exv10w1






EXHIBIT 4.3 AND 10.1






CREDIT AGREEMENT




BY AND BETWEEN




COMERICA BANK (“Bank”)




AND




TANDY BRANDS ACCESSORIES, INC. (“Borrower”)




Dated as of February 12, 2008




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	SECTION 1.	 	     DEFINITIONS	 	 	1	 
	 
	 	1.1	 	Defined Terms	 	 	1	 
	 
	 	1.2	 	Accounting Terms	 	 	1	 
	 
	 	1.3	 	Singular and Plural	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	SECTION 2.	 	     TERMS, CONDITIONS AND PROCEDURES FOR BORROWING	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	SECTION 3.	 	     REPRESENTATIONS AND WARRANTIES	 	 	1	 
	 
	 	3.1	 	Authority	 	 	1	 
	 
	 	3.2	 	Due Authorization	 	 	2	 
	 
	 	3.3	 	Title to Property	 	 	2	 
	 
	 	3.4	 	Encumbrances	 	 	2	 
	 
	 	3.5	 	Subsidiaries	 	 	2	 
	 
	 	3.6	 	Taxes	 	 	2	 
	 
	 	3.7	 	No-Defaults	 	 	2	 
	 
	 	3.8	 	Enforceability of Agreement and Loan Documents	 	 	2	 
	 
	 	3.9	 	Non-violation	 	 	3	 
	 
	 	3.10	 	Actions, Suits, Litigation or Proceedings	 	 	3	 
	 
	 	3.11	 	Compliance with Laws	 	 	3	 
	 
	 	3.12	 	Consents, Approvals and Filings, Etc	 	 	3	 
	 
	 	3.13	 	Contracts, Agreements and Leases	 	 	3	 
	 
	 	3.14	 	ERISA	 	 	3	 
	 
	 	3.15	 	No Investment Company	 	 	3	 
	 
	 	3.16	 	No Margin Stock	 	 	3	 
	 
	 	3.17	 	Environmental Representations	 	 	4	 
	 
	 	3.18	 	Accuracy of Information	 	 	4	 
	 
	 	3.19	 	[Reserved]	 	 	5	 
	 
	 	3.20	 	Conditions Precedent	 	 	5	 
	 
	 	3.21	 	Obligations	 	 	5	 
	 
	 	3.22	 	Material Agreements	 	 	5	 
	 
	 	3.23	 	Misrepresentation	 	 	5	 
	 
	 	3.24	 	No Conflicting Agreements	 	 	5	 
	 
	 	3.25	 	Intellectual Property	 	 	6	 
	 
	 	3.26	 	Survival of Representations and Warranties	 	 	6	 






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TABLE OF CONTENTS

(continued)






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	SECTION 4.	 	     AFFIRMATIVE COVENANTS	 	 	6	 
	 
	 	4.1	 	Preservation of Existence, Etc	 	 	6	 
	 
	 	4.2	 	Keeping of Books	 	 	6	 
	 
	 	4.3	 	Reporting Requirements	 	 	6	 
	 
	 	4.4	 	Financial Covenants	 	 	8	 
	 
	 	4.5	 	Inspections	 	 	8	 
	 
	 	4.6	 	Further Assurances; Financing Statements	 	 	8	 
	 
	 	4.7	 	Compliance with Leases, Licenses and Governmental Requirements	 	 	8	 
	 
	 	4.8	 	Indemnification	 	 	8	 
	 
	 	4.9	 	Governmental and Other Approvals	 	 	9	 
	 
	 	4.10	 	Insurance	 	 	9	 
	 
	 	4.11	 	Compliance with ERISA	 	 	9	 
	 
	 	4.12	 	Environmental Covenants	 	 	9	 
	 
	 	4.13	 	Accounts	 	 	10	 
	 
	 	4.14	 	Use of Loan Proceeds	 	 	10	 
	 
	 	4.15	 	Taxes	 	 	10	 
	 
	 	4.16	 	[Reserved.]	 	 	10	 
	 
	 	4.17	 	Future Domestic Subsidiaries; Additional Collateral	 	 	11	 
	 
	 	4.18	 	Registration of Intellectual Property Rights	 	 	11	 
	 
	 	4.19	 	Intellectual Property	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	SECTION 5.	 	     NEGATIVE COVENANTS	 	 	12	 
	 
	 	5.1	 	Capital Structure, Business Purpose	 	 	12	 
	 
	 	5.2	 	Mergers or Dispositions	 	 	12	 
	 
	 	5.3	 	Guaranties	 	 	12	 
	 
	 	5.4	 	Debt	 	 	12	 
	 
	 	5.5	 	Encumbrances	 	 	13	 
	 
	 	5.6	 	Acquisitions	 	 	13	 
	 
	 	5.7	 	Dividends	 	 	13	 
	 
	 	5.8	 	Investments	 	 	13	 
	 
	 	5.9	 	Transactions with Affiliates	 	 	14	 
	 
	 	5.10	 	Defaults on Other Obligations	 	 	14	 
	 
	 	5.11	 	Prepayment of Debt	 	 	14	 






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TABLE OF CONTENTS

(continued)






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.12	 	Pension Plans	 	 	14	 
	 
	 	5.13	 	Subordinate Indebtedness	 	 	14	 
	 
	 	5.14	 	No Further Negative Pledges	 	 	14	 
	 
	 	5.15	 	Accounts Receivable	 	 	14	 
	 
	 	5.16	 	[Reserved.]	 	 	14	 
	 
	 	5.17	 	Acquire Fixed Assets	 	 	14	 
	 
	 	5.18	 	Subordinated Debt	 	 	15	 
	 
	 	5.19	 	Property Transfers	 	 	15	 
	 
	 	5.20	 	Off-Site Inventory and Equipment	 	 	15	 
	 
	 	5.21	 	Government Regulation	 	 	15	 
	 
	 	5.22	 	Misrepresentation	 	 	15	 
	 
	 	5.23	 	Margin Stock	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	SECTION 6.	 	     EVENTS OF DEFAULT	 	 	15	 
	 
	 	6.1	 	Events of Default	 	 	15	 
	 
	 	6.2	 	Remedies Upon Event of Default	 	 	17	 
	 
	 	6.3	 	Setoff	 	 	17	 
	 
	 	6.4	 	Waiver of Certain Laws	 	 	18	 
	 
	 	6.5	 	Waiver of Defaults	 	 	18	 
	 
	 	6.6	 	Receiver	 	 	18	 
	 
	 	6.7	 	[Reserved]	 	 	18	 
	 
	 	6.8	 	Application of Proceeds of Collateral	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	SECTION 7.	 	     MISCELLANEOUS	 	 	18	 
	 
	 	7.1	 	Accounting Principles	 	 	18	 
	 
	 	7.2	 	Taxes and Fees	 	 	18	 
	 
	 	7.3	 	Governing Law	 	 	19	 
	 
	 	7.4	 	Audits of Collateral; Fees	 	 	19	 
	 
	 	7.5	 	Costs and Expenses	 	 	19	 
	 
	 	7.6	 	Notices	 	 	19	 
	 
	 	7.7	 	Further Action	 	 	19	 
	 
	 	7.8	 	Successors and Assigns; Participation	 	 	20	 
	 
	 	7.9	 	Indulgence	 	 	20	 
	 
	 	7.10	 	Amendment and Waiver	 	 	20	 






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TABLE OF CONTENTS

(continued)






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.11	 	Severability	 	 	20	 
	 
	 	7.12	 	Headings and Construction of Terms	 	 	20	 
	 
	 	7.13	 	[Reserved.]	 	 	20	 
	 
	 	7.14	 	Reliance on and Survival of Various Provisions	 	 	20	 
	 
	 	7.15	 	Effective Upon Execution	 	 	20	 
	 
	 	7.16	 	Complete Agreement; Conflicts	 	 	21	 
	 
	 	7.17	 	Exhibits and Addenda	 	 	21	 
	 
	 	7.18	 	Treatment of Certain Information; Confidentiality	 	 	21	 
	 
	 	7.19	 	WAIVER OF JURY TRIAL	 	 	22	 
	 
	 	7.20	 	USA Patriot Act Notification	 	 	22	 
	 
	 	7.21	 	OFAC/BSA Provision	 	 	22	 
	 
	 	7.22	 	ORAL AGREEMENTS INEFFECTIVE	 	 	23	 






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	ADDENDA:	 	 
	 	 	Defined Terms Addendum
	 	 	Financial Covenants Addendum
	 	 	Loan Terms, Conditions and Procedures Addendum
	 
	 	 	 	 
	EXHIBITS:	 	 
	 	 	Exhibit A — Form of Borrowing Base Certificate
	 	 	Exhibit B — Form of Compliance Certificate
	 	 	Exhibit C — Form of Request for Advance
	 
	 	 	 	 
	SCHEDULES:	 	 
	 

	 	Schedule 3.1(c)(3)
	 	Guarantors
	 

	 	Schedule 3.1(c)(6)
	 	Accounts
	 

	 	Schedule 3.1(j)
	 	Documentation Checklist
	 

	 	Schedule 3.5
	 	Subsidiaries
	 

	 	Schedule 3.14
	 	Pension Plans subject to Title IV of ERISA
	 

	 	Schedule 3.17
	 	Environmental Disclosures
	 

	 	Schedule 3.22
	 	Material Agreements
	 

	 	Schedule 3.25
	 	Intellectual Property
	 

	 	Schedule 5.4
	 	Debt
	 

	 	Schedule 5.5
	 	Encumbrances
	 

	 	Schedule 5.20
	 	Loan Party Locations







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CREDIT AGREEMENT




     THIS CREDIT AGREEMENT is made and delivered effective as of the 12th day of February, 2008,
(“Effective Date”) by and between TANDY BRANDS ACCESSORIES, INC., a Delaware corporation
(“Borrower”), and COMERICA BANK, a Texas banking association (“Bank”), and delivered to Bank in
Detroit, Michigan for execution by Bank at its offices in Detroit, Michigan.



RECITALS




     A. Borrower desires to obtain certain credit facilities from the Bank, and the Bank is willing
to provide such credit facilities to and in favor of Borrower.



     B. Such credit facilities are subject to the terms and conditions set forth herein and in
every other Loan Document.



AGREEMENT




     NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained,
Borrower and Bank agree as follows:



SECTION 1. DEFINITIONS




     1.1 Defined Terms. The terms as used in this Agreement shall have the meanings
assigned to such terms in the Defined Terms Addendum.



     1.2 Accounting Terms. All accounting terms not specifically defined in this Agreement
shall be determined and construed in accordance with GAAP.



     1.3 Singular and Plural. Where the context herein requires, the singular number shall
be deemed to include the plural, the masculine gender shall include the feminine and neuter
genders, and vice versa.



SECTION 2. TERMS, CONDITIONS AND PROCEDURES FOR BORROWING




     Subject to the terms, conditions and procedures of this Agreement and each other Loan Document
including, but not limited to, the terms, conditions and procedures set forth in the Defined Terms
Addendum and Loan Terms, Conditions and Procedures Addendum, Bank agrees to make credit available
to the Borrower on such dates and in such amounts as the Borrower shall request from time to time.



SECTION 3. REPRESENTATIONS AND WARRANTIES




     Borrower represents and warrants, and such representations and warranties shall be deemed to
be continuing representations and warranties during the entire life of this Agreement, and so long
as Bank shall have any commitment or obligation to make any Loans or issue any Letters of Credit
hereunder, and so long as any Indebtedness remains unpaid and outstanding under any Loan Document,
as follows:



     3.1 Authority. Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and is duly qualified and
authorized to do business in each other jurisdiction in which the character of its assets or the
nature of its business makes such qualification necessary except to the extent that the failure to
do so would result in a Material Adverse Effect.













 





     3.2 Due Authorization. Each Loan Party has all requisite corporate or other
organizational power and authority to execute, deliver and perform its obligations under each Loan
Document to which it is a party or is otherwise bound, all of which have been duly authorized by
all necessary corporate or other organizational action, and are not in contravention of law or the
terms of any Loan Party’s organizational or other governing documents.



     3.3 Title to Property. Each Loan Party has marketable title to all property and
assets purported to be owned by it, including those assets identified on the Financial Statements
most recently delivered by Borrower to Bank, subject only to Permitted Encumbrances. Each Loan
Party owns or has the right to use all assets and properties, real and personal, tangible and
intangible, including without limitation all trademarks, service marks, trade names, copyrights,
patents, franchises and licenses that are necessary or material to the conduct of its business as
now operated, and no such ownership or right violates the rights of any other Person therein,
except where the failure to own such properties or the right to use such properties would not have
a Material Adverse Effect.



     3.4 Encumbrances. There are no security interests or other Liens or encumbrances on,
and no financing statements on file with respect to, any of the property or assets of any Loan
Party, except for Permitted Encumbrances.



     3.5 Subsidiaries. Borrower has no Subsidiaries as of the Effective Date, except as
set forth in Schedule 3.5 which Schedule sets forth the percentage of ownership of Borrower
in each such Subsidiary as of the Effective Date. As to Borrower and each of its Subsidiaries as
of the Effective Date, (a) it is an organization as described on Schedule 3.5 hereto and,
with respect to the Domestic Subsidiaries, has provided the Bank with complete and correct copies
of its articles of incorporation, by-laws or other applicable charter or organizational documents,
and, if applicable, a good standing certificate from its jurisdiction of organization and each
United States jurisdiction in which it has a physical presence, and (b) its correct legal name,
chief executive office address, type of organization and jurisdiction of organization, and tax
identification number are set forth on Schedule 3.5 hereto.



     3.6 Taxes. Each Loan Party has filed, on or before their respective due dates, all
federal, state, local and foreign tax returns which are required to be filed, or has obtained
extensions for filing such tax returns, and is not delinquent in filing such returns in accordance
with such extensions, and has paid all taxes which have become due and payable pursuant to those
returns or pursuant to any assessments received by any such party, as the case may be, to the
extent such taxes have become due and payable, except to the extent such tax payments are being
actively and diligently contested in good faith by appropriate proceedings, and if requested by
Bank, have been bonded or reserved in an amount and manner reasonably satisfactory to Bank.



     3.7 No-Defaults. There exists no default (or event which, with the giving of notice
or passage of time, or both, would result in a default) under the provisions of any instrument or
agreement evidencing, governing, securing or otherwise relating to any Debt of any Loan Party or
pertaining to any of the Permitted Encumbrances that would, individually or in the aggregate, have
a Material Adverse Effect.



     3.8 Enforceability of Agreement and Loan Documents. Each Loan Document has been duly
executed and delivered by duly authorized officer(s) or other representative(s) of each Loan Party,
and constitutes the valid and binding obligations of each Loan Party, enforceable in accordance
with their respective terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and general principles of equity at the time in effect.



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     3.9 Non-violation. The execution, delivery and performance by each Loan Party of the
Loan Documents to which such Loan Party is a party or otherwise bound, are not in violation of the
terms of any indenture, agreement or undertaking to which any such Loan Party is a party or by
which it is bound, except to the extent that such terms have been waived or that failure to comply
with any such terms would not have a Material Adverse Effect.



     3.10 Actions, Suits, Litigation or Proceedings. There are no actions, suits,
litigation or proceedings, at law or in equity, and no proceedings before any arbitrator or by or
before any Governmental Authority, pending, or, to the knowledge of Borrower, threatened against
any Loan Party, which, if adversely determined, could materially impair the right of any Loan Party
to carry on its business substantially as now conducted or could reasonably be expected to have a
Material Adverse Effect. To the knowledge of Borrower, no Loan Party has received any written
notice from any Governmental Authority that such Loan Party is under investigation by, or is
operating under any restrictions imposed by, any Governmental Authority.



     3.11 Compliance with Laws. Each Loan Party has complied with all Governmental
Requirements applicable to it, including, without limitation, Environmental Laws, to the extent
that failure to so comply could reasonably be expected to have a Material Adverse Effect.



     3.12 Consents, Approvals and Filings, Etc. Except as have been previously obtained or
as otherwise expressly provided in this Agreement, no authorization, consent, approval, license,
qualification or formal exemption from, nor any filing (other than financing statements and filings
with the SEC related to the execution, delivery and performance of any Loan Document), declaration
or registration with, any Governmental Authority and no material authorization, consent or approval
from any other Person, is required in connection with the execution, delivery and performance by
each Loan Party of any Loan Document to which it is a party. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations and registrations which have
previously been obtained or made, as the case may be, are in full force and effect and are not the
subject of any attack, or to the knowledge of Borrower, any threatened attack, in any material
respect, by appeal, direct proceeding or otherwise.



     3.13 Contracts, Agreements and Leases. To Borrower’s knowledge, no Loan Party is in
default (beyond any applicable period of grace or cure) in complying with any provision of any
material contract, agreement, indenture, lease or instrument to which it is a party or by which it
or any of its properties or assets are bound, where such default would have a Material Adverse
Effect.



     3.14 ERISA. Except as shown on Schedule 3.14, as the same may be updated or
supplemented from time to time, no Loan Party maintains or contributes to any Pension Plan subject
to Title IV of ERISA. Furthermore, no Loan Party has incurred any accumulated funding deficiency
within the meaning of ERISA or incurred any liability to the PBGC in connection with any Pension
Plan established or maintained by such Loan Party, other than liabilities for premium payments.
There have been no unreported “reportable events” described in Section 4043(c) of ERISA with
respect to any Pension Plan and no Loan Party has participated in any “prohibited transaction”
described in Sections 406 or 407 of ERISA for which no exemption exists under Section 408 of ERISA.



     3.15 No Investment Company. No Loan Party is required to be registered as an
“investment company” within the meaning of the Investment Company Act of 1940, as amended.



     3.16 No Margin Stock. No Loan Party is engaged principally, or as one of its
important activities, directly or indirectly, in the business of extending credit for the purpose
of purchasing or carrying margin stock, and none of the proceeds of any of the Loans will be used,
directly or indirectly, to purchase or carry any margin stock or made available by any Loan Party
in any manner to any other



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Person to enable or assist such Person in purchasing or carrying margin stock, or otherwise
used or made available for any other purpose which might violate the provisions of Regulations G,
T, U, or X of the Board of Governors of the Federal Reserve System. Terms for which meanings are
provided in Regulation U of said Board of Governors or any regulations substituted therefor, as are
from time to time in effect, are used in this Section with such meanings, and these representations
and warranties shall be immediately effective.




     3.17 Environmental Representations.



          (a) No Loan Party has received any written notice of any violation of any Environmental Law(s)
that either individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect; and no Loan Party is a party to any litigation or administrative proceeding, nor,
so far as is known by Borrower, is any litigation or administrative proceeding threatened against
any Loan Party which, in any case, (i) asserts or alleges that any Loan Party violated any
Environmental Law(s), (ii) asserts or alleges that any Loan Party is required to clean up, remove
or take any other remedial or response action due to the disposal, depositing, discharge, leaking
or other release of any Hazardous Materials, or (iii) asserts or alleges that any Loan Party is
required to pay all or a portion of any past, present or future clean-up, removal or other remedial
or response action which arises out of or is related to the disposal, depositing, discharge,
leaking or other release of any Hazardous Materials by any Loan Party, and which, with respect to
clauses (i), (ii) or (iii) above, either singularly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.




          (b) To Borrower’s knowledge, there are no conditions existing currently which could reasonably
be expected to subject any Loan Party to damages, penalties, injunctive relief or clean-up costs
under any applicable Environmental Law(s), or which require, or are likely to require, clean-up,
removal, remedial action or other response pursuant to any applicable Environmental Law(s) by any
Loan Party, and which, in any case, either singularly or in aggregate, could reasonably be expected
to have a Material Adverse Effect.




          (c) No Loan Party is subject to any judgment, decree, order or citation related to or arising
out of any applicable Environmental Law(s), which, either singularly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and, to Borrower’s knowledge, no Loan
Party has been named or listed as a potentially responsible party by any Governmental Authority in
any matter arising under any applicable Environmental Law(s), except as disclosed in Schedule
3.17 as of the Effective Date, and, in the event that any such matters are disclosed in said
Schedule 3.17 they will not, either singularly or in the aggregate, have a Material Adverse
Effect.




          (d) Each Loan Party has all permits, licenses and approvals required under applicable
Environmental Laws, except where the failure to so obtain or maintain any such permits, licenses or
approvals could reasonably be expected to have a Material Adverse Effect.




     3.18 Accuracy of Information. The Financial Statements previously furnished to Bank
have been prepared in all material respects in accordance with GAAP and fairly presented in all
material respects the financial condition of Borrower and, as applicable, the consolidated
financial condition of Borrower and such other Person(s) as such Financial Statements purport to
present, and the results of their respective operations as of the dates and for the periods covered
thereby, provided that in the case of interim Financial Statements, such Financial Statements are
subject to normally recurring year-end adjustments; and since the date(s) of said Financial
Statements, there has been no Material Adverse Effect. As of the date covered by such Financial
Statements, no Loan Party has any material contingent obligations, liabilities for taxes, long-term
leases or long-term commitments not disclosed by, or reserved against in, such Financial
Statements. After the making of the Loans, the Loan Parties, taken as a whole,



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are able to pay their debts as they mature, have capital sufficient to carry on their
businesses and have assets the fair market value of which, taken as a whole, exceed their
liabilities, and no Loan Party will be rendered insolvent, under-capitalized or unable to pay debts
generally as they become due by the execution or performance of any Loan Document to which it is a
party or by which it is otherwise bound.




     3.19 [Reserved]



     3.20 Conditions Precedent. As of each Disbursement Date, all appropriate conditions
precedent referred to in Section 3 of the Loan Terms, Conditions and Procedures Addendum
hereof shall have been satisfied or waived in writing by Bank.



     3.21 Obligations. Neither Borrower nor any Loan Party has any Debt, except as
permitted by Section 5.4.



     3.22 Material Agreements. Borrower is, and to Borrower’s knowledge, all other parties
to Borrower’s Material Agreements are, in compliance with all of Borrower’s Material Agreements in
all material respects, and to Borrower’s knowledge, no event has occurred and no condition exists
that can be reasonably anticipated to result in any failure of compliance with any such Material
Agreement in any material respect. Schedule 3.22 sets forth the Material Agreement(s) of
each Loan Party in effect on the Effective Date.



     3.23 Misrepresentation. No warranty or representation by Borrower contained herein or
in any certificate or other document furnished by Borrower pursuant hereto contains any untrue
statement of material fact or omits to state a material fact necessary to make such warranty or
representation not misleading in light of the circumstances under which it was made; provided,
that, with respect to projected financial information, Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be reasonable at the time
in light of the circumstances when made There is no fact known to Borrower which Borrower has not
disclosed to Bank in writing which could reasonably be expected to have a Material Adverse Effect.



     3.24 No Conflicting Agreements. Neither Borrower nor any Loan Party is in default
under any shareholder agreement or preferred stock agreement that could reasonably be expected to
have a Material Adverse Effect. No provision of the Certificate of Incorporation, Bylaws or
preferred stock, if any, of Borrower, and no provision of any existing mortgage, indenture, note,
statute (including, without limitation, any applicable usury or similar law), rule, regulation,
judgment, decree or order binding on Borrower or affecting the property of Borrower conflicts with,
or requires any consent under, or would in any way prevent the execution, delivery or carrying out
of the terms of, this Agreement and the documents contemplated hereby, and the taking of any such
action will not constitute a default under, or result in the creation or imposition of, or
obligation to create any lien upon the property of Borrower pursuant to the terms of any such
mortgage, indenture or note.



     3.25 Intellectual Property. Borrower and each Loan Party own or have rights to use
all Intellectual Property necessary to continue to conduct their respective businesses as now or
heretofore conducted, except where the failure to own such intellectual property or the right to
use such intellectual property would not have a Material Adverse Effect, and each patent,
trademark, copyright and license held by Borrower or such other Loan Party as of the Effective Date
is listed, together with application or registration, numbers, as applicable, on Schedule
3.25. To Borrower’s knowledge, Borrower and each Loan Party conduct their respective
businesses and affairs without infringement upon or interference with any Intellectual Property of
any other Person, except where such infringement or interference would not have a Material Adverse
Effect.



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     3.26 Survival of Representations and Warranties. All the representations and
warranties contained in Sections 3.1 through 3.24, inclusive, shall survive the execution and
delivery of this Agreement and shall continue in full force and effect until all amounts owing
hereunder have been repaid and the credit facilities made available hereunder have been terminated.



SECTION 4. AFFIRMATIVE COVENANTS




     Borrower covenants and agrees that, so long as Bank is committed to make any Loan or issue any
Letter of Credit under this Agreement, and so long as any Indebtedness remains outstanding, it
will, and, as applicable, it will cause each Loan Party within its control to:



     4.1 Preservation of Existence, Etc. Preserve and maintain its corporate existence
except as permitted by Sections 5.1 and 5.2, and preserve and maintain such of its rights,
licenses, and privileges as are material to the business and operations conducted by it except to
the extent the failure to maintain such rights, licenses and privileges would not have a Material
Adverse Effect; qualify and remain qualified to do business in each jurisdiction in which such
qualification is material to its business and operations or ownership of its properties except
where the failure to so qualify would not have a Material Adverse Effect, continue to conduct and
operate its business substantially as conducted and operated on the Effective Date; at all times
maintain, preserve and protect all of its franchises and trade names and preserve all the remainder
of its property necessary to conduct its business except where the failure to do so would not have
a Material Adverse Effect and keep the same in good repair, working order and condition (ordinary
wear and tear excepted); and from time to time make, or cause to be made, all needed and proper
repairs, renewals, replacements, betterments and improvements thereto necessary to conduct its
business except where the failure to do so would not have a Material Adverse Effect.



     4.2 Keeping of Books. Keep proper books of record and account in which full and
correct entries shall be made of all of its financial transactions and its assets and businesses so
as to permit the presentation of financial statements (including, without limitation, those
Financial Statements to be delivered to Bank pursuant Section 4.3 hereof) prepared in
accordance with GAAP.



     4.3 Reporting Requirements. Furnish to Bank, or cause to be furnished to Bank, the
following:



          (a) Within three (3) Business Days after becoming aware of the occurrence or existence of each
Default or Event of Default hereunder, any occurrence that which has or could reasonably be
expected to have a Material Adverse Effect, a written statement of the chief financial officer of
Borrower (or in his or her absence, a responsible senior officer of Borrower), setting forth
details of such Default, Event of Default or occurrence, and the action which Borrower has taken,
or has caused to be taken, or proposes to take, or to cause to be taken, with respect thereto;




          (b) within ninety (90) days after and as of the end of each fiscal year of Borrower, audited
Financial Statements of Borrower and its consolidated Subsidiaries, including a balance sheet,
statement of operations and statement of cash flows, for and as of such fiscal year then ending,
with comparative numbers for the preceding fiscal year. Such audited Financial Statements shall be
prepared in accordance with GAAP by independent certified public accountants of recognized standing
selected by Borrower and satisfactory to Bank and shall contain unqualified opinions as to the
fairness of the statements therein contained.




