Exhibit 10.2

DEBTOR-IN-POSSESSION CREDIT AGREEMENT

by and among

ENESCO GROUP, INC.,

ENESCO INTERNATIONAL LTD.,

and

GREGG MANUFACTURING, INC.,

as Debtors and Debtors-in-Possession

as Borrowers,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

and

WELLS FARGO FOOTHILL, INC.

as the Arranger and Administrative Agent

Dated as of January 23, 2007

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TABLE OF CONTENTS

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EXHIBITS AND SCHEDULES

     
Exhibit B-1
Exhibit C-1
Exhibit I-1
Exhibit L-1
  Form of Budget
Form of Compliance Certificate
Form of Interim Financing Order
Form of LIBOR Notice
 
   
Schedule A-1
Schedule C-1
Schedule D-1
Schedule P-1
Schedule R-1
Schedule 1.1
Schedule 2.7(a)
Schedule 3.1
Schedule 4.5
Schedule 4.7(a)
Schedule 4.7(b)
Schedule 4.7(c)
Schedule 4.7(d)
Schedule 4.8(b)
Schedule 4.8(c)
Schedule 4.10
Schedule 4.13
Schedule 4.14
Schedule 4.15
Schedule 4.17
Schedule 4.19
Schedule 5.2
Schedule 5.3
Schedule 6.6
  Agent’s Account
Commitments
Designated Account
Permitted Liens
Real Property Collateral
Definitions
Cash Management Banks
Conditions Precedent
Locations of Inventory and Equipment
States of Organization
Chief Executive Offices
Organizational Identification Numbers
Commercial Tort Claims
Capitalization of Borrowers
Capitalization of Borrowers’ Subsidiaries
Litigation
Benefit Plans
Environmental Matters
Intellectual Property
Deposit Accounts and Securities Accounts
Permitted Indebtedness
Collateral Reporting
Financial Statements, Reports, Certificates
Nature of Business

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DEBTOR-IN-POSSESSION CREDIT AGREEMENT

THIS DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this “Agreement”), is entered into
as of January 23, 2007 by and among the lenders identified on the signature
pages hereof (such lenders, together with their respective successors and
permitted assigns, are referred to hereinafter each individually as a “Lender”
and collectively as the “Lenders”), WELLS FARGO FOOTHILL, INC., a California
corporation, as the arranger and administrative agent for the Lenders (“Agent”),
ENESCO GROUP, INC., an Illinois corporation, as debtor and debtor-in-possession
(“Parent”), ENESCO INTERNATIONAL LTD., a Delaware corporation, as debtor and
debtor-in-possession (“EI Borrower”), and GREGG MANUFACTURING, INC., a
California corporation, as debtor and debtor-in-possession (“Gregg Borrower”,
and together with Parent and EI Borrower, collectively, the “Borrowers” and
each, individually, a "Borrower”).

BACKGROUND

WHEREAS, on January 12, 2007 (the “Filing Date”), Borrowers filed voluntary
petitions for relief under chapter 11 of the Bankruptcy Code (as hereinafter
defined) in the United States Bankruptcy Court for the Northern District of
Illinois (Eastern Division) (the “Bankruptcy Court”);

WHEREAS, Borrowers are continuing to operate their respective businesses and
manage their respective properties as debtors-in-possession under Sections 1107
and 1108 of the Bankruptcy Code;

WHEREAS, Borrowers have requested that the Lenders provide a secured revolving
credit facility to Borrowers in order to (i) fund the continued operation of
each Borrower’s business as debtor and debtor-in-possession under the Bankruptcy
Code and (ii) satisfy and extinguish in full the Existing Secured Obligations
(as hereinafter defined); and

WHEREAS, the Lenders are willing to make available to Borrowers such
post-petition loans and other extensions of credit upon the terms and subject to
the conditions set forth herein.

The parties agree as follows:

1.   DEFINITIONS AND CONSTRUCTION.

1.1. Definitions. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.

1.2. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
“financial statements” shall include the notes and schedules thereto.

1.3. Code. Any terms used in this Agreement that are defined in the Code shall
be construed and defined as set forth in the Code unless otherwise defined
herein; provided, however, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 of the Code shall
govern.

1.4. Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein or in any
other Loan Document to the satisfaction or repayment in full of the Obligations
shall mean the repayment in full in cash (or cash collateralization in
accordance with the terms hereof) of all Obligations other than unasserted
contingent indemnification Obligations and other than any Bank Product
Obligations that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding and that are not required by the provisions of
this Agreement to be repaid or cash collateralized. Any reference herein to any
Person shall be construed to include such Person’s successors and assigns. Any
requirement of a writing contained herein or in any other Loan Document shall be
satisfied by the transmission of a Record and any Record so transmitted shall
constitute a representation and warranty as to the accuracy and completeness of
the information contained therein.

1.5. Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

2.   LOAN AND TERMS OF PAYMENT.

2.1. Revolver Advances.

(a) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender agrees (severally, not jointly or jointly and
severally) to make advances (“Advances”) to Borrowers in an amount at any one
time outstanding not to exceed such Lender’s Pro Rata Share of an amount equal
to the Maximum Revolver Amount less the Letter of Credit Usage at such time less
the Bank Product Reserve. Notwithstanding the foregoing, (i) the aggregate
Advances made during any week, together with all Advances made in prior weeks,
shall not exceed the aggregate disbursements of cash set forth for such week,
together with aggregate disbursements of cash set forth for all prior weeks, in
each case as set forth in the Budget and (ii) Advances shall be used by
Borrowers solely as set forth in Section 6.14.

(b) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall
have the right to establish reserves against the Maximum Revolver Amount in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, including reserves (i) with respect to sums
that Borrowers or their Subsidiaries are required to pay under any Section of
this Agreement or any other Loan Document (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and have failed to pay, (ii) with respect to amounts owing by
Borrowers or their Subsidiaries to any Person to the extent secured by a Lien
on, or trust over, any of the Collateral (other than a Permitted Lien), which
Lien or trust, in the Permitted Discretion of Agent could have a priority
superior to the Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, Liens
pertaining to employee wages or Liens or trusts for ad valorem, excise, sales,
or other taxes where given priority under applicable law) in and to such item of
the Collateral, (iii) to address the results of any audit or appraisal performed
by or on behalf of Agent from time to time after the Closing Date, including
audits and appraisals of any Equipment, Inventory or Real Property, (iv) the
Retained Professionals Carveout and UST Fees, and (v) other potential costs
expenses pertaining to the Bankruptcy Case. Promptly after establishing any
individual reserve for an amount in excess of $500,000, Agent will notify
Borrowers thereof.

(c) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement. The outstanding principal amount of the Advances,
together with interest accrued thereon, shall be due and payable on the Maturity
Date or, if earlier, on the date on which they are declared due and payable
pursuant to the terms of this Agreement.

2.2. [Intentionally Reserved].

2.3. Borrowing Procedures and Settlements.

(a) Procedure for Borrowing. Each Borrowing shall be made by an irrevocable
written request by a Responsible Officer delivered to Agent. Such notice must be
received by Agent no later than 9:00 a.m. (California time) on the requested
Funding Date specifying (i) the amount of such Borrowing and (ii) the requested
Funding Date, which shall be a Business Day. At Agent’s election, in lieu of
delivering the above-described written request, any Responsible Officer may give
Agent telephonic notice of such request by the required time. In such
circumstances, Borrowers agree that any such telephonic notice will be confirmed
in writing within 24 hours of the giving of such telephonic notice, but the
failure to provide such written confirmation shall not affect the validity of
the request.

(b) Making of Loans.

