Lender pursuant to Section 2.01(b).

“Loan
Conversion” has the meaning provided in Section 2.01(b).

“New Loan”has the meaning provided in Section 2.01(c).

“New Commitment” means, as to each Lender, its obligation to
make an Additional New Loan to the Borrower pursuant to Section 2.01(c) in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender’s name on Schedule 2.01A under the caption “New Commitment”, as such
amount may be adjusted from time to time in accordance with this Agreement.  The initial aggregate amount of the New
Commitments is $0.00.

“Non-Converting Lender” means each Lender with outstanding
Original Loans that is not a Converting Lender.

“Original
Commitment” means, as to each Lender, its obligation to make an
Original Loan to the Borrower pursuant to Section 2.01(a) in an aggregate
principal amount not to exceed the amount set forth opposite such Lender’s name
on Schedule 2.01 under the caption “Original Commitment”, as such amount may be
adjusted from time to time in accordance with this Agreement.  The initial aggregate amount of the Original
Commitments is $2,400,000,000.

“Original
Loan” means the making of a term loan by a Lender to the Borrower
pursuant to Section 2.01(a).

“Original
Loan Borrowing” has the meaning provided in Section 2.03(a).

“Pro
Rata Share” means, with respect to each Lender, (i) at or prior to
the funding on the Closing Date, a fraction (expressed as a percentage, carried
out to the ninth decimal place), the numerator of which is the amount of the
Commitment of such Lender at such time and the denominator of which is the
amount of the Aggregate Commitments of all Lenders at such time, (ii) for
purposes of Section 2.02(b) only, at the time of the funding of the Additional
New Loans on the First Amendment Effective Date, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the amount of the New Commitment of such Lender at such time and the
denominator of which is the sum of the aggregate New Commitments of all Lenders
at such time

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and (iii) at any other time, a fraction (expressed as a percentage,
carried out to the ninth decimal place), the numerator of which is the
principal amount of the Loans of such Lender at such time and the denominator
of which is the aggregate principal amount of the Loans of all Lenders at such
time.

2.                                       Section
2.01 of the Credit Agreement is hereby amended by (i) inserting “(a)”
immediately before the text “each Lender” appearing in the first sentence of
said Section and (ii) inserting the following text after the text “Closing Date”
appearing in the first sentence of said Section:

“and, (b) on the First Amendment Effective Date (i) all outstanding
Original Loans of each Lender that has theretofore executed and delivered a
counterpart of the First Amendment to the Administrative Agent in accordance
with the terms thereof (each such Lender, a “Converting
Lender” and, collectively, the “Converting
Lenders”) shall be automatically converted (the “Loan Conversion”) into new term loans
hereunder denominated in Dollars (each such term loan, a “Converted New Loan” and, collectively, the “Converted New Loans”) and (c) each Lender
with a New Commitment severally agrees to make to the Borrower a single term
loan denominated in Dollars (each, an “Additional
New Loan” and, collectively, the “Additional
New Loans” and, together with the Converted New Loans, the “New Loans”) in a principal amount equal to
such Lender’s New Commitment on the First Amendment Effective Date”.

3.                                       Section
2.02(a) of the Credit Agreement is hereby amended by inserting a comma
immediately after the text “Borrowing” appearing in clause (i) of the sixth
sentence appearing therein.

4.                                       Section
2.03 of the Credit Agreement is hereby amended by deleting the said Section in
its entirety and inserting the following new Section 2.03 in lieu thereof:

“2.03  Special
Provisions Relating to New Loans  (a)
Notwithstanding anything to the contrary contained in this Agreement, (i) each
Borrowing of Original Loans existing on the First Amendment Effective Date
immediately prior to the Loan Conversion and maintained as Eurocurrency Rate
Loans (each, an “Original Loan Borrowing”) shall,
upon the occurrence of the Loan Conversion, be deemed to be a new Borrowing of
New Loans for all purposes of this Agreement, (ii) each such newly-deemed
Borrowing of New Loans shall be subject to the same Interest Period (and
Eurocurrency Rate) as the Original Loan Borrowing to which it relates (as if no
new Borrowing had in fact occurred), (iii) Additional New Loans shall be
initially incurred pursuant to a single Borrowing of Eurocurrency Loans which
shall be added to (and thereafter be deemed to constitute a part of) each such
newly-deemed Borrowing of New Loans described in preceding subclause (i) on a pro
rata basis (based on the relative sizes of the various such newly-deemed
Borrowings of New Loans), with such Borrowing to be subject to (x) an Interest
Period which commences on the First Amendment Effective Date and ends on the
last day of the Interest Period applicable to each Original Loan Borrowing and
(y) the same Eurocurrency Rate applicable to the

