EXHIBIT 10.4

BRIDGE LOAN AGREEMENT
 
This Bridge Loan Agreement (as amended, restated, supplemented or otherwise
modified from time to time, this “Agreement”), dated as of June 18, 2012 (the
"Effective Date") among Imperial Industries, Inc., a Delaware corporation
("Borrower"), the other Credit Parties signatory hereto, and Q.E.P. Co., Inc., a
Delaware corporation (together with its successors and assigns, "Lender").
 
RECITALS
 
WHEREAS, the Borrower and the Lender entered into a Letter of Intent dated June
12, 2012, for the acquisition of Borrower by the Lender (the "Merger
Transaction").
 
WHEREAS, in connection with the Merger Transaction, Borrower desires to enter
into a financing transaction with the Lender pursuant to which the Lender will
commit, subject to the terms and conditions set forth in this Agreement, to make
advances to Borrower up to the aggregate principal amount of $500,000.00 (the
"Loan").
 
WHEREAS, Borrower has agreed to secure all of its obligations under the Loan by
granting to Lender a security interest in and lien upon all of its existing and
after-acquired personal and real property.
 
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A, and, for purposes of this Agreement and the other
Loan Documents, the rules of construction set forth in Annex A, shall
govern.  All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, “Appendices”) hereto, or expressly identified in this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement.  These Recitals shall be construed as
part of the Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
 
1. COMMITMENT AMOUNT AND ADVANCES; USE OF PROCEEDS
 
1.1 Commitment Amount and Advances.
 
(a) Subject to the terms and conditions set forth in this Agreement, and until
ten (10) days prior to the Maturity Date, the Lender shall from time to time
make advances on the terms and conditions set forth in this Agreement of up to a
maximum amount of $100,000 during each 30 calendar day period commencing with
the Effective Date ("Advances") to Borrower under the Loan provided that the
aggregated outstanding principal amount of advances shall not exceed at any one
time in the aggregate $500,000.00 (the "Commitment Amount"). Any sums advanced
pursuant to this Section and subsequently repaid may be re-borrowed from time to
time. Borrower may request advances in excess of $100,000 in any 30 calendar day
period; provided however, the decision to allow such an advance is solely in the
absolute discretion of the Lender.
 
(b) The Loan shall be evidenced by a promissory note substantially in the form
of Exhibit 1.1 attached hereto (the "Revolving Note"), and Borrower shall
execute and deliver the Revolving Note to Lender.  The Revolving Note shall
represent the obligation of Borrower to pay to Lender the amount of the
outstanding Commitment Amount, together with interest thereon as prescribed in
Section 1.3.
 
 
1

--------------------------------------------------------------------------------

 
 
 
(c) The aggregate outstanding Commitment Amount shall be due and payable on the
Maturity Date.
 
1.2 Voluntary Prepayments. Borrower may at any time on at least five (5) days’
prior written notice to Lender voluntarily prepay without penalty all or part of
the outstanding Commitment Amount.
 
1.3 Interest.
 
(a) The Loan, evidenced by the Revolving Note, shall bear interest on the unpaid
principal amount thereof for the period from and including the Effective Date to
and including the day immediately preceding the Termination Date, at a fixed
rate equal to ten percent (10%) per annum, calculated on the basis of a 360-day
year for the actual number of days elapsed.
 
(b) Accrued, unpaid interest on the Loan shall be compounded on the last day of
each calendar month.  After the Maturity Date and/or after the occurrence and
during the continuance of an Event of Default, the principal, interest and all
other amounts due under the Loan and/or this Agreement or any other Loan
Document shall bear cash interest at a rate (the “Default Rate”) per annum which
is 800 basis points (8.0%) greater than the rate which would otherwise be
applicable (provided, that in the case of an Event of Default, such Default Rate
shall only continue to accrue until such Event of Default has been cured,
remedied or waived by Lender).
 
(c) Interest shall be payable, in cash, no later than 3 Business Days following
the last day of each calendar month, upon prepayment of that portion of the
principal amount of the Loan pursuant to Section 1.2, on the Maturity Date, upon
payment in full of the Loan, and upon acceleration of the Loan.
 
(d) Notwithstanding anything to the contrary set forth in this Section 1.3, if a
court of competent jurisdiction determines in a final order that the rate of
interest payable hereunder exceeds the highest rate of interest permissible
under law (the “Maximum Lawful Rate”), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate.
 
1.4 Advance Requests. Borrower shall give the Lender written notice of its
request for an Advance at least four (4) Business Days prior to the date the
Advance is to be funded and shall specify the date and the amount of the
requested Advance (substantially in the form of Exhibit 1.4 hereto, the "Advance
Request").  The obligation of Lender to fund is subject to compliance with
Article 2 hereof.  Lender shall make each properly authorized Advance in
immediately available funds by wire transfer to an account designated by
Borrower, as soon as practicable, but in no event later than the funding date
set forth in the written request for an Advance.
 
1.5 Receipt of Payments. Borrower shall make each payment under this Agreement
not later than Noon (Eastern time) on the day when due in immediately available
funds in Dollars to such account or location as so directed by Lender.  For
purposes of computing interest as of any date, all payments shall be deemed
received on the Business Day on which immediately available funds therefor are
received by Lender prior to Noon Eastern time.  Payments received after Noon
Eastern time on any Business Day or on a day that is not a Business Day shall be
deemed to have been received on the following Business Day.
 
 
2

--------------------------------------------------------------------------------

 
 
1.6 Application and Allocation of Payments. So long as no Event of Default has
occurred and is continuing, voluntary prepayments shall be applied as directed
by Borrower.  As to any other payment, and as to all payments made when an Event
of Default has occurred and is continuing or following the Maturity Date,
Borrower hereby irrevocably waives the right to direct the application of any
and all payments received from or on behalf of Borrower, and Borrower hereby
irrevocably agrees that Lender shall have the continuing exclusive right to
apply any and all such payments against the Obligations as Lender may deem
advisable notwithstanding any previous entry by Lender in its other books and
records.  In all circumstances, after acceleration or maturity of the
Obligations, all payments and proceeds of Collateral shall be applied to amounts
then due and payable in the following order: (1) to Lender’s expenses
reimbursable hereunder, (2) to interest on the Loan, (3) to principal payments
on the Loan, and (4) to all other Obligations to the extent reimbursable under
Section 1.5.
 
1.7 Indemnity. Borrower shall indemnify and hold harmless each of Lender and its
Affiliates, and each such Person’s respective officers, directors, employees,
attorneys, agents and representatives (each, an “Indemnified Person”), from and
against any and all suits, actions, proceedings, claims, damages, losses,
liabilities and expenses (including reasonable attorneys’ fees and disbursements
and other costs of investigation or defense, including those incurred upon any
appeal) which may be instituted or asserted against or incurred by any such
Indemnified Person as the result of credit having been extended under this
Agreement and the other Loan Documents and the administration of such credit,
and in connection with or arising out of the transactions contemplated hereunder
and thereunder, but excluding the Merger Transaction (which shall contain its
own indemnification), and any actions or failures to act in connection
therewith, including any and all Environmental Liabilities and legal costs and
expenses arising out of or incurred in connection with disputes between or among
any parties to any of the Loan Documents (collectively, “Indemnified
Liabilities”); provided, that Borrower shall not be liable for any
indemnification to an Indemnified Person to the extent that any such suit,
action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person’s gross negligence or willful misconduct as finally
determined by a non-appealable court of competent jurisdiction.  NO INDEMNIFIED
PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT,
ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER
TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER, BUT EXCLUDING THE MERGER
TRANSACTION (WHICH SHALL CONTAIN ITS OWN INDEMNIFICATION).
 
1.8 Taxes.
 
(a) Any and all payments by Borrower hereunder or under the Revolving Note shall
be made, in accordance with this Section 1.8, free and clear of and without
deduction for any and all present or future Taxes.  If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Revolving Note, (i) the sum payable shall be increased as
much as shall be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
1.8) Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law.  Within thirty (30) days after the
date of any payment of Taxes, Borrower shall furnish to Lender the original or a
certified copy of a receipt evidencing payment thereof.
 
 
3

--------------------------------------------------------------------------------

 
 
(b) Borrower shall indemnify and, within ten (10) days of demand therefor, pay
Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 1.8) paid by Lender, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally asserted.
 
1.9 Use of Proceeds. Borrower agrees that the Advances shall be for the
exclusive use of the Credit Parties and such funds shall be used only to fund
the Credit Parties' operating expenses in the ordinary course of business,
including the expenses associated with soliciting proxies and holding a meeting
of Borrower's stockholders for the purpose of approving a proposed Merger
Transaction, including attorneys’ fees, accounting fees, printing costs, and
cost of a fairness opinion.
 
