<SEC-DOCUMENT>0001299933-16-002126.txt : 20160301
<SEC-HEADER>0001299933-16-002126.hdr.sgml : 20160301
<ACCEPTANCE-DATETIME>20160301163309
ACCESSION NUMBER:		0001299933-16-002126
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20160226
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20160301
DATE AS OF CHANGE:		20160301

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KIRKLAND'S, INC
		CENTRAL INDEX KEY:			0001056285
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-RETAIL STORES, NEC [5990]
		IRS NUMBER:				621287151
		FISCAL YEAR END:			0130

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-49885
		FILM NUMBER:		161473842

	BUSINESS ADDRESS:	
		STREET 1:		5310 MARYLAND WAY
		CITY:			BRENTWOOD
		STATE:			TN
		ZIP:			37027
		BUSINESS PHONE:		615-872-4800

	MAIL ADDRESS:	
		STREET 1:		5310 MARYLAND WAY
		CITY:			BRENTWOOD
		STATE:			TN
		ZIP:			37027

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KIRKLANDS INC
		DATE OF NAME CHANGE:	19980219
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_53192.htm
<DESCRIPTION>LIVE FILING
<TEXT>
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<TITLE> Kirkland's, Inc. (Form: 8-K) </TITLE>
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		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
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<BR>
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	WASHINGTON, D.C. 20549
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	FORM 8-K
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	CURRENT REPORT
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	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
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	Date of Report (Date of Earliest Event Reported):
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	&nbsp;
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	February 26, 2016
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	Kirkland's, Inc.
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<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
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	Tennessee
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	000-49885
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	621287151
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_____________________<BR>
	(State or other jurisdiction
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_____________<BR>
	(Commission
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______________<BR>
	(I.R.S. Employer
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	of incorporation)
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	File Number)
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	Identification No.)
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	&nbsp;&nbsp;
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	5310 Maryland Way, Brentwood, Tennessee
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	&nbsp;
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	37027
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_________________________________<BR>
	(Address of principal executive offices)
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	&nbsp;
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___________<BR>
	(Zip Code)
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	Registrant&#146;s telephone number, including area code:
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	&nbsp;
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	615-872-4800
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	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
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	&nbsp;
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<!-- CoverPageRegistrant END --><P><FONT SIZE="2">
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:</FONT>
</P>
<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
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<FONT SIZE="2">Top of the Form</FONT>
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<B>
	Item 1.01 Entry into a Material Definitive Agreement.
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	On February 26, 2016, Kirkland&#x2019;s, Inc. (the "Company"), entered into a Joinder and First Amendment to Amended and Restated Credit Agreement (the "Amendment"), by and among the Company which, together with one of its subsidiaries, serves as a guarantor thereunder, the remaining of the Company&#x2019;s subsidiaries as borrowers (the "Borrowers"), Bank of America, N.A., as administrative agent and collateral agent, and the lenders named therein, to the Company&#x2019;s Amended and Restated Credit Agreement (the "Credit Agreement").  The Amendment increases the Company&#x2019;s senior secured revolving credit facility from $50 million to $75 million and extends its maturity date to February 2021 (the "Credit Facility").  The Credit Facility was scheduled to expire in August of 2016.  The Credit Facility will bear interest at an annual rate equal to LIBOR plus a margin ranging from 125 to 175 basis points with no LIBOR floor.<br><br>	Pursuant to the Amendment, the fee paid to the lenders on the unused portion of the Credit Facility was reduced from 37.5 basis points to 25 basis points, the swingline availability was increased from $5 million to $10 million, and a $25 million incremental accordion feature was added.  At the closing, there were no outstanding borrowings under the Credit Facility.<br><br>	Borrowings under the Credit Facility are subject to certain customary conditions and contain customary events of default, including, without limitation, failure to make payments, a cross-default to certain other debt, breaches of covenants, breaches of representations and warranties, a change in control, certain monetary judgments and bankruptcy and ERISA events.  Upon any such event of default, the principal amount of any unpaid loans and all other obligations under the Credit Agreement may be declared immediately due and payable.  The maximum availability under the Credit Facility is limited by a borrowing base which consists of a percentage of eligible inventory and eligible credit card receivables, less reserves.  As of February 26, 2016, the Company had approximately $39.9 million available for borrowing under the borrowing base formula.<br><br>Certain of the lenders under the Amendment or their affiliates have provided, and may in the future provide, certain commercial banking, financial advisory, and investment banking services in the ordinary course of business for the Company, its subsidiaries and certain of its affiliates, for which they receive customary fees and commissions. <br><br>The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.  The Company&#x2019;s Amended and Restated Credit Facility dated August 19, 2011, and the Amended and Restated Security Agreement of the same date have been previously filed with the Securities and Exchange Commission.
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	Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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	The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
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	Item 9.01 Financial Statements and Exhibits.
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        (d)  	Exhibits<br><br>        10.1	Joinder and First Amendment to Amended and Restated Credit Agreement dated as of February 26, 2016, by and among Kirkland&#x2019;s Inc., the borrowers and guarantors named therein, Bank of America, N.A., as administrative agent, and the lenders named therein.
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<B>
	SIGNATURES
</B>
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	Pursuant to the requirements of the Securities Exchange Act of 1934, the
	registrant has duly caused this report to be signed on its behalf by the
	undersigned hereunto duly authorized.
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	&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<FONT SIZE="2">
	Kirkland's, Inc.
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	&nbsp;&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<I>
	March 1, 2016
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	&nbsp;
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<I>
	By:
</I>
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	&nbsp;
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<I>
	/s/ Carter R. Todd
</I>
<BR>
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	&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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	&nbsp;
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<I>
	Name: Carter R. Todd
</I>
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	&nbsp;
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<I>
	Title: Vice President and General Counsel
</I>
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	Exhibit&nbsp;Index
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	Exhibit No.
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	Description
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	10.1
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	&nbsp;
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Joinder and First Amendment to Amended and Restated Credit Agreement dated as of February 26, 2016, by and among Kirkland&#x2019;s Inc., the borrowers and guarantors named therein, Bank of America, N.A., as administrative agent, and the lenders named therein.
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit1.htm
<DESCRIPTION>EX-10.1
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<TITLE> EX-10.1 </TITLE>
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<BODY style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><FONT style="font-size: 12pt"><B>EXHIBIT 10.1</B></FONT>



<P align="right" style="font-size: 12pt">EXECUTION VERSION



<P align="center" style="font-size: 12pt">JOINDER AND FIRST AMENDMENT TO<BR>
AMENDED AND RESTATED CREDIT AGREEMENT



<P align="left" style="font-size: 12pt; text-indent: 4%">JOINDER AND FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
&#147;<U>Amendment</U>&#148;) dated as of February&nbsp;26, 2016 among:


<P align="left" style="font-size: 12pt; text-indent: 4%"><B>KIRKLAND&#146;S STORES, INC.</B>, a Tennessee corporation (the &#147;<U>Lead Borrower</U>&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">The other Borrowers party thereto (together with the Lead Borrower, individually, a
&#147;<U>Borrower</U>&#148;, and collectively, the &#147;<U>Borrowers</U>&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">The Guarantors party hereto;


<P align="left" style="font-size: 12pt; text-indent: 4%">the Lenders party hereto; and


<P align="left" style="font-size: 12pt; text-indent: 4%"><B>BANK OF AMERICA, N.A.</B>, as Administrative Agent and Collateral Agent (in such capacities, the
&#147;<U>Agent</U>&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">in consideration of the mutual covenants herein contained and benefits to be derived herefrom.


