Exhibit 10.2
CREDIT AGREEMENT

DATED AS OF NOVEMBER 3, 2008

AMONG

RC2 CORPORATION,
LEARNING CURVE BRANDS, INC.,
LEARNING CURVE CANADA LIMITED,
RC2 (ASIA) LIMITED
RC2 (AUSTRALIA) PTY., LTD.,
RC2 DEUTSCHLAND GMBH,
RACING CHAMPIONS INTERNATIONAL LIMITED,
RACING CHAMPIONS WORLDWIDE LIMITED

THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

AND

BANK OF MONTREAL,
AS ADMINISTRATIVE AGENT
 

 

 
BMO CAPITAL MARKETS, AS SOLE LEAD ARRANGER AND SOLE BOOK RUNNER
NATIONAL CITY BANK, AS SYNDICATION AGENT

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TABLE OF CONTENTS
 

 SECTION  HEADING  PAGE        SECTION 1.
THE CREDIT FACILITIES
 
1
 
Section 1.1.
Term Loan Commitments
1
 
Section 1.2.
Revolving Credit Commitments
1
 
Section 1.3.
Letters of Credit
2
 
Section 1.4.
Applicable Interest Rates
5
 
Section 1.5.
Minimum Borrowing Amounts; Maximum Eurocurrency Loans
6
 
Section 1.6.
Manner of Borrowing Loans and Designating Applicable Interest Rates
6
 
Section 1.7.
Interest Periods
8
 
Section 1.8.
Maturity of Loans
9
 
Section 1.9.
Prepayments
10
 
Section 1.10.
Default Rate
11
 
Section 1.11.
Evidence of Indebtedness
12
 
Section 1.12.
Funding Indemnity
12
 
Section 1.13.
Commitment Terminations
13
 
Section 1.14.
Substitution of Lenders
14
 
Section 1.15.
Appointment of the Company as Agent for Borrowers
14
 
Section 1.16.
Swing Loans
14
 
Section 1.17.
Increase in Revolving Credit Commitments, Additional Term Loans
16
 
Section 1.18.
Defaulting Lenders

 
17
SECTION 2.
FEES
 

17
 
Section 2.1.
Fees
 

 
17
SECTION 3.
PLACE AND APPLICATION OF PAYMENTS
 

18
 
Section 3.1.
Place and Application of Payments
18
 
Section 3.2.
Account Debit
 

 
20
SECTION 4.
THE COLLATERAL AND  GUARANTIES
 

20
 
Section 4.1.
Collateral
20
 
Section 4.2.
Guaranties
21
 
Section 4.3
Joint and Several Obligors
21
 
Section 4.4.
Further Assurances
 
 
21
SECTION 5.
DEFINITIONS; INTERPRETATION
 

21
 
Section 5.1.
Definitions
21
 
Section 5.2.
Interpretation
37
 
Section 5.3.
Change in Accounting Principles
 

37

ii

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SECTION 6.
REPRESENTATIONS AND WARRANTIES
 

38
 
Section 6.1.
Organization and Qualification
38
 
Section 6.2.
Subsidiaries
38
 
Section 6.3.
Authority and Validity of Obligations
39
 
Section 6.4.
Use of Proceeds; Margin Stock
39
 
Section 6.5.
Financial Reports
39
 
Section 6.6.
No Material Adverse Change
40
 
Section 6.7.
Full Disclosure
40
 
Section 6.8.
Trademarks, Franchises, and Licenses
40
 
Section 6.9.
Governmental Authority and Licensing
40
 
Section 6.10.
Good Title
40
 
Section 6.11.
Litigation and Other Controversies
40
 
Section 6.12.
Taxes
41
 
Section 6.13.
Approvals
41
 
Section 6.14.
Affiliate Transactions
41
 
Section 6.15.
Investment Company
41
 
Section 6.16.
ERISA
41
 
Section 6.17.
Compliance with Laws
41
 
Section 6.18.
Other Agreements
42
 
Section 6.19.
Solvency
42
 
Section 6.20.
No Default
42
 
Section 6.21.
No Broker Fees.
 

 
42
SECTION 7.
CONDITIONS PRECEDENT
 

42
 
Section 7.1.
All Credit Events
42
 
Section 7.2.
Initial Credit Event
 

43
SECTION 8.
COVENANTS
 

 
45
 
Section 8.1.
Maintenance of Business
45
 
Section 8.2.
Maintenance of Properties
46
 
Section 8.3.
Taxes and Assessments
46
 
Section 8.4.
Insurance
46
 
Section 8.5.
Financial Reports
46
 
Section 8.6.
Inspection
48
 
Section 8.7.
Borrowings and Guaranties
48
 
Section 8.8.
Liens
49
 
Section 8.9.
Investments, Acquisitions, Loans and Advances
50
 
Section 8.10.
Mergers, Consolidations and Sales
52
 
Section 8.11.
Maintenance of Subsidiaries
52
 
Section 8.12.
Dividends and Certain Other Restricted Payments
53
 
Section 8.13.
ERISA
53
 
Section 8.14.
Compliance with Laws
53
 
Section 8.15.
Burdensome Contracts With Affiliates
54
 
Section 8.16.
No Changes in Fiscal Year
54
 
Section 8.17.
Formation of Subsidiaries
54

iii

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Section 8.18.
Change in the Nature of Business
54
 
Section 8.19.
Use of Loan Proceeds
54
 
Section 8.20.
No Restrictions
54
 
Section 8.21.
Financial Covenants
54
  Section 8.22.
Post Closing Covenants.
 
 
55
SECTION 9.
EVENTS OF DEFAULT AND REMEDIES
 

55  
Section 9.1.
Events of Default
55
 
Section 9.2.
Non-Bankruptcy Defaults
57
 
Section 9.3.
Bankruptcy Defaults
58
 
Section 9.4.
Collateral for Undrawn Letters of Credit
58
 
Section 9.5.
Notice of Default
59
 
Section 9.6.
Expenses
 

59
SECTION 10.
CHANGE IN CIRCUMSTANCES
 

59
 
Section 10.1.
Change of Law
59
 
Section 10.2.
Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR
59
 
Section 10.3.
Increased Cost and Reduced Return
60
 
Section 10.4.
Lending Offices
61
 
Section 10.5.
Discretion of Lender as to Manner of Funding
 

61
SECTION 11.
THE ADMINISTRATIVE AGENT
 

62
 
Section 11.1.
Appointment and Authorization of Administrative Agent
62
 
Section 11.2.
Administrative Agent and its Affiliates
62
 
Section 11.3.
Action by Administrative Agent
62
 
Section 11.4.
Consultation with Experts
63
 
Section 11.5.
Liability of Administrative Agent; Credit Decision
63
 
Section 11.6.
Indemnity
63
 
Section 11.7.
Resignation of Administrative Agent and Successor Administrative Agent
64
 
Section 11.8.
L/C Issuer and Swing Line Lender.
64
 
Section 11.9.
Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements
65
 
Section 11.10.
Designation of Additional Agents
65
 
Section 11.11.
Authorization to Release or Subordinate or Limit Liens
65
 
Section 11.12.
Authorization to Enter into, and Enforcement of, the Collateral Documents
 

66
SECTION 12.
THE GUARANTEES; JOINT AND SEVERAL OBLIGATIONS
 

66
 
Section 12.1.
The Guarantees
66
 
Section 12.2.
Guarantee Unconditional
67
 
Section 12.3.
Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances
67
 
Section 12.4.
Subrogation
68

iv

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Section 12.5.
Waivers
68
 
Section 12.6.
Limit on Recovery
68
 
Section 12.7.
Stay of Acceleration
68
 
Section 12.8.
Benefit to Guarantors
68
 
Section 12.9.
Guarantor Covenants
69
 
Section 12.10.
Joint and Several Obligors
 

69
SECTION 13.
MISCELLANEOUS
 

70
 
Section 13.1.
Withholding Taxes
70
 
Section 13.2.
No Waiver, Cumulative Remedies
71
 
Section 13.3.
Non-Business Days
71
 
Section 13.4.
Documentary Taxes
71
 
Section 13.5.
Survival of Representations
71
 
Section 13.6.
Survival of Indemnities
72
 
Section 13.7.
Sharing of Set-Off
72
 
Section 13.8.
Notices
72
 
Section 13.9.
Counterparts
73
 
Section 13.10.
Successors and Assigns
73
 
Section 13.11.
Participants
73
 
Section 13.12.
Assignments
74
 
Section 13.13.
Amendments
76
 
Section 13.14.
Headings
77
 
Section 13.15.
Costs and Expenses; Indemnification
77
 
Section 13.16.
Set-off
78
 
Section 13.17.
Entire Agreement
78
 
Section 13.18.
Governing Law
78
 
Section 13.19.
Severability of Provisions
79
 
Section 13.20.
Excess Interest
79
 
Section 13.21.
Construction
79
 
Section 13.22.
Lender’s and L/C Issuer’s Obligations Several; Lenders and their Affiliates
80
 
Section 13.23.
Intentionally Omitted
80
 
Section 13.24.
Submission to Jurisdiction; Waiver of Jury Trial
80
 
Section 13.25.
USA Patriot Act
80
 
Section 13.26.
Confidentiality
80
           Signature Page    S-1 

 
Exhibit A

—

Notice of Payment Request
Exhibit B
—
Notice of Borrowing
Exhibit C
—
Notice of Continuation/Conversion
Exhibit D-1
—
Term Note
Exhibit D-2
—
Revolving Note
Exhibit D-3
—
Swing Note
Exhibit E
—
Compliance Certificate
Exhibit F
—
Additional Guarantor Supplement

Exhibit G
—
Assignment and Acceptance
Exhibit H
—
Commitment Amount Increase Request
Schedule 1
—
Commitments
Schedule 6.2
—
Subsidiaries

v

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CREDIT AGREEMENT

This Credit Agreement is entered into as of November 3, 2008 by and among RC2
Corporation, a Delaware corporation (the “Company”), Learning Curve Brands,
Inc., a Delaware corporation (“LCBI”), Learning Curve Canada Limited, a
corporation incorporated under the laws of Ontario, Canada (“LCCL”), RC2 (Asia)
Limited, a company incorporated in Hong Kong (“RC2 Asia”), RC2 (Australia) Pty.,
Ltd., a proprietary company duly incorporated in Victoria, Australia (“RC2
Australia”), RC2 Deutschland GmbH, a private company duly incorporated and
registered under the laws of Germany (“RC2 Germany”), Racing Champions
International Limited, a corporation organized under the laws of England and
Wales  (“RC2 UK”), Racing Champions Worldwide Limited, a corporation organized
under the laws of England and Wales (“Racing Champions”; and together with the
Company, LCBI, LCCL, RC2 Asia, RC2 Australia, RC2 Germany, RC2 UK, and Racing
Champions collectively, the “Borrowers” and individually, a “Borrower”), the
Subsidiaries of the Company from time to time party to this Agreement, as
Guarantors, the several financial institutions from time to time party to this
Agreement, as Lenders, and Bank of Montreal, as Administrative Agent as provided
herein.  All capitalized terms used herein without definition shall have the
same meanings herein as such terms are defined in Section 5.1 hereof.
 
PRELIMINARY STATEMENT
 
The Borrowers have requested, and the Lenders have agreed to extend, certain
credit facilities on the terms and conditions of this Agreement.
 
Now, Therefore, in consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
 
Section 1.  The Credit Facilities
 
Section 1.1.  Term Loan Commitments.  Subject to the terms and conditions
hereof, each Lender, by its acceptance hereof, severally agrees to make a loan
(individually a “Term Loan” and collectively for all the Lenders the “Term
Loans”) in U.S. Dollars to the Borrowers in the amount of such Lender’s Term
Loan Commitment.  The Term Loans shall be advanced in a single Borrowing on the
Closing Date and shall be made ratably by the Lenders in proportion to their
respective Term Loan Percentages, at which time the Term Loan Commitments shall
expire.  As provided in Section 1.6(a) hereof, the Company, on behalf of the
Borrowers, may elect that the Term Loans be outstanding as Base Rate Loans or
Eurocurrency Loans.  No amount repaid or prepaid on any Term Loan may be
borrowed again.
 
Section 1.2.  Revolving Credit Commitments.  Subject to the terms and conditions
hereof, each Lender, by its acceptance hereof, severally agrees to make a loan
or loans (individually a “Revolving Loan” and collectively the “Revolving
Loans”) in U.S. Dollars to the Borrowers from time to time on a revolving basis
up to the amount of such Lender’s Revolving Credit Commitment, subject to any
reductions thereof pursuant to the terms hereof, before the Revolving Credit
Termination Date.  The sum of the aggregate principal amount of Revolving
Loans,Swing Loans, and L/C Obligations at any time outstanding shall not exceed
the Revolving Credit Commitments in effect at such time. 
 

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 Each Borrowing of Revolving Loans shall be made ratably by the Lenders in
proportion to their respective Revolver Percentages.  As provided in
Section 1.6(a) hereof, the Company, on behalf of the applicable Borrower, may
elect that each Borrowing of Revolving Loans be either Base Rate Loans or
Eurocurrency Loans.  Revolving Loans may be repaid and the principal amount
thereof reborrowed before the Revolving Credit Termination Date, subject to the
terms and conditions hereof.
 
Section 1.3.  Letters of Credit.  (a)  General Terms.  Subject to the terms and
conditions hereof, as part of the Revolving Credit, the L/C Issuer shall issue
standby letters of credit (each a “Letter of Credit”) for the account of the
applicable Borrower of an aggregate undrawn face amount up to the L/C
Sublimit.  Each Letter of Credit shall be issued by the L/C Issuer, but each
Lender shall be obligated to reimburse the L/C Issuer for such Lender’s Revolver
Percentage of the amount of each drawing thereunder and, accordingly, each
Letter of Credit shall constitute usage of the Revolving Credit Commitment of
each Lender pro rata in an amount equal to its Revolver Percentage of the
L/C Obligations then outstanding.  Notwithstanding anything contained herein to
the contrary, each of the Existing L/Cs shall constitute a “Letter of Credit”
herein for all purposes of this Agreement to the same extent, and with the same
force and effect, as if the Existing L/Cs had been issued at the request of the
Company hereunder.
 
(b) Applications.  At any time before the Revolving Credit Termination Date, the
L/C Issuer shall, at the request of the Company, which is acting on behalf of
the Borrowers, issue one or more Letters of Credit in U.S. Dollars, in a form
satisfactory to the L/C Issuer, with expiration dates no later than the earlier
of 12 months from the date of issuance (or which are cancelable not later than
12 months from the date of issuance and each renewal) or 30 days prior to the
Revolving Credit Termination Date, in an aggregate face amount as set forth
above, upon the receipt of an application duly executed by the Company, on
behalf of the applicable Borrower, for the relevant Letter of Credit in the form
then customarily prescribed by the L/C Issuer for the Letter of Credit requested
(each an “Application”).  Notwithstanding anything contained in any Application
to the contrary:  (i) the Borrowers shall pay fees in connection with each
Letter of Credit as set forth in Section 2.1 hereof, (ii) except as otherwise
provided in Section 1.9 or 1.18 hereof, before the occurrence of a Default or an
Event of Default, the L/C Issuer will not call for the funding by the Borrowers
of any amount under a Letter of Credit before being presented with a drawing
thereunder, and (iii) if the L/C Issuer is not timely reimbursed for the amount
of any drawing under a Letter of Credit on the date such drawing is paid, the
Borrowers’ obligation to reimburse the L/C Issuer for the amount of such drawing
shall bear interest (which the Borrowers hereby promise to pay) from and after
the date such drawing is paid at a rate per annum, equal to the sum of the Base
Rate from time to time in effect (computed on the basis of a year of 365 or 366
days, as the case may be, and the actual number of days elapsed) plus the
Applicable Margin for Base Rate Loans.  If the L/C Issuer issues any Letter of
Credit with an expiration date that is automatically extended unless the L/C
Issuer gives notice that the expiration date will not so extend beyond its then
scheduled expiration date, unless the Required Lenders instruct the L/C Issuer
otherwise, the L/C Issuer will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date:  (i) the expiration date of such Letter of Credit if so extended would be
after the Revolving Credit Termination Date, (ii) the Revolving Credit
Commitments have been terminated, or (iii) a Default or an Event of Default
exists and the Administrative Agent, at the request or with the consent of the
Required Lenders, has given the L/C Issuer instructions not to so permit the
extension of the expiration date of such Letter of Credit. 
 

2

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The L/C Issuer agrees to issue amendments to the Letter(s) of Credit increasing
the amount, or extending the expiration date, thereof at the request of the
Company, on behalf of the applicable Borrower, subject to the conditions of
Section 7 hereof and the other terms of this Section 1.3.  Notwithstanding
anything contained herein to the contrary, the L/C Issuer shall be under no
obligation to issue, extend or amend any Letter of Credit if a default of any
Lender’s obligations to fund under Section 1.3(e) exists or any Lender is at
such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into
arrangements with Borrower or such Lender satisfactory to the L/C Issuer to
eliminate the L/C Issuer’s risk with respect to such Lender.
 
(c) The Reimbursement Obligations.  Subject to Section 1.3(b) hereof, the
obligation of the Borrowers to reimburse the L/C Issuer for all drawings under a
Letter of Credit (such obligation of the Borrowers being herein referred to as a
“Reimbursement Obligation”) shall be governed by the Application related to such
Letter of Credit, except that reimbursement shall be made in immediately
available funds by no later than 12:00 Noon (Chicago time) on the date when each
drawing is to be paid if the Company, on behalf of the applicable Borrower, has
been informed of such drawing by the L/C Issuer on or before 9:00 a.m. (Chicago
time) (including the day before such drawing is to be paid) on the date when
such drawing is to be paid or, if notice of such drawing is given to the
Company, on behalf of the applicable Borrower, after 9:00 a.m. (Chicago time) on
the date when such drawing is to be paid, by the end of such day in immediately
available funds, at the Administrative Agent’s principal office in Chicago,
Illinois or such other office as the Administrative Agent may designate in
writing to the Company, on behalf of the applicable Borrower (and the
Administrative Agent shall thereafter cause to be distributed to the L/C Issuer
such amount(s) in like funds).  If the Borrowers do not make any such
reimbursement payment on the date due and the Participating Lenders fund their
participations therein in the manner set forth in Section 1.3(e) below, then all
payments thereafter received by the Administrative Agent in discharge of any of
the relevant Reimbursement Obligations shall be distributed in accordance with
Section 1.3(e) below.
 
(d)  Obligations Absolute.  The Borrowers’ obligation to reimburse L/C
Obligations as provided in subsection (c) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and the relevant Application under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the L/C Issuer under a Letter of Credit against presentation of a draft or other
document that does not strictly comply with the terms of such Letter of Credit,
or (iv) any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrowers obligations hereunder. None of the Administrative Agent,
the Lenders, or the L/C Issuer shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of
 

3

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technical terms or any consequence arising from causes beyond the control of the
L/C Issuer; provided that the foregoing shall not be construed to excuse the
L/C Issuer from liability to the Borrowers to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrowers to the extent permitted by applicable law) suffered by a
Borrower that are caused by the L/C Issuer ’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof.  The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
L/C Issuer (as finally determined by a court of competent jurisdiction), the
L/C Issuer shall be deemed to have exercised care in each such
determination.  In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the L/C Issuer may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
 
(e) The Participating Interests.  Each Lender (other than the Lender acting as
L/C Issuer in issuing the relevant Letter of Credit), by its acceptance hereof,
severally agrees to purchase from the L/C Issuer, and the L/C Issuer hereby
agrees to sell to each such Lender (a “Participating Lender”), an undivided
percentage participating interest (a “Participating Interest”), to the extent of
its Revolver Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer.  Upon any failure by a
Borrower to pay any Reimbursement Obligation at the time required on the date
the related drawing is to be paid, as set forth in Section 1.3(c) above, or if
the L/C Issuer is required at any time to return to any Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of Exhibit A
hereto from the L/C Issuer (with a copy to the Administrative Agent) to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than 1:00 p.m. (Chicago time) the following Business Day, if such
certificate is received after such time, pay to the Administrative Agent for the
account of the L/C Issuer an amount equal to such Participating Lender’s
Revolver Percentage of such unpaid or recaptured Reimbursement Obligation
together with interest on such amount accrued from the date the related payment
was made by the L/C Issuer to the date of such payment by such Participating
Lender at a rate per annum equal to:  (i) from the date the related payment was
made by the L/C Issuer to the date 2 Business Days after payment by such
Participating Lender is due hereunder, the Federal Funds Rate for each day and
(ii) from the date 2 Business Days after the date such payment is due from such
Participating Lender to the date such payment is made by such Participating
Lender, the Base Rate in effect for each such day.  Each such Participating
Lender shall thereafter be entitled to receive its Revolver Percentage of each
payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the L/C Issuer retaining its Revolver Percentage
thereof as a Lender hereunder.  The several obligations of the Participating
Lenders to the L/C Issuer under this Section 1.3 shall be absolute, irrevocable,
and unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any
Participating Lender may have or have had against the Borrower, the L/C Issuer,
the Administrative Agent, any Lender or any other Person whatsoever.  Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of the
Commitment of any Lender after the issuance of the applicable Letter of Credit,
and each payment by a Participating Lender under this Section 1.3 shall be made
without any offset, abatement, withholding or reduction whatsoever.
 

4

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(f)  Indemnification.  The Participating Lenders shall, to the extent of their
respective Revolver Percentages, indemnify the L/C Issuer (to the extent not
reimbursed by the applicable Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the L/C Issuer’s gross negligence or
willful misconduct) that the L/C Issuer may suffer or incur in connection with
any Letter of Credit issued by it.  The obligations of the Participating Lenders
under this Section 1.3(f) and all other parts of this Section 1.3 shall survive
termination of this Agreement and of all Applications, Letters of Credit, and
all drafts and other documents presented in connection with drawings thereunder.
 
(g)  Manner of Requesting a Letter of Credit.  The Company, on behalf of the
applicable Borrower, shall provide at least five (5) Business Days’ advance
written notice to the Administrative Agent of each request for the issuance of a
Letter of Credit, such notice in each case to be accompanied by an Application
for such Letter of Credit properly completed and executed by the Company, on
behalf of the applicable Borrower, and, in the case of an extension or an
increase in the amount of a Letter of Credit, a written request therefor, in a
form acceptable to the Administrative Agent and the L/C Issuer, in each case,
together with the fees called for by this Agreement.  The Administrative Agent
shall promptly notify the L/C Issuer of the Administrative Agent’s receipt of
each such notice (and the L/C Issuer shall be entitled to assume that the
conditions precedent to any such issuance, extension, amendment or increase have
been satisfied unless notified to the contrary by the Administrative Agent or
the Required Lenders) and the L/C Issuer shall promptly notify the
Administrative Agent and the Lenders of the issuance of the Letter of Credit so
requested.
 
(h)  Replacement of the L/C Issuer.  The L/C Issuer may be replaced at any time
by written agreement among the Company, on behalf of the Borrowers, the
Administrative Agent, the replaced L/C Issuer and the successor L/C Issuer.  The
Administrative Agent shall notify the Lenders of any such replacement of the
L/C Issuer.  At the time any such replacement shall become effective, the
Borrowers shall pay all unpaid fees accrued for the account of the replaced
L/C Issuer.  From and after the effective date of any such replacement (i) the
successor L/C Issuer shall have all the rights and obligations of the L/C Issuer
under this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to the term “L/C Issuer ” shall be deemed to refer to
such successor or to any previous L/C Issuer, or to such successor and all
previous L/C Issuer s, as the context shall require.  After the replacement of a
L/C Issuer hereunder, the replaced L/C Issuer shall remain a party hereto and
shall continue to have all the rights and obligations of a L/C Issuer under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
 
Section 1.4.  Applicable Interest Rates.  (a) Base Rate Loans.  Each Base Rate
Loan made or maintained by a Lender shall bear interest during each Interest
Period it is outstanding (computed on the basis of a year of 365 or 366 days, as
the case may be, and the actual days elapsed) on the unpaid principal amount
thereof from the date such Loan is advanced, continued or created by conversion
from a Eurocurrency Loan, until maturity (whether by acceleration or otherwise)
at a rate per annum equal to the sum of the Applicable Margin plus the Base Rate
from time to time in effect, payable by the Borrowers on the last day of each
Interest Period and at maturity (whether by acceleration or otherwise).
 

5

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(b)  Eurocurrency Loans.  Each Eurocurrency Loan made or maintained by a Lender
shall bear interest during each Interest Period it is outstanding (computed on
the basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued or created by
conversion from a Base Rate Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Adjusted LIBOR applicable for such Interest Period, payable on the last day
of the Interest Period and at maturity (whether by acceleration or otherwise),
and, if the applicable Interest Period is longer than three months, on each day
occurring every three months after the commencement of such Interest Period.
 
(c)  Rate Determinations. The Administrative Agent shall determine each interest
rate applicable to the Loans and the Reimbursement Obligations hereunder, and
its determination thereof shall be conclusive and binding except in the case of
manifest error.
 
Section 1.5.  Minimum Borrowing Amounts; Maximum Eurocurrency Loans.    Each
Borrowing of Base Rate Loans shall be in an amount not less than $2,000,000 or
such greater amount which is an integral multiple of $100,000.  Each Borrowing
of Eurocurrency Loans shall be in an amount not less than $4,000,000 or such
greater amount which is an integral multiple of $100,000.  Without the
Administrative Agent’s consent, there shall not be more than ten (10) Borrowings
of Eurocurrency Loans outstanding hereunder at any one time.
 
Section 1.6.  Manner of Borrowing Loans and Designating Applicable Interest
Rates.  (a) Notice to the Administrative Agent.  The Company, on behalf of the
Borrowers, shall give notice to the Administrative Agent by no later than
12:00 noon (Chicago time):  (i) at least 3 Business Days before the date on
which the Company, on behalf of the applicable Borrower, requests the Lenders to
advance a Borrowing of Eurocurrency Loans and (ii) on the date the Company, on
behalf of the applicable Borrower, requests the Lenders to advance a Borrowing
of Base Rate Loans.  The Loans included in each Borrowing shall bear interest
initially at the type of rate specified in such notice of a new
Borrowing.  Thereafter, subject to the terms and conditions hereof, the Company,
on behalf of the applicable Borrower, may from time to time elect to change or
continue the type of interest rate borne by each Borrowing or, subject to the
minimum amount requirement contained in Section 1.5 for each outstanding
Borrowing, a portion thereof, as follows:  (i) if such Borrowing is of
Eurocurrency Loans, on the last day of the Interest Period applicable thereto,
the Company, on behalf of the applicable Borrower, may (subject to the notice
requirement set forth herein) continue part or all of such Borrowing as
Eurocurrency Loans or convert part or all of such Borrowing into Base Rate Loans
or (ii) if such Borrowing is of Base Rate Loans, on any Business Day, the
Company, on behalf of the applicable Borrower, may convert all or part of such
Borrowing into Eurocurrency Loans for an Interest Period or Interest Periods
specified by the Company.  

