Document:

Exhibit 10.1

Exhibit 10.1

[EXECUTION COPY]

DEPOSIT ESCROW AGREEMENT

THIS DEPOSIT ESCROW AGREEMENT (“Deposit Escrow Agreement”) is made and entered into this
3rd day of October, 2011, by and among Nicole Crafts LLC, a Delaware limited liability
company (“Parent”), Sbar’s Acquisition Corporation, a Pennsylvania corporation (“Merger Sub”), and
A.C. Moore Arts & Crafts, Inc., a Pennsylvania corporation (“Company”), and Wells Fargo Bank,
National Association, a national banking association (“Deposit Escrow Agent”).

BACKGROUND

On the date hereof, Parent, Merger Sub and Company have entered into an Agreement and Plan of
Merger (“Merger Agreement”). Capitalized terms not defined herein shall have the same definitions
as set forth in the Merger Agreement. Parent desires to acquire the Company pursuant to the Merger
Agreement through the Offer and/or the Merger whereby Merger Sub will merge with and into the
Company. In order to secure Parent’s and Merger Sub’s obligations under the Merger Agreement,
Merger Sub has deposited $20,000,000 into escrow with the Deposit Escrow Agent to be held, invested
and distributed in accordance with the terms and provisions of this Deposit Escrow Agreement.

Parent, Merger Sub and Company hereto acknowledge that Deposit Escrow Agent is not a party to,
is not bound by, and has no duties or obligations under, the Merger Agreement, that all references
in this Deposit Escrow Agreement to the Merger Agreement are for convenience, and that Deposit
Escrow Agent shall have no implied duties beyond the express duties set forth in this Deposit
Escrow Agreement.

NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt of which is hereby acknowledged, and
intending to be legally bound hereby, covenant and agree as follows:

	 	1.	 	Appointment of Deposit Escrow Agent; Delivery of Deposit;
Acknowledgment of Receipt.

1.1 Deposit Escrow Agent is hereby appointed to act as escrow agent to hold the Deposit
Escrow Amount as defined in paragraph 1.2 below and to make distributions, all in accordance
with the terms hereof, and Deposit Escrow Agent hereby accepts such appointment and agrees
to act in the capacity of escrow agent in accordance with the terms hereof.

1.2 Prior to or contemporaneously with the execution and delivery hereof, Merger Sub
shall deposit with Deposit Escrow Agent funds in the amount of Twenty Million Dollars
($20,000,000) (the “Deposit”). The Deposit Escrow Agent shall acknowledge receipt of the
Deposit upon actual receipt thereof. The Deposit and the proceeds of investment thereof
and/or any interest thereon, as applicable, are hereinafter
collectively referred to as the “Deposit Escrow Amount.” Deposit Escrow Agent shall
hold and dispose of the Deposit Escrow Amount in accordance with the terms of this Deposit
Escrow Agreement.

 

 

 

1.3 Deposit Escrow Agent is authorized and directed to deposit, transfer, and hold and
invest any cash in the Deposit Escrow Amount and any investment income thereon only as set
forth in Exhibit “A” hereto, or as set forth in any subsequent written instruction
signed by all the parties. Parent, Merger Sub and Company acknowledge that they have read
and understand Exhibit “A” hereto. The dividends, distributions, interest, gains
and other earnings of or from the Deposit Escrow Amount (“Net Income”), less any fees, costs
and expenses charged against and paid from such Net Income, shall be held by Deposit Escrow
Agent and shall become part of the Deposit Escrow Amount, and shall be disbursed in
accordance with paragraph 2 and paragraph 3 of this Deposit Escrow Agreement.

1.4 Deposit Escrow Agent is hereby authorized and directed to sell or redeem any such
investments as it deems necessary to make any payments or distributions required under this
Deposit Escrow Agreement. Deposit Escrow Agent shall have no responsibility or liability
for any loss which may result from any investment or sale of investment made pursuant to
this Deposit Escrow Agreement. Deposit Escrow Agent is hereby authorized, in making or
disposing of any investment permitted by this Deposit Escrow Agreement, to deal with itself
(in its individual capacity) or with any one or more of its affiliates, whether it or any
such affiliate is acting as agent of Deposit Escrow Agent or for any third person or dealing
as principal for its own account. Parent, Merger Sub and Company acknowledge that Deposit
Escrow Agent is not providing investment supervision, recommendations, or advice.

	 	2.	 	Distribution of Deposit Escrow Amount upon Acceptance Date or Effective
Time.

On the Acceptance Date, the Deposit Escrow Agent shall pay the Deposit Escrow Amount to the
Paying Agent in partial payment of the aggregate Offer Price in accordance with written
instructions from Parent and Company in the form attached hereto as Exhibit “2”, which
written instructions shall be provided to Deposit Escrow Agent immediately on the Acceptance Date.
Except as otherwise provided in paragraph 3, if the Offer Closing does not occur, Deposit Escrow
Agent shall pay prior to the Effective Time the Deposit Escrow Amount to the Paying Agent in
partial payment of the aggregate Merger Consideration, in accordance with written instructions from
Parent and Company in the form attached hereto as Exhibit “2”, which written instructions
shall be provided to Deposit Escrow Agent prior to the Effective Time.

	 	3.	 	Distribution of Deposit Escrow Amount in All Other Circumstances.

If the Merger Agreement is not signed by all parties thereto by 11:59 p.m. on October 4, 2011,
the Deposit Escrow Agent shall return the Deposit Escrow Amount to Merger Sub, at the written
direction of Merger Sub.

 

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If the Closing shall not occur on or before December 30, 2011, upon the Final
Determination (as defined below), the Deposit Escrow Amount shall be paid to the Company if
(a) all conditions under Sections 8.1 and 8.2 of the Merger Agreement have been satisfied or waived
by Parent on behalf of itself and Merger Sub (it being understood and agreed that if a condition
under Sections 8.1 and 8.2 is not satisfied primarily as a result of Parent’s or Merger Sub’s
breach of a representation, warranty or covenant contained in the Merger Agreement, such condition
shall be deemed to have been satisfied) or (b) the conditions under Section 8.3 of the Merger
Agreement have not been satisfied, or waived by Company (it being understood and agreed that if a
condition under Section 8.3 is not satisfied primarily as a result of Company’s breach of a
representation, warranty or covenant contained in the Merger Agreement, such condition shall be
deemed to have been satisfied). If the Closing shall not occur on or before December 30, 2011,
upon the Final Determination, the Deposit Escrow Amount shall be paid to Merger Sub if (x) the
conditions to be satisfied under Section 8.1 and 8.2 of the Merger Agreement have not been
satisfied, deemed satisfied or waived by Parent on behalf of itself and Merger Sub and (y) the
conditions under Section 8.3 under the Merger Agreement have been satisfied, deemed satisfied or
waived by Company. In all circumstances, the Deposit Escrow Amount shall be retained by the
Deposit Escrow Agent pending a Final Determination, and the Final Determination shall control the
manner, amount and recipients in which the Deposit Escrow Amount is to be paid. The procedure for
determining the party entitled to receive payment of the Deposit Escrow Amount is set forth below.