(i) Promptly after receipt of a request for a Borrowing pursuant to
Section 2.3(a), Agent shall notify the Lenders, not later than 11:00 a.m.
(California time) on the Funding Date applicable thereto, by telecopy,
telephone, or other similar form of transmission, of the requested Borrowing.
Each Lender shall make the amount of such Lender’s Pro Rata Share of the
requested Borrowing available to Agent in immediately available funds, to
Agent’s Account, not later than 1:00 p.m. (California time) on the Funding Date
applicable thereto. After Agent’s receipt of the proceeds of such Advances,
Agent shall make the proceeds thereof available to Administrative Borrower on
the applicable Funding Date by transferring immediately available funds equal to
such proceeds received by Agent to Administrative Borrower’s Designated Account;
provided, however, that, Agent shall not request any Lender to make, and no
Lender shall have the obligation to make, any Advance if Agent shall have actual
knowledge that (1) one or more of the applicable conditions precedent set forth
in Section 3 will not be satisfied on the requested Funding Date for the
applicable Borrowing unless such condition has been waived, or (2) the requested
Borrowing would exceed the Availability on such Funding Date.

(ii) Unless Agent receives notice from a Lender prior to 9:00 a.m. (California
time) on the date of a Borrowing, that such Lender will not make available as
and when required hereunder to Agent for the account of Borrowers the amount of
that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender
has made or will make such amount available to Agent in immediately available
funds on the Funding Date and Agent may (but shall not be so required), in
reliance upon such assumption, make available to Borrowers on such date a
corresponding amount. If and to the extent any Lender shall not have made its
full amount available to Agent in immediately available funds and Agent in such
circumstances has made available to Borrowers such amount, that Lender shall on
the Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each day during
such period. A notice submitted by Agent to any Lender with respect to amounts
owing under this subsection shall be conclusive, absent manifest error. If such
amount is so made available, such payment to Agent shall constitute such
Lender’s Advance on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to Agent on the Business Day following the
Funding Date, Agent will notify Administrative Borrower of such failure to fund
and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Advances composing such Borrowing. The failure of any Lender to make
any Advance on any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance on such Funding Date, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on any Funding Date.

(iii) Agent shall not be obligated to transfer to a Defaulting Lender any
payments made by Borrowers to Agent for the Defaulting Lender’s benefit, and, in
the absence of such transfer to the Defaulting Lender, Agent shall transfer any
such payments to each other non-Defaulting Lender member of the Lender Group
ratably in accordance with their Commitments (but only to the extent that such
Defaulting Lender’s Advance was funded by the other members of the Lender Group)
or, if so directed by Administrative Borrower and if no Default or Event of
Default had occurred and is continuing (and to the extent such Defaulting
Lender’s Advance was not funded by the Lender Group), retain same to be
re-advanced to Borrowers as if such Defaulting Lender had made Advances to
Borrowers. Subject to the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrowers for the account of such Defaulting Lender the
amount of all such payments received and retained by Agent for the account of
such Defaulting Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents, such Defaulting Lender shall be
deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be
zero. This Section shall remain effective with respect to such Lender until
(x) the Obligations under this Agreement shall have been declared or shall have
become immediately due and payable, (y) the non-Defaulting Lenders, Agent, and
Administrative Borrower shall have waived such Defaulting Lender’s default in
writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable
Advance and pays to Agent all amounts owing by Defaulting Lender in respect
thereof. The operation of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of its duties and
obligations hereunder, or to relieve or excuse the performance by Borrowers of
their duties and obligations hereunder to Agent or to the Lenders other than
such Defaulting Lender. Any such failure to fund by any Defaulting Lender shall
constitute a material breach by such Defaulting Lender of this Agreement and
shall entitle Administrative Borrower at its option, upon written notice to
Agent, to arrange for a substitute Lender to assume the Commitment of such
Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent.
In connection with the arrangement of such a substitute Lender, the Defaulting
Lender shall have no right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and Acceptance in favor of
the substitute Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being repaid its
share of the outstanding Obligations (other than Bank Product Obligations, but
including an assumption of its Pro Rata Share of the Risk Participation
Liability) without any premium or penalty of any kind whatsoever; provided
however, that any such assumption of the Commitment of such Defaulting Lender
shall not be deemed to constitute a waiver of any of the Lender Groups’ or
Borrowers’ rights or remedies against any such Defaulting Lender arising out of
or in relation to such failure to fund.

(c) Protective Advances.

(i) Agent hereby is authorized by Borrowers and the Lenders, from time to time
in Agent’s sole discretion, (A) after the occurrence and during the continuance
of a Default or an Event of Default, or (B) at any time that any of the other
applicable conditions precedent set forth in Section 3 are not satisfied, to
make Advances to Borrowers on behalf of the Lenders that Agent, in its Permitted
Discretion deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of repayment
of the Obligations (other than the Bank Product Obligations), or (3) to pay any
other amount chargeable to Borrowers pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses described in
Section 9 (any of the Advances described in this Section 2.3(c)(i) shall be
referred to as “Protective Advances”).

(ii) Each Protective Advance shall be deemed to be an Advance hereunder, except
that no Protective Advance shall be eligible to be a LIBOR Rate Loan and all
payments on the Protective Advances shall be payable to Agent solely for its own
account. The Protective Advances shall be repayable on demand, secured by the
Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans. The
provisions of this Section 2.3(c) are for the exclusive benefit of Agent and the
Lenders and are not intended to benefit any Borrower in any way.

(d) Settlement. It is agreed that each Lender’s funded portion of the Advances
is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share
of the outstanding Advances. Such agreement notwithstanding, Agent and the other
Lenders agree (which agreement shall not be for the benefit of any Borrower)
that in order to facilitate the administration of this Agreement and the other
Loan Documents, settlement among the Lenders as to the Advances and the
Protective Advances shall take place on a periodic basis in accordance with the
following provisions:

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly
basis, or on a more frequent basis if so determined by Agent (1) for itself,
with respect to the outstanding Protective Advances, and (2) with respect to
Borrowers’ or their Subsidiaries’ Collections received, as to each by notifying
the Lenders by telecopy, telephone, or other similar form of transmission, of
such requested Settlement, no later than 2:00 p.m. (California time) on the
Business Day immediately prior to the date of such requested Settlement (the
date of such requested Settlement being the “Settlement Date”). Such notice of a
Settlement Date shall include a summary statement of the amount of outstanding
Advances and Protective Advances for the period since the prior Settlement Date.
Subject to the terms and conditions contained herein (including
Section 2.3(b)(iii)): (y) if a Lender’s balance of the Advances (including
Protective Advances) exceeds such Lender’s Pro Rata Share of the Advances
(including Protective Advances) as of a Settlement Date, then Agent shall, by no
later than 12:00 p.m. (California time) on the Settlement Date, transfer in
immediately available funds to a Deposit Account of such Lender (as such Lender
may designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Protective Advances), and (z) if a Lender’s balance of the Advances
(including Protective Advances) is less than such Lender’s Pro Rata Share of the
Advances (including Protective Advances) as of a Settlement Date, such Lender
shall no later than 12:00 p.m. (California time) on the Settlement Date transfer
in immediately available funds to the Agent’s Account, an amount such that each
such Lender shall, upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Share of the Advances (including Protective Advances). Such amounts
made available to Agent under clause (z) of the immediately preceding sentence
shall be applied against the amounts of the applicable Protective Advances and
shall constitute Advances of such Lenders. If any such amount is not made
available to Agent by any Lender on the Settlement Date applicable thereto to
the extent required by the terms hereof, Agent shall be entitled to recover for
its account such amount on demand from such Lender together with interest
thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the Advances and Protective
Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of
the Advances and Protective Advances as of a Settlement Date, Agent shall, as
part of the relevant Settlement, apply to such balance the portion of payments
actually received in good funds by Agent with respect to principal, interest,
fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds
of Collateral. To the extent that a net amount is owed to any such Lender after
such application, such net amount shall be distributed by Agent to that Lender
as part of such next Settlement.