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The Company, on behalf of the applicable Borrower, shall give all such notices
requesting the advance, continuation or conversion of a Borrowing to the
Administrative Agent by telephone or telecopy (which notice shall be irrevocable
once given and, if by telephone, shall be promptly confirmed in writing),
substantially in the form attached hereto as Exhibit B (Notice of Borrowing) or
Exhibit C (Notice of Continuation/Conversion), as applicable, or in such other
form acceptable to the Administrative Agent.  Notice of the continuation of a
Borrowing of Eurocurrency Loans for an additional Interest Period or of the
conversion of part or all of a Borrowing of Base Rate Loans into Eurocurrency
Loans must be given by no later than 10:00 a.m. (Chicago time) at least
3 Business Days before the date of the requested continuation or
conversion.  All such notices concerning the advance, continuation or conversion
of a Borrowing shall specify the date of the requested advance, continuation or
conversion of a Borrowing (which shall be a Business Day), the amount of the
requested Borrowing to be advanced, continued or converted, the type of Loans to
comprise such new, continued or converted Borrowing and, if such Borrowing is to
be comprised of Eurocurrency Loans, the currency and the Interest Period
applicable thereto.  Upon notice to the Company by the Administrative Agent or
the Required Lenders, no Borrowing of Eurocurrency Loans shall be advanced,
continued, or created by conversion if any Default or Event of Default then
exists.  The Borrowers agree that the Administrative Agent may rely on any such
telephonic or telecopy notice given by any person the Administrative Agent in
good faith believes is an Authorized Representative of the Company without the
necessity of independent investigation, and in the event any such notice by
telephone conflicts with any written confirmation such telephonic notice shall
govern if the Administrative Agent has acted in reliance thereon.
 
(b) Notice to the Lenders.  The Administrative Agent shall give prompt
telephonic or telecopy notice to each Lender of any notice from the Company
received pursuant to Section 1.6(a) above and, if such notice requests the
Lenders to make Eurocurrency Loans, the Administrative Agent shall give notice
to the Company and each Lender by like means of the interest rate applicable
thereto promptly after the Administrative Agent has made such determination.
 
(c) Company’s Failure to Notify; Automatic Continuations and Conversions.  Any
outstanding Borrowing of Base Rate Loans shall automatically be continued for an
additional Interest Period on the last day of its then current Interest Period
unless the Company, on behalf of the applicable Borrower, has notified the
Administrative Agent within the period required by Section 1.6(a) that such
Borrower intends to convert such Borrowing into a Borrowing of Eurocurrency
Loans or such Borrowing is prepaid in accordance with Section 1.9(a).  If the
Company, on behalf of the applicable Borrower, fails to give notice pursuant to
Section 1.6(a) above of the continuation or conversion of any outstanding
principal amount of a Borrowing of Eurocurrency Loans before the last day of its
then current Interest Period within the period required by Section 1.6(a) and
such Borrowing is not prepaid in accordance with Section 1.9(a), such Borrowing
shall automatically be converted into a Borrowing of Base Rate Loans.  In the
event the Company, on behalf of the applicable Borrower, fails to give notice
pursuant to Section 1.6(a) above of a Borrowing equal to the amount of a
Reimbursement Obligation and has not notified the Administrative Agent by
12:00 noon (Chicago time) on the day such Reimbursement Obligation becomes due
that it intends to repay such Reimbursement Obligation through funds not
borrowed under this Agreement, the relevant Borrower shall be deemed to have
requested a Borrowing of Base Rate Loans under the Revolving Credit (or, at the
option of the Administrative Agent, under the Swing Line) on such day in the
amount of theReimbursement Obligation then due, which Borrowing shall be applied
to pay the Reimbursement Obligation then due.
 
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(d) Disbursement of Loans.  Not later than 1:00 p.m. (Chicago time) on the date
of any requested advance of a new Borrowing, subject to Section 7 hereof, each
Lender shall make available its Loan comprising part of such Borrowing in funds
immediately available at the principal office of the Administrative Agent (or
its Affiliate’s) in Chicago, Illinois.  The Administrative Agent shall make the
proceeds of each new Borrowing available to the relevant Borrower at the
Administrative Agent’s principal office in Chicago, Illinois, by depositing such
proceeds to the credit of such Borrower’s Designated Disbursement Account or as
the Company, on behalf of the relevant Borrower, and the Administrative Agent
may otherwise agree.
 
(e) Administrative Agent Reliance on Lender Funding.  Unless the Administrative
Agent shall have been notified by a Lender prior to (or, in the case of a
Borrowing of Base Rate Loans, by 1:00 p.m. (Chicago time) on the date on which
such Lender is scheduled to make payment to the Administrative Agent of the
proceeds of a Loan (which notice shall be effective upon receipt) that such
Lender does not intend to make such payment, the Administrative Agent may assume
that such Lender has made such payment when due and the Administrative Agent may
in reliance upon such assumption (but shall not be required to) make available
to the applicable Borrower the proceeds of the Loan to be made by such Lender
and, if any Lender has not in fact made such payment to the Administrative
Agent, such Lender shall, on demand, pay to the Administrative Agent the amount
made available to the applicable Borrower attributable to such Lender together
with interest thereon in respect of each day during the period commencing on the
date such amount was made available to the applicable Borrower and ending on
(but excluding) the date such Lender pays such amount to the Administrative
Agent at a rate per annum equal to:  (i) from the date the related advance was
made by the Administrative Agent to the date 2 Business Days after payment by
such Lender is due hereunder, the Federal Funds Rate in effect for each such day
and (ii) from the date 2 Business Days after the date such payment is due from
such Lender to the date such payment is made by such Lender, the Base Rate in
effect for each such day.  If such amount is not received from such Lender by
the Administrative Agent immediately upon demand, the Borrowers will, on demand,
repay to the Administrative Agent the proceeds of the Loan attributable to such
Lender with interest thereon at a rate per annum equal to the interest rate
applicable to the relevant Loan, but without such payment being considered a
payment or prepayment of a Loan under Section 1.12 hereof so that the Borrowers
will have no liability under such Section with respect to such payment.
 
Section 1.7.  Interest Periods.  As provided in Section 1.6(a) hereof, at the
time of each request to advance, continue or create by conversion a Borrowing of
Eurocurrency Loans or Swing Loans, the Company, on behalf of the applicable
Borrower, shall select an Interest Period applicable to such Loans from among
the available options.  The term “Interest Period” means the period commencing
on the date a Borrowing of Loans is advanced, continued or created by conversion
and ending:  (a) in the case of Base Rate Loans and Swing Loans bearing interest
at the Base Rate, on the last day of the calendar quarter (i.e., the last day of
March, June, September or December, as applicable) in which such Borrowing is
advanced, continued or created by conversion (or on the last day of the
following calendar quarter if such Loan is advanced, continued or created by
conversion on the last day of a calendar quarter), (b) in the case of a
Eurocurrency Loan, one, two, three or six months thereafter, and (c) in the case
of a Swing Loan bearing interest at the Swing Loan Lender’s Quoted Rate, on the
date one to five days thereafter as mutually agreed to by the Company, on behalf
of the applicable Borrower, and the Administrative Agent; provided, however,
that:
 
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(i)  any Interest Period for a Borrowing of Revolving Loans consisting of Base
Rate Loans that otherwise would end after the Revolving Credit Termination Date
shall end on the Revolving Credit Termination Date, and any Interest Period for
a Borrowing of Term Loans consisting of Base Rate Loans that otherwise would end
after the final maturity date of the Term Loans shall end on the final maturity
date of the Term Loans;
 
(ii)  no Interest Period with respect to any portion of the Revolving Loans
consisting of Eurocurrency Loans shall extend beyond the Revolving Credit
Termination Date and no Interest Period with respect to any portion of the Term
Loans shall extend beyond the final maturity date of the Term Loans;
 
(iii)  no Interest Period with respect to any portion of the Term Loans
consisting of Eurocurrency Loans shall extend beyond a date on which the
Borrowers are required to make a scheduled payment of principal on the Term
Loans unless the sum of (a) the aggregate principal amount of Term Loans that
are Base Rate Loans plus (b) the aggregate principal amount of Term Loans that
are Eurocurrency Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount to be paid on the Term Loans on such
payment date;
 
(iv)  whenever the last day of any Interest Period would otherwise be a day that
is not a Business Day, the last day of such Interest Period shall be extended to
the next succeeding Business Day, provided that, if such extension would cause
the last day of an Interest Period for a Borrowing of Eurocurrency Loans to
occur in the following calendar month, the last day of such Interest Period
shall be the immediately preceding Business Day; and
 
(v)  for purposes of determining an Interest Period for a Borrowing of
Eurocurrency Loans, a month means a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next calendar
month; provided, however, that if there is no numerically corresponding day in
the month in which such an Interest Period is to end or if such an Interest
Period begins on the last Business Day of a calendar month, then such Interest
Period shall end on the last Business Day of the calendar month in which such
Interest Period is to end.
 
Section 1.8.  Maturity of Loans.   (a) Scheduled Payments of Term Loans.  The
Borrowers shall make principal payments on the Term Loans in quarterly
installments on the last day of each March, June, September, and December in
each year, commencing with the quarter ending March 31, 2009, with the amount of
each such principal installment to equal the amount set forth in Column B below
shown opposite of the relevant due date as set forth in Column A below:
 
Column A

Payment Date 
Column B
Scheduled Principal
Payment on Term Loans 
03/31/09 
$3,750,000 
06/30/09 
$3,750,000 
09/30/09 
$3,750,000 
12/31/09 
$3,750,000 
03/31/10 
$3,750,000 
06/30/10 
$3,750,000 
09/30/10 
$3,750,000 
12/31/10 
$3,750,000
03/31/11 
$3,750,000 
06/30/11 
$3,750,000 
09/30/11 
$3,750,000 
11/01/11 
$33,750,000 

 
; it being agreed that the final payment of both principal and interest not
sooner paid on the Term Loans shall be due and payable on November 1, 2011 the
final maturity thereof.  Each such principal payment shall be applied to the
Lenders holding the Term Loans pro rata based upon their Term Loan Percentages;
provided,however, that if any additional Term Loans are advanced pursuant to
Section 1.17 hereof, each scheduled installment due from and after the date of
such advance through September 30, 2011 shall be increased by an amount equal to
the product of (A) such additional Term Loan advance multiplied by (b) an amount
(expressed as a percentage), the numerator of which is the amount of the
scheduled installment for such period (without giving effect to such additional
Term Loan) and the denominator of which is the outstanding principal balance of
the Term Loans (without giving effect to such additional Term Loans).
 
(b)  Revolving Loans and Swing Loans.  Each Revolving Loan and Swing Loan, both
for principal and interest not sooner paid, shall mature and become due and
payable by the Borrowers on the Revolving Credit Termination Date.
 
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Section 1.9.  Prepayment.s  (a) Optional.   The Borrowers may prepay in whole or
in part (but, if in part, then:  (i) if such Borrowing is of Base Rate Loans, in
an amount not less than $500,000, (ii) if such Borrowing is of Eurocurrency
Loans, in an amount not less than $1,000,000, and (iii) in each case, in an
amount such that the minimum amount required for a Borrowing pursuant to
Sections 1.5 and 1.16 hereof remains outstanding) any Borrowing of
(y) Eurocurrency Loans at any time upon 3 Business Days prior notice by the
Company, on behalf of the Borrowers, to the Administrative Agent, or (z) Base
Rate Loans, at any time upon notice delivered by the Company, on behalf of the
Borrowers, to the Administrative Agent no later than 10:00 a.m. (Chicago time)
on the date of prepayment (or, in any case, such shorter period of time then
agreed to by the Administrative Agent), such prepayment to be made by the
payment of the principal amount to be prepaid and, in the case of any Term Loans
or Eurocurrency Loans or Swing Loans, accrued interest thereon to the date fixed
for prepayment plus any amounts due the Lenders under Section 1.12 hereof.
 
(b)  Mandatory.  (i) Dispositions or Event of Loss.  If the Company or any
Subsidiary shall at any time or from time to time make or agree to make a
Disposition or shall suffer an Event of Loss resulting in Net Cash Proceeds in
excess of $10,000,000 individually or on a cumulative basis in any fiscal year
of the Borrowers, then (x) the Company shall promptly notify the Administrative
Agent of such proposed Disposition or Event of Loss (including the amount of the
estimated Net Cash  Proceeds to be received by such Person in respect thereof)
and (y) promptly upon receipt by such Person of such Net Cash Proceeds in excess
of $10,000,000 from such Disposition or Event of Loss, the Company shall cause
such Person to prepay the Term Loans (or all outstanding Loans and
L/C Obligations if an Event of Default exists) in an aggregate amount equal to
100% of the amount of all such Net Cash Proceeds in excess of $10,000,000;
provided that in the case of each Disposition or Event of Loss, if the Company
states in its notice of such event that such Person intends to reinvest, within
360 days of the applicable Disposition or Event of Loss, the Net Cash Proceeds
thereof in assets similar to the assets which were subject to such Disposition
or Event of Loss, then so long as no Default or Event of Default then exists,
such Person shall not be required to make a mandatory prepayment under this
Section in respect of such Net Cash Proceeds to the extent such Net Cash
Proceeds are actually reinvested in such similar assets with such 360-day
period.  The amount of each such prepayment shall be applied first to the
outstanding Term Loans until paid in full, then to the outstanding principal
amount of Revolving Loans until paid in full and then to cash collateralized
Letters of Credit in accordance with Section 9.4 hereof.
 
(ii)  Debt Issuance.  If after the Closing Date the Company or any Subsidiary
shall issue any Indebted­ness for Borrowed Money, other than Indebtedness for
Borrowed Money permitted by Section 8.7 hereof, the Company shall promptly
notify the Administrative Agent of the estimated Net Cash Proceeds of such
issuance to be received by or for the account of such Person in respect
thereof.  Promptly upon receipt by such Person of Net Cash Proceeds of such
issuance, the Company shall cause such Person to prepay the Term Loans (or all
outstanding Loans and L/C Obligations if an Event of Default exists) in an
aggregate amount equal to 100% of the amount of such Net Cash Proceeds.  The
amount of each such prepayment shall be applied first to the outstanding Term
Loans until paid in full, then to the outstanding principal amount of Revolving
Loans until paid in full and then to cash collateralized Letters of Credit in
accordance with Section 9.4 hereof.  The Borrowers and Guarantors acknowledge
that their performance hereunder shall not limit the rights and remedies of the
Lenders for any breach of Section 8.7 hereof or any other terms of this
Agreement.
 

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(iii)  Commitment Terminations.  The Borrowers shall, on each date the Revolving
Credit Commitments are reduced pursuant to Section 1.13 hereof, prepay the
Revolving Credit Loans and Swing Loans, and, if necessary, prefund the L/C
Obligations by the amount, if any, necessary to reduce the sum of the aggregate
principal amount of Revolving Credit Loans and Swing Loans and L/C Obligations
then outstanding to the amount to which the Revolving Credit Commitments have
been so reduced.
 
(iv)  Application of Prepayments.  Unless the Company, on behalf of the
Borrowers, otherwise directs, prepayments made under this Section 1.9(b) shall
be applied first to Borrowings of Base Rate Loans until payment in full thereof
with any balance applied to Borrowings of Eurocurrency Loans in the order in
which their Interest Periods expire.  Each prepayment of Loans under this
Section 1.9(b) shall be made by the payment of the principal amount to be
prepaid and, in the case of any Term Loans or Eurocurrency Loans or Swing Loans,
accrued interest thereon to the date of prepayment together with any amounts due
the Lenders under Section 1.12 hereof.  Each prefunding of L/C Obligations shall
be made in accordance with Section  9.4 hereof.
 
(c)  Notice; Reborrowing.  The Administrative Agent will promptly advise each
Lender of any notice of prepayment it receives from the Borrowers.  Any amount
of Revolving Loans and Swing Loans paid or prepaid before the Revolving Credit
Termination Date may, subject to the terms and conditions of this Agreement, be
borrowed, repaid and borrowed again. No amount of the Term Loans paid or prepaid
may be reborrowed, and, in the case of any partial prepayment, such prepayment
shall be applied to the remaining amortization payments on the Term Loans on a
ratable basis among all such remaining amortization payments based on the
principal amounts thereof.
 
Section 1.10.  Default Rate.  Notwithstanding anything to the contrary contained
in Section 1.3 hereof, while any Event of Default exists or after acceleration,
the Borrowers shall, jointly and severally, pay interest (after as well as
before entry of judgment thereon to the extent permitted by law) on the
principal amount of all Loans and Reimbursement Obligations and letter of credit
fees at a rate per annum equal to:
 
(a)  for any Base Rate Loan or Swing Loans bearing interest at the Base Rate,
the sum of 2.0% plus the Applicable Margin plus the Base Rate from time to time
in effect;
 
(b)  for any Eurocurrency Loan or Swing Loans bearing interest at the Swing Line
Lender’s Quoted Rate, the sum of 2.0% plus the rate of interest in effect
thereon at the time of such default until the end of the Interest Period
applicable thereto and, thereafter, at a rate per annum equal to the sum of 2.0%
plus the Applicable Margin for Base Rate Loans plus the Base Rate from time to
time in effect;
 
(c)  for any Reimbursement Obligation, the sum of 2.0% plus the amounts due
under Section 1.3 with respect to such Reimbursement Obligation; and
 
(d) for any Letter of Credit, the sum of 2.0% plus the letter of credit fee due
under Section  2.1 with respect to such Letter of Credit;
 
provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or withthe consent of the Required Lenders, with written
notice to the Borrowers.  While any Event of Default exists or after
acceleration, interest shall be paid on demand of the Administrative Agent at
the request or with the consent of the Required Lenders.
 

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Section 1.11.  Evidence of Indebtedness.  (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
 
(b)  The Administrative Agent shall also maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the type thereof and the
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from the Borrowers and each Lender’s share thereof.
 
(c)  The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded absent manifest error; provided,
however, that the failure of the Administrative Agent or any Lender to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrowers to repay the Obligations in accordance with their terms.
 
(d)  Any Lender may request that its Loans be evidenced by a promissory note or
notes in the forms of Exhibit D-1 (in the case of its Term Loan and referred to
herein as a “Term Note”), D-2 (in the case of its Revolving Loans and referred
to herein as a “Revolving Note”), or D-3 (in the case of its Swing Loans and
referred to herein as a “Swing Note”), as applicable (the Term Notes, Revolving
Notes, and Swing Note being hereinafter referred to collectively as the “Notes”
and individually as a “Note”).  In such event, the Borrowers shall execute and
deliver to such Lender a Note payable to such Lender or its registered assigns
in the amount of the Term Loan, Commitment, or Swing Line Sublimit, as
applicable.  Thereafter, the Loans evidenced by such Note or Notes and interest
thereon shall at all times (including after any assignment pursuant to
Section 13.12) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 13.12, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described
in subsections (a) and (b) above.
 
Section 1.12.  Funding Indemnity.  If any Lender shall incur any loss, cost or
expense (including, without limitation, any loss of profit, and any loss, cost
or expense incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender to fund or maintain any Eurocurrency Loan or
Swing Loan or the relending or reinvesting of such deposits or amounts paid or
prepaid to such Lender) as a result of:
 
(a)  any payment, prepayment or conversion of a Eurocurrency Loan or Swing Loan
on a date other than the last day of its Interest Period,
 
(b)  any failure (because of a failure to meet the conditions of Section 7 or
otherwise) by any Borrower to borrow or continue a Eurocurrency Loan or Swing
Loan,or to convert a Base Rate Loan into a Eurocurrency Loan or Swing Loan on
the date specified in a notice given pursuant to Section 1.6(a) or 1.16 hereof,
 

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(c)  any failure by a Borrower to make any payment of principal on any
Eurocurrency Loan or Swing Loan when due (whether by acceleration or otherwise),
or
 
(d)  any acceleration of the maturity of a Eurodollar Loan or Swing Loan as a
result of the occurrence of any Event of Default hereunder,
 
then, within 15 days after the demand by such Lender, the Borrowers shall pay to
such Lender such amount as will reimburse such Lender for such loss, cost or
expense.  If any Lender makes such a claim for compensation, it shall provide to
the Company, on behalf of the Borrowers, with a copy to the Administrative
Agent, a certificate setting forth the amount of such loss, cost or expense in
reasonable detail (including an explanation of the basis for and the computation
of such loss, cost or expense) and the amounts shown on such certificate shall
be deemed prime facie correct, absent manifest error.
 
Section 1.13.  Commitment Terminations.  (a) Optional Revolving Credit
Terminations.  The Borrowers shall have the right at any time and from time to
time, upon 5 Business Days prior written notice given by the Company to the
Administrative Agent (or such shorter period of time agreed to by the
Administrative Agent), to terminate the Revolving Credit Commitments without
premium or penalty and in whole or in part, any partial termination to be (i) in
an amount not less than $5,000,000 and (ii) allocated ratably among the Lenders
in proportion to their respective Revolver Percentages, provided that the
Revolving Credit Commitments may not be reduced to an amount less than the sum
of the aggregate principal amount of Revolving Loans, Swing Loans, and all
L/C Obligations then outstanding.  Any termination of the Revolving Credit
Commitments below the L/C Sublimit or Swing Line Sublimit then in effect shall
reduce the L/C Sublimit and Swing Line Sublimit, as applicable, to an amount
equal to the reduced aggregate amount of the Revolving Credit Commitments.  The
Administrative Agent shall give prompt notice to each Lender of any such
termination of the Revolving Credit Commitments.
 
(b)  Mandatory Revolving Credit Termination.  If at any time Net Cash Proceeds
or other amounts remain after the prepayment of the Term Loans in full pursuant
to Section 1.9(b)(i) or (ii) hereof, the Revolving Credit Commitments shall
ratably terminate by an amount equal to 100% of such excess (i) to the extent
the Revolving Credit Commitments in effect at such time exceed $50,000,000;
provided, that in the absence of an Event of Default that has occurred and is
continuing, such termination shall not reduce the Revolving Credit Commitments
below $50,000,000 and (ii) to the extent that the Revolving Credit Commitments
in effect at such time are $50,000,000 or less, then the Revolving Credit
Commitments shall only be terminated if an Event of Default has occurred and is
continuing.
 
 
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(c)  No Reinstatement.  Any termination of the Revolving Credit Commitments
pursuant to this Section 1.13 may not be reinstated.
 
Section 1.14.  Substitution of Lenders.  In the event (a) the Borrowers receive
a claim from any Lender for compensation under Section 10.3 or 13.1 hereof,
(b) the Borrowers receive a notice from any Lender of any illegality pursuant to
Section 10.1 hereof, (c) any Lender is then a Defaulting Lender or such Lender
is a Subsidiary or Affiliate of a Person who has been deemed insolvent or
becomes the subject of a bankruptcy or insolvency proceeding or a receiver or
conservator has been appointed for any such Person, or (d) a Lender fails to
consent to an amendment or waiver requested under Section 13.13 hereof at a time
when the Required Lenders have approved such amendment or waiver (any such
Lender referred to in clause (a), (b), (c) or (d) above being hereinafter
referred to as an “Affected Lender”), the Borrowers may, in addition to any
other rights the Borrowers may have hereunder or under applicable law, require,
at the Borrowers’ expense, any such Affected Lender to assign, at par plus
accrued interest and fees, without recourse, all of its interest, rights, and
obligations hereunder (including all of its Commitments and the Loans and
participation interests in Letters of Credit and other amounts at any time owing
to it hereunder and the other Loan Documents) to an Eligible Assignee, provided
that (i) such assignment shall not conflict with or violate any law, rule or
regulation or order of any court or other governmental authority, (ii) the
Borrowers shall have received the written consent of the Administrative Agent,
which consent shall not be unreasonably withheld, to such assignment, (iii) the
Borrowers shall have paid to the Affected Lender all monies (together with
amounts due such Affected Lender under Section 1.12 hereof as if the Loans owing
to it were prepaid rather than assigned except if such Lender is being replaced
pursuant to clause (c) above) other than such principal owing to it hereunder,
and (iv) the assignment is entered into in accordance with the other
requirements of Section 13.12 hereof (provided any assignment fees and
reimbursable expenses due thereunder shall be paid by the Borrower).
 
Section 1.15.  Appointment of the Company as Agent for Borrowers.  Each Borrower
hereby irrevocably appoints the Company as its agent hereunder to make requests
on such Borrower’s behalf under Section 1 hereof for Borrowings, to request on
such Borrower’s behalf Letters of Credit and to execute all Applications
therefor, and to take any other action contemplated by the Loan Documents with
respect to the credit extended hereunder to such Borrower.  The Administrative
Agent and the Lenders shall be entitled to conclusively presume that any action
by the Company under the Loan Documents is taken on behalf of all of the
Borrowers whether or not the Company so indicates.
 
Section 1.16.  Swing Loans. (a) Generally.  Subject to the terms and conditions
hereof, as part of the Revolving Credit, the Swing Line Lender may, in its
discretion, make loans in U.S. Dollars to the Borrowers, or any of them, under
the Swing Line (individually a “Swing Loan” and collectively the “Swing Loans”)
which shall not in the aggregate at any time outstanding exceed the Swing Line
Sublimit.  Swing Loans may be availed by the Borrowers from time to time and
borrowings thereunder may be repaid and used again during the period ending on
the Revolving Credit Termination Date; provided, that each Swing Loan must be
repaid on the last day of the Interest Period applicable thereto.  Each Swing
Loan shall be in a minimum amount of $250,000 or such greater amount which is an
integral multiple of $50,000.
 
(b)  Interest on Swing Loans.  Each Swing Loan shall bear interest until
maturity (whether by acceleration or otherwise) at a rate per annum equal to
(i) the sum of the Base Rate plus the Applicable Margin for Base Rate Loans as
from time to time in effect (computed on the basis of a year of 365 or 366 days,
as the case may be, for the actual number of days elapsed) or (ii) the Swing
Line Lender’s Quoted Rate (computed on the basis of a year of 360 days for
theactual number of days elapsed).  Interest on each Swing Loan shall be due and
payable on the last day of its Interest Period and at maturity (whether by
acceleration or otherwise).
 

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(c)  Requests for Swing Loans.  The Company, on behalf of the applicable
Borrower, shall give the Administrative Agent prior notice (which may be written
or oral) no later than 12:00 Noon (Chicago time) on the date upon which a
Borrower requests that any Swing Loan be made, of the amount and date of such
Swing Loan, and the Interest Period requested therefor.  The Administrative
Agent shall promptly advise the Swing Line Lender of any such notice received
from the Company, on behalf of the applicable Borrower.  After receiving such
notice, the Swing Line Lender shall in its discretion quote an interest rate
(which shall never be less than the Administrative Agent’s cost of funds) to the
Company, on behalf of the applicable Borrower, at which the Swing Line Lender
would be willing to make such Swing Loan available to such Borrower for the
Interest Period so requested (the rate so quoted for a given Interest Period
being herein referred to as “Swing Line Lender’s Quoted Rate”).  The Borrowers
acknowledge and agree that the interest rate quote is given for immediate and
irrevocable acceptance.  If the Company, on behalf of the applicable Borrower,
does not so immediately accept the Swing Line Lender’s Quoted Rate for the full
amount requested by such Borrower for such Swing Loan, the Swing Line Lender’s
Quoted Rate shall be deemed immediately withdrawn and such Swing Loan shall bear
interest at the rate per annum determined by adding the Applicable Margin for
Base Rate Loans under the Revolving Credit to the Base Rate as from time to time
in effect.  Subject to the terms and conditions hereof, the proceeds of each
Swing Loan extended to the Borrowers shall be deposited or otherwise wire
transferred to such Borrower’s Designated Disbursement Account or as the
Company, on behalf of the relevant Borrower, the Administrative Agent, and the
Swing Line Lender may otherwise agree.  Anything contained in the foregoing to
the contrary notwithstanding, the undertaking of the Swing Line Lender to make
Swing Loans shall be subject to all of the terms and conditions of this
Agreement (provided that the Swing Line Lender shall be entitled to assume that
the conditions precedent to an advance of any Swing Loan have been satisfied
unless notified to the contrary by the Administrative Agent or the Required
Lenders).
 