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Original Loan Borrowing to which it is added as
contemplated above by this clause (iii), and (iv) in connection with the Loan
Conversion and the incurrence of Additional New Loans pursuant to Sections
2.01(b) and (c), respectively, the Administrative Agent shall (and is hereby
authorized to) take all appropriate actions to ensure that all Lenders with
outstanding New Loans (after giving effect to the Loan Conversion and the
incurrence of Additional New Loans pursuant to Section 2.01(c)) participate in
each newly-deemed Borrowing of New Loans based on their Pro Rata
Share.

(b)                                 In connection with the incurrence of
Additional New Loans pursuant to Section 2.01(c) and the repayment of Original
Loans with the proceeds thereof, the Lenders and the Borrower hereby agree
that, notwithstanding anything to the contrary contained in this Agreement, the
Borrower shall be obligated to pay to each Non-Converting Lender all breakage or
other costs of the type referred to in Section 3.05 (if any) incurred or
suffered in connection with the repayment of the outstanding Original Loans of
such Non-Converting Lender with the proceeds of Additional New Loans (it being
understood that breakage or other costs of the type referred to in Section 3.05
(if any) shall not be payable to Converting Lenders in connection with the
Loans Conversion).

(c)                                  On and after the First Amendment
Effective Date, each Converting Lender which holds a Note shall be entitled to
surrender such Note to the Borrower against delivery of a new Note completed in
conformity with Section 2.11; provided that
if any such Note is not so surrendered, then from and after the First Amendment
Effective Date such Note shall be deemed to evidence the Converted Loans into
which the Original Loans theretofore evidenced by such Note have been
converted.

(d)                                 Notwithstanding anything to the contrary
contained in this Agreement, all proceeds of the Additional New Loans (if any)
will be used solely to repay outstanding Original Loans of only Non-Converting
Lenders (if any) on the First Amendment Effective Date.”

5.                                       Schedule
2.01 to the Credit Agreement is hereby amended by adding thereto the
information set forth on Schedule 2.01 attached hereto.

B.                                     Miscellaneous
Provisions

1.                                       In
order to induce the Lenders to enter into this First Amendment, the Borrower
hereby represents and warrants to each of the Lenders that (i) all of the
representations and warranties contained in the Credit Agreement and in the
other Loan Documents are true and correct in all material respects on and as of
the First Amendment Effective Date (as defined below), both immediately before
and after giving effect to this First Amendment, unless such representations
and warranties relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date, (ii) there exists no Default or Event of
Default on the First Amendment Effective Date, both immediately before and
after giving effect to

 5
 

this First Amendment and (iii) concurrently
with this effectiveness of the First Amendment, the proceeds of Additional New
Loans shall be immediately applied by the Borrower to repay all outstanding
Loans of Non-Converting Lenders (if any).

2.                                       This
First Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Loan Document.

3.                                       This
First Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instru­ment.  A complete set of counterparts executed by
all the parties hereto shall be lodged with the Borrower and the Administrative
Agent.

4.                                       THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

5.                                       This
First Amendment shall become effective on the date (the “First Amendment Effective Date”) when:

(i)                                     the
Borrower, the Administrative Agent, the Required Lenders and each Lender with a
New Commitment shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Administrative Agent (but only so long as
Converting Lenders holding outstanding Original Loans in an aggregate principal
amount which, when added to the aggregate amount of New Commitments of the
Lenders, equals at least the aggregate outstanding principal amount of Original
Loans on the First Amendment Effective Date (before giving effect to the
incurrence (including by way of conversion of Original Loans) of New Loans on
such date) shall have signed a counterpart of this First Amendment);