(e) Notation; Register. Agent shall record on its books the principal amount of
the Advances owing to each Lender, Protective Advances owing to Agent, and the
interests therein of each Lender, from time to time and such records shall,
absent manifest error, conclusively be presumed to be correct and accurate.
Agent, acting solely for this purpose as a non-fiduciary agent of each Borrower
(but without creating any duties except those set forth in this paragraph),
shall maintain at its office a register for the recordation of the name and
address of each Lender, and the Revolver Commitment of each Lender, and
outstanding principal amount of the Advances owing to each Lender pursuant to
the terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and each of the Borrowers and each member of the Lender
Group shall treat the Person(s) whose name(s) are recorded in the Register
pursuant to the terms hereof as Lender(s) hereunder for all purposes of this
Agreement, any note and any other Loan Document, notwithstanding notice to the
contrary. The Register shall be available for inspection by any Borrower at any
reasonable time and from time to time upon reasonable prior notice.

(f) Lenders’ Failure to Perform. All Advances (other than Protective Advances)
shall be made by the Lenders contemporaneously and in accordance with their Pro
Rata Shares. It is understood that (i) no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make any Advance (or
other extension of credit) hereunder, nor shall any Commitment of any Lender be
increased or decreased as a result of any failure by any other Lender to perform
its obligations hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its obligations
hereunder.

2.4. Payments.

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by Borrowers
shall be made to Agent’s Account for the account of the Lender Group and shall
be made in immediately available funds, no later than 11:00 a.m. (California
time) on the date specified herein. Any payment received by Agent later than
11:00 a.m. (California time), shall be deemed solely for the purpose of
calculating interest and fees to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue until such
following Business Day.

(ii) Unless Agent receives notice from Administrative Borrower prior to the date
on which any payment is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that Borrowers have made
(or will make) such payment in full to Agent on such date in immediately
available funds and Agent may (but shall not be so required), in reliance upon
such assumption, distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent Borrowers do not make such
payment in full to Agent on the date when due, each Lender severally shall repay
to Agent on demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.

(b) Apportionment and Application.

(i) So long as no Event of Default has occurred and is continuing and except as
otherwise provided with respect to Defaulting Lenders, all principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Obligations to which such payments relate
held by each Lender) and all payments of fees and expenses (other than fees or
expenses that are for Agent’s separate account) shall be apportioned ratably
among the Lenders having a Pro Rata Share of the Revolver Commitment or
Obligation to which a particular fee or expense relates. All payments to be made
hereunder by Borrowers shall be remitted to Agent and all (subject to
Section 2.4(b)(iv) hereof) such payments, and all proceeds of Collateral
received by Agent, shall be applied, so long as no Event of Default has occurred
and is continuing, to reduce the balance of the Advances outstanding and,
thereafter, to Borrowers (to be wired to the Designated Account) or such other
Person entitled thereto under applicable law.

(ii) At any time that an Event of Default has occurred and is continuing and the
Agent has declared all or any portion of the Obligations immediately due and
payable in accordance with Section 8.1, and except as otherwise provided with
respect to Defaulting Lenders, all payments remitted to Agent and all proceeds
of Collateral received by Agent shall be applied as follows:

(A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to Agent under the Loan Documents, until
paid in full,

(B) second, to pay any fees or premiums then due to Agent under the Loan
Documents until paid in full,

(C) third, to pay interest due in respect of all Protective Advances until paid
in full,

(D) fourth, to pay the principal of all Protective Advances until paid in full,

(E) fifth, ratably to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Loan
Documents, until paid in full,

(F) sixth, ratably to pay any fees or premiums then due to any of the Lenders
under the Loan Documents until paid in full,

(G) seventh, ratably to pay interest due in respect of the Advances (other than
Protective Advances) until paid in full,

(H) eighth, ratably (i) to pay the principal of all Advances until paid in full,
(ii) to Agent, to be held by Agent, for the ratable benefit of Issuing Lender
and those Lenders having a Revolver Commitment, as cash collateral in an amount
up to 105% of the Letter of Credit Usage, and (iii) to Agent, to be held by
Agent, for the benefit of the Bank Product Providers, as cash collateral in an
amount up to the amount of the Bank Product Reserve established prior to the
occurrence of, and not in contemplation of, the subject Event of Default,

(I) ninth, to pay any other Obligations (including the provision of amounts to
Agent, to be held by Agent, for the benefit of the Bank Product Providers, as
cash collateral in an amount up to the amount determined by Agent in its
Permitted Discretion as the amount necessary to secure Borrowers’ and their
Subsidiaries’ obligations in respect of Bank Products), and

(J) tenth, to Borrowers (to be wired to the Designated Account) or such other
Person entitled thereto under applicable law.

(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable
wire instructions received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided in
Section 2.3(d).

(iv) In each instance, so long as no Event of Default has occurred and is
continuing, Section 2.4(b)(i) shall not apply to any payment made by Borrowers
to Agent and specified by Borrowers to be for the payment of specific
Obligations then due and payable (or prepayable) under any provision of this
Agreement.

(v) For purposes of Section 2.4(b)(ii), “paid in full” means payment of all
amounts owing under the Loan Documents according to the terms thereof, including
loan fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements, whether or not any
of the foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.

(vi) In the event of a direct conflict between the priority provisions of this
Section 2.4 and any other provision contained in any other Loan Document, it is
the intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.4 shall control and
govern.

(c) Mandatory Prepayments.

(i) [Intentionally Reserved]

(ii) Immediately upon the receipt by Borrowers or any of their Subsidiaries of
the proceeds of any voluntary or involuntary sale or disposition by Borrowers or
any of their Subsidiaries of property or assets (including casualty losses or
condemnations but excluding sales or dispositions which qualify as Permitted
Dispositions), Borrowers shall prepay the outstanding principal amount of the
Obligations in accordance with Section 2.4(d) in an amount equal to 100% of the
Net Cash Proceeds (including condemnation awards and payments in lieu thereof)
received by such Person in connection with such sales or dispositions. Nothing
contained in this Section 2.4(c)(ii) shall permit Borrowers or any of their
Subsidiaries to sell or otherwise dispose of any property or assets other than
in accordance with Section 6.4.

(iii) Immediately upon the receipt by Borrowers or any of their Subsidiaries of
any Extraordinary Receipts, Borrowers shall prepay the outstanding principal
amount of the Obligations in accordance with Section 2.4(d) in an amount equal
to 100% of such Extraordinary Receipts, net of any reasonable expenses incurred
in collecting such Extraordinary Receipts.

(iv) Immediately upon the issuance or incurrence by Borrowers or any of their
Subsidiaries of any Indebtedness (other than Indebtedness permitted under
Section 6.1(a), (b), (c), (d), (e) or (f)) or the issuance by Borrowers or any
of their Subsidiaries of any shares of Borrowers’ Stock or their Subsidiaries’
Stock (other than in the event that Borrowers or any of Subsidiary of a Borrower
forms a Subsidiary in accordance with the terms hereof, the issuance by such
Subsidiary of Stock to a Borrower or such Subsidiary, as applicable), Borrowers
shall prepay the outstanding principal amount of the Obligations in accordance
with Section 2.4(d) in an amount equal to 100% of the Net Cash Proceeds received
by such Person in connection with such issuance or incurrence. The provisions of
this Section 2.4(c)(iv) shall not be deemed to be implied consent to any such
issuance or incurrence otherwise prohibited by the terms and conditions of this
Agreement.

(d) Application of Payments. Each prepayment pursuant to Section 2.4(c)(ii),
2.4(c)(iii) or 2.4(c)(iv) above shall be applied in the manner set forth in
Section 2.4(b)(ii) (with, solely in the case of prepayments pursuant to Section
2.4(c)(ii) or 2.4(c)(iv), a corresponding permanent reduction of the Maximum
Revolver Amount).

