Document:

Purchase Agreement

 Exhibit 10.10 
  
 Execution Copy 
  
 Brookstone Company, Inc. 
  
 $185,000,000 12.00% Second Lien Senior Secured Notes due 2012 
  
 Purchase Agreement 
  
 September 23, 2005 
  
 Goldman, Sachs & Co. 
 As representative of the Purchasers 
 named in Schedule I hereto 
 c/o Goldman, Sachs & Co. 
 85 Broad Street 
 New York, New York 10004 
  
 Ladies and Gentlemen: 
  
 Brookstone Company, Inc., a New Hampshire corporation (the
“Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Purchasers named in Schedule I hereto (the “Purchasers”) an aggregate of $185,000,000 principal amount of 12.00% Second Lien
Senior Secured Notes due 2012 Notes, specified above (the “Securities”). The Securities will be fully and unconditionally guaranteed as to the payment of principal, premium, if any, and interest (the “Guarantees”) jointly and
severally by Brookstone, Inc., a Delaware corporation (the “Parent”), and each other entity named in Schedule II hereto (collectively, the “Guarantors”). 
  
 Concurrently with the closing of the offering of the Securities, the Company and the Guarantors will enter into a new senior
secured credit facility, to be dated as of October 4, 2005, in an aggregate of up to $100,000,000 with Bank of America, N.A. (in its capacity as collateral agent under the new senior secured credit facility, the “First Lien Collateral
Agent”), Goldman Sachs Credit Partners L.P. and a syndicate of other financial institutions (as the same may be amended, modified, supplemented or restated from time to time, the “Credit Facility”). 
  
 The Company and the Guarantors have agreed to secure the Securities and the
Guarantees of the Securities by second priority security interests granted to Wells Fargo Bank, N.A., as the collateral agent (the “Collateral Agent”) for the benefit of the Trustee (as defined below) and the holders of the Securities and
any additional securities issued pursuant to the Indenture (as defined below) on all of the personal property of the Company and each of the Guarantors, whether tangible or intangible (the “Collateral”), subject to certain exceptions set
forth in the Indenture, the Security Agreement and the IP Security Agreement (each as defined below). Such second priority security interests will be evidenced by the security agreement to be dated as of October 4, 2005, among the Company, the
Guarantors and the Collateral Agent (the “Security Agreement”); the intellectual property security agreement to be dated as of October 4, 2005, among the Company, Guarantors and the Collateral Agent (the “IP Security
Agreement”); the intercreditor agreement to be dated as of October 4, 2005, among the Company, the Guarantors, the Collateral Agent and the First Lien Collateral Agent (the “Intercreditor Agreement”); the collateral agency
agreement to be dated as of 

 
October 4, 2005, among the Company, the Guarantors, the Trustee and the Collateral Agent (the “Collateral Agency Agreement”); and any account
control agreements to which the Company or any Guarantor is a party that are in effect at the Time of Delivery (such agreements, together with the Security Agreement, the IP Security Agreement, the Intercreditor Agreement and the Collateral Agency
Agreement, the “Security Documents”). 
  
 1. The Company
and each of the Guarantors, jointly and severally, represents and warrants to, and agrees with, each of the Purchasers that: 
  
 (a) A preliminary offering circular, dated September 9, 2005 (the “Preliminary Offering Circular”) and an offering circular, dated
September 23, 2005 (the “Offering Circular”) have been prepared in connection with the offering of the Securities. Any reference to the Preliminary Offering Circular or the Offering Circular shall be deemed to refer to and include any
Additional Issuer Information (as defined in Section 5(f)) furnished by the Company prior to the completion of the distribution of the Securities. The Preliminary Offering Circular or the Offering Circular and any amendments or supplements
thereto did not and will not, as of their respective dates, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a Purchaser through
Goldman, Sachs & Co. expressly for use therein; 
  
 (b)
Neither the Parent nor any of its subsidiaries has sustained since the date of the latest audited financial statements included in the Offering Circular any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Circular; and, since the respective dates as of which information
is given in the Offering Circular, and other than as set forth or contemplated in the Offering Circular on the date hereof, there has not been any change in the capital stock or long-term debt of the Parent or any of its subsidiaries or any payment
of or declaration to pay any dividends or other distribution with respect to the capital stock (or other) of the Parent or any of its subsidiaries (other than as a result of exercises of stock options or other equity incentive awards) or any
material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Parent and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the Offering Circular; 
  
 (c) The Parent and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Offering Circular or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Parent and its
subsidiaries; and any real property and buildings held under lease by the Parent and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not, individually or in the aggregate, have a
Material Adverse Effect in light of the use made and proposed to be made of such property and buildings by the Parent and its subsidiaries; 
  
 (d) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of New Hampshire, with
power and authority (corporate and other) to own its properties and conduct its business as described in the Offering Circular, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or conducts any 

  

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business so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such
jurisdiction; and the Parent and each of its subsidiaries other than the Company have been duly incorporated or formed and each is validly existing as a corporation or a limited liability company, as the case may be, and is in good standing under
the laws of its jurisdiction of incorporation or formation, as the case may be; 
  
 (e) The Parent has an authorized capitalization as set forth under the caption “Capitalization” in the Offering Circular, and all of the issued shares of capital stock of the Parent have been duly and
validly authorized and issued and are fully paid and non-assessable; and all of the issued shares of capital stock or limited liability company interests, as applicable, of each of the Parent’s subsidiaries have been duly and validly authorized
and issued and are fully paid and non-assessable and, except as otherwise disclosed in the Offering Circular with respect to the joint ventures of the Parent’s subsidiaries, all of the issued shares of capital stock or limited liability company
interests, as applicable, of each such subsidiary are owned directly or indirectly by the Parent, free and clear of all liens, encumbrances, equities or claims, other than those liens arising under the “new senior secured credit facility”
described in the Offering Circular or the “existing revolving credit facility” described in the Offering Circular (as applicable); 
  
 (f) The Securities have been duly authorized by the Company; the temporary global Security, when executed, issued and delivered by the Company to and paid
for by the Purchasers pursuant to this Agreement, and authenticated by the Trustee, will have been duly executed, issued and delivered and will constitute a valid and legally binding obligation of the Company entitled to the benefits provided by the
indenture to be dated as of October 4, 2005 (the “Indenture”) between the Company, the Guarantors and Wells Fargo Bank, N.A., as Trustee (the “Trustee”), under which they are to be issued, which will be substantially in the
form previously delivered to you; the Securities in definitive form, when executed, issued and delivered by the Company in exchange for the temporary global Security and authenticated by the Trustee in accordance with the terms of the Indenture,
will have been duly executed, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; the Indenture has been duly authorized by the Company and the Guarantors
and assuming due authorization by the Trustee, when executed and delivered by the Company and the Guarantors and the Trustee, will constitute a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the temporary global Security, the Securities and the Indenture will
conform to the descriptions thereof in the Offering Circular; 
  
 (g) The Guarantees to be endorsed on the Securities have been duly authorized by the Guarantors, and when executed and delivered in accordance with the terms of the Indenture and when the Securities are duly executed, issued and delivered
by the Company and authenticated by the Trustee in accordance with the terms of the Indenture and delivered to and paid for by the Purchasers in accordance with the terms of this Agreement and the Indenture, will constitute the valid and legally
binding obligations of each of the Guarantors, enforceable against each of the Guarantors in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or
affecting creditors’ rights and to general equity principles; and the Guarantees to be endorsed on the Securities will conform to the descriptions thereof in the Offering Circular; 
  
 (h) Each of the Security Documents has been duly and validly authorized by the Company and each of the Guarantors. When each
of the Security Documents have been duly executed and delivered, each of the Security Documents will constitute the valid and binding agreements of the 

  

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Company and the Guarantors, enforceable against the Company and such Guarantors in accordance with their respective terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and except as enforcement thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law); 
  
 (i) When each of the Security Documents has been duly executed and delivered, the Security Documents will be effective to grant and create, in favor of the Collateral Agent, for the benefit of each present and future holder of the
Securities, a valid and enforceable security interest in the Collateral described therein and proceeds and products thereof; and (i) when financing statements and other filings in appropriate form are filed in the offices as specified in the
Security Agreement and the IP Security Agreement and (ii) upon the taking of possession or control by the Collateral Agent of any such Collateral with respect to which a security interest may be perfected only by possession or control, the
security interest created by the Security Agreement and the IP Security Agreement, together with the Collateral Agency Agreement, shall constitute a fully perfected security interest on, and security interest in all right, title and interest of the
grantors thereunder in such Collateral (other than such Collateral in which a security interest cannot be perfected under the UCC (as defined below) as in effect at the relevant time in the relevant jurisdiction), in each case subject to no Liens
(as defined in the Indenture) other than Permitted Liens (as defined in the Indenture)(and subject as to priority, to no Liens other than Permitted Prior Liens(as defined in the Indenture)); 
  
 (j) At the Time of Delivery, the representations and warranties contained in
the Security Documents will be true and correct in all material respects as if made as of the Time of Delivery; 
  
 (k) The Company and each of the domestic Guarantors is a “registered organization” (as defined in Article 9 of the Uniform Commercial Code (the
“UCC”) as in effect in the state of New York and the states in which the Company and each of the domestic Guarantors is organized) under the law of the jurisdiction in which it is organized, and at the Time of Delivery the Company and the
Guarantors will have made provision for the prompt perfection of all security interests granted under the Security Agreement and IP Security Agreement in Collateral consisting of personal property or fixtures to the extent such security interests
may be perfected by filing pursuant to the filing of financing statements in connection with the execution of the Security Agreement and the recordation of the IP Security Agreement in the United States Copyright Office and the United States Patent
and Trademark Office; 
  
 (l) As of the Time of Delivery the
Company and each of the Guarantors will own or otherwise have the rights it purports to have in the Collateral securing the Securities free and clear of all Liens (other than Permitted Liens (as defined in the Indenture)), and no financing
statements in respect of Collateral securing the Securities will be on file in favor of any person other than those in respect of Permitted Liens and those for which duly authorized termination statements are delivered to the Collateral Agent or the
First Lien Collateral Agent at the Time of Delivery; 
  
 (m) This
Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors; 
  
 (n) The Exchange and Registration Rights Agreement to be dated as of October 4, 2005 among the Company, the Guarantors and the Purchasers (the
“Registration Rights Agreement”), which will be substantially in the form previously delivered to you, has been duly authorized by the Company and each of the Guarantors, and as of the Time of Delivery (as defined herein), will have been
duly executed and delivered by the Company and each of the Guarantors, and will constitute a valid and legally binding instrument enforceable against the Company and each of the Guarantors in 

  

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accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or
affecting creditors’ rights and to general equity principles; and the Registration Rights Agreement will conform to the descriptions thereof in the Offering Circular; 
  
 (o) The Exchange Securities have been duly and validly authorized for issuance by the Company, and when executed, issued and
delivered by the Company and authenticated by the Trustee in accordance with the terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, will be the valid and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms and entitled to the benefits of the Indenture, subject, as to enforcement, to applicable bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting
creditors’ rights and to general equity principles; 
  
 (p)
The Guarantees to be endorsed on the Exchange Securities have been duly authorized by each of the Guarantors, and when executed and delivered in accordance with the terms of the Indenture and when the Exchange Securities are duly executed, issued
and delivered by the Company and authenticated by the Trustee in accordance with the terms of the Registration Rights Agreement, the Exchange Offer and the Indenture, will constitute the valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their terms, subject, as to enforcement, to applicable bankruptcy, insolvency, reorganization, and other laws of general applicability relating to or affecting creditors’
rights and to general equity principles; 
  
 (q) None of the
transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale of the Securities) will violate or result in a violation of Section 7 of the United States Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or any regulation promulgated thereunder, including, without limitation, Regulations T, U, and X of the Board of Governors of the Federal Reserve System, in each case as the same may be in effect or as the
same may hereafter be in effect at the Time of Delivery; 
  
 (r)
Prior to the date hereof, neither the Company nor any of its affiliates nor any of the Guarantors has taken any action which is designed to or which has constituted or which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection with the offering of the Securities; 
  
 (s) The issue and sale of the Securities and the compliance by the Company and the Guarantors with all of the provisions of the Securities, the Indenture,
the Registration Rights Agreement, the Security Agreement, the IP Security Agreement, the Intercreditor Agreement and this Agreement and the consummation of the transactions herein and therein contemplated (i) will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Parent or any of its subsidiaries is a party or by
which the Parent or any of its subsidiaries is bound or to which any of the property or assets of the Parent or any of its subsidiaries is subject, (ii) will not result in any violation of the provisions of the respective Certificate of
Incorporation or By-laws of the Company or each of the Guarantors, (iii) will not result in a violation of any statute or order, rule or regulation of any court or governmental agency or body having jurisdiction over the Parent or any of its
subsidiaries or any of their properties and (iv) will not result in the imposition of a lien, other than liens permitted under the Credit Facility, on any assets of the Company or any of the Guarantors, except in the case of clauses
(i) and (iii) above, for such conflicts, breaches, violations, defaults or liens that, individually or in the aggregate, would not have a material adverse effect on the business, management, condition (financial or otherwise), or results
of operations of the Parent and its 

  

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subsidiaries, taken as a whole (any such event, “Material Adverse Effect”); and, assuming the accuracy of the representations and warranties of the
Purchasers in Section 3 of this Agreement, no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the
consummation by the Company and each of the Guarantors of the transactions contemplated by this Agreement, the Indenture, the Security Documents or the Registration Rights Agreement, except for the filing of a registration statement by the Company
and each of the Guarantors with the Securities and Exchange Commission (the “Commission”) pursuant to the United States Securities Act of 1933, as amended (the “Securities Act”) pursuant to the Registration Rights Agreement, such
consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws or the private placement or equivalent provisions of the securities laws of any jurisdiction outside the United States in
connection with the purchase and distribution of the Securities by the Purchasers and the qualification of the Indenture (or any substantially identical indenture referred to in the Registration Rights Agreement) under the Trust Indenture Act of
1939 and the filings required to perfect the Collateral Agent’s security interests granted pursuant to the Security Documents; 
  
 (t) Neither the Parent nor any of its subsidiaries is in violation of (i) its Certificate of Incorporation or By-laws or other organization
documents, as the case may be, or (ii) is in default in the performance or observance of any material obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound, except, in the case of clause (ii) above, for such violations or defaults that, individually or in the aggregate would have a Material Adverse Effect; 
  
 (u) The statements set forth in the Offering Circular under the caption
“Description of Notes,” insofar as they purport to constitute a summary of the terms of the Securities and the statements in the Offering Circular under the captions “Certain United States Federal Tax Considerations” and
“Underwriting,” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects; 
  
 (v) [Intentionally Omitted]; 
  
 (w) Other than as set forth in the Offering Circular, there are no legal or governmental proceedings pending to which the Parent or any of its
subsidiaries is a party or of which any property of the Parent or any of its subsidiaries is the subject which, if determined adversely to the Parent or any of its subsidiaries, would, individually or in the aggregate, have a Material Adverse
Effect; and, to the best knowledge of the Parent and its subsidiaries, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; 
  
 (x) When the Securities are issued and delivered pursuant to this Agreement, the Securities will not be of the same class
(within the meaning of Rule 144A under the Securities Act) as securities which are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system; 

 
 (y) Neither the Company nor any Guarantor is, or after giving effect to
the offering and sale of the Securities and the consummation of the transactions contemplated in the Offering Circular, will be, an “investment company”, as such term is defined in the United States Investment Company Act of 1940, as
amended (the “Investment Company Act”); 
  
 (z) Neither
the Company nor any Guarantor nor any person acting on its or their behalf has offered or sold the Securities by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act or, with respect to Securities
sold outside the United States to 

  

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non-U.S. persons (as defined in Rule 902 under the Act), by means of any directed selling efforts within the meaning of Rule 902 under the Securities Act and
the Company, any affiliate of the Company and any person acting on its or their behalf has complied with and will implement the “offering restriction” within the meaning of such Rule 902; 
  
 (aa) Within the preceding six months, neither the Company nor any other
person acting on behalf of the Company (other than the Purchasers and their affiliates as to whom the Company and the Guarantors make no representation) has offered or sold to any person any Securities, or any securities of the same or a similar
class as the Securities, other than Securities offered or sold to the Purchasers hereunder. The Company and each of the Guarantors will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States
or to any U.S. person (as defined in Rule 902 under the Act) of any Securities or any substantially similar security issued by the Company or any of the Guarantors, within six months subsequent to the date on which the distribution of the Securities
has been completed (as notified to the Company by Goldman, Sachs & Co.), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities in the United States and to
U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Securities Act; 
  
 (bb) The Parent maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) in
accordance with the requirements of the Exchange Act which has been designed by the Parent’s principal executive officer and principal financial officer (as such terms are defined in the Exchange Act), or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Parent’s internal control over financial
reporting was effective as of January 29, 2005 and the Parent is not aware of any material weaknesses in its internal control over financial reporting; 
  
 (cc) Since January 29, 2005, there has been no change in the Parent’s internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, the Parent’s internal control over financial reporting; 
  
 (dd) The Parent maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) in accordance with the
requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Parent and its subsidiaries is made known to the Company’s principal executive officer and
principal financial officer by others within those entities; such disclosure controls and procedures were effective as of July 30, 2005. 
  
 (ee) PricewaterhouseCoopers LLP, which has audited certain financial statements of the Parent and its subsidiaries is an independent registered public
accounting firm as required by the Act and the rules and regulations of the Commission thereunder; 
  
 (ff) Each of the Parent and its subsidiaries (either individually or together) owns or possesses or has the right to use the licenses, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, the “Intellectual Property”) presently
employed by it in connection with, and material to, individually or in the aggregate, its operations, except where the failure to own, possess or have the right to use would not, individually or in the aggregate, have a Material Adverse Effect; and
neither the Parent nor any of its subsidiaries have received any notice of infringement of or conflict with asserted rights of others with respect to the foregoing which, individually or in the aggregate, would result have a Material Adverse Effect.
To the 

  

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knowledge of the Parent and its subsidiaries, the use of such Intellectual Property in connection with the business and operations of the Company and its
subsidiaries as described in the Offering Circular does not infringe on the rights of any person, except as would not, individually or in the aggregate, have a Material Adverse Effect; 
  
 (gg) All tax returns required to be filed by the Parent and its subsidiaries in all jurisdictions have been timely and duly
filed, other than those filings being contested in good faith or, except in the case in which failure to so file would not have a Material Adverse Effect. There are no tax returns of the Parent or its subsidiaries that are currently being audited by
state, local or federal taxing authorities or agencies (and with respect to which the Parent or its subsidiaries have received notice), except such audits as would not have a Material Adverse Effect. All taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to be due from such entities, have been paid, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without
penalty or interest, or those as would not have a Material Adverse Effect; 
  
 (hh) Each of the Parent and its subsidiaries is in compliance with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”), except for any non-compliance which would not have a Material Adverse Effect; no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined
in Section 3(2) of ERISA) for which the Parent or any of its subsidiaries would have any liability, except such as would not have a Material Adverse Effect; neither the Parent nor any of its subsidiaries has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “defined benefit pension plan” as defined in Section 3(35) of ERISA or (ii) Section 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”), in each case, except as would not have a Material Adverse Effect; and each “pension plan” for which the Parent and its
subsidiaries would have any liability, except as would not have a Material Adverse Effect, that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or
by failure to act, which would cause the loss of such qualification, except, in each case, as would not have a Material Adverse Effect; 
  
 (ii) Except for such matters as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the Parent and its subsidiaries are
not in violation of environmental, safety or similar laws or regulations applicable to them or their business or property relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (collectively, the “Environmental Laws”), (ii) the Parent and its subsidiaries have all permits, licenses and approvals required under the applicable Environmental Laws and are not in violation of any term or condition
of such permits, licenses or approvals, (iii) there are no pending or, to the knowledge of the Parent and its subsidiaries, threatened, administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any Environmental Laws against the Parent and its subsidiaries and (iv) to the knowledge of the Parent and its subsidiaries, there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or remediation, or any action, suit or proceeding by any private party or governmental body or agency, against or affecting the Parent and its subsidiaries relating to the
Environmental Laws. 
  

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 (jj) Each certificate signed by any officer of the Company and/or any of the Guarantors and delivered to
the Purchasers or counsel to the Purchasers pursuant to this Agreement shall be deemed to be a representation and warranty by the Company or such Guarantor, as the case may be, to the Purchasers as to the matters covered thereby. 
  
 2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to each of the Purchasers, and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 96.333% of the principal amount thereof, plus accrued interest, if any, from
October 4, 2005 to the Time of Delivery hereunder, the principal amount of Securities set forth opposite the name of such Purchaser in Schedule I attached hereto. 
  
 3. Upon the authorization by you of the release of the Securities, the several Purchasers propose to offer the Securities
for sale upon the terms and conditions set forth in this Agreement and the Offering Circular and each Purchaser hereby represents and warrants to, and agrees with the Company that: 
  
 (a) It will offer and sell the Securities only to: (i) persons who it reasonably believes are “qualified
institutional buyers” (“QIBs”) within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A and (ii) upon the terms and conditions set forth in Annex I attached hereto; and

  
 (b) It is an Institutional Accredited Investor; and

  
 (c) It has not solicited offers and will not offer or sell the
Securities by any form of general solicitation or general advertising, including but not limited to the methods described in Rule 502(c) under the Securities Act. 
  
 4. (a) The Securities to be purchased by each Purchaser hereunder, in such authorized denominations and registered in
such names as Goldman, Sachs & Co. may request upon at least forty-eight hours’ prior notice to the Company, will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of
the Company with The Depository Trust Company (“DTC”) or its designated custodian. The Company will deliver the Securities to Goldman, Sachs & Co., for the account of each Purchaser, against payment by or on behalf of such
Purchaser of the purchase price therefor by wire transfer in Federal (same day) funds to an account designated by the Company, by causing DTC to credit the Securities to the account of Goldman, Sachs & Co. at DTC. The Company will cause the
certificates representing the Securities to be made available to Goldman, Sachs & Co. for checking at least twenty-four hours prior to the Time of Delivery (as defined below) at the office of DTC or its designated custodian (the
“Designated Office”). The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on October 4, 2005 or such other time and date as Goldman, Sachs & Co. and the Company may agree upon in writing.
Such time and date are herein called the “Time of Delivery.” 
  
 (b) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof, including the cross-receipt for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(i) hereof, will be delivered at such time and date at Kaye Scholer LLP, 425 Park Avenue, New York, New York 10022 (the “Closing Location”), and the Securities will be delivered to the Designated Office, all at
the Time of Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York City time, on the New York Business Day next preceding the Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to
the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or executive order to close. 
  

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 5. Each of the Company and the Guarantors jointly and severally agrees with each of the Purchasers:

  
 (a) To prepare the Offering Circular in a form reasonably
approved by you; to make no amendment or any supplement to the Offering Circular unless the Purchasers shall previously have been advised thereof and shall not have reasonably objected thereto within a reasonable time after being furnished a copy
thereof; 
  
 (b) Promptly from time to time to take such action as
you may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith neither the Company nor any Guarantor shall be required to (i) qualify as a foreign corporation or file a
general consent to service of process in any jurisdiction, (ii) take any other action that would subject it to general service of process or taxation in excess of a nominal amount in respect of doing business in any jurisdiction in which it is
not otherwise subject or (iii) make any changes to its organizational documents; 
  
 (c) To furnish the Purchasers with written and electronic copies of the Offering Circular in such quantities as you may from time to time reasonably request, and if, at any time prior to the earlier to occur of
(i) receipt by the Company of a written confirmation from the Purchasers of the completion of the resale by the Purchasers of the Securities or (ii) expiration of nine months after the date of the Offering Circular, any event shall have
occurred as a result of which the Offering Circular as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Offering Circular is delivered, not misleading, or, if for any other reason it shall be necessary or desirable during such same period to amend or supplement the Offering Circular, to notify you and
upon your request to prepare and furnish without charge to each Purchaser and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Offering Circular or a supplement to the
Offering Circular which will correct such statement or omission or effect such compliance; 
  
 (d) During the period beginning from the date hereof and continuing until the date six months after the Time of Delivery, not to offer, sell contract to sell or otherwise dispose of, except as provided hereunder or in
the Registration Rights Agreement any securities of the Company that are substantially similar to the Securities; 
  
 (e) Not to be or become, at any time prior to the expiration of two years after the Time of Delivery, an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act; 
  
 (f) At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders
from time to time of Securities, to furnish at its expense, upon request, to holders of Securities and prospective purchasers of securities information (the “Additional Issuer Information”) satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Act; 
  

 10 

 (g) If requested by you, to use its commercially reasonable efforts to cause such Designated Securities
to be eligible for the PORTAL trading system of the National Association of Securities Dealers, Inc.; 
  
 (h) So long as any notes are outstanding, (i) to furnish to the holders of the Securities or cause the Trustee to furnish to the holders of
Securities and post to its website or (ii) to file with the Securities and Exchange Commission (the “SEC”), transmit to the Trustee an electronic or paper copy of, and if the Company has a website, post to its website, in each case
within the time periods that such reports would be required to be filed with the SEC if the rules and regulations of the SEC were applicable to the Company (x) all quarterly and annual reports that would be required to be filed with the SEC on
Forms 10-Q and 10-K if the Company were required to file such reports and (y) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports; to prepare all such reports in all
material respects in accordance with all of the rules and regulations applicable to such reports; to include a report on the Company’s consolidated financial statements by the Company’s certified independent accountants in each annual
report on Form 10-K; 
  
 (i) During the period of two years after
the Time of Delivery, the Parent and Company will not, and will not permit any of their “affiliates” (as defined in Rule 144 under the Securities Act) over which either of them exercises control to, resell any of the Securities which
constitute “restricted securities” under Rule 144 that have been reacquired by any of them; 
  
 (j) Pursuant and subject to the Registration Rights Agreement, the Company and the Guarantors shall file with the Commission within 120 days following the
Time of Delivery and use its commercially reasonable efforts to cause to be declared or become effective under the Securities Act, on or prior to 240 days after the Time of Delivery, a registration statement on Form S-4 providing for the
registration of a new series of debt securities of the Company (the “Exchange Securities”) having substantially identical terms as the Securities except that the Exchange Securities will be registered pursuant to an effective Registration
Statement under the Securities Act (the “Exchange Offer”), and to the extent required by the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Securities Act related to the resale by certain
holders of the Securities, and to use its commercially reasonable efforts to cause such shelf registration statement to be declared effective, and shall exchange of the Securities for the Exchange Securities; and 
  
 (k) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Offering Circular under the caption “Use of Proceeds.” 
  
 6. The Company and the Guarantors, jointly and severally, covenant and agree with the several Purchasers that the Company will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company’s and Guarantors’ counsel and accountants in connection with the issue of the Securities and all other expenses in connection with the preparation, printing and filing
of the Preliminary Offering Circular and the Offering Circular and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the cost of printing or producing any Agreement among
Purchasers, this Agreement, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement, the Security Agreement, the IP Security Agreement, the Blue Sky and legal investment surveys, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities (but not, however, the legal fees and expenses of counsel to the Purchasers incurred in connection with the foregoing, except as provided
in Section 11 hereof) ; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable fees and disbursements

  

 11 

 
of counsel for the Purchasers in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (iv) any fees
charged by securities rating services for rating the Securities; (v) the cost of preparing the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities; (vii) any cost incurred in connection with the designation of the Securities for trading in PORTAL; and (viii) all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section 6, and Sections 8 and 11 hereof, the Purchasers will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make. 
  
 7. The obligations of the Purchasers hereunder shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company and Guarantors herein are, at and as of the Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions: 
  
 (a)
Latham & Watkins LLP, counsel for the Purchasers, shall have furnished to you such opinion or opinions, dated the Time of Delivery, with respect to the matters as you may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon such matters; 
  
 (b) Kaye Scholer LLP, counsel for the Parent and its subsidiaries, shall have furnished to you their written opinion, dated the Time of Delivery to the effect set forth in Annex II hereto; 
  
 (c) Cook, Little, Rosenblatt & Manson, P.L.L.C., counsel for
Brookstone Company, Inc., Brookstone International Holdings, Inc., Brookstone Purchasing, Inc., Brookstone Holdings, Inc., Brookstone Stores, Inc., Brookstone Properties, Inc. and Gardeners Eden, Inc. shall have furnished to you their written
opinion, dated the Time of Delivery to the effect set forth in Annex III hereto; 
  
 (d) Daniel Burke, General Counsel of the Parent, shall have furnished to you his written opinion, dated the Time of Delivery to the effect set forth in Annex IV hereto; 
  
 (e) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, PricewaterhouseCoopers LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof to the effect set forth in Annex V hereto; 
  
 (f) (i) Neither the Parent nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in the Offering Circular any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Circular, and (ii) since the respective dates as of which information is given in the Offering Circular there shall not have
been any change in the capital stock or any payment of or declaration to pay any dividends or other distribution with respect to the capital stock of the Parent or any of its subsidiaries (other than as a result of exercises of stock options or
other equity incentive awards) or long-term debt of the Parent or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders’
equity or results of operations of the Parent and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Offering Circular, the effect of which, in any such case described in clause (i) or (ii), is in the
judgment of Goldman, Sachs & Co. so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in this Agreement and in the
Offering Circular; 
  

 12 

 (g) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the
Securities by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of the Securities; 
  
 (h) On or after the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities
generally on the NYSE or the NASDAQ; (ii) a suspension or material limitation in trading in the Parent’s securities on the NYSE or the NASDAQ; (iii) a general moratorium on commercial banking activities declared by either Federal or
New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in
clause (iv) or (v) in the judgment of the Goldman, Sachs & Co. makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in the Offering
Circular; 
  
 (i) The Securities have been designated for trading
on PORTAL; 
  
 (j) The Company shall have furnished or caused to
be furnished to you at the Time of Delivery certificates of officers of the Company satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsection (e) of this Section and as to such other matters as you may reasonably request; 
  
 (k) The Collateral Agent shall have received at the Time of Delivery (or with
respect to clause (v) below, the Company shall have used its commercially reasonable efforts to deliver): 
  
 (i) appropriately completed copies, which have been duly authorized for filing by the appropriate Person, of UCC-1 financing statements
naming the Company and each Guarantor as a debtor and the Collateral Agent as the secured party, or other similar instruments or documents to be filed under the UCC of all jurisdictions as may be necessary or, in the reasonable opinion of the
Collateral Agent and its counsel, desirable to perfect the security interests of the Collateral Agent; 
  
 (ii) duly executed, delivered and completed copies of the Security Agreement and IP Security Agreement; 
  
 (iii) appropriately completed copies, which have been duly
authorized for filing by the appropriate Person, of Uniform Commercial Code Form UCC-3 termination statements delivered to the First Lien Collateral Agent, if any, necessary to release all Liens (other than Permitted Liens (as defined in the
Indenture)) of any Person in any Collateral; 
  
 (iv) copies of all lien searches provided to Bank of America, N.A., the Administrative Agent and First Lien Collateral Agent for the Credit Facility, together with copies of all financing statements provided to the First Lien Collateral
Agent that name the Company or any Guarantor (under its present or previous names) as debtor (none of 

  

 13 

 
which shall cover Collateral described in the Security Documents, except for Permitted Liens (as defined in the Indenture) and any Liens for which duly
authorized UCC-3 termination statements are delivered to the First Lien Collateral Agent); and 
  
 (v) such other approvals, opinions, or documents with respect to the Collateral as the Purchasers may reasonably request in form and
substance reasonably satisfactory to each of them. 
  
 (l) The
Parent shall have consummated, or shall consummate concurrently with the issuance of the Securities, the “transactions” (as defined in the Offering Circular); 
  
 (m) The Company, the Guarantors and the Trustee shall have entered into the Indenture and the Purchasers shall have received
executed counterparts thereof; and 
  
 (n) The Company, the
Guarantors and the Purchasers shall have entered into the Registration Rights Agreement and the Purchasers shall have received executed counterparts thereof. 
  
 8. (a) The Company and the Guarantors will, jointly and severally, indemnify and hold harmless each Purchaser against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary Offering Circular or the Offering Circular, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, and will reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that neither the Company nor the Guarantors shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary Offering Circular or the Offering Circular or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any
Purchaser through Goldman, Sachs & Co. expressly for use therein. 
  
 (b) Each Purchaser will indemnify and hold harmless the Company and the Guarantors against any losses, claims, damages or liabilities to which the Company and the Guarantors may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Circular or the
Offering Circular, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact or necessary to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Offering Circular or the Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Purchaser through Goldman, Sachs & Co. expressly for use therein; and will reimburse the Company and the Guarantors for any legal or other expenses reasonably incurred by
the Company and the Guarantors in connection with investigating or defending any such action or claim as such expenses are incurred. 
  
 (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be 

  

 14 

 
made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to
notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified party. 
  
 (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions
in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Purchasers on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Guarantors on the one hand and the Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the
one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and the Guarantors bear to the total underwriting discounts and
commissions received by the Purchasers. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Guarantors on the one hand or the Purchasers on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The Company and the Guarantors and the Purchasers agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Purchasers were treated as one entity
for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) 

  

 15 

 
referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to investors were offered to investors exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. 
  
 (e) The obligations of the Company and the Guarantors under this Section 8 shall be in addition to any liability which
the Company and the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to any affiliate of each Purchaser and each person, if any, who controls any Purchaser within the meaning of the Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and each Guarantor and to
each person, if any, who controls the Company and each Guarantor within the meaning of the Act. 
  
 9. (a) If any Purchaser shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such Securities on the terms contained herein. If within thirty-six hours after such default by any Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you
notify the Company that you have so arranged for the purchase of such Securities, or the Company notifies you that it has so arranged for the purchase of such Securities, you or the Company shall have the right to postpone the Time of Delivery for a
period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Offering Circular, or in any other documents or arrangements, and the Company agrees to prepare promptly any amendments to the Offering
Circular which in your opinion may thereby be made necessary. The term “Purchaser” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this
Agreement with respect to such Securities. 
  
 (b) If, after
giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased
does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Purchaser to purchase the principal amount of Securities which such Purchaser agreed to
purchase hereunder and, in addition, to require each non-defaulting Purchaser to purchase its pro rata share (based on the principal amount of Securities which such Purchaser agreed to purchase hereunder) of the Securities of such defaulting
Purchaser or Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Purchaser from liability for its default. 
  

(c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right 

  

 16 

 
described in subsection (b) above to require non-defaulting Purchasers to purchase Securities of a defaulting Purchaser or Purchasers, then this
Agreement shall thereupon terminate, without liability on the part of any non-defaulting Purchaser or the Company, except for the expenses to be borne by the Company and the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Purchaser from liability for its default. 
  
 10. The respective indemnities, agreements, representations, warranties and other statements of the Company, the Guarantors and the several Purchasers, as
set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any
Purchaser or any controlling person of any Purchaser, or the Company or the Guarantors, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities. 
  
 11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as provided in Sections 6 and 8 hereof; but, if for any other reason, the Securities are not delivered by or on behalf of the Company and the Guarantors as provided herein,
the Company and the Guarantors will, jointly and severally, reimburse the Purchasers through you for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale and delivery of the Securities, but the Company and the Guarantors shall then be under no further liability to any Purchaser except as provided in Sections 6 and 8 hereof. 
  
 12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Purchaser made or given by you jointly or by Goldman, Sachs & Co. on behalf of you as the representative.

  
 All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Purchasers shall be delivered or sent by mail, telex or facsimile transmission to you as the representative in care of Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Attention:
Registration Department; and if to the Company or any Guarantor shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Offering Circular, Attention: Secretary; provided, however, that any
notice to a Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Purchaser at its address set forth in its Purchasers’ Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 
  
 13. This Agreement shall be binding upon, and inure solely to the benefit of, the Purchasers, the Company, the Guarantors,
and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of the Company and the Guarantors and each person who controls the Company and/or the Guarantors or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from any Purchaser shall be deemed a successor or assign by reason merely of such
purchase. 
  
 14. Time shall be of the essence of this Agreement.

  
 15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. 
  

 17 

 16. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 
  
 17. Notwithstanding anything herein to the contrary, the Company (and the Company’s employees, representatives, and other agents) are authorized to
disclose to any and all persons, the tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without
the Purchasers imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to
comply with securities laws. For this purpose, “tax treatment” means U.S. federal and state income tax treatment, and “tax structure” is limited to any facts that may be relevant to that treatment. 
  
 18. The Company and the Guarantors acknowledge and agree that (i) the
purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company and the Guarantors, on the one hand, and the Purchasers, on the other, (ii) in connection therewith and with the
process leading to such transaction each Purchaser is acting solely as a principal and not the agent or fiduciary of the Company or any of the Guarantors, (iii) no Purchaser has assumed an advisory or fiduciary responsibility in favor of the
Company or any of the Guarantors with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Purchaser has advised or is currently advising the Company or any of the Guarantors on other matters) or
any other obligation to the Company or the Guarantors except the obligations expressly set forth in this Agreement and (iv) the Company and each of the Guarantors has consulted its own legal and financial advisors to the extent it deemed
appropriate. The Company and each of the Guarantors agree that it will not claim that the Purchasers, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company or the Guarantors, in
connection with such transaction or the process leading thereto. 
  
 19. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Guarantors and the Purchasers, or any of them, with respect to the subject matter hereof. 
  
 20. The Company and each of the Purchasers hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 
  
 If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Purchasers, this letter and such acceptance hereof shall constitute a binding agreement between each of the Purchasers, the Company and the
Guarantors. It is understood that your acceptance of this letter on behalf of each of the Purchasers is pursuant to the authority set forth in a form of Agreement Among Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the signers thereof. 
  
 [Signature pages follow] 
  

 18 

			
	Very truly yours,
	
	Brookstone Company, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President
	
	Brookstone, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	 	 	Executive Vice President
	
	Brookstone International Holdings, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President
	
	Brookstone Purchasing, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President
	
	Brookstone Stores, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President

  
 [Purchase
Agreement] 

			
	Brookstone Retail Puerto Rico, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President
	
	Brookstone Holdings, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President
	
	Brookstone Properties, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President
	
	Advanced Audio Concepts, Ltd.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President
	
	Gardeners Eden, Inc.
		
	By:	 	/s/    PHILIP W. ROIZIN        
	Name:	 	Philip W. Roizin
	Title:	 	Executive Vice President

  
 [Purchase
Agreement] 

 Accepted as of the date hereof: 
  

			
	Goldman, Sachs & Co.
	    On behalf of each of the Purchasers
		
	By:	 	/s/    Goldman, Sachs & Co.
	 	 	(Goldman, Sachs & Co.)

  
 [Purchase Agreement]

 SCHEDULE I 
  

				
	 Purchaser

	  	Principal
Amount of
Securities to be
Purchased

	 Goldman, Sachs & Co.
	  	$	129,500,000
	 UBS Securities LLC
	  	$	55,500,000
	 	  	
	

	 Total
	  	$	185,000,000
	 	  	
	

 SCHEDULE II 
  
 The Guarantors 
  
 Brookstone, Inc. 
  
 Brookstone International Holdings, Inc. 
  
 Brookstone Purchasing, Inc. 
  
 Brookstone Stores, Inc. 
  
 Brookstone Retail Puerto Rico, Inc. 
  
 Brookstone Holdings, Inc. 
  
 Brookstone Properties, Inc. 
  
 Advanced Audio Concepts, Ltd. 
  
 Gardeners Eden, Inc. 

 ANNEX I 
  

	(1)	The Securities have not been and will not be registered under the Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S under the Act or pursuant to an exemption from the registration requirements of the Act. Each Purchaser represents that it has offered and sold the Securities, and will offer and sell the Securities (i) as
part of their distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering and the Time of Delivery, only in accordance with Rule 903 of Regulation S or, Rule 144A under the Act. Accordingly,
each Purchaser agrees that neither it, its affiliates nor any persons acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Securities, and it and they have complied and will comply with the
offering restrictions requirement of Regulation S. Each Purchaser agrees that, at or prior to confirmation of sale of Securities (other than a sale pursuant to Rule 144A), it will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during the restricted period a confirmation or notice to substantially the following effect: 

  
 “The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the “Securities
Act”) and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meaning given to them by Regulation S.” 
  
 Terms used in this paragraph have the meanings given to them by Regulation
S. 
  
 Each Purchaser further agrees that it has not entered and
will not enter into any contractual arrangement with respect to the distribution or delivery of the Securities, except with its affiliates or with the prior written consent of the Company. 
  

	(2)	Notwithstanding the foregoing, Securities in registered form may be offered, sold and delivered by the Purchasers in the United States and to U.S. persons pursuant to
Section 3 of this Agreement without delivery of the written statement required by paragraph (1) above. 

  
 Each Initial Purchaser has represented and agreed that: 
  

	(a)	(i) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and
(ii) it has not offered or sold and will not offer or sell the Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their
businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Notes would otherwise constitute a contravention of Section 19
of the FSMA by the Issuer; 

  

	(b)	 it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment
activity (within the 

  

 A-1 

	 	 
meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the
FSMA does not apply to the Issuer or the Guarantors; and 

  

	(c)	it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United
Kingdom. 

  
 In relation to each Member State of the European
Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each Initial Purchaser has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that
Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of Notes to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Notes which has been approved by the
competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it
may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State at any time: 
  

	(a)	to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in
securities; 

  

	(b)	to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than
€43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or 

  

	(c)	in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. 

  
 For the purposes of this provision, the expression an “offer of Notes to the
public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase
or subscribe the Notes, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State. 
  

	(3)	Each Purchaser agrees that it will not offer, sell or deliver any of the Securities in any jurisdiction outside the United States except under circumstances that will result in
compliance with the applicable laws thereof, and that it will take at its own expense whatever action is required to permit its purchase and resale of the Securities in such jurisdictions. Each Purchaser understands that no action has been taken to
permit a public offering in any jurisdiction outside the United States where action would be required for such purpose. Each Purchaser agrees not to cause any advertisement of the Securities to be published in any newspaper or periodical or posted
in any public place and not to issue any circular relating to the Securities, except in any such case with Goldman, Sachs & Co.’s express written consent and then only at its own risk and expense. 

  

 A-2 

 ANNEX II 
  

Form of Legal Opinion of Kaye Scholer LLP 
  
 Goldman, Sachs & Co. 
 UBS Securities LLC 
 c/o Goldman, Sachs & Co. 
 85 Broad Street 
 New York, New York 10004 
  
 Ladies and
Gentlemen: 
  
 We have acted as counsel to Brookstone Company,
Inc., a New Hampshire corporation (the “Company”), Brookstone, Inc., a Delaware corporation (“Parent”) and each of the other companies listed on Schedule A hereto (collectively with Parent, the
“Guarantors”) in connection with the Purchase Agreement (the “Purchase Agreement”) dated as of September __, 2005 by and among the Company, the Guarantors, Goldman, Sachs & Co. and UBS Securities LLC
(collectively, the “Purchasers”). 
  
 This
opinion is given pursuant to Section 7(b) of the Purchase Agreement. Capitalized terms used in this opinion without definition have the meanings given to them in the Purchase Agreement. 
  
 As to various questions of fact material to our opinions in the numbered
paragraphs below, we have relied upon, and assumed without independent investigation the accuracy of, the representations made by the Company and each of the Guarantors in Section 1 of the Purchase Agreement and the Security Documents (as
defined below). We have also examined (i) the Indenture (the “Indenture”), dated as of October     , 2005, by and among the Company, the Guarantors and Wells Fargo Bank, N.A. (“Wells
Fargo”), as Trustee and Collateral Agent, (ii) the Registration Rights Agreement (the “Registration Rights Agreement”), dated as of October     , 2005, by and among the Company, the
Guarantors and the Purchasers, (iii) the Securities, (iv) the Security Agreement, dated as of October     , 2005 (the “Security Agreement”), among the Company, the Guarantors and Wells Fargo, as
Collateral Agent (in such capacity, the “Collateral Agent”), (v) the IP Security Agreement, dated October     , 2005 (the “IP Security Agreement”), among the Company, the Guarantors
and the Collateral Agent, (vi) the Collateral Agency Agreement dated as of October     , 2005 (the “Collateral Agency Agreement”), by and among the Company, the Guarantors and Wells Fargo, as Trustee
and Collateral Agent, (vii) [the intercreditor agreement] dated as of October     , 2005 (the “Intercreditor Agreement”), (viii) the organizational documents of Parent; (ix) the agreements
listed on Schedule B hereto, (x) the unfiled copy of a financing statement attached hereto as Annex A (the “Financing Statement”), which we understand will be filed in the office of the Secretary of State of the
State of Delaware, and (xi) such certificates, documents and records and have made such investigation as we have deemed necessary in connection with the opinions set forth below. The Security Agreement, the IP Security Agreement, the Collateral
Agency Agreement and the Intercreditor Agreement are referred to herein collectively as the “Security Documents.” 
  
