EMPLOYMENT AGREEMENT

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         THIS AGREEMENT, is made as of the 24th day of December, 2004, between

FACTORY CARD OUTLET OF AMERICA LTD, an Illinois corporation (hereinafter,

together with any successor thereof, referred to as the "Corporation"), and

Michael Perri (the "Executive").



                              W I T N E S S E T H:

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         WHEREAS, the Corporation and the Executive entered into an Employment

Agreement (the "Prior Agreement") dated as of April 8, 2002 which expires on

April 8, 2005; and



         WHEREAS, the Corporation desires to continue to employ the Executive

after April 8, 2005, and the Executive is willing to render such services, in

accordance with the terms and conditions set forth below.



         NOW, THEREFORE, in consideration of the premises and the mutual

agreements hereinafter contained, the parties hereto agree as follows:



         1. Effectiveness of Agreement. Notwithstanding any other provision of

this Agreement, this Agreement shall supersede any prior employment agreement

with the Executive, including the Prior Agreement.



         2. Term. Unless earlier terminated pursuant to Sections 8, 9 and 10

below, the employment term shall begin on the on the date hereof, and shall

continue until April 8, 2006 (the "Initial Term"); provided that such term shall

be automatically extended for subsequent one-year terms terminating on the next

succeeding anniversary date of this Agreement (each such term an "Additional

Term," and all such terms, collectively with the Initial Term, the "Employment

Term" or "Term") unless either the Executive or the Corporation shall have given

written notice to the other party that such party does not desire to extend the

term of this Agreement, such notice to be given at least sixty (60) days prior

to the end of the Initial Term or an Additional Term, as applicable (such notice

to be referred to herein as a "Notice of Non-Renewal"). Notwithstanding anything

else herein and without implication for any other provisions hereof, the

provisions of Sections 10 and 14 hereof shall survive and remain in effect

notwithstanding the termination of the Employment Term for any reason or a

breach or repudiation or alleged breach or repudiation by the Corporation of

this Agreement or any one or more of its terms.





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         3. Duties and Extent of Services. (a) During the Term, the Executive

shall serve as the Vice President and General Merchandise Manager of the

Corporation faithfully and to the best of his ability under the direction of the

Chief Executive Officer of the Corporation and the Board of Directors of the

Corporation (the "Board"), and shall devote substantially all of his business

time, energy and skill to such employment. The Executive shall perform the

duties commensurate with the position of the Vice President and General

Merchandise Manager, including specific duties and services of a senior officer

nature as the Board or the Chief Executive Officer of the Corporation, if any,

shall reasonably request. The Executive's title(s) shall not be changed and his

functions and responsibilities shall not be materially diminished without his

written consent.



         4. Salary. During the Term, the Corporation agrees to pay the Executive

an annual salary in the amount of Two Hundred and Ten Thousand Dollars

($210,000), subject to review and increases at the discretion of the Board. The

Executive's salary shall be paid in accordance with the Corporation's payroll

practices for its officers.





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         5. Annual Bonus. With respect to the Corporation's fiscal year ending

on January 29, 2005, the Executive shall be entitled to a bonus in accordance

with the terms of the Corporation's Management Incentive Program for such year

in effect on the date hereof ("Current Incentive Program"), such bonus shall be

the Target Bonus (as defined below) for such fiscal year. With respect to

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