Exhibit 10.2         

SECOND AMENDMENT TO LOAN AGREEMENT

         THIS SECOND AMENDMENT TO LOAN AGREEMENT (this “Second Amendment”)
entered into as of this 26th day of May, 2005, between the DEPARTMENT OF
BUSINESS AND ECONOMIC DEVELOPMENT, a principal department of the State of
Maryland (the “Department”), and PHEONIX COLOR CORP., a Delaware corporation
(the “Borrower”).

RECITALS

         1. The Department made a conditional loan to the Borrower in the
original principal amount of $500,000 (the “Loan”) pursuant to the terms of a
Loan Agreement dated May 3, 2000, between the Department and the Borrower, as
amended by a First Amendment to Loan Agreement dated July 20, 2000, between the
Department and the Borrower (as amended, the “Loan Agreement”).

         2. The Loan is evidenced by a promissory note dated May 3, 2000, made
by the Borrower payable to the order of the Department in the original principal
amount of $500,000 (the “Note”).

         3. The Borrower has requested that the Department modify the terms of
the Loan Agreement.

         4. Pursuant to the Borrower’s request, the Department agrees to amend
the terms of the Loan Agreement pursuant to this Second Amendment.

         NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Borrower and Department agree as follows:

         1. Defined Terms: All capitalized terms used in this Second Amendment
shall have the same meanings as in the Loan Agreement unless otherwise defined
herein.

         2. Recitals. The Borrower and the Department acknowledge that the above
Recitals are true and correct, and agree that the Recitals are incorporated by
reference into this Second Amendment.

         3. Amendment of Loan Agreement. The Loan Agreement is hereby amended as
follows:

                   (a) The title to Section 3.03 is hereby changed to “Section
3.03. Full Forgiveness.”

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Phoenix Color Second Amendment
May 9, 2005

                   (b) Section 3.03(e) is hereby amended by inserting at the
beginning of the Section the following: “Except as provided in Section 3.05
and/or 3.06 below,”.

                   (c) Sections 3.05 and 3.06 are hereby added to the Loan
Agreement as follows:

                             “Section 3.05. Pro Rata Repayment.

 

                   If as of December 31, 2005, the Borrower and the Borrower’s
Subsidiaries employ less than 543 Permanent, Full-time Employees, but employ at
least 360 Permanent, Full-time Employees, the Borrower shall repay to the
Department a portion of the Loan equal to $1,485 for each Permanent, Full-time
Employees less than 543, together with accrued interest thereon from May 3, 2000
(except as provided in Section 3.06(a) below), as provided in the Note.

                             Section 3.06. Partial Forgiveness.

 

                            (a) Notwithstanding the provisions of Section 3.05
above, if the Borrower  provides the employment report required under Section
3.04(b) by January 30, 2006, is required to repay a portion of the Loan under
the terms of Section 3.05, and is willing to make such payment to the Department
by January 31, 2006, the Borrower may calculate the amount owed under Section
3.05 exclusive of accrued interest. If the Department determines that the
Borrower has complied with the provisions of this subsection, the Department
will forgive the interest which has accrued on the principal amount to be repaid
under Section 3.05. If the Borrower fails to meet the requirements of this
subsection, then the Borrower shall repay the full amount required to be repaid
under Section 3.05 as provided in the Note.

 

                            (b) If the Borrower is required to repay a portion
of the Loan as provided  in Section 3.05, the Department will forgive the amount
of the Loan which is not subject to repayment under Section 3.05, if no Default
exists, and no event, circumstance, act or omission which, with the giving of
notice, the passage of time, or both, would constitute a Default. Determination
of amounts to be forgiven shall be made after determining any amounts required
to be repaid under Section 3.05.”

         4. The Borrower ratifies and confirms all of its liabilities and
obligations under the Loan Agreement and agrees that, except as expressly
modified in this Second Amendment, the Loan Agreement continues in full force
and effect as if set forth specifically herein.

         5. As used in the Loan Agreement, the term “this Agreement” means the
Loan Agreement as modified by this Second Amendment, and the term “Note” means
the Note as modified by the Note Modification, unless the context clearly
indicates or dictates a contrary meaning.

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Phoenix Color Second Amendment
May 9, 2005

         6. The Borrower and the Department agree that this Second Amendment
shall not be construed as an agreement to extinguish the original obligations
under the Loan Agreement and shall not constitute a novation as to the
obligations of the Borrower under the Loan Agreement.

         7. This Second Amendment may not be amended, changed, modified,
altered, or terminated without in each instance the prior written consent of the
Department. This Second Amendment shall be construed in accordance with and
governed by the laws of the State of Maryland.

         8. This Second Amendment shall inure to the benefit of, be enforceable
by and be binding upon the Department and Borrower and their respective
successors and assigns.