 In expressing the opinions set forth below, we have assumed the genuineness of all signatures and the capacity of the persons so signing, the authenticity
of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as certified, conformed, photostatic or facsimile copies and the authenticity of the originals of such copies. 
  

 A-1 

 We have assumed that the Purchase Agreement, Registration Rights Agreement, Indenture, the Securities and
the Security Documents (collectively, the “Transaction Documents”) have been duly authorized, executed and delivered by each of the parties thereto other than Parent, and that each such party has all requisite power and authority to
effect the transactions contemplated by the Transaction Documents. In rendering the opinions expressed in paragraphs 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 below with respect to each of the Company and the Guarantors (other than Parent), we have
assumed that: (i) it has the requisite power and authority to execute, deliver and perform the Transaction Documents to which it is a party; (ii) the execution, delivery and performance by it of the Transaction Documents to which it is a
party have been duly authorized by all requisite action and such Transaction Documents have been duly executed and delivered on its behalf by one or more duly authorized officers thereof; (iii) it has been duly organized and is validly existing
and is in good standing under the laws of the jurisdiction of its organization; (iv) the issuance and sale of the Securities and the execution, delivery and performance by it of the Transaction Documents to which it is a party do not
violate (A) any provisions of law, regulation or treaty applicable to it or public policy, in each case in the jurisdiction where it is organized or (B) any provision of its organizational documents; and (v) no consent, approval,
authorization, order, registration, qualification of, or other action by, or filing with, any governmental authority in the jurisdiction of its organization is required for the valid execution, delivery or performance by it of any of the Transaction
Documents to which it is a party, except for such approvals, authorizations, actions and filings as have been obtained, taken or made, as the case may be. 
  
 Except with respect to paragraph 19 below and as otherwise provided herein, the Laws covered by the opinions expressed herein are limited to the federal
laws of the United States of America, the laws of the State of New York and the General Corporation Law of the State of Delaware which, in each case, in the exercise of customary professional diligence would reasonably be recognized as applicable
directly to Parent, the Company and the other Guarantors, as the case may be (excluding in any event Section 547 and 548 of the federal Bankruptcy Code and comparable provisions of state law or of any federal or state anti-fraud, antitrust,
securities or trade regulation laws or laws relating to the right of any Lender to receive or retain any payment of indebtedness if such payment is found to be voidable under the federal Bankruptcy Code or other applicable insolvency statute)
(collectively, the “Opining Laws”). The opinion in paragraph 19 below is based solely on the Uniform Commercial Code as in effect in the State of New York on the date hereof (the “New York UCC”) and Sections 9-501, 9-502,
9-503, 9-504, 9-509, 9-510 and 9-521 (the “Filing Sections”) of the Uniform Commercial Code as in effect in the State of Delaware on the date hereof, as same appears in the Delaware Code Annotated, as supplemented by the 2002
Supplement (the “Delaware UCC”). Further, our opinion in paragraph 18 below is limited to Article 9 of the New York UCC and therefore that opinion paragraph does not address (i) laws other than Article 9 of the New York UCC and
(ii) collateral of a type not subject to Article 9 of the New York UCC. For purposes of this opinion letter, the “Law” of a jurisdiction means such jurisdiction’s statutes, the judicial and administrative decisions, and the rules
and regulations of the governmental agencies of such jurisdiction, but excluding the statutes and ordinances, the administrative decisions, and the rules and regulations of counties, towns, municipalities, and special political subdivisions (whether
created or enabled through legislative action at the federal, state or regional level) and judicial decisions to the extent that they deal with any of the foregoing excluded items. 
  
 Based on the foregoing and on the qualifications, limitations and assumptions set forth herein, we are of the opinion that:

  
 1. Parent is validly existing as a corporation in good
standing under the laws of the State of Delaware. 
  

 A-2 

 2. Parent has the corporate power and authority to own its properties and conduct its business as
described in the Offering Circular. 
  
 3. All of the issued and
outstanding capital stock of Brookstone Acquisition Corp. (“Acquisition”) has been duly authorized and validly issued, is fully paid and non-assessable. All the outstanding shares of capital stock of Acquisition are owned of record
by Brookstone Holdings Corp. (“Holdings”) and, immediately following the merger of Acquisition with and into Parent (the “Merger”), with Parent as the surviving corporation, as contemplated by the Agreement and Plan
of Merger, dated as of April 15, 2005, as amended on July 15, 2005, by and among Holdings, Parent and Acquisition, all of the outstanding shares of capital stock of Parent will be owned of record by Holdings. 
  
 4. The Purchase Agreement has been duly authorized, executed and delivered
by Parent. 
  
 5. The Indenture has been duly authorized, executed
and delivered by Parent and constitutes a valid and binding instrument, enforceable against the Company and the Guarantors in accordance with its terms, except as rights to indemnification and contribution thereunder may be limited by applicable law
or against public policy and subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws of general applicability relating to or affecting the rights and remedies of creditors and to general equity principles
(regardless of whether considered in a proceeding at law or in equity). 
  
 6. The Registration Rights Agreement has been duly authorized, executed and delivered by Parent and constitutes a valid and binding agreement, enforceable against the Company and the Guarantors in accordance with its terms, except as rights
to indemnification and contribution thereunder may be limited by applicable law or against public policy and subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws of general applicability relating to or
affecting the rights and remedies of creditors and to general equity principles (regardless of whether considered in a proceeding at law or in equity). 
  
 7. Each of the Security Documents has been duly authorized, executed and delivered by Parent and constitutes a valid and binding agreement, enforceable
against the Company and the Guarantors in accordance with its terms, except as rights to indemnification and contribution thereunder may be limited by applicable law or against public policy and subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws of general applicability relating to or affecting the rights and remedies of creditors and to general equity principles (regardless of whether considered in a proceeding at law or in equity).

  
 8. The issue and sale of the Securities and, to the extent a
party thereto, the consummation by the Company and the Guarantors of the transactions contemplated by the Transaction Documents will not (a) result in any breach or violation of the provisions of any of the Opining Laws (other than performance
by the Company and the Guarantors of their obligations under the indemnification and contribution sections of the Purchase Agreement, Registration Rights Agreement, Indenture and Security Documents, as applicable, as to which we render no opinion),
(b) result in a breach or violation of any of the terms or provisions of, or constitute a default under, any of the agreements listed on Schedule B hereto or (c) violate the provisions of the Certificate of Incorporation or Bylaws
of Parent as in effect immediately following the Merger. 
  

 A-3 

 9. No consent, approval, authorization, order, filing, registration or qualification of or with any
federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the General Corporation Law of the State of Delaware is required for the issuance and sale of the Securities or the Guarantees or the
consummation by the Company or the Guarantors of the transactions contemplated by the Transaction Documents other than the Security Documents. Except for the filing or recordation in the appropriate governmental offices of UCC financing statements
(including the Financing Statement) and other appropriate filings, registrations and recordings to perfect liens created under the Security Documents in assets that do not constitute Article 9 Collateral (as defined below), no consent, approval,
authorization, order, filing, registration or qualification of or with any federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the General Corporation Law of the State of Delaware is
required for the execution and delivery by Parent of the Security Documents, the authorization by Parent of the filing of the Financing Statement being filed against it or the performance by Parent of its obligations under the Security Documents,
including without limitation the grant of any security interests under the Security Agreement and the IP Security Agreement. 
  
 10. The Guarantees have been duly authorized by the Parent and constitute the valid and binding obligations of each of the Guarantors, enforceable against
each of the Guarantors in accordance with their terms, except as rights to indemnification and contribution thereunder may be limited by applicable law or against public policy and subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws of general applicability relating to or affecting the rights and remedies of creditors and to general equity principles (regardless of whether considered in a proceeding at law or in equity). 
  
 11. Each of the Securities, including those Securities in the form of a
Regulation S Temporary Global Note (as defined in the Indenture), when executed and authenticated in accordance with the provisions of the Indenture and issued and delivered and paid for by the Purchasers in accordance with the terms of the Purchase
Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization and other laws applicable
to creditors’ rights generally and to general equitable principles (whether considered in an action at law or a proceeding in equity). 
  
 12. Each of the Securities in the form of a Regulation S Permanent Global Note, when executed and authenticated in accordance with the provisions of the
Indenture and issued and delivered in accordance with the provisions of the Indenture, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms, and
subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws of general applicability relating to or affecting the rights and remedies of creditors and to general equity principles (regardless of whether
considered in a proceeding at law or in equity). 
  
 13. Each of
the Exchange Securities, when executed and authenticated in accordance with the provisions of the Indenture, and issued and delivered in accordance with the provisions of the Indenture and the Registration Rights Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization and other laws applicable to creditors’ rights
generally and to general equitable principles (whether considered in an action at law or a proceeding in equity). 
  

 A-4 

 14. The guarantees included in the Exchange Securities have been duly authorized by the Parent, and when
executed and delivered in accordance with the terms of the Indenture and when the Exchange Securities are executed and authenticated in accordance with the provisions of the Indenture, and issued and delivered in accordance with the provisions of
the Indenture and the Registration Rights Agreement, will constitute the valid and binding obligations of each of the Guarantors, enforceable against each of the Guarantors in accordance with their terms, except as rights to indemnification and
contribution thereunder may be limited by applicable law or against public policy and subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws of general applicability relating to or affecting the rights and
remedies of creditors and to general equity principles (regardless of whether considered in a proceeding at law or in equity). 
  
 15. The statements set forth in the Offering Circular under the caption “Description of Notes,” insofar as they purport to constitute a summary
of the terms of the Securities, and under the caption “Certain United States Federal Income Tax Considerations,” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate in all material
respects. 
  
 16. Assuming the accuracy of and compliance with the
representations, warranties and covenants of the Company, the Guarantors and of each of the Purchasers contained in the Purchase Agreement, it is not necessary in connection with the offer, sale and initial resale of such Securities by the
Purchasers in the manner contemplated by the Purchase Agreement and the Offering Circular to register the Securities under the Act or to qualify the Indenture under the United States Trust Indenture Act of 1939 (the “Trust Indenture
Act”). 
  
 17. Neither the Company nor any of the
Guarantors is, nor after giving effect to the offering and sale of the Securities to be issued and sold by the Company under the Purchase Agreement and the Indenture and the application of the net proceeds from such sale as described in the Offering
Circular under the caption “Use of Proceeds,” will be, required to register as an “investment company,” as such term is defined in the Investment Company Act. 
  
 18. The Security Agreement and the IP Security Agreement, together with the Collateral Agency Agreement, create in favor of
the Collateral Agent, for the benefit of the [secured parties] (as defined in the Security Agreement), a security interest in the assets of each of the Company and each Guarantor described therein in which a security interest may be created under
Article 9 of the New York UCC (the “Article 9 Collateral”), which security interest secures the Obligations (as defined in the Security Agreement and IP Security Agreement, respectively) of such Person. 
  
 19. The Financing Statement is in proper form for filing in the office of the
Secretary of State of the State of Delaware, and upon due filing in such office, the Collateral Agent, for the benefit of the [secured parties], will have a perfected security interest in that portion of the Article 9 Collateral of Parent in which a
security interest is perfected by filing a financing statement under the Delaware UCC (the “Filing Collateral”). 
  
 We have acted as U.S. counsel to the Company and the Guarantors in connection with the preparation of the Offering Circular. In connection with the
preparation of the Offering Circular, we have participated in conferences with officers and representatives of the Company and the Purchasers, counsel for the Purchasers and the independent public accountants of the Company, at which the contents of
the Offering Circular were discussed. We have not undertaken to determine independently and we are not passing upon, guaranteeing 

  

 A-5 

 
and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Offering Circular and have made no
independent verification or check thereof, except as set forth in paragraph 15 above. However, subject to the foregoing, on the basis of our participation in the conferences referred to above and our examination of the documents referred to herein,
we advise you that no facts have come to our attention which cause us to believe that the Offering Circular, as of the date thereof or as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state
any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (except that we express no such view with respect to any financial statements, accounting information or
financial or statistical data, including, in each case, the notes and schedules thereto, that is included in the Offering Circular or any amendments or supplements thereto). 
  
 The opinions expressed above are subject to the following qualifications, assumptions and exceptions: 
  
 (a) We express no opinion with respect to limitations imposed by law and
court decisions upon the availability of the remedy of specific performance, injunctive relief and other equitable remedies, whether sought in legal or equitable proceedings. 
  
 (b) We express no opinion with respect to the enforceability under certain circumstances, (i) of provisions that
expressly or by implication waive broadly or vaguely stated rights, unknown future rights, defenses to obligations or rights granted by law, where such waivers are against public policy or prohibited by law; or (ii) of provisions stating that
rights or remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to or with any other right or remedy or that the election of some particular remedy or remedies does not preclude recourse to one or more
others or that failure to exercise or delay in exercising rights or remedies will not operate as a waiver of any such right or remedy. 
  
 (c) We express no opinion with respect to the effect of legal or equity principles which provide, essentially, that a court may not enforce (or may limit
the application of) a contract or portions thereof, which the court finds as a matter of law to have been unconscionable at the time the contract was made. 
  
 (d) The foregoing opinions are limited to the specific issues addressed and to laws existing on the date hereof. By rendering our opinion, we do not
undertake to advise you with respect to any matter or, of any change in, such laws or in the interpretations thereof which may occur after the date hereof. 
  
 (e) With respect to our opinion in paragraphs 8 and 9 above, we express no opinion as to the Securities Act, the Exchange Act, the Trust Indenture Act,
state securities or “blue sky” laws or foreign securities laws, or the effect thereof. With respect to our opinion in paragraph 16 above, we express no opinion as to when or under what circumstances any Securities initially resold by the
Purchasers may be reoffered or resold. 
  
 (f) Our opinions in
paragraphs 18 and 19 above are subject to the following additional qualifications and assumptions: 
  
 (i) We have assumed that Parent has its respective rights in the Article 9 Collateral as to which it has granted a security interest to
the Collateral Agent and that value has been given therefor. We express no opinion as to the nature or extent of any person’s rights in, or title to, any Article 9 Collateral or as to the validity or enforceability of any Article 9 Collateral.

  

 A-6 

 (ii) We have assumed that the descriptions of the Article 9 Collateral contained in, or
attached as schedules to, the Security Documents are factually accurate descriptions of the collateral intended to be covered by such documents. 
  
 (iii) The security interest of the Collateral Agent in proceeds of the Article 9 Collateral is limited to the extent set forth in
Section 9-315 of the New York UCC and Delaware UCC. 
  
 (iv) In the case of Article 9 Collateral consisting of chattel paper, accounts and general intangibles, the security interest of the Collateral Agent may be subject to the rights of account debtors, claims and
defenses of account debtors and the terms of agreements with account debtors to the extent set forth in the New York UCC. 
  
 (v) Except to the extent Article 9 of the New York UCC and the Filing Sections are applicable, no opinion is expressed concerning any item
of Article 9 Collateral that is subject to a statute, regulation or treaty of the United States of America that provides for a national or international registration or a national or international certificate of title for the creation of a security
interest therein. 
  
 (vi) To the extent that the
Company or any Guarantor acquires rights in any Article 9 Collateral subsequent to the date hereof, the security interest of the Collateral Agent will not attach until such Person acquires such rights. 
  
 (vii) We do not, except to the extent Article 9 of the New
York UCC and the Filing Sections are applicable, address the security interest of any person in any copyrights, patents, trademarks, service marks or other intellectual property, the proceeds thereof or any rights (including accounts, general
intangibles or payment intangibles) with respect to the lease, license or use thereof. 
  
 (viii) We express no opinion as to the effect of agreements or laws (other than the New York UCC) prohibiting, restricting or conditioning
the assignment of any of the Article 9 Collateral. 
  
 (ix) Except as set forth in paragraph 19 above, we express no opinion as to the perfection of any security interest. We express no opinion as to the priority or freedom from adverse claims of any security interest. 
  
 (x) We have assumed that none of the Article 9 Collateral
consists of consumer goods, crops growing or to be grown, timber to be cut, minerals or the like (including oil and gas) or accounts resulting from the sale of minerals or the like at the wellhead or the minehead. 
  
 (xi) We have assumed that each item of Article 9 Collateral
consisting of instruments and certificated securities is represented by only one writing. 
  
 (xii) We have assumed that the mailing address of the Collateral Agent listed on the Financing Statements is accurate and complete in all
respects. 
  

 A-7 

 (xiii) We express no opinion with respect to commercial tort claims. 
  
 (xiv) We have assumed that Parent is a corporation duly
organized only under the laws of the State of Delaware. 
  
 (xv) In the case of the issuance of distributions with respect to the Article 9 Collateral, the validity, perfection and priority of the security interest of the Collateral Agent may be dependent upon obtaining
possession thereof or taking other appropriate action in accordance with the provisions of the New York UCC or Delaware UCC. 
  
 (xvi) In rendering our opinion in paragraph 19 above, we have assumed that any and all recording taxes and fees with respect to the
perfection of security interests in the Article 9 Collateral have been paid to the appropriate governmental authorities. 
  
 (g) We call to your attention that certain courts have held that indemnities with respect to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1980, 42 U.S.C.A. Section 9601 et seq., are unenforceable and we express no opinion with respect to the effect of such decisions on the enforceability of
the Security Documents. 
  
 (h) The foregoing opinions are subject
to the qualification that the enforceability of certain remedies, waivers and submissions provided in the Transaction Documents may be unavailable or limited by certain laws and judicial decisions. In respect of such qualification, however, we are
of the opinion that such laws and judicial decisions do not, subject to the other exceptions and limitations contained in this opinion letter, make the remedies generally afforded by such documents inadequate to permit enforcement of any
indebtedness or any security interests arising thereunder. 
  
 (i)
We note that rights, remedies and other provisions of any Transaction Document that permit any person thereunder to take action or make determinations, or to benefit from indemnities and similar undertakings of the Company or any Guarantor may be
subject to a requirement that such action be taken or such determinations be made, and that any action or inaction by such person which may give rise to a request for payment under such an undertaking be taken or not taken, on a reasonable basis and
in good faith. 
  
 (j) We have assumed that each party to each of
the Transaction Documents will enforce same in compliance with the provisions thereof and all requirements of applicable law. 
  
 *        *        *         *

  
 IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department
regulations, we inform you that any U.S. federal tax advice contained in this opinion is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed under the U.S. Internal Revenue Code
or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. 
  
 *        *        *        * 
  

 A-8 

 This opinion is being furnished only to you solely for the purpose set out above and is not to be used,
circulated, quoted or otherwise relied upon for any other purpose. This opinion may not be relied upon for any other purpose, or relied upon by any other person for any purpose, without our prior written consent. 
  
 Very truly yours, 
  

 A-9 

 SCHEDULE A 
  

Brookstone International Holdings, Inc. 
  
 Brookstone Purchasing, Inc. 
  
 Brookstone Stores, Inc. 
  
 Brookstone Retail Puerto Rico, Inc. 
  
 Brookstone Holdings, Inc. 
  
 Brookstone Properties, Inc. 
  
 Advanced Audio Concepts, Ltd. 
  
 Gardeners Eden, Inc. 
  

 A-10 

 SCHEDULE B 
  

	1.	Real Estate Loan Agreement dated August 24, 2004 between Banknorth, N.A. and Brookstone Company, Inc. 

  

	2.	Real Estate Promissory Note dated August 24, 2004 between Banknorth, N.A. and Brookstone Company, Inc. 

  

	3.	Mortgage and Security Agreements dated August 24, 2004 between Banknorth, N.A. and Brookstone Company, Inc. 

  

 A-11 

 ANNEX III 
  

Form of Legal Opinion of Cook, Little, Rosenblatt & Manson, P.L.L.C. 
  
 October 4, 2005 
  
 Goldman, Sachs & Co. 
 UBS Securities LLC 
 c/o Goldman, Sachs & Co. 
 85 Broad Street 
 New York, New York 10004 
  
 Ladies and
Gentlemen: 
  
 We have acted as special New Hampshire counsel to
Brookstone Company, Inc., a New Hampshire corporation (the “Company”) and each of Brookstone International Holdings, Inc., Brookstone Purchasing, Inc., Brookstone Holdings, Inc., Brookstone Stores, Inc., Brookstone Properties, Inc.,
and Gardeners Eden, Inc. (all New Hampshire corporations and collectively the “New Hampshire Guarantors”) in connection with the Purchase Agreement (the “Purchase Agreement”) dated as of September 23, 2005, by
and among the Company, Brookstone, Inc., a Delaware corporation (the “Parent”), the New Hampshire Guarantors, Brookstone Retail Puerto Rico, Inc. (“Brookstone Retail Puerto Rico”), Advanced Audio Concepts, Ltd.
(“Advanced Audio”) and Goldman, Sachs & Co. as representative of the Purchasers named in Schedule A hereto. 
  
 This opinion is given pursuant to Section 7(c) of the Purchase Agreement. Capitalized terms used in this opinion without definition have the meanings
given to them in the Purchase Agreement. 
  
 As to various
questions of fact material to our opinions in the numbered paragraphs below, we have relied upon, and assumed without independent investigation the accuracy of, the representations made by the Company and each of the New Hampshire Guarantors in
Section 1 of the Purchase Agreement. We have examined (i) the Purchase Agreement, (ii) the Indenture (the “Indenture”), dated as of October 4, 2005, by and among the Parent, the Company, the New Hampshire Guarantors,
Brookstone Retail Puerto Rico, Advanced Audio and Wells Fargo Bank, N.A., as Trustee (the “Trustee”), (iii) the Registration Rights Agreement (the “Registration Rights Agreement”), dated as of October 4, 2005, by and
among the Parent, Company, the New Hampshire Guarantors, Brookstone Retail Puerto Rico, Advanced Audio and the Purchasers, (iv) the Security Agreement (the “Security Agreement”), dated as of October 4, 2005, by and among the
Parent, Company, the New Hampshire Guarantors, Brookstone Retail Puerto Rico, Advanced Audio and Wells Fargo Bank, N.A., as Collateral Agent (the “Collateral Agent”), (v) the Intellectual Property Security Agreement (the “IP
Security Agreement”) dated as of October 4, 2005, by and among the Company, the New Hampshire Guarantors, Brookstone Retail Puerto Rico, Advanced Audio and the Collateral Agent, (vi) the Collateral Agency Agreement (the
“Collateral Agency Agreement”) dated as of October 4, 2005, by and among the Parent, the Company, the New Hampshire Guarantors, Brookstone Retail Puerto Rico, Advanced Audio and the Collateral Agent, (vii) the Intercreditor
Agreement (the “Intercreditor Agreement”) dated as of October 4, 2005, by and among the Parent, the Company, the New Hampshire Guarantors, Brookstone Retail Puerto Rico, Advanced Audio, the Trustee, the Collateral Agent and Bank of
America, N.A., as collateral agent under the new senior secured credit facility dated as of the date hereof, (viii) the Securities (including therein, 

  

 A-12 

 
the temporary Global Security and the Exchange Securities as described in the Purchase Agreement), (ix) the Guarantees of the New Hampshire Guarantors,
(x) the form of unfiled copy of a financing statement attached hereto as Annex A (the “Financing Statements”), which we understand will be filed in the office of the Secretary of State of the State of New Hampshire with
respect to each of the Company and the New Hampshire Guarantors named as debtor therein, and (xi) such certificates, documents and records and have made such investigation as we have deemed necessary in connection with the opinions set forth
below. We have also examined and relied upon the Articles of Incorporation certified by the New Hampshire Secretary of State, By-laws certified by the secretary, certificates of existence issued by the New Hampshire Secretary of State, and
Secretary’s Certificates executed by the secretary for each of the Company and the New Hampshire Guarantors (collectively, the foregoing being the “Organizational Documents”). 
  
 We have assumed that the Purchase Agreement, the Registration Rights
Agreement, the Indenture, the Security Agreement, the IP Security Agreement, the Collateral Agency Agreement, the Intercreditor Agreement, the Securities, and the Guarantees (collectively, the “Transaction Documents” and the Security
Agreement, the IP Security Agreement, the Collateral Agency Agreement, and the Intercreditor Agreement being collectively, the “Security Documents”) have been duly authorized, executed and delivered by each of the parties thereto, other
than Company and the New Hampshire Guarantors, and that each such party has all requisite power and authority to effect the transactions contemplated by the Transaction Documents. We have further assumed with respect to each party to the Transaction
Documents, other than the Company and the New Hampshire Guarantors, that it has been duly organized and is validly existing and is in good standing under the laws of the jurisdiction of its organization; the execution, delivery and
performance by it of the Transaction Documents to which it is a party do not violate any provisions of law, regulation or treaty applicable to it or public policy, in each case in the jurisdiction where it is organized or any provision of its
organizational documents; and no approval, authorization or other action by, or filing with, any governmental authority in the jurisdiction of its organization is required for the valid execution, delivery or performance by it of any of the
Transaction Documents to which it is a party, except for such approvals, authorizations, actions and filings as have been obtained, taken or made, as the case may be. 
  
 In addition to the Transaction Documents and the Organizational Documents, we have examined such other documents and
corporate or other entity records and questions of law as we have deemed necessary for the purposes of this opinion. As to matters of fact, we have also examined such certificates of public officials, officers of the Company and the New Hampshire
Guarantors and other Persons as we have deemed relevant and appropriate as a basis for the opinions expressed herein, and we have made no effort to independently verify the facts set forth in such certificates. Further, in making the foregoing
examinations, we have assumed the genuineness of all signatures, the legal capacity of each person signatory to any of the documents reviewed by us, the authenticity of all documents submitted to us as originals and the conformity to authentic
original documents of all documents submitted to us as copies. In making the foregoing examinations, we have assumed that, as to factual matters, all representations and warranties made in the aforesaid documents were and are true, correct and
complete. 
  
 Additionally, for purposes of rendering our opinion
concerning the ownership of shares of the capital stock of the Company and the New Hampshire Guarantors as set forth in paragraph numbered 9 below, we have relied solely upon that separate certificate of the Assistant Secretary of the Company and
the New Hampshire Guarantors with respect thereto, a copy of which is attached hereto as Annex B. We have no reason to believe that we are not justified in relying upon such certificate. 
  

 A-13 

 Based on the foregoing and on the qualifications, limitations and assumptions set forth herein, we are of
the opinion that: 
  
 1. Each of the Company and the New
Hampshire Guarantors is incorporated and validly existing as a corporation in good standing under the laws of the State of New Hampshire and has the corporate power and authority to own its properties and conduct its business as described in the
“Business” section of the Offering Circular. 
  
 2. Each
of the of the Company and the New Hampshire Guarantors (a) has the power and authority to execute and deliver each of the Transaction Documents to which it is a party, to authorize the filing of the Financing Statements, and to grant the
security interests to be granted by it pursuant to the Security Documents, and to perform its obligations under the Transaction Documents to which it is a party, (b) has duly authorized by all requisite corporate action, executed and delivered
each of the Transaction Documents to be delivered as of the Closing Date to which it is a party, and (c) has duly authorized by all requisite corporate action the filing of the Financing Statements. 
  
 3. The temporary global Security (as described in the Purchase Agreement) has
been duly executed and delivered by the Company. 
  
 4. The
Securities in definitive form, when duly executed, authenticated and delivered in exchange for the temporary global Security in accordance with the terms of the Indenture, will have been duly executed and delivered by the Company. 
  
 5. The Exchange Securities have been duly authorized and when duly executed
and delivered by the Company in accordance with the terms of the Indenture and the Registration Rights Agreement, will have been duly executed and delivered by the Company. 
  
 6. The Guarantees have been duly authorized, executed and delivered by each of the New Hampshire Guarantors. 
  
 7. The Exchange Guarantees have been duly authorized and when duly executed
and delivered by each of the New Hampshire Guarantors in accordance with the terms of the Indenture, will have been duly executed and delivered by each of the New Hampshire Guarantors. 
  
 8. The execution and delivery by each of the Company and the New Hampshire Guarantors of the Transaction Documents to which
it is a party, the granting of the security interests to be granted by it pursuant to the Security Documents, and the authorization by it of the filing of the Financing Statements will not contravene its respective Organizational Documents or any
applicable law of the State of New Hampshire. 
  
 9. The
authorized capital stock of each of the Company and the New Hampshire Guarantors and the record ownership thereof is as follows: 
  

	 	(a)	Brookstone Company, Inc.: one hundred (100) shares of common capital stock authorized, one hundred (100) shares of which are issued and outstanding and owned by the
Parent. 

  

 A-14 

	 	(b)	Brookstone Stores, Inc.: one hundred (100) shares of common capital stock authorized, ten (10) shares of which are issued and outstanding and owned by Brookstone Company,
Inc. 

  

	 	(c)	Brookstone Purchasing, Inc.: one hundred (100) shares of common capital stock authorized, ten (10) shares of which are issued and outstanding and owned by Brookstone
Company, Inc. 

  

	 	(d)	Brookstone Holdings, Inc.: one hundred (100) shares of common capital stock authorized, ten (10) shares of which are issued and outstanding and owned by the Brookstone
Stores, Inc. 

  

	 	(e)	Brookstone Properties, Inc.: one thousand (1000) shares of common capital voting stock authorized, one hundred (100) shares of which are issued and outstanding and owned
by Brookstone Holdings, Inc. and one thousand (1,000) shares of Preferred Non-Voting Stock authorized, none of which are outstanding. 

  

	 	(f)	Brookstone International Holdings, Inc.: one hundred (100) shares of common capital stock authorized, one hundred (100) of which are issued and outstanding and owned by
the Brookstone Company, Inc. 

  

	 	(g)	Gardeners Eden, Inc.: one hundred (100) shares of common capital stock authorized, ten (10) of which are issued and outstanding and owned by the Brookstone Company, Inc.

  
 10. Each of the Financing Statements is in
proper form for filing in the office of the Secretary of State of the State of New Hampshire, and upon due filing in such office, the Collateral Agent, for the benefit of the Secured Parties, will have a perfected security interest in that portion
of the property of the Company and the New Hampshire Guarantors in which a security interest (a) may be created under Article 9 of the New York Uniform Commercial Code (assuming that the provisions of Article 9 of the New York Uniform
Commercial Code are in this respect identical to the provisions of the New Hampshire Uniform Commercial Code (the “New Hampshire UCC”)) and (b) is perfected by filing a financing statement under the New Hampshire UCC (the “Filing
Collateral”). 
  
 The opinions expressed above are subject to
the following qualifications, assumptions and exceptions: 
  
 (a)
We express no opinion with respect to limitations imposed by law and court decisions upon the availability of the remedy of specific performance, injunctive relief and other equitable remedies, whether sought in legal or equitable proceedings.

  
 (b) Our opinions are subject to applicable bankruptcy,
solvency, insolvency, reorganization, moratorium or other similar laws and legal requirements (including, without limitation, fraudulent transfer laws) and general equitable principles (whether considered in a proceeding in equity or at law).

  
 (c) We express no opinion as to, and have assumed for purposes
of our opinions, the fairness of the transactions contemplated under the Transaction Documents and the adequacy of consideration for the obligations of each party under the Transaction Documents. 
  

 A-15 

 (d) We express no opinion with respect to the enforceability of the Transaction Documents. 
  
 (e) We express no opinion as to the Parent’s, Company’s or the New
Hampshire Guarantors’ title to, or rights in or to, any property, real or personal, purported to be owned by any of them, or with respect to any liens, encumbrances, equities or claims affecting any such property. 
  
 (f) The foregoing opinions are limited to the specific issues addressed and
to laws existing on the date hereof. By rendering our opinion, we do not undertake to advise you with respect to any change in such laws or in the interpretations thereof which may occur after the date hereof. 
  
 (g) The laws covered by the opinions expressed herein are limited solely to
the laws of the State of New Hampshire, and we express no opinion as to the laws of any other jurisdiction and we assume no responsibility for the applicability or effect of the law of any other jurisdiction. For purposes of this opinion letter, the
“law” of a jurisdiction means such jurisdiction’s statutes, the judicial and administrative decisions, and the rules and regulations of the governmental agencies of such jurisdiction, but excluding the statutes and ordinances,
the administrative decisions, and the rules and regulations of counties, towns, municipalities, and special political subdivisions (whether created or enabled through legislative action at the federal, state or regional level) and judicial decisions
to the extent that they deal with any of the foregoing excluded items. 
  
 (h) Our opinions as they relate to the laws of the State of New Hampshire are based upon a review of those laws as in effect on the date hereof which a lawyer exercising customary professional diligence would reasonably recognize as being
applicable with respect to the transactions contemplated by the Transaction Documents. 
  
 (i) We express no opinion as to the Securities Act, the Exchange Act, the Trust Indenture Act, state securities or “blue sky” laws (including New Hampshire securities laws) or foreign securities laws, or the
effect thereof. 
  
 (j) Our opinions are subject to the following
additional qualifications and assumptions: 
  
 (i) We have assumed that each of the Company and the New Hampshire Guarantors has its respective rights in the Filing Collateral as to which it has granted a security interest to the Collateral Agent and that value has been given therefor.
We express no opinion as to the nature or extent of any Person’s rights in, or title to, any Filing Collateral or as to the validity or enforceability of any Filing Collateral. 
  
 (ii) We have assumed that the descriptions of the Filing Collateral contained in, or attached as schedules
to, the Transaction Documents are factually accurate descriptions of the collateral intended to be covered by such documents. 
  
 (iii) The security interests of the Collateral Agent in proceeds of the Filing Collateral is limited to the extent set forth in
Section 9-315 of the New Hampshire UCC. 
  
 (iv) In the case of Filing Collateral consisting of chattel paper, accounts and general intangibles, the security interest of the Collateral Agent may be subject to the rights of account debtors, claims and defenses of account debtors and
the terms of agreements with account debtors to the extent set forth in the New Hampshire UCC. 
  

 A-16 

 (v) Except to the extent Article 9 of the New Hampshire UCC and the Filing
Sections are applicable, no opinion is expressed concerning any item of Filing Collateral that is subject to a statute, regulation or treaty of the United States of America that provides for a national or international registration or a
national or international certificate of title for the creation of a security interest therein. 
  
 (vi) To the extent that any of the Company or the New Hampshire Guarantors acquires rights in any Filing Collateral subsequent to the date
hereof, the security interest of the Filing Collateral Agent will not attach until the Company or the New Hampshire Guarantors, as applicable, acquires such rights. 
  
 (vii) Our opinion in paragraph 10 does not, except to the extent Article 9 of the New Hampshire UCC is
applicable, address the security interest of any Person in any copyrights, patents, trademarks, service marks or other intellectual property, the proceeds thereof or any rights (including accounts, general intangibles or payment intangibles) with
respect to the lease, license or use thereof. 
  
 (viii) We express no opinion as to the effect of agreements or laws (other than the New Hampshire UCC) prohibiting, restricting or conditioning the assignment of any of the Collateral. 
  
 (ix) Except as set forth in paragraph 10 above, we
express no opinion as to the perfection of any security interest. We express no opinion as to the priority or freedom from adverse claims of any security interest. 
  
 (x) We have assumed that none of the Filing Collateral consists of consumer goods, crops growing or to be
grown, timber to be cut, minerals or the like (including oil and gas) or accounts resulting from the sale of minerals or the like at the wellhead or the minehead. 
  
 (xi) We have assumed that each item of Filing Collateral consisting of instruments and certificated
securities is represented by only one writing. 
  
 (xii) Our opinions expressed in paragraph 10 do not address the passage of time or other events subsequent to the date hereof, including, without limitation, changes in the name, jurisdiction of organization or location of the Company or
the New Hampshire Guarantors, which can result in the lapsing of perfection unless certain additional steps are taken 
  
 (xiii) In the case of the issuance of distributions with respect to the Filing Collateral, the validity, perfection and priority of the
security interest of the Collateral Agent may be dependent upon obtaining possession thereof or taking other appropriate action in accordance with the provisions of the New Hampshire. 
  
 (xiv) We have assumed that any and all recording taxes and fees with respect to the perfection of security
interests in the Filing Collateral have been paid to the appropriate governmental authorities. 
  
 This opinion is being delivered solely for your benefit and may not be relied upon by any other individual or entity without our prior written consent; provided, however, that Kaye Scholer LLP may rely on this opinion
for purposes of rendering its opinions to you on behalf of the Company and the New Hampshire Guarantors in connection with the transactions contemplated by the Purchase Agreement. 
  

	
	Very truly yours,
	
	 Cook Little Rosenblatt & Manson, pllc

  

 A-17 

 SCHEDULE A 
  
 PURCHASERS 
  
 Goldman, Sachs & Co 
  
 UBS Securities LLC 
  

 A-18 

 COOK, LITTLE, ROSENBLATT 
  
 & MANSON, P.L.L.C. 
  
 OPINION LETTER 
  
 ANNEX B 
  
 CERTIFICATE OF ASSISTANT SECRETARY 
  
 The
undersigned, being the duly authorized Assistant Secretary of each of Brookstone Company, Inc., Brookstone Stores, Inc., Brookstone Purchasing, Inc., Brookstone Properties, Inc., Brookstone Holdings, Inc., Brookstone Holdings International, Inc.,
and Gardeners Eden, Inc. (collectively, the “Corporations”), does hereby certify to Cook, Little, Rosenblatt & Manson, P.L.L.C., for purposes of such law firm rendering a legal opinion on behalf of each of the Corporations in
accordance with the provisions of a certain Purchase Agreement (the “Purchase Agreement”) dated as of September 23, 2005, by and among Brookstone, Inc., a Delaware corporation (the “Parent”), the Corporations,
Brookstone Retail Puerto Rico, Inc. (“Brookstone Retail Puerto Rico”), Advanced Audio Concepts, Ltd. (“Advanced Audio”) and Goldman, Sachs & Co. as representative of the Purchasers under the Purchase Agreement, made as
of the date hereof (the “Closing Date”), that, as of the Closing Date, the authorized capital stock of the Corporations is as follows: 
  
 (a) Brookstone Company, Inc.: one hundred (100) shares of common capital stock authorized, one hundred (100) shares of which are issued and
outstanding and owned by the Parent. 
  
 (b) Brookstone Stores,
Inc.: one hundred (100) shares of common capital stock authorized, ten (10) shares of which are issued and outstanding and owned by Brookstone Company, Inc. 
  
 (c) Brookstone Purchasing, Inc.: one hundred (100) shares of common capital stock authorized, ten (10) shares of
which are issued and outstanding and owned by Brookstone Company, Inc. 
  
 (d) Brookstone Holdings, Inc.: one hundred (100) shares of common capital stock authorized, ten (10) shares of which are issued and outstanding and owned by the Brookstone Stores, Inc. 
  
 (e) Brookstone Properties, Inc.: one thousand (1000) shares of common
capital voting stock authorized, one hundred (100) shares of which are issued and outstanding and owned by Brookstone Holdings, Inc. and one thousand (1,000) shares of Preferred Non-Voting Stock authorized, none of which are outstanding.

  
 (f) Brookstone International Holdings, Inc.: one hundred
(100) shares of common capital stock authorized, one hundred (100) of which are issued and outstanding and owned by the Brookstone Company, Inc. 
  
 (g) Gardeners Eden, Inc.: one hundred (100) shares of common capital stock authorized, ten (10) of which are issued and outstanding and owned by
the Brookstone Company, Inc. 
  
 [SIGNATURE PAGE FOLLOWS]

  

 A-19 

 COOK, LITTLE, ROSENBLATT 
  
 & MANSON, P.L.L.C. 
  
 OPINION LETTER 
  
 ANNEX B 
  
 CERTIFICATE OF ASSISTANT SECRETARY 
  
 IN WITNESS
WHEREOF, the undersigned has executed the within certificate as of the 4th day of October, 2005. 
  

					
	 	 	BROOKSTONE COMPANY, INC.,
	 	 	BROOKSTONE STORES, INC.,
	 	 	BROOKSTONE PURCHASING, INC.,
	 	 	BROOKSTONE PROPERTIES, INC.,
	 	 	BROOKSTONE HOLDINGS, INC.,
	 	 	BROOKSTONE INTERNATIONAL
	 	 	HOLDINGS, INC., and GARDENERS
	 	 	EDEN, INC.
			
	  

	 	By:	 	  

	Witness	 	 	 	Daniel J. Burke, Assistant Secretary

  

 A-20 

 ANNEX IV 
  

Form of Legal Opinion of Daniel Burke, 
 General Counsel of Brookstone, Inc. and its Subsidiaries 
  
 [Brookstone Letterhead] 
  
 October
    , 2005 
  
 Goldman, Sachs & Co. 
 UBS Securities LLC 
 c/o Goldman, Sachs & Co. 
 85 Broad Street 
 New York, New York 10004 
  
 Ladies and Gentlemen: 
  
 The undersigned is counsel to Brookstone Company, Inc., a New Hampshire corporation (the
“Company”), Brookstone, Inc., a Delaware corporation (“Parent”) and each of the other companies listed on Schedule A hereto (collectively with Parent, the “Guarantors”) in connection with the Purchase Agreement (the
“Purchase Agreement”) dated as of September 23, 2005 by and among the Company, the Guarantors and Goldman, Sachs & Co., as representative of the Purchasers named in Schedule B (collectively, the “Purchasers”).

  
 This opinion is being furnished to you pursuant to Section 7(d) of the
Purchase Agreement. Capitalized terms defined in the Purchase Agreement and not otherwise defined herein are used herein with the meanings attributed to them in the Purchase Agreement. 
  
 I have examined originals or copies, certified or otherwise identified to my satisfaction, of such documents and records and have made such
investigation of fact and such examination of law as I have deemed appropriate in order to render the opinions set forth herein. In conducting such investigation, I have relied, without independent verification, upon certificates of officers of the
Parent, the Company and the Guarantors, public officials and other appropriate persons, and on the representations and warranties as to matters of fact contained in the Purchase Agreement or certificates delivered in connection with the Purchase
Agreement. 
  
 In expressing the opinions set forth below, I have assumed the
genuineness of all signatures and the capacity of the persons so signing, the authenticity of all documents submitted to me as originals, the conformity to the originals of all documents submitted to me as certified, conformed, photostatic or
facsimile copies and the authenticity of the originals of such copies. 
  
 I
express no opinion as to the laws of any jurisdiction other than those of the State of New Hampshire, the General Corporation Law of the State of Delaware and the federal laws of the United States of America. 
  

 A-21 

 Based on the foregoing and on the qualifications, limitations and assumptions set forth herein, I am of the opinion that:

  
 1. To my knowledge, all of the legal proceedings involving the Parent, the
Company or the Guarantors that would be required to be described in a registration statement under Item 103 of Regulation S-K, if the offering of the Securities was registered under the Securities Act, have been described in the Offering
Circular. 
  
 2. To my knowledge, neither the Parent, the Company nor any of its
Guarantors is (a) in violation of its Certificate of Incorporation, Bylaws or other organizational documents, as appropriate or (b) in default in the performance of any of the agreements listed on Schedule C hereto. 
  
 This opinion is being furnished to the Purchasers and, except as otherwise consented to by
me, is solely for the benefit of the Purchasers, and may not be relied upon by any other individual or entity for any other purpose. 
  

	
	Very truly yours,
	
	  

 Daniel
Burke, Esq.

	General Counsel

  

 A-22 

 SCHEDULE A 
  
 Brookstone International Holdings, Inc. 
  
 Brookstone Purchasing, Inc. 
  
 Brookstone Stores, Inc. 
  
