EX-10.2 2 a10-11016_1ex10d2.htm EX-10.2

Exhibit 10.2

EXHIBIT A-1

ASSIGNMENT AND ACCEPTANCE (TRANCHE A)

This Assignment and Acceptance (Tranche A) (this “Assignment and Acceptance”) is dated as of the Assignment Effective Date set forth below and is entered into by and between [the][each](1) Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each](2) Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees](3) hereunder are several and not joint.](4) Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as further defined below, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by [each, the] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Assignment Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Tranche A Lender][their respective capacities as Tranche A Lenders] under the Credit Agreement and the other Loan Documents to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the revolving credit facility provided by Tranche A Lenders under the Credit Agreement (including, without limitation, participations in Letters of Credit and Swingline Loans included in such facility) and (ii) to the extent permitted to be assigned under Applicable Law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Tranche A Lender)][the respective Assignors (in their respective capacities as Tranche A Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses

(1) For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.

(2) For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.

(3) Select as appropriate.

(4) Include bracketed language if there are either multiple Assignors or multiple Assignees.

(i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by [the][any] Assignor.

1.	Assignor[s]:



2.	Assignee[s]:



3.	Borrowers: Michaels Stores, Inc., a Delaware corporation, Michaels Stores Procurement Company, Inc., a Delaware corporation, Aaron Brothers, Inc., a Delaware corporation, and Artistree, Inc., a Delaware corporation

4.	Administrative Agent:	Bank of America, N.A.

5.	Collateral Agent:	Bank of America, N.A.

6.	Credit Agreement: Amended and Restated Credit Agreement dated as of February 18, 2010 (as such may be amended, restated, supplemented, or otherwise modified from time to time) by, among others, (i) Michaels Stores, Inc., a Delaware corporation, for itself and as agent (in such capacity, the “Lead Borrower”) for the Borrowers party thereto, (ii) the other Borrowers party thereto, (iii) the Facility Guarantors party thereto, (iv) the Lenders party thereto, and (v) Bank of America, N.A., as Administrative Agent and Collateral Agent.

7.	Assigned Interest[s]:

Assignor[s](5)	Assignee[s](6)	Aggregate Amount of Tranche A Commitment/ Tranche A Loans for all Tranche A Lenders(7)	Amount of Tranche A Commitment / Tranche A Loans Assigned(8)	Percentage Assigned of Tranche A Loans(9)
		$	$		%
		$	$		%

(5) List each Assignor, as appropriate.

(6) List each Assignee, as appropriate.

(7) Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Assignment Effective Date.

(8) Subject to minimum amount requirements pursuant to Section 9.07(a) of the Credit Agreement.

(9) Set forth, to at least 9 decimals, as a percentage of the Tranche A Commitment/ Tranche A Loans of all Tranche A Lenders thereunder.

[8. Trade Date: ](10)

Assignment Effective Date: , 20 [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE DATE OF DELIVERY OF THIS ASSIGNMENT AND ACCEPTANCE FOR RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Acceptance are hereby agreed to:

		ASSIGNOR
		[NAME OF ASSIGNOR]

		By:
		Name:
		Title:


		ASSIGNEE
		[NAME OF ASSIGNEE]

		By:
		Name:
		Title:

[Consented to and](11) Accepted:

BANK OF AMERICA, N.A., as
Administrative Agent

By:
Name:
Title:

(10) To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

(11) To the extent that the Administrative Agent’s consent is required under Section 9.07(a) of the Credit Agreement.

[Consented to:](12)

MICHAELS STORES, INC., as Lead Borrower

By:
Name:
Title:

(12) To the extent required under Section 9.07(a) of the Credit Agreement.

ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE

Reference is made to the Amended and Restated Credit Agreement dated as of February 18, 2010 (as such may be amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by, among others, (i) Michaels Stores, Inc., a Delaware corporation, for itself and as agent (in such capacity, the “Lead Borrower”) for the Borrowers party thereto, (ii) the other Borrowers party thereto, (iii) the Facility Guarantors party thereto, (iv) the Lenders party thereto, and (v) Bank of America, N.A., as Administrative Agent and Collateral Agent.

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Loan Parties or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Loan Parties or any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Tranche A Lender under the Credit Agreement, (ii) it meets all the requirements to be an Eligible Assignee under the Credit Agreement (subject to such consents, if any, as may be required under Section 9.07(a) of the Credit Agreement) and it is not a Deteriorating Lender, (iii) from and after the Assignment Effective Date, it shall be bound by the provisions of the Credit Agreement as a Tranche A Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Tranche A Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01(a), Section 5.01(b) or Section 5.01(c) thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, the Collateral Agent, or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter

into this Assignment and Acceptance and to purchase [the][such] Assigned Interest, and (vii) if it is a Lender that is organized under the laws of a jurisdiction other than that in which the Borrowers are residents for tax purposes, to the extent reasonably requested by the Administrative Agent, attached hereto are duly completed and executed by [the][such] Assignee, any U.S. Internal Revenue Service forms required under Section 2.23 of the Credit Agreement; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, the Collateral Agent, [the][any] Assignor 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 taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Tranche A Lender.

2. Payments. From and after the Assignment Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued up to but excluding the Assignment Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Assignment Effective Date.

3. General Provisions. This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed by, and construed in accordance with, the law of the State of New York.

4. Fees. This Assignment and Acceptance shall be delivered to the Administrative Agent with a processing and recordation fee of $3,500, to the extent required by the terms of the Credit Agreement.

EXHIBIT A-2

ASSIGNMENT AND ACCEPTANCE (FILO)

This Assignment and Acceptance (FILO) (this “Assignment and Acceptance”) is dated as of the Assignment Effective Date set forth below and is entered into by and between [the][each](1) Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each](2) Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees](3) hereunder are several and not joint.](4) Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as further defined below, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by [each, the] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Assignment Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a FILO Lender][their respective capacities as FILO Lenders] under the Credit Agreement and the other Loan Documents to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the revolving credit facility provided by FILO Lenders under the Credit Agreement (including, without limitation, FILO Loans included in such facility) and (ii) to the extent permitted to be assigned under Applicable Law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a FILO Lender)][the respective Assignors (in their respective capacities as FILO Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively

(3) Select as appropriate.

(4) Include bracketed language if there are either multiple Assignors or multiple Assignees.

as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by [the][any] Assignor.

1.	Assignor[s]:



2.	Assignee[s]:



3.	Borrowers: Michaels Stores, Inc., a Delaware corporation, Michaels Stores Procurement Company, Inc., a Delaware corporation, Aaron Brothers, Inc., a Delaware corporation, and Artistree, Inc., a Delaware corporation

4.	Administrative Agent:	Bank of America, N.A.

5.	Collateral Agent:	Bank of America, N.A.

6.	Credit Agreement: Amended and Restated Credit Agreement dated as of February 18, 2010 (as such may be amended, restated, supplemented, or otherwise modified from time to time) by, among others, (i) Michaels Stores, Inc., a Delaware corporation, for itself and as agent (in such capacity, the “Lead Borrower”) for the Borrowers party thereto, (ii) the other Borrowers party thereto, (iii) the Facility Guarantors party thereto, (iv) the Lenders party thereto, and (v) Bank of America, N.A., as Administrative Agent and Collateral Agent.

7.	Assigned Interest[s]:

Assignor[s](5)	Assignee[s](6)	Aggregate Amount of FILO Commitment/ FILO Loans for all FILO Lenders(7)	Amount of FILO Commitment / FILO Loans Assigned(8)	Percentage Assigned of FILO Loans(9)
		$	$		%
		$	$		%

[8. Trade Date: ](10)

(5) List each Assignor, as appropriate.

(6) List each Assignee, as appropriate.

(8) Subject to minimum amount requirements pursuant to Section 9.07(a) of the Credit Agreement.

(9) Set forth, to at least 9 decimals, as a percentage of the FILO Commitment/ FILO Loans of all FILO Lenders thereunder.

The terms set forth in this Assignment and Acceptance are hereby agreed to:

		ASSIGNOR
		[NAME OF ASSIGNOR]

		By:
		Name:
		Title:


		ASSIGNEE
		[NAME OF ASSIGNEE]

		By:
		Name:
		Title:

[Consented to and](11) Accepted:

BANK OF AMERICA, N.A., as
Administrative Agent

By:
Name:
Title:

(10) To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

(11) To the extent that the Administrative Agent’s consent is required under Section 9.07(a) of the Credit Agreement.

[Consented to:](12)

MICHAELS STORES, INC., as Lead Borrower

By:
Name:
Title:

(12) To the extent required under Section 9.07(a) of the Credit Agreement.

ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a FILO Lender under the Credit Agreement, (ii) it meets all the requirements to be an Eligible Assignee under the Credit Agreement (subject to such consents, if any, as may be required under Section 9.07(a) of the Credit Agreement) and it is not a Deteriorating Lender, (iii) from and after the Assignment Effective Date, it shall be bound by the provisions of the Credit Agreement as a FILO Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a FILO Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01(a), Section 5.01(b) or Section 5.01(c) thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, the Collateral Agent, or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter

4. Fees. This Assignment and Acceptance shall be delivered to the Administrative Agent with a processing and recordation fee of $3,500, to the extent required by the terms of the Credit Agreement.

EXHIBIT B TO CREDIT AGREEMENT

CUSTOMS BROKER AGENCY AGREEMENT

Name and Address of Customs Broker:

Dear Sir/Madam:

, a with its principal executive offices at (the “Borrower”), among others, has entered into various financing agreements with (a) Bank of America, N.A., a national banking association with offices at 100 Federal Street, 9th Floor, Boston, Massachusetts 02110, as Collateral Agent (in such capacity, herein the “ABL Collateral Agent”) for the ratable benefit of a syndicate of lenders and certain other secured parties (collectively, the “ABL Secured Parties”), and (b) Deutsche Bank AG New York Branch, a branch of Deutsche Bank AG, with a license issued by the Bank Department of the State of New York, with offices at 60 Wall Street, New York, New York 10005, as Collateral Agent (in such capacity, herein the “Term Loan Collateral Agent”) for the ratable benefit of a syndicate of lenders and certain other secured parties (collectively, the “Term Loan Secured Parties”, and together with the ABL Secured Parties, collectively, the “Secured Parties”), pursuant to which agreements the Borrower, among others, has granted a security interest to the ABL Collateral Agent and the Term Loan Collateral Agent in and to substantially all of the assets of the Borrower, including, without limitation, all of the Borrower’s inventory, goods, documents, bills of lading and other documents of title.

The ABL Collateral Agent and the Term Loan Collateral Agent have requested that you (the “Customs Broker”) act as their agent and bailee for the limited purpose of more fully perfecting and protecting the security interest of the ABL Collateral Agent and the Term Loan Collateral Agent in such bills of lading, documents and other documents of title and in the goods and inventory for which such bills of lading, documents, or other documents of title have been issued, and the Customs Broker has agreed to do so. This letter shall set forth the terms of the Customs Broker’s engagement.

1. Acknowledgment of Security Interest; Power of Attorney: The Customs Broker acknowledges, consents, and agrees that the Borrower has granted to each of the ABL Collateral Agent and the Term Loan Collateral Agent, for its respective benefit and the benefit of the other applicable Secured Parties, a security interest in all of the Borrower’s right, title, and interest in, to and under all goods and any contracts or agreements with carriers, customs brokers, and/or freight forwarders for shipment or delivery of such goods. The Borrower further advises the Customs Broker, and the Customs Broker acknowledges, consents, and agrees, that the Borrower has irrevocably constituted and appointed the ABL Collateral Agent (or, upon the

Customs Broker’s receipt of written notification from the ABL Collateral Agent that the obligations of the Borrower to the ABL Collateral Agent and the other ABL Secured Parties have been paid in full and performed in full, the Term Loan Collateral Agent) as the Borrower’s true and lawful attorney, with full power of substitution to exercise all of such rights, title, and interest, which appointment has been coupled with an interest. The Customs Broker hereby agrees that it shall act as the Borrower’s agent and bailee for the purpose of receiving any Title Documents (as defined herein) or Property (as defined herein). The Customs Broker further agrees that: (i) the Borrower holds title to all Title Documents and Property while in the custody or control of the Customs Broker; (ii) upon receipt of any Title Documents or Property, the Customs Broker shall promptly notify the Borrower that the Customs Broker is holding such Title Documents or Property on behalf of the Borrower; and (iii) if the Customs Broker receives notice from any seller of any Property of such seller’s intent to stop delivery of such Property to the Borrower, the Customs Broker shall promptly notify the Borrower, ABL Collateral Agent and Term Loan Collateral Agent of same and, to the extent that the ABL Collateral Agent (or Term Loan Collateral Agent, as applicable) delivers notice to the Customs Broker pursuant to Section 4 or 5 of this Agreement, shall follow solely the instructions of the ABL Collateral Agent (or, upon the Customs Broker’s receipt of written notification from the ABL Collateral Agent that the obligations of the Borrower to the ABL Collateral Agent and the other ABL Secured Parties have been paid in full and performed in full, the Term Loan Collateral Agent) concerning the release, transfer, or other disposition of such Property and shall not follow any instructions of the Borrower or any other person concerning same.

2. Appointment Of Customs Broker as Agent of ABL Collateral Agent and Term Loan Collateral Agent: The Customs Broker is hereby appointed as agent for the ABL Collateral Agent and the Term Loan Collateral Agent to receive and retain possession of all goods, inventory, or other property of the Borrower which are received by the Customs Broker for processing (collectively, the “Property”), together with all bills of lading, waybills, documents, and other documents of title (collectively, the “Title Documents”) heretofore or at any time hereafter issued for any Property, such receipt and retention of possession being for the purpose of more fully perfecting and preserving the ABL Collateral Agent’s and the Term Loan Collateral Agent’s security interests in the Title Documents and the Property. The Customs Broker will maintain possession of the Title Documents and the Property, subject to the security interests of the ABL Collateral Agent and the Term Loan Collateral Agent, and will note the security interests of the ABL Collateral Agent and the Term Loan Collateral Agent on the Customs Broker’s books and records. In the event that the ABL Collateral Agent or the Term Loan Collateral Agent is designated as the consignee or co-consignee on any such Title Documents, subject to the terms and conditions hereof, each of the ABL Collateral Agent and the Term Loan Collateral Agent hereby appoints the Customs Broker as its attorney-in-fact solely to execute and deliver any such Title Documents for and on behalf of the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable, pursuant to the terms of this Agreement.

3. Delivery of Title Documents. Release of Goods: Until the Customs Broker receives written notification from (a) the ABL Collateral Agent pursuant to Section 4 below to the contrary or (b) the Term Loan Collateral Agent pursuant to Section 5 below to the contrary,

the Customs Broker is authorized by the ABL Collateral Agent and the Term Loan Collateral Agent to, and the Customs Broker may, deliver:

(a) the Title Documents to the Borrower or its agents for the purpose of permitting the Borrower, as consignee, to obtain possession or control of the Property subject to such Title Documents; and

(b) the Property to the Borrower or as directed by the Borrower.

4. Notice From ABL Collateral Agent To Follow ABL Collateral Agent’s Instructions: Upon the Customs Broker’s receipt of written notification from the ABL Collateral Agent, the Customs Broker shall thereafter follow solely the instructions of the ABL Collateral Agent concerning the disposition of the Title Documents and the Property and will not follow any instructions of Borrower or any other person concerning the same; provided, however, that upon the Customs Broker’s receipt of notice from the ABL Collateral Agent that the obligations of the Borrower to the ABL Collateral Agent and the ABL Secured Parties have been paid and performed in full, the Customs Broker shall follow the Term Loan Collateral Agent’s instructions in accordance with Section 5 below. Such notifications and instructions shall be given to the Customs Broker as set forth in Section 8 below.

5. Notice From Term Loan Collateral Agent To Follow Term Loan Collateral Agent’s Instructions: Upon the Customs Broker’s receipt of written notification from the ABL Collateral Agent that the obligations of the Borrower to the ABL Collateral Agent and the ABL Secured Parties have been paid and performed in full as provided in Section 4, the Customs Broker shall thereafter follow solely the instructions of the Term Loan Collateral Agent concerning the disposition of the Title Documents and the Property and will not follow any instructions of Borrower or any other person concerning the same. Such notifications and instructions shall be given to the Customs Broker as set forth in Section 8 below.

6. Limited Authority: The Customs Broker’s sole authority as the agent of the ABL Collateral Agent and the Term Loan Collateral Agent is to receive and maintain possession of the Title Documents and Property on behalf of the ABL Collateral Agent and the Term Loan Collateral Agent and to follow the instructions of the ABL Collateral Agent and the Term Loan Collateral Agent as provided herein. Except as may be specifically authorized and instructed in writing by the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable, the Customs Broker shall have no authority as the agent of the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable, to undertake any other action or to enter into any other commitments on behalf of the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable.