(d)  Refunding Loans.  In its sole and absolute discretion, the Swing Line
Lender may at any time, on behalf of the Borrowers (which hereby irrevocably
authorize the Swing Line Lender to act on their behalf for such purpose) and
with notice to the Company, on behalf of the Borrowers, and the Administrative
Agent, request each Lender to make a Revolving Loan in the form of a Base Rate
Loan in an amount equal to such Lender’s Revolver Percentage of the amount of
the Swing Loans outstanding on the date such notice is given.  Unless an Event
of Default described in Section 9.1(j) or 9.1(k) exists with respect to any
Borrower, regardless of the existence of any other Event of Default, each Lender
shall make the proceeds of its requested Revolving Loan available to the
Administrative Agent for the account of the Swing Line Lender), in immediately
available funds, at the Administrative Agent’s (or its Affiliate’s) office in
Chicago, Illinois (or such other location designated by the Administrative
Agent), before 12:00 Noon (Chicago time) on the Business Day following the day
such notice is given.  The Administrative Agent shall promptly remit the
proceeds of such Borrowing to the Swing Line Lender to repay the outstanding
Swing Loans
 
 
 

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(e)  Participations.  If any Lender refuses or otherwise fails to make a
Revolving Loan when requested by the Swing Line Lender pursuant to
Section 1.16(d) above (because anEvent of Default described in Section 9.1(j) or
9.1(k) exists with respect to a Borrower or otherwise), such Lender will, by the
time and in the manner such Revolving Loan was to have been funded to the Swing
Line Lender, purchase from the Swing Line Lender an undivided participating
interest in the outstanding Swing Loans in an amount equal to its Revolver
Percentage of the aggregate principal amount of Swing Loans that were to have
been repaid with such Revolving Loans.  Each Lender that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Revolver Percentage of each payment of principal received on the Swing Loan and
of interest received thereon accruing from the date such Lender funded to the
Swing Line Lender its participation in such Loan.  The several obligations of
the Lenders under this Section shall be absolute, irrevocable, and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Lender may have or have
had against any Borrower, any other Lender, or any other Person
whatsoever.  Without limiting the generality of the foregoing, such obligations
shall not be affected by any Default or Event of Default or by any reduction or
termination of the Commitments of any Lender, and each payment made by a Lender
under this Section shall be made without any offset, abatement, withholding, or
reduction whatsoever.
 
Section 1.17.  Increase in Revolving Credit Commitments, Additional Term
Loans..  The Company, on behalf of the Borrowers, may from time to time in
consultation with the Administrative Agent, on any Business Day prior to the
Revolving Credit Termination Date so long as no Event of Default exists,
increase the aggregate outstanding amount of the Revolving Credit Commitments
and/or increase the aggregate outstanding principal amount of the Term Loans, by
delivering a Commitment Amount Increase Request substantially in the form
attached hereto as Exhibit H or in such other form reasonably acceptable to the
Administrative Agent at least ten (10) Business Days prior to the stated
effective date of such increase (the “Commitment Amount Increase”) identifying
any additional Lender(s) (or additional Revolving Credit Commitment or Term
Loans for existing Lender(s)) and the amount of its Revolving Credit Commitment
or Term Loans (or additional amount of its Revolving Credit Commitment(s) or
Term Loans); provided, however, that (i) any increase shall be in an amount not
less than $10,000,000 and for all such increases shall not exceed $50,000,000 in
the aggregate, (ii) any additional Term Loans advanced hereunder shall be on the
same terms and conditions as the Term Loans except that the Borrowers and the
Lenders providing such additional Term Loans may determine the interest rate
applicable to such additional Term Loans, and (iii) if the Borrowers invite
additional Lenders to join this Agreement, such additional Lenders shall enter
into such joinder agreements to give effect thereto as the Administrative Agent
may reasonably request.  The effective date of any Commitment Amount Increase
shall be agreed upon by the Borrowers and the Administrative Agent.  It shall be
a condition to such effectiveness that either no Eurocurrency Loans be
outstanding on the date of such effectiveness or the Borrowers pay any
applicable breakage cost under Section 1.12 incurred by any Lender resulting
from the repayment of the applicable Loans.  The Borrowers agree to pay any
reasonable expenses of the Administrative Agent relating to any Commitment
Amount Increase.  Notwithstanding anything herein to the contrary, no Lender
shall have any obligation to increase its Revolving Credit Commitment or advance
additional Term Loans and no Lender’s Revolving Credit Commitment shall be
increased without its consent thereto, and each Lender may at its option,
unconditionally and without cause, decline to increase its Revolving Credit
Commitment or advance additional Term Loans.  Any additional Term Loan advanced
under this Section 1.17 shall be a “Term Loan” for all purposes of this
Agreement.
 

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Section 1.18.  Defaulting Lenders.  Anything contained herein to the contrary
notwithstanding, in the event that any Lender at any time is a Defaulting
Lender, then (a) during any Default Period with respect to such Defaulting
Lender, such Defaulting Lender shall be deemed not to be a “Lender” for purposes
of voting on any matters (including the granting of any consents or waivers)
with respect to any of the Loan Documents; (b) to the extent permitted by
applicable law, until such time as the Default Excess with respect to such
Defaulting Lender shall have been reduced to zero, any voluntary prepayment of
the Loans shall, if the Administrative Agent so directs at the time of receiving
such voluntary prepayment, be applied to the Loans of the other Lenders as if
such Defaulting Lender had no Loans outstanding; (c) such Defaulting Lender’s
Commitments and outstanding Loans shall be excluded for purposes of calculating
any commitment fee payable to Lenders pursuant to Section 2.1 in respect of any
day during any Default Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any fee pursuant to
Section 2.1 with respect to such Defaulting Lender’s Commitment in respect of
any Default Period with respect to such Defaulting Lender (and any Letter of
Credit fee otherwise payable to a Lender who is a Defaulting Lender shall
instead be paid to the Company in the event that the Company has delivered to
the L/C Issuer cash collateral pursuant to clause (e) below or, if such cash
collateral has not been delivered, to the L/C Issuer for its use and benefit);
(d) the utilization of Commitments as at any date of determination shall be
calculated as if such Defaulting Lender had funded all Loans of such Defaulting
Lender; and (e) if so requested by the L/C Issuer at any time during the Default
Period with respect to such Defaulting Lender, the Borrowers shall deliver to
the Administrative Agent cash collateral in an amount equal to such Defaulting
Lender’s Percentage of L/C Obligations then outstanding (to be held by the
Administrative Agent as set forth in Section 9.4 hereof).  No Commitment of any
Lender shall be increased or otherwise affected, and, except as otherwise
expressly provided in this Section 1.18, performance by the Borrowers of their
obligations hereunder and the other Loan Documents shall not be excused or
otherwise modified as a result of the operation of this Section 1.18.  The
rights and remedies against a Defaulting Lender under this Section 1.18 are in
addition to other rights and remedies which the Borrowers may have against such
Defaulting Lender and which the Administrative Agent or any Lender may have
against such Defaulting Lender.
 
SECTION 2.  FEES.
 
Section 2.1.  Fees.  (a) Revolving Credit Commitment Fee.  The Borrowers shall
pay to the Administrative Agent for the ratable account of the Lenders in
accordance with their Revolver Percentages a commitment fee at the rate per
annum equal to the Applicable Margin (computed on the basis of a year of
360 days and the actual number of days elapsed) on the average daily Unused
Revolving Credit Commitments.  Such commitment fee shall be payable
quarter-annually in arrears on the last day of each March, June, September, and
December in each year (commencing on the first such date occurring after the
date hereof) and on the Revolving Credit Termination Date, unless the Revolving
Credit Commitments are terminated in whole on an earlier date, in which event
the commitment fee for the period to the date of such termination in whole shall
be paid on the date of such termination.
 

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(b)  Letter of Credit Fees.  On the date of issuance or extension, or increase
in the amount, of any Letter of Credit pursuant to Section 1.3 hereof, the
applicable Borrower shall pay to the L/C Issuer for its own account a fronting
fee equal to 0.25% of the face amount of (or of the increase in the face amount
of) such Letter of Credit.  Quarterly in arrears, on the last day of each March,
June, September, and December, commencing on the first such date occurring after
the date hereof, the Borrower shall pay to the Administrative Agent, for the
ratable benefit of the Lenders in accordance with their Revolver Percentages, a
letter of credit fee at a rate per annum equal to the Applicable Margin
(computed on the basis of a year of 360 days and the actual number of days
elapsed) in effect during each day of such quarter applied to the daily average
face amount of Letters of Credit outstanding during such quarter.  In addition,
the applicable Borrower shall pay to the L/C Issuer for its own account the L/C
Issuer’s standard issuance, drawing, negotiation, amendment, assignment, and
other administrative fees for each Letter of Credit established by the L/C
Issuer from time to time.
 
(c)  Upfront Fees.  On the Closing Date, the Borrowers shall pay to the
Administrative Agent, for the account of the Lenders, upfront fees in the
amounts previously agreed to by the Borrowers, the Lenders and the
Administrative Agent.
 
(d)  Administrative Agent Fees.  The Borrowers shall pay to the Administrative
Agent, for its own use and benefit, the arrangement fees and administrative fees
agreed to between the Administrative Agent and the Borrowers in a fee letter
dated as of October 17, 2008 or as otherwise agreed to in writing between them.
 
(e)  Audit Fees.  The Borrowers shall pay to the Administrative Agent for its
own use and benefit charges for audits of the Collateral performed by the
Administrative Agent or its agents or representatives in such amounts as the
Administrative Agent may from time to time request (the Administrative Agent
acknowledging and agreeing that such charges shall be computed in the same
manner as it at the time customarily uses for the assessment of charges for
similar collateral audits); provided, however, that in the absence of any
Default and Event of Default, the Borrowers shall not be required to pay the
Administrative Agent for more than one such audit per calendar year.
 
SECTION 3.  PLACE AND APPLICATION OF PAYMENTS.
 
Section 3.1.  Place and Application of Payments.  All payments of principal of
and interest on the Loans and the Reimbursement Obligations, and of all other
Obligations payable by the Borrowers under this Agreement and the other Loan
Documents, shall be made by the Borrowers to the Administrative Agent by no
later than 12:00 Noon (Chicago time) on the due date thereof at the office of
the Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Company, on behalf of the Borrowers),
for the benefit of the Lender or Lenders entitled thereto.  Any payments
received after such time shall be deemed to have been received by the
Administrative Agent on the next Business Day.  All such payments shall be made
in U.S. Dollars, in immediately available funds at the place of payment, in each
case without set-off or counterclaim.  The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest on Loans and on Reimbursement Obligations in which the
Lenders have purchased Participating Interests ratably to the Lenders and like
funds relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this
Agreement.  If the Administrative Agent causes amounts to be distributed to the
Lenders in reliance upon the assumption that the Borrowers will make a scheduled
payment and such scheduled payment isnot so made, each Lender shall, on demand,
repay to the Administrative Agent the amount distributed to such Lender together
with interest thereon in respect of each day during the period commencing on the
date such amount was distributed to such Lender and ending on (but excluding)
the date such Lender repays such amount to the Administrative Agent, at a rate
per annum equal to:  (i) from the date the distribution was made to the date 2
Business Days after payment by such Lender is due hereunder, the Federal Funds
Rate for each such day and (ii) from the date 2 Business Days after the date
such payment is due from such Lender to the date such payment is made by such
Lender, the Base Rate in effect for each such day.
 

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Anything contained herein to the contrary notwithstanding (including, without
limitation, Section 1.9(b) hereof), all payments and collections received in
respect of the Obligations and all proceeds of the Collateral received, in each
instance, by the Administrative Agent or any of the Lenders after acceleration
or the final maturity of the Obligations or termination of the Commitments as a
result of an Event of Default shall be remitted to the Administrative Agent and
distributed as follows:
 
(a)  first, to the payment of any outstanding costs and expenses incurred by the
Administrative Agent, and any security trustee therefor, in monitoring,
verifying, protecting, preserving or enforcing the Liens on the Collateral, in
protecting, preserving or enforcing rights under the Loan Documents, and in any
event including all costs and expenses of a character which the Borrowers have
agreed to pay the Administrative Agent or the Lenders under Section 13.15 hereof
(such funds to be retained by the Administrative Agent for its own account
unless it has previously been reimbursed for such costs and expenses by the
Lenders, in which event such amounts shall be remitted to the Lenders to
reimburse them for payments theretofore made to the Administrative Agent);
 
(b)  second, to the payment of the Swing Loans, both for principal and accrued
but unpaid interest;
 
(c)  third, to the payment of any outstanding interest and fees due under the
Loan Documents to be allocated pro rata in accordance with the aggregate unpaid
amounts owing to each holder thereof;
 
(d)  fourth, to the payment of principal on the Loans (other than Swing Loans),
unpaid Reimbursement Obligations, together with amounts to be held by the
Administrative Agent as collateral security for any outstanding L/C Obligations
pursuant to Section 9.4 hereof (until the Administrative Agent is holding an
amount of cash equal to the then outstanding amount of all such
L/C Obligations), and Hedging Liability, the aggregate amount paid to, or held
as collateral security for, the Lenders and L/C Issuer and, in the case of
Hedging Liability, their Affiliates to be allocated pro rata in accordance with
the aggregate unpaid amounts owing to each holder thereof;
 
(e)  fifth, to the payment of all other unpaid Obligations and all other
indebtedness, obligations, and liabilities of the Borrowers and their
Subsidiaries secured by the Loan Documents (including, without limitation, Funds
Transfer and DepositAccount Liability) to be allocated pro rata in accordance
with the aggregate unpaid amounts owing to each holder thereof; and
 

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(f)  finally, to the Company, on behalf of the Borrowers, or whoever else may be
lawfully entitled thereto.
 
Section 3.2.  Account Debit.  Each Borrower hereby irrevocably authorizes the
Administrative Agent to charge any of such Borrower’s deposit accounts
maintained with the Administrative Agent for the amounts from time to time
necessary to pay any then due Obligations; provided that the Borrowers
acknowledge and agree that the Administrative Agent shall not be under an
obligation to do so and the Administrative Agent shall not incur any liability
to the Borrowers or any other Person for the Administrative Agent’s failure to
do so.
 
SECTION 4.  THE COLLATERAL AND GUARANTIES.
 
Section 4.1.  Collateral.  The Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall be secured by (a) valid, perfected
and enforceable Liens on all right, title, and interest of the Company and each
Subsidiary in all capital stock and other equity interests held by such Person
in each of its Subsidiaries, whether now owned or hereafter formed or acquired,
and all proceeds thereof, and (b) valid, perfected, and enforceable Liens on all
right, title, and interest of the Company and each Domestic Subsidiary in all of
their accounts, chattel paper, instruments, documents, general intangibles,
letter-of-credit rights, supporting obligations, deposit accounts, investment
property, inventory, equipment, fixtures, commercial tort claims and certain
other Property, whether now owned or hereafter acquired or arising, and all
proceeds thereof (the “Collateral”); provided, however, that:  (i) until a
Default or Event of Default has occurred and is continuing and thereafter until
otherwise required by the Administrative Agent or the Required Lenders, Liens on
local petty cash accounts maintained by the Company and its Subsidiaries in
proximity to their operations need not be perfected, provided that the total
amount on deposit at any one time not so perfected shall not exceed $1,000,000
in the aggregate and Liens on payroll accounts maintained by the Company and its
Subsidiaries need not be perfected provided the total amount on deposit at any
time does not exceed the current amount of their payroll obligations,
(ii) unless otherwise required by the Administrative Agent or the Required
Lenders during the existence of any Event of Default, Liens on the Voting Stock
of a Foreign Subsidiary which, if granted, would cause a material adverse effect
on the Company’s federal income tax liability shall be limited to 65% of the
total outstanding Voting Stock of such Foreign Subsidiary, (iii) unless
otherwise required by the Administrative Agent or the Required Lenders during
the existence of any Event of Default, Liens need not be granted on the
Collateral of a Foreign Subsidiary which, if granted, would cause a material
adverse effect on the Company’s federal income tax liability, (iv) unless
otherwise required by the Administrative Agent or the Required Lenders, Foreign
Subsidiaries need not grant to the Administrative Agent Liens on the capital
stock or other equity interests held by such Foreign Subsidiary in another
Foreign Subsidiary, and (v) until a Default or Event of Default has occurred and
is continuing and thereafter until otherwise required by the Administrative
Agent or the Required Lenders, Liens on U.S. general intangibles, to the extent
perfected by recording an instrument with the U.S. Patent and Trademark Office,
need only be perfected on material U.S. general intangibles.  The Borrowers and
Guarantors acknowledge and agree that the Liens on the Collateral shall
begranted to the Administrative Agent for the benefit of the holders of the
Obligations, the Hedging Liability, and the Funds Transfer and Deposit Account
Liability and shall be valid and perfected first priority Liens subject however,
to the proviso appearing at the end of the preceding sentence and to Liens
permitted by Section 8.8 hereof, in each case, pursuant to one or more
Collateral Documents from such Persons, each in form and substance satisfactory
to the Administrative Agent.
 

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Section 4.2.  Guaranties.  The payment and performance of the Obligations,
Hedging Liability, and Funds Transfer and Deposit Account Liability shall at all
times be guaranteed by each direct and indirect Subsidiary of the Company (other
than the Borrowers) pursuant to Section 12 hereof or pursuant to one or more
guaranty agreements in form and substance acceptable to the Administrative
Agent, as the same may be amended, modified, or supplemented from time to time
(individually a “Guaranty” and collectively, the “Guaranties”, and the Company
and each such Subsidiary executing and delivering this Agreement as a Guarantor
(including any Subsidiary hereafter executing and delivering an Additional
Guarantor Supplement in the form called for by Section 12 hereof) or a separate
Guaranty being referred to herein as a “Guarantor” and collectively the
“Guarantors”); provided, however, that unless otherwise required by the
Administrative Agent or the Required Lenders during the existence of any Event
of Default, a Foreign Subsidiary shall not be required to be a guarantor
hereunder if providing such Guaranty would cause a material adverse effect on
the Company’s federal income tax liability.
 
Section 4.3.  Joint and Several Obligors.  The payment and performance of the
Obligations, Hedging Liability and Funds Transfer and Deposit Account Liability
shall at all times be a joint and several obligation of each Borrower pursuant
to Section 12.10 hereof.
 
Section 4.4.  Further Assurances.  The Company and each other Borrower agree
that each shall, and shall cause each of its Subsidiaries to, from time to time
at the request of the Administrative Agent or the Required Lenders, execute and
deliver such documents and do such acts and things as the Administrative Agent
or the Required Lenders may reasonably request in order to provide for and
maintain the guarantees contemplated by this Section 4.  In the event the
Company, any other Borrower or any other Subsidiary of the Company forms or
acquires any Subsidiary after the date hereof, except as otherwise provided in
Section 4.1 and 4.2 above, the Company and the other Borrowers shall promptly
upon such formation or acquisition cause such newly formed or acquired
Subsidiary to execute a Guaranty and such Collateral Documents as are required
by this Section 4 and as the Administrative Agent may then require, and the
Company and the Borrowers shall also deliver to the Administrative Agent, or
cause such Subsidiary to deliver to the Administrative Agent, at the Borrowers’
cost and expense, such other instruments, documents, certificates, and opinions
reasonably required by the Administrative Agent in connection therewith.
 
SECTION 5.  DEFINITIONS; INTERPRETATION
 
Section 5.1.  Definitions.  The following terms when used herein shall have the
following meanings:
 

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“Acquired Business” means the entity or assets acquired by the Company or any
Subsidiary in an Acquisition after the date hereof.
 
“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity of any Person (other than
a Person that is a Subsidiary), or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary) provided that a
Borrower or a Subsidiary of a Borrower is the surviving entity.
 
“Additional Guarantor Supplement” means a letter to the Administrative Agent in
the form attached hereto as Exhibit F executed by a Subsidiary of the Company
after the date hereof whereby it acknowledges that it is a party hereto as a
Guarantor and is liable for the Obligations pursuant to Section 12 hereof.
 
“Adjusted EBITDA” means, with reference to any period, the sum of (a) the EBITDA
of the Company and its Subsidiaries for such period, plus(without duplication)
(b) EBITDA of any Person and its subsidiaries acquired pursuant to
Section 8.9(k) hereof for such period (as if any such Permitted Acquisition had
occurred on the first day of such period), plus (c) adjustments associated with
any Permitted Acquisition to the extent reasonably acceptable to the
Administrative Agent, plus (d) non-recurring costs and extraordinary expenses
incurred during the fiscal year ended December 31, 2007 in connection with the
recall of specific components from the Thomas and Friends product line in an
aggregate amount not to exceed $28,300,000, plus (e) other fees, costs and
expenses incurred or provided for (minus rebates and other reimbursements)
related to the recall of specific components from the Thomas and Friends product
line not to exceed $5,000,000 during the fiscal year ending December 31, 2008,
plus (f) non-recurring costs in connection with the settlement of claims with
HIT Entertainment in an aggregate amount not to exceed $15,000,000, plus
(g) losses on the sale, transfer or disposition of Property during such period,
plus (h) non-recurring costs in connection with the termination of the purchase
agreement for the children’s book division of Publications International,
Limited in an aggregate amount not to exceed $2,000,000, plus (i) non-cash
charges relating to the write-down of the Company’s investment in Meteor the
Monster Truck, Inc. not to exceed $2,100,000 in the aggregate, minus (j) gains
on the sale or transfer of Property during such period, minus (k) EBITDA of any
Person and its subsidiaries sold, transferred or otherwise disposed of during
such period (as if any such sale, transfer or disposition had occurred on the
first day of such period).
 
“Adjusted LIBOR” means, for any Borrowing of Eurocurrency Loans, a rate per
annum determined in accordance with the following formula:
 
Adjusted LIBOR     =                                LIBOR                     
1 - Eurocurrency Reserve Percentage

“Administrative Agent” means Bank of Montreal and any successor pursuant to
Section 11.7 hereof.
 

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“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
“Affiliate” means any Person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, another Person.  A Person
shall be deemed to control another Person for the purposes of this definition if
such Person possesses, directly or indirectly, the power to direct, or cause the
direction of, the management and policies of the other Person, whether through
the ownership of voting securities, common directors, trustees or officers, by
contract or otherwise; provided that, in any event for purposes of this
definition, any Person that owns, directly or indirectly, 10% or more of the
securities having the ordinary voting power for the election of directors or
governing body of a corporation or 10% or more of the partnership or other
ownership interest of any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
 
“Agreement” means this Credit Agreement, as the same may be amended, modified,
restated or supplemented from time to time pursuant to the terms hereof.
 
“Applicable Margin” means, with respect to Loans, Reimbursement Obligations, and
the commitment fees and letter of credit fees payable under Section 2.1 hereof
until the first Pricing Date, the rates per annum shown opposite Level IV below,
and thereafter from one Pricing Date to the next the Applicable Margin means the
rates per annum determined in accordance with the following schedule:
 
Level

Leverage Ratio for Such Pricing Date
 
Applicable Margin for Base Rate Loans under revolving credit and Term Credit and
Reimbursement Obligations shall be:

Applicable Margin for Eurodollar Loans under Revolving credit and Term Credit
and Letter of credit Fee Shall Be:

Applicable Margin for Commitment Fee Shall Be:

         
V

Greater than or equal to 2.25 to 1.0

2.25%

3.25%

0.50%

IV

Less than 2.25 to 1.0, but greater than or equal to 1.75 to 1.0

2.00%

3.00%

0.50%

III

Less than 1.75 to 1.0, but greater than or equal to 1.25 to 1.0

1.75%

2.75%

0.50%

II

Less than 1.25 to 1.0, but greater than or equal to 0.75 to 1.0

1.50%

2.50%

0.50%

I

Less than 0.75 to 1.0

1.25%

2.25%

0.45%

         

For purposes hereof, the term “Pricing Date” means, for any fiscal quarter of
the Borrowers ending on or after December 31, 2008, the date on which the
Administrative Agent is in receipt of the Borrowers’ most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 8.5 hereof.  The
Applicable Margin shall be established based on the Leverage Ratio for the most
recently completed fiscal quarter and the Applicable Margin established on a
Pricing Date shall remain in effect until the next Pricing Date.  If the
Borrowers have not delivered their financial statements by the date such
financial statements (and, in the case of the year-end financial statements,
audit report) are required to be delivered under Section 8.5 hereof, until such
financial statements and audit report are delivered, the Applicable Margin shall
be the highest Applicable Margin (i.e., Level V shall apply).  If the Borrowers
subsequently deliver such financial statements before the next Pricing Date, the
Applicable Margin established by such late delivered financial statements shall
take effect from the date of delivery until the next Pricing Date.  In all other
circumstances, the Applicable Margin established by such financial statements
shall be in effect from the Pricing Date that occurs immediately after the end
of the fiscal quarter covered by such financial statements until the next
Pricing Date.  Each determination of the Applicable Margin made by the
Administrative Agent in accordance with the foregoing shall be conclusive and
binding on the Borrowers and the Lenders if reasonably determined.
 
Notwithstanding the foregoing, in the event that any financial statement or
compliance certificate delivered pursuant to Section 8.5(j) hereof is shown to
be inaccurate at any time this Agreement is in effect (due to an error made by
the Company, and not as a result of a change in GAAP) and as a result of such
inaccuracy the Company is required to restate such financial statements
(regardless of whether (i) the Revolving Credit Commitments are in effect or
(ii) any Loan or other extension of credit is outstanding when such inaccuracy
is discovered or such financial statement or compliance certificate was
delivered), and such inaccuracy, if corrected, would have led to the application
of a higher Applicable Margin for any period (an “Applicable Period”) than the
Applicable Margin applied for such Applicable Period, then (x) the
Borrowersshall promptly deliver to the Administrative Agent a correct compliance
certificate for such Applicable Period, (y) the Applicable Margin for such
Applicable Period shall be determined as if the Leverage Ratio in the corrected
compliance certificate were applicable for such Applicable Period, and (z) the
Borrowers shall promptly, but in any event within five (5) Business Days, pay to
the Lenders the accrued additional interest (but not overdue interest) owing as
a result of such increased Applicable Margin for such Applicable Period.
 

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“Application” is defined in Section 1.3(b) hereof.
 
“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
 
“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 13.12 hereof), and accepted by the Administrative Agent, in
substantially the form of Exhibit G or any other form approved by the
Administrative Agent.
 
“Authorized Representative” means those persons shown on the list of officers
provided by the Borrowers pursuant to Section 7.2 hereof or on any update of any
such list provided by the Borrowers to the Administrative Agent, or any further
or different officers of any Borrower so named by any Authorized Representative
of such Borrower in a written notice to the Administrative Agent.
 
“Base Rate” means for any day the greatest of:  (i) the rate of interest
announced or otherwise established by the Administrative Agent from time to time
as its prime commercial rate, or its equivalent, for U.S. Dollar loans to
borrowers located in the United States as in effect on such day, with any change
in the Base Rate resulting from a change in said prime commercial rate to be
effective as of the date of the relevant change in said prime commercial rate
(it being acknowledged and agreed that such rate may not be the Administrative
Agent’s best or lowest rate), (ii) the sum of (x) the rate determined by the
Administrative Agent to be the average (rounded upward, if necessary, to the
next higher 1/100 of 1%) of the rates per annum quoted to the Administrative
Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds brokers
selected by the Administrative Agent for sale to the Administrative Agent at
face value of Federal funds in the secondary market in an amount equal or
comparable to the principal amount for which such rate is being determined, plus
(y) 1/2 of 1%, and (iii) the LIBOR Quoted Rate for such day plus 1.00%.  As used
herein, the term “LIBOR Quoted Rate” means, for any date, the rate per annum
determined by a fraction, the numerator of which is the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) for deposits in U.S. Dollars for an Interest Period equal to one month,
which appears on the LIBOR01 Page as of 11:00 a.m. (London, England time) on
such date and the denominator of which is 1 minus the Eurodollar Reserve
Percentage.
 
“Base Rate Loan” means a Loan bearing interest at a rate specified in
Section 1.4(a) hereof.
 

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“Borrowers” is defined in the introductory paragraph of this Agreement.
 