          (c) within thirty (30) days after and as of the end of each of the first two months of each
calendar quarter, and within forty-five (45) days after and as of the end of the last month of each
calendar quarter, Financial Statements of Borrower and its Subsidiaries, consolidated, as
applicable, for


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and as of such reporting period, including a balance sheet, statement of operations and
statement of cash flows for and as of such reporting period then ending and for and as of that
portion of the fiscal year then ending, with comparative numbers for the same period of the
preceding fiscal year, in each case, certified by the chief financial officer of Borrower as to
consistency with prior financial reports and accounting periods, accuracy and fairness of
presentation, subject to year end audit adjustments;




          (d) within thirty (30) days after and as of the end of each calendar month, agings and reports
of accounts receivable of Borrower and such of the other Borrowing Base Obligors as may be required
by the Bank, in form and detail satisfactory to Bank;




          (e) within thirty (30) days after and as of the end of each calendar month, agings and reports
of accounts payable of Borrower and such of the other Loan Parties as may be required by the Bank,
in form and detail satisfactory to Bank;




          (f) within thirty (30) days after and as of the end of each calendar month, a listing of
Eligible Inventory of Borrower and such of the other Borrowing Base Obligors in form and detail
satisfactory to Bank, such listing to identify the cost and location thereof;




          (g) within forty-five (45) days after and as of the end of the earlier of (i) each calendar
quarter, or (ii) each date of filing of Borrower’s 10-Q with the SEC, a Compliance Certificate
dated as of the end of such quarter;




          (h) within thirty (30) days after and as of the end of each calendar month, a Borrowing Base
Certificate dated as of the end of such month;




          (i) promptly upon becoming available, a copy of all financial statements, reports, notices,
proxy statements and other material written communications sent by Borrower or any Loan Party to
their stockholders, and all regular and periodic reports filed by Borrower or any Loan Party with
any securities exchange and the SEC;




          (j) promptly following receipt thereof, copies of all management letters and other substantive
reports submitted to any Loan Party by independent certified public accountants in connection with
any annual audit of any such party;




          (k) within thirty (30) days after the end of each fiscal year of Borrower, a forecast of the
income, expense and cash flow of Borrower for the succeeding fiscal year presented on a
month-by-month and year-to-date basis and accompanied by a narrative summary of assumptions, and in
form and detail satisfactory to Bank; and




          (l) promptly, and in form and detail satisfactory to Bank, such other information as Bank may
request in writing from time to time.




     4.4 Financial Covenants. On a consolidated basis, Borrower and its Subsidiaries will
maintain all financial covenants set forth in the Financial Covenants Addendum.



     4.5 Inspections. Permit Bank, through its authorized attorneys, accountants and
representatives, at Borrower’s cost and expense, to visit any office of any Loan Party, discuss its
financial matters with its officers, employees and independent certified public accountants, and by
this provision, Borrower authorizes such officers, employees and accountants to discuss the
finances and affairs of any Loan Party, and examine each Loan Party’s books, accounts, records,
ledgers, assets and properties of every kind and description, wherever located, at all reasonable
times during normal business hours of



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Borrower or such Loan Party, upon three (3) Business Days prior written request of Bank,
provided that no advance request or notice shall be required upon the occurrence and during the
existence or continuance of an Event of Default. Borrower agrees to reimburse Bank, within 30 days
of written demand, for the costs and expenses incurred by Bank for such inspections, provided that,
so long as no Event of Default has occurred and is continuing or existing, Borrower shall not be
obligated to reimburse Bank for more than four inspections during any calendar year.




     4.6 Further Assurances; Financing Statements. Furnish Bank, at Borrower’s expense,
upon Bank’s request and in form satisfactory to Bank (and execute and deliver or cause to be
executed and delivered), such additional pledges, assignments, mortgages, lien instruments or other
security instruments, consents, acknowledgments, subordinations and financing statements covering
any or all of the Collateral pledged, assigned, mortgaged or encumbered pursuant to any Loan
Document, of every nature and description, whether now owned or hereafter acquired by Borrower or
any other Loan Party providing such Collateral, together with such other documents or instruments
as Bank may require to effectuate more fully the purposes of any Loan Document. Borrower further
agrees to provide or cause to be provided to Bank such documentation or information as requested by
Bank from time to time, including, without limitation, information to satisfy the Bank’s
requirements under “Know Your Customer” or “Customer Identification” provisions under federal laws
relating to anti-money laundering or terrorism including, without limitation, under the Patriot Act
and regulations issued pursuant thereto, as well as acts administered by the Office of Foreign
Assets Control.



     4.7 Compliance with Leases, Licenses and Governmental Requirements. Comply with all
terms and conditions of (i) any leases covering any premises or property (real or personal) wherein
any of the Collateral is or may be located, or covering any of the other material personal or real
property now or hereafter owned, leased or otherwise used by any Loan Party in the conduct of its
business, (ii) any license agreements covering any Inventory now or hereafter owned or otherwise
used by any Loan Party in the conduct of its business, (c) any Material Agreement, and, (d) any
Governmental Requirement, except in each case where the failure to so comply could not reasonably
be expected to result in a Material Adverse Effect.



     4.8 Indemnification. INDEMNIFY, DEFEND AND SAVE BANK HARMLESS FROM ANY AND ALL
CLAIMS, LOSSES, COSTS, DAMAGES, LIABILITIES, OBLIGATIONS AND EXPENSES, INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES, INCURRED BY BANK BY REASON OF ANY DEFAULT OR EVENT OF
DEFAULT, IN DEFENDING OR PROTECTING THE LIENS WHICH SECURE OR PURPORT TO SECURE ALL OR ANY PORTION
OF THE INDEBTEDNESS, WHETHER EXISTING UNDER ANY LOAN DOCUMENT OR OTHERWISE OR THE PRIORITY THEREOF,
OR IN ENFORCING THE OBLIGATIONS OF BORROWER OR ANY OTHER PERSON UNDER OR PURSUANT TO ANY LOAN
DOCUMENT, OR IN THE PROSECUTION OR DEFENSE OF ANY ACTION OR PROCEEDING CONCERNING ANY MATTER
GROWING OUT OF OR CONNECTED WITH THE COLLATERAL OR ANY LOAN DOCUMENT, INCLUDING ANY CLAIMS, LOSSES,
COSTS, DAMAGES, LIABILITIES, OBLIGATIONS, AND EXPENSES RESULTING FROM BANK’S OWN NEGLIGENCE,
EXCEPT AND TO THE EXTENT BUT ONLY TO THE EXTENT CAUSED BY BANK’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.



     4.9 Governmental and Other Approvals. Apply for, obtain and/or maintain in effect, as
applicable, all authorizations, consents, approvals, licenses, qualifications, exemptions, filings,
declarations and registrations (whether with any court, governmental agency, regulatory authority,
securities exchange or otherwise) which are necessary in connection with the execution, delivery
and/or performance by any Loan Party of any Loan Document to which it is a party, except where the
failure to do so would not have a Material Adverse Effect .



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     4.10 Insurance. Maintain insurance coverage on its physical assets and against other
business risks in such amounts and of such types as are customarily carried by companies similar in
size and nature (including, without limitation, loss of rent and/or business interruption insurance
and boiler and machinery insurance), including but not limited to (a) insurance under an “all risk”
policy against fire and other risks customarily insured against, and (b) public liability insurance
and other insurance as may be required by law or reasonably required by Bank, and in the event of
acquisition of additional property, real or personal, or of the incurrence of additional risks of
any nature, increase such insurance coverage in such manner and to such extent as prudent business
judgment and present practice would dictate, all of which insurance shall be in amount, form and
content, and written by companies as may be reasonably satisfactory to Bank; and in the case of all
policies covering property subject to any Loan Document or property in which the Bank shall have a
Lien of any kind whatsoever, other than those policies protecting against casualty liabilities to
strangers, all such insurance policies shall provide that the loss payable thereunder shall be
payable to Borrower (or other Person providing Collateral) and Bank, with lender’s loss payee
and/or mortgagee’s clauses, as applicable, in favor of and satisfactory to Bank for all such
policies, and such policies shall also provide that they may not be canceled or changed without
thirty (30) days’ prior written notice to Bank (ten (10) days’ prior notice in the event of
cancellation due to non-payment of premiums). Upon the request of Bank, all of said policies, or
copies thereof, including all endorsements thereon and those required hereunder, shall be deposited
with Bank.



     4.11 Compliance with ERISA. In the event that any Loan Party or any of its
Subsidiaries maintain(s) or establish(es) a Pension Plan, such party shall (a) comply in all
material respects with all applicable requirements imposed by ERISA as presently in effect or
hereafter promulgated, including, but not limited to, the minimum funding requirements thereof; (b)
promptly notify Bank upon the occurrence of a “reportable event” described in Section 4043(c) of
ERISA, or the occurrence of a “prohibited transaction” described in Sections 406 and 407 of ERISA
for which no exemption exists under Section 408 of ERISA, or the commencement by the PBGC or any
Loan Party of proceedings to terminate any Pension Plan, together with a copy of any proposed
notice of such event which may be required to be filed with the PBGC; and (c) furnish to Bank (or
cause the plan administrator to furnish to Bank) a copy of the annual return (including all
schedules and attachments) for each Pension Plan, and filed with the Department of Labor by any
Loan Party not later than thirty (30) days after such report has been so filed.



     4.12 Environmental Covenants.



          (a) Comply with all applicable Environmental Laws, and maintain all permits, licenses and
approvals required under applicable Environmental Laws, where the failure to do so could reasonably
be expected to have a Material Adverse Effect.




          (b) Promptly notify Bank, in writing, after Borrower becomes aware of any condition or
circumstance which makes any of the environmental representations or warranties set forth in this
Agreement incomplete, incorrect or inaccurate in any material respect as of such date if such
condition or circumstance could reasonably be expected to have a Material Adverse Effect; and
promptly provide to Bank, after receipt thereof, copies of any material correspondence, notice,
pleading, citation, indictment, complaint, order or decree, or other document from any source
received by Borrower asserting or alleging a violation of any Environmental Laws by any Loan Party,
or of any circumstance or condition which requires or may require, a financial contribution by any
Loan Party, or a clean-up, removal, remedial action or other response by or on behalf of any Loan
Party, under applicable Environmental Law(s), or which seeks damages or civil, criminal or punitive
penalties from any Loan Party or any violation or alleged violation of Environmental Law(s), if the
same could reasonably be expected to have a Material Adverse Effect.




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          (c) BORROWER HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD BANK, AND ANY OF BANK’S PAST, PRESENT
AND FUTURE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, REPRESENTATIVES AND CONSULTANTS (THE
“INDEMNIFIED PARTIES”), HARMLESS FROM ANY AND ALL CLAIMS, LOSSES, DAMAGES, SUITS, PENALTIES, COSTS,
LIABILITIES, OBLIGATIONS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE LEGAL EXPENSES AND
REASONABLE ATTORNEYS’ FEES) INCURRED OR ARISING OUT OF ANY CLAIM, LOSS OR DAMAGE OF ANY PROPERTY,
INJURIES TO OR DEATH OF ANY PERSONS, CONTAMINATION OF OR ADVERSE EFFECTS ON THE ENVIRONMENT, OR
OTHER VIOLATION OF ANY APPLICABLE ENVIRONMENTAL LAW(S), IN ANY CASE, CAUSED BY ANY LOAN PARTY OR IN
ANY WAY RELATED TO ANY PROPERTY OWNED OR OPERATED BY ANY LOAN PARTY OR DUE TO ANY ACTS OF ANY LOAN
PARTY OR ANY OF ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, CONSULTANTS AND/OR
REPRESENTATIVES INCLUDING ANY CLAIMS, LOSSES, DAMAGES, SUITS, PENALTIES, COSTS, LIABILITIES,
OBLIGATIONS OR EXPENSES, RESULTING FROM BANK’S OWN NEGLIGENCE; PROVIDED HOWEVER, THAT THE
FOREGOING INDEMNIFICATION SHALL NOT BE APPLICABLE, AND BORROWER SHALL NOT BE LIABLE FOR ANY SUCH
CLAIMS, LOSSES, DAMAGES, SUITS, PENALTIES, COSTS, LIABILITIES, OBLIGATIONS OR EXPENSES, TO THE
EXTENT (BUT ONLY TO THE EXTENT) THE SAME ARISE OR RESULT FROM ANY GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE INDEMNIFIED PARTIES.




     4.13 Accounts. By May 12, 2008, open and maintain, deposit accounts (including all
operating accounts, cash management accounts, and collection/lockbox services) of Borrower with
Bank, provided that, with respect to any such accounts maintained with any other Person (other than
accounts for payroll or other liabilities related to employees) listed on Schedule 3.1(c)(6), while
such account is maintained with such Person, cause to be executed and delivered an Account Control
Agreement in form and substance satisfactory to Bank and Borrower by March 17, 2008. In the event
Borrower is unable to deliver a satisfactory Account Control Agreement for an account by March 17,
2008, Borrower shall have until May 12, 2008 to transfer such account to Bank or such other
financial institution as will provide an Account Control Agreement in form and substance
satisfactory to Bank and Borrower.



     4.14 Use of Loan Proceeds. Use the proceeds of the Loans only for the purposes set
forth in the Section 1.6 of the Loan Terms, Conditions and Procedures Addendum.



     4.15 Taxes. Pay promptly and within the time that they can be paid without late
charge, penalty or interest all taxes, assessments and similar imposts and charges of every kind
and nature lawfully levied, assessed or imposed upon Borrower or any Loan Party, and their
property, except to the extent being contested in good faith and, if requested by Bank, bonded or
reserved in an amount and manner reasonably satisfactory to Bank. If Borrower shall fail to pay
such taxes and assessments within the time they can be paid without penalty, late charge or
interest, and the same are not being contested in accordance with this Section, Bank shall have the
option to do so, and Borrower agrees to repay Bank upon demand, with interest at the Applicable
Interest Rate, all amounts so expended by Bank.



     4.16 [Reserved.]



     4.17 Future Domestic Subsidiaries; Additional Collateral.



          (a) Within 30 days of the date such Person becomes a Domestic Subsidiary after the Effective
Date, cause such Domestic Subsidiary to execute and deliver to the Bank a guaranty of the
Indebtedness or a joinder to the Guaranty delivered on the Effective Date;




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          (b) With respect to the tangible and intangible personal property of each Person which becomes
a Domestic Subsidiary after the Effective Date, within 30 days of the date such Person becomes a
Domestic Subsidiary, cause such Domestic Subsidiary to execute and deliver to the Bank a Security
Agreement encumbering substantially all of the tangible and intangible personal property of such
Domestic Subsidiary to secure the Indebtedness to the same extent covered by the Security Agreement
delivered on the Effective Date, or a joinder to the Security Agreement delivered on the Effective
Date;




          (c) With respect to real property owned, leased or otherwise acquired by Borrower or any Loan
Party, upon the request of Bank, the Borrower and/or any Loan Party shall execute or cause to be
executed, a first priority mortgage covering such property subject to Permitted Encumbrances of the
types described in clauses (b), (d), (e) and (f) of the definition of Permitted Encumbrances (and
Collateral Access Agreement in the case of leased property), together with such real estate due
diligence and documentation as may be required by Bank, including, but not limited to, title
insurance, survey, appraisal, environmental, insurance (including flood insurance where required);
and




          (d) In each case, (i) such document of guaranty, security or mortgage shall be in form
satisfactory to the Bank, together with such supporting documentation, including without limitation
corporate authority items, certificates and opinions of counsel, as reasonably required by the
Bank, and (ii) Borrower shall take, or cause to be taken, such steps as are necessary or advisable
under applicable law to perfect the liens granted pursuant to such document.




     4.18 Registration of Intellectual Property Rights. Borrower and each other Loan Party
shall promptly register or cause to be registered (to the extent not already registered) with the
United States Patent and Trademark Office or the United States Copyright Office, as applicable,
those Intellectual Property rights listed in Schedule 3.25 to this Agreement or in any
security agreement now or hereafter securing or purporting to secure any of the Indebtedness.
Borrower and each other Loan Party shall register or cause to be registered with the United States
Patent and Trademark Office or the United States Copyright Office, as applicable, those additional
Intellectual Property rights developed or acquired by Borrower or such other Loan Party from time
to time prior to the sale or licensing of such product to any third party including, without
limitation, revisions or additions to the Intellectual Property rights listed in Schedule
3.25 to this Agreement or in any agreement now or hereafter securing or purporting to secure
any of the Indebtedness, except where the failure to do so would not have a Material Adverse
Effect.



          (a) Borrower and each other Loan Party shall execute and deliver such additional instruments
and documents from time to time as Bank shall request to perfect the Bank’s Liens upon the
Intellectual Property now or hereafter securing or purporting to secure any of the Indebtedness.




          (b) Borrower and each other Loan Party shall (i) protect, defend and maintain the validity and
enforceability of all trademarks, patents and copyrights and other Intellectual Property now or
hereafter securing or purporting to secure any of the Indebtedness, except where the failure to do
so would not have a Material Adverse Effect (ii) use commercially reasonable efforts to detect
infringements of the same and promptly advise Bank in writing of material infringements detected
and (iii) not allow any of the same to be abandoned, forfeited or dedicated to the public, except
where the failure to do so would not have a Material Adverse Effect.




          (c) Bank shall have the right, but not the obligation, to take, at Borrower’s sole expense,
any actions that Borrower is required under this Section to take but which Borrower fails to take.




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     4.19 Intellectual Property. Borrower and each Loan Party will conduct their
respective businesses and affairs without intentional infringement of any Intellectual Property of
any other Person, except to the extent such infringement would not have a Material Adverse Effect.



SECTION 5. NEGATIVE COVENANTS




     Borrower covenants and agrees that, so long as Bank is committed to make any Loan or issue any
Letter of Credit under this Agreement, and so long as any Indebtedness remains outstanding, it will
not, and, as applicable, it will not allow any Loan Party within its control to, without the prior
written consent of the Bank:



     5.1 Capital Structure, Business Purpose. Purchase, acquire or redeem any of its
equity ownership interests except pursuant to and in conjunction with the Employee Benefit Plans,
or enter into any reorganization or recapitalization or reclassify its equity ownership interests,
or make any material change in its capital structure or general business purpose, except pursuant
to the Permitted Reorganization.



     5.2 Mergers or Dispositions. (i) Change its name, enter into any merger or
consolidation, whether or not the surviving entity thereunder, except for (a) mergers or
consolidations of any Subsidiary into Borrower or any Guarantor so long as Borrower or Guarantor
shall be the continuing or surviving entity; and (b) pursuant to the Permitted Reorganization;
provided that at the time of each such merger or consolidation, both before and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing or result from such
merger or consolidation, or (ii) sell, lease, transfer or dispose of all, substantially all, or any
material part of its assets (whether in a single transaction or in a series of transactions) except
for sales of Inventory in the ordinary course of business and except pursuant to the Permitted
Reorganization.



     5.3 Guaranties. Guarantee, endorse, or otherwise become secondarily liable for or
upon the obligations or Debt of others (whether directly or indirectly), except:



          (a) guaranties in favor of and satisfactory to Bank; and




          (b) endorsements for deposit or collection in the ordinary course of business.




     5.4 Debt. Become or remain obligated for any Debt, except:



          (a) Indebtedness and other Debt from time to time outstanding and owing to Bank;




          (b) current unsecured trade, utility or non-extraordinary accounts payable arising in the
ordinary course of business;




          (c) Subordinated Debt, provided (i) at the time of and upon the issuance of such Subordinated
Debt there is and will be immediately after such issuance Continuing Compliance, and (ii) Borrower
complies with the provisions of Section 2.8 of the Loan Terms, Conditions and Procedures Addendum;




          (d) purchase money indebtedness incurred for the purpose of purchasing or acquiring fixed
assets, so long as the amount of such purchase money indebtedness incurred by Borrower and its
Subsidiaries does not exceed $1,000,000 of principal in the aggregate outstanding at any time;




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          (e) Debt outstanding as of the date hereof more particularly described in Schedule 5.4
attached hereto;




          (f) any of Sheldon Canada’s obligations under the Intercompany Note;




          (g) Capitalized Lease Obligations not to exceed $1,000,000 in the aggregate outstanding at any
time;




          (h) Debt with respect to the Existing Letters of Credit;




          (i) Debt that constitutes a renewal, refinancing or extension of any Debt referred to in this
Section 5.4 (other than clause (h)); provided, that (i) no Lien existing at the time of such
renewal reflecting an extension shall be extended to cover any property not already subject to such
Lien and (ii) the principal amount of any Debt renewed, refinanced or extended shall not exceed the
amount of such Debt outstanding immediately prior to such renewal, refinancing or extension; and




          (j) Additional Debt in an aggregate principal amount not to exceed $1,000,000 at any time
outstanding.




     5.5 Encumbrances. Create, incur, assume or suffer to exist any Lien upon, or create,
suffer or permit to exist any Lien upon any of its property or assets, including any real property,
whether now owned or hereafter acquired, except for Permitted Encumbrances.



     5.6 Acquisitions. Purchase or otherwise acquire or become obligated for the purchase
of all or substantially all of the assets or business interests of any Person or any shares of
stock or other ownership interests of any Person, except pursuant to the Permitted Reorganization.



     5.7 Dividends. Declare or pay dividends on, or make any other Distribution (whether
by reduction of capital or otherwise) in respect of any shares of its capital stock or other
ownership interests, except (a) dividends and Distributions payable by a Subsidiary of Borrower to
Borrower or by the Subsidiary of another Loan Party to such other Loan Party; (b) dividends and
Distributions payable solely in stock; (c) the redemption, repurchase or acquisition of any shares
of its capital stock payable upon an employee’s termination pursuant to its employee stock option,
repurchase, or similar plan; and (d) Borrower’s dividend to be paid on or about March 31, 2008 in
an amount not to exceed $300,000; provided, however, that after giving effect to such redemption,
repurchase or acquisition, no Default or event of Default shall have occurred and be continuing.



     5.8 Investments. Make or allow to remain outstanding any investment (whether such
investment shall be of the character of investment in shares of stock, evidences of indebtedness or
other securities or otherwise) in, or any loans, advances or extensions of credit to, any Person,
other than:



          (a) Borrower’s current ownership interests in those Subsidiaries of Borrower identified on
Schedule 3.5 attached hereto;




          (b) any investment in direct obligations of the United States of America or any agency
thereof, or in certificates of deposit issued by Bank, maintained consistent with Borrower’s or
such Subsidiary’s business practices prior to the date hereof; provided, that no such investment
shall mature more than ninety (90) days after the date when made or the issuance thereof; and




          (c) loans and advances by Borrower to Sheldon Canada evidenced by (and not, in aggregate
amount at any time outstanding to exceed the face amount of) the Intercompany Note;




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          (d) Investments made pursuant to the Permitted Reorganization;




          (e) Investments made in connection with the Employee Benefit Plans; and




          (f) Investments not described in clauses (a) through (e) above in an aggregate amount not to
exceed $500,000 per annum.




     5.9 Transactions with Affiliates. Enter into any transaction with any of their
stockholders, officers, employees, partners or any of their Affiliates, except subject to the terms
hereof, transactions in the ordinary course of business and on terms not less favorable than would
be usual and customary in similar transactions between Persons dealing at arm’s length.



     5.10 Defaults on Other Obligations. Fail to perform, observe or comply duly with any
covenant, agreement or other obligation to be performed, observed or complied with by any Loan
Party, subject to any grace periods provided therein, which failure could reasonably be expected to
have a Material Adverse Effect.



     5.11 Prepayment of Debt. Prepay any Debt (or take any actions which impose an
obligation to prepay), except, subject to the terms hereof or thereof, Indebtedness.



     5.12 Pension Plans. Except in compliance with this Agreement, enter into, maintain,
or make contribution to, directly or indirectly, any Pension Plan that is subject to Title IV of
ERISA.



     5.13 Subordinate Indebtedness. Subordinate any indebtedness due to it from any Person
to indebtedness of other creditors of such Person.



     5.14 No Further Negative Pledges. Enter into or become subject to any agreement
(other than this Agreement or the Loan Documents) which has the legal effect of (a) prohibiting the
guaranteeing by any Loan Party of any obligations, (b) preventing the creation or assumption of any
Lien upon the properties or assets of any Loan Party in favor of Bank, whether now owned or
hereafter acquired, other than any Excluded Asset, or (c) requiring an obligation to become secured
(or further secured) if another obligation is secured or further secured.



     5.15 Accounts Receivable. Sell or assign any Account, account receivable, note or
trade acceptance, except to the Bank and except in the ordinary course of business.



     5.16 [Reserved.]



     5.17 Acquire Fixed Assets. Acquire or expend for, or commit to acquire or expend for,
fixed assets by lease (including any Capitalized Lease Obligations), purchase or otherwise if at
the time of or upon the consummation of such acquisition or purchase there is not or will not be
Continuing Compliance.



     5.18 Subordinated Debt. Make any direct or indirect payment of all or any part of any
Subordinated Debt or take any other action or omit to take any other action in respect of any
Subordinated Debt except in accordance with the Subordination Agreement. Except to the extent
expressly provided in the Subordination Agreement, neither Borrower nor any Loan Party shall
repurchase, redeem or retire in any way any instrument evidencing Subordinated Debt prior to
maturity or enter into any agreement which could in any way be construed to amend, modify, alter or
terminate any one or more instruments or agreements evidencing, governing, guaranteeing or
otherwise relating to Subordinated Debt.



-14-









 





     5.19 Property Transfers. (a) Sell, lease, transfer or otherwise dispose of properties
and assets, except for (i) sales of inventory in the ordinary course of business, (ii) the
disposition of obsolete or worn-out property in the ordinary course of business, (iii) other
dispositions of property or assets in the ordinary course of business which will not, individually
or in the aggregate, have a Material Adverse Effect, (iv) the sale or transfer of the West Bend
Property, (v) the sale or transfer of the Yoakum Property, or (vi) dispositions or other transfers
of property or assets pursuant to the Permitted Reorganization; provided in the case of clauses
(iv) and (v), Borrower complies with the provisions of Section 2.9 of the Loan Terms, Conditions
and Procedures Addendum, or (b) enter into any sale-leaseback transaction.