<P align="center" style="font-size: 12pt"><U>W</U> <U>I</U> <U>T</U> <U>N</U> <U>E</U> <U>S</U> <U>S</U> <U>E</U> <U>T</U> <U>H</U>:



<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the Borrowers, the Guarantors, certain of the Lenders and the Agent, among others,
have entered into a certain Amended and Restated Credit Agreement dated as of August&nbsp;19, 2011 (the
&#147;<U>Credit Agreement</U>&#148;);


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, Pinnacle Bank (the &#147;<U>New Lender</U>&#148;) desires to join the Credit Agreement as a
Lender; and


<P align="left" style="font-size: 12pt; text-indent: 4%">WHEREAS, the parties to the Credit Agreement desire to modify certain provisions of the Credit
Agreement as provided herein.


<P align="left" style="font-size: 12pt; text-indent: 4%">NOW THEREFORE, in consideration of the mutual promises and agreements herein contained, the
parties hereto hereby agree as follows:


<P>
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<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Incorporation of Defined Terms.</U> All capitalized terms not otherwise defined herein
shall have the same meaning as in the Credit Agreement, as applicable.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Joinder and Assumption of Obligations</U>. The New Lender hereby acknowledges that it
has received and reviewed a copy of the Credit Agreement and each of the other Loan Documents,
and hereby:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>joins in the execution of, and becomes a party to, the Credit Agreement and the
other Loan Documents (as applicable) as a Lender;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>is bound by all agreements and obligations, and has all of the rights and
benefits, of a Lender under the Credit Agreement and the other Loan Documents to which
the Lenders are party, in each case, with the same force and effect as if the New
Lender was a signatory to the Credit Agreement and such other Loan Documents and was
expressly named as a Lender therein; and</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>assumes and performs all duties of a Lender under the Credit Agreement and the
other Loan Documents (as applicable).</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Representations and Warranties</U>. Each of the Loan Parties hereby represents and
warrants that as of the First Amendment Effective Date, (i)&nbsp;no Default or Event of Default
exists under the Credit Agreement or under any other Loan Document, and (ii)&nbsp;all
representations and warranties contained in the Credit Agreement and in the other Loan
Documents are true and correct in all material respects; <U>provided</U> that, to the extent
that such representations and warranties specifically refer to an earlier date, they are true
and correct in all material respects as of such earlier date; <U>provided</U>,
<U>further</U> that, any representation and warranty that is qualified as to &#147;materiality,&#148;
&#147;Material Adverse Effect&#148; or similar language is true and correct (after giving effect to any
qualification therein) in all respects.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Ratification of Loan Documents</U>. The Credit Agreement, as hereby amended, and all
other Loan Documents, are hereby ratified and re-affirmed in all respects and shall continue
in full force and effect.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Amendments to Credit Agreement</U>.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Section&nbsp;1.01 of the Credit Agreement is hereby amended as follows:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;Accelerated Borrowing Base
Delivery Event&#148; in its entirety and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Accelerated Borrowing Base Delivery Event&#148; means either (i)&nbsp;the occurrence
and continuance of any Event of Default, or (ii)&nbsp;the failure of the
Borrowers to maintain Availability at least equal to $12,500,000. For
purposes of this Agreement, the occurrence of an Accelerated Borrowing Base
Delivery Event shall be deemed continuing (i)&nbsp;so long as such Event of
Default has not been waived, and/or (ii)&nbsp;if the Accelerated Borrowing Base
Delivery Event arises as a result of the Borrowers&#146; failure to achieve
Availability as required hereunder, until Availability has exceeded
$12,500,000 for thirty (30)&nbsp;consecutive calendar days, in which case an
Accelerated Borrowing Base Delivery Event shall no longer be deemed to be
continuing for purposes of this Agreement; <U>provided</U> that an
Accelerated Borrowing Base Delivery Event shall be deemed continuing (even
if an Event of Default is no longer continuing and/or Availability exceeds
the required amount for thirty (30)&nbsp;consecutive days) at all times during
any Fiscal Year after an Accelerated Borrowing Base Delivery Event has
occurred and been discontinued on two (2)&nbsp;occasions in such Fiscal Year. The
termination of an Accelerated Borrowing Base Delivery Event as provided
herein shall in no way limit, waive or delay the occurrence of a subsequent
Accelerated Borrowing Base Delivery Event in the event that the conditions
set forth in this definition again arise.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;Aggregate Commitments&#148; in its
entirety and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Aggregate Commitments&#148; means the Commitments of all the Lenders. As of the
First Amendment Effective Date, the Aggregate Commitments are $75,000,000.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the pricing grid set forth in the definition of
&#147;Applicable Margin&#148; in its entirety and substituting the following in its
stead:</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top"><FONT style="font-size: 11pt"><B>Level</B></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 11pt"><B>Average Daily<BR>
Availability</B></FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 12pt"><B>LIBOR Margin</B><BR>
<BR></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 11pt"><B>Base Rate Margin</B><BR>
<BR></FONT></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD align="left" valign="top"><FONT style="font-size: 11pt">I</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 11pt">Greater than<BR>
$30,000,000</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 11pt">1.25%<BR>
<BR></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 11pt">0.25%<BR>
<BR></FONT></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD align="left" valign="top"><FONT style="font-size: 11pt">II</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 11pt">Equal to or less than<BR>
$30,000,000 but<BR>
greater than<BR>
$15,000,000</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 11pt">1.50%<BR>
<BR>
<BR>
<BR></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 11pt">0.50%<BR>
<BR>
<BR>
<BR></FONT></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 11pt">
    <TD align="left" valign="top"><FONT style="font-size: 11pt">III</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="font-size: 11pt">Equal to or less than<BR>
$15,000,000</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 11pt">1.75%<BR>
<BR></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 11pt">0.75%<BR>
<BR></FONT></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 11pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><FONT style="font-size: 12pt">iv.</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><FONT style="font-size: 12pt">by deleting the definition of &#147;Cash Dominion Event&#148; in its entirety and
substituting the following in its stead:</FONT></TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Cash Dominion Event&#148; means either (i)&nbsp;the occurrence and continuance of any
Event of Default, or (ii)&nbsp;the failure of the Borrowers at any time to
maintain Availability of at least the greater of (x)&nbsp;15% of the Loan Cap or
(y) $10,000,000. For purposes of this Agreement, the occurrence of a Cash
Dominion Event shall be deemed continuing (i)&nbsp;so long as such Event of
Default has not been waived, and/or (ii)&nbsp;if the Cash Dominion Event arises
as a result of the Borrowers&#146; failure to achieve Availability as required
hereunder, until Availability has exceeded the greater of (x)&nbsp;15% of the
Loan Cap or (y) $10,000,000 for thirty (30)&nbsp;consecutive days, in which case
a Cash Dominion Event shall no longer be deemed to be continuing for
purposes of this Agreement; <U>provided</U> that a Cash Dominion Event
shall be deemed continuing (even if an Event of Default is no longer
continuing and/or Availability exceeds the required amount for thirty (30)
consecutive days) at all times during any Fiscal Year after a Cash Dominion
Event has occurred and been discontinued on two (2)&nbsp;occasions in such Fiscal
Year. The termination of a Cash Dominion Event as provided herein shall in