“Borrowing” means the total of Loans of a single type advanced, continued for an
additional Interest Period, or converted from a different type into such type by
the Lenders under a Credit on a single date and, in the case of Eurocurrency
Loans, for a single Interest Period.  Borrowings of Loans are made and
maintained ratably from each of the Lenders under a Credit according to their
Percentages of such Credit.  A Borrowing is “advanced” on the day Lenders
advance funds comprising such Borrowing to the applicable Borrower, is
“continued” on the date a new Interest Period for the same type of Loans
commences for such Borrowing, and is “converted” when such Borrowing is changed
from one type of Loans to the other, all as requested by the Company, on behalf
of the Borrowers, pursuant to Section 1.6(a) hereof.  Borrowings of Swing Loans
are made by the Swing Line Lender in accordance with the procedures set forth in
Section 1.16 hereof.
 
“Business Day”means any day (other than a Saturday or Sunday) on which banks are
not authorized or required to close in Chicago, Illinois and, if the applicable
Business Day relates to the advance or continuation of, or conversion into, or
payment of a Eurocurrency Loan, on which banks are dealing in U.S. Dollar
deposits in the interbank Eurocurrency market in London, England and Nassau,
Bahamas.
 
“Capital Expenditures” means, with respect to any period, the aggregate amount
of all expenditures (whether paid in cash or accrued as a liability) by the
Company and its Subsidiaries during that period for the acquisition or leasing
(pursuant to a Capital Lease) of fixed or capital assets or additions to
property, plant, or equipment (including replacements, capitalized repairs, and
improvements) which should be capitalized on the balance sheet of the Company
and its Subsidiaries in accordance with GAAP.
 
“Capital Lease” means any lease of Property which in accordance with GAAP is
required to be capitalized on the balance sheet of the lessee.
 
“Capitalized Lease Obligation” means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
 
“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and any future
amendments.
 
“Change of Control” means any of (a) the acquisition by any “person” or “group”
(as such terms are used in sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) at any time of beneficial ownership of 33-1/3% or more
of the outstanding capital stock or other equity interest of the Company on a
fully-diluted basis, (b) the failure of the Company to own 100% of the Voting
Stock of any Borrower, (c) the failure of individuals who are members of the
board of directors (or similar governing body) of the Company or any Borrower on
the Closing Date (together with any new or replacement directors whose initial
nomination for election was approved by a majority of the directors who were
either directors on the Closing Date or previously so approved) to constitute a
majority of the board of directors (orsimilar governing body) of the Company or
such Borrower, as the case may be, or (d) any “Change of Control” (or words of
like import), as defined in any agreement or indenture relating to any issue of
Indebtedness for Borrowed Money shall occur.
 

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“Closing Date” means the date of this Agreement or such later Business Day upon
which each condition described in Section 7.2 shall be satisfied or waived in a
manner acceptable to the Administrative Agent in its discretion.
 
“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute thereto.
 
“Collateral” means all properties, rights, interests, and privileges from time
to time subject to the Liens granted to the Administrative Agent, or any
security trustee therefor, by the Collateral Documents.
 
“Collateral Account” is defined in Section 9.4 hereof.
 
“Collateral Documents” means the Security Agreement, and all other security
agreements, pledge agreements, assignments, financing statements and other
documents as shall from time to time secure or relate to the Obligations, the
Hedging Liability, and the Funds Transfer and Deposit Account Liability or any
part thereof.
 
“Commitment Amount Increase” is defined in Section 1.17 hereof.
 
“Commitment Amount Increase Request” means a Commitment Amount Increase Request
in the form of Exhibit H hereto.
 
“Commitments” means the Revolving Credit Commitments and Term Loan Commitments.
 
“Company” is defined in the introductory paragraph of this Agreement.
 
“Controlled Group” means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
 
“Credit” means any of the Revolving Credit, the Term Credit or the Swing Line.
 
“Credit Event” means the advancing of any Loan, or extension of the expiration
date or increase in the amount of, any Letter of Credit.
 
“Credit Parties” means, collectively, the Borrowers and the Guarantors.
 
“Default” means any event or condition the occurrence of which would, with the
passage of time or the giving of notice, or both, constitute an Event of
Default.
 
“Designated Disbursement Account” means collectively, the accounts of each
Borrower maintained with the Administrative Agent or its Affiliate and
designated in writing to theAdministrative Agent as such Borrower’s Designated
Disbursement Account (or such other account as the Company, on behalf of such
Borrower, and the Administrative Agent may otherwise agree).
 

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“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans, participations in L/C Obligations or participations in Swing Loans
required to be funded by it hereunder (herein, a “Defaulted Loan”) within
two (2) Business Days of the date required to be funded by it hereunder unless
such failure has been cured, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to paid by it
hereunder within two (2) Business Days of the date when due, unless the subject
of a good faith dispute or unless such failure has been cured, or (c) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding
or a receiver or conservator has been appointed for such Lender.
 
“Default Excess” means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender’s Percentage of the aggregate outstanding
principal amount of Loans of all Lenders (calculated as if all Defaulting
Lenders other than such Defaulting Lender had funded all of their respective
Defaulted Loans) over the aggregate outstanding principal amount of all Loans of
such Defaulting Lender.
 
“Defaulting Lender” has the meaning set forth in Section 1.18.
 
“Default Period” means, with respect to any Defaulting Lender, the period
commencing on the date upon which such Lender first became a Defaulting Lender
and ending on the earliest of the following dates:  (i) the date on which all
Commitments are cancelled or terminated and/or the Obligations are declared or
become immediately due and payable and (ii) the date on which (a) the Default
Excess with respect to such Defaulting Lender shall have been reduced to zero
(whether by the funding by such Defaulting Lender of any Defaulted Loans of such
Defaulting Lender or otherwise) and (b) such Defaulting Lender shall have
delivered to the Company and the Administrative Agent a written reaffirmation of
such Defaulting Lender’s intention to honor its obligations hereunder with
respect to its Commitments.
 
“Disposition” means the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
subsections (a) through (f) of Section 8.10 hereof.
 
“Domestic Borrower” means collectively the Company and each Borrower that is a
Domestic Subsidiary.
 
“Domestic Subsidiary” means each Subsidiary that is not a Foreign Subsidiary.
 
“EBITDA” means, for any Person and with reference to any period, Net Income of
such Person and its subsidiaries for such period plus the sum of all amounts
deducted in arriving at such Net Income amount in respect of (a) Interest
Expense of such Person and its subsidiaries for such period, (b) federal, state,
and local income taxes for such period of such Person and its subsidiaries for
such period, (c) depreciation of fixed assets and amortization of intangible
assets of such Person and its subsidiaries for such period, and (d) non-cash
expenses related to equity awards.
 

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“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, (ii) in the case of any assignment of a
Revolving Credit Commitment, the L/C Issuer, and (iii) unless an Event of
Default has occurred and is continuing, the Borrowers (each such approval not to
be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include any Borrower or Guarantor or
any of such Borrower’s or Guarantor’s Affiliates or Subsidiaries.
 
“Eligible Line of Business” means any business engaged in as of the date of this
Agreement by the Credit Parties or any of their Subsidiaries or any business
substantially similar thereto.
 
“Environmental Law” means any current or future Legal Requirement pertaining to
(a) the protection of health, safety and the indoor or outdoor environment, (b)
the conservation, management or use of natural resources and wildlife, (c) the
protection or use of surface water or groundwater, (d) the management,
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, release, threatened release, abatement, removal, remediation
or handling of, or exposure to, any Hazardous Material or (e) pollution
(including any release to air, land, surface water or groundwater), and any
amendment, rule, regulation, order or directive issued thereunder.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute thereto.
 
“Eurocurrency Loan” means a Loan bearing interest at the rate specified in
Section 1.4(b) hereof.
 
“Eurocurrency Reserve Percentage” means, for any Borrowing of Eurocurrency
Loans, the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal, and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) on “eurocurrency liabilities”, as defined in such Board’s
Regulation D (or in respect of any other category of liabilities that includes
deposits by reference to which the interest rate on Eurocurrency Loans is
determined or any category of extensions of credit or other assets that include
loans by non-United States offices of any Lender to United States residents),
subject to any amendments of such reserve requirement by such Board or its
successor, taking into account any transitional adjustments thereto.  For
purposes of this definition, the Eurocurrency Loans shall be deemed to be
“eurocurrency liabilities” as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D.
 
“Event of Default” means any event or condition identified as such in
Section 9.1 hereof.
 
“Event of Loss” means, with respect to any Property consisting of real estate,
furniture, fixtures, equipment or other fixed assets, any of the
following:  (a) any loss, destruction or damage of such Property or (b) any
condemnation, seizure, or taking, by exercise of the power ofeminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.
 

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 “Existing Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of September 15, 2004, as amended, by and among LCBI,
Learning Curve International, Inc., The First Years Inc., Racing Champions
Worldwide Limited, the Guarantors party thereto, the lenders party thereto and
Harris N.A., as administrative agent.
 
“Existing L/Cs” means the letters of credit issued and outstanding under the
Existing Credit Agreement.
 
“Federal Funds Rate” means the fluctuating interest rate per annum described in
part (x) of clause (ii) of the definition of Base Rate.
 
“Fixed Charge Coverage Ratio” means, at any time the same is to be determined,
the ratio of (a) Adjusted EBITDA of the Company for the four consecutive fiscal
quarters of the Company then ended minus Capital Expenditures during the same
four fiscal quarters then ended to (b) Fixed Charges made during the same four
fiscal quarters then ended.
 
“Fixed Charges” means, with reference to any period, the sum of (a) all
scheduled payments of principal during such period with respect to Indebtedness
for Borrowed Money of the Company and its Subsidiaries, (b) cash Interest
Expense for the Company and its Subsidiaries for such period, (c) federal,
state, and local income taxes paid or payable in cash by the Company and its
Subsidiaries during such period, net of cash refunds received or receivable by
the Company or any Subsidiary during such period, all as disclosed on the
Company’s cash flow statement, and (d) Restricted Payments permitted by Section
8.12(iii) hereof paid in cash during such period.
 
“Foreign Borrower” means each Borrower that is a Foreign Subsidiary.
 
“Foreign Subsidiary” means each Subsidiary which (a) is organized under the laws
of a jurisdiction other than the United States of America or any state thereof
or the District of Columbia, (b) conducts substantially all of its business
outside of the United States of America, and (c) has substantially all of its
assets outside of the United States of America.
 
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
 
“Funds Transfer and Deposit Account Liability” means the liability of a Borrower
or any of its Subsidiaries owing to any of the Lenders, or any Affiliates of
such Lenders, arising out of (a) the execution or processing of electronic
transfers of funds by automatic clearing house transfer, wire transfer or
otherwise to or from the deposit accounts of a Borrower and/or any Subsidiary
now or hereafter maintained with any of the Lenders or their Affiliates, (b) the
acceptance for deposit or the honoring for payment of any check, draft or other
item with respect to any such deposit accounts, and (c) any other deposit,
disbursement, and cash management services afforded to a Borrower or any
Subsidiary by any of such Lenders or their Affiliates.
 

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“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
 
“Guarantor” and “Guarantors” each is defined in Section 4.2 hereof.
 
“Guaranty” and “Guaranties” each is defined in Section 4.2 hereof.
 
“Hazardous Material” means any substance, chemical, compound, product, solid,
gas, liquid, waste, byproduct, pollutant, contaminant or material which is
hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as “hazardous” or “toxic”
or words of like import pursuant to an Environmental Law.
 
“Hedging Liability” means the liability of a Borrower or any Subsidiary to any
of the Lenders, or any Affiliates of such Lenders, in respect of any interest
rate swap agreements, interest rate cap agreements, interest rate collar
agreements, interest rate floor agreements, interest rate exchange agreements,
foreign currency contracts, currency swap contracts, or other similar interest
rate or currency hedging arrangements as such Borrower or such Subsidiary, as
the case may be, may from time to time enter into with any one or more of the
Lenders party to this Agreement or their Affiliates.
 
“Hostile Acquisition” means the acquisition of the capital stock or other equity
interests of a Person through a tender offer or similar solicitation of the
owners of such capital stock or other equity interests which has not been
approved (prior to such acquisition) by resolutions of the Board of Directors of
such Person or by similar action if such Person is not a corporation, and as to
which such approval has not been withdrawn.
 
“Indebtedness for Borrowed Money” means for any Person (without duplication)
(a) all indebtedness of such Person for borrowed money, whether current or
funded, or secured or unsecured, (b) all indebtedness for the deferred purchase
price of Property or services, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of a default are limited to
repossession or sale of such Property), (d) all indebtedness secured by a
purchase money mortgage or other Lien to secure all or part of the purchase
price of Property subject to such mortgage or Lien, (e) all obligations under
leases which shall have been or must be, in accordance with GAAP, recorded as
Capital Leases in respect of which such Person is liable as lessee, (f) any
liability in respect of banker’s acceptances or letters of credit, and (g) any
indebtedness, whether or not assumed, secured by Liens on Property acquired by
such Person at the time of acquisition thereof, it being understood that the
term “Indebtedness for Borrowed Money” shall not include trade payables arising
in the ordinary course of business.
 

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“Interest Expense” means, for any Person with reference to any period, the sum
of all interest charges (including imputed interest charges with respect to
Capitalized Lease Obligations and all amortization of debt discount and expense)
of such Person and its subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
 
“Interest Period” is defined in Section 1.7 hereof.
 
“L/C Issuer” means (i) with respect to the Existing L/Cs, Harris N.A. and (ii)
with respect to all other L/Cs, the Administrative Agent, or any other Lender
requested by the Company, on behalf of the Borrowers, and approved by the
Administrative Agent in its reasonable discretion with respect to any Letter of
Credit.
 
“L/C Obligations”means the aggregate undrawn face amounts of all outstanding
Letters of Credit and all unpaid Reimbursement Obligations.
 
“L/C Sublimit” means $20,000,000, as reduced pursuant to the terms hereof.
 
“Legal Requirement” means any treaty, convention, statute, law, regulation,
ordinance, license, permit, governmental approval, injunction, judgment, order,
consent decree or other requirement of any governmental authority, whether
federal, state, or local.
 
“Lenders” means and includes each financial institution party hereto and the
other financial institutions from time to time party to this Agreement,
including each assignee Lender pursuant to Section 13.12 hereof and, unless the
context otherwise requires, the Swing Line Lender.
 
“Lending Office” is defined in Section 10.4 hereof.
 
“Letter of Credit” is defined in Section 1.3(a) hereof.
 
“Leverage Ratio” means, at any time the same is to be determined, the ratio of
(i) Total Funded Debt of the Company and its Subsidiaries as of the last day of
the most recently completed fiscal quarter of the Company to (ii) Adjusted
EBITDA of the Company and its Subsidiaries for the period of four fiscal
quarters then ended.
 
“LIBOR” means, for an Interest Period for a Borrowing of Eurocurrency Loans,
(a) the LIBOR Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds
are offered to the Administrative Agent at 11:00 a.m. (London, England time) two
(2) Business Days before the beginning of such Interest Period by three (3) or
more major banks in the interbank eurocurrency market selected by the
Administrative Agent for delivery on the first day of and for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made as part of such Borrowing.
 
“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) fordeposits in U.S. Dollars for a period equal to such Interest Period,
which appears on the appropriate page on the Reuters Service in the relevant
currency (London, England time) on the day 2 Business Days before the
commencement of such Interest Period.
 

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“Lien” means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
 
“Loan” means any Revolving Loan, Swing Loan or Term Loan, whether outstanding as
a Base Rate Loan or Eurocurrency Loan or otherwise, each of which is a “type” of
Loan hereunder.
 
“Loan Documents” means this Agreement, the Notes (if any), the Applications, the
Collateral Documents, the Guaranties and each other instrument or document to be
delivered hereunder or thereunder or otherwise in connection therewith.
 
“Material Adverse Effect” means (a) a material adverse change in, or material
adverse effect upon, the operations, business, Property or, condition (financial
or otherwise) of any Borrower or of the Borrowers and their Subsidiaries taken
as a whole, (b) a material impairment of the ability of any Credit Party to
perform its obligations under any Loan Document or (c) a material adverse effect
upon (i) the legality, validity, binding effect or enforceability against any
Credit Party of any Loan Document or the rights and remedies of the
Administrative Agent and the Lenders thereunder or (ii) the perfection or
priority of any Lien granted under any Collateral Document.
 
“Moody’s” means Moody’s Investors Service, Inc.
 
“Net Cash Proceeds” means, as applicable, (a) with respect to any Disposition by
a Person, cash and cash equivalent proceeds received by or for such Person’s
account, net of (i) reasonable direct costs relating to such Disposition and
(ii) sale, use or other transactional taxes paid or payable by such Person as a
direct result of such Disposition; (b) with respect to any Event of Loss of a
Person, cash and cash equivalent proceeds received by or for such Person’s
account (whether as a result of payments made under any applicable insurance
policy therefor or in connection with condemnation proceedings or otherwise),
net of (i) reasonable direct costs incurred in connection with the collection of
such proceeds, awards or other payments, (ii) sale or other transactional taxes
paid or payable by such Person as a direct result of such Event of Loss, and
(iii) amounts required to be applied to repay principal of, premium, if any, and
interest on any Indebtedness for Borrowed Money secured by a Lien on the
Property (or portion thereof) so damaged or taken (other than the Obligations
hereunder) which is required to be and is repaid in connection with such Event
of Loss; and (c) with respect to any offering of equity securities of a Person
or the issuance of any Indebtedness for Borrowed Money by a Person,  cash and
cash equivalent proceeds received by or for such Person’s account, net of
reasonable legal, underwriting, and other fees and expenses incurred as a direct
result thereof.
 
“Net Income” means, for any Person and with reference to any period, the net
income (or net loss) of such Person and its subsidiaries for such period
computed on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from Net Income (a) the netincome (or net loss) of any Person
accrued prior to the date it becomes a subsidiary of, or has merged into or
consolidated with, such Person or another subsidiary of such Person, and (b) the
net income (or net loss) of any other Person (other than a subsidiary of such
Person) in which such Person or any subsidiary of such Person has an equity
interest in, except to the extent of the amount of dividends or other
distributions actually paid to such Person or such subsidiary during such
period.
 

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 “Note” and “Notes” each is defined in Section 1.11 hereof.
 
“Obligations” means all obligations of the Borrowers, or any of them, to pay
principal and interest on the Loans, all Reimbursement Obligations owing under
the Applications, all fees and charges payable hereunder, and all other payment
obligations of any Credit Party arising under or in relation to any Loan
Document, in each case whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever evidenced,
held or acquired.
 
“Participating Interest” is defined in Section 1.3(e) hereof.
 
“Participating Lender” is defined in Section 1.3(e) hereof.
 
“PBGC” means the Pension Benefit Guaranty Corporation or any Person succeeding
to any or all of its functions under ERISA.
 
“Percentage” means for any Lender its Revolver Percentage or Term Loan
Percentage, as applicable; and where the term “Percentage” is applied on an
aggregate basis (including, without limitation, Section 11.6 hereof), such
aggregate percentage shall be calculated by aggregating the separate components
of the Revolver Percentage and Term Loan Percentage, and expressing such
components on a single percentage basis.
 
“Permitted Acquisition” means any Acquisition with respect to which all of the
following conditions shall have been satisfied:
 
(a)  the Total Consideration for the Acquired Business does not exceed
$15,000,000 and the Total Consideration for all Acquired Businesses does not
exceed $30,000,000 in the aggregate for all Acquisitions completed after the
Closing Date;
 
(b)  the Acquired Business is an Eligible Line of Business;
 
(c)  the Acquisition shall not be a Hostile Acquisition;
 
(d)  the financial statements of the Acquired Business shall have been audited
by a nationally recognized accounting firm or such financial statements shall
have undergone review of a scope satisfactory to the Administrative Agent;
 
(e)  in the event of a merger involving the Company, the Company must be the
entity surviving the merger;
 

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(f)  if a new Subsidiary is formed or acquired as a result of or in connection
with the Acquisition, the Borrowers shall have complied with the requirements of
Section 4 hereof in connection therewith;
 
(g)  the Borrowers shall have delivered to the Administrative Agent evidence
reasonably satisfactory to the Administrative Agent that the Borrowers would
have a Leverage Ratio as of the last day of the last fiscal quarter for which
financial statements have been delivered on a pro forma basis that is at least
0.25:1.00 below the then maximum Leverage Ratio permitted by Section 8.21(i)
(assuming the indebtedness incurred at the time of such Acquisition was incurred
on the first day of such 12-month period and on a pro forma basis after giving
effect to such Acquisition);
 
(h)  immediately prior to and after giving effect to the Acquisition and any
Credit Event in connection therewith, no Default or Event of Default shall
exist, including with respect to the financial covenants contained in
Section 8.21 hereof on a pro forma basis; and
 
(i)  after giving effect to the Acquisition and any Credit Event in connection
therewith, the Borrower shall have not less than $35,000,000 of Unused Revolving
Credit Commitments.
 
“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.
 
“Plan” means any employee pension benefit plan covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code that
either (a) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group or (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
 
“Property” means, as to any Person, all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent balance sheet of such Person and its subsidiaries under GAAP.
 
“Reimbursement Obligation” is defined in Section 1.3(c) hereof.
 
“Required Lenders” means, as of the date of determination thereof, Lenders whose
outstanding Loans and interests in Letters of Credit and Unused Revolving Credit
Commitments constitute more than 50% of the sum of the total outstanding Loans,
interests in Letters of Credit, and Unused Revolving Credit Commitments of the
Lenders.
 
“Restricted Payments” is defined in Section 8.12 hereof.
 
“Revolver Percentage” means, for each Lender, the percentage of the Revolving
Credit Commitments represented by such Lender’s Revolving Credit Commitment or,
if the Revolving Credit Commitments have been terminated, the percentage held by
such Lender (includingthrough participation interests in Reimbursement
Obligations) of the aggregate principal amount of all Revolving Credit Loans and
L/C Obligations then outstanding.
 

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“Revolving Credit” means the credit facility for making Revolving Loans and
Swing Loans and issuing Letters of Credit described in Sections 1.2, 1.3 and
1.16 hereof.
 
“Revolving Credit Commitment” means, as to any Lender, the obligation of such
Lender to make Revolving Loans and to participate in Swing Loans and Letters of
Credit issued for the account of any Borrower hereunder in an aggregate
principal or face amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 1 attached hereto and made a
part hereof, as the same may be increased, reduced or modified at any time or
from time to time pursuant to the terms hereof.  The Borrowers and the Lenders
acknowledge and agree that the Revolving Credit Commitments of the Lenders
aggregate $70,000,000 on the date hereof.
 
“Revolving Credit Termination Date” means November 1, 2011, or such earlier date
on which the Revolving Credit Commitments are terminated in whole pursuant to
Section 1.13, 9.2 or 9.3 hereof.
 
“Revolving Loan” is defined in Section 1.2 hereof and, as so defined, includes a
Base Rate Loan or a Eurocurrency Loan, each of which is a “type” of Revolving
Loan under the Revolving Credit.
 
“Revolving Note” is defined in Section 1.11 hereof.
 
“S&P” means Standard & Poor’s Ratings Services Group, a division of The
McGraw-Hill Companies, Inc.
 
“SEC” means the U.S. Securities and Exchange Commission or any successor agency.
 
“Security Agreement” means that certain Security Agreement dated the date of
this Agreement among the Domestic Borrowers, the Guarantors and the
Administrative Agent, as the same may be amended, modified, supplemented or
restated from time to time.
 
“Subsidiary” means, as to any particular parent corporation or organization, any
other corporation or organization more than 50% of the outstanding Voting Stock
of which is at the time directly or indirectly owned by such parent corporation
or organization or by any one or more other entities which are themselves
subsidiaries of such parent corporation or organization.  Unless otherwise
expressly noted herein, the term “Subsidiary” means a subsidiary of the Company
or any other Credit Party or of any of their direct or indirect Subsidiaries, as
applicable.
 
“Swing Line” means the credit facility for making one or more Swing Loans
described in Section 1.16 hereof.
 
“Swing Line Lender” means BMO Capital Markets Financing, Inc., acting in its
capacity as the Lender of Swing Loans hereunder, or any successor Lender acting
in such capacity appointed pursuant to Section 13.12 hereof.
 

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“Swing Line Lender’s Quoted Rate” is defined in Section 1.16(c) hereof.
 
“Swing Line Sublimit” means $10,000,000, as reduced pursuant to the terms
hereof.
 
“Swing Loan” and “Swing Loans” each is defined in Section 1.16 hereof.
 
“Swing Note” is defined in Section 1.11 hereof.
 
“Term Credit” means the credit facility for the Term Loans described in
Section 1.1(a) hereof.
 
“Term Loan” is defined in Section 1.1(a) hereof and, as so defined, includes a
Base Rate Loan or a Eurocurrency Loan, each of which is a “type” of Term Loan
hereunder.
 
“Term Loan Commitment” means, as to any Lender, the obligation of such Lender to
make its Term Loan on the Closing Date or thereafter pursuant to Section 1.17
hereof in the principal amount not to exceed the amount set forth opposite such
Lender’s name on Schedule 1 attached hereto and made a part hereof.  The
Borrowers and the Lenders acknowledge and agree that the Term Loan Commitments
of the Lenders aggregate $75,000,000 on the date hereof.
 
“Term Loan Percentage” means, for each Lender, the percentage of the Term Loan
Commitments represented by such Lender’s Term Loan Commitment or, if the Term
Loan Commitments have been terminated or have expired, the percentage held by
such Lender of the aggregate principal amount of all Term Loans then
outstanding.
 
“Term Note” is defined in Section 1.11 hereof.
 
“Total Consideration” means the total amount (but without duplication) of
(a) cash paid in connection with any Acquisition, plus (b) indebtedness payable
to the seller in connection with such Acquisition, plus (c) the fair market
value of any equity securities, including any warrants or options therefor,
delivered in connection with any Acquisition, plus (d) the present value of
covenants not to compete entered into in connection with such Acquisition or
other future payments which are required to be made over a period of time and
are not contingent upon the Company or any Subsidiary meeting financial
performance objectives (exclusive of salaries paid in the ordinary course of
business) (discounted at the Base Rate), but only to the extent not included in
clause (a), (b) or (c) above, plus (e) the amount of indebtedness assumed in
connection with such Acquisition.
 
“Total Funded Debt” means, at any time the same is to be determined, the
aggregate of (but without duplication) all Indebtedness for Borrowed Money of
the Company and its Subsidiaries at such time, including all Indebtedness for
Borrowed Money of any other Person which is directly or indirectly guaranteed by
the Company or any Subsidiary or which the Company or any Subsidiary has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which the Company or any Subsidiary has otherwise assured a creditor against
loss.
 
“Unfunded Vested Liabilities” means, for any Plan at any time, the amount (if
any) by which the present value of all vested nonforfeitable accrued benefits
under such Plan exceeds thefair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of a member of the Controlled Group to the PBGC or the Plan under Title IV of
ERISA.
 

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“Unused Revolving Credit Commitments” means, at any time, the difference between
the Revolving Credit Commitments then in effect and the aggregate outstanding
principal amount of Revolving Loans and L/C Obligations.
 
“U.S. Dollars” and “$” each means the lawful currency of the United States of
America.
 
“Voting Stock” of any Person means capital stock or other equity interests of
any class or classes (however designated) having ordinary power for the election
of directors or other similar governing body of such Person, other than stock or
other equity interests having such power only by reason of the happening of a
contingency.
 
“Welfare Plan” means a “welfare plan” as defined in Section 3(1) of ERISA.
 
“Wholly-owned Subsidiary” means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors’ qualifying shares as
required by law) or other equity interests are owned by any Borrower and/or one
or more Wholly-owned Subsidiaries within the meaning of this definition.
 