     5.20 Off-Site Inventory and Equipment. Store Inventory or Equipment with a bailee,
warehouseman, or similar third party unless the third party has been notified of Bank’s security
interest and Bank (a) has received, subject to the terms of Section 3.2(b) of the Loan Terms,
Conditions and Procedures Addendum, an acknowledgment from the third party that it is holding or
will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of the warehouse
receipt, where negotiable, covering such Inventory or Equipment. Except for Inventory sold in the
ordinary course of business and except for such other locations as Bank may approve in writing,
Borrower shall keep the Inventory and Equipment only at the Loan Party Locations and such other
locations of which Borrower gives Bank 10 days prior written notice.



     5.21 Government Regulation. (a) Be or become subject at any time to any law,
regulation, or list of any government agency (including, without limitation, the U.S. Office of
Foreign Asset Control list) that prohibits or limits Bank from making any advance or extension of
credit to Borrower or from otherwise conducting business with Borrower, or (b) fail to provide
documentary and other evidence of Borrower’s identity as may be requested by Bank at any time to
enable Bank to verify Borrower’s identity or to comply with any applicable law or regulation,
including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.



     5.22 Misrepresentation. Furnish Bank with any certificate or other document that
contains any untrue statement by a Loan Party of a material fact or omits to state a material fact
necessary to make such certificate or document not misleading in light of the circumstances under
which it was furnished.



     5.23 Margin Stock. Apply any of the proceeds of any of the Loans to the purchase or
carrying of any “margin stock” in violation of Regulation U of the Board of Governors of the
Federal Reserve System, or any regulations, interpretations or rulings thereunder.



SECTION 6. EVENTS OF DEFAULT




     6.1 Events of Default. The occurrence or existence of any of the following conditions
or events shall constitute an “Event of Default” hereunder:



          (a) upon non-payment of any interest due under the terms of this Agreement or under the Note
within three (3) days of the date when due; upon non-payment of any principal or other sums due
under the terms of this Agreement or under the Note, or under any other instrument or evidence of
Indebtedness, whether under this Agreement, the Note, or otherwise, in any case, when due in
accordance with the terms hereof or thereof; or if any Loan Party shall fail to pay, within five
(5) days of the date when due, any indebtedness, obligation or liability whatsoever of any such
Loan Party to Bank;




          (b) default in the observance or performance of any of the other conditions, covenants or
agreements of Borrower set forth in this Agreement;




-15-









 








          (c) any representation or warranty made by any Loan Party in any Loan Document shall be untrue
or incorrect in any material respect;




          (d) any default or event of default, as the case may be, in the observance or performance of
any of the conditions, covenants or agreements of any Loan Party set forth in any Loan Document and
continuation thereof beyond any applicable period of grace or cure provided with respect thereto;




          (e) any default by any Loan Party, in the payment of any Material Debt, or in the observance
or performance of any conditions, covenants or agreements related or given with respect thereto, in
each such case, continuing beyond any applicable grace or cure period;




          (f) the rendering of one or more judgments or decrees for the payment of money in excess of
the Material Amount, against any Loan Party, and such judgment(s) or decree(s) shall remain
unvacated, unbonded or unstayed, by appeal or otherwise, for a period of thirty (30) consecutive
days after the date of entry; or if or if a writ of attachment or garnishment against the property
of Borrower or any Loan Party shall be issued and not released or appealed and bonded in an amount
and manner satisfactory to Bank within thirty (30) consecutive days after such issuance and levy;




          (g) if there shall be (i) any change in Borrower’s chief financial officer or chief executive
officer, whether by reason of incapacity, death, resignation, termination or otherwise, or (ii) any
change in the ownership of Borrower which results in any Person acquiring 25% or more of Borrower’s
issued and outstanding common stock entitled to vote in the election of directors, which in either
case, in Bank’s sole judgment, shall have a material adverse effect upon the future prospects for
the successful operation by Borrower, of its businesses as conducted before such change, or its
ability to pay and perform its liabilities and obligations under this Agreement, the Indebtedness,
or the Loan Documents;




          (h) the failure by any Loan Party, to meet the minimum funding requirements under ERISA with
respect to any Pension Plan established or maintained by it; the occurrence of any “reportable
event”, as defined in ERISA, which could constitute grounds for termination by the PBGC of any
Pension Plan subject to Title IV or for the appointment by the appropriate United States District
Court of a trustee to administer such Pension Plan, and such reportable event is not corrected and
such determination is not revoked within thirty (30) days after notice thereof has been given to
the plan administrator or any Loan Party, as the case may be; or the institution of any proceedings
by the PBGC to terminate any such Pension Plan or to appoint a trustee by the appropriate United
States District Court to administer any such Pension Plan;




          (i) if any Loan Party, voluntarily suspend transaction of its business (other than with
respect to a Permitted Reorganization), becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, its debts as they mature, or applies for, consents to, or acquiesces
in the appointment of a trustee, receiver, liquidator, conservator or other custodian for any Loan
Party, or a substantial part of its property, or makes a general assignment for the benefit of
creditors; or in the absence of such application, consent or acquiescence, a trustee, receiver,
liquidator, conservator or other custodian is appointed for any Loan Party, or for a substantial
part of its property, and the same is not discharged within thirty (30) days; or any bankruptcy,
reorganization, debt arrangement, or other proceedings under any bankruptcy or insolvency law, or
any dissolution or liquidation proceeding, is instituted by or against any Loan Party, and, if
instituted against any Loan Party, the same is consented to or acquiesced in by any such Loan Party
or otherwise remains undismissed for thirty (30) days; or any warrant of attachment is issued
against any substantial part of the property of any Loan Party, which is not released within thirty
(30) days of service thereof; or




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          (j) if any Loan Document shall be terminated, revoked, or otherwise rendered void or
unenforceable, in any case, without Bank’s prior written consent; or




          (k) if there occurs a material adverse change in Borrower’s prospects, business or financial
condition, or if there is a material impairment in the Borrower’s ability to repay any portion of
the Indebtedness or a material impairment in the perfection, value or priority of Bank’s security
interests in the Collateral.




     6.2 Remedies Upon Event of Default. Upon the occurrence and at any time during the
existence or continuance of any Event of Default, but without impairing or otherwise limiting the
Bank’s right to demand payment of all or any portion of the Indebtedness which is payable on
demand, at Bank’s option, Bank may give notice to Borrower declaring all or any portion of the
Indebtedness remaining unpaid and outstanding, whether under the Note or otherwise, to be due and
payable in full without presentation, demand, protest, notice of dishonor, notice of intent to
accelerate, notice of acceleration or other notice of any kind, all of which are hereby expressly
waived, whereupon all such Indebtedness shall immediately become due and payable. Furthermore,
upon the occurrence of a Default or Event of Default and at any time during the existence or
continuance of any Default or Event of Default, but without impairing or otherwise limiting the
right of Bank, if reserved under any Loan Document, to make or withhold financial accommodations at
its discretion, to the extent not yet disbursed, any commitment by Bank to make any further Loans
to Borrower or issue any further Letters of Credit for Borrower’s account under this Agreement may
be terminated by Bank upon notice to Borrower; provided, should such Default or Event of Default be
cured to Bank’s satisfaction, Bank may, but shall be under no obligation to, reinstate any such
commitment by written notice to Borrower. Notwithstanding the foregoing, in the case of an Event
of Default under Section 6.1(i), and notwithstanding the lack of any notice, demand or
declaration by Bank, the entire Indebtedness remaining unpaid and outstanding shall become
automatically due and payable in full, and any commitment by Bank to make any further loans to
Borrower or issue any further Letters of Credit for Borrower’s account shall be automatically and
immediately terminated, without any requirement of notice or demand by Bank upon Borrower, each of
which are hereby expressly waived by Borrower. The foregoing rights and remedies are in addition
to any other rights, remedies and privileges Bank may otherwise have or which may be available to
it, whether under this Agreement, any other Loan Document, by law, or otherwise.



     6.3 Setoff. In addition to any other rights or remedies of Bank under any Loan
Document, by law or otherwise, upon the occurrence and during the continuance or existence of any
Event of Default, Bank may, at any time and from time to time, without notice to Borrower (any
requirements for such notice being expressly waived by Borrower), (i) setoff and apply against any
or all of the Indebtedness (then due and payable), any or all deposits (general or special, time or
demand, provisional or final) at any time held by Borrower and other indebtedness at any time owing
by Bank to or for the credit or for the account of Borrower, and any property of Borrower, from
time to time in possession or control of Bank, irrespective of whether or not Bank shall have made
any demand hereunder or for payment of the Indebtedness and although such obligations may be
contingent or unmatured, and regardless of whether any Collateral then held by Bank is adequate to
cover the Indebtedness, and (ii) hold portions of any deposits held by Bank as cash collateral for
any Letters of Credit then issued that remain outstanding and unexpired. The rights of Bank under
this Section are in addition to any other rights and remedies (including, without limitation, other
rights of setoff) which Bank may otherwise have. Borrower hereby grants Bank a Lien on and
security interest in all such deposits, indebtedness and other property as additional collateral
for the payment and performance of the Indebtedness.



     6.4 Waiver of Certain Laws. To the extent permitted by applicable law, Borrower
hereby agrees to waive, and does hereby absolutely and irrevocably waive and relinquish, the
benefit and advantage of any valuation, stay, appraisement, extension or redemption laws now
existing or which may



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hereafter exist, which, but for this provision, might be applicable to any sale made under the
judgment, order or decree of any court, on any claim for interest on the Note, or to any security
interest or other Lien contemplated by or granted under or in connection with this Agreement or the
Indebtedness.




     6.5 Waiver of Defaults. No Default or Event of Default shall be waived by Bank except
in a written instrument specifying the scope and terms of such waiver and signed by an authorized
officer of Bank, and such waiver shall be effective only for the specific time(s) and purpose(s)
given. No single or partial exercise of any right, power or privilege hereunder, nor any delay in
the exercise thereof, shall preclude other or further exercise of Bank’s rights. No waiver of any
Default or Event of Default shall extend to any other or further Default or Event of Default. No
forbearance on the part of Bank in enforcing any of Bank’s rights or remedies under any Loan
Document shall constitute a waiver of any of its rights or remedies. Borrower expressly agrees
that this Section may not be waived or modified by Bank by course of performance, estoppel or
otherwise.



     6.6 Receiver. Bank, in any action or suit to foreclose upon any of the Collateral
during the continuance of an Event of Default, shall be entitled, without notice or consent to the
extent permitted by applicable law, and completely without regard to the adequacy of any security
for the Indebtedness, to the appointment of a receiver of the business and premises in question,
and of the rents and profits derived therefrom. This appointment shall be in addition to any other
rights, relief or remedies afforded Bank. Such receiver, in addition to any other rights to which
he shall be entitled, shall be authorized to sell, foreclose or complete foreclosure on Collateral
for the benefit of Bank, pursuant to provisions of applicable law.



     6.7 [Reserved].



     6.8 Application of Proceeds of Collateral. Notwithstanding anything to the contrary
set forth in any Loan Document, during the continuance of an Event of Default, the proceeds of any
of the Collateral, together with any offsets, voluntary payments, and any other sums received or
collected in respect of the Indebtedness, may be applied in such order and manner as determined by
Bank in its sole and absolute discretion.



SECTION 7. MISCELLANEOUS




     7.1 Accounting Principles. Except to the extent expressly stated to the contrary
herein, where the character or amount of any asset or liability or item of income or expense is
required to be determined, or any consolidation or other accounting computation is required to be
made for purposes of this Agreement, it shall be done in accordance with GAAP, consistently
applied, and all accounting terms not specifically defined in this Agreement shall be construed in
accordance with GAAP.



     7.2 Taxes and Fees. Unless otherwise prohibited by applicable law, should any tax
(other than a tax based upon the net income of Bank) or recording or filing fee become payable in
respect of any Loan Document, any of the Collateral, any of the Indebtedness or any amendment,
modification or supplement hereof or thereof, Borrower agrees to pay such taxes (or reimburse Bank
therefor within thirty (30) days of written demand for reimbursement), together with any interest
or penalties thereon, and agrees to hold Bank harmless with respect thereto.



     7.3 Governing Law. Each Loan Document shall be deemed to have been delivered in the
State of Michigan, and shall be governed by and construed and enforced in accordance with the laws
of the State of Michigan, except to the extent that the Uniform Commercial Code, other personal
property law or real property law of another jurisdiction where Collateral is located is
applicable, and except to the extent expressed to the contrary in any Loan Document. Whenever
possible, each provision of this



-18-









 




Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement 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.




     7.4 Audits of Collateral; Fees. Bank shall have the right from time to time at
reasonable times during normal business hours of Borrower or the applicable Loan Party, upon three
(3) Business Days prior written request of Bank, provided that no advance request or notice shall
be required upon the occurrence and during the existence or continuance of an Event of Default, to
audit Accounts and Inventory pledged by any Loan Party and other Collateral four (4) times per
year, and at any time an Event of Default exists or is continuing. Borrower agrees to reimburse
Bank, within thirty (30) days of written demand, for customary and reasonable fees and costs
incurred by Bank for such audits and for each appraisal of Collateral and financial analysis and
examination of Borrower or any other Loan Party performed from time to time in accordance with this
Section.



     7.5 Costs and Expenses. Borrower shall pay Bank, within thirty (30) days from receipt
of written demand by Bank, all costs and expenses, including, without limitation, reasonable
attorneys’ fees and legal expenses, incurred by Bank in perfecting, revising, protecting or
enforcing any of its rights or remedies against any Loan Party or any Collateral, or otherwise
incurred by Bank in connection with any Default or Event of Default or the enforcement of the Loan
Documents or the Indebtedness. In the event such costs and expenses are not paid when due, until
the same are paid in full, the unpaid amount of such costs and expenses shall constitute
Indebtedness and shall bear interest at the Default Rate.



     7.6 Notices. All notices and other communications provided for in any Loan Document
(unless otherwise expressly stipulated therein) or contemplated thereby, given thereunder or
required by law to be given, shall be in writing (unless expressly provided to the contrary). If
personally delivered, such notices shall be effective when delivered, and in the case of mailing or
delivery by overnight courier, such notices shall be effective three (3) Business Days from when
placed in an envelope and deposited at a post office or official depository under the exclusive
care and custody of the United States Postal Service or delivered to an overnight courier, postage
prepaid, in each case addressed to the parties as set forth on the signature page of this
Agreement, or to such other address as a party shall have designated to the other in writing in
accordance with this Section. In the case of mailing, the mailing shall be by certified or first
class mail. The giving of at least five (5) days notice before Bank shall take any action
described in any notice shall conclusively be deemed reasonable for all purposes; provided, that
this shall not be deemed to require Bank to give such five (5) days notice, or any notice, if not
specifically required to do so in this Agreement.



     7.7 Further Action. Borrower, from time to time, upon written request of Bank, will
promptly make, execute, acknowledge and deliver, or cause to be made, executed, acknowledged and
delivered, all such further and additional instruments, and promptly take all such further action
as may be reasonably required to carry out the intent and purpose of the Loan Documents, and to
provide for the Loans thereunder and payment of the Note, according to the intent and purpose
therein expressed.



     7.8 Successors and Assigns; Participation. This Agreement shall be binding upon and
shall inure to the benefit of Borrower and Bank and their respective successors and assigns. The
foregoing shall not authorize any assignment or transfer by Borrower, of any of its respective
rights, duties or obligations hereunder, such assignments or transfers being expressly prohibited.
Bank, however, may freely assign, whether by assignment, participation or otherwise, its rights and
obligations hereunder, and is hereby authorized to disclose to any such assignee or participant (or
proposed assignee or participant) any financial or other information in its knowledge or possession
regarding any Loan Party or the Indebtedness; provided, however, that prior to any such disclosure,
each such assignee or



-19-









 




participant shall agree in writing to preserve the confidentiality of any confidential
information relating to any Loan Party.




     7.9 Indulgence. No delay or failure of Bank in exercising any right, power or
privilege hereunder or under any of the Loan Documents shall affect such right, power or privilege,
nor shall any single or partial exercise thereof preclude any further exercise thereof, nor the
exercise of any other right, power or privilege available to Bank. The rights and remedies of Bank
hereunder are cumulative and are not exclusive of any rights or remedies of Bank.



     7.10 Amendment and Waiver. No amendment or waiver of any provision of any Loan
Document, nor consent to any departure by any Loan Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by Bank, and then such waiver or consent shall be
effective only in the specific instance(s) and for the specific time(s) and purpose(s) for which
given.



     7.11 Severability. In case any one or more of the obligations of any Loan Party under
any Loan Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of such Loan Party shall not in any way be
affected or impaired thereby, and such invalidity, illegally or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the obligations of such
Loan Party under any Loan Document in any other jurisdiction.



     7.12 Headings and Construction of Terms. The headings of the various sub-Sections
hereof are for convenience of reference only and shall in no way modify or affect any of the terms
or provisions hereof. Where the context herein requires, the singular number shall include the
plural, and any gender shall include any other gender.



     7.13 [Reserved.]



     7.14 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of any Loan Party made in any Loan Document, or in any
certificate, report, financial statement or other document furnished by or on behalf of any Loan
Party in connection with any Loan Document, shall be deemed to have been relied upon by Bank,
notwithstanding any investigation heretofore or hereafter made by Bank or on Bank’s behalf, and
those covenants and agreements of Borrower set forth in Sections 4.8 and 4.12
hereof (together with any other indemnities of Borrower contained elsewhere in any Loan Document)
shall survive the termination of this Agreement and the repayment in full of the Indebtedness.



     7.15 Effective Upon Execution. This Agreement shall become effective upon the
execution and delivery hereof by Bank and Borrower, and shall remain effective until the
Indebtedness under this Agreement and the Note and the related Loan Documents shall have been
repaid and discharged in full and no commitment to extend any credit hereunder (whether optional or
obligatory) remains outstanding. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.



     7.16 Complete Agreement; Conflicts. The Loan Documents contain the entire agreement
of the parties thereto, and none of the parties shall be bound by anything not expressed in
writing. In the event that and to the extent that any of the terms, conditions or provisions of
any of the other Loan Documents are inconsistent with or in conflict with any of the terms,
conditions or provisions of this Agreement, the applicable terms, conditions and provisions of this
Agreement shall govern and control.



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     7.17 Exhibits and Addenda. The following Addenda, Exhibits and Schedules are attached
to this Agreement and are incorporated into this Agreement by this reference and made a part hereof
for all purposes:



Addenda:

Defined Terms Addendum

Financial Covenants Addendum

Loan Terms, Conditions and Procedures Addendum





Exhibits:

Exhibit A — Form of Borrowing Base Certificate

Exhibit B — Form of Compliance Certificate

Exhibit C — Form of Request for Advance




	 	 	 
	Schedules:
	 	 
	Schedule 3.1(c)(3)

	 	Guarantors
	Schedule 3.1(c)(6)

	 	Accounts
	Schedule 3.1(j)

	 	Documentation Checklist
	Schedule 3.5

	 	Subsidiaries
	Schedule 3.14

	 	Pension Plans Subject to Title IV of ERISA
	Schedule 3.17

	 	Environmental Disclosures
	Schedule 3.22

	 	Material Agreements
	Schedule 3.25

	 	Intellectual Property
	Schedule 5.4

	 	Debt
	Schedule 5.5

	 	Liens
	Schedule 5.20

	 	Loan Party Locations






     7.18 Treatment of Certain Information; Confidentiality. Bank agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a)
solely in connection with this Agreement and the transactions contemplated hereby, to its
Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and representatives (it being understood that the Persons to whom such disclosure
is made shall keep such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; provided, however, to the extent permitted
by applicable law, regulation and otherwise, Borrower is promptly notified in order that it may
seek a protective order or take other appropriate action, (d) to any other party hereto, (e) to the
extent required or deemed advisable by Bank, in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section, to (i) any
assignee of or participant in, or any prospective assignee of or participant in, any of its rights
or obligations under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrower and its obligations, (g) with
the consent of Borrower or (h) to the extent such Information (x) becomes publicly available other
than as a result of a breach of this Section or (y) becomes available to Bank or any of its
respective Affiliates on a nonconfidential basis from a source other than Borrower.



     For purposes of this Section, “Information” means all information received from Borrower or
any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses,
other than any such information that is available to Bank on a nonconfidential basis prior to
disclosure by Borrower or any Subsidiary, provided that, in the case of information received from
Borrower or any Subsidiary after the Effective Date, such information is clearly identified at the
time of delivery as confidential. Any



-21-









 




Person required to maintain the confidentiality of Information as provided in this Section
shall be considered to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.




     7.19 WAIVER OF JURY TRIAL. BANK AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL
BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED
UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTION OF
EITHER OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY BANK OR BORROWER, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM.



     7.20 USA Patriot Act Notification. The following notification is provided to Borrower
pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:




IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
fight the funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify, and record information that identifies each person
or entity that opens an account, including any deposit account, treasury management account,
loan, other extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual, Bank will ask for
Borrower’s name, taxpayer identification number, residential address, date of birth, and
other information that will allow Bank to identify Borrower, and, if Borrower is not an
individual, Bank will ask for Borrower’s name, taxpayer identification number, business
address, and other information that will allow Bank to identify Borrower. Bank may also
ask, if Borrower is an individual, to see Borrower’s driver’s license or other identifying
documents, and, if Borrower is not an individual, to see Borrower’s legal organizational
documents or other identifying documents.



     7.21 OFAC/BSA Provision. Borrower shall (a) cause each Subsidiary to ensure that no
person who owns a controlling interest in or otherwise controls any Subsidiary is or shall be
listed on the Specially Designated Nationals and Blocked Person List or other similar lists
maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury, or
included in any Executive Orders, (b) not use or permit the use of proceeds of the loans to violate
any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order
relating thereto, and (c) comply, and cause each Subsidiary to comply, with all applicable Bank
Secrecy Act (“BSA”) laws and regulations, as amended.



-22-









 





     7.22 ORAL AGREEMENTS INEFFECTIVE. THIS AGREEMENT AND THE OTHER “LOAN
AGREEMENTS” (AS DEFINED IN SECTION 26.02(a)(2) OF THE TEXAS BUSINESS & COMMERCE
CODE, AS AMENDED) REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, AND THIS AGREEMENT AND THE
OTHER WRITTEN LOAN AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.



	 	 	 	 	 
	 	Remainder of the Page

Left Blank Intentionally





Signature Page to Follow

 	 
	 	 	 
	 	 	 
	 	 	 



-23-









 





Signature Page to Credit Agreement



     WITNESS the due execution hereof as of the day and year first above written.






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMERICA BANK	 	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Steven Colwick	 	 	 	By:	 	/s/ Craig Mackey	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Steven Colwick
	 	 	 	 	 	Name:
	 	Craig Mackey	 	 
	 

	 	Title:
	 	Vice President - Texas Division
	 	 	 	 	 	Title:
	 	Chief Financial Officer	 	 
	 

	 	Address:
	 	8828 Stemmons Freeway, Suite 441 Dallas, Texas, 65247
	 	 	 	 	 	Address:
	 	690 E. Lamar Blvd., Suite 200 Arlington, Texas 76011	 	 
	 

	 	Attn:
	 	Steven Colwick, Vice President
	 	 	 	 	 	Attn:
	 	Craig Mackey, Chief Financial Officer	 	 
	 

	 	Telefax No.:
	 	214-589-1360
	 	 	 	 	 	Telefax No.:

	 	817-460-8902	 	 








Signature Page — 1

















 





DEFINED TERMS ADDENDUM




SECTION 1. DEFINITIONS




     1.1 Defined Terms. As used in this Agreement, the following terms shall have the
following respective meanings:



     “Account Control Agreement(s)” shall mean those certain account control agreements, or similar
agreements that are delivered pursuant to Section 4.13 of this Agreement or otherwise, as
the same may be amended, restated or otherwise modified from time to time.



     “Account Debtor” shall mean the party who is obligated on or under any Account.



     “Accounts,” “Chattel Paper,” “Documents”, “Equipment,” “Fixtures,” “General Intangibles,”
“Goods,” “Instruments” and “Inventory” shall have the respective meanings assigned to them in the
UCC on the date of this Agreement.



     “Account Debtor Reserve” shall mean, with respect to any Account, any offset or charge back of
an Account Debtor for costs incurred in connection with the marketing or advertising of the goods
related to such Account.



     “Affiliate” shall mean, when used with respect to any Person, any other Person which, directly
or indirectly, controls or is controlled by or is under common control with such Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”), with respect to any Person, shall mean possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or otherwise.



     “Affiliate Receivables” shall mean, as of any time of determination, any amounts in respect of
loans or advances owing to Borrower or another Loan Party from any of its Subsidiaries or
Affiliates at such time.



     “Agreement” shall mean this Credit Agreement, including the Defined Terms Addendum, the
Financial Covenants Addendum and the Loan Terms, Conditions and Procedures Addendum, together with
all exhibits and schedules, as it may be amended, supplemented, renewed, extended, modified or
restated from time to time.



     “Applicable Interest Rate” shall mean, with respect to the Indebtedness from time to time
outstanding under any Note the rate or rates provided in such Note as the Applicable Interest Rate.



     “Bankruptcy Code” shall mean Title 11 of the United States Code, as amended, or any successor
act or code.



     “Borrowing Base Certificate” shall mean a certificate substantially in the form of Exhibit
A.



     “Borrowing Base Limitation” shall mean the sum of:




	 	(a)	 	eighty percent (80%) of Eligible Accounts, which for purposes of this Agreement
shall be measured or valued net of the Account Debtor Reserve; and
	 
	 	(b)	 	the lesser of (i) forty percent (40%) of Eligible Inventory, or (ii) the
Inventory Cap.





			
	 	 	 
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	 	Defined Terms Addendum






 









 






     “Borrowing Base Obligors” shall mean Borrower and the Guarantors, and “Borrowing Base Obligor”
shall mean any of them, as the context shall indicate.



     “Business Day” shall mean any day, other than a Saturday, Sunday or holiday, on which the Bank
is open to carry on all or substantially all of its normal commercial lending business in Dallas,
Texas.



     “Capitalized Lease Obligation” shall mean any Debt represented by obligations under a lease
that is required to be capitalized for financial reporting purposes in accordance with GAAP.



     “Collateral” shall mean all property, assets and rights in which a Lien or other encumbrance
in favor of or for the benefit of Bank is or has been granted or arises or has arisen, or may
hereafter be granted or arise, under or in connection with any Loan Document, or otherwise, to
secure the payment or performance of the Indebtedness, including, but not limited to including all
of Borrower’s interest in the Intercompany Note (and the security therefor).