7. Expenses: None of the ABL Secured Parties or the Term Loan Secured Parties shall be obligated to compensate the Customs Broker for serving as agent hereunder, nor shall any of the ABL Secured Parties or the Term Loan Secured Parties be responsible for any fees, expenses, customs, duties, taxes, or other charges relating to the Title Documents or the Property. The Customs Broker acknowledges that the Borrower is solely responsible for

payment of any compensation and charges which are to Borrower’s account. The Borrower is further responsible for paying any fees, expenses, customs duties, taxes, or other charges which are, or may, accrue, to the account of the Title Documents or the Property. The ABL Collateral Agent or the Term Loan Collateral Agent, as applicable, at the ABL Collateral Agent’s or the Term Loan Collateral Agent’s sole option, may authorize the Customs Broker to perform specified services on behalf of the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable, at mutually agreed rates of compensation, which shall be to the ABL Collateral Agent’s or Term Loan Collateral Agent’s account, as applicable, and payable to the Customs Broker by the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable (provided, however, such payment shall not affect any obligation of the Borrower to reimburse the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable, for any such compensation or other costs or expenses incurred by the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable).

8. Term:

(a) In the event that the Customs Broker desires to terminate this Agreement, the Customs Broker shall furnish the ABL Collateral Agent and the Term Loan Collateral Agent with not less than sixty (60) days’ prior written notice of the Customs Broker’s intention to do so. During such sixty (60) day period (which may be shortened by written notice to the Customs Broker by the ABL Collateral Agent and the Term Loan Collateral Agent), the Customs Broker shall continue to serve as agent hereunder and the Borrower shall fully compensate the Customs Broker with respect to such period. The Customs Broker shall also cooperate with the ABL Collateral Agent and the Term Loan Collateral Agent and execute all such documentation and undertake all such action as may be reasonably required by the ABL Collateral Agent and the Term Loan Collateral Agent in connection with such termination. Any written notice provided to any party hereto shall be delivered to such party at the following address (or to such other address, written notice of which is given by such party to the other parties hereto in writing with at least seven (7) days’ prior notice):

If to the ABL Collateral Agent:

Bank of America, N.A.

100 Federal Street, 9th Floor

Boston, Massachusetts 02110

Attn: David Vega

If to the Term Loan Collateral Agent:

Deutsche Bank AG New York Branch

60 Wall Street

New York, New York 10005

Attn: Meg Sutton

	If to the Customs Broker:



	Attn:

(b) Except as provided in Section 8(a), above, this Agreement shall remain in full force and effect until the Customs Broker receives written notification from the ABL Collateral Agent and the Term Loan Collateral Agent of the termination of the Customs Broker’s responsibilities hereunder. This Agreement may be (i) amended only by notice in writing signed by the Borrower and (x) as to the ABL Collateral Agent, the ABL Collateral Agent, and (y) as to the Term Loan Collateral Agent, the Term Loan Collateral Agent, and (ii) terminated, as to the ABL Collateral Agent or the Term Loan Collateral Agent, solely by written notice signed by an officer of the ABL Collateral Agent or the Term Loan Collateral Agent, as applicable.

9. Customs Broker’s Lien: The Customs Broker shall have a lien, to the extent provided by law, on any Property then in the possession of the Customs Broker, which lien shall be to the extent of any costs, fees, freight charges, storage charges, or other charges or expenses incurred or paid by the Customs Broker with respect only to that Property then in the possession of the Customs Broker, for which the Customs Broker has not received payment, but not for any amount owed on account of any other Property, item, or matter. The Customs Broker hereby waives all other liens and interests in any other Property. Upon receipt by the Customs Broker of payment in full of all outstanding amounts, including, but not limited to, any costs, fees, freight charges, storage charges, or other charges or expenses incurred or paid by the Customs Broker with respect to the Property then in the possession of the Customs Broker, the Customs Broker shall not assert against such Property any statutory, possessory, or other lien, including, without limitation, any right of levy or distraint.

10. Counterparts; Integration: 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 constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all contemporaneous or previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the parties and when the ABL Collateral 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.

11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

If the foregoing correctly sets forth our understanding, please indicate your assent below following which this letter will take effect as a sealed instrument.

		Very truly yours,

		BORROWER:



		By:
		Name:
		Title:


Agreed:

CUSTOMS BROKER:



By:
Name:
Title:

Signature Page to Customs Broker Agency Agreement

ABL COLLATERAL AGENT:

BANK OF AMERICA, N.A.

By:
Name:
Title:


TERM LOAN COLLATERAL AGENT:

DEUTSCHE BANK AG NEW YORK BRANCH

By:
Name:
Title:

Signature Page to Customs Broker Agency Agreement

EXHIBIT C TO CREDIT AGREEMENT

FORM OF NOTICE OF BORROWING

Date:

To: Bank of America, N.A., as Administrative Agent

100 Federal Street, 9th Floor

Boston, Massachusetts 02110

Attention: Mr. David Vega

Re: Amended and Restated Credit Agreement dated as of February 18, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and between, among others, Michaels Stores, Inc., a Delaware corporation, for itself and as agent (in such capacity, the “Lead Borrower”) for the other Borrowers party thereto, the other Borrowers party thereto, and Bank of America, N.A., as administrative agent (the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties. Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement.

Ladies and Gentlemen:

The Lead Borrower refers to the above described Credit Agreement and, on behalf of the Borrowers, hereby irrevocably notifies you of the Borrowing requested below:

1. The Business Day of the proposed Borrowing is , 20 .(1)

2. The aggregate amount of the proposed Borrowing is $ (which shall be in an integral multiple of $1,000,000.00, but not less than $5,000,000.00 in the case of LIBO Loans), which Borrowing consists of the following Types:

Type of Borrowing (Prime Rate Loans or LIBO Loans; FILO Loans or Tranche A Loans)(2)	Amount of Loan	Interest Period for LIBO Loans(3)
	$	[days/months]
	$	[days/months]
	$	[days/months]
	$	[days/months]

(1) For LIBO Loans, Notice of Borrowing must be received by 12:30 p.m. on the second Business Day prior to the proposed Borrowing date. For Prime Rate Loans, Notice of Borrowing must be received by 12:00 p.m. on the same Business Day as the proposed Borrowing date.

(2) If no election is made as to the Type of Revolving Credit Loan, such notice shall be deemed a request for Borrowing of Prime Rate Loans. All Borrowings shall be FILO Loans until such time as the FILO Credit Extensions are in an amount equal to the lesser of the FILO Commitments or Incremental Availability.

3. Proceeds of the proposed Borrowing are to be disbursed to the following account(s):

The Lead Borrower, on behalf of the Borrowers, hereby certifies that the following statements are true and correct on the date of the proposed Borrowing, before and after giving effect thereto and to the application of the proceeds therefrom:

(a) The representations and warranties of the Loan Parties contained in the Credit Agreement and the other Loan Documents or otherwise made in writing in connection therewith are true and correct in all material respects as though made on and as of the date of the proposed Borrowing, other than representations and warranties that relate solely to an earlier date, which are true and correct in all material respects as of such earlier date, provided that any representation and warranty which is qualified as to “materiality”, “Material Adverse Effect” or similar language are true and correct in all respects on such respective dates;

(b) No Default or Event of Default has occurred and is continuing, or would result from such proposed Borrowing; and

(c) After giving effect to the proposed Borrowing set forth in Section 2 above, there will be no more than ten (10) Borrowings of LIBO Loans outstanding under the Credit Agreement.

	MICHAELS STORES, INC.,
	as Lead Borrower

	By:
	Name:
	Title:

(3) If no election of Interest Period is specified, such notice shall be deemed a request for an Interest Period of one (1) month.

EXHIBIT D TO CREDIT AGREEMENT

FORM OF REVOLVING CREDIT NOTE

REVOLVING CREDIT NOTE

$	February 18, 2010

FOR VALUE RECEIVED, the undersigned (each, a “Borrower” and collectively, the “Borrowers”, together with all successors and assigns), jointly and severally promise to pay to the order of (hereinafter, together with its successors in title and assigns, the “Lender”), c/o Bank of America, N.A., 100 Federal Street, 9th Floor, Boston, Massachusetts 02110, the principal sum of DOLLARS ($ ), or, if less, the aggregate unpaid principal balance of Revolving Credit Loans made by the Lender to or for the account of any Borrower pursuant to the Credit Agreement (as hereafter defined), with interest, fees, expenses and costs at the rate and payable in the manner stated in the Credit Agreement. As used herein, the “Credit Agreement” means and refers to that certain Amended and Restated Credit Agreement dated as of even date (as such may be amended, restated, supplemented or otherwise modified from time to time) by, among others, (i) Michaels Stores, Inc., a Delaware corporation, as a Borrower and as agent (in such capacity, the “Lead Borrower”) for itself and the other Borrowers, (ii) the other Borrowers named therein, (iii) the Facility Guarantors named therein, (iv) the Lenders named therein, (v) Bank of America, N.A. as Administrative Agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties, and (vi) Bank of America, N.A. as Collateral Agent for its own benefit and the benefit of the other Secured Parties. [This Revolving Credit Note replaces in its entirety that certain Revolving Credit Note dated [October 31, 2006], by the Borrowers, payable to the Lender, in the aggregate principal amount of [$ ].]