         9. In connection with this Second Amendment, the Borrower represents
and warrants as follows:

                   (a) Except for specific defaults set forth in Section 10
below, there is no default on the part of the Borrower under the Loan Agreement
or the other Loan Documents, as amended, and no event has occurred or is
continuing which, with notice, or the passage of time, or both, would constitute
a default under the Loan Agreement or the other Loan Documents, as amended.

                   (b) All of the representations and warranties of the Borrower
in the Loan Agreement and the other Loan Documents, are true and correct on the
date hereof as if the same were made on the date hereof.

                   (c) The Loan Agreement (as amended by this Second Amendment),
the Note, as amended, and the other Loan Documents, as amended, constitute the
legal, valid and binding obligations of the Borrower enforceable in accordance
with their terms.

                   (d) If any of the foregoing representations and warranties
prove to be false, incorrect or misleading in any material respect, the
Department may, in its absolute and sole discretion, declare (i) that event of
default has occurred and exists under the provisions of the Loan Agreement,
and/or (ii) any of the provisions of this Second Amendment to be void and of no
force.

         10. The Department understands that the Borrower has failed to complete
the Additional Facilities by the Completion Date and has ceased to use the
Manufacturing Facility. These failures were defaults under Section 5.01(h) and
(f) of the Loan Agreement, respectively. The Department hereby waives these two
specific defaults.

         IN WITNESS WHEREOF: the Borrower and the Department have caused this
Second Amendment to be duly executed and delivered under its seal, as of the day
and year written in the preamble of this Second Amendment.

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Phoenix Color Second Amendment
May 9, 2005

WITNESS:

   /s/ Gloria M. Shryock    

WITNESS:

   /s/ Diane Leland            

DEPARTMENT OF BUSINESS AND
  ECONOMIC DEVELOPMENT

By:   /s/ Aris Melissaratos     
Name: Aris Melissaratos
Title: Secretary

PHOENIX COLOR CORP.

By:   /s/ Edward Lieberman      (Seal)
Name: Edward Lieberman
Title: Chief Financial Officer

STATE OF MARYLAND, CITY/COUNTY OF BALTIMORE, TO WIT:

         I HEREBY CERTIFY that on this 26th day of May, 2005, before me, a
Notary Public of the State of Maryland, in and for the State and City/County
aforesaid, personally appeared Aris Melissaratos, who acknowledged himself to be
the Secretary of Business and Economic Development of the State of Maryland, a
principal department of the State of Maryland, known or satisfactorily proven to
me to be the person whose name is subscribed to the within instrument, and
acknowledged that he executed the foregoing Agreement on behalf of the
Department of Business and Economic Development for the purposes therein
contained as the duly authorized Secretary of Business and Economic Development
of the State of Maryland.

         AS WITNESS my hand and Notarial Seal.

  
  /s/ Robin G. Whitfield      
Notary Public

My Commission expires: 3/1/08

STATE OF MARYLAND, CITY/COUNTY OF WASHINGTON, TO WIT:

         I HEREBY CERTIFY that on this 9th day of May, 2005, before me, a Notary
Public in and for the State of Maryland, personally appeared Edward Lieberman,
who acknowledged himself/herself to be the CFO of Phoenix Color Corp., known or
satisfactorily proven to me to be the person whose name is subscribed to the
within instrument, and acknowledged that she/he executed the foregoing Second
Amendment on behalf of Phoenix Color Corp., for the purposes therein contained
as its duly authorized _________________.

         AS WITNESS my hand and Notarial Seal.

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Phoenix Color Second Amendment
May 9, 2005

  
 /s/ Rachel A. Grimm      
Notary Public

My Commission expires: 5-1-2008

ACKNOWLEDGEMENT OF THE BOARD OF COUNTY COMMISSIONERS OF WASHINGTON COUNTY

         The undersigned, the Board of County Commissioners of Washington
County, guaranteed a portion of the Loan pursuant to the terms of a Guaranty
Agreement dated May 3, 2000, made for the benefit of the Department. The
undersigned acknowledges and consents to the terms of this Amendment and the
Note Modification, and reaffirms its obligations under the terms of the Guaranty
Agreement.

WITNESS:

 /s/ Joni L. Bittner     
Joni L. Bittner, Clerk BOARD OF COUNTY COMMISSIONERS
  OF WASHINGTON COUNTY

By:  /s/ Gregory I. Snook     
Name: Gregory I. Snook
Title: President

STATE OF MARYLAND, CITY/COUNTY OF WASHINGTON, TO WIT:

         I HEREBY CERTIFY that on this 17th day of May, 2005, before me, a
Notary Public in and for the State of Maryland, personally appeared Gregory I.
Snook, who acknowledged himself to be the President of the Board of County
Commissioners of Washington County, known or satisfactorily proven to me to be
the person whose name is subscribed to the within instrument, and acknowledged
that she/he executed the foregoing Agreement on behalf of the Board of County
Commissioners of Washington County for the purposes therein contained as its
duly authorized President.

         AS WITNESS my hand and Notarial Seal.

  
 /s/ Vicki L.Grimm          
Notary Public

My Commission expires: 11-1-08

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