2. CONDITIONS PRECEDENT TO ADVANCES
 
2.1 Conditions to Advances. Lender shall not be obligated to make any Advance,
or to take, fulfill, or perform any other action hereunder, until the following
conditions have been satisfied, in Lender’s reasonable discretion, or waived in
writing by Lender:
 
(a) As of the date of any requested Advance, no event shall have occurred and be
continuing, or would result from the Advance requested thereby, which, with the
giving of notice or the passage of time or both, would constitute an Event of
Default and no Event of Default shall be continuing.
 
(b) As of the date of such requested Advance, there shall not be any pending or
threatened action or proceeding affecting Borrower or Premix before any court,
governmental agency or arbitrator which is likely to have a materially adverse
effect on the financial condition or operations of Borrower or Premix other than
actions already disclosed in Filed SEC Documents or in any schedule to the Loan
Documents.
 
(c) Borrower shall waive any claim or defense based upon the occurrence of any
action or inaction of Lender on or prior to the date of such requested Advance
which Borrower believes at such time may (i) be actionable against Lender;
provided, however, that Borrower does not have to waive any claims actionable
against Lender that relate solely to the Merger Transaction, or (ii) give rise
to a defense to payment under the Advances or the Revolving Note for any reason,
including without limitation, commission of a tort or violation of any
contractual duty or duty implied at law.
 
(d) Each of the representations and warranties set forth in Article 3 shall be
true and correct in all material respects as of the date of each Advance.
 
(e) No later than the date of the second requested Advance, Lender shall have
received duly executed landlord waivers from each landlord for each of the real
properties leased by a Credit Party located at 1259 NW 21st Street, Pompano
Beach, FL33069 and 325 Old Sanford Oviedo Road, Winter Springs, FL 32708, each
in a form reasonably approved by Lender.
 
 
4

--------------------------------------------------------------------------------

 
 
3. REPRESENTATIONS AND WARRANTIES
 
To induce Lender to make the Loan, the Credit Parties executing this Agreement,
jointly and severally, make the following representations and warranties to
Lender with respect to all Credit Parties, each and all of which shall survive
the execution and delivery of this Agreement.
 
3.1 Corporate Existence; Compliance with Law. Each Credit Party (a) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization as set forth in Disclosure
Schedule (3.1), (b) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not result in exposure to losses or liabilities
which could reasonably be expected to have a Material Adverse Effect, (c) has
the requisite power and authority and the legal right to own, pledge, mortgage
or otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now conducted or proposed to
be conducted, (d) has all licenses, permits, consents or approvals from or by,
and has made all material filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct except where the failure to possess such
license, permit, consent or approval could not reasonably be expected to have a
Material Adverse Effect, (e) is in compliance with its charter and bylaws, and
(f) is in compliance with all applicable provisions of law, except where the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
 
3.2 Corporate Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by each Credit Party of the Loan Documents to which it
is a party and the creation of all Liens provided for therein: (a) are within
such Person’s power, (b) have been duly authorized by all necessary or proper
corporate action, (c) do not contravene any provision of such Person’s charter
or bylaws, (d) do not violate any law or regulation, or any order or decree of
any court or Governmental Authority, (e) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound, (f) do not result in the
creation or imposition of any Lien upon any of the property of such Person other
than those in favor of Lender pursuant to the Loan Documents, and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those as set forth in Disclosure Schedule (3.2), all of which
have been duly obtained, made or complied with prior to the Effective
Date.  Each of the Loan Documents shall be duly executed and delivered by each
Credit Party that is a party thereto and each such Loan Document shall
constitute a legal, valid and binding obligation of such Credit Party
enforceable against it in accordance with its terms.
 
3.3 No Litigation.
 
(a) Except as set forth in the Filed Borrower SEC Documents and as otherwise set
forth on Disclosure Schedule (3.3), there is no claim, suit, action or
proceeding pending or, to the knowledge of Credit Parties, threatened against a
Credit Party, not otherwise fully covered by insurance.  There is no judgment
outstanding against the Credit Parties or any of their respective assets that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.  The Credit Parties have not received any written
notification of, and to the knowledge of the Credit Parties there is no,
investigation by any Governmental Authority involving the Credit Parties or any
of their respective assets that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
 
(b) No action, claim, lawsuit, demand, investigation or proceeding is now
pending or, to the knowledge of any Credit Party, threatened against any Credit
Party, before any Governmental Authority or before any arbitrator or panel of
arbitrators that challenges any Credit Party’s right or power to enter into or
perform any of its obligations under the Loan Documents to which it is a party,
or the validity or enforceability of any Loan Document or any action taken
thereunder.
 
 
5

--------------------------------------------------------------------------------

 
 
3.4 Taxes; Tax Returns.
 
(a) Each of the Credit Parties has timely filed, or has caused to be filed on
its behalf, all Tax Returns required to be filed by it, and all such Tax Returns
are true, complete and accurate in all material respects.  All Taxes shown to be
due on such Tax Returns, or otherwise required to have been paid by the Credit
Parties, have been paid.  There are no Liens for Taxes (other than Liens for
Taxes not yet due and payable) on the assets of the Credit Parties.  No claim
has ever been made by an authority in a jurisdiction where the Credit Parties do
not file Tax Returns that a Credit Party is or may be subject to taxation by
that jurisdiction.
 
(b) The most recent financial statements included in the Filed Borrower SEC
Documents reflect an adequate reserve for all Taxes payable or to be paid by the
Credit Parties (in addition to any reserve for deferred Taxes to reflect timing
differences between book and Tax items) for all taxable periods and portions
thereof through the closing date of such financial statements to the extent
required by GAAP.
 
3.5 Title to Assets; No Liens.
 
(a) Neither Credit Party owns any real property.
 
(b) The Credit Parties have good, valid and marketable title to, or valid
leasehold interests in or other comparable contract rights in or relating to all
of the properties, assets and rights of every nature, kind and description,
real, personal or mixed, tangible and intangible, wherever located, owned, used
or held for use by the Credit Parties, and all such properties, assets and
rights, other than personal properties in which the Credit Parties has a
leasehold interest or other comparable contract right, are free and clear of all
Liens, except Liens set forth on Disclosure Schedule (3.5).
 
(c) None of the Credit Parties has received written notice of any material
default under any agreement evidencing any Lien or any current leases and
subleases entered into by, on behalf of, or for the benefit of any Credit Party
with respect to leased real property used or held for use by a Credit Party and
under which they are in occupancy, which default continues.
 
 
6

--------------------------------------------------------------------------------

 
 
3.6 No Liabilities. None of the Credit Parties has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
except liabilities, obligations, conditions or circumstances (i) to the extent
disclosed and provided for in the most recent financial statements included in
the Filed Borrower SEC Documents or of a nature not required by GAAP to be
reflected thereon, (ii) incurred or arising in the ordinary course of business
since the date of the most recent financial statements included in the Filed
Borrower SEC Documents or in connection with the Loan, or (iii) as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  There are no unconsolidated Borrower Subsidiaries or any
off-balance sheet arrangements of any type (including any off-balance sheet
arrangement required to be disclosed pursuant to Item 303(a)(4) of Regulation
S-K promulgated under the Securities Act) that have not been so described in the
Filed Borrower SEC Documents nor any obligations to enter into any such
arrangements.
 
4. FINANCIAL STATEMENTS AND INFORMATION
 
4.1 Reports and Notices. Borrower hereby agrees that from and after the
Effective Date and until the Termination Date, it shall deliver to Lender the
Financial Statements, notices, and other information at the times, to the
Persons and in the manner set forth in Annex C.
 
5. AFFIRMATIVE COVENANTS
 
Each Credit Party executing this Agreement jointly and severally agrees as to
all Credit Parties that from and after the date hereof and until the Termination
Date:
 
5.1 Maintenance of Existence. Each Credit Party shall preserve and maintain its
existence in its current form of organization and good standing in the
jurisdiction of its organization, and qualify and remain qualified as a foreign
entity in each jurisdiction in which such qualification is required except where
the failure to so qualify shall not have a Material Adverse Effect.
 
5.2 Books and Records. Each Credit Party shall keep adequate records and books
of account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all of its financial transactions.
 
5.3 Maintenance of Properties. Each Credit Party shall maintain, keep, and
preserve all of its properties necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted
except where the failure to so keep and preserve shall not have a Material
Adverse Effect.
 