3.1 Parent (on behalf of Merger Sub) and/or Company, as applicable, shall give written
notice to the Deposit Escrow Agent of its entitlement to the Deposit Escrow Amount. The
written notice shall be in the form of Exhibit “3.1” (each, a “Claim Notice”).

3.2 Upon receipt of a Claim Notice from either party (the “Claimant”), the Deposit
Escrow Agent shall forward a copy thereof to the other party (the “Respondent”). If the
Deposit Escrow Agent does not receive a written objection to the Claim Notice from the
Respondent in the form of Exhibit “3.2” (“Objection Notice”) within ten (10)
Business Days after the date such notice was deemed delivered to the Respondent, the Deposit
Escrow Agent shall deliver the Deposit Escrow Amount to the Claimant or its designee in the
manner set forth in the Claim Notice. If the Deposit Escrow Agent receives the Objection
Notice within ten (10) Business Days after the date the Claim Notice was deemed delivered to
the Respondent, Deposit Escrow Agent shall hold the Deposit Escrow Amount and take no action
with respect to it until a Final Determination.

3.3 A “Final Determination” shall mean (i) a written notice from Parent and Company to
the Deposit Escrow Agent in the form of Exhibit “3.3” setting forth the manner in
which the Deposit Escrow Amount is to be paid, or (ii) a copy of a final order or judgment
of a court of competent jurisdiction or decision of an arbitration panel determining the
rights of Parent, Merger Sub and Company with respect to the Deposit Escrow Amount or
resolution of a claim with respect thereto, accompanied by a letter of counsel of Parent (on
behalf of Merger Sub) or Company, as the case may be, addressed to the Deposit Escrow Agent
stating that such order or judgment has been finally affirmed on appeal by the highest court
before which such appeal may be sought, or has become final by lapse of time or is otherwise
not subject to appeal or such decision of the arbitration panel is binding and is not
subject to appeal.

 

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A “Business Day” shall mean a day other than a Saturday, Sunday or day on which the
Deposit Escrow Agent is authorized or permitted to close in the jurisdiction in which it is
located.

3.4 The Deposit Escrow Agent shall release the Deposit Escrow Amount promptly following
the receipt of written evidence of a Final Determination in respect of a pending claim, as
contemplated by paragraph 3.3 above.

	 	4.	 	Duties and Liabilities of the Deposit Escrow Agent.

Parent, Merger Sub and Company hereby recognize and acknowledge that the Deposit Escrow Agent
is serving hereunder at their request. Accordingly, it is understood and agreed as follows:

4.1 The Deposit Escrow Agent shall hold the Deposit Escrow Amount during the period or
periods specified in this Deposit Escrow Agreement and shall dispose of the Deposit Escrow
Amount in accordance with the terms hereof and not as the property of the Deposit Escrow
Agent. The duties and responsibilities of the Deposit Escrow Agent shall be entirely
administrative and not discretionary, and shall arise solely under and in accordance with
this Deposit Escrow Agreement. Under no circumstance will Deposit Escrow Agent be deemed to
be a fiduciary to any party or any other person under this Deposit Escrow Agreement.

4.2 Parent, Merger Sub and Company agree that the Deposit Escrow Agent shall not be
liable for any claim arising hereunder or in connection herewith (whether or not asserted by
Parent, Merger Sub, Company or any third party) unless such claim is based upon the willful
misconduct or gross negligence of the Deposit Escrow Agent in performing its duties pursuant
to this Deposit Escrow Agreement. Parent (on behalf of itself and Merger Sub) and Company
hereby jointly and severally agree to indemnify the Deposit Escrow Agent and hold it
harmless from and against all claims, demands, costs, liabilities and expenses, including,
without limitation, attorneys’ fees and costs which may be asserted against the Deposit
Escrow Agent or to which it may be exposed or which it may incur or suffer, directly or
indirectly, by reason of the execution or performance of this Deposit Escrow Agreement,
unless such claims, demands, costs, liabilities or expenses are based upon the willful
misconduct or gross negligence of the Deposit Escrow Agent in performing its duties pursuant
to this Deposit Escrow Agreement. This paragraph 4.2 shall survive notwithstanding any
termination of this Deposit Escrow Agreement or the resignation or removal of the Deposit
Escrow Agent. The indemnification provided in this paragraph 4.2 is only for the benefit of
the Deposit Escrow Agent and shall not affect the rights of the parties under the Merger
Agreement.

 

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4.3 DEPOSIT ESCROW AGENT SHALL NOT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (i)
DAMAGES, LOSSES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN
DAMAGES, LOSSES OR EXPENSES WHICH HAVE BEEN FINALLY ADJUDICATED TO HAVE DIRECTLY RESULTED
FROM DEPOSIT ESCROW AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (ii) SPECIAL,
INDIRECT OR
CONSEQUENTIAL DAMAGES OR LOSSES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION
LOST PROFITS), EVEN IF DEPOSIT ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION.

4.4 Deposit Escrow Agent may fully rely and shall be protected in acting or refraining
from acting upon any written notice, instruction or request furnished to it hereunder and
believed by it to be genuine and to have been signed or printed by the proper party or
parties. Concurrent with the execution of this Escrow Agreement, the Parties shall deliver
to the Escrow Agent authorized signers’ forms in the form of Exhibit “4.4-A” and
Exhibit “4.4-B” to this Escrow Agreement.

4.5 Deposit Escrow Agent shall not be liable for any reasonable action taken by it in
good faith and believed by it to be authorized or within the rights or powers conferred upon
it by this Deposit Escrow Agreement, and may consult with counsel of its own choice and
shall have full and complete authorization and protection for any action taken or suffered
by it hereunder in good faith or in accordance with or in reliance upon the opinion of such
counsel. In addition, the Deposit Escrow Agent shall have no liability if it distributes
the Deposit Escrow Amount in accordance with a Final Determination or an order of a court of
competent jurisdiction or if it delivers such Deposit Escrow Amount to such a court for
disposition by such court.