     “Collateral Access Agreement” means an agreement in form and substance satisfactory to Bank
pursuant to which a mortgagee or lessor of real property on which Collateral is stored or otherwise
located, or a warehouseman, processor or other bailee of Inventory or other property owned by
Borrower or any Loan Party, that acknowledges the Liens under the Loan Documents and subordinates
or waives any Liens held by such Person on such property and, in the case of any such agreement
with a mortgagee or lessor, permits Bank reasonable access to and the use of such real property
during the continuance of an Event of Default to assemble, complete and sell any Collateral stored
or otherwise located thereon.



     “Compliance Certificate” shall mean a certificate to be furnished by Borrower to Bank, in
substantially the form of Exhibit B, certified by the chief financial officer of Borrower
(or in such officer’s absence, another responsible officer of Borrower) pursuant to Section
4.3 of this Agreement, certifying that, as of the date thereof, no Default or Event of Default
shall have occurred and be continuing, or if any Default or Event of Default shall have occurred
and be continuing, specifying in detail the nature and period of existence thereof and any action
taken or proposed to be taken by Borrower with respect thereto, and also certifying as to whether
Borrower is in compliance with the financial covenants contained in the Financial Covenants
Addendum to this Agreement (which certificate shall set forth, in reasonable detail, the
calculations and the resultant ratios and financial tests determined thereunder).



     “Consolidated” or “consolidated” shall mean, when used with reference to any financial term in
this Agreement, the aggregate for two or more Persons of the amounts signified by such term for all
such Persons determined on a consolidated basis in accordance with GAAP. Unless otherwise
specified herein, references to “consolidated” financial statements or data of the Borrower
includes consolidation with its Subsidiaries in accordance with GAAP.



     “Continuing Compliance” means, at any date of determination, that no Default or Event of
Default exists or has occurred and is continuing without Bank’s waiver in the form required
hereunder, and, in the case of a particular transaction, act or omission by Borrower or any Loan
Party, such transaction, act or omission will not result, directly or indirectly, in any Default or
Event of Default and in the case of any transaction involving the payment of money or the
incurrence of Debt, will not result in Borrower’s failure to be in compliance with the covenants
set forth in Section 4.4 either as of the date of determination or as of the next date provided
herein for measuring Borrower’s compliance with such covenants.



     “Debt” shall mean, as of any applicable date of determination thereof, all items of
indebtedness, obligation or liability of a Person, whether matured or unmatured, liquidated or
unliquidated, direct or



			
	 	 	 
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	 	Defined Terms Addendum






 









 





indirect, absolute or contingent, joint or several, that should be classified as liabilities
in accordance with GAAP. In the case of Borrower, the term “Debt” shall include, without
limitation, the Indebtedness.




     “Default” shall mean, any condition or event which, with the giving of notice or the passage
of time, or both, would constitute an Event of Default.



     “Default Rate” shall mean, at any time of determination thereof with respect to the applicable
portion of the Indebtedness, a per annum rate of interest equal to the sum of the contractual rate
of interest which would apply to such Indebtedness if the Default Rate was not then in effect plus
three percent (3%).



     “Disbursement Date” shall mean the date upon which Bank makes a Loan under this Agreement.



     “Distribution” shall mean any dividend on or other distribution (whether by reduction of
capital or otherwise) with respect to any shares of capital stock (or other ownership interests),
except for dividends from a Subsidiary of a Loan Party to another of its Subsidiaries.



     “Domestic Subsidiary” shall mean any Subsidiary that is organized under the laws of the United
States, a State thereof or the District of Columbia.



     “Eligible Account” shall mean an Account (but shall not include interest and service charges
thereon) arising in the ordinary course of a Borrowing Base Obligor’s business which meets each of
the following requirements:




	 	(a)	 	it is not owing more than ninety (90) days after the date of the original
invoice or other writing evidencing such Account;
	 
	 	(b)	 	it is not owing by an Account Debtor who has failed to pay twenty-five percent
(25%) or more of the aggregate amount of its Accounts owing to any Borrowing Base
Obligor within ninety (90) days after the dates of the respective invoices or other
writings evidencing such Accounts;
	 
	 	(c)	 	it arises from the sale or lease of goods and such goods have been shipped or
delivered to the Account Debtor under such Account, or it arises from services rendered
and such services have been performed;
	 
	 	(d)	 	it is evidenced by an invoice, dated not later than the date of shipment or
performance, rendered to such Account Debtor or some other evidence of billing
acceptable to Bank;
	 
	 	(e)	 	it is not evidenced by any note, trade acceptance, draft or other Instrument or
by any Chattel Paper, unless such note or other document or Instrument or Chattel Paper
has previously been endorsed and delivered by the relevant Loan Party to Bank;
	 
	 	(f)	 	it is a valid, legally enforceable obligation of the Account Debtor thereunder,
and is not subject to any offset or any counterclaim or other defense on the part of
such Account Debtor or to any claim on the part of such Account Debtor denying
liability thereunder in whole or in part;
	 
	 	(g)	 	it is not subject to any sale of accounts, any rights of offset other than an
Account Debtor Reserve or Lien whatsoever other than to Bank and other than the
Permitted Encumbrances subordinated to Bank’s Lien;





			
	 	 	 
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	 	Defined Terms Addendum






 









 







	 	(h)	 	it is not owing by a Subsidiary or Affiliate of any Borrowing Base Obligor, or
by an Account Debtor which (i) does not maintain its chief executive office in the
United States of America, or (ii) is not organized under the laws of the United States
of America, or any state thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality or other instrumentality
thereof;
	 
	 	(i)	 	is not an Account billed in advance, payable on delivery, for consigned goods,
for guaranteed sales, for unbilled sales, for progress billings, payable at a future
date in accordance with its terms, subject to a retainage or holdback by the Account
Debtor or insured by a surety company;
	 
	 	(j)	 	it is not an Account owing by the United States of America or any state or
political subdivision thereof, or by any department, agency, public body corporate or
other instrumentality of any of the foregoing, unless all necessary steps are taken to
comply with the Federal Assignment of Claims Act of 1940, as amended, or with any
comparable state law, if applicable, and all other necessary steps are taken to perfect
Bank’s security interest in such Account;
	 
	 	(k)	 	it is not owing by an Account Debtor for which a Loan Party or any of its
Subsidiaries has received a notice of (i) the death of the Account Debtor or any
partner of the Account Debtor, (ii) the dissolution, liquidation, termination of
existence, insolvency or business failure of the Account Debtor, (iii) the appointment
of a receiver for any part of the property of the Account Debtor, or (iv) an assignment
for the benefit of creditors, the filing of a petition in bankruptcy, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against
the Account Debtor; and
	 
	 	(l)	 	it is not an Excluded Account.




An Account which is at any time an Eligible Account, but which subsequently fails to meet any of
the foregoing requirements, shall forthwith cease to be an Eligible Account, and in the
determination of Eligible Accounts, that portion of the Accounts of any Account Debtor which exceed
fifty percent (50%) of all Eligible Accounts shall be excluded.




     “Eligible Inventory” shall mean all of Borrowing Base Obligors’ Inventory which is in good and
merchantable condition, is not obsolete or discontinued, and which would properly be classified as
“finished goods” under GAAP, excluding (a) any Borrowing Base Obligor’s work in process, raw
materials, miscellaneous supplies such as hand tools and packaging materials, consigned goods,
Inventory located outside the United States of America and goods in transit, (b) Inventory covered
by or subject to a seller’s right to repurchase, or any consensual or nonconsensual Lien
(including, without limitation, purchase money security interests) other than in favor of Bank and
other than Permitted Encumbrances subordinated to Bank’s Lien, whether senior or junior to Bank’s
security interest and Liens, (c) Inventory that has been owned by any Borrowing Base Obligor for
longer than one (1) year, and (d) Excluded Inventory. Inventory which is at any time Eligible
Inventory, but which subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Inventory. Eligible Inventory shall be valued at the lesser of cost or market
value in accordance with GAAP and in accordance with Borrower’s inventory management policy.



     “Employee Benefit Plans” shall mean those employee benefit plans disclosed in Borrower’s
filings with the SEC from time to time.



     “Environmental Law(s)” shall mean all laws, codes, ordinances, rules, regulations, orders,



			
	 	 	 
	-4-
	 	Defined Terms Addendum






 









 





decrees and directives issued by any federal, state, local, foreign or other governmental or
quasi governmental authority or body (or any agency, instrumentality or political subdivision
thereof) pertaining to Hazardous Materials or otherwise intended to regulate or improve health,
safety or the environment, including, without limitation, any hazardous materials or wastes, toxic
substances, flammable, explosive or radioactive materials, asbestos, and/or other similar
materials; any so-called “superfund” or “superlien” law, pertaining to Hazardous Materials on or
about any of the Collateral, or any other property at any time owned, leased or otherwise used by
any Loan Party, or any portion thereof, including, without limitation, those relating to soil,
surface, subsurface ground water conditions and the condition of the ambient air; and any other
federal, state, foreign or local statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous,
toxic, radioactive, flammable or dangerous waste, substance or material, as now or at anytime
hereafter in effect.




     “Equipment” shall have the meaning assigned to such term in the UCC on the date of this
Agreement together with all of the following to the extent, if any, the same are not included
within such definition: all machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (except Inventory) including, without limitation, data processing
hardware and software, motor vehicles, aircraft, dies, tools, jigs, and office equipment, as well
as all of such types of property that are leased and all rights and interests with respect thereto
under such leases to the extent that any such lease does not prohibit or require a consent to the
creation of a Lien in favor of the Bank (including, without limitation, options to purchase)
together with all present and future additions and accessions thereto, replacements therefor,
component and auxiliary parts and supplies used or to be used in connection therewith, and all
substitutes for any of the foregoing, and all manuals, drawings, instructions, warranties and
rights with respect thereto wherever any of the foregoing is located to the extent that any of the
foregoing are now owned or hereafter acquired by the Borrower and to the extent that any other Loan
Party now or hereafter grants or purports to grant a Lien upon all or any of the foregoing as
security for all or any portion of the Indebtedness.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, or any
successor act or code.



     “Event of Default” shall mean any of those conditions or events listed in Section 6.1
of this Agreement.



     “Excluded Account” shall mean any Account that has been identified by the Bank as being
unacceptable for inclusion of calculation of the Borrowing Base Limitation because the Bank has
determined that the Account Debtor obligated on such account is not creditworthy or that the Bank
might not otherwise be able to receive the full amount of the Account within a reasonable period of
time and at a reasonable cost of collection if it sought to realize on its security interest
therein, such determination to be made in the Bank’s judgment, in good faith and based on
information which, in its judgment, supports such determination.



     “Excluded Asset” shall mean any license, contract, agreement, permit, letter of credit right
or asset, to the extent, but only to the extent, that a grant of a security interest or Lien
therein would, under the terms of such license, contract, agreement, permit, letter of credit right
or the documentation governing such asset, be prohibited by or result in a termination of the terms
of, or give rise to a default which would allow for a party to terminate such license, contract,
agreement, permit, letter of credit right or the documentation governing such asset (other than to
the extent that any such term (x) has been waived by the other parties to such license, contract,
agreement, permit, letter of credit right or documentation governing such asset or (y) would be
rendered ineffective pursuant to Sections 9-406, 9-



			
	 	 	 
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	 	Defined Terms Addendum






 









 





407, 9-408, 9-409 or other applicable provisions of the Uniform Commercial Code of any
relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of
equity).




     “Excluded Inventory” shall mean any Inventory that has been identified by the Bank as being
unacceptable for inclusion of calculation of the Borrowing Base Limitation because the Bank has
determined that such Inventory is not readily saleable, such determination to be made in the Bank’s
judgment, in good faith and based on information which, in its judgment, supports such
determination.



     “Excluded Subsidiary” shall mean (i) a Subsidiary existing or formed solely to facilitate the
Permitted Reorganization, provided that such Subsidiary’s only asset is an ownership interest in
another Subsidiary and such Subsidiary conducts no business or operations; and (ii) any Foreign
Subsidiary.



     “Existing Letters of Credit” shall mean the letters of credit issued prior to the Effective
Date for the account of Borrower or a Subsidiary of Borrower under the Wells Fargo Credit Agreement
as more particularly described on Schedule 5.4 attached hereto.



     “Financial Statements” shall mean all balance sheets, statements of operations, statements of
cash flow and other financial data, statements and reports (whether of Borrower, any of its
Subsidiaries, any Guarantor, or any other Loan Party or otherwise) which are required to, have
been, or may from time to time hereafter, be furnished to Bank, for the purposes of, or in
connection with, this Agreement, the transactions contemplated hereby or any of the Indebtedness.



     “Fixed Asset Gain/Loss” shall have the meaning set forth in the definition of Net Income.



     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.



     “GAAP” shall mean generally accepted accounting principles.



     “Good Faith” or “good faith” shall have the meaning ascribed to the term “good faith” in
Chapter 1.201(19) of the UCC on the date of this Agreement.



     “Governmental Authority” shall mean the United States, each state, each county, each city, and
each other political subdivision in which all or any portion of the Collateral is located, and each
other political subdivision, agency, or instrumentality exercising jurisdiction over Bank, any Loan
Party or any Collateral.



     “Governmental Requirements” shall mean all laws, ordinances, rules, and regulations of any
Governmental Authority applicable to any Loan Party, any of the Indebtedness or any Collateral.



     “Guarantor(s)” shall mean, as the context dictates, any Person(s) (other than the Borrower)
who shall, at any time, guarantee or otherwise be or become obligated for the repayment of all or
any part of the Indebtedness, including, without limitation, the parties listed on Schedule
3.1(c)(3), attached hereto.



     “Guaranty” means a guaranty (or separate guaranties) in the form and content satisfactory to
Bank pursuant to which Guarantor (jointly and severally if more than one) unconditionally
guarantees repayment to Bank of all Indebtedness of Borrower to Bank.



     “Hazardous Material” shall mean and include any hazardous, toxic or dangerous waste, substance
or material defined as such in, or for purposes of, any Environmental Law(s).



     “Indebtedness” shall mean all loans, advances, indebtedness, obligations and liabilities of
any



			
	 	 	 
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	 	Defined Terms Addendum






 









 





Loan Party to Bank under any Loan Document, together with all other indebtedness, obligations
and liabilities whatsoever of Borrower to Bank, whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, joint or several, due or to become due,
now existing or hereafter arising, voluntary or involuntary, known or unknown, or originally
payable to Bank or to a third party and subsequently acquired by Bank including, without
limitation, any: late charges; loan fees or charges; overdraft indebtedness; costs incurred by Bank
in establishing, determining, continuing or defending the validity or priority of any Lien or in
pursuing any of its rights or remedies under any Loan Document or in connection with any proceeding
involving Bank as a result of any financial accommodation to Borrower; debts, obligations and
liabilities for which Borrower would otherwise be liable to the Bank were it not for the invalidity
or enforceability of them by reason of any bankruptcy, insolvency or other law or for any other
reason; and reasonable costs and expenses of attorneys and paralegals, whether any suit or other
action is instituted, and to court costs if suit or action is instituted, and whether any such
fees, costs or expenses are incurred at the trial court level or on appeal, in bankruptcy, in
administrative proceedings, in probate proceedings or otherwise; provided, however, that the term
Indebtedness shall not include any consumer loan to the extent treatment of such loan as part of
the Indebtedness would violate any Governmental Requirement.




     “Intellectual Property” shall mean:




	 	(a)	 	copyright rights, copyright applications, copyright registrations and like
protections in work or authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret (collectively,
the “Copyrights”);
	 
	 	(b)	 	trade secrets and any and all intellectual property rights in computer software
and computer software products;
	 
	 	(c)	 	design rights;
	 
	 	(d)	 	patents, patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same;
	 
	 	(e)	 	trademark and servicemark rights, whether registered or not, applications to
register and registrations of the same and like protections, and the entire goodwill of
the business connected with and symbolized by such trademarks or servicemarks
(collectively, the “Trademarks”);
	 
	 	(f)	 	rights to the proceeds (excluding attorneys’ and other professional and expert
fees and expenses) arising from any and all claims or damages by way of past, present
and future infringement of any of the rights included above, with the right, but not
the obligation, to sue on behalf of and collect such damages for said use or
infringement of the intellectual property rights identified above;
	 
	 	(g)	 	licenses and other rights to use any of the foregoing, and all license fees and
royalties arising from such use to the extent permitted by any such license or right;
	 
	 	(h)	 	amendments, renewals and extensions of any of the foregoing; and
	 
	 	(i)	 	proceeds and products of the foregoing, including without limitation all
payments under insurance or any indemnity or warranty payable in respect of any of the
foregoing.





			
	 	 	 
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	 	Defined Terms Addendum






 









 






     “Intercompany Note” shall mean one or more demand promissory notes made by Sheldon Canada from
time to time to the order of Borrower in the aggregate face amount of up to $5,000,000 as evidence
of loans and advances from time to time made by Borrower to Sheldon Canada.



     “Inventory” shall have the meaning assigned to such term in the UCC on the date of this
Agreement together with all goods, merchandise and other personal property of Borrower and each
other Loan Party which shall pledge or purport to pledge the same as security for any of the
Indebtedness, now owned or hereafter produced, manufactured or acquired by any such Person, which
are held for sale or lease or are furnished under a contract of service or are raw materials,
work-in-process or materials used or consumed or to be used or consumed in any such Person’s
business, and any other Inventory of any such Person, as determined in accordance with GAAP.



     “Inventory Cap” shall mean fifty percent (50%) of the amount of the Borrowing Base Limitation.



     “Letter of Credit” shall mean a standby or commercial letter of credit issued by the Bank for
the account of Borrower upon the application of Borrower in accordance with this Agreement, as such
Letter of Credit may be amended, supplemented, extended or confirmed from time to time.



     “Letter of Credit Liabilities” shall mean, at any time and in respect of all Letters of
Credit, the sum of (a) the aggregate amount available to be drawn under all such Letters of Credit
plus (b) the aggregate unpaid amount of all Reimbursement Obligations then due and payable in
respect of previous drawings under such Letters of Credit.



     “Lien” shall mean any valid and enforceable interest in any property, whether real, personal
or mixed, securing an indebtedness, obligation or liability owed to or claimed by any Person other
than the owner of such property, whether such indebtedness is based on the common law or any
statute or contract and including, but not limited to, a security interest, pledge, mortgage,
assignment, conditional sale, trust receipt, lease, consignment or bailment for security purposes.



     “Loan Documents” shall mean collectively, this Agreement, the Note, any reimbursement
agreement or other documentation executed in connection with any Letter of Credit, the Guaranty,
the Security Agreement, and any other documents, instruments or agreements evidencing, governing,
securing, guaranteeing or otherwise relating to or executed pursuant to or in connection with any
of the Indebtedness or any Loan Document (whether executed and delivered prior to, concurrently
with or subsequent to this Agreement), as such documents may have been or may hereafter be amended
from time to time.



     “Loan Party” shall mean Borrower, each of its Subsidiaries (whether or not a party to any Loan
Document) other than Excluded Subsidiaries, each Guarantor, and each other Person who or which
shall be liable for the payment or performance of all or any portion of the Indebtedness or who or
which shall own any property that is subject to (or purported to be subject to) a Lien which
secured all or any portion of the Indebtedness.



     “Loan Party Location” shall mean the locations listed on Schedule 5.20 attached hereto.



     “Loans” shall mean, collectively, the Revolving Loans, and “Loan” shall mean any of them.



     “Material Adverse Effect” shall mean any act, event, condition or circumstance which (i)
materially and adversely affects the business, operations or financial condition, of any Loan
Party, or (ii) adversely affects, the ability of any such Loan Party to perform its obligations
under any Loan Document to which it is a party or by which it is bound or the enforceability of any
Loan Document; or (iii) which is



			
	 	 	 
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	 	Defined Terms Addendum






 









 







	 	 	likely to result in the incurrence of a loss, liability or obligation upon or by a Loan Party
in excess of a Material Amount.





     “Material Agreements” means the agreements, contracts, leases, or commitments of any kind to
which a Borrower or a Loan Party is a party (including, without limitation, employment agreements,
collective bargaining agreements, powers of attorney, distribution contracts, patent or trademark
licenses, contracts for future purchase or delivery of goods or rendering of services, bonus,
pension and retirement plans, or accrued vacation pay, insurance and welfare agreements) that if
breached would have a Material Adverse Effect and for which the per annum payments thereunder
exceed the Material Amount.



     “Material Amount” shall mean $1,000,000.



     “Material Debt” shall mean Debt (other than the Indebtedness) owed by any Loan Party in the
principal amount equal to or greater than the Material Amount.



     “Maximum Legal Rate” shall mean the maximum rate of nonusurious interest per annum permitted
to be paid by Borrower or, if applicable, another Loan Party or received by Bank with respect to
the applicable portion of the Indebtedness from time to time under applicable state or federal law
as now or as may be hereafter in effect.



     “Net Cash Proceeds” shall mean the aggregate cash payments received by Borrower and/or any
Loan Party, as the case may be, (a) from the issuance of any Debt, net of the ordinary and
customary direct expenses of such sale or issuance, as the case may be, such as taxes, commissions,
fees and expenses and other third party charges, and (b) from any disposition of other assets or
property, net of ordinary and customary sales or other similar taxes paid or payable by the seller
in connection with such disposition, broker fees in connection with such disposition, legal fees
and other expenses payable by the seller in connection with such disposition, the amount of any
Debt secured by the assets or property that must be repaid in connection with such disposition so
long as it is a Debt permitted under this Agreement, and any amounts required to be escrowed
pursuant to such disposition.



     “Net Income” shall mean the net income (or loss) of a Person for any applicable period of
determination, determined in accordance with GAAP, but excluding, in any event:




	 	(a)	 	any gains or losses on the sale or other disposition, not in the ordinary
course of business, of investments or fixed or capital assets, and any taxes on the
excluded gains and any tax deductions or credits on account of any excluded losses
(“Fixed Asset Gain/Loss”); and
	 
	 	(b)	 	in the case of Borrower, net earnings of any Person in which Borrower has an
ownership interest, unless such net earnings shall have actually been received by
Borrower in the form of cash distributions.





     “Note” shall mean the Revolving Credit Note.



     “PBGC” shall mean the Pension Benefit Guaranty Corporation, or any Person succeeding to the
present powers and functions of the Pension Benefit Guaranty Corporation.



     “Pension Plan(s)” shall mean any and all “employee pension benefit plans”, as such term is
defined in Section 3(2) of ERISA, established or maintained by a Loan Party from time to time.



     “Permitted Encumbrances” shall mean:



			
	 	 	 
	-9-
	 	Defined Terms Addendum






 









 







	 	(a)	 	Liens in favor of the Bank;
	 
	 	(b)	 	Liens for taxes, assessments or other governmental charges or levies which are
not yet due and payable, incurred in the ordinary course of business and for which no
interest, late charge or penalty is attaching or which are being contested in good
faith by appropriate proceedings and, if requested by Bank, bonded or reserved in an
amount and manner reasonably satisfactory to Bank;
	 
	 	(c)	 	Liens, not delinquent, arising in the ordinary course of business and created
by statute in connection with worker’s compensation, unemployment insurance, social
security and similar statutory obligations;
	 
	 	(d)	 	Liens of mechanics, materialmen, carriers, warehousemen or other like statutory
or common law Liens securing obligations incurred in good faith in the ordinary course
of business that are not yet due and payable or which are being contested in good faith
by appropriate proceedings and, if requested by Bank have been bonded or reserved in an
amount and manner reasonably satisfactory to Bank;
	 
	 	(e)	 	encumbrances consisting of existing or future zoning restrictions, existing
recorded rights-of-way, existing recorded easements, recorded private restrictions or
existing or future public restrictions on the use of real property and other minor
title defects, none of which materially impairs the use of such property in the
operation of the business for which it is used, and none of which is violated in any
material respect by any existing or proposed structure or land use;
	 
	 	(f)	 	Liens securing Debt permitted by Section 5.4(d), (g) and (i) provided that (i)
such Liens shall be created substantially simultaneously with the acquisition of such
fixed or capital asset, (ii) such Liens do not at any time encumber any property other
than the property, equipment or improvements financed by such Debt, and (iii) the
principal amount of Debt secured by any such Lien shall at no time exceed 100% of the
original purchase price of such property, Inventory, equipment or improvements and
related costs and charges imposed by the vendors thereof;
	 
	 	(g)	 	Liens existing as of the date hereof as more particularly described in Schedule
5.5 attached to this Agreement and Liens subsequently approved by Bank in writing;
	 
	 	(h)	 	[Reserved];
	 
	 	(i)	 	Statutory, contractual and common law landlord’s Liens under leases to which
Borrower or any of its Subsidiaries is a party; and
	 
	 	(k)	 	Liens securing the performance of surety and bid and performance bonds,
tenders, leases and other obligations of similar nature, in each case incurred in the
ordinary course of business (exclusive of obligations in respect to the payment for
borrower money).





     “Permitted Reorganization” shall mean a transaction or series of transactions (including all
amendments to the organizational documents of the applicable Subsidiary related to such
transactions) pursuant to which (a) any existing or newly created Subsidiary of Borrower merges
into, or consolidates or amalgamates with, one or more existing or newly formed Subsidiaries of
Borrower, or (b) Borrower, or any existing or newly created Subsidiary of Borrower conveys,
transfers or leases any material portion of its properties and assets to an existing or newly
formed Subsidiary; provided that (i) the surviving,



			
	 	 	 
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	 	Defined Terms Addendum






 









 





existing or newly formed Subsidiary or Subsidiary to which such assets are conveyed,
transferred or leased, is a Domestic Subsidiary organized as a corporation or limited liability
company, and such Subsidiary is or has become a Loan Party pursuant to Section 4.17, (ii) no
Default or Event of Default exists immediately prior or after giving effect thereto, (iii) and
Borrower has provided Bank with 30 days prior written notice of such transaction.




     “Person” or “person” shall mean any individual, corporation, partnership, joint venture,
limited liability company, association, trust, unincorporated association, joint stock company,
government, municipality, political subdivision or agency, or other entity.



     “Reimbursement Obligations” shall mean, at any time and in respect of all Letters of Credit,
the aggregate obligations any Loan Party, then outstanding or which may thereafter arise, to
reimburse the Bank for any amount paid or incurred by the Bank in respect of any and all drawings
under such Letter of Credit, together with any and all other Indebtedness, obligations and
liabilities of any Loan Party to Bank related to such Letter of Credit arising under this
Agreement, any Letter of Credit application or any other Loan Document.



     “Request for Advance” shall mean an oral or written request or authorization for an advance of
Loan proceeds which if made in writing shall be in the form annexed hereto as Exhibit C, or
in such other form as is acceptable to Bank.



