(b) The third and fourth sentences of Section 2.2(a) are amended and restated to read in fullas follows:“No standby Letter of Credit shall be issued with an expiry datelater than the earlier of: (i) one (1) year from the date ofissuanceand (ii) except as provided in Section 2.2(h), the Maturity Date.No commercial Letter of Credit shall be issued with an expiry datelater than the earlier of: (i) one hundred twenty (120) days fromthe date of issuance and (ii) except as provided in Section 2.2(h),the Maturity Date.”(c) The following new Section 2.2(h) is added immediately following Section 2.2(g):“(h) If the expiration date for any Letter of Credit requested bythe Borrowers to be issued, or extended or renewed, pursuant toSection 2.2(a) is later than the Maturity Date, the Fronting Lendermay nonetheless issue, or extend or renew, such Letter of Creditnotwithstanding that such expiration date is later than the MaturityDate, provided that Borrowers shall on or before the day five (5)days prior to the Maturity Date deposit with the AdministrativeAgent as security for the Obligations, cash in an amount equal tothe Letter of Credit Coverage Requirement with respect to each suchLetter of Credit which remains outstanding on such date, which cashshall be deposited with, pledged to and held by the AdministrativeAgent for the benefit of the Lenders in the same manner as providedin Section 8.2(c).”(d) Section 8.2(c) is hereby amended and restated to read in full as follows:“(c) Upon the occurrence and during the continuance of an Event ofDefault and in addition to all other rights and remedies availableto the Administrative Agent, the Borrowers shall upon demand of theAdministrative Agent, deposit in a non-interest bearing account withthe Administrative Agent, as cash collateral for the Obligations, anamount equal to the aggregate Letter of Credit Coverage Requirement,and the Borrowers hereby pledge to the Administrative Agent and theLenders, and grant to the Administrative Agent and the Lenders asecurity interest in, all such cash as security for the Obligations.Amounts held in such cash collateral account shall be applied bythe Administrative Agent to the payment of drafts drawn under anyLetters of Credit, and the unused portion thereof after all theLetters of Credit shall have expired or been fully drawn upon, ifany, shall be applied to repay other Obligations of the Borrowershereunder and under the Notes. After all Letters of Credit shallhave expired or been fully drawn upon, all Obligations with respectthereto shall have been satisfied and all other Obligations of theBorrowers hereunder and under the Notes shall have been paid infull, the balance, if any, in such cash collateral account shall bereturned to the Borrowers. The Borrowers shall execute and deliverto the Administrative Agent, for the account of the Fronting Bankand the Lenders, such further documents and instruments as theAdministrative Agentmay request to evidence the creation and perfection of the withinsecurity interest in such cash collateral account. Except asexpressly provided above in this Section, presentment, demand,protest and all other notices of any kind are expressly waived.”
 
2

 
**3. ****Amendment to the Loan Documents**. All references to the Loan Agreement in the LoanDocuments shall be deemed to refer to the Loan Agreement as amended hereby.**4. ****Ratification of the Loan Documents**. Notwithstanding anything to the contraryherein contained or any claims of the parties to the contrary, the Administrative Agent, theLenders and the Borrowers agree that the Loan Documents are in full force and effect and each suchdocument shall remain in full force and effect, as amended by this Amendment and each Borrowerhereby ratifies and confirms its obligations thereunder.**5.****Representations and Warranties**.(a) Each Borrower hereby certifies that after giving effect to this Amendment, (i) therepresentations and warranties of such Borrower in the Loan Agreement are true and correct in allmaterial respects as if made on the date hereof and (ii) no Event of Default and no event whichcould become an Event of Default with the passage of time or the giving of notice, or both, underthe Loan Agreement or the other Loan Documents exists on the date hereof.(b) Each Borrower further represents that such Borrower has all the requisite power andauthority to enter into and to perform its obligations under this Amendment, and that theexecution, delivery and performance of this Amendment have been duly authorized by all requisiteaction and will not violate or constitute a default under any provision of any applicable law,rule, regulation, order, writ, judgment, injunction, decree, determination or award presently ineffect or of the Certificate of Incorporation or Formation, by-laws or operating agreement or otherorganizational documents of such Borrower, or of any indenture, note, loan or loan agreement,license or any other agreement, lease or instrument to which such Borrower is a party or by whichsuch Borrower or any of its properties are bound.(c) Each Borrower also further represents that its obligations to repay the Advances, togetherwith all interest accrued thereon, are absolute and unconditional, and there exists no right of setoff or recoupment, counterclaim or defense of any nature whatsoever to payment of the Advances.(d) Each Borrower also further represents that there have been no changes to the Certificateof Incorporation or Formation, by-laws or operating agreement or other organizational documents ofsuch Borrower since the most recent date true and correct copies thereof were delivered to theAdministrative Agent.
 