2.5. Intentionally Reserved.

2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in Section 2.6(c), all Obligations
(except for undrawn Letters of Credit and except for Bank Product Obligations)
that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof as follows (i) if the relevant
Obligation is an Advance that is a LIBOR Rate Loan, at a per annum rate equal to
the LIBOR Rate plus the LIBOR Rate Margin, and (ii) otherwise, at a per annum
rate equal to the Base Rate plus the Base Rate Margin.

The foregoing notwithstanding, at no time shall any portion of the Obligations
(other than Bank Product Obligations) bear interest on the Daily Balance thereof
at a per annum rate less than 5%. To the extent that interest accrued hereunder
at the rate set forth herein would be less than the foregoing minimum daily
rate, the interest rate chargeable hereunder for such day automatically shall be
deemed increased to the minimum rate.

(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of
the Lenders with a Revolver Commitment, subject to any agreements between Agent
and individual Lenders), a Letter of Credit fee (in addition to the charges,
commissions, fees, and costs set forth in Section 2.12(e)) which shall accrue at
a rate equal to 5.5% per annum times the Daily Balance of the undrawn amount of
all outstanding Letters of Credit.

(c) Default Rate. Upon the occurrence and during the continuation of an Event of
Default, at the election of the Required Lenders,

(i) all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof at a per annum
rate equal to 2 percentage points above the per annum rate otherwise applicable
hereunder, and

(ii) the Letter of Credit fee provided for in Section 2.6(b) shall be increased
to 2 percentage points above the per annum rate otherwise applicable hereunder.

(d) Payment. Except as provided to the contrary in Section 2.11 or Section
2.13(a), interest, Letter of Credit fees, and all other fees payable hereunder
shall be due and payable, in arrears, on the first day of each month at any time
that Obligations or Revolver Commitments are outstanding. Borrowers hereby
authorize Agent, from time to time, without prior notice to Borrowers, to charge
all interest and fees (when due and payable), all Lender Group Expenses (as and
when incurred), all charges, commissions, fees, and costs provided for in
Section 2.12(e) (as and when accrued or incurred), all fees and costs provided
for in Section 2.11 (as and when accrued or incurred), and all other payments as
and when due and payable under any Loan Document (including any amounts due and
payable to the Bank Product Providers in respect of Bank Products up to the
amount of the Bank Product Reserve) to Borrowers’ Loan Account, which amounts
thereafter shall constitute Advances hereunder and shall accrue interest at the
rate then applicable to Advances that are Base Rate Loans. Any interest not paid
when due shall be compounded by being charged to the Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances that are Base Rate Loans.

(e) Computation. All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360 day year for the actual number of days
elapsed. In the event the Base Rate is changed from time to time hereafter, the
rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrowers
in excess of such legal maximum, whenever received, shall be applied to reduce
the principal balance of the Obligations to the extent of such excess.

2.7. Cash Management.

(a) Borrowers shall and shall cause each of their U.S. Subsidiaries to
(i) establish and maintain cash management services of a type and on terms
satisfactory to Agent at one or more of the banks set forth on Schedule 2.7(a)
(each a “Cash Management Bank”), and shall request in writing and otherwise take
such reasonable steps to ensure that all of their and their U.S. Subsidiaries’
Account Debtors forward payment of the amounts owed by them directly to such
Cash Management Bank, and (ii) deposit or cause to be deposited promptly, and in
any event no later than the first Business Day after the date of receipt
thereof, all of their Collections (including those sent directly by their
Account Debtors to Borrowers or their Subsidiaries, but excluding disputed
checks) into a bank account in Agent’s name (a “Cash Management Account”) at one
of the Cash Management Banks.

(b) Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and Borrowers. Each such Cash Management Agreement shall
provide, among other things, that (i) the Cash Management Bank will comply with
any instructions originated by Agent directing the disposition of the funds in
such Cash Management Account without further consent by Borrowers or their
Subsidiaries, as applicable, (ii) the Cash Management Bank has no rights of
setoff or recoupment or any other claim against the applicable Cash Management
Account, other than for payment of its service fees and other charges directly
related to the administration of such Cash Management Account and for returned
checks or other items of payment, and (iii) it will forward, by daily sweep, all
amounts in the applicable Cash Management Account to the Agent’s Account.

(c) So long as no Default or Event of Default has occurred and is continuing,
Administrative Borrower may amend Schedule 2.7(a) to add or replace a Cash
Management Bank or Cash Management Account; provided, however, that (i) such
prospective Cash Management Bank shall be reasonably satisfactory to Agent, and
(ii) prior to the time of the opening of such Cash Management Account, a
Borrower (or its U.S. Subsidiary, as applicable) and such prospective Cash
Management Bank shall have executed and delivered to Agent a Cash Management
Agreement. Borrowers (or their U.S. Subsidiaries, as applicable) shall close any
of their Cash Management Accounts (and establish replacement cash management
accounts in accordance with the foregoing sentence) promptly and in any event
within 30 days of notice from Agent that the creditworthiness of any Cash
Management Bank is no longer acceptable in Agent’s reasonable judgment, or as
promptly as practicable and in any event within 60 days of notice from Agent
that the operating performance, funds transfer, or availability procedures or
performance of the Cash Management Bank with respect to Cash Management Accounts
or Agent’s liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent’s reasonable judgment.

(d) Each Cash Management Account shall be a cash collateral account subject to a
Control Agreement.

(e) Although the prior provisions of this Section 2.7 pertain solely to
Borrowers and each of their U.S. Subsidiaries, on the 15th day after the Closing
Date, such provisions shall pertain to all Subsidiaries (other than Dormant
Subsidiaries and Enesco France S.A. (if in the case of Enesco France S.A.,
providing Cash Management Agreements would conflict with any provision of the
credit facility of Enesco France S.A. as it exists on the date hereof)). The
requirement of this paragraph (e) to obtain Cash Management Agreements will be
on a best efforts basis and such Cash Management Agreements need not require
daily cash sweeps in the absence of an Event of Default.

(f) Within 15 days after the Closing Date, Borrowers will either (i) close their
account(s) at Wilmington Trust and cause all funds that would otherwise have
been deposited in such account(s) consistent with past practice, to be deposited
in an account subject to a Cash Management Agreement, (ii) cause such accounts
to be subject to a Cash Management Agreement, or (iii) open a replacement
account in Delaware that is subject to a Cash Management Agreement.

2.8. Crediting Payments; Clearance Charge. The receipt of any payment item by
Agent (whether from transfers to Agent by the Cash Management Banks pursuant to
the Cash Management Agreements or otherwise) shall not be considered a payment
on account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent’s Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent’s Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent’s Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed solely for the purpose of calculating interest
and fees to have been received by Agent as of the opening of business on the
immediately following Business Day. From and after the Closing Date, Agent shall
be entitled to charge Borrowers for one Business Days of ‘clearance’ at the rate
then applicable under Section 2.6 to Advances that are Base Rate Loans on all
Collections that are received by Borrowers and their Subsidiaries (regardless of
whether forwarded by the Cash Management Banks to Agent). This across-the-board
one Business Day clearance charge on all Collections of Borrowers and their
Subsidiaries is acknowledged by the parties to constitute an integral aspect of
the pricing of the financing of Borrowers and shall apply irrespective of
whether or not there are any outstanding monetary Obligations; the effect of
such clearance charge being the equivalent of charging interest on such
Collections through the completion of a period ending one Business Days after
the receipt thereof. The parties acknowledge and agree that the economic benefit
of the foregoing provisions of this Section 2.8 shall be for the exclusive
benefit of Agent.

2.9. Designated Account. Agent is authorized to make the Advances, and Issuing
Lender is authorized to issue the Letters of Credit, under this Agreement based
upon telephonic or other instructions received from anyone purporting to be a
Responsible Officer or, without instructions, if pursuant to Section 2.6(d).
Administrative Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the proceeds of
the Advances requested by Borrowers and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Administrative Borrower, any Advance or
Protective Advance shall be made to the Designated Account.