4.6 The fees of Deposit Escrow Agent, as set forth on Exhibit “4.6” hereof, and
all of its out-of-pocket expenses, shall be charged against and paid from the Net Income in
accordance with paragraph 1.3 of this Deposit Escrow Agreement. The fee agreed upon for the
services rendered hereunder is intended as full compensation for the Deposit Escrow Agent’s
services as contemplated by this Deposit Escrow Agreement; provided,
however, that in the event that the conditions for the disbursement of the Deposit
Escrow Amount under this Deposit Escrow Agreement are not fulfilled, or the Deposit Escrow
Agent renders any service related to this Deposit Escrow Agreement, but not contemplated in
this Deposit Escrow Agreement, or there is any assignment of interest in the subject matter
of this Deposit Escrow Agreement, or any material modification hereof, or if any material
controversy arises hereunder, or the Deposit Escrow Agent is made a party to any litigation
pertaining to this Deposit Escrow Agreement or the subject matter hereof, then the Deposit
Escrow Agent shall be compensated for such extraordinary services and reimbursed for all
costs and expenses, including reasonable attorneys’ fees and expenses, occasioned by any
such delay, controversy, litigation or event. If any amount due to the Deposit Escrow Agent
hereunder is not paid within thirty (30) days of the date due, the Deposit Escrow Agent in
its sole discretion may charge interest on such amount up to the highest rate permitted by
applicable law. The Deposit Escrow Agent shall have, and is hereby granted, a prior lien
upon the Deposit Escrow Amount with respect to its unpaid fees, non-reimbursed expenses and
unsatisfied indemnification rights, superior to the interests of any other persons or
entities and is hereby granted the right to set off and deduct any unpaid fees,
non-reimbursed expenses and unsatisfied indemnification rights from the Deposit Escrow
Amount.

 

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4.7 Income with respect to the Deposit Escrow Amount shall be deemed to have been
earned by the party who receives the Deposit Escrow Amount and shall be subject to
withholding regulations then in force with respect to United States taxes. Each party
shall, at the request of Deposit Escrow Agent, provide the Deposit Escrow Agent with
appropriate W-9 forms or tax identification number certifications, or resident alien
certifications. This paragraph shall survive notwithstanding any termination of this
Deposit Escrow Agreement or the resignation of the Deposit Escrow Agent.

4.8 This Deposit Escrow Agreement expressly sets forth all the duties of the Deposit
Escrow Agent with respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Deposit Escrow Agreement against the Deposit Escrow
Agent. Deposit Escrow Agent shall not be bound by the provisions of any agreement among the
other parties hereto except the Deposit Escrow Agreement.

4.9 Deposit Escrow Agent may resign and be discharged from its duties or obligations
under this Deposit Escrow Agreement by giving not less than thirty (30) days’ prior written
notice to Parent and Company of such resignation, provided that no such resignation shall be
effective until a successor Deposit Escrow Agent, designated jointly by Parent and Company,
has agreed to serve as Deposit Escrow Agent in accordance with the terms of this Deposit
Escrow Agreement. From the date of said letter of resignation until the delivery of the
Deposit Escrow Amount to the successor Deposit Escrow Agent, the Deposit Escrow Agent’s sole
duty hereunder shall be to retain the Deposit Escrow Amount and invest and reinvest said
Deposit Escrow Amount pursuant to paragraph 1.3. Notwithstanding the foregoing, if no
successor is appointed within thirty (30) days after such resignation notice is deemed given
hereunder, the Deposit Escrow Agent may deliver the Deposit Escrow Amount into a court of
competent jurisdiction and, thereupon, shall be released from any and all obligations and
liabilities arising under or in connection with this Deposit Escrow Agreement or its duties
as an escrow agent hereunder.

4.10 If any conflict, disagreement or dispute arises between, among, or involving any
of the parties hereto concerning the meaning or validity of any provision hereunder or
concerning any other matter relating to this Deposit Escrow Agreement, or the Deposit Escrow
Agent is in doubt as to the action to be taken hereunder, the Deposit Escrow Agent may, at
its option, retain the Deposit Escrow Amount until the Deposit Escrow Agent (i) receives a
final non-appealable order of a court of competent jurisdiction or a final non-appealable
arbitration decision directing delivery of the Deposit Escrow Amount, (ii) receives a
written agreement executed by each of the parties involved in such disagreement or dispute
directing delivery of the Deposit Escrow Amount, in which event the Deposit Escrow Agent
shall be authorized to disburse the Deposit Escrow Amount in accordance with such final
court order, arbitration decision, or agreement, or (iii) files an interpleader action in
any court of competent jurisdiction, and upon the filing thereof, the Deposit Escrow Agent
shall be relieved of all liability as to the Deposit Escrow Amount and shall be entitled to
recover attorneys’ fees, expenses and other costs incurred in commencing and maintaining any
such interpleader action. The Deposit Escrow Agent shall be entitled to act on any such
agreement, court order, or arbitration decision without further question, inquiry, or
consent.

 

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	 	5.	 	Termination.

The duties of the Deposit Escrow Agent shall be terminated (a) upon disbursement or release of
the entire Deposit Escrow Amount by the Deposit Escrow Agent in accordance with the terms hereof;
(b) by written mutual consent signed by Company and Parent (on behalf of itself and Merger Sub), or
(c) by delivery or payment of the Deposit Escrow Amount into a court of competent jurisdiction
pursuant to a resignation in accordance with paragraph 4.9 or as otherwise contemplated by
paragraph 4.10.

	 	6.	 	Escheat.

Parent, Merger Sub and Company are aware that under applicable state law, property which is
presumed abandoned may under certain circumstances escheat to the applicable state. The Deposit
Escrow Agent shall have no liability to the parties, their respective heirs, legal representatives,
successors and assigns, or any other party, should any or all of the Deposit Escrow Amount escheat
by operation of law.

	 	7.	 	Notice.

All notices, consents, approvals, directions, and instructions required or permitted under
this Deposit Escrow Agreement shall be given in writing and delivered either by hand or by
registered or certified mail, postage prepaid, or by a nationally recognized overnight courier
service guaranteeing delivery within twenty-four (24) hours (charges prepaid), and addressed as
follows:

	 	(i)	 	If to Parent or Merger Sub:

Nicole Crafts LLC

14 Sbar Blvd.

Moorestown, NJ 08057

Attention: Adolph Piperno

Facsimile: (856) 234-9159

with a copy to:

Bryan Cave LLP

1201 W. Peachtree Street, N.W.

One Atlantic Center, Fourteenth Floor

Atlanta, GA 303309-3488

Attention: Todd Wade, Esquire

Facsimile: (404) 420-0694

 

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	 	(ii)	 	If to Company:

A.C. Moore Arts & Crafts, Inc.