Section 5.2.  Interpretation.  The foregoing definitions are equally applicable
to both the singular and plural forms of the terms defined.  The words “hereof”,
“herein”, and “hereunder” and words of like import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement.  All references to time of day herein are references to Chicago,
Illinois, time unless otherwise specifically provided.  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 the purposes of this Agreement, it shall be done in accordance with
GAAP except where such principles are inconsistent with the specific provisions
of this Agreement.
 
Section 5.3.  Change in Accounting Principles.  If, after the date of this
Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the
Borrowers or the Required Lenders may by notice to the Lenders and the
Borrowers, respectively, require that the Lenders and the Borrowers negotiate in
good faith to amend such covenants, standards, and term so as equitably to
reflect such change in accounting principles, with the desired result being that
the criteria for evaluating the financial condition of the Borrowers and their
Subsidiaries shall be the same as if such change had not been made.  No delay by
the Borrowers or the Required Lenders in requiring such negotiation shall limit
their right to so require such a negotiation at any time after such a change in
accounting principles.  Until any such covenant, standard, or term is amended in
accordance with this Section 5.3, financial covenants shall be computed and
determined in accordance with GAAP in effect prior to such change in accounting
principles.  Without limiting the generality of the foregoing, theBorrowers
shall neither be deemed to be in compliance with any financial covenant
hereunder nor out of compliance with any financial covenant hereunder if such
state of compliance or noncompliance, as the case may be, would not exist but
for the occurrence of a change in accounting principles after the date hereof.
 

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SECTION 6.  REPRESENTATIONS AND WARRANTIES.
 
To induce the Lenders to enter into this Agreement and to make the extensions of
credit contemplated hereby, each of the Credit Parties represents and warrants
to the Administrative Agent and the Lenders as follows:
 
Section 6.1.  Organization and Qualification.  Each Credit Party is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has full and adequate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect.
 
Section 6.2.  Subsidiaries.  The Company holds 100% of the issued and
outstanding stock of each of the other Borrowers.  Each Subsidiary of the
Borrowers is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect.  Schedule 6.2 hereto identifies each
Subsidiary, the jurisdiction of its incorporation or organization, as the case
may be, the percentage of issued and outstanding shares of each class of its
capital stock or other equity interests owned by any Borrower and the other
Subsidiaries and, if such percentage is not 100% (excluding directors’
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding.  All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 6.2 as owned by a Borrower or another
Subsidiary are owned, beneficially and of record, by such Borrower or such
Subsidiary, as the case may be, free and clear of all Liens other than the Liens
granted in favor of the Administrative Agent pursuant to the Collateral
Documents.  There are no outstanding commitments or other obligations of any
Subsidiary to issue, and no options, warrants or other rights of any Person to
acquire, any shares of any class of capital stock or other equity interests of
any Subsidiary.
 
 
 

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Section 6.3.  Authority and Validity of Obligations.  Each Borrower has full
right and authority to enter into this Agreement and the other Loan Documents
executed by it, to make the borrowings herein provided for, to issue its Notes
in evidence thereof, to grant to the Administrative Agent the Liens described in
the Collateral Documents executed by it, and to perform all of its obligations
hereunder and under the other Loan Documents executed by it.  Each Guarantor has
full right and authority to enter into the Loan Documents executed by it, to
guarantee the Obligations, Hedging Liability, and Funds Transfer and Deposit
Account Liability, to grant to the Administrative Agent the Liens described in
the Collateral Documents executed by it, and to perform all of its obligations
under the Loan Documents executed by it.  The Loan Documents delivered by each
Credit Party have been duly authorized, executed, and delivered by such Credit
Party and constitute valid and binding obligations of such Credit Party
enforceable against it in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors’ rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan Documents
do not, nor does the performance or observance by any Credit Party of any of the
matters and things herein or therein provided for, (a) contravene or constitute
a default under any provision of law or any judgment, injunction, order or
decree binding upon any Credit Party or any provision of the organizational
documents (e.g., charter, certificate or articles of incorporation and by-laws,
certificate or articles of association and operating agreement, partnership
agreement or other organizational document) of any Credit Party, (b) contravene
or constitute a default under any covenant, indenture or agreement of or
affecting any Credit Party or any of its Property, in each case where such
contravention or default, individually or in the aggregate,  could reasonably be
expected to have a Material Adverse Effect or (c) result in the creation or
imposition of any Lien on any Property of any Credit Party other than the Liens
granted in favor of the Administrative Agent pursuant to the Collateral
Documents.
 
Section 6.4.  Use of Proceeds; Margin Stock.  The Borrowers shall use the
proceeds of the Term Loans and the Revolving Credit to refinance existing
indebtedness and to fund a portion of the fees and expenses incurred or
otherwise required to be paid in connection with the consummation of the
transactions contemplated by this Agreement; and the Borrowers shall use the
proceeds of the Revolving Credit to finance Permitted Acquisitions, to finance
Capital Expenditures, to finance Restricted Payments permitted by Section 8.12
hereof (other than Restricted Payments permitted by Section 8.12(iii)), for its
general working capital purposes, and for such other legal and proper purposes
as are consistent with all applicable laws.  None of the Borrowers or
Subsidiaries are engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Loan or any other extension of credit made hereunder will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.  Margin stock (as
hereinabove defined) constitutes less than 25% of the assets of each Borrower
and its Subsidiaries which are subject to any limitation on sale, pledge or
other restriction hereunder.
 
Section 6.5.  Financial Reports.   The consolidated balance sheet of the Company
and its Subsidiaries as at December 31, 2007, and the related consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
which financial statements are accompanied by the audit report of KPMG LLP,
independent public accountants, and the unaudited interim consolidated balance
sheet of the Company and its Subsidiaries as at September 30, 2008, and the
related consolidated statements of income, retained earnings and cash flows of
the Company and its Subsidiaries for the three months then ended, heretofore
furnished to the Administrative Agent and the Lenders, fairly present the
consolidated financial condition of the Company and its Subsidiaries as at said
dates and the consolidated results of their operations and cash flows forthe
periods then ended in conformity with GAAP applied on a consistent basis.  None
of the Borrowers or Subsidiaries have contingent liabilities which are material
to it other than as indicated on such financial statements or, with respect to
future periods, on the financial statements furnished pursuant to Section 8.5
hereof.
 

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Section 6.6.  No Material Adverse Change.  Since December 31, 2007, there has
been no change in the condition (financial or otherwise) of the Company or any
Subsidiary except those occurring in the ordinary course of business, none of
which individually or in the aggregate have had a Material Adverse Effect.
 
Section 6.7.  Full Disclosure.  The statements and information furnished to the
Administrative Agent and the Lenders in connection with the negotiation of this
Agreement and the other Loan Documents and the commitments by the Lenders to
provide all or part of the financing contemplated hereby do not contain any
untrue statements of a material fact or omit a material fact necessary to make
the material statements contained herein or therein not misleading, the
Administrative Agent and the Lenders acknowledging that as to any projections
furnished to the Administrative Agent and the Lenders, the Credit Parties only
represent that the same were prepared on the basis of information and estimates
the Credit Parties believed to be reasonable.
 
Section 6.8.  Trademarks, Franchises, and Licenses.  Each Credit Party and its
Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how, and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person.
 
Section 6.9.  Governmental Authority and Licensing.  Each Credit Party and its
Subsidiaries have received all licenses, permits, and approvals of all federal,
state, and local governmental authorities, if any, necessary to conduct their
businesses, in each case where the failure to obtain or maintain the same could
reasonably be expected to have a Material Adverse Effect.  No investigation or
proceeding which, if adversely determined, could reasonably be expected to
result in revocation or denial of any material license, permit or approval is
pending or, to the knowledge of any Credit Party, threatened.
 
Section 6.10.  Good Title.  Each Credit Party and its Subsidiaries have good and
defensible title (or valid leasehold interests) to their assets as reflected on
the most recent consolidated balance sheet furnished to the Administrative Agent
and the Lenders (except for sales of assets in the ordinary course of business),
subject to no Liens other than such thereof as are permitted by
Section 8.8 hereof.
 
Section 6.11.  Litigation and Other Controversies.  There is no litigation or
arbitration or governmental proceeding or labor controversy pending, nor to the
knowledge of any Credit Party threatened, against any Credit Party or any
Subsidiary which if adversely determined, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
 

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Section 6.12.  Taxes.  All tax returns required to be filed by any Credit Party
(to the best of such Credit Party’s knowledge with respect to any local tax
returns) or any Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees, and other governmental charges upon any Credit
Party or any Subsidiary or upon any of its Property, income or franchises, which
are shown to be due and payable in such returns, have been paid, except such
taxes, assessments, fees and governmental charges, if any, as are being
contested in good faith and by appropriate proceedings which prevent enforcement
of the matter under contest and as to which adequate reserves established in
accordance with GAAP have been provided.  No Credit Party knows of any proposed
additional tax assessment against it or its Subsidiaries for which adequate
provisions in accordance with GAAP have not been made on their
accounts.  Adequate provisions in accordance with GAAP for taxes on the books of
each Credit Party and its Subsidiaries have been made for all open years, and
for each such Person’s current fiscal period.
 
Section 6.13.  Approvals.  No authorization, consent, license or exemption from,
or filing or registration with, any court or governmental department, agency or
instrumentality, nor any approval or consent of any other Person, is or will be
necessary to the valid execution, delivery or performance by any Credit Party of
any Loan Document, except for such approvals which have been obtained prior to
the date of this Agreement and remain in full force and effect and except where
failure to obtain such authorization, consent, license, exemption, registration
or approval would not have a Material Adverse Effect.
 
Section 6.14.  Affiliate Transactions.  Neither any Credit Party nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-owned Subsidiaries) on terms and conditions which are
less favorable to such Credit Party or such Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other.
 
Section 6.15.  Investment Company.  Neither any Credit Party nor any Subsidiary
is an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.
 
Section 6.16.  ERISA.  Each Credit Party and each other member of its Controlled
Group has fulfilled its obligations under the minimum funding standards of and
is in compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any liability to the PBGC or a Plan under
Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.  Neither any Credit Party nor any Subsidiary has any
contingent liabilities with respect to any post-retirement benefits under a
Welfare Plan, other than liability for continuation coverage described in
article 6 of Title I of ERISA.
 
Section 6.17.  Compliance with Laws.  The Credit Parties and their Subsidiaries
are in compliance with the requirements of all federal, state and local laws,
rules and regulations applicable to or pertaining to their Property or business
operations (including, without limitation, the Occupational Safety and Health
Act of 1970, the Americans with Disabilities Act of 1990, and Environmental
Laws), where any such non-compliance, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.  Neither any Credit
Party nor any Subsidiary has received notice to the effect that its operations
are not in compliance with any of the requirements of applicable federal, state
or local environmental, health, and safety statutesand regulations or is the
subject of any governmental investigation evaluating whether any remedial action
is needed to respond to a release of any toxic or hazardous waste or substance
into the environment, where any such non-compliance or remedial action,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
 

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Section 6.18.  Other Agreements.  Neither any Credit Party nor any Subsidiary is
in default under the terms of any covenant, indenture or agreement of or
affecting such Person or any of its Property, which default if uncured could
reasonably be expected to have a Material Adverse Effect.
 
Section 6.19.  Solvency.  Each Credit Party and its Subsidiaries are solvent,
able to pay their debts as they become due, and have sufficient capital to carry
on their business and all businesses in which they are about to engage.
 
Section 6.20.  No Default.  No Default or Event of Default has occurred and is
continuing.
 
Section 6.21.  No Broker Fees.  No broker’s or finder’s fee or commission will
be payable by the Credit Parties with respect hereto or any of the transactions
contemplated hereby; and the Credit Parties hereby agree to indemnify the
Administrative Agent and the Lenders against, and agree that they will hold the
Administrative Agent and the Lenders harmless from, any claim, demand, or
liability for any such broker’s or finder’s fees alleged to have been incurred
in connection herewith or therewith and any expenses (including reasonable
attorneys’ fees) arising in connection with any such claim, demand, or
liability.
 
SECTION 7.  CONDITIONS PRECEDENT.
 
Section 7.1.  All Credit Events.  At the time of each Credit Event hereunder:
 
(a)  each of the representations and warranties set forth herein shall be and
remain true and correct as of said time, except to the extent the same expressly
relate to an earlier date;
 
(b)  each Credit Party and each Subsidiary shall be in compliance with all of
the terms and conditions hereof and of the other Loan Documents, and no Default
or Event of Default shall have occurred and be continuing or would occur as a
result of such Credit Event;
 
(c)  in the case of a Borrowing, the Administrative Agent shall have received
the notice required by Section 1.5 hereof, in the case of the issuance of any
Letter of Credit the L/C Issuer shall have received a duly completed Application
for such Letter of Credit together with any fees called for by Section 2.1
hereof, and, in the case of an extension or increase in the amount of a Letter
of Credit, a written request therefor in a form acceptable to the L/C Issuer
together with fees called for by Section 2.1 hereof; and
 
(d)  such Credit Event shall not violate any order, judgment or decree of any
court or other authority or any provision of law or regulation applicable to
theAdministrative Agent or any Lender (including, without limitation,
Regulation U of the Board of Governors of the Federal Reserve System) as then in
effect.
 

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Each request for a Borrowing hereunder and each request for the issuance of,
increase in the amount of, or extension of the expiration date of, a Letter of
Credit shall be deemed to be a representation and warranty by the Borrowers on
the date of such Credit Event as to the facts specified in subsections (a)
through (c), both inclusive, of this Section; provided, however, that the
Lenders may continue to make advances under the Revolving Credit, in the sole
discretion of the Lenders with Revolving Credit Commitments, notwithstanding the
failure of any Borrower to satisfy one or more of the conditions set forth above
and any such advances so made shall not be deemed a waiver of any Default or
Event of Default or other condition set forth above that may then exist.
 
Section 7.2.  Initial Credit Event.  Before or concurrently with the initial
Credit Event:
 
(a)  the Administrative Agent shall have received for each Lender this Agreement
duly executed by the Borrowers, the Guarantors party hereto and the Lenders;
 
(b)  if requested by any Lender, the Administrative Agent shall have received
for such Lender such Lender’s duly executed Notes of the Borrowers dated the
date hereof and otherwise in compliance with the provisions of Section 1.11
hereof;
 
(c)  the Administrative Agent shall have received the Security Agreement duly
executed by each Credit Party party thereto, together with (i) original stock
certificates or other similar instruments or securities representing the issued
and outstanding shares of capital stock or other equity interests in each
Subsidiary to the extent required by Section 4.1 hereof, (ii) stock powers for
the Collateral consisting of the stock or other equity interest in each
Subsidiary executed in blank and undated, (iii) UCC financing statements to be
filed against the Company and each Subsidiary, as debtor, in favor of the
Administrative Agent, as secured party, (iv) patent, trademark, and copyright
collateral assignments to the extent requested by the Administrative Agent,
(v) deposit account, securities account, and commodity account control
agreements to the extent requested by the Administrative Agent and
(vi) landlord’s and warehouseman’s lien waivers to the extent required by the
Security Agreement;
 
(d)  the Administrative Agent shall have received evidence of insurance required
to be maintained under the Loan Documents, naming the Administrative Agent as
lender’s loss payee;
 
(e)  the Administrative Agent shall have received copies of each Credit Party’s
articles of incorporation and bylaws (or comparable organizational documents)
and any amendments thereto, certified in each instance by its Secretary or
Assistant Secretary (or officer or manager holding a comparable office);
 
(f)  the Administrative Agent shall have received copies of resolutions of each
Credit Party’s Board of Directors (or similar governing body) authorizing the
execution,delivery and performance of this Agreement and the other Loan
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby, together with specimen signatures of the
persons authorized to execute such documents on such Credit Party’s behalf, all
certified in each instance by its Secretary or Assistant Secretary (or officer
or manager holding a comparable office);
 

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 (g)  the Administrative Agent shall have received copies of the certificates of
good standing for each Credit Party (dated no earlier than 30 days prior to the
date hereof) from the office of the secretary of the state of its incorporation
or organization and of each state in which it is qualified to do business as a
foreign corporation or organization;
 
(h)  the Administrative Agent shall have received a list of the Borrowers’
Authorized Representatives;
 
(i)  there shall be no injunction, temporary restraining order or other legal
action in effect which would prohibit the consummation of the transaction
contemplated under this Agreement and the initial Credit Event;
 
(j)  the Administrative Agent shall have received a certificate regarding the
solvency of the Company and its Subsidiaries, after giving effect to the initial
Credit Event, executed by the chief financial officer of the Company;
 
(k)  the Administrative Agent shall have received for itself and for the Lenders
the initial fees called for by Section 2.1 hereof;
 
(l)  the Administrative Agent shall have a confirmation that (i) the Company’s
Adjusted EBITDA for the twelve-month period ended September 30, 2008 was at
least $64,000,000 and (ii) the Leverage Ratio is not greater than 2.2 to 1.0,
for the period ended September 30, 2008, each calculated based on pro forma
consolidated Adjusted EBITDA for the twelve-month period ended September 30,
2008, and after giving effect to the initial Credit Event;
 
(m)  no material adverse change in the business, condition (financial or
otherwise), operations, performance, Properties or prospects of any Borrower or
Subsidiary from that reflected in the financial statements as December 31, 2007
shall have occurred;
 
(n)  each Lender shall have received such evaluations and certifications as it
may reasonably require in order to satisfy itself as to the financial condition
of the Borrowers and their Subsidiaries, and the lack of material contingent
liabilities of the Borrowers and their Subsidiaries;
 
(o)  the Administrative Agent shall have received financing statement, tax, and
judgment lien search results against the Property of the Company, LCBI and each
Guarantor evidencing the absence of Liens on its Property except as permitted by
Section 8.8 hereof;
 

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(p)  the Administrative Agent shall have received pay-off and lien release
letters from secured creditors of each Credit Party setting forth, among other
things, the total amount of indebtedness outstanding and owing to them (or
outstanding letters of credit issued for their account) and containing an
undertaking to cause to be delivered to the Administrative Agent (or authorizing
the Administrative Agent to file) UCC termination statements and any other lien
release instruments necessary to release such secured creditor’s Liens on the
assets of each Credit Party, which pay-off and lien release letters shall be in
form and substance acceptable to the Administrative Agent;
 
(q)  the Administrative Agent shall have received for each Lender the favorable
written opinion of counsel to each of the Credit Parties, in form and substance
satisfactory to the Administrative Agent;
 
(r)  the Administrative Agent shall have received an Internal Revenue Service
Form W-9, or Form W-8, as applicable, duly executed by each Credit Party in form
and  substance acceptable to the Administrative Agent;
 
(s)  after giving effect to the initial Credit Event hereunder, the aggregate
amount of Loans and L/C Obligations outstanding shall not exceed $130,000,000;
 
(t)  the Administrative Agent shall have received certificates of merger
evidencing the merger of (i) The First Years, Inc., a Delaware corporation with
and into The First Years, Inc., a Massachusetts corporation (“TFY(MA)”) with
TFY(MA) as the surviving corporation and (ii) TFY(MA) with and into LCBI with
LCBI being the surviving corporation; and
 
(u)  the Administrative Agent shall have received for the account of the Lenders
such other agreements, instruments, documents, certificates, and opinions as the
Administrative Agent may reasonably request.
 
SECTION 8.  COVENANTS.
 
The Credit Parties agree that, so long as any credit is available to or in use
by the Borrowers, or any of them, hereunder, except to the extent compliance in
any case or cases is waived in writing pursuant to the terms of Section 13.13
hereof:
 
Section 8.1.  Maintenance of Business.  (a)   Each Credit Party shall, and shall
cause each Subsidiary to, preserve and maintain its existence, except as
otherwise provided in Section 8.10(c) hereof.
 
(b)  Each Credit Party shall, and shall cause each Subsidiary to, preserve and
keep in force and effect all licenses, permits, franchises, approvals, patents,
trademarks, trade names, trade styles, copyrights, and other proprietary rights
necessary to the proper conduct of itsbusiness where the failure to do so could
reasonably be expected to have a Material Adverse Effect.
 

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Section 8.2.  Maintenance of Properties.  Each Credit Party shall, and shall
cause each Subsidiary to, maintain, preserve, and keep its Property, plant, and
equipment used or useful in its business in good repair, working order and
condition (ordinary wear and tear excepted), and shall from time to time make
all needful and proper repairs, renewals, replacements, additions, and
betterments thereto so that at all times the efficiency thereof shall be fully
preserved and maintained.
 
Section 8.3.  Taxes and Assessments.  Each Credit Party shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees, and governmental charges upon or against it or its
Property, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor and except to
the extent that failure to so pay or discharge would not have a Material Adverse
Effect.
 
Section 8.4.  Insurance.  Each Credit Party shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and each Credit Party shall insure, and shall cause each Subsidiary
to insure, such other hazards and risks (including, without limitation,
employers’ and public liability risks) with good and responsible insurance
companies as and to the extent usually insured by Persons similarly situated and
conducting similar businesses. The Credit Parties shall in any event maintain,
and cause each Subsidiary to maintain, insurance on the Collateral to the extent
required by the Collateral Documents.  Each Credit Party shall, upon the request
of the Administrative Agent, furnish to the Administrative Agent and the Lenders
a certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section.
 
Section 8.5.  Financial Reports.  The Company shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with
GAAP.  The Company and each Borrower shall furnish to the Administrative Agent,
each Lender and each of their duly authorized representatives such information
respecting the business and financial condition of the Borrowers and their
respective Subsidiaries as the Administrative Agent or such Lender may
reasonably request; and without any request, the Company and the Borrowers shall
furnish to the Administrative Agent and the Lenders:
 
(a)  as soon as available, and in any event within 45 days after the close of
each fiscal quarter of each fiscal year of the Company (or such shorter period
as may be required by the SEC for filing quarterly reports with the SEC), a copy
of the consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of the last day of such fiscal quarter and the consolidated and
consolidating statements of income, retained earnings, and cash flows of the
Company and its Subsidiaries for the fiscal quarter and for the fiscal
year-to-date period then ended, each in reasonable detail showing incomparative
form the figures for the corresponding date and period in the previous fiscal
year, prepared by the Company in accordance with GAAP (subject to the absence of
footnote disclosures and year-end audit adjustments) and certified to by its
chief financial officer or another officer of the Company acceptable to the
Administrative Agent;
 

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(b)  as soon as available, and in any event within 90 days after the close of
each fiscal year of the Company (or such shorter period as may be required by
the SEC for filing annual reports with the SEC), a copy of the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as of the last
day of the fiscal year then ended and the consolidated and consolidating
statements of income, retained earnings, and cash flows of the Company and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
each in reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied by an unqualified opinion of a firm of
independent public accountants of recognized national standing, selected by the
Company and reasonably satisfactory to the Administrative Agent and the Required
Lenders, to the effect that the consolidated financial statements have been
prepared in accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Company and its Subsidiaries as of the
close of such fiscal year and the results of their operations and cash flows for
the fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, such examination
included such tests of the accounting records and such other auditing procedures
as were considered necessary in the circumstances;
 
(c)  within the period provided in subsection (b) above, the written statement
of the accountants who certified the audit report thereby required that in the
course of their audit they have obtained no knowledge of any Default or Event of
Default, or, if such accountants have obtained knowledge of any such Default or
Event of Default, they shall disclose in such statement the nature and period of
the existence thereof;
 
(d)  promptly after receipt thereof, any additional written reports, management
letters or other detailed information contained in writing concerning
significant aspects of the Company’s or any Subsidiary’s operations and
financial affairs given to it by its independent public accountants;
 
(e)  promptly after the sending or filing thereof, copies of each financial
statement, report, notice or proxy statement sent by the Company or any
Subsidiary to its stockholders or other equity holders, and copies of each
regular, periodic or special report, registration statement or prospectus
(including all Form 10-K, Form 10-Q and Form 8-K reports) filed by the Company
or any Subsidiary with any securities exchange or the SEC;
 
(f)  promptly after receipt thereof, a copy of each audit made by any regulatory
agency of the books and records of the Company or any Subsidiary or of notice of
any material noncompliance with any applicable law, regulation or guideline
relating to the Company or any Subsidiary, or its business;
 

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(g)  as soon as available, and in any event within 60 days after the end of each
fiscal year of the Company, a copy of the Company’s consolidated and
consolidating operating budget for the following fiscal year, in reasonable
detail prepared by the Company and in form satisfactory to the Administrative
Agent (which shall include a summary of all assumptions made in preparing such
operating budget);
 
(h)  notice of any Change in Control;
 
(i)  promptly after knowledge thereof shall have come to the attention of any
responsible officer of any Credit Party, written notice of (i) any threatened or
pending litigation or governmental proceeding or labor controversy against the
Company or any Subsidiary which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, (ii) of the occurrence of any
Default or Event of Default hereunder, or (iii) upon the occurrence of or any
condition exists that could reasonably be expected to have a Material Adverse
Effect; and
 
(j)  with each of the financial statements furnished to the Lenders pursuant to
subsections (a) and (b) above, a written certificate in the form attached hereto
as Exhibit E signed by the chief financial officer of the Company or another
officer of the Company acceptable to the Administrative Agent to the effect that
to the best of such officer’s knowledge and belief no Default or Event of
Default has occurred during the period covered by such statements or, if any
such Default or Event of Default has occurred during such period, setting forth
a description of such Default or Event of Default and specifying the action, if
any, taken by the Credit Parties or any Subsidiary to remedy the same.  Such
certificate shall also set forth the calculations in respect of Section 8.9(h)
hereof and supporting such statements in respect of Section 8.21 hereof.
 
Section 8.6.  Inspection.  The Credit Parties shall, and shall cause each
Subsidiary to, permit the Administrative Agent, each Lender, the L/C Issuer and
each of their duly authorized representatives and agents to visit and inspect
any of its Property, corporate books, and financial records, to examine and make
copies of its books of accounts and other financial records, and to discuss its
affairs, finances, and accounts with, and to be advised as to the same by, its
officers, employees and independent public accountants (and by this provision
each Credit Party hereby authorizes such accountants to discuss with the
Administrative Agent, such Lenders and the L/C Issuer the finances and affairs
of such Credit Party and its Subsidiaries) at such reasonable times and
intervals as the Administrative Agent or any such Lender or the L/C Issuer may
designate and, so long as no Default or Event of Default exists, with reasonable
prior notice to the Borrowers.
 
Section 8.7.  Borrowings and Guaranties. The Credit Parties shall not, nor shall
they permit any Subsidiary to, issue, incur, assume, create or have outstanding
any Indebtedness for Borrowed Money, or be or become liable as endorser,
guarantor, surety or otherwise for any debt, obligation or undertaking of any
other Person, or otherwise agree to provide funds for payment of the obligations
of another, or supply funds thereto or invest therein or otherwise assure a
creditor of another against loss, or apply for or become liable to the issuer of
a letter of credit which supports an obligation of another, or subordinate any
claim or demand it may haveto the claim or demand of any other Person; provided,
however, that the foregoing shall not restrict nor operate to prevent:
 

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(a)  the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability of the Borrowers and their Subsidiaries owing to the Administrative
Agent and the Lenders (and their Affiliates in the case of Hedging Liability);
 
(b)  The Guaranties;
 
(c)  purchase money indebtedness and Capitalized Lease Obligations of the
Borrower and its Subsidiaries in an amount not to exceed $500,000 in the
aggregate at any one time outstanding;
 
(d)  endorsement of items for deposit or collection of commercial paper received
in the ordinary course of business;
 
(e)  unsecured intercompany indebtedness among the Company and its Domestic
Subsidiaries, provided that any such indebtedness shall be fully subordinated to
the Obligations on terms reasonably satisfactory to the Administrative Agent;
 
(f)  unsecured intercompany indebtedness among the Company, the Domestic
Subsidiaries and the Foreign Subsidiaries, provided that any such indebtedness
(i) shall be fully subordinated to the Obligations on terms reasonably
satisfactory to the Administrative Agent and (ii) is permitted by Section 8.9(h)
hereof;
 
(g)  the Company’s guarantee of the obligations of LCBI with respect to its
licensing arrangements with Disney Enterprises, Inc.; and
 
(h)  a guaranty by a Credit Party of indebtedness of another Credit Party
permitted by this Section 8.7; and
 
(i)  Indebtedness for Borrowed Money and other contingent obligations other than
those which are permitted by the foregoing subsections (a) through (f) provided
such Indebtedness and other contingent obligations do not exceed $10,000,000 at
any time outstanding for the Company and its Subsidiaries in the aggregate.
 