 Brookstone Retail Puerto Rico, Inc. 
  
 Brookstone Holdings, Inc. 
  
 Brookstone Properties, Inc. 
  
 Advanced Audio Concepts, Ltd. 
  
 Gardeners Eden, Inc. 
  

 A-23 

 SCHEDULE B 
  
 Goldman, Sachs & Co. 
  
 UBS Securities LLC 
  

 A-24 

 SCHEDULE C 
  
 1. Real Estate Loan Agreement dated August 24, 2004 between Banknorth, N.A. and the Company. 
  
 2. Real Estate Promissory Note dated August 24, 2004 between Banknorth, N.A. and the
Company. 
  
 3. Mortgage and Security Agreements dated August 24, 2004
between Banknorth, N.A. and the Company. 
  

 A-25 

 ANNEX V 
  
 Form of Comfort Letter of PricewaterhouseCoopers LLP 
  
 September 23, 2005 
  
 Brookstone, Inc. 
 One Innovation Way 
 Merrimack, NH 03054 
  
 and 
  
 Goldman, Sachs & Co. and 
 UBS Securities LLC 
 c/o Goldman, Sachs & Co. 
 85 Broad Street 
 New York, NY 10004 
  
 Ladies and
Gentlemen: 
  
 We have audited: 
  

	 	1.	The consolidated financial statements of Brookstone, Inc. (the “Company”) and subsidiaries as of January 29, 2005 and January 31, 2004 and for each of the three
years in the period ended January 29, 2005 included in the Company’s annual report on Form 10-K for the year ended January 29, 2005, as amended on the Company’s Current Report on Form 8-K dated September 14, 2005 (the
“Form 10-K”), 

  

	 	2.	The related financial statement schedule included in the Form 10-K, 

  

	 	3.	Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of January 29, 2005 which is included in the Form 10-K, and

  

	 	4.	The effectiveness of the Company’s internal control over financial reporting as of January 29, 2005. 

  
 The consolidated financial statements, financial statement schedule and management’s
assessment referred to above are all included in the offering memorandum for Brookstone Company, Inc.’s $190,000,000 Senior Notes due 2012 (the “Senior Notes”). Our reports with respect thereto are also included in the offering
memorandum. The offering memorandum dated September 23, 2005 is herein referred to as the Offering Memorandum. 
  
 This letter is being furnished in reliance upon your representation to us that: 
  

	a.	You are knowledgeable with respect to the due diligence review process that would be performed if this placement of securities were being registered pursuant to the Securities Act
of 1933 (the Act). 

  

	b.	In connection with the offering of the Senior Notes, the review process you have performed is substantially consistent with the due diligence review process that you would have
performed if this placement of securities were being registered pursuant to the Act. 

  

 A-26 

 In connection with the Offering Memorandum: 
  

	1.	We are an independent registered public accounting firm with respect to the Company within the applicable rules and regulations adopted by the Securities and Exchange Commission
(SEC) and the Public Company Accounting Oversight Board (United States) (“PCAOB)”. 

  

	2.	Company officials have advised us that the financial statements included in the Offering Memorandum are prepared in accordance with Regulation S-X of the SEC except for the
supplemental consolidating financial information which is not in compliance with Rule 3-10 of Regulation S-X and has been presented in its current format for informational purposes. In our opinion, the financial statements audited by us and included
in the Offering Memorandum comply as to form in all material respects with the applicable sections of Regulation S-X except for the supplemental consolidating financial information which is not in compliance with Rule 3-10 of Regulation S-X.

  

	3.	We have not audited any financial statements of the Company as of any date or for any period subsequent to January 29, 2005; although we have conducted an audit for the year
ended January 29, 2005, the purpose (and therefore the scope) of the audit was to enable us to express an opinion on the consolidated financial statements as of January 29, 2005 and for the year then ended, but not on the financial
statements for any interim period within that year. Therefore, we are unable to and do not express any opinion on the unaudited consolidated balance sheet as of July 30, 2005 and the unaudited consolidated statement of income for the thirteen
and twenty-six week periods ended July 30, 2005 and July 31, 2004, and of the unaudited consolidated statement of cash flows for the twenty-six week periods ended July 30, 2005 and July 31, 2004 included in the Offering
Memorandum, or on the financial position, results of operations, or cash flows as of any date or for any period subsequent to January 29, 2005. Also, we have not audited the Company’s internal control over financial reporting as of any
date subsequent to January 29, 2005. Therefore, we do not express any opinion on the Company’s internal control over financial reporting as of any date subsequent to January 29, 2005. 

  

	4.	For purposes of this letter we have read the fiscal 2005 minutes of the meetings of the stockholders, the Board of Directors, and the Audit Committee of the Company and its
subsidiaries as set forth in minute books as of September 20, 2005, officials of the Company having advised us that the minutes of all such meetings through that date were set forth therein and have carried out other procedures to
September 20, 2005 (our work did not extend to the period from September 21, 2005 to September 23, 2005, inclusive), as follows: 

  

	 	a.	With respect to the thirteen and twenty-six week periods ended July 30, 2005 and July 31, 2004, we have i) performed the procedures (completed on August 26, 2005)
specified by the PCAOB for a review of interim financial information as described in SAS No. 100, Interim Financial Information, on the unaudited consolidated balance sheet as of July 30, 2005 and the unaudited consolidated
statement of income for the thirteen and twenty-six week periods ended July 30, 2005 and July 31, 2004 and the unaudited consolidated statement of cash flows for the twenty-six week periods ended July 30, 2005 and July 31, 2004
included in the Offering Memorandum and ii) inquired of certain officials of the Company who have responsibility for financial and accounting matters whether the unaudited condensed consolidated financial statements referred to in a (i) above
comply as to form in all material respects with the applicable sections of Regulation S-X. 

  

 A-27 

	 	b.	With respect to the period from July 31, 2005 to August 27, 2005, we have: 

  

	 	(i)	read the unaudited consolidated financial data of the Company for August of both 2005 and 2004, furnished us by the Company, officials of the Company having advised us that no such
financial data as of any date or for any period subsequent to August 27, 2005, were available. The financial information for August of both 2005 and 2004 is incomplete in that it omits the statements of cash flows and other disclosures.

  

	 	(ii)	inquired of certain officials of the Company who have responsibility for financial and accounting matters whether the unaudited financial data referred to in b(i) are stated on a
basis substantially consistent with that of the audited financial statements included in the Offering Memorandum. 

  
 The foregoing procedures do not constitute an audit conducted in accordance with standards of the PCAOB. Also, they would not necessarily reveal matters
of significance with respect to the comments in the following paragraph. Accordingly, we make no representations regarding the sufficiency of the foregoing procedures for your purposes. 
  

	5.	Nothing came to our attention as a result of the foregoing procedures, however, that caused us to believe that: 

  

	 	a.	any material modifications should be made to the unaudited consolidated financial statements described in 4a. for them to be in conformity with generally accepted accounting
principles; or 

  

	 	b.	the unaudited condensed consolidated financial statements described in 4a. do not comply as to form in all material respects with the applicable sections of Regulation S-X; or

  

	 	c.	(i) at August 27, 2005, there was any change in capital stock (except for the exercise of stock options resulting in the issuance of 1,375 shares of common stock),
increase in long-term debt, any decrease in consolidated net current assets (working capital) (except for a decrease of $2,728,000) or any decrease in consolidated stockholders’ equity (except for a decrease of $3,595,000) of the Company and
subsidiaries as compared with amounts shown on the July 30, 2005 unaudited consolidated balance sheet included in the Offering Memorandum, or (ii) for the period from July 31, 2005 to August 27, 2005, as compared to the
corresponding period in the preceding year, any decrease in total consolidated net sales, any decrease in income from operations (except for a decrease of $1,098,000) or any decrease in net income (except for a decrease of $903,000), and except in
all instances for increases or decreases that the Offering Memorandum discloses have occurred or may occur. 

  

	6.	 As mentioned in 4b, Company officials have advised us that no consolidated financial data as of any date or for any period subsequent to August 27, 2005, are
available; accordingly, the procedures carried out by us with respect to changes in financial statement items after August 27, 2005, have, of necessity, been even more limited than those with respect to the periods referred to in 4. We have
inquired of certain officials of the Company who have responsibility for financial and accounting matters whether at September 20, 2005 there was any change in the capital stock or increase in long-term debt of the Company 

  

 A-28 

	 	 
and subsidiaries as compared with amounts shown on the July 30, 2005 unaudited consolidated balance sheet included in the Offering Memorandum. On the
basis of these inquiries and our reading of the minutes as described in 4, nothing came to our attention that caused us to believe that there was any such change, increase or decrease, except in all instances for increases or decreases that the
Offering Memorandum discloses have occurred or may occur and except for the exercise of stock options resulting in the issuance of 1,375 shares of common stock. 

  

	7.	For purposes of this letter, we have also read the items identified by you on the attached copy of the Offering Memorandum and have performed the procedures set forth in Attachment
A, which were applied as indicated with respect to the number explained in Attachment A to this letter. We make no comment as to whether the SEC would view any non-GAAP financial information included or incorporated by reference in this document as
being compliant with the requirements of Regulation G or Item 10 of Regulation S-K. 

  

	8.	Our audit of the consolidated financial statements for the periods referred to in the introductory paragraph of this letter comprised audit tests and procedures deemed necessary for
the purpose of expressing an opinion on such financial statements taken as a whole. For none of the periods referred to therein, or any other period, did we perform audit tests for the purpose of expressing an opinion on individual balances of
accounts or summaries of selected transactions such as those enumerated above and, accordingly, we express no opinion thereon. 

  

	9.	Company officials have advised us that the pro forma financial statements included in the Offering Memorandum comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X. At your request, we have: 

  

	 	a.	Read the unaudited pro forma consolidated balance sheet as of July 30, 2005 and the unaudited pro forma consolidated statement of operations for the year ended January 29,
2005, the twelve months ended July 30, 2005 and the twenty-six weeks ended July 30, 2005 which appear in the Offering Memorandum. 

  

	 	b.	Inquired of certain officials of the Company who have responsibility for financial and accounting matters about: 

  

	 	(i)	the basis for their determination of the pro forma adjustments, and 

  

	 	(ii)	whether the unaudited pro forma consolidated financial statements referred to in 9a. comply as to form in all material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X. 

  

	 	c.	Proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the unaudited pro forma consolidated financial statements.

  
 The foregoing procedures are substantially less
in scope than an examination, the objective of which is the expression of an opinion on management’s assumptions, the pro forma adjustments, and the application of those adjustments to historical financial information. Accordingly, we do not
express such an opinion. The foregoing procedures would not necessarily reveal matters of significance with respect to the comments in the following paragraph. Accordingly, we make no representation about the sufficiency of such procedures for your
purposes. 
  

 A-29 

	10.	Nothing came to our attention as a result of the procedures specified in paragraph 9, however, that caused us to believe that the unaudited proforma consolidated financial
statements referred to in 9a. included in the Offering Memorandum do not comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements. Had we performed additional procedures or had we made an examination of the consolidated pro forma financial statements, other matters might have come to our attention that
would have been reported to you. 

  

	11.	The procedures enumerated in paragraphs 7, 9 and 10 do not constitute an audit conducted in accordance with standards of the PCAOB. Accordingly, we make no representations regarding
the sufficiency of the foregoing procedures for your purposes. 

  

	12.	It should be understood that we make no representations regarding questions of legal interpretation or regarding the sufficiency for your purposes of the procedures enumerated in
the preceding paragraphs; also, such procedures would not necessarily reveal any material misstatement of the amounts or percentages listed above. Further, we have addressed ourselves solely to the foregoing data as set forth in the Offering
Memorandum and make no representations regarding the adequacy of disclosure or regarding whether any material facts have been omitted. 

  

	13.	This letter is solely for the information of the addressees and to assist Goldman, Sachs & Co. and UBS Securities LLC in conducting and documenting their investigation of
the affairs of the Company in connection with the offering of securities covered by the Offering Memorandum, and it is not to be used, circulated, quoted, or otherwise referred to for any other purpose, including but not limited to the registration,
purchase or sale of securities, nor is it to be filed with or referred to in whole or in part in the Offering Memorandum or any other document, except that reference may be made to it in the Underwriter Agreement or in any list of closing documents
pertaining to the offering of securities covered by the Offering Memorandum. 

  

 A-30Credit Agreement

 Exhibit 10.11 
  
 EXECUTION COPY 
  
 CREDIT AGREEMENT 
  
 dated as of 
  
 OCTOBER 4, 2005 
  
 among 
  
 BROOKSTONE
COMPANY, INC. 
 AS LEAD BORROWER 
  
 BROOKSTONE, INC. 
 AS FACILITY GUARANTOR 
  
 THE LENDERS PARTY HERETO, 
  
 BANK OF AMERICA, N.A. 
 AS ISSUING BANK 
  
 AND 
  
 BANK OF AMERICA, N.A. 
 AS ADMINISTRATIVE AGENT AND AS COLLATERAL AGENT 
  
 GOLDMAN SACHS CREDIT PARTNERS L.P. 
 AS DOCUMENTATION AGENT 

  
 TABLE OF CONTENTS

  

			
	 ARTICLE I Definitions
	  	1
		
	 Section 1.01 Defined Terms
	  	1
	 Section 1.02 Terms Generally
	  	32
	 Section 1.03 Accounting Terms; GAAP
	  	33
		
	 ARTICLE II Amount and Terms of Credit
	  	33
		
	 Section 2.01 Commitments of the Lenders
	  	33
	 Section 2.02 Reserves; Changes to Reserves
	  	34
	 Section 2.03 Making of Revolving Loans
	  	34
	 Section 2.04 Overadvances
	  	36
	 Section 2.05 Swingline Loans
	  	36
	 Section 2.06 Letters of Credit
	  	36
	 Section 2.07 Settlements Amongst Lenders
	  	39
	 Section 2.08 Notes
	  	40
	 Section 2.09 Interest on Loans
	  	41
	 Section 2.10 Default Interest
	  	41
	 Section 2.11 Certain Fees
	  	42
	 Section 2.12 Commitment Fee and Line Fee
	  	42
	 Section 2.13 Letter of Credit Fees
	  	42
	 Section 2.14 Early Termination Fees
	  	43
	 Section 2.15 Nature of Fees
	  	43
	 Section 2.16 Termination or Reduction of Commitments
	  	43
	 Section 2.17 Alternate Rate of Interest
	  	44
	 Section 2.18 Conversion and Continuation of Revolving Loans
	  	44
	 Section 2.19 Mandatory Prepayment; Cash Collateral
	  	45
	 Section 2.20 Optional Prepayment of Loans; Reimbursement of Lenders
	  	46
	 Section 2.21 Maintenance of Loan Account; Statements of Account
	  	47
	 Section 2.22 Cash Receipts
	  	48
	 Section 2.23 Application of Payments
	  	50
	 Section 2.24 Increased Costs
	  	53
	 Section 2.25 Change in Legality
	  	54
	 Section 2.26 Payments; Sharing of Setoff
	  	54
	 Section 2.27 Taxes
	  	55
	 Section 2.28 Security Interests in Collateral
	  	57
	 Section 2.29 Mitigation Obligations; Replacement of Lenders
	  	57
		
	 ARTICLE III Representations and Warranties
	  	58
		
	 Section 3.01 Organization; Powers
	  	58
	 Section 3.02 Authorization; Enforceability
	  	58
	 Section 3.03 Governmental Approvals; No Conflicts
	  	58
	 Section 3.04 Financial Condition
	  	59
	 Section 3.05 Properties
	  	59
	 Section 3.06 Litigation and Environmental Matters
	  	59
	 Section 3.07 Compliance with Laws and Agreements
	  	60
	 Section 3.08 Investment and Holding Company Status
	  	60
	 Section 3.09 Taxes
	  	60

  

 (i) 

			
	 Section 3.10 ERISA
	  	60
	 Section 3.11 Disclosure
	  	61
	 Section 3.12 Subsidiaries
	  	61
	 Section 3.13 Insurance
	  	61
	 Section 3.14 Labor Matters
	  	61
	 Section 3.15 Security Documents
	  	62
	 Section 3.16 Federal Reserve Regulations
	  	62
	 Section 3.17 Solvency
	  	62
		
	 ARTICLE IV Conditions
	  	62
		
	 Section 4.01 Closing Date
	  	62
	 Section 4.02 Conditions Precedent to Each Loan and Each Letter of Credit
	  	66
		
	 ARTICLE V Affirmative Covenants
	  	66
		
	 Section 5.01 Financial Statements and Other Information
	  	66
	 Section 5.02 Notices of Material Events
	  	68
	 Section 5.03 Information Regarding Collateral
	  	69
	 Section 5.04 Existence; Conduct of Business
	  	69
	 Section 5.05 Payment of Obligations
	  	69
	 Section 5.06 Maintenance of Properties
	  	69
	 Section 5.07 Insurance
	  	70
	 Section 5.08 Casualty
	  	70
	 Section 5.09 Books and Records; Inspection and Audit Rights; Appraisals; Accountants
	  	70
	 Section 5.10 Physical Inventories
	  	71
	 Section 5.11 Compliance with Laws
	  	72
	 Section 5.12 Use of Proceeds and Letters of Credit
	  	72
	 Section 5.13 Additional Subsidiaries or Borrowers
	  	72
	 Section 5.14 Further Assurances
	  	72
		
	 ARTICLE VI Negative Covenants
	  	73
		
	 Section 6.01 Indebtedness and Other Obligations
	  	73
	 Section 6.02 Liens
	  	75
	 Section 6.03 Fundamental Changes
	  	75
	 Section 6.04 Investments, Loans, Advances, Guarantees and Acquisitions
	  	76
	 Section 6.05 Asset Sales; Store Closings
	  	77
	 Section 6.06 Restricted Payments; Certain Payments of Indebtedness
	  	79
	 Section 6.07 Transactions with Affiliates
	  	79
	 Section 6.08 Restrictive Agreements
	  	80
	 Section 6.09 Amendment of Material Documents
	  	81
	 Section 6.10 Additional Subsidiaries
	  	81
	 Section 6.11 Financial Covenants
	  	81
	 Section 6.12 Fiscal Year
	  	81
	 Section 6.13 Environmental Laws
	  	81
		
	 ARTICLE VII Events of Default
	  	82
		
	 Section 7.01 Events of Default
	  	82
	 Section 7.02 When Continuing
	  	84
	 Section 7.03 Remedies on Default
	  	85

  

 (ii) 

			
	 ARTICLE VIII The Agents
	  	85
		
	 Section 8.01 Administration by Administrative Agent
	  	85
	 Section 8.02 The Collateral Agent
	  	85
	 Section 8.03 Agreement of Required Lenders
	  	86
	 Section 8.04 Liability of Agents
	  	86
	 Section 8.05 Notice of Default; Actions on Default
	  	87
	 Section 8.06 Lenders’ Credit Decisions
	  	87
	 Section 8.07 Reimbursement and Indemnification
	  	87
	 Section 8.08 Rights of Agents
	  	88
	 Section 8.09 Notice of Transfer
	  	88
	 Section 8.10 Successor Agent
	  	88
	 Section 8.11 Reports and Financial Statements
	  	89
	 Section 8.12 Delinquent Lender
	  	89
	 Section 8.13 Release of Liens
	  	90
		
	 ARTICLE IX Miscellaneous
	  	90
		
	 Section 9.01 Notices
	  	90
	 Section 9.02 Waivers; Amendments
	  	91
	 Section 9.03 Expenses; Indemnity; Damage Waiver
	  	92
	 Section 9.04 Designation of Lead Borrower as Borrowers’ Agent
	  	94
	 Section 9.05 Successors and Assigns
	  	95
	 Section 9.06 Survival
	  	97
	 Section 9.07 Counterparts; Integration; Effectiveness
	  	98
	 Section 9.08 Severability
	  	98
	 Section 9.09 Right of Setoff
	  	98
	 Section 9.10 Governing Law; Jurisdiction; Consent to Service of Process
	  	98
	 Section 9.11 WAIVER OF JURY TRIAL
	  	99
	 Section 9.12 Headings
	  	99
	 Section 9.13 Interest Rate Limitation
	  	99
	 Section 9.14 Additional Waivers
	  	99
	 Section 9.15 Confidentiality
	  	100
	 Section 9.16 Publicity
	  	101
	 Section 9.17 USA Patriot Act
	  	101

  

 (iii) 

  
 EXHIBITS 

 

			
	A.	  	Assignment and Acceptance
	B-1.	  	Revolving Notes
	B-2.	  	Swingline Note
	C.	  	Opinion of Counsel to Loan Parties
	D.	  	Form of Compliance Certificate
	E.	  	Borrowing Base Certificate
	F.	  	Form of Custom Broker Agreement
	G.	  	Form of Joint Venture Consent Agreement

  

 (iv) 

  
 SCHEDULES

  

			
	1.1(a)	 	Lenders and Commitments
	1.1(b)	 	Existing Letters of Credit
	1.1(c)	 	Joint Ventures
	1.1(d)	 	EBITDA Adjustments
	2.22(a)	 	DDAs
	2.22(b)	 	Credit Card Arrangements
	2.22(c)	 	Blocked Accounts
	2.22(h)	 	Disbursement Accounts
	3.05(c)(i)	 	Title to Properties; Real Estate Owned
	3.05(c)(ii)	 	Leased Properties
	3.06	 	Disclosed Matters
	3.10	 	ERISA
	3.12	 	Subsidiaries
	3.13	 	Insurance
	5.01(h)	 	Financial Reporting Requirements
	6.01	 	Indebtedness
	6.02	 	Liens
	6.04	 	Investments
	6.07	 	Transactions with Affiliates

  

 (v) 

 CREDIT AGREEMENT dated as of October 4, 2005 among: 
  
 BROOKSTONE COMPANY, INC., a Delaware corporation (“Brookstone
Company”), as Lead Borrower (in such capacity, the “Lead Borrower”) for the Borrowers now or hereafter a party hereto; 
  
 the Facility Guarantors now or hereafter party hereto; 
  
 the Lenders now or hereafter party hereto; 
  
 BANK OF AMERICA, N.A., as Issuing Bank; 
  
 BANK OF AMERICA, N.A., as Administrative Agent and as Collateral Agent for the Lenders; and 
  
 GOLDMAN SACHS CREDIT PARTNERS L.P., as Documentation Agent for the
Lenders. 
  
 In consideration of the mutual covenants herein
contained and benefits to be derived herefrom, the parties hereto agree as follows: 
  
 ARTICLE I 
  
 Definitions 
  
 Section 1.01 Defined
Terms. 
  
 As used in this Agreement, the following terms
have the meanings specified below: 
  
 “A/B Exchange
Offer” means the offer made by the Company to the holders of the Senior Notes to exchange their Senior Notes for a new issuance of the Company’s debt securities that are registered under the Securities Act of 1933, as amended, and that
have terms identical to the Senior Notes (other than with respect to transfer restrictions) 
  
 “Account” means “accounts” as defined in the UCC, and also all: accounts, accounts receivable, receivables, and rights to payment (whether or not earned by performance) for: property that
has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; services rendered or to be rendered; a policy of insurance issued or to be issued; a secondary obligation incurred or to be incurred; and obligations arising out of the
use of a credit or charge card or information contained on or used with that card. 
  
 “ACH” means automated clearing house transfers. 
  
 “Acquisition” means any transaction, merger, consolidation or acquisition of all or substantially all of the assets, or assets comprising
a division or business unit of, or all or substantially all of the Capital Stock or other ownership interests in, any Person. 
  
 “Adjusted Excess Availability” means the sum of Excess Availability plus Eligible Cash on Hand. 
  
 “Adjusted LIBO Rate” means, with respect to any LIBO
Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO 

 
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. The Adjusted LIBO Rate will be adjusted automatically as to all LIBO Rate
Loans then outstanding as of the effective date of any change in the Statutory Reserve Rate. 
  
 “Administrative Agent” means Bank of America, in its capacity as administrative agent for the Lenders hereunder. 
  
 “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified or is a director or officer of such Person. 
  
 “Agent’s Account” has the meaning set forth in Section 2.22(d). 
  
 “Agents” means collectively, the Administrative Agent and the Collateral Agent. 
  
 “Agreement” means this Credit Agreement, as modified,
amended, supplemented or restated, and in effect from time to time. 
  
 “Agreement Value” means, for each Hedging Agreement, on any date of determination, an amount equal to: 
  
 (a) in the case of a Hedging Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published by the
International Swap and Derivatives Association, Inc. (the “Master Agreement”), the amount, if any, that would be payable by any Loan Party or any of its Subsidiaries to its counterparty to such Hedging Agreement; 
  
 (b) in the case of a Hedging Agreement traded on an
exchange, the mark-to-market value of such Hedging Agreement, which will be the unrealized loss on such Hedging Agreement to the Loan Party or Subsidiary of a Loan Party to such Hedging Agreement based on the settlement price of such Hedging
Agreement on such date of determination; or 
  
 (c) in all other cases, the mark-to-market value of such Hedging Agreement, which will be the unrealized loss on such Hedging Agreement to the Loan Party or Subsidiary of a Loan Party to such Hedging Agreement calculated as the amount, if
any, by which (i) the present value of the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Loan Party or Subsidiary pursuant to such Hedging
Agreement; capitalized terms used and not otherwise defined in this definition shall have the respective meanings set forth in the above described Master Agreement. 
  
 “Applicable Law” means as to any Person: (a) all statutes, rules, regulations, orders, or other
requirements having the force of law and (b) all court orders and injunctions, and/or similar rulings, in each instance ((a) and (b)) of or by any Governmental Authority, or court, or tribunal which has jurisdiction over such Person, or any
property of such Person. 
  
 “Applicable Margin”
means: 
  
 (a) From and after the Closing Date
until the first Adjustment Date identified below, the percentages set forth in Level 2 of the Pricing Grid below; and 
  

 2 

 (b) On the first day of each fiscal quarter commencing on or about January 31, 2006
(each, an “Adjustment Date”), subject to the provisions of the following paragraph, the Applicable Margin shall be determined from such Pricing Grid based upon the average daily Excess Availability for the most recently ended fiscal
quarter immediately preceding such Adjustment Date; provided, however, that notwithstanding anything to the contrary set forth herein, upon the occurrence of an Event of Default, the Applicable Margin shall be immediately increased to
that set forth in Level 3 (even if the average daily Excess Availability requirements for a different Level have been met) and be determined in the manner set forth in Section 2.10. 
  
 No downward adjustment of the Applicable Margin shall be permitted at any time unless there shall exist no Default or Event
of Default at the time of such proposed downward adjustment. 
  

									
	 Level

	  	 Performance Criteria

	  	Prime
Rate
Loans

	 	 	LIBO Loans

	 
	 1
	  	Average daily Excess Availability greater than $75,000,000.00	  	0.00	%	 	1.25	%
	 2
	  	Average daily Excess Availability greater than $35,000,000.00 but less than or equal to $75,000,000.00	  	  .25	%	 	1.50	%
	 3
	  	Average daily Excess Availability less than or equal to $35,000,000.00	  	0.50	%	 	1.75	%

  
 “Appraisal
Percentage” means 90%. 
  
 “Appraised
Value” means the net appraised liquidation value (which is expressed as a percentage) of the Borrowers’ Eligible Inventory as set forth in the Borrowers’ inventory stock ledger as determined from time to time by an independent
appraiser reasonably satisfactory to the Administrative Agent. 
  
 “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.05), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the Administrative Agent. 
  
 “Availability” means the lesser of the following: 
  

					
	(a)	 	(i)	 	the Total Commitments,
			
	 	 	 	 	minus
			
	 	 	(ii)	 	the Credit Extensions;
			
	 	 	or	 	 
			
	(b)	 	(i)	 	the Borrowing Base,
			
	 	 	 	 	minus
			
	 	 	(ii)	 	the Credit Extensions.

  

 3 

 “Availability Reserves” means such reserves as the Administrative Agent from time to
time determines in the Administrative Agent’s reasonable discretion, exercised in good faith, as being appropriate to reflect the impediments to the Agents’ ability to realize upon the Collateral. Availability Reserves shall be established
and calculated in a manner and methodology consistent with the Administrative Agent’s general operational practices. 
  
 “Bank of America” means Bank of America, N.A., a national banking association with offices at 40 Broad Street, Boston, Massachusetts
02109. 
  
 “Blocked Account Agreements” has the
meaning set forth in Section 2.22(c). 
  
 “Blocked
Account Banks” means the banks with whom the Borrowers have entered into Blocked Account Agreements. 
  
 “Blocked Accounts” has the meaning set forth in Section 2.22(c). 
  
 “Board” means the Board of Governors of the Federal Reserve System of the United States of America.

  
 “Borrower(s)” means Brookstone Company,
Brookstone International Holdings, Inc., Brookstone Holdings, Inc., Brookstone Properties, Inc., Brookstone Purchasing, Inc., Brookstone Retail Puerto Rico, Inc., Brookstone Stores, Inc. and Gardeners Eden, Inc., together with any Subsidiary of
Brookstone Company (i) designated to the Administrative Agent in writing from time to time by the Lead Borrower and acceptable to Administrative Agent in its reasonable discretion and (ii) formed or acquired after the Closing Date and
added as a “Borrower” hereunder in accordance with Section 5.13. 
  
 “Borrowing” means (a) the incurrence of Revolving Loans of a single Type, on a single date and having, in the case of LIBO Loans, a single Interest Period, or (b) a Swingline Loan.

  
 “Borrowing Base” means, at any time of
calculation, an amount equal to: 
  
 (a) the
Appraisal Percentage multiplied by the Appraised Value of Eligible Inventory (less Inventory Reserves); plus 
  
 (b) the Credit Card Advance Rate multiplied by the face amount of Eligible Credit Card Receivables, plus  
  
 (c) the Appraisal Percentage multiplied by the
Appraised Value multiplied by the undrawn amount of any outstanding Eligible L/C, plus 
  
 (d) the then Stretch Subfacility Amount, if any, minus 
  
 (e) the then amount of all Availability Reserves, minus 
  
 (f) the Excess Availability Amount. 
  

 4 

 “Borrowing Base Certificate” has the meaning set forth in Section 5.01(e).

  
 “Borrowing Request” means a request by the
Lead Borrower for a Borrowing in accordance with Section 2.03. 
  
 “Breakage Costs” has the meaning set forth in Section 2.20(b). 
  
 “Brookstone Acquisition” means Brookstone Acquisition, Inc., a Delaware corporation which purchased 100% of the issued and outstanding Capital Stock of Brookstone, Inc. and, pursuant to the Merger
Agreement. merged with and into Brookstone, Inc. 
  
 “Brookstone Company” has the meaning provided in the introductory paragraph to this Agreement. 
  
 “Brookstone Holdings” means Brookstone Holdings Corp., a Delaware corporation which owns 100% of the issued and outstanding Capital Stock
of Brookstone, Inc. 
  
 “Brookstone, Inc.” means
Brookstone, Inc., a Delaware corporation which owns 100% of the issued and outstanding Capital Stock of Brookstone Company. 
  
 “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina, Boston,
Massachusetts or New York are authorized or required by law to remain closed, provided that, when used in connection with a LIBO Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market. 
  
 “Capital Expenditures” means, for any period, all expenditures made or costs incurred (whether made in the form of cash, or other property), for the acquisition, improvement or repair of fixed or capital assets of a Person,
in each case that are required to be set forth in a Consolidated statement of cash flows of such Person and its Consolidated Subsidiaries for such period prepared in accordance with GAAP as capital expenditures. 
  
 “Capital Lease Obligations” of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. 
  
 “Capital Stock” means, as to any Person that is a corporation, the authorized shares of such Person’s
capital stock, including all classes of common, preferred, voting and nonvoting capital stock, and, as to any Person that is not a corporation or an individual, the membership or other ownership interests in such Person, together with, in any such
case, all warrants, options and other rights to purchase or otherwise acquire, and all other instruments convertible into or exchangeable (other than any debt security exchangeable for or convertible into such capital stock) for, any of the
foregoing. 
  
 “Cash Collateral Account” means an
interest-bearing account established by the Borrowers with the Collateral Agent at Bank of America under the sole and exclusive dominion and control of the Collateral Agent. 
  

 5 

 “Cash Dominion Event” means the occurrence of either (i) a Specified Event of
Default, or (ii) a Liquidity Event. For purposes of this Agreement, the occurrence of a Cash Dominion Event shall be deemed continuing if the Cash Dominion Event arises as a result of the occurrence of (x) a Specified Event of Default, as
long as such Specified Event of Default shall continue, and/or (y) a Liquidity Event, until there has been no Liquidity Event for ninety (90) consecutive days; provided, however, that if a Cash Dominion Event shall occur and
be discontinued during a Fiscal Year and a second Cash Dominion Event shall occur during the same Fiscal Year, then (x) a Cash Dominion Event shall be deemed continuing for the rest of such Fiscal Year even if the applicable Specified Event(s)
of Default no longer exists and/or there has been no Liquidity Event for ninety (90) consecutive days and (y) a Cash Dominion Event shall be deemed to be terminated only as of such date in the next Fiscal Year that no Specified Event(s) of
Default exist(s) and/or there has been no Liquidity Event for ninety (90) consecutive days. Notwithstanding the foregoing, even if a Liquidity Event shall have occurred and be continuing, so long as (i) no Specified Event of Default
exists, and (ii) either (x) no Credit Extensions are outstanding or (y) if only Letters of Credit are outstanding, the Borrowers have deposited in the Cash Collateral Account an amount in cash equal to 105% of the Letter of Credit
Outstandings as of such date, then (A) no Cash Dominion Event shall commence; and (B) if no Cash Dominion Event has been terminated or discontinued during the then current Fiscal Year, any existing Cash Dominion Event shall terminate.

  
 “Cash Receipts” has the meaning set forth in
Section 2.22(c). 
  
 “CERCLA” means the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. 
  
 “Change in Control” means the occurrence of any of the following: 
  
 (a) during any period of two (2) consecutive years, individuals who at the beginning of such period
constituted the board of directors of OSIM Brookstone Holdings, Inc. (together with any new directors who were nominated for election by a Current Stockholder or whose election or appointment by such board of directors, or whose nomination for
election by shareholders of OSIM Brookstone Holdings, Inc, as the case may be, was approved by a vote of at least 51% of the directors still in office who were either directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a majority of the board of directors then in office; 
  
 (b) if any Person or group (within the meaning of the Securities and Exchange Act of 1934, as amended), other than one or more Current
Stockholders, is or becomes the beneficial owner (within the meaning of Rule 13d-3 and 13d-5 of the Securities and Exchange Act of 1934, as amended, except that such person shall be deemed to have “beneficial ownership” of all shares that
such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% (on a fully diluted basis) of the total then outstanding (i) Capital Stock of OSIM
Brookstone Holdings, Inc. or (ii) limited partnership interests in OSIM Brookstone Holdings, LP; 
  
 (c) the failure of OSIM Brookstone Holdings, Inc. at any time to be the sole general partner of OSIM Brookstone Holdings, LP; 

 
 (d) the failure of OSIM Brookstone Holdings, LP at any
time to Control Brookstone Holdings; 
  
 (e) the
failure of Brookstone Holdings at any time to Control Brookstone, Inc.; 
  

 6 

 (f) the failure of Brookstone, Inc at any time to beneficially own and Control 100% of
the Capital Stock of Brookstone Company free and clear of all Liens (other than the Liens in favor of the Collateral Agent for the benefit of the Secured Parties and nonconsensual Permitted Encumbrances) except to the extent permitted under
Section 6.03 or Section 6.05; or 
  
 (g) the failure of Brookstone Company at any time to beneficially own and Control, directly or indirectly, 100% of the Capital Stock of the other Borrowers and of the Subsidiaries which are Facility Guarantors free and clear of all Liens
(other than the Liens in favor of the Collateral Agent for the benefit of the Secured Parties and nonconsensual Permitted Encumbrances) except to the extent permitted under Section 6.03 or Section 6.05. 
  
 “Change in Law” means (a) the adoption of any law, rule
or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.24(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this Agreement. 
  
 “Charges” has the meaning set forth in Section 9.13. 
  
 “Closing Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived, which date is
October 4, 2005. 
  
 “Code” means the
Internal Revenue Code of 1986 and the Treasury regulations promulgated thereunder, as amended from time to time. 
  
 “Collateral” means any and all “Collateral” as defined in any applicable Security Document. 
  
 “Collateral Agent” means Bank of America, in its capacity as
collateral agent under the Security Documents. 
  
 “Commercial Letter of Credit” means any Letter of Credit or amendment thereto issued for the purpose of providing the primary payment mechanism in connection with the purchase of any materials, goods or services by any of
the Borrowers in the ordinary course of business. 
  
 “Commitment” means, with respect to each Lender, the aggregate commitment of such Lender hereunder in the amount set forth opposite its name on Schedule 1.1(a) annexed hereto or as may subsequently be set
forth in the Register from time to time, as the same may be reduced from time to time pursuant to Section 2.16 hereof. 
  
 “Commitment Fee” has the meaning set forth in Section 2.12(a). 
  
 “Commitment Percentage” means, with respect to each Lender, that percentage of the Commitments of all
Lenders hereunder in the amount set forth opposite its name on Schedule 1.1(a) annexed hereto or as may subsequently be set forth in the Register from time to time, as the same may be reduced from time to time pursuant to
Section 2.16. 
  
 “Compliance Certificate”
has the meaning set forth in Section 5.01(c). 
  

 7 

 “Concentration Account” has the meaning specified in Section 2.22(d)(iv).

  
 “Consent” means actual consent given by a
Lender from whom such consent is sought; or the passage of seven (7) Business Days from receipt of written notice to a Lender from the Administrative Agent of a proposed course of action to be followed by the Administrative Agent without such
Lender’s giving the Administrative Agent written notice of that Lender’s objection to such course of action. 
  
 “Consolidated” means, when used to modify a financial term, test, statement, or report of a Person, refers to the application or
preparation of such term, test, statement or report (as applicable) based upon the consolidation, in accordance with GAAP, of the financial condition or operating results of such Person and its Subsidiaries. 
  
 “Consolidated Cash Interest Expense” means for a Person and
its Consolidated Subsidiaries on any date of determination thereof and for the period specified, Consolidated Interest Expense for such period, excluding any amount not payable in cash during such period. 
  
 “Consolidated EBITDA” means for a Person and its
Consolidated Subsidiaries on any date of determination thereof and for the period specified, the sum of the following, in each case determined in accordance with GAAP consistently applied: 
  
 (a) Consolidated Net Income (minus extraordinary or
one-time gains and plus extraordinary or one-time non-cash losses (to the extent such losses have not been and will not become cash losses in a later fiscal period)) for such period; 
  
 (b) Consolidated depreciation and amortization expenses for such period; 
  
 (c) Consolidated Interest Expense for such period;

  
 (d) income tax expense for such period;

  
 (e) the aggregate amount of all other
non-cash items reducing Consolidated Net Income (excluding any non-cash item that results in an accrual of a reserve for cash items in any future period) for such period; 
  
 (f) other non-recurring losses in an aggregate amount not to exceed $2,500,000 in any Fiscal Year;

  
 (g) one time transaction costs and expenses
relating to the effectiveness of the Loan Documents, the issuance and sale of the Senior Notes and the consummation of the Merger; 
  
 (h) any operating losses relating to Gardener’s Eden, Inc. and any one-time costs, fees and expenses associated with the sale,
liquidation or other disposition of Gardener’ Eden, Inc.; 
  
 (i) purchase accounting adjustments required or permitted by GAAP in connection with the Merger and any Permitted Acquisition; and 
  
 (j) to the extent such period includes any fiscal month of Brookstone Inc. ending on or prior to
October 1, 2005, the pro forma adjustments set forth on Schedule 1.1(d). 
  

 8 

 “Consolidated Fixed Charge Coverage Ratio” means for a Person and its Consolidated
Subsidiaries on any date of determination thereof and for the period specified, the ratio of (a) the total of (i) Consolidated EBITDA for such period plus (ii) Consolidated Rent Expense during such period, minus
(iii) Consolidated Capital Expenditures made during such period, to (b) the total, calculated without duplication, of (i) Consolidated Cash Interest Expense for such period, plus (ii) Consolidated Rent Expense for such
period, plus (iii) all regularly scheduled payments of principal and cash interest on Indebtedness scheduled to be made during such period, plus (iv) all Restricted Payments made in cash during such period, all as determined
on a Consolidated basis in accordance with GAAP. 
  
 “Consolidated Interest Expense” means for a Person and its Consolidated Subsidiaries for any period for which the amount thereof shall be determined, Consolidated net interest expense (including imputed interest on capital
lease obligations) and amortized debt discount, determined in accordance with GAAP consistently applied. 
  
 “Consolidated Net Income” means for a Person and its Consolidated Subsidiaries on any date of determination thereof and for the period
specified, the net income (or deficit) after taxes, determined in accordance with GAAP consistently applied. 
  
 “Consolidated Rent Expense” means for a Person and its Consolidated Subsidiaries on any date of determination thereof and for the period
specified, the aggregate amount of minimum rent and percentage rent paid under real property lease agreements with third parties, determined in accordance with GAAP consistently applied. 
  
 “Control” means the possession, directly or indirectly, of the power (a) to vote 51% or more of the
securities having ordinary voting power for the election of directors of a Person, or (b) to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or
otherwise. The terms “Controlling” and “Controlled” have meanings correlative thereto. 
  
 “Cost” means the cost of purchases with respect to all Eligible Inventory as reported on the Borrowers’ inventory stock ledger and,
in each case, based upon the Borrowers’ accounting practices which are in effect on the date of this Agreement. “Cost” does not include inventory capitalization costs or other non-purchase price charges (other than freight-in) used in
the Borrowers’ calculation of cost of goods sold. 
  
 “Credit Card Advance Rate” means 90%. 
  
 “Credit Card Notifications” has the meaning set forth in Section 2.22(c). 
  
 “Credit Extensions” means as of any day, the sum of (a) the principal balance of all Revolving Loans then outstanding, and
(b) the then amount of the Letter of Credit Outstandings. 
  
 “Current Stockholder” means any Sponsor and any Sponsor Related Party. 
  
 “DDAs” means any checking or other demand deposit account maintained by the Borrowers (other than any Disbursement Account). 

 
 “DDA Notification” has the meaning set forth in
Section 2.22(c). 
  

 9 

 “Default” means any event or condition that constitutes an Event of Default or that upon
notice, lapse of time or both would, unless cured or waived, become an Event of Default. 
  
 “Delinquent Lender” has the meaning set forth in Section 8.12. 
  
 “Delinquent Lender’s Future Commitment” has the meaning set forth in Section 8.12. 
  
 “Disbursement Accounts” has the meaning set forth in
Section 2.22(h). 
  
 “dollars” or
“$” refers to lawful money of the United States of America. 
  
 “Early Termination Fee” has the meaning set forth in Section 2.14. 
  
 “Eligible Assignee” means a bank, insurance company, or company engaged in the business of making commercial loans having a combined
capital and surplus in excess of $100,000,000 or any Affiliate of any Lender. Notwithstanding the foregoing, in no event shall Black Diamond Asset Management or any other entity known to be an Affiliate of Black Diamond Asset Management without
additional inquiry by the Administrative Agent, or a Lender making an assignment pursuant to Section 9.05, be deemed an Eligible Assignee. 
  
 “Eligible Cash on Hand” means cash of a Borrower from time to time deposited in an account in the name of a Borrower (excluding any
amounts on deposit in any other escrow, or special purpose or restricted account, such as an account specifically designated for payroll or sales taxes), which account is held by Bank of America or its Affiliates or is subject to a Blocked Account
Agreement or is otherwise subject to a first priority security interest in favor of the Collateral Agent for the benefit of the other Secured Parties. 
  