5.4 Conduct of Business. Each Credit Party shall continue to engage in a
business of the same general type as conducted and proposed to be conducted by
it on the date of this Agreement.
 
5.5 Insurance. Each Credit Party shall (a) keep its properties, including
without limitation its Inventory, and the Property insured against fire, theft
and other hazards (so-called “All Risk” coverage) in amounts no less than the
current amounts held by the Credit Parties on the Effective Date and with
existing insurance carriers, (b) maintain public liability coverage against
claims for personal injuries, death or property damage in an amount no less than
the current amounts held by the Credit Parties on the Effective Date, and (c)
maintain all workers' compensation, employment or similar insurance as may be
required by applicable law.  Such All Risk property insurance coverage shall
provide for a minimum of thirty (30) days’ written cancellation notice to the
Lender and shall name Lender as an Additional Insured.  The Credit Parties agree
to deliver copies of all of the aforesaid insurance policies to the Lender upon
request.  In the event of any loss or damage to the Collateral, the Credit
Parties shall give prompt written notice to the Lender and to its insurers of
such loss or damage and shall properly file its proofs of loss with said
insurers.
 
 
7

--------------------------------------------------------------------------------

 
 
5.6 Compliance with Laws. Each Credit Party shall comply in all material
respects with all applicable laws, rules, regulations, and orders of
Governmental Authorities, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments, and governmental
charges imposed upon it or upon its property, provided that any Credit Party may
contest any such compliance in good faith upon making adequate reserves in
accordance with GAAP for the consequences of any noncompliance.
 
5.7 Right of Inspection. At any reasonable time upon reasonable notice and from
time to time, the Credit Parties shall permit the Lender or any agent or
representative of Lender to examine and make copies of any abstracts from the
records, including without limitation computer records, and books of account of,
and visit the properties of, the Credit Parties and to discuss the affairs,
finances, and accounts of the Credit Parties with any of its or their officers
and directors and its independent accountants (who, by this reference, are
authorized by the Credit Parties to discuss such matters with the Lender or any
agent or representative of the Lender).
 
5.8 Collateral. The Credit Parties shall (a) preserve the Collateral in good
condition and order and not permit it to be abused or misused, (b) except as set
forth on Schedule 5.8, not allow any of the Collateral to be affixed to real
estate unless such real estate is subject to a Lien in favor of the Lender, (c)
if an Event of Default has occurred and is continuing, upon request of Lender,
prepare to deliver all proceeds of the Collateral to the Lender immediately upon
receipt in the identical form received without commingling with other property,
(d) if an Event of Default has occurred and is continuing, if required by the
Lender, notify Account Debtors and obligors that their accounts, instruments,
documents, contracts and all of the Credit Parties’ rights to receive payments
have been assigned to the Lender and shall be paid directly to the Lender, (e)
take necessary steps to preserve the liability of Account Debtors, obligors, and
secondary parties whose liabilities are part of the Collateral, (f) take any
action required by the Lender with reference to the Federal Assignment of Claims
Act or other applicable law, (g) allow the Lender to inspect the Collateral and
to inspect and copy all records relating to the Collateral upon reasonable
notice, (h) upon the occurrence and continuance of an Event of Default,
immediately upon request by the Lender:  (A) transfer possession or permit the
Lender to take possession of all Collateral; and (B) assign and/or allow the
Lender to immediately take possession of all instruments, and documents which
are part of the Collateral, or as to those hereafter acquired, immediately
following acquisition, and (i) notify the Lender of any change of location or
material adverse change in the condition of any of the Collateral, or of any
material adverse change in any fact or circumstance warranted or represented by
Borrower herein or furnished to the Lender, or if any Event of Default occurs.
 
5.9 Defend Collateral. The Credit Parties shall defend the Collateral against
all claims and demands of all persons at any time claiming the same or any
interest therein and, in the event Lender’s security interest in the Collateral,
or any part thereof, would be impaired by an adverse decision, allow the Lender
to contest or defend any such claim or demand in any Credit Party’s name and
pay, upon demand, the Lender’s reasonable costs, charges and expenses,
including, without limitation reasonable attorneys’ fees in connection
therewith.
 
 
8

--------------------------------------------------------------------------------

 
 
5.10 Environmental Covenants. The Credit Parties shall provide at the expense of
Borrower a Phase I environmental site assessment of the Property if an Event of
Default shall have occurred and be continuing or the Lender shall have
reasonable cause to believe that an actual or threatened violation of an
Environmental Law has occurred, is occurring or is about to occur, in each case
prepared by an independent environmental consulting or engineering firm
acceptable to the Lender in its reasonable discretion, together with such
additional environmental studies, audits, site assessments or remedial or
corrective actions as shall be reasonably required by the Lender or recommended
by any such Phase I site assessment.  Should Borrower fail to commence any such
environmental site assessment, study, audit or remedial or corrective action
within thirty (30) days of the Lender’s written request, the Lender shall have
the right but not the obligation to retain an environmental consultant to
perform the same, at Borrower’s expense, and all costs and expenses incurred by
the Lender in connection therewith shall be payable by Borrower upon demand.
 
5.11 Merger Transaction Budget. Borrower shall develop a budget for the proposed
Merger Transaction related costs and expenses and shall consult with Lender in
the development of such budget.
 
6. NEGATIVE COVENANTS
 
Each Credit Party executing this Agreement jointly and severally agrees as to
all Credit Parties that from and after the date hereof until the Termination
Date:
 
6.1 Liens. No Credit Party shall create, incur, assume, or suffer to exist any
Lien upon or with respect to any of its properties, now owned or hereafter
acquired, except:
 
(a) Liens in favor of the Lender;
 
(b) Liens for taxes or assessments or other government charges or levies not yet
due and payable or, if due and payable, Liens for taxes being contested in good
faith by appropriate proceedings and for which appropriate reserves in
accordance with GAAP are maintained;
 
(c) Liens imposed by law, such as mechanics, materialmen’s, landlords’,
warehousemen’s, and carriers’ Liens, and other similar Liens, securing
obligations incurred in the ordinary course of business which do not exceed in
the aggregate $5,000.00 and which are not past due for more than thirty (30)
days, unless such Liens are being contested in good faith by appropriate
proceedings and appropriate cash reserves have been established therefor; and
 
(d) Liens securing Debt permitted under Section 6.2(b) hereof; and
 
(e) Personal property leases and similar liens and purchase money liens securing
the cost of acquisition of assets subject to such liens or security interests
not to exceed an aggregate dollar amount of $25,000.
 
 
9

--------------------------------------------------------------------------------

 
 
6.2 Debt. No Credit Party shall create, incur, assume, or suffer to exist any
recourse or nonrecourse Debt, except:
 
(a) Debt of Borrower under this Agreement;
 
(b) Debt (if any) described in Schedule 6.2(b), but no renewals, extensions, or
refinancings thereof; and
 
(c) Accounts payable to trade creditors for goods or services and current
operating liabilities (other than for borrowed money), in each case incurred in
the ordinary course of business and paid in accordance with historical
practices, unless contested by Borrower in good faith and by appropriate
proceedings.
 
6.3 Mergers, Etc. No Credit Party shall merge, amalgamate or consolidate with,
or sell, assign, lease, or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person other than to the Lender or an
Affiliate of the Lender, or acquire all or substantially all of the assets or
the business of any Person.
 
6.4 Leases. No Credit Party shall create, incur, assume, or suffer to exist any
obligation as lessee for the rental or hire of any real or personal property,
except leases existing on the date of this Agreement as set forth in Schedule
6.4 and any extensions or renewals thereof.
 
6.5 Sale and Leaseback. No Credit Party shall sell, transfer, or otherwise
dispose of any real or personal property to any Person and thereafter directly
or indirectly lease back the same or similar property.
 
6.6 Restricted Payments. Except as set forth on Schedule 6.6, no Credit Party
shall pay, make or declare any Restricted Payment.
 
6.7 Sale of Assets. No Credit Party shall sell, lease, assign, transfer, or
otherwise dispose of any of its now owned or hereafter acquired assets
except:  (a) for Inventory disposed of in the ordinary course of business; and
(b) the sale or other disposition of assets no longer used or useful in the
conduct of its business consistent with past practices.
 
6.8 Investments. No Credit Party shall make any loan or advance to any Person,
or purchase or otherwise acquire any capital stock, assets, obligations, or
other securities of, make any capital contribution to, or otherwise invest in or
acquire any interest in any Person, except for advances to employees in the
ordinary course of business for travel and similar reasonable business expenses.
 