2.10. Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”)
on which Borrowers will be charged with all Advances (including Protective
Advances) made by Agent or the Lenders to Borrowers or for Borrowers’ account,
the Letters of Credit issued by Issuing Lender for Borrowers’ account, and with
all other payment Obligations hereunder or under the other Loan Documents
(except for Bank Product Obligations), including, accrued interest, fees and
expenses, and Lender Group Expenses. In accordance with Section 2.8, the Loan
Account will be credited with all payments received by Agent from Borrowers or
for Borrowers’ account, including all amounts received in the Agent’s Account
from any Cash Management Bank. Agent shall render statements regarding the Loan
Account to Administrative Borrower, including principal, interest, fees, and
including an itemization of all charges and expenses constituting Lender Group
Expenses owing, and such statements, absent manifest error, shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrowers and the Lender Group unless, within 30 days after
receipt thereof by Administrative Borrower, Administrative Borrower shall
deliver to Agent written objection thereto describing the error or errors
contained in any such statements.

2.11. Fees. Borrowers shall pay to Agent, as and when due and payable under the
terms of the Fee Letter, the fees set forth in the Fee Letter.

2.12. Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, the Issuing Lender
agrees to issue letters of credit for the account of Borrowers (each, an “L/C”)
or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an "L/C Undertaking”) with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be Wells Fargo) for the account of
Borrowers. Each request for the issuance of a Letter of Credit or the amendment,
renewal, or extension of any outstanding Letter of Credit, shall be made in
writing by a Responsible Officer and delivered to the Issuing Lender and Agent
via hand delivery, telefacsimile, or other electronic method of transmission
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension. Each such request shall be in form and substance satisfactory to the
Issuing Lender in its Permitted Discretion and shall specify (i) the amount of
such Letter of Credit, (ii) the date of issuance, amendment, renewal, or
extension of such Letter of Credit, (iii) the expiration date of such Letter of
Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary
of the Underlying Letter of Credit, as applicable), and (v) such other
information (including, in the case of an amendment, renewal, or extension,
identification of the outstanding Letter of Credit to be so amended, renewed, or
extended) as shall be necessary to prepare, amend, renew, or extend such Letter
of Credit. If requested by the Issuing Lender, Borrowers also shall be an
applicant under the application with respect to any Underlying Letter of Credit
that is to be the subject of an L/C Undertaking. The Issuing Lender shall have
no obligation to issue a Letter of Credit if any of the following would result
after giving effect to the issuance of such requested Letter of Credit:

(i) the Letter of Credit Usage would exceed $3,000,000, or

(ii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less
the outstanding amount of Advances less the Bank Product Reserve.

Borrowers and the Lender Group acknowledge and agree that certain Underlying
Letters of Credit may be issued to support letters of credit that already are
outstanding as of the Closing Date. Each Letter of Credit (and corresponding
Underlying Letter of Credit) shall be in form and substance acceptable to the
Issuing Lender (in the exercise of its Permitted Discretion), including the
requirement that the amounts payable thereunder must be payable in Dollars. If
Issuing Lender is obligated to advance funds under a Letter of Credit, Borrowers
immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to
Agent an amount equal to such L/C Disbursement not later than 11:00 a.m.,
California time, on the date that such L/C Disbursement is made, if
Administrative Borrower shall have received written or telephonic notice of such
L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such
notice has not been received by Administrative Borrower prior to such time on
such date, then not later than 11:00 a.m., California time, on the Business Day
that Administrative Borrower receives such notice, if such notice is received
prior to 10:00 a.m., California time, on the date of receipt, and, in the
absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, initially, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans.
To the extent an L/C Disbursement is deemed to be an Advance hereunder,
Borrowers’ obligation to reimburse such L/C Disbursement shall be discharged and
replaced by the resulting Advance. Promptly following receipt by Agent of any
payment from Borrowers pursuant to this paragraph, Agent shall distribute such
payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.12(b) to reimburse the Issuing Lender, then to such
Lenders and the Issuing Lender as their interests may appear.

(b) Promptly following receipt of a notice of L/C Disbursement pursuant to
Section 2.12(a), each Lender with a Revolver Commitment agrees to fund its Pro
Rata Share of any Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if Borrowers had requested such Advance and
Agent shall promptly pay to Issuing Lender the amounts so received by it from
the Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and
each such Lender agrees to pay to Agent, for the account of the Issuing Lender,
such Lender’s Pro Rata Share of any payments made by the Issuing Lender under
such Letter of Credit. In consideration and in furtherance of the foregoing,
each Lender with a Revolver Commitment hereby absolutely and unconditionally
agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not
reimbursed by Borrowers on the date due as provided in Section 2.12(a), or of
any reimbursement payment required to be refunded to Borrowers for any reason.
Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each L/C Disbursement made by the
Issuing Lender pursuant to this Section 2.12(b) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3. If any such Lender fails to make available to
Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made
by the Issuing Lender in respect of such Letter of Credit as provided in this
Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for
the account of the Issuing Lender) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.

(c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender
Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; provided, however, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability to the extent
that it is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Underlying Issuer’s regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender’s interpretations of any L/C issued by
Issuing Lender to or for such Borrower’s account, even though this
interpretation may be different from such Borrower’s own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrowers’ instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as a result of the Lender Group’s
indemnification of any Underlying Issuer; provided, however, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that it is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group. Each
Borrower hereby acknowledges and agrees that neither the Lender Group nor the
Issuing Lender shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.

(d) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver
to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender’s instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.

(e) Any and all issuance charges, commissions, fees, and costs incurred by the
Issuing Lender relating to Underlying Letters of Credit shall be Lender Group
Expenses for purposes of this Agreement and immediately shall be reimbursable by
Borrowers to Agent for the account of the Issuing Lender; it being acknowledged
and agreed by each Borrower that, as of the Closing Date, the issuance charge
imposed by the prospective Underlying Issuer is .875% per annum times the
undrawn amount of each Underlying Letter of Credit, that such issuance charge
may be changed from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.

(f) If by reason of (i) any change after the Closing Date in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Letter of Credit issued hereunder, or

(ii) there shall be imposed on the Underlying Issuer or the Lender Group any
other condition regarding any Underlying Letter of Credit or any Letter of
Credit issued pursuant hereto;

and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto. Notwithstanding the provisions of this paragraph, the Borrowers shall
not be obligated to pay any amounts pursuant to this paragraph for periods
occurring prior to the 180th day before the giving of written demand hereunder.

2.13. LIBOR Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option (the “LIBOR
Option”) to have interest on all or a portion of the Advances be charged
(whether at the time when made (unless otherwise provided herein), upon
conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a
LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR
Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the
last day of the Interest Period applicable thereto, (ii) the date on which all
of the Obligations are accelerated pursuant to the terms hereof, or (iii) the
date on which this Agreement is terminated pursuant to the terms hereof. On the
last day of each applicable Interest Period, unless Administrative Borrower
properly has exercised the LIBOR Option with respect thereto, the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of
interest then applicable to Base Rate Loans of the same type hereunder. At any
time that an Event of Default has occurred and is continuing, Borrowers no
longer shall have the option to request that Advances bear interest at a rate
based upon the LIBOR Rate.

(b) LIBOR Election.

(i) Administrative Borrower may, at any time and from time to time, so long as
no Event of Default has occurred and is continuing, elect to exercise the LIBOR
Option by notifying Agent prior to 11:00 a.m. (California time) at least 3
Business Days prior to the commencement of the proposed Interest Period (the
“LIBOR Deadline”). Notice of Administrative Borrower’s election of the LIBOR
Option for a portion of the Advances shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic
notice received by Agent before the LIBOR Deadline (to be confirmed by delivery
to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (California
time) on the same day). Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the affected Lenders.