 “Eligible Credit Card Receivables” means Accounts due to a Borrower on a non-recourse basis (excluding customary chargebacks) from
(i) Visa, Mastercard, American Express Company, or Discover and (ii) other major credit card processors, in each case acceptable to the Administrative Agent in its reasonable discretion, as arise in the ordinary course of business for the
purchase of merchandise, which have been earned by performance and are deemed by the Administrative Agent in its reasonable discretion exercised in good faith to be eligible for inclusion in the calculation of the Borrowing Base. Without limiting
the foregoing, unless the Administrative Agent otherwise agrees, none of the following shall be deemed to be Eligible Credit Card Receivables: 
  
 (a) Accounts that have been outstanding for more than five (5) Business Days from the date of sale; 
  
 (b) Accounts with respect to which a Borrower does not have
good, valid and marketable title and which are not subject to a first priority security interest granted to the Collateral Agent for its own benefit and the benefit of the other Secured Parties, it being the intent that chargebacks in the ordinary
course by the credit card processors shall not be deemed violative of this clause; 
  
 (c) Accounts which are disputed, are with recourse, or with respect to which a claim, counterclaim, offset or chargeback has been asserted
(to the extent of such claim, counterclaim, offset or chargeback); or 
  

 10 

 (d) Accounts which are acquired in a Permitted Acquisition unless and until the
Administrative Agent has completed an appraisal of such Accounts, establishes an advance rate and reserves (if applicable) therefore, and otherwise agrees that such Accounts shall be deemed Eligible Credit Card Receivables. 
  
 “Eligible In-Transit Inventory” means, as of the date of
determination thereof, without duplication of other Eligible Inventory, Inventory (a) which has been shipped from any foreign location for receipt by a Borrower within thirty five (35) days of the date of shipment, but which has not yet
been received by a Borrower, (b) for which (i) either payment in full has been made by a Borrower or the payment is supported by a Commercial Letter of Credit and (ii) title has passed to a Borrower, (c) for which the document of
title reflects a Borrower as consignee (along with delivery to a Borrower of the documents of title with respect thereto), (d) as to which the Collateral Agent has control over the documents of title which evidence ownership of the subject
Inventory (such as by the delivery of a customs broker agency agreement substantially in the form annexed hereto as Exhibit F), and (e) which otherwise constitutes Eligible Inventory (without reference to clauses (b) and (e) of
the definition thereof). 
  
 “Eligible Inventory”
means, as of the date of determination thereof, (i) Eligible In-Transit Inventory and (ii) items of Inventory of Borrowers that are finished goods, merchantable and readily saleable to the public in the ordinary course and deemed by the
Administrative Agent in its reasonable discretion exercised in good faith to be eligible for inclusion in the Borrowing Base. Without limiting the foregoing, unless otherwise approved in writing by the Administrative Agent, none of the following
shall be deemed to be Eligible Inventory: 
  
 (a)
Inventory that is not owned solely by the Borrowers, or is leased, on memo, or on consignment or the Borrowers do not have good and valid title thereto; 
  
 (b) Inventory (other than Eligible In-Transit Inventory) that is not located at a distribution center or retail store, or in-transit
(within the United States) to a distribution center or retail store, used by the Borrowers in the ordinary course or at a property that is owned or leased by the Borrowers, unless, in each case, a landlord, bailee or other access or custodial
agreement in favor of, and reasonably satisfactory to, Collateral Agent has been executed and delivered by the applicable landlord or other Person; 
  
 (c) Inventory located at a retail store leased by a Joint Venture unless (i) the Inventory is owned by a Borrower, (ii) the
applicable Borrower has properly recorded a UCC consignment filing against such Inventory, which UCC consignment filing has been duly assigned to the Collateral Agent for the benefit of the Secured Parties, (iii) a Joint Venture Consent has
been duly executed and delivered by the applicable Joint Venture and (iv) a reasonable period of time prior to the requested inclusion of such Inventory as Eligible Inventory, the Lead Borrower has provided to the Administrative Agent a copy of
the applicable joint venture agreement and organizational documents, if any, of the Joint Venture; 
  
 (d) Inventory that represents (i) goods damaged, defective or otherwise unmerchantable, (ii) goods that do not conform in all
material respects to the representations and warranties contained in this Agreement or any of the Security Documents, or (iii) goods to be returned to the vendor; 
  
 (e) Inventory (other than Eligible In-Transit Inventory) that is not located in the United States of
America, Puerto Rico, or Canada (excluding other territories and possessions thereof) and, provided, that in any event, the aggregate amount of Inventory that constitutes Eligible Inventory (i) of Brookstone Retail Puerto Rico, Inc. shall at no
time exceed $1,000,000 at cost and (ii) located in Canada shall at no time exceed $1,000,000 unless Administrative Agent has completed an appraisal of such 

  

 11 

 
Inventory, field examinations, established Inventory Reserves (if applicable) therefore, and otherwise determined in its reasonable discretion that such
Inventory shall be deemed Eligible Inventory; 
  
 (f) Inventory that is not subject to a perfected first priority security interest in favor of the Collateral Agent for the benefit of the Secured Parties; 
  
 (g) Inventory which consists of promotional or marketing materials, samples, labels, bags, packaging, and
other similar non-merchandise categories; 
  
 (h)
Without duplication of clause (d)(i) above, Inventory that is obsolete, unusable, or otherwise unavailable for sale; 
  
 (i) Inventory as to which insurance in compliance with the provisions of Section 5.07 hereof is not in effect; 
  
 (j) Inventory which has been sold but not yet delivered;

  
 (k) Inventory which consists of raw materials
or work in progress; and 
  
 (l) Inventory which
is acquired in a Permitted Acquisition unless and until the Administrative Agent has completed an appraisal of such Inventory, establishes Inventory Reserves (if applicable) therefore, and otherwise agrees that such Inventory shall be deemed
Eligible Inventory. 
  
 “Eligible L/C” means, as
of the date of determination thereof, a Commercial Letter of Credit (i) issued with respect to the purchase of Inventory for which no documents of title have been issued and which Inventory is not Eligible In-Transit Inventory, (ii) which
either (a) has an initial expiry within fifty-five (55) days of the date of issuance or amendment, as applicable; (b) has an initial expiry greater than fifty-five (55) days and the initial Commercial Letter of Credit or initial
amendment, as applicable, is due to expire within fifty-five (55) days of the date of determination, or (c) in the case of an amendment, the Inventory subject to such amendment has an initial ship date of within fifty-five (55) days
of the date of such amendment, and (iii) which provides that it may be drawn only once documents of title have been issued that reflect a Borrower a consignee of the subject Inventory. 
  
 “Environmental Laws” means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices having the force of orders or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, handling, treatment, storage, disposal, Release or threatened Release of any Hazardous Material or to health and safety matters with respect to Hazardous Materials. 
  
 “Environmental Liability” means any liability, contingent or
otherwise (including any liability for damages, natural resource damage, costs of environmental remediation, administrative oversight costs, fines, penalties or indemnities), of any Person directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release
of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. 
  

 12 

 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time and the regulations promulgated and rulings issued thereunder. 
  
 “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with Brookstone Inc. or any Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. 
  
 “ERISA Event” means (a) any “reportable event” as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by Brookstone Inc., any Borrower or any of their ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by Brookstone Inc., any Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by Brookstone Inc., any Borrower or any of their ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by Brookstone Inc., any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
Brookstone Inc., any Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA. 
  
 “Event of Default”
has the meaning set forth in Section 7.01. 
  
 “Excess Availability” means as of any date of determination, the excess, if any, of (a) Availability over (b) the sum of (i) all then held checks (other than held checks drawn to pay accounts which are
not more than thirty (30) days beyond stated credit terms); (ii) accounts payable which are more than sixty (60) days beyond credit terms then accorded the Loan Parties other than by reason of bona fide dispute; and
(iii) overdrafts. 
  
 “Excess Availability
Amount” means 10% of the most recent Borrowing Base calculation, without giving effect to subsections (d) or (f) thereof. 
  
 “Excluded Taxes” means, with respect to the Agents, any Lender, any Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Loan Parties hereunder, (a) income or franchise Taxes imposed on (or measured by) its gross or net income by the United States of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, or by a jurisdiction in which it otherwise conducts business (other than solely as a result of a Loan
Party’s activities in a jurisdiction), (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which a Loan Party is located and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrowers under Section 2.29(b) any withholding Tax that (i) is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office), except, in the case of the designation of a new lending office or an assignment pursuant to Section 2.27(e), to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of such
designation or assignment, to 

  

 13 

 
receive additional amounts from the Borrowers with respect to such withholding Tax pursuant to Section 2.27(a), or (ii) is attributable to such
Foreign Lender’s failure to comply with Sections 2.27(e) or (f). 
  
 “Existing Financing Agreement” means that certain Amended and Restated Credit Agreement, dated as of February 21, 2002, as amended, among Brookstone, Inc., Brookstone Company, Brookstone Stores,
Inc., Brookstone Purchasing, Inc., Gardeners Eden by Mail, Inc., Gardeners Eden Company, Inc., Gardeners Eden Purchasing, Inc., Fleet National Bank as agent for the lenders thereunder and Citizens Bank of Massachusetts, as documentation agent.

  
 “Existing Letters of Credit” means
collectively the letters of credit issued for the account of the Borrowers pursuant to the Existing Financing Agreement prior to the date hereof and listed on Schedule 1.1(b) hereto. 
  
 “Facility Guarantee” means the Guarantee executed by the
Facility Guarantors in favor of the Agents, the Issuing Bank and the Lenders. 
  
 “Facility Guarantors” means Brookstone, Inc., Advanced Audio Concepts, Limited the Borrowers, any other Subsidiary of Brookstone, Inc. (other than a Joint Venture or a Foreign Subsidiary) which is not
a Borrower, and each other Subsidiary that is required from time to time to execute and deliver a Facility Guarantee pursuant to Section 5.13. 
  
 “Facility Guarantors Collateral Documents” means all security agreements, mortgages, pledge agreements, deeds of trust, and other
instruments, documents or agreements executed and delivered by any Facility Guarantor to secure the Facility Guarantee. 
  
 “Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by the Administrative Agent. 
  
 “Fee Letter” means the letter entitled “Fee Letter” among the Borrowers and the Administrative Agent of even date herewith, as such letter may from time to time be amended. 
  
 “Financial Officer” means, with respect to a Loan Party, the
chief executive officer, chief financial officer, treasurer, operating vice president - finance, or controller of that Loan Party. 
  
 “Fiscal Year” means any period of 52 or 53 consecutive weeks ending on the Saturday nearest to January 31 of each calendar year.

  
 “Foreign Lender” means any Lender that is
organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia. 
  
 “Foreign Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or
any State thereof or the District of Columbia. 
  

 14 

 “GAAP” means principles which are consistent with those promulgated or adopted by the
Financial Accounting Standards Board and its predecessors (or successors) in effect and applicable to that accounting period in respect of which reference to GAAP is being made. 
  
 “Gift Certificate and Merchandise Credit Liability” means, at any time, the aggregate face value at such
time of (a) outstanding gift certificates and gift cards of any Borrower entitling the holder thereof to use all or a portion of the certificate to pay all or a portion of the purchase price for any Inventory, and (b) outstanding
merchandise credits of any Borrower. 
  
 “Governmental
Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. 
  
 “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation, provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. 
  
 “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, mold, fungi or similar bacteria, and all other
substances or wastes of any nature regulated pursuant to any Environmental Law, including any material listed as a hazardous substance under Section 101(14) of CERCLA. 
  
 “Hedging Agreement” means any interest rate protection agreement, interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, foreign currency exchange agreement, commodity price protection agreement, or other interest or currency exchange rate or commodity price hedging arrangement designed to hedge against fluctuations
in interest rates or foreign exchange rates. 
  
 “Indebtedness” of any Person means, without duplication, 
  
 (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, 
  
 (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, 
  

 15 

 (c) all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, 
  
 (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business), 
  
 (e) all Indebtedness for which such Person is not the
obligor that is secured by any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, 
  
 (f) all Guarantees by such Person of Indebtedness of others, 
  
 (g) all Capital Lease Obligations of such Person, 
  
 (h) all obligations, contingent or otherwise, of such Person
as an account party in respect of letters of credit and letters of guaranty 
  
 (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, 
  
 (j) the Agreement Value of all Hedging Agreements, 
  
 (k) the principal and interest portions of all rental obligations of such Person under any Synthetic Lease,
Tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing where such transaction is considered borrowed money indebtedness for Tax purposes but is classified as an operating lease in accordance with GAAP, and

  
 (l) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment prior to the payment in full of all Obligations (other than contingent obligations for which no claim has been made) in respect of Capital Stock or other ownership or profit interests
in such Person or in any other Person (or warrants, rights or options to acquire such Capital Stock or ownership interests). 
  
 The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefore as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefore.
Notwithstanding the foregoing, in no event will obligations or liabilities in respect of Capital Stock (except as set forth in clause (m) above) constitute Indebtedness. 
  
 “Indemnified Taxes” means Taxes other than Excluded Taxes. 
  
 “Indemnitee” has the meaning set forth in
Section 9.03(b). 
  
 “Initial Lenders” means
Goldman Sachs Credit Partners, LP, UBS Loan Finance LLC, or any of their respective Affiliates. 
  
 “Intellectual Property Security Agreement” means any Intellectual Property Security Agreement entered among the Loan Parties and the
Collateral Agent for the benefit of the Secured Parties, as amended and in effect from time to time. 
  

 16 

 “Intercreditor Agreement” means that Intercreditor Agreement entered into by and among
the Administrative Agent, Wells Fargo Bank, N.A., in its capacity as trustee of the indenture and as the collateral agent under the Senior Note Documents, and the Loan Parties as of even date hereof, with respect to the Senior Notes, as amended and
in effect from time to time. 
  
 “Interest Payment
Date” means (a) with respect to any Prime Rate Loan (including a Swingline Loan), the first day of each calendar month, and (b) with respect to any LIBO Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part, and, in addition, if such LIBO Loan has an Interest Period of greater than 90 days, the last day of the third month of such Interest Period. 
  
 “Interest Period” means, with respect to any LIBO Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months (and to the extent available to all Lenders nine or twelve months) thereafter, as the Lead Borrower may elect by notice to the
Administrative Agent in accordance with the provisions of this Agreement; and provided, further, (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the last calendar month during which such Interest Period ends) shall end on the last Business Day of the calendar month of such Interest Period, (c) any
Interest Period which would otherwise end after the Termination Date shall end on the Termination Date, and (d) notwithstanding the provisions of clause (c), no Interest Period shall, unless approved by the Administrative Agent and all of the
Lenders, have a duration of less than one month, and if any Interest Period applicable to a LIBO Borrowing would be for a shorter period, such Interest Period shall not be available hereunder. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. 
  
 “Inventory” has the meaning set forth the Security Agreement. 
  
 “Inventory Reserves” means such reserves as may be established from time to time by the Administrative
Agent in the Administrative Agent’s reasonable discretion, exercised in good faith, with respect to the determination of the salability, at retail, of the Eligible Inventory or which reflect such other factors as affect the market value of the
Eligible Inventory. Inventory Reserves shall be established and calculated in a manner and methodology consistent with the Administrative Agent’s general operational practices. 
  
 “Investment” means any investment, whether now existing or hereafter made, including, without limitation
(a) any stock, evidence of Indebtedness or other security of another Person, (b) any loan, advance, contribution to capital, extension of credit (except for trade and customer accounts receivable for inventory sold or services rendered in
the ordinary course of business to another Person, (c) any purchase of stock or other securities of another Person, or (d) any commitment or option to make any such purchase. 
  
 “Issuing Bank” means Bank of America, in its capacity as the issuer of Letters of Credit hereunder, and any
of its successors in such capacity (which may only be a Lender selected by the Administrative Agent in its discretion). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by an Affiliate of the Issuing
Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. 
  

 17 

 “Joint Venture” means a joint venture formed by a Loan Party with a third-party for the
purpose of operating a retail store or stores at specific locations. Each Joint Venture existing on the Closing Date is listed on Schedule 1.1(c) annexed hereto. No Joint Venture may at any time be a Borrower. 
  
 “Joint Venture Consent” means a Joint Venture Consent
Agreement between a Joint Venture and the Collateral Agent, substantially in the form attached as Exhibit G, annexed hereto. 
  
 “Landlord Lien State” means Washington, Virginia, Pennsylvania and such other state(s) in which a landlord’s claim for rent has
priority over the lien of the Collateral Agent in any of the Collateral. 
  
 “L/C Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit. 
  
 “Lead Borrower” means Brookstone Company. 
  
 “Lease” means any agreement, whether written or oral, no matter how styled or structured, pursuant to which a Borrower is entitled to the
use or occupancy of any space in a structure, land, improvements or premises for any period of time. 
  
 “Lenders” means the Persons identified on Schedule 1.1(a) annexed hereto as a “Lender” and each assignee that
becomes a party to this Agreement as provided in Section 9.05(b). 
  
 “Letter of Credit” means (A) a letter of credit that is ((i) issued pursuant to this Agreement for the account of a Borrower, (ii) a Standby Letter of Credit or Commercial Letter of Credit, (iii) issued in
connection with the purchase of Inventory by a Borrower and for other purposes for which a Borrower has historically obtained letters of credit, or for any other purpose that is reasonably acceptable to the Administrative Agent, and (iv) in
form reasonably satisfactory to the Issuing Bank; and (B) the Existing Letters of Credit. 
  
 “Letter of Credit Fees” means the fees payable in respect of Letters of Credit pursuant to Section 2.13. 
  

“Letter of Credit Outstandings” means, at any time, the sum of (a) with respect to Letters of Credit outstanding at such time,
the aggregate maximum amount that then is or at any time thereafter may become available for drawing or payment thereunder plus (b) all amounts theretofore drawn or paid under Letters of Credit for which the Issuing Bank has not been
reimbursed. 
  
 “LIBO Borrowing” means a
Borrowing comprised of LIBO Loans. 
  
 “LIBO
Loan” means any Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article II. 
  
 “LIBO Rate” means, with respect to any LIBO Borrowing for any Interest Period, the rate per annum as determined on the basis of the
offered rates for deposits in dollars, for a period of time comparable to such Interest Period which appears on the “Telerate Page 3750” as of 11:00 a.m. London time on the day that is two (2) Business Days preceding the first day of
such Interest Period; provided, however, if the rate described above does not appear on the Telerate System on any applicable interest determination date, the LIBO Rate shall be the rate (rounded upward, if necessary, to the nearest 1/16 of 1%),
determined on the basis of the offered rates for deposits in dollars for a period of time comparable to such Interest Period which are offered by three (3) major banks in the London interbank market at 

  

 18 

 
approximately 11:00 a.m. London time, on the day that is two (2) Business Days preceding the first day of such Interest Period as selected by the
Administrative Agent. In the event that the Administrative Agent is unable to obtain any such quotation as provided above, it will be deemed that a LIBO Rate pursuant to a LIBO Borrowing cannot be obtained. 
  
 “Lien” means, with respect to any asset, (a) any
collateral assignment, mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset or (c) in the case of securities, any purchase option, call or similar right of a third party with respect
to such securities. 
  
 “Line Fee” has the
meaning set forth in Section 2.12(b). 
  
 “Liquidity
Event” means the failure of the Borrowers to maintain Adjusted Excess Availability of at least $20,000,000 at any time. For the purposes of Sections 5.01(c), and 6.11, a Liquidity Event shall be deemed continuing until such time as Adjusted
Excess Availability shall exceed $20,000,000 for forty-five (45) consecutive calendar days. 
  
 “Loan Account” has the meaning set forth in Section 2.21. 
  
 “Loan Documents” means this Agreement, the Notes, the Letters of Credit, the Fee Letter, all Borrowing Base
Certificates, the Blocked Account Agreements, the DDA Notifications, the Credit Card Notifications, the Security Documents, the Facility Guarantee, the Facility Guarantors Collateral Documents, the Intercreditor Agreement, and any other document,
instrument or agreement now or hereafter executed and delivered in connection herewith, each as amended and in effect from time to time. 
  
 “Loan Party” or “Loan Parties” means each Borrower and each Facility Guarantor. 
  
 “Loans” means all loans at any time made to the Borrowers or
for account of the Borrowers pursuant to this Agreement. 
  
 “Material Adverse Effect” means a material adverse effect on (a) the business, operations, property, assets, or condition, financial or otherwise, of Brookstone Inc. and its Subsidiaries taken as a whole, (b) the
ability of any Loan Party to perform any obligation or to pay any Obligations under this Agreement or any of the other Loan Documents, or (c) the validity or enforceability of this Agreement or any of the other Loan Documents or any of the
rights or remedies of the Administrative Agent, the Collateral Agent, the Issuing Bank or the Lenders hereunder or thereunder. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event in
and of itself does not have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event together with all other events related thereto (whether concurrent or in a series) would result in a Material
Adverse Effect. 
  
 “Material Indebtedness” means
Indebtedness (other than the Loans and Letters of Credit) of the Borrowers in an aggregate principal amount exceeding $5,000,000.00. For purposes of determining the amount of Material Indebtedness at any time, the amount of the obligations in
respect of any Hedging Agreement at such time shall be the Agreement Value. 
  
 “Maturity Date” means October 4, 2010. 
  

 19 

 “Maximum Rate” has the meaning set forth in Section 9.13. 
  
 “Merger” means the merger of Brookstone Acquisition with and
into Brookstone, Inc., with Brookstone, Inc. as the surviving entity, in accordance with the terms of the Merger Agreement. 
  
 “Merger Agreement” means the Agreement and Plan of Merger dated as of April 15, 2005 (as amended as of July 15, 2005), between
and among Brookstone Holdings, Brookstone Acquisition and Brookstone, Inc. 
  
 “Merger Documents” means the Merger Agreement and each instrument, document and agreement executed and delivered in connection therewith relating to the Merger. 
  
 “Merrimack Mortgage” means that certain Mortgage and
Security Agreement dated as of August 24, 2004 held by TD Banknorth, N.A. which encumbers the real property of Brookstone Company located at One International Drive, Merrimack, New Hampshire recorded with the Hillsborough County Registry of
Deeds, at Book 6991, Page 864. 
  
 “Minority
Lenders” has the meaning set forth in Section 9.02(c). 
  
 “Moody’s” means Moody’s Investors Service, Inc. 
  
 “Multiemployer Plan” means a multiemployer plan, sponsored by a Loan Party as defined in Section 4001(a)(3) of ERISA to which Brookstone Inc., a Borrower, or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within the preceding five plan years made or accrued an obligation to make contributions. 
  
 “Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that is sponsored by Brookstone
Inc. or any Borrower, and (a) is maintained for employees of Brookstone Inc. or any of its Subsidiaries or any ERISA Affiliate and at least one Person other than Brookstone Inc., any Subsidiary or the ERISA Affiliate or (b) was so
maintained and in respect of which Brookstone Inc., any Subsidiary or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. 
  
 “Net Proceeds” means cash proceeds, in excess in each case
of $1,000,000, in respect of: 
  
 (a) the sale or
transfer of any property, except transactions permitted by Sections 6.05(a)(i) through 6.05(a)(xv); 
  
 (b) the incurrence of any Indebtedness other than Permitted Indebtedness (nothing contained herein being deemed to permit any such
incurrence); and 
  
 (c) any casualty,
condemnation, taking or other event of loss other than with respect to real property; 
  
 in the case of the foregoing, net of: (i) in the event of a disposition, (v) the direct costs relating to such disposition excluding amounts payable to a Loan Party or any Affiliate of any Loan Party, (w) sale, use or other
transaction taxes paid or payable as a result thereof, (x) amounts required to be applied to repay principal, interest and prepayment premiums and penalties on Indebtedness (other than the Obligations) secured by a Lien on the asset that is the
subject of such disposition, (y) the amount of any reserves 

  

 20 

 
established by a Loan Party and its Subsidiaries to fund contingent liabilities reasonably estimated to be payable and that are attributable to such event
(as determined reasonably and in good faith by such Loan Party); provided that any amount by which such reserves are reduced for reasons other than payment of any such contingent liabilities shall be considered Net Proceeds upon such
reduction, and (z) cash escrows (until released from escrow to a Loan Party or any of its Subsidiaries) from the sale price for such disposition; (ii) in the event of a casualty, condemnation, taking or other event of loss, (w) the
reasonable cost of putting any real property in a safe and secure condition, (x) all money actually applied to repair or reconstruct the damaged property or property affected by the condemnation or taking in accordance with the terms hereof,
(y) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (z) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other
payments; and (iii) in the event of a debt incurrence or issuance of Capital Stock, customary fees, commissions, costs and other expenses incurred in connection therewith. 
  
 “Notes” means (i) the promissory notes of the Borrowers substantially in the form of Exhibit
B-1, each payable to the order of a Lender, evidencing the Revolving Loans, and (ii) the promissory note of the Borrowers substantially in the form of Exhibit B-2, payable to the Swingline Lender, evidencing the Swingline Loans.

  
 “Obligations” means (a) the due and
punctual payment by the Loan Parties of (i) the principal of, and interest (including all interest that accrues after the commencement of any case or proceeding by or against any Loan Party under any federal or state bankruptcy, insolvency,
receivership or similar law, whether or not allowed in such case or proceeding) on the Loans, as and when due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made
by any Loan Party under the Credit Agreement in respect of any Letter of Credit issued by an Issuing Bank, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral
and (iii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise, of any Loan Party to the Secured Parties under the Credit Agreement or the other Loan
Documents, (b) the due and punctual payment and performance of all the covenants, agreements, obligations and liabilities of any Loan Party under or pursuant to this Agreement or the other Loan Documents, (c) all monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise of any Loan Party arising out of any cash management, depository, investment, letter of credit, Hedging Agreement or other banking or
financial services provided by Bank of America or any of its Affiliates, and the due and punctual payment and performance of all of the covenants, agreements, obligations and liabilities of any Loan Party relating thereto and (d) with respect
to any Hedging Agreement which has been provided to the Borrowers by the Initial Lenders, the then-current Agreement Value thereof which the Initial Lenders have provided the Agents. Obligations which arise out of any cash management, depository,
investment, letter of credit, Hedging Agreement, or other banking or financial services shall be secured Obligations solely to the extent that there is sufficient Collateral following satisfaction of the Obligations described in clauses (a) and
(b) of this definition. 
  
 “Organizational
Document” means, relative to any Loan Party, its certificate of incorporation or formation, its by-laws, membership agreements (if a limited liability company) or partnership agreements (if a partnership). 
  
 “Other Taxes” means any and all current or future stamp or
documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document. 

 

 21 

 “Overadvance” means, at any time of calculation, a circumstance in which the Credit
Extensions exceeds the lesser of (a) the Total Commitments, or (b) the Borrowing Base. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar
functions. 
  
 “Parent Company” means each of
OSIM Brookstone Holdings, Inc., OSIM Brookstone Holdings, L.P., and each Subsidiary (if any) thereof that directly or indirectly owns Capital Stock of Brookstone Company. 
  
 “Participation Register” has the meaning set forth in Section 9.05(e). 
  
 “Permitted Acquisition” means an Acquisition which satisfies
all of the following conditions: 
  
 (a) The
Acquisition is of a business permitted to be conducted by the Loan Parties pursuant to Section 6.03(b); 
  
 (b) The Lead Borrower shall have delivered to the Administrative Agent: 
  
 (i) at least fifteen (15) Business Days prior to the intended date of the consummation thereof,

  
 (A) notice of the intended Acquisition,

  
 (B) to the extent available, copies of the
most recent audited, and if later, unaudited financial statements of the Person which is the subject of the proposed Acquisition, 
  
 (C) a description of the proposed Acquisition in such detail as the Administrative Agent may reasonably request, 
  
 (D) an unaudited pro forma Consolidated balance sheet and
income statement of Brookstone, Inc. and its Subsidiaries as of the end of the most recently completed fiscal quarter but prepared as though the Acquisition had occurred on such date; 
  
 (E) a current Borrowing Base Certificate demonstrating that there shall be Adjusted Excess Availability of
not less than $20,000,000 both before and after giving effect to such Acquisition; and 
  
 (F) if the Acquisition shall be for consideration in excess of $5,000,000, a business plan (reasonably satisfactory to the Agents) for
the next twelve months giving effect to the proposed Acquisition; 
  
 (ii) as soon as available, copies of letters of intent and purchase and sale agreements or other acquisition documents executed in connection with the proposed Acquisition; and 
  
 (iii) to the extent available, any quality of earnings or
similar reports relating to the Person which is the subject of the Acquisition; 
  

 22 

 (c) Prior to and after giving effect to the Acquisition, no Default or Event of Default
will exist or will arise therefrom; 
  
 (d) The
Person making the Acquisition must be Brookstone Company or a Subsidiary thereof which will become a Loan Party in accordance with Section 5.13 hereof and in each case the Loan Parties (including such Person) shall take such steps as are
necessary to grant to the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable first priority security interest in all of the assets (including Capital Stock) (subject to Permitted Encumbrances) acquired in
connection with such acquisition (provided that in the case of an Acquisition of a Foreign Subsidiary such security interest shall be limited to 65% of the Capital Stock of such Foreign Subsidiary held by the Loan Parties) and/or owned by such
acquired Person (if such Person is not a Foreign Subsidiary); 
  
 (e) If the Loan Party or its Subsidiary shall merge with such other Person, such Loan Party or Subsidiary shall be the surviving party of such merger; 
  
 (f) Such Acquisition shall have been approved by a majority of the Board of Directors (or the equivalent
governing body), or shareholders, as applicable, of the Person which is the subject of such Acquisition and such Person shall not have publicly announced, whether by written notice to any Person or otherwise, that it will oppose such Acquisition
(and such opposition has not been publicly withdrawn) or shall not have commenced any action which alleges that such Acquisition will violate Applicable Law; and 
  
 (g) The total consideration paid or payable in connection with (i) any individual Acquisition (whether
in cash, property or securities) shall be not greater than $10,000,000.00 and (ii) all Acquisitions permitted hereunder (in each case whether in cash, property or securities) shall be not greater than $50,000,000.00 in the aggregate.

  
 “Permitted Dividends” means: 
  
 (a) Cash dividends payable by the Borrowers to Brookstone,
Inc. and by Brookstone, Inc. to Brookstone Holdings to be utilized by Brookstone Holdings to pay cash dividends to its stockholders, subject to the following: 
  

(i) at the time of and after giving effect to such dividend payment, (x) no Default or Event of Default exists; (y) Borrowers
shall have Adjusted Excess Availability of not less than $20,000,000; and (z) the Lead Borrower shall have delivered to the Administrative Agent a current Borrowing Base Certificate evidencing such Adjusted Excess Availability; and 

 
 (ii) only one such dividend may be paid in any Fiscal
Year and only after delivery to the Agents of (x) the annual audited financial statements of Brookstone, Inc. for the Fiscal Year most recently ended in accordance with Section 5.01(a); and (y) a business plan for the next twelve
months giving effect to the proposed dividend which business plan is reasonably satisfactory to the Agents; 
  
 (b) Dividends with respect to Capital Stock payable solely in additional shares of or warrants to purchase common stock; 
  
 (c) Stock splits or reclassifications of stock into
additional or other shares of common stock; 
  

 23 

 (d) The declaration and payment of a dividend by any Subsidiary of a Loan Party to a Loan
Party; 
  
 (e) In the case of a Joint Venture,
the declaration and payment of a dividend ratably to any member or partner of such Joint Venture (taking into account the relative preferences, if any, on the various classes of Capital Stock of such Joint Venture); 
  
 (f) any dividend, payment or distribution occurring as part
of the transactions on the Closing Date in connection with the Merger under the Merger Agreement; 
  
 (g) so long as no Default or Event of Default exists, the repurchase, redemption or other acquisition or retirement for value of any
Capital Stock of Brookstone Company or any Subsidiary that is a Loan Party, or payments by Brookstone Company to any Parent Company to permit such Parent Company to, and which are used by any Parent Company to, repurchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Parent Company which is held by any current or former officer, director, consultant or employee of Brookstone Company or any other Loan Party (or permitted transferees, assigns, estates or heirs
of the foregoing); provided, however, that the aggregate price paid for all Capital Stock repurchased, redeemed, acquired or retired pursuant to this clause (g) shall not exceed $5,000,000 in any Fiscal Year of Brookstone Company
(with unused amounts being carried over for availability in the following calendar year) net of proceeds (i) received by or contributed to Brookstone Company by any Loan Party from sales or re-sales of any Capital Stock to any Loan Party
pursuant to this clause (g) and net of repayment of loans related to such Capital Stock by a Loan Party made pursuant to Section 6.04(l) and repaid in connection with such repurchase, redemption, acquisition or retirement of such Capital
Stock and (ii) received by a Parent Company and ultimately contributed to Brookstone Company after the Closing Date in connection with re-sales of any Capital Stock so purchased, redeemed or acquired; 
  
 (h) so long as no Event of Default exists, Brookstone
Company may pay cash dividends to Brookstone Inc. (which are subsequently dividended or distributed to any Parent Company) at the times and in the amounts necessary to enable such Parent Company to pay its franchise tax obligations and other fees
required to maintain its existence, provided that (x) the amount of cash dividends paid pursuant to this clause (h) shall not exceed the amount of such franchise taxes and other fees required to maintain its existence
actually owing by such Parent Company which are attributable to the ownership of Brookstone Company and its Subsidiaries at such time for the respective period and (y) any refunds received by such Parent Company shall promptly be returned to
Brookstone Company; 
  
 (i) to the extent that
Brookstone Company or one or more of its Subsidiaries are members of a consolidated, combined or similar income tax group of which a direct or indirect parent of Brookstone Company is the common parent, so long as no Event of Default exists
Brookstone Company and its Subsidiaries may make Restricted Payments pursuant to a tax sharing agreement or otherwise to the extent necessary to pay, and which are used to pay, any income taxes of such tax group that are attributable to the
ownership of Brookstone Company and its Subsidiaries and are not payable directly by Brookstone Company and/or its Subsidiaries; 
  
 (j) so long as no Default or Event of Default exists, Brookstone Company may make Restricted Payments to or on behalf of any Parent
Company in an amount sufficient to pay out-of-pocket legal, accounting and filing and other general corporate overhead costs of such Parent Company actually incurred by such Parent Company and which are attributable to the ownership of Brookstone
Company and its Subsidiaries at such time, in any case in an aggregate amount not to exceed $1,000,000 in any calendar year; and 
  

 24 

 (k) cashless exercises of options and warrants. 
  
 “Permitted Encumbrances” means 
  
 (a) Liens in favor of the Secured Parties or the Collateral
Agent for the benefit of the Secured Parties; 
  
 (b) Liens against assets of the Loan Parties existing as the date of this Agreement and disclosed in Schedule 6.02 annexed hereto, and any renewals, replacements or extensions thereof, provided that (i) no additional
property is covered thereby and (ii) the amount secured or benefited thereby is not increased (except, in connection with any refinancing, refunding, renewal or extension thereof, by an amount equal to accrued interest, a reasonable premium
paid in connection with such renewal, replacement or extension, as applicable, and fees and expenses reasonably incurred in connection therewith); 
  
 (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.05; 
  
 (d) landlords’ and lessors’ liens in respect of rent not in default, or in default and being contested in good faith, or liens in respect of pledges or deposits under workmen’s compensation,
unemployment insurance, social security laws, or similar legislation (other than ERISA), or in connection with appeal and similar bonds incidental to litigation; mechanics’, laborers’, repairmen’s, suppliers’ and
materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent for a period of more than thirty (30) days or which are being contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the applicable Person; liens securing the payment of insurance premiums, statutory obligations, the performance of bids, tenders, contracts (other than for the payment of money);
and liens in connection with statutory obligations incidental to the conduct of the business of the Loan Parties taken as a whole and that do not in the aggregate materially detract from the value of the property or materially impair the use thereof
in the operation of their business; 
  
 (e)
judgment liens not giving rise to an Event of Default under Section 7.01(l); 
  
 (f) Liens securing Indebtedness permitted by Section 6.01(a)(iv), provided that such Lien shall only encumber the asset acquired with
the proceeds of such Indebtedness; 
  
 (g)
easements, rights of way, restrictions, encroachments and other similar charges or Liens relating to real property and not interfering in a material way with the ordinary conduct of business of the Loan Parties taken as a whole; 
  
 (h) Liens on property or assets created in connection with
the refinancing of Indebtedness secured by Permitted Encumbrances on such property, provided that the amount of Indebtedness secured by any such Encumbrance shall not be increased (except by an amount equal to accrued interest, a reasonable premium
paid in connection therewith and reasonable fees and expenses incurred in connection therewith) as a result of such refinancing and no such Encumbrance shall extend to property and assets of any such Loan Party not encumbered prior to any such
refinancing; 
  
 (i) Liens in the nature of a
security interest in checks created or to be created in connection with a certain Welcome Check Warranty Agreement dated September 1, 1994 between the 

  

 25 

 
Company and Equifax Check Services, Inc. (the “Equifax Agreement”) or similar agreements relating to the discounting of customer checks;

  
 (j) Liens solely on any cash earnest money
deposits in connection with any letter of intent or purchase agreement permitted under this Agreement; 
  
 (k) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with
the importation of goods; 
  
 (l) any zoning or
similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property; 
  
 (m) Liens in favor of any Loan Party; 
  
 (n) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection;

  
 (o) Liens deemed to exist in connection with
Investments in repurchase agreements permitted under Section 6.04; 
  
 (p) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto to the extent permitted under this Agreement; 
  
 (q) bankers’ Liens, rights of setoff and similar Liens
existing solely with respect to cash and Permitted Investments on deposit in one or more accounts maintained by any Loan Party or Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such
accounts are maintained, securing amounts owing to such bank with respect to cash management or other account arrangements, including those involving pooled accounts and netting arrangements, provided, that unless such Liens are
non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness; 
  
 (r) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal
property entered into in the ordinary course of business; 
  
 (s) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business but solely with respect to the sale of such
property; 
  
 (t) licenses of patents, trademarks
and other intellectual property rights granted by Brookstone Company or any of its Subsidiaries in the ordinary course of business and not (i) interfering in any respect with the ordinary conduct of the business of Brookstone, Inc. and its
Subsidiaries, taken as a whole or (ii) detrimental in any material respects to the value of such intellectual property; 
  
 (u) Liens on assets acquired after the Closing Date, as permitted by the terms of this Agreement, existing at the time of acquisition
thereof by Brookstone Company or any of its Subsidiaries; provided that such Liens were not incurred in connection with, or in contemplation of, such acquisition and do not extend to any assets of Brookstone Company or any of its Subsidiaries
other than the specific assets so acquired (and improvements thereon); 
  

 26 

 (v) any purchase option, call or similar right of a partner or member of any Joint
Venture with respect to ownership interests in such Joint Venture; 
  
 (w) Liens securing Indebtedness permitted by Section 6.01(a)(vii) provided that such Liens are subordinate to the Liens created by the Security Documents in accordance with the Intercreditor Agreement; and

  
 (x) Liens not otherwise permitted hereunder,
provided that the aggregate amount of all obligations secured thereby does not exceed $500,000 at any time outstanding. 
  
 “Permitted Investments” means each of the following: 
  
 (a) United States dollars (including such dollars as are held as overnight deposits and demand deposits with
U.S. banks); 
  
 (b) notes, bonds or other
obligations of the United States of America or any agency or instrumentality thereof that as to principal and interest constitute direct obligations of or are guaranteed by the United States of America; 
  
 (c) bankers’ acceptances, certificates of deposit or
other deposit instruments or accounts of banks or trust companies organized under the laws of the United States or any state thereof or the District of Columbia that have capital and surplus of at least $100,000,000; 
  
 (d) marketable direct obligations issued by any State of the
United States of America or any political subdivision of any such State or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having a rating of at least A-2 from S&P
or at least P-2 of Moody’s; 
  
 (e)
commercial paper that is rated not less than A-2 or their equivalents by Moody’s or S&P, respectively, or their successors; 
  
 (f) any repurchase agreement secured by any one or more of the foregoing; 
  
 (g) investments in shares of any so-called “Money Market fund” provided that such fund is
registered under the Investment Company Act of 1940, has net assets of at least $100,000,000, has an investment portfolio with an average maturity of 365 days or less and is not considered to be a “high-yield” fund); 
  
 (h) in the case of Foreign Subsidiaries, Investments made
locally of a type comparable to those described in clauses (a) through (g) of this definition; and 
  
 (i) investments listed on Schedule 6.04 annexed hereto. 
  
 “Permitted Overadvance” means an Overadvance determined by the Administrative Agent, in its reasonable
discretion, (a) which is made to maintain, protect or preserve the Collateral and/or the Lenders’ rights under the Loan Documents, or (b) which is otherwise in the Lenders’ interests; provided, however, that
Permitted Overadvances shall not (i) exceed ten percent (10%) of the then Borrowing Base in the aggregate outstanding at any time or (ii) remain outstanding for more than ninety (90) consecutive Business Days, unless in case of
this clause (ii), the Required Lenders otherwise agree; and, provided  

  

 27 

 
further, that the foregoing shall not modify or abrogate any of the provisions of Section 2.06(f) regarding the Lender’s obligations with
respect to L/C Disbursements, or result in any claim or liability against the Administrative Agent (regardless of the amount of any Overadvance) for “inadvertent Overadvances” (i.e. where an Overadvance results from changed circumstances
beyond the control of the Administrative Agent (such as a reduction in the collateral value)), and provided further that, in no event shall the Administrative Agent make an Overadvance, if after giving effect thereto, the principal amount of
the Revolving Loans and the Letter of Credit Outstandings (including any Overadvance or proposed Overadvance) would exceed the Total Commitments. 
  
 “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. 
  
 “Plan” means a Single Employer Plan or a Multiple Employer Plan. 
  
 “Pledge Agreement” means the Pledge Agreement dated as of the date hereof among the Loan Parties and the Collateral Agent for the benefit of the Secured Parties, as amended and in effect from time to
time. 
  
 “Prime Rate” means, for any day, the
higher of (a) the variable annual rate of interest then most recently announced by Bank of America at its head office in Charlotte, North Carolina, as its “Prime Rate” and (b) the Federal Funds Effective Rate in effect on such
day plus  1/2 of 1% (0.50%) per annum. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for
any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations thereof in accordance with the terms hereof, the Prime Rate shall be determined without regard to clause (b) of the first sentence of
this definition, until the circumstances giving rise to such inability no longer exist. Any change in the Prime Rate due to a change in Bank of America’s Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of
such change in Bank of America’s Prime Rate or the Federal Funds Effective Rate, respectively. 
  
 “Prime Rate Loan” means any Loan bearing interest at a rate determined by reference to the Prime Rate in accordance with the provisions
of Article II. 
  
 “Real Estate” means all land,
together with the buildings, structures, parking areas, and other improvements thereon, now or hereafter owned by any Loan Party, including all easements, rights-of-way, and similar rights relating thereto and all leases, tenancies, and occupancies
thereof. 
  
 “Register” has the meaning set forth
in Section 9.05. 
  
 “Regulation T” means
Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. 
  
 “Regulation U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations
thereunder or thereof. 
  
 “Regulation X”
means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof. 
  

 28 

 “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates. 
  
 “Release” has the meaning set forth in Section 101(22) of CERCLA. 
  
 “Required Lenders” means (a) at any time there are two or fewer Lenders who are not Delinquent
Lenders, all Lenders who are not Delinquent Lenders; and (b) at any time there are three or more Lenders who are not Delinquent Lenders, Lenders (other than Delinquent Lenders) the sum of whose Commitments exceeds 50% of the Total Commitments
at such time, or if the Commitments have been terminated, Lenders whose percentage of the outstanding Obligations (after settlement and repayment of all Swingline Loans by the Lenders) exceeds 50% of all such Obligations. 
  
 “Reserves” means all Inventory Reserves and Availability
Reserves. 
  
 “Responsible Officer” of any Person
means any of the chief executive officer, chief operating officer, president, vice president, chief financial officer or treasurer of such Person. 
  
 “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares
of any class of Capital Stock of any Loan Party or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of Capital Stock of any Loan Party or any Subsidiary or any option, warrant or other right to acquire any such shares of Capital Stock of any Loan Party or any Subsidiary, in each case other than
Permitted Dividends. 
  
 “Revolving Loans” means
all Loans at any time made by a Lender pursuant to Section 2.01. 
  
 “S&P” means Standard & Poor’s. 
  
 “SEC” means the Securities and Exchange Commission. 
  
