{"id":41100,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-agreement-american-greetings-corp-and-schurman-fine.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-agreement-american-greetings-corp-and-schurman-fine","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-agreement-american-greetings-corp-and-schurman-fine.html","title":{"rendered":"Loan Agreement – American Greetings Corp. and Schurman Fine Papers"},"content":{"rendered":"

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE
\nSUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
\nINTERCREDITOR AND SUBORDINATION AGREEMENT, DATED AS OF THE DATE HEREOF (THE
\n“SUBORDINATION AGREEMENT”), AMONG BORROWER (AS HEREINAFTER DEFINED), LENDER (AS
\nHEREINAFTER DEFINED) AND SENIOR AGENT (AS HEREINAFTER DEFINED), TO THE
\nINDEBTEDNESS (INCLUDING INTEREST) OWED BY BORROWER PURSUANT TO THAT CERTAIN
\nFIRST AMENDED LOAN AND SECURITY AGREEMENT, DATED AS OF THE DATE HEREOF (THE
\n“SENIOR LOAN AGREEMENT”), AMONG BORROWER, THE SUBSIDIARIES OF BORROWER PARTY
\nTHERETO, THE LENDERS FROM TIME TO TIME PARTY THERETO AND SENIOR AGENT AND
\nPURSUANT TO THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE SENIOR LOAN AGREEMENT)
\nAS SUCH SENIOR LOAN AGREEMENT AND OTHER LOAN DOCUMENTS MAY BE AMENDED, RESTATED,
\nSUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS
\nREFINANCING THE INDEBTEDNESS THEREUNDER AS CONTEMPLATED BY THE SUBORDINATION
\nAGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
\nIRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
\nAGREEMENT.<\/strong><\/p>\n

LOAN AGREEMENT<\/strong><\/p>\n

by and between<\/strong><\/p>\n

SCHURMAN FINE PAPERS, d\/b\/a PAPYRUS<\/strong><\/p>\n

as Borrower,<\/strong><\/p>\n

and<\/strong><\/p>\n

AMERICAN GREETINGS CORPORATION<\/strong><\/p>\n

as Lender<\/strong><\/p>\n

Dated as of April 17, 2009<\/strong><\/p>\n<\/p>\n<\/p>\n

<\/p>\n

TABLE OF CONTENTS<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n

1.<\/p>\n<\/td>\n

\n<\/td>\n\n

DEFINITIONS AND CONSTRUCTION<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

1<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

1.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Definitions<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

1<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

1.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Accounting Terms<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

16<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

1.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Code<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

16<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

1.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Construction<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

16<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

1.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Schedules and Exhibits<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

16<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

2.<\/p>\n<\/td>\n

\n<\/td>\n\n

LOAN AND TERMS OF PAYMENT<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

16<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Revolving Credit<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

16<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Procedure for Borrowing<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

17<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Payments<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

17<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Interest Rates: Rates, Payments, and Calculations<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

17<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Crediting Payments<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

18<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.6<\/p>\n<\/td>\n

\n<\/td>\n\n

Designated Account<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

19<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.7<\/p>\n<\/td>\n

\n<\/td>\n\n

Maintenance of Loan Account; Statements of Obligations<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

19<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

2.8<\/p>\n<\/td>\n

\n<\/td>\n\n

Fees<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

19<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

3.<\/p>\n<\/td>\n

\n<\/td>\n\n

CONDITIONS; TERM OF AGREEMENT<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

19<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

3.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Conditions Precedent to Initial Extension of Credit<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

19<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

3.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Conditions Precedent to all Extensions of Credit<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

21<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

3.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Term<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

22<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

3.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Effect of Termination<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

22<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

3.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Early Termination by Borrower; Reduction of Commitment<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

22<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

4.<\/p>\n<\/td>\n

\n<\/td>\n\n

REPRESENTATIONS AND WARRANTIES<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

23<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.1<\/p>\n<\/td>\n

\n<\/td>\n\n

No Encumbrances<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

23<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Records<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

23<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Legal Status<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

23<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Due Organization and Qualification; Subsidiaries<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

23<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Due Authorization; No Conflict<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

24<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.6<\/p>\n<\/td>\n

\n<\/td>\n\n

Litigation<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

25<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.7<\/p>\n<\/td>\n

\n<\/td>\n\n

No Material Adverse Change<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

25<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.8<\/p>\n<\/td>\n

\n<\/td>\n\n

Fraudulent Transfer<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

25<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-i-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

TABLE OF CONTENTS<\/strong>
\n(continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.9<\/p>\n<\/td>\n

\n<\/td>\n\n

Employee Benefits<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

26<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.10<\/p>\n<\/td>\n

\n<\/td>\n\n

Environmental Condition<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

26<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.11<\/p>\n<\/td>\n

\n<\/td>\n\n

Brokerage Fees<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

26<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.12<\/p>\n<\/td>\n

\n<\/td>\n\n

Intellectual Property<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

26<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.13<\/p>\n<\/td>\n

\n<\/td>\n\n

Leases<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

26<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.14<\/p>\n<\/td>\n

\n<\/td>\n\n

Indebtedness<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

26<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.15<\/p>\n<\/td>\n

\n<\/td>\n\n

Filing of Tax Returns and Payment of Taxes<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

27<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.16<\/p>\n<\/td>\n

\n<\/td>\n\n

Royalty Payments<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

27<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.17<\/p>\n<\/td>\n

\n<\/td>\n\n

Complete Disclosure<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

27<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.18<\/p>\n<\/td>\n

\n<\/td>\n\n

Reserved<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

27<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.19<\/p>\n<\/td>\n

\n<\/td>\n\n

Insurance<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

27<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.20<\/p>\n<\/td>\n

\n<\/td>\n\n

Requirements of Law<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.21<\/p>\n<\/td>\n

\n<\/td>\n\n

No Margin Stock<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.22<\/p>\n<\/td>\n

\n<\/td>\n\n

Investment Company Status<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.23<\/p>\n<\/td>\n

\n<\/td>\n\n

No Events of Default<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.24<\/p>\n<\/td>\n

\n<\/td>\n\n

Use of Proceeds<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.25<\/p>\n<\/td>\n

\n<\/td>\n\n

Shareholder Agreements<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

4.26<\/p>\n<\/td>\n

\n<\/td>\n\n

Investments<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

5.<\/p>\n<\/td>\n

\n<\/td>\n\n

AFFIRMATIVE COVENANTS<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Accounting System<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Financial Statements, Reports, Certificates<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

28<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Returns<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

30<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Maintenance of Properties<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

30<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Tax Matters<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

31<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.6<\/p>\n<\/td>\n

\n<\/td>\n\n

Insurance<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

31<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.7<\/p>\n<\/td>\n

\n<\/td>\n\n

Location of Inventory and Equipment<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

32<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.8<\/p>\n<\/td>\n

\n<\/td>\n\n

Compliance with Laws<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

32<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.9<\/p>\n<\/td>\n

\n<\/td>\n\n

Leases<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

32<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.10<\/p>\n<\/td>\n

\n<\/td>\n\n

Existence<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

32<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.11<\/p>\n<\/td>\n

\n<\/td>\n\n

Environmental<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

32<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-ii-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

TABLE OF CONTENTS<\/strong>
\n(continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.12<\/p>\n<\/td>\n

\n<\/td>\n\n

Immediate Notice to Lender<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

32<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.13<\/p>\n<\/td>\n

\n<\/td>\n\n

Disclosure Updates<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

33<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.14<\/p>\n<\/td>\n

\n<\/td>\n\n

Solvency<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

33<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.15<\/p>\n<\/td>\n

\n<\/td>\n\n

Line of Business: Borrower and Subsidiaries<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

33<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

5.16<\/p>\n<\/td>\n

\n<\/td>\n\n

Royalty Payments<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

33<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

6.<\/p>\n<\/td>\n

\n<\/td>\n\n

NEGATIVE COVENANTS<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

34<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Indebtedness<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

34<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Liens<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

35<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Restrictions on Fundamental Changes<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

35<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Disposal of Assets<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

35<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Change of Name or Address<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

35<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.6<\/p>\n<\/td>\n

\n<\/td>\n\n

Nature of Business<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

35<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.7<\/p>\n<\/td>\n

\n<\/td>\n\n

Prepayments and Amendments<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

35<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.8<\/p>\n<\/td>\n

\n<\/td>\n\n

Change of Control<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

36<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.9<\/p>\n<\/td>\n

\n<\/td>\n\n

Distributions<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

36<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.10<\/p>\n<\/td>\n

\n<\/td>\n\n

Accounting Methods<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

36<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.11<\/p>\n<\/td>\n

\n<\/td>\n\n

Investments<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

36<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.12<\/p>\n<\/td>\n

\n<\/td>\n\n

Transactions with Affiliates<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

36<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.13<\/p>\n<\/td>\n

\n<\/td>\n\n

Store Openings and Closings<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

36<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.14<\/p>\n<\/td>\n

\n<\/td>\n\n

Suspension<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.15<\/p>\n<\/td>\n

\n<\/td>\n\n

Use of Proceeds<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.16<\/p>\n<\/td>\n

\n<\/td>\n\n

Benefit Plans<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.17<\/p>\n<\/td>\n

\n<\/td>\n\n

Warrants<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.18<\/p>\n<\/td>\n

\n<\/td>\n\n

Shareholder Agreements<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

6.19<\/p>\n<\/td>\n

\n<\/td>\n\n

Fiscal Year<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

7.<\/p>\n<\/td>\n

\n<\/td>\n\n

EVENTS OF DEFAULT<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Payment<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Covenants, etc.<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Attachment<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

37<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Insolvency<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

38<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-iii-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

TABLE OF CONTENTS<\/strong>
\n(continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Involuntary Insolvency<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

38<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.6<\/p>\n<\/td>\n

\n<\/td>\n\n

Injunction<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

38<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.7<\/p>\n<\/td>\n

\n<\/td>\n\n

Levy<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

38<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.8<\/p>\n<\/td>\n

\n<\/td>\n\n

Judgment<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

38<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.9<\/p>\n<\/td>\n

\n<\/td>\n\n

Material Agreements<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

38<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.10<\/p>\n<\/td>\n

\n<\/td>\n\n

Insurance<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.11<\/p>\n<\/td>\n

\n<\/td>\n\n

Subordinated Debt<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.12<\/p>\n<\/td>\n

\n<\/td>\n\n

Misrepresentation<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.13<\/p>\n<\/td>\n

\n<\/td>\n\n

Loan Documents<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.14<\/p>\n<\/td>\n

\n<\/td>\n\n

Material Adverse Change<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.15<\/p>\n<\/td>\n

\n<\/td>\n\n

Change of Control<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

7.16<\/p>\n<\/td>\n

\n<\/td>\n\n

Material Restraint<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

8.<\/p>\n<\/td>\n

\n<\/td>\n\n

LENDER’S RIGHTS AND REMEDIES<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

8.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Rights and Remedies<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

39<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

8.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Remedies Cumulative<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

40<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

9.<\/p>\n<\/td>\n

\n<\/td>\n\n

TAXES AND EXPENSES<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

40<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

10.<\/p>\n<\/td>\n

\n<\/td>\n\n

WAIVERS; INDEMNIFICATION<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

40<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

10.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Demand; Protest; etc.<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

40<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

10.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Indemnification<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

40<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

10.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Costs and Expenses of Lender<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

41<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

11.<\/p>\n<\/td>\n

\n<\/td>\n\n

NOTICES<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

42<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

12.<\/p>\n<\/td>\n

\n<\/td>\n\n

CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

43<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

13.<\/p>\n<\/td>\n

\n<\/td>\n\n

MISCELLANEOUS PROVISIONS<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

13.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Successors<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

13.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Amendments and Waivers<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

13.3<\/p>\n<\/td>\n

\n<\/td>\n\n

No Waivers; Cumulative Remedies<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

13.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Reliance by Lender<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n

14.<\/p>\n<\/td>\n

\n<\/td>\n\n

GENERAL PROVISIONS<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.1<\/p>\n<\/td>\n

\n<\/td>\n\n

Effectiveness<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.2<\/p>\n<\/td>\n

\n<\/td>\n\n

Section Headings<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-iv-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

TABLE OF CONTENTS<\/strong>
\n(continued)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Reserved<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.4<\/p>\n<\/td>\n

\n<\/td>\n\n

Severability of Provisions<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Amendments in Writing<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

44<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.6<\/p>\n<\/td>\n

\n<\/td>\n\n

Counterparts; Telefacsimile Execution<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

45<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.7<\/p>\n<\/td>\n

\n<\/td>\n\n

Revival and Reinstatement of Obligations<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

45<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.8<\/p>\n<\/td>\n

\n<\/td>\n\n

Integration<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

45<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.9<\/p>\n<\/td>\n

\n<\/td>\n\n

Reserved<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

45<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.10<\/p>\n<\/td>\n

\n<\/td>\n\n

Press Releases<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

45<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

14.11<\/p>\n<\/td>\n

\n<\/td>\n\n

No Strict Construction<\/p>\n<\/td>\n

\n<\/td>\n\n<\/td>\n\n

45<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-v-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

TABLE OF CONTENTS<\/strong><\/p>\n

EXHIBITS AND SCHEDULES<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n

Exhibit A-1<\/p>\n<\/td>\n

\n<\/td>\n\n

Form of Compliance Certificate<\/p>\n<\/td>\n<\/tr>\n

\n

Exhibit B-1<\/p>\n<\/td>\n

\n<\/td>\n\n

Business Plan<\/p>\n<\/td>\n<\/tr>\n

\n

Exhibit 2.1(f)<\/p>\n<\/td>\n

\n<\/td>\n\n

Form of Revolving Credit Note<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n

Schedule P-1<\/p>\n<\/td>\n

\n<\/td>\n\n

Permitted Liens<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.3<\/p>\n<\/td>\n

\n<\/td>\n\n

Legal Status<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.4(b)<\/p>\n<\/td>\n

\n<\/td>\n\n

Capitalization of Borrower<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.4(c)<\/p>\n<\/td>\n

\n<\/td>\n\n

Borrower’s Subsidiaries<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.4(d)<\/p>\n<\/td>\n

\n<\/td>\n\n

Options and Warrants<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.5<\/p>\n<\/td>\n

\n<\/td>\n\n

Consents, Approvals, and Registrations<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.6(a)<\/p>\n<\/td>\n

\n<\/td>\n\n

Litigation<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.10<\/p>\n<\/td>\n

\n<\/td>\n\n

Environmental Matters<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.12<\/p>\n<\/td>\n

\n<\/td>\n\n

Intellectual Property<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.14<\/p>\n<\/td>\n

\n<\/td>\n\n

Permitted Indebtedness<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.16<\/p>\n<\/td>\n

\n<\/td>\n\n

Royalty Contracts and Payments<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.19<\/p>\n<\/td>\n

\n<\/td>\n\n

Insurance<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.25<\/p>\n<\/td>\n

\n<\/td>\n\n

Shareholder Agreements<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 4.26<\/p>\n<\/td>\n

\n<\/td>\n\n

Existing Permitted Investments<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 5.7<\/p>\n<\/td>\n

\n<\/td>\n\n

Location of Inventory and Equipment<\/p>\n<\/td>\n<\/tr>\n

\n

Schedule 6.15<\/p>\n<\/td>\n

\n<\/td>\n\n

Subleases<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-vi-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

LOAN AGREEMENT<\/u><\/strong><\/p>\n

THIS LOAN AGREEMENT <\/strong>(this “Agreement<\/u>“) is entered
\ninto as of April 17, 2009 by and between AMERICAN GREETINGS
\nCORPORATION<\/strong>, an Ohio corporation (“Lender<\/u>“), with offices at One
\nAmerican Road, Cleveland, Ohio 44144, and SCHURMAN FINE PAPERS
\n<\/strong>d\/b\/a PAPYRUS <\/strong>(“Papyrus<\/u>” or
\n“Borrower<\/u>“), in consideration of mutual covenants contained herein and
\nbenefits derived herefrom.<\/p>\n

RECITALS<\/u><\/strong><\/p>\n

WHEREAS, Borrower has requested that Lender provide, and Lender is willing to
\nprovide, a revolving credit facility on the terms and conditions set forth in
\nthis Agreement and the other Loan Documents.<\/p>\n

NOW THEREFORE, in consideration of the mutual covenants contained herein and
\nthe benefits to be derived herefrom, the parties hereto hereby agree as follows.\n<\/p>\n

WITNESSETH:<\/u><\/strong><\/p>\n

1. DEFINITIONS AND CONSTRUCTION<\/u><\/strong>.<\/p>\n

1.1 Definitions<\/u>.<\/p>\n

As used in this Agreement, the following terms shall have the following
\ndefinitions:<\/p>\n

“Accounts<\/u>” means all of Borrower’s now owned or hereafter acquired
\nrights, title, and interests with respect to “accounts” (as such term is defined
\nfrom time to time in the Code and including, without limitation, credit card
\nreceivables), and any and all supporting obligations in respect thereof.<\/p>\n

“Acquired Assets<\/u>” means the “Retailed Purchased Assets” as such term
\nis defined in the Purchase and Sale Agreement.<\/p>\n

“Act<\/u>” has the meaning set forth in Section 14.9<\/u>.<\/p>\n

“Administrative Fee<\/u>” has the meaning set forth in Section
\n2.8(d)<\/u>.<\/p>\n

“Advances<\/u>” has the meaning set forth in Section 2.1(a)<\/u>.<\/p>\n

“Affiliate<\/u>” means, as applied to any Person, any other Person who,
\ndirectly or indirectly, controls, is controlled by, or is under common control
\nwith, such Person. For purposes of this definition, “control” means the
\npossession, directly or indirectly, of the power to direct the management and
\npolicies of a Person, whether through the ownership of Stock, by contract, or
\notherwise; provided<\/u>, however,<\/u> that, for purposes of Section
\n6.12<\/u> hereof: (a) any Person which owns directly or indirectly 10% or more of
\nthe securities having ordinary voting power for the election of directors or
\nother members of the governing body of a Person or 10% or more of the
\npartnership or other ownership interests of a Person (other than as a limited
\npartner of such Person) shall be deemed to control such Person; (b) each
\ndirector (or comparable manager) of a<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

Person shall be deemed to be an Affiliate of such Person; and (c) each
\npartnership or joint venture in which a Person is a partner or joint venturer
\nshall be deemed to be an Affiliate of such Person. In no event shall Lender be
\ndeemed an Affiliate of Borrower.<\/p>\n

“Agreement<\/u>” has the meaning set forth in the preamble hereto.<\/p>\n

“AG Credit Agreement<\/u>” means that certain Credit Agreement, dated as of
\nApril 4, 2006, by and among Lender, the foreign subsidiaries of Lender from time
\nto time party thereto, the lenders from time to time party thereto, National
\nCity Bank, as global administrative agent, and the other agents party thereto,
\nas the same may be from time to time modified, amended, restated or
\nsupplemented, and any renewal, extension or refinancing thereof.<\/p>\n