(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In
connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and
hold Agent and the Lenders harmless against any loss, cost, or expense incurred
by Agent or any Lender as a result of (A) the payment of any principal of any
LIBOR Rate Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (B) the conversion of
any LIBOR Rate Loan other than on the last day of the Interest Period applicable
thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR
Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto
(such losses, costs, or expenses, “Funding Losses”). Funding Losses shall, with
respect to Agent or any Lender, be deemed to equal the amount determined by
Agent or such Lender to be the excess, if any, of (1) the amount of interest
that would have accrued on the principal amount of such LIBOR Rate Loan had such
event not occurred, at the LIBOR Rate that would have been applicable thereto,
for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert, or
continue, for the period that would have been the Interest Period therefor),
minus (2) the amount of interest that would accrue on such principal amount for
such period at the interest rate which Agent or such Lender would be offered
were it to be offered, at the commencement of such period, Dollar deposits of a
comparable amount and period in the London interbank market. A certificate of
Agent or a Lender delivered to Administrative Borrower setting forth any amount
or amounts that Agent or such Lender is entitled to receive pursuant to this
Section 2.13 shall be conclusive absent manifest error.

(iii) Borrowers shall have not more than 4 LIBOR Rate Loans in effect at any
given time. Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of
at least $1,000,000 and integral multiples of $500,000 in excess thereof.

(c) Prepayments. Borrowers may prepay LIBOR Rate Loans at any time; provided,
however, that in the event that LIBOR Rate Loans are prepaid on any date that is
not the last day of the Interest Period applicable thereto, including as a
result of any automatic prepayment through the required application by Agent of
proceeds of Borrowers’ and their Subsidiaries’ Collections in accordance with
Section 2.4(b) or for any other reason, including early termination of the term
of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold
Agent and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with Section 2.13 (b)(ii) above.

(d) Special Provisions Applicable to LIBOR Rate.

(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs,
in each case, due to changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including changes in tax
laws (except changes of general applicability in corporate income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), excluding the Reserve Percentage,
which additional or increased costs would increase the cost of funding or
maintaining loans bearing interest at the LIBOR Rate. In any such event, the
affected Lender shall give Administrative Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit the notice to
each other Lender and, upon its receipt of the notice from the affected Lender,
Administrative Borrower may, by notice to such affected Lender (y) require such
Lender to furnish to Administrative Borrower a statement setting forth the basis
for adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to which such
adjustment is made (together with any amounts due under Section 2.13(b)(ii)).

(ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund
or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Administrative Borrower and
Agent promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Rate Loans of such Lender that are outstanding, the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans
of such Lender thereafter shall accrue interest at the rate then applicable to
Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR
Option until such Lender determines that it would no longer be unlawful or
impractical to do so.

(e) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither Agent, nor any Lender, nor any of their Participants,
is required actually to acquire eurodollar deposits to fund or otherwise match
fund any Obligation as to which interest accrues at the LIBOR Rate. The
provisions of this Section shall apply as if each Lender or its Participants had
match funded any Obligation as to which interest is accruing at the LIBOR Rate
by acquiring eurodollar deposits for each Interest Period in the amount of the
LIBOR Rate Loans.

2.14. Capital Requirements. If, after the date hereof, any Lender determines
that (i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender’s or
such holding company’s capital as a consequence of such Lender’s Revolver
Commitments hereunder to a level below that which such Lender or such holding
company could have achieved but for such adoption, change, or compliance (taking
into consideration such Lender’s or such holding company’s then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity’s capital) by any amount deemed by such Lender to be material, then
such Lender may notify Administrative Borrower and Agent thereof. Following
receipt of such notice, Borrowers agree to pay such Lender on demand the amount
of such reduction of return of capital as and when such reduction is determined,
payable within 90 days after presentation by such Lender of a statement in the
amount and setting forth in reasonable detail such Lender’s calculation thereof
and the assumptions upon which such calculation was based (which statement shall
be deemed true and correct absent manifest error). In determining such amount,
such Lender may use any reasonable averaging and attribution methods.
Notwithstanding the provisions of this paragraph, (a) the Borrowers shall not be
obligated to pay any amounts pursuant to this paragraph for periods occurring
prior to the 180th day before the giving of written demand hereunder and (b) the
Borrowers shall not be obligated to pay any amounts to any Lender pursuant to
this paragraph unless such Lender is generally demanding payment under
comparable provisions of its agreements with similarly situated borrowers.

2.15. Joint and Several Liability of Borrowers.

(a) Each Borrower is accepting joint and several liability hereunder and under
the other Loan Documents in consideration of the financial accommodations to be
provided by the Lender Group under this Agreement, for the mutual benefit,
directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations.

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including, without limitation, any Obligations
arising under this Section 2.15), it being the intention of the parties hereto
that all the Obligations shall be the joint and several obligations of each
Borrower without preferences or distinction among them.

(c) If and to the extent that any Borrower shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other Borrowers will make such payment with respect to, or perform, such
Obligation.

(d) The Obligations of each Borrower under the provisions of this Section 2.15
constitute the absolute and unconditional, full recourse Obligations of each
Borrower enforceable against each Borrower to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstances whatsoever.

(e) Except as otherwise expressly provided in this Agreement, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advances or Letters of Credit issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by Agent or Lenders under or in respect of any of the Obligations and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of
any of the Obligations, the acceptance of any payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by Agent or Lenders at any time or times in respect of
any default by any other Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any other Borrower. Without
limiting the generality of the foregoing, each Borrower assents to any other
action or delay in acting or failure to act on the part of any Agent or Lender
with respect to the failure by any other Borrower to comply with any of its
respective Obligations, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder, which might, but for the provisions
of this Section 2.15 afford grounds for terminating, discharging or relieving
any other Borrower, in whole or in part, from any of its Obligations under this
Section 2.15, it being the intention of each Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the Obligations of each Borrower
under this Section 2.15 shall not be discharged except by performance and then
only to the extent of such performance. The Obligations of each Borrower under
this Section 2.15 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any other Borrower or any Agent or Lender.

(f) Each Borrower represents and warrants to Agent and Lenders that such
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants to Agent and Lenders that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby covenants
that such Borrower will continue to keep informed of Borrowers’ financial
condition, the financial condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Obligations.

(g) Each Borrower waives all rights and defenses arising out of an election of
remedies by Agent or any Lender, even though that election of remedies, such as
a non-judicial foreclosure with respect to security for a guaranteed obligation,
has destroyed Agent’s or such Lender’s rights of subrogation and reimbursement
against such Borrower by the operation of Section 580(d) of the California Code
of Civil Procedure or otherwise.

(h) Each Borrower waives all rights and defenses that such Borrower may have
because the Obligations are secured by Real Property. This means, among other
things:

(i) Agent and Lenders may collect from such Borrower without first foreclosing
on any Collateral pledged by Borrowers or any other Person;

(ii) If Agent or any Lender forecloses on any Real Property Collateral pledged
by any Borrower or any other Person:

(A) The amount of the Obligations may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price;

(B) Agent and Lenders may collect from such Borrower even if Agent or Lenders,
by foreclosing on the Real Property Collateral, has destroyed any right such
Borrower may have to collect from the other Borrowers.

(i) The provisions of this Section 2.15 are made for the benefit of Agent,
Lenders and their respective successors and assigns, and may be enforced by it
or them from time to time against any or all Borrowers as often as occasion
therefor may arise and without requirement on the part of any such Agent,
Lender, successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this Section 2.15 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by any Agent or Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this
Section 2.15 will forthwith be reinstated in effect, as though such payment had
not been made.

(j) Each Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against any other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent or Lenders with respect to any of the Obligations
or any collateral security therefor until such time as all of the Obligations
have been paid in full in cash. Any claim which any Borrower may have against
any other Borrower with respect to any payments to any Agent or Lender hereunder
or under any other Loan Documents are hereby expressly made subordinate and
junior in right of payment, without limitation as to any increases in the
Obligations arising hereunder or thereunder, to the prior payment in full in
cash of the Obligations and, in the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding under the
laws of any jurisdiction relating to any Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in full in
cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower therefor.