no way limit, waive or delay the occurrence of a subsequent Cash Dominion
Event in the event that the conditions set forth in this definition again
arise.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">v.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;Commitment Fee Percentage&#148; in
its entirety and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Commitment Fee Percentage&#148; means 0.25% per annum.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">vi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;Consolidated Fixed Charge
Coverage Ratio&#148; in its entirety and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Consolidated Fixed Charge Coverage Ratio&#148; means, at any date of
determination, the ratio of (a) (i)&nbsp;Consolidated EBITDA for such period
minus (ii)&nbsp;Capital Expenditures made during such period, minus (iii)&nbsp;the
aggregate amount of Federal, state, local and foreign income taxes paid in
cash during such period (but not less than zero) to (b)&nbsp;Debt Service Charges
for such period, in each case, of or by the Parent and its Subsidiaries for
the most recently completed Measurement Period, all as determined on a
Consolidated basis in accordance with GAAP.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">vii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting &#147;$5,000,000&#148; wherever it appears in the definition
of &#147;Covenant Compliance Event&#148; and substituting &#147;$7,500,000&#148; in its stead</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">viii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;Defaulting Lender&#148; in its
entirety and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Defaulting Lender&#148; means, subject to <U>Section&nbsp;9.16(b)</U>, any Lender
that (a)&nbsp;has failed to (i)&nbsp;fund all or any portion of its Loans within two
Business Days of the date such Loans were required to be funded hereunder,
or (ii)&nbsp;pay to the Agent, the L/C Issuer, the Swing Line Lender or any other
Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit or Swing Line Loans)
within two Business Days of the date when due, (b)&nbsp;has notified the Lead
Borrower, the Agent, the L/C Issuer or the Swing Line Lender in writing that
it does not intend to comply with its funding obligations hereunder, or has
made a public statement to that effect, (c)&nbsp;has failed, within three
Business Days after written request by the Agent or the Lead Borrower, to
confirm in writing to the Agent and the Lead Borrower that it will comply
with its prospective funding obligations hereunder (<U>provided</U> that
such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c)&nbsp;upon receipt of such written confirmation by the Agent and the Lead
Borrower), or (d)&nbsp;has, or has a direct or indirect parent company that has,
(i)&nbsp;become the subject of a proceeding under any Debtor Relief Law, or (ii)
had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or assets,
including the Federal Deposit Insurance Corporation or any other state or
federal regulatory authority acting in such a capacity; <U>provided</U>
that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any Equity Interest in that Lender or any direct
or indirect parent company thereof by a Governmental Authority so long as
such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts within the United States or from
the enforcement of judgments or writs of attachment on its assets or permit
such Lender (or such Governmental Authority) to reject, repudiate, disavow
or disaffirm any contracts or agreements made with such Lender. Any
determination by the Agent that a Lender is a Defaulting Lender under any
one or more of clauses (a)&nbsp;through (d)&nbsp;above, and of the effective date of
such status, shall be conclusive and binding absent manifest error, and such
Lender shall be deemed to be a Defaulting Lender (subject to <U>Section
9.16(b)</U>) as of the date established therefor by the Agent in a written
notice of such determination, which shall be delivered by the Agent to the
Lead Borrower, the L/C Issuer, the Swing Line Lender and each other Lender
promptly following such determination.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">ix.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;LIBOR Rate&#148; in its entirety and
substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;LIBOR Rate&#148; means the per annum rate of interest (rounded up to the nearest
1/8th of 1% and in no event less than zero) determined by Agent at or about
11:00&nbsp;a.m. (London time) two Business Days prior to an interest period for a
term equivalent to such period, equal to the London Interbank Offered Rate,
or comparable or successor rate approved by Agent, as published on the
applicable Reuters screen page (or other commercially available source
designated by Agent from time to time); <U>provided</U>, that any
comparable or successor rate shall be applied by Agent, if administratively
feasible, in a manner consistent with market practice.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">x.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;Maturity Date&#148; in its entirety
and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Maturity Date&#148; means February&nbsp;26, 2021.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">xi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by adding &#147;<U>provided</U> that Obligations of a Loan Party
shall exclude any Excluded Swap Obligations with respect to such Loan Party&#148; at
the end of the definition of &#147;Obligations&#148;.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">xii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting clause (c)&nbsp;of &#147;Permitted Encumbrances&#148; in its
entirety and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;(c) Pledges and deposits made in the ordinary course of business in
compliance with workers&#146; compensation, unemployment and other types of
insurance and other social security laws or regulations, other than any Lien
imposed by ERISA;&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">xiii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting &#147;or Deteriorating Lender&#148; where it appears in the
definition of &#147;Required Lenders&#148;.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">xiv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting &#147;$5,000,000&#148; in clause (a)&nbsp;of the definition of
&#147;Swing Line Sublimit&#148; and substituting &#147;$10,000,000&#148; in its stead.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">xv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definition of &#147;Payment Conditions&#148; in its
entirety and substituting the following in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Payment Conditions&#148; means, at the time of determination with respect to any
specified transaction or payment, that (a)&nbsp;no Default or Event of Default
then exists or would arise as a result of entering into such transaction or
the making of such payment, and (b)&nbsp;after giving pro forma effect to such
transaction or payment, either (x) (i)&nbsp;the projected Availability as of the
end of each Fiscal Month during any subsequent projected six (6)&nbsp;Fiscal
Months will be equal to or greater than the greater of (A)&nbsp;20% of the Loan
Cap and (B) $15,000,000, and (ii)&nbsp;the Consolidated Fixed Charge Coverage
Ratio, as projected on a pro-forma basis for the twelve months immediately
preceding such transaction or payment, will be equal to or greater than
1.0:1.0, or (y)&nbsp;the projected Availability as of the end of each Fiscal
Month during any subsequent projected six (6)&nbsp;Fiscal Months will be equal to
or greater than 30% of the Loan Cap. Prior to undertaking any transaction
or payment which is subject to the Payment Conditions, the Loan Parties
shall deliver to the Agent evidence of satisfaction of the conditions
contained in clause (b)&nbsp;above on a basis (including, without limitation,
giving due consideration to results for prior periods) reasonably
satisfactory to the Agent.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">xvi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting the definitions of &#147;Deteriorating Lender&#148;, &#147;Pro
Forma Availability Condition&#148; and &#147;Pro Forma Excess Availability&#148; in their
entirety.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">xvii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by adding the following new definitions in appropriate
alphabetical order:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Additional Commitment Lender&#148; has the meaning set forth in <U>Section
2.15(c)</U>.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Commodity Exchange Act&#148; means the Commodity Exchange Act (7 U.S.C. &#167; 1 et
seq.).