130 A.C. Moore Drive

Berlin, NJ 08009

Attention: Amy Rhoades

Facsimile: (856) 753-7057

with a copy to:

Blank Rome LLP

One Logan Square

Philadelphia, Pennsylvania 19103-6998

Attention: Alan H. Lieblich, Esquire

Facsimile: (215) 569-5555

	 	(iii)	 	If to Deposit Escrow Agent:

Wells Fargo Bank, National Association

45 Broadway, 14th Floor

New York, New York 10006

Attention: Lisa D’Angelo; Corporate, Municipal and Escrow Solutions

Telephone: (212) 515-5261

Facsimile: (212) 509-1716

or to such other address or to the attention of such other person as any party shall have requested
by a written notice given pursuant to this paragraph 7. Notices will be deemed to have been given
hereunder when delivered personally, one day after deposit with a nationally recognized overnight
courier service or three (3) days after deposit in the U.S. Mail, as may be applicable, whether or
not delivery is accepted by the addressee. Notices also may be given by facsimile with written
confirmation of receipt, to the fax numbers, as applicable, set forth above, and shall be effective
on the date transmitted if confirmed within forty-eight (48) hours thereafter by a signed original
sent in one of the manners provided above. Copies of all communications hereunder shall be sent to
Deposit Escrow Agent.

	 	8.	 	Assignment.

Subject to the Deposit Escrow Agent’s right to withdraw pursuant to Paragraph 4.9 hereof, this
Agreement may not be assigned by Parent, Merger Sub, Company or the Deposit Escrow Agent without
the prior written consent of the other parties (with written consent by Parent applicable to both
Parent and Merger Sub) hereto.

	 	9.	 	Entire Agreement; Waiver.

This Deposit Escrow Agreement contains the entire agreement among the parties with respect to
the subject matter hereof. This Deposit Escrow Agreement may not be amended, supplemented or
discharged, no provision hereof may be modified or waived, except by an instrument in writing
signed by all of the parties (with instrument in writing signed by Parent
applicable to both Parent and Merger Sub) hereto. No waiver of any provision hereof by any
party shall be deemed a continuing waiver of any matter by such party.

 

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	 	10.	 	Force Majeure.

The Deposit Escrow Agent shall not be responsible or liable for any failure or delay in the
performance of its obligation under this Deposit Escrow Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fire; flood; wars; acts of terrorism; civil or military
disturbances; sabotage; epidemic; riots; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or communications services; accidents; labor disputes; acts of civil or
military authority or governmental action; it being understood that the Escrow Agent shall use
commercially reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as reasonably practicable under the circumstances.

	 	11.	 	Governing Law.

This Deposit Escrow Agreement shall be governed by and construed in accordance with the laws
and decisions of the State of Delaware applicable to agreements made to be performed entirely in
such jurisdiction, regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws (whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any state other than the State of Delaware, except to the extent
that provisions of the Pennsylvania Business Corporation Law are applicable hereto. Each of the
parties irrevocably consents to the exclusive jurisdiction and venue of the federal and state
courts located in Philadelphia, in the Commonwealth of Pennsylvania, in connection with any claims
or disputes that may arise out of or relate to the subject matter set forth herein.

	 	12.	 	Counterparts.

This Deposit Escrow Agreement may be executed in one or more counterparts, including by
facsimile, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

	 	13.	 	Construction.

The captions in this Deposit Escrow Agreement are inserted for convenience of reference only
and shall not limit or affect the interpretation of any provision in this Deposit Escrow Agreement.
The singular shall include the plural, and the plural shall include the singular; any gender shall
include all other genders as the meaning and context of this Deposit Escrow Agreement shall
require. This Deposit Escrow Agreement is the product of arm’s length negotiations between
sophisticated, well-represented parties and no provision herein shall be construed against the
drafter thereof.

**********************

 

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IN WITNESS WHEREOF, the parties hereto have executed this Deposit Escrow Agreement on the date
and year first written above.

	 	 	 	 	 
	 	PARENT:

NICOLE CRAFTS LLC

 	 
	 	By:  	/s/ Adolph Piperno
 	 
	 	 	Name:  	Adolph Piperno 	 
	 	 	Title:  	President 	 
	 
	 	MERGER SUB:

SBAR’S ACQUISITION CORPORATION

 	 
	 	By:  	/s/ Adolph Piperno
 	 
	 	 	Name:  	Adolph Piperno 	 
	 	 	Title:  	President 	 
	 
	 	COMPANY:

A.C. MOORE ARTS & CRAFTS, INC.

 	 
	 	By:  	/s/ Joseph A. Jeffries
 	 
	 	 	Name:  	Joseph A. Jeffries 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	Wells Fargo Bank, National Association acting solely

as DEPOSIT ESCROW AGENT:

 	 
	 	By:  	/s/ Lisa D’Angelo
 	 
	 	 	Name:  	Lisa D’Angelo 	 
	 	 	Title:  	Vice President 	 

 

 

 

	 	 	 	 	 

Exhibit A

Agency and Custody Account Direction

For Cash Balances

Wells Fargo Money Market Deposit Accounts

Direction to use the following Wells Fargo Money Market Deposit Accounts for Cash Balances for the
escrow account or accounts (the “Account”) established under the Escrow Agreement to which this
Exhibit A is attached.

You are hereby directed to deposit, as indicated below, or as we shall jointly direct further in
writing from time to time, all cash in the Account in the following money market deposit account of
Wells Fargo Bank, National Association:

Fed Effective Deposit Account (FFDA)

We understand that amounts on deposit in the FFDA are insured, subject to the applicable rules and
regulations of the Federal Deposit Insurance Corporation (FDIC), in the basic FDIC insurance amount
of $250,000 per depositor, per insured bank. This includes principal and accrued interest up to a
total of $250,000.

We acknowledge that we have full power to direct investments of the Account.

We understand that we may change this direction at any time and that it shall continue in effect
until revoked or modified by us by written notice to you.