This is a “Revolving Credit Note” to which reference is made in the Credit Agreement and is subject to all terms and provisions thereof. The principal of, and interest on, this Revolving Credit Note shall be payable at the times, in the manner, and in the amounts as provided in the Credit Agreement and shall be subject to prepayment and acceleration as provided therein. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

The Administrative Agent’s books and records concerning the Revolving Credit Loans, the accrual of interest thereon, and the repayment of such Revolving Credit Loans, shall be prima facie evidence of the indebtedness to the Lender hereunder, absent manifest error.

No delay or omission by any Agent or the Lender in exercising or enforcing any of such Agent’s or Lender’s powers, rights, privileges, remedies, or discretions hereunder shall operate as a waiver thereof on that occasion nor on any other occasion. No waiver of any Event of Default shall operate as a waiver of any other Event of Default, nor as a continuing waiver.

Each Borrower waives presentment, demand, notice, and protest, and also waives any delay on the part of the holder hereof. Each Borrower assents to any extension or other indulgence (including, without limitation, the release or substitution of Collateral) permitted by any Agent and/or the Lender with respect to this Revolving Credit Note and/or any Security Document or any extension or other indulgence with respect to any other liability or any collateral given to secure any other liability of any Borrower or any other Person obligated on account of this Revolving Credit Note.

This Revolving Credit Note shall be binding upon each Borrower and upon their respective successors, assigns, and representatives, and shall inure to the benefit of the Lender and its successors, endorsees and assigns.

The liabilities of each Borrower are joint and several, provided, however, the release by any Agent or the Lender of any one or more such Persons shall not release any other Person obligated on account of this Revolving Credit Note. Each reference in this Revolving Credit Note to each Borrower is to such Person individually and also to all such Persons jointly. No Person obligated on account of this Revolving Credit Note may seek contribution from any other Person also obligated unless and until all liabilities, obligations and indebtedness to the Lender of the Person from whom contribution is sought have been satisfied in full.

Each Borrower agrees that any legal action or proceeding arising under this Revolving Credit Note or in any way connected with or related or incidental to the dealings of the parties hereto or any of them with respect to this Revolving Credit Note or any other Loan Document, or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, may be brought in the courts of the state of New York sitting in New York City or of the United States for the Southern District of such state, and by execution and delivery of this Revolving Credit Note, each Borrower consents, for itself and in respect of its property, to the non-exclusive jurisdiction of those courts. Each Borrower irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction or other jurisdiction chose by the Agents in respect of any Loan Document or other document related thereto.

THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Each Borrower makes the following waiver knowingly, voluntarily, and intentionally, and understands that the Agents and the Lender, in the establishment and maintenance of their respective relationship with the Borrowers contemplated by this Revolving Credit Note, are each relying thereon. EACH BORROWER, AND THE LENDER BY ITS ACCEPTANCE

HEREOF, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS REVOLVING CREDIT NOTE OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS REVOLVING CREDIT NOTE OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH BORROWER, AND THE LENDER BY ITS ACCEPTANCE HEREOF, HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY; AND WAIVES PRESENTMENT, DEMAND, PROTEST AND ANY OTHER NOTICES THEREOF.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the Borrowers have caused this Revolving Credit Note to be duly executed as of the date set forth above.

	BORROWERS:

	MICHAELS STORES, INC., as Lead Borrower and as a Borrower

	By:
	Name:
	Title:


	AARON BROTHERS, INC., as a Borrower

	By:
	Name:
	Title:


	MICHAELS STORES PROCUREMENT COMPANY, INC., as a Borrower

	By:
	Name:
	Title:


	ARTISTREE, INC., as a Borrower

	By:
	Name:
	Title:

Signature Page to Revolving Credit Note

EXHIBIT E TO CREDIT AGREEMENT

FORM OF SWINGLINE NOTE

SWINGLINE NOTE

$75,000,000.00

February 18, 2010

FOR VALUE RECEIVED, the undersigned (each, a “Borrower” and collectively, the “Borrowers”, together with all successors and assigns), jointly and severally promise to pay to the order of BANK OF AMERICA, N.A., a national banking association with an office at 100 Federal Street, 9th Floor, Boston, Massachusetts 02110 (hereinafter, together with its successors in title and assigns, the “Swingline Lender”), the principal sum of SEVENTY FIVE MILLION DOLLARS ($75,000,000.00), or, if less, the aggregate unpaid principal balance of Swingline Loans made by the Swingline Lender to or for the account of any Borrower pursuant to the Credit Agreement (as hereafter defined), with interest, fees, expenses and costs at the rate and payable in the manner stated in the Credit Agreement. As used herein, the “Credit Agreement” means and refers to that certain Amended and Restated Credit Agreement dated as of even date (as such may be amended, restated, supplemented or otherwise modified from time to time) by, among others, (i) Michaels Stores, Inc., a Delaware corporation, as a Borrower and as agent (in such capacity, the “Lead Borrower”) for itself and the other Borrowers, (ii) the other Borrowers named therein, (iii) the Facility Guarantors named therein, (iv) the Lenders named therein, (v) Bank of America, N.A. as Administrative Agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties, and (vi) Bank of America, N.A. as Collateral Agent for its own benefit and the benefit of the other Secured Parties.

This is the “Swingline Note” to which reference is made in the Credit Agreement and is subject to all terms and provisions thereof. The principal of, and interest on, this Swingline Note shall be payable at the times, in the manner, and in the amounts as provided in the Credit Agreement and shall be subject to prepayment and acceleration as provided therein. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

The Administrative Agent’s books and records concerning the Swingline Loans, the accrual of interest thereon, and the repayment of such Swingline Loans, shall be prima facie evidence of the indebtedness to the Swingline Lender hereunder, absent manifest error.

No delay or omission by any Agent or the Swingline Lender in exercising or enforcing any of such Agent’s or Swingline Lender’s powers, rights, privileges, remedies, or discretions hereunder shall operate as a waiver thereof on that occasion nor on any other occasion. No

waiver of any Event of Default shall operate as a waiver of any other Event of Default, nor as a continuing waiver.

Each Borrower waives presentment, demand, notice, and protest, and also waives any delay on the part of the holder hereof. Each Borrower assents to any extension or other indulgence (including, without limitation, the release or substitution of Collateral) permitted by any Agent and/or the Swingline Lender with respect to this Swingline Note and/or any Security Document, or any extension or other indulgence with respect to any other liability or any collateral given to secure any other liability of any Borrower or any other Person obligated on account of this Swingline Note.

This Swingline Note shall be binding upon each Borrower and upon their respective successors, assigns, and representatives, and shall inure to the benefit of the Swingline Lender and its successors, endorsees and assigns.

The liabilities of each Borrower are joint and several, provided, however, the release by any Agent or the Swingline Lender of any one or more such Persons shall not release any other Person obligated on account of this Swingline Note. Each reference in this Swingline Note to each Borrower is to such Person individually and also to all such Persons jointly. No Person obligated on account of this Swingline Note may seek contribution from any other Person also obligated unless and until all liabilities, obligations and indebtedness to the Swingline Lender of the Person from whom contribution is sought have been satisfied in full.

Each Borrower agrees that any legal action or proceeding arising under this Swingline Note or in any way connected with or related or incidental to the dealings of the parties hereto or any of them with respect to this Swingline Note or any other Loan Document, or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, may be brought in the courts of the state of New York sitting in New York City or of the United States for the Southern District of such state, and by execution and delivery of this Swingline Note, each Borrower consents, for itself and in respect of its property, to the non-exclusive jurisdiction of those courts. Each Borrower irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction or other jurisdiction chose by the Agents in respect of any Loan Document or other document related thereto.

THIS SWINGLINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Each Borrower makes the following waiver knowingly, voluntarily, and intentionally, and understands that the Agents and the Swingline Lender, in the establishment and maintenance of their respective relationship with the Borrowers contemplated by this Swingline Note, are each relying thereon. EACH BORROWER, AND THE LENDER BY ITS ACCEPTANCE HEREOF, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS SWINGLINE NOTE OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY

CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS SWINGLINE NOTE OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH BORROWER, AND THE LENDER BY ITS ACCEPTANCE HEREOF, HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY; AND WAIVES PRESENTMENT, DEMAND, PROTEST AND ANY OTHER NOTICES THEREOF.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the Borrowers have caused this Swingline Note to be duly executed as of the date set forth above.