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Excluded Swap Obligation&#148; means, with respect to any Loan Party, any Swap
Obligation if, and to the extent that, all or a portion of the guaranty of
such Loan Party under the Facility Guaranty of, or the grant under a Loan
Document by such Loan Party of a security interest to secure, such Swap
Obligation (or any guaranty thereof) is or becomes illegal under the
Commodity Exchange Act (or the application or official interpretation
thereof) by virtue of such Loan Party&#146;s failure for any reason to constitute
an &#147;eligible contract participant&#148; as defined in the Commodity Exchange Act
(determined after giving effect to <U>Section&nbsp;10.25</U> hereof and any and
all guarantees of such Loan Party&#146;s Swap Obligations by other Loan Parties)
at the time the guaranty of such Loan Party, or grant by such Loan Party of
a security interest, becomes effective with respect to such Swap Obligation.
If a Swap Obligation arises under a Master Agreement governing more than
one Swap Contract, such exclusion shall apply only to the portion of such
Swap Obligation that is attributable to Swap Contracts for which such
guaranty or security interest becomes illegal.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;First Amendment Effective Date&#148; means February&nbsp;26, 2016.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Fronting Exposure&#148; means, at any time there is a Defaulting Lender, (a)
with respect to the L/C Issuer, such Defaulting Lender&#146;s Applicable
Percentage of the outstanding L/C Obligations other than L/C Obligations as
to which such Defaulting Lender&#146;s participation obligation has been
reallocated to other Lenders or Cash Collateralized in accordance with the
terms hereof, and (b)&nbsp;with respect to the Swing Line Lender, such Defaulting
Lender&#146;s Applicable Percentage of Swing Line Loans other than Swing Line
Loans as to which such Defaulting Lender&#146;s participation obligation has been
reallocated to other Lenders in accordance with the terms hereof.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Increase Effective Date&#148; has the meaning set forth in <U>Section
2.15(d)</U>.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Non-Defaulting Lender&#148; means, at any time, each Lender that is not a
Defaulting Lender at such time.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;RP Conditions&#148; means, at the time of determination with respect to any
applicable Restricted Payment, that (a)&nbsp;no Default or Event of Default then
exists or would arise as a result of the making of such Restricted Payment,
and (b)&nbsp;after giving pro forma effect to such Restricted Payment, either (x)
(i)&nbsp;the projected Availability as of the end of each Fiscal Month during any
subsequent projected six (6)&nbsp;Fiscal Months will be equal to or greater than
the greater of (A)&nbsp;20% of the Loan Cap and (B) $15,000,000, and (ii)&nbsp;the
Consolidated Fixed Charge Coverage Ratio, as projected on a pro-forma basis
for the twelve months immediately preceding such transaction or payment,
will be equal to or greater than 1.1:1.0, or (y)&nbsp;the projected Availability
as of the end of each Fiscal Month during any subsequent projected six (6)
Fiscal Months will be equal to or greater than 30% of the Loan Cap. Prior
to undertaking any Restricted Payment which is subject to the RP Conditions,
the Loan Parties shall deliver to the Agent evidence of satisfaction of the
conditions contained in clause (b)&nbsp;above on a basis (including, without
limitation, giving due consideration to results for prior periods)
reasonably satisfactory to the Agent.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Qualified ECP Guarantor&#148; means, at any time, each Loan Party with total
assets exceeding $10,000,000 or that qualifies at such time as an &#147;eligible
contract participant&#148; under the Commodity Exchange Act and can cause another
Person to qualify as an &#147;eligible contract participant&#148; at such time under
Section&nbsp;1a(18)(A)(v)(II) of the Commodity Exchange Act.



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Specified Loan Party&#148; means any Loan Party that is not then an &#147;eligible
contract participant&#148; under the Commodity Exchange Act (determined prior to
giving effect to <U>Section&nbsp;10.25</U>).



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;Swap Obligations&#148; means with respect to any Loan Party any obligation to
pay or perform under any agreement, contract or transaction that constitutes
a &#147;swap&#148; within the meaning of Section&nbsp;1a(47) of the Commodity Exchange Act.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Article&nbsp;II of the Credit Agreement is hereby amended as follows:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting &#147;or Deteriorating Lender&#148; where it appears in
Section&nbsp;2.03(a)(iii)(E) and Section&nbsp;2.04(a).</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">ii.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">by adding the following new Section&nbsp;2.15 at the end thereof:</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#147;<B>2.15</B>
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Increase in Commitments</B>.</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left:12%; font-size: 12pt">(a) <U>Request for Increase</U>. Provided no Default or Event of Default
then exists or would arise therefrom, upon notice to the Agent (which shall
promptly notify the Lenders), the Lead Borrower may from time to time
request an increase in the Aggregate Commitments by an amount (for all such
requests) not exceeding $25,000,000; <U>provided</U> that (i)&nbsp;any such
request for an increase shall be in a minimum amount of $5,000,000, and (ii)
the Lead Borrower may make a maximum of three such requests. At the time of
sending such notice, the Lead Borrower (in consultation with the Agent)
shall specify the time period within which each Lender is requested to
respond (which shall in no event be less than ten Business Days from the
date of delivery of such notice to the Lenders).



<P align="left" style="margin-left:12%; font-size: 12pt">(b) <U>Lender Elections to Increase</U>. Each Lender shall notify the
Agent within such time period whether or not it agrees to increase its
Commitment and, if so, whether by an amount equal to, greater than, or less
than its Applicable Percentage of such requested increase. Any Lender not
responding within such time period shall be deemed to have declined to
increase its Commitment.



<P align="left" style="margin-left:12%; font-size: 12pt">(c) <U>Notification by Agent; Additional Lenders</U>. The Agent shall
notify the Lead Borrower and each Lender of the Lenders&#146; responses to each
request made hereunder. To achieve the full amount of a requested increase
and subject to the approval of the Agent, the L/C Issuer and the Swing Line
Lender, to the extent that the existing Lenders decline to increase their
Commitments, or decline to increase their Commitments to the amount
requested by the Lead Borrower, the Agent, in consultation with the Lead
Borrower, will use its reasonable efforts to arrange for other Eligible
Assignees to become a Lender hereunder (each such Lender, an &#147;<U>Additional
Commitment Lender</U>&#148;) and to issue commitments in an amount equal to the
amount of the increase in the Aggregate Commitments requested by the Lead
Borrower and not accepted by the existing Lenders (and the Lead Borrower may
also invite additional Eligible Assignees to become Lenders),
<U>provided</U>, however, that without the consent of the Agent, at no time
shall the Commitment of any Additional Commitment Lender be less than
$5,000,000.



<P align="left" style="margin-left:12%; font-size: 12pt">(d) <U>Effective Date and Allocations</U>. If the Aggregate Commitments
are increased in accordance with this Section, the Agent, in consultation
with the Lead Borrower, shall determine the effective date (the
&#147;<U>Increase Effective Date</U>&#148;) and the final allocation of such
increase. The Agent shall promptly notify the Lead Borrower and the Lenders
of the final allocation of such increase and the Increase Effective Date and
on the Increase Effective Date (i)&nbsp;the Aggregate Commitments under, and for
all purposes of, this Agreement shall be increased by the aggregate amount
of such Commitment Increases, and (ii) <U>Schedule&nbsp;2.01</U> shall be deemed
modified, without further action, to reflect the revised Commitments and
Applicable Percentages of the Lenders.