“Applicable Law<\/u>” means as to any Person: (i) all statutes, rules,
\nregulations, orders, treaties or other requirements having the force of law, and
\n(ii) all court orders, judgments, opinions, decrees and injunctions,
\narbitrator’s decisions, and\/or similar rulings, in each instance (i) and (ii) of
\nor by any federal, state, municipal, and other Governmental Authority, or court,
\ntribunal, panel, or other body which has or claims jurisdiction over such
\nPerson, or any property of such Person, or of any other Person for whose conduct
\nsuch Person would be responsible.<\/p>\n

“Authorized Person<\/u>” means the Chief Executive Officer or the Chief
\nFinancial Officer of Borrower, or any other officer or employee designated by
\nthe Board of Directors of Borrower in writing to Lender and reasonably
\nacceptable to Lender.<\/p>\n

“Availability<\/u>” means, as of any date of determination, the result of\n<\/p>\n

(a) the Maximum Revolver Amount<\/p>\n

Minus<\/em><\/p>\n

(b) the aggregate unpaid balance of the Loan Account<\/p>\n

Minus<\/em><\/p>\n

(c) the undrawn face amount of the Letter of Credit (Bridge).<\/p>\n

“Bankruptcy Code<\/u>” means the United States Bankruptcy Code, as in
\neffect from time to time.<\/p>\n

“Base Rate<\/u>” means the greater of (i) the “Base Rate” as defined in the
\nAG Credit Agreement and (ii) the sum of the “Adjusted Eurodollar Rate” as
\ndefined in the AG Credit Agreement plus<\/u> 1.0%.<\/p>\n

“Base Rate Margin<\/u>” means 6.5% per annum.<\/p>\n

“Benefit Plan<\/u>” means a “defined benefit plan” (as defined in Section
\n3(35) of ERISA) for which Borrower or any Subsidiary or ERISA Affiliate of
\nBorrower has been an “employer” (as defined in Section 3(5) of ERISA) within the
\npast six years.<\/p>\n

-2-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

“Board of Directors<\/u>” means the board of directors (or comparable
\nmanagers) of Borrower or any committee thereof duly authorized to act on behalf
\nthereof.<\/p>\n

“Books<\/u>” means all of Borrower’s and its Subsidiaries’ now owned or
\nhereafter acquired books and records (including all of its Records indicating,
\nsummarizing, or evidencing its assets or liabilities, all of Borrower’s or its
\nSubsidiaries’ Records relating to its or their business operations or financial
\ncondition, and all of its or their goods (as defined in the Code) or General
\nIntangibles related to such information).<\/p>\n

“Borrower<\/u>” has the meaning set forth in the preamble to this
\nAgreement.<\/p>\n

“Borrowing<\/u>” means a borrowing hereunder consisting of Advances made on
\nthe same day by Lender.<\/p>\n

“Business Day<\/u>” means any day that is not a Saturday, Sunday, or other
\nday on which national banks are authorized or required to close in Cleveland,
\nOhio.<\/p>\n

“Business Plan<\/u>” means the set of Projections of Borrower for the
\nperiod following the Closing Date to January 2011 (on a year by year basis)
\nattached hereto as Exhibit B-1<\/u>, and similar sets of monthly and annual
\nProjections required to be delivered pursuant to Section 5.2<\/u> of this
\nAgreement, together, in each case, with any amendment, modification or revision
\nthereto approved by Lender in its Permitted Discretion.<\/p>\n

“Capital Expenditures<\/u>” means expenditures for the purchase or
\nconstruction of fixed assets, plant and equipment which are capitalized in
\naccordance with GAAP.<\/p>\n

“Capital Lease<\/u>” means a lease that is required to be capitalized for
\nfinancial reporting purposes in accordance with GAAP.<\/p>\n

“Capitalized Lease Obligation<\/u>” means any Indebtedness represented by
\nobligations under a Capital Lease.<\/p>\n

“Cash Equivalents<\/u>” means (a) marketable direct obligations issued or
\nunconditionally guaranteed by the United States or issued by any agency thereof
\nand backed by the full faith and credit of the United States, in each case
\nmaturing within one year from the date of acquisition thereof, (b) marketable
\ndirect obligations issued by any state of the United States or any political
\nsubdivision of any such state or any public instrumentality thereof maturing
\nwithin one year from the date of acquisition thereof and, at the time of
\nacquisition, having the highest rating obtainable from either S&P or
\nMoody’s, (c) commercial paper maturing no more than 270 days from the date of
\nacquisition thereof and, at the time of acquisition, having a rating of A-1 or
\nP-1, or better, from S&P or Moody’s, and (d) certificates of deposit or
\nbankers’ acceptances maturing within one year from the date of acquisition
\nthereof either (i) issued by any bank organized under the laws of the United
\nStates or any state thereof which bank has a rating of A or A2, or better, from
\nS&P or Moody’s, or (ii) certificates of deposit less than or equal to
\n$100,000 in the aggregate issued by any other bank insured by the Federal
\nDeposit Insurance Corporation.<\/p>\n

“Change of Control<\/u>” means (a) any “person” or “group” (within the
\nmeaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
\nHolders, becomes the beneficial<\/p>\n

-3-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

owner (as defined in Rule 13d-3 under the Exchange Act), directly or
\nindirectly, of more than 20% of the Stock of Borrower having the right to vote
\nfor the election of members of the Board of Directors of Borrower; (b) a
\nmajority of the members of the Board of Directors of Borrower do not constitute
\nContinuing Directors; (c) Parent or a Subsidiary of Parent ceases to
\ncollectively own and control, directly or indirectly, 55% of the outstanding
\ncapital Stock or limited liability company membership interests of Borrower; or
\n(d) Borrower ceases to own and control, directly or indirectly, 100% of the
\noutstanding capital Stock or limited liability company membership interests of
\nany of its direct or indirect Subsidiaries.<\/p>\n

“Closing Date<\/u>” means the date on which all of the conditions precedent
\nset forth at Section 3.1<\/u> are satisfied as determined by Lender in its
\nPermitted Discretion.<\/p>\n

“Code<\/u>” means the Uniform Commercial Code, as in effect from time to
\ntime in the State of Ohio.<\/p>\n

“Commitment<\/u>” means Ten Million Dollars ($10,000,000.00).<\/p>\n

“Compliance Certificate<\/u>” means a certificate substantially in the form
\nof Exhibit A-1<\/u> delivered by the chief financial officer of Borrower to
\nLender.<\/p>\n

“Consolidated<\/u>” means when used to modify a financial term, test,
\nstatement, or report, refers to the application or preparation of such term,
\ntest, statement or report (as applicable) based upon the consolidation, in
\naccordance with GAAP, of the financial condition or operating results of
\nBorrower and its Subsidiaries.<\/p>\n

“Continuing Director<\/u>” means (a) any member of the Board of Directors
\nof Borrower who was a director (or comparable manager) of Borrower on the
\nClosing Date, and (b) any individual who becomes a member of the Board of
\nDirectors after the Closing Date if such individual was appointed or nominated
\nfor election to the Board of Directors by a majority of the Continuing
\nDirectors, but excluding any such individual originally proposed for election in
\nopposition to the Board of Directors in office at the Closing Date in an actual
\nor threatened election contest relating to the election of the directors (or
\ncomparable managers) of Borrower (as such terms are used in Rule 14a-11 under
\nthe Exchange Act) and whose initial assumption of office resulted from such
\ncontest or the settlement thereof.<\/p>\n

“Customer Credit Liabilities<\/u>” means gift certificates, customer
\ndeposits, merchandise credits, layaway obligations, frequent shopper programs,
\nand similar liabilities of Borrower to their retail customers and prospective
\ncustomers.<\/p>\n

“Daily Balance<\/u>” means, with respect to each day during the term of
\nthis Agreement, the amount of an Obligation owed at the end of such day.<\/p>\n

“Default<\/u>” means an event, condition, or default that, with the giving
\nof notice, the passage of time, or both, would be an Event of Default.<\/p>\n

“Default Rate<\/u>” means the applicable interest as set forth in
\nSection 2.4(c)<\/u>.<\/p>\n

-4-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

“Designated Account<\/u>” means an account of Borrower located at Wells
\nFargo Bank, N.A. with account number 4121720502 and ABA number 121000248.<\/p>\n

“Distribution<\/u>” means, with respect to any Person, (a) the declaration
\nor payment of any dividend on or in respect of any shares of any class of
\ncapital Stock of such Person, other than dividends payable solely in shares of
\ncommon Stock of such Person, (b) the purchase, redemption, or other retirement
\nof any shares of any class of capital Stock of such Person, directly or
\nindirectly, (c) the return of capital by such Person to its shareholders or
\nmembers, or (d) any other distribution on or in respect of any shares of any
\nclass of capital Stock of such Person.<\/p>\n

“Disposed Assets<\/u>” means the “Wholesale Purchased Assets” as such term
\nis defined in the Purchase and Sale Agreement.<\/p>\n

“Dollars<\/u>” or “$<\/u>” means United States dollars.<\/p>\n

“Environmental Actions<\/u>” means any complaint, summons, citation,
\nnotice, directive, order, claim, litigation, investigation, judicial or
\nadministrative proceeding, judgment, letter, or other communication from any
\nGovernmental Authority, or any third party involving violations of Environmental
\nLaws or releases of Hazardous Materials from (a) any assets, properties, or
\nbusinesses of Borrower or any predecessor in interest, (b) from adjoining
\nproperties or businesses, or (c) from or onto any facilities which received
\nHazardous Materials generated by Borrower or any predecessor in interest.<\/p>\n

“Environmental Law<\/u>” means any applicable federal, state, provincial,
\nforeign or local statute, law, rule, regulation, ordinance, code, binding and
\nenforceable guideline, binding and enforceable written policy or rule of common
\nlaw now or hereafter in effect and in each case as amended, or any judicial or
\nadministrative interpretation thereof, including any judicial or administrative
\norder, consent decree or judgment, to the extent binding on Borrower, relating
\nto the environment, employee health and safety, or Hazardous Materials,
\nincluding the Comprehensive Environmental Response, Compensation, and Liability
\nAct of 1980, 42 U.S.C. \u00a7 9601 et<\/u> seq.<\/u>; the Resource Conservation
\nand Recovery Act, 42 U.S.C. \u00a7 6901 et<\/u> seq.<\/u>; the Federal Water
\nPollution Control Act, 33 U.S.C. \u00a7 1251 et<\/u> seq.<\/u>; the Toxic
\nSubstances Control Act, 15 U.S.C. \u00a7 2601 et<\/u> seq.<\/u>; the Clean Air
\nAct, 42 U.S.C. \u00a7 7401 et<\/u> seq.<\/u>; the Safe Drinking Water Act, 42
\nU.S.C. \u00a7 3803 et<\/u> seq.<\/u>; the Oil Pollution Act of 1990, 33 U.S.C. \u00a7
\n2701 et<\/u> seq.<\/u>; the Emergency Planning and the Community
\nRight-to-Know Act of 1986, 42 U.S.C. \u00a7 11001 et seq.<\/u>; the Hazardous
\nMaterial Transportation Act, 49 U.S.C. \u00a7 1801 et<\/u> seq.<\/u>; and the
\nOccupational Safety and Health Act, 29 U.S.C. \u00a7651 et<\/u> seq.<\/u> (to the
\nextent it regulates occupational exposure to Hazardous Materials); any state and
\nlocal or foreign counterparts or equivalents, in each case as amended from time
\nto time.<\/p>\n

“Environmental Liabilities and Costs<\/u>” means all liabilities, monetary
\nobligations, Remedial Actions, losses, damages, punitive damages, consequential
\ndamages, treble damages, costs and expenses (including all reasonable fees,
\ndisbursements and expenses of counsel, experts, or consultants, and costs of
\ninvestigation and feasibility studies), fines, penalties, sanctions, and
\ninterest incurred as a result of any claim or demand by any Governmental
\nAuthority or any third party, and which relate to any Environmental Action.<\/p>\n

-5-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

“Environmental Lien<\/u>” means any Lien in favor of any Governmental
\nAuthority for Environmental Liabilities and Costs.<\/p>\n

“EPI<\/u>” means EPI Printers, Inc.<\/p>\n

“EPI Intercreditor & Subordination Agreement<\/u>” means that certain
\nIntercreditor & Subordination Agreement, among EPI and Lender, dated as of
\nthe date hereof, pursuant to which EPI subordinates its repayment rights and
\nother rights and interest in the EPI Notes in favor of Lender.<\/p>\n

“EPI Notes<\/u>” means those certain Promissory Notes, dated as of the date
\nhereof, issued by Papyrus in favor of EPI.<\/p>\n

“Equipment<\/u>” means all of Borrower’s now owned or hereafter acquired
\nright, title, and interest with respect to “equipment” (as such term is defined
\nfrom time to time in the Code), fixtures and vehicles (including motor
\nvehicles), including all attachments, accessories, accessions, replacements,
\nsubstitutions, additions, and improvements to any of the foregoing.<\/p>\n

“ERISA<\/u>” means the Employee Retirement Income Security Act of 1974, as
\namended, and any successor statute thereto.<\/p>\n

“ERISA Affiliate<\/u>” means (a) any Person subject to ERISA whose
\nemployees are treated as employed by the same employer as the employees of
\nBorrower under IRC Section 414(b), (b) any trade or business subject to ERISA
\nwhose employees are treated as employed by the same employer as the employees of
\nBorrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
\nERISA and Section 412 of the IRC, any organization subject to ERISA that is a
\nmember of an affiliated service group of which Borrower is a member under IRC
\nSection 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
\n412 of the IRC, any Person subject to ERISA that is a party to an arrangement
\nwith Borrower and whose employees are aggregated with the employees of Borrower
\nunder IRC Section 414(o).<\/p>\n

“Event of Default<\/u>” has the meaning set forth in Section 7<\/u>.<\/p>\n

“Exchange Act<\/u>” means the Securities Exchange Act of 1934, as in effect
\nfrom time to time.<\/p>\n

“Existing Warrants<\/u>” means the warrants listed on Schedule
\n4.4(b)<\/u>.<\/p>\n

“Existing Warrant-holder<\/u>” means each of the Persons identified as
\nholders of Existing Warrants on Schedule 4.4(b)<\/u>.<\/p>\n

“Federal Funds Rate<\/u>” shall mean, for any day, a floating rate equal to
\nthe weighted average of the rates on overnight federal funds transactions among
\nmembers of the Federal Reserve System, as determined by Lender.<\/p>\n

“Federal Reserve Board<\/u>” means the Board of Governors of the Federal
\nReserve System, or any successor thereto.<\/p>\n

-6-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

“Fiscal<\/u>” means, when followed by “month” or “quarter”, the relevant
\nfiscal period based on Borrower’s fiscal year and accounting conventions (e.g. a
\nreference to “April Fiscal 2009” is to the fiscal month of April of Borrower’s
\n2009 fiscal year). When followed by reference to a specific year, the fiscal
\nyear which encompasses the majority of months in such fiscal year (e.g. if
\nBorrower’s 2009 fiscal year ends in January 2009 reference to that year would be
\nto Borrower’s “Fiscal 2009”).<\/p>\n

“Funding Date<\/u>” means any date on which a Borrowing occurs.<\/p>\n

“GAAP<\/u>” means generally accepted accounting principles as in effect
\nfrom time to time in the United States, consistently applied.<\/p>\n

“General Intangibles<\/u>” means all of Borrower’s now owned or hereafter
\nacquired right, title, and interest with respect to “general intangibles” or
\n“intangibles” (as such terms are defined from time to time in the Code), and any
\nand all supporting obligations in respect thereof.<\/p>\n

“Governing Documents<\/u>” means, with respect to any Person, the
\ncertificate or articles of incorporation, by-laws, or other organizational
\ndocuments of such Person.<\/p>\n

“Governmental Authority<\/u>” means any federal, state, local or other
\npolitical subdivision thereof or other governmental or administrative body,
\ninstrumentality, department, or agency or any court, tribunal, administrative
\nhearing body, arbitration panel, commission, or other similar dispute-resolving
\npanel or body.<\/p>\n

“Hazardous Materials<\/u>” means (a) substances that are defined or listed
\nin, or otherwise classified pursuant to, any applicable laws or regulations as
\n“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
\nsubstances,” or any other formulation intended to define, list, or classify
\nsubstances by reason of deleterious properties such as ignitability,
\ncorrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
\ntoxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
\nnatural gas liquids, synthetic gas, drilling fluids, produced waters, and other
\nwastes associated with the exploration, development, or production of crude oil,
\nnatural gas, or geothermal resources, (c) any flammable substances or explosives
\nor any radioactive materials, and (d) asbestos in any form or electrical
\nequipment that contains any oil or dielectric fluid containing levels of
\npolychlorinated biphenyls in excess of 50 parts per million.<\/p>\n

“Indebtedness<\/u>” means (a) all obligations for borrowed money, (b) all
\nobligations evidenced by bonds, debentures, notes, or other similar instruments
\nand all reimbursement or other obligations in respect of letters of credit,
\nbankers acceptances, interest rate swaps, or other financial products, (c) all
\nobligations under Capital Leases, (d) all obligations or liabilities of others
\nsecured by a Lien on any asset of Borrower or its Subsidiaries, irrespective of
\nwhether such obligation or liability is assumed, (e) all obligations for the
\ndeferred purchase price of assets (other than trade debt incurred in the
\nordinary course of business and repayable in accordance with customary trade
\npractices), and (f) any obligation guaranteeing or intended to guarantee
\n(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
\nsold with recourse) any obligation of any other Person.<\/p>\n

“Indemnified Liabilities<\/u>” has the meaning set forth in Section
\n10.2<\/u>.<\/p>\n

-7-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

“Indemnified Person<\/u>” has the meaning set forth in Section
\n10.2<\/u>.<\/p>\n

“Insolvency Proceeding<\/u>” means any proceeding commenced by or against
\nany Person under any provision of the Bankruptcy Code or under any other state
\nor federal bankruptcy or insolvency law, assignments for the benefit of
\ncreditors, formal or informal moratoria, compositions, extensions generally with
\ncreditors, or proceedings seeking reorganization, arrangement, or other similar
\nrelief.<\/p>\n

“Inventory<\/u>” means all Borrower’s now owned or hereafter acquired
\nrights, title, and interests with respect to inventory, including goods held for
\nsale or lease or to be furnished under a contract of service, goods that are
\nleased by Borrower as lessor, goods that are furnished by Borrower under a
\ncontract of service, and raw materials, work in process, or materials used or
\nconsumed in Borrower’s business.<\/p>\n

“Investment<\/u>” means, with respect to any Person, any investment by such
\nPerson in any other Person (including Affiliates) in the form of loans,
\nguarantees, advances, or capital contributions (excluding (a) commission,
\ntravel, and similar advances to officers and employees of such Person made in
\nthe ordinary course of business, and (b) bona fide Accounts arising in the
\nordinary course of business consistent with past practices), purchases or other
\nacquisitions for consideration of Indebtedness or Stock, and any other items
\nthat are or would be classified as investments on a balance sheet prepared in
\naccordance with GAAP.<\/p>\n