	 	 	 	 	 	 	 
	PARENT:

	 	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	/s/ Adolph Piperno
 

Authorized Representative

	 	 	 	/s/ Joseph A. Jeffries
 

Authorized Representative
	 	 
	 
	 	 	 	 	 	 
	October 3, 2011
 

Date

	 	 	 	October 3, 2011
 

Date
	 	 
	 
	 	 	 	 	 	 
	MERGER SUB:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Adolph Piperno
 

Authorized Representative

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	October 3, 2011
 

Date

	 	 	 	 	 	 

 

 

 

Exhibit 2

Form of Payment Notice — Closing

BANK ADDRESS Attention:

Ladies and Gentlemen:

Pursuant to paragraph 2 of the Deposit Escrow Agreement (“Deposit Escrow Agreement”), dated
October 3, 2011, by and among Nicole Crafts LLC, a Delaware limited liability company (“Parent”),
Sbar’s Acquisition Corporation, a Pennsylvania corporation (“Merger Sub”), A.C. Moore Arts &
Crafts, Inc., a Pennsylvania corporation (“Company”), and you, Parent, on behalf of itself and
Merger Sub, and Company hereby authorize and direct you to pay the entire Deposit Escrow Amount
being maintained by you under and pursuant to the Deposit Escrow Agreement to Paying Agent as
follows:

[insert agreed upon instructions for payment]

	 	 	 	 	 
	 	Sincerely,

	 
	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	 	 
	 	By:  	

 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

 

Exhibit 3.1

Form of Claim Notice

BANK ADDRESS Attention:

Ladies and Gentlemen:

Pursuant to paragraph 3.1 of the Deposit Escrow Agreement (“Deposit Escrow Agreement”), dated
October 3, 2011, by and among Nicole Crafts LLC, a Delaware limited liability company (“Parent”),
Sbar’s Acquisition Corporation, a Pennsylvania corporation (“Merger Sub”), A.C. Moore Arts &
Crafts, Inc., a Pennsylvania corporation (“Company”), and you, [Insert Name of Claimant] hereby
notifies you that it is making a claim against [Insert Name of Respondent] for [$                    ] [the
full amount] of the Deposit Escrow Amount. The factual basis for this claim is as follows:

[insert facts]

Payment of the Deposit Escrow Amount pursuant to this claim shall be delivered as follows:

[insert instructions for payment]

	 	 	 	 	 
	 	Sincerely,

[INSERT NAME OF CLAIMANT]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

 

Exhibit 3.2

Form of Objection Notice

BANK ADDRESS Attention:

Ladies and Gentlemen:

Pursuant to paragraph 3.2 of the Deposit Escrow Agreement (“Deposit Escrow Agreement”), dated
October 3, 2011, by and among Nicole Crafts LLC, a Delaware limited liability company (“Parent”),
Sbar’s Acquisition Corporation, a Pennsylvania corporation (“Merger Sub”), A.C. Moore Arts &
Crafts, Inc., a Pennsylvania corporation (“Company”), and you, the undersigned hereby notifies you
that it objects to [Insert Name of Claimant] Claim Notice dated                     , 2011, and requests
that you hold the entire Deposit Escrow Amount until a Final Determination. The factual basis for
this objection is as follows:

[insert facts]

	 	 	 	 	 
	 	Sincerely,

[INSERT NAME OF RESPONDENT]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

 

Exhibit 3.3

Form of Payment Notice — No Closing

BANK ADDRESS Attention:

Ladies and Gentlemen:

Pursuant to paragraph 3.3 of the Deposit Escrow Agreement (“Deposit Escrow Agreement”), dated
October 3, 2011, by and among Nicole Crafts LLC, a Delaware limited liability company (“Parent”),
Sbar’s Acquisition Corporation, a Pennsylvania corporation (“Merger Sub”), A.C. Moore Arts &
Crafts, Inc., a Pennsylvania corporation (“Company”), and you, Parent, on behalf of itself and
Merger Sub, and Company hereby authorize and direct you to pay the entire Deposit Escrow Amount as
follows:

[insert agreed upon instructions for payment]

	 	 	 	 	 
	 	Sincerely,

	 
	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

 

Exhibit 4.4-A

Certificate as to Authorized Signatures

The specimen signatures shown below are the specimen signatures of the individuals who have been
designated as authorized representatives of Nicole Crafts LLC, a Delaware limited liability
company, and Sbar’s Acquisition Corporation, a Pennsylvania corporation, and are authorized to
initiate and approve transactions of all types for the escrow account or accounts established under
the Escrow Agreement to which this Exhibit 4.4-A is attached, on behalf of Nicole Crafts LLC, a
Delaware limited liability company, and Sbar’s Acquisition Corporation, a Pennsylvania corporation.

	 	 	 	 	 	 	 
	Name / Title	 	Specimen Signature	 	 
	 
	 	 	 	 	 	 
	Adolph Piperno
 

Name

	 	 	 	/s/ Adolph Piperno
 

Signature
	 	 
	 
	 	 	 	 	 	 
	President, Nicole Crafts LLC and
Sbar’s Acquisition Corporation
 

Title

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Name

	 	 	 	 

Signature
	 	 
	 
	 	 	 	 	 	 
	Title
 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Name

	 	 	 	 

Signature
	 	 
	 
	 	 	 	 	 	 
	 

Title

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Name

	 	 	 	 

Signature
	 	 
	 
	 	 	 	 	 	 
	 

Title

	 	 	 	 	 	 

 

 

 

Exhibit 4.4-B

Certificate as to Authorized Signatures

The specimen signatures shown below are the specimen signatures of the individuals who have been
designated as authorized representatives of A.C. Moore Arts & Crafts, Inc., a Pennsylvania
corporation, and are authorized to initiate and approve transactions of all types for the escrow
account or accounts established under the Escrow Agreement to which this Exhibit 4.4-B is attached,
on behalf of A.C. Moore Arts & Crafts, Inc., a Pennsylvania corporation.

	 	 	 	 	 	 	 
	Name / Title	 	Specimen Signature	 	 
	 
	 	 	 	 	 	 
	Joseph A. Jeffries
 

Name

	 	 	 	/s/ Joseph A. Jeffries
 

Signature
	 	 
	 
	 	 	 	 	 	 
	Chief Executive Officer
 

Title

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	David Stern
 

Name

	 	 	 	/s/ David Stern
 

Signature
	 	 
	 
	 	 	 	 	 	 
	Executive Vice President, Chief Financial
	 	 	 	 	 	 
	Officer and Chief Administrative Officer
 

Title

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Rodney Schriver
 

Name

	 	 	 	/s/ Rodney Schriver
 

Signature
	 	 
	 
	 	 	 	 	 	 
	Vice President, Chief Accounting Officer
	 	 	 	 	 	 
	and Controller
 

Title

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Amy Rhoades
 

Name

	 	 	 	/s/ Amy Rhoades
 

Signature
	 	 
	 
	 	 	 	 	 	 
	Senior Vice President and General Counsel
 

Title

	 	 	 	 	 	 

 

 

 

Exhibit 4.6

Fees of Deposit Escrow AgentExhibit 10.2

Exhibit 10.2

EXECUTION COPY

LIMITED GUARANTY

This Limited Guaranty, dated as of October 3, 2011 (the “Guaranty”), is hereby made
and delivered by SBAR’S, Inc., a New Jersey corporation (the “Guarantor”), to A.C. Moore
Arts & Crafts, Inc., a Pennsylvania corporation (the “Company”), in favor of, and for the
benefit of, the Guaranteed Parties (as defined below).