<P align="left" style="margin-left:12%; font-size: 12pt">(e) <U>Conditions to Effectiveness of Increase</U>. As a condition
precedent to such increase, (i)&nbsp;the Lead Borrower shall deliver to the Agent
a certificate of each Loan Party dated as of the Increase Effective Date
signed by a Responsible Officer of such Loan Party (A)&nbsp;certifying and
attaching the resolutions adopted by such Loan Party approving or consenting
to such increase, and (B)&nbsp;in the case of the Borrowers, certifying that,
before and after giving effect to such increase, (1)&nbsp;the representations and
warranties contained in <U>Article&nbsp;V</U> and the other Loan Documents are
true and correct on and as of the Increase Effective Date, except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this <U>Section&nbsp;2.15</U>, the
representations and warranties contained in subsections (a)&nbsp;and (b)&nbsp;of
<U>Section&nbsp;5.05</U> shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a)&nbsp;and (b), respectively, of <U>Section
6.01</U>, and (2)&nbsp;no Default or Event of Default exists or would arise
therefrom, (ii)&nbsp;the Borrowers, the Agent, and any Additional Commitment
Lender shall have executed and delivered a joinder to the Loan Documents in
such form as the Agent shall reasonably require; (iii)&nbsp;the Borrowers shall
have paid such fees and other compensation to the Additional Commitment
Lenders as the Lead Borrower and such Additional Commitment Lenders shall
agree; (iv)&nbsp;the Borrowers shall have paid such arrangement fees to the Agent
as the Lead Borrower and the Agent may agree; (v)&nbsp;if requested by the Agent,
the Borrowers shall deliver an opinion or opinions, in form and substance
reasonably satisfactory to the Agent, from counsel to the Borrowers
reasonably satisfactory to the Agent and dated such date; (vi)&nbsp;the Borrowers
and the Additional Commitment Lender shall have delivered such other
instruments, documents and agreements as the Agent may reasonably have
requested; and (vii)&nbsp;no Default or Event of Default exists. The Borrowers
shall prepay any Committed Loans outstanding on the Increase Effective Date
(and pay any additional amounts required pursuant to <U>Section&nbsp;3.05</U>)
to the extent necessary to keep the outstanding Committed Loans ratable with
any revised Applicable Percentages arising from any nonratable increase in
the Commitments under this Section.



<P align="left" style="margin-left:12%; font-size: 12pt">(f) <U>Conflicting Provisions</U>. This Section shall supersede any
provisions in <U>Sections&nbsp;2.13</U> or <U>10.01</U> to the contrary.&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Section&nbsp;6.01(b) of the Credit Agreement is hereby deleted in its entirety and
the following substituted in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:8%; font-size: 12pt">&#147;(b) (i)&nbsp;as soon as available, but in any event within 45&nbsp;days after the end of each
of the Fiscal Quarters of each Fiscal Year of the Parent, a Consolidated balance
sheet of the Parent and its Subsidiaries as at the end of such Fiscal Quarter, and
the related Consolidated statements of income or operations, Shareholders&#146; Equity
and cash flows for such Fiscal Quarter, and for the portion of the Parent&#146;s Fiscal
Year then ended, setting forth in each case in comparative form the figures for (A)
such period set forth in the projections delivered pursuant to <U>Section
6.01(c)</U> hereof, (B)&nbsp;the corresponding Fiscal Quarter of the previous Fiscal Year
and (C)&nbsp;the corresponding portion of the previous Fiscal Year, all in reasonable
detail, such Consolidated statements to be certified by a Responsible Officer of the
Lead Borrower as fairly presenting the financial condition, results of operations,
Shareholders&#146; Equity and cash flows of the Parent and its Subsidiaries as of the end
of such Fiscal Quarter in accordance with GAAP, subject only to normal year-end
audit adjustments and the absence of footnotes; and



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(ii)&nbsp;at any time that Availability is less than forty (40%) percent of the Loan
Cap, then as soon as available, but in any event within 30&nbsp;days after the end of
each of the Fiscal Months of each Fiscal Year of the Parent (unless such month is
the last month of a Fiscal Quarter, and then within 45&nbsp;days after the end of such
month), a Consolidated balance sheet of the Parent and its Subsidiaries as at the
end of such Fiscal Month, and the related Consolidated statements of income or
operations, Shareholders&#146; Equity and cash flows for such Fiscal Month, and for the
portion of the Parent&#146;s Fiscal Year then ended, setting forth in each case in
comparative form the figures for (A)&nbsp;such period set forth in the projections
delivered pursuant to <U>Section&nbsp;6.01(c)</U> hereof, (B)&nbsp;the corresponding Fiscal
Month of the previous Fiscal Year and (C)&nbsp;the corresponding portion of the previous
Fiscal Year, all in reasonable detail, such Consolidated statements to be certified
by a Responsible Officer of the Lead Borrower as fairly presenting the financial
condition, results of operations, Shareholders&#146; Equity and cash flows of the Parent
and its Subsidiaries as of the end of such Fiscal Month in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes.&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Section&nbsp;6.02(b) of the Credit Agreement is hereby deleted in its entirety and
the following substituted in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:8%; font-size: 12pt">&#147;(b) so long as no Loans are outstanding hereunder, on the fifteenth
(15<sup>th</sup>) day of each Fiscal Quarter (or, if such day is not a Business Day,
on the next succeeding Business Day), a Borrowing Base Certificate showing the
Borrowing Base as of the close of business as of the last day of the immediately
preceding Fiscal Quarter, each Borrowing Base Certificate to be certified as
complete and correct by a Responsible Officer of the Lead Borrower; <U>provided</U>
that at any time that Loans are outstanding hereunder, such Borrowing Base
Certificate shall be delivered on the fifteenth (15<sup>th</sup>) day of each Fiscal
Month (or, if such day is not a Business Day, on the next succeeding Business Day)
as of the close of business as of the last day of the immediately preceding Fiscal
Month; <U>provided further</U> that at any time that an Accelerated Borrowing Base
Delivery Event has occurred and is continuing, such Borrowing Base Certificate shall
be delivered on Wednesday of each week (or, if Wednesday is not a Business Day, on
the next succeeding Business Day), as of the close of business on the immediately
preceding Saturday.&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Sections&nbsp;6.10(b) and (c)&nbsp;of the Credit Agreement are hereby deleted in their
entirety and the following substituted in their stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:8%; font-size: 12pt">&#147;(b) Upon the request of the Agent after reasonable prior notice, permit the Agent
or professionals (including investment bankers, consultants, accountants, and
lawyers) retained by the Agent to conduct commercial finance examinations and other
evaluations, including, without limitation, of (i)&nbsp;the Lead Borrower&#146;s practices in
the computation of the Borrowing Base (ii)&nbsp;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 (iii)&nbsp;the Loan Parties&#146; business plan,
forecasts and cash flows; <U>provided that</U>, except as set forth in the last
sentence of this clause (b), at any times that there are no Loans outstanding
hereunder, the Agent shall not undertake any commercial finance examinations. The
Loan Parties shall pay the reasonable fees and expenses of the Agent and such
professionals with respect to (i)&nbsp;up to one (1)&nbsp;commercial finance examination in
any twelve month period if any Loans are outstanding hereunder during such period
and Availability is equal to or greater than the 40% of the Loan Cap, and (ii)&nbsp;up to
two (2)&nbsp;commercial finance examinations in any twelve month period if any Loans are
outstanding hereunder during such period and Availability is less than 40% of the
Loan Cap. Notwithstanding the foregoing, the Agent (x)&nbsp;shall cause one additional
commercial finance examination to be undertaken at the Loan Parties&#146; expense within
one hundred and twenty (120)&nbsp;days following the First Amendment Effective Date, and
(y)&nbsp;may cause additional commercial finance examinations to be undertaken (i)&nbsp;as it
in its discretion deems necessary or appropriate, at its own expense or, (ii)&nbsp;if
required by Law or if a Default or Event of Default shall have occurred and be
continuing, at the expense of the Loan Parties.