6.9 Guaranties, Etc. Except for guarantees disclosed in the Filed Borrower SEC
Documents for liabilities of its Subsidiaries, no Credit Party shall assume,
guaranty, endorse, or otherwise be or become directly or contingently
responsible or liable (including, but not limited to, an agreement to purchase
any obligation, stock, assets, goods, or services, or to supply or advance any
funds, assets, goods, or services, or to maintain or cause such Person to
maintain a minimum working capital or net worth, or otherwise to assure the
creditors of any Person against loss) for obligations of any Person.
 
 
10

--------------------------------------------------------------------------------

 
 
6.10 Transactions With Affiliates. No Credit Party shall enter into any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of Borrower’s
business and upon fair and reasonable terms no less favorable to Borrower than
Borrower would obtain in a comparable arm’s-length transaction with a Person not
an Affiliate.
 
6.11 Subsidiaries.
 
No Credit Party shall create, or otherwise acquire an interest in, any
Subsidiary.
 
6.12 Fiscal Year. No Credit Party shall change its fiscal year.
 
6.13 Accounting Methods. No Credit Party shall make or consent to a material
change (a) in the stock ownership or structure of such Credit Party or in the
manner in which business of such Credit Party is conducted or (b) in its method
of accounting unless such change is within the permissible standards of GAAP.
 
6.14 Inventory Locations. No Credit Party shall move Inventory to or otherwise
maintain Inventory at a location with respect to which Borrower has not
delivered to the Lender (i) a lessor’s consent and agreement from the lessor
thereof (ii) a subordination, nondisturbance and attornment agreement from each
mortgagee thereof and (iii) such other documents or instruments as the Lender
shall deem necessary in its reasonable discretion in order to create or maintain
a perfected security interest in such Inventory in favor of the Lender, in each
case in form and substance satisfactory to the Lender in its reasonable
discretion.
 
6.15 Charter Documents. No Credit Party shall amend, or waive any provision of,
its organizational charter, Bylaws or other comparable charter or organizational
documents.
 
6.16 Material Contracts. No Credit Party shall enter into, amend, or otherwise
modify, terminate or waive any material provision of, any material Contract
(other than any extension or expiration of such material Contract in accordance
with its terms).
 
6.17 Capital Expenditures. No Credit Party shall make or agree to make any
capital expenditure or commitment therefor, other than the capital expenditures
set forth on Schedule 6.17;
 
 
11

--------------------------------------------------------------------------------

 
 
6.18 Compensation; Benefit Plans; Employment Agreements. No Credit Party shall
(A) grant to any current or former officer, director, employee or other service
provider of the Credit Party any increase in compensation, (B) grant to any
current or former officer, director, employee or other service provider of the
Credit Party any severance or termination pay, (C) enter into any employment,
severance or termination agreement with any current or former stockholder,
officer, director, employee or other service provider other than extensions of
existing agreements in accordance with their respective terms, (D) establish,
adopt, enter into or amend in any respect any collective bargaining agreement or
benefit plan, (E) take any action to adopt, increase, accelerate, amend, modify
or terminate the schedule of payments or benefits, or make any determinations
under any benefit plan, or (F) pay any bonuses to any current or former officer,
director, employee or other service provider, except, in the case of the
foregoing clauses (A), (B), (C), (D) and (E), (1) as required pursuant to the
terms of any benefit plan or other agreement as in effect on the Effective Date
or (2) as otherwise expressly required by applicable law.
 
6.19 Bankruptcy Filings. No Credit Party shall (i) file, or suffer to exist, a
voluntary or involuntary petition seeking relief under the Bankruptcy Code, or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) consent to or fail to contest in a timely and appropriate manner the
institution of proceedings thereunder or the filing of any such petition or the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for such Credit Party or
for any substantial part of such Credit Party’s assets, (iii) make an assignment
for the benefit of creditors, or (iv) take any action in furtherance of any of
the foregoing or (v) admit in writing its inability to pay its debts as such
debts become due.
 
6.20 Director Compensation. Borrower shall not pay or incur any obligation to
pay any compensation or remuneration, whether in cash, stock, or in-kind, to any
member of Borrower's Board of Directors on account of their service in such
capacity.  The foregoing sentence shall not prohibit Borrower from (i) paying
any compensation or remuneration to a Director that was earned and unpaid as of
June 12, 2012, or (ii) reimbursing Board members for their reasonable
out-of-pocket expenses for attending Board meetings in accordance with
Borrower's policies and procedures, and shall not preclude or diminish the
payment of regular employment compensation for an employee Director.
 
7. TERM
 
7.1 Termination. The financing arrangements contemplated hereby shall be in
effect until the Maturity Date, and the Loan and all other Obligations shall be
automatically due and payable in full on such date.
 
7.2 Survival of Obligations Upon Termination of Financing Arrangements. Except
as otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Lender relating to any
unpaid portion of the Loan or any other Obligations, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring prior to such
termination, or any transaction or event, the performance of which is required
after the Maturity Date.  Except as otherwise expressly provided herein or in
any other Loan Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Lender,
all as contained in the Loan Documents, shall not terminate or expire, but
rather shall survive any such termination or cancellation and shall continue in
full force and effect until the Termination Date; provided, that the provisions
of Article 10, the payment obligations under Article 1, and the indemnities
contained in the Loan Documents shall survive the Termination Date.
 
 
12

--------------------------------------------------------------------------------

 
 
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
 
8.1 Events of Default. The occurrence of any one or more of the following events
(regardless of the reason therefor) shall constitute an “Event of Default”
hereunder:
 
(a) Borrower (i) fails to make any payment of principal of, or interest, owing
in respect of, the Loan or any of the other Obligations when due and payable, or
(ii) fails to pay or reimburse Lender for any expense reimbursable hereunder or
under any other Loan Document within fifteen (15) days following Lender’s demand
for such reimbursement or payment of expenses.
 
(b) Any Credit Party fails or neglects to perform, keep or observe any other
provision of this Agreement or of any of the other Loan Documents (other than
any provision embodied in or covered by any other clause of this Section 8.1).
 
(c) A case or proceeding is commenced against any Credit Party seeking a decree
or order in respect of such Credit Party (i) under the Bankruptcy Code, as now
constituted or hereafter amended or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such
Credit Party or for any substantial part of any such Credit Party’s assets or
(iii) ordering the winding-up or liquidation of the affairs of such Credit
Party, and such case or proceeding shall remain undismissed or unstayed for
thirty (30) days or more or a decree or order granting the relief sought in such
case or proceeding is granted by a court of competent jurisdiction.
 
(d) Any Credit Party (i) files a petition seeking relief under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) consents to or fails to contest in a timely and appropriate
manner the institution of proceedings thereunder or the filing of any such
petition or the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such
Credit Party or for any substantial part of such Credit Party’s assets, (iii)
makes an assignment for the benefit of creditors, or (iv) takes any action in
furtherance of any of the foregoing or (v) admits in writing its inability to,
or is generally unable to, pay its debts as such debts become due.
 
(e) Any representation or warranty set forth in this Agreement or any other Loan
Document by the Credit Parties at any time not being true and correct when made
or confirmed.
 
(f) Any actual or asserted invalidity of this Agreement or any Loan Document by
any Credit Party or any member of its Board of Directors.
 
(g) A Change of Control of a Credit Party.
 
(h) Borrower fails to convene a meeting of its stockholders on or before October
15, 2012 at which meeting the Borrower's stockholders shall vote on a binding
resolution to adopt and approve a recommendation of Borrower's Board of
Directors to enter into and adopt a Merger Agreement between Borrower and
Lender, unless Lender has agreed in writing to extend such deadline; provided,
however, that the failure of the stockholders to approve the Merger Agreement
shall not be an Event of Default.
 
 
13

--------------------------------------------------------------------------------

 
 
8.2 Remedies.
 
(a) If any Event of Default has occurred and is continuing, Lender may without
notice, except as otherwise expressly provided herein, increase the rate of
interest applicable to the Loan to the Default Rate.
 
(b) If any Event of Default has occurred and is continuing, Lender may, without
notice, (i) stop making Advances, (ii) declare all or any portion of the
Obligations, including all or any portion of any or all of the Loan to be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by Borrower and each other
Credit Party, or (iii) exercise any rights and remedies provided to Lender under
the Loan Documents or at law or equity, including all remedies provided under
the Code; provided, however, that upon the occurrence of an Event of Default
specified in Section 8.1(c) or 8.1(d), all of the Obligations shall become
immediately due and payable without declaration, notice or demand by any Person.
 