Section 8.8.  Liens.  The Credit Parties shall not, nor shall they permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however, that the foregoing shall
not apply to nor operate to prevent:
 
(a)  Liens arising by statute in connection with worker’s compensation,
unemployment insurance, old age benefits, social security obligations, taxes,
assessments, statutory obligations or other similar charges (other than Liens
arising under ERISA), good faith cash deposits in connection with tenders,
contracts or leases to which any Credit Party or any Subsidiary is a party or
other cash deposits required to be made in the ordinary course of business,
provided in each case that the obligation is not for borrowed money and that the
obligation secured is not overdue or, if overdue, isbeing contested in good
faith by appropriate proceedings which prevent enforcement of the matter under
contest and adequate reserves have been established therefor;
 

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(b)  mechanics’, workmen’s, materialmen’s, landlords’, carriers’ or other
similar Liens arising in the ordinary course of business with respect to
obligations which are not due or which are being contested in good faith by
appropriate proceedings which prevent enforcement of the matter under contest;
 
(c)  judgment liens and judicial attachment liens not constituting an Event of
Default under Section 9.1(g) hereof and the pledge of assets for the purpose of
securing an appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of such judgment liens and attachments and
liabilities of the Credit Parties and their Subsidiaries secured by a pledge of
assets permitted under this subsection, including interest and penalties
thereon, if any, shall not be in excess of $1,000,000 at any one time
outstanding;
 
(d)  Liens on Property of any Credit Party or any Subsidiary created solely for
the purpose of securing indebtedness permitted by Section 8.7(c) hereof,
representing or incurred to finance the purchase price of Property, provided
that no such Lien shall extend to or cover other Property of such Credit Party
or such Subsidiary other than the respective Property so acquired, and the
principal amount of indebtedness secured by any such Lien shall at no time
exceed the purchase price of such Property, as reduced by repayments of
principal thereon;
 
(e)  any interest or title of a lessor under any operating lease;
 
(f)  easements, rights-of-way, restrictions, and other similar encumbrances
against real property incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially detract
from the value of the Property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any Subsidiary; and
 
(g)  the Liens granted in favor of the Administrative Agent pursuant to the
Collateral Documents; and
 
(h)  Liens other than those permitted by any of the foregoing subsections (a)
through (g) provided such Liens do not extend to any Collateral and provided
further that such Liens secure obligations not exceeding $10,000,000 in the
aggregate for the Company and its Subsidiaries.
 
Section 8.9.  Investments, Acquisitions, Loans and Advances.  The Credit Parties
shall not, nor shall they permit any Subsidiary to, directly or indirectly,
make, retain or have outstanding any investments (whether through purchase of
stock or obligations or otherwise) in, or loans or advances to, any other
Person, or acquire all or any substantial part of the assets or business of any
other Person or division thereof; provided, however, that the foregoing shall
not apply to nor operate to prevent:
 

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(a)  investments in direct obligations of the United States of America or of any
agency or instrumentality thereof whose obligations constitute full faith and
credit obligations of the United States of America, provided that any such
obligations shall mature within one year of the date of issuance thereof;
 
(b)  investments in commercial paper rated at least P-1 by Moody’s and at least
A-1 by S&P maturing within one year of the date of issuance thereof;
 
(c)  investments in certificates of deposit issued by any Lender or by any
United States commercial bank having capital and surplus of not less than
$100,000,000 which have a maturity of one year or less;
 
(d)  investments in repurchase obligations with a term of not more than seven
days for underlying securities of the types described in subsection (a) above
entered into with any bank meeting the qualifications specified in
subsection (c) above, provided all such agreements require physical delivery of
the securities securing such repurchase agreement, except those delivered
through the Federal Reserve Book Entry System;
 
(e)  investments in money market funds that invest solely, and which are
restricted by their respective charters to invest solely, in investments of the
type described in the immediately preceding subsections (a), (b), (c), and (d)
above;
 
(f)  the Company’s investments from time to time in its Domestic Subsidiaries,
and investments made from time to time by any such Domestic Subsidiary in one or
more of its Domestic Subsidiaries;
 
(g)  intercompany advances made from time to time from the Company or any
Domestic Subsidiary to any one or more Domestic Subsidiaries in the ordinary
course of business to finance working capital needs;
 
(h)  intercompany advances and loans made from time to time by the Company and
its Domestic Subsidiaries to any one or more Foreign Subsidiaries (net of
intercompany advances and loans made from time to time by any one or more
Foreign Subsidiaries to the Company and its Domestic Subsidiaries) in an
aggregate net amount not to exceed $53,000,000 as of the last day of each fiscal
quarter of the Company (it being acknowledged that the net amount of such
advances and loans was $42,737,304 as of September 30, 2008), as such limitation
shall be reduced dollar-for-dollar by the amount of any investment made after
the Closing Date by the Company or any Domestic Subsidiary in the common stock
or paid-in-capital of any Foreign Subsidiary;
 
(i)   investments made from time to time by any Foreign Subsidiary in one or
more of its Foreign Subsidiaries;
 
(j)  intercompany advances and loans made from time to time from any Foreign
Subsidiary to any one or more Foreign Subsidiaries in the ordinary course of
business to finance working capital needs;
 
(k)  Permitted Acquisitions; and
 

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(l)  other investments, loans, and advances in addition to those otherwise
permitted by this Section provided that such investments, loans and advances do
not exceed $7,500,000 individually or $15,000,000 in the aggregate at any one
time outstanding.
 
In determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.
 
Section 8.10.  Mergers, Consolidations and Sales.  The Credit Parties shall not,
nor shall they permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any part
of its Property, including any disposition of Property as part of a sale and
leaseback transaction, or in any event sell or discount (with or without
recourse) any of its notes or accounts receivable; provided, however, that this
Section shall not apply to nor operate to prevent:
 
(a)  the sale or lease of inventory in the ordinary course of business;
 
(b)  the sale, transfer, lease or other disposition of Property of any Credit
Party and its Subsidiaries to one another in the ordinary course of its
business; provided that any sale, transfer, lease or other disposition of
Property to a Foreign Subsidiary for less than fair market value shall be deemed
an investment in such Foreign Subsidiary to the extent of such deficiency and
shall utilize the basket set forth in Section 8.9(h) hereof;
 
(c)  the merger of a Credit Party or any Subsidiary of a Credit Party with and
into any Credit Party or any other Subsidiary of a Credit Party, provided that,
in the case of any merger involving a Credit Party, such Credit Party is the
corporation surviving the merger and, in the case of any merger of a Borrower
and a Guarantor, such Borrower is the corporation surviving the merger;
 
(d)  the sale of delinquent notes or accounts receivable in the ordinary course
of business for purposes of collection only (and not for the purpose of any bulk
sale or securitization transaction);
 
(e)  the sale, transfer or other disposition of any tangible personal property
that, in the reasonable business judgment of the relevant Credit Party or its
Subsidiary, has become obsolete or worn out, and which is disposed of in the
ordinary course of business; and
 
(f)  the sale, transfer, lease or other disposition of Property of any Credit
Party or any Subsidiary (including any disposition of Property as part of a sale
and leaseback transaction) aggregating for the Credit Parties and their
Subsidiaries not more than $10,000,000 during any fiscal year of the Credit
Parties.
 
Section 8.11.  Maintenance of Subsidiaries.  The Credit Parties shall not
assign, sell or transfer, nor shall it permit any Subsidiary to issue, assign,
sell or transfer, any shares of capital stock or other equity interests of a
Subsidiary; provided, however, that the foregoing shall notoperate to prevent
(a) the issuance, sale, and transfer to any person of any shares of capital
stock of a Subsidiary solely for the purpose of qualifying, and to the extent
legally necessary to qualify, such person as a director of such Subsidiary, and
(b) any transaction permitted by Section 8.10(c) above.
 

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Section 8.12.  Dividends and Certain Other Restricted Payments.  The Credit
Parties shall not, nor shall they permit any Subsidiary to, (a) declare or pay
any dividends on or make any other distributions in respect of any class or
series of its capital stock or other equity interests or (b) directly or
indirectly purchase, redeem, or otherwise acquire or retire any of its capital
stock or other equity interests or any warrants, options, or similar instruments
to acquire the same; provided, however, that the foregoing shall not operate to
prevent the following (all of which are referred to collectively as “Restricted
Payments”): (i) the making of dividends or distributions by any Wholly-owned
Subsidiary of any Credit Party to its parent corporation, (ii) dividends payable
solely in the same class of capital stock of such Person, (iii) the making of
regularly scheduled dividends to the Company’s shareholders, provided that (A)
no Default or Event of Default has occurred and is continuing at such time or
would be directly or indirectly caused as a result thereof and (B) such
dividends shall be paid out of Net Income, and (iv) the Company’s repurchase of
shares of its capital stock on the open market or non-scheduled, non-recurring
dividends, provided that (A) no Default or Event of Default has occurred and is
continuing at such time or would be directly or indirectly caused as a result
thereof on an actual or pro forma basis, (B) after giving effect to such
repurchase or dividend, the Borrowers would have a Leverage Ratio on a pro forma
basis of at least 0.25:1.00 below the then maximum Leverage Ratio permitted by
Section 8.21(i), (C) after giving effect to such repurchase or dividend, there
shall be at least $35,000,000 in Unused Revolving Credit Commitments and (D) the
aggregate amount for such share repurchase or non-scheduled, non-recurring
dividend shall not exceed $5,000,000 for each fiscal year of the Company and
$15,000,000 during the term of the facilities.
 
Section 8.13.  ERISA.  The Credit Parties shall, and shall cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed could reasonably be expected
to result in the imposition of a Lien against any of its Property.  The Credit
Parties shall, and shall cause each Subsidiary to, promptly notify the
Administrative Agent and each Lender of:  (a) the occurrence of any reportable
event (as defined in ERISA) with respect to a Plan, (b) receipt of any notice
from the PBGC of its intention to seek termination of any Plan or appointment of
a trustee therefor, (c) its intention to terminate or withdraw from any Plan,
and (d) the occurrence of any event with respect to any Plan which would result
in the incurrence by any Credit Party or any Subsidiary of any material
liability, fine or penalty, or any material increase in the contingent liability
of any Credit Party or any Subsidiary with respect to any post-retirement
Welfare Plan benefit.
 
Section 8.14.  Compliance with Laws.  Each Credit Party shall, and shall cause
each Subsidiary to, comply in all respects with all Legal Requirements
applicable to or pertaining to its Property or business operations, where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its
Property.
 

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Section 8.15.  Burdensome Contracts With Affiliates. The Credit Parties shall
not, nor shall they permit any Subsidiary to, enter into any contract, agreement
or business arrangement with any of its Affiliates (other than with Wholly-owned
Subsidiaries) on terms and conditions which are less favorable to such Credit
Party or such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other.
 
Section 8.16.  No Changes in Fiscal Year.  The fiscal year of the Company and
its Subsidiaries ends on December 31 of each year; and the Company shall not,
nor shall it permit any Subsidiary to, change its fiscal year from its present
basis.
 
Section 8.17.  Formation of Subsidiaries.  Promptly upon the formation or
acquisition of any Subsidiary of the Company (whether direct or indirect), the
Company shall provide the Administrative Agent and the Lenders notice thereof
(at which time Schedule 6.2 shall be deemed amended to include reference to such
Subsidiary) and, in the case of the formation or acquisition of a Domestic
Subsidiary of the Company, comply with the requirements of Section 4 hereof on a
timely basis.
 
Section 8.18.  Change in the Nature of Business.  The Credit Parties shall not,
nor shall they permit any Subsidiary to, engage in any business or activity if
as a result the general nature of the business of such Credit Party or such
Subsidiary would be changed in any material respect from the general nature of
the business engaged in by it as of the Closing Date.
 
Section 8.19.  Use of Loan Proceeds.  The Borrowers shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 6.4 hereof.
 
Section 8.20.  No Restrictions.  Except as provided herein, the Credit Parties
shall not, nor shall they permit any Subsidiary to, directly or indirectly
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of such Credit Party or
such Subsidiary to:  (a) pay dividends or make any other distribution on any
Subsidiary’s capital stock or other equity interests owned by such Credit Party
or such Subsidiary, (b) pay any indebtedness owed to any Borrower or any
Subsidiary, (c) make loans or advances to any Borrower or any Subsidiary,
(d) transfer any of its Property to any Borrower or any Subsidiary or
(e) guarantee the Obligations, Hedging Liability and Funds Transfer and Deposit
Account Liability, and/or grant Liens on its assets to the Administrative Agent
as required by the Loan Documents.
 
Section 8.21.  Financial Covenants.  (i) Leverage Ratio.  The Company shall not,
as of the last day of each fiscal quarter of the Company, permit the Leverage
Ratio to be greater than 2.50 to 1.0.
 
(ii)  Fixed Charge Coverage Ratio.  The Company shall not, as of the last day of
each fiscal quarter of the Company, permit the Fixed Charge Coverage Ratio to be
less than 1.25 to 1.0.
 
(iii)  Operating Leases.  The Company shall not, nor shall it permit any
Subsidiary to, acquire the use or possession of any Property under a lease or
similar arrangement, whether or not the Company or any Subsidiary has the
express or implied right to acquire title to or purchasesuch Property, at any
time if, after giving effect thereto, the aggregate amount of fixed rentals and
other consideration payable by the Company and its Subsidiaries under all such
leases and similar arrangements would exceed $10,000,000 during any fiscal year
of the Company.  Capital Leases shall not be included in computing compliance
with this Section to the extent the Company’s and its Subsidiaries’ liability in
respect of the same is permitted by Section 8.7(c) hereof.
 

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(iv)  Clean-Down.  For a period of 60 consecutive days occurring between
January 1 and April 30 of each year, the aggregate principal amount of Revolving
Loans, Swing Loans and L/C Obligations shall not exceed (A) $30,000,000 for the
fiscal year ending December 31, 2009, (B) $27,500,000 for the fiscal year ending
December 31, 2010 and (C) $25,000,000 for the fiscal year ending December 31,
2011.
 
Section 8.22.  Post-Closing Covenants.  (i)  Deposit Account Control
Agreements.  Not later than 30 days after the Closing Date (as such date may be
extended by the Administrative Agent in its sole discretion) and subject to
Section 4.1 hereof, the Company shall, and shall cause each domestic Credit
Party to, deliver to the Administrative Agent account control agreements with
respect to each deposit account of the Company and domestic Credit Parties on
terms reasonably acceptable to the Administrative Agent.
 
(ii)  Opinions of Counsel.  Not later than 5 Business Days after the Closing
Date (as such date may be extended by the Administrative Agent in its sole
discretion), each Foreign Borrower shall deliver an opinion of counsel in form
and substance satisfactory to the Administrative Agent.  Notwithstanding
anything else contained herein to the contrary, the Company may not request a
Borrowing on behalf of any Foreign Borrower that has not delivered an opinion of
counsel in form and substance satisfactory to the Administrative Agent and the
Lenders shall not be obligated to advance any Borrowing to such Foreign Borrower
until receipt of such opinion.
 
SECTION 9.  EVENTS OF DEFAULT AND REMEDIES.
 
Section 9.1.  Events of Default.  Any one or more of the following shall
constitute an “Event of Default” hereunder:
 
(a)  default in the payment when due of all or any part of the principal of any
Loan (whether at the stated maturity thereof or at any other time provided for
in this Agreement) or of any Reimbursement Obligation, or default for a period
of 3 Business Days in the payment when due of any interest, fee or other
Obligation payable hereunder or under any other Loan Document;
 
(b)  default in the observance or performance of any covenant set forth in
Section 8.1(a), 8.4, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.21 or 8.22 hereof
or of any provision in any Loan Document dealing with the use, disposition or
remittance of the proceeds of Collateral or requiring the maintenance of
insurance thereon;
 
(c)  default in the observance or performance of any other provision hereof or
of any other Loan Document which is not remedied within 30 days after the
earlier of (i) the date on which such failure shall first become known to any
officer of anyBorrower or (ii) written notice thereof is given to the Borrowers
by the Administrative Agent;
 

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(d)  any representation or warranty made herein or in any other Loan Document or
in any certificate furnished to the Administrative Agent or the Lenders pursuant
hereto or thereto or in connection with any transaction contemplated hereby or
thereby proves untrue in any material respect as of the date of the issuance or
making or deemed making thereof;
 
(e)  any event occurs or condition exists (other than those described in
subsections (a) through (d) above) which is specified as an event of default
under any of the other Loan Documents, or any of the Loan Documents shall for
any reason not be or shall cease to be in full force and effect or is declared
to be null and void, or any of the Collateral Documents shall for any reason
fail to create a valid and perfected first priority Lien in favor of the
Administrative Agent in any Collateral purported to be covered thereby except as
expressly permitted by the terms thereof, or any Credit Party takes any action
for the purpose of terminating, repudiating or rescinding any Loan Document
executed by it or any of its obligations thereunder;
 
(f)  default shall occur under any Indebtedness for Borrowed Money issued,
assumed or guaranteed by any Credit Party or any Subsidiary aggregating in
excess of $1,000,000, or under any indenture, agreement or other instrument
under which the same may be issued, and such default shall continue for a period
of time sufficient to permit the acceleration of the maturity of any such
Indebtedness for Borrowed Money (whether or not such maturity is in fact
accelerated), or any such Indebtedness for Borrowed Money shall not be paid when
due (whether by demand, lapse of time, acceleration or otherwise);
 
(g)  any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes, shall be entered or filed
against any Credit Party or any Subsidiary, or against any of its Property, in
an aggregate amount in excess of $1,000,000 (except to the extent fully covered
by insurance pursuant to which the insurer has accepted liability therefor in
writing), and which remains undischarged, unvacated, unbonded or unstayed for a
period of 30 days;
 
(h)  any Credit Party or any Subsidiary, or any member of its Controlled Group,
shall fail to pay when due an amount or amounts aggregating in excess of
$1,000,000 which it shall have become liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having
aggregate Unfunded Vested Liabilities in excess of $1,000,000 (collectively, a
“Material Plan”) shall be filed under Title IV of ERISA by any Credit Party or
any Subsidiary, or any other member of its Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any Material Plan or a proceeding shall be instituted by
a fiduciary of any Material Plan against any Credit Party Borrower or any
Subsidiary, or any member of its Controlled Group, to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30
daysthereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated;
 

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(i)  any Change of Control shall occur;
 
(j)  any Credit Party or any Subsidiary shall (i) have entered involuntarily
against it an order for relief under the United States Bankruptcy Code, as
amended, (ii) not pay, or admit in writing its inability to pay, its debts
generally as they become due, (iii) make an assignment for the benefit of
creditors, (iv) apply for, seek, consent to or acquiesce in, the appointment of
a receiver, custodian, trustee, examiner, liquidator or similar official for it
or any substantial part of its Property, (v) institute any proceeding seeking to
have entered against it an order for relief under the United States Bankruptcy
Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) take any
action in furtherance of any matter described in parts (i) through (v) above, or
(vii) fail to contest in good faith any appointment or proceeding described in
Section 9.1(k) hereof; or
 
(k)  a custodian, receiver, trustee, examiner, liquidator or similar official
shall be appointed for any Credit Party or any Subsidiary, or any substantial
part of any of its Property, or a proceeding described in Section 9.1(j)(v)
shall be instituted against any Credit Party or any Subsidiary, and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 60 days.
 
Section 9.2.  Non-Bankruptcy Defaults.  When any Event of Default other than
those described in subsection (j) or (k) of Section 9.1 hereof has occurred and
is continuing, the Administrative Agent shall, by written notice to the
Borrowers:  (i) if so directed by the Required Lenders, terminate the remaining
Commitments and all other obligations of the Lenders hereunder on the date
stated in such notice (which may be the date thereof); (ii) if so directed by
the Required Lenders, declare the principal of and the accrued interest on all
outstanding Loans to be forthwith due and payable and thereupon all outstanding
Loans, including both principal and interest thereon, shall be and become
immediately due and payable together with all other amounts payable under the
Loan Documents without further demand, presentment, protest or notice of any
kind; and (iii) if so directed by the Required Lenders, demand that the
Borrowers immediately pay to the Administrative Agent the full amount then
available for drawing under each or any Letter of Credit, and the Borrowers
agree to immediately make such payment and acknowledge and agree that the
Lenders would not have an adequate remedy at law for failure by the Borrowers to
honor any such demand and that the Administrative Agent, for the benefit of the
Lenders, shall have the right to require the Borrowers to specifically perform
such undertaking whether or not any drawings or other demands for payment have
been made under any Letter of Credit.  The Administrative Agent, after giving
notice to the Borrowers pursuant to Section 9.1(c) or this Section 9.2, shall
also promptly send a copy of such notice to the other Lenders, but the failure
to do so shall not impair or annul the effect of such notice.
 

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Section 9.3.  Bankruptcy Defaults.  When any Event of Default described in
subsections (j) or (k) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Loans shall immediately become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind, the obligation of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate
and the Borrowers shall immediately pay to the Administrative Agent the full
amount then available for drawing under all outstanding Letters of Credit, the
Borrowers acknowledging and agreeing that the Lenders would not have an adequate
remedy at law for failure by the Borrowers to honor any such demand and that the
Lenders, and the Administrative Agent on their behalf, shall have the right to
require the Borrowers to specifically perform such undertaking whether or not
any draws or other demands for payment have been made under any of the Letters
of Credit.
 
Section 9.4.  Collateral for Undrawn Letters of Credit.  (a) If the prepayment
of the amount available for drawing under any or all outstanding Letters of
Credit is required under Section 1.8(b), Section 1.18, Section 9.2 or 9.3 above,
the Borrowers shall forthwith pay the amount required to be so prepaid, to be
held by the Administrative Agent as provided in subsection (b) below.
 
(b)  All amounts prepaid pursuant to subsection (a) above shall be held by the
Administrative Agent in one or more separate collateral accounts (each such
account, and the credit balances, properties, and any investments from time to
time held therein, and any substitutions for such account, any certificate of
deposit or other instrument evidencing any of the foregoing and all proceeds of
and earnings on any of the foregoing being collectively called the “Collateral
Account”) as security for, and for application by the L/C Issuer (to the extent
available) to, the reimbursement of any payment under any Letter of Credit then
or thereafter made by the Administrative Agent, and to the payment of the unpaid
balance of all other Obligations (and to all Hedging Liability and Funds
Transfer and Deposit Account Liability).  The Collateral Account shall be held
in the name of and subject to the exclusive dominion and control of the
Administrative Agent for the benefit of the Administrative Agent, the Lenders,
and the L/C Issuer.  If and when requested by the Company, on behalf of the
Borrowers, the Administrative Agent shall invest funds held in the Collateral
Account from time to time in direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided that the
Administrative Agent is irrevocably authorized to sell investments held in the
Collateral Account when and as required to make payments out of the Collateral
Account for application to amounts due and owing from the Borrowers to the L/C
Issuer, the Administrative Agent or the Lenders; provided, however, that if
(i) the Borrowers shall have made payment of all such obligations referred to in
subsection (a) above, (ii) all relevant preference or other disgorgement periods
relating to the receipt of such payments have passed, and (iii) no Letters of
Credit, Commitments, Loans or other Obligations, Hedging Liability or Funds
Transfer and Deposit Account Liability remain outstanding hereunder, then the
Administrative Agent shall release to the Company, on behalf of the Borrowers,
any remaining amounts held in the Collateral Account.
 

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Section 9.5.  Notice of Default.  The Administrative Agent shall give notice to
the Borrowers under Section 9.1(c) hereof promptly upon being requested to do so
by any Lender and shall thereupon notify all the Lenders thereof.
 
Section 9.6.  Expenses.  The Borrowers jointly and severally agree to pay to the
Administrative Agent and each Lender, and any other holder of any Note
outstanding hereunder, all costs and expenses incurred or paid by the
Administrative Agent and such Lender or any such holder, including reasonable
attorneys’ fees and court costs, in connection with any Default or Event of
Default hereunder or in connection with the enforcement of any of the Loan
Documents (including all such costs and expenses incurred in connection with any
proceeding under the United States Bankruptcy Code involving any Borrower or any
Subsidiary as a debtor thereunder).
 
SECTION 10.  CHANGE IN CIRCUMSTANCES.
 
Section 10.1.  Change of Law.  Notwithstanding any other provisions of this
Agreement or any other Loan Document, if at any time any change in applicable
law or regulation or in the interpretation thereof makes it unlawful for any
Lender to make or continue to maintain any Eurocurrency Loans or to perform its
obligations as contemplated hereby, such Lender shall promptly give notice
thereof to the Borrowers and such Lender’s obligations to make or maintain
Eurocurrency Loans under this Agreement shall be suspended until it is no longer
unlawful for such Lender to make or maintain Eurocurrency Loans.  The applicable
Borrower shall prepay on demand the outstanding principal amount of any such
affected Eurocurrency Loans, together with all interest accrued thereon and all
other amounts then due and payable to such Lender under this Agreement;
provided, however, subject to all of the terms and conditions of this Agreement,
the Company, on behalf of the applicable Borrower, may then elect to borrow the
principal amount of the affected Eurocurrency Loans from such Lender by means of
Base Rate Loans from such Lender, which Base Rate Loans shall not be made
ratably by the Lenders but only from such affected Lender.
 
Section 10.2.  Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR.  If on or prior to the first day of any Interest Period
for any Borrowing of Eurocurrency Loans:
 
(a)  the Administrative Agent determines that deposits in U.S. Dollars (in the
applicable amounts) are not being offered to it in the interbank Eurocurrency
market for such Interest Period, or that by reason of circumstances affecting
the interbank Eurocurrency market adequate and reasonable means do not exist for
ascertaining the applicable LIBOR, or
 
(b)  the Required Lenders advise the Administrative Agent that (i) LIBOR as
determined by the Administrative Agent will not adequately and fairly reflect
the cost to such Lenders of funding their Eurocurrency Loans for such Interest
Period or (ii) that the making or funding of Eurocurrency Loans become
impracticable,
 
then the Administrative Agent shall forthwith give notice thereof to the
Borrowers and the Lenders, whereupon until the Administrative Agent notifies the
Borrowers that the circumstancesgiving rise to such suspension no longer exist,
the obligations of the Lenders to make Eurocurrency Loans shall be suspended.
 