<P align="left" style="margin-left:8%; font-size: 12pt">(c)&nbsp;Upon the request of the Agent after reasonable prior notice, permit the Agent or
professionals (including appraisers) retained by the Agent to conduct appraisals of
the Collateral, including, without limitation, the assets included in the Borrowing
Base; <U>provided that</U>, except as set forth in the last sentence of this clause
(c), at any times that there are no Loans outstanding hereunder, the Agent shall not
undertake any appraisals. The Loan Parties shall pay the reasonable fees and
expenses of the Agent and such professionals with respect to (i)&nbsp;up to one (1)
appraisal in any twelve month period if any Loans are outstanding hereunder during
such period and Availability is equal to or greater than the 40% of the Loan Cap,
and (ii)&nbsp;up to two (2)&nbsp;appraisals in any twelve month period if any Loans are
outstanding hereunder during such period and Availability is less than the 40% of
the Loan Cap. Notwithstanding the foregoing, the Agent (x)&nbsp;shall cause one
appraisal to be undertaken at the Loan Parties&#146; expense within one hundred and
twenty (120)&nbsp;days following the First Amendment Effective Date, and (y)&nbsp;may cause
additional appraisals to be undertaken (i)&nbsp;as it in its discretion deems necessary
or appropriate, at its own expense or, (ii)&nbsp;if required by Law or if a Default or
Event of Default shall have occurred and be continuing, at the expense of the Loan
Parties.&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Sections&nbsp;7.06(c) and (d)&nbsp;of the Credit Agreement are hereby deleted in their
entirety and the following substituted in their stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:8%; font-size: 12pt">&#147;(c) if (i) (x)&nbsp;no Loans have been outstanding for the six (6)&nbsp;month period
immediately preceding such payment, (y)&nbsp;no Loans are projected to be borrowed by the
Borrowers pursuant to the projections delivered by the Loan Parties pursuant to
6.01(c) hereof for the six (6)&nbsp;month period immediately following such payment, and
(z)&nbsp;the Parent uses cash on hand to make such payment, or (ii)&nbsp;the RP Conditions are
satisfied, the Loan Parties and each Subsidiary may purchase, redeem or otherwise
acquire Equity Interests issued by it; and



<P align="left" style="margin-left:8%; font-size: 12pt">(d)&nbsp;if (i) (x)&nbsp;no Loans have been outstanding for the six (6)&nbsp;month period
immediately preceding such payment, (y)&nbsp;no Loans are projected to be borrowed by the
Borrowers pursuant to the projections delivered by the Loan Parties pursuant to
6.01(c) hereof for the six (6)&nbsp;month period immediately following such payment, and
(z)&nbsp;the Parent uses cash on hand to make such payment, or (ii)&nbsp;the RP Conditions are
satisfied, the Parent may declare or pay cash dividends to its stockholders.&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Section&nbsp;7.15 of the Credit Agreement is hereby amended by deleting &#147;1.1:1.0&#148; in
the last line thereof and by substituting &#147;1.0:1.0&#148; in its stead.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">h.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Section&nbsp;9.16 of the Credit Agreement is hereby deleted in its entirety and the
following substituted in its stead:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:8%; font-size: 12pt">&#147;<B>9.16 Defaulting Lenders</B>.



<P align="left" style="margin-left:8%; font-size: 12pt">(a) <U>Adjustments</U>. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that
Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(i) <U>Waivers and Amendments</U>. Such Defaulting Lender&#146;s right to approve
or disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of &#147;Required Lenders&#148; and <U>Section
10.01</U>.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(ii) <U>Defaulting Lender Waterfall</U>. Any payment of principal, interest,
fees or other amounts received by the Agent for the account of such Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to <U>Article
VIII</U> or otherwise) or received by the Agent from a Defaulting Lender pursuant to
<U>Section&nbsp;10.08</U> shall be applied at such time or times as may be determined by
the Agent as follows: first, to the payment of any amounts owing by such Defaulting
Lender to the Agent hereunder; second, to the payment on a pro rata basis of any
amounts owing by such Defaulting Lender to the L/C Issuer or Swing Line Lender
hereunder; third, to Cash Collateralize the L/C Issuer&#146;s Fronting Exposure with
respect to such Defaulting Lender; fourth, as the Lead Borrower may request (so long
as no Default or Event of Default exists), to the funding of any Loan in respect of
which such Defaulting Lender has failed to fund its portion thereof as required by
this Agreement, as determined by the Agent; fifth, if so determined by the Agent and
the Lead Borrower, to be held in a deposit account and released pro rata in order to
(x)&nbsp;satisfy such Defaulting Lender&#146;s potential future funding obligations with
respect to Loans under this Agreement and (y)&nbsp;Cash Collateralize the L/C Issuer&#146;s
future Fronting Exposure with respect to such Defaulting Lender with respect to
future Letters of Credit issued under this Agreement; sixth, to the payment of any
amounts owing to the Lenders, the L/C Issuer or Swing Line Lender as a result of any
judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer
or the Swing Line Lender against such Defaulting Lender as a result of such
Defaulting Lender&#146;s breach of its obligations under this Agreement; seventh, so long
as no Default or Event of Default exists, to the payment of any amounts owing to the
Borrowers as a result of any judgment of a court of competent jurisdiction obtained
by the Borrowers against such Defaulting Lender as a result of such Defaulting
Lender&#146;s breach of its obligations under this Agreement; and eighth, to such
Defaulting Lender or as otherwise directed by a court of competent jurisdiction;
<U>provided</U> that if (x)&nbsp;such payment is a payment of the principal amount of
any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully
funded its appropriate share, and (y)&nbsp;such Loans were made or the related Letters of
Credit were issued at a time when the conditions set forth in <U>Section&nbsp;4.02</U>
were satisfied or waived, such payment shall be applied solely to pay the Loans of,
and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to
being applied to the payment of any Loans of, or L/C Obligations owed to, such
Defaulting Lender until such time as all Loans and funded and unfunded
participations in L/C Obligations and Swing Line Loans are held by the Lenders pro
rata in accordance with the Commitments hereunder without giving effect to
<U>Section&nbsp;9.16(a)(iv)</U>. Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post Cash Collateral pursuant to this <U>Section
9.16(a)(ii)</U> shall be deemed paid to and redirected by such Defaulting Lender,
and each Lender irrevocably consents hereto.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(iii) <U>Certain Fees</U>.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(A)&nbsp;No Defaulting Lender shall be entitled to receive any fee payable under
<U>Section&nbsp;2.09(a)</U> for any period during which that Lender is a Defaulting
Lender (and the Borrowers shall not be required to pay any such fee that otherwise
would have been required to have been paid to that Defaulting Lender).