 “Secured Parties” has the meaning set forth in the Security Agreement. 
  
 “Security Agreement” means the Security Agreement dated as the date hereof among the Loan Parties and the
Collateral Agent for the benefit of the Secured Parties, as amended and in effect from time to time. 
  
 “Security Documents” means the Security Agreement, the Pledge Agreement, the Facility Guarantors Collateral Documents, the Intellectual
Property Security Agreement, and each other security agreement or other instrument or document executed and delivered by any Loan Party to secure any of the Obligations. 
  
 “Senior Note Documents” means the Senior Notes and all other documents, instruments and agreements
(including guarantees, security agreements or other instruments or documents securing the Indebtedness under the Senior Notes) executed and delivered in connection therewith. 
  
 “Senior Notes” means the senior notes issued by Brookstone Company on the Closing Date in the amount of
$185,000,000 pursuant to a public offering or Rule 144A, or other private placement. 
  

 29 

 “Settlement Date” has the meaning set forth in Section 2.07(b) hereof. 

 
 “Shrink” means Inventory which has been lost, misplaced,
stolen, or is otherwise unaccounted for. 
  
 “Single
Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that is sponsored by a Loan Party and (a) is maintained for employees of Brookstone Inc. or any of its Subsidiaries or any ERISA Affiliate
and no Person other than Brookstone Inc., its Subsidiaries or the ERISA Affiliate or (b) was so maintained and in respect of which Brookstone Inc., any Subsidiary or any ERISA Affiliate could have liability under Section 4069 of ERISA in
the event such plan has been or were to be terminated. 
  
 “Significant Subsidiary” means any Subsidiary of Brookstone Inc. that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Act, as such Regulation
is in effect on the date hereof. 
  
 “Solvent”
means, with respect to any Person on a particular date, that on such date (a) at fair valuations, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person,
(b) the present fair saleable value of the properties and assets of such Person is not less than the amount that would be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such
Person is able to realize upon its properties and assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not
believe that it will, incur debts beyond such Person’s ability to pay as such debts mature, and (e) such Person is not engaged in a business or a transaction, and is not about to engage in a business or transaction, for which such
Person’s properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged. The amount of all Guarantees and contingent obligations at
any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, can reasonably be expected to become an actual or matured liability. 
  
 “Specified Event of Default” means an Event of Default under any of Section 7.01(a),
Section 7.01(b), Section 7.01(d), Section 7.01(i), Section 7.01(j) or Section 7.01(k). 
  
 “Sponsor” means any of J.W. Childs Associates, L.P., OSIM International Ltd. and Temasek Capital (Private) Limited, and any of their
Affiliates. 
  
 “Sponsor Related Party” means
(i) any controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Sponsor or (ii) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more of the Sponsors and/or such other Persons referred to in the immediately preceding clause (i). 
  
 “Standby Letter of Credit” means any Letter of Credit or
amendment thereto other than a Commercial Letter of Credit. 
  
 “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a 

  

 30 

 
decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. LIBO Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 
  
 “Stretch Subfacility Amount” means at any time an amount equal to the lesser of (i) 90% of an amount equal to (A) the Stretch
Subfacility Appraisal Percentage multiplied by (B) the Appraised Value of Eligible Inventory (less Inventory Reserves), or (ii) $15,000,000. 
  
 “Stretch Subfacility Appraisal Percentage” means 20%. 
  
 “Stretch Subfacility Credit Extensions” means at any time the aggregate of all outstanding (i) Stretch
Subfacility Revolving Loans and (ii) Stretch Subfacility Letters of Credit. 
  
 “Stretch Subfacility Letter of Credit” means (a) any Letter of Credit which is issued solely due to the inclusion of the Stretch Subfacility Amount in the Borrowing Base and (b) any
outstanding Letter of Credit which, upon the delivery of a Borrowing Base Certificate in accordance with Section 5.01(e) hereof, the issuance of which would result in an Overadvance but for the inclusion of the Stretch Subfacility Amount in the
Borrowing Base; provided, however, that a Stretch Subfacility Letter of Credit shall cease to be deemed a Stretch Subfacility Letter of Credit if, and to the extent, a Borrowing Base Certificate delivered in accordance with
Section 5.01(e) hereof demonstrates that an Overadvance would not exist even if the Stretch Subfacility Amount were excluded from the Borrowing Base; and provided, further, that in any event, no Letter of Credit shall be deemed to
constitute a Stretch Subfacility Letter of Credit unless at the time of determination thereof no outstanding Revolving Loans are Stretch Subfacility Revolving Loans. 
  
 “Stretch Subfacility Revolving Loan” means (a) any Revolving Loan which is made solely due to the
inclusion of the Stretch Subfacility Amount in the Borrowing Base and (b) any outstanding Revolving Loan the making of which, upon the delivery of a Borrowing Base Certificate in accordance with Section 5.01(e) hereof, would result in an
Overadvance, but for the inclusion of the Stretch Subfacility Amount in the Borrowing Base; provided, however, that a Revolving Loan shall cease to be deemed a Stretch Subfacility Revolving Loan if, and to the extent, a Borrowing Base
Certificate delivered in accordance with Section 5.01(e) hereof demonstrates that an Overadvance would not exist even if the Stretch Subfacility Amount were excluded from the Borrowing Base. 
  
 “Subordinated Indebtedness” means Indebtedness which is
expressly subordinated in right of payment, in form and on terms approved by the Administrative Agent in its reasonable discretion in writing, to the prior payment in full of the Obligations. 
  
 “Subsidiary” means, with respect to any Person (the
“parent”) at any date, any corporation, limited liability company, partnership, association or other entity of which the Capital Stock or other equity interests representing more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests are, directly or indirectly as of such date, owned, controlled, or held, by the parent or one or more subsidiaries of the parent. 
  

 31 

 “Swingline Lender” means Bank of America, in its capacity as lender of Swingline Loans
hereunder. 
  
 “Swingline Loan” means a Loan made
by the Swingline Lender to the Borrowers pursuant to Section 2.05 hereof. 
  
 “Synthetic Lease” means any lease or other agreement for the use or possession of property creating obligations which do not appear as Indebtedness on the balance sheet of the lessee thereunder but
which, upon the insolvency or bankruptcy of such Person, would be characterized as Indebtedness of such lessee without regard to the accounting treatment. 
  
 “Taxes” means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority. 
  
 “Termination Date”
means the earliest to occur of (i) the Maturity Date, (ii) the date on which the maturity of the Loans is accelerated and the Commitments are terminated, or (iii) the date of the occurrence of any Event of Default pursuant to
Section 7.01(i) or 7.01(j). 
  
 “Total
Commitments” means, at any time, the sum of the Commitments at such time. As of the Closing Date, the Total Commitments aggregate $100,000,000. 
  
 “Type”, when used in reference to any Revolving Loan or Borrowing, refers to whether the rate of interest on such Revolving Loan, or on
the Revolving Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Prime Rate. 
  
 “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York. 
  
 “Unused Commitment” means, on any day, (a) the then
Total Commitments minus (b) the sum of (i) the principal amount of Revolving Loans then outstanding (including the principal amount of Swingline Loans then outstanding) and (ii) the then Letter of Credit Outstandings. 
  
 “Voting Stock” means, with respect to any Person, the
outstanding Capital Stock of all classes (or equivalent interests) which ordinarily, in the absence of contingencies, entitles holders thereof to vote for the election of directors (or Persons performing similar functions) of such Person, even
though the right so to vote has been suspended by the happening of such contingency. 
  
 “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E
of Title IV of ERISA. 
  
 Section 1.02 Terms
Generally. 
  
 The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such 

  

 32 

 
agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights. 
  
 Section 1.03 Accounting Terms; GAAP. 
  
 Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect on the Closing Date, provided that, if the Lead Borrower notifies
the Administrative Agent that the Lead Borrower requests an amendment to any provision hereof to reflect the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Lead Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such provision shall have been amended in accordance herewith. 
  
 ARTICLE II 
  
 Amount and Terms of Credit 
  
 Section 2.01 Commitments of the Lenders. 
  
 (a) Each Lender severally and not jointly with any other
Lender, agrees, upon the terms and subject to the conditions herein set forth, to extend credit to the Borrowers on a revolving basis, in the form of Revolving Loans and Letters of Credit, in an amount not to exceed the lesser of such Lender’s
Commitment or such Lender’s Commitment Percentage of the Borrowing Base, subject to the following limitations: 
  
 (i) The aggregate outstanding amount of the Revolving Loans and Letter of Credit Outstandings shall not at any time exceed the lesser of
the Total Commitments or the Borrowing Base. 
  
 (ii) No Lender shall be obligated to issue any Letter of Credit, and Letters of Credit shall be available solely from the Issuing Bank, subject to the ratable participation of all Lenders, as set forth in Section 2.06. The Borrowers
will not at any time permit the aggregate Letter of Credit Outstandings to exceed $80,000,000. 
  
 (iii) Subject to all of the other provisions of this Agreement, Revolving Loans that are repaid may be reborrowed prior to the Termination
Date and no new Credit Extension shall be made to the Borrowers after the Termination Date. 
  

 33 

 (iv) Subject to all of the other provisions of this Agreement, Stretch Subfacility
Revolving Loans and Stretch Subfacility Letter of Credit shall be made or issued only if no Default or Event of Default shall have occurred and be continuing. 
  

(b) Each Borrowing of Revolving Loans (other than Swingline Loans) shall be made by the Lenders pro rata in accordance
with their respective Commitments. The failure of any Lender to make any Revolving Loan shall neither relieve any other Lender of its obligation to fund its Revolving Loan in accordance with the provisions of this Agreement nor increase the
obligation of any other Lender. 
  
 Section 2.02 Reserves;
Changes to Reserves. 
  
 (a) The initial
Reserves as of the date of this Agreement are the following (without duplication): 
  
 (i) “Gift Certificate and Merchandise Credit Liability” (an Availability Reserve): An amount equal to 50% of the amount of the
Gift Certificate and Merchandise Credit Liabilities as reflected from time to time on the Borrowers’ books and records; 
  
 (ii) “Customer Deposits” (an Availability Reserve): An amount equal to 50% of the amount of the customer deposits as reflected
from time to time on the Borrowers’ books and records; 
  
 (iii) Rent Reserves (an Availability Reserve): An amount equal to two (2) months rent for all leased facilities of the Loan Parties in Landlord Lien States for which landlord waivers reasonably satisfactory to
Administrative Agent have not been obtained; 
  
 (iv) Return to Vendor (an Inventory Reserve): An amount equal to the Cost of Inventory to be returned to vendors as reflected from time to time on the Borrowers’ books and records (without duplication of amounts referred to in clause
(c)(iii) of the definition of Eligible Inventory); and 
  
 (v) Shrink (an Inventory Reserve). 
  
 (b) The Administrative Agent may hereafter establish additional Reserves or change any of the foregoing Reserves, in the exercise of its reasonable credit judgment exercised in good faith, which Reserves shall be calculated in a manner and
methodology consistent with the Administrative Agent’s general operational practices. 
  
 Section 2.03 Making of Revolving Loans. 
  
 (a) Revolving Loans (other than Swingline Loans) by the Lenders shall be either Prime Rate Loans or LIBO Loans as the Lead Borrower may
request subject to and in accordance with this Section 2.03, provided that all Swingline Loans shall be only Prime Rate Loans. All Revolving Loans made pursuant to the same Borrowing shall, unless otherwise specifically provided herein,
be Revolving Loans of the same Type. Each Lender may fulfill its Commitment with respect to any Revolving Loan by causing any lending office of such Lender to make such Revolving Loan; but any such use of a lending office shall not affect the
obligation of the Borrowers to repay such Revolving Loan in accordance with the terms of the applicable Note. Subject to the other provisions of this Section 2.03 and the provisions of 

  

 34 

 
Section 2.18, Borrowings of Revolving Loans of more than one Type may be incurred at the same time, but no more than ten (10) Borrowings of LIBO
Loans may be outstanding at any time. 
  
 (b) The
Lead Borrower shall give the Administrative Agent three Business Days’ prior telephonic notice (thereafter confirmed in writing) of each Borrowing of LIBO Loans and prior telephonic notice (thereafter confirmed in writing) of each Borrowing of
Prime Rate Loans. Any such notice, to be effective, must be received by the Administrative Agent not later than 11:00 a.m., Boston time, on the third Business Day in the case of LIBO Loans prior to the date on which, and same Business Day in the
case of Prime Rate Loans on which, such Borrowing is to be made. Such notice shall be irrevocable and shall specify the amount of the proposed Borrowing (which with respect to (i) Prime Rate Loans shall be not less than $100,000 and integral
multiples of $50,000, and (ii) LIBO Loans shall be not less than $1,000,000 and integral multiples of $500,000 ) and the date thereof (which shall be a Business Day) and shall contain disbursement instructions. Such notice shall specify whether
the Borrowing then being requested is to be a Borrowing of Prime Rate Loans or LIBO Loans and, if LIBO Loans, the Interest Period with respect thereto. If no election of Interest Period is specified in any such notice for a Borrowing of LIBO Loans,
such notice shall be deemed a request for an Interest Period of one month. If no election is made as to the Type of Revolving Loan, such notice shall be deemed a request for Borrowing of Prime Rate Loans. The Administrative Agent shall promptly
notify each Lender of its proportionate share of such Borrowing, the date of such Borrowing, the Type of Borrowing being requested and the Interest Period or Interest Periods applicable thereto, as appropriate. On the borrowing date specified in
such notice, each Lender shall make its share of the Borrowing available at the office of the Administrative Agent at 100 Federal Street, Boston, Massachusetts 02110, no later than 2:00 p.m., Boston time, in immediately available funds. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing (or in the case of Prime Rate Loans which the Lead Borrower has requested for the same Business Day, prior to 2:00 p.m. on such day) that such
Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with this Section 2.03 and may,
in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the
Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the Borrowers, the interest rate applicable to Prime Rate Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Revolving Loan included in such Borrowing.
Upon receipt of the funds made available by the Lenders to fund any Borrowing hereunder, the Administrative Agent shall disburse such funds into a Disbursement Account or otherwise in the manner specified in the notice of borrowing delivered by the
Lead Borrower and shall use reasonable efforts to make the funds so received from the Lenders available to the Borrowers no later than 4:00 p.m., Boston time. 
  

(c) The Agent, without the request of the Borrowers, may advance any interest, fee, service charge, or other payment to which any Agent
or their Affiliates or any Lender is entitled from the Borrowers pursuant hereto or any other Loan Document and may charge the same to the Loan Account notwithstanding that an Overadvance may result thereby. The Administrative Agent shall advise the
Lead Borrower of any such advance or charge promptly after the making thereof. Such action on the part of the Administrative Agent shall not constitute a waiver of the Administrative Agent’s rights and the Borrowers’ obligations under
Section 2.19(a). Any amount which is added to the principal balance of the Loan 

  

 35 

 
Account as provided in this Section 2.03(c) shall bear interest at the interest rate then and thereafter applicable to Prime Rate Loans. 
  
 Section 2.04 Overadvances. 
  
 The Agents and the Lenders have no obligation to make any Loan or to provide
any Letter of Credit if an Overadvance would result. The Administrative Agent may, in its discretion, make Permitted Overadvances without the Consent of the Lenders and each Lender shall be bound thereby. Any Permitted Overadvances may constitute
Swingline Loans. The Permitted Overadvances shall constitute Revolving Loans and Obligations. For the avoidance of doubt, the making of a Permitted Overadvance shall be an Event of Default. The making of any such Permitted Overadvance on any one
occasion shall not obligate the Administrative Agent or any Lender to make or permit any Permitted Overadvance on any other occasion or to permit such Permitted Overadvances to remain outstanding. 
  
 Section 2.05 Swingline Loans. 
  
 (a) The Swingline Lender is authorized by the Lenders, but
is not obligated, to make Swingline Loans at any time (subject to Section 2.05(b)) up to the amount of (i) $10,000,000 plus (ii) the principal amount of any Permitted Overadvance in the aggregate outstanding at such time, upon a
notice of Borrowing from Lead Borrower received by the Administrative Agent and the Swingline Lender (which notice, at the Swingline Lender’s discretion, may be submitted prior to 1:00 p.m., Boston time, on the Business Day on which such
Swingline Loan is requested). Swingline Loans shall be Prime Rate Loans and shall be subject to periodic settlement with the Lenders under Section 2.07. 
  

(b) Swingline Loans may be made only in the following circumstances: (A) for administrative convenience, the Swingline Lender may,
but is not obligated to, make Swingline Loans in reliance upon the Borrowers’ actual or deemed representations under Section 4.02, that the applicable conditions for borrowing are satisfied or (B) for Permitted Overadvances. If the
conditions for borrowing under Section 4.02 cannot be fulfilled, the Required Lenders may direct the Swingline Lender to, and the Swingline Lender thereupon shall, cease making Swingline Loans (other than Permitted Overadvances) until such
conditions can be satisfied or are waived in accordance with Section 9.02 hereof. Unless the Required Lenders so direct the Swingline Lender, the Swingline Lender may, but is not obligated to, continue to make Swingline Loans notwithstanding
that the conditions for borrowing under Section 4.02 cannot be fulfilled. No Swingline Loans shall be made pursuant to this Section 2.05(b) if the limitation set forth in Section 2.01(a)(i) would be exceeded as a result thereof.

  
 Section 2.06 Letters of Credit. 
  
 (a) Upon the terms and subject to the conditions herein set
forth, the Lead Borrower may request the Issuing Bank, at any time and from time to time after the date hereof and prior to the Termination Date, to issue, and subject to the terms and conditions contained herein, the Issuing Bank shall issue, for
the account of the Borrowers one or more Letters of Credit. No Letter of Credit shall be issued hereunder if after giving effect to such issuance (i) the aggregate Letter of Credit Outstandings shall exceed $80,000,000 or (ii) the
aggregate Credit Extensions would exceed the limitation set forth in Section 2.01(a)(i); provided, however, that no Letter of Credit shall be issued if the Issuing Bank shall have received notice from the Administrative Agent or
the Required Lenders that the conditions to such issuance have not been met. 
  

 36 

 (b) Each Standby Letter of Credit shall expire at or prior to the close of business on
the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five (5) Business
Days prior to the Maturity Date, provided that each Standby Letter of Credit may, upon the request of the Lead Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of
12 months or less (but not beyond the date that is five (5) Business Days prior to the Maturity Date) unless the Issuing Bank notifies the beneficiary thereof at least 30 days prior to the then-applicable expiration date that such
Letter of Credit will not be renewed. 
  
 (c)
Each Commercial Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date 180 days after the date of the issuance of such Commercial Letter of Credit and (ii) the date that is five (5) Business
Days prior to the Maturity Date. 
  
 (d) Drafts
drawn under each Letter of Credit shall be reimbursed by the Borrowers in dollars on the same Business Day of any such drawing by paying to the Administrative Agent an amount equal to such drawing not later than 12:00 noon, Boston time, on
(i) the date that the Lead Borrower shall have received notice of such drawing, if such notice is received prior to 11:00 a.m., Boston time, on such date, or (ii) the Business Day immediately following the day that the Lead Borrower
receives such notice, if such notice is received after 11:00 a.m., Boston time on the day of drawing, provided that the Lead Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 (other than as to amount) that such payment be financed with a Revolving Loan consisting of a Prime Rate Loan or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers’ obligation to make such
payment shall be discharged and replaced by the resulting Prime Rate Loan or Swingline Loan. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.
The Issuing Bank shall promptly notify the Administrative Agent and the Lead Borrower by telephone of such demand for payment and whether the Issuing Bank has made or will make payment thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the Lenders with respect to any such payment. 
  

(e) If the Issuing Bank shall make any L/C Disbursement, then, unless the Borrowers shall reimburse the Issuing Bank in full on the
date such payment is made, the unpaid amount thereof shall bear interest, for each day from and including the date such payment is made to but excluding the date that the Borrowers reimburse the Issuing Bank therefore, at the rate per annum then
applicable to Prime Rate Loans, provided that, if the Borrowers fail to reimburse such Issuing Bank when due pursuant to Section 2.06(d), then Section 2.10 shall apply. Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to Section 2.06(g) to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

  
 (f) Immediately upon the issuance of any
Letter of Credit by the Issuing Bank (or the amendment of a Letter of Credit increasing the amount thereof), and without any further action on the part of the Issuing Bank, the Issuing Bank shall be deemed to have sold to each Lender, and each such
Lender shall be deemed unconditionally and irrevocably to have purchased from the Issuing Bank, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Commitment Percentage, in such Letter of
Credit, each drawing thereunder and the obligations of the Borrowers under this Agreement and the other Loan Documents with respect thereto. Upon any change in the Commitments pursuant to Section 9.05 it is hereby agreed that with respect to
all Letter of Credit Outstandings, there shall be an automatic adjustment to the participations hereby created to reflect the new Commitment 

  

 37 

 
Percentages of the assigning and assignee Lenders. Any action taken or omitted by the Issuing Bank under or in connection with a Letter of Credit, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not create for the Issuing Bank any resulting liability to any Lender. 
  
 (g) In the event that the Issuing Bank makes any L/C Disbursement and the Borrowers shall not have reimbursed such amount in full to the
Issuing Bank pursuant to this Section 2.06, the Issuing Bank shall promptly notify the Administrative Agent, which shall promptly notify each Lender of such failure, and each Lender shall promptly and unconditionally pay to the Administrative
Agent for the account of the Issuing Bank the amount of such Lender’s Commitment Percentage of such unreimbursed payment in dollars and in same day funds. If the Issuing Bank so notifies the Administrative Agent, and the Administrative Agent so
notifies the Lenders prior to 11:00 a.m., Boston time, on any Business Day, each such Lender shall make available to the Issuing Bank such Lender’s Commitment Percentage of the amount of such unreimbursed payment on such Business Day in same
day funds (or if such notice is received by the Lenders after 11:00 a.m., Boston time on the day of receipt, payment shall be made on the immediately following Business Day). If and to the extent such Lender shall not have so made its Commitment
Percentage of the amount of such unreimbursed payment available to the Issuing Bank, such Lender agrees to pay to the Issuing Bank, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of the Issuing Bank at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
Each Lender agrees to fund its Commitment Percentage of such unreimbursed payment notwithstanding a failure to satisfy any applicable lending conditions or the provisions of, Section 2.01, Section 2.06, or Article IV, or the occurrence of
the Termination Date. The failure of any Lender to make available to the Issuing Bank its Commitment Percentage of any payment under any Letter of Credit shall neither relieve any Lender of its obligation hereunder to make available to the Issuing
Bank its Commitment Percentage of any payment under any Letter of Credit on the date required, as specified above, nor increase the obligation of such other Lender. Whenever any Lender has made payments to the Issuing Bank in respect of any
reimbursement obligation for any Letter of Credit, such Lender shall be entitled to share ratably, based on its Commitment Percentage, in all payments and collections thereafter received on account of such reimbursement obligation. 
  
 (h) Whenever the Borrowers desire that the Issuing Bank
issue a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Lead Borrower shall give to the Issuing Bank and the Administrative Agent at least two Business Days’ prior written notice (or such
shorter period as may be agreed upon in writing by the Issuing Bank and the Lead Borrower) specifying the date on which the proposed Letter of Credit is to be issued, amended, renewed or extended (which shall be a Business Day), the stated amount of
the Letter of Credit so requested, the expiration date of such Letter of Credit, the name and address of the beneficiary thereof, and the provisions thereof. If requested by the Issuing Bank, the Borrowers shall also submit a letter of credit
application on the Issuing Bank’s standard form in connection with any request for the issuance, amendment, renewal or extension of a Letter of Credit. 
  
 (i) The obligations of the Borrowers to reimburse the Issuing Bank for any L/C Disbursement shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, setoff,
defense or other right which the Borrowers may have at any time against a beneficiary of any Letter of Credit or against the Issuing Bank or any of the Lenders, whether in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction; (iii) any draft, demand, certificate or other document presented under 

  

 38 

 
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any
respect; (iv) payment by the Issuing Bank of any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit; (v) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder;
or (vi) the fact that any Event of Default shall have occurred and be continuing. None of the Administrative Agent, the Lenders, the Issuing Bank or any of their Affiliates shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Issuing Bank, provided that the foregoing provisions of this Section 2.06(i) shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by Applicable Law) suffered by the Borrowers that are caused by the gross negligence or willful misconduct on the
part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof,
the parties agree that, with respect to documents presented that appear on their face to be in compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

  
 (j) If any Event of Default shall occur and
be continuing, on the Business Day that the Lead Borrower receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in the Cash Collateral
Account an amount in cash equal to 105% of the Letter of Credit Outstandings as of such date. Each such deposit shall be held by the Collateral Agent as collateral for the payment and performance of the Obligations. The Collateral 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 deposits, which investments shall be made at the option and sole discretion of
the Collateral Agent at the request of the Lead Borrower and at the Borrowers’ risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such Cash
Collateral Account shall be applied by the Collateral Agent to reimburse the Issuing Bank for payments on account of drawings under Letters of Credit for which it has not been reimbursed and, to the extent not so applied, shall be held first for the
satisfaction of the reimbursement obligations of the Borrowers for the Letter of Credit Outstandings at such time and thereafter be applied to satisfy other Obligations of the Borrowers under this Agreement. If the Borrowers are required to provide
an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount together with interest income (if any), to the extent not applied as aforesaid, shall be returned to the Borrowers within five (5) Business
Days after all Defaults or Events of Default have been cured or waived. 
  
 Section 2.07 Settlements Amongst Lenders. 
  
 (a) The Swingline Lender may (but shall not be obligated to), at any time, on behalf of the Borrowers (which hereby authorizes the Swingline Lender to act on its behalf in that regard) request the 

  

 39 

 
Administrative Agent to cause the Lenders to make a Revolving Loan (which shall be a Prime Rate Loan) in an amount equal to such Lender’s Commitment
Percentage of the outstanding amount of Swingline Loans made in accordance with Section 2.05, which request may be made regardless of whether the conditions set forth in Article IV have been satisfied. Upon such request, each Lender shall make
available to the Administrative Agent the proceeds of such Revolving Loan for the account of the Swingline Lender. If the Swingline Lender requires a Revolving Loan to be made by the Lenders and the request therefore is received prior to 12:00 Noon,
Boston time, on a Business Day, such transfers shall be made in immediately available funds no later than 3:00 p.m., Boston time, that day; and, if the request therefore is received after 12:00 Noon, Boston time, then no later than 3:00 p.m., Boston
time, on the next Business Day. The obligation of each Lender to transfer such funds is irrevocable, unconditional and without recourse to or warranty by the Administrative Agent or the Swingline Lender. If and to the extent any Lender shall not
have so made its transfer to the Administrative Agent, such Lender agrees to pay to the Administrative Agent, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the
Administrative Agent at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 
  
 (b) The amount of each Lender’s Commitment Percentage
of outstanding Revolving Loans (excluding Swingline Loans) shall be computed weekly (or more frequently in the Administrative Agent’s discretion) and shall be adjusted upward or downward based on all Revolving Loans (excluding Swingline Loans)
and repayments of Revolving Loans (excluding Swingline Loans) received by the Administrative Agent as of 3:00 p.m., Boston time, on the first Business Day following the end of the period specified by the Administrative Agent (such date, the
“Settlement Date”). 
  
 (c) The
Administrative Agent shall deliver to each of the Lenders promptly after the Settlement Date a summary statement of the amount of outstanding Revolving Loans (excluding Swingline Loans) for the period and the amount of repayments received for the
period. As reflected on the summary statement, each Lender shall transfer to the Administrative Agent (as provided below), or the Administrative Agent shall transfer to each Lender, such amounts as are necessary to ensure that, after giving effect
to all such transfers, the amount of Revolving Loans made by each Lender with respect to Revolving Loans (excluding Swingline Loans) shall be equal to such Lender’s applicable Commitment Percentage of Revolving Loans (excluding Swingline Loans)
outstanding as of such Settlement Date. If the summary statement requires transfers to be made to the Administrative Agent by the Lenders and is received prior to 12:00 Noon, Boston time, on a Business Day, such transfers shall be made in
immediately available funds no later than 3:00 p.m., Boston time, that day; and, if received after 12:00 Noon, Boston time, then no later than 3:00 p.m., Boston time, on the next Business Day. The obligation of each Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the Administrative Agent. If and to the extent any Lender shall not have so made its transfer to the Administrative Agent, such Lender agrees to pay to the Administrative Agent,
forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent at the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation. 
  
 Section 2.08 Notes. 
  
 (a) If requested by a Lender, the Revolving Loans made by such Lender shall be evidenced by a revolving note duly executed on behalf of the Borrowers, dated the Closing Date, in substantially the form attached hereto
as Exhibit B-1, payable to the order of each such Lender in an aggregate principal amount equal to such Lender’s Commitment. 
  

 40 

 (b) The Swingline Loans made by the Swingline Lender shall be evidenced by a swingline
note duly executed on behalf of the Borrowers, dated the Closing Date, in substantially the form attached hereto as Exhibit B-2 payable to the order of the Swingline Lender in an aggregate principal amount equal to $10,000,000.

  
 (c) Each Note shall bear interest from the
date thereof on the outstanding principal balance thereof as set forth in this Article II. Each Lender is hereby authorized by the Borrowers to endorse on a schedule attached to each Note delivered to such Lender (or on a continuation of such
schedule attached to such Note and made a part thereof), or otherwise to record in such Lender’s internal records, an appropriate notation evidencing the date and amount of each Loan from such Lender, each payment and prepayment of principal of
any such Loan, each payment of interest on any such Loan and the other information provided for on such schedule; provided, however, that the failure of any Lender to make such a notation or any error therein shall not affect the
obligation of the Borrowers to repay the Loans made by such Lender in accordance with the terms of this Agreement and the applicable Notes. 
  
 (d) Upon receipt of an affidavit of a Lender as to the loss, theft, destruction or mutilation of such Lender’s Note and upon
cancellation of such Note, the Borrowers will issue, in lieu thereof, a replacement Note in favor of such Lender, in the same principal amount thereof and otherwise of like tenor. 
  
 Section 2.09 Interest on Loans. 
  
 (a) Subject to Section 2.10, each Prime Rate Loan shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365/366 days, as applicable) at a rate per annum that shall be equal to the then Prime Rate, plus the Applicable Margin for Prime Rate Loans; provided, however, that subject to
Section 2.10, each Prime Rate Loan which constitutes a Stretch Subfacility Revolving Loan shall, so long as it continues to so constitute a Stretch Subfacility Revolving Loan, bear interest (computed on the basis of the actual number of days
elapsed over a year of 365/366 days, as applicable) at a rate per annum that shall be equal to the then Prime Rate plus 3.75%. 
  
 (b) Subject to Section 2.10, each LIBO Loan shall bear interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal, during each Interest Period applicable thereto, to the Adjusted LIBO Rate for such Interest Period, plus the Applicable Margin for LIBO Loans; provided, however, that, subject to
Section 2.10, each LIBO Loan which constitutes a Stretch Subfacility Revolving Loan shall, so long as it continues to so constitute a Stretch Subfacility Revolving Loan, bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal during each Interest Period applicable thereto, to the Adjusted LIBO Rate for such Interest Period, plus 5.00%. 
  
 (c) Accrued interest on all Revolving Loans shall be payable in arrears on each Interest Payment Date
applicable thereto, at maturity (whether by acceleration or otherwise), after such maturity on demand and (with respect to LIBO Loans) upon any repayment or prepayment thereof (on the amount prepaid). 
  
 Section 2.10 Default Interest. 
  
 (a) Effective upon the occurrence of an Event of Default
pursuant to any of Section 7.01(a), Section 7.01(b), Section 7.01(i), Section 7.01(j) or Section 7.01(k) and at all times thereafter while such Event of Default is continuing, at the option of the Administrative Agent or
upon the direction of the 

  

 41 

 
Required Lenders, interest shall accrue on all outstanding Obligations (including Swingline Loans) (after as well as before judgment, as and to the extent
permitted by law) at a rate per annum equal to the rate (including the Applicable Margin for Revolving Loans) in effect from time to time plus 2.00% per annum, and such interest shall be payable on demand. 
  
 Section 2.11 Certain Fees. 
  
 The Borrowers shall pay to the Administrative Agent, for the account of the
Administrative Agent, the fees set forth in the Fee Letter as and when payment of such fees is due as therein set forth. 
  
 Section 2.12 Commitment Fee and Line Fee. 
  
 The Commitment Fee and Line Fee shall be payable at the times and in the manner set forth below: 
  
 (a) The Borrowers shall pay to the Administrative Agent, for
the account of the Lenders, a commitment fee (the “Commitment Fee”) equal to 0.25% per annum (on the basis of actual days elapsed in a year of 360 days) of the average daily balance of the Unused Commitment for each day
commencing on and including the Closing Date and ending on but excluding the Termination Date. The Commitment Fee so accrued in any calendar quarter shall be payable in arrears on the first Business Day of the immediately succeeding calendar
quarter, except that all Commitment Fees so accrued as of the Termination Date shall be payable on the Termination Date. 
  
 (b) The Administrative Agent shall remit to each Lender a portion (referred to herein as the “Line Fee”) of the
Commitment Fee actually received by Administrative Agent under Section 2.12(a) equal to 0.25% per annum (on the basis of actual days elapsed in a year of 360 days) of the average daily balance for each day, commencing on and including the
Closing Date and ending on but excluding the Termination Date, of the excess of (i) such Lender’s Commitment over (ii) an amount equal to the sum of (x) such Lender’s Commitment Percentage multiplied by the principal
amount of Revolving Loans then outstanding plus (y) such Lender’s Commitment Percentage multiplied by the then Letter of Credit Outstandings; provided, however, that for purposes of calculating the share of the Line
Fee due to any Lender which is both the Swingline Lender and a Lender of other Revolving Loans, such Lender’s share shall be equal to the difference between (i) such Lender’s Commitment, and (ii) the sum of (x) such
Lender’s Commitment Percentage of the principal amount of all Revolving Loans then outstanding (including the principal amount of Swingline Loans then outstanding), and (y) such Lender’s Commitment Percentage of the then Letter of
Credit Outstandings. The Line Fee so accrued in any calendar quarter shall be payable in arrears on the first Business Day of the immediately succeeding calendar quarter, except that all Line Fees so accrued as of the Termination Date shall be
payable on the Termination Date. If the Commitment Fee actually paid by the Borrowers to Administrative Agent is insufficient to pay the Line Fee due the Lenders, the deficiency shall be paid to the Lenders by the Swingline Lender from its own funds
(and the Borrowers shall have no liability with respect thereto). 
  
 Section 2.13 Letter of Credit Fees. 
  
 (a) The Borrowers shall pay the Administrative Agent, for the account of the Lenders, on the first day of each calendar quarter, in arrears, a fee (each, a “Letter of Credit Fee”) equal to the
following per annum percentages of the average face amount of the following categories of Letters of Credit outstanding during the subject quarter: 
  
 (i) Standby Letters of Credit: At a per annum rate equal to the then Applicable Margin for LIBO Loans; provided, however,
that the Letter of Credit Fee shall be at a per annum rate equal to 5.0% for Standby Letters of Credit for such time as such Letters of Credit constitute Stretch Subfacility Letters of Credit. 
  

 42 

 (ii) Commercial Letters of Credit: At a per annum rate equal to one half of the then
Applicable Margin for LIBO Loans; provided, however, that the Letter of Credit Fee shall be at a per annum rate equal to 2.50% for Commercial Letters of Credit for such time as such Letters of Credit constitute Stretch Subfacility
Letters of Credit. 
  
 (iii) Effective upon the
occurrence of an Event of Default pursuant to any of Section 7.01(a), Section 7.01(b), Section 7.01(i), Section 7.01(j) or Section 7.01(k) and at all times thereafter while such Event of Default is continuing, at the option
of the Administrative Agent or upon the direction of the Required Lenders, the Letter of Credit Fee shall be increased by an amount equal to two percent (2%) per annum. 
  
 (b) The Borrowers shall pay to the Administrative Agent, for the account of the Issuing Bank, and in
addition to all Letter of Credit Fees otherwise provided for hereunder, a fronting fee in the amount of twelve and one half basis points (0.125%) on the face amount of each Letter of Credit and all other fees and charges in connection with the
issuance, negotiation, settlement, amendment and processing of each Letter of Credit issued by the Issuing Bank as are customarily imposed by the Issuing Bank from time to time in connection with letter of credit transactions. 
  
 (c) All Letter of Credit Fees shall be calculated on the
basis of a 360-day year and actual days elapsed. 
  
 Section
2.14 Early Termination Fees. 
  
 In the event that the
Borrowers terminate or reduce the Total Commitments pursuant to Section 2.16 or the Termination Date occurs, for any reason, prior to eighteen (18) months after the Closing Date (other than by virtue of the Borrowers’ refinancing of
the Obligations with financing provided by (i) Bank of America or any of its Affiliates, or (ii) a syndicate of lenders arranged by Bank of America, or any of its Affiliates, and with respect to which Bank of America, or any of its
Affiliates, shall act as administrative or collateral agent), the Borrowers shall pay to the Administrative Agent, for the ratable benefit of the Lenders, a fee (the “Early Termination Fee”) in an amount equal to one half of one
percent (.50%) of the Total Commitments as in effect on the Closing Date (or, in the case of a partial reduction of the Total Commitments, the pro rata portion of such amount attributable to such reduction.) 
  
 Section 2.15 Nature of Fees. 
  
 All fees shall be paid on the dates due, in immediately available funds, to
the Administrative Agent for the respective accounts of the Administrative Agent, the Issuing Bank and the Lenders, as provided herein. All fees shall be fully earned on the date when due and shall not be refundable under any circumstances.

  
 Section 2.16 Termination or Reduction of
Commitments. 
  
 Upon at least three (3) Business
Days’ prior written notice to the Administrative Agent, the Borrowers may, at any time, in whole permanently terminate, or from time to time in part permanently 

  

 43 

 
reduce, the Commitments. Each such partial reduction shall be in the principal amount of $1,000,000 or any integral multiple of $500,000 in excess thereof.
Each such reduction or termination shall (i) be applied ratably to the Commitments of each Lender and (ii) be irrevocable when given. At the effective time of each such reduction or termination, the Borrowers shall pay to the
Administrative Agent for application as provided herein (i) the Line Fee accrued on the amount of the Commitments so terminated or reduced through the date thereof, (ii) any amount by which the sum of the Revolving Loans and the Letter of
Credit Outstandings on such date exceed the amount to which the Commitments are to be reduced effective on such date, in each case pro rata based on the amount prepaid; and (iii) a pro rata portion of the Early
Termination Fee as a result of such reduction or termination (based upon the amount of the reduction to the then Commitments). No reduction or termination of the Commitments may be reinstated. 
  
 Section 2.17 Alternate Rate of Interest. 
  
 If prior to the commencement of any Interest Period for a LIBO Borrowing:

  
 (a) the Administrative Agent determines
(which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or 
  
 (b) the Administrative Agent is advised by the Required Lenders that, as a result of a Change in Law after
the Closing Date, the making or maintaining of their Loans included in such Borrowing for such Interest Period has become unlawful or impracticable; 
  
 then the Administrative Agent shall give notice thereof to the Lead Borrower and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Lead Borrower and the Lenders that the circumstances giving rise to such notice no longer exist (which the Administrative Agent agrees to do as promptly as practicable after the
circumstances giving rise to such notice no longer exist), (i) any Borrowing Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a LIBO Borrowing shall be ineffective and (ii) if any Borrowing
Request requests a LIBO Borrowing, such Borrowing shall be made as a Borrowing of Prime Rate Loans. 
  
 Section 2.18 Conversion and Continuation of Revolving Loans. 
  
 The Lead Borrower shall have the right at any time, on three Business Days’ prior irrevocable notice to the
Administrative Agent (which notice, to be effective, must be received by the Administrative Agent not later than 11:00 a.m., Boston time, on the third Business Day preceding the date of any conversion), (x) to convert any outstanding Borrowings
of Revolving Loans (but in no event Swingline Loans) of one Type (or a portion thereof) to a Borrowing of Revolving Loans of the other Type or (y) to continue an outstanding Borrowing of LIBO Loans for an additional Interest Period, subject to
the following: 
  
 (a) no Borrowing of Revolving
Loans may be converted into, or continued as, LIBO Loans at any time when an Event of Default has occurred and is continuing; 
  
 (b) if less than a full Borrowing of Revolving Loans is converted, such conversion shall be made pro rata among the Lenders
based upon their Commitment Percentages in accordance with the 

  

 44 

 
respective principal amounts of the Revolving Loans comprising such Borrowing held by such Lenders immediately prior to such conversion; 
  
 (c) the aggregate principal amount of Revolving Loans being
converted into or continued as LIBO Loans shall be in an integral of $100,000 and at least $500,000; 
  
 (d) each Lender shall effect each conversion by applying the proceeds of its new LIBO Loan or Prime Rate Loan, as the case may be, to its
Revolving Loan being so converted; 
  
 (e) the
Interest Period with respect to a Borrowing of LIBO Loans effected by a conversion or in respect to the Borrowing of LIBO Loans being continued as LIBO Loans shall commence on the date of conversion or the expiration of the current Interest Period
applicable to such continuing Borrowing, as the case may be; 
  
 (f) a Borrowing of LIBO Loans may be converted only on the last day of an Interest Period applicable thereto; 
  
 (g) each request for a conversion or continuation of a Borrowing of LIBO Loans which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month; and 
  
 (h) no more than ten (10) Borrowings of LIBO Loans may be outstanding at any time. 
  
 If the Lead Borrower does not give notice to convert any Borrowing of LIBO Loans, or does not give notice to continue, or does not have the right to
continue, any Borrowing as LIBO Loans, in each case as provided above, such Borrowing shall automatically be converted to a Borrowing of Prime Rate Loans at the expiration of the then-current Interest Period. The Administrative Agent shall, after it
receives notice from the Lead Borrower, promptly give each Lender notice of any conversion, in whole or part, of any Revolving Loan made by such Lender. 
  
 Section 2.19 Mandatory Prepayment; Cash Collateral. 
  
 The outstanding Obligations shall be subject to mandatory prepayment as follows: 
  
 (a) If at any time the amount of the Credit Extensions
exceeds the lesser of the Borrowing Base or Total Commitments, the Borrowers will upon demand therefor from the Administrative Agent (A) prepay the Revolving Loans in an amount necessary to eliminate such excess, and (B) if, after giving
effect to the prepayment in full of all outstanding Revolving Loans such excess has not been eliminated, deposit cash into the Cash Collateral Account in an amount necessary to eliminate such excess of the Letter of Credit Outstanding. It shall be
an Event of Default hereunder if payment is not made (i) within two (2) Business Days after demand therefor is made the first time in any Fiscal Year under the prior sentence and (ii) thereafter during the rest of such Fiscal Year,
immediately upon demand therefor. 
  
 (b) The
Revolving Loans shall be repaid in accordance with the provisions of Section 2.23 hereof. 
  
 (c) If an Event of Default shall have occurred and be continuing, any Credit Extensions shall be outstanding and any Loan Party shall
receive any Net Proceeds, then within one Business Day after receipt thereof, the Lead Borrowers shall apply, or cause to be applied, one hundred percent (100%)

  

 45 

 
of such Net Proceeds to the prepayment of the Loans and the other Obligations, or cash collateralize Letter of Credit Outstandings, in accordance with
Section 2.23. 
  
 (d) Subject to the
provisions of Section 2.19(a) and (b), outstanding Prime Rate Loans shall be prepaid before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans shall be in an integral multiple of $100,000. No prepayment of LIBO Loans
shall be permitted pursuant to this Section 2.19 other than on the last day of an Interest Period applicable thereto, unless the Borrowers simultaneously reimburse the Lenders for all Breakage Costs associated therewith. In order to avoid such
Breakage Costs, as long as no Event of Default has occurred and is continuing, at the request of the Lead Borrower, the Administrative Agent shall hold all amounts required to be applied to LIBO Loans in the Cash Collateral Account and will apply
such funds to the applicable LIBO Loans at the end of the then pending Interest Period therefore and such LIBO Loans shall continue to bear interest at the rate set forth in Section 2.10 until the amounts in the Cash Collateral Account have
been so applied (provided that the foregoing shall in no way limit or restrict the Agents’ rights upon the subsequent occurrence of an Event of Default). No partial prepayment of a Borrowing of LIBO Loans shall result in the aggregate principal
amount of the LIBO Loans remaining outstanding pursuant to such Borrowing being less than $1,000,000. Except as provided in Section 2.16, no prepayment of the Revolving Loans shall permanently reduce the Commitments. 
  