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Section 10.3.  Increased Cost and Reduced Return.  (a) If, on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Lending Office) or the L/C Issuer with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
 
(i)  shall subject any Lender (or its Lending Office) or the L/C Issuer to any
tax, duty or other charge with respect to its Eurodollar Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any Reimbursement
Obligations owed to it or its obligation to make Eurodollar Loans, issue a
Letter of Credit, or to participate therein, or shall change the basis of
taxation of payments to any Lender (or its Lending Office) or the L/C Issuer of
the principal of or interest on its Eurodollar Loans, Letter(s) of Credit, or
participations therein or any other amounts due under this Agreement or any
other Loan Document in respect of its Eurodollar Loans, Letter(s) of Credit, any
participation therein, any Reimbursement Obligations owed to it, or its
obligation to make Eurodollar Loans, or issue a Letter of Credit, or acquire
participations therein (except for changes in the rate of tax on the overall net
income of such Lender or its Lending Office or the L/C Issuer imposed by the
jurisdiction in which such Lender’s or the L/C Issuer’s principal executive
office or Lending Office is located); or
 
(ii)  shall impose, modify or deem applicable any reserve, special deposit or
similar requirement (including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System, but excluding with
respect to any Eurodollar Loans any such requirement included in an applicable
Eurodollar Reserve Percentage) against assets of, deposits with or for the
account of, or credit extended by, any Lender (or its Lending Office) or the
L/C Issuer or shall impose on any Lender (or its Lending Office) or the
L/C Issuer or on the interbank market any other condition affecting its
Eurodollar Loans, its Notes, its Letter(s) of Credit, or its participation in
any thereof, any Reimbursement Obligation owed to it, or its obligation to make
Eurodollar Loans, or to issue a Letter of Credit, or to participate therein;
 
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) or the L/C Issuer of making or maintaining any
Eurodollar Loan, issuing or maintaining a Letter of Credit, or participating
therein, or to reduce the amount of any sum received or receivable by such
Lender (or its Lending Office) or the L/C Issuer under this Agreement or under
any other Loan Document with respect thereto, by an amount deemed by such Lender
or L/C Issuer to be material, then, within 15 days after demand by such Lender
or L/C Issuer (with a copy to the Administrative Agent), the Borrowers shall be
obligated to pay to such Lender or L/C Issuer such additional amount or amounts
as will compensate such Lender or L/C Issuer for such increased cost or
reduction.  Any demand on the Borrowers by a Lender under this Section shall be
accompanied by a certificate setting forth the amount of such increased cost or
reduced sum in reasonable detail (including an explanation of the basis for and
computation of such increased cost or reduced return).
 

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(b)  If, after the date hereof, any Lender, the L/ C Issuer, or the
Administrative Agent shall have determined that the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) or
the L/C Issuer or any corporation controlling such Lender or L/C Issuer with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has had the
effect of reducing the rate of return on such Lender’s or L/C Issuer ’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which such Lender or L/C Issuer or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s or L/C Issuer ’s or such corporation’s policies with respect to
capital adequacy) by an amount deemed by such Lender or L/C Issuer to be
material, then from time to time, within 15 days after demand by such Lender or
L/C Issuer (with a copy to the Administrative Agent), the Borrower shall pay to
such Lender or L/C Issuer, as applicable, such additional amount or amounts as
will compensate such Lender or L/C Issuer for such reduction.  Any demand on the
Borrowers by a Lender under this Section shall be accompanied by a certificate
setting forth the amount of such reduced return in reasonable detail (including
an explanation of the basis for and the computation of such reduced return).
 
(c)  A certificate of a Lender or L/C Issuer claiming compensation under this
Section 10.3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive, absent manifest error, if reasonably
determined.  In determining such amount, such Lender or L/C Issuer may use any
reasonable averaging and attribution methods.
 
Section 10.4.  Lending Offices.  Each Lender may, at its option, elect to make
its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a “Lending Office”) for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice to the
Borrower and the Administrative Agent.  To the extent reasonably possible, a
Lender shall designate an alternative branch or funding office with respect to
its Eurocurrency Loans to reduce any liability of the Borrowers to such Lender
under Section 10.3 hereof or to avoid the unavailability of Eurocurrency Loans
under Section 10.2 hereof, so long as such designation is not otherwise
disadvantageous to the Lender.
 
Section 10.5.  Discretion of Lender as to Manner of Funding.  Notwithstanding
any other provision of this Agreement, each Lender shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder with respect to Eurocurrency Loans shall be made as if
each Lender had actually funded and maintained each Eurocurrency Loan through
the purchase of deposits in the interbank Eurocurrency market having a maturity
corresponding to such Loan’s Interest Period, and bearing an interest rate equal
to LIBOR for such Interest Period.
 

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SECTION 11.  THE ADMINISTRATIVE AGENT.

                Section 11.1.  Appointment and Authorization of Administrative
Agent.    Each Lender and the L/C Issuer hereby appoints Bank of Montreal as the
Administrative Agent under the Loan Documents and hereby authorizes the
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto.  The Lenders and L/C Issuer expressly agree that
the Administrative Agent is not acting as a fiduciary of the Lenders or the
L/C Issuer in respect of the Loan Documents, the Borrower or otherwise, and
nothing herein or in any of the other Loan Documents shall result in any duties
or obligations on the Administrative Agent or any of the Lenders or L/C Issuer
except as expressly set forth herein.
 
Section 11.2.  Administrative Agent and its Affiliates.  The Administrative
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Lender and may exercise or refrain from exercising
such rights and power as though it were not the Administrative Agent, and the
Administrative Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with any Borrower or any Affiliate
of such Borrower as if it were not the Administrative Agent under the Loan
Documents.  The term “Lender” as used herein and in all other Loan Documents,
unless the context otherwise clearly requires, includes the Administrative Agent
in its individual capacity as a Lender (if applicable).
 
Section 11.3.  Action by Administrative Agent.  If the Administrative Agent
receives from any Borrower a written notice of an Event of Default pursuant to
Section 8.5 hereof, the Administrative Agent shall promptly give each of the
Lenders and L/C Issuer written notice thereof.  The obligations of the
Administrative Agent under the Loan Documents are only those expressly set forth
therein.  Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action hereunder with respect to any
Default or Event of Default, except as expressly provided in Sections 9.2 and
9.5.  Upon the occurrence of an Event of Default, the Administrative Agent shall
take such action to enforce its Lien on the Collateral and to preserve and
protect the Collateral as may be directed by the Required Lenders.  Unless and
until the Required Lenders give such direction, the Administrative Agent may
(but shall not be obligated to) take or refrain from taking such actions as it
deems appropriate and in the best interest of all the Lenders and
L/C Issuer.  In no event, however, shall the Administrative Agent be required to
take any action in violation of applicable law or of any provision of any Loan
Document, and the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Loan Document unless it
first receives any further assurances of its indemnification from the Lenders
that it may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such
action.  The Administrative Agent shall be entitled to assume that no Default or
Event of Default exists unless notified in writing to the contrary by a Lender,
the L/C Issuer, or the Company or a Borrower.  In all cases in which the Loan
Documents do not require the Administrative Agent to take specific action, the
Administrative Agent shall be fully justified in using its discretion in failing
to take or in taking any action thereunder.  Any instructions of the Required
Lenders, or of any other group of Lenders called for under the specific
provisions of the Loan Documents, shall be binding upon all the Lenders and the
holders of the Obligations.
 

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Section 11.4.  Consultation with Experts.  The Administrative Agent may consult
with legal counsel, independent public accountants, and other experts selected
by it in good faith and shall not be liable for any action taken or omitted to
be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
 
Section 11.5.  Liability of Administrative Agent; Credit Decision.  Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection with the
Loan Documents:  (i) with the consent or at the request of the Required Lenders
or (ii) in the absence of its own gross negligence or willful
misconduct.  Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify:  (i) any statement, warranty or
representation made in connection with this Agreement, any other Loan Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Credit Parties or any Subsidiary contained herein or in any
other Loan Document; (iii) the satisfaction of any condition specified in
Section 7 hereof, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness, genuineness,
enforceability, perfection, value, worth or collectibility hereof or of any
other Loan Document or of any other documents or writing furnished in connection
with any Loan Document or of any Collateral; and the Administrative Agent makes
no representation of any kind or character with respect to any such matter
mentioned in this sentence.  The Administrative Agent may execute any of its
duties under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, the L/C Issuer,
the Credit Parties, or any other Person for the default or misconduct of any
such agents or attorneys-in-fact selected with reasonable care.  The
Administrative Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, other document or statement (whether written
or oral) reasonably believed by it to be genuine or to be sent by the proper
party or parties.  In particular and without limiting any of the foregoing, the
Administrative Agent shall have no responsibility for confirming the accuracy of
any compliance certificate or other document or instrument received by it under
the Loan Documents.  The Administrative Agent may treat the payee of any
Obligation as the holder thereof until written notice of transfer shall have
been filed with the Administrative Agent signed by such payee in form
satisfactory to the Administrative Agent.  Each Lender and L/C Issuer
acknowledges that it has independently and without reliance on the
Administrative Agent or any other Lender or L/C Issuer, and based upon such
information, investigations and inquiries as it deems appropriate, made its own
credit analysis and decision to extend credit to the Borrowers in the manner set
forth in the Loan Documents.  It shall be the responsibility of each Lender and
L/C Issuer to keep itself informed as to the creditworthiness of the Borrowers
and their Subsidiaries, and the Administrative Agent shall have no liability to
any Lender or L/C Issuer with respect thereto.
 
Section 11.6.  Indemnity.  The Lenders shall ratably, in accordance with their
respective Percentages, indemnify and hold the Administrative Agent, and its
directors, officers, employees, agents, and representatives harmless from and
against any liabilities, losses, costs or expenses suffered or incurred by it
under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrowers and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified.  The obligations of the
Lenders under this Section shall survivetermination of this Agreement.  The
Administrative Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from such
Lender to the Administrative Agent hereunder (whether as fundings of
participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Administrative Agent by any Lender arising outside
of this Agreement and the other Loan Documents.
 

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Section 11.7.  Resignation of Administrative Agent and Successor Administrative
Agent.  The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders, the L/C Issuer, and the Borrowers and may be removed by
the Required Lenders upon twenty (20) days prior written notice to the
Borrowers, the Administrative Agent, the L/C Issuers and the Lenders.  Upon any
such resignation or removal of the Administrative Agent, the Required Lenders
shall have the right to appoint a successor Administrative Agent, which
appointment shall be with the Borrowers’ consent if no Event of Default
exists.  If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment after the
Administrative Agent has delivered its notice of resignation, within 30 days
after the retiring Administrative Agent’s giving of notice of resignation then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which may be any Lender hereunder or any
commercial bank, or an Affiliate of a commercial bank, having an office in the
United States of America and having a combined capital and surplus of at least
$200,000,000, which appointment shall be with the Borrowers’ consent if no Event
of Default exists.  Upon the acceptance of its appointment as the Administrative
Agent hereunder, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights and duties of the retiring Administrative
Agent under the Loan Documents, and the retiring Administrative Agent shall be
discharged from its duties and obligations thereunder.  The removal of the
Administrative Agent hereunder shall become effective 20 days after receipt of
such notice of removal, and upon the effectiveness of such removal, the removed
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents.  After any retiring or removed Administrative Agent’s
resignation or removal (as the case may be) hereunder as Administrative Agent,
the provisions of this Section 11 and all protective provisions of the other
Loan Documents shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent, but no successor
Administrative Agent shall in any event be liable or responsible for any actions
of its predecessor.  If the Administrative Agent resigns or is removed and no
successor is appointed, the rights and obligations of such Administrative Agent
shall be automatically assumed by the Required Lenders and (i) the Borrowers
shall be directed to make all payments due each Lender and L/C Issuer hereunder
directly to such Lender or L/C Issuer and (ii) the Administrative Agent’s rights
in the Collateral Documents shall be assigned without representation, recourse
or warranty to the Lenders and L/C Issuer as their interests may appear.
 
Section 11.8.  L/C Issuer and Swing Line Lender.  The L/C Issuer shall act on
behalf of the Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and the Swing Line Lender shall act on behalf of
the Lenders with respect to the Swing Loans made hereunder.  The L/C Issuer and
the Swing Line Lender shall each have all of the benefits and immunities
(i) provided to the Administrative Agent in this Section 11 with respect to any
acts taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and the Applications
pertaining to such Lettersof Credit or by the Swing Line Lender in connection
with Swing Loans made or to be made hereunder as fully as if the term
“Administrative Agent”, as used in this Section 11, included the L/C Issuer and
the Swing Line Lender with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to such L/C Issuer or Swing
Line Lender, as applicable.
 

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Section 11.9.  Hedging Liability and Funds Transfer and Deposit Account
Liability Arrangements.  By virtue of a Lender’s execution of this Agreement or
an assignment agreement pursuant to Section 13.12 hereof, as the case may be,
any Affiliate of such Lender with whom any Borrower or any Subsidiary has
entered into an agreement creating Hedging Liability or Funds Transfer and
Deposit Account Liability shall be deemed a Lender party hereto for purposes of
any reference in a Loan Document to the parties for whom the Administrative
Agent is acting, it being understood and agreed that the rights and benefits of
such Affiliate under the Loan Documents consist exclusively of such Affiliate’s
right to share in payments and collections out of the Collateral and the
Guaranties as more fully set forth in Section 3.1 hereof.  In connection with
any such distribution of payments and collections, or any request for the
release of the Guaranties and the Administrative Agent’s Liens in connection
with the termination of the Commitments and the payment in full of the
Obligations, the Administrative Agent shall be entitled to assume no amounts are
due to any Lender or its Affiliate with respect to Hedging Liability or Funds
Transfer and Deposit Account Liability unless such Lender has notified the
Administrative Agent in writing of the amount of any such liability owed to it
or its Affiliate prior to such distribution or payment or release of Guaranties
and Liens.
 
Section 11.10.  Designation of Additional Agents.  The Administrative Agent
shall have the continuing right, for purposes hereof, at any time and from time
to time to designate one or more of the Lenders (and/or its or their Affiliates)
as “syndication agents,” “documentation agents,” “arrangers,” or other
designations for purposes hereto, but such designation shall have no substantive
effect, and such Lenders and their Affiliates shall have no additional powers,
duties or responsibilities as a result thereof.
 
Section 11.11.  Authorization to Release or Subordinate or Limit Liens.   The
Administrative Agent is hereby irrevocably authorized by each of the Lenders and
the L/C Issuer to (a) release any Lien covering any Collateral that is sold,
transferred, or otherwise disposed of in accordance with the terms and
conditions of this Agreement and the relevant Collateral Documents (including a
sale, transfer, or disposition permitted by the terms of Section 8.10 hereof or
which has otherwise been consented to in accordance with Section 13.13 hereof),
(b) release or subordinate any Lien on Collateral consisting of goods financed
with purchase money indebtedness or under a Capital Lease to the extent such
purchase money indebtedness or Capitalized Lease Obligation, and the Lien
securing the same, are permitted by Sections 8.7(c) and 8.8(d) hereof,
(c) reduce or limit the amount of the indebtedness secured by any particular
item of Collateral to an amount not less than the estimated value thereof to the
extent necessary to reduce mortgage registry, filing and similar tax, and
(d) release Liens on the Collateral following termination or expiration of the
Commitments and payment in full in cash of the Obligations and, if then due,
Hedging Liability and Funds Transfer and Deposit Account Liability.
 

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Section 11.12.   Authorization to Enter into, and Enforcement of, the Collateral
Documents.  The Administrative Agent is hereby irrevocably authorized by each of
the Lenders and the L/C Issuer to execute and deliver the Collateral Documents
on behalf of each of the Lenders and their Affiliates and the L/C Issuer and to
take such action and exercise such powers under the Collateral Documents as the
Administrative Agent considers appropriate, provided the Administrative Agent
shall not amend the Collateral Documents unless such amendment is agreed to in
writing by the Required Lenders.  Each Lender and L/C Issuer acknowledges and
agrees that it will be bound by the terms and conditions of the Collateral
Documents upon the execution and delivery thereof by the Administrative
Agent.  Except as otherwise specifically provided for herein, no Lender (or its
Affiliates) or L/C Issuer, other than the Administrative Agent, shall have the
right to institute any suit, action or proceeding in equity or at law for the
foreclosure or other realization upon any Collateral or for the execution of any
trust or power in respect of the Collateral or for the appointment of a receiver
or for the enforcement of any other remedy under the Collateral Documents; it
being understood and intended that no one or more of the Lenders (or their
Affiliates) or L/C Issuer shall have any right in any manner whatsoever to
affect, disturb or prejudice the Lien of the Administrative Agent (or any
security trustee therefor) under the Collateral Documents by its or their action
or to enforce any right thereunder, and that all proceedings at law or in equity
shall be instituted, had, and maintained by the Administrative Agent (or its
security trustee) in the manner provided for in the relevant Collateral
Documents for the benefit of the Lenders, the L/C Issuer, and their Affiliates.
 
SECTION 12.  THE GUARANTEES; JOINT AND SEVERAL OBLIGATIONS.
 
Section 12.1.  The Guarantees.  To induce the Lenders and L/C Issuer to provide
the credits described herein and in consideration of benefits expected to accrue
to the Borrowers by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Company and each
Domestic Subsidiary party hereto (including any Subsidiary executing an
Additional Guarantor Supplement in the form attached hereto as Exhibit F or such
other form acceptable to the Administrative Agent) hereby unconditionally and
irrevocably guarantees jointly and severally to the Administrative Agent, the
Lenders, and the L/C Issuer and their Affiliates, the due and punctual payment
of all present and future Obligations, Hedging Liability, and Funds Transfer and
Deposit Account Liability, including, but not limited to, the due and punctual
payment of principal of and interest on the Loans, the Reimbursement
Obligations, and the due and punctual payment of all other Obligations now or
hereafter owed by the Borrowers, or any of them, under the Loan Documents and
the due and punctual payment of all Hedging Liability and Funds Transfer and
Deposit Account Liability, in each case as and when the same shall become due
and payable, whether at stated maturity, by acceleration, or otherwise,
according to the terms hereof and thereof (including all interest, costs, fees,
and charges after the entry of an order for relief against any Borrower or such
other obligor in a case under the United States Bankruptcy Code or any similar
proceeding, whether or not such interest, costs, fees and charges would be an
allowed claim against any Borrower or any such obligor in any such
proceeding).  In case of failure by a Borrower or other obligor punctually to
pay any Obligations, Hedging Liability, or Funds Transfer and Deposit Account
Liability guaranteed hereby, each Guarantor hereby unconditionally agrees to
make such payment or to cause such payment to be made punctually as and when the
same shall become due and payable, whether at stated maturity, by acceleration,
or otherwise, and as if such payment were made by such Borrower.
 

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Section 12.2.  Guarantee Unconditional.  The obligations of each Guarantor under
this Section 12 shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged, or otherwise
affected by:
 
(a)  any extension, renewal, settlement, compromise, waiver, or release in
respect of any obligation of any Borrower or of any other Guarantor under this
Agreement or any other Loan Document or by operation of law or otherwise;
 
(b)  any modification or amendment of or supplement to this Agreement or any
other Loan Document or any agreement relating to Hedging Liability or Funds
Transfer and Deposit Account Liability;
 
(c)  any change in the corporate existence, structure, or ownership of, or any
insolvency, bankruptcy, reorganization, or other similar proceeding affecting,
any Borrower, any other Guarantor, or any of their respective assets, or any
resulting release or discharge of any obligation of any Borrower or of any other
Guarantor contained in any Loan Document;
 
(d)  the existence of any claim, set-off, or other rights which any Borrower or
any other Guarantor may have at any time against the Administrative Agent, any
Lender, the L/C Issuer or any other Person, whether or not arising in connection
herewith;
 
(e)  any failure to assert, or any assertion of, any claim or demand or any
exercise of, or failure to exercise, any rights or remedies against any
Borrower, any other Guarantor, or any other Person or Property;
 
(f)  any application of any sums by whomsoever paid or howsoever realized to any
obligation of any Borrower, regardless of what obligations of the Borrowers
remain unpaid;
 
(g)  any invalidity or unenforceability relating to or against any Borrower or
any other Guarantor for any reason of this Agreement or of any other Loan
Document or any agreement relating to Hedging Liability or Funds Transfer and
Deposit Account Liability or any provision of applicable law or regulation
purporting to prohibit the payment by any Borrower or any other Guarantor of the
principal of or interest on any Loan or any Reimbursement Obligation or any
other amount payable under the Loan Documents or any agreement relating to
Hedging Liability or Funds Transfer and Deposit Account Liability; or
 
(h)  any other act or omission to act or delay of any kind by the Administrative
Agent, any Lender, the L/C Issuer or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the obligations of the Borrowers under this
Section 12.
 
Section 12.3.  Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances.  Each Guarantor’s obligations under this Section 12 shall remain
in full force and effect until the Commitments are terminated, all Letters of
Credit have expired, and the principal of and interest on the Loans and all
other amounts payable by the Borrowers and the Guarantorsunder this Agreement
and all other Loan Documents and, if then outstanding and unpaid, all Hedging
Liability and Funds Transfer and Deposit Account Liability, shall have been paid
in full.  If at any time any payment of the principal of or interest on any Loan
or any Reimbursement Obligation or any other amount payable by any Borrower or
any Guarantor under the Loan Documents or any agreement relating to Hedging
Liability or Funds Transfer and Deposit Account Liability is rescinded or must
be otherwise restored or returned upon the insolvency, bankruptcy, or
reorganization of any Borrower or of any Guarantor, or otherwise, each
Guarantor’s obligations under this Section 12 with respect to such payment shall
be reinstated at such time as though such payment had become due but had not
been made at such time.
 

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Section 12.4.  Subrogation.  Each Guarantor agrees it will not exercise any
rights which it may acquire by way of subrogation by any payment made hereunder,
or otherwise, until all the Obligations, Hedging Liability, and Funds Transfer
and Deposit Account Liability shall have been paid in full subsequent to the
termination of the Commitments and expiration of all Letters of Credit.  If any
amount shall be paid to a Guarantor on account of such subrogation rights at any
time prior to the later of (x) the payment in full of the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability and all other
amounts payable by the Borrowers hereunder and the other Loan Documents and
(y) the termination of the Commitments and expiration of all Letters of Credit,
such amount shall be held in trust for the benefit of the Administrative Agent,
the Lenders, and the L/C Issuers (and their Affiliates) and shall forthwith be
paid to the Administrative Agent for the benefit of the Lenders the L/C Issuers
(and their Affiliates) or be credited and applied upon the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability, whether matured or
unmatured, in accordance with the terms of this Agreement.
 
Section 12.5.  Waivers.  Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest, and any notice not provided for herein, as well as
any requirement that at any time any action be taken by the Administrative
Agent, any Lender, the L/C Issuer or any other Person against any Borrower,
another Guarantor, or any other Person.
 
Section 12.6.  Limit on Recovery.  Notwithstanding any other provision hereof,
the right of recovery against each Guarantor under this Section 12 shall not
exceed $1.00 less than the lowest amount which would render such Guarantor’s
obligations under this Section 12 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.
 
Section 12.7.  Stay of Acceleration.  If acceleration of the time for payment of
any amount payable by any Borrower under this Agreement or any other Loan
Document, or under any agreement establishing Hedging Liability or Funds
Transfer and Deposit Account Liability, is stayed upon the insolvency,
bankruptcy or reorganization of any Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement or the other Loan Documents,
or under any agreement establishing Hedging Liability or Funds Transfer and
Deposit Account Liability, shall nonetheless be payable by the Guarantors
hereunder forthwith on demand by the Administrative Agent made at the request of
the Required Lenders.
 
Section 12.8.  Benefit to Guarantors.  Each Guarantor will derive substantial
direct and indirect benefit from the extensions of credit hereunder.
 

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Section 12.9.  Guarantor Covenants.  Each Guarantor shall take such action as
the Borrowers are required by this Agreement to cause such Guarantor to take,
and shall refrain from taking such action as the Borrowers are required by this
Agreement to prohibit such Guarantor from taking.
 
Section 12.10.  Joint and Several Obligors.  (a) Each Borrower agrees that it is
jointly and severally liable for all the Obligations, Hedging Liability and
Funds Transfer and Deposit Account Liability of each other Borrower; provided,
however, no Foreign Borrower shall be liable (whether as a joint and several
obligor or as a guarantor) for the Obligations, Hedging Liability and Funds
Transfer and Deposit Account Liability of any Domestic Borrower.  Each Borrower
further acknowledges and agrees that its joint and several liability on the
Loans and on all other Obligations, Hedging Liability and Funds Transfer and
Deposit Account Liability owed by any Borrower or Borrowers is absolute and
unconditional and shall not in any manner be affected or impaired by any acts or
omissions whatsoever by the Lenders or the Administrative Agent, and without
limiting the generality of the foregoing, each Borrower’s joint and several
liability on the Obligations, Hedging Liability and Funds Transfer and Deposit
Account Liability of the Borrowers shall not be impaired by any acceptance by
the Administrative Agent or the Lenders of any other security for or guarantors
upon the Obligations, Hedging Liability and Funds Transfer and Deposit Account
Liability or by any failure, neglect or omission on the Lenders’ or the
Administrative Agent’s part to resort to any one or all of the Borrowers for
payment of the Obligations, Hedging Liability and Funds Transfer and Deposit
Account Liability or to realize upon or protect any collateral security
therefor.  Each Borrower’s joint and several liability on the Obligations,
Hedging Liability and Funds Transfer and Deposit Account Liability of each
Borrower shall not in any manner be impaired or affected by who receives or uses
the proceeds of the Loans or for what purposes such proceeds are used, and each
Borrower waives notice of borrowing requests issued by, and loans made to, other
Borrowers.  Such joint and several liability of each Borrower shall also not be
impaired or affected by any sale, pledge, surrender, compromise, settlement,
release, renewal, extension, indulgence, alteration, substitution, exchange,
change in, modification or disposition of any collateral security for the
Obligations, Hedging Liability and Funds Transfer and Deposit Account Liability
or of any guaranty thereof.  In order to enforce payment of the Obligations,
Hedging Liability and Funds Transfer and Deposit Account Liability, foreclose or
otherwise realize on any collateral security therefor, and to exercise the
rights granted to the Administrative Agent hereunder and thereunder and under
applicable law, the Administrative Agent shall be under no obligation at any
time to first resort to any collateral security, property, liens or any other
rights or remedies whatsoever, and the Lenders shall have the right to enforce
the Obligations, Hedging Liability and Funds Transfer and Deposit Account
Liability irrespective of whether or not other proceedings or steps are pending
seeking resort to or realization upon or from any of the foregoing.  By its
acceptance below, each Borrower hereby expressly waives and surrenders any
defense to its joint and several liability on the Obligations, Hedging Liability
and Funds Transfer and Deposit Account Liability of each Borrower based upon any
of the foregoing.  In furtherance thereof, each Borrower agrees that wherever in
this Agreement it is provided that a Borrower is liable for a payment such
obligation is the joint and several obligation of each Borrower; provided,
however, no Foreign Borrower shall be liable (whether as a joint and several
obligor or as a guarantor) for the Obligations, Hedging Liability and Funds
Transfer and Deposit Account Liability of any Domestic Borrower.
 

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SECTION 13.  MISCELLANEOUS.
 
Section 13.1.  Withholding Taxes.  (a) Payments Free of Withholding.  Except as
otherwise required by law and subject to Section 13.1(b) hereof, each payment by
any Borrower and the Guarantors under this Agreement or the other Loan Documents
shall be made without withholding for or on account of any present or future
taxes (other than overall net income taxes on the recipient) imposed by or
within the jurisdiction in which such Borrower or such Guarantor is domiciled,
any jurisdiction from which such Borrower or such Guarantor makes any payment,
or (in each case) any political subdivision or taxing authority thereof or
therein.  If any such withholding is so required, the relevant Borrower or such
Guarantor shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Lender, the L/C Issuer and the
Administrative Agent free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount which that Lender, L/C Issuer or the
Administrative Agent (as the case may be) would have received had such
withholding not been made.  If the Administrative Agent, the L/C Issuer, or any
Lender pays any amount in respect of any such taxes, penalties or interest, the
Borrowers or such Guarantor shall reimburse the Administrative Agent, or L/C
Issuer or such Lender for that payment on demand in the currency in which such
payment was made.  If any Borrower or such Guarantor pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Lender, the L/C Issuer or
Administrative Agent on whose account such withholding was made (with a copy to
the Administrative Agent if not the recipient of the original) on or before the
thirtieth day after payment.
 