	BORROWERS:

	MICHAELS STORES, INC., as Lead Borrower and as a Borrower

	By:
	Name:
	Title:


	AARON BROTHERS, INC., as a Borrower

	By:
	Name:
	Title:


	MICHAELS STORES PROCUREMENT COMPANY, INC., as a Borrower

	By:
	Name:
	Title:


	ARTISTREE, INC., as a Borrower

	By:
	Name:
	Title:

Signature Page to Swingline Note

EXHIBIT F TO CREDIT AGREEMENT

FORM OF JOINDER TO CREDIT AGREEMENT

This Joinder to Credit Agreement (this “Joinder”) is made as of , by and among:

, a (the “New [Borrower/Facility Guarantor]”), with its principal executive offices at ; and

BANK OF AMERICA, N.A., a national banking association, having a place of business at 100 Federal Street, 9th Floor, Boston, Massachusetts 02110 as administrative agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties (as defined in the Credit Agreement referred to below) and as collateral agent (in such capacity, the “Collateral Agent”), for its own benefit and for the benefit of the other Secured Parties (as defined in the Credit Agreement referred to below) to the Credit Agreement (as defined below);

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H :

A. Reference is made to a certain Amended and Restated Credit Agreement dated as of February 18, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by, among others, (i) Michaels Stores, Inc., a Delaware corporation, as a Borrower and as agent (in such capacity, the “Lead Borrower”) for itself and the other Borrowers, (ii) the other Borrowers named therein (collectively, with the Lead Borrower, the “Existing Borrowers”), (iii) the Facility Guarantors named therein (the “Existing Facility Guarantors”, and together with the Existing Borrowers and the New [Borrower/Facility Guarantor], the “Loan Parties”), (iv) the Lenders named therein (collectively, the “Lenders”), (v) Bank of America, N.A., as Administrative Agent, and (vi) Bank of America, N.A., as Collateral Agent. All capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned to such terms in the Credit Agreement.

B. The New [Borrower/Facility Guarantor] desires to become a party to, and bound by the terms of, the Credit Agreement and the other Loan Documents in the same capacity and to the same extent as the Existing [Borrowers/Facility Guarantors] thereunder.

C. Pursuant to the terms of the Credit Agreement, in order for the New [Borrower/Facility Guarantor] to become party to the Credit Agreement and the other Loan

Documents as provided herein, the New [Borrower/Facility Guarantor] and the Existing [Borrowers/Facility Guarantors] are required to execute this Joinder.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Joinder and Assumption of Obligations. Effective as of the date of this Joinder, the New [Borrower/Facility Guarantor] hereby acknowledges that the New [Borrower/Facility Guarantor] has received and reviewed a copy of the Credit Agreement, and hereby:

a. joins in the execution of, and becomes a party to, the Credit Agreement as a [Borrower/Facility Guarantor], as indicated by its signature below;

b. covenants and agrees to be bound by all covenants, agreements, liabilities and acknowledgments (other than covenants, agreements, liabilities and acknowledgments which specifically relate solely to an earlier date) of a [Borrower/Facility Guarantor] under the Credit Agreement and the other Loan Documents, in each case, with the same force and effect as if such New [Borrower/Facility Guarantor] was a signatory to the Credit Agreement and the other Loan Documents and was expressly named as a [Borrower/Facility Guarantor] therein;

c. assumes and agrees to perform all applicable duties and Obligations of a Loan Party under the Credit Agreement and the other Loan Documents.

2. Representations and Warranties. The New [Borrower/Facility Guarantor] hereby makes all representations, warranties and other statements (other than representations, warranties and statements which specifically relate solely to an earlier date) of a [Borrower/Facility Guarantor] under the Credit Agreement and the other Loan Documents, in each case, with the same force and effect as if such New [Borrower/Facility Guarantor] was a signatory to the Credit Agreement and the other Loan Documents and was expressly named as a [Borrower/Facility Guarantor] therein. To the extent that any changes in any representations, warranties, and covenants require any amendments to the Schedules to the Credit Agreement, such Schedules are hereby updated, as evidenced by any supplemental Schedules (if any) annexed to this Joinder.

3. Ratification of Loan Documents. Except as specifically amended by this Joinder and the other documents executed and delivered in connection herewith, all of the terms and conditions of the Credit Agreement and of the other Loan Documents shall remain in full force and effect as in effect prior to the date hereof, without releasing any Loan Party thereunder or Collateral therefor.

4. Conditions Precedent to Effectiveness. This Joinder shall not be effective until each of the following conditions precedent has been fulfilled to the satisfaction of the Administrative Agent:

a. This Joinder shall have been duly executed and delivered by the respective parties hereto, and shall be in full force and effect and shall be in form and substance reasonably satisfactory to the Administrative Agent.

b. All action on the part of the New [Borrower/Facility Guarantor] and the other Loan Parties necessary for the valid execution, delivery and performance by the New [Borrower/Facility Guarantor] of this Joinder and all other documentation, instruments, and agreements required to be executed in connection herewith shall have been duly and effectively taken and evidence thereof reasonably satisfactory to the Administrative Agent shall have been provided to the Administrative Agent.

c. The New [Borrower/Facility Guarantor] (and each other Loan Party, to the extent requested by the Administrative Agent) shall each have delivered the following to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent:

i. Certificate of Legal Existence and Good Standing issued by the Secretary of the State of its incorporation or organization.

ii. A certificate of an authorized officer of the due adoption, continued effectiveness, and setting forth the text, of each corporate resolution adopted in connection with the assumption of obligations under the Credit Agreement and the other Loan Documents, and attesting to the true signatures of each Person authorized as a signatory to any of the Loan Documents, together with true and accurate copies of all Organization Documents.

iii. Perfection Certificate in the form delivered by the Loan Parties on the Closing Date.

iv. Execution and delivery by the New [Borrower/Facility Guarantor] of the following Loan Documents:

a) [Joinders to the Revolving Credit Notes];

b) [Joinder to the Swingline Note];

c) Joinder to the Security Documents, as applicable;

d) [Joinder to the Fee Letter];

e) [Blocked Account Agreement with [ ]];

f) [Joinder to the Facility Guarantee]; and

g) Such other documents, agreements and certificates as the Administrative Agent and the Collateral Agent may reasonably require.

d. The Agents shall have received a favorable written legal opinion of the Loan Parties’ counsel addressed to the Agents and the other Lenders, covering such matters relating to the New [Borrower/Facility Guarantor], the Loan Documents and/or the transactions contemplated thereby as the Agents shall reasonably request.

e. The Collateral Agent shall have received all documents and instruments, (including UCC financing statements and Blocked Account Agreements), required by law or reasonably requested by the Collateral Agent to create or perfect the first priority Lien (subject only to Permitted Encumbrances having priority by operation of Applicable Law) intended to be created under the Loan Documents and all such documents and instruments shall have been so filed, registered or recorded to the reasonable satisfaction of the Collateral Agent.

f. All Credit Party Expenses incurred by the Agents in connection with the preparation and negotiation of this Joinder and related documents (including the fees and expenses of counsel to the Agents) shall have been paid in full by the New [Borrower/Facility Guarantor].

g. The Loan Parties shall have executed and delivered to the Agents such additional documents, instruments, and agreements as the Agents may reasonably request.

5. Miscellaneous.

a. This Joinder may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.

b. This Joinder expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.

c. Any determination that any provision of this Joinder or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Joinder.

d. THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each of the undersigned has caused this Joinder to be duly executed and delivered by its proper and duly authorized officer as of the date set forth below.

	NEW [BORROWER/FACILITY GUARANTOR]:



	By:
	Name:
	Title:


	ADMINISTRATIVE AGENT:

	BANK OF AMERICA, N.A.

	By:
	Name:
	Title:


	COLLATERAL AGENT:

	BANK OF AMERICA, N.A.