     “Revolving Credit Commitment” shall mean THIRTY-FIVE MILLION DOLLARS ($35,000,000).



     “Revolving Credit Maturity Date” shall mean February 12, 2010 or such earlier date on which
the Bank’s commitment to fund Loans and to issue Letters of Credit hereunder is terminated pursuant
to this Agreement; provided, however, if any such date is not a Business Day, then the Revolving
Credit Maturity Date shall be the next succeeding Business Day.



     “Revolving Credit Maximum Amount” shall mean the lesser of (a) the Revolving Credit
Commitment, or (b) the Borrowing Base Limitation.



     “Revolving Credit Note” shall mean the Revolving Credit Note of even date herewith in the
original principal amount of $35,000,000 made by Borrower payable to the order of the Bank, as the
same may be amended, supplemented, renewed, extended, modified, increased or restated from time to
time.



     “Revolving Loan” shall mean an advance made, or to be made, under the revolving credit loan
facility to or for the credit of Borrower by the Bank pursuant to the Loan Terms, Conditions and
Procedures Addendum.



     “SEC” shall mean the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission.



     “Security Agreement” means Security Agreements in the form and content satisfactory to Bank
pursuant to which Borrower and each other Loan Party grants to Bank a first priority security
interest, subject only to Permitted Encumbrances, in all personal property of Borrower and such
Loan Party, including all Accounts, Chattel Paper, Documents, Equipment, Fixtures, General
Intangibles, Goods, Instruments and Inventory, wherever located and whether now owned or hereafter
acquired, together with all replacements thereof, substitutions therefor, accessions thereto and
all proceeds and products of all the foregoing.



			
	 	 	 
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	 	Defined Terms Addendum






 









 






     “Sheldon Canada” shall mean H.A. Sheldon Canada Ltd., an Ontario business corporation.



     “Stock Pledge Agreement” shall mean a pledge agreement in the form and content satisfactory to
Bank pursuant to which Borrower pledges 65% all of the issued and outstanding capital stock of
Sheldon Canada to Bank as security for the Indebtedness.



     “Subordinated Debt” shall mean any Debt of Borrower (other than the Indebtedness) which has
been subordinated to the Indebtedness pursuant to the Subordination Agreement or any other
agreement in form and content satisfactory to the Bank.



     “Subsidiary” shall mean as to any particular parent entity, any corporation, partnership,
limited liability company or other entity (whether now existing or hereafter organized or acquired)
in which more than fifty percent (50%) of the outstanding equity ownership interests having voting
rights as of any applicable date of determination, shall be owned directly, or indirectly through
one or more Subsidiaries, by such parent entity.



     “Tangible Net Worth” shall mean, with respect to any Person and as of any applicable date of
determination, (a) the net book value of all assets of such Person (excluding Affiliate
Receivables, patent rights, trademarks, trade names, franchises, copyrights, licenses, goodwill,
and all other intangible assets of such Person), after all appropriate deductions in accordance
with GAAP (including, without limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization), less (b) all Debt of such Person at such time, plus (c) the
Subordinated Debt of such Person.



     “Telephone Notice Authorization” shall mean an agreement in form satisfactory to Bank
authorizing telephonic and facsimile notices of borrowing and establishing a codeword system of
identification in connection therewith.



     “UCC” shall mean the Uniform Commercial Code as adopted and in force in the State of Michigan,
as amended.



     “Wells Fargo Credit Agreement” shall mean the Amended and Restated Credit Agreement dated as
of September 7, 2006 among Borrower, Wells Fargo HSBC Trade Bank, N.A., as Administrative Agent,
and the other financial institutions from time to time party thereto, as amended.



     “West Bend Property” shall mean Borrower’s property located at 820 East Washington Street,
West Bend, Wisconsin.



     “Yoakum Property” shall mean Borrower’s property located at 500 Airport Road, Yoakum, Texas.



			
	 	 	 
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	 	Defined Terms Addendum






 









 






FINANCIAL COVENANTS ADDENDUM




SECTION 1. FINANCIAL COVENANTS.




     1.1 Tangible Net Worth. Maintain a Tangible Net Worth as of the end of each of
Borrower’s fiscal quarters, to be tested as of the end of each such fiscal quarter, not less the
amount set forth below during the corresponding period set forth below:




	 	(a)	 	Fifty-Two Million Dollars ($52,000,000) as of December 31,
2007;
	 
	 	(b)	 	as of the end of each fiscal quarter thereafter, the sum of:






	 	(i)	 	the amount of Tangible Net Worth that was
required to be maintained as of the end of the immediately preceding
fiscal quarter, plus
	 
	 	(ii)	 	fifty percent (50%) of the Net Income (if
positive), for the fiscal quarter ended as of the date of
determination, plus one hundred percent of the Fixed Asset Gain/Loss
(if positive), for the fiscal quarter ended as of the date of
determination; plus
	 
	 	(iii)	 	one hundred percent (100%) of the Net Cash
Proceeds from the issuance of any equity ownership interests during the
fiscal quarter ended as of the date of determination.





			
	 	 	 
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	 	Financial Covenant Addendum






 









 







LOAN TERMS, CONDITIONS AND PROCEDURES ADDENDUM




SECTION 1. REVOLVING CREDIT FACILITY




     1.1 Revolving Credit Commitment. Subject to the terms and conditions of this
Agreement, the Bank agrees to make Revolving Loans to Borrower at any time and from time to time
from the Effective Date hereof until (but not including) the Revolving Credit Maturity Date. The
aggregate principal amount of Revolving Loans at any time outstanding plus the Letter of Credit
Liabilities shall not exceed the Revolving Credit Maximum Amount. All of such Revolving Loans
shall be evidenced by the Revolving Credit Note, under which advances, repayments and re-advances
may be made, subject to the terms and conditions of the Loan Documents.



     1.2 Repayment of and Interest on the Revolving Credit Note. Each Revolving Loan
evidenced by the Revolving Credit Note from time to time outstanding hereunder shall, from and
after the date of such Revolving Loan, bear interest at a per annum rate equal to the Applicable
Interest Rate until the occurrence of an Event of Default and thereafter at the Default Rate and
shall be due and payable in accordance with the terms of the Revolving Credit Note. All unpaid
principal, accrued and unpaid interest and other amounts owing under the Revolving Credit Note
shall be due and payable on the Revolving Credit Maturity Date.



     1.3 Requests for Advances. Except as hereinafter provided, Borrower may request a
Revolving Loan by submitting to Bank a Request for Advance by an authorized officer or other
representative of Borrower, subject to the following:




	 	(a)	 	each such Request for Advance shall include, without
limitation, the proposed amount of such Revolving Loan and the proposed
Disbursement Date, which date must be a Business Day;
	 
	 	(b)	 	each such Request for Advance shall be communicated to Bank
within the time periods set forth in the Note;
	 
	 	(c)	 	a Request for Advance, once communicated to Bank, shall not be
revocable by Borrower;
	 
	 	(d)	 	each Request for Advance, once communicated to Bank, shall
constitute a representation, warranty and certification by Borrower as of the
date thereof that:






	 	(i)	 	both before and after the making of such
Revolving Loan, the obligations set forth in the Loan Documents are and
shall be valid, binding and enforceable obligations of each Loan Party,
as applicable;
	 
	 	(ii)	 	all terms and conditions precedent to the
making of such Revolving Loan have been satisfied or waived by Bank in
accordance with this Agreement, and shall remain satisfied through the
date of such Revolving Loan;
	 
	 	(iii)	 	the making of such Revolving Loan will not
cause the aggregate outstanding principal amount of all Revolving Loans
plus the Letter of Credit Liabilities to exceed the Revolving Credit
Maximum Amount;





			
	 	 	 
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	 	Loan Party Locations

Schedule 5.20






 









 







	 	(iv)	 	no Default or Event of Default shall have
occurred and is continuing, and none will exist or arise upon the
making of such Revolving Loan;
	 
	 	(v)	 	the representations and warranties contained in
the Loan Documents are true and correct in all material respects and
shall be true and correct in all material respects as of the making of
such Revolving Loan, except to the extent such representations and
warranties specifically refer to an earlier date, in which case they
shall be true and correct in all material respects as of such earlier
date; and
	 
	 	(vi)	 	the Request for Advance will not violate the
terms or conditions of any contract, indenture, agreement or other
borrowing of Borrower, except to the extent that such terms or
conditions have been waived or that failure to comply with any such
terms or conditions would not have a Material Adverse Effect.




Bank may elect (but without any obligation to do so) to make a Revolving Loan upon the telephonic
or facsimile request of Borrower, provided that Borrower has first executed and delivered to Bank a
Telephone Notice Authorization. If any such Revolving Loan based upon a telephonic or facsimile
request is made by Borrower, Bank may require Borrower to confirm said telephonic or facsimile
request in writing by delivering to Bank, on or before 11:00 a.m. (Dallas, Texas time) on the next
Business Day following the Disbursement Date of such Revolving Loan, a duly executed written
Request for Advance, and all other provisions of this Section 1 shall be applicable with
respect to such Revolving Loan. In addition, Borrower may authorize the Bank to automatically make
Revolving Loans pursuant to such other written agreements as may be entered into by Bank and
Borrower.




     1.4 Prepayment. Borrower may prepay all or part of the outstanding balance under the
Revolving Credit Note at any time, without premium, penalty or prejudice to the right of Borrower
to reborrow under the terms of this Agreement, subject to the terms and conditions of the Loan
Documents.



     1.5 Revolving Credit Maximum Amount and Reduction of Indebtedness. Notwithstanding
anything contained in this Agreement to the contrary, the aggregate principal amount of all
Revolving Loans at any time outstanding plus the Letter of Credit Liabilities shall not exceed the
Revolving Credit Maximum Amount. If said limitations are exceeded at anytime, Borrower shall
immediately, without demand by Bank, pay to Bank an amount not less than such excess, or, if Bank,
in its sole discretion, shall so agree, Borrower shall provide Bank cash collateral in an amount
not less than such excess, and Borrower hereby pledges and grants to Bank a security interest in
such cash collateral so provided to Bank.



     1.6 Use of Proceeds of Revolving Loans. The proceeds of Revolving Loans shall be used
to (a) refinance the indebtedness outstanding under the Wells Fargo Credit Agreement, (b) finance
working capital needs of Borrower, and (c) and for the purpose of making advances to Sheldon Canada
under (and not to exceed, in aggregate amount outstanding, the face amount of) the Intercompany
Note, for the purpose of financing the working capital needs of Sheldon Canada.



     1.7 [Reserved.]



     1.8 Unused Commitment Fee. Borrower shall pay to Bank an unused commitment fee in an
amount equal to the product of (a) 0.375% multiplied by (b) the difference between (i) the
Revolving Credit Commitment and (ii) the aggregate outstanding principal balance of all Revolving
Loans. Such fee shall be computed on a daily basis and shall be payable quarterly in arrears as of
the end of each of



			
	 	 	 
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	 	Loan Party Locations

Schedule 5.20






 









 





Borrower’s fiscal quarters. Bank shall invoice Borrower for such fees, which invoice shall be
due and payable within fifteen (15) days after receipt.




     1.9 Letters of Credit.




	 	(a)	 	Letters of Credit. Subject to the terms and conditions
of this Agreement and the other Loan Documents, the Bank shall, upon request
from Borrower from time to time prior to the Revolving Credit Maturity Date,
issue one or more Letters of Credit for the account of Borrower and in support
of the obligations of Borrower or any of its Subsidiaries. The Letter of
Credit Liabilities outstanding at any time shall not exceed $10,000,000; and
the sum of (i) the outstanding principal balance of all Revolving Loans
plus (ii) the Letter of Credit Liabilities outstanding at any time
shall not exceed the Revolving Credit Maximum Amount. Each Letter of Credit
issued pursuant to this Agreement shall be in a minimum amount of $100,000. No
Letter of Credit shall have a stated expiration date later than the earlier of
(i) thirty (30) days prior to the Revolving Credit Maturity Date, or (ii) (A)
one (1) year from the date of issuance in case of a standby Letter of Credit,
or (B) one hundred eighty (180) days from the date of issuance in the case of a
commercial Letter of Credit.
	 
	 	(b)	 	Additional Provisions. The following additional
provisions shall apply to each Letter of Credit:






	 	(i)	 	Borrower shall give the Bank written notice
requesting each issuance of a Letter of Credit hereunder not less than
three (3) Business Days prior to the requested issuance date and shall
furnish such additional information regarding such transaction as Bank
may request. The issuance by Bank of each Letter of Credit shall, in
addition to the conditions precedent set forth elsewhere in this
Agreement, be subject to the conditions precedent that (A) such Letter
of Credit shall be in form and substance satisfactory to Bank, (B)
Borrower shall have executed and delivered such applications and other
instruments and agreements relating to such Letter of Credit as Bank
shall have requested and are not inconsistent with the terms of this
Agreement, (C) each of the statements in Section 1.3(d)(i), (ii),
(iv), (v) and (vi) of this Loan Terms, Conditions and Procedures
Addendum are true as of the date of issuance of such Letter of Credit
with respect to issuance of such Letter of Credit (as opposed to making
a Revolving Loan), and the submission of an application for issuance of
a Letter of Credit shall constitute a representation, warranty and
certification of Borrower to that effect, and (D) no Letter of Credit
may be issued if after giving effect thereto, the sum of the aggregate
outstanding principal balance of all Revolving Loans plus the Letter of
Credit Liabilities would exceed the Revolving Credit Maximum Amount.
With respect to the issuance or renewal of each Letter of Credit,
Borrower shall pay to Bank such letter of credit fees and other
expenses customarily charged by Bank in connection with the issuance or
renewals of letters of credit.
	 
	 	(ii)	 	Borrower shall be irrevocably and
unconditionally obligated forthwith to reimburse Bank for any amount
paid by Bank upon any drawing under any Letter of Credit, without
presentment, demand, protest or other





			
	 	 	 
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	 	Loan Party Locations

Schedule 5.20






 









 







	 	 	 	formalities of any kind, all of which are hereby waived. Unless
Borrower shall elect to otherwise satisfy such Reimbursement
Obligation, such reimbursement shall, subject to satisfaction of any
conditions provided herein for the making of Revolving Loans and to
the Revolving Credit Maximum Amount, automatically be made by
advancing to Borrower a Revolving Loan in the amount of such
Reimbursement Obligation.
	 
	 	(iii)	 	Borrower shall pay to Bank letter of credit
fees upon the date of issuance of each standby Letter of Credit in the
amount equal to two and three-quarters percent (2.75%) per annum on the
maximum amount which may be drawn under such Letter of Credit. Such
fees shall be assessed for the actual number of days from the date of
issuance until the date of expiration of such letter of credit.
Borrower shall pay to Bank a letter of credit fee quarterly in advance
for each commercial Letter of Credit, each such quarterly fee to be in
an amount equal to the greater of (a) one-half percent (0.50%) of the
amount of the commercial Letter of Credit, or (b) $250.
	 
	 	(iv)	 	In connection with the Letters of Credit,
Borrower will pay Bank, letter of credit issuance fees and standard
administration, payment and cancellation charges assessed by Bank, at
the times, in the amounts customarily charged by Bank at such time with
respect to its letters of credit generally.






	 	(b)	 	Indemnification; Release. BORROWER HEREBY INDEMNIFIES
AND AGREES TO DEFEND AND HOLD HARMLESS BANK AND ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND REPRESENTATIVES FROM AND AGAINST ANY AND ALL CLAIMS AND
DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES WHICH ANY SUCH INDEMNIFIED
PARTY MAY INCUR (OR WHICH MAY BE CLAIMED AGAINST BANK OR ANY SUCH INDEMNIFIED
PARTY BY ANY PERSON WHATSOEVER), REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN
PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, IN CONNECTION WITH
THE EXECUTION AND DELIVERY OF ANY LETTER OF CREDIT OR TRANSFER OF OR PAYMENT OR
FAILURE TO PAY UNDER ANY LETTER OF CREDIT; PROVIDED THAT BORROWER SHALL NOT BE
REQUIRED TO INDEMNIFY ANY PARTY SEEKING INDEMNIFICATION FOR ANY CLAIMS,
DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES TO THE EXTENT, BUT ONLY TO THE
EXTENT, CAUSED BY (I) THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE PARTY
SEEKING INDEMNIFICATION, OR (II) BY THE FAILURE BY THE PARTY SEEKING
INDEMNIFICATION TO PAY UNDER ANY LETTER OF CREDIT AFTER THE PRESENTATION TO IT
OF A REQUEST REQUIRED TO BE PAID UNDER APPLICATION LAW.





SECTION 2. FUNDING LOANS, PAYMENTS, RECOVERIES AND COLLECTIONS




     2.1 Funding Loans. Subject to the satisfaction of all conditions precedent to the
making and funding of any Loan set forth in any Loan Document, including, without limitation, those
conditions



			
	 	 	 
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	 	Loan Party Locations

Schedule 5.20






 









 





precedent set forth in Section 3 of this Addendum, Bank shall make the proceeds of any
such Loan available to Borrower by 5:00 p.m. (Dallas, Texas time) on the respective Disbursement
Date of such Loan, by depositing such proceeds into such account maintained by Borrower with Bank
as Borrower shall designate in writing or as otherwise agreed to in writing by Borrower and Bank.




     2.2 Bank’s Books and Records. The amount and date of each Loan hereunder, the amount
from time to time outstanding under the Note, the Applicable Interest Rate in respect of each Loan,
and the amount and date of any repayment hereunder or under the Note, shall be noted on Bank’s
books and records, which shall be conclusive evidence thereof, absent manifest error; provided,
however, any failure by Bank to make any such notation, or any error in any such notation, shall
not relieve Borrower of its obligations to pay to Bank all amounts owing to Bank under or pursuant
to the Loan Documents, in each case, when due in accordance with the terms hereof or thereof.



     2.3 Payments on Non-Business Day. In the event that any payment of any principal,
interest, fees or any other amounts payable by Borrower under or pursuant to any Loan Document
shall become due on any day which is not a Business Day, such due date shall be extended to the
next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and
be payable at the Applicable Interest Rate(s) for and during any such extension.



     2.4 Payment Procedures. Unless otherwise expressly provided in a Loan Document, all
sums payable by Borrower to Bank under or pursuant to any Loan Document, whether principal,
interest, or otherwise, shall be paid, when due, directly to Bank at the office of Bank identified
on the signature page of this Agreement, or at such other office of Bank as Bank may designate in
writing to Borrower from time to time, in immediately available United States funds, and without
setoff, deduction or counterclaim. Bank may, in its discretion, charge any and all deposit or
other accounts (including, without limitation, any account evidenced by a certificate of deposit or
time deposit) of Borrower maintained with Bank for all or any part of any Indebtedness then due and
payable; provided, however, that such authorization shall not affect Borrower’s obligations to pay
all Indebtedness, when due, whether or not any such account balances maintained by Borrower with
Bank are insufficient to pay any amounts then due.



     2.5 Maximum Interest Rate. At no time shall any Applicable Interest Rate or Default
Rate under this Agreement or any Note, or otherwise in respect of any Loan or any Indebtedness
hereunder, exceed the Maximum Legal Rate, giving due consideration to the execution of this
Agreement and each Note. In the event that any interest is charged or otherwise received by Bank
in excess of the Maximum Legal Rate, Borrower hereby acknowledges and agrees that any such excess
shall be deemed to have been payments of principal, and not of interest, and shall be applied,
first, to reduce the principal Indebtedness then outstanding, second, any remaining excess, if any,
shall be applied to reduce any other Indebtedness, and third, any remaining excess, if any, shall
be returned to Borrower. Notwithstanding the foregoing or anything to the contrary contained in
this Agreement or any other Loan Document, but subject to all limitations contained in this
paragraph, if at anytime any Applicable Interest Rate or Default Rate or other rate of interest
applicable to any portion of the Indebtedness is computed on the basis of the Maximum Legal Rate,
any subsequent reduction in the Applicable Interest Rate, Default Rate or such other rate of
interest shall not reduce such interest rate thereafter payable below the Maximum Legal Rate until
the aggregate amount of interest accrued equals the total amount of interest that would have
accrued if interest had, at all times, been computed solely on the basis of the Applicable Interest
Rate, Default Rate or such other interest rate. This paragraph shall control all agreements
between the Borrower and the Bank.



     2.6 Receipt of Payments by Bank. Any payment by Borrower of any of the Indebtedness
made by mail will be deemed tendered and received by Bank only upon actual receipt thereof by Bank
at



			
	 	 	 
	-5-
	 	Loan Party Locations

Schedule 5.20






 









 





the address designated for such payment, whether or not Bank has authorized payment by mail or
in any other manner, and such payment shall not be deemed to have been made in a timely manner
unless actually received by Bank on or before the date due for such payment, time being of the
essence. Borrower expressly assumes all risks of loss or liability resulting from non-delivery or
delay of delivery of any item of payment transmitted by mail or in any other manner. Acceptance by
Bank of any payment in an amount less than the amount then due shall be deemed an acceptance on
account only, and any failure to pay the entire amount then due shall constitute and continue to be
an Event of Default hereunder. Bank shall be entitled to exercise any and all rights and remedies
conferred upon and otherwise available to Bank under any Loan Document upon the occurrence and
during the continuance of any such Event of Default. Prior to the occurrence of any Default,
Borrower shall have the right to direct the application of any and all payments made to Bank
hereunder to the Indebtedness evidenced by the Note. Borrower waives the right to direct the
application of any and all payments received by Bank hereunder at any time or times after the
occurrence and during the continuance of any Default. Borrower further agrees that after the
occurrence and during the continuance of any Default, or prior to the occurrence of any Default if
Borrower has failed to direct such application, Bank shall have the continuing exclusive right to
apply and to reapply any and all payments received by Bank at any time or times, whether as
voluntary payments, proceeds from any Collateral, offsets, or otherwise, against the Indebtedness
in such order and in such manner as Bank may, in its sole discretion, deem advisable,
notwithstanding any entry by Bank upon any of its books and records. Borrower hereby expressly
agrees that, to the extent that Bank receives any payment or benefit of or otherwise upon any of
the Indebtedness, and such payment or benefit, or any part thereof, is subsequently invalidated,
declared to be fraudulent or preferential, set aside, or required to be repaid to a trustee,
receiver, or any other Person under any bankruptcy act, state or federal law, common law, equitable
cause or otherwise, then to the extent of such payment or benefit, the Indebtedness, or part
thereof, intended to be satisfied shall be revived and continued in full force and effect as if
such payment or benefit had not been made or received by Bank, and, further, any such repayment by
Bank shall be added to and be deemed to be additional Indebtedness.




     2.7 Security. Payment and performance of the Indebtedness shall be secured by Liens
on all of the assets and properties of Borrower and of such other Loan Parties as Bank may require
from time to time and shall be guaranteed by the Guarantors.



     2.8 Mandatory Repayment from Subordinated Indebtedness. In the event of any issuance
of Subordinated Debt by Borrower or any Loan Party, the Borrower shall repay the Note in an amount
equal to the lesser of (i) the Net Cash Proceeds of any such Subordinated Debt, or (ii) the
aggregate amount of all outstanding Indebtedness, such prepayment and premium to be made within ten
(10) Business Days of receipt of such Net Cash Proceeds. Any such amount shall be applied in
payment of the Indebtedness, first to Bank’s costs and expenses due and payable pursuant to this
Agreement, then to accrued and unpaid interest, then to principal on such Loans as Bank may elect
(in inverse order of their maturities if principal amounts are due in installments), then to other
Indebtedness, and any remaining excess, if any, shall be returned to Borrower.



     2.9 Mandatory Repayment from Sale of West Bend Property and/or Yoakum Property. In
the event of a sale or transfer of the West Bend Property or the Yoakum Property, Borrower shall
repay the Note in an amount equal to the lesser of (i) the Net Cash Proceeds from the sale of the
West Bend Property or the Yoakum Property, as applicable, or (ii) the aggregate amount of all
Indebtedness, such prepayment and premium to be made within ten (10) Business Days of receipt of
such Net Cash Proceeds. Any such amount shall be applied in payment of the Indebtedness, first to
Bank’s costs and expenses due and payable pursuant to this Agreement, then to accrued and unpaid
interest, then to principal on such Loans as Bank may elect (in inverse order of their maturities
if principal amounts are due in installments), then to other Indebtedness, and any remaining
excess, if any, shall be returned to Borrower.



			
	 	 	 
	-6-
	 	Loan Party Locations

Schedule 5.20






 









 






SECTION 3. CONDITIONS PRECEDENT




     3.1 Conditions Precedent to First Loan or First Letter of Credit. The obligation of
the Bank to issue the first Letter of Credit or to make the first Revolving Loan under or pursuant
to this Agreement shall be subject to the following conditions precedent:




	 	(a)	 	Execution of this Agreement, Note and other Loan
Documents. Borrower shall have executed and delivered to Bank, or caused
to have been executed and delivered to Bank, this Agreement, the Note and all
other Loan Documents, and this Agreement (including all addenda, schedules,
exhibits, certificates, opinions, financial statements and other documents to
be delivered pursuant hereto), such Note, and all other Loan Documents, shall
be in full force and effect and binding and enforceable obligations of Borrower
and, to the extent that it is a party thereto or otherwise bound thereby, of
each other Person who may be a party thereto or bound thereby.
	 
	 	(b)	 	Authority Documents. Bank shall have received: (i)
copies of resolutions of the board of directors, partners or members or
managers, as applicable, of each Loan Party evidencing approval of the
borrowing hereunder and the transactions contemplated by the Loan Documents,
and authorizing the execution, delivery and performance by each Loan Party of
each Loan Document to which it is a party or by which it is otherwise bound,
which resolutions shall have been certified by a duly authorized officer,
partner or other representative, as applicable, of each Loan Party as of the
date of this Agreement as being complete, accurate and in full force and
effect; (ii) incumbency certifications of a duly authorized officer, partner or
other representative, as applicable, of each Loan Party, in each case,
identifying those individuals who are authorized to execute the Loan Documents
for and on behalf of such Person(s), respectively, and to otherwise act for and
on behalf of such Person(s); (iii) certified copies of each of such Person(s)’
articles of incorporation and bylaws, partnership agreement, certificate of
limited partnership, articles of organization, regulations or operating
agreement, as applicable, and all amendments thereto; and (iv) certificates of
existence, good standing and authority to do business, as applicable, certified
substantially contemporaneously with the date of this Agreement, from the state
or other jurisdiction of each of such Person(s)’ organization and, with respect
to Borrower, from every other state or jurisdiction in which Borrower is
qualified to do business as a foreign corporation.
	 