(k) Each Borrower hereby agrees that, after the occurrence and during the
continuance of any Default or Event of Default, the payment of any amounts due
with respect to the indebtedness owing by any Borrower to any other Borrower is
hereby subordinated to the prior payment in full in cash of the Obligations.
Each Borrower hereby agrees that after the occurrence and during the continuance
of any Default or Event of Default, upon request of Agent, such Borrower will
not demand, sue for or otherwise attempt to collect any indebtedness of any
other Borrower owing to such Borrower until the Obligations shall have been paid
in full in cash. If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with Section 2.4(b).

3.   CONDITIONS; TERM OF AGREEMENT.

3.1. Conditions Precedent to the Initial Extension of Credit. The obligation of
each Lender to make its initial extension of credit provided for hereunder, is
subject to the fulfillment, to the satisfaction of Agent and each Lender of each
of the conditions precedent set forth on Schedule 3.1 in accordance with such
Schedule 3.1.

3.2. Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder (or to
extend any other credit hereunder) at any time shall be subject to the following
conditions precedent:

(a) the representations and warranties contained in this Agreement or in the
other Loan Documents shall be true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof) on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);

(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof;

(c) no injunction, writ, restraining order, or other order of any nature
restricting or prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
any Borrower, Agent, or any Lender; and

(d) no Material Adverse Change shall have occurred since the Closing Date.

3.3. Term. This Agreement shall continue in full force and effect for a term
ending on that date (the “Maturity Date”) that is the earliest to occur of:
(a) the date on which Agent provides written notice pursuant to the Financing
Order to counsel to the Administrative Borrower and counsel for any creditors
committee of the occurrence and continuance of an Event of Default and Agent’s
election to cease funding and accelerate the Obligations and terminate the
Revolver Commitments pursuant to the terms of this Agreement; (b) the entry of
an order converting the Bankruptcy Case to a case under chapter 7 of the Code or
dismissing the Bankruptcy Case; (c) the effective date of any plan of
reorganization or liquidation confirmed in the Bankruptcy Case; (d) 90 calendar
days after the date on which the interim Financing Order is entered by the
Bankruptcy Court, unless extended in writing by Agent; (e) the closing date of a
sale of all or substantially all of the Collateral pursuant to Bankruptcy Code
§ 363; (f) if the final Financing Order authorizing the Borrowers to incur the
Indebtedness hereunder on a final basis is not entered on or before February 21,
2007; or (g) the date of the Final Hearing, if a final Financing Order
acceptable to Agent is not entered in connection therewith.

3.4. Effect of Termination. On the date of termination of this Agreement, all
Obligations (including contingent reimbursement obligations of Borrowers with
respect to outstanding Letters of Credit and including all Bank Product
Obligations) immediately shall become due and payable without notice or demand
(including (a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product
Providers with respect to the Bank Product Obligations). No termination of this
Agreement, however, shall relieve or discharge Borrowers or their Subsidiaries
of their duties, Obligations, or covenants hereunder or under any other Loan
Document and the Agent’s Liens in the Collateral shall remain in effect until
all Obligations have been paid in full and the Lender Group’s obligations to
provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been paid in full and the
Lender Group’s obligations to provide additional credit under the Loan Documents
have been terminated irrevocably, Agent will, at Borrowers’ sole expense,
execute and deliver any termination statements, lien releases, mortgage
releases, re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably requested by a Borrower to release, as of record, the
Agent’s Liens and all notices of security interests and liens previously filed
by Agent with respect to the Obligations.

3.5. Early Termination by Borrowers. Borrowers have the option, at any time upon
5 days prior written notice by Administrative Borrower to Agent, to terminate
this Agreement and terminate the Revolver Commitments hereunder without premium
or penalty by paying to Agent, in cash, the Obligations (including (a) either
(i) providing cash collateral to be held by Agent for the benefit of those
Lenders with a Revolver Commitment in an amount equal to 105% of the Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be returned to
the Issuing Lender, and (b) providing cash collateral (in an amount determined
by Agent as sufficient to satisfy the reasonably estimated credit exposure) to
be held by Agent for the benefit of the Bank Product Providers with respect to
the Bank Product Obligations), in full. If Administrative Borrower has sent a
notice of termination pursuant to the provisions of this Section, then the
Revolver Commitments shall terminate and Borrowers shall be obligated to repay
the Obligations (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender, and (b) providing cash
collateral (in an amount determined by Agent as sufficient to satisfy the
reasonably estimated credit exposure) to be held by Agent for the benefit of the
Bank Product Providers with respect to the Bank Product Obligations), in full,
on the date set forth as the date of termination of this Agreement in such
notice.

4.   REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects, as of the date
hereof, and shall be true, correct, and complete, in all material respects, as
of the Closing Date, and at and as of the date of the making of each Advance (or
other extension of credit) made thereafter, as though made on and as of the date
of such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:

4.1. No Encumbrances. Each Borrower and its Subsidiaries has good and
indefeasible title to, or a valid leasehold interest in, their personal property
assets and good and marketable title to, or a valid leasehold interest in, their
Real Property, in each case, free and clear of Liens except for Permitted Liens.

4.2. [Intentionally Reserved].

4.3. [Intentionally Reserved].

4.4. Equipment. Each material item of Equipment of Borrowers and their
Subsidiaries is used or held for use in their business and is in good working
order, ordinary wear and tear and damage by casualty excepted.

4.5. Location of Inventory and Equipment. The Inventory and Equipment (other
than vehicles or Equipment out for repair and Inventory and Equipment with an
aggregate value at any one U.S. domestic location of $50,000 or less ($300,000
or less in the case of any foreign location)) of Borrowers and their
Subsidiaries are located only at, or in-transit between, to, or from, the
locations identified on Schedule 4.5 (as such Schedule may be updated pursuant
to Section 5.9).

4.6. Inventory Records. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries’ Inventory and the book value thereof.

4.7. Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.

(a) The name of (within the meaning of Section 9-503 of the Code) and
jurisdiction of organization of each Borrower and each of its Subsidiaries is
set forth on Schedule 4.7(a) (as such Schedule may be updated from time to time
to reflect changes permitted to be made under Section 6.5).

(b) The chief executive office of each Borrower and each of its Subsidiaries is
located at the address indicated on Schedule 4.7(b) (as such Schedule may be
updated from time to time to reflect changes permitted to be made under
Section 5.9).

(c) Each Borrower’s and each of its Subsidiaries’ tax identification numbers and
organizational identification numbers, if any, are identified on Schedule 4.7(c)
(as such Schedule may be updated from time to time to reflect changes permitted
to be made under Section 6.5).

(d) As of the Closing Date, Borrowers and their U.S. Subsidiaries do not hold
any commercial tort claims in excess of $50,000 individually, except as set
forth on Schedule 4.7(d).

4.8. Due Organization and Qualification; Subsidiaries.

(a) Each Borrower and each of its Subsidiaries is duly organized and existing
and in good standing (or the foreign equivalent thereof) under the laws of the
jurisdiction of its organization and qualified to do business in any state where
the failure to be so qualified reasonably could be expected to result in a
Material Adverse Change.

(b) Set forth on Schedule 4.8(b) (as such Schedule may be updated from time to
time to reflect changes permitted to be made under Section 5.16), is a complete
and accurate description of the authorized capital Stock of each Borrower, by
class, and, as of the Closing Date, a description of the number of shares of
each such class that are issued and outstanding. Other than as described on
Schedule 4.8(b), there are no subscriptions, options, warrants, or calls
relating to any shares of each Borrower’s capital Stock, including any right of
conversion or exchange under any outstanding security or other instrument. No
Borrower is subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital Stock or any security
convertible into or exchangeable for any of its capital Stock.