“IRC<\/u>” means the Internal Revenue Code of 1986, as amended.<\/p>\n

“Leasehold Interest<\/u>” means “Leasehold Interest” as defined in the
\nSenior Credit Agreement.<\/p>\n

“Lender<\/u>” has the meaning set forth in the preamble to this Agreement.\n<\/p>\n

“Lender’s Account<\/u>” means an account of Lender located at National City
\nBank, with account number 4007736, ABA number 041000124 and account name
\nAmerican Greetings Corporation.<\/p>\n

“Lender Expenses<\/u>” means all (a) costs or expenses (including taxes,
\nand insurance premiums) required to be paid by Borrower under any of the Loan
\nDocuments that are paid or incurred by Lender, (b) reasonable out-of-pocket fees
\nor charges paid or incurred by Lender in connection with Lender’s transactions
\nwith Borrower, including, reasonable fees or charges for photocopying,
\nnotarization, couriers and messengers, telecommunication, public record searches
\n(including tax lien, litigation and UCC searches and including searches with the
\npatent and trademark office, the copyright office, or the department of motor
\nvehicles), filing, recording, publication, appraisal, real estate surveys, real
\nestate title policies and endorsements, and environmental audits, (c) reasonable
\ncosts and expenses incurred by Lender in the disbursement of funds to or for the
\naccount of Borrower (by wire transfer or otherwise), (d) reasonable
\nout-of-pocket costs and expenses paid or incurred by Lender to correct any
\ndefault or enforce any provision of the Loan Documents, (e) reasonable audit
\nfees and expenses of Lender related to audit examinations of the Books to the
\nextent of the fees and charges (and in all cases subject to the limitations and
\nrestrictions contained in this Agreement), (f) reasonable out-of-pocket costs
\nand expenses of third party claims or any other suit paid or incurred by Lender
\nin enforcing or<\/p>\n

-8-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

defending the Loan Documents or in connection with the transactions
\ncontemplated by the Loan Documents, (g) Lender’s reasonable out-of-pocket fees
\nand expenses (including attorneys’ fees) incurred in advising, structuring,
\ndrafting, reviewing, administering, or amending the Loan Documents, and (h)
\nLender’s reasonable out-of-pocket fees and expenses (including attorneys’ fees)
\nincurred in terminating, enforcing (including attorneys fees and expenses
\nincurred in connection with a “workout,” a “restructuring,” or an Insolvency
\nProceeding concerning Borrower or in exercising rights or remedies under the
\nLoan Documents), or defending the Loan Documents, irrespective of whether suit
\nis brought.<\/p>\n

“Lender-Related Person<\/u>” means Lender, together with Lender’s
\nAffiliates, and the officers, directors and employees of Lender.<\/p>\n

“Letter of Credit (Bridge)<\/u>” means that certain Irrevocable Standby
\nLetter of Credit No. SCL015563 issued by National City Bank on behalf of Lender
\nto WFRF, as beneficiary, with an initial issue date of April 16, 2009, and any
\nrenewal or replacement thereof.<\/p>\n

“Lien<\/u>” means any interest in an asset securing an obligation owed to,
\nor a claim by, any Person other than the owner of the asset, whether such
\ninterest shall be based on the common law, statute, or contract, whether such
\ninterest shall be recorded or perfected, and whether such interest shall be
\ncontingent upon the occurrence of some future event or events or the existence
\nof some future circumstance or circumstances, including the lien or security
\ninterest arising from a mortgage, deed of trust, encumbrance, pledge,
\nhypothecation, assignment, deposit arrangement, security agreement, conditional
\nsale or trust receipt, or from a lease, consignment, or bailment for security
\npurposes or from a sale of accounts receivable or chattel paper, or the interest
\nof a lessor under a Capital Lease or other arrangement pursuant to which any
\nPerson is entitled to any preference or priority with respect to the property or
\nassets of another Person or the income or profits of such other Person and also
\nincluding reservations, exceptions, encroachments, easements, rights-of-way,
\ncovenants, conditions, restrictions, leases, and other title exceptions and
\nencumbrances affecting Real Property each of the foregoing whether consensual or
\nnon-consensual and whether arising by way of agreement, operation of law, legal
\nprocess or otherwise.<\/p>\n

“Loan Account<\/u>” has the meaning set forth in Section 2.7<\/u>.<\/p>\n

“Loan Documents<\/u>” means this Agreement and all documents executed or
\ndelivered in connection with this Agreement, including, without limitation any
\nRevolving Credit Note, the EPI Intercreditor & Subordination Agreement, the
\nSchurman Family Intercreditor & Subordination Agreement, any certificates
\n(including without limitation, each Solvency Certificate, and each Compliance
\nCertificate) from time to time delivered by Borrower pursuant to this Agreement
\nor any other Loan Document, any note or notes executed by Borrower in connection
\nwith this Agreement and payable to Lender, and any other agreement entered into,
\nnow or in the future, by Borrower and Lender in connection with this Agreement.\n<\/p>\n

“Material Adverse Change<\/u>” means (a) a material adverse change in the
\nbusiness, prospects, operations, results of operations, assets, liabilities or
\ncondition (financial or otherwise) of Borrower and its Subsidiaries taken as a
\nwhole, or (b) any impairment of Borrower’s ability to<\/p>\n

-9-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

perform its material obligations under the Loan Documents or of Lender’s
\nability to enforce the Obligations.<\/p>\n

“Maximum Revolver Amount<\/u>” means $10,000,000.<\/p>\n

“Moody’s<\/u>” means Moody’s Investors Service, Inc. and any successor
\ncompany thereto which is a nationally recognized statistical rating organization
\nand otherwise reasonably acceptable to Lender in its Permitted Discretion.<\/p>\n

“Multiple Closing Minimum<\/u>” has the meaning set forth in Section
\n6.13<\/u>.<\/p>\n

“Obligations<\/u>” means all Advances, debts, principal, interest
\n(including any interest that, but for the provisions of the Bankruptcy Code,
\nwould have accrued), contingent reimbursement obligations with respect to
\noutstanding premiums, liabilities, obligations, fees (including, without
\nlimitation, the Unused Line Fee), charges, costs, Lender Expenses (including any
\nfees or expenses that, but for the provisions of the Bankruptcy Code, would have
\naccrued), lease payments, guaranties, covenants, indemnification obligations
\narising pursuant to the Loan Documents (including, without limitation,
\nunderSection 10.2<\/u>), and duties of any kind and description owing by
\nBorrower to Lender pursuant to or evidenced by the Loan Documents and
\nirrespective of whether for the payment of money, whether direct or indirect,
\nabsolute or contingent, due or to become due, now existing or hereafter arising,
\nand including all interest not paid when due and all Lender Expenses that
\nBorrower is required to pay or reimburse by the Loan Documents, by law, or
\notherwise. Any reference in this Agreement or in the Loan Documents to the
\nObligations shall include all amendments, changes, extensions, modifications,
\nrenewals replacements, substitutions, and supplements, thereto and thereof, as
\napplicable, both prior and subsequent to any Insolvency Proceeding.<\/p>\n

“Papyrus<\/u>” has the meaning set forth in the preamble to this Agreement.\n<\/p>\n

“Parent<\/u>” means Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund
\nII, L.P., and Dorset Capital L.P.<\/p>\n

“Permitted Discretion<\/u>” means a determination made in good faith and in
\nthe exercise of reasonable business judgment.<\/p>\n

“Permitted Dispositions<\/u>” means (a) sales or other dispositions by
\nBorrower or its Subsidiaries of Equipment that is substantially worn, damaged,
\nor obsolete in the ordinary course of business, (b) sales by Borrower or its
\nSubsidiaries of Inventory to buyers in the ordinary course of business, (c) the
\nuse or transfer of money or Cash Equivalents by Borrower or its Subsidiaries in
\na manner that is not prohibited by the terms of this Agreement or the other Loan
\nDocuments, (d) the licensing and sub-licensing by Borrower or its Subsidiaries,
\non a non-exclusive basis, of patents, trademarks, copyrights, and other
\nintellectual property rights in the ordinary course of business, (e) sales,
\nincluding “going-out-of business” sales and other dispositions in respect of
\nlocations being closed in compliance with Section 6.13<\/u> hereof, (f)
\nPermitted Liens and (g) the sale or transfer of the Disposed Assets in
\naccordance with the Purchase and Sale Documents.<\/p>\n

“Permitted Holder<\/u>” means (a) Parent or its Affiliates and (b) the
\nSchurman Family.<\/p>\n

-10-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

“Permitted Investments<\/u>” means (a) investments in Cash Equivalents, (b)
\nadvances made in connection with purchases of goods or services in the ordinary
\ncourse of business; (c) investments received in connection with the bankruptcy
\nor reorganization of customers or suppliers and in settlement of delinquent
\nobligations of, and other disputes with, such customers or suppliers arising in
\nthe ordinary course of business, (d) Investments existing as of the Closing Date
\nset forth on Schedule 4.26<\/u>, and (e) other Investments not to exceed
\n$22,000 in the aggregate at any time outstanding.<\/p>\n

“Permitted Liens<\/u>” means (a) Liens in favor of the Senior Agent, (b)
\nLiens for unpaid Taxes that either (i) are not yet delinquent, or (ii) do not
\nconstitute an Event of Default hereunder and are the subject of Permitted
\nProtests, (c) Liens set forth on Schedule P-1<\/u>, (d) the interests of
\nlessors under operating leases, (e) Liens or the interests of lessors under
\nCapital Leases to the extent that such Liens or interests secure Permitted
\nPurchase Money Indebtedness and so long as such Lien attaches only to the asset
\npurchased or acquired and the proceeds thereof, (f) Liens arising by operation
\nof law or pursuant to contract in favor of warehousemen, landlords, carriers,
\nmechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
\nof business and not in connection with the borrowing of money, and which Liens
\neither (i) are for sums not yet delinquent, (ii) are the subject of Permitted
\nProtests, or (iii) result from the Purchase and Sale, (g) Liens arising from
\ndeposits made in connection with obtaining worker’s compensation or other
\nunemployment insurance, (h) Liens or deposits to secure performance of bids,
\ntenders, or leases incurred in the ordinary course of business and not in
\nconnection with the borrowing of money, (i) Liens granted as security for surety
\nor appeal bonds in connection with obtaining such bonds in the ordinary course
\nof business, (j) Liens resulting from any judgment or award that is not an Event
\nof Default hereunder, (k) with respect to any Real Property, easements, rights
\nof way, and zoning restrictions that do not materially interfere with or impair
\nthe use or operation thereof, (l) non-exclusive licenses or sublicenses entered
\nin the ordinary course of Borrower’s business, (m) Liens on insurance proceeds
\nin favor of insurance companies granted solely as security for financed
\npremiums, (n) Liens which constitute rights of set-off of a customary nature or
\nbankers’ or securities intermediaries’ Liens with respect to amounts on deposit
\nor investment property, as applicable, whether arising by operation of law or by
\ncontract, in connection with arrangements entered into with banks or securities
\nintermediaries, to the extent permitted by the Loan Documents, and (o) subleases
\nentered in the ordinary course of Borrower’s business.<\/p>\n

“Permitted Protest<\/u>” means the right of Borrower or any of its
\nSubsidiaries, as applicable, to protest any Lien, Taxes (other than payroll
\nTaxes or Taxes that are the subject of a United States federal tax lien), or
\nrental payment, provided<\/u> that (a) a reserve with respect to such
\nobligation is established on the Books in such amount as is required under GAAP
\nand (b) any such protest is instituted promptly and prosecuted diligently by
\nBorrower or any of its Subsidiaries, as applicable, in good faith.<\/p>\n

“Permitted Purchase Money Indebtedness<\/u>” means, as of any date of
\ndetermination, (i) Purchase Money Indebtedness, and (ii) Capitalized Lease
\nObligations in an aggregate amount outstanding at any one time not in excess of
\n$550,000. In no event shall Permitted Purchase Money Indebtedness include
\nIndebtedness incurred for the purpose of financing all or any part of the
\nacquisition cost of any Inventory.<\/p>\n

-11-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

“Person<\/u>” means natural persons, corporations, limited liability
\ncompanies, limited partnerships, general partnerships, limited liability
\npartnerships, joint ventures, trusts, land trusts, business trusts, or other
\norganizations, irrespective of whether they are legal entities, and governments
\nand agencies and political subdivisions thereof.<\/p>\n

“Preferred Stock<\/u>” means the Series A Preferred Stock and Series B
\nPreferred Stock of Papyrus.<\/p>\n

“Projections<\/u>” means Borrower’s forecasted (a) balance sheets, (b)
\nprofit and loss statements, and (c) cash flow statements, all prepared on a
\nconsistent basis with Borrower’s historical financial statements, together with
\nappropriate supporting details and a statement of underlying assumptions.<\/p>\n

“Purchase and Sale<\/u>” means the series of transactions between Lender
\nand its Affiliates, on the one hand, and Papyrus and its Affiliates, on the
\nother hand, pursuant to which Papyrus purchases from Lender and its Affiliates
\nthe Acquired Assets and sells, transfers and conveys to Lender and its
\nAffiliates the Disposed Assets.<\/p>\n

“Purchase and Sale Agreement<\/u>” means the Purchase and Sale Agreement
\namong AG and its Subsidiaries party thereto and Papyrus and its Subsidiaries
\nparty thereto dated as of the Restatement Date.<\/p>\n

“Purchase and Sale Documents<\/u>” means, collectively, the Purchase and
\nSale Agreement and each “Ancillary Agreement” as defined in the Purchase and
\nSale Agreement.<\/p>\n

“Purchase Money Indebtedness<\/u>” means Indebtedness (other than the
\nObligations, but including Capitalized Lease Obligations) incurred at the time
\nof, or within 20 days after, the acquisition of any fixed assets for the purpose
\nof financing all or any part of the acquisition cost thereof.<\/p>\n

“Real Property<\/u>” means any fee, leasehold or other estate or interest
\nin real property now or hereafter owned or leased hereafter acquired by Borrower
\nand the improvements thereto.<\/p>\n

“Record<\/u>” means information that is inscribed on a tangible medium or
\nwhich is stored in an electronic or other medium and is retrievable in
\nperceivable form.<\/p>\n

“Remedial Action<\/u>” means all actions taken to (a) clean up, remove,
\nremediate, contain, treat, monitor, assess, evaluate, or in any way address
\nHazardous Materials in the indoor or outdoor environment, (b) prevent or
\nminimize a release or threatened release of Hazardous Materials so they do not
\nmigrate or endanger or threaten to endanger public health or welfare or the
\nindoor or outdoor environment, (c) perform any pre-remedial studies,
\ninvestigations, or post-remedial operation and maintenance activities, or (d)
\nconduct any other actions authorized by Applicable Law, including 42 U.S.C.
\n \u00a79601.<\/p>\n

“Restricted Payment<\/u>” means (i) any cash dividend or other cash
\ndistribution or payment, direct or indirect, on or on account of any shares of
\nany class of stock of Borrower now or hereafter outstanding (including any
\npayments to any holders of Preferred Stock or warrants in their capacity as
\nholders of such Stock but excluding any regular salary or bonus payments or<\/p>\n

-12-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

other payments which Borrower may make to any Person who holds Stock or
\nwarrants in Borrower in such Person’s capacity as an employee of Borrower or any
\ncapacity other than as a shareholder or warrant holder in the ordinary course of
\nBorrower’s business); (ii) any dividend or other distribution in respect of, or
\nredemption, purchase or other acquisition, direct or indirect, of any shares of
\nany class of stock of Borrower (including Preferred Stock) now or hereafter
\noutstanding or of any warrants (including Existing Warrants), options or rights
\nto purchase any such stock (including, without limitation, the repurchase of any
\nsuch stock, warrant, option or right or any refund of the purchase price thereof
\nin connection with the exercise by the holder thereof of any right of rescission
\nor similar remedies with respect thereto); and (iii) any direct salary,
\nnon-salary managerial fees, fee (consulting, management or other), fringe
\nbenefit, allowance or other expense directly or indirectly paid or payable by
\nBorrower (as compensation or otherwise) to any shareholder or Affiliate of
\nBorrower (other than to an employee or consultant, to the extent of such
\nemployee’s or consultant’s compensation; provided that the terms of such
\ncompensation are approved by the applicable board of directors or the
\ncompensation committee thereof) and (iv) meeting fees, travel and expense
\nreimbursement and clothing allowance payable to the directors of Borrower or any
\npartner, shareholder or Affiliate (in his capacity as a director, partner,
\nshareholder or Affiliate, but not as an employee) thereof, solely for purposes
\nof this subsection (iv), not to exceed $100,000 per annum in the aggregate (and
\nnot for each director, partner, shareholder or Affiliate) or such greater amount
\nas may be agreed to in writing by Lender, in its Permitted Discretion, upon
\nrequest from Borrower provided that such cap on the meeting fees, travel and
\nexpense reimbursement and clothing allowance referenced in this clause (iv)
\nshall not apply to the meeting fees, travel and expense reimbursement and
\nclothing allowance payable to any director of Borrower or any partner,
\nshareholder or Affiliate, in each case, solely in his or her capacity as an
\nemployee of Borrower.<\/p>\n

“Revolver Usage<\/u>” means, as of any date of determination, the then
\nextant amount of outstanding principal amount of Advances.<\/p>\n

“Revolving Credit<\/u>” has the meaning set forth in Section
\n2.1(a)<\/u>.<\/p>\n

“Revolving Credit Maturity Date<\/u>” means the date that is nineteen
\nmonths after the Closing Date; provided<\/u>, however<\/u>, after the
\ninitial period, this Agreement shall automatically renew for up to three
\nconsecutive one-year periods unless either Borrower or Lender provides
\nirrevocable written notice to the other party not less than 90 days prior to the
\nend of such period of its intention to terminate the this Agreement.
\nNotwithstanding the foregoing, the final Revolving Credit Maturity Date shall be
\nJune 25, 2013.<\/p>\n

“Revolving Credit Note<\/u>” has the meaning set forth in Section
\n2.1(f)<\/u>.<\/p>\n

“Revolving Credit Obligations<\/u>” means the aggregate of Borrower’s
\nliabilities, obligations, and indebtedness of any character on account of or in
\nrespect to the Revolving Credit.<\/p>\n

“Revolving Credit Termination Date<\/u>” shall mean the earliest to occur
\nof: (a) the Revolving Credit Maturity Date; (b) termination of this Agreement by
\nBorrower pursuant to Section 3.5<\/u>; (c) termination of this Agreement by
\nLender pursuant to Section 8.1<\/u> for reasons<\/p>\n

-13-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

other than an occurrence of an Event of Default pursuant to Sections
\n7.4<\/u> or 7.5<\/u>; or (d) automatically upon the occurrence of an Event of
\nDefault pursuant to Sections 7.4<\/u> or 7.5<\/u>.<\/p>\n