(ii)                                  there
shall have been delivered to the Administrative Agent for the account of each
of the Lenders that have requested same an appropriate Note executed by the
Borrower, in each case in the amount, maturity and otherwise as provided in the
Credit Agreement (as modified hereby);

(iii)                               (x)
the principal of all outstanding Original Loans of Non-Converting Lenders shall
have been repaid in full and (y) all accrued and unpaid interest on all
Original Loans shall have been paid in full and all costs of the type described
in Section 3.05 of the Credit Agreement shall have been paid in full in
connection with the repayment of the Original Loans; and

(iv)                              there
shall have been delivered to Administrative Agent (A) copies of resolutions of
the board of directors of each Loan Party approving and authorizing the
execution, delivery and performance of this First Amendment and the Loan
Documents as amended by this First Amendment, certified as of the

 6
 

First Amendment Effective Date by a
Responsible Officer, secretary or assistant secretary of such Loan Party as
being in full force and effect without modification or amendment and (B) good
standing certificates for each Loan Party from each jurisdiction in which such
Loan Party is organized.

6.                                       By
executing and delivering a copy hereof, each Loan Party hereby agrees that all
Loans (including, without limitation, the New Loans) shall be fully guaran­teed
pursuant to the Guaranty to which it is party in accordance with the terms and
provisions thereof and shall be fully secured pursuant to the applicable
Collateral Documents.

7.                                       From
and after the First Amendment Effective Date, all references in the Credit
Agreement and in the other Loan Documents to the Credit Agreement shall be
deemed to be references to the Credit Agreement as modified hereby.

*                                         *                                         *

 7

IN WITNESS WHEREOF, the
undersigned have caused this First Amendment to be duly executed and delivered
as of the date first above written.

	
  

  	
   

  	
  MICHAELS STORES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lisa K. Klinger

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. Klinger

  
	
   

  	
   

  	
  Title:

  	
  Vice President – Treasurer and

  Investor Relations

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  DEUTSCHE BANK AG NEW YORK

  BRANCH, Individually and as Administrative

  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Marguerite Sutton

  
	
   

  	
   

  	
  Name:

  	
  Marguerite Sutton

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Paul O’Leary

  
	
   

  	
   

  	
  Name:

  	
  Paul O’Leary

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  JPMORGAN CHASE BANK, N.A., as

  Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Samantha E. Hamerman

  
	
   

  	
   

  	
  Name:

  	
  Samantha E. Hamerman

  
	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  BANK OF AMERICA, N.A, as
 Co-Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   By:

  	
  /s/ L. Murchison Taylor

  
	
   

  	
   

  	
  Name:

  	
  L. Murchison Taylor

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

 

	
  

  	
   

  	
  CREDIT SUISSE, as

  Co-Documentation Agent 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

Each of the undersigned
Guarantors acknowledges and agrees to the terms of the First Amendment.

	
  

  	
   

  	
  AARON BROTHERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lisa K. Klinger

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. Klinger

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ARTISTREE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lisa K. Klinger

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. Klinger

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  MICHAELS FINANCE COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lisa K. Klinger

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. Klinger

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  MICHAELS OF CANADA, ULC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lisa K. Klinger

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. Klinger

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  MICHAELS STORES CARD SERVICES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lisa K. Klinger

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. Klinger

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  MICHAELS STORES PROCUREMENT

  COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lisa K. Klinger

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. Klinger

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
					

 

 

	
  

  	
   

  	
  SIGNATURE PAGE TO THE FIRST AMENDMENT, DATED AS
  OF JANUARY 19, 2007, TO THE CREDIT AGREEMENT, DATED AS OF OCTOBER 31, 2006,
  AMONG MICHAELS STORES, INC., DEUTSCHE BANK AG NEW YORK BRANCH, AS
  ADMINISTRATIVE AGENT, JPMORGAN CHASE BANK, N.A., AS SYNDICATION AGENT, AND
  BANK OF AMERICA, N.A. AND CREDIT SUISSE, AS CO-DOCUMENTATION AGENTS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [REQUIRED LENDER SIGNATURES ON FILE WITH REGISTRANT]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

SCHEDULE 2.01A

To Credit Agreement

Schedule 2.01A

New Commitments

	
  LENDER

  	
   

  	
  NEW COMMITMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  None.

  	
   

  	
  $

  	
  0.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]