(c) Set forth on Schedule 4.8(c) (as such Schedule may be updated from time to
time to reflect changes permitted to be made under Section 5.16), is a complete
and accurate list of each Borrower’s direct and indirect Subsidiaries, showing:
(i) the jurisdiction of their organization, (ii) the number of shares of each
class of common and preferred Stock authorized for each of such Subsidiaries,
and (iii) the number and the percentage of the outstanding shares of each such
class owned directly or indirectly by the applicable Borrower. All of the
outstanding capital Stock of each such Subsidiary has been validly issued and is
fully paid and non-assessable.

(d) Except as set forth on Schedule 4.8(c), there are no subscriptions, options,
warrants, or calls relating to any shares of any Borrower’s Subsidiaries’
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. No Borrower or any of its respective
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of any Borrower’s
Subsidiaries’ capital Stock or any security convertible into or exchangeable for
any such capital Stock.

4.9. Due Authorization; No Conflict.

(a) Subject to the approval of the Bankruptcy Court pursuant to the Financing
Order, as to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the Loan Documents to which it is a party have
been duly authorized by all necessary action on the part of such Borrower.

(b) Subject to the approval of the Bankruptcy Court pursuant to the Financing
Order, as to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the other Loan Documents to which it is a party
do not and will not (i) violate any provision of federal, state, or local law or
regulation applicable to any Borrower, the Governing Documents of any Borrower,
or any order, judgment, or decree of any court or other Governmental Authority
binding on any Borrower, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of any Borrower, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of Borrower, other than Permitted Liens, or (iv) require any approval
of any Borrower’s stockholders or any approval or consent of any Person under
any material contractual obligation of any Borrower, other than consents or
approvals that have been obtained and that are still in force and effect.

(c) Subject to the approval of the Bankruptcy Court pursuant to the Financing
Order, the execution, delivery, and performance by each Borrower of this
Agreement and the other Loan Documents to which such Borrower is a party do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority, other than consents
or approvals that have been obtained and that are still in force and effect.

(d) Subject to the approval of the Bankruptcy Court pursuant to the Financing
Order, as to each Borrower, this Agreement and the other Loan Documents to which
such Borrower is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by such Borrower will be the legally valid
and binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms.

(e) Subject to the approval of the Bankruptcy Court pursuant to the Financing
Order, the Agent’s Liens are validly created, perfected, and first priority
Liens (other than with respect to the Retained Professionals Carveout and UST
Fees) and there are no other Liens on any of the Collateral other than Permitted
Liens.

(f) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which it is a party have been duly authorized by all necessary
action on the part of such Guarantor.

(g) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which it is a party do not and will not (i) violate any provision
of federal, state, or local law or regulation applicable to such Guarantor, the
Governing Documents of such Guarantor, or any order, judgment, or decree of any
court or other Governmental Authority binding on such Guarantor, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of such Guarantor,
(iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of such Guarantor, other than Permitted
Liens, or (iv) require any approval of such Guarantor’s interestholders or any
approval or consent of any Person under any material contractual obligation of
such Guarantor, other than consents or approvals that have been obtained and
that are still in force and effect.

(h) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which such Guarantor is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority, other than (i) consents or approvals that
have been obtained and that are still in force and effect and (ii) registration
of each of the UK Security Documents with (a) the United Kingdom Registrar of
Companies and (b) Registers of Scotland (as applicable) (together the “UK
Registrations”).

(i) The Loan Documents to which each Guarantor is a party, and all other
documents contemplated hereby and thereby, when executed and delivered by such
Guarantor will be the legally valid and binding obligations of such Guarantor,
enforceable against such Guarantor in accordance with their respective terms,
except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.

4.10. Litigation. Other than the Bankruptcy Case and other than those matters
disclosed on Schedule 4.10 and other than matters arising after the Closing Date
that reasonably could not be expected to result in a Material Adverse Change,
there are no actions, suits, or proceedings pending or, to the best knowledge of
each Borrower, threatened against any Borrower or any of its Subsidiaries.

4.11. Financial Statements. All financial statements relating to Borrowers and
their Subsidiaries that have been delivered by Borrowers to the Lender Group
have been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-end
audit adjustments) and present fairly in all material respects, Borrowers’ and
their Subsidiaries’ financial condition as of the date thereof and results of
operations for the period then ended.

4.12. Dormant Subsidiaries . Each of Lilliput Lane Limited, Border Fine Arts
Company Limited, Fine Ceramic Transfer Limited, Bilston & Battersea Enamels
Limited, Enesco (2004) Ltd., Enesco (2005) Ltd., Enesco (2006) Ltd. and Stanley
Home Produtos de Limpeza Ltda. is a Dormant Subsidiary.

4.13. Employee Benefits. Except as set forth on Schedule 4.13, none of
Borrowers, any of their Subsidiaries, or any of their ERISA Affiliates maintains
or contributes to any Benefit Plan.

4.14. Environmental Condition. Except as set forth on Schedule 4.14, (a) to
Borrowers’ knowledge, none of Borrowers’ or their Subsidiaries’ properties or
assets has ever been used by Borrowers, their Subsidiaries, or by previous
owners or operators in the disposal of, or to produce, store, handle, treat,
release, or transport, any Hazardous Materials, where such use, production,
storage, handling, treatment, release or transport was in violation, in any
material respect, of any applicable Environmental Law, (b) to Borrowers’
knowledge, none of Borrowers’ nor their Subsidiaries’ properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) none of Borrowers
nor any of their Subsidiaries have received notice that a Lien arising under any
Environmental Law has attached to any revenues or to any Real Property owned or
operated by Borrowers or their Subsidiaries, and (d) none of Borrowers nor any
of their Subsidiaries have received a material summons, citation, notice, or
directive from the United States Environmental Protection Agency or any other
federal or state governmental agency concerning any action or omission by any
Borrower or any Subsidiary of a Borrower resulting in the releasing or disposing
of Hazardous Materials into the environment which could reasonably be expected
to result in a Material Adverse Change.

4.15. Intellectual Property. Each Borrower and each Subsidiary of a Borrower
owns, or holds licenses in, all trademarks, trade names, copyrights, patents,
patent rights, and licenses that are necessary to the conduct of its business as
currently conducted, and attached hereto as Schedule 4.15 (as updated from time
to time) is a true, correct, and complete listing of all material patents,
patent applications, trademarks, trademark applications, copyrights, and
copyright registrations as to which each Borrower or one of its Subsidiaries is
the owner or is an exclusive licensee; provided, however, that Borrowers may
amend Schedule 4.15 to add additional property so long as such amendment occurs
by written notice to Agent not less than 2 days before the date on which a
Borrower or any Subsidiary of Borrower acquires any such property after the
Closing Date and Schedule 4.15 will automatically be deemed amended without any
further consent of the Agent or any Lender.

4.16. Leases. Borrowers and their Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to their business and to which they are
parties or under which they are operating and all of such material leases are
valid and subsisting.

4.17. Deposit Accounts and Securities Accounts. Set forth on Schedule 4.17 is a
listing of all of Borrowers’ and their Subsidiaries’ Deposit Accounts and
Securities Accounts as of the date hereof, including, with respect to each bank
or securities intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.

4.18. Complete Disclosure. All factual information (taken as a whole) furnished
by or on behalf of Borrowers or their Subsidiaries in writing to Agent or any
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement, the
other Loan Documents, or any transaction contemplated herein or therein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of Borrowers or their Subsidiaries in writing to Agent or any Lender
will be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. Any Projections that are delivered to
Agent will represent, Borrowers’ good faith estimate of their and their
Subsidiaries’ future performance for the periods covered thereby based upon
assumptions believed by Borrowers to be reasonable at the time of the delivery
thereof to Agent (it being understood that