“S&P<\/u>” means Standard & Poor’s Rating Services, a division of
\nThe McGraw Hill Companies, Inc., and any successor company thereto which is a
\nnationally recognized statistical rating organization and is otherwise
\nreasonably acceptable to Lender in its Permitted Discretion.<\/p>\n

“Schurman Family<\/u>” means Dominique Schurman and Marcel Schurman (and
\neach of their lineal heirs and descendants) and the Schurman 1988 Family Trust.\n<\/p>\n

“Schurman Family Intercreditor & Subordination Agreement<\/u>” means
\nthat certain Intercreditor & Subordination Agreement, dated as of the date
\nhereof, among the Schurman Family and Lender, pursuant to which the Schurman
\nFamily subordinates its repayment rights under the Schurman Family Notes in
\nfavor of Lender.<\/p>\n

“Schurman Family Notes<\/u>” means, collectively, that certain Promissory
\nNote, dated as of April 17, 2009, issued by Papyrus to Marcel Schurman, and that
\ncertain Promissory Note, dated as of April 17, 2009, issued by Papyrus to
\nMargrit Schurman.<\/p>\n

“SEC<\/u>” means the United States Securities and Exchange Commission and
\nany successor thereto.<\/p>\n

“Senior Agent<\/u>” means WFRF, as administrative agent, under the Senior
\nCredit Agreement.<\/p>\n

“Senior Credit Agreement<\/u>” means that certain First Amended and
\nRestated Loan and Security Agreement, dated as of the date hereof, by and among
\nPapyrus, each of its Subsidiaries party thereto, WFRF, as administrative agent,
\ncollateral agent and a revolving credit lender, and each other revolving credit
\nlender party thereto, as amended from time to time.<\/p>\n

“Senior Indebtedness<\/u>” means the “Obligations” as defined in the Senior
\nCredit Agreement.<\/p>\n

“Shareholder Consent<\/u>” means an agreement from any shareholder of
\nBorrower, including holders of Preferred Stock, consenting to Borrower entering
\ninto the Loan Documents and the transactions contemplated hereby.<\/p>\n

“Solvency Certificate<\/u>” means a certificate signed by an Authorized
\nPerson of Borrower, dated as of the Closing Date, demonstrating that Borrower is
\nSolvent and reasonably acceptable to Lender.<\/p>\n

“Solvent<\/u>” means, with respect to any Person on a particular date, that
\nsuch Person is not insolvent (as such term is defined in the Uniform Fraudulent
\nTransfer Act).<\/p>\n

“Stock<\/u>” means all shares, options, warrants, interests,
\nparticipations, or other equity equivalents (regardless of how designated) of or
\nin a Person, whether voting or nonvoting, including common stock, preferred
\nstock, or any other “equity security<\/u>” (as such term is defined<\/p>\n

-14-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC
\nunder the Exchange Act).<\/p>\n

“Sublease Requirement<\/u>” means “Sublease Requirement” as defined in the
\nSenior Credit Agreement.<\/p>\n

“Subordination Agreement<\/u>” means the Schurman Family Intercreditor
\n& Subordination Agreement and the EPI Intercreditor & Subordination
\nAgreement.<\/p>\n

“Subordinated Indebtedness<\/u>” means aggregate Indebtedness of Borrower
\nthat is subordinate in right of payment and priority to the Obligations in a
\nmanner which is satisfactory to Lender in its Permitted Discretion.<\/p>\n

“Subsidiary<\/u>” of a Person means a corporation, partnership, limited
\nliability company, or other entity in which that Person directly or indirectly
\nowns or controls the shares of Stock having ordinary voting power to elect a
\nmajority of the board of directors (or appoint other comparable managers) of
\nsuch corporation, partnership, limited liability company, or other entity.<\/p>\n

“Taxes<\/u>” or “Tax<\/u>” means includes any taxes, duties, fees,
\npremiums, assessments, levies, tariffs and any other charges whatsoever imposed,
\nassessed, reassessed or collected by any Governmental Authority, including all
\nfines, penalties, interest, additions to tax, installments on account of taxes,
\nor other additional amounts imposed, assessed or collected by any Governmental
\nAuthority in respect thereof, and including those related to any tax-sharing
\nagreement or any other contract relating to the sharing or payment of any such
\nTaxes, or levied on, or measured by, or referred to as, gross income, net
\nincome, gross receipts, profits, royalty, capital, capital gains, transfer, land
\ntransfer, sales, goods and services, harmonized sales, use, alternative, net
\nworth, value-added, severance, premium, real property, capital stock, personal
\nproperty, ad valorem, windfall profits, environmental, excise, stamp,
\nwithholding, business, franchise, property development, occupancy, employer
\nhealth, payroll, employment, health, social services, education and social
\nsecurity taxes, all surtaxes, all customs duties and import and export taxes,
\ncountervail and anti-dumping, all license, franchise and registration fees and
\nall employment insurance, health insurance and other government pension plan
\npremiums or contributions, all withholdings on amounts paid to or by the
\nrelevant Person, and any liability for any of the foregoing as a transferee,
\nsuccessor, guarantor or by contract or by operation of Applicable Law, whether
\ndisputed or not.<\/p>\n

“Tax Returns<\/u>” includes all returns, elections, filings, forms, and any
\nother documents (whether in electronic, tangible or any other form whatsoever)
\nmade, prepared or filed, or to be made, prepared or filed in respect of Taxes
\nunder Applicable Law.<\/p>\n

“Unused Line Fee<\/u>” has the meaning set forth in Section 2.8(a)<\/u>.\n<\/p>\n

“Voidable Transfer<\/u>” has the meaning set forth in Section 14.7<\/u>.\n<\/p>\n

“WFRF<\/u>” means Wells Fargo Retail Finance, LLC.<\/p>\n

-15-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

1.2 Accounting Terms<\/u>. All accounting terms not specifically defined
\nherein shall be construed in accordance with GAAP. When used herein, the term
\n“financial statements” shall include the notes and schedules thereto. Whenever
\nthe term “Borrower” is used in respect of a financial covenant or a related
\ndefinition, it shall be understood to mean Borrower and its Subsidiaries on a
\nConsolidated basis unless the context clearly requires otherwise.<\/p>\n

1.3 Code<\/u>. Any terms used in this Agreement that are defined in the
\nCode shall be construed and defined as set forth from time to time in the Code
\nunless otherwise defined herein.<\/p>\n

1.4 Construction<\/u>. Unless the context of this Agreement or any other
\nLoan Document clearly requires otherwise, references to the plural include the
\nsingular, references to the singular include the plural, the term “including” is
\nnot limiting, and the term “or” has, except where otherwise indicated, the
\ninclusive meaning represented by the phrase “and\/or.” The words “hereof,”
\n“herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any
\nother Loan Document refer to this Agreement or such other Loan Document, as the
\ncase may be, as a whole and not to any particular provision of this Agreement or
\nsuch other Loan Document, as the case may be. Section, subsection, clause,
\nschedule, and exhibit references herein are to this Agreement unless otherwise
\nspecified. Any reference in this Agreement or in the other Loan Documents to any
\nagreement, instrument, or document shall include all alterations, amendments,
\nchanges, extensions, modifications, renewals, replacements, substitutions,
\njoinders, and supplements, thereto and thereof, as applicable (subject to any
\nrestrictions on such alterations, amendments, changes, extensions,
\nmodifications, renewals, replacements, substitutions, joinders, and supplements
\nset forth herein). Any reference herein to any Person shall be construed to
\ninclude such Person’s successors and assigns. Any requirement of a writing
\ncontained herein or in the other Loan Documents shall be satisfied by the
\ntransmission of a Record and any Record transmitted shall constitute a
\nrepresentation and warranty as to the accuracy and completeness of the
\ninformation contained therein.<\/p>\n

1.5 Schedules and Exhibits<\/u>. All of the schedules and exhibits attached
\nto this Agreement shall be deemed incorporated herein by reference.<\/p>\n

2. LOAN AND TERMS OF PAYMENT<\/u><\/strong>.<\/p>\n

2.1 Revolving Credit<\/u>.<\/p>\n

(a) During the term of this Agreement, Lender agrees to make cash advances
\n(“Advances<\/u>“) to Borrower in an aggregate amount at any one time
\noutstanding not to exceed an amount equal to the difference of (i) the Maximum
\nRevolver Amount minus<\/u> (ii) the undrawn face amount of the Letter of
\nCredit (Bridge), each as then in effect. The Advances to be made under this
\nSection 2<\/u> shall be referred to as the “Revolving Credit<\/u>“.<\/p>\n

(b) Reserved.<\/p>\n

(c) Lender shall have no obligation to make additional Advances hereunder to
\nthe extent an Event of Default has occurred and is continuing, or after giving
\neffect to the issuance of such Advance (i) the Revolver Usage would exceed the
\nlesser of Availability or the Maximum Revolver Amount, (ii) a Default or Event
\nof Default would occur or (iii) the<\/p>\n

-16-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

conditions set forth in Sections 3.1 and 3.2, as applicable, have not been
\nsatisfied or waived by Lender.<\/p>\n

(d) Amounts borrowed pursuant to this Section shall be repaid and, subject to
\nthe terms and conditions of this Agreement, may be reborrowed at any time during
\nthe term of this Agreement.<\/p>\n

(e) All amounts borrowed pursuant to this Section, together with all other
\nObligations, shall be due and payable on the Revolving Credit Termination Date.\n<\/p>\n

(f) Borrower’s obligation to repay Advances and other financial
\naccommodations under the Revolving Credit, with interest as provided herein, may
\nbe evidenced by a note or notes substantially in the form of Exhibit
\n2.1(f)<\/u> (the “Revolving Credit Note<\/u>“), executed by Borrower, payable
\nto Lender. Neither the original nor a copy of any Revolving Credit Note shall be
\nrequired, however, to establish or prove any Obligation. Upon Borrower being
\nprovided with an affidavit (which shall include an indemnity reasonably
\nsatisfactory to Borrower) from Lender to the effect that the Revolving Credit
\nNote has been lost, mutilated, or destroyed, Borrower shall execute and deliver
\na replacement thereof to Lender.<\/p>\n

2.2 Procedure for Borrowing<\/u>. Each Borrowing shall be made by an
\nirrevocable written request by an Authorized Person delivered to Lender, which
\nnotice must be received by Lender no later than 1:00 p.m. (Cleveland, Ohio time)
\nat least four Business Days prior to the date that is the requested Funding
\nDate, or such shorter period as agreed to by Lender in its sole discretion, and
\nspecify (i) the amount of such Borrowing, (ii) the requested Funding Date, which
\nshall be a Business Day and (iii) the use for which the proceeds are to be used.\n<\/p>\n

2.3 Payments<\/u>.<\/p>\n

(a) Payments by Borrower<\/u>. Except as otherwise expressly provided
\nherein, all payments by Borrower shall be made to Lender’s Account and shall be
\nmade in immediately available funds, no later than 1:00 p.m. (Cleveland, Ohio
\ntime) on the date specified herein. Any payment received by Lender later than
\n1:00 p.m. (Cleveland, Ohio time), shall be deemed to have been received on the
\nfollowing Business Day and any applicable interest or fee shall continue to
\naccrue until such following Business Day.<\/p>\n

(b) Application of Payments<\/u>. Except as otherwise provided in the Loan
\nDocuments, all payments shall be remitted to Lender and all such payments shall
\nbe applied first to Lender Expenses and any fees and charges then due and
\npayable hereunder, second to any accrued but unpaid interest then due and
\npayable hereunder and, third, to reduce the outstanding principal balance of the
\nObligations.<\/p>\n

2.4 Interest Rates: Rates, Payments, and Calculations<\/u>.<\/p>\n

(a) Interest Rates<\/u>. Except as provided in clause (c) below, all
\nObligations that have been charged to the Loan Account pursuant to the terms
\nhereof shall bear interest on the Daily Balance thereof at a per annum rate
\nequal to the Base Rate plus<\/u> the Base Rate Margin.<\/p>\n

(b) Reserved<\/u>.<\/p>\n

-17-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(c) Default Rate<\/u>. Upon the occurrence and during the continuation of
\nan Event of Default, and without notice to Borrower, all Obligations that have
\nbeen charged to the Loan Account pursuant to the terms hereof shall bear
\ninterest on the Daily Balance thereof at a per annum rate equal to two
\npercentage points above the per annum rate otherwise applicable hereunder (the
\n“Default Rate<\/u>“).<\/p>\n

(d) Payment<\/u>. Interest and all other fees payable hereunder shall be
\ndue and payable, in arrears, on the first day of each month at any time that
\nObligations or Commitments are outstanding. Borrower hereby authorizes Lender,
\nfrom time to time, without prior notice to Borrower, to charge such interest and
\nfees, all Lender Expenses (as and when incurred), the charges, commissions,
\nfees, and costs provided for in Section 2.8<\/u> (as and when accrued or
\nincurred) and all other payments as and when due and payable under any Loan
\nDocument to Borrower’s Loan Account, which amounts thereafter shall constitute
\nAdvances hereunder and shall accrue interest at the rate then applicable to
\nAdvances hereunder and shall accrue interest at the rate then applicable to
\nAdvances hereunder. Any interest not paid when due shall be compounded by being
\ncharged to Borrower’s Loan Account and shall thereafter constitute Advances
\nhereunder and shall accrue interest at the rate then applicable to Advances.
\nLender shall provide Borrower with copies of invoices it receives in respect to
\nLender Expenses upon request.<\/p>\n

(e) Computation<\/u>. All interest and fees chargeable under the Loan
\nDocuments shall be computed on the basis of a 360 day year for the actual number
\nof days elapsed. In the event the Base Rate is changed from time to time
\nhereafter, the rates of interest hereunder based upon the Base Rate
\nautomatically and immediately shall be increased or decreased by an amount equal
\nto such change in the Base Rate.<\/p>\n

(f) Intent to Limit Charges to Maximum Lawful Rate<\/u>. In no event shall
\nthe interest rate or rates payable under this Agreement, plus<\/u> any other
\namounts paid in connection herewith, exceed the highest rate permissible under
\nany law that a court of competent jurisdiction shall, in a final determination,
\ndeem applicable. Borrower and Lender, in executing and delivering this
\nAgreement, intend legally to agree upon the rate or rates of interest and manner
\nof payment stated within it; provided<\/u>, however<\/u>, that, anything
\ncontained herein to the contrary notwithstanding, if said rate or rates of
\ninterest or manner of payment exceeds the maximum allowable under applicable
\nlaw, then, ipso facto<\/em>, as of the date of this Agreement, Borrower is
\nand shall be liable only for the payment of such maximum as allowed by law, and
\npayment received from Borrower in excess of such legal maximum, whenever
\nreceived, shall be applied to reduce the principal balance of the Obligations to
\nthe extent of such excess.<\/p>\n

2.5 Crediting Payments<\/u>. The receipt of any payment item by Lender
\nshall not be considered a payment on account unless such payment item is a wire
\ntransfer of immediately available federal funds made to Lender’s Account or
\nunless and until such payment item is honored when presented for payment. Should
\nany payment item not be honored when presented for payment, then Borrower shall
\nbe deemed not to have made such payment and interest shall be calculated
\naccordingly. Anything to the contrary contained herein notwithstanding, any
\npayment item shall be deemed received by Lender only if it is received into
\nLender’s Account on a Business Day on or before 1:00 p.m. (Cleveland, Ohio
\ntime). If any payment item is received into Lender’s Account on a non-Business
\nDay or after 1:00 p.m. (Cleveland, Ohio time) on a<\/p>\n

-18-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

Business Day, it shall be deemed to have been received by Lender as of the
\nopening of business on the immediately following Business Day.<\/p>\n

2.6 Designated Account<\/u>. Lender is authorized to make the Advances
\nunder this Agreement based upon instructions received from anyone purporting to
\nbe an Authorized Person, or without instructions if pursuant to Section
\n2.4(c)<\/u>. Borrower agrees to establish and maintain the Designated Account for
\nthe purpose of receiving the proceeds of the Advances requested by Borrower and
\nmade by Lender hereunder. Notwithstanding the foregoing, Lender, in its sole
\ndiscretion, may make Advances directly to creditors of Borrower provided such
\nAdvance satisfies the requirements of Section 6.15<\/u>.<\/p>\n

2.7 Maintenance of Loan Account; Statements of Obligations<\/u>.<\/p>\n

(a) Lender shall maintain an account on its books in the name of Borrower
\n(the “Loan Account<\/u>“) on which Borrower will be charged with all Advances
\nmade by Lender to Borrower and with all other payment Obligations hereunder or
\nunder the other Loan Documents, including accrued interest, fees and expenses,
\nand Lender Expenses incurred by Lender. Lender shall render statements regarding
\nthe Loan Account to Borrower, including principal, interest, fees, and including
\nan itemization of all charges and expenses constituting Lender Expenses incurred
\nby Lender, and such statements shall be conclusively presumed to be correct and
\naccurate and constitute an account stated between Borrower and Lender unless,
\nwithin 30 days after receipt thereof by Borrower, Borrower shall deliver to
\nLender written objection thereto describing the error or errors contained in any
\nsuch statements.<\/p>\n

2.8 Fees<\/u>. Borrower shall pay to Lender the following fees and charges,
\nwhich fees and charges shall be non-refundable when paid (irrespective of
\nwhether this Agreement is terminated thereafter):<\/p>\n

(a) Unused Line Fee<\/u>. On the first day of each month during the term of
\nthis Agreement, an unused line fee for in an amount equal to 0.5% per annum
\ntimes <\/em>the result of (a) the Maximum Revolver Amount then in effect,
\nless <\/em>(b) the average Daily Balance of Advances that were outstanding
\nduring the immediately preceding month (the “Unused Line Fee<\/u>“).<\/p>\n

(b) Reserved<\/u>.<\/p>\n

(c) Reserved<\/u>.<\/p>\n

(d) Administrative Fee<\/u>. Borrower shall pay Lender an administrative
\nfee of $10,000 per annum during the term of this facility (the
\n“Administrative Fee<\/u>“). The Administrative Fee shall in no way limit
\nBorrower’s obligations to pay any other fee, or reimburse Lender for any cost or
\nexpense, under the Loan Documents. The Administrative Fee shall be payable on
\nthe Closing Date and each anniversary thereof.<\/p>\n

3. CONDITIONS; TERM OF AGREEMENT<\/u><\/strong><\/p>\n

3.1 Conditions Precedent to Initial Extension of Credit<\/u>. The
\nobligation of Lender to make the initial Advance (or otherwise to extend any
\ncredit provided for hereunder on the<\/p>\n

-19-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

Closing Date) is subject to the prior fulfillment, to the satisfaction of
\nLender in its sole discretion, of each of the conditions precedent set forth
\nbelow:<\/p>\n

(a) the transactions contemplated under the Purchase and Sale Documents shall
\nhave been consummated in accordance with the terms thereof, without waiver of
\nany material condition by Lender;<\/p>\n

(b) Lender shall have received a certified true, accurate and complete copy
\nof the Senior Credit Agreement, all of which shall be satisfactory to Lender,
\nwhich is in full force and effect;<\/p>\n