	 	(c)	 	Collateral Documents. As security and support for the
payment and performance of all Indebtedness of Borrower to Bank, Borrower shall
have furnished, executed and delivered to Bank, or shall have caused to have
been furnished, executed and delivered to Bank, prior to or concurrently with
the Disbursement Date for the initial Loan hereunder, in form satisfactory to
Bank, the following documents, and Bank shall have received proof that
appropriate security agreements, financing statements, collateral and other
documents covering the Collateral shall have been executed and delivered by the
appropriate Persons to be recorded or filed in such jurisdictions and such
other steps shall have been taken as necessary to perfect, subject only to
Permitted Encumbrances, the Liens granted thereby in accordance with such
agreements:






	 	(i)	 	Security Agreement executed by the Borrower and
the Guarantors;





			
	 	 	 
	-7-
	 	Loan Party Locations

Schedule 5.20






 









 







	 	(ii)	 	Guaranty executed by the Guarantors;
	 
	 	(iii)	 	Stock Pledge Agreement executed by the
Borrower (accompanied by the certificate(s) representing all of the
pledged stock and assignments separate from certificate, duly endorsed
by the Borrower in blank;
	 
	 	(iv)	 	financing statements required or requested by
Bank to perfect all security interests to be conferred upon Bank under
the Loan Documents and to accord Bank a perfected security position in
the Collateral that can be perfected by filing such financing
statements, subject only to Permitted Encumbrances;
	 
	 	(v)	 	such additional documents or certificates as
may be required by Bank and/or required under the terms of any and
every Loan Document; and
	 
	 	(vi)	 	such other documents or agreements of security
and appropriate assurances of validity, perfection and priority of Lien
as Bank may request.






	 	(d)	 	Legal Opinion Letter. Borrower shall have furnished to
Bank an opinion of Borrower’s and each Loan Party’s legal counsel, dated as of
the date of this Agreement, and covering such matters as are requested by Bank
and which is otherwise satisfactory in form and substance to Bank.
	 
	 	(e)	 	Licenses, Permits, Approvals, Etc. To the extent
necessary and applicable, Borrower shall have received any and all necessary
authorizations, approvals and consents from all applicable Governmental
Authorities in respect of the borrowing by Borrower of the Loans hereunder, the
Loan Documents and the transactions contemplated by any Loan Document; and Bank
shall have also received copies of each authorization, license, permit,
consent, order or approval of, or registration, declaration or filing with, any
Governmental Authority or any securities exchange or other Person obtained or
made by Borrower or any Loan Party in connection with the transactions
contemplated by the Loan Documents and which is material to the financial
condition of Borrower or any Loan Party or the conduct of its business or the
transactions contemplated hereby or the Collateral.
	 
	 	(f)	 	UCC Lien Search. Bank shall have received UCC, tax
lien and judgment lien record and copy searches disclosing no notice of any
Liens or encumbrances filed against any of the Collateral, other than the
Permitted Encumbrances.
	 
	 	(g)	 	Casualty Insurance. Borrower shall have furnished to
Bank, or cause to have been furnished to Bank, evidence of insurance required
to be maintained pursuant to this Agreement or any of the other Loan Documents.
	 
	 	(h)	 	Approval of Bank Counsel. All actions, proceedings,
instruments and documents required to carry out the borrowings and transactions
contemplated by this Agreement or any other Loan Document or incidental
thereto, and all other related legal matters, shall have been satisfactory to
and approved by legal counsel for Bank, and said counsel shall have been
furnished with such certified





			
	 	 	 
	-8-
	 	Loan Party Locations

Schedule 5.20






 









 








	 	 	 	copies of actions and proceedings and such other instruments and documents
as they shall have requested.
	 
	 	(i)	 	Compliance with Certain Documents and Agreements. Each
Loan Party shall have each performed and complied with all agreements and
conditions then due contained in the Loan Documents applicable to it and which
are then in effect.
	 
	 	(j)	 	Other Documents and Instruments. Bank shall have
received such other instruments and documents (not inconsistent with the terms
hereof) as Bank may request in connection with the making of the Loans
hereunder, including, but not limited to, those items set forth on the
Documentation Checklist set forth on Schedule 3.1(j) attached hereto, and all
such instruments and documents shall be satisfactory in form and substance to
Bank.
	 
	 	(k)	 	Payment of Other Debt. Contemporaneously with the
closing hereof, Borrower shall have paid in full all indebtedness of Borrower
arising under the Wells Fargo Credit Agreement (other than with respect to the
Existing Letters of Credit) and shall have delivered to Bank evidence, in a
form satisfactory to Bank, of the termination of all security interests and
other liens and encumbrances of Wells Fargo HSBC Trade Bank, N.A., as
Administrative Agent, upon the assets of Borrower and any Loan Party.
	 
	 	(l)	 	Payment of Up-Front Fee. Borrower shall pay to Bank an
up-front fee in the total amount of $100,000. Bank acknowledges receipt of
$25,000 toward payment of such up-front fee.





     3.2 Post-Closing Conditions. It is a condition to Bank’s continuing obligations under
this Agreement that Borrower achieve or satisfy each of the following by the date indicated, and
failure to do so as to any one or more of the following shall constitute an Event of Default:




	 	(a)	 	Bank Accounts. Borrower shall open and maintain
deposit accounts in accordance with Section 4.13 of the Agreement.
	 
	 	(b)	 	Collateral Access Agreements. Borrower shall have
delivered Collateral Access Agreements for the domestic leased locations of
Borrower and each Guarantor set forth on Schedule 5.20 by March 17, 2008 or
such later date as extended by Bank.
	 
	 	(c)	 	Account Control Agreements. Borrower shall have
delivered the Account Control Agreements in accordance with Section 4.13 of the
Agreement.
	 
	 	(d)	 	Intellectual Property Collateral. By April 12, 2008,
Borrower and each other applicable Loan Party shall execute and deliver such
instruments and documents as Bank shall request to perfect a first priority
Lien in favor of the Bank upon such domestic Intellectual Property as may be
designated by Bank, including but not limited to separate pledge and/or
security agreements to be filed by Bank with the United States Patent and
Trademark Office or the United States Copyright Office, as applicable. By
March 12, 2008, Borrower and each other applicable Loan Party shall have
delivered to Bank domestic patent, copyright and trademark searches disclosing
no notice of any Liens or encumbrances filed against any of the Collateral
other than Permitted Encumbrances.





			
	 	 	 
	-9-
	 	Loan Party Locations

Schedule 5.20






 









 






     3.3 Conditions Precedent to Disbursement of All Loans and All Letters of Credit. In
addition to any other terms and conditions set forth in this Agreement, including, without
limitation, those set forth in Section 3.1 above, the obligation of Bank to make any Loan
or to issue any Letter of Credit under this Agreement, including, without limitation, the initial
Loan hereunder, shall be further subject to the satisfaction of each of the following conditions
precedent on or before the Disbursement Date for such Loan:




	 	(a)	 	Loan Documents Binding and Enforceable. All Loan
Documents shall be in full force and effect and binding and enforceable
obligations of each Loan Party, subject to the limitations set forth in Section
3.8 of this Agreement.
	 
	 	(b)	 	Representations and Warranties. Each of the
representations and warranties of each Loan Party under any Loan Document shall
be true and correct in all material respects, except to the extent such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date.
	 
	 	(c)	 	No Default or Material Adverse Effect. No Default or
Event of Default shall have occurred and be continuing; there shall have been
no Material Adverse Effect since the date of the Financial Statements most
recently delivered to Bank pursuant to this Agreement.





			
	 	 	 
	-10-
	 	Loan Party Locations

Schedule 5.20







 












 





Exhibit A 




FORM OF BORROWING BASE CERTIFICATE




See attached.




Form of Borrowing Base Certificate

Exhibit A




 









 





Standard Borrowing Base Requirements



Listed below are Comerica Bank’s Standard Borrowing Base requirements and ineligible
definitions. Please be sure to check your Loan Documents (ex. Advance Formula Agreement, Credit
Agreement, Security Agreement) for any changes or exceptions to the Standard Borrowing Base requirements and
ineligible definitions.




	 	 	 
	Accounts Receivable Aging:

	 	aged by INVOICE DATE,
and with invoice date, $
amount, grouped by
customer, in alphabetical
order, *including
customer address and
phone number and terms of
sales *(a quarterly
customer address list may
be required)
	 
	 	 
	Accounts Payable Aging:

	 	aged as of INVOICE
DATE, grouped by vendor,
in alphabetical order,
including terms of
sale
	 
	 	 
	Ineligibles:
	 	 
	 
	 	 
	> 90 days from invoice date:

	 	Invoices 90 days or
less from invoice date
are eligible, i.e.
accounts greater than 90
days past invoice date
are ineligible.
	 
	 	 
	Credit Balances > 90 days from invoice
date:

	 	Those accounts with
account debtor credit
balances that have
existed for more than 90
days from invoice date.



If there are several
accounts for the same
debtor, check to see if
the aggregate totals are
a credit balance > 90
days. If not, do not
exclude.
	 
	 	 
	25% affected or Cross-agings rule

	 	Those accounts in
which 25% or more of the
account is aged past 60
days from invoice date
renders the remaining
account balance
ineligible as well.
Multiple accounts for the
same account debtor are
aggregated. 


Include this
if designated in Advance
Formula Agreement.
	 
	 	 
	Foreign Accounts

	 	Accounts receivable
which originate from
companies outside of the
United States. Generally,
foreign subsidiaries of
U.S. corporations are
ineligible, while U.S.
subsidiaries of foreign
companies are eligible.



*At the Bank’s
discretion, Foreign A/R
may be considered
eligible if backed by a
Letter of Credit (L/C).
The Bank must be in
possession of the
original L/C, or posses
evidence of assignment of
the L/C to Comerica Bank.
The Loan Agreement will
specify if L/C backed A/R
may be considered
eligible (subject to all
other ineligible
exclusions). 


**At the
Bank’s discretion,
Foreign A/R may be
considered eligible if it
is supported by foreign
credit insurance. A
complete copy of the
entire insurance policy,
along with evidence of
endorsement/assignment of
the Policy to Comerica
Bank, must be submitted
to the Loan Analysis
Department. The Loan
Agreement will specify if
insured foreign A/R may
be considered eligible
(subject to all other
ineligible
exclusions).
	 
	 	 
	U.S. Government

	 	Accounts with respect
to which the account
debtor is a federal
governmental entity or
any department, agency,
or instrumentality
thereof. 


*At the Bank’s
discretion, those
accounts of the United
States or any department,
agency or instrumentality
thereof, as to which the
payee has assigned its
rights to payment thereof
to Comerica Bank and the
assignment has been
acknowledged, pursuant to
the Assignment of Claims
Act of 1940, as amended
(31 U.S.C. 3727), may be
considered eligible for
the Borrowing Base,
subject to all other
ineligible
exclusions.
	 
	 	 
	Contra

	 	Contra accounts are
defined as the condition
under which a borrower
has both A/R and A/P from
the same company. The
borrowing base is reduced
by the lesser of the A/P
or eligible A/R.
	 
	 	 
	Promotional or Demo

	 	Accounts that are
generated by
demonstration or
promotional equipment, or
with respect to which
goods are placed on
consignment, guaranteed
sale,






 









 






	 	 	 
	 
	 	 
	 

	 	Standard Borrowing Base Requirements
	 
	 	 
	 

	 	sale or return, sale on approval, bill and hold, or other terms by reason of
which the payment by the account debtor may be conditional are ineligible.
	 
	 	 
	Intercompany

	 	Those accounts that are intercompany, affiliates, subsidiary, employee and
shareholder accounts are ineligible for the Borrowing Base.
	 
	 	 
	COD

	 	Those accounts that contain Cash on Delivery terms are considered ineligible
when

 > 30 days from invoice date.
	 
	 	 
	Unbilled A/R

	 	Unbilled A/R do not constitute a true sale, therefore they are ineligible.
	 
	 	 
	50% Concentration

	 	Accounts with respect to an account debtor, whose total obligations to
Borrower exceed 50% of total A/R. The exclusionary amount is net of all ineligible
items already excluded.
	 
	 	 
	Progress Billings

	 	A progress billing refers to accounts receivable or contract rights generated
at various completion stages of a project, usually subject to some form of
approval for payment on the part of the obligor.
	 
	 	 
	Prebilled Receivables, Including Bill &

Holds

	 	An account or invoice for which the receivable has been billed to obligor
prior to shipment of goods or providing of services.
	 
	 	 
	Dated and/or Extended Term Receivable

	 	An ineligible amount exists if the obligor has the legal right to delay
payment of an invoice (past 30 days from invoice date) due to extended sales
terms. 


For example: Terms of net 60 or longer, hold back of 10% until a job is
completed to obligor’s satisfaction.
	 
	 	 
	Consigned or Guaranteed Sales

	 	A consignment sale occurs when inventory is shipped and invoiced, but the
obligor is not responsible for paying the invoice until they sell the inventory. 


A
guaranteed sale occurs when the sales terms offered allow for the repurchase of
the inventory if it is not sold by the obligor.
	 
	 	 
	Interest/Service Charges

	 	Any interest/finance charges on unpaid accounts receivable are ineligible.
	 
	 	 
	Customer Deposits

	 	Advance payments from an obligor to provide working funds to start or complete
a project must be offset against any open accounts receivable for that
obligor.
	 
	 	 
	Bonded Receivables

	 	Accounts which arise from projects where performance is guaranteed by a
surety, usually an insurance company, by the issuance of a bond in favor of the
owner are ineligible. The surety is legally responsible for the completion of the
project in the event the contractor cannot perform.
	 
	 	 
	Debit memos (Chargebacks, short pays)

	 	Amounts which arise as the result of a short paid invoice or adjustment. The
unpaid balance of the invoice is removed from the aging and reissued as a debit
memo until payment is received or the item is researched and credit is
issued.
	 
	 	 
	Other

	 	Represents service(maintenance) contracts, commissions, container receivables,
non-trade receivables, Chapter 11 receivables, accounts against which liens have
been placed, and any other special provisions outlined in the advance formula
or






 









 





	 	 	 
	Comerica Bank
	 	 
	 
	 	 
	Company:

	 	<Name>
	 
	 	 
	A/R INELIGIBLES — DETAIL
	 	 






	 	 	 	 	 
	 	 	Amounts In Whole Dollars	 
	 	 	Ineligible	 
	 	 	Amount	 
	Net Balance 90+ Days from Invoice
	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	25% Taint	 	Total	 	A/R	 	%	 	 	Ineligible	 
	Customer Name	 	A/R	 	>
90 Days	 	Taint	 	 	Amount	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	#DIV/0!	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contra A/P Offsets	 	 	 	 	 	A/R	 	 	Total	 	 	Ineligible	 
	Customer/Vendor Name	 	(Contra)	 	 	<
90 Days	 	 	A/P	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Affiliated/Intercompany	 	Total	 	 	A/R	 	 	Ineligible	 
	Customer Name	 	A/R	 	 	>
90 Days	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Federal Government	 	Total	 	 	A/R	 	 	Ineligible	 
	Customer Name	 	A/R	 	 	> 90 Days	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 





 









 





	 	 	 
	Comerica Bank
	 	 
	 
	 	 
	Company:

	 	<Name>
	 
	 	 
	A/R INELIGIBLES — DETAIL
	 	 






	 	 	 	 	 
	 	 	Amounts In Whole Dollars	 
	 	 	Ineligible	 
	 	 	Amount	 
	Total
	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Foreign Accounts (excl CAN)	 	Total	 	 	A/R	 	 	Ineligible	 
	Customer Name	 	A/R	 	 	>
90 Days	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Customer Deposits	 	 	 	 	 	A/R	 	 	Total	 	 	Ineligible	 
	Customer Name	 	(Contra)	 	 	<
90 Days	 	 	Deposits	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-Billed / Bill&Hold Invoices	 	Invoice	 	 	Total	 	 	Amt	 	 	Ineligible	 
	Customer Name	 	Number	 	 	Amt	 	 	>
90 Days	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Past Due Credits	 	 	 	 	 	Credits	 	 	A/R	 	 	Ineligible	 
	Customer Name	 	(Contra)	 	 	> 90	 	 	< 90	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 






 









 





	 	 	 
	Comerica Bank
	 	 
	 
	 	 
	Company:

	 	<Name>
	 
	 	 






	 	 	 	 	 
	 	 	Amounts In Whole Dollars	 
	 	 	Ineligible	 
	 	 	Amount	 
	 
	 	 	 	 







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Customer Rebates / Volume Disc. Accruals	 	 	 	 	 	A/R	 	 	Total	 	 	Ineligible	 
	Customer Name	 	(Contra)	 	 	< 90 Days	 	 	Accruals	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Unearned / Deferred Revenue Accruals	 	 	 	 	 	A/R	 	 	Total	 	Ineligible	 
	Customer Name	 	(Contra)	 	 	< 90 Days	 	 	 	Accruals	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Progress Billings	 	Total	 	 	A/R	 	 	Ineligible	 
	Customer Name	 	A/R	 	 	>90 Days	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	 	 	 	 	0	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	Bankruptcy	 	Total	 	 	A/R	 	 	Ineligible	 
	Customer Name	 	A/R	 	 	>90 Days	 	 	Amount	 
	
	 	 	 	 	 	 	 	 	 	 	0	 
	Total
	 	 	 	 	 	 	 	 	 	 	0	 






 









 





	 	 	 
	Comerica
Bank
	 	 
	 
	 	 
	Company:

	 	<Name>
	 
	 	 
	INELIGIBLES SUMMARY 
	 	 






	 	 	 	 	 	 	 	 	 	 	 
	Accounts Receivable	 	 	Inventory	 
	a. Over 90 days from the invoice date
	 	$	0	 	 	a. WIP	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	b. 25% Taint (Cross-Aging)
	 	$	0	 	 	b. Off-site (Including In-Transit)	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	c. Contra Accounts
	 	$	0	 	 	c.  Consigned to customers/employees	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	(A/R and A/P from same entity)
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	d. Affiliate/Intercompany Accounts
	 	$	0	 	 	d. Slow Moving/Inventory Reserve	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	e. Federal Government Accounts
	 	$	0	 	 	e. Obsolete	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	f. Foreign Accounts (excl CAN)
	 	$	0	 	 	f.   Preprinted Stock	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	g. Customer Deposits
	 	$	0	 	 	g. Packaging	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	h. Pre-Billed/Bill&Hold Invoices
	 	$	0	 	 	h. Display Units	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	I. Past Due Credit Balances
	 	$	0	 	 	i    Rolling Stock	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	j. Accruals for A/R
	 	$	0	 	 	j.   Other (defined as:                     )	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	(Volume discounts, Co-op Advertising, R/A)
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	k. Unearned/Deferred Revenue Liabs
	 	$	0	 	 	k.  Other (defined as:                    )	 	$	0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	l. Progress Billings
	 	$	0	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	m. Bankruptcy
	 	$	0	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Other
Ineligibles (Not listed on Detail Worksheet)
	 	 	 	 	 	 	 	 	 	 
	n. Retention/Dated Sales/Guaranteed Sales/
Consignment Sales
	 	$	0	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	o. A/R from Bonded Jobs
	 	$	0	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	p. Service / Finance Charges
	 	$	0	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	q. Unapplied Cash
	 	$	0	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	Total Ineligibles (to line 10)
	 	$	0	 	 	Total Ineligibles (to line 10)	 	$	0	 
	 






***Please
note all ineligibles on the actual aging (i.e., highlight, circle, underline, etc.)***




Additional Comments:



 

 

 



 











 






Comerica Bank

Commercial Loan
Accounting Service

 Post
Office Box 650282

Dallas,
Texas
75265-0282




We submit the following information with the Security Agreement (Accounts
Receivable and/or Inventory) heretofore executed by the undersigned in favor
of the Bank.




	 	 	 
	Company:

	 	Tandy Brands Accessories, Inc.






BORROWING BASE CERTIFICATE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ACCOUNTS RECEIVABLE	 	 	INVENTORY	 
	Rollforward	 
	1. A/R Balance per G/L
	 	 	 	28-Feb-08	 	 	 	 	$	0	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2. Sales (Since Last Report)
	 	+	 	$	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3. Misc.
Debits (Since Last Report)
	 	+	 	$	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4. Cash
Receipts (Since Last Report)
	 	-	 	$	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5. Credit
Memos (Since Last Report)
	 	-	 	$	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6. Misc.
Credits (Since Last Report)
	 	-	 	$	0	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7. A/R Balance per G/L
	 	 	 	28-Feb-08	 	 	=	 	$	0	 	 	7. Inventory Balance per G/L	 	28-Feb-08	 	 	=	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Borrowing Base Calculation
	 	 	 	 
	 

	 	 
	 	 	 	 
	8. A/R Balance per Aging
	 	 	 	28-Feb-08	 	 	=	 	$	0	 	 	8. Inventory Balance per Perpetual	 	28-Feb-08	 	 	=	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	9. Variance (Lines: 7 - 8)
	 	 	 	$	0	 	 	 	 	 	 	 	 	9. Variance (Lines: 7 - 8)	 	$	0	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10. Ineligible Accounts *
	 	 	 	 	 	 	 	-	 	$	0	 	 	10. Ineligible Inventory*	 	 	 	 	 	-	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11. Net Eligible Accounts Receivable
(Lines: 8-10)	 	=	 	$	0	 	 	11. Net Eligible Inventory (Lines: 8 - 10)	 	=	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12. Loan
Formula 80% of Line 11
	 	 	 	 	 	 	 	*	 	$	0	 	 	12. Loan Formula 40% of Line 11	 	 	 	 	 	*	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	13. A/R Capped@ 35,000,000 (LOC
Max if no Specific Cap)	 	 	 	 	 	 	 	13. Invy Capped
@ 50% of total BB (Delete  no
Specific Cap) 		 			 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	14. Lessor of Line 12 or Line 13	 	=	 	$	0	 	 	14. Lessor of Line 12 or Line 13	 	=	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15. Overformula $0.00 (If Applicable)	 	+	 	$	0	 	 	15. Overformula $0.00 (If Applicable)	 	+	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16. Other
$0.00
	 	 	 	 	 	 	 	+/-	 	$	0	 	 	16. Other  $0.00	 	 	 	 	 	+/-	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	17. Total A/R Borrowing Base (Lines:
14+15+/-16)	 	=	 	$	0	 	 	17. Total Inventory
Borrowing Base (Lines: 14+15+/-16)	 	 =	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	18. Total Borrowing Base (Accounts Receivable and Inventory)
	 	 	 	 	 	=	 	 	 $0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	19. Line Of Credit Capped @ $35,000,000
	 	 	 	 	 	 	 			 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	20. Official Reported Borrowing Base (Lessor of Line 18 or Line 19):
	 	 	 	 	 	=	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Loan Balance	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	Loan Balance per Last Report
	 	 	 	28-Feb-08	 	 	 	 	 	 	 	 	TBD	 	 	 	 	 	 	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less: Net Payments
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	-	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plus: Note
Advances
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	+	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Loan Balance as of
	 	 	 	28-Feb-08	 	 	 	 	 	 	 	 	 	 	 	 	 	 	=	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plus: Letters of Credit	 	 	 	 	 	 	 	 	 	(if Applicable)	 	+	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less: DOF Balance	 	 	 	 	 	 	 	 	 	(if Applicable)	 	-	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other	 	 	 	 	 	 	 	 	 	(if Applicable)	 	+/-	 	$	 0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Balance
	 	 	 	28-Feb-08	 	 	 	 	 	 	 	 	 	 	 	 	 	 	=	 	 $	 0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net Unfunded Availability/(Deficit)

	 	28-Feb-08	 	 	 	 	 	 	 	 	 	 	 	 	 	 	=	 	 $	 0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 




To the best of my knowledge and belief, this information is correct and may be relied upon by
you as a basis for advancing any credit to us.




	 	 	 	 	 	 	 
	Company Name:

	 	Tandy Brands Accessories, Inc.
	 	Name/Signature:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date Report Submitted:

	 	 	 	Title:
	 	Chief Financial Officer (Craig
Mackey)
	 

	 	 
	 	 	 	 







 




			
	*	 	Please detail on the “Ineligible Calculations Page” in the “Comments” section.


















 





Exhibit B




FORM COMPLIANCE CERTIFICATE



     This Compliance Certificate is executed and delivered to Comerica Bank (“Bank”) by Tandy Brands Accessories, Inc.,
a Delaware corporation (“Borrower”), this                      day of
                    ,                    . All capitalized terms used but not defined herein, shall have the
meanings given to such terms in that certain Credit Agreement, dated as of February 12, 2008
between Bank and Borrower (as amended, supplemented, renewed, extended, modified or restated from
time to time, the “Credit Agreement”). The undersigned hereby certifies to Bank as follows:



     (1) The undersigned is the duly elected, qualified
and acting                      of Borrower and, as such, is authorized to make and deliver this Certificate.



     (2) The undersigned has reviewed the provisions of the Credit Agreement and confirms that, as of the date hereof:



          (a) the representations and warranties contained in Section 3 of the
Credit Agreement are true and correct in all material respects on and as of the date hereof with the same force and effect as though made on and as of the date hereof, except to the extent such
representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;




          (b) no Default or Event of Default has occurred and is continuing or is imminent, and Borrower has complied with all of the terms, covenants and conditions set forth in the
Credit Agreement; and




          (c) attached
hereto as Schedule A is a report prepared by the
undersigned setting forth information and calculations that
demonstrate compliance (or noncompliance) with each of the covenants set forth in the Financial Covenants Addendum to the Credit Agreement.




     The foregoing certificate is given in my capacity as                      of Borrower, and not in my individual capacity.