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(B)&nbsp;Each Defaulting Lender shall be entitled to receive Letter of Credit Fees
for any period during which that Lender is a Defaulting Lender only to the extent
allocable to its Applicable Percentage of the stated amount of Letters of Credit for
which it has provided Cash Collateral pursuant to <U>Section&nbsp;2.03(g)</U>.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(C)&nbsp;With respect to any fee payable under <U>Section&nbsp;2.09(a)</U> or any Letter
of Credit Fee not required to be paid to any Defaulting Lender pursuant to
<U>clause (A)</U> or <U>(B)</U> above, the Borrowers shall (x)&nbsp;pay to each
Non-Defaulting Lender that portion of any such fee otherwise payable to such
Defaulting Lender with respect to such Defaulting Lender&#146;s participation in L/C
Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting
Lender pursuant to <U>clause (iv)</U> below, (y)&nbsp;pay to the L/C Issuer and Swing
Line Lender, as applicable, the amount of any such fee otherwise payable to such
Defaulting Lender to the extent allocable to such L/C Issuer&#146;s or Swing Line
Lender&#146;s Fronting Exposure to such Defaulting Lender, and (z)&nbsp;not be required to pay
the remaining amount of any such fee.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(iv) <U>Reallocation of Applicable Percentages to Reduce Fronting
Exposure</U>. All or any part of such Defaulting Lender&#146;s participation in L/C
Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Applicable Percentages (calculated
without regard to such Defaulting Lender&#146;s Commitment) but only to the extent that
(x)&nbsp;the conditions set forth in <U>Section&nbsp;4.02</U> are satisfied at the time of
such reallocation (and, unless the Borrowers shall have otherwise notified the Agent
at such time, the Borrowers shall be deemed to have represented and warranted that
such conditions are satisfied at such time), and (y)&nbsp;such reallocation does not
cause the aggregate Outstanding Amount of Obligations of any Non-Defaulting Lender
to exceed such Non-Defaulting Lender&#146;s Commitment. No reallocation hereunder shall
constitute a waiver or release of any claim of any party hereunder against a
Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting
Lender&#146;s increased exposure following such reallocation.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(v) <U>Cash Collateral, Repayment of Swing Line Loans</U>. If the
reallocation described in clause (a)(iv) above cannot, or can only partially, be
effected, the Borrowers shall, without prejudice to any right or remedy available to
them hereunder or under applicable Law, (x)&nbsp;first, prepay Swing Line Loans in an
amount equal to the Swing Line Lenders&#146; Fronting Exposure and (y)&nbsp;second, Cash
Collateralize the L/C Issuers&#146; Fronting Exposure in accordance with the procedures
set forth in <U>Section&nbsp;2.03(g)</U>.



<P align="left" style="margin-left:8%; font-size: 12pt">(b) <U>Defaulting Lender Cure</U>. If the Lead Borrower, the Agent, the Swing Line
Lender and the L/C Issuer agree in writing that a Lender is no longer a Defaulting
Lender, the Agent will so notify the parties hereto, whereupon as of the effective
date specified in such notice and subject to any conditions set forth therein (which
may include arrangements with respect to any Cash Collateral), that Lender will, to
the extent applicable, purchase at par that portion of outstanding Loans of the
other Lenders or take such other actions as the Agent may determine to be necessary
to cause the Committed Loans and funded and unfunded participations in Letters of
Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in
accordance with their Applicable Percentages (without giving effect to <U>Section
9.16(a)(iv)</U>), whereupon such Lender will cease to be a Defaulting Lender;
<U>provided</U> that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrowers while that Lender was a
Defaulting Lender; and <U>provided</U>, <U>further</U>, that except to the extent
otherwise expressly agreed by the affected parties, no change hereunder from
Defaulting Lender to Lender will constitute a waiver or release of any claim of any
party hereunder arising from that Lender&#146;s having been a Defaulting Lender.&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Article&nbsp;X of the Credit Agreement is hereby amended as follows:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by deleting &#147;Deteriorating Lender or&#148; where it appears in
Sections&nbsp;10.01 and 10.13 of the Credit Agreement.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by adding the following new Section&nbsp;10.25 at the end thereof:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:12%; font-size: 12pt">&#147;<B>10.25 Keepwell</B>. Each Loan Party that is a Qualified ECP Guarantor at the
time the Facility Guaranty or the grant of a security interest under the
Loan Documents, in each case, by any Specified Loan Party becomes effective
with respect to any Swap Obligation, hereby jointly and severally,
absolutely, unconditionally and irrevocably undertakes to provide such funds
or other support to each Specified Loan Party with respect to such Swap
Obligation as may be needed by such Specified Loan Party from time to time
to honor all of its obligations under the Loan Documents in respect of such
Swap Obligation (but, in each case, only up to the maximum amount of such
liability that can be hereby incurred without rendering such Qualified ECP
Guarantor&#146;s obligations and undertakings under the Facility Guaranty
voidable under applicable Law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount). The obligations and
undertakings of each Qualified ECP Guarantor under this Section shall remain
in full force and effect until the Obligations have been indefeasibly paid
and performed in full. Each Loan Party intends this Section to constitute,
and this Section shall be deemed to constitute, a guarantee of the
obligations of, and a &#147;keepwell, support, or other agreement&#148; for the
benefit of, each Specified Loan Party for all purposes of the Commodity
Exchange Act.&#148;


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Amendments to Exhibits and Schedules</U>. Exhibit&nbsp;D (Compliance Certificate) to the
Credit Agreement and Schedules 2.01 (Commitments and Applicable Percentages) and 6.02
(Financial Reporting) to the Credit Agreement are each hereby deleted in their entirety and
the Exhibits and Schedules attached hereto are substituted in their stead.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Conditions to Effectiveness</U>. This Amendment shall not be effective until each of the
following conditions precedent has been fulfilled to the satisfaction of the Agent:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Amendment shall have been duly executed and delivered by the Loan Parties
and the Lenders. The Agent shall have received a fully executed original or pdf copy
hereof.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Agent shall have received an updated Information Certificate and such lien
searches and other diligence as the Agent shall reasonably request.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All action on the part of the Loan Parties necessary for the valid execution,
delivery and performance by the Loan Parties of this Amendment shall have been duly and
effectively taken.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Borrowers shall have paid the fees to the Agent and the Lenders set forth
in the Fee Letter dated as of the First Amendment Effective Date.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There shall not have occurred since January&nbsp;31, 2015 any event or condition
that has had or could be reasonably expected, either individually or in the aggregate,
to have a Material Adverse Effect.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>After giving effect to this Amendment, no Default or Event of Default shall
have occurred and be continuing.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Binding Effect</U>. The terms and provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their heirs, representatives, successors and assigns.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Expenses</U>. The Borrowers shall reimburse the Agent for all reasonable out-of-pocket
costs and expenses of the Agent, including, reasonable attorneys&#146; fees of one primary counsel
and, if necessary, local counsel, in connection with or relating to this Amendment.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Multiple Counterparts</U>. This Amendment may be executed in multiple counterparts,
each of which shall constitute an original and together which shall constitute but one and the
same instrument.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Governing Law</U>. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 12pt">&#091;remainder of page intentionally left blank; signature pages follow&#093;







<P align="center" style="font-size: 10pt; display: none">1
<!-- PAGEBREAK -->




<P align="left" style="font-size: 12pt; text-indent: 4%">IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by each of the parties
hereto as of the date first above written.