(c) Lender shall have received the following duly executed and delivered Loan
\nDocuments, in form and substance satisfactory to Lender, and each such document
\nshall be in full force and effect:<\/p>\n

(i) this Agreement (with all exhibits and schedules attached);<\/p>\n

(ii) the Revolving Credit Note;<\/p>\n

(iii) the EPI Intercreditor & Subordination Agreement;<\/p>\n

(iv) the Schurman Family Intercreditor & Subordination Agreement; and\n<\/p>\n

(v) any other documents or agreements required by Lender.<\/p>\n

(d) no “default” or “event of default” (as such terms or similar terms are
\ndefined in any of (i) the Senior Credit Agreement, (ii) the Schurman Family
\nNotes or (iii) the EPI Notes) shall have occurred and be continuing on the date
\nof such Advance, or shall result from the making of such Advance;<\/p>\n

(e) Lender shall have received a pro forma Compliance Certificate dated as of
\nthe Closing Date;<\/p>\n

(f) Lender shall have received the Solvency Certificate and Lender shall
\notherwise be satisfied, in its Permitted Discretion, with the capital structure
\nof Borrower and its Affiliates;<\/p>\n

(g) Lender shall have received a certificate from the Secretary of Borrower
\nattesting to and attaching the resolutions of Borrower’s Board of Directors
\nauthorizing its execution, delivery, and performance of this Agreement and the
\nother Loan Documents to which such Person is a party and authorizing specific
\nofficers of Borrower to execute the same;<\/p>\n

(h) Lender shall have received Shareholder Consents from at least 85% of all
\nshareholders of Borrower and copies of all consents, approvals, and
\nregistrations described on Schedule 4.5<\/u>;<\/p>\n

-20-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(i) Lender shall have received copies of Borrower’s Governing Documents, as
\namended, modified, or supplemented to the Closing Date, certified by the
\nSecretary of Borrower, in form and substance satisfactory to Lender;<\/p>\n

(j) Lender shall have received a certificate of status with respect to
\nBorrower, dated within 10 days of the Closing Date, such certificate to be
\nissued by the appropriate officer of the jurisdiction of organization of
\nBorrower, which certificate shall indicate that Borrower is in good standing in
\nsuch jurisdiction;<\/p>\n

(k) Reserved;<\/p>\n

(l) Lender shall have received the Business Plan, in form and substance
\nsatisfactory to Lender in their Permitted Discretion;<\/p>\n

(m) Borrower shall have paid all Lender Expenses incurred in connection with
\nthe transactions evidenced by this Agreement;<\/p>\n

(n) Lender shall have received evidence satisfactory to it in its Permitted
\nDiscretion that Borrower has received all consents, licenses, approvals or
\nevidence of other actions required by any Person, including any Governmental
\nAuthority, in connection with the execution and delivery by Borrower of this
\nAgreement or any other Loan Document or with the consummation of the
\ntransactions contemplated hereby or thereby;<\/p>\n

(o) Lender shall have received an Officer’s Closing Certificate dated as of
\nthe Closing Date, the form and substance of which shall be satisfactory to
\nLender;<\/p>\n

(p) Lender shall have received a certified copy of the following:<\/p>\n

(i) Schurman Family Notes and the EPI Notes;<\/p>\n

(ii) evidence of the termination and cancellation of (A) the warrants issued
\nby Borrower and (B) the Preferred Stock; and<\/p>\n

(iii) any Shareholder Agreements.<\/p>\n

(q) all other documents and legal matters in connection with the transactions
\ncontemplated by this Agreement shall have been delivered, executed, or recorded
\nand shall be in form and substance satisfactory to Lender.<\/p>\n

3.2 Conditions Precedent to all Extensions of Credit<\/u>. The obligation
\nof Lender to make any Advance (or to extend any other credit hereunder) shall be
\nsubject to the following conditions precedent:<\/p>\n

(a) the representations and warranties contained in this Agreement and the
\nother Loan Documents shall be true and correct in all material respects on and
\nas of the date of such extension of credit, as though made on and as of such
\ndate (except to the extent that such representations and warranties relate
\nsolely to an earlier date);<\/p>\n

-21-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(b) Lender shall be satisfied that the proceeds of such Advance will be
\nissued solely for the purposes permitted pursuant to Section 6.15<\/u>;<\/p>\n

(c) Lender shall have received an officer’s certificate signed by an
\nAuthorized Person attesting to and attaching a resolution of the approval of all
\neligible directors, which shall not include any Institutional Director (as such
\nterm is defined in the Stockholders Agreement of the Borrower as in effect on
\nthe date hereof) who abstains or recuses herself or himself from the action (i)
\nauthorizing such Advance and (ii) acknowledging that based on Borrower’s current
\nfinancial condition and in the Board of Directors’ good faith determination,
\nsuch Advance is the only funding option of those currently available to Borrower
\nto make any such payment as described in Section 6.15<\/u>;<\/p>\n

(d) no “default” or “event of default” (as such terms or similar terms are
\ndefined in any of (i) the Senior Credit Agreement, (ii) the Schurman Family
\nNotes or (iii) the EPI Notes) shall have occurred and be continuing on the date
\nof such extension of credit, or shall result from the making of such Advance;\n<\/p>\n

(e) no Default or Event of Default shall have occurred and be continuing on
\nthe date of such extension of credit, nor shall either result from the making
\nthereof;<\/p>\n

(f) no injunction, writ, restraining order, or other order of any nature
\nprohibiting, directly or indirectly, the extending of such credit shall have
\nbeen issued and remain in force by any Governmental Authority against Borrower,
\nLender, or any of their Affiliates; and<\/p>\n

(g) no Material Adverse Change shall have occurred since April 1, 2009.<\/p>\n

3.3 Term<\/u>. This Agreement shall become effective upon the Closing Date.
\nLender shall have the right to terminate its obligations under this Agreement
\nimmediately and without notice upon the occurrence and during the continuation
\nof an Event of Default other than an Event of Default pursuant to Sections
\n7.4<\/u> or 7.5<\/u>. This Agreement shall automatically terminate without
\nnotice upon the occurrence of an Event of Default pursuant to Sections
\n7.4<\/u> or 7.5<\/u>. Borrower shall have the right to terminate this Agreement
\npursuant to Section 3.5<\/u>. If not earlier terminated, this Agreement shall
\nterminate on the Revolving Credit Maturity Date.<\/p>\n

3.4 Effect of Termination<\/u>. On the Revolving Credit Termination Date,
\nall Revolving Credit Obligations immediately shall become due and payable
\nwithout notice or demand.<\/p>\n

3.5 Early Termination by Borrower; Reduction of Commitment<\/u>.<\/p>\n

(a) Borrower has the option, at any time upon 90 days prior written notice to
\nLender, to terminate the Revolving Credit by paying to Lender, in cash, the
\nObligations (other than any inchoate Obligations which have not been asserted
\nand are not otherwise known to Borrower or Lender) in full. If Borrower has sent
\na notice of termination pursuant to the provisions of this Section, then the
\nCommitments shall terminate and Borrower shall be obligated to repay the
\nObligations in full, on the date set forth as the date of termination of this
\nAgreement in such notice.<\/p>\n

(b) Reserved.<\/p>\n

-22-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(c) Borrower may from time to time, by written notice to Lender, reduce the
\nunused Commitment, provided that Borrower shall not reduce the Commitment if,
\nafter giving effect to any concurrent prepayment of any outstanding Obligations
\nin accordance with this Section, the sum of the outstanding Obligations would
\nexceed an amount equal to the difference of (i) the Maximum Revolver Amount
\nminus<\/u> (ii) the undrawn face amount of the Letter of Credit (Bridge).<\/p>\n

4. REPRESENTATIONS AND WARRANTIES<\/u><\/strong>.<\/p>\n

In order to induce Lender to enter into this Agreement, Borrower makes the
\nfollowing representations and warranties to Lender which shall be true, correct,
\nand complete, in all material respects, as of the Closing Date, and at and as of
\nthe date of each certificate delivered pursuant to Section 5.2<\/u> hereof
\n(except to the extent that such representations and warranties relate solely to
\nan earlier date) and such representations and warranties shall survive the
\nexecution and delivery of this Agreement.<\/p>\n

4.1 No Encumbrances<\/u>. Borrower has good and legally marketable title to
\nall of its property, free and clear of Liens except for Permitted Liens.<\/p>\n

4.2 Records<\/u>. Borrower keeps correct and accurate Books itemizing and
\ndescribing the type, and quantity of its Inventory and Equipment and the book
\nvalue thereof.<\/p>\n

4.3 Legal Status<\/u>. Borrower represents and warrants that (a) Borrower’s
\nexact legal name is that indicated on Schedule 4.3<\/u> and on the signature
\npage hereof; (b) Borrower is an organization of the type, and is organized in
\nthe jurisdiction, set forth on Schedule 4.3<\/u>; (c) Schedule 4.3<\/u>
\naccurately sets forth Borrower’s organizational identification number or
\naccurately states that Borrower has none; and (d) Schedule 4.3<\/u>
\naccurately sets forth Borrower’s place of business or, if more than one, its
\nchief executive office, as well as Borrower’s mailing address, if different.\n<\/p>\n

4.4 Due Organization and Qualification; Subsidiaries<\/u>.<\/p>\n

(a) Borrower is duly organized and existing and in good standing under the
\nlaws of the jurisdiction of its organization and qualified to do business in any
\nstate where the failure to be so qualified reasonably could be expected to
\nresult in a Material Adverse Change.<\/p>\n

(b) Set forth on Schedule 4.4(b)<\/u>, is a complete and accurate
\ndescription of the authorized capital Stock of Borrower, by class, and, as of
\nthe Closing Date, a description of the number of shares of each such class that
\nare issued and outstanding. Other than as described on Schedule 4.4(b)<\/u>,
\nthere are no subscriptions, options, warrants, or calls relating to any shares
\nof Borrower’s capital Stock, including any right of conversion or exchange under
\nany outstanding security or other instrument. The Borrower is not subject to any
\nobligation (contingent or otherwise) to repurchase or otherwise acquire or
\nretire any shares of its capital Stock or any security convertible into or
\nexchangeable for any of its capital Stock. As of the Closing Date, there is no
\npreferred Stock of Borrower. The preferred Stock of Borrower was converted to
\ncommon Stock in connection with the Purchase and Sale. No previous holder of any
\npreferred Stock of Borrower received any Restricted Payment, or is entitled to
\nreceive any Restricted Payment, in connection with such conversion or otherwise.\n<\/p>\n

-23-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(c) Set forth on Schedule 4.4(c)<\/u>, is a complete and accurate list of
\nBorrower’s direct and indirect Subsidiaries, showing: (i) the jurisdiction of
\ntheir organization; (ii) the number of shares of each class of common and
\npreferred Stock authorized for each of such Subsidiaries; and (iii) the number
\nand the percentage of the outstanding shares of each such class owned directly
\nor indirectly by Borrower. All of the outstanding capital Stock of each such
\nSubsidiary has been validly issued and is fully paid and nonassessable.<\/p>\n

(d) Except as set forth on Schedule 4.4(d)<\/u> hereto, there are no
\nsubscriptions, options, warrants, or calls relating to any shares of Borrower’s
\nor its Subsidiaries’ capital Stock, including any right of conversion or
\nexchange under any outstanding security or other instrument. The Existing
\nWarrants have been cancelled and terminated in connection with the Purchase and
\nSale. No previous Existing Warrant-holder received any Restricted Payment, or is
\nentitled to receive any Restricted Payment, in connection with such cancellation
\nor otherwise.<\/p>\n

(e) Neither Borrower nor any of its Subsidiaries is subject to any obligation
\n(contingent or otherwise) to repurchase or otherwise acquire or retire any
\nshares of Borrower’s or Subsidiary’s capital Stock or any security convertible
\ninto or exchangeable for any such capital Stock.<\/p>\n

4.5 Due Authorization; No Conflict<\/u>.<\/p>\n

(a) The execution, delivery, and performance by Borrower of this Agreement,
\nthe other Loan Documents and the Purchase and Sale Documents have been duly
\nauthorized by all necessary action on the part of Borrower.<\/p>\n

(b) The execution, delivery, and performance by Borrower of this Agreement,
\nthe other Loan Documents and the Purchase and Sale Documents do not and will not
\n(i) violate any provision of Applicable Law, or the Governing Documents of
\nBorrower, (ii) conflict with, result in a breach of, or constitute (with due
\nnotice or lapse of time or both) a default under any contractual obligation of
\nBorrower which could reasonably be expected to result in a Material Adverse
\nEffect, (iii) result in or require the creation or imposition of any Lien of any
\nnature whatsoever upon any properties or assets of Borrower, other than
\nPermitted Liens, or (iv) require any approval of Borrower’s interestholders or
\nany approval or consent of any Person under any material contractual obligation
\nof Borrower other than consents and approvals which have been already obtained
\nprior to the Closing Date, or as set forth on Schedule 4.5<\/u>.<\/p>\n

(c) The execution, delivery, and performance by Borrower of this Agreement,
\nthe other Loan Documents and the Purchase and Sale Documents do not and will not
\nrequire any registration with, consent, or approval of, or notice to, or other
\naction with or by, any Governmental Authority or other Person other than
\nregistrations, consents and approvals which have been already made or obtained
\nprior to the Closing Date, or as set forth on Schedule 4.5<\/u>.<\/p>\n

(d) This Agreement, the other Loan Documents and the Purchase and Sale
\nDocuments, and all other documents contemplated hereby and thereby, when
\nexecuted and delivered by Borrower will be the legally valid and binding
\nobligations of Borrower, enforceable against Borrower in accordance with their
\nrespective terms, except as enforcement may be<\/p>\n

-24-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

limited by equitable principles or by bankruptcy, insolvency, reorganization,
\nmoratorium, or similar laws relating to or limiting creditors’ rights generally.\n<\/p>\n

4.6 Litigation<\/u>.<\/p>\n

(a) Other than those matters disclosed on Schedule 4.6(a)<\/u> and
\nimmaterial matters where the amount in controversy is less than $250,000, there
\nare no actions, suits, or proceedings pending or, to the knowledge of Borrower,
\nthreatened against Borrower or any of its Subsidiaries, as applicable.
\nSchedule 4.6(a)<\/u> includes, as applicable, for each matter set forth
\nthereon (i) the name, docket number and jurisdiction for such matter, (ii) the
\nstatus of such proceeding, and (iii) whether such matter is covered by an
\ninsurance policy and, if so, the insurance carrier, the policy number and the
\ndeductible amount associated with such insurance policy.<\/p>\n

(b) There are no actions, suits or proceedings pending or, to the knowledge
\nof Borrower, threatened against Borrower or any of its Subsidiaries, as
\napplicable, that question the validity or enforceability of this Agreement, any
\nother Loan Document or the Purchase and Sale Documents or any action taken by
\nBorrower in connection therewith.<\/p>\n

4.7 No Material Adverse Change<\/u>. All financial statements relating to
\nBorrower (including any Projections with respect to Acquired Assets and the
\nPurchase and Sale) that have been delivered by Borrower to Lender have been
\nprepared in accordance with GAAP (except, in the case of unaudited financial
\nstatements, for the lack of footnotes and being subject to year-end audit
\nadjustments) and present fairly in all material respects Borrower’s financial
\ncondition as of the date thereof and results of operations for the period then
\nended. There has not been a Material Adverse Change with respect to Borrower
\nsince the date of the latest financial statements submitted to Lender. The
\nconsummation of the transactions contemplated by the Purchase and Sale Documents
\nshall not cause a Material Adverse Change.<\/p>\n

4.8 Fraudulent Transfer<\/u>. After giving effect to the Purchase and Sale
\n(and the transactions contemplated thereby and hereby):<\/p>\n

(a) Borrower is Solvent;<\/p>\n

(b) no transfer of property is being made by Borrower and no obligation is
\nbeing incurred by Borrower in connection with the transactions contemplated by
\nthis Agreement or the other Loan Documents with the intent to hinder, delay, or
\ndefraud either present or future creditors of Borrower; and<\/p>\n

(c) no transfer of property is being made by Borrower without receiving a
\nreasonably equivalent value in exchange for such transfer and Borrower’s
\nremaining assets are not unreasonably small in relation to their businesses.\n<\/p>\n

Lender acknowledges that the representation of Borrower in Section
\n4.8(a)<\/u> is made in reliance upon the Business Plan. Lender further
\nacknowledges that it has contributed certain financial data and other
\ninformation, including certain assumptions, concerning the Acquired Assets to
\nthe Business Plan. For purpose of the representation in Section 4.8(a)<\/u>,
\nBorrower has assumed, with<\/p>\n

-25-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

the permission of Lender, the truth and accuracy of all data and information
\ncontributed by Lender that has been incorporated into the Business Plan.<\/p>\n

4.9 Employee Benefits<\/u>. None of Borrower, any of its Subsidiaries, or
\nany of their ERISA Affiliates maintains or contributes to any Benefit Plan.<\/p>\n

4.10 Environmental Condition<\/u>. Except as set forth on Schedule
\n4.10<\/u>, (a) to Borrower’s knowledge, none of Borrower’s properties or assets
\nhas ever been used by Borrower or by previous owners or operators in the
\ndisposal of, or to produce, store, handle, treat, release, or transport, any
\nHazardous Materials, where such production, storage, handling, treatment,
\nrelease or transport was in violation, in any material respect, of applicable
\nEnvironmental Law, (b) to Borrower’s knowledge, none of Borrower’s properties or
\nassets has ever been designated or identified in any manner pursuant to any
\nenvironmental protection statute as a Hazardous Materials disposal site, (c)
\nBorrower has not received notice that a Lien arising under any Environmental Law
\nhas attached to any revenues or to any Real Property owned or operated by
\nBorrower, and (d) Borrower has not received a summons, citation, notice, or
\ndirective from the Environmental Protection Agency or any other federal or state
\ngovernmental agency concerning any action or omission by Borrower resulting in
\nthe releasing or disposing of Hazardous Materials into the environment.<\/p>\n

4.11 Brokerage Fees<\/u>. Borrower has not utilized the services of any
\nbroker or finder in connection with Borrower’s obtaining financing from Lender
\nunder this Agreement and no brokerage commission or finders fee is payable by
\nBorrower in connection herewith.<\/p>\n

4.12 Intellectual Property<\/u>. Borrower owns, or holds licenses in, all
\ntrademarks, trade names, copyrights, patents, patent rights, and licenses that
\nare necessary to the conduct of its business as currently conducted. Attached
\nhereto as Schedule 4.12<\/u> is a true, correct, and complete listing of all
\npatents, patent applications, registered trademarks, trademark applications,
\nregistered copyrights, and copyright registration applications as to which
\nBorrower is the owner or is an exclusive licensee. All licenses set out in
\nSchedule 4.12<\/u> are in good standing and there have been no defaults
\nthereunder by Borrower or, to the knowledge of Borrower, by any other party
\nthereto. All royalty fees have been paid on the patents and patent applications
\nowned by Borrower and set out in Schedule 4.12<\/u> and all renewal fees have
\nbeen paid on the registered trademarks owned by Borrower.<\/p>\n