	By:
	Name:
	Title:

Signature Page to Joinder to Credit Agreement

Acknowledged and Agreed:

MICHAELS STORES, INC.,
as Lead Borrower and as a Borrower

By:
Name:
Title:


AARON BROTHERS, INC., as a Borrower

By:
Name:
Title:


MICHAELS STORES PROCUREMENT
COMPANY, INC., as a Borrower

By:
Name:
Title:


ARTISTREE, INC., as a Borrower

By:
Name:
Title:


MICHAELS FINANCE COMPANY, INC.,
as a Facility Guarantor

By:
Name:
Title:

Acknowledgment Page to Joinder to Credit Agreement

MICHAELS STORES CARD SERVICES, LLC,
as a Facility Guarantor

By:
Name:
Title:


MICHAELS OF CANADA, ULC,
as a Facility Guarantor

By:
Name:
Title:

Acknowledgment Page to Joinder to Credit Agreement

EXHIBIT G TO CREDIT AGREEMENT

CREDIT CARD NOTIFICATION

PREPARE ON LOAN PARTY LETTERHEAD - ONE FOR EACH PROCESSOR

, 2010

BY CERTIFIED MAIL — RETURN RECEIPT REQUESTED

To: [Name and Address of Processor]

(the “Processor”)

Re:

Merchant Account Number: . The credit card processing agreement between and dated (the “Processing Agreement”).

Dear Sir/Madam:

Under various agreements among , a with an address at (the “Loan Party”) and (i) Bank of America, N.A., a national banking association with offices at 100 Federal Street, 9th Floor, Boston, Massachusetts 02110, as collateral agent (in such capacity, herein the “Collateral Agent”) for the benefit of a syndicate of lenders and certain other secured parties (the “ABL Secured Parties”), and (ii) Deutsche Bank AG New York Branch, a branch of Deutsche Bank AG, with a license issued by the Bank Department of the State of New York, with offices at 60 Wall Street, New York, New York 10005, as agent (in such capacity, herein the “Term Agent”) for the benefit of a syndicate of lenders and certain other secured parties (the “Term Loan Secured Parties”), the Loan Party has granted to the Collateral Agent, for the benefit of the Collateral Agent and the other ABL Secured Parties, and to the Term Agent, for the benefit of the Term Agent and the other Term Loan Secured Parties, a security interest in and to, among other things, the Loan Party’s inventory, credit card receivables, certain accounts, books and records relating to the foregoing, and proceeds therefrom, including without limitation, all amounts due or to become due from the Processor to the Loan Party pursuant to the Processing Agreement between the Processor and the Loan Party.

Under the terms and provisions of the agreements with the Collateral Agent and the Term Agent, under certain circumstances, the Loan Party is obligated to deliver all proceeds of the Loan Party’s accounts, accounts receivable and inventory to the Collateral Agent or the Term Agent, as applicable. Such proceeds include all credit card charges (the “Charges”) submitted by the Loan Party to the Processor for processing and the amounts which the Processor owes to the

Loan Party on account thereof (the “Credit Card Proceeds”) and all other amounts due or to become due to the Loan Party under the Processing Agreement.

Until the Processor receives notification from an officer of the Collateral Agent as provided below, all amounts due from time to time from the Processor to the Loan Party (including Credit Card Proceeds, payment from any reserve account or the like or other payments) shall be transferred only as follows:

By ACH, Depository Transfer Check, or Electronic Depository Transfer to:

ABA #

For Credit to

Account No.

After the Processor receives notification from an officer of the Collateral Agent, all amounts shall be transferred as the Processor may be instructed from time to time in writing by an officer of the Collateral Agent. After the Processor receives notification from the Collateral Agent that all obligations of the Loan Party to the ABL Secured Parties have been paid in full and the commitments of the ABL Secured Parties to make loans or advances to the Loan Party have terminated, all amounts shall be transferred as the Processor may be instructed from time to time in writing by an officer of the Term Agent. After the Processor receives notification from the Term Agent that all obligations of the Loan Party to the Term Loan Secured Parties have been paid in full and the commitments of the Term Loan Secured Parties to make loans to the Loan Party have terminated, all amounts shall thereafter be transferred as the Processor may be instructed by the Loan Party.

Upon request of an officer of the Collateral Agent or the Term Agent, a copy of each periodic statement provided by the Processor to the Loan Party should be provided to the Collateral Agent or the Term Agent, as applicable, at the following address (which address may be changed upon seven (7) days’ written notice given to the Processor by an officer of the Collateral Agent or the Term Agent, as applicable):

If to the Collateral Agent:

Bank of America, N.A.

100 Federal Street, 9th Floor

Boston, Massachusetts 02110

Attention: David Vega

If to the Term Agent:

Deutsche Bank AG New York Branch

60 Wall Street

New York, New York 10005

Attn: Meg Sutton

The Processor shall be fully protected in acting on any order or direction by an officer of the Collateral Agent or the Term Agent given in accordance with the terms of this letter respecting the Charges and the Credit Card Proceeds without making any inquiry whatsoever as to the Collateral Agent’s or the Term Agent’s right or authority to give such order or direction or as to the application of any payment made pursuant thereto.

This letter may be amended only by notice in writing signed by an officer of the Loan Party, an officer of the Collateral Agent and an officer of the Term Agent, and may be terminated solely by written notice signed by an officer of the Collateral Agent and an officer of the Term Agent.

[remainder of page intentionally blank]

		Very truly yours,

		The LOAN PARTY:




		By:
			Name:
			Title:

cc:	Bank of America, N.A.
	Deutsche Bank AG New York Branch

Signature Page to Credit Card Notification

EXHIBIT H TO CREDIT AGREEMENT

FORM OF COMPLIANCE CERTIFICATE

To:	Bank of America, N.A.,	Date:
	as Administrative Agent
	100 Federal Street, 9th Floor
	Boston, Massachusetts 02110
	Attention: Mr. David Vega

Re: Amended and Restated Credit Agreement dated as of February 18, 2010 (as modified, amended, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and between, among others, Michaels Stores, Inc. for itself and as agent (in such capacity, the “Lead Borrower” ) for the other Borrowers party thereto, the other Borrowers party thereto, and Bank of America, N.A., as administrative agent (the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties. Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement.

The undersigned, a duly authorized and acting Financial Officer of the Lead Borrower, hereby certifies to you as follows:

1. No Defaults or Events of Default. No Default or Event of Default presently exists, except as set forth in Appendix I.

2. Financial Calculations. Attached hereto as Appendix II are all reasonably detailed calculations with respect to (a) average daily Availability and (b) the Consolidated Fixed Charge Coverage Ratio, each for the period ending .

3. Store Openings and Closings. Appendix III hereto sets forth in reasonable detail all Store openings and Store closings for the period ending , and states the aggregate number of the Loan Parties’ Stores as of the first day of the current Fiscal Quarter/Year.

4. Rental Payment Status. Appendix IV hereto sets forth in reasonable detail the status of rental payments for each of the Loan Parties’ (i) warehouses and distribution centers (other than warehouses and distribution centers with respect to which the Collateral Agent has received a Collateral Access Agreement in form and substance reasonably satisfactory to the Collateral Agent), and (ii) other leased locations in the Landlord Lien States designated by the Administrative Agent in its commercially reasonable judgment (which, as of the Effective Date, are Washington, Pennsylvania and Virginia) for the period ending .

5. No Material Accounting Changes, Etc. There has been no change in GAAP or the application thereof since the date of the audited financial statements furnished to the Administrative Agent for the Fiscal Year ending , other than the material accounting changes as disclosed on Appendix V hereto.

IN WITNESS WHEREOF, I have executed this Certificate this day of , .

	MICHAELS STORES, INC., as Lead Borrower

	By:
	Name:
	Title:		(1)

(1) A Responsible Officer of the Lead Borrower.

Signature Page to Compliance Certificate

APPENDIX I

[If a Default or Event of Default exists, the following describes the nature of the Default or Event of Default in reasonable detail and the steps, if any, being taken or contemplated by the Loan Parties to be taken on account thereof]

APPENDIX II

1.	Average daily Availability

	a.	FILO Borrowing Base (or, if the FILO Commitments have been terminated, the then Tranche A Borrowing Base) calculated daily for the period ending minus daily outstanding Credit Extensions:	See Attached Schedule

	b.	Revolving Credit Ceiling calculated daily minus daily outstanding Credit Extensions for the period ending :	See Attached Schedule

	c.	Number of days in such period:

	d.	Average daily Availability (Lesser of Line 1(a) divided by Line 1(c) or Line 1(b) divided by Line 1(c)):

	Pricing Grid Level:

2.	Consolidated Fixed Charge Coverage Ratio for the period ending :

A.	Consolidated EBITDA for such period:

1.	The sum (without duplication) of:

	(a)	Consolidated Net Income for such period:

		Plus

	(b)	provision for Consolidated Taxes paid or accrued during such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income for such period:

		Plus

	(c)	Consolidated Interest Expense of such Person for such period, plus amounts excluded from Consolidated Interest Expense as set forth in clauses (i) through (viii) of the definition thereof, to the extent the same were deducted (and not added back) in calculating such Consolidated Net Income for such period:

		Plus

	(d)	Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same was deducted (and not added back) in computing Consolidated Net Income for such period:

		Plus

	(e)	any non-cash charges, including (i) any write offs or write downs, (ii) equity based awards compensation expense, (iii) losses on sales, disposals or abandonment of, or any impairment charges or asset write off, related to intangible assets, long-lived assets and investments in debt and equity securities, (iv) all losses from investments recorded using the equity method, and (v) other non-cash charges, non-cash expenses or non-cash losses reducing Consolidated Net Income for such period (provided that if any such non-cash charges referred to in clauses (i) through (v) of this clause represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period):

		Plus

	(f)	the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-wholly-owned Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income for such period:

		Plus

	(g)	Advisory Fees paid or accrued in such period to the Sponsors or Highfields Capital to the extent otherwise permitted under the Credit Agreement:

		Plus

	(h)	the amount of net cost savings projected by

		the Lead Borrower in good faith to be realized as a result of specified actions taken during such period (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (x) such cost savings are reasonably identifiable and factually supportable, and (y) such cost savings do not exceed in the aggregate $40,000,000 in any four consecutive Fiscal Quarters (or such greater amount reasonably approved in good faith by the Administrative Agent):

		Plus

	(i)	any costs or expense incurred by the Lead Borrower or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Lead Borrower or net cash proceeds of an issuance of Capital Stock of the Lead Borrower (other than Disqualified Capital Stock) for such period:

		Plus

	(j)	any net loss from disposed or discontinued operations
		for such period:

		Plus

	(k)	cash receipts (or reduced cash expenditures) to the extent non-cash gains relating to such income were deducted in the calculation of Consolidated EBITDA pursuant to Line 2 below for any previous period:

	(l)	Sum of lines 1(a) through 1(k):

2.	Minus (without duplication) the sum of the following:

	(a)	non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential

		cash item that reduced Consolidated EBITDA in any prior period and any non-cash gains with respect to cash actually received in such period or received in a prior period:

		Plus

	(b)	any net income from disposed or discontinued operations for such period:

	(c)	The sum of Lines 2(a) and 2(b):

3.	Plus or Minus (as applicable, without duplication):

	(a)	any adjustments resulting from the application of FASB Interpretation No. 45 (Guarantees):

4.	Consolidated EBITDA for such period (Line 1(l) minus Line 2(c) plus or minus (as applicable) Line 3(a)):

Plus

B.	Net Proceeds of capital contributions received or Permitted Equity Issuances made during such period to the extent used to make payments on account of Debt Service Charges or Taxes:

Minus

C.	Capital Expenditures paid in cash which are not financed with the Net Proceeds of Permitted Indebtedness (other than the Obligations) during such period:

D.	The sum of Line A(4) and Line B:

E.	Line C subtracted from Line D:

F.	Debt Service Charges payable in cash during such period:

	1.	Consolidated Interest Expense required to be paid or paid in cash:

		Plus

	2.	Scheduled principal payments made or required to be made on account of Indebtedness for borrowed money, including the full amount of any non-recourse Indebtedness (after giving effect to any prepayments paid in cash that reduce the amount

		of such required payments) (excluding the Obligations and any AHYDO Amount (as such term Is defined in the Subordinated Discount Note Indenture), but including, without limitation, obligations with respect to Capitalized Leases) for such period:

		Plus

	3.	Scheduled mandatory payments on account of Disqualified Capital Stock (whether in the nature of dividends, redemption, repurchase or otherwise) required to be made during such period during such period:

	4.	Debt Service Charges (the sum of Lines F(1) through F(3):

	Plus

G.	Federal, state and foreign income Taxes paid in cash (net of cash refunds received) during such period:

	Plus

H.	Restricted Payments permitted by SECTION 6.06(k) of the Credit Agreement paid in cash to the holders of Capital Stock of the Lead Borrower during such period (but excluding Restricted Payments to the extent funded by an issuance by the Lead Borrower of Permitted Indebtedness, a Permitted Equity Issuance or a capital contribution to the Lead Borrower) during such period:

I.	The sum of Lines F(4) through H:

J.	Consolidated Fixed Charge Coverage Ratio [Line E divided by Line I]:

	Detailed calculations of the foregoing are set forth on a schedule attached hereto.

APPENDIX III

[Attach reasonable detail of all Store openings and Store closings for the period ending ]

Aggregate number of the Loan Parties’ Stores as of the first day of the current Fiscal Quarter/Year:

APPENDIX IV

[Attach reasonable detail of the status of rental payments for each of the Loan Parties’ (i) warehouses and distribution centers (other than warehouses and distribution centers with respect to which the Collateral Agent has received a Collateral Access Agreement in form and substance reasonably satisfactory to the Collateral Agent), and (ii) other leased locations in the Landlord Lien States designated by the Administrative Agent in its commercially reasonable judgment (which, as of the Effective Date, are Washington, Pennsylvania and Virginia) for the period ending ]

APPENDIX V

Except as set forth below, no material changes in GAAP or the application thereof have occurred since [the date of the most recently delivered financial statements to the Administrative Agent prior to the date of this Certificate]. [If material changes in GAAP or in application thereof have occurred, the following describes the nature of the changes in reasonable detail and the effect, if any, of each such material change in GAAP or in application thereof on the financial statements delivered in accordance with the Credit Agreement.]

EXHIBIT I to Credit Agreement

Form of Borrowing Base Certificate

MICHAELS STORES

REVOLVING LINE OF CREDIT AVAILABILITY

			Certificate #:
			Date:

(in ‘000)	Tranche (A)		FILO

Eligible Credit Card Receivables	—		—
Credit Card Advance Rate	90	%	5		%
Credit Card Receivables Availability	—	(a)	—		(a)

Total Inventory Borrowing Base as of	—	(b)	—		(b)

Less Availability Reserves
Rent in Arrears for: PA, VA and WA	—
Customer Credit Liabilities (50%)	—

Total Reserves	—	(c)

Total ‘Tranche A’ and Total ‘FILO’ Uncapped Borrowing Base (a+b+c)	—	(i)	—		(ii)

Total ‘Tranche A’ and Total ‘FILO’ Capped Borrowing Base	—	(iii)	—		(iv)
Total ‘Tranche A’ not to exceed $1,052MM
Total ‘FILO’ not to exceed $50MM

Total Tranche A and FILO Borrowing Base: Lesser of (i + ii) and (iii + iv)			$	—

AVAILABILITY CALCULATION

Request Date:

FILO Borrowing Base (Capped at $50MM)		—
FILO Outstandings		—
Required Incremental Draw		—

Total Tranche A and FILO Borrowing Base		—

Beginning Principal Balance
Add: prior day advance		—
Add: Interest charged today		—
Add: LCs Fees charged		—
Add: LCs Invoices charged		—
Add: Other Fees charged		—
Less: Prior day drawdown		—

Ending principal balance		—

Add: Standby letters of credit
Add: Commercial letters of credit		—

Total loan balance prior to request		—

Excess Availability prior to today’s request		—

ADVANCE REQUEST		—
Paydown Request		—
Excess Availability after today’s request		—

The undersigned represents and warrants that the information set forth above has been prepared in accordance with the requirements of the Amended and Restated Credit Agreement dated February 18, 2010 (as amended, restated, supplemented or otherwise modified) by, among others, Michaels Stores, Inc., as Lead Borrower, the other Borrowers and Facility Guarantors party thereto, the Lenders party thereto, and Bank of America, N.A., as Administrative Agent and Collateral Agent for the Lenders.