WHEREAS, Nicole Crafts, LLC, a Delaware limited liability company (“Parent”), Sbar’s
Acquisition Corp., a Pennsylvania corporation (“Merger Sub”), and the Company are parties
to an Agreement and Plan of Merger, dated as of October 3, 2011 (as it may be amended or modified
from time to time, the “Merger Agreement”); and

WHEREAS, all capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed thereto in the Merger Agreement; and

WHEREAS, pursuant to Section 7.9 of the Merger Agreement, the Surviving Corporation
has agreed to indemnify, defend and hold harmless the Guaranteed Parties to the extent set forth
therein; and

WHEREAS, the undersigned desires to irrevocably and unconditionally guarantee to the
Indemnified Parties (the “Guaranteed Parties”) the performance and discharge of any and all
liabilities and obligations of the Surviving Corporation under such Section 7.9 of the
Merger Agreement, subject to the limitations set forth herein.

NOW, THEREFORE, to induce the Company to enter into the Merger Agreement and in consideration
of the consummation of the transactions contemplated by the Merger Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor, intending to be legally bound as primary obligor and not merely as surety, hereby agrees
as follows:

1. Limited Guaranty. Subject to the limitations set forth herein, the Guarantor
hereby irrevocably and unconditionally guarantees to the Guaranteed Parties the due and punctual
payment, performance and discharge of any and all liabilities and obligations of the Surviving
Corporation under and pursuant to Section 7.9 of the Merger Agreement, subject to the
limitations described in such Section 7.9 (all of the foregoing, including all collection
costs incurred hereunder being hereinafter called, collectively, the “Guaranteed
Obligations”), if, and only to the extent, any portion of the Guaranteed Obligations remains
unpaid thirty (30) days following written demand for payment made to the Surviving Corporation.
Notwithstanding any other terms of this Guaranty, it is expressly agreed that the Guarantor shall
only be liable, and the Company or the Guaranteed Parties shall only be entitled to make any claim,
under this Guaranty at any time that (i) the real property (the “Property”) of A.C. Moore
Urban Renewal, LLC (“Urban Renewal”) located in Berlin, New Jersey is not free and clear of
any Lien or Liens, other than Liens up to a maximum aggregate amount of $500,000; or (ii) there has
been consummated
any direct or indirect transfer of the Property to a Person, other than to a wholly-owned
Subsidiary of the Surviving Corporation, including, but not limited to, the sale of the Property
subject to an understanding or agreement (contingent or otherwise) to repurchase such Property.
All payments hereunder shall be made in lawful money of the United States, in immediately available
funds.

 

 

 

2. Terms of Guaranty.

(a) This Guaranty is one of payment and performance, not of collection, and a separate action
or actions may be brought and prosecuted against the Guarantor to enforce this Guaranty, regardless
of whether an action is brought against Parent, Merger Sub or the Surviving Corporation.

(b) Except as otherwise provided herein and without amending or limiting the other provisions
of this Guaranty, the liability of the Guarantor under this Guaranty shall, to the fullest extent
permitted under applicable Law, be absolute, irrevocable and unconditional irrespective of:

(i) any change in the corporate existence, structure or ownership of Parent, Merger
Sub, the Surviving Corporation or the Guarantor, or any insolvency, bankruptcy,
reorganization, moratorium or other similar proceeding affecting Parent, Merger Sub, the
Surviving Corporation or the Guarantor or any of their respective assets;

(ii) the existence of any claim, set-off or other right that (x) the Guarantor may have
at any time against Parent, Merger Sub, the Surviving Corporation, the Guaranteed Parties or
the Company or (y) Parent or Merger Sub may have at any time against the Company or the
Guaranteed Parties, in each case, whether in connection with any Guaranteed Obligations or
otherwise; or

(iii) the addition, substitution or release of any Person now or hereafter liable with
respect to the Guaranteed Obligations or otherwise interested in the transactions
contemplated by the Merger Agreement.

(c) The Guarantor hereby waives any and all notice of the creation, renewal, extension or
accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Company or
the Guaranteed Parties upon this Guaranty or acceptance of this Guaranty. The Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Guaranty, and all dealings between Parent, Merger Sub or the
Guarantor, on the one hand, and the Company, on the other, shall likewise be conclusively presumed
to have been had or consummated in reliance upon this Guaranty.

(d) The Guaranteed Parties shall not be obligated to file any claim relating to any Guaranteed
Obligations in the event that the Surviving Corporation becomes subject to a bankruptcy,
reorganization or similar proceeding, and the failure of the Guaranteed Parties to so file shall
not affect the Guarantor’s obligations hereunder. In the event that any payment to the Guaranteed
Parties in respect of any Guaranteed Obligation is rescinded or must otherwise be returned for any
reason whatsoever, the Guarantor shall remain liable hereunder with respect to the Guaranteed
Obligations as if such payment had not been made.

 

 

 

(e) The Guarantor will not exercise any rights of subrogation or contribution against the
Surviving Corporation, whether arising by contract or operation of law (including, without
limitation, any such right arising under bankruptcy or insolvency Laws) or otherwise, by reason of
any payment by it pursuant to the provisions of this Guaranty unless and until the Guaranteed
Obligations have been indefeasibly paid in full.

(f) Subject to the terms of Section 1 herein above, if the Surviving Corporation fails to
discharge its Guaranteed Obligations when due in accordance with the applicable terms of the Merger
Agreement, then the Guaranteed Parties may at any time and from time to time, in their sole
discretion, and so long as the Surviving Corporation has failed to discharge the Guaranteed
Obligations, take any and all actions available hereunder or under applicable Law to collect any of
the Guarantor’s liabilities hereunder in respect of the Guaranteed Obligations. The Guarantor
shall pay, or cause to be paid, to the Guaranteed Parties not later than the third (3rd)
day following receipt of a written notice by the Guaranteed Parties of the failure of the Surviving
Corporation to pay any or all of the Guaranteed Obligations in accordance with the Merger
Agreement, the full amount then due and payable by the Surviving Corporation under the Merger
Agreement in cash by wire transfer to the account set forth in such notice.

(g) No delay or failure on the part of the Guaranteed Parties in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by the Guaranteed
Parties of any right or remedy shall preclude other or further exercise thereof or the exercise of
any other right or remedy.

(h) The Guarantor agrees, in the event that this Guaranty is enforced or collected by law or
through an attorney at law, to pay all costs of collection incurred by the Guaranteed Parties,
including, without limitation, reasonable attorneys’ fees.