4.13 Leases<\/u>. Borrower enjoys peaceful and undisturbed possession under
\nall leases (including subleases) material to the business of Borrower and to
\nwhich Borrower is a party or under which Borrower is operating other than any
\nsublease to which the Sublease Requirement applies but has not been satisfied.
\nExcept for any failure to comply with the Sublease Requirement, all of such
\nleases are valid and subsisting and no material default by Borrower exists under
\nany of them.<\/p>\n

4.14 Indebtedness<\/u>. Set forth on Schedule 4.14<\/u> is a true and
\ncomplete list of all Indebtedness of Borrower outstanding immediately prior to
\nthe Closing Date that is to remain outstanding immediately after the Closing
\nDate. Such Schedule accurately reflects the aggregate principal amount of such
\nIndebtedness and the principle terms thereof and whether (and to what extent)
\nsuch Indebtedness is secured.<\/p>\n

-26-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

4.15 Filing of Tax Returns and Payment of Taxes<\/u>. Except where the
\nfailure to do so could not reasonably result in a Material Adverse Change:<\/p>\n

(a) Borrower has duly and timely filed, or caused to be duly and timely
\nfiled, all Tax Returns required to be filed by it in respect of Taxes, and has
\nduly and timely paid, or caused to be duly and timely paid, all Taxes due and
\npayable by it as required by Applicable Law, including all Taxes assessed,
\nreassessed or for which a demand for payment was made by any Governmental
\nAuthority, except when and so long as the validity of any such Taxes is being
\ncontested in good faith by it or any other Person on its behalf through
\nappropriate proceedings, such contest is a Permitted Protest, and adequate
\nprovisions for such Taxes have been made in its financial statements in
\naccordance with GAAP.<\/p>\n

(b) Borrower has duly and timely withheld, or caused to be duly and timely
\nwithheld, all Taxes and other amounts required to be withheld by it in
\naccordance with Applicable Law from any amount paid, or credited, or deemed to
\nbe paid or credited by it to or for the account of any Person (including any
\nemployees, officers or any non-resident Person), and has duly and timely
\nremitted, or caused to be duly and timely remitted, to the appropriate
\nGovernmental Authority such Taxes required by Applicable Law to be remitted by
\nit.<\/p>\n

(c) Borrower has not failed to pay any Taxes which has or would result in a
\nLien (other than a Permitted Lien) on its property. Borrower has only contested
\na Permitted Lien that is subject to a Permitted Protest.<\/p>\n

4.16 Royalty Payments<\/u>. Schedule 4.16<\/u> lists all contracts or
\nother agreements between Borrower and any other Person pursuant to which
\nBorrower has made any royalty or similar payments in either of the two Fiscal
\nyears prior to the Closing Date.<\/p>\n

4.17 Complete Disclosure<\/u>. All factual information (taken as a whole)
\nfurnished by or on behalf of Borrower in writing to Lender (including all
\ninformation contained in the Schedules hereto or in the other Loan Documents)
\nfor purposes of or in connection with this Agreement, the other Loan Documents
\nor any transaction contemplated herein or therein is, and all other such factual
\ninformation (taken as a whole) hereafter furnished by or on behalf of Borrower
\nin writing to Lender will be, as of the date provided, true and accurate in all
\nmaterial respects on the date as of which such information is dated or certified
\nor otherwise speaks and not incomplete by omitting to state any fact necessary
\nto make such information (taken as a whole) not misleading in any material
\nrespect at such time in light of the circumstances under which such information
\nwas provided. On the Closing Date, the Business Plan (giving effect to the
\nPurchase and Sale) represents, and as of the date on which any other Business
\nPlan is delivered to Lender, such additional Business Plans represent,
\nBorrower’s good faith best estimate of its future performance for the periods
\ncovered thereby.<\/p>\n

4.18 Reserved<\/u>.<\/p>\n

4.19 Insurance<\/u>. Schedule 4.19<\/u> annexed hereto, is a schedule of
\nall insurance policies owned by Borrower or under which Borrower is the named
\ninsured. Each such policy is in full force and effect. Neither the issuer of any
\nsuch policy nor Borrower is in default or violation of<\/p>\n

-27-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

any such policy. The coverage reflected on Schedule 4.19<\/u> satisfies the
\nrequirements of Section 5.6<\/u>.<\/p>\n

4.20 Requirements of Law<\/u>. To Borrower’s knowledge, Borrower is in
\ncompliance with, and shall hereafter comply with and use its assets in
\ncompliance with, all requirements of Applicable Law except where the failure of
\nsuch compliance will not be reasonably likely to result in a Material Adverse
\nChange. Borrower has not received any notice of any violation of any requirement
\nof law (other than of a violation which could not be reasonably likely to result
\nin a Material Adverse Change) which violation has not been cured or otherwise
\nremedied.<\/p>\n

4.21 No Margin Stock<\/u>. Borrower is not engaged in the business of
\nextending credit for the purpose of purchasing or carrying any margin stock
\n(within the meaning of Regulations U, T, and X of the Board of Governors of the
\nFederal Reserve System of the United States). No part of the proceeds of any
\nBorrowing hereunder will be used at any time to purchase or carry any such
\nmargin stock or to extend credit to others for the purpose of purchasing or
\ncarrying any such margin stock.<\/p>\n

4.22 Investment Company Status<\/u>. Borrower is not an “investment
\ncompany” as defined in, or subject to regulation under, the Investment Company
\nAct of 1940.<\/p>\n

4.23 No Events of Default<\/u>. As of any date of determination, both
\nbefore and after giving effect to the making of any Advances, there are no
\nEvents of Default.<\/p>\n

4.24 Use of Proceeds<\/u>. The proceeds of any Advance is neither intended
\nor anticipated to be used nor been used in any way which would cause a breach of
\nSection 6.15<\/u> or otherwise result in an Event of Default.<\/p>\n

4.25 Shareholder Agreements<\/u>. Schedule 4.25<\/u> lists all
\nShareholder Agreements in place as of the Closing Date, including any voting
\nagreements among shareholders, concerning any class or all classes of Borrower’s
\ncapital stock, including Preferred Stock.<\/p>\n

4.26 Investments<\/u>. Schedule 4.26<\/u> lists all Investments of
\nBorrower, or any agreements or other legally binding commitments made by
\nBorrower to invest in any Person, existing as of the Closing Date.<\/p>\n

5. AFFIRMATIVE COVENANTS<\/u><\/strong>.<\/p>\n

Borrower covenants and agrees that, so long as this Agreement and any other
\nLoan Document remains in effect and until full and final payment of the
\nObligations (other than any inchoate Obligations which have not been asserted
\nand are not otherwise known to Borrower or Lender), Borrower shall and shall
\ncause each of its Subsidiaries to do all of the following:<\/p>\n

5.1 Accounting System<\/u>. Maintain a system of accounting that enables
\nBorrower to produce financial statements in accordance with GAAP.<\/p>\n

5.2 Financial Statements, Reports, Certificates<\/u>. Deliver to Lender:\n<\/p>\n

-28-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(a) as soon as available, but in any event within 15 days after the end of
\neach month during each of Borrower’s Fiscal years,<\/p>\n

(i) a Borrower prepared Consolidated and individual balance sheet, income
\nstatement, and statement of cash flow covering Borrower’s and its Subsidiaries’
\noperations during such period and comparing the then current Business Plan and
\nthe same period during the prior year on a Consolidated, consolidating and
\nindividual basis,<\/p>\n

(ii) a certificate signed by the chief financial officer of Borrower to the
\neffect that:<\/p>\n

(A) the financial statements delivered hereunder have been prepared in
\naccordance with GAAP (except for the lack of footnotes and being subject to
\nfiscal year-end audit adjustments) and fairly present in all material respects
\nthe financial condition of Borrower and its Subsidiaries,<\/p>\n

(B) the representations and warranties of Borrower contained in this
\nAgreement and the other Loan Documents are true and correct in all material
\nrespects on and as of the date of such certificate, as though made on and as of
\nsuch date (except to the extent that such representations and warranties relate
\nsolely to an earlier date), and<\/p>\n

(C) there does not exist any condition or event that constitutes a Default or
\nEvent of Default (or, to the extent of any non-compliance, describing such
\nnon-compliance as to which he or she may have knowledge and what action Borrower
\nhas taken, is taking, or proposes to take with respect thereto).<\/p>\n

(b) Reserved;<\/p>\n

(c) as soon as available, but in any event within 90 days after the end of
\nBorrower’s Fiscal year, Consolidated and consolidating financial statements of
\nBorrower and its Subsidiaries for each such Fiscal year, audited by independent
\ncertified public accountants selected by Borrower and reasonably acceptable to
\nLender and certified, without any qualifications, by such accountants to have
\nbeen prepared in accordance with GAAP (such audited financial statements to
\ninclude a balance sheet, income statement, and statement of cash flow and, if
\nprepared, such accountants’ letter to management) together with a certificate of
\nsuch accountants addressed to Lender stating that such accountants do not have
\nknowledge of the existence of any Default or Event of Default;<\/p>\n

(d) as soon as available but in any event:<\/p>\n

(i) within 15 days after the end of each month during the first twelve
\ncalendar months after the Closing Date copies of Borrower’s monthly Business
\nPlan, for the next four week period, on a week-by-week basis; and<\/p>\n

(ii) prior to the last Business Day of each January, in each Fiscal year of
\nBorrower, copies of Borrower’s annual Business Plan, for the forthcoming year,
\non a month-by-month basis, year by year;<\/p>\n

-29-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

each such Business Plan to be in form and substance (including as to scope
\nand underlying assumptions) satisfactory to Lender in its Permitted Discretion
\ncertified by the chief financial officer of Borrower (in such officer’s capacity
\nas such and not individually) as being such officer’s good faith best estimate
\nof the financial performance of Borrower and its Subsidiaries during the period
\ncovered thereby,<\/p>\n

(e) if and when filed by Borrower,<\/p>\n

(i) any filings made by Borrower with the SEC or any other securities
\ncommission in any other jurisdiction,<\/p>\n

(ii) copies of Borrower’s federal income tax returns, and any amendments
\nthereto, filed with the Internal Revenue Service or any other relevant
\nGovernmental Authority, and<\/p>\n

(iii) any other information that is provided by Borrower to its shareholders
\ngenerally solely in their capacities as shareholders,<\/p>\n

(f) if and when filed by Borrower and as reasonably requested by Lender,
\nsatisfactory evidence of payment of any applicable Taxes in each jurisdiction in
\nwhich (i) Borrower is required to pay any Taxes, (ii) where Borrower’s failure
\nto pay any such applicable Taxes would result in a Lien (other than a Permitted
\nLien) on the properties or assets of Borrower, or (iii) where Borrower’s failure
\nto pay any such applicable Taxes reasonably could be expected to result in a
\nMaterial Adverse Change,<\/p>\n

(g) as soon as Borrower has knowledge of any event or condition that
\nconstitutes a Default or an Event of Default, notice thereof and a statement of
\nthe curative action that Borrower propose to take with respect thereto, and<\/p>\n

(h) upon the request of Lender, any other report reasonably requested
\nrelating to the financial condition of Borrower.<\/p>\n

Borrower agrees that it and its Subsidiaries will have the same Fiscal year.
\nBorrower agrees that its independent certified public accountants are authorized
\nto communicate with Lender and to release to Lender whatever financial
\ninformation concerning Borrower that Lender reasonably may request. Borrower
\nwaives the right to assert a confidential relationship, if any, it may have with
\nany accounting firm or service bureau in connection with any information
\nrequested by Lender pursuant to or in accordance with this Agreement, and agree
\nthat Lender may contact directly any such accounting firm or service bureau in
\norder to obtain such information.<\/p>\n

5.3 Returns<\/u>. Account for returns of Inventory and Customer Credit
\nLiabilities and record the effects thereof on the general ledger on the same
\nbasis and in accordance with the usual customary practices of Borrower, as they
\nexist at the time of the execution and delivery of this Agreement.<\/p>\n

5.4 Maintenance of Properties<\/u>. Maintain and preserve all of their
\nproperties which are necessary or useful in the proper conduct to Borrower’s
\nbusiness in good working order and condition, ordinary wear and tear excepted,
\nand comply at all times with the provisions of all<\/p>\n

-30-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

material leases to which it is a party as lessee, so as to prevent any loss
\nor forfeiture thereof or thereunder.<\/p>\n

5.5 Tax Matters<\/u>.<\/p>\n

(a) Duly and timely file, or cause to be duly and timely filed, all Tax
\nReturns required to be filed by it in respect of Taxes, and duly and timely pay,
\nor cause to be duly and timely paid, all Taxes due and payable by it as required
\nby Applicable Law, including all Taxes assessed, reassessed or for which a
\ndemand for payment is made by any Governmental Authority, except when and so
\nlong as the validity of any such Taxes is being contested in good faith by it or
\nany other Person on its behalf through appropriate proceedings, and such contest
\nis a Permitted Protest and adequate provisions for such Taxes have been made in
\nits financial statements in accordance with GAAP or where the failure to pay
\nsuch Tax will not be reasonably likely to result in, or result in, a Material
\nAdverse Change.<\/p>\n

(b) Borrower will duly and timely withhold, or cause to be duly and timely
\nwithheld, all material Taxes required to be withheld by it in accordance with
\nApplicable Law from any amount paid, or credited, or deemed to be paid or
\ncredited by it to or for the account of any Person (including any employees,
\nofficers or any non-resident Person), and will duly and timely remit, or cause
\nto be duly and timely remitted, to the appropriate Governmental Authority such
\nTaxes required by Applicable Law to be remitted by it.<\/p>\n

(c) Borrower will not fail to pay any Taxes or other amounts which would
\nresult in a Lien (other than a Permitted Lien) on its property. Borrower shall
\nonly contest a Permitted Lien that is subject to a Permitted Protest.<\/p>\n

(d) Borrower will, upon written request, furnish to Lender satisfactory
\nevidence that Borrower has paid such Taxes in each jurisdiction in which
\nBorrower is required to pay such Taxes.<\/p>\n

5.6 Insurance<\/u>.<\/p>\n

(a) At Borrower’s expense, maintain insurance respecting its property and
\nassets wherever located, covering loss or damage by fire, theft, explosion, and
\nall other hazards and risks as ordinarily are insured against by other Persons
\nengaged in the same or similar businesses. Borrower also shall maintain business
\ninterruption, public liability, and product liability insurance, as well as
\ninsurance against larceny, embezzlement, and criminal misappropriation. All such
\npolicies of insurance shall be in such amounts and with such insurance companies
\nas are reasonably satisfactory to Lender. Borrower shall deliver copies of all
\nsuch policies to Lender.<\/p>\n

(b) Borrower shall give Lender prompt notice of any material loss covered by
\nsuch insurance. Any monies received as payment for any loss under any insurance
\npolicy mentioned above (other than liability insurance policies) or as payment
\nof any award or compensation for condemnation or taking by eminent domain, shall
\nbe applied either to the prepayment of the obligations under the Senior Credit
\nAgreement or shall be used to fund the cost of repairs, replacements, or
\nrestorations. Any such repairs, replacements, or restorations<\/p>\n

-31-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

shall be affected with reasonable promptness and shall be of a value at least
\nequal to the value of the items or property destroyed prior to such damage or
\ndestruction.<\/p>\n

5.7 Location of Inventory and Equipment<\/u>. Keep the Inventory and
\nEquipment at the locations identified on Schedule 5.7<\/u> (except for
\nInventory or Equipment in transit and except for samples) or such other
\nlocations identified by written notice to Lender not less than 10 Business Days
\nprior to the date on which the Inventory or Equipment is moved to such new
\nlocation, so long as such new location is within the continental United States.\n<\/p>\n

5.8 Compliance with Laws<\/u>. Comply with the requirements of all
\nApplicable Law, including the Fair Labor Standards Act and the Americans With
\nDisabilities Act, other than laws, rules, regulations, and orders the
\nnon-compliance with which, individually or in the aggregate, would not result in
\nand reasonably could not be expected to result in a Material Adverse Change.\n<\/p>\n

5.9 Leases<\/u>. Pay when due all rents and other amounts payable and
\nperform all material obligations under any material leases and subleases to
\nwhich Borrower is a party or by which Borrower’s properties and assets are
\nbound, unless such payments are the subject of a Permitted Protest.<\/p>\n

5.10 Existence<\/u>. At all times preserve and keep in full force and
\neffect Borrower’s valid existence and good standing and any rights and
\nfranchises material to Borrower’s businesses, including those with respect to
\ntrademark licenses and the Purchase and Sale Documents.<\/p>\n

5.11 Environmental<\/u>. Keep any property either owned or operated by
\nBorrower free of any Environmental Liens or post bonds or other financial
\nassurances sufficient to satisfy the obligations or liability evidenced by such
\nEnvironmental Liens, (b) comply, in all material respects, with Environmental
\nLaws and provide to Lender documentation of such compliance which Lender
\nreasonably requests, (c) promptly notify Lender of any release of a Hazardous
\nMaterial of any reportable quantity from or onto property owned or operated by
\nBorrower and take any Remedial Actions required to abate said release or
\notherwise to come into compliance with applicable Environmental Law, and (d)
\npromptly provide Lender with written notice within 10 days of the receipt of any
\nof the following: (i) notice that an Environmental Lien has been filed against
\nany of the real or personal property of Borrower, (ii) commencement of any
\nEnvironmental Action or notice that an Environmental Action will be filed
\nagainst Borrower, and (iii) notice of a violation, citation, or other
\nadministrative order which reasonably could be expected to result in a Material
\nAdverse Change.<\/p>\n

5.12 Immediate Notice to Lender<\/u>. Borrower shall provide Lender with
\nwritten notice promptly upon the occurrence of any of the following events,
\nwhich written notice shall state with reasonable particularity the facts and
\ncircumstances of the event for which such notice is being given:<\/p>\n

(a) the occurrence of any “default” or “event of default” under any of the
\nEPI Notes, the Schurman Family Notes or the Senior Credit Agreement;<\/p>\n

(b) any notices provided to the Senior Lender pursuant to the Senior Credit
\nAgreement and not otherwise delivered to Lender, other than borrowing notices;\n<\/p>\n

-32-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(c) any change in the Authorized Persons;<\/p>\n

(d) any cessation by Borrower of its making payment to its creditors
\ngenerally as Borrower’s debts become due;<\/p>\n

(e) any failure by Borrower to pay rent at any of Borrower’s locations, which
\nfailure continues for more than two Business Days following the last day on
\nwhich such rent was payable without more than a minimal adverse effect on
\nBorrower;<\/p>\n

(f) any Material Adverse Change;<\/p>\n

(g) the occurrence of any Default or Event of Default;<\/p>\n

(h) any intention on the part of Borrower to discharge Borrower’s present
\nindependent accountants or any withdrawal or resignation by such independent
\naccountants from their acting in such capacity;<\/p>\n