8.3 Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Lender on which any Credit Party may in any way
be liable, and hereby ratifies and confirms whatever Lender may do in this
regard, (b) all rights to notice and a hearing prior to Lender’s taking
possession or control of, or to Lender’s replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Lender to exercise any of its remedies and (c) the benefit of all
valuation, appraisal and exemption laws.
 
9. SUCCESSORS AND ASSIGNS
 
9.1 Successors and Assigns. This Agreement and the other Loan Documents shall be
binding on and shall inure to the benefit of each Credit Party, Lender and their
respective successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein.  No Credit Party may assign, transfer, hypothecate
or otherwise convey its rights, benefits, obligations or duties hereunder or
under any of the other Loan Documents without the prior express written consent
of Lender.  Any such purported assignment, transfer, hypothecation or other
conveyance by any Credit Party without the prior express written consent of
Lender shall be void.  The terms and provisions of this Agreement are for the
purpose of defining the relative rights and obligations of each Credit Party and
Lender with respect to the Loan and no Person shall be a third party beneficiary
of any of the terms and provisions of this Agreement or any of the other Loan
Documents.  Lender reserves the right at any time to sell, transfer or assign
any or all of its rights in the Loan and under the Loan Documents.
 
10. MISCELLANEOUS
 
10.1 Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in Section 10.2 below.
 
10.2 Amendments and Waivers.
 
(a) No amendment, modification, termination or waiver of any provision of this
Agreement, the Revolving Note or the Security Agreement, or any consent to any
departure by any Credit Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by Lender and Borrower.
 
(b) Upon payment in full in cash and performance of all of the Obligations
(other than indemnification Obligations) and a release of all claims against
Lender (except for any claims against Lender that relate solely to the Merger
Transaction), and so long as no suits, actions proceedings, or claims are
pending or threatened against any Indemnified Person asserting any damages,
losses or liabilities that are Indemnified Liabilities, Lender shall deliver to
Borrower termination statements, and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
 
10.3 Fees and Expenses. Borrower shall reimburse Lender for all out-of-pocket
fees, costs and expenses (including the reasonable fees and expenses of all of
its counsel, advisors, consultants and auditors or other advisors, including
environmental and management consultants and appraisers) incurred in connection
with:
 
 
14

--------------------------------------------------------------------------------

 
 
(a) any amendment, modification or waiver of, or consent with respect to, any of
the Loan Documents;
 
(b) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Lender, any Credit Party or any other Person) in any way relating
to the Collateral, any of the Loan Documents or any other agreement to be
executed or delivered in connection herewith or therewith, and whether as a
party, witness or otherwise) including any litigation, contest, dispute, suit,
case, proceeding or action, and any appeal or review thereof, in connection with
a case commenced by or against any or all of the Credit Parties or any other
Person that may be obligated to Lender by virtue of the Loan Documents,
including any such litigation, contest, dispute, suit, proceeding or action
arising in connection with any work-out or restructuring of the Loan during the
pendency of one or more Events of Default; provided, that no Person shall be
entitled to reimbursement under this Section 10.3(b) in respect of any
litigation, contest, dispute, suit, proceeding or action to the extent any of
the foregoing results from such Person’s gross negligence or willful misconduct;
 
(c) following an Event of Default, any attempt to enforce any remedies of Lender
against any or all of the Credit Parties or any other Person that may be
obligated to Lender by virtue of any of the Loan Documents, including any such
attempt to enforce any such remedies in the course of any work-out or
restructuring of the Loan during the pendency of one or more Events of Default;
 
(d) any workout or restructuring of the Loan during the pendency of one or more
Events of Default; and/or
 
(e) efforts to  verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral during the pendency of
an Event of Default;
 
including, as to each of clauses (a) through (e) above, all reasonable
attorneys’ and other professional and service providers’ fees arising from such
services and other advice, assistance or representation, including those in
connection with any appellate proceedings; and all expenses, costs, charges and
other fees incurred by such counsel and others in any way or respect arising in
connection with or relating to any of the events or actions described in this
Section 10.3, all of which shall be payable, on demand, by Borrower to
Lender.  Without limiting the generality of the foregoing, such expenses, costs,
charges and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services.
 
Notwithstanding anything herein to the contrary, Credit Parties shall not be
responsible for any of Lender's fees and expenses resulting from or incurred in
connection with the consummation of the Loan, it being understood that the
parties hereto shall bear their on expenses and fees incurred in connection
therewith.
 
 
15

--------------------------------------------------------------------------------

 
 
10.4 No Waiver. Lender’s failure, at any time or times, to require strict
performance by the Credit Parties of any provision of this Agreement or any
other Loan Documents shall not waive, affect or diminish any right of Lender
thereafter to demand strict compliance and performance herewith or
therewith.  Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type.  None of the
undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Lender and directed to Borrower specifying such suspension or waiver.
 
10.5 Remedies. Lender’s rights and remedies under this Agreement shall be
cumulative and nonexclusive of any other rights and remedies that Lender may
have under any other agreement, including the other Loan Documents, by operation
of law or otherwise.  Recourse to the Collateral shall not be required.
 
10.6 Severability. Wherever possible, each provision of this Agreement and the
other Loan Documents shall be interpreted in such a manner as to be effective
and valid under applicable law, but if any provision of this Agreement or any
other Loan Document shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or such other Loan Document.
 
10.7 Conflict of Terms. Except as otherwise provided in this Agreement or any of
the other Loan Documents by specific reference to the applicable provisions of
this Agreement, if any provision contained in this Agreement conflicts with any
provision in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
 
10.8 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN
DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
FLORIDA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  EACH CREDIT PARTY AND LENDER
HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS LOCATED IN BROWARD
COUNTY, FLORIDA SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES AND LENDER PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT
LENDER AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF BROWARD COUNTY; AND, PROVIDED,
FURTHER NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER.  EACH CREDIT PARTY
AND LENDER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY AND LENDER
HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.
 
 
16

--------------------------------------------------------------------------------

 
 
10.9 Notices.
 
(a) Addresses.  All notices, demands, requests, directions and other
communications required or expressly authorized to be made by this Agreement
shall, whether or not specified to be in writing but unless otherwise expressly
specified to be given by any other means, be given in writing and (i) addressed
to the party to be notified and sent to the address or facsimile number
indicated in Annex D or (ii) addressed to such other address as shall be
notified in writing (A) in the case of Borrower and Lender, to the other parties
hereto and (B) in the case of all other parties, to Borrower and Lender.
 
(b) Effectiveness.  All communications described in clause (a) above and all
other notices, demands, requests and other communications made in connection
with this Agreement shall be effective and be deemed to have been received (i)
if delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, one (1) Business Day after delivery to such courier service,
(iii) if delivered by mail, when deposited in the mails and (iv) if delivered by
facsimile, upon sender’s receipt of confirmation of proper
transmission.  Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrower or Lender) designated in Annex D to receive copies shall in
no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.  The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice.
 
10.10 Section Titles. The Section titles and Table of Contents contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
 
10.11 Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.  Facsimile or other electronic transmissions (including by email and
PDF) of any executed original document and/or retransmission of any executed
facsimile or other electronic transmission shall be deemed to be the same as the
delivery of an executed original.
 
10.12 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, BETWEEN LENDER AND ANY CREDIT PARTY ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS RELATED THERETO.
 
 
17

--------------------------------------------------------------------------------

 
 
10.13 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Credit
Party for liquidation or reorganization, should any Credit Party become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Credit Party’s assets, and shall continue to be effective or to be reinstated,
as the case may be, if at any time payment and performance of the Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a “voidable preference”, “fraudulent conveyance” or
otherwise, all as though such payment or performance had not been made.  In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
 
10.14 Advice of Counsel. Each of the parties represents to each other party
hereto that it has discussed this Agreement and, specifically, the provisions of
Sections 10.8 and 10.12, with its counsel.
 
10.15 No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
 
[Remainder of Page Intentionally Left Blank]
 
 
18

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
 

  IMPERIAL INDUSTRIES, INC., as Borrower          
Date
By:
/s/ Howard L. Ehler, Jr.       Name: Howard L. Ehler, Jr.       Title: Chief
Operating Officer             PREMIX-MARBLETITE MANUFACTURING CO., INC., as a
Credit Party            
By:
/s/ Howard L. Ehler, Jr.       Name: Howard L. Ehler, Jr.       Title: Vice
President             Q.E.P. CO., INC., as Lender           By: /s/ Lewis Gould
      Name: Lewis Gould       Title: CEO & Chairman  

 
 
19

--------------------------------------------------------------------------------

 
 
 
ANNEX A (Recitals)
to
BRIDGE LOAN AGREEMENT

DEFINITIONS

Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:
 
“Account Debtor” means any Person who may become obligated to any Credit Party
under, with respect to, or on account of, an Account, Chattel Paper (as defined
in the Code) or General Intangibles (as defined in the Code) (including a
payment intangible).
 
“Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, ten percent (10%) or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person’s officers, directors, joint venturers and partners and (d) in
the case of Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower.  For the purposes of
this definition, “control” of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term “Affiliate” shall specifically
exclude Lender.
 
“Agreement” has the meaning ascribed to it in the preamble to the Agreement.
 
“Appendices” has the meaning ascribed to it in the recitals to the Agreement.
 
“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§ 101 et seq., as amended from time to time, and any successor statute
thereto.
 
“Borrower” has the meaning ascribed to it in the preamble to the Agreement.
 
“Business Day” means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the State of Florida.
 
“Change of Control” means the occurrence of one or more of the following events:
(i) the sale of all or substantially all of Borrower's assets; (ii) any
transaction in which any person, including a "group" as defined in Section
13(d)(3) of the Exchange Act who owns less than twenty percent (20%) of
Borrower's capital stock on the date hereof, becomes the beneficial owner of at
least fifty percent (50%) or more of the capital stock of Borrower; (iii) the
merger, consolidation, division or other reorganization of Borrower in which its
stockholders immediately prior to such transaction cease to own beneficially
and/or of record more than fifty (50%) percent of the issued and outstanding
shares of the surviving or new company immediately following such transaction;
or (iv) three or more directors nominated by the Board of Directors to serve as
a director, each having agreed to serve in such capacity, fail to be elected in
a contested election of directors.
 
“Charges” means all federal, state, county, city, municipal, local, foreign or
other governmental taxes (including taxes owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances upon or
relating to (a) the Collateral, (b) the Obligations, (c) the employees, payroll,
income or gross receipts of any Credit Party, (d) any Credit Party’s ownership
or use of any properties or other assets or (e) any other aspect of any Credit
Party’s business.
 
 
A-1

--------------------------------------------------------------------------------

 
 
“Closing Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with the Agreement, the other Loan Documents and the transactions
contemplated thereunder, substantially in the form attached hereto as Annex B.
 
“Code” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of Florida; provided, that to the extent that
the Code is used to define any term herein or in any Loan Document and such term
is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided, further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to Lender’s Lien on any Collateral is governed by the Uniform Commercial
Code as enacted and in effect in a jurisdiction other than the State of Florida,
the term “Code” shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority or remedies and for purposes
of definitions related to such provisions.
 
“Collateral” means the property covered by the Security Agreement,  and the
other Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Lender to secure the
Obligations.
 
“Collateral Documents” means the Security Agreement, the Intellectual Property
Security Agreement and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the
Obligations.
 
“Contracts” means all contracts, undertakings, or agreements in or under which
any Credit Party may now or hereafter have any right, title or interest,
including any agreement relating to the terms of payment or the terms of
performance of any Account.
 
“Copyright License” means any and all rights now owned or hereafter acquired by
any Credit Party under any written agreement granting any right to use any
Copyright or Copyright registration.
 
“Copyrights” means all of the following now owned or hereafter adopted or
acquired by any Credit Party: (a) all copyrights and General Intangibles (as
defined in the Code) of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof and (b) all reissues, extensions or renewals thereof.
 
“Credit Parties” means Borrower and Premix.
 
“Debt”, as applied to any Person, means:  (1) indebtedness or liability of such
Person for borrowed money, or with respect to deposits or advances of any kind,
or for the deferred purchase price of property or services (including trade
obligations); (2) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments, (3) all obligations of such Person under
conditional sale or other title retention agreements relating to property or
assets purchased by such Person, (4) all obligations of such Person for the
deferred purchase price of property or services (including trade obligations);
(5) all obligations of such Person as lessee under Capital Leases; (6) current
liabilities of such Person in respect of the present value of unfunded vested
benefits under any Plan; (7) obligations of such Person under letters of credit,
bankers acceptances, or comparable arrangements; (8) obligations of such Person
arising under acceptance facilities; (9) guaranties, endorsements (other than
for collection or deposit in the ordinary course of business), and other
contingent obligations of such Person to purchase, to provide funds for payment,
to supply funds to invest in any Persons, or otherwise to assure a creditor
against loss; (10) all obligations of such Person secured by any Lien on any of
such Person’s assets or property, whether or not the obligations have been
assumed, and (11) all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements, provided that any net positive amount owed
to such Person shall not be deemed an obligation.  The Debt of any Person shall
include the Debt of any partnership in which such person is a general partner.
 
 
A-2

--------------------------------------------------------------------------------

 
 
“Default” means any event that, with the passage of time or notice or both,
would, unless waived, become an Event of Default.
 
“Default Rate” has the meaning ascribed to it in Section 1.3(c).
 
“Disclosure Schedules” means the Schedules prepared by Borrower in the Index to
the Agreement.
 
“Dollars” or “$” means lawful currency of the United States of America.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations and published interpretations thereunder.
 
“Environmental Laws” means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation).  Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§
9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation Authorization
Act of 1994 (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42
U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601 et
seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water
Pollution Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. §§ 651 et seq.); and the Safe Drinking Water Act (42
U.S.C. §§ 300(f) et seq.), and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.
 
“Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
 
 
A-3

--------------------------------------------------------------------------------

 
 
“Environmental Permits” means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
 
“Event of Default” has the meaning ascribed to it in Section 8.1.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Filed Borrower SEC Documents” means all reports, schedules, forms, statements
and other documents with required to be filed or furnished, as applicable, by
Borrower under the Securities Act and the Exchange Act, together with any
documents and information incorporated therein by reference and together with
any documents filed during such period by Borrower with the Securities and
Exchange Commission on a voluntary basis on Current Reports on Form 8-K, filed
with the Securities and Exchange Commission and publicly available prior to the
Effective Date.
 
“Financial Statements” means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrower delivered in
accordance with Annex C to the Agreement.
 
“GAAP” means generally accepted accounting principles in the United States of
America as in effect on the Effective Date.
 
“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
 
“Hazardous Material” means any substance, material or waste that is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance that is (a) defined as a “solid
waste”, “hazardous waste”, “hazardous material”, “hazardous substance”,
“extremely hazardous waste”, “restricted hazardous waste”, “pollutant”,
“contaminant”, “hazardous constituent”, “special waste”, “toxic substance” or
other similar term or phrase under any Environmental Laws and (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB’s),
or any radioactive substance.
 
“Indemnified Liabilities” has the meaning ascribed to it in Section 1.7.
 
“Indemnified Person” has the meaning ascribed to it in Section 1.7.
 
“Intellectual Property” means any and all Licenses, Patents, Copyrights,
Trademarks and the goodwill associated with such Trademarks.
 
“Intellectual Property Security Agreement” means the Intellectual Property
Security Agreement dated as of the date hereof entered into between Lender and
Borrower.
 
“Inventory” means all “inventory”, as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, and in any
event including inventory, merchandise, goods and other personal property that
are held by or on behalf of any Credit Party for sale or lease or are furnished
or are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, or materials or
supplies of any kind used or consumed or to be used or consumed in such Credit
Party’s business or in the processing, production, packaging, promotion,
delivery or shipping of the same, including all supplies and embedded software.
 
“Lender” has the meaning ascribed to it in the preamble to this Agreement.
 
“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Credit Party.
 
 
A-4

--------------------------------------------------------------------------------

 
 
“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable
law of any jurisdiction).
 
“Loan” has the meaning ascribed to it in the recitals.
 
“Loan Documents” means the Agreement, the Revolving Note, the Collateral
Documents and all other agreements, instruments, documents and certificates
identified in the Closing Checklist executed and delivered to, or in favor of,
Lender and including all other pledges, powers of attorney, consents,
assignments, contracts, notices and all other written matter whether heretofore,
now or hereafter executed by or on behalf of any Credit Party, or any employee
of any Credit Party, and delivered to Lender in connection with the Agreement or
the transactions contemplated thereby.  Any reference in the Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
 
“Material Adverse Effect” means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, results in a
material adverse change in, or a material adverse effect upon, any of (i) the
condition (financial or otherwise), operations, business, properties or
prospects of the Borrower and its Subsidiaries taken as a whole; (ii) the rights
and remedies of the Lender hereunder or under any of the other Loan Documents,
or the ability of the Borrower to perform its respective Obligations; or (iii)
the legality, validity or enforceability of this Agreement or any of the other
Loan Documents.
 
“Maturity Date” means the earlier of (i) December 14, 2012, or (ii) sixty days
following the date of the stockholder meeting to approve the Merger Transaction.
 