 (e) All amounts required to be applied to all Revolving
Loans hereunder (other than Swingline Loans) shall be applied ratably in accordance with each Lender’s Commitment Percentage. 
  
 (f) Upon the Termination Date, the Commitments and the credit facility provided hereunder shall be terminated in full and the Borrowers
shall pay, in full and in cash, all outstanding Loans and all other outstanding Obligations. 
  
 Section 2.20 Optional Prepayment of Loans; Reimbursement of Lenders. 
  
 (a) The Borrowers shall have the right at any time and from time to time to prepay outstanding Revolving Loans in whole or in part,
(x) with respect to LIBO Loans, upon at least two (2) Business Days’ prior written, telex or facsimile notice to the Administrative Agent prior to 11:00 a.m., Boston time, and (y) with respect to Prime Rate Loans, on any Business
Day if written, telex or facsimile notice is received by the Administrative Agent prior to 1:00 p.m., Boston time, subject to the following limitations: 
  
 (i) All prepayments shall be paid to the Administrative Agent for application in accordance with Section 2.23. 
  
 (ii) Subject to Section 2.23, outstanding Prime Rate
Loans shall be prepaid before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans shall be in an integral multiple of $100,000. No prepayment of LIBO Loans shall be permitted pursuant to this Section 2.20 other than on the
last day of an Interest Period applicable thereto, unless the Borrowers simultaneously reimburse the Lenders for all Breakage Costs associated therewith. No partial prepayment of a Borrowing of LIBO Loans shall result in the aggregate principal
amount of the LIBO Loans remaining outstanding pursuant to such Borrowing being less than $1,000,000. 
  
 (iii) Each notice of prepayment shall specify the prepayment date, the principal amount and Type of the Revolving Loans to be prepaid and,
in the case of LIBO Loans, the 

  

 46 

 
Borrowing or Borrowings pursuant to which such Revolving Loans were made. Each notice of prepayment shall be irrevocable and shall commit the Borrowers to
prepay such Revolving Loan by the amount and on the date stated therein. The Administrative Agent shall, promptly after receiving notice from the Lead Borrower hereunder, notify each Lender of the principal amount and Type of the Revolving Loans
held by such Lender which are to be prepaid, the prepayment date and the manner of application of the prepayment. 
  
 (b) The Borrowers shall reimburse each Lender on demand for any loss (other than lost profit) incurred or to be incurred by it in the
reemployment of the funds released (i) resulting from any prepayment (for any reason whatsoever, including, without limitation, conversion to Prime Rate Loans or acceleration by virtue of, and after, the occurrence and continuance of an Event
of Default) of any LIBO Loan required or permitted under this Agreement, if such LIBO Loan is prepaid other than on the last day of the Interest Period for such LIBO Loan or (ii) in the event that after the Lead Borrower delivers a notice of
borrowing under Section 2.03 in respect of LIBO Loans, such LIBO Loans are not made on the first day of the Interest Period specified in such notice of borrowing for any reason other than a breach by such Lender of its obligations hereunder or
the delivery of any notice pursuant to Section 2.17. Such loss shall be the amount as reasonably determined by such Lender as the excess, if any, of (A) the amount of interest which would have accrued to such Lender on the amount so paid
or not borrowed at a rate of interest equal to the Adjusted LIBO Rate for such Revolving Loan, for the period from the date of such payment or failure to borrow to the last day (x) in the case of a payment or refinancing with Prime Rate Loans
other than on the last day of the Interest Period for such LIBO Loan, of the then current Interest Period for such LIBO Loan or (y) in the case of such failure to borrow, of the Interest Period for such Revolving Loan which would have commenced
on the date of such failure to borrow, over (B) the amount of interest which would have accrued to such Lender on such amount by investing such amount in United States Treasury securities (bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the last day of the applicable Interest Period (collectively, “Breakage Costs”). Any Lender demanding reimbursement for such loss shall deliver to the Lead Borrower from time to time
one or more certificates setting forth the amount of such loss as determined by such Lender and setting forth in reasonable detail the manner in which such amount was determined. 
  
 (c) In the event the Borrowers fail to prepay any Revolving Loan on the date specified in any prepayment
notice delivered pursuant to Section 2.20(a), the Borrowers on demand by any Lender shall pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any loss, cost or expenses incurred by
reason of the acquisition of deposits or other funds by such Lender to fulfill deposit obligations incurred in anticipation of such prepayment. Any Lender demanding such payment shall deliver to the Lead Borrower from time to time one or more
certificates setting forth the amount of such loss as determined by such Lender and setting forth in reasonable detail the manner in which such amount was determined. 
  
 (d) Whenever any partial prepayment of Revolving Loans are to be applied to LIBO Loans, such LIBO Loans
shall be prepaid in the chronological order of their Interest Payment Dates. 
  
 Section 2.21 Maintenance of Loan Account; Statements of Account. 
  
 (a) The Administrative Agent shall maintain an account on its books in the name of the Borrowers (the “Loan Account”)
which will reflect (i) all Swingline Loans, all Revolving Loans and other advances made by the Lenders to the Borrowers or for the Borrowers’ account, (ii) all L/C Disbursements, fees and interest that have become payable as herein
set forth, and (iii) any and all other Obligations that have become payable. 
  

 47 

 (b) The Loan Account will be credited with all amounts received by the Administrative
Agent from the Borrowers or otherwise for the Borrowers’ account, including all amounts received in the Agent’s Account, and the amounts so credited shall be applied as set forth in Section 2.23(a). After the end of each month, the
Administrative Agent shall send to the Lead Borrower a statement accounting for the charges, loans, advances and other transactions occurring among and between the Administrative Agent, the Lenders and the Borrowers during that month. The monthly
statements shall, absent manifest error, be final, conclusive and binding on the Loan Parties, unless otherwise object to in writing by the Lead Borrower within fifteen (15) days after receipt of the monthly statement. 
  
 Section 2.22 Cash Receipts. 
  
 (a) Annexed hereto as Schedule 2.22(a) is a
list of all DDAs that exist on the Closing Date, which Schedule includes, with respect to each depository (i) the name and address of that depository; and (ii) the account number(s) maintained with such depository. 
  
 (b) Annexed hereto as Schedule 2.22(b) is a
list describing all arrangements that exist on the Closing Date to which the Borrowers are a party with respect to the payment to the Borrowers of the proceeds of all credit card charges for sales by the Borrowers. 
  
 (c) On or prior to the Closing Date, the Borrowers shall
(i) deliver to the Administrative Agent notifications executed on behalf of the Borrowers to each depository institution with which any DDA is maintained, in form and substance satisfactory to the Administrative Agent (each, a “DDA
Notification”), (ii) deliver to the Administrative Agent notifications to each of the Borrowers’ credit card clearinghouses and processors of notice in form and substance satisfactory to the Administrative Agent (each, a
“Credit Card Notification”), and (iii) enter into control agreements with the banks maintaining the deposit accounts identified on Schedule 2.22(c) annexed hereto (collectively, the “Blocked
Accounts”), which agreements (the “Blocked Account Agreements”) shall be in form and substance reasonably satisfactory to the Administrative Agent. 
  
 (d) It is further agreed as follows: 
  
 (i) Borrowers shall deposit, or cause to be deposited, into the DDAs or Blocked Accounts all available cash
receipts (other than cash held in the ordinary course of business consistent with past practices) from the sale of Inventory and other assets, all collections of Accounts, all proceeds of Collateral, and all other cash payments received by the
Borrowers from any Person or from any source or on account of any sale or other transaction or event (all such cash receipts and collections, “Cash Receipts”); 
  
 (ii) so long as no Cash Dominion Event shall exist, the Borrowers shall cause the ACH or wire transfer to
the Blocked Accounts or the Concentration Account, no less frequently than twice a week (and whether or not any Obligations are then outstanding), of (A) the then contents of each DDA, each such transfer to be net of any minimum balance, not to
exceed $7,500, as may be required to be maintained in the subject DDA by the bank at which such DDA is maintained; and (B) the proceeds of all credit card charges not otherwise provided for pursuant hereto; 
  
 (iii) the Credit Card Notifications and DDA Notifications
shall require, after the occurrence and during the continuance of a Cash Dominion Event, the ACH or wire transfer to a Blocked Account or the Concentration Account, no less frequently than daily (and whether or not 

  

 48 

 
any Obligations are then outstanding), of (A) at such time the contents of such DDA exceeds $5,000, the contents of the account in excess of any minimum
balance, not to exceed $5,000, as may be required to be maintained in the subject DDA by the financial institution at which such DDA is maintained; and (B) the proceeds of all credit card charges not otherwise provided for pursuant hereto;

  
 (iv) the Borrowers shall cause the ACH or
wire transfer to the account (Account No. 1134902201) of Lead Borrower with Citizens Bank or another account with a financial institution that is reasonably satisfactory to the Administrative Agent (the “Concentration
Account”), which Concentration Account shall be subject to a Blocked Account Agreement whether or not any Obligations are then outstanding, of the then balance of each Blocked Account, net of such minimum balance, not to exceed $7,500, as
may be required to be maintained in the subject Blocked Account by the bank at which such Blocked Account is maintained, no less frequently than (x) twice a week, so long as no Cash Dominion Event shall exist, and (y) daily after the
occurrence and during the continuance of a Cash Dominion Event; and 
  
 (v) after the occurrence and during the continuance of a Cash Dominion Event, whether or not any Obligations are then outstanding, the Borrowers shall cause the ACH or wire transfer to an account which shall be opened
and maintained by the Collateral Agent at Bank of America, N.A. (the “Agent’s Account”), no less frequently than daily, of the then available balance of the Concentration Account, net of such minimum balance, not to exceed
$5,000, as may be required to be maintained in the Concentration Account. 
  
 (e) In the event that, notwithstanding the provisions of this Section 2.22, after the occurrence and during the continuance of a Cash Dominion Event, any Loan Party receives or otherwise has dominion and control
of any Cash Receipts, proceeds or collections, such Cash Receipts, proceeds, and collections shall be deemed held in trust by the Loan Parties for the Administrative Agent and, other than cash held in the ordinary course of business consistent with
past practices, shall, within one Business Day after receipt, either be deposited into a DDA, a Blocked Account, the Concentration Account, or the Agent’s Account. 
  
 (f) The Borrowers shall deliver or shall cause to be delivered to the Administrative Agent accurate reports
of all amounts deposited in the Blocked Accounts to ensure the proper transfer of funds as set forth above. 
  
 (g) The Borrowers may close DDAs or Blocked Accounts and/or open new DDAs or Blocked Accounts, subject to the execution and delivery to
the Administrative Agent of appropriate DDA Notifications or Blocked Account Agreements (unless expressly waived by the Administrative Agent) consistent with the provisions of this Section 2.22 and otherwise satisfactory to the Administrative
Agent. Unless consented to in writing by the Administrative Agent, the Borrowers may not maintain any bank accounts or enter into any agreements with credit card processors other than the ones expressly contemplated herein. 
  
 (h) The Borrowers may also maintain one or more disbursement
accounts (the “Disbursement Accounts”) to be used by the Borrowers for disbursements and payments (including payroll, sales taxes, or withholding taxes) in the ordinary course of business or as otherwise permitted hereunder,
provided such Disbursement Accounts (other than accounts specifically designated as and used, exclusively for payroll, sales taxes, or withholding taxes) are subject to a first priority perfected security 

  

 49 

 
interest in favor of the Collateral Agent for the benefit of itself and the Secured Parties. The only Disbursement Accounts as of the Closing Date are those
described in Schedule 2.22(h) annexed hereto. 
  
 (i) The Agent’s Account shall at all times be under the sole dominion and control of the Collateral Agent. The Borrowers acknowledge and agree that (i) the Borrowers shall have no right of withdrawal from
the Agent’s Account, (ii) the funds on deposit in the Agent’s Account at any time shall be collateral security for all of the Obligations and (iii) the funds on deposit in the Agent’s Account shall be applied as provided in
Section 2.23(a). 
  
 (j) Except upon the
occurrence and during the continuance of a Cash Dominion Event, neither the Administrative Agent nor the Collateral Agent will furnish any notice or make any request of any depository institution with which any DDA is maintained notwithstanding
anything to the contrary contained in any DDA Notification. In the event that the Administrative Agent or Collateral Agent has give a notice to any depository institution with which any DDA or Blocked Account in maintained as contemplated herein and
thereafter the applicable Cash Dominion Event ceases to exist, the Collateral Agent or the Administrative Agent, as applicable, shall promptly furnish to the relevant depositary institutions a written notice revoking any prior instruction or
direction given by it to such depositary institution. 
  
 (k) In the event that the Administrative Agent or the Collateral Agent receives any amounts (whether in the Agent’s Account or otherwise) pursuant to the provisions of this Section 2.22 at any time when no Credit Extensions are
outstanding (or, if Letters of Credit are the only Credit Extensions outstanding, such Letters of Credit have been fully cash collateralized), then the Administrative Agent and the Collateral Agent shall promptly remit such amounts to the
Concentration Account. 
  
 Section 2.23 Application of
Payments. 
  
 (a) So long as no Event of
Default shall have occurred and be continuing, all amounts received by the Administrative Agent or Collateral Agent from any source, including the Blocked Account Banks, and all prepayments made by the Borrowers, shall be applied in the following
order: 
  
 (i) To pay fees and expense
reimbursements and indemnification then due and payable to the Administrative Agent, the Issuing Bank, the Collateral Agent, and the Lenders, and then 
  
 (ii) To pay interest due and payable on Credit Extensions, and then 
  
 (iii) At the option of the Administrative Agent, to repay outstanding Swingline Loans, and
then 
  
 (iv) To repay Revolving Loans that are
Prime Rate Loans, and then 
  
 (v) To repay all
outstanding reimbursement obligations under Letters of Credit, and then 
  
 (vi) To repay outstanding Revolving Loans that are LIBO Loans and all Breakage Costs due in respect of such repayment pursuant to Section 2.20(b) or, at the Lead Borrower’s option (if no Event of Default has
occurred and is then continuing), to fund a cash collateral 

  

 50 

 
deposit to the Cash Collateral Account sufficient to pay, and with direction to pay, all such outstanding LIBO Loans on the last day of the then-pending
Interest Period therefore, and then 
  
 (vii) To
pay all other Obligations that are then outstanding and due and payable, other than Obligations pursuant to Hedging Agreements provided by the Initial Lenders, and then 
  
 (viii) To pay all Obligations that are then outstanding and due and payable pursuant to Hedging Agreements
provided by the Initial Lenders, the then-current Agreement Value of which has been provided by the Initial Lenders to the Agents on or before the close of business of the immediately prior week. 
  
 (b) If at any time all Obligations are paid in full and all
Letters of Credit Outstandings shall be fully cash collateralized, then so long as no Default or Event of Default shall have occurred and be continuing, any excess amounts shall be deposited in a separate cash collateral account and shall be
released to the Borrowers upon the request of the Lead Borrower and utilized by the Borrowers prior to any further Revolving Loans being made. Any other amounts received by the Administrative Agent, the Issuing Bank, the Collateral Agent, or any
Lender as contemplated by Section 2.16, Section 2.19, Section 2.20, or Section 2.22 shall also be applied in the order set forth above in this Section 2.23. 
  
 (c) After the occurrence and during the continuance of any Event of Default, the Administrative Agent may,
and upon the direction of the Required Lenders shall, apply all payments in respect of any Obligations and all proceeds of the Collateral, subject to the provisions of this Agreement, in the following order: 
  
 (i) To pay fees and expense reimbursements and
indemnification then due and payable to the Agents until paid in full, and then 
  
 (ii) To pay fees and expense reimbursements and indemnification then due and payable to the Issuing Bank and the Lenders until paid in
full, and then 
  
 (iii) Ratably to pay interest
accrued in respect of the Permitted Overadvances until paid in full, and then 
  
 (iv) To pay interest accrued in respect of the SwingLine Loans until paid in full, and then 
  
 (v) Ratably to pay interest accrued in respect of the Revolving Loans until paid in full, and then 
  
 (vi) Ratably to pay principal in respect of the Permitted
Overadvances until paid in full, and then 
  
 (vii) Ratably to pay principal due in respect of the SwingLine Loans until paid in full, and then 
  
 (viii) To the Administrative Agent, to be held by the Administrative Agent, for the ratable benefit of the Issuing Bank and the Lenders,
as cash collateral in an amount up to 105% of the then extant Letters of Credit Outstandings, and then 
  

 51 

 (ix) Ratably to pay principal due in respect of the Revolving Loans until paid in full,
and then 
  
 (x) Ratably to pay any other
Obligations then owing to the SwingLine Lender, and then 
  
 (xi) Ratably to pay any other Obligations then owing to the Lenders, other than Obligations pursuant to Hedging Agreements provided by the Initial Lenders, and then 
  
 (xii) To pay the Early Termination Fee, if due and payable,
and then 
  
 (xiii) To pay all other Obligations
that are then outstanding and due and payable, other than Obligations pursuant to Hedging Agreements provided by the Initial Lenders, and then 
  
 (xiv) To pay all Obligations that are then outstanding and due and payable pursuant to Hedging Agreements provided by the Initial Lenders,
the then-current Agreement Value of which has been provided by the Initial Lenders to the Agents on or before the close of business of the immediately prior week, and then 
  
 (xv) To the Lead Borrower or such other Person entitled thereto under Applicable Law. 
  
 For purposes of the foregoing (other than Section 2.23(c)(xiii)),
“paid in full” means payment of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement
of any insolvency or other similar proceedings under the Bankruptcy Code or otherwise), default interest, interest on interest, and expense reimbursements, except to the extent that default or overdue interest (but not any other interest) and loan
fees, each arising from or related to a default, are disallowed in any insolvency or other similar proceedings under the Bankruptcy Code or otherwise; provided, however, that for the purposes of Section 2.23(c)(xiii), “paid
in full” means payment of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any
Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not the same would be or is allowed or disallowed in whole or in part in any insolvency or other similar proceedings under the Bankruptcy Code or
otherwise. 
  
 (d) In the event of a direct
conflict between the priority provisions of this Section 2.23 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that such priority provisions in such documents shall be read together and
construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.23 shall control and govern.

  
 (e) All credits against the Obligations shall
be conditioned upon final payment to the Administrative Agent of the items giving rise to such credits and unless received prior to 11:00 a.m. Boston time, shall be subject to one Business Day’s clearance and collection. If any item deposited
to the Agent’s Account and credited to the Loan Account is dishonored or returned unpaid for any reason, whether or not such return is rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge the
amount of such item to the Loan Account and the Borrowers shall indemnify the Administrative 

  

 52 

 
Agent, the Collateral Agent, the Issuing Bank and the Lenders against all claims and losses resulting from such dishonor or return. 
  
 Section 2.24 Increased Costs. 
  
 (a) If any Change in Law shall: 
  
 (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any holding company of any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or 
  
 (ii) impose on any Lender or the
Issuing Bank or the London interbank market any other condition (not including, for the avoidance of doubt, any condition with respect to Taxes, which shall only give rise to additional payments to the extent provided by Section 2.27) affecting
this Agreement or LIBO Loans made by such Lender or any Letter of Credit or participation therein; 
  
 and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any LIBO Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may
be, for such additional costs incurred or reduction suffered. 
  
 (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s
capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued
by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the
Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered. 
  
 (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to
compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and setting forth in reasonable detail the manner in which such amount or amounts were determined
shall be delivered to the Lead Borrower and shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) Business Days
after receipt thereof. 
  
 (d) Failure or delay
on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation. 
  

 53 

 Section 2.25 Change in Legality. 
  
 (a) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (x) any Change in Law shall make it unlawful for a Lender to make or maintain a LIBO Loan or to give effect to its obligations as contemplated hereby with respect to a LIBO Loan or (y) at any time any Lender
reasonably determines that the making or continuance of any of its LIBO Loans has become impracticable as a result of a contingency occurring after the date hereof which adversely affects the London interbank market or the position of such Lender in
the London interbank market, then, by written notice to the Lead Borrower, such Lender may (i) declare that LIBO Loans will not thereafter be made by such Lender hereunder, whereupon any request by the Lead Borrower for a LIBO Borrowing shall,
as to such Lender only, be deemed a request for a Prime Rate Loan unless such declaration shall be subsequently withdrawn; and (ii) require that all outstanding LIBO Loans made by it be converted to Prime Rate Loans, in which event all such
LIBO Loans shall be automatically converted to Prime Rate Loans as of the effective date of such notice as provided in paragraph (b) below. In the event any Lender shall exercise its rights under clause (i) or (ii) of this paragraph
(a), all payments and prepayments of principal which would otherwise have been applied to repay the LIBO Loans that would have been made by such Lender or the converted LIBO Loans of such Lender shall instead be applied to repay the Prime Rate Loans
made by such Lender in lieu of, or resulting from the conversion of, such LIBO Loans. 
  
 (b) For purposes of this Section 2.25, a notice to the Lead Borrower and Administrative Agent by any Lender pursuant to paragraph
(a) above shall be effective, if any LIBO Loans shall then be outstanding, on the last day of the then-current Interest Period; and otherwise such notice shall be effective on the date of receipt by the Lead Borrower. 
  
 Section 2.26 Payments; Sharing of Setoff. 
  
 (a) The Borrowers shall make each payment required to be
made by it hereunder or under any other Loan Document (whether of principal, interest, fees or reimbursement of drawings under Letters of Credit, or of amounts payable under Section 2.20(b), Section 2.24, Section 2.27, or otherwise)
prior to 11:00 a.m., Boston time, on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating interest thereon. Except as otherwise provided herein, if any day on which payment is due is not a Business Day, then the payment shall be due on the next day following which
is a Business Day and such extension of time shall be included in computing interest and fees in connection with such payment. All such payments shall be made to the Administrative Agent at its offices at 40 Broad Street, Boston, Massachusetts (or
as the Administrative Agent may otherwise direct in writing), except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Section 2.20(b), Section 2.24,
Section 2.27, and Section 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, except with respect to LIBO Borrowings, the
date for payment shall be extended to the next succeeding Business Day, and such extension of time shall be included in computing interest and fees in connection with such payment. All payments under each Loan Document shall be made in dollars.

  
 (b) All funds received by and available to
the Administrative Agent to pay principal, unreimbursed drawings under Letters of Credit, interest and fees then due hereunder, shall be applied in 

  

 54 

 
accordance with the provisions of Section 2.23(e), ratably among the parties entitled thereto in accordance with the amounts of principal, unreimbursed
drawings under Letters of Credit, interest, and fees then due to such respective parties. 
  
 (c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in drawings under Letters of Credit or Swingline Loans resulting in such Lender’s receiving payment of a greater proportion of the aggregate amount of its Loans and participations in drawings under
Letters of Credit and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and
participations in drawings under Letters of Credit and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Loans and participations in drawings under Letters of Credit and Swingline Loans, provided that (i) if any such participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the
Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in drawings under Letters of
Credit to any assignee or participant, other than to the Borrowers or any Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrowers consent to the foregoing and agrees, to the extent it may effectively do so under
Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrowers rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct
creditor of the Borrowers in the amount of such participation. 
  
 (d) Unless the Administrative Agent shall have received notice from the Lead Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 
  
 Section 2.27 Taxes. 
  
 (a) Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any Indemnified Taxes, provided that if the Borrowers shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions for Indemnified Taxes (including deductions for Indemnified Taxes applicable to additional sums payable under this Section) the Agents, such Lender or the Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions, and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable
Law. 
  

 55 

 (b) In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental
Authority in accordance with Applicable Law. 
  
 (c) The Borrowers shall indemnify the Agents, each Lender and the Issuing Bank, within ten (10) Business Days after written demand therefore, for the full amount of any Indemnified Taxes or Other Taxes paid by the Agents, such Lender
or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto. A certificate as to the amount of such payment or liability delivered to the Lead Borrower by a Lender
or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of an Agent, a Lender or the Issuing Bank setting forth in reasonable detail the manner in which such amount was determined, shall be conclusive absent manifest
error. 
  
 (d) As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall deliver to the Administrative Agent evidence of such payment reasonably satisfactory to the Administrative Agent. 
  
 (e) Any Foreign Lender shall deliver to the Lead Borrower
and the Administrative Agent two copies of either United States Internal Revenue Service Form W-8BEN or Form W-8ECI, or any subsequent versions thereof or successors thereto to establish its exemption from U.S. Federal withholding tax, or, in the
case of a Foreign Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, (i) a Form W-8BEN, or any subsequent versions thereof or
successors thereto and (ii) a certificate representing that such Foreign Lender is not (A) a bank for purposes of Section 881(c) of the Code, (B) is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Borrowers and (C) is not a controlled foreign corporation related to the Borrowers (within the meaning of Section 864(d)(4) of the Code)), properly completed and duly executed by such Foreign Lender claiming, as
applicable, complete exemption from or reduced rate of, U.S. Federal withholding Tax on payments by the Borrowers under this Agreement and the other Loan Documents. Such forms shall be delivered by each Foreign Lender on or before the date it
becomes a party to this Agreement (or, in the case of a transferee that is a participation holder, on or before the date such participation holder becomes a transferee hereunder) and on or before the date, if any, such Foreign Lender changes its
applicable lending office by designating a different lending office (a “New Lending Office”). In addition, each Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by
such Foreign Lender. Notwithstanding any other provision of this Section 2.27(e), a Foreign Lender shall not be required to deliver any form pursuant to this Section 2.27(e) that such Foreign Lender is not legally able to deliver. Each
Foreign Lender who does not deliver a Form W-8ECI represents that any services performed hereunder with respect to any fees received or to be received by them will have been, and will be, performed outside of the United States. 
  
 (f) Upon the request of the Lead Borrower, any Lender that
is not a Foreign Lender shall deliver to the Lead Borrower two copies of United States Internal Revenue Service Form W-9 or any subsequent versions thereof or successors thereto, properly completed and duly executed. If any Lender fails to deliver
Form W-9 or any subsequent versions thereof or successors thereto as required herein, then the Borrowers may withhold from any payment to such party an amount equivalent to the applicable backup withholding Tax imposed by the Code, without
reduction. 
  

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 (g) The Borrowers shall not be required to indemnify any Lender or to pay any additional
amounts to any Lender in respect of U.S. Federal withholding tax pursuant to paragraph (a) or (c) above to the extent that the obligation to pay such additional amounts would not have arisen but for a failure by such Lender to comply with
the provisions of paragraphs (e) or (f) above. Should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the Borrowers shall, at such Lender’s expense, take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes. 
  
 (h) Each of the Lenders agrees that upon the occurrence of any circumstances entitling such party to indemnification or additional amounts pursuant to Section 2.27(a) or (c), such party shall use reasonable
efforts to take any action (including designating a new lending office and signing any prescribed forms or other documentation appropriate in the circumstances) if such action would reduce or eliminate any Tax (including penalties or interest, as
applicable) with respect to which such indemnification or additional amounts may thereafter accrue. 
  
 (i) If any Lender reasonably determines that it has actually and finally realized, by reason of a refund, deduction or credit of any Taxes
paid or reimbursed by the Borrowers pursuant to subsection (a), (b) or (c) above in respect of payments under the Loan Documents, a current monetary benefit that it would otherwise not have obtained and that would result in the total
payments under this Section 2.27 exceeding the amount needed to make such Lender whole, such Lender shall pay to the Borrowers, with reasonable promptness following the date upon which it actually realizes such benefit, an amount equal to the
lesser of the amount of such benefit or the amount of such excess, in each case net of all out-of-pocket expenses incurred in securing such refund, deduction or credit. 
  
 Section 2.28 Security Interests in Collateral. 
  
 To secure their Obligations, the Loan Parties shall grant to the Collateral Agent, for its benefit and the benefit of the
Secured Parties, a first-priority security interest in all of the Collateral pursuant to the Security Documents. 
  
 Section 2.29 Mitigation Obligations; Replacement of Lenders. 
  
 (a) If any Lender requests compensation under Section 2.24, or if the Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.27, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.24 or 2.27, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment; provided, however, that the Borrowers shall not be liable for such costs and expenses of a Lender requesting compensation if
(i) such Lender becomes a party to this Agreement on a date after the Closing Date and (ii) the relevant Change in Law occurs on a date prior to the date such Lender becomes a party hereto. 
  
 (b) If any Lender requests compensation under
Section 2.24, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.27, or if any Lender defaults in its obligation to fund Loans
hereunder, then 

  

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the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained in Section 9.05), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i) the Borrowers shall have received the prior written consent of the Administrative Agent, the Issuing Bank and Swingline Lender, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in unreimbursed drawings under Letters of Credit and Swingline Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.24 or payments required to be made pursuant to Section 2.27, such assignment will result in a reduction in such compensation or payments. 
  
 ARTICLE III 
  
 Representations and Warranties 
  
 Each Loan Party represents and warrants to the Agents and the Lenders that as
of the Closing Date and after giving effect to the Merger: 
  
 Section 3.01 Organization; Powers. 
  
 Each Loan Party is duly organized, validly existing and (except as otherwise disclosed to the Agents with respect to Brookstone Retail Puerto Rico, Inc.), is in good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business
in, and is in good standing in, every jurisdiction where such qualification is required except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
  
 Section 3.02 Authorization; Enforceability. 
  
 The transactions contemplated hereby and by the other Loan Documents to be
entered into by each Loan Party are within such Loan Party’s corporate, limited partnership, limited liability company, or other powers and have been duly authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by each Loan Party that is a party hereto and constitutes, and each other Loan Document to which any Loan Party is a party, when executed and delivered by such Loan Party will constitute, a legal, valid
and binding obligation of such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject
to general principles of equity, regardless of whether considered in a proceeding in equity or at law. 
  
 Section 3.03 Governmental Approvals; No Conflicts. 
  

The transactions to be entered into contemplated by the Loan Documents (a) do not require any consent or approval of, registration or filing with,
or any other action by, any Governmental Authority, except for (i) such as have been obtained or made and are in full force and effect, (ii) filings and recordings necessary to perfect Liens created under the Loan Documents and
(iii) those the failure of 

  

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which to obtain or make could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any material Applicable Law or the
Organizational Documents of any Loan Party or any material order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or its assets, or give
rise to a right thereunder to require any payment to be made by any Loan Party, except in each case as could not reasonably be expected to result in a Material Adverse Effect and (d) will not result in the creation or imposition of any Lien on
any asset of any Loan Party, except Liens in favor of the Secured Parties created under the Loan Documents. 
  
 Section 3.04 Financial Condition. 
  
 The Lenders have previously received the Consolidated balance sheet, and statements of income, stockholders’ equity, and cash flows for Brookstone,
Inc. and its Consolidated Subsidiaries as of and for Fiscal Year ending January 29, 2005 and as of and for the fiscal quarter ending April 30, 2005, certified by Brookstone, Inc.’s Chief Financial Officer. Such financial statements
present fairly, in all material respects the financial position, results of the operations and cash flows for Brookstone, Inc. and its Consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year end audit
adjustments and the absence of footnotes. To the best of the knowledge of the Responsible Officers of the Loan Parties, since July 30, 2005 there has been no material adverse change in the assets, business or financial condition of the Loan
Parties taken as a whole. 
  
 Section 3.05 Properties.

  
 (a) Except as disclosed in Schedule
3.05(c)(i) annexed hereto and Schedule 3.05(c)(ii) annexed hereto, each Loan Party has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for defects which could
not reasonably be expected to result in a Material Adverse Effect. 
  
 (b) Each Loan Party owns or is licensed to use, all trademarks, trade names, copyrights, patents and other intellectual property material to its business, except for those which the failure to own or license could not
reasonably be expected to result in a Material Adverse Effect, and the use thereof by the Loan Parties does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. 
  
 (c) Schedule 3.05(c)(i) sets forth as of the Closing Date the address of all Real Estate that is owned by the Loan Parties, together with a list of the holders of any mortgage or other Lien thereon.
Schedule 3.05(c)(ii) sets forth as of the Closing Date the address (including county) of all Leases of the Loan Parties, together with a list of the holders of any mortgage or other Lien on the Borrowers’ interest in such Lease.
Upon the occurrence and during the continuance of a Cash Dominion Event, the Lead Borrower shall upon the request of the Agent provide the Agent a revised Schedule 3.05(c)(ii) within a reasonable period of time of such request. Each of such Leases
is in full force and effect and the Loan Parties are not in default of the terms thereof, except where such default(s), individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
  
 Section 3.06 Litigation and Environmental Matters. 

 
 (a) Except as set forth on Schedule 3.06(a)
annexed hereto, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Responsible Officers of the Borrowers, threatened against or affecting any Loan Party
(i) that could 

  

 59 

 
reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, or (ii) that involve any of the Loan Documents.

  
 (b) Except for the matters set forth on
Schedule 3.06(b) annexed hereto and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental Liability. 
  
 (c) Since the date of this Agreement, there has been no change in the status of the matters set forth on Schedule 3.06 (a) or
Schedule 3.06 (b) that, individually or in the aggregate, has resulted in, or could reasonably be expected to result in, a Material Adverse Effect. 
  

Section 3.07 Compliance with Laws and Agreements. 
  
 Each Loan Party is in compliance with all Applicable Law and all indentures, material agreements and other instruments
binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing. 
  
 Section 3.08 Investment and Holding Company Status. 

 
 No Loan Party is (a) an “investment company” as defined
in, or subject to registration under, the Investment Company Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. 
  
 Section 3.09 Taxes. 
  
 Each Loan Party has timely filed or caused to be filed all federal and state
Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings, for which such Loan Party has
set aside on its books adequate reserves, and as to which no Lien has been filed, or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. The Loan Parties do not intend to treat
any of the transactions contemplated by the Loan Documents as being a “reportable transaction” within the meaning of 26 CFR 1.6011-4. 
  
 Section 3.10 ERISA. 
  
 No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. Except as disclosed on Schedule 3.10, the present value of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of all such underfunded Plans. 
  

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 Section 3.11 Disclosure. 
  
 The Borrowers have disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which any
Loan Party is subject as of the Closing Date, and all other matters known to any Responsible Officers of any of them as of the Closing Date, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
The reports, financial statements, certificates or other information other than financial projections furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any
other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished), do not contain any material misstatement of fact or omit any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading. All financial projections that have been or will be prepared by the Borrowers and made available to the Administrative Agent, any Lender or any other party hereto, have been or
will be prepared in good faith based upon reasonable assumptions, it being understood by the Administrative Agent, the Lenders and all the other parties hereto that such projections are subject to significant uncertainties and contingencies, many of
which are beyond the Borrowers’ control, and that no assurances can be given that the projections will be realized. 
  
 Section 3.12 Subsidiaries. 
  
 (a) Schedule 3.12 annexed hereto sets forth the name of, and the ownership interest of each Loan Party as of the
Closing Date in, each Subsidiary, joint venture, general or limited partnership, limited liability company, and each other business venture or entity. 
  
 (b) Brookstone Inc. and its Subsidiaries have received the consideration for which the Capital Stock and other ownership interests was
authorized to be issued and have otherwise complied with all legal requirements relating to the authorization and issuance of shares of stock and other ownership interests, and all such shares and ownership interests are validly issued, fully paid,
and non-assessable. 
  
 Section 3.13 Insurance.

  
 Schedule 3.13 annexed hereto sets forth, as
of the Closing Date, a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries. As of the Closing Date, each of such policies is in full force and effect. As of the Closing Date, all premiums in respect of
such insurance that are due and payable have been paid. 
  
 Section 3.14 Labor Matters. 
  
 There are
no strikes, lockouts or slowdowns as of the Closing Date against any Loan Party pending or, to the knowledge of the Responsible Officers of the Borrowers, threatened. The hours worked by and payments made to employees of the Loan Parties have not
been in violation of the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such matters to the extent that any such violation could reasonably be expected to result in a Material Adverse Effect. All
payments due from any, individually or in the aggregate, Loan Party, or for which any claim may be made against any Loan Party, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of such member, except as could not reasonably be expected to result in a Material Adverse Effect. The consummation of the transactions contemplated by the Loan Documents will not give rise to any right of termination or right
of renegotiation on the part of any union under any collective bargaining agreement to which any Loan Party is bound, which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. 
  

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 Section 3.15 Security Documents. 
  
 The Security Documents create in favor of the Collateral Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral, and the Security Documents constitute the creation of a fully perfected Lien on, and security interest in, all right, title and interest of the Loan
Parties in such Collateral, which Lien shall be a first priority Lien on and security interest in the Collateral, each case prior and superior in right to any other Person (other than Permitted Encumbrances having priority under Applicable Law).

  
 Section 3.16 Federal Reserve Regulations.

  
 (a) No Loan Party is engaged principally,
or as one of its principal or important activities, in the business of extending credit for the purpose of “buying”, “carrying”, or “purchasing” “margin stock” (each such term having the meaning set forth in
Regulations T, U, and X). 
  
 (b) No part of the
proceeds of any Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation U or X. 
  
 Section 3.17 Solvency. 
  
 Each Borrower
and each other Loan Party, before and after giving effect to the Merger, is Solvent. No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by
this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of any Loan Party. 
  
 ARTICLE IV 
  
 Conditions 
  
 Section 4.01 Closing Date. 
  
 The obligation of the Lenders to make each Loan and of the Issuing Bank to issue each Letter of Credit, including the initial Loans and the initial Letters of Credit, if any, on the Closing Date, is subject to the
following conditions precedent: 
  
 (a) The
Agents (or their counsel) shall have received from each party hereto either (i) a counterpart of this Agreement and all other Loan Documents (including, without limitation, the Security Documents) signed on behalf of such party or
(ii) written evidence satisfactory to the Agents (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and all other Loan Documents. 
  
 (b) The Agents shall have received a favorable written
opinion (addressed to each Agent and the Lenders and dated the Closing Date) of Kaye Scholer, LLP, counsel for the Loan Parties, in form and substance reasonably satisfactory to the Agents and covering such matters relating to the Loan Parties,

  

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the Loan Documents, the Merger Documents, and the transactions contemplated thereby as the Agents shall reasonably request. The Borrowers hereby request such
counsel to deliver such opinion. 
  
 (c) The
Agents shall have received such documents and certificates as the Agents or their counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the transactions contemplated by the
Loan Documents and Merger Documents and any other legal matters relating to the Loan Parties, the Loan Documents, Merger Documents or the transactions contemplated thereby, all in form and substance reasonably satisfactory to the Agents and their
counsel. 
  
 (d) The Agents shall have received a
Borrowing Base Certificate dated the Closing Date, relating to the most recent month ended prior to the Closing Date and executed by a Financial Officer of the Lead Borrower, demonstrating that after giving effect to (i) the first funding of
Credit Extensions under this Agreement and consummation of the Merger; (ii) any charges to the Loan Account made in connection with the establishment of the credit facility contemplated hereby; and (iii) all Letters of Credit to be issued
at, or immediately subsequent to, such establishment of the credit facilities, Adjusted Excess Availability shall be not less than $40,000,000. 
  
 (e) The Agents shall have received a certificate from a Financial Officer of each Loan Party, reasonably satisfactory in form and
substance to the Agents, certifying that, as of the Closing Date and after giving effect to the Merger, the representations and warranties made by the Loan Parties in the Loan Documents are true and complete in all material respects and that no
Default or Event of Default exists. 
  
 (f) All
consents and approvals material to the transactions contemplated hereby and with respect to the consummation of the Merger shall have been obtained and evidence thereof shall be delivered to and be reasonably satisfactory to the Agents. 

 
 (g) The Collateral Agent shall have received
(a) appraisals of the Inventory (based upon net orderly liquidation value) by a third party appraiser acceptable to the Collateral Agent, the results of which are reasonably satisfactory to the Collateral Agent and (b) a written report
regarding the results of a commercial finance examination of the Loan Parties, which shall be reasonably satisfactory to the Collateral Agent. 
  
 (h) The Agents shall have received at least thirty (30) days prior to the Closing Date the Consolidated balance sheet of Brookstone,
Inc. and its Consolidated Subsidiaries and related statements of operations, stockholders’ equity and cash flows for each of the three (3) Fiscal Years ending immediately prior to the Closing Date, all audited and reported on by Price
Waterhouse Coopers LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without a qualification or exception as to the scope of such audit) to the
effect that such Consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Brookstone, Inc. and its Consolidated Subsidiaries on a Consolidated basis as at the dates indicated
in accordance with GAAP consistently applied. 
  
 (i) The Agents shall have received a detailed Consolidated projections by month for the Fiscal Year commencing February 1, 2006 (including a projected Consolidated balance sheet, availability model, and related statements of projected
operations and cash flow as of the end of and for such Fiscal Year) and a detailed Consolidated projections by year for each Fiscal Year commencing February 1, 2006 

  

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through the Maturity Date (including a projected Consolidated balance sheet and related statements of projected operations and cash flow as of the end of and
for such Fiscal Year). 
  
 (j) The Agents shall
have received unaudited Consolidated balance sheets of Brookstone, Inc. and its Consolidated Subsidiaries and related statements of operations, equity and cash flows for each Fiscal quarter from the most recent Fiscal Year just ended more than 45
days prior to the Closing Date, each certified by a financial officer of Brookstone, Inc. 
  
 (k) The Agents shall be reasonably satisfied that any financial statements delivered to them fairly present the business and financial
condition of Brookstone, Inc. and its Consolidated Subsidiaries, and that there has been no material adverse change in the business assets, properties, liabilities, condition (financial or otherwise), or results in Brookstone, Inc. and its
Consolidated Subsidiaries since the date of the most recent financial information delivered to the Agents; provided, however, that no change resulting from any of the following, in and of itself, shall be deemed to constitute a
material adverse change under this clause (l): (i) a general deterioration in economic conditions; (ii) the announcement of the Merger Agreement or the transactions contemplated thereby (other than evictions under real estate leases
resulting from the announcement of the transactions contemplated by the Merger Agreement, as to which this exclusion shall expressly not apply); (iii) any action required to be taken by Brookstone, Inc. or its Subsidiaries pursuant to the terms
of the Merger Agreement; or (iv) changes or conditions affecting similarly situated companies in the same consumer home products specialty retail industry and not disproportionately affecting Brookstone, Inc. or its Subsidiaries. 
  
 (l) The Agents, based upon delivery of a customary officers
solvency certificate, shall be satisfied that all Loan Parties are Solvent on the Closing Date and shall be Solvent after giving effect to the Merger. 
  
 (m) Brookstone Holdings shall have received at least $247,600,000 of net cash proceeds of an equity contribution from the Current
Stockholders and certain executives of Brookstone, Inc., the terms of all such equity contributions to be reasonably satisfactory to the Agents. 
  
 (n) The Senior Notes shall have been issued and Brookstone Company shall have received the gross proceeds thereof in the sum of at least
$182,800,000. The documentation evidencing, and terms and conditions of, the Senior Loan Documents shall be reasonably satisfactory to the Administrative Agent. 
  
 (o) The Administrative Agent shall be satisfied that the Merger has been consummated on the terms and
conditions of the Merger Documents (without amendment, modification or waiver (with all conditions precedent set forth in the Merger Agreement having been satisfied or waived with the written consent of the Administrative Agent) prior to the initial
funding of the Loans. 
  
 (p) The Agents shall
not have become aware of any information which in the Agents’ reasonable judgment is inconsistent in a material and adverse manner with any information disclosed to the Agents prior to the date hereof with respect to any Loan Party or the
transactions contemplated in connection with this Agreement, the Senior Note Documents or the Merger Documents. 
  