(i) any litigation which, if determined adversely to Borrower, could
\nreasonably be expected to result in a Material Adverse Change;<\/p>\n

(j) at Lender’s request, Borrower shall provide Lender, when so distributed,
\nwith copies of all national or otherwise material advertising copy (including
\nprint advertising and video and radio advertising);<\/p>\n

(k) provide Lender, when received by Borrower, with a copy of any management
\nletter or similar communications from any accountant of Borrower; and<\/p>\n

(l) provide Lender with prompt written notice upon the acquisition or
\nformation of any Subsidiary.<\/p>\n

5.13 Disclosure Updates<\/u>. Promptly and in no event later than five
\nBusiness Days after an Authorized Person or other senior officer of Borrower
\nobtains actual knowledge thereof, (a) notify Lender if any written information,
\nexhibit, schedule, or report furnished to Lender contained any untrue statement
\nof a material fact or omitted to state any material fact necessary to make the
\nstatements contained therein not misleading in light of the circumstances in
\nwhich made at the time made, or (b) correct any defect or error that may be
\ndiscovered therein or in any Loan Document or in the execution, acknowledgement,
\nfiling, or recordation thereof.<\/p>\n

5.14 Solvency<\/u>. Borrower shall be in compliance with Section 4.8<\/u>
\nhereof.<\/p>\n

5.15 Line of Business: Borrower and Subsidiaries<\/u>. Neither Borrower nor
\nany of its Subsidiaries shall engage in any business other than the business in
\nwhich it is currently engaged or a business reasonably related thereto (the
\nconduct of which reasonably related business is reflected in the then current
\nBusiness Plan).<\/p>\n

5.16 Royalty Payments<\/u>. In the event that, as of the end of any Fiscal
\nquarter, Schedule 4.16<\/u> fails to list the Persons to which Borrower paid
\nroyalty payments or any other similar payment in the previous Fiscal quarter,
\nBorrower shall, within 15 days after the end of such<\/p>\n

-33-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

Fiscal quarter, provide Lender with an appendix to such Schedule providing
\ndetails of the Persons to which Borrower paid royalty payments or any other
\nsimilar payment in the previous Fiscal quarter.<\/p>\n

6. NEGATIVE COVENANTS<\/u><\/strong>.<\/p>\n

Borrower covenants and agrees that, so long as this Agreement and any other
\nLoan Document remains in effect and until full and final payment of the
\nObligations (other than any inchoate Obligations which have not been asserted
\nand are not otherwise known to Borrower or Lender), Borrower will not, and will
\nnot permit any of its Subsidiaries to do, any of the following:<\/p>\n

6.1 Indebtedness<\/u>. Create, incur, assume, permit, guarantee, or
\notherwise become or remain, directly or indirectly, liable with respect to any
\nIndebtedness, except:<\/p>\n

(a) Indebtedness evidenced by this Agreement and the other Loan Documents;\n<\/p>\n

(b) Indebtedness set forth on Schedule 4.14<\/u>;<\/p>\n

(c) Permitted Purchase Money Indebtedness;<\/p>\n

(d) refinancings, renewals, or extensions of Indebtedness permitted under
\nclauses (b) and (c) of this Section 6.1<\/u> (and continuance or renewal of
\nany Permitted Liens associated therewith) so long as: (i) the terms and
\nconditions of such refinancings, renewals, or extensions do not, in Lender’s
\nreasonable judgment, materially impair the prospects of repayment of the
\nObligations by Borrower or materially impair Borrower’s creditworthiness, (ii)
\nsuch refinancings, renewals, or extensions do not result in an increase in the
\nprincipal amount of the Indebtedness so refinanced, renewed, or extended, (iii)
\nsuch refinancings, renewals, or extensions do not result in a shortening of the
\naverage weighted maturity of the Indebtedness so refinanced, renewed, or
\nextended, nor are they on terms or conditions, that, taken as a whole, are
\nmaterially more burdensome or restrictive to Borrower, and (iv) if the
\nIndebtedness that is refinanced, renewed, or extended was subordinated in right
\nof payment to the Obligations, then the terms and conditions of the refinancing,
\nrenewal, or extension Indebtedness must include subordination terms and
\nconditions that are at least as favorable to Lender as those that were
\napplicable to the refinanced, renewed, or extended Indebtedness;<\/p>\n

(e) Indebtedness comprising Permitted Investments; and<\/p>\n

(f) Indebtedness secured by Permitted Liens;<\/p>\n

(g) Subordinated Indebtedness;<\/p>\n

(h) Senior Indebtedness; and<\/p>\n

(i) other Indebtedness not to exceed $22,000 in the aggregate at any time
\noutstanding.<\/p>\n

-34-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

6.2 Liens<\/u>. Create, incur, assume, or permit to exist, directly or
\nindirectly, any Lien on or with respect to any of its assets, of any kind,
\nwhether now owned or hereafter acquired, or any income or profits therefrom,
\nexcept for Permitted Liens (including Liens that are replacements of Permitted
\nLiens to the extent that the original Indebtedness is refinanced, renewed, or
\nextended under Section 6.1(d)<\/u> and so long as the replacement Liens only
\nencumber those assets that secured the refinanced, renewed, or extended
\nIndebtedness).<\/p>\n

6.3 Restrictions on Fundamental Changes<\/u>.<\/p>\n

(a) Enter into any merger, consolidation, reorganization, or
\nrecapitalization, or reclassify its Stock or otherwise change Borrower’s type of
\norganization, jurisdiction of organization or other legal or corporate
\nstructure.<\/p>\n

(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
\ndissolution).<\/p>\n

(c) Convey, sell, lease, license, assign, transfer, or otherwise dispose of,
\nin one transaction or a series of transactions, all or any substantial part of
\nits assets (other than as a Permitted Disposition).<\/p>\n

(d) Purchase or otherwise acquire substantially all of the capital stock or
\nall or substantially all of the assets of any other Person with a value of more
\nthan $250,000 in the aggregate.<\/p>\n

6.4 Disposal of Assets<\/u>. Other than Permitted Dispositions, convey,
\nsell, lease, license, assign, transfer, or otherwise dispose of any of the
\nassets of Borrower.<\/p>\n

6.5 Change of Name or Address<\/u>. Change Borrower’s name or
\norganizational identification number or relocate Borrower’s chief executive
\noffice to a new location; provided, however, that Borrower may change its name
\nor chief executive office location upon at least 30 days prior written notice by
\nBorrower to Lender of such change.<\/p>\n

6.6 Nature of Business<\/u>. Make any change in the principal nature of
\nBorrower’s business except as otherwise permitted by Section 5.15<\/u>.<\/p>\n

6.7 Prepayments and Amendments<\/u>.<\/p>\n

(a) Except in connection with a refinancing permitted by Section
\n6.1(d)<\/u> and regularly scheduled payments not prohibited under the terms of
\nany subordination agreement, prepay, redeem, defease, purchase, or otherwise
\nacquire any Indebtedness of Borrower, other than the Obligations in accordance
\nwith this Agreement.<\/p>\n

(b) Except in connection with a refinancing permitted by Section
\n6.1(d)<\/u>, directly or indirectly, amend, modify, alter, increase, or change
\nany of the terms or conditions of any agreement, instrument, document,
\nindenture, or other writing evidencing or concerning Indebtedness permitted
\nunder Sections 6.1(b)<\/u>, (c)<\/u>, (g)<\/u> or (h)<\/u>.<\/p>\n

-35-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(c) Directly or indirectly, amend, modify, alter, increase or change any of
\nthe terms or conditions of any Purchase and Sale Document without Lender’s prior
\nconsent.<\/p>\n

6.8 Change of Control<\/u>. Cause, permit, or suffer, directly or
\nindirectly, any Change of Control.<\/p>\n

6.9 Distributions<\/u>. Make or permit any Subsidiary to, directly or
\nindirectly (i) declare, order, pay or make any Restricted Payment or (ii) set
\naside any sum or property therefore or exercise any set-off or similar rights of
\nBorrower, if any, with respect to any Subordinated Indebtedness.<\/p>\n

6.10 Accounting Methods<\/u>. Modify or change its method of accounting
\n(other than as may be required to conform to GAAP) or enter into, modify, or
\nterminate any agreement currently existing, or at any time hereafter entered
\ninto with any third party accounting firm or service bureau for the preparation
\nor storage of Borrower’s accounting records without said accounting firm or
\nservice bureau agreeing to provide Lender information regarding Borrower’s
\nfinancial condition.<\/p>\n

6.11 Investments<\/u>. Except for Permitted Investments, directly or
\nindirectly, make or acquire any Investment, or incur any liabilities (including
\ncontingent obligations) for or in connection with any Investment.<\/p>\n

6.12 Transactions with Affiliates<\/u>. Directly or indirectly enter into
\nor permit to exist any transaction with any Affiliate of Borrower (including,
\nwithout limitation, purchases of Inventory and other transactions between
\nBorrower or any of its Affiliates) except for transactions that are in the
\nordinary course of Borrower’s business, upon fair and reasonable terms, fully
\ndisclosed to Lender in reasonable detail, no less favorable to Borrower than
\nwould be obtained in an arm’s length transaction with a non-Affiliate.<\/p>\n

6.13 Store Openings and Closings<\/u>. Commit to open, open or close any
\nlocation at which Borrower maintains, offers for sale or stores any Inventory
\nunless Borrower has provided Lender at least 30 days’ prior written notice of
\nsuch commitment, opening or closing and (i) in the case of any such opening,
\nsuch opening is consistent with the then current Business Plan or Lender has
\nconsented thereto in writing or (ii) in the case of any such closing, such
\nclosing is consistent with the then current Business Plan or Lender has
\nconsented thereto in writing and is conducted in a manner consistent with
\nBorrower’s historical store closing practices, including, without limitation, as
\nto any third party agent that Borrower propose to employ in connection
\ntherewith, provided further that if Borrower intends that 5% or more of
\nBorrower’s (individually as to Borrower or in the aggregate among Borrower and
\nits Subsidiaries) stores are to be closed within any Fiscal year or within any
\nperiod of 12 consecutive months (“Multiple Closing Minimum<\/u>“), Borrower
\nmust retain a nationally-recognized liquidator (or such other Person approved by
\nLender) as either a consultant or liquidator in connection with the closing of
\neach of such stores. Borrower may purchase Real Property as part of any store
\nopening permitted hereunder provided that (i) such purchase is consistent with
\nthe current Business Plan approved by Lender, (ii) the financing of such
\npurchase of Real Property is permitted hereunder and is consistent with the
\ncurrent Business Plan approved by Lender, and (iii) such purchase and, if
\napplicable, the financing thereof, are consented to by Lender in its sole
\ndiscretion.<\/p>\n

-36-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

6.14 Suspension<\/u>. Suspend or go out of a substantial portion of
\nBorrower’s business.<\/p>\n

6.15 Use of Proceeds<\/u>. Use the proceeds of the Advances for any purpose
\nother than making (a) any scheduled or required payment of interest or principal
\nof the Senior Indebtedness, or subject to the terms of the applicable
\nSubordination Agreement, the Subordinated Indebtedness, (b) a payment of rent
\nunder any sublease listed on Schedule 6.15<\/u> or (c) a payment of payroll
\nobligations of Borrower or its Subsidiaries that are due and payable.<\/p>\n

6.16 Benefit Plans<\/u>. No Borrower, any of its Subsidiaries, or any of
\ntheir ERISA Affiliates shall maintain or contribute to any Benefit Plan.<\/p>\n

6.17 Warrants<\/u>. Borrower shall not, and shall not permit any Subsidiary
\nto, grant or issue any warrants with respect to its Stock.<\/p>\n

6.18 Shareholder Agreements<\/u>. None of the Shareholder Agreements
\ndescribed on Schedule 4.25<\/u> shall be amended, modified, superseded,
\nwaived, or replaced without Lender’s prior written consent (not to be
\nunreasonably withheld or delayed).<\/p>\n

6.19 Fiscal Year<\/u>. Borrower shall not change its Fiscal year from the
\ncurrent twelve month period that comprises its Fiscal year as of the Closing
\nDate.<\/p>\n

7. EVENTS OF DEFAULT<\/u><\/strong>.<\/p>\n

Any one or more of the following events shall constitute an event of default
\n(each, an “Event of Default<\/u>“) under this Agreement:<\/p>\n

7.1 Payment<\/u>. If Borrower fails to pay when due and payable or when
\ndeclared due and payable, all or any portion of the Obligations (whether of
\nprincipal, interest (including any interest which, but for the provisions of the
\nBankruptcy Code, would have accrued on such amounts), fees and charges due
\nLender, reimbursement of Lender Expenses, or other amounts constituting
\nObligations);<\/p>\n

7.2 Covenants, etc<\/u>.<\/p>\n

(a) If Borrower fails to perform, keep, or observe any term, provision,
\ncondition, covenant, or agreement contained in Articles 5<\/u> or 6<\/u> of
\nthis Agreement or in any of the other Loan Documents;<\/p>\n

(b) If Borrower fails to perform, keep, or observe any other term, provision,
\ncondition, covenant, or agreement contained in this Agreement or any other Loan
\nDocument, and such failure shall continue unremedied for a period of 15 days
\nafter the first to occur of Borrower’s actual knowledge thereof or notice
\nthereof from Lender to Borrower;<\/p>\n

7.3 Attachment<\/u>. If any material portion of Borrower’s or any of its
\nSubsidiaries’ assets is attached, seized, subjected to a writ or distress
\nwarrant, levied upon, or comes into the possession of any third Person;<\/p>\n

-37-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

7.4 Insolvency<\/u>. If an Insolvency Proceeding is commenced by Borrower
\nor any of its Subsidiaries;<\/p>\n

7.5 Involuntary Insolvency<\/u>. If an Insolvency Proceeding is commenced
\nagainst Borrower or any of its Subsidiaries and any of the following events
\noccur: (a) Borrower or the applicable Subsidiary consents to the institution of
\nthe Insolvency Proceeding against it, (b) the petition commencing the Insolvency
\nProceeding is not timely controverted, (c) the petition commencing the
\nInsolvency Proceeding is not dismissed within 60 calendar days of the date of
\nthe filing thereof, (d) an interim trustee or interim receiver or a trustee or
\nreceiver is appointed to take possession of all or any substantial portion of
\nthe properties or assets of, or to operate all or any substantial portion of the
\nbusiness of, Borrower or any of its Subsidiaries, or (e) an order for relief
\nshall have been entered therein;<\/p>\n

7.6 Injunction<\/u>. If Borrower or any of its Subsidiaries is enjoined,
\nrestrained, or in any way prevented by court order or otherwise from continuing
\nto conduct all or any material part of its business affairs;<\/p>\n

7.7 Levy<\/u>. If a notice of Lien, levy, or assessment is filed of record
\nwith respect to any material portion of Borrower’s or any of its Subsidiaries’
\nassets by the United States, or any department, agency, or instrumentality
\nthereof, or by any state, county, municipal, governmental agency or other
\nGovernmental Authority, or if any taxes or debts owing at any time hereafter to
\nany one or more of such entities becomes a Lien, whether choate or otherwise,
\nupon Borrower’s or any of its Subsidiaries’ assets and the same is not paid on
\nthe payment date thereof;<\/p>\n

7.8 Judgment<\/u>. If one or more judgments or orders for the payment of
\nmoney is rendered against Borrower in excess of $250,000 in the aggregate
\n(provided<\/u>, that<\/u>, any judgment covered by insurance where the
\ninsurer has assumed responsibility in writing for such judgment and acknowledged
\nthat Borrower will receive the proceeds of such insurance within 30 days of the
\nissuance of a final, non-appealable judgment and execution thereon is
\neffectively stayed shall not be included in calculating such amount) and shall
\nremain undischarged or unvacated for a period in excess of 30 days or execution
\nshall at any time not be effectively stayed, or any judgment other than for the
\npayment of money, or injunction, attachment, garnishment or execution is
\nrendered against Borrower or any of its assets having a value in excess of
\n$250,000 and shall remain undischarged or unvacated for a period in excess of 30
\ndays or execution shall at any time not be effectively stayed;<\/p>\n

7.9 Material Agreements<\/u>. If there is a default by Borrower in any
\nPurchase and Sale Document or by any party (other than Lender) in any other
\nagreement material to the operations of the business of Borrower to which
\nBorrower or any of its Subsidiaries is a party and such default (a) occurs at
\nthe final maturity of the obligations thereunder (with respect to monetary
\nobligations) or on the date required for performance (with respect to
\nperformance obligations), or (b) results in a right by the other party thereto,
\nirrespective of whether exercised, to accelerate the maturity of Borrower’s or
\nits Subsidiaries’ obligations thereunder, to terminate such agreement, or to
\nrefuse to renew such agreement pursuant to an automatic renewal right therein,
\nunless such default is a monetary default and the amount necessary for Borrower
\nto pay to cure such default is less than $250,000 and Borrower has established
\nadequate reserves therefor and is contesting such default in good faith;<\/p>\n

-38-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

7.10 Insurance<\/u>. Any event occurs, as a result of which
\nrevenue-producing activities (except to the extent such lost revenue is promptly
\nreplaced with business interruption insurance) cease or are substantially
\ncurtailed at (a) any of Borrower’s principal distribution centers and such
\ncessation or curtailment continues for more than five Business Days or (b) any
\nother facility or facilities of Borrower generating more than 10% of Borrower’s
\nConsolidated revenues for Borrower’s Fiscal year preceding such event, and such
\ncessation or curtailment continues for more than 20 days;<\/p>\n

7.11 Subordinated Debt<\/u>. If Borrower or any of its Subsidiaries makes
\nany payment on account of Subordinated Indebtedness, except to the extent such
\npayment is permitted by the terms of the subordination provisions applicable to
\nsuch Indebtedness;<\/p>\n

7.12 Misrepresentation<\/u>. If any material misstatement or
\nmisrepresentation exists in any warranty, representation, statement, or Record
\nmade to Lender by Borrower, its Subsidiaries, or any officer, employee, agent,
\nor director of Borrower or any of its Subsidiaries;<\/p>\n

7.13 Loan Documents<\/u>. Any provision of any Loan Document or any
\nPurchase and Sale Document shall at any time for any reason be declared to be
\nnull and void, or the validity or enforceability thereof shall be contested by
\nor on behalf of Borrower, or a proceeding shall be commenced seeking to
\nestablish the invalidity or unenforceability thereof (as the case may be), or
\nBorrower shall deny that Borrower has any liability or obligation purported to
\nbe created under any Loan Document or any Purchase and Sale Document, in each
\ncase other than in connection with any Leasehold Interest subject to the
\nSublease Requirement;<\/p>\n