3

 
**6. ****Conditions Precedent**. The amendments set forth herein shall be effective as of theAmendment Effective Date upon the fulfillment, to the satisfaction of the Administrative Agent andits counsel, of the following conditions precedent:(a) Each Borrower shall have delivered to the Administrative Agent the following, all of whichshall be in form and substance satisfactory to the Administrative Agent and shall be duly completedand executed: (i) counterparts of this Amendment executed by each Borrower, the Majority Lendersand the Guarantors; (ii) copies, certified by the Secretary or an Assistant Secretary of each Borrowerof resolutions of the board of directors or members of such Borrower in effect on thedate hereof authorizing the execution, delivery and performance of this Amendment andthe other documents and transactions contemplated hereby; and (iii) such additional documents, certificates and information as the AdministrativeAgent may reasonably request.(b) After giving effect to this Amendment, the representations and warranties set forth in theLoan Agreement shall be true and correct on and as of the date hereof.(c) After giving effect to this Amendment, no Event of Default, and no event which, with thepassage of time or the giving of notice, or both, would become such an Event of Default shall haveoccurred and be continuing as of the date hereof.**7.****Miscellaneous**(a) To induce the Administrative Agent and the Lenders to enter into this Amendment, eachBorrower waives and releases and forever discharges the Administrative Agent and the Lenders andtheir respective officers, directors, attorneys, agents, and employees from any liability, damage,claim, loss or expense of any kind of which it has knowledge as of the date hereof against any ofthem arising out of or relating to the Loan Documents. Each Borrower further agrees to indemnifyand hold the Administrative Agent, the Lenders and their respective officers, directors, attorneys,agents and employees (collectively, the “Indemnitees”) harmless from any loss, damage, judgment,liability or expense (including reasonable attorneys’ fees), other than any such loss, damagejudgment, liability or expense caused by the Indemnitee’s own willful misconduct or grossnegligence, suffered by or rendered against any of them on account of any claims arising out of orrelating to the Loan Documents. Each Borrower further states that it has carefully read theforegoing release and indemnity, knows the contents thereof and grants the same as its own free actand deed.(b) All terms, conditions, provisions and covenants in the Loan Documents and all otherdocuments delivered to the Administrative Agent in connection therewith shall remain unaltered andin full force and effect except as modified or amended hereby. To the extent that any term orprovision of this Amendment is or may be deemed expressly inconsistent with any term or provisionin any Loan Document or any other document executed in connection therewith, the terms andprovisions hereof shall control.(c) This Amendment constitutes the entire agreement of the parties with respect to the subjectmatter hereof and supersedes all prior and contemporaneous understandings and agreements.
 
4

 
(d) In the event any provisions of this Amendment shall be held invalid or unenforceable byany court of competent jurisdiction, such holding shall not invalidate or render unenforceable anyother provision hereof.(e) This Amendment shall be governed by and construed according to the laws of theCommonwealth of Pennsylvania.(f) This Agreement shall inure to the benefit of, and be binding upon, the parties hereto andtheir respective successors and assigns and may be executed in one or more counterparts, each ofwhich shall be deemed an original, but all of which together shall constitute one and the sameinstrument.(g) The headings used in this Agreement are for convenience of reference only, do not form apart of this Amendment and shall not affect in any way the meaning or interpretation of thisAmendment.**Each Borrower expressly ratifies and confirms the waiver of jury trial provisions contained inthe Loan Documents.**
 
5

 
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and yearfirst above written.      CSS INDUSTRIES, INC.