MICHAELS

Eligible Inventory Calculation

								Certificate #		0
								Date		1/0/1900

(in ‘000)					COST

Beg. Inventory as of :

ADD	Purchases - Direct Ship
	Purchases - DC Transfers
	Purchases - Artistree Custom Framing Transfers
	Store to Store Transfers

LESS	Net Sales at Retail (memo only)

	Cost of Goods Sold @ Cost
	Returns to Vendor
	Shrink
	Damage and Stolen
	Other

	Total Adds / (Reductions)				—

Ending Inventory as of:	1/0/1900				—

ADD	Michaels DC Inventory as of	1/0/1900
	Star Decorators Inventory as of	1/0/1900
	Artistree Finished Inventory	1/0/1900
	Michaels Inventory not in Stock Ledger

	Eligible Letter of Credit Inventory				—
	Eligible In transit: Trailers
	Eligible In transit: Inter-Co
	Eligible In transit: From Vendors		25	%

	Total Adds				—

Total Ending Inventory					—

LESS	Shrink Reserve - Michaels & Star
	Ineligible Inventory (supplies)

Eligible Inventory as of :	1/0/1900				—

Appraised Value as of Sept 09 Appraisal

January - August	85.3	%
September - December	96.9	%

Inventory Advance Rate	Tranche (A)		FILO
December 16 - August 14	85.0	%	5.0	%
August 15 - December 15	87.5	%	5.0	%

	Tranche (A)		FILO
Advance Rate	72.5	%	4.3	%
Total Inventory Borrowing Base	0		0

AARON BROTHERS

Eligible Inventory Calculation

								Certificate #		0
								Date		1/0/1900

(in ‘000)				COST

Beg. Inventory as of :	1/0/1900

ADD	Purchases
	Other			—

LESS	Net Sales @ Retail (memo only)
	Cost of Goods Sold @ Cost
	Returns to Vendor
	Shrink
	Other

	Total Adds / (Reductions)			—

Ending Inventory as of:	1/0/1900			—

ADD	Custom Framing Inventory
	Eligible Letter of Credit Inventory			—
	Eligible In transit: Inter-Co			—
	Eligible In transit: From Vendors	25	%	—

	Total Adds			—

Total Ending Inventory				—

LESS	Shrink Reserve

Eligible Inventory as of :	1/0/1900			—

Appraised Value as of Sept 09 Appraisal

January - August	76.9	%
September - December	82.6	%

Inventory Advance Rate	Tranche (A)		FILO
December 16 - August 14	85.0	%	5.0	%
August 15 - December 15	87.5	%	5.0	%

	Tranche (A)		FILO
Advance Rate	65.4	%	3.8	%
Total Inventory Borrowing Base	0		0

ARTISTREE**

Eligible Inventory Calculation

								Certificate #		0
								Date		1/0/1900

(in ‘000)				COST

Ending Inventory as of:	1/0/1900

ADD	Eligible Letter of Credit Inventory			—
	Eligible In transit: Inter-Co			—
	Eligible In transit: From Vendors	25	%	—

Total Ending Inventory				—

Appraised Value as of Sept 09 Appraisal

January - August	24.3	%
September - December	24.8	%

Inventory Advance Rate	Tranche (A)		FILO
December 16 - August 14	85.0	%	5.0	%
August 15 - December 15	87.5	%	5.0	%

	Tranche (A)		FILO
Advance Rate	20.7	%	1.2	%
Total Inventory Borrowing Base	—		—

** Commodity Inventory Only

Exhibit J

DOCUMENT AGENDA

for

AMENDED AND RESTATED

SENIOR SECURED REVOLVING CREDIT FACILITY

among

MICHAELS STORES, INC.,
As the Lead Borrower

For

THE BORROWERS AND GUARANTORS PARTY THERETO

BANK OF AMERICA, N.A.,

As Administrative Agent and Collateral Agent

THE LENDERS PARTY THERETO

WELLS FARGO RETAIL FINANCE, LLC,

as Syndication Agent

DEUTSCHE BANK AG, NEW YORK BRANCH

JPMORGAN CHASE BANK, N.A.

CREDIT SUISSE
as Co-Documentation Agents

BANC OF AMERICA SECURITIES LLC,
WELLS FARGO RETAIL FINANCE, LLC,

as Joint Lead Arrangers

BANC OF AMERICA SECURITIES LLC
WELLS FARGO RETAIL FINANCE, LLC

DEUTSCHE BANK SECURITIES INC.

J.P. MORGAN SECURITIES INC.

CREDIT SUISSE

as Joint Book Runners

and

GENERAL ELECTRIC CAPITAL CORPORATION

UBS SECURITIES LLC

RBS BUSINESS CAPITAL, A DIVISION OF RBS ASSET FINANCE, INC.

as Senior Managing Agents

Table of Parties

Bank of America, N.A.		“Agent” or “A”
Riemer & Braunstein LLP (Agent’s Counsel)		“R&B”
Ogilvy Renault LLP (Agent’s Canadian Counsel)		“OR”
Michaels Stores, Inc. Aaron Brothers, Inc. Michaels Stores Procurement Company, Inc. Artistree, Inc.		“Borrowers” or “B”
Michaels Finance Company, Inc. Michaels Stores Card Services, LLC		“US Guarantors” or “USG”
Michaels of Canada, ULC		“Canadian Guarantor” or “CG” (together with USG, collectively, “Guarantors” or “G”, and together with B, collectively, “Loan Parties” or “LP”)
Ropes & Gray LLP (Loan Parties’ Counsel)		“BC”
McInnes Cooper (Canadian Guarantor’s Counsel)		“CGC”
Deutsche Bank		“Term Loan Agent” or “TLA”
White & Case LLP (Term Loan Agent’s Counsel)		“W&C”

Item

PART ONE: LOAN AND OPERATIVE DOCUMENTS

1. Amended and Restated Credit Agreement

2. Exhibits to Amended and Restated Credit Agreement

(a) Exhibit A-1 — Form of Assignment and Acceptance (Tranche A)

(b) Exhibit A-2 — Form of Assignment and Acceptance (FILO)

(d) Exhibit C — Form of Notice of Borrowing

(e) Exhibit D — Form of Revolving Credit Note

(f) Exhibit E — Form of Swingline Note

(g) Exhibit F — Form of Joinder to Credit Agreement

(h) Exhibit G — Form of Credit Card Notification

(i) Exhibit H — Form of Compliance Certificate

(j) Exhibit I — Form of Borrowing Base Certificate

(k) Exhibit J — Closing Agenda

3. Schedules to Amended and Restated Credit Agreement

(a) Schedule 1.1(a) — Lenders and Commitments

(b) Schedule 2.18(b) — Credit Card Arrangements

(d) Schedule 3.01 — Organization Information

(e) Schedule 3.05 — Financial Statement Exceptions

(f) Schedule 3.08(b)(i) — Owned Real Estate

(g) Schedule 3.08(b)(ii) — Leased Real Estate

(h) Schedule 3.09(b) — Environmental Matters

(i) Schedule 3.09(d) — Environmental Investigation

(j) Schedule 3.10 — Taxes

(k) Schedule 3.11 — ERISA and other Pension Matters

(l) Schedule 3.12 — Subsidiaries; Equity Interests

(m) Schedule 3.15 — Intellectual Property

(n) Schedule 4.01(b) — Local U.S. and Canadian Counsel Opinions

(o) Schedule 5.02(f) — Reporting Requirements

(p) Schedule 5.02 — Lead Borrower’s Website

(q) Schedule 5.07 — Insurance

(r) Schedule 5.14 — Unrestricted Subsidiaries

(s) Schedule 6.01 — Permitted Encumbrances

(t) Schedule 6.02 — Permitted Investments

(u) Schedule 6.03 — Existing Indebtedness

(v) Schedule 6.05 — Permitted Dispositions

(w) Schedule 6.08 — Affiliate Transactions

(x) Schedule 6.09 — Burdensome Agreements

4. Amended and Restated Revolving Credit Notes

(a) Wells Fargo Retail Finance, LLC

(b) Regions Bank

(d) RBS Business Capital, a Division of RBS Asset Finance, Inc., a Subsidiary of RBS Citizens, N.A.

(e) Deutsche Bank AG New York Branch

5. Confirmation, Ratification and Amendment of Ancillary Loan Documents — US

(a) Annex A — Updated Schedules to Security Agreement

(a) Annex B — Updated Schedules to other Ancillary Loan Documents

6. Confirmation, Ratification and Amendment of Ancillary Loan Documents — Canada

7. Grant of Security Interest in Trademarks — Michaels Stores Procurement Company, Inc.

(a) Schedule I — Trademarks

8. Amendment to Grant of Security Interest in Trademarks — Michaels of Canada, ULC

(a) Schedule I — Trademarks

9. Blocked Account Agreements

(a) Amendment to Blocked Account Agreement — Canadian Imperial Bank of Commerce

(b) Wells Fargo Bank, National Association — Michaels of Canada, ULC and Michaels Finance Company, Inc.

10. PPSA Registration Statements/Amendments

11. Landlord Waivers

(a) 63 Green Mountain Road, Hazleton, PA (Michaels)

(b) 2720 Pellissier Place, City of Industry, CA (Artistree)

12. Freight Forwarder Agreement with OOCL Logistics Ltd.

13. Customs Broker Agreement with UPS Supply Chain Solutions, Inc.

14. Carrier Agreements

(a) APL Co. Pte Ltd.

(b) CMA CGM (America) LLC

(d) Mitsui O.S.K. Lines, Ltd.

15. Officer’s Certificate

16. Solvency Certificate

PART TWO: ORGANIZATIONAL AND AUTHORITY DOCUMENTS

17. Michaels Stores, Inc.