“Maximum Lawful Rate” has the meaning ascribed to it in Section 1.3(c).
 
“Obligations” means all loans, advances, debts, liabilities and obligations for
the performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable) owing by any Credit Party to Lender, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other instrument,
arising under the Agreement or any of the other Loan Documents.  This term
includes all principal, interest (including all interest that accrues after the
commencement of any case or proceeding by or against any Credit Party in
bankruptcy, whether or not allowed in such case or proceeding), expenses,
attorneys’ fees and any other sum chargeable to any Credit Party under the
Agreement or any of the other Loan Documents.
 
“Patent License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right with respect to any invention on
which a Patent is in existence.
 
 
A-5

--------------------------------------------------------------------------------

 
 
“Patents” means all of the following in which any Credit Party now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
of any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State or any other country and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
 
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
 
“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
 
“Plan” means any plan established, maintained, or to which contributions have
been made by the Borrower or any ERISA Affiliate for the benefit of any of their
employees.
 
“Premix” means Premix-Marbletite Manufacturing Co., Inc., Florida corporation.
 
“Prohibited Transaction” means any transaction set forth in Section 406 of ERISA
or Section 4975 of the Internal Revenue Code of 1954, as amended from time to
time.
 
 “Property” means all real property with improvements thereon owned or leased by
a Credit Party.
 
“Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.
 
“Reportable Event” means any of the events set forth in Section 4043 of ERISA.
 
“Restricted Payment” means (i) any cash or property dividend, distribution or
payment of any kind, direct or indirect, by the Borrower or any of its
Subsidiaries to any Person who now or in the future may hold an equity interest
in the Borrower or any of its Subsidiaries, whether evidenced by a security or
not, (ii) any payment on account of the purchase, redemption, retirement or
other acquisition for value of any capital stock of the Borrower or its
Subsidiaries, or any other payment or distribution made in respect thereof,
either directly or indirectly, and (ii) any management or similar fees paid or
payable by the Borrower or any of its Subsidiaries to any Person who now or in
the future may, directly or indirectly, hold an equity interest in Borrower or
any of its Subsidiaries.
 
“Revolving Note” has the meaning ascribed to it in Section 1.1(b).
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Security Agreement” means the Security Agreement dated as of the date hereof
entered into among Lender and each Credit Party that is a signatory thereto.
 
“Stock” means all shares, options, warrants, general or limited partnership
interests, membership interests, or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other “equity security” (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).
 
 
A-6

--------------------------------------------------------------------------------

 
 
“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner.  Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of Borrower.
 
“Taxes” means taxes, levies, imposts, deductions, Charges or withholdings, and
all liabilities with respect thereto, excluding taxes imposed on or measured by
the net income of Lender by the jurisdictions under the laws of which Lender is
organized or conducts business or any political subdivision thereof or is
otherwise subject.
 
“Tax Return” means any return, declaration, report, claim for refund,
information return or statement in connection with the determination of or
liability for any Tax that is required to be filed or is actually filed with a
Governmental Authority responsible for the administration of Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
 
“Termination Date” means the date on which the Loan has been indefeasibly repaid
in full and all other Obligations under the Agreement and the other Loan
Documents have been completely discharged.
 
“Trademark License” means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right to use any Trademark.
 
“Trademarks” means all of the following now owned or hereafter existing or
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof, (b) all reissues, extensions
or renewals thereof and (c) all goodwill associated with or symbolized by any of
the foregoing.
 
Unless otherwise specifically provided herein, any accounting term used in the
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied.  All other undefined terms contained in any of
the Loan Documents shall, unless the context indicates otherwise, have the
meanings provided for by the Code to the extent the same are used or defined
therein; in the event that any term is defined differently in different Articles
or Divisions of the Code, the definition contained in Article or Division 9
shall control.  Unless otherwise specified, reference in the Agreement or any of
the Appendices to a Section, subsection or clause refer to such Section,
subsection or clause as contained in the Agreement.  The words “herein”,
“hereof” and “hereunder” and other words of similar import refer to the
Agreement as a whole, including all Annexes, Exhibits and Schedules, as the same
may from time to time be amended, restated, modified or supplemented, and not to
any particular section, subsection or clause contained in the Agreement or any
such Annex, Exhibit or Schedule.
 
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders.  The words “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; the word “or”
is not exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations.  Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of any Credit Party, such words are intended
to signify that such Credit Party has actual knowledge or awareness of a
particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
 
 
A-7

--------------------------------------------------------------------------------

 
 
ANNEX B
to
BRIDGE LOAN AGREEMENT

CLOSING CHECKLIST

The following items must be received by Lender in form and substance
satisfactory to Lender on or prior to the Effective Date (each capitalized term
used but not otherwise defined herein shall have the meaning ascribed thereto in
Annex A to the Agreement):
 
A.           Appendices.  All Appendices to the Agreement, in form and substance
satisfactory to Lender.
 
B.           Revolving Note.  Duly executed originals of the Revolving Note
dated the Effective Date.
 
C.           Security Agreement.  Duly executed originals of the Security
Agreement, dated the Effective Date, and all instruments, documents and
agreements executed pursuant thereto, including powers of attorney for each
Credit Party.
 
D.           Intellectual Property Security Agreement.  Duly executed original
of the Intellectual Property Security Agreement dated the Effective Date and
signed by each Credit Party which owns Trademarks, Copyrights and/or Patents, as
applicable, all in form and substance reasonably satisfactory to Lender,
together with all instruments, documents and agreements executed pursuant
thereto.
 
E.           Security Interests and Code Filings.  (a) Evidence satisfactory to
Lender that Lender has a valid and perfected first priority security interest in
the Collateral other than the Collateral listed in Schedule 6.2, including such
documents duly executed by each Credit Party (including financing statements
under the Code and other applicable documents under the laws of any jurisdiction
with respect to the perfection of Liens) as Lender may request in order to
perfect its security interests in the Collateral.
 
F.           Insurance.  Satisfactory evidence that the insurance policies
required by Section 5.5 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as reasonably requested by Lender, in favor of Lender.
 
G.           Charter and Good Standing.  For each Credit Party, such Person’s
(a) charter and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of formation and (c) good
standing certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Effective Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.
 
H.           Bylaws and Resolutions.  For each Credit Party, (a) such Person’s
bylaws, together with all amendments thereto and (b) resolutions of such
Person’s Board of Directors approving and authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of the
Effective Date by such Person’s secretary or an assistant secretary as being in
full force and effect without any modification or amendment.
 
I.           Incumbency Certificates.  For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Effective Date by such Person’s secretary or
an assistant secretary as being true, accurate, correct and complete.
 
J.           Other Documents.  Such other certificates, documents and agreements
respecting any Credit Party as Lender may reasonably request.
 
 
B-1

--------------------------------------------------------------------------------

 

ANNEX C
to
BRIDGE LOAN AGREEMENT
 
FINANCIAL STATEMENTS  -- REPORTING
 
Borrower shall furnish or cause to be furnished to the Lender the following:
 
(a)           Within thirty (30) days after the end of each month, consolidated
and consolidating financial statements of Borrower and its consolidated
subsidiaries for the period in question and the fiscal year to date, prepared
and certified as being true, complete and correct by the chief financial officer
of Borrower.
 
(b)           Promptly upon receipt thereof, and in any event simultaneously
with the delivery of the financial statements required by clause (a) hereof,
copies of any reports and management letters submitted to Borrower by
independent certified public accountants in connection with the examination of
financial statements.
 
(c)           Within (i) five (5) days subsequent to filing with the Internal
Revenue Service or any other applicable Governmental Authority, and applicable
state and foreign taxing authorities, copies of federal, state and foreign
income tax returns, of Borrower, and (ii) five (5) days subsequent to filing
with the SEC, or any other applicable Governmental Authority copies of all Forms
8-K, 10-K and 10-Q filed with the SEC or any other applicable Governmental
Authority filed by Borrower.
 
(d)           Promptly after the commencement thereof, notice of all threatened
or actual actions, suits, and proceedings affecting any Credit Party, which, if
determined adversely to Borrower, could have a Material Adverse Effect, and such
additional information regarding such actions, suits, and proceedings as Lender
may request from time to time.
 
(e)           Immediately upon the occurrence of each Default or Event of
Default, a written notice setting forth the details of such Default or Event of
Default and the action which is being taken or proposed to be taken by Borrower
with respect thereto.
 
(f)           Promptly after the furnishing thereof, copies of any material
statement or report furnished to a Board member or the Board of Directors of the
Company or any committee thereof.
 