	 	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 






Form of Compliance Certificate

Exhibit B








- 1 -









 








SCHEDULE A TO COMPLIANCE CERTIFICATE




1. Tangible Net Worth.




	 	 	 	 	 
	(a) Tangible Net Worth:
	 	$	 	 
	 
	 	 	 	 
	(b) Financial Covenants Addendum presently requires Tangible 

Net Worth be not less than:
	 	$	 	 







	 	 	 	o Covenant Satisfied
	 
	 	 	 	o Covenant Not Satisfied
	 
	 	 	 	o Covenant Not Tested





Form of Compliance Certificate

Exhibit B





- 2 -











 





Exhibit C




FORM OF REQUEST FOR ADVANCE 



(Revolving Loan)



     The undersigned hereby requests COMERICA BANK (“Bank”) to make a Revolving Loan to the
undersigned under the Credit Agreement dated as of February 12, 2008 by and between the
undersigned and Bank (as amended, supplemented, renewed, extended, modified or restated from time
to time herein called the “Credit Agreement”) as follows:




	 	A.	 	Date of Revolving Loan/Refunding/Conversion:                                          , 20 ___
	 
	 	B.	 	Type of Activity (check only
one):






	 	o	 	Revolving Loan
	 
	 	o	 	Refunding of                                         
	 
	 	o	 	Conversion                                        






	 	 	[Describe Revolving Loan to be refunded or converted by reference to principal amount,
current interest rate and current interest period]






	 	C.	 	Interest Option (check only one):






	 	o	 	Prime Rate
	 
	 	o	 	Eurodollar Rate






	 	D.	 	Amount of Revolving Loan to be advanced/refunded/converted:

$                                        
	 
	 	E.	 	Eurodollar Interest Period (not applicable to Prime Rate
Balances):



                     days (insert 30, 60, 90, 120, 150, or 180)
	 
	 	F.	 	Disbursement Instructions:





     The undersigned represents, warrants and certifies that no Default or Event of Default has
occurred and is continuing under the Credit Agreement, and none will exist upon the
making/refunding/conversion of the Revolving Loan requested hereunder. The undersigned further
certifies that upon advancing/refunding/converting the sum requested hereunder, the aggregate
principal amount outstanding under the Revolving Credit Note plus the Letter of Credit Liabilities
will not exceed the Revolving Credit Maximum Amount.



     The undersigned hereby authorizes Bank to disburse the proceeds of the Revolving Loan being
requested by this Request for Advance by crediting the account of the undersigned with Bank
separately designated by the undersigned or as the undersigned and Bank may otherwise agree.



     Capitalized terms used but not otherwise defined herein shall have the respective meanings
given to them in the Credit Agreement.



Form of Request for Advance

Exhibit C








- 1 -









 







Dated this
                     day of                    , ___.




	 	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






Form of Request for Advance

Exhibit C




- 2 -









 





Schedule 3.1(c)(3)




GUARANTORS



Accessory Design Group, Inc.




Amity/Rolfs, Inc.




Tandy Brands Accessories Handbags, Inc.




TBAC-Acquisition, Inc.




TBAC General Management Company




TBAC Investments, Inc.




TBAC Investment Trust




TBAC Management Company L.P.




TBAC-Mass Merchant Quality Control, Inc.




TBAC — Prince Gardner, Inc.




TBAC-Torel, Inc.




Stagg Industries, Inc.




Superior Merchandise Company




Guarantors

Schedule 3.l(c)(3)








- 1 -









 








Confidential Treatment




Schedule 3.1 (c)(6)



ACCOUNTS



	 	 	 	 	 	 	 
	Bank	 	Account Name	 	Account Number	 	Currency
	First State Bank
	 	Tandy Brands Accessories, Inc.
	 	[*]
	 	USD
	First State Bank
	 	TAB Mens Accessories Disbursements
	 	[*]
	 	USD
	M&I Marshall & Ilsley Bank
	 	Amity/ Rolfs Deposit Acct.
	 	[*]
	 	USD
	Wells Fargo HSBC Trade
Bank
	 	TBAC Investments, Inc.
	 	[*]
	 	USD
	Wells Fargo HSBC Trade
Bank
	 	Tandy Brands Acc. Corporate Concentration
	 	[*]
	 	USD
	Wells Fargo Bank
	 	Dreyfus Cash Management Plus
	 	[*]
	 	USD






Accounts


Schedule
3.1(c)(6)


- 1 -









 








Schedule 3.1(j)




DOCUMENTATION CHECKLIST



	 	 	 
	Borrower:

	 	Tandy Brands Accessories, Inc.
	 
	Lender:

	 	Comerica Bank
	 
	Guarantor:

	 	Accessory Design Group, Inc. (“ADG”)
	 
	 

	 	TBAC — Prince Gardner, Inc. (“Prince”) 
	 
	 

	 	Amity/Rolfs, Inc.(“Amity”)
	 
	 

	 	TBAC General Management Company (“TBAC General”)
	 
	 

	 	TBAC Investments, Inc. (“TBAC Investments”) 
	 
	 

	 	TBAC Investment Trust (“TBAC Trust”) 
	 
	 

	 	TBAC Management Company L.P. (“TBAC Management”) 
	 
	 

	 	Tandy Brands Accessories Handbags, Inc. (“TBA Handbags”) 
	 
	 

	 	Stagg Industries, Inc. (“Stagg”)
	 
	 

	 	 TBAC-Torel, Inc. (“Torel”) 


TBAC-Acquisition, Inc. (“Acquisition”)
	 
	 

	 	Superior Merchandise Company (“Superior”) 
	 
	 

	 	 TBAC-Mass Merchant Quality Control, Inc. (“TBAC Mass”)
	 
	Other Parties:

	 	H.A. Sheldon Canada Ltd. (“Sheldon Canada”)
	 
	Transaction:

	 	$35,000,000 Secured Formula Based Revolving Credit Facility
	 
	Closing Date:

	 	February 12, 2008






	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS
	ORGANIZATION DOCUMENTATION	 	 	 	 	 	Ordered	 	Complete
	1 .

	 	Tandy Brands Accessories, Inc.
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE, CA, NC, TX, NY
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary and
Incumbency

	 	MCPS
	 	 	 	þ
	 	þ






Documentation Checklist

Schedule 3.1(j)




- 1 -









 








	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS
	2.

	 	Accessory Design Group, Inc. (“ADG”)
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE, TX
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency

	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	3.

	 	TBAC — Prince Gardner, Inc. (“Prince”)
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE, TX
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency

	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	4.

	 	Amity/Rolfs, Inc. (“Amity”)
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE, TX, WI
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency

	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	5.

	 	TBAC General Management Company (“TBAC
General”)
	 	Borrower	 	Nevada corporation	 	þ
	 	þ
	 

	 	a) Articles of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	NV, TX
	 	þ
	 	þ
	 

	 	c) Certificate of Existence
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	MCPS
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	6.

	 	TBAC Investments, Inc. (“TBAC Investments”)
	 	Borrower	 	Nevada corporation	 	þ
	 	þ
	 

	 	a) Articles of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	NV
	 	þ
	 	þ
	 

	 	c) Certificate of Existence
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	MCPS
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency
	 	 	 	 	 	 	 	 






Documentation Checklist

Schedule 3.1(j)








- 2 -









 








	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS
	7.

	 	TBAC Investment Trust (“TBAC Trust”)
	 		 	Pennsylvania business trust	 		 	
	 

	 	a) Deed of Trust
	 	Borrower	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower 	 	PA
	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant
Secretary and Incumbency
	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	8.

	 	TBAC Management Company L.P. (“TBAC
Management”)
	 	 	 	Delaware limited partnership
	 	 
	 	 
	 

	 	a) Certificate of Limited Partnership
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Limited Partnership Agreement
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Officer and
Incumbency

	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	9.

	 	Tandy Brands Accessories Handbags,
Inc. (“TEA Handbags”)
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	DE, TX
	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency
	 	MCPS	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	10.

	 	Stagg Industries, Inc. (“Stagg”)
	 	 	 	Alabama corporation	 	 	 	 
	 

	 	a) Articles of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	AL
	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency

	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	11.

	 	TBAC-Torel, Inc. (“Torel”)
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE, TX
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency

	 	MCPS
	 	 	 	þ
	 	þ






Documentation Checklist

Schedule 3.1(j)








- 3 -









 








	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS
	12.

	 	TBAC-Acquisition, Inc. (“Acquisition”)
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE, TX
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency

	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	13.

	 	Superior Merchandise Company
(“Superior”)
	 	 	 	Louisiana corporation	 	 	 	 
	 

	 	a) Articles of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	LA
	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency
	 	MCPS
	 	 	 	þ
	 	þ
	 
	 	 	 	 	 	 	 	 	 	 
	14.

	 	TBAC-Mass Merchant Quality Control
Inc. (“TBAC Mass”)
	 	 	 	Delaware corporation	 	 	 	 
	 

	 	a) Certificate of Incorporation
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	b) Bylaws
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	c) Certificate of Good Standing
	 	Borrower
	 	DE, TX
	 	þ
	 	þ
	 

	 	d) Authorizing Resolution
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	e) Certificate of Assistant Secretary
and Incumbency
	 	MCPS
	 	 	 	þ
	 	þ

	 
	 	 	 	 	 	 	 	 	 	 
	15.

	 	H.A. Sheldon Canada Ltd. (“Sheldon
Canada”)
	 	 	 	 	 	þ
	 	þ
	 

	 	a) Shareholder Resolution re: Pledge	 	Borrower	 	 	 	 	 	 






Documentation Checklist

Schedule 3.1(j)




- 4 -









 





	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS
	DUE DILIGENCE DOCUMENTATION	 	 	 	 	 	Ordered	 	Complete
	16.

	 	UCC and Tax Lien Search
	 	Borrower	 	 	 	 	 	 
	 

	 	a) Borrower
	 	 	 	 	 	þ
	 	þ
	 

	 	b) ADG
	 	 	 	 	 	þ
	 	þ
	 

	 	c) Prince
	 	 	 	 	 	þ
	 	þ
	 

	 	d) Amity
	 	 	 	 	 	þ
	 	þ
	 

	 	e) TBAC General
	 	 	 	 	 	þ
	 	þ
	 

	 	f) TBAC Investments
	 	 	 	 	 	þ
	 	þ
	 

	 	g) TBAC Trust
	 	 	 	 	 	þ
	 	þ
	 

	 	h) TBAC Management
	 	 	 	 	 	þ
	 	þ
	 

	 	i) TBA Handbags
	 	 	 	 	 	þ
	 	þ
	 

	 	j) Stagg
	 	 	 	 	 	þ
	 	þ
	 

	 	k) Torel
	 	 	 	 	 	þ
	 	þ
	 

	 	1) Acquisition
	 	 	 	 	 	þ
	 	þ
	 

	 	m) Superior \TBAC Mass
	 	 	 	 	 	þ
	 	þ
	 

	 	
	 	 	 	 	 	þ
	 	þ
	 
	17.

	 	Insolvency Search — Sheldon Canada
	 	MCPS
	 	 	 	þ
	 	þ
	 
	18.

	 	Bank Act Search — Sheldon Canada
	 	MCPS
	 	Ontario
	 	þ
	 	þ
	 
	19.

	 	PPSA Search — Sheldon Canada
	 	MCPS
	 	 	 	þ
	 	þ
	 
	20.

	 	Certificates of Insurance
	 	Borrower	 	 	 	 	 	 
	 

	 	a) Liability
	 	 	 	 	 	þ
	 	þ
	 

	 	b) Property (all-risk/casualty) — all U.S.
locations

	 	 	 	 	 	þ
	 	þ
	 
	21.

	 	List of all Borrower Locations
	 	Borrower
	 	 	 	þ
	 	þ
	 
	22.

	 	Real Property/Facility Leases
	 	Borrower
	 	 	 	þ
	 	þ
	 
	23.

	 	Organizational Chart
	 	Borrower
	 	 	 	þ
	 	þ
	 
	24.

	 	Field Audit
	 	Bank
	 	Per S. Colwick
	 	þ
	 	þ
	 
	25.

	 	Receivables Information
	 	Borrower
	 	Set forth in Borrowing
Base certificate.
	 	þ
	 	þ
	 
	26.

	 	Inventory Information
	 	Borrower
	 	Set forth in Borrowing
Base certificate.
	 	þ
	 	þ
	 
	27.

	 	License Agreements
	 	Borrower
	 	Received List
	 	þ
	 	þ
	 
	28.

	 	Deposit/Investment Account Information
	 	Borrower
	 	 	 	þ
	 	þ
	 
	29.

	 	Intercompany Loan Documents —Sheldon Canada
	 	Borrower
	 	 	 	þ
	 	þ
	 

	 	a. Note (original to be delivered at closing)	 	 	 	 	 	 	 	 






Documentation Checklist

Schedule 3.1(j)




- 5 -









 





	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS
	LOAN DOCUMENTATION	 	 	 	 	 	Drafted	 	Complete
	30.

	 	Credit Agreement
	 	MCPS
	 	 	 	þ
	 	þ
	 
	31.

	 	Revolving Note
	 	MCPS
	 	 	 	þ
	 	þ
	 
	32.

	 	Request for Advance Form
	 	MCPS
	 	 	 	þ
	 	þ
	 
	33.

	 	Borrowing Base Certificate
	 	Borrower
	 	 	 	þ
	 	þ
	 
	34.

	 	Covenant Compliance Certificate
	 	MCPS
	 	 	 	þ
	 	þ
	 
	35.

	 	Borrower’s Telephone and Facsimile
	 	MCPS
	 	 	 	þ
	 	þ
	 

	 	Authorization	 	 	 	 	 	 	 	 
	 
	36.

	 	Automatic Loan Payment Authorization
	 	MCPS
	 	Not required for closing.
	 	 þ
	 	o
	 
	 

	 	Collateral	 	 	 	 	 	 	 	 
	Instruments/Agreements/Guaranty	 	 	 	 	 	 	 	 
	37.

	 	Security Agreement (Borrower and all
	 	MCPS
	 	 	 	þ
	 	þ
	 

	 	Guarantors)	 	 	 	 	 	 	 	 
	 
	38.

	 	Stock Pledge Agreement — Borrower (of
	 	MCPS
	 	 	 	þ
	 	þ
	 

	 	65% of Sheldon Canada stock)	 	 	 	 	 	þ
	 	þ
	 

	 	including Stock Assignment and
	 	 	 	 	 	þ
	 	þ
	 

	 	Original Stock Certificate	 	 	 	 	 	 	 	 
	 
	39.

	 	Assignment Separate from Note
	 	MCPS
	 	 	 	þ
	 	þ
	 
	40.

	 	Account Control Agreement(s)
	 	MCPS
	 	To be delivered post-closing.
	 	þ
	 	o
	 
	41.

	 	Landlord’s/Mortgagee’s/Warehouseman’s Waiver/Subordination — Form	 	MCPS
	 	To be delivered post-closing.
	 	þ
	 	o
	 

	 	 
	 	 	 	All borrower/guarantor
U.S. locations — please
see Schedule A attached
hereto	 	 	 	 
	 
	42.

	 	UCC-1 Financing Statements
	 	MCPS	 	 	 	þ
	 	þ
	 

	 	a) Borrower
	 	 	 	 	 	þ
	 	þ
	 

	 	b) ADG
	 	 	 	 	 	þ
	 	þ
	 

	 	c) Prince
	 	 	 	 	 	þ
	 	þ
	 

	 	d) Amity
	 	 	 	 	 	þ
	 	þ
	 

	 	e) TBAC General
	 	 	 	 	 	þ
	 	þ
	 

	 	f) TBAC Investments
	 	 	 	 	 	þ
	 	þ
	 

	 	g) TBAC Trust
	 	 	 	 	 	þ
	 	þ
	 

	 	h) TBAC Management
	 	 	 	 	 	þ
	 	þ
	 

	 	i) TBA Handbags
	 	 	 	 	 	þ
	 	þ
	 

	 	j) Stagg
	 	 	 	 	 	þ
	 	þ
	 

	 	k) Torel
	 	 	 	 	 	þ
	 	þ
	 

	 	1) Acquisition
	 	 	 	 	 	þ
	 	þ
	 

	 	 	 	 	 	 	 	þ
	 	þ






Documentation Checklist

Schedule 3.1(j)




- 6 -









 





	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS	 	 	 	 
	 

	 	m) Superior	 	 	 	 	 	 	 	 
	 

	 	n) TBAC Mass	 	 	 	 	 	 	 	 
	 
	43.

	 	Guaranty — Guarantors
	 	MCPS
	 	 	 	þ
	 	þ
	 
	 

	 	Other	 	 	 	 	 	 	 	 
	 
	44.

	 	Patriot Act Affidavit
	 	MCPS
	 	 	 	þ
	 	þ
	 
	45.

	 	Opinion of Counsel to Borrower and Guarantors
	 	Borrower
	 	 	 	þ
	 	þ
	 
	46.

	 	Payoff Letters
	 	Borrower
	 	 	 	þ
	 	þ
	 
	47.

	 	Closing Statement
	 	MCPS
	 	 	 	þ
	 	þ
	 
	48.

	 	UCC-3 Terminations
	 	Borrower
	 	To be delivered post-closing per payoff letter.
	 	o
	 	o
	 
	49.

	 	Discharge Documents
	 	Borrower
	 	 	 	o
	 	þ






Documentation Checklist

Schedule 3.1(j)








- 7 -









 








SCHEDULE A

LESSOR’S ACKNOWLEDGEMENTS AND SUBORDINATIONS




	 	 	 	 	 	 	 	 	 	 	 
	ITEM	 	SOURCE	 	STATUS	 	 	 	 
	LESSOR’S ACKNOWLEDGEMENTS AND SUBORDINATIONS	 	 	 	 	 	Drafted/

Requested	 	Complete
	1 .

	 	350 Fifth Avenue, New York, NY
	 	MCPS
	 	Includes Rooms
53 A, 480 1-4806,
and 4820-4824
	 	þ
	 	o
	 

	 	a) Lease
	 	 	 	 	 	þ
	 	þ
	 
	2.

	 	690 East Lamar Blvd., Arlington, TX
	 	MCPS
	 	 	 	þ
	 	o
	 

	 	a) Lease
	 	 	 	 	 	þ
	 	þ
	 
	3 .

	 	1200 NE McClain Road, Suite 40, Bentonville, AR
	 	MCPS
	 	 	 	þ
	 	o
	 

	 	a) Lease
	 	 	 	 	 	þ
	 	þ
	 
	4.

	 	211 W. Grand Ave., Yoakum, TX
	 	MCPS
	 	Month to Month
Lease
	 	þ
	 	o
	 

	 	a) Lease
	 	 	 	 	 	þ
	 	þ
	 
	5.

	 	3631 West Davis Street, Suite A, Dallas, TX
	 	MCPS
	 	 	 	þ
	 	o
	 

	 	a) Lease
	 	 	 	 	 	þ
	 	þ
	 
	6.

	 	621 North 31 st Street, Birmingham, AL
	 	 MCPS
	 	 	 	þ
	 	o
	 

	 	a) Lease
	 	 	 	 	 	þ
	 	þ






Documentation Checklist

Schedule 3.1(j)








- 8 -









 








Schedule 3.5 




SUBSIDIARIES



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	% Ownership of	 	 	 	 
	 	 	Jurisdiction/	 	Borrower as of the	 	Chief Executive Office	 	 
	Subsidiary Name	 	Entity	 	Effective Date	 	Address	 	Tax ID
	Accessory Design Group, Inc.

	 	Delaware corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	76-2425974
	Amity/Rolfs, Inc.

	 	Delaware corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	75-2762580
	Tandy Brands Accessories
Handbags, Inc.

	 	Delaware corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	75-2826639
	TBAC-Acquisition, Inc.

	 	Delaware corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	34-198227-1
	TBAC General Management 

Company

	 	Nevada corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	75-2461158
	TBAC Investments, Inc.

	 	Nevada corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	75-2438454
	TBAC Investment Trust

	 	Pennsylvania

business trust
	 	TBAC Investments,

Inc. owns 100% of

TBAC Investment
Trust
	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	25-6436339
	TBAC Management Company L.P.

	 	Delaware limited

partnership
	 	TBAC Investments,
Inc. owns 99% of the equity interests; TBAC
General Management Company owns 1% of the equity
interests
	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	75-2461159






Subsidiaries

Schedule 3.5







- 1 -









 








	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	% Ownership of	 	 	 	 
	 	 	Jurisdiction/	 	Borrower as of the	 	Chief Executive Office	 	 
	Subsidiary Name	 	Entity	 	Effective Date	 	Address	 	Tax ID
	TBAC-Mass Merchant Quality
Control, Inc.

	 	Delaware corporation
	 	Accessory Design
Group, Inc. owns

100% of TBAC-Mass

Merchant Quality

Control, Inc.
	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	56-2392776
	TBAC — Prince Gardner, Inc.

	 	Delaware corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	75-2531762
	TBAC-Torel, Inc.

	 	Delaware corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	75-2934023
	Stagg Industries, Inc.

	 	Alabama corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	63-0846901
	Superior Merchandise Company

	 	Louisiana corporation
	 	TBAC-Acquisition,
Inc. owns 100% of Superior Merchandise Company
	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	72-0700693
	H.A. Sheldon Canada Ltd.

	 	Ontario, Canada

corporation
	 	 	100	%	 	690 E. Lamar, Suite 200
Arlington, Texas 76011
	 	N/A






Subsidiaries

Schedule 3.5





- 2 -











 





Schedule 3.14




PENSION
PLANS SUBJECT TO TITLE IV OF ERISA



None.



			
	 	 	 
	 
	 	Pension Plans Subject to Title IV of ERISA

Schedule 3.14






- 1 -









 





Schedule 3.17 




ENVIRONMENTAL DISCLOSURES



None.



			
	 	 	 
	 
	 	Environmental Disclosures

Schedule 3.17






- 1 -









 





Schedule 3.22




MATERIAL AGREEMENTS



Trademark license agreements that generate sales revenue in excess of the Material Amount.



			
	 	 	 
	 
	 	Material Agreements

Schedule 3.22






- 1 -









 





Schedule 3.25 




INTELLECTUAL PROPERTY



See attached.



			
	 	 	 
	 
	 	Intellectual Property

Schedule 3.25











- 1 -









 











SCHEDULE 3.25




	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	JAMES B. FAIRCHILD
	 	 	74/021220	 	 	1829864
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	20358	 	 	20358
	Colombia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	659311	 	 	659311
	Great Britain
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	291/47	 	 	19490461
	Hong Kong
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	44877	 	 	44877
	New Zealand
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	659312	 	 	659312
	Great Britain
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	291/47	 	 	19490462
	Hong Kong
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	44878	 	 	44878
	New Zealand
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	9508	 	 	T4709508H
	Singapore
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	F-019787	 	 	19787
	Venezuela
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK A MAN’S COMPANY & wreath design
	 	 	211570/81	 	 	925996
	Japan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	510326	 	 	510326
	Japan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	2240798	 	 	2240798
	Japan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	120705/87	 	 	2255925
	Japan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	20358A	 	 	20358A
	Colombia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	178896	 	 	178896
	Mexico
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 1 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	HICKOK
	 	 	242036	 	 	242036
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	241858	 	 	241858
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	275362	 	 	275362
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	179484	 	 	179484
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	53764	 	 	53764
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK LIFESTYLES UNLIMITED & design
	 	 	27420	 	 	29785
	Philippines
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & design
	 	 	27421	 	 	29666
	Philippines
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK LIFESTYLES UNLIMITED & design
	 	 	50898	 	 	38806
	Philippines
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK LIFESTYLES UNLIMITED & design
	 	 	50901	 	 	38774
	Philippines
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	89847	 	 	21170
	Philippines
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	A113576	 	 	A113576
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	55921	 	 	55921
	New Zealand
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	1861/54	 	 	1861/54
	South Africa
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	A113575	 	 	A113575
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	55920	 	 	55920
	New Zealand
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	1859-1861/	 	 	1860/54
	South Africa
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	A113386	 	 	A113386
	Australia
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 2 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	HICKOK & crest design
	 	 	55919	 	 	55919
	New Zealand
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	1859-1861 /	 	 	1859/54
	South Africa
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	A210910	 	 	A210910
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK & crest design
	 	 	A212122	 	 	A212122
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	692409	 	 	692409
	Germany
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	20358B	 	 	20358B
	Colombia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	4838	 	 	4838
	Panama
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	421511	 	 	158155
	Colombia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	34973/93	 	 	3241945
	Japan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	165074	 	 	471497
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	93421510	 	 	158156
	Colombia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	34974/93	 	 	3134459
	Japan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	74/556405	 	 	2187998
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	200213563	 	 	1082380
	China P.R.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	1560673	 	 	1560673
	France
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	MI2001C002290	 	 	970116
	Italy
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	895378	 	 	148313
	Norway
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 3 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	Registration No.
	 