3. Waiver of Acceptance, Presentment; Etc. The Guarantor expressly and irrevocably
waives defenses on the basis of promptness, diligence, notice of acceptance hereof, presentment,
demand for payment, notice of non-performance, default, dishonor, protest and any notice of any
kind (other than notices to be provided in accordance with the Merger Agreement), all defenses
which may be available by virtue of any valuation, stay, moratorium or other similar Law now or
hereafter in effect, any right to require the marshalling of assets of the Surviving Corporation,
or any other Person liable with respect to any of the Guaranteed Obligations, and all suretyship
defenses generally. The Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers
set forth in this Guaranty are knowingly made in contemplation of such benefits and after the
advice of counsel.

4. Continuing Guaranty; Certain Waivers.

(a) This Guaranty is a continuing one and shall remain in full force and effect until the
indefeasible payment and satisfaction in full of the Guaranteed Obligations, shall be binding upon
the Guarantor, its successors and permitted assigns, and shall inure to the benefit of, and be
enforceable by, the Guaranteed Parties and their respective heirs, executors, administrators,
successors and permitted transferees and assigns. All obligations to which this Guaranty applies
or may apply under the terms hereof shall be conclusively presumed to have been created in
reliance hereon.

 

 

 

(b) The Guarantor agrees that the obligations of the Guarantor hereunder shall not be released
or discharged, in whole or in part, or otherwise affected by: (a) the failure of the Guaranteed
Parties to assert any claim or demand or to enforce any right or remedy against the Surviving
Corporation; (b) any change in the time, place or manner of payment of any of the Guaranteed
Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification
of any of the terms or provisions of the Merger Agreement or any other agreement evidencing,
securing or otherwise executed in connection with any of the Guaranteed Obligations (provided that
any such change, rescission, waiver, compromise, consolidation or other amendment or modification
shall be subject to the prior written consent of the Surviving Corporation to the extent expressly
required by the Merger Agreement); (c) the addition, substitution or release of any Person
interested in the transactions contemplated by the Merger Agreement (provided, that any such
addition, substitution or release shall be subject to the prior written consent of the Surviving
Corporation to the extent expressly required under the Merger Agreement); (d) any change in the
corporate existence, structure or ownership of the Surviving Corporation or any other Person liable
with respect to any of the Guaranteed Obligations; (e) any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Surviving Corporation or any other Person liable with
respect to any of the Guaranteed Obligations; (f) any lack of validity or enforceability of the
Guaranteed Obligations, the Merger Agreement or any agreement or instrument relating thereto; (g)
the existence of any claim, set-off or other rights which the Guarantor may have at any time
against the Surviving Corporation (other than defenses under the Merger Agreement), whether in
connection with the Guaranteed Obligations or otherwise; or (h) the adequacy of any other means the
Company or the Guaranteed Parties may have of obtaining repayment of any of the Guaranteed
Obligations.

5. Representations and Warranties. The Guarantor hereby represents and warrants to the
Guaranteed Parties with respect to itself that: (a) it is duly organized and validly existing under
the Laws of its jurisdiction of organization; (b) it has all corporate power and authority to
execute, deliver and perform this Guaranty; (c) the execution, delivery and performance of this
Guaranty by the Guarantor has been duly and validly authorized and approved by all necessary
corporate action, and no other proceedings or actions on the part of the Guarantor are necessary
therefor; (d) this Guaranty has been duly and validly executed and delivered by it and constitutes
a valid and legally binding obligation of it, enforceable against the Guarantor in accordance with
its terms; (e) the execution, delivery and performance by the undersigned of this Guaranty do not
and will not (i) violate the organizational documents of the Guarantor, (ii) violate any applicable
Law or judgment, or (iii) result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any
obligation, any contract to which the Guarantor is a party, in any case, for which the violation,
default or right would be reasonably likely to prevent or materially impede, interfere with, hinder
or delay the consummation by the Guarantor of the transactions contemplated by this Guaranty on a
timely basis; and (f) the Guarantor has the financial capacity to pay and perform all of its
obligations under this Guaranty, and all funds necessary to fulfill the Guaranteed Obligations
under this Guaranty shall be available to the Guarantor for as long as this Guaranty shall remain
in effect. The Guarantor acknowledges that the Company and the Guaranteed Parties have specifically
relied on the accuracy of the representations and warranties contained in this Section 
5 and in the event of any breach hereof, the Guaranteed Parties (or, prior to the
earlier of the closing of the Offer or the Merger, the Company) shall have a right to seek
appropriate damages and any such damages shall be a “Guaranteed Obligation” for purposes of this
Guaranty.

 

 

 

6. Entire Agreement. This Guaranty, together with the Merger Agreement and the
Confidentiality Agreement, constitutes the entire agreement with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings with respect to the subject
matter hereof, whether written or oral, among Parent, Merger Sub and the Guarantor, on the one
hand, and the Company and the Guaranteed Parties, on the other hand. Furthermore, no course of
dealing between the parties, no usage of trade, and no parol or extrinsic evidence shall be used to
supplement or modify any terms of this Guaranty; nor are there any conditions to the complete
effectiveness of this Guaranty.

7. Amendments and Waivers. No amendment or waiver of any provision of this Guaranty
will be valid and binding unless it is in writing and signed, in the case of an amendment, by the
Guarantor and (i) the Company, prior to the earlier to occur of the closing of the Offer or the
Merger, or (ii) the Guaranteed Parties Representative, following the earlier to occur of the
closing of the Offer or the Merger, or in the case of waiver, by the party against whom the waiver
is to be effective. No waiver by any party of any breach or violation of, or default under, this
Guaranty, whether intentional or not, will be deemed to extend to any prior or subsequent breach,
violation or default hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence. No delay or omission on the part of any party in exercising any right,
power or remedy under this Guaranty will operate as a waiver thereof.

8. Third Party Beneficiaries. The Guarantor hereby agrees that its representations,
warranties and covenants set forth herein are specifically intended for the benefit of the Company,
prior to the earlier to occur of the closing of the Offer or the Merger, and the Guaranteed
Parties, in accordance with and subject to the terms of this Guaranty. Other than the Guaranteed
Parties, the Company and their respective heirs, legal representatives, successors and permitted
assigns hereunder, this Guaranty is not intended to, and does not, confer upon any person any
rights or remedies hereunder, including the right to rely upon the representations and warranties
set forth herein.

9. Counterparts; Facsimile and Electronic Signatures. This Guaranty may be executed in
one or more counterparts, all of which shall be considered one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the parties and
delivered to the other parties. This Guaranty or any counterpart may be executed and delivered by
facsimile copies or delivered by electronic communications by portable document format (.pdf), each
of which shall be deemed an original.