<P align="left" style="font-size: 12pt"><U>BORROWERS</U>:


<P align="left" style="font-size: 12pt"><B>KIRKLAND&#146;S STORES, INC.</B>, as Lead Borrower and as a Borrower

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Adam Holland<BR>
Adam Holland<BR>
VP and CFO</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><B>KIRKLANDS.COM, LLC</B>, as a Borrower

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Adam Holland<BR>
Adam Holland<BR>
VP and CFO</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><B>KIRKLAND&#146;S TEXAS, LLC</B>, as a Borrower

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Adam Holland<BR>
Adam Holland<BR>
VP and CFO</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><U>GUARANTORS</U>:


<P align="left" style="font-size: 12pt"><B>KIRKLAND&#146;S INC.</B>, as Parent and as a Guarantor

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Adam Holland<BR>
Adam Holland<BR>
VP and CFO</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><B>KIRKLAND&#146;S DC, INC.</B>, as a Guarantor

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Adam Holland<BR>
Adam Holland<BR>
VP and CFO</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt; display: none">2
<!-- PAGEBREAK -->


<P align="left" style="font-size: 12pt"><B>BANK OF AMERICA, N.A.</B>, as Administrative Agent, as Collateral Agent and as a Lender

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="24%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="71%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Christine M. Scott<BR>
Christine M. Scott<BR>
SVP-Director</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><B>WELLS FARGO BANK, NATIONAL ASSOCIATION</B>, as a Lender

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="72%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Robert C. Chakarian<BR>
Robert C. Chakarian<BR>
Vice President</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><B>PINNACLE BANK</B>, as a Lender

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="24%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="71%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:<BR>
Name:<BR>
Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ William H. Diehl<BR>
William H. Diehl<BR>
Senior Vice President</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt; display: none">3
<!-- PAGEBREAK -->


<P align="center" style="font-size: 12pt"><B>SCHEDULE 2.01 TO CREDIT AGREEMENT</B>



<P align="center" style="font-size: 12pt"><U>Commitments and Applicable Percentages</U>


<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="46%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Lender</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Commitment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Applicable Percentage</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bank of America, N.A.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">32,500,000.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">43.333333333</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wells Fargo Bank, National<BR>
Association
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">$32,500,000.00<BR>
<BR>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="center" valign="top">43.333333333%<BR>
<BR>
</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Pinnacle Bank
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">10,000,000.00</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13.333333334</TD>
    <TD nowrap valign="top">%</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><B>$</B></TD>
    <TD align="right" valign="top"><B>75,000,000.00</B></TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>100.000000000</B></TD>
    <TD nowrap valign="top"><B>%</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt; display: none">4
<!-- PAGEBREAK -->


<P align="center" style="font-size: 12pt"><B>SCHEDULE 6.02 TO CREDIT AGREEMENT</B>



<P align="center" style="font-size: 12pt"><U>Financial Reporting Requirements</U>



<P align="left" style="font-size: 12pt"><FONT style="font-size: 11pt"><B>15&nbsp;days after Fiscal Quarter End</B><sup>1</sup>
</FONT>


<P align="left" style="margin-left:4%; font-size: 11pt">Borrowing Base Certificate
<BR>
Inventory Certificate (Bank of America Form)
<BR>
Stock Ledger (by Department & Store)
<BR>
Gift Certificate Liability Aging


<P align="left" style="font-size: 11pt"><B>45&nbsp;days after Fiscal Quarter End</B>



<P align="left" style="margin-left:4%; font-size: 11pt">Compliance Certificate
<BR>
Store Activity Report (Bank of America Form)
<BR>
Inventory Reconciliation (Bank of America Form)
<BR>
Gross Margin Reconciliation (Bank of America Form)
<BR>
Top Ten Vendor Concentration
<BR>
Quarterly Financial Statements and 10-Q


<P align="left" style="font-size: 11pt"><B>30&nbsp;days after Fiscal Month End</B><sup><B>2</B></sup>



<P align="left" style="margin-left:4%; font-size: 11pt">Compliance Certificate<B>3</B>
<BR>
Store Activity Report (Bank of America Form)
<BR>
Inventory Reconciliation (Bank of America Form)
<BR>
Gross Margin Reconciliation (Bank of America Form)
<BR>
Top Ten Vendor Concentration
<BR>
Monthly Financial Statements<sup>4</sup>


<P align="left" style="font-size: 11pt"><B>90&nbsp;days after Fiscal Year End</B>



<P align="left" style="margin-left:4%; font-size: 11pt">Compliance Certificate
<BR>
Audited Annual Financial Statements and 10-K


<P align="left" style="font-size: 11pt"><B>30&nbsp;days after Fiscal Year End</B>



<P align="left" style="margin-left:4%; font-size: 11pt">Business Plan


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 11pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><FONT style="font-size: 12pt"></FONT><FONT style="font-size: 10pt"><sup>1</sup></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><FONT style="font-size: 10pt"><FONT style="font-size: 9.5pt">Unless (i)&nbsp;any Loans are outstanding,
in which event on the 15<sup>th</sup> day of each Fiscal Month (or if such date
is not a Business Day, then the next succeeding Business Day) as of the close
of business as of the last day of the immediately preceding Fiscal Month, or
(ii)&nbsp;an Accelerated Borrowing Base Delivery Event has occurred and is
continuing, in which event on the Wednesday of each week (or if such day is not
a Business Day, then the next succeeding Business Day) as of the close of
business on the immediately preceding Saturday.</FONT></TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 9.5pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><FONT style="font-size: 12pt"></FONT><FONT style="font-size: 10pt"><sup>2</sup></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><FONT style="font-size: 10pt">Only if Availability is less than forty
percent (40%) of the Loan Cap.</FONT></TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><FONT style="font-size: 12pt"></FONT><FONT style="font-size: 10pt"><sup>3</sup></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><FONT style="font-size: 10pt"><FONT style="font-size: 9.5pt">Unless with respect to monthly
financial statements for the last month of a Fiscal Quarter, in which event
within 45&nbsp;days after such month end.</FONT></TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 9.5pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right"><FONT style="font-size: 12pt"></FONT><FONT style="font-size: 10pt"><sup>4</sup></FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><FONT style="font-size: 10pt">See Note 3.</FONT></TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt; display: none">5




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