	PRINCE GARDNER
	 	 	101958	 	 	4-1995-104229
	Philippines
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	74/040455	 	 	1638232
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	233808	 	 	323810
	Uruguay
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	231794	 	 	B231794
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	325290	 	 	170954
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	75033	 	 	75033
	Costa Rica
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	522366/18 WZ	 	875811
	Germany
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	48277	 	 	48277
	Dominican Republic
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	2381921	 	 	2381921
	Spain
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	B660/1972	 	 	B660/1972
	Hong Kong
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	16141	 	 	16141
	Puerto Rico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	2001/12185	 	 	2001/12185
	Turkey
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER stylized
	 	 	71/542652	 	 	0516773
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	69/3118	 	 	1969/03118
	South Africa
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCESS GARDNER
	 	 	1340870	 	 	 
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCESS GARDNER
	 	 	74/556406	 	 	2187999
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	THE PRINCESS GARDNER & design
	 	 	71/414102	 	 	367247
	United States
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 4 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	PRINCESS GARDNER
	 	 	1024369	 	 	1024369
	Great Britain
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCESS
	 	 	72/265332	 	 	0844803
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	AM5103/89	 	129593
	Austria
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	736275	 	 	466944
	Benelux
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	8120	 	 	337176
	Switzerland
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	146.134	 	 	146.134
	Greece
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	2277331	 	 	1837127
	Argentina
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	73691	 	 	73691
	Costa Rica
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER
	 	 	48334	 	 	48334
	Dominican Republic
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	WILD HICKOK
	 	 	212170	 	 	538848
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	74/693222	 	 	2049808
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	34040	 	 	34040
	Benelux
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	23269	 	 	23269
	Puerto Rico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	43233	 	 	141167
	Taiwan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	72/037631	 	 	0674224
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	72/327445	 	 	0911958
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY & design
	 	 	373967	 	 	214806
	Canada
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 5 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	CANTERBURY & design
	 	 	73/009645	 	 	0998500
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	LADY CANTERBURY & design
	 	 	B1126749	 	 	B1126749
	Great Britain
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	95082437	 	 	960353
	China P.R.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	242853	 	 	579135
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCE GARDNER ACCESSORIES & design
	 	 	74/713656	 	 	2041364
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCESS GARDNER ACCESSORIES & design
	 	 	74/713654	 	 	2082144
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY & design
	 	 	23268	 	 	23268
	Puerto Rico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY & design
	 	 	72/201369	 	 	0791884
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY BELTS LTD. & design
	 	 	2035/1981	 	 	2035/1981
	Hong Kong
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CARLOS TOMASINI
	 	 	75/035106	 	 	2035301
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	HICKOK
	 	 	122845	 	 	TMDA37290
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CANTERBURY
	 	 	95083548	 	 	936939
	China P.R.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROYALLE BY PRINCESS GARDNER
	 	 	298964	 	 	585568
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PRINCESS GARDNER
	 	 	298962	 	 	588202
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROYALLE BY PRINCE GARDNER
	 	 	75/453145	 	 	2319811
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMITY
	 	 	278248	 	 	B278248
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMITY
	 	 	0167700	 	 	UCA007845
	Canada
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 6 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	AMITY
	 	 	531993	 	 	1557347
	France
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMITY
	 	 	108198	 	 	108198
	New Zealand
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMITY
	 	 	285184	 	 	21974
	Panama
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	278246	 	 	B278246
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	278245	 	 	B278245
	Australia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	2001042288	 	 	1927338
	China P.R.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	48452/18	 	 	1177058
	Germany
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	216325	 	 	216325
	Community Trademark
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	559221	 	 	820343
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	559222	 	 	760583
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	90/07467	 	 	90/07467
	Malaysia
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	S/6874/90	 	 	6874/90
	Singapore
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	S/1286/89	 	 	1286/89
	Singapore
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	S/6675/89	 	 	T89/06675B
	Singapore
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	77-48205	 	 	438955
	Taiwan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	77-48206	 	 	439075
	Taiwan
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	77-48207	 	 	441247
	Taiwan
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 7 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	ROLFS
	 	 	73/170121	 	 	1118634
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CREDENTIAL
	 	 	72/096179	 	 	731338
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CREDIT GUARD
	 	 	732321	 	 	429760
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CREDIT GUARD
	 	 	73/075924	 	 	1050073
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	DIRECTOR
	 	 	8814	 	 	8814
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	DIRECTOR
	 	 	71/394447	 	 	0351388
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	IDENTIFIER
	 	 	72/096178	 	 	710096
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	KEY KADDY
	 	 	283761	 	 	187501
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	PROTECTA-CARD
	 	 	73/075927	 	 	1050074
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROYAL CREST
	 	 	345828	 	 	TMA189656
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROYAL CREST
	 	 	73/679465	 	 	1485277
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	TOWNSMAN
	 	 	72/045442	 	 	669459
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BRACETAC
	 	 	37887	 	 	37887
	Community Trademark
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BRACETAC
	 	 	73/731419	 	 	1550618
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMITY
	 	 	178555	 	 	622848
	Chile
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMITY
	 	48453/18WZ	 	1182263
	Germany
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	AMITY
	 	 	216556	 	 	216556
	Community Trademark
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 8 of 20






 









 





	 	 	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	AMITY & design
	 	 	591/1977	 	 	 	1829/1977	 
	Hong Kong
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY* design
	 	 	591/1977	 	 	 	93/1978	 
	Hong Kong
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY & design
	 	 	591/1977	 	 	 	94/78	 
	Hong Kong
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY & design
	 	 	591/1977	 	 	 	95/1978	 
	Hong Kong
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY & design
	 	 	512/78	 	 	 	442/1979	 
	Hong Kong
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY
	 	 	74855/76	 	 	 	1802179	 
	Japan
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY
	 	 	S/6872/90	 	 	 	6872/90	 
	Singapore
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY & design
	 	 	S/71693	 	 	 	71693	 
	Singapore
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY & design
	 	 	S/71692	 	 	 	71692	 
	Singapore
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY
	 	 	77-48203	 	 	 	439074	 
	Taiwan
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY
	 	 	77-48204	 	 	 	441246	 
	Taiwan
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY & design
	 	 	73/125993	 	 	 	1105460	 
	United States
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LA GARDE
	 	 	71/158540	 	 	 	163698	 
	United States
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMERICAN CLASSIC & eagle design
	 	 	73/386959	 	 	 	1301680	 
	United States
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY CLASSIC
	 	 	74/199601	 	 	 	1708196	 
	United States
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY & thick line design
	 	 	71/091140	 	 	 	0110105	 
	United States
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	AMITY
	 	 	1425	 	 	 	90.419-F	 
	Venezuela
	 	 	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 9 of 20






 









 





	 	 	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	AMITY
	 	 	1424	 	 	92.249-F
	Venezuela
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BODY BILLFOLD
	 	 	72/454486	 	 	988166
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BRACELINC
	 	 	73/755691	 	 	1552060
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CACHE
	 	 	73/815513	 	 	1585671
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CAR CADDY
	 	 	72/056291	 	 	682112
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CHANGEABLE
	 	 	74/189236	 	 	1745862
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	COURIER
	 	 	72/237072	 	 	0829612
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ESSENTIALS BY ROLFS
	 	 	75/279231	 	 	2352242
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	GLO-GETTER
	 	 	73/749770	 	 	1541147
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	NITE & DAY
	 	 	73/822549	 	 	1588883
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	NOSTALGIA
	 	 	74/396910	 	 	1821361
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIDEKICK
	 	 	72/418486	 	 	961820
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SNAP HAPPY
	 	 	72/221333	 	 	0817206
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SPRINTKIT
	 	 	73/308133	 	 	1228487
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	THEFT-GUARD
	 	 	73/749693	 	 	1541535
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	TRAVEL LITE
	 	 	73/683149	 	 	1623664
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ROLFS
	 	 	74/662841	 	 	2032901
	United States
	 	 	 	 	 	 






			
	 	 	 
	SCHEDULE 3.25
	 	Page 10 of 20







 











 





	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	ROLFS
	 	76/405168	 	2777432
	United States
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	277400	 	140458
	Canada
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	66290/74	 	1375473
	Japan
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	71/656539	 	604067
	United States
	 	 	 	 
	 
	 	 	 	 
	LA GARDE
	 	1562/87	 	B2458/1989
	Hong Kong
	 	 	 	 
	 
	 	 	 	 
	LA GARDE
	 	73/652855	 	1485246
	United States
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	278247	 	B278247
	Australia
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	94013987	 	1082193
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	857839	 	857839
	Great Britain
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	106318	 	971404
	Mexico
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	108197	 	108197
	New Zealand
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	285183	 	21904
	Panama
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	42874	 	364305
	Benelux
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	32695/18	 	1008037
	Germany
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	818058536	 	818058536
	Brazil
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	818058544	 	818058544
	Brazil
	 	 	 	 
	 
	 	 	 	 
	Miscellaneous design rose in triangle
	 	75/603133	 	2511417
	United States
	 	 	 	 






					
	 	 	 	 	 
	SCHEDULE 3.25
	 	 
	 	Page 11 of 20






 









 






	 	 	 	 	 	 
	Mark	 	Application No.	 	 	Registration No.
	 
	DESIGNED AND CRAFTED FOR LIFE
	 	76/975051	 	 	2678999
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	DESIGNED AND CRAFTED FOR LIFE
	 	76/975428	 	 	2733308
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	DESIGNED AND CRAFTED FOR LIFE
	 	76/976166	 	 	2818258
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	DESIGNED AND CRAFTED FOR LIFE ON THE ROAD
	 	76/975578	 	 	2760189
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	860134	 	 	860134
	Australia
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	892927	 	 	892927
	Australia
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	2000198556	 	 	1927045
	China P.R.
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	2001120783	 	 	1923543
	China P.R.
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	76/975574	 	 	2760187
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	76/976720	 	 	2921373
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	001993443	 	 	001993443
	Community Trademark
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	002441327	 	 	002441327
	Community Trademark
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	2000/26720	 	 	03341/2003
	Hong Kong
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	19212/2001	 	 	03487/2003
	Hong Kong
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	2000-140180	 	 	4560009
	Japan
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	2000/18726	 	 	 
	Malaysia
	 	 	 	 	 
	 
	 	 	 	 	 
	P G PRINCESS GARDNER & design
	 	2002/00157	 	 	02000157
	Malaysia
	 	 	 	 	 






					
	 	 	 	 	 
	SCHEDULE 3.25
	 	 
	 	Page 12 of 20






 









 






	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	P G PRINCESS GARDNER & design
	 	628836	 	628836
	New Zealand
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & design
	 	647954	 	647954
	New Zealand
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & design
	 	70592	 	70592
	Puerto Rico
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & design
	 	70591	 	70591
	Puerto Rico
	 	 	 	 
	 
	 	 	 	 
	NECESSITIES BY ROLFS
	 	76/059964	 	2782299
	United States
	 	 	 	 
	 
	 	 	 	 
	STACY RYAN
	 	76/223824	 	2653563
	United States
	 	 	 	 
	 
	 	 	 	 
	DANIEL ADAM
	 	76/362819	 	2736047
	United States
	 	 	 	 
	 
	 	 	 	 
	BACK TO SCHOOL
	 	76/232341	 	3360098
	United States
	 	 	 	 
	 
	 	 	 	 
	SURPLUS & design left of circle
	 	76/269006	 	2897619
	United States
	 	 	 	 
	 
	 	 	 	 
	TOREL
	 	76/268901	 	2642164
	United States
	 	 	 	 
	 
	 	 	 	 
	TOREL
	 	76/379875	 	2659342
	United States
	 	 	 	 
	 
	 	 	 	 
	CROSS IN CIRCLE Design
	 	76/320731	 	2594330
	United States
	 	 	 	 
	 
	 	 	 	 
	CROSS IN CIRCLE AND DOTS design right
	 	76/320962	 	2685683
	United States
	 	 	 	 
	 
	 	 	 	 
	CROSS IN CIRCLE design
	 	76/320961	 	2798556
	United States
	 	 	 	 
	 
	 	 	 	 
	CROSS IN CIRCLE AND DOTS design right
	 	76/975185	 	2714536
	United States
	 	 	 	 
	 
	 	 	 	 
	AMITY LIFESTYLE ACCESSORIES
	 	76/386026	 	2686096
	United States
	 	 	 	 
	 
	 	 	 	 
	HICKOK wreath with banner design
	 	1057356	 	1057356
	China P.R.
	 	 	 	 






					
	 	 	 	 	 
	SCHEDULE 3.25
	 	 
	 	Page 13 of 20






 









 






	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	HICKOK wreath with banner design
	 	1070730	 	1070730
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	HICKOK & crest design
	 	1057358	 	1057358
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	DON LOPER
	 	746347	 	941228
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DON LOPER
	 	746345	 	 
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DON LOPER
	 	746340	 	954933
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DON LOPER
	 	794856	 	947182
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DON LOPER
	 	76/429247	 	2752354
	United States
	 	 	 	 
	 
	 	 	 	 
	DON LOPER
	 	76/433633	 	2823928
	United States
	 	 	 	 
	 
	 	 	 	 
	DL & design
	 	794857	 	953700
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DL & design
	 	794851	 	951193
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DL & design
	 	794853	 	948673
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DL stylized
	 	794854	 	961719
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DL stylized
	 	794855	 	 
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DL stylized
	 	794849	 	984436
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DL & design
	 	794848	 	953082
	Mexico
	 	 	 	 
	 
	 	 	 	 
	DL stylized
	 	76/433943	 	2763803
	United States
	 	 	 	 
	 
	 	 	 	 
	DL stylized
	 	77/046738	 	 
	United States
	 	 	 	 






					
	 	 	 	 	 
	SCHEDULE 3.25
	 	 
	 	Page 14 of 20 






 









 






	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	HICKOK & design
	 	1057357	 	1057357
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	PRINCESS GARDNER & design
	 	5251145	 	 
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	TANDY BRANDS ACCESSORIES, INC. OUTLET STORE
	 	76/497225	 	2812643
	United States
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	635269	 	822611
	Mexico
	 	 	 	 
	 
	 	 	 	 
	COLETTA
	 	76/568946	 	2917096
	United States
	 	 	 	 
	 
	 	 	 	 
	ROLFS RESERVE
	 	1232447	 	TMA679976
	Canada
	 	 	 	 
	 
	 	 	 	 
	ROLFS RESERVE
	 	76/585633	 	2956784
	United States
	 	 	 	 
	 
	 	 	 	 
	ROLFS RESERVE
	 	1232447	 	TMA679976
	Canada
	 	 	 	 
	 
	 	 	 	 
	ROLFS RESERVE
	 	76/585642	 	3066421
	United States
	 	 	 	 
	 
	 	 	 	 
	COLLAR-EASE
	 	75/054062	 	2095928
	United States
	 	 	 	 
	 
	 	 	 	 
	STAYS ‘N CASE
	 	76/440003	 	2724002
	United States
	 	 	 	 
	 
	 	 	 	 
	ETON
	 	75/143036	 	2404968
	United States
	 	 	 	 
	 
	 	 	 	 
	ETON
	 	74/125681	 	1721441
	United States
	 	 	 	 
	 
	 	 	 	 
	CORKY
	 	76/345269	 	2698645
	United States
	 	 	 	 
	 
	 	 	 	 
	MARDIGRASBEADS.COM
	 	76/337840	 	2650875
	United States
	 	 	 	 
	 
	 	 	 	 
	SPORTS PLAY
	 	76/292027	 	2792151
	United States
	 	 	 	 
	 
	 	 	 	 
	STAYS ‘N CASE
	 	75/064244	 	2028047
	United States
	 	 	 	 






					
	 	 	 	 	 
	SCHEDULE 3.25
	 	 
	 	Page 15 of 20






 









 






	 	 	 	 	 
	Mark	 	Application No.	 	Registration No.
	 
	AMERICAN CLASSICS BY ROLFS
	 	77/064348	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	SNAPS
	 	78/807711	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	ROLFS WEEKENDER
	 	76/657177	 	3333160
	United States
	 	 	 	 
	 
	 	 	 	 
	ACE BY CANTERBURY & design
	 	76/662158	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	ACE BY CANTERBURY & design
	 	76/662159	 	3291402
	United States
	 	 	 	 
	 
	 	 	 	 
	CITY CLUTCHES BY ROLFS
	 	76/666187	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	CITY SERIES
	 	76/668493	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	UTIL
	 	77/077930	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	BACK TO CAMPUS
	 	77/080037	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	NEXTGEN ACCESSORIES.COM & design
	 	77/149960	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	PEEK-A-BOO
	 	77/149988	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	GETAWAY
	 	76/676156	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	BACK TO SCHOOL & design
	 	76/677347	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	OPUS
	 	76/677357	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	GENO D’LUCCA
	 	76/682921	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	GENO D’LUCCA BELTS & design
	 	76/682922	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	G in circle design
	 	76/683062	 	 
	United States
	 	 	 	 






					
	 	 	 	 	 
	SCHEDULE 3.25
	 	 
	 	Page 16 of 20






 









 






	 	 	 	 	 	 
	Mark	 	Application No.	 	 	Registration No.
	 
	SURPLUS
	 	77/317316	 	 	 
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	DON LOPER
	 	73/707382	 	 	1552433
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	DON LOPER
	 	257209	 	 	842497
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	BARRY WELLS stylized
	 	74/029450	 	 	1630139
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	HICKOK
	 	76/379885	 	 	2962740
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	HICKOK
	 	71/595957	 	 	0548994
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	HICKOK
	 	65361	 	 	0684952
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	HICKOK
	 	72/082979	 	 	700221
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	ORLEANS
	 	500683	 	 	1348132
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	HICKOK
	 	73/543425	 	 	1381527
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	LUCARELLI
	 	73/477532	 	 	1396878
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	LUCARELLI
	 	73/477534	 	 	1399411
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	TANDY BRANDS ACCESSORIES
	 	73/756261	 	 	1752430
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	TANDY BRANDS
	 	73/756262	 	 	1751187
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	HICKOK
	 	373338	 	 	0338625
	United States
	 	 	 	 	 
	 
	 	 	 	 	 
	HICKOK
	 	373339	 	 	0337194
	United States
	 	 	 	 	 






					
	 	 	 	 	 
	SCHEDULE 3.25
	 	 
	 	Page 17 of 20






 









 






	 	 	 	 	 	 	 
	Patent Title	 	 	 	 	 	 
	Country	 	Application No.	 	Patent No.	 	Expiration Date
	 
	Belt Rack Tab 
	 	29/022042                   	 	D366065                      	 	1/9/2010
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Automobile Accessory 
	 	29/032392                   	 	DES.366356                   	 	1/23/2010
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Wallet With Carrying Strap 
	 	07/012492                   	 	DES.343951                   	 	2/8/2008
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Suspender Button
	 	M8801493.2                  	 	M8801493.2                   	 	9/5/2013
	Germany
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Suspender Button 
	 	1052949	 	1052949                      	 	8/12/2013
	Great Britain
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Pocket Book Fastener 
	 	29/005208                   	 	DES.355767                   	 	2/28/2009
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Display Fixture with Built-In Sign Holder 
	 	29/137335                   	 	D451703                      	 	12/11/2015
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Gun Protector 
	 	29/213233                   	 	D520235                      	 	5/9/2020
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Cell Phone Purse 
	 	29/214830                   	 	D512560                      	 	12/13/2019
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Drink Holder 
	 	29/011921                   	 	D352827                      	 	11/29/2008
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Releasably Locking Button Pin 
	 	1997-1959                   	 	84068                        	 	6/5/2008
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Releasably Locking Button Pin 
	 	29/066168                   	 	D390162                      	 	2/3/2012
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Decorative Bead 
	 	29/075162                   	 	D398879                      	 	9/29/2012
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Expandable Cup Holder 
	 	29/087911                   	 	D407951                      	 	4/13/2013
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Set of Jazz Beads 
	 	29/092377                   	 	D410866                      	 	6/15/2013
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Crawfish Bead 
	 	29/092379                   	 	D411967                      	 	7/13/2013
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Set of Gumbo Beads 
	 	29/092837                   	 	D412680                      	 	8/10/2013
	United States
	 	 	 	 	 	 






					
	 	 	 	 	 
	Schedule 3.25
	 	 
	 	Page 18 of 20






 









 







	 	 	 	 	 	 	 
	Patent Title	 	 	 	 	 	 
	Country	 	Application No.	 	Patent No.	 	Expiration Date
	 
	Rice and Bean Beads
	 	29/102111	 	D420931	 	2/22/2014
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Golf Bag Portable Cooler
	 	29/110050	 	D425761	 	5/30/2014
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Bottle Caddy
	 	29/127089	 	D450445	 	11/20/2015
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dog Leash and Light Combination
	 	29/137093	 	D453386	 	2/5/2016
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Electric Ice Scraper
	 	29/136973	 	D456576	 	4/30/2016
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Helmet Bead
	 	29/176075	 	D487409	 	3/9/2018
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Carrier for Digital Player and Headphones
	 	ZL200530124574.1	 	200530124574.1	 	9/8/2015
	China P.R.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Carrier for Digital Player and Headphones
	 	000399423	 	000399423-0001	 	9/5/2030
	European Community Design
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Carrier for Digital Player and Headphones
	 	3-2005-000896	 	 	 	 
	Philippines
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Carrier for Digital Player and Headphones
	 	29/224985	 	D519275	 	4/25/2020
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Travel Bag With Multiple Compartments
	 	07/060723	 	4821853	 	6/10/2007
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Travel Bag With Multiple Compartments
	 	07/324296	 	4966260	 	10/30/2007
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Method and Apparatus for Manufacturing

Coin Pouch
	 	08/228698	 	5480605	 	4/18/2014
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Multi-Card Element for a Billfold
	 	07/906549	 	5263523	 	6/30/2012
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Combination Suspenders for Use With
Button and Buttonless Trousers
	 	07/714496	 	5172429	 	6/13/2011
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Personal Accessory with Quick Access
	 	10/025542	 	6601622	 	12/18/2021
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 





					
	 	 	 	 	 
	Schedule 3.25
	 	 
	 	Page 19 of 20 






 









 






	 	 	 	 	 	 	 
	Patent Title	 	 	 	 	 	 
	Country 	 	Application No.	 	Patent No.	 	Expiration Date
	 
	Personal Accessory with
Quick Access
	 	2471793	 	 	 	 
	Canada
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Personal Accessory with
Quick Access
	 	PA/a/2004/006813	 	250096	 	11/27/2022
	Mexico
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Gun Sling with Single-Handed
Adjustment Mechanism
	 	10/360191	 	 	 	 
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Gun Protector
	 	10/942330	 	 	 	 
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Digital Media Device Billfold
	 	11/525576	 	 	 	 
	United States
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Necktie Label
	 	29/003513	 	D350370	 	9/6/2008
	United States
	 	 	 	 	 	 






	 	 	 
	Title of Copyrighted Works	 	Registration No.
	 
	Waterfowl Duck Tie #1
	 	VA 577-756
	United States
	 	 
	 
	 	 
	Waterfowl Duck Tie #2
	 	VA 557-757
	United States
	 	 
	 
	 	 
	Waterfowl Duck Tie #3
	 	VA 577-760
	United States
	 	 
	 
	 	 
	Waterfowl Duck Tie #4
	 	VA 577-758
	United States
	 	 
	 
	 	 
	Waterfowl Duck Tie #5
	 	VA 577-759
	United States
	 	 
	 
	 	 
	Rolfs Sports Almanac CD
	 	TXu 1-099-544
	United States
	 	 
	 
	 	 
	Amity Racing Almanac CD
	 	TXu-1-114-703
	United States
	 	 






					
	 	 	 	 	 
	Schedule 3.25
	 	 
	 	Page 20 of 20






 









 






Schedule 5.4 




DEBT




Existing Letters of Credit




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Issuing	 	Applicant’s	 	Beneficiary’s	 	Letter of	 	Outstanding	 	Date of	 	Date of
	Bank	 	Name	 	Name	 	Credit No.	 	Amount	 	Issue	 	Expiry
	 
	Wells Fargo
	 	Tandy	 	Sunex	 	DC	 	$	250,240.40	 	 	03/22/2007	 	02/05/2008
	HSBC Trade
	 	Brands	 	Company	 	HKH815103	 	 	 	 	 	 	 	 
	Bank, N.A.
	 	Accessories,	 	Ltd.	 	 	 	 	 	 	 	 	 	 
	 
	 	Inc.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo
	 	Tandy	 	Best	 	DC	 	$	24,032.36	 	 	09/20/2007	 	02/15/2008
	HSBC Trade
	 	Brands	 	Development	 	HKH815108	 	 	 	 	 	 	 	 
	Bank, N.A.
	 	Accessories,	 	Company	 	 	 	 	 	 	 	 	 	 
	 
	 	Inc.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo
	 	Tandy	 	Best	 	DC	 	$	1,025,354.77	 	 	12/13/2007	 	03/31/2008
	HSBC Trade
	 	Brands	 	Development	 	HKH815110	 	 	 	 	 	 	 	 
	Bank, N.A.
	 	Accessories,	 	Company	 	 	 	 	 	 	 	 	 	 
	 
	 	Inc.	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo
	 	Amity/Rolfs,	 	A.B. Sales	 	DC	 	$	65,500.60	 	 	11/06/2007	 	03/20/2008
	HSBC Trade
	 	Inc.	 	Corp.	 	HKH815109	 	 	 	 	 	 	 	 
	Bank, N.A.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo
	 	Amity/Rolfs,	 	A.B. Sales	 	DC	 	$	13,309.00	 	 	04/27/2007	 	01/11/2008
	HSBC Trade
	 	Inc.	 	Corp.	 	HKH815106	 	 	 	 	 	 	 	 
	Bank, N.A.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo
	 	Tandy	 	Empire State	 	NZS554430	 	$	94,166.00	 	 	09/29/2006	 	04/30/2008
	Bank, N.A.
	 	Brands	 	Building	 	 	 	 	 	 	 	 	 	 
	 
	 	Accessories,	 	Company	 	 	 	 	 	 	 	 	 	 
	 
	 	Inc.	 	L.L.C.	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo
	 	Tandy	 	HSBC Bank	 	NZS403381	 	    Canadian	 	06/29/2001	 	06/26/2008
	Bank, N.A.
	 	Brands	 	Canada	 	 	 	$	1,000,000	 	 	 	 	 
	 
	 	Accessories,	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Inc.	 	 	 	 	 	 	 	 	 	 	 	 







					
	 	 	 	 	 
	 
	 	-1 -
	 	Debt

Schedule 5.4






 









 






Schedule 5.5 




ENCUMBRANCES




UCC/Lien filings




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Original	 	 	 	 
	 	 	 	 	Filing	 	Instrument	 	Original	 	 
	Debtor	 	Secured Party	 	Jurisdiction	 	No.	 	Filing Date	 	Collateral
	 
	Tandy Brands
	 	IBM Credit	 	DE – SOS	 	32717737	 	10/06/03	 	Leased computer
	Accessories, Inc.
	 	LLC	 	 	 	 	 	 	 	equipment and
	 
	 	 	 	 	 	 	 	 	 	proceeds
	 
	 	 	 	 	 	 	 	 	 	 
	Tandy Brands
	 	IBM Credit	 	DE – SOS	 	32829136	 	10/24/03	 	Leased computer
	Accessories, Inc.
	 	LLC	 	 	 	 	 	 	 	equipment and
	 
	 	 	 	 	 	 	 	 	 	proceeds
	 
	 	 	 	 	 	 	 	 	 	 
	Superior
	 	Louisiana	 	LA – Jefferson	 	Filing No.	 	03/14/06	 	 
	Merchandise
	 	Department of	 	Parish	 	10612711;	 	 	 	 
	Company1
	 	Labor	 	 	 	Book 4269	 	 	 	 
	 
	 	 	 	 	 	Page 535	 	 	 	 









 




			
	1	 	To be released per letter from Louisiana Department of Labor dated 10/19/06.





					
	 	 	 	 	 
	 
	 	- 1 -
	 	Enmbrances

Schedule 5.20






 









 






Schedule 5.20




LOAN PARTY LOCATIONS




105-107 West Gonzales

Yoakum, TX 77995




301 Hickey Street

Yoakum, TX 77995




208 Industrial Loop

Yoakum, TX 77995




500 Airport Highway

Yoakum, TX 77995




1708 N. South St.

Yoakum, TX




211 West Grand Avenue

Yoakum, TX 77995




690 E. Lamar

Suites 200, 300, 320, 340, 350

Arlington, TX 76011




820 East Washington Street

West Bend, WI 53095




3631 West Davis, Suite A

Dallas, TX 75211




350 Fifth Avenue

New York, NY 10118




1200 NE McClain Rd., Suite 40

Bentonville, AR 72712




621 North 31 St.

Birmingham, AL 35203




220 Midland Ave., Unit 68AP

Ontario, Canada




Unit 1007, Tower 2

Enterprise Square

9 Sheung Yuet Road

Kowloon Bay, Kowloon, HK




					
	 	 	 	 	 
	 
	 	- 1 -	 	Loan Party Locations

Schedule 5.20