 (q) The Collateral Agent shall have received results of searches or other evidence reasonably satisfactory to the Collateral Agent (in
each case dated as of a recent date reasonably satisfactory to the Collateral Agent) indicating the absence of Liens (including tax or judgment liens) on the assets of the Loan Parties, except for Permitted Encumbrances and Liens for which
termination 

  

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statements and releases reasonably satisfactory to the Collateral Agent are being tendered concurrently with such extension of credit. 
  
 (r) The Collateral Agent shall have received (i) all
documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create or perfect the first priority Liens intended to be
created under the Loan Documents and all such documents and instruments shall have been so filed, registered or recorded to the satisfaction of the Collateral Agent, and (ii) the DDA Notifications, Credit Card Notifications, and Blocked Account
Agreements required pursuant to Section 2.22(c) hereof. 
  
 (s) The Agents shall have received a payoff letter or evidence otherwise reasonably satisfactory in form and substance to the Agents from the administrative agent under the Existing Financing Agreement confirming the
termination of such credit facility upon receipt of payment of the amounts due, if any, thereunder. All obligations to the agents and the lenders under the Existing Financing Agreement, if any, shall be repaid with the proceeds of the initial Loans
hereunder (and a back-to-back L/C issued by the Issuing Bank to support the outstanding letters of credit thereunder), all Liens with respect to the foregoing financing arrangements on any of the Borrowers’ assets, if any, shall have been
terminated (or provision therefore satisfactory to the Collateral Agent made) and all prior lockbox and blocked account arrangements shall be terminated; 
  
 (t) The Collateral Agent shall have received, and be reasonably satisfied with, evidence of the Loan Parties’ insurance, together
with such endorsements as are required by the Loan Documents. 
  
 (u) All fees due at or immediately after the Closing Date and all costs and expenses incurred by the Agents in connection with the establishment of the credit facility contemplated hereby (including the reasonable
fees and expenses of counsel to the Agents) shall be paid in full on the Closing Date and in accordance with a Closing Date funds flow memorandum reasonably satisfactory to the Agents. 
  
 (v) The consummation of the transactions contemplated hereby shall not (i) violate any Applicable Law
or (ii) conflict with, or result in a default or event of default under, any material agreement of any Loan Party (and the Agents and the Lenders shall receive a satisfactory opinion of Loan Parties’ counsel to that effect). No event shall
exist which is, or solely with the passage of time, the giving of notice or both, would be a default under any material agreement of any Loan Party. 
  
 (w) No material changes in governmental regulations or policies affecting any Loan Party, the Agents, or any Lender involved in this
transaction shall have occurred prior to the Closing Date the effect of which would prohibit the Lenders from making Loans to the Borrowers. 
  
 (x) There shall have been delivered to the Administrative Agent such additional instruments and documents as the Agents or counsel to the
Agents reasonably may require or request. 
  
 (y)
The Administrative Agent shall have entered into the Intercreditor Agreement which shall be in form and substance satisfactory to the Administrative Agent and its counsel. 
  
 (z) The Administrative Agent shall notify the Lead Borrower and the Lenders of the Closing Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived by the Administrative 

  

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Agent in writing) at or prior to 12:00 noon, Boston time, on October 5, 2005 (and, in the event such conditions are not so satisfied or waived, the
Termination Date shall be deemed to have occurred, and this Agreement and all Commitments hereunder shall terminate at such time). 
  
 Section 4.02 Conditions Precedent to Each Loan and Each Letter of Credit. 
  
 The obligation of the Lenders to make each Revolving Loan and of the Issuing Bank to issue each Letter of Credit, is subject
to the following conditions precedent: 
  
 (a)
Notice. The Administrative Agent shall have received a notice with respect to such Borrowing or issuance, as the case may be, as required by Article II. 
  

(b) Representations and Warranties. All representations and warranties contained in this Agreement and the other Loan Documents
or otherwise made in writing in connection herewith or therewith shall be true and correct in all material respects on and as of the date of each Borrowing or the issuance of each Letter of Credit hereunder with the same effect as if made on and as
of such date, other than representations and warranties that relate solely to an earlier date. 
  
 (c) No Default. On the date of each Borrowing hereunder and the issuance of each Letter of Credit, no Default or Event of Default
shall have occurred and be continuing or arise therefrom. 
  
 (d) Borrowing Base Certificate. The Administrative Agent shall have received the timely delivery of the most recently required Borrowing Base Certificate, with each such Borrowing Base Certificate including
schedules as reasonably required by the Administrative Agent. 
  
 The request by the Borrowers for, and the acceptance by the Borrowers of, each extension of credit hereunder shall be deemed to be a representation and warranty by the Borrowers that the conditions specified in this Section 4.02 have
been satisfied at that time and that after giving effect to such extension of credit the Borrowers shall continue to be in compliance with the Borrowing Base. The conditions set forth in this Section 4.02 are for the sole benefit of the
Administrative Agent and each Lender and may be waived by the Administrative Agent, in whole or in part, without prejudice to the Administrative Agent or any Lender. 
  
 ARTICLE V 
  
 Affirmative Covenants 
  
 Until (i) the Commitments have expired or been terminated, (ii) the principal of and interest on each Loan and all fees and other Obligations
(other than contingent indemnification obligations for which no claim has been made) shall have been paid in full, (iii) all Letters of Credit shall have expired or terminated or been collateralized, to the extent of 105% of the then Letter of
Credit Outstandings, by cash or a letter of credit issued by a financial institution and on terms reasonably satisfactory to the Administrative Agent, and (iv) all L/C Disbursements shall have been reimbursed, each Loan Party covenants and
agrees with the Agents and the Lenders that: 
  
 Section 5.01
Financial Statements and Other Information. 
  
 The
Borrowers will furnish to the Agents: 
  
 (a)
within ninety (90) days after the end of each Fiscal Year of Brookstone, Inc., its Consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous Fiscal Year, all audited and reported on by an independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and
without a qualification or exception as to the scope of such audit) to the effect that such Consolidated financial statements present fairly in all material respects the financial condition and results of operations of Brookstone, Inc. and its
Subsidiaries on a Consolidated basis in accordance with GAAP consistently applied; 
  

 66 

 (b) within thirty (30) days after the end of each fiscal month of Brookstone, Inc.,
its unaudited Consolidated balance sheets and related statements of operations, stockholders’ equity and cash flows, each as of the end of and for such fiscal month and the elapsed portion of the Fiscal Year, setting forth in each case in
comparative form the figures for the corresponding month end and year to date periods of the previous Fiscal Year and the figures as set forth in the projections delivered pursuant to Section 5.01(d) hereof, all certified by one of its
Financial Officers as presenting in all material respects the financial condition and results of operations of Brookstone, Inc. and its Subsidiaries on a Consolidated, basis in accordance with GAAP consistently applied, subject to normal year end
audit adjustments and the absence of footnotes; 
  
 (c) concurrently with any delivery of financial statements under clause (a) or (b) above a certificate of a Financial Officer of the Lead Borrower in the form of Exhibit D (a “Compliance Certificate”)
certifying as to whether a Default or Event of Default has occurred and, if a Default or Event of Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (B) setting forth
reasonably detailed calculations (x) with respect to the average Adjusted Excess Availability for such period, and (y) if a Liquidity Event has occurred and is continuing, demonstrating compliance with Section 6.11 regarding financial
covenants, and (C) stating to his or her knowledge whether any material change in GAAP relevant to such financial statements or in the application thereof has occurred since the date of Brookstone Inc.’s audited financial statements
referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; 
  
 (d) within thirty (30) days after the commencement of each Fiscal Year of Brookstone, Inc., a detailed
Consolidated budget by month for such Fiscal Year (including a projected Consolidated balance sheet, availability model, and related statements of projected operations and cash flow as of the end of and for such Fiscal Year) and promptly when
available, any significant revisions of such budget approved by the Board of Directors of Brookstone, Inc.; 
  
 (e) Weekly not later than Thursday of each week, a certificate in the form of Exhibit E (a “Borrowing Base
Certificate”) together with the supporting documentation referenced therein showing the Borrowing Base as of the close of business on Saturday of the immediately preceding week, each Borrowing Base Certificate to be certified as complete
and correct on behalf of the Borrowers by a Financial Officer of the Lead Borrower. 
  
 (f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials, if
any, filed in final form by any Loan Party with the Securities and Exchange Commission (including, without limitation, Forms 10K and 10Q but excluding any registration statement on Form S-8 or its equivalent), or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any national securities exchange, as the case may be; 
  

 67 

 (g) promptly upon receipt thereof, copies of any material written reports submitted to
any Loan Party by independent certified public accountants in connection with each annual, interim audit of the books of the Loan Parties or any of their Subsidiaries made by such accountants, including any management letter commenting on the Loan
Parties’ internal controls submitted by such accountants to management in connection with their annual audit; 
  
 (h) the financial and collateral reports described on Schedule 5.01(h) annexed hereto, at the times set forth in such
Schedule; 
  
 (i) promptly following any request
therefore, such other information regarding the operations, business affairs and financial condition of any Loan Party, or compliance with the terms of any Loan Document, as the Agents or any Lender may reasonably request; 
  
 (j) promptly upon receipt thereof notices of termination
received by any Loan Party from any landlord with respect to any Lease; and 
  
 (k) promptly upon receipt thereof notices from any party to the Merger Agreement relating to any material dispute, claim, suit or proceeding relating to the Merger Agreement or the transactions contemplated thereby.

  
 Section 5.02 Notices of Material Events.

  
 The Borrowers will furnish to the Agents prompt written
notice of the following: 
  
 (a) the occurrence
of any Default or Event of Default; 
  
 (b) the
filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or directly affecting any Loan Party or any Subsidiary thereof that could reasonably be expected to result in a Material Adverse
Effect; 
  
 (c) the occurrence of any ERISA Event
that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; 
  
 (d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; 
  
 (e) any failure by any Loan Party to pay rent at any of such
Loan Party’s locations, which failure continues for more than ten (10) days (or such shorter cure period as provided in the lease for such location) following the day on which such rent first came due, unless such payment is being
contested in good faith with adequate reserves being set aside therefor; 
  
 (f) the discharge by any Loan Party of its present independent accountants or any withdrawal or resignation by such independent accountants; 
  
 (g) any collective bargaining agreement or other labor contract to which a Loan Party becomes a party, or
the application for the certification of a collective bargaining agent; and 
  
 (h) upon a Responsible Officer becoming aware thereof, the filing of any Lien for unpaid Taxes against any Loan Party. 
  

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 Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or
other executive officer of the Lead Borrower setting forth the details of the event or development requiring such notice and, if applicable, any action taken or proposed to be taken with respect thereto. 
  
 Section 5.03 Information Regarding Collateral. 
  
 The Borrowers will furnish to the Agents prompt written notice of any change
(i) in any Loan Party’s corporate name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (ii) in the location of any Loan Party’s chief executive office, any office in
which it maintains books or records relating to Collateral owned by it or any office or facility at which Collateral owned by it is located (including the establishment of any such new office or facility), (iii) in any Loan Party’s
corporate structure or jurisdiction of incorporation or formation, or (iv) in any Loan Party’s Federal Taxpayer Identification Number or organizational identification number assigned to it by its state of organization. The Borrowers will
promptly notify the Agents if any material portion of the Collateral is damaged or destroyed. 
  
 Section 5.04 Existence; Conduct of Business. 
  
 Each Loan Party will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to comply with its respective Organizational Documents, as applicable, and to preserve, renew and keep in
full force and effect (a) its legal existence and (b) the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect; provided, that nothing in this Section 5.04 shall prohibit any disposition, merger, consolidation, liquidation or dissolution permitted under this Agreement. 
  
 Section 5.05 Payment of Obligations. 
  
 Each Loan Party will, and will cause each of the Subsidiaries to, pay its
material Tax liabilities and material claims for labor, materials, or supplies, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings,
(b) such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such contest effectively suspends collection of the contested obligation and enforcement of any Lien
securing such obligation, (d) no Lien has been filed with respect thereto has priority or is pari passu with the Liens granted to the Collateral Agent pursuant to the Loan Documents, and (e) the failure to make payment pending such contest
would not reasonably be expected to result in a Material Adverse Effect. Nothing contained herein shall be deemed to limit the rights of the Administrative Agent under Section 2.02(b) hereof. 
  
 Section 5.06 Maintenance of Properties. 
  
 Each Loan Party will, and will cause each of the Subsidiaries to, keep and
maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, except as would not reasonably be expected to result in a Material Adverse Effect or as provided in
Section 6.05. 
  

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 Section 5.07 Insurance. 
  
 (a) Each Loan Party shall (i) maintain insurance with financially sound and reputable insurers (or a
program of self-insurance reasonably acceptable to the Administrative Agent) on such of its property and in at least such amounts and against at least such risks as is customary with companies in the same or similar businesses operating in the same
or similar locations, including public liability insurance against claims for personal injury or death occurring upon, in or about or in connection with the use of any properties owned, occupied or controlled by it (including the insurance required
pursuant to the Security Documents); (ii) maintain such other insurance as may be required by law; and (iii) furnish to the Administrative Agent, upon written request, full information as to the insurance carried. 
  
 (b) Fire and extended coverage policies maintained with
respect to any Collateral shall be endorsed or otherwise amended to include (i) Lenders’ loss payable clause (regarding personal property), in form and substance reasonably satisfactory to the Collateral Agent, which endorsements or
amendments shall provide that the insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies directly to the Collateral Agent, (ii) a provision to the effect that none of the Loan Parties, the Administrative Agent,
the Collateral Agent, or any other party shall be a coinsurer and (iii) such other provisions as the Collateral Agent may reasonably require from time to time to protect the interests of the Lenders. Commercial general liability policies shall
be endorsed to name the Collateral Agent as an additional insured. Business interruption policies shall name the Collateral Agent as a loss payee and shall be endorsed or amended to include (i) a provision that, from and after the Closing Date,
the insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies directly to the Administrative Agent or the Collateral Agent, (ii) a provision to the effect that none of the Loan Parties, the Administrative Agent,
the Collateral Agent or any other party shall be a co-insurer and (iii) such other provisions as the Collateral Agent may reasonably require from time to time to protect the interests of the Lenders. Each such policy referred to in this
paragraph also shall provide that it shall not be canceled, modified or not renewed (i) by reason of nonpayment of premium except upon not less than 30 days’ prior written notice thereof by the insurer to the Collateral Agent (giving
the Collateral Agent the right to cure defaults in the payment of premiums) or (ii) for any other reason except upon not less than 30 days’ prior written notice thereof (ten (10) days in the case of non-payment) by the insurer to the
Collateral Agent. The Borrowers shall deliver to the Collateral Agent, prior to the cancellation, modification or nonrenewal of any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Collateral Agent, including an insurance binder) together with evidence satisfactory to the Collateral Agent of payment of the premium therefore. 
  
 Section 5.08 Casualty. 
  
 The Borrowers will furnish to the Agents and the Lenders prompt written notice of any casualty or other insured damage to
any material portion of the Collateral. 
  
 Section 5.09
Books and Records; Inspection and Audit Rights; Appraisals; Accountants. 
  
 (a) Each Loan Party will, and will cause each of the Subsidiaries to, keep proper books of record and account in a manner sufficient to
permit preparation of financial statements in accordance with GAAP and in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each Loan Party will, and will cause each of the
Subsidiaries to, permit any representatives designated by any Agent, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and, during normal business hours, to discuss its

  

 70 

 
affairs, finances and condition with its officers and, in the presence of a Financial Officer, its independent accountants, all at such reasonable times and
as often as reasonably requested. 
  
 (b) Subject
to the following sentence, each Loan Party will, and will cause each of the Subsidiaries to, from time to time upon the request of the Collateral Agent or the Required Lenders through the Administrative Agent and after reasonable prior notice,
permit any Agent or professionals (including investment bankers, consultants, accountants, lawyers and appraisers) retained by the Agents to conduct appraisals, commercial finance examinations and other evaluations, including, without limitation, of
(i) the Borrowers’ practices in the computation of the Borrowing Base and (ii) the assets included in the Borrowing Base and related financial information such as, but not limited to, sales, gross margins, payables, accruals and
reserves, and pay the reasonable fees and expenses of the Agents or such professionals with respect to such evaluations and appraisals. The Loan Parties acknowledge that the Agents shall be entitled to undertake up to (x) two (2) Inventory
appraisals, and (y) two (2) commercial finance examinations each Fiscal Year after the Closing Date, at the Loan Parties’ expense; provided, however, that the Agents shall be entitled to undertake one
(1) additional Inventory appraisal and one (1) additional commercial finance examination each Fiscal Year at the Agents’ own expense. Notwithstanding the foregoing, during the continuance of a Default or Event of Default the Agents
may cause additional appraisals and commercial finance examinations to be undertaken as they in their discretion deem necessary or appropriate, or as may be required by Applicable Law and such additional appraisals and commercial finance
examinations shall be at the Loan Parties’ expense. 
  
 (c) The Loan Parties shall, at all times, retain independent nationally recognized certified public accountants and instruct such accountants to cooperate with, and be available to, the Administrative Agent or its
representatives to discuss the Loan Parties’ financial performance, financial condition, operating results, controls, and such other matters, within the scope of the retention of such accountants, as may be raised by the Administrative Agent.

  
 Section 5.10 Physical Inventories. 

 
 (a) The Collateral Agent, at the expense of the Loan
Parties, may participate in and/or observe each physical count and/or inventory of so much of the Collateral as consists of Inventory which is undertaken on behalf of the Borrowers so long as such participation does not disrupt the normal inventory
schedule or process. 
  
 (b) The Borrowers, at
their own expense, shall cause not less than one physical inventory of the Borrowers’ Inventory to be undertaken in each twelve (12) month period during which this Agreement is in effect, conducted by nationally recognized inventory takers
(or by the Borrowers provided independent auditors review the inventory process and sample the results of the inventory) and using practices consistent with practices in effect on the date hereof. 
  
 (c) The Borrowers, within forty-five (45) days
following the completion of such inventory, shall provide the Collateral Agent with a reconciliation of the results of each such inventory (as well as of any other physical inventory undertaken by the Borrowers) and shall post such results to the
Borrowers’ inventory stock ledger and general ledger, as applicable. 
  
 (d) The Collateral Agent, in its discretion, if any Default or Event of Default exists and is continuing , may cause such additional inventories to be taken as the Collateral Agent determines (each, at the expense of
the Borrowers). 
  

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 Section 5.11 Compliance with Laws. 
  
 Each Loan Party will, and will cause each of the Subsidiaries to, comply
with all Applicable Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
  
 Section 5.12 Use of Proceeds and Letters of Credit. 
  
 (a) The proceeds of all Loans made hereunder and Letters of
Credit issued hereunder will be used only (i) to refinance the Indebtedness under the Existing Financing Agreements on the Closing Date, (ii) to finance the acquisition of working capital assets of the Borrowers, including the purchase of
inventory, in the ordinary course of business, (iii) to finance Capital Expenditures of the Borrowers, (iv) to provide ongoing working capital and for general corporate purposes, including payments for Permitted Acquisitions, Permitted
Dividends and Permitted Investments, and (v) to pay transaction costs, fees and expenses, all of the foregoing to the extent permitted herein. 
  
 (b) No part of the proceeds of any Loan or Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations U and X. 
  
 Section 5.13 Additional Subsidiaries or Borrowers. 
  
 If any additional Subsidiary of any Loan Party is formed or acquired after the Closing Date in accordance with the terms of this Agreement, the Lead
Borrower will promptly notify the Agents and the Lenders thereof and, other than with respect to Joint Ventures, (a) if such Subsidiary is not a Foreign Subsidiary, the Borrowers will cause such Subsidiary to become a (i) Loan Party
hereunder by the execution and delivery of a Facility Guarantee to the Agents and in the case of a Borrower a joinder agreement (reasonably satisfactory to the Agent); (ii) a party to each applicable Security Document in the manner provided
therein within ten (10) Business Days after such Subsidiary is formed or acquired and promptly take such actions to create and perfect Liens on such Subsidiary’s assets to secure the Obligations as any Agent or the Required Lenders shall
reasonably request; and (iii) a party to the Intercreditor Agreement within ten (10) Business Days after such Subsidiary is formed or acquired and (b) if any shares of Capital Stock or Indebtedness of such Subsidiary are owned by or
on behalf of any Loan Party, the Borrowers will cause such shares (if certificated) and promissory notes evidencing such Indebtedness to be pledged within ten (10) Business Days after such Subsidiary is formed or acquired (except that, if such
Subsidiary is a Foreign Subsidiary, shares of stock of such Subsidiary to be pledged shall be limited to 65% of the outstanding shares of the Capital Stock of such Subsidiary). 
  
 Section 5.14 Further Assurances. 
  
 (a) Each Loan Party will execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and recording of financing statements and other documents), that are required under any Applicable Law, or which any Agent may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Loan Parties. The Loan Parties
also agree to provide to the Agents, from time to time upon request, evidence reasonably satisfactory to the Agents as to the perfection and priority of the Liens created or intended to be created by the Security Documents. 
  

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 (b) If any assets are acquired by any Loan Party after the Closing Date (other than
assets constituting Collateral under the Security Agreement that become subject to the Lien of the Security Agreement upon acquisition thereof), the Borrowers will notify the Agents and the Lenders thereof, and the Loan Parties will cause such
assets to be subjected to a Lien securing the Obligations and will take such actions as shall be necessary or reasonably requested by any Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all
at the expense of the Loan Parties. 
  
 (c) Upon
the request of the Administrative Agent, the Borrowers shall cause each of its customs brokers to deliver an agreement, substantially in the from annexed hereto as Exhibit F, to the Administrative Agent covering such matters as the Collateral
Agent may reasonably require. 
  
 ARTICLE VI 
  
 Negative Covenants 
  
 Until (i) the Commitments have expired or been terminated, (ii) the
principal of and interest on each Loan and all fees and other Obligations (other than contingent indemnification obligations for which no claim has been made) shall have been paid in full, (iii) all Letters of Credit shall have expired or
terminated or been collateralized, to the extent of 105% of the then Letter of Credit Outstandings, by cash or a letter of credit issued by a financial institution and on terms reasonably satisfactory to the Administrative Agent, and (iv) all
L/C Disbursements shall have been reimbursed, each Loan Party covenants and agrees with the Agents and the Lenders that: 
  
 Section 6.01 Indebtedness and Other Obligations. 
  

(a) The Loan Parties will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except: 
  
 (i) Indebtedness constituting
Obligations; 
  
 (ii) Indebtedness set forth in
Schedule 6.01 annexed hereto and extensions, renewals replacements and refinancings of any such Indebtedness (including, without limitation, the Merrimack Mortgage), provided, that after giving effect to any of the
foregoing (i) the principal amount of the outstanding Indebtedness is not increased (except by an amount equal to accrued interest thereon and the amount of all reasonable costs, expenses and premiums incurred in connection with such extension,
renewal, replacement or refinancing), (ii) neither the tenor nor the average life is reduced, and (iii) the holders of such Indebtedness are not afforded covenants, defaults, rights or remedies that, taken as a whole, are more burdensome
in any material respect to the obligor or obligors than those contained in the Indebtedness being extended, renewed, replaced or refinanced as determined by the Administrative Agent in its reasonable credit judgment; 
  
 (iii) intercompany unsecured Indebtedness arising from loans
permitted under any of Section 6.04(b), Section 6.04(n) or Section 6.04(o); 
  
 (iv) Indebtedness of any Loan Party to finance the acquisition of any fixed or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof; provided, that the aggregate principal amount of Indebtedness permitted by this clause

  

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(iv), including, without limitation, any extensions, renewals and replacements of any such Indebtedness, shall not exceed $15,000,000 at any time
outstanding; 
  
 (v) Indebtedness under Hedging
Agreements entered into in the ordinary course of business, other than for speculative purposes; 
  
 (vi) contingent liabilities under surety bonds or similar instruments incurred in the ordinary course of business in connection with the
construction or improvement of stores; 
  
 (vii)
Indebtedness under the Senior Note Documents and exchange notes issued under the A/B Exchange Offer, and, in each case, refinancings and replacements of the foregoing on terms and conditions reasonably satisfactory to the Agents, including, if
applicable, the execution and delivery of an intercreditor agreement reasonably satisfactory to the Agents; 
  
 (viii) Indebtedness of Brookstone, Inc. to the City of Mexico, Missouri evidenced by a capitalized lease of the Brookstone, Inc.’s
facility in the City of Mexico, Missouri in an aggregate amount not to exceed $1,933,751.87; 
  
 (ix) Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, bids,
performance, completion, appeal and surety bonds or guarantees, and similar types of obligations in the ordinary course of business; 
  
 (x) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds, so long as such Indebtedness is covered within five (5) Business Days; 
  
 (xi) guaranties by a Loan Party of Indebtedness of another Loan Party, in each case, with respect to Indebtedness otherwise permitted to
be incurred pursuant to this Section 6.01; 
  
 (xii) (A) Subordinated Indebtedness in an aggregate principal amount not to exceed $2,500,000 at any time outstanding and (B) other Subordinated Indebtedness that is non-cash pay and owed to the Current Shareholders or any of their
respective Affiliates; 
  
 (xiii) Indebtedness
incurred by Subsidiaries that are not Facility Guarantors that is non-recourse to the Loan Parties; 
  
 (xiv) Indebtedness incurred by a Borrower or any of its Subsidiaries consisting of guarantees, earn-outs, indemnities or obligations in
respect of purchase price adjustments in connection with the disposition of assets permitted under Section 6.05, including, without limitation, shares of Capital Stock; 
  
 (xv) Indebtedness of any Person that becomes a Subsidiary pursuant to a Permitted Acquisition in an
aggregate principal amount not to exceeds $5,000,000 at any time outstanding, provided that such Indebtedness was not incurred in contemplation of such Person becoming a Subsidiary and is not secured by Collateral; 
  
 (xvi) Indebtedness incurred to finance the payment of
insurance premiums; and 
  

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 (xvii) other unsecured Indebtedness of Brookstone, Inc. and its Subsidiaries, in an
aggregate amount not to exceed $20,000,000 at any time outstanding. 
  
 (b) None of the Loan Parties will, nor will they permit any Subsidiary to, issue any preferred stock to any Person other than a Loan Party (except for preferred stock (i) all dividends in respect of which are to
be paid (and all other payments in respect of which are to be made) in additional shares of such preferred stock, in lieu of cash, (ii) that is not subject to redemption prior to the payment in full of the Obligations (other than contingent
obligations for which no claim has been made), other than redemption at the option of the Loan Party issuing such preferred and (iii) all payments in respect of which are expressly subordinated to the Obligations) or be or become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem, retire, acquire or make any other payment in respect of (i) any shares of Capital Stock of any Loan Party prior to the Maturity Date or (ii) any option, warrant or
other right to acquire any such shares of Capital Stock. 
  
 Section 6.02 Liens. 
  
 The Loan Parties
will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except Permitted Encumbrances. 
  
 Section 6.03 Fundamental Changes. 
  
 (a) No Loan Party shall merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing, 
  
 (i) any Facility Guarantor may merge with and into any other Facility Guarantor, provided that in any such transaction involving
Brookstone, Inc., Brookstone, Inc. shall be the surviving entity, 
  
 (ii) a Borrower may merge into any other Borrower, 
  
 (iii) Brookstone Company or a Subsidiary thereof may merge with an acquired entity in connection with a Permitted Acquisition, provided
that Brookstone Company or its Subsidiary shall be the surviving entity, 
  
 (iv) any Facility Guarantor may merge into any Borrower, provided that the Borrower shall be the surviving entity, 
  
 (v) any Facility Guarantor (other than Brookstone, Inc.) may liquidate or dissolve voluntarily into any other Loan Party, 
  
 (vi) a Subsidiary may merge with and into a Loan Party or
another Subsidiary (provided, that if a Loan Party is a party to such merger, the Loan Party must be the survivor), 
  

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 (vii) a Subsidiary which is not a Loan Party and which is less than wholly-owned by a
Loan Party, may liquidate or dissolve voluntarily into its equity holder which is not a Loan Party, and 
  
 (viii) Loan Parties may engage in transactions permitted under Section 6.05. 
  
 (b) The Loan Parties will not engage in any business other
than businesses of the type conducted by the Loan Parties on the date of execution of this Agreement and businesses which are similar or reasonably related thereto. 
  
 Section 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. 
  
 The Loan Parties will not purchase, hold or acquire (including pursuant to
any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Capital Stock, evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, guarantee any Indebtedness of, or make or permit to exist any Investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any
assets of any other Person constituting a business unit, except: 
  
 (a) Permitted Investments; 
  
 (b) Loans or advances made by any Facility Guarantor to any Borrower or by a Borrower to any other Borrower, or by any Borrower to a Facility Guarantor, for purposes permitted by this Agreement, provided, that, that
upon the request of Agents, such loans or advances shall be evidenced by promissory notes having terms (including subordination terms) reasonably satisfactory to Agents, the sole originally executed counterparts of which shall be pledged and
delivered to the Collateral Agent, for the benefit of the Secured Parties, as security for the Obligations; 
  
 (c) Guarantees constituting Indebtedness permitted by Section 6.01; 
  
 (d) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent
accounts and disputes with, customers and suppliers, in each case in the ordinary course of business; 
  
 (e) Permitted Acquisitions; 
  
 (f) extensions of trade credit and prepaid expenses made in the ordinary course of business; 
  
 (g) Capital Expenditures made in the ordinary course of
business; 
  
 (h) investments in Joint Ventures
and Foreign Subsidiaries in an aggregate amount not exceeding $10,000,000 during the term of this Agreement; 
  
 (i) Investments existing on the Effective Date (or in respect of which a binding commitment to make such Investment exists on the
Effective Date) and set forth on Schedule 6.04; 
  
 (j) Investments permitted by Section 6.01(a)(v); 
  

 76 

 (k) Investments received in connection with the bankruptcy or reorganization of, or
settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business; 
  
 (l) loans and advances to employees, officers and directors of the Loan Parties in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) not to exceed $1,000,000 in the aggregate at any time outstanding; 
  
 (m) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance
and similar deposits entered into as a result of the operations of the business in the ordinary course of business; 
  
 (n) loans and advances to employees, officers and directors of OSIM Brookstone Holdings LP, or any of its Subsidiaries used to acquire
Capital Stock of OSIM Brookstone Holdings LP to the extent such transactions are booked as loans or advances but are cashless; and 
  
 (o) other Investments made after the Closing Date not to exceed $5,000,000 in the aggregate at any time outstanding. 
  
 Section 6.05 Asset Sales; Store Closings. 
  
 (a) The Loan Parties will not, and will not permit any of
the Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including any Capital Stock or ownership interest, nor will the Loan Parties permit any of the Subsidiaries to issue any additional shares of its Capital Stock or other
ownership interest in such Subsidiary, except: 
  
 (i) sales of Inventory in the ordinary course of business; 
  
 (ii) sales or other disposition of used, obsolete, worn-out or surplus property in the ordinary course of business; 
  
 (iii) sales of Permitted Investments in the ordinary course of business; 
  
 (iv) sales, transfers and dispositions among the Loan Parties and their Subsidiaries; provided,
that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.07; 
  
 (v) the lease or sublease of real or personal property in the ordinary course of business; 
  
 (vi) Liens permitted by Section 6.02 and Investments
permitted under Section 6.04; 
  
 (vii)
sales, transfers and other dispositions of property by any Subsidiary of a Loan Party that is not a Loan Party to another Subsidiary of a Loan Party that is not a Loan Party; 
  
 (viii) non-exclusive licenses and sublicenses of intellectual property in the ordinary course of business
which are not detrimental in any material respect to the value of such intellectual property; 
  

 77 

 (ix) the abandonment or cancellation of intellectual property that is not material or is
no longer used or useful in any material respect in the business of Brookstone, Inc. and its Subsidiaries, taken as a whole; 
  
 (x) sales or forgiveness of accounts receivable in the ordinary course of business in connection with the collection or compromise
thereof; 
  
 (xi) issuances of Capital Stock in a
Subsidiary of a Loan Party to a Loan Party or, in the case of a Subsidiary which is a Joint Venture, issuances of Capital Stock of such Joint Ventures; 
  
 (xii) sales of equipment or real property to the extent that (a) such property is exchanged for credit against the purchase price of
similar replacement property or (b) the proceeds of such sales are reasonably promptly applied to the purchase price of such replacement property; 
  
 (xiii) any taking of any property of Brookstone, Inc. or any Subsidiary thereof or any portion thereof, in or by condemnation or other
eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition or use of any property of Brookstone, Inc. or any Subsidiary thereof or any portion thereof, by any Governmental Authority; 
  
 (xiv) sales and other dispositions not otherwise permitted
under this Section 6.05; provided that the aggregate fair market value of all property disposed of in reliance on this Section 6.05(a)(xiv) shall not exceed $1,000,000 in any Fiscal Year, with unused amounts, not to exceed $1,000,000, for
any Fiscal Year being added to the amount of sales and other dispositions permitted to be made pursuant to this clause (xiv) in the following Fiscal Year; and 
  
 (xv) the sale, liquidation or other disposition of Gardener’s Eden, Inc. and related tangible and
intangible assets; 
  
 provided, that all sales,
transfers, leases and other dispositions under clauses (iii), (xiv) and (xv) shall be made at arm’s length and for fair value and at least seventy five percent (75%) of the consideration therefore shall be in cash. 
  
 (b) The Loan Parties shall not close or agree to close
(other than to relocate such location substantially contemporaneously with such closure) any location (including, without limitation, any Joint Venture location) at which any Loan Party (or any Joint Venture) maintains, offers for sale or stores any
Inventory or other Collateral, except that in any twelve month period the Loan Parties may close up to ten percent (10%) of the number of stores existing on the Closing Date; provided, however, that if in any twelve month
period the Loan Parties shall close (other than to relocate such location substantially contemporaneously with such closure) more than five percent (5%) of the number of stores then existing, then all such closings in excess of five percent
(5%) shall be conducted by professional liquidators approved by the Administrative Agent in its reasonable discretion and such closings shall be conducted in a manner satisfactory to the Administrative Agent in its reasonable discretion.

  

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 Section 6.06 Restricted Payments; Certain Payments of Indebtedness. 
  
 (a) The Loan Parties will not, and will not permit any
Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except the Loan Parties and their Subsidiaries may declare and pay Permitted Dividends. 
  
 (b) The Loan Parties will not, and will not permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash securities or other property) of or in respect of principal of or interest on any Subordinated Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Subordinated Indebtedness, except
as long as no Event of Default has occurred and is continuing or would result from such payments: 
  
 (i) payment of regularly scheduled interest and principal payments as and when due in respect of any Subordinated Indebtedness permitted
hereunder; and 
  
 (ii) refinancings of
Subordinated Indebtedness to the extent permitted by Section 6.01. 
  
 Section 6.07 Transactions with Affiliates. 
  
 The Loan Parties will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except transactions that are in the ordinary course of business and that are at prices and on terms and conditions not less favorable to the Loan Parties or such Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties; provided, however, that the foregoing restrictions shall not apply to: 
  
 (i) the payment of the closing fee on the Closing Date; 
  
 (ii) so long as no Event of Default exists, management fees to Sponsors and their Affiliates in an amount
not to exceed $1,000,000 in any Fiscal Year of Brookstone Company; 
  
 (iii) reasonable and customary fees and reimbursements paid to members of the Board of Directors of OSIM Brookstone Holdings and its Subsidiaries; 
  
 (iv) compensation arrangements (including discounts on purchases of goods of any Loan Party or Subsidiary
thereof) for officers, directors, consultants and employees of OSIM Brookstone Holdings, L.P. and its Subsidiaries entered into in the ordinary course of business with respect to services provided by such Persons to any of the Loan Parties or their
Subsidiaries; 
  
 (v) Investments with Affiliates
permitted by Section 6.04; 
  
 (vi)
Permitted Dividends; 
  
 (vii) the transactions
set forth on Schedule 6.07 (and renewals and replacements thereof on terms, in each case taken as a whole, not materially more disadvantageous to the applicable Loan Party or Subsidiary, as the case may be); 
  

 79 

 (viii) payments to Sponsors or any of their respective Affiliates of reasonable expenses
incurred in connection with services provided by such Persons to any of the Loan Parties or their Subsidiaries; and 
  
 (ix) transactions permitted by Section 6.01(a)(iii) or Section 6.03; and 
  
 (x) transactions between and among Loan Parties other than
Brookstone, Inc. 
  
 Section 6.08 Restrictive
Agreements. 
  
 The Loan Parties will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Loan Parties or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its Capital Stock or to make or repay loans or advances to the Loan
Parties or any other Subsidiary or to guarantee Indebtedness of the Loan Parties or any other Subsidiary, provided, however, that 
  
 (i) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, 
  
 (ii) clause (a) of the foregoing shall not apply to customary provisions in leases and contracts restricting the assignment or
subleasing thereof, and 
  
 (iii) clauses
(a) and (b) of the foregoing shall not apply to: 
  
 (A) restrictions and conditions imposed by law, by any Loan Document, or any Senior Note Document; 
  
 (B) restrictions and conditions existing on the Closing Date not otherwise excepted from this Section 6.08 and identified on
Schedule 6.08 (but shall not apply to any amendment or modification expanding the scope of any such restriction or condition); 
  
 (C) any agreement in effect at the time any Person becomes a Subsidiary of a Loan Party; provided that such agreement was not entered
into in contemplation of such Person becoming a Subsidiary of such Loan Party and doesn’t extend to any other Loan Party; 
  
 (D) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary of a Loan Party (or the assets of
a Subsidiary of a Loan Party) pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold (or whose assets are to be sold) and such sale is permitted hereunder; and 
  
 (E) customary provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, limited liability company operating agreements, partnership agreements, stockholders agreements, asset sale agreements, agreements in respect of sales of Capital Stock and other similar
agreements entered into in connection with transactions not prohibited under this Agreement, provided that such encumbrance or restriction shall only be effective against the assets or property that are the subject of such agreements. 
  

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 Section 6.09 Amendment of Material Documents. 
  
 (a) The Loan Parties will not, and will not permit any
Subsidiary to, amend, modify or waive any of its rights under (i) its Organizational Documents, to the extent that such amendment, modification or waiver could reasonably likely result in a Material Adverse Effect, (ii) any Subordinated
Indebtedness, or (iii) any other instruments, documents or agreements, in each case with respect to this clause (iii), to the extent that such amendment, modification or waiver could result in a Material Adverse Effect. 
  
 (b) No Loan Party shall, and no Loan Party shall permit or
cause any of its Subsidiaries to, directly or indirectly, amend, supplement or otherwise modify the terms of any of the Senior Note Documents to the extent the effect of such change or amendment is to: (i) increase the interest rate or the cash
rate of interest on, such Indebtedness; (ii) cause there to be an earlier maturity date or decreased weighted average life thereof; (iii) add, or change in a manner adverse to any Loan Party, any event of default or add, or make more
restrictive, any covenant with respect to the Indebtedness thereunder; (iv) change in a manner adverse to any Loan Party the prepayment provisions of such Indebtedness; (v) change in a manner adverse to any Loan Party the terms of or
otherwise alter any redemption or put rights thereunder; or (vi) change or amend any other term if such change or amendment would (x) increase the obligations of the Loan Parties or (y) confer additional rights on the holder of such
Indebtedness in a manner adverse to any Loan Party, Agent or Lenders. 
  
 (c) No Loan Party shall, and no Loan Party shall permit or cause any of its Subsidiaries to, directly or indirectly, amend, supplement or otherwise modify the terms of any of the Merger Documents in manner that is
material and adverse to the Loan Parties or the Lenders. 
  
 Section 6.10 Additional Subsidiaries. 
  
 The Loan Parties will not, and will not permit any Subsidiary to, create any additional Subsidiary unless no Default or Event of Default would arise therefrom and the requirements of Section 5.13 are satisfied. 
  
 Section 6.11 Financial Covenants. 
  
 Upon the occurrence and during the continuance of a Liquidity Event, the
Loan Parties shall maintain a Consolidated Fixed Charge Coverage Ratio of at least 1.00 to 1.00 measured on a rolling twelve month basis at the end of each fiscal month during the continuance of such Liquidity Event. 
  
 Section 6.12 Fiscal Year 
  
 Brookstone Inc. and its Subsidiaries shall not change their Fiscal Year
without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld. 
  
 Section 6.13 Environmental Laws. 
  
 The Loan Parties shall not (a) fail to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, or (b) undertake actions that are reasonably likely to result in an Environmental Liability, except in either case where such failure or actions could reasonably be expected to result in a Material Adverse
Effect. 
  

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 ARTICLE VII 
  
 Events of Default 
  
 Section 7.01 Events of Default. 
  
 If any of the following events (“Events of Default”) shall occur: 
  
 (a) the Loan Parties shall fail to pay any principal of any Loan or any reimbursement obligation in respect
of any L/C Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; 
  
 (b) the Loan Parties shall fail to pay any interest on any Loan or any fee or any other amount (other than
an amount referred to in clause (a) of this Section 7.01) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable and such failure continues for five (5) Business Days;

  
 (c) any representation or warranty made or
deemed made by or on behalf of any Loan Party in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made; 
  
 (d) the Loan Parties shall fail to observe or perform any covenant, condition or agreement contained in
Section 2.22, Section 5.01(e), Section 5.07 (with respect to insurance covering the Collateral), Section 5.09, Section 5.12, or in Article VI; 
  
 (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any
Loan Document (other than those specified in clause (a), (b), (c), or (d) of this Section 7.01), and such failure shall continue unremedied for a period of twenty (20) days after the earliest of: (i) in the case of any
report required by Section 5.01 (other than a report due in accordance with Section 5.01(e)) the date any such report is due; (ii) the knowledge by a Responsible Officer of a Borrower thereof; and (iii) notice thereof from the
Administrative Agent to the Lead Borrower; 
  
 (f) any Loan Party shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness when and as the same shall become due and payable (after giving effect to the
expiration of any grace or cure period set forth therein); 
  
 (g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any such Material Indebtedness or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity; 
  
 (h) the subordination
provisions contained in or otherwise pertaining to any agreement or instrument governing any Subordinated Indebtedness shall for any reason be revoked or invalidated by any Governmental Authority, or otherwise cease to be in full force and effect,
or any Loan Party shall assert in writing the invalidity or unenforceability of the subordination provisions thereof, or the Obligations for any reason shall not have the priority contemplated by this Agreement, any agreement or subordination

  

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provisions thereof evidencing any Subordinated Indebtedness or any Loan Party shall acquiesce in the breach by a subordinated creditor of the subordination
provisions of any Subordination Indebtedness; 
  
 (i) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Borrower or any Significant Subsidiary thereof or its debts, or of a
substantial part of its assets, under any federal or state bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Borrower or any Significant Subsidiary thereof or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 45 days or an order or decree approving or ordering any of the
foregoing shall be entered; 
  
 (j) any Borrower
or any Significant Subsidiary thereof shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal or state bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section 7.01, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Borrower or any Significant Subsidiary thereof or for a substantial part of its assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; 
  
 (k) any Borrower or any Significant Subsidiary thereof shall
become unable, admit in writing its inability or fail generally to pay its debts as they become due; 
  
 (l) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 (to the extent not covered by insurance
or by an enforceable third party indemnification) shall be rendered against any Loan Party or any combination thereof and the same shall remain undischarged for a period of 45 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any material assets of any Loan Party to enforce any such judgment; or any non-monetary judgment or order shall have been rendered against any Loan Party or
any of its Subsidiaries that is reasonably likely to have a Material Adverse Effect and there shall be any period 45 consecutive days during which a stay of enforcement of such judgment or other, by reason of a pending appeal or otherwise, shall not
be in effect; 
  
 (m) an ERISA Event shall have
occurred that when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties in an aggregate amount exceeding $5,000,000; 
  
 (n) any challenge to the validity of any Loan Document or
the applicability or enforceability of any Loan Document strictly in accordance with the subject Loan Document’s terms or which seeks to void, avoid, limit, or otherwise adversely affect any security interest created by or in any Loan Document
or any payment made pursuant thereto, which challenge the Administrative Agent determines is a bona fide claim which if adversely determined could materially and adversely effect any security interest created by or in any Loan Document, any payment
payable or made pursuant to any Loan Document or the value of any Collateral; 
  
 (o) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Inventory, Accounts 

  

 83 

 
arising from goods sold or services rendered, the proceeds of the foregoing, or a material amount of any other Collateral, with the priority required by the
applicable Security Document, except as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents by reason of the gross negligence of the Collateral Agent or any Secured Party;

  
 (p) the occurrence of any uninsured loss to
any material portion of the Collateral; 
  
 (q)
the indictment of, or institution of any legal process or proceeding against, any Loan Party, under any federal, state, municipal, and other civil or criminal statute, rule, regulation, order, or other requirement having the force of law where the
relief, penalties, or remedies sought or available include the forfeiture of any material property of any Loan Party and/or the imposition of any stay or other order, the effect of which could reasonably be expected to have a Material Adverse
Effect; 
  
 (r) the determination by any Loan
Party , whether by vote of such Loan Party’s partners, board of directors or otherwise to: suspend the operation of such Loan Party’s business in the ordinary course, liquidate all or a material portion of such Loan Party’s assets or
store locations other than pursuant to Section 6.05(b), or employ an agent or other third party to conduct a program of closings, liquidations or “Going-Out-Of-Business” sales of any material portion of the business other than
pursuant to Section 6.05(b); or 
  
 (s) any
Change in Control; or 
  
 (t) the consummation of
the Merger is revoked or invalidated by any Governmental Authority for any reason; 
  
 then, and in every such event (other than an event with respect to any Loan Party described in clause (h) or (i) of this Section 7.01), and at any time thereafter during the continuance of such event,
the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Lead Borrower, take any of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the Loan Parties, (iii) instruct the Collateral Agent to exercise its remedies under the Security Documents (including, without limitation, foreclosure upon and taking
possession of the Collateral) and (iv) exercise any and all other remedies under the Loan Documents and applicable law available to the Administrative Agent, the Issuing Bank, the Collateral Agent and the Lenders; and in case of any event with
respect to any Loan Party described in clause (h) or (i) of this Section 7.01, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Loan Parties shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Loan Parties. 
  