(b)  U.S. Withholding Tax Exemptions.  Each Lender or L/C Issuer that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrower and the Administrative Agent on or before the
date the initial Credit Event is made hereunder or, if later, the date such
financial institution becomes a Lender or L/C Issuer hereunder, two duly
completed and signed copies of (i) either Form W-8 BEN (relating to such Lender
or L/C Issuer and entitling it to a complete exemption from withholding under
the Code on all amounts to be received by such Lender or L/C Issuer, including
fees, pursuant to the Loan Documents and the Obligations) or Form W-8 ECI
(relating to all amounts to be received by such Lender or L/C Issuer, including
fees, pursuant to the Loan Documents and the Obligations) of the United States
Internal Revenue Service or (ii) solely if such Lender is claiming exemption
from United States withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of “portfolio interest”, a Form W-8 BEN, or any
successor form prescribed by the Internal Revenue Service, and a certificate
representing that such Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of any Borrower and is not a controlled
foreign corporation related to any Borrower (within the meaning of
Section 864(d)(4) of the Code).  Thereafter and from time to time, each Lender
and L/C Issuer shall submit to the Borrowers and the Administrative Agent such
additional duly completed and signed copies of one or the other of such Forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) and such other certificates as may be
(i) requested by the Company, on behalf of Borrowers, in a written notice,
directly or through the Administrative Agent, to such Lender or L/C Issuer and
(ii) required under then-current United States law orregulations to avoid or
reduce United States withholding taxes on payments in respect of all amounts to
be received by such Lender or L/C Issuer, including fees, pursuant to the Loan
Documents or the Obligations.  Upon the request of the Company, on behalf of the
Borrowers, or the Administrative Agent, each Lender and L/C Issuer that is a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Company and the Administrative Agent a certificate to
the effect that it is such a United States person.
 

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(c)  Inability of Lender to Submit Forms.  If any Lender or L/C Issuer
determines, as a result of any change in applicable law, regulation or treaty,
or in any official application or interpretation thereof, that it is unable to
submit to the Borrowers or the Administrative Agent any form or certificate that
such Lender or L/C Issuer is obligated to submit pursuant to subsection (b) of
this Section 13.1 or that such Lender or L/C Issuer is required to withdraw or
cancel any such form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Lender or
L/C Issuer shall promptly notify the Borrowers and Administrative Agent of such
fact and the Lender or L/C Issuer shall to that extent not be obligated to
provide any such form or certificate and will be entitled to withdraw or cancel
any affected form or certificate, as applicable.
 
Section 13.2.  No Waiver, Cumulative Remedies.  No delay or failure on the part
of the Administrative Agent, the L/C Issuer or any Lender or on the part of the
holder or holders of any of the Obligations in the exercise of any power or
right under any Loan Document shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof or the exercise of
any other power or right.  The rights and remedies hereunder of the
Administrative Agent, the Lenders and of the holder or holders of any of the
Obligations are cumulative to, and not exclusive of, any rights or remedies
which any of them would otherwise have.
 
Section 13.3.  Non-Business Days.  If any payment hereunder becomes due and
payable on a day which is not a Business Day, the due date of such payment shall
be extended to the next succeeding Business Day on which date such payment shall
be due and payable.  In the case of any payment of principal falling due on a
day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
 
Section 13.4.  Documentary Taxes.  The Borrowers jointly and severally agree to
pay on demand any documentary, stamp or similar taxes payable in respect of this
Agreement or any other Loan Document, including interest and penalties, in the
event any such taxes are assessed, irrespective of when such assessment is made
and whether or not any is then in use or available hereunder.
 
Section 13.5.  Survival of Representations.  All representations and warranties
made herein or in any other Loan Document or in certificates given pursuant
hereto or thereto shall survive the execution and delivery of this Agreement and
the other Loan Documents, and shall continue in full force and effect with
respect to the date as of which they were made as long as any credit is in use
or available hereunder.
 

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Section 13.6.  Survival of Indemnities.  All indemnities and other provisions
relative to reimbursement to the Lenders and L/C Issuer of amounts sufficient to
protect the yield of the Lenders and L/C Issuer with respect to the Loans and
Letters of Credit, including, but not limited to, Sections 1.12, 10.3, and 13.15
hereof, shall survive the termination of this Agreement and the other Loan
Documents and the payment of the Obligations.
 
Section 13.7.  Sharing of Set-Off.  Each Lender agrees with each other Lender a
party hereto that if such Lender shall receive and retain any payment, whether
by set-off or application of deposit balances or otherwise, on any of the Loans
or Reimbursement Obligations in excess of its ratable share of payments on all
such Obligations then outstanding to the Lenders, then such Lender shall
purchase for cash at face value, but without recourse, ratably from each of the
other Lenders such amount of the Loans or Reimbursement Obligations, or
participations therein, held by each such other Lenders (or interest therein) as
shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however, that if any such purchase is made
by any Lender, and if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest.  For purposes
of this Section, amounts owed to or recovered by the L/C Issuer in connection
with Reimbursement Obligations in which Lenders have been required to fund their
participation shall be treated as amounts owed to or recovered by the L/C Issuer
as a Lender hereunder.
 
Section 13.8.  Notices.  Except as otherwise specified herein, all notices
hereunder and under the other Loan Documents shall be in writing (including,
without limitation, notice by telecopy) and shall be given to the relevant party
at its address or telecopier number set forth below, or such other address or
telecopier number as such party may hereafter specify by notice to the
Administrative Agent and the Borrowers given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt.  Notices
under the Loan Documents to any Lender shall be addressed to its address or
telecopier number set forth on its Administrative Questionnaire; and notices
under the Loans Documents to the Borrowers, any Guarantor, the Administrative
Agent or L/C Issuer shall be addressed to its respective address or telecopier
number set forth below:
 
to any Borrower or any Guarantor: 
 
RC2 Corporation
1111 West 22nd Street, Suite 320
Oak Brook, Illinois  60523
Attention:        Mr. Curt Stoelting
Telephone:      (630) 573-7200,
                          ext. 7326
Telecopy:        (630) 573-7578
to the Administrative Agent and L/C Issuer :
 

Bank of Montreal
115 South LaSalle Street
Chicago, Illinois  60603
Attention:        Mr. Paul R. Feaser III
Telephone:       (312) 461-4170
Telecopy:         (312) 765-1624

 

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with a copy to:
 
James M. Bedore, Esq.
Reinhart Boerner Van Deuren, S.C.
1000 North Water Street
Milwaukee, Wisconsin  53202
Telephone:   (414) 298-8196
Facsimile:   (414) 298-8097

Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or in the relevant Administrative Questionnaire and a
confirmation of such telecopy has been received by the sender, (ii) if given by
mail, 5 days after such communication is deposited in the mail, certified or
registered with return receipt requested, addressed as aforesaid or (iii) if
given by any other means, when delivered at the addresses specified in this
Section or in the relevant Administrative Questionnaire; provided that any
notice given pursuant to Section 1 hereof shall be effective only upon receipt.
 
Section 13.9.  Counterparts.  This Agreement may be executed in any number of
counterparts, and by the different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
 
Section 13.10.   Successors and Assigns.  This Agreement shall be binding upon
the Borrowers and the Guarantors and their successors and assigns, and shall
inure to the benefit of the Administrative Agent, the L/C Issuer, and each of
the Lenders, and the benefit of their respective successors and assigns,
including any subsequent holder of any of the Obligations.  The Borrowers and
the Guarantors may not assign any of their rights or obligations under any Loan
Document without the written consent of all of the Lenders and, with respect to
any Letter of Credit or the Application therefor, the L/C Issuer.
 
Section 13.11.  Participants.  Each Lender shall have the right at its own cost
to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitment held by such Lender at any time and from time to time to one
or more other Persons; provided that no such participation shall relieve any
Lender of any of its obligations under this Agreement, and, provided, further
that no such participant shall have any rights under this Agreement except as
provided in this Section, and the Administrative Agent shall have no obligation
or responsibility to such participant.  Any agreement pursuant to which such
participation  is granted shall provide that the granting Lender shall retain
the sole right and responsibility to enforce the obligations of the Borrowers
under this Agreement and the other Loan Documents including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
the Loan Documents, except that such agreement may provide that such Lender will
not agree to any modification, amendment or waiver of the Loan Documents that
would reduce the amount of or postpone any fixed date for payment of any
Obligation in which such participant has an interest.  Any party to which such a
participation has been granted shall have the benefits of Section 1.12 and
Section 10.3 hereof.  The Borrowers authorize each Lender to disclose to any
participant or prospective participant under this Section any financial or other
information pertaining to any Borrower or any Subsidiary.
 

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Section 13.12.  Assignments.  (a) Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
at the time owing to it); provided that any such assignment shall be subject to
the following conditions:
 
(i)  Minimum Amounts.  (A) In the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and the Loans and participation
interest in L/C Obligations at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and (B) in any case not described in subsection
(a)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Loans and participation interest in L/C Obligations
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans and participation interest in L/C
Obligations of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent or, if “Effective Date” is specified in
the Assignment and Acceptance, as of the Effective Date) shall not be less than
$5,000,000, in the case of any assignment in respect of the Revolving Credit, or
$5,000,000, in the case of any assignment in respect of any Term Loan, unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrowers otherwise consent (each such consent
not to be unreasonably withheld or delayed);
 
(ii)  Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among separate Credits
on a non-pro rata basis.
 
(iii)  Required Consents.  No consent shall be required for any assignment
except to the extent required by Section 13.12(a)(i)(B) and, in addition:
 
(a)  the consent of the Borrowers (such consent not to be unreasonably withheld
or delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund;
 
(b)  the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments in respect
of (i) the Revolving Credit if such assignment is to a Person that is not a
Lender with a Commitment in respect of such facility, an Affiliate of such
Lender or an Approved Fund with respect to such Lender or (ii) the Term Loans to
a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund;
 
(c)  the consent of the L/C Issuer (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment that increases the obligation
of the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding); and
 

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(d)  the consent of the Swing Line Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Swing
Loans (whether or not then outstanding).
 
(iv)  Assignment and Acceptance.  The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500, and the assignee, if it is not
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.
 
(v)  No Assignment to any Borrower.  No such assignment shall be made to any
Borrower or any of its Affiliates or Subsidiaries.
 
(vi)  No Assignment to Natural Persons.  No such assignment shall be made to a
natural person.
 
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 13.12(b) hereof, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 13.6 and 13.15 with respect to facts and circumstances
occurring prior to the effective date of such assignment.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with Section 13.11 hereof.
 
(b)  Register.  The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in Chicago,
Illinois, a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent,
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be
available for inspection by any Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
 
(c)  Any Lender may at any time pledge or grant a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any such pledge or grant to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or grant of a security interest;
provided that no such pledge or grant of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such pledgee or
secured party for such Lender as a party hereto; provided further, however, the
right of any suchpledgee or grantee (other than any Federal Reserve Bank) to
further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.
 

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(d)  Notwithstanding anything to the contrary herein, if at any time the Swing
Line Lender assigns all of its Revolving Credit Commitments and Revolving Loans
pursuant to subsection (a) above, the Swing Line Lender may terminate the Swing
Line.  In the event of such termination of the Swing Line, the Borrowers shall
be entitled to appoint another Lender to act as the successor Swing Line Lender
hereunder (with such Lender’s consent); provided, however, that the failure of
the Company to appoint a successor shall not affect the resignation of the Swing
Line Lender.  If the Swing Line Lender terminates the Swing Line, it shall
retain all of the rights of the Swing Line Lender provided hereunder with
respect to Swing Loans made by it and outstanding as of the effective date of
such termination, including the right to require Lenders to make Revolving Loans
or fund participations in outstanding Swing Loans pursuant to Section 1.16
hereof.
 
Section 13.13.  Amendments.  Any provision of this Agreement or the other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by (a) the Borrowers, (b) the Required Lenders, and
(c) if the rights or duties of the Administrative Agent, the L/C Issuer, or the
Swing Line Lender are affected thereby, the Administrative Agent, the
L/C Issuer, or the Swing Line Lender, as applicable; provided that:
 
(i)  no amendment or waiver pursuant to this Section 13.13 shall (A) increase
any Commitment of any Lender without the consent of such Lender, (B) reduce the
amount of or postpone the date for any scheduled payment of any principal of or
interest on any Loan or of any Reimbursement Obligation or of any fee payable
hereunder or of any indemnity or other provision relative to reimbursement to
the Lenders of amounts sufficient to protect the yield of the Lenders with
respect to Loans and Letters of Credit (including, but not limited to
Sections 1.12, 10.3 and 13.5 hereof), in each case, without the consent of the
Lender to which such payment is owing or which has committed to make such Loan
or Letter of Credit (or participate therein) hereunder, (C) amend, modify or
waive the application of proceeds set forth in Section 3.1 without the consent
of each Lender affected thereby, or (D) amend or modify, the pro rata
application of prepayments set forth in Section 1.9 without the consent of each
Lender affected thereby;
 
(ii)  no amendment or waiver pursuant to this Section 13.13 shall, unless signed
by each Lender, extend the Revolving Credit Termination Date, change the
definition of Required Lenders, increase the amount of Total Consideration set
forth in clause (a) of the defined term Permitted Acquisition, increase the
limitations set forth in Section 8.12(iv), increase the amount of the Clean-Down
set forth in Section 8.21(iv), amend Section 13.11 or Section 13.12 to impose
additional restrictions or requirements, change the provisions of this Section
13.13, release all or substantially all of the Guarantors or all or substantial
all of the Collateral (except as otherwise provided for in the Loan Documents),
or affect the number of Lenders required to take any action hereunder or under
any other Loan Document; and
 

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(iii)  no amendment to Section 12 hereof shall be made without the consent of
the Borrowers or the Guarantors affected thereby.
 
Section 13.14.  Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
 
Section 13.15.  Costs and Expenses; Indemnification.   (a) The Borrowers jointly
and severally agree to pay all costs and expenses of the Administrative Agent in
connection with the preparation, negotiation, syndication, and administration of
the Loan Documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, in connection with the
preparation and execution of the Loan Documents, and any amendment, waiver or
consent related thereto, whether or not the transactions contemplated herein are
consummated, together with any fees and charges suffered or incurred by the
Administrative Agent in connection with periodic environmental audits, fixed
asset appraisals, title insurance policies, collateral filing fees and lien
searches.  The Borrowers jointly and severally agree to pay to the
Administrative Agent, the L/C Issuer and each Lender, and any other holder of
any Obligations outstanding hereunder, all costs and expenses reasonably
incurred or paid by the Administrative Agent, the L/C Issuer, such Lender, or
any such holder, including reasonable attorneys’ fees and disbursements and
court costs, in connection with any Default or Event of Default hereunder or in
connection with the enforcement of any of the Loan Documents (including all such
costs and expenses incurred in connection with any proceeding under the United
States Bankruptcy Code involving any Borrower or any Guarantor as a debtor
thereunder).  The Borrowers further jointly and severally agree to indemnify the
Administrative Agent, the L/C Issuer, each Lender, and any security trustee
therefor, and their respective directors, officers, employees, agents, financial
advisors, and consultants (each such Person being called an “Indemnitee”)
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all reasonable fees and disbursements
of counsel for any such Indemnitee and all reasonable expenses of litigation or
preparation therefor, whether or not the Indemnitee is a party thereto, or any
settlement arrangement arising from or relating to any such litigation) which
any of them may pay or incur arising out of or relating to any Loan Document or
any of the transactions contemplated thereby or the direct or indirect
application or proposed application of the proceeds of any Loan or Letter of
Credit, other than those which arise from the gross negligence or willful
misconduct of the party claiming indemnification.  The Borrowers, upon demand by
the Administrative Agent, the L/C Issuer or a Lender at any time, shall
reimburse the Administrative Agent, the L/C Issuer or such Lender for any
reasonable legal or other expenses (including, without limitation, all
reasonable fees and disbursements of counsel for any such Indemnitee) incurred
in connection with investigating or defending against any of the foregoing
(including any settlement costs relating to the foregoing) except if the same is
directly due to the gross negligence or willful misconduct of the party to be
indemnified.  To the extent permitted by applicable law, no Borrower nor any
Guarantor shall assert, and each such Person hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or the other Loan Documents
or any agreement or instrument contemplated hereby or thereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof.  The obligations of the Borrowers under this Section shall
survive the termination of this Agreement.
 

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(b)  Each Borrower unconditionally agrees to forever indemnify, defend and hold
harmless, and covenants not to sue for any claim for contribution against, each
Indemnitee for any damages, costs, loss or expense, including without
limitation, response, remedial or removal costs and all fees and disbursements
of counsel for any such Indemnitee, arising out of any of the following:  (i)
any presence, release, threatened release or disposal of any hazardous or toxic
substance or petroleum by any Borrower or any Subsidiary or otherwise occurring
on or with respect to its Property (whether owned or leased), (ii) the operation
or violation of any Environmental Law by any Borrower or any Subsidiary or
otherwise occurring on or with respect to its Property (whether owned or
leased), (iii) any claim for personal injury or property damage in connection
with any Borrower or any Subsidiary or otherwise occurring on or with respect to
its Property (whether owned or leased), and (iv) the inaccuracy or breach of any
environmental representation, warranty or covenant by any Borrower or any
Subsidiary made herein or in any other Loan Document evidencing or securing any
Obligations or setting forth terms and conditions applicable thereto or
otherwise relating thereto, except for damages arising from the willful
misconduct or gross negligence of the relevant Indemnitee.  This indemnification
shall survive the payment and satisfaction of all Obligations and the
termination of this Agreement, and shall remain in force beyond the expiration
of any applicable statute of limitations and payment or satisfaction in full of
any single claim under this indemnification.  This indemnification shall be
binding upon the successors and assigns of the Borrowers and shall inure to the
benefit of each Indemnitee and its successors and assigns.
 
Section 13.16.  Set-off.  In addition to any rights now or hereafter granted
under the Loan Documents or applicable law and not by way of limitation of any
such rights, upon the occurrence of any Event of Default, each Lender, the
L/C Issuer, each subsequent holder of any Obligation, and each of their
respective affiliates, is hereby authorized by each Borrower and each Guarantor
at any time or from time to time, without notice to any Borrower, any Guarantor
or to any other Person, any such notice being hereby expressly waived, to
set-off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured, and in whatever currency denominated,
but not including trust accounts) and any other indebtedness at any time held or
owing by that Lender, L/C Issuer, subsequent holder, or affiliate, to or for the
credit or the account of such Borrower or such Guarantor, whether or not
matured, against and on account of the Obligations of such Borrower or such
Guarantor to that Lender, L/C Issuer, or subsequent holder under the Loan
Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with the Loan Documents, irrespective of
whether or not (a) that Lender, L/C Issuer, or subsequent holder shall have made
any demand hereunder or (b) the principal of or the interest on the Loans and
other amounts due hereunder shall have become due and payable pursuant to
Section 9 and although said obligations and liabilities, or any of them, may be
contingent or unmatured.
 
Section 13.17.  Entire Agreement.  The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.
 
Section 13.18.  Governing Law.  This Agreement and the other Loan Documents, and
the rights and duties of the parties hereto, shall be construed and determined
in accordance with the internal laws of the State of Illinois; provided,
however, that nothing herein or in any other LoanDocument shall prevent any
Credit Party from contesting or raising defenses to any confession of judgment
obtained pursuant to 735 ILCS 5/2-1301(c).
 

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Section 13.19.  Severability of Provisions.  Any provision of any Loan Document
which is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.  All rights, remedies and powers provided
in this Agreement and the other Loan Documents may be exercised only to the
extent that the exercise thereof does not violate any applicable mandatory
provisions of law, and all the provisions of this Agreement and other Loan
Documents are intended to be subject to all applicable mandatory provisions of
law which may be controlling and to be limited to the extent necessary so that
they will not render this Agreement or the other Loan Documents invalid or
unenforceable.
 
Section 13.20.  Excess Interest.  Notwithstanding any provision to the contrary
contained herein or in any other Loan Document, no such provision shall require
the payment or permit the collection of any amount of interest in excess of the
maximum amount of interest permitted by applicable law to be charged for the use
or detention, or the forbearance in the collection, of all or any portion of the
Loans or other obligations outstanding under this Agreement or any other Loan
Document (“Excess Interest”).  If any Excess Interest is provided for, or is
adjudicated to be provided for, herein or in any other Loan Document, then in
such event (a) the provisions of this Section shall govern and control,
(b) neither any Borrower nor any Guarantor or endorser shall be obligated to pay
any Excess Interest, (c) any Excess Interest that the Administrative Agent or
any Lender may have received hereunder shall, at the option of the
Administrative Agent, be (i) applied as a credit against the then outstanding
principal amount of Obligations hereunder and accrued and unpaid interest
thereon (not to exceed the maximum amount permitted by applicable law),
(ii) refunded to the Company, on behalf of the Borrowers, or (iii) any
combination of the foregoing, (d) the interest rate payable hereunder or under
any other Loan Document shall be automatically subject to reduction to the
maximum lawful contract rate allowed under applicable usury laws (the “Maximum
Rate”), and this Agreement and the other Loan Documents shall be deemed to have
been, and shall be, reformed and modified to reflect such reduction in the
relevant interest rate, and (e) neither any Borrower nor any Guarantor or
endorser shall have any action against the Administrative Agent or any Lender
for any damages whatsoever arising out of the payment or collection of any
Excess Interest.  Notwithstanding the foregoing, if for any period of time
interest on any of Borrowers’ Obligations is calculated at the Maximum Rate
rather than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest payable
on the Borrowers’ Obligations shall remain at the Maximum Rate until the Lenders
have received the amount of interest which such Lenders would have received
during such period on the Borrowers’ Obligations had the rate of interest not
been limited to the Maximum Rate during such period.
 
Section 13.21.  Construction.  The parties acknowledge and agree that the Loan
Documents shall not be construed more favorably in favor of any party hereto
based upon which party drafted the same, it being acknowledged that all parties
hereto contributed substantially to the negotiation of the Loan
Documents.  Nothing contained herein shall be deemed or construed to permit any
act or omission which is prohibited by the terms of any Collateral Document, the
covenants and agreements contained herein being in addition to and not in
substitution for the covenants and agreements contained in the Collateral
Documents.
 

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Section 13.22.  Lender’s and L/C Issuer’s Obligations Several; Lenders and their
Affiliates.  The obligations of the Lenders and L/C Issuer hereunder are several
and not joint.  Nothing contained in this Agreement and no action taken by the
Lenders or L/C Issuer pursuant hereto shall be deemed to constitute the Lenders
and L/C Issuer a partnership, association, joint venture or other entity.  Each
Lender, L/C Issuer and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with any Borrower or any Affiliate
of any Borrower as if it were not a Lender hereunder; provided, however, that
the foregoing shall not be deemed to permit any Credit Party to do that which is
otherwise prohibited by the Loan Documents.
 
Section 13.23. Intentionally Omitted.  Intentionally Omitted.
 
Section 13.24.  Submission to Jurisdiction; Waiver of Jury Trial.  The Borrowers
and the Guarantors hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Northern District of Illinois and of any Illinois
State court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby.  The Borrowers and the Guarantors
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.  The Borrowers, the Guarantors,
the Administrative Agent, the L/C Issuer and the Lenders hereby irrevocably
waive any and all right to trial by jury in any legal proceeding arising out of
or relating to any Loan Document or the transactions contemplated thereby.
 
Section 13.25.  USA Patriot Act.  Each Lender and L/C Issuer that is subject to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”) hereby notifies the Borrowers that
pursuant to the requirements of the Act, it is required to obtain, verify, and
record information that identifies the Borrowers, which information includes the
name and address of the Borrowers and other information that will allow such
Lender or L/C Issuer to identify the Borrowers in accordance with the Act.
 
Section 13.26.   Confidentiality.  Each of the Administrative Agent, the
Lenders, and the L/C Issuer severally agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors to the extent any such
Person has a need to know such Information (it being understood that the Persons
to whom such disclosure is made will first be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Loan Document or any suit, action or proceeding relatingto 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 (A) any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement or (B) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to any Borrower or any
Subsidiary and its obligations, (g) with the prior written consent of the
Company, on behalf of the Borrowers, (h) to the extent such Information
(A) becomes publicly available other than as a result of a breach of this
Section or (B) becomes available to the Administrative Agent, any Lender or the
L/C Issuer on a non-confidential basis from a source other than any Borrower or
any Subsidiary or any of their directors, officers, employees or agents,
including accountants, legal counsel and other advisors, (i) to rating agencies
if requested or required by such agencies in connection with a rating relating
to the Loans or Commitments hereunder, or (j) to entities which compile and
publish information about the syndicated loan market, provided that only basic
information about the pricing and structure of the transaction evidenced hereby
may be disclosed pursuant to this subsection (j). For purposes of this Section,
“Information” means all information received from any Borrower or any of the
Subsidiaries or from any other Person on behalf of any Borrower or any
Subsidiary relating to any Borrower or any Subsidiary or any of their respective
businesses, other than any such information that is available to the
Administrative Agent, any Lender or the L/C Issuer on a non-confidential basis
prior to disclosure by any Borrower or any of the Subsidiaries or from any other
Person on behalf of any Borrower or any of the Subsidiaries.
 
[Signature Pages to Follow]

 
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This Agreement is entered into between us for the uses and purposes hereinabove
set forth as of the date first above written.
“Borrowers”

RC2 Corporation
Learning Curve Brands, Inc.
Learning Curve Canada Limited
RC2 (Australia) Pty., Ltd.
RC2 Deutschland GmbH
Racing Champions International Limited
Racing Champions Worldwide Limited

By  /s/ Curt Stoelting                                      
Name  Curt Stoelting                                           
Title  CEO                                               

RC2 (Asia) Limited

By  /s/ Lo Siu Fun Helena                                 
Name  Lo Siu Fun Helena                                
Title  Director                                       

“Guarantors”
RCE Holdings, LLC
Learning Curve International, Inc.
Learningcurveshop.com, Inc.
Learning Curve Canada Holdco, Inc.

By  /s/ Curt Stoelting                                                  
Name  Curt Stoelting                                
Title  CEO                                                               

S-1

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“Lenders”

 
Bank of Montreal, in its individual capacity
   as an L/C Issuer and as Administrative Agent

By  /s/ Paul R. Feaser III                                  
Name  Paul R. Feaser III                         
Title  Vice President                              

Harris N.A., as an L/C Issuer

By  /s/ Paul R. Feaser III                                              
Name  Paul R. Feaser III                                   
Title  Vice President                                          

S-2

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BMO Capital Markets Financing, Inc., as a
    Lender and Swing Line Lender

By  /s/ Paul R. Feaser III                                  
Name  Paul R. Feaser III                                   
Title  Vice President                              
 
 
S-3

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National City Bank, as a Lender

By  /s/ Stephanie Kline                                 
Name  Stephanie Kline                              
Title  Senior Vice President                         
 
 
S-4

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U.S. Bank National Association, as a Lender

By  /s/ Barry Litwin                                        
Name  Barry Litwin                                
Title  Senior Vice President                     
 

S-5

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Fifth Third Bank (Chicago), A MICHIGAN
  BANKING CORPORATION, as a Lender

By  /s/ Kim Puszczewicz                                  
Name  Kim Puszczewicz                         
Title  Vice President                              
 

S-6

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The Northern Trust Company, as a Lender

By  /s/ Jeffrey Clark                                        
Name  Jeffrey Clark                                  
Title  Senior Vice President                        
 

S-7

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The PrivateBank and Trust Company, as a Lender

By  /s/ Michael F. Perry                                   
Name  Michael F. Perry                                    
Title  Associate Managing Director          
 
 
 
S-8

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