 

 

 

10. Notices. Unless otherwise set forth herein, any notice, request, instruction or
other document to be given hereunder shall be in writing and shall be deemed duly given (i) upon
delivery, when delivered personally, (ii) one (1) Business Day after being sent by overnight
courier or when sent by facsimile transmission (with a confirming copy sent by overnight courier)
and (iii) three (3) Business Days after being sent by registered or certified mail, postage
prepaid, as follows:

If to the Company:

A.C. Moore Arts & Crafts, Inc.

130 A.C. Moore Drive

Berlin, NJ 08009

Attention: Amy Rhoades

Facsimile: (856) 753-7057

If to the Guaranteed Parties:

c/o Guaranteed Parties Representative

Michael J. Joyce

XXXXX

XXXXX

Facsimile: XXXXX

With a copy to (which shall not constitute notice):

Blank Rome LLP

One Logan Square

130 North 18th Street

Philadelphia, PA 19103-6998

Attn: Alan H. Lieblich

Facsimile: (215) 569-5555

If to the Guarantor:

Nicole Crafts LLC

14 Sbar Blvd.

Moorestown, NJ 08057

Attention: Adolph Piperno

Facsimile: (856) 234-9159

With a copy to (which shall not constitute notice):

Bryan Cave LLP

1201 W. Peachtree Street, N.W.

One Atlantic Center, Fourteenth Floor

Atlanta, GA 30309-3488

Attn: Todd Wade

Facsimile: (404) 420-0694

or to such other Persons or addresses as may be designated in writing by the party to receive
such notice.

 

 

 

11. Governing Law. This Guaranty shall be governed by and construed in accordance
with the laws and decisions of the State of Delaware applicable to guaranties or other
agreements made to be performed entirely in such jurisdiction, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws of any state other
than the State of Delaware, except to the extent that provisions of the Pennsylvania Business
Corporation Law are applicable hereto.

12. Jurisdiction; Venue; Service of Process.

(a) Each of the parties hereto irrevocably agrees that any legal action or proceeding arising
out of or relating to this Guaranty, including, without limitation, its negotiation, terms,
performance, or the transactions contemplated hereby (except for enforcement of any judgment
against said parties), shall be brought and determined exclusively in the state or federal courts
located within the Commonwealth of Pennsylvania. The parties hereby irrevocably consent to
personal jurisdiction in said courts and agree that, in the event of the filing of a legal action
or proceeding, they shall not raise as defense that any such court (a) lacks personal jurisdiction;
or (b) is an inconvenient forum. The parties further agree, to the extent permitted by Law, that
service of process or other legal papers commencing any such action may be effected in the manner
provided in Section 10, and the parties hereby irrevocably agree that if service is so
made, the parties shall not assert as a defense that service was ineffective.

(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, OR RELATING TO, THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES
THAT (i) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT, IN THE
EVENT OF ANY ACTION, SUIT OR PROCEEDING, SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

(c) The Guarantor acknowledges that, in the event that any of the provisions of this Guaranty
were not performed in accordance with its specific terms or were otherwise breached, irreparable
damage would occur and the Guaranteed Parties would not have any adequate remedy at law. The
Guarantor further hereby waives any defense, in the event that any action for injunction, specific
performance or other equitable relief, that a remedy at law would be adequate. It is accordingly
agreed that the Guaranteed Parties shall be entitled to an injunction or injunctions to prevent
breaches or threatened breaches of this Guaranty and to enforce specifically the terms and
provisions of this Guaranty in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative. To the extent permitted by Law, any
requirements for the securing or posting of any bond with such remedy are waived.

 

 

 

13. No Assignment. Neither this Guaranty nor any rights, interests or obligations
hereunder may be assigned by any party to any other person (except by operation of law) (i) in the
case of a purported assignment by the Guarantor, without the written consent of the Guaranteed
Parties, and (ii) in the case of a purported assignment by a Guaranteed Party, without the written
consent of the Guarantor. The Guarantor shall require and cause any successor entity by operation
of law to all or substantially all of the business and/or assets of the Guarantor, by written
agreement in form and substance satisfactory to the Guaranteed Parties, to expressly assume and
agree to perform this Guaranty in the same manner and to the same extent that the Guarantor would
be required to perform this Guaranty as if no succession had taken place.

14. Severability. If any term or other provision of this Guaranty is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other conditions and
provisions of this Guaranty shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to
modify this Guaranty so as to effect the original intent of the parties as closely as possible to
the fullest extent permitted by applicable Law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

15. Headings. The headings contained in this Guaranty are for convenience purposes
only and will not in any way affect the meaning or interpretation hereof.

16. Appointment of Guaranteed Parties Representative. The Company, by its
acknowledgement of this Guaranty, hereby irrevocably appoints Michael J. Joyce as the agent and
attorney-in-fact to represent the interests of the Guaranteed Parties for all purposes under this
Guaranty from and after the earlier to occur of the closing of the Offer or the Merger (the
“Guaranteed Parties Representative”), and consents to the taking by the Guaranteed Parties
Representative of any and all actions and the making of any decisions required or permitted to be
taken by the Guaranteed Parties hereunder. By his execution below, Michael J. Joyce hereby accepts
his appointment as Guaranteed Parties Representative hereunder. From and after the earlier to occur
of the closing of the Offer or the Merger, the Guarantor shall be entitled to deal exclusively with
the Guaranteed Parties Representative on all matters relating to this Guaranty and shall be
entitled to rely conclusively (without further evidence of any kind whatsoever) on any document
executed or purported to be executed on behalf of an Indemnified Party by the Guaranteed Parties
Representative, and on any other action taken or purported to be taken on behalf of a Guaranteed
Party by the Guaranteed Parties Representative, as fully binding upon such Guaranteed Party.

[Signatures on following page]

 

 

 

IN WITNESS WHEREOF, the undersigned have executed and delivered this Guaranty as of the date
first written above.

	 	 	 	 	 
	 	GUARANTOR:

SBAR’S, Inc.

 	 
	 	By:  	/s/ Adolph Piperno
 	 
	 	 	Name:  	Adolph Piperno 	 
	 	 	Title:  	President 	 

ACKNOWLEDGED BY:

THE COMPANY

A.C. Moore Arts & Crafts, Inc.

	 	 	 	 	 
	By:

	 	/s/ Michael J. Joyce
 

Name: Michael J. Joyce
	 	 
	 

	 	Title: Chairman of the Board of Directors	 	 
	 
	 	 	 	 
	GUARANTEED PARTIES REPRESENTATIVE	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael J. Joyce
 

Name: Michael J. Joyce

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