7.14 Material Adverse Change<\/u>. If there is a Material Adverse Change;\n<\/p>\n

7.15 Change of Control<\/u>. If a Change of Control shall occur without the
\nconsent of Lender; or<\/p>\n

7.16 Material Restraint<\/u>. The indictment of, or institution of any
\nlegal process or proceeding against Borrower or its Subsidiary where the relief,
\npenalties or remedies sought or available include the forfeiture of any property
\nof Borrower or Subsidiary and\/or the imposition of any stay or other order, the
\neffect of which could be to restrain in any material way the conduct by Borrower
\nof its business in the ordinary course or would otherwise result in a Material
\nAdverse Change.<\/p>\n

8. LENDER’S RIGHTS AND REMEDIES<\/u><\/strong>.<\/p>\n

8.1 Rights and Remedies<\/u>. Upon the occurrence, and during the
\ncontinuation, of an Event of Default, Lender may exercise any of the rights and
\nremedies provided for in this Agreement or any other Loan Document or otherwise
\navailable to it at law or in equity, such rights and remedies to include,
\nwithout limitation, the following, all of which are authorized by Borrower:<\/p>\n

(a) declare all Obligations, whether evidenced by this Agreement, by any of
\nthe other Loan Documents, or otherwise, immediately due and payable;<\/p>\n

-39-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(b) cease advancing money or extending credit to or for the benefit of
\nBorrower under this Agreement, under any of the Loan Documents, or under any
\nother agreement between Borrower and Lender;<\/p>\n

(c) terminate this Agreement and any of the other Loan Documents as to any
\nfuture liability or obligation of Lender but without affecting the Obligations;\n<\/p>\n

(d) without notice to Borrower (such notice being expressly waived), and
\nwithout constituting a retention of any collateral in satisfaction of an
\nobligation (within the meaning of the Code), set off and apply to the
\nObligations any and all (i) balances and deposits of Borrower held by Lender, or
\n(ii) Indebtedness at any time owing to or for the credit or the account of
\nBorrower held by Lender; and<\/p>\n

(e) Lender shall have all other rights and remedies available to it at law or
\nin equity pursuant to any other Loan Documents.<\/p>\n

8.2 Remedies Cumulative<\/u>. The rights and remedies of Lender under this
\nAgreement, the other Loan Documents, and all other agreements shall be
\ncumulative and may be exercised simultaneously. Lender shall have all other
\nrights and remedies not inconsistent herewith as provided under the Code, by
\nlaw, or in equity. No exercise by Lender of one right or remedy shall be deemed
\nan election, and no waiver by Lender of any Event of Default shall be deemed a
\ncontinuing waiver. No delay by Lender shall constitute a waiver, election, or
\nacquiescence by it.<\/p>\n

9. TAXES AND EXPENSES<\/u><\/strong>.<\/p>\n

If Borrower fails to pay any monies (whether Taxes or, in the case of leased
\nproperties or assets, rents or other amounts payable under such leases) due to
\nthird Persons, or fails to make any deposits or furnish any required proof of
\npayment or deposit, all as required under the terms of this Agreement, then,
\nLender, in its sole discretion and without prior notice to Borrower, may do any
\nor all of the following: (a) make payment of the same or any part thereof, or
\n(b) set up such reserves in Borrower’s Loan Account as Lender deems necessary to
\nprotect itself from the exposure created by such failure. Any such amounts paid
\nby Lender shall constitute Lender Expenses and any such payments shall not
\nconstitute an agreement by Lender to make similar payments in the future or a
\nwaiver by Lender of any Event of Default under this Agreement. Lender need not
\ninquire as to, or contest the validity of, any such expense, tax, or Lien and
\nthe receipt of the usual official notice for the payment thereof shall be
\nconclusive evidence that the same was validly due and owing.<\/p>\n

10. WAIVERS; INDEMNIFICATION<\/u><\/strong>.<\/p>\n

10.1 Demand; Protest; etc<\/u>. Borrower waives demand, protest, notice of
\nprotest, notice of intention to accelerate, notice of acceleration, notice of
\ndefault or dishonor, notice of payment and nonpayment, nonpayment at maturity,
\nrelease, compromise, settlement, extension, or renewal of documents,
\ninstruments, chattel paper, and guarantees at any time held by the Lender on
\nwhich Borrower may in any way be liable.<\/p>\n

10.2 Indemnification<\/u>. Borrower shall pay, indemnify, defend, and hold
\nLender, Lender-Related Persons, and each of their respective officers,
\ndirectors, employees, agents,<\/p>\n

-40-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

attorneys, and attorneys-in-fact (each, an “Indemnified Person<\/u>“)
\nharmless (to the fullest extent permitted by law) from and against any and all
\nclaims, demands, suits, actions, investigations, proceedings, and damages, and
\nall reasonable attorneys fees and disbursements and other costs and expenses
\nactually incurred in connection therewith (as and when they are incurred and
\nirrespective of whether suit is brought), at any time asserted against, imposed
\nupon, or incurred by any of them (a) in connection with or as a result of or
\nrelated to the execution, delivery, enforcement, performance, or administration
\nof this Agreement, any of the other Loan Documents, or the transactions
\ncontemplated hereby or thereby, and (b) with respect to any investigation,
\nlitigation, or proceeding related to this Agreement, any other Loan Document, or
\nthe use of the proceeds of the credit provided hereunder (irrespective of
\nwhether any Indemnified Person is a party thereto), or any act, omission, event,
\nor circumstance in any manner related thereto (all the foregoing, collectively,
\nthe “Indemnified Liabilities<\/u>“). The foregoing to the contrary
\nnotwithstanding, Borrower shall have no obligation to any Indemnified Person
\nunder this Section 10.2<\/u> with respect to any Indemnified Liability that a
\ncourt of competent jurisdiction finally determines to have resulted from the
\ngross negligence or willful misconduct of such Indemnified Person. This
\nprovision shall survive the termination of this Agreement and the repayment of
\nthe Obligations. If any Indemnified Person makes any payment to any other
\nIndemnified Person with respect to an Indemnified Liability as to which Borrower
\nwas required to indemnify the Indemnified Person receiving such payment, the
\nIndemnified Person making such payment is entitled to be indemnified and
\nreimbursed by Borrower with respect thereto. Borrower shall be subrogated to an
\nIndemnified Person’s rights of recovery to the extent of any liabilities
\nsatisfied by Borrower and such Indemnified Person shall execute and deliver such
\ninstruments and papers as are necessary to assign such rights and assist in the
\nexecution thereof; provided, however, that, and, notwithstanding the foregoing
\nto the contrary, such subrogation rights of Borrower may not be exercised until
\npayment in full of all Obligations due hereunder and the termination of Lender’s
\nobligation to make Advances under the Revolving Credit and shall be subordinate
\nto the Obligations due Lender in all respects. WITHOUT LIMITATION, THE
\nFOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO
\nINDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF
\nANY NEGLIGENT ACT (NOT CONSTITUTING GROSS NEGLIGENCE) OR OMISSION OF SUCH
\nINDEMNIFIED PERSON OR OF ANY OTHER PERSON.<\/strong><\/p>\n

10.3 Costs and Expenses of Lender<\/u>.<\/p>\n

(a) Borrower shall pay from time to time on demand all costs of collection,
\nLender Expenses and all reasonable costs, expenses, and disbursements (including
\nreasonable attorneys’ fees and expenses) which are incurred by Lender in
\nconnection with the preparation, negotiation, execution, administration and
\ndelivery of this Agreement and of any other Loan Documents, and all other
\nreasonable costs, expenses, and disbursements which may be incurred in
\nconnection with or in respect to the credit facility contemplated hereby or
\nwhich otherwise are incurred with respect to the Obligations.<\/p>\n

(b) Borrower shall pay from time to time on demand all Lender Expenses
\n(including reasonable attorneys’ fees and reasonable attorneys’ expenses)
\nincurred, following the occurrence of any Event of Default, by Lender.<\/p>\n

-41-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

(c) Borrower authorizes Lender to pay all such fees and expenses, and in
\nLender’s discretion, to add such fees and expenses to the Loan Account.<\/p>\n

(d) The undertaking on the part of Borrower in this Section 10.3<\/u>
\nshall survive payment of the Obligations and\/or any termination, release, or
\ndischarge executed by Lender in favor of Borrower, other than a termination,
\nrelease, or discharge which makes specific reference to this Section
\n10.3<\/u>.<\/p>\n

11. NOTICES<\/u><\/strong>.<\/p>\n

Unless otherwise provided in this Agreement, all notices or demands by
\nBorrower or Lender to the others relating to this Agreement or any other Loan
\nDocument shall be in writing and (except for financial statements and other
\ninformational documents which may be sent by first-class mail, postage prepaid)
\nshall be personally delivered or sent by registered or certified mail (postage
\nprepaid, return receipt requested), overnight courier, electronic mail (at such
\nemail addresses as Borrower or Lender, as applicable, may designate to each
\nother in accordance herewith), or telefacsimile (with a confirming receipt from
\nthe sending machine) to Borrower or Lender, as the case may be, at its address
\nset forth below:<\/p>\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

If to Borrower: Schurman Fine Papers, d\/b\/a Papyrus 500 Chadbourne Road
\nCaller Box 6030 Fairfield, CA 94533 Attn: Tom Shaw With a copy to: Dominique
\nSchurman Fax No: (707) 428-0641<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

With copies to: Morgan Lewis & Bockius LLP One Market Spear Street Tower
\nSan Francisco, CA 94024 Attn: Scott Karchmer, Esquire Fax No: (415) 442-1001\n<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

If to Lender: American Greetings Corporation One American Road Cleveland,
\nOhio 44144 Attn: Chris Haffke Fax No: (216) 252-6741<\/p>\n<\/td>\n<\/tr>\n

\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n

with copies to: Jones Day 901 Lakeside Avenue Cleveland, Ohio 44114 Attn:
\nRachel Rawson Fax No: (216) 579-0212<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Lender and Borrower may change the address at which they are to receive
\nnotices hereunder, by notice in writing in the foregoing manner given to the
\nother party. All notices or<\/p>\n

-42-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

demands sent in accordance with this Section 11<\/u>, shall be deemed
\nreceived on the earlier of the date of actual receipt or three (3) Business Days
\nafter the deposit thereof in the mail.<\/p>\n

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER<\/u><\/strong>.<\/p>\n

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
\n(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
\nOF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
\nHEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
\nRESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
\nTHERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
\nTHE LAWS OF THE STATE OF NEW YORK.<\/strong><\/p>\n

(b) BORROWER AND LENDER IRREVOCABLY CONSENT AND SUBMIT TO THE NON-EXCLUSIVE
\nJURISDICTION OF THE NEW YORK COUNTY SUPREME COURT OF THE STATE OF NEW YORK AND
\nANY COURT TO WHICH AN APPEAL MAY BE TAKEN THEREFROM AND THE UNITED STATES
\nDISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICHEVER LENDER MAY
\nELECT. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
\nWITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED
\nONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF
\nNEW YORK, PROVIDED<\/u>, HOWEVER<\/u>, THAT ANY SUIT SEEKING ENFORCEMENT
\nAGAINST ANY ASSETS OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE
\nCOURTS OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE
\nSUCH ASSETS OR OTHER PROPERTY MAY BE FOUND. BORROWER WAIVES, TO THE EXTENT
\nPERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF
\nFORUM<\/u> NON<\/u> CONVENIENS<\/u> OR TO OBJECT TO VENUE TO THE EXTENT
\nANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b)<\/u>.<\/p>\n

(c) BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
\nOF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
\nDOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
\nCLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
\nSTATUTORY CLAIMS. BORROWER AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS
\nWAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
\nCONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
\nAGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.<\/p>\n

-43-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

13. MISCELLANEOUS PROVISIONS<\/u><\/strong>.<\/p>\n

13.1 Successors<\/u>. This Agreement shall bind and inure to the benefit of
\nthe respective successors and assigns of each of the parties; provided<\/u>,
\nhowever<\/u>, that Borrower may not assign this Agreement or any rights or
\nduties hereunder without Lender’s prior written consent and any prohibited
\nassignment shall be absolutely void ab initio<\/em>. No consent to assignment
\nby Lender shall release Borrower from its Obligations.<\/p>\n

13.2 Amendments and Waivers<\/u>. No amendment or waiver of any provision
\nof this Agreement or any other Loan Document, and no consent with respect to any
\ndeparture by Borrower therefrom, shall be effective unless the same shall be in
\nwriting and signed by Lender and Borrower and then any such waiver or consent
\nshall be effective only in the specific instance and for the specific purpose
\nfor which given.<\/p>\n

13.3 No Waivers; Cumulative Remedies<\/u>. No failure by Lender to exercise
\nany right, remedy, or option under this Agreement or any other Loan Document nor
\nany delay by Lender in exercising the same, will operate as a waiver thereof. No
\nwaiver by Lender will be effective unless it is in writing, and then only to the
\nextent specifically stated. No waiver by Lender on any occasion shall affect or
\ndiminish its rights thereafter to require strict performance by Borrower of any
\nprovision of this Agreement. Lender’s rights under this Agreement and the other
\nLoan Documents will be cumulative and not exclusive of any other right or remedy
\nthat Lender may have.<\/p>\n

13.4 Reliance by Lender<\/u>. Lender shall be entitled to rely upon any
\ncertificate, notice or other document (including any cable, telegram, telex, or
\nfacsimile) reasonably believed by Lender to be genuine and correct and to have
\nbeen signed or sent by or on behalf of the proper Person or Persons, and upon
\nadvice and statements of attorneys, accountants and other experts selected by
\nLender.<\/p>\n

14. GENERAL PROVISIONS<\/u><\/strong>.<\/p>\n

14.1 Effectiveness<\/u>. This Agreement shall be binding and deemed
\neffective when executed by Borrower and Lender.<\/p>\n

14.2 Section Headings<\/u>. Headings and numbers have been set forth herein
\nfor convenience only. Unless the contrary is compelled by the context,
\neverything contained in each Section applies equally to this entire Agreement.\n<\/p>\n

14.3 Reserved.<\/p>\n

14.4 Severability of Provisions<\/u>. Each provision of this Agreement
\nshall be severable from every other provision of this Agreement for the purpose
\nof determining the legal enforceability of any specific provision.<\/p>\n

14.5 Amendments in Writing<\/u>. This Agreement only can be amended by
\nwriting in accordance with Section 13.2<\/u>.<\/p>\n

-44-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

14.6 Counterparts; Telefacsimile Execution<\/u>. This Agreement may be
\nexecuted in any number of counterparts and by different parties on separate
\ncounterparts, each of which, when executed and delivered, shall be deemed to be
\nan original, and all of which, when taken together, shall constitute but one and
\nthe same agreement. Delivery of an executed counterpart of this Agreement by
\ntelefacsimile shall be equally as effective as delivery of an original executed
\ncounterpart of this Agreement. Any party delivering an executed counterpart of
\nthis Agreement by telefacsimile also shall deliver an original executed
\ncounterpart of this Agreement but the failure to deliver an original executed
\ncounterpart shall not affect the validity, enforceability, and binding effect of
\nthis Agreement. The foregoing shall apply to each other Loan Document
\nmutatis mutandis<\/em>, except as otherwise specifically provided therein or
\ntherefor.<\/p>\n

14.7 Revival and Reinstatement of Obligations<\/u>. If the incurrence or
\npayment of the Obligations by Borrower or the transfer to Lender of any property
\nshould for any reason subsequently be declared to be void or voidable under any
\nstate or federal law relating to creditors’ rights, including provisions of the
\nBankruptcy Code relating to fraudulent conveyances, preferences, or other
\nvoidable or recoverable payments of money or transfers of property
\n(collectively, a “Voidable Transfer<\/u>“), and if Lender is required to repay
\nor restore, in whole or in part, any such Voidable Transfer, or elects to do so
\nupon the reasonable advice of its counsel, then, as to any such Voidable
\nTransfer, or the amount thereof that Lender is required or elects to repay or
\nrestore, and as to all reasonable costs, expenses, and attorneys fees of Lender
\nrelated thereto, the liability of Borrower automatically shall be revived,
\nreinstated, and restored and shall exist as though such Voidable Transfer had
\nnever been made.<\/p>\n

14.8 Integration<\/u>. This Agreement, together with the other Loan
\nDocuments, reflects the entire understanding of the parties with respect to the
\ntransactions contemplated hereby and shall not be contradicted or qualified by
\nany other agreement, oral or written, before the date hereof.<\/p>\n

14.9 Reserved<\/u>.<\/p>\n

14.10 Press Releases<\/u>. The Borrower agrees that neither it nor its
\nAffiliates will in the future issue any press releases or other public
\ndisclosure using the name of Lender or its Affiliates or referring to this
\nAgreement or the other Loan Documents without at least two (2) Business Days’
\nprior notice to Lender and without the prior written consent of Lender unless
\n(and only to the extent that) Borrower or its Affiliate is required to do so
\nunder Applicable Law and then, in any event, Borrower or its Affiliate will
\nconsult with Lender before issuing such press release or other public
\ndisclosure. Borrower, on their own behalf and on behalf of its Affiliates,
\nconsents to the publication by Lender of advertising material relating to the
\nfinancing transactions contemplated by this Agreement using Borrower’s or
\nAffiliates name, product photographs, logo or trademark. Lender shall provide a
\ndraft reasonably in advance of any advertising material to Borrower for review
\nand comment prior to the publication thereof.<\/p>\n

14.11 No Strict Construction<\/u>. The parties hereto have participated
\njointly in the negotiation and drafting of this Agreement and the other Loan
\nDocuments. In the event an ambiguity or question of intent or interpretation
\narises, this Agreement and the other Loan Documents shall be construed as if
\ndrafted jointly by the parties hereto and no presumption or<\/p>\n

-45-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

burden of proof shall arise favoring or disfavoring any party by virtue of
\nthe authorship of any provisions of this Agreement and the other Loan Documents.\n<\/p>\n

[The remainder of this page is intentionally left blank.]<\/p>\n

-46-<\/p>\n<\/p>\n<\/p>\n

<\/p>\n

IN WITNESS WHEREOF<\/strong>, the parties hereto have caused this
\nAgreement to be executed and delivered as of the date first above written.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

SCHURMAN FINE PAPERS d\/b\/a PAPYRUS,<\/strong>
\nas Borrower<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Thomas A. Shaw<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

Name:<\/p>\n<\/td>\n

\n

Thomas A. Shaw<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

Title:<\/p>\n<\/td>\n

\n

Chief Financial Officer<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

AMERICAN GREETINGS CORPORATION<\/strong>,
\nas Lender<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Catherine M. Kilbane<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

Name:<\/p>\n<\/td>\n

\n

Catherine Kilbane<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n\n<\/td>\n\n

Title:<\/p>\n<\/td>\n

\n

Senior Vice President, General Counsel
\n& Secretary<\/p>\n<\/td>\n

\n<\/td>\n<\/tr>\n
\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Signature Page to Loan Agreement : Papyrus<\/p>\n

-47-<\/p><\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6669],"corporate_contracts_industries":[9468],"corporate_contracts_types":[9560,9567],"class_list":["post-41100","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-american-greetings-corp","corporate_contracts_industries-media__other","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41100"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41100"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41100"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}