(g)           Such other information respecting the condition or operations,
financial or otherwise, of the Credit Parties as the Lender may from time to
time reasonably request.
 
The reports described above shall be in form and detail as shall be satisfactory
to the Lender and shall be certified by Borrower’s chief financial officer as
being true, complete and correct.
 
 
C-1

--------------------------------------------------------------------------------

 

ANNEX D
to
BRIDGE LOAN AGREEMENT

NOTICE ADDRESSES

(A)           If to Lender, at:

Q.E.P. Co., Inc.
1001 Broken Sound Parkway NW
Suite A
Boca Raton, FL 33487
Attention: Lewis Gould
Telephone: (561) 994-5550
Facsimile: (561) 994-1530

with a copy to:

Holland & Knight LLP
701 Brickell Ave., Suite 3000
Miami, FL 33131
Attention: Rodney H. Bell, Esq.
Telephone: (305) 374-8500
Facsimile: (305) 789-7799

(B)           If to Borrower, at:

Imperial Industries, Inc.
1259 NW 21st Street
Pompano Beach, FL  33069
Attention: Howard L. Ehler, Jr. Executive Vice President/Chief Operating Officer
Telephone: (954) 970-6540
Facsimile: (954) 970-3538

with a copy to:

Bryan W. Bauman, Esq.
Bryan W. Bauman, P. A.
15851 SW 41st Street, Suite 600
Davie, FL 33331
Telephone: (954) 656-8077
Facsimile: (954) 796-3401

 
D-1

--------------------------------------------------------------------------------

 

EXHIBIT 1.4

FORM OF ADVANCE REQUEST
 

To: Q.E.P. Co., Inc   Attention: Lewis Gould, CEO & Chairman   1001 Broken Sound
Parkway NW, Suite A   Boca Raton, FL 33487

 
Pursuant to the terms and conditions set forth in the Bridge Loan Agreement
dated June 18, 2012 (the "Bridge Loan Agreement"), between Imperial Industries,
Inc. ("Borrower"), the other Credit Parties thereto, and Q.E.P. Co., Inc.
("Lender"), the undersigned hereby requests a Loan Advance in the amount of
$__________________________ in accordance with these instructions.  All
capitalized terms used herein but not otherwise defined herein shall have the
meanings given to them in the Bridge Loan Agreement or in Annex A thereto.

This Advance Request is for (specify purpose and amount in reasonable detail):
 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Please make a Loan Advance under the Bridge Loan Agreement as follows (insert
wire instructions):
 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 
Borrower requests that this Advance Request be funded by Lender on
___________________, which is a date at least four (4) Business Days after the
date of this Advance Request.

To induce the Lender to make the requested Loan Advance, Borrower hereby
certifies to the Lender that:

1.           As of the date of this Advance Request, no event has occurred or is
continuing, or would result from this Advance Request, which, with the giving of
notice or the passage of time or both, would constitute an Event of Default and
no Event of Default is continuing.

2.           As of the date of this Advance Request, there is no pending or
threatened action or proceeding affecting a Credit Party before any court,
governmental agency or arbitrator which is likely to have a materially adverse
effect on the financial condition or operations of a Credit Party other than
actions already disclosed in Filed SEC Documents or in any schedule to the Loan
Documents.

3.           Borrower hereby waives any claim or defense based upon the
occurrence of any action or inaction of the Lender on or prior to the date this
Advance Request which Borrower believes may (i) be actionable against the
Lender, except for those claims actionable against Lender that relate solely to
the Merger Transaction, or (ii) give rise to a defense to payment under the
Advances or the Revolving Note for any reason, including without limitation,
commission of a tort or violation of any contractual duty or duty implied at
law.
 
 
 

--------------------------------------------------------------------------------

 

4.           Each of the representations and warranties set forth in Article 3
of the Bridge Loan Agreement are true and correct in all material respects.

DATED this ___ day of ___, ___
 

BORROWER       IMPERIAL INDUSTRIES, INC.               By:     Its:    

 
 
 

--------------------------------------------------------------------------------

 
 
TABLE OF CONTENTS
 

         
Page
                1. COMMITMENT AMOUNT AND ADVANCES; USE OF PROCEEDS     1     1.1
Commitment Amount and Advances.
    1     1.2
Voluntary Prepayments.
    2     1.3
Interest.
    2     1.4
Advance Requests.
    2     1.5
Receipt of Payments.
    2     1.6
Application and Allocation of Payments.
    3     1.7
Indemnity.
    3     1.8
Taxes.
    3     1.9
Use of Proceeds.
    4                 2. CONDITIONS PRECEDENT TO ADVANCES     4     2.1
Conditions to Advances.
    4                 3. REPRESENTATIONS AND WARRANTIES     5                  
3.1
Corporate Existence; Compliance with Law.
    5     3.2
Corporate Power, Authorization, Enforceable Obligations.
    5     3.3
No Litigation.
    5     3.4
Taxes; Tax Returns.
    6     3.5
Title to Assets; No Liens.
    6     3.6
No Liabilities.
    7                 4. FINANCIAL STATEMENTS AND INFORMATION     7            
      4.1
Reports and Notices.
    7                 5. AFFIRMATIVE COVENANTS     7                   5.1
Maintenance of Existence.
    7     5.2
Books and Records.
    7     5.3
Maintenance of Properties.
    7     5.4
Conduct of Business.
    7     5.5
Insurance.
    7     5.6
Compliance with Laws.
    8     5.7
Right of Inspection.
    8     5.8
Collateral.
    8     5.9
Defend Collateral.
    8     5.1
Environmental Covenants.
    9     5.11
Merger Transaction Budget.
    9                 6. NEGATIVE COVENANTS     9                   6.1
Liens.
    9     6.2
Debt.
    10     6.3
Mergers, Etc.
    10     6.4
Leases.
    10     6.5
Sale and Leaseback.
    10     6.6
Restricted Payments.
    10     6.7
Sale of Assets.
    10     6.8
Investments.
    10     6.9
Guaranties, Etc.
    10     6.10
Transactions With Affiliates.
    11     6.11
Subsidiaries.
    11     6.12
Fiscal Year.
    11     6.13
Accounting Methods.
    11     6.14
Inventory Locations.
    11     6.15
Charter Documents.
    11     6.16
Material Contracts.
    11     6.17
Capital Expenditures.
    11     6.18
Compensation; Benefit Plans; Employment Agreements.
    12     6.19
Bankruptcy Filings.
    12     6.20
Director Compensation.
    12                 7. TERM     12                   7.1
Termination.
    12     7.2
Survival of Obligations Upon Termination of Financing Arrangements.
    12                 8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES     13        
          8.1
Events of Default.
    13     8.2
Remedies.
    14     8.3
Waivers by Credit Parties.
    14                 9. SUCCESSORS AND ASSIGNS     14                   9.1
Successors and Assigns.
    14                 10. MISCELLANEOUS     14                   10.1
Complete Agreement; Modification of Agreement.
    14     10.2
Amendments and Waivers.
    14     10.3
Fees and Expenses.
    14     10.4
No Waiver.
    16     10.5
Remedies.
    16     10.6
Severability.
    16     10.7
Conflict of Terms.
    16     10.8
GOVERNING LAW.
    16     10.9
Notices.
    17     10.1
Section Titles.
    17     10.11
Counterparts.
    17     10.12
WAIVER OF JURY TRIAL.
    17     10.13
Reinstatement.
    18     10.14
Advice of Counsel.
    18     10.15
No Strict Construction.
    18  

 
 
 

--------------------------------------------------------------------------------

 

INDEX OF APPENDICES

Annex A
-
Definitions
Annex B
-
Closing Checklist
Annex C
-
Financial Statements - Reporting
Annex D
-
Notice Addresses
Exhibit 1.1
-
Form of Revolving Note
Exhibit 1.4
-
Advance Request Form
     
Disclosure Schedule 3.1
-
Type of Entity; State of Organization
Disclosure Schedule 3.2
-
Consents
Disclosure Schedule 3.5
-
Liens
     
Schedule 5.8
 
Permitted Fixtures
Schedule 6.2(b)
Permitted Debt
Schedule 6.4
 
Permitted Leases
Schedule 6.6
 
Permitted Restricted Payments
Schedule 6.17
Permitted Capital Expenditures

 
 
 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 
 
BRIDGE LOAN AGREEMENT

Dated as of June 18, 2012

among

IMPERIAL INDUSTRIES, INC.,
as Borrower,

THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,

and

Q.E.P. CO., INC.,
as Lender
 
 

--------------------------------------------------------------------------------