 Section 7.02 When Continuing. 
  
 For all purposes under this Agreement, each Default and Event of Default
that has occurred shall be deemed to be continuing at all times thereafter unless it either (a) is cured or corrected (for the 

  

 84 

 
avoidance of doubt (i) financial performance covenants which are tested as of a date certain cannot be cured, (ii) Defaults for which there is no
grace period may not be cured and (iii) Defaults for which there is a grace period, may not be cured after the expiration of such grace period), or (b) is waived in writing by the Required Lenders in accordance with Section 9.02.

  
 Section 7.03 Remedies on Default. 
  
 In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the maturity of the Loans shall have been accelerated pursuant hereto, the Administrative Agent may proceed to protect and enforce its rights and remedies under this Agreement and the Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Agreement and the other Loan Documents or any instrument pursuant to which the Obligations are evidenced, and, if such
amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Agents or the Lenders. No remedy herein is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law. 
  
 ARTICLE VIII 
  
 The Agents 
  
 Section 8.01 Administration by Administrative Agent. 
  
 Each Lender, the Collateral Agent and the Issuing Bank hereby irrevocably designate Bank of America, N.A., as Administrative
Agent under this Agreement and the other Loan Documents. The general administration of the Loan Documents shall be by the Administrative Agent. Each Lender, the Collateral Agent and the Issuing Bank hereby irrevocably authorize the Administrative
Agent (i) to enter into the Loan Documents to which it is a party and (ii) at its discretion, to take or refrain from taking such actions as agent on its behalf and to exercise or refrain from exercising such powers under the Loan
Documents and the Notes as are delegated by the terms hereof or thereof, as appropriate, together with all powers reasonably incidental thereto. The Administrative Agent shall have no duties or responsibilities except as set forth in this Agreement
and the remaining Loan Documents, nor shall it have any fiduciary relationship with any Lender, and no implied covenants, responsibilities, duties, obligations, or liabilities shall be read into the Loan Documents or otherwise exist against the
Administrative Agent. 
  
 Section 8.02 The Collateral
Agent. 
  
 Each Lender, the Administrative Agent and the
Issuing Bank hereby irrevocably (i) designate Bank of America, N.A., as Collateral Agent under this Agreement and the other Loan Documents, (ii) authorize the Collateral Agent to enter into the Security Documents and the other Loan
Documents to which it is a party and to perform its duties and obligations thereunder, together with all powers reasonably incidental thereto, and (iii) agree and consent to all of the provisions of the Security Documents. All Collateral shall
be held or administered by the Collateral Agent (or its duly-appointed agent) for its benefit and for the benefit of the other Secured Parties. Any proceeds received by the Collateral Agent from the foreclosure, sale, lease or other disposition of
any of the Collateral and any other proceeds received pursuant to the terms of the Collateral Documents or the other Loan Documents shall be paid over to the Administrative Agent for application as provided in Section 2.23. The Collateral Agent
shall have no duties or responsibilities except as set forth in this Agreement and the remaining 

  

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Loan Documents, nor shall it have any fiduciary relationship with any Lender, and no implied covenants, responsibilities, duties, obligations, or liabilities
shall be read into the Loan Documents or otherwise exist against the Collateral Agent. 
  
 Section 8.03 Agreement of Required Lenders. 
  
 Upon any occasion requiring or permitting an approval, consent, waiver, election or other action on the part of (i) only the Required Lenders, action shall be taken by the Agents for and on behalf or for the
benefit of all Lenders upon the direction of the Required Lenders, and any such action shall be binding on all Lenders, and (ii) all of the Lenders, action shall be taken by the Agents for and on behalf or for the benefit of all Lenders upon
the direction of all such Lenders and any such action shall be binding on all Lenders. No amendment, modification, consent, or waiver shall be effective except in accordance with the provisions of Section 9.02. 
  
 Section 8.04 Liability of Agents. 
  
 (a) Each of the Agents, when acting on behalf of the Lenders
and the Issuing Bank, may execute any of its respective duties under this Agreement by or through any of its respective officers, agents and employees, and none of the Agents nor their respective directors, officers, agents or employees shall be
liable to the Lenders or the Issuing Bank or any of them for any action taken or omitted to be taken in good faith, or be responsible to the Lenders or the Issuing Bank or to any of them for the consequences of any oversight or error of judgment, or
for any loss, except to the extent of any liability imposed by law by reason of such Agent’s own gross negligence or willful misconduct. The Agents and their respective directors, officers, agents and employees shall in no event be liable to
the Lenders or the Issuing Bank or to any of them for any action taken or omitted to be taken by them pursuant to instructions received by them from the Required Lenders or all Lenders, as applicable, or in reliance upon the advice of counsel
selected by it. Without limiting the foregoing, none of the Agents, nor any of their respective directors, officers, employees, or agents shall be (A) responsible to any Lender or the Issuing Bank for the due execution, validity, genuineness,
effectiveness, sufficiency, or enforceability of, or for any recital, statement, warranty or representation in, this Agreement, any Loan Document or any related agreement, document or order, (B) required to ascertain or to make any inquiry
concerning the performance or observance by any Loan Party of any of the terms, conditions, covenants, or agreements of the Loan Parties under this Agreement or any of the Loan Documents, (C) responsible to any Lender or the Issuing Bank for
the state or condition of any properties of the Loan Parties or any other obligor hereunder constituting Collateral for the Obligations of the Loan Parties hereunder, or any information contained in the books or records of the Loan Parties;
(D) responsible to any Lender or the Issuing Bank for the validity, enforceability, collectibility, effectiveness or genuineness of this Agreement or any other Loan Document or any other certificate, document or instrument furnished in
connection therewith; or (E) responsible to any Lender or the Issuing Bank for the validity, priority or perfection of any lien securing or purporting to secure the Obligations or the value or sufficiency of any of the Collateral. 

 
 (b) The Agents may execute any of their duties under this
Agreement or any other Loan Document by or through their agents or attorneys-in-fact, and shall be entitled to the advice of counsel concerning all matters pertaining to its rights and duties hereunder or under the Loan Documents. The Agents shall
not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by them with reasonable care. 
  
 (c) None of the Agents nor any of their respective directors, officers, employees, or agents shall have any responsibility to the Loan
Parties on account of the failure or delay in performance or breach 

  

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by any Lender (other than by the Agent in its capacity as a Lender) or the Issuing Bank of any of their respective obligations under this Agreement or the
Loan Documents or in connection herewith or therewith. 
  
 (d) The Agents shall be entitled to rely, and shall be fully protected in relying, upon any notice, consent, certificate, affidavit, or other document or writing believed by it to be genuine and correct and to have been signed, sent or made
by the proper person or persons, and upon the advice and statements of legal counsel (including, without, limitation, counsel to the Loan Parties), independent accountants and other experts selected by the Agents. The Agents shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan Document unless they shall first receive such advice or concurrence of the applicable Lenders as they deem appropriate or they shall first be indemnified to their
satisfaction by the Lenders against any and all liability and expense which may be incurred by them by reason of the taking or failing to take any such action. 
  

Section 8.05 Notice of Default; Actions on Default. 
  
 (a) The Agents shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Agents have actual knowledge of the same or has received notice from a Lender or the Loan Parties referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of
default”. In the event that the Agents obtain such actual knowledge or receive such a notice, the Agents shall give prompt notice thereof to each of the Lenders. 
  
 (b) The Agents shall (subject to the provisions of Section 9.02) take such action with respect to any
Default or Event of Default as shall be reasonably directed by the Required Lenders. Unless and until the Agents shall have received such direction, the Agents may (but shall not be obligated to) take such action, or refrain from taking such action,
with respect to any such Default or Event of Default as they shall deem advisable in the best interest of the Lenders. In no event shall the Agents be required to comply with any such directions to the extent that the Agents believe that the
Agents’ compliance with such directions would be unlawful. 
  
 Section 8.06 Lenders’ Credit Decisions. 
  
 Each Lender acknowledges that it has, independently and without reliance upon the Agents or any other Lender, and based on the financial statements prepared by the Loan Parties and such other documents and information as it has deemed
appropriate, made its own credit analysis and investigation into the business, assets, operations, property, and financial and other condition of the Loan Parties and has made its own decision to enter into this Agreement and the other Loan
Documents and agrees that the Agents shall bear no responsibility therefore. Each Lender also acknowledges that it will, independently and without reliance upon the Agents or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in determining whether or not conditions precedent to closing any Loan hereunder have been satisfied and in taking or not taking any action under this Agreement and the other
Loan Documents. 
  
 Section 8.07 Reimbursement and
Indemnification. 
  
 Each Lender agrees (i) to
reimburse (x) each Agent for such Lender’s Commitment Percentage of any expenses and fees incurred by such Agent for the benefit of the Lenders or the Issuing Bank under this Agreement, and any of the Loan Documents, including, without
limitation, counsel fees and compensation of agents and employees paid for services rendered on behalf of the Lenders or the Issuing 

  

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Bank, and any other expense incurred in connection with the administration or enforcement thereof not reimbursed by the Loan Parties and (y) each Agent
for such Lender’s Commitment Percentage of any expenses of such Agent incurred for the benefit of the Lenders or the Issuing Bank that the Loan Parties have agreed to reimburse pursuant to Section 9.03 and has failed to so reimburse and
(ii) to indemnify and hold harmless the Agents and any of their directors, officers, employees, or agents, on demand, in the amount of such Lender’s Commitment Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against it or any of them in any way relating to or arising out of this Agreement,
the Loan Documents or any action taken or omitted by it or any of them under this Agreement, the Loan Documents to the extent not reimbursed by the Loan Parties (except such as shall result from their respective gross negligence or willful
misconduct). The provisions of this Section 8.07 shall survive the repayment of the Obligations and the termination of the Commitments. 
  
 Section 8.08 Rights of Agents. 
  
 It is understood and agreed that Bank of America, N.A., shall have the same rights and powers hereunder (including the right to give such instructions) as
the other Lenders and may exercise such rights and powers, as well as its rights and powers under other agreements and instruments to which it is or may be party, and engage in other transactions with the Borrowers, as though it were not the
Administrative Agent or the Collateral Agent of the Lenders under this Agreement. The Agents and their affiliates may accept deposits from, lend money to, and generally engage in any kind of commercial or investment banking, trust, advisory or other
business with the Loan Parties and their Subsidiaries and Affiliates as if it were not the Agent hereunder. 
  
 Section 8.09 Notice of Transfer. 
  
 The Agents may deem and treat a Lender party to this Agreement as the owner of such Lender’s portion of the Loans for all purposes, unless and until,
and except to the extent, an Assignment and Acceptance shall have become effective as set forth in Section 9.05(b). 
  
 Section 8.10 Successor Agent. 
  
 Any Agent may resign at any time by giving five (5) Business Days written notice thereof to the Lenders, the Issuing Bank, the other Agents and the
Lead Borrower. Upon any such resignation of any Agent, the Required Lenders shall have the right to appoint a successor Agent, which so long as no Default or Event of Default has occurred and is continuing, shall be reasonably satisfactory to the
Lead Borrower (whose consent shall not be unreasonably withheld or delayed). If no successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment, within 30 days after the retiring Agent’s giving
of notice of resignation, the retiring Agent may, on behalf of the Lenders, the other Agents and the Issuing Bank, appoint a successor Agent which shall be a Person capable of complying with all of the duties of such Agent (and the Issuing Bank),
hereunder (in the opinion of the retiring Agent and as certified to the Lenders in writing by such successor Agent) which, so long as no Default or Event of Default has occurred and is continuing, shall be reasonably satisfactory to the Lead
Borrower (whose consent shall not be unreasonably withheld or delayed). Upon the acceptance of any appointment as Agent by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring 

  

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Agent’s resignation hereunder as such Agent, the provisions of this Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was such Agent under this Agreement. 
  
 Section 8.11 Reports and Financial Statements. 
  
 Promptly after receipt thereof from the Borrowers, the Administrative Agent shall remit to each Lender and the Collateral Agent copies of all financial statements required to be delivered by the Borrowers hereunder and all commercial
finance examinations and appraisals of the Collateral received by the Administrative Agent. 
  
 Section 8.12 Delinquent Lender. 
  
 If for any reason any Lender (herein, a “Delinquent Lender”) shall fail or refuse to abide by its obligations under this Agreement, including without limitation its obligation to make available to
Administrative Agent its Commitment Percentage of any Revolving Loans, expenses or setoff or purchase its Commitment Percentage of a participation interest in the Swingline Loans or Letters of Credit and such failure is not cured within ten
(10) days after receipt from the Administrative Agent of written notice thereof, then, in addition to the rights and remedies that may be available to Agents, other Lenders, the Loan Parties or any other party at law or in equity, and not at
limitation thereof, (i) such Delinquent Lender’s right to participate in the administration of, or decision-making rights related to, the Loans, this Agreement or the other Loan Documents shall be suspended during the pendency of such
failure or refusal, and (ii) a Delinquent Lender shall be deemed to have assigned any and all payments due to it from the Loan Parties, whether on account of outstanding Loans, interest, fees or otherwise, to the remaining non-delinquent
Lenders for application to, and reduction of, their proportionate shares of all outstanding Loans until, as a result of application of such assigned payments the Lenders’ respective Commitment Percentage of all outstanding Loans shall have
returned to those in effect immediately prior to such delinquency and without giving effect to the nonpayment causing such delinquency. The Delinquent Lender’s decision-making and participation rights and rights to payments as set forth in
clauses (i) and (ii) hereinabove shall be restored only upon the payment by the Delinquent Lender of its Commitment Percentage of any Loans, any participation obligation, or expenses as to which it is delinquent, together with interest
thereon at the rate set forth in Section 2.10 hereof from the date when originally due until the date upon which any such amounts are actually paid. 
  
 The non-delinquent Lenders shall also have the right, but not the obligation, in their respective, sole and absolute discretion, to acquire for no cash
consideration, (pro rata, based on the respective Commitments of those Lenders electing to exercise such right) the Delinquent Lender’s Commitment to fund future Loans (the “Delinquent Lender’s Future
Commitment”). Upon any such purchase of the Commitment Percentage of any Delinquent Lender’s Future Commitment, the Delinquent Lender’s share in future Loans and its rights under the Loan Documents with respect thereto shall
terminate on the date of purchase, and the Delinquent Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest, including, if so requested, an Assignment and Acceptance. Each Delinquent Lender shall
indemnify the Agents and each non-delinquent Lender from and against any and all loss, damage or expenses, including but not limited to reasonable attorneys’ fees and funds advanced by any Agent or by any non-delinquent Lender, on account of a
Delinquent Lender’s failure to timely fund its Commitment Percentage of a Loan or to otherwise perform its obligations under the Loan Documents. 
  

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 Section 8.13 Release of Liens 
  
 The Lenders and the Issuing Bank irrevocably authorize the Administrative
Agent and the Collateral Agent (and the Administrative Agent and the Collateral Agent hereby agree): 
  
 (i) to release any Lien on any property granted to or held by the Collateral Agent under any Loan Document (x) upon termination of
the Commitments and payment in full of all Obligations (other than contingent indemnification obligations as to which no claim has been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit which have been
collateralized), (y) that is sold or to be sold as part of or in connection with any sale or disposition permitted hereunder or under any other Loan Document, or (z) subject to Section 9.02, if approved, authorized or ratified in
writing by the Required Lenders; and 
  
 (ii) to
release any Facility Guarantor from its obligations under the Facility Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. 
  
 ARTICLE IX 
  
 Miscellaneous 
  
 Section 9.01 Notices. 
  
 Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 
  

(a) if to any Loan Party, to it at Brookstone, Inc. One Innovation Way, Merrimack , New Hampshire 03054 Attention: Philip W. Roizin
(Telecopy (603)-577-8004); with a copy to J.W. Childs Associates, L.P. 111 Huntington Ave. Suite 2900, Boston Massachusetts 02199 Attention: James Rhee (Telecopy (617) 753-1101) and Kaye Scholer LLP, 425 Park Avenue, New York, NY 10022-3598,
Attention: Edmond Gabbay, Esq. (Telecopy: (212) 836-6476) 
  
 (b) if to the Administrative Agent or the Collateral Agent, or the Swingline Lender to Bank of America, N.A., 40 Broad Street, Boston, Massachusetts 02109, Attention Kathleen Dimock (Telecopy No. (617) 434-6685),
with a copy to Riemer & Braunstein, LLP, Three Center Plaza, Boston, Massachusetts 02108, Attention: Kevin J. Simard, Esquire (Telecopy No. (617) 880-3456); 
  
 (c) if to any other Lender, to it at its address (or telecopy number) set forth on the signature pages
hereto or on any Assignment and Acceptance for such Lender. 
  
 Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of receipt. 
  

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 Section 9.02 Waivers; Amendments. 
  
 (a) No failure or delay by the Agents, the Issuing Bank or
any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 9.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan
or issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Agents, any Lender or the Issuing Bank may have had notice or knowledge of such Default or Event of Default at the
time. 
  
 (b) Neither this Agreement nor any
other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or, in the
case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Agents and the Loan Parties that are parties thereto, in each case with the Consent of the Required Lenders, provided, that no such
agreement shall: 
  
 (i) without the Consent of
each Lender affected thereby, increase the Commitment of such Lender; 
  
 (ii) without the Consent of each Lender: 
  
 (A) reduce the principal amount of any Loan or Letter of Credit or reduce the rate of interest thereon, or reduce any fees payable hereunder; 
  
 (B) postpone the scheduled date of payment of the principal amount of any Loan or Letter of Credit
Outstanding , or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of the Commitments or the Maturity Date; 
  
 (C) change Sections 2.20, 2.22, or 2.23; 
  
 (D) change any of the provisions of this Section 9.02
or the definition of the term “Required Lenders”, or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any
consent thereunder; 
  
 (E) release any Loan
Party from its obligations under any Loan Document (except in connection with a disposition permitted under Section 6.05 or a transaction permitted under Section 6.03), or limit its liability in respect of such Loan Document; 

 

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 (F) except for dispositions described in Section 6.05 or as permitted in the
Security Documents, release any material portion of the Collateral from the Liens of the Security Documents; 
  
 (G) change the definition of the terms “Adjusted Excess Availability”, “Availability”, “Borrowing Base” or
“Excess Availability”, or any component definition thereof if as a result thereof the amounts available to be borrowed by the Borrowers would be increased; provided, that the foregoing shall not limit the discretion of the
Administrative Agent pursuant to the definitions of Eligible Credit Card Receivables, Eligible Inventory, Eligible In-Transit Inventory, or Eligible L/C or to change, establish or eliminate any Reserves; 
  
 (H) increase the Commitments to an amount greater than
$100,000,000; or 
  
 (I) change the definition
of Permitted Overadvances if the effect is to increase the amount thereof permitted hereunder; or 
  
 (iii) without the prior written consent of the Agents or the Issuing Bank, as the case may be, amend, modify or otherwise affect the
rights or duties of the Agents or the Issuing Bank. 
  
 (c) Notwithstanding anything to the contrary contained in this Section 9.02, in the event that the Borrowers request that this Agreement or any other Loan Document be modified, amended or waived in a manner which would require the
Consent of the Lenders pursuant to Section 9.02(b) and such amendment is approved by the Required Lenders, but not by the percentage of the Lenders set forth in said Section 9.02(b), the Borrowers and the Required Lenders shall be
permitted to amend this Agreement without the Consent of the Lender or Lenders which did not agree to the modification or amendment requested by the Borrowers (such Lender or Lenders, collectively the “Minority Lenders”) to provide
for (i) the termination of the Commitment of each of the Minority Lenders, (ii) the addition to this Agreement of one or more other financial institutions, or an increase in the Commitment of one or more of the Required Lenders, so that
the aggregate Commitments after giving effect to such amendment shall be in the same amount as the aggregate Commitments immediately before giving effect to such amendment, (iii) if any Loans are outstanding at the time of such amendment, the
making of such additional Loans by such new or increasing Lender or Lenders, as the case may be, as may be necessary to repay in full the outstanding Loans (including principal, interest, and fees) of the Minority Lenders immediately before giving
effect to such amendment and (iv) such other modifications to this Agreement or the Loan Documents as may be appropriate and incidental to the foregoing. 
  

(d) No notice to or demand on any Loan Party shall entitle any Loan Party to any other or further notice or demand in the same, similar
or other circumstances. Each holder of a Note shall be bound by any amendment, modification, waiver or consent authorized as provided herein, whether or not a Note shall have been marked to indicate such amendment, modification, waiver or consent
and any consent by a Lender, or any holder of a Note, shall bind any Person subsequently acquiring a Note, whether or not a Note is so marked. No amendment to this Agreement or any other Loan Document shall be effective against the Borrowers unless
signed by the Borrowers or other applicable Loan Party. 
  
 Section 9.03 Expenses; Indemnity; Damage Waiver. 
  
 (a) The Loan Parties shall jointly and severally pay (i) all reasonable out-of-pocket expenses incurred by the Agents, including the reasonable fees, charges and disbursements of counsel for the Agents, outside
consultants for the Agents, appraisers for the Agents, for commercial finance 

  

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examinations and environmental site assessments, in connection with the syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents and any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, and (iii) all reasonable out-of-pocket expenses incurred by the Agents, Lenders and the
Issuing Bank, including the reasonable fees, charges and disbursements of any counsel and any outside consultants, in connection with the enforcement or protection of their rights in connection with the Loan Documents, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Obligations. 
  
 (b) The Loan Parties shall, jointly and severally, indemnify the Agents, the Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including
the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any
other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the transactions contemplated by the Loan Documents or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by any Loan Party or any of the
Subsidiaries, or any Environmental Liability related in any way to any Loan Party or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent there is a specific finding in a judicial proceeding
before a court of competent jurisdiction (in which the Indemnitee has had notice and an opportunity to be heard) from which no further appeal is available that such losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or willful misconduct of such Indemnitee or any Affiliate of such Indemnitee (or of any officer, director, employee, advisor or agent of such Indemnitee or any such Indemnitee’s Affiliates). In connection with any indemnified claim
hereunder, the Indemnitee shall be entitled to select its own counsel the Loan Parties shall promptly pay the reasonable fees and expenses of such counsel. 
  
 (c) To the extent that any Loan Party fails to pay any amount required to be paid by it to the Agents or the Issuing Bank under paragraph
(a) or (b) of this Section 9.03, each Lender severally agrees to pay to the Agents or the Issuing Bank, as the case may be, such Lender’s Commitment Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount. 
  
 (d) No Loan Party shall assert and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated by the Loan Documents, any Loan or Letter of Credit or the use of the proceeds thereof. The Loan Parties further
agree that no Indemnitee shall have any liability to the Loan Parties, any Person asserting claims by or on behalf of any Loan Party or any other 

  

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Person in connection with this Agreement or the other Loan Documents except the Indemnitee’s gross negligence or willful misconduct. 
  
 (e) All amounts due under this Section 9.03 shall be
payable promptly after written demand therefore. 
  
 Section
9.04 Designation of Lead Borrower as Borrowers’ Agent. 
  
 (a) Each Borrower hereby irrevocably designates and appoints the Lead Borrower as that Borrower’s agent to obtain Loans and Letters of Credit hereunder, the proceeds of which shall be available to each Borrower
for those uses as those set forth herein. As the disclosed principal for its agent, each Borrower shall be obligated to the Agents and each Lender on account of Loans so made and Letters of Credit so issued hereunder as if made directly by the
Lenders to or for the benefit of that Borrower, notwithstanding the manner by which such Loans and Letters of Credit are recorded on the books and records of the Lead Borrower and of any other Borrower. 
  
 (b) Each Borrower recognizes that credit available to it
hereunder is in excess of and on better terms than it otherwise could obtain on and for its own account and that one of the reasons therefore is its joining in the credit facility contemplated herein with all other Borrowers. Consequently, each
Borrower hereby assumes and agrees to discharge all Obligations of all other Borrowers as if the Borrower so assuming were each other Borrower. 
  
 (c) The Lead Borrower shall act as a conduit for each Borrower (including itself, as a “Borrower”) on whose behalf the Lead
Borrower has requested a Loan. 
  
 (d) The Lead
Borrower shall cause the transfer of the proceeds of each Loan to the (those) Borrower(s) on whose behalf such Loan was obtained. Neither the Agents nor any Lender shall have any obligation to see to the application of such proceeds. 
  
 (e) If, for any reason, and at any time during the term of
this Agreement, any Borrower, including the Lead Borrower, as agent for the Borrowers, shall be unable to, or prohibited from carrying out the terms and conditions of this Agreement (as determined by the Administrative Agent in the Administrative
Agent’s sole and absolute discretion) then the Lenders may make Loans directly to, and cause the issuance of Letters of Credit directly for the account of such of the Borrowers as the Administrative Agent determines to be expedient, which Loans
may be made without regard to the procedures otherwise included herein. 
  
 (f) In the event that the Administrative Agent determines to forgo the procedures included herein pursuant to which Loans and Letters of Credit are to be channeled through the Lead Borrower, then the Administrative
Agent may designate one or more of the Borrowers to fulfill the financial and other reporting requirements otherwise imposed herein upon the Lead Borrower. 
  
 (g) Each of the Borrowers shall remain liable to the Agents and the Lenders for the payment and performance of all Obligations (which
payment and performance shall continue to be secured by all Collateral granted by each of the Borrowers) notwithstanding any determination by the Administrative Agent to cease making Loans or causing Letters of Credit to be issued to or for the
benefit of any Borrower. 
  

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 (h) The authority of the Lead Borrower to request Loans on behalf of, and to bind, the
Borrowers, shall continue unless and until the Administrative Agent acts as provided in subparagraph (e), above, or the Administrative Agent actually receives: 
  

(i) written notice of: (x) the termination of such authority, and (y) the subsequent appointment of a successor Lead
Borrower, which notice is signed by an executive officer of each Borrower (other than the President of the Lead Borrower being replaced) then eligible for borrowing under this Agreement; and 
  
 (ii) written notice from such successive Lead Borrower
(x) accepting such appointment; (y) acknowledging that such removal and appointment has been effected by the respective executive officers of such Borrowers eligible for borrowing under this Agreement; and (z) acknowledging that from
and after the date of such appointment, the newly appointed Lead Borrower shall be bound by the terms hereof, and that as used herein, the term “Lead Borrower” shall mean and include the newly appointed Lead Borrower. 
  
 Section 9.05 Successors and Assigns. 
  
 (a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that no Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder or under any other Loan Document without the prior written consent of each Lender (and any such attempted assignment or transfer without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the Agents, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 
  
 (b) Any Lender may assign all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it), provided, that  
  
 (i) except in the case of an assignment by a Lender to a Lender or an Affiliate of a Lender, the Lead Borrower (but only if no Event of
Default exists and is continuing), the Administrative Agent and the Issuing Bank must give their prior written consent to such assignment by a Lender (which consent shall not be unreasonably withheld or delayed); 
  
 (ii) any assignment made by a Lender may be made only to one
or more Eligible Assignees; 
  
 (iii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Revolving Loans, the amount of the Commitment or Revolving Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 without the prior written consent of Administrative
Agent and the Lead Borrower; 
  

 95 

 (iv) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations; and 
  
 (v) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, and, after completion of the syndication of the Loans, together with a processing and recordation
fee of $3,500. 
  
 Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section 9.05, from and after the effective date specified in an Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Section 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section 9.05. 
  
 (c) The Administrative Agent, acting for this purpose as an agent of the Loan Parties, shall maintain at one of its offices in Boston,
Massachusetts a copy of each Assignment and Acceptance delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and L/C
Disbursements owing to, each Lender pursuant to the terms hereof from time to time. The entries in the Register shall be conclusive absent manifest error and the Loan Parties, the Administrative Agent, the Issuing Bank and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Lead Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 
  
 (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the processing and
recordation fee referred to in paragraph (b) of this Section 9.05 and any written consent to such assignment required by paragraph (b) of this Section 9.05, the Administrative Agent shall accept such Assignment and Acceptance and
record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph (d). 
  
 (e) Any Lender may, without the consent of the Loan Parties,
the Agents, or the Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it), provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Loan Parties, the Agents, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation in the Commitments, the Loans and the Letters of Credit Outstandings shall provide that such Lender shall retain the sole right to enforce the Loan Documents and, except
as provided in the following sentence, to approve any amendment, modification or waiver of any provision of the Loan Documents. Subject to paragraph (f) of this Section 9.05, the Loan Parties agree that each Participant shall be entitled
to 

  

 96 

 
the benefits of Section 2.24, Section 2.26, and Section 2.27 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.09 as though it were a Lender, provided such Participant agrees to be subject
to Section 2.26(c) as though it were a Lender. Each Lender, acting for this purpose as an agent of the Loan Parties, shall maintain at its offices a record of each agreement or instrument effecting any participation and a register for the
recordation of the names and addresses of its Participants and their rights with respect to principal amounts and other Obligations from time to time (each a “Participation Register”). The entries in each Participation Register
shall be conclusive absent manifest error and the Loan Parties, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in a Participant Register as a Participant for all purposes of this Agreement
(including, for the avoidance of doubt, for purposes of entitlement to benefits under Section 2.24, Section 2.26, Section 2.27 and Section 9.09). The Participation Register shall be available for inspection by the Lead Borrower,
the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 
  
 (f) A Participant shall not be entitled to receive any greater payment under Section 2.24 or 2.27 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such Participant. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.27 unless (i) the Lead Borrower
is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.27(e) as though it were a Lender and (ii) such Participant is eligible for exemption from the
withholding Tax referred to therein, following compliance with Section 2.27(e). 
  
 (g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure obligations to any of the twelve Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341, and this Section 9.05 shall
not apply to any such pledge or assignment of a security interest, provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto. 
  
 Section 9.06
Survival. 
  
 All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied
upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and
notwithstanding that the Agents, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.22, 2.25 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof. 
  

 97 

 Section 9.07 Counterparts; Integration; Effectiveness. 
  
 This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all contemporaneous or previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Agents and the Lenders and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement. 
  
 Section 9.08
Severability. 
  
 Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 
  
 Section 9.09 Right of Setoff. 
  
 If an Event of Default shall have occurred and be continuing and the Administrative Agent shall so direct, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the Loan Parties against any of and all the obligations of the Loan Parties now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not
such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section 9.09 are in addition to other rights and remedies (including other rights of setoff) that
such Lender may have. 
  
 Section 9.10 Governing Law;
Jurisdiction; Consent to Service of Process. 
  
 (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
  
 (b) The Loan Parties agree that any suit for the enforcement of this Agreement or any other Loan Document may be brought in any New York
state or federal court sitting in New York County as the Administrative Agent may elect in its sole discretion and consent to the non-exclusive jurisdiction of such courts. The Loan Parties hereby waive any objection which they may now or hereafter
have to the venue of any such suit or any such court or that such suit is brought in an inconvenient forum. The Loan Parties agree that any action commenced by any Loan Party asserting any claim or counterclaim arising under or in connection with
this Agreement or any other Loan Document shall be brought solely in any New York state or federal court sitting in New York County as the Administrative Agent may elect in its sole discretion and consent to the exclusive jurisdiction of such courts
with respect to any such action. 
  

 98 

 (c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. 
  
 Section 9.11 WAIVER OF JURY TRIAL. 
  
 EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH ANY LOAN PARTY, ANY AGENT, ISSUING BANK, ANY LENDER OR ANY PARTICIPANT IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST ANY LOAN
PARTY, THE AGENT, ISSUING BANK, AND/OR SUCH LENDER OR PARTICIPANT OR IN WHICH ANY LOAN PARTY, THE AGENT, ISSUING BANK, OR SUCH LENDER OR PARTICIPANT, IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF, ANY
RELATIONSHIP AMONGST OR BETWEEN ANY LOAN PARTY OR ANY OTHER PERSON AND THE AGENT, ISSUING BANK, OR SUCH LENDER OR PARTICIPANT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
  
 Section 9.12 Headings. 
  
 Article and
Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 

 
 Section 9.13 Interest Rate Limitation. 
  
 Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under Applicable Law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and
the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefore) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the
date of repayment, shall have been received by such Lender. 
  
 Section 9.14 Additional Waivers. 
  
 (a) The Obligations are the joint and several obligations of each Loan Party. To the fullest extent permitted by Applicable Law, the obligations of each Loan Party hereunder shall not be affected by (i) the
failure of any Agent or any Secured Party to assert any claim or demand or to enforce or exercise 

  

 99 

 
any right or remedy against any other Loan Party under the provisions of this Agreement, any other Loan Document or otherwise, (ii) any rescission,
waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement, any other Loan Document, or any other agreement, including with respect to any other Loan Party, or (iii) the failure to perfect any
security interest in, or the release of, any of the security held by or on behalf of the Collateral Agent or any other Secured Party. 
  
 (b) To the fullest extent permitted by Applicable Law, the obligations of each Loan Party hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of
each Loan Party hereunder shall not be discharged or impaired or otherwise affected by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or omission that may or might in any manner or to
any extent vary the risk of any Loan Party or that would otherwise operate as a discharge of any Loan Party as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). 
  
 (c) To the fullest extent permitted by Applicable Law, each
Loan Party waives any defense based on or arising out of any defense of any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any other Loan Party,
other than the payment in full in cash of all the Obligations. The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any other Loan Party, or exercise any other right or remedy available to them against any other Loan Party,
without affecting or impairing in any way the liability of any Loan Party hereunder except to the extent that all the Obligations (other than contingent indemnification obligations as to which no claim has been made) have been paid in full in cash.
Pursuant to Applicable Law, each Loan Party waives any defense arising out of any such election even though such election operates, pursuant to Applicable Law, to impair or to extinguish any right of reimbursement or subrogation or other right or
remedy of such Loan Party against any other Loan Party, as the case may be, or any security. 
  
 (d) Upon payment by any Loan Party of any Obligations, all rights of such Loan Party against any other Loan Party arising as a result
thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior payment in full in cash of all the Obligations (other than contingent
indemnification obligations as to which no claim has been made). In addition, any indebtedness of any Loan Party now or hereafter held by any other Loan Party is hereby subordinated in right of payment to the prior payment in full of the Obligations
(other than contingent indemnification obligations as to which no claim has been made). Notwithstanding the foregoing, prior to the occurrence of an Event of Default, Loan Party may make payments to any other Loan Party on account of any such
indebtedness. After the occurrence and during the continuance of an Event of Default, none of the Loan Parties will demand, sue for, or otherwise attempt to collect any such indebtedness. 
  
 Section 9.15 Confidentiality. 
  
 Each of the Lenders agrees that it will not to disclose without the prior consent of the Lead Borrower (other than to its
affiliates and its and their respective employees officers, directors, auditors, 

  

 100 

 
examiners, counsel or other professional advisors, in each case who have a need to know such Confidential Information in accordance with customary banking
practices and who are informed of the confidential nature of such information and is instructed to keep such information confidential on the same terms as provided in this Section 9.15) or to another Lender if the Lender or such Lender’s
holding or parent company in its sole discretion reasonably determines that any such party should have access to such information, any information with respect to the Borrowers or any other Loan Party which is furnished pursuant to this Agreement
(all such information, “Confidential Information”), provided that any Lender may disclose any Confidential Information (a) as has become generally available to the public other than as a result of a disclosure in
violation of any duty of confidentiality hereunder by such Lender or the Administrative Agent or a disclosure in violation of any duty of confidentiality hereunder known to such Lender or the Administrative Agent to have been made by any person or
entity to which such Lender or the Administrative Agent has delivered such Confidential Information, (b) as may be required by any judicial, administrative, or governmental authority (including, without limitation, the Federal Reserve Board or
the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors), (c) as may be required in response to any summons or subpoena or in connection with any litigation, provided
that unless specifically prohibited by Applicable Law, reasonable efforts shall be made to notify Lead Borrower of such request, (d) in order to comply with any law, order, regulation or ruling applicable to such Lender or its Affiliates,
(e) in connection with the enforcement of remedies under this Agreement and the other Loan Documents, and (f) to any prospective transferee in connection with any contemplated transfer of any of the Loans or Notes or any interest therein
by such Lender provided that such prospective transferee receives such Confidential Information having been made aware of the confidential nature thereof and agrees to be bound by the terms of this Section 9.15. The Loan Parties hereby agree
that the failure of a Lender to comply with the provisions of this Section 9.15 shall not relieve the Loan Parties of any of its obligations to such Lender under this Agreement and the other Loan Documents. 
  
 Section 9.16 Publicity. 
  
 The Agents may issue a “tombstone” notice of the establishment of
the credit facility contemplated by this Agreement and may make reference to each Loan Party (and may utilize any logo or other distinctive symbol associated with each Loan Party) in connection with any advertising, promotion, or marketing
undertaken by the Agents. The Loan Parties shall give the Agents one business days notice of any press release prior to it being issued, which press release shall be acceptable to the Agents in its reasonable discretion. 
  
 Section 9.17 USA Patriot Act. 
  
 Each Lender hereby notifies the Loan Parties that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Loan Parties, which information
includes the name and address of the Loan Parties and other information that will allow such Lender to identify the Loan Parties in accordance with the Act. 
  
 [SIGNATURE PAGES FOLLOW] 
  

 101 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
authorized officers as a sealed instrument as of the day and year first above written. 
  

			
	 BROOKSTONE COMPANY, INC., as Lead
 Borrower and Borrower:

		
	By	 	 /s/ Philip W. Roizin

			
	 Name:
	 	 Philip W. Roizin

	 Title:
	 	Executive Vice President, Treasurer, Secretary and Chief Financial Officer
		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

	
	 BROOKSTONE INTERNATIONAL
 HOLDINGS,
INC.

			
		
	By	 	 /s/ Philip W. Roizin

			
	 Name:
	 	 Philip W. Roizin

	 Title:
	 	Executive Vice President, Treasurer and Secretary
		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

	
	BROOKSTONE HOLDINGS, INC.

			
		
	By	 	 /s/ Philip W. Roizin

			
	 Name:
	 	 Philip W. Roizin

	 Title:
	 	Executive Vice President, Treasurer and Secretary
		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

  

 S-1 

			
	BROOKSTONE PROPERTIES, INC.

			
		
	By	 	 /s/ Philip W. Roizin

			
	 Name:
	 	 Philip W. Roizin

	 Title:
	 	Executive Vice President, Treasurer and Secretary
		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

	
	BROOKSTONE PURCHASING, INC.

			
		
	By	 	 /s/ Philip W. Roizin

			
	 Name:
	 	 Philip W. Roizin

	 Title:
	 	Executive Vice President, Treasurer and Secretary
		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

	
	BROOKSTONE RETAIL PUERTO RICO, INC.

			
		
	By	 	 /s/ Philip W. Roizin

			
	 Name:
	 	 Philip W. Roizin

	 Title:
	 	Executive Vice President, Treasurer and Secretary
		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

  

 S-2 

			
	BROOKSTONE STORES, INC.

			
		
	By	 	 /s/ Philip W. Roizin

	 Name:
	 	 Philip W. Roizin

	 Title:
	 	 Executive Vice President, Treasurer and Secretary

		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

	
	GARDENERS EDEN, INC.

			
		
	By	 	 /s/ Philip W. Roizin

	 Name:
	 	 Philip W. Roizin

	 Title:
	 	 Executive Vice President, Treasurer and Secretary

		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

	
	 BROOKSTONE, INC., as a Facility Guarantor,:

			
		
	By	 	 /s/ Philip W. Roizin

	 Name:
	 	 Philip W. Roizin

	 Title:
	 	 Executive Vice President, Treasurer and Secretary

		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

  

 S-3 

			
	 ADVANCED AUDIO CONCEPTS, LTD., as a
 Facility Guarantor:

			
		
	By	 	 /s/ Philip W. Roizin

	 Name:
	 	 Philip W. Roizin

	 Title:
	 	 Executive Vice President, Treasurer and Secretary

		
	 Address:
	 	 
	 One Innovation Way
 Merrimack, New Hampshire 03054

	 Attn: Philip W. Roizin

	 Telephone: 1-603-577-8010

	 Telecopy: 1-603-577-8004

  

 S-4 

			
	 BANK OF AMERICA, N.A., as Administrative
 Agent, as Collateral Agent, Swingline Lender,
 Issuing Bank and Lender

			
		
	By:	 	 /s/ Daniel Platt

			
	 Name:
	 	Daniel Platt
	 Title:
	 	Director
		
	 Address:
	 	 
	 40 Broad Street, 10th Floor
 Boston, Massachusetts 02109

	 Attn: Kathleen Dimock

	 Telephone: (617) 434-3830

	 Telecopy: (617) 434-6685

	
	 GOLDMAN SACHS CREDIT PARTNERS L.P.,
 as Documentation Agent and as a Lender

			
		
	By:	 	 /s/ William A. Archer

			
	 Name:
	 	 William A. Archer

	 Title:
	 	 Managing Director

		
	 Address:
	 	 
	 85 Broad Street
 New York, New York 10004

	 Attn: Chris Burns

	 Telephone: 1-212-902-5524

	 Telecopy: 1-212-357-9110

	
	UBS LOAN FINANCE LLC,
	 as Lender

			
		
	By:	 	 /s/ Wilfred V. Saint

			
	 Name:
	 	 Wilfred V. Saint

	 Title:
	 	 Director Banking Products Services, US

			
		
	By:	 	 /s/ Richard L. Tavrow

			
	 Name:
	 	 Richard L. Tavrow

	 Title:
	 	 Director Banking Products Services, US

		
	 Address:
	 	 
	 c/o UBS AG, Stamford Branch
 677 Washington Boulevard
 Stamford, Connecticut 06901

	 Attn:
	 	 Deborah Porter

	 Telephone:
	 	 (203) 719-6391

	 Telecopy:
	 	 (203) 719-4176

  

 S-5 

			
	TD BANKNORTH, N.A.,
	 as Lender

			
		
	By:	 	 /s/ Jeff Westling

			
	 Name:
	 	 Jeff Westling

	 Title:
	 	 Senior Vice President

		
	 Address:
	 	 
	 7 New England Executive Park, 10th Floor
 Burlington,
Massachusetts 01803

	 Attn:
	 	 Jeff Westling

	 Telephone:  (781) 229-3902

	 Telecopy:
	 	  718-229-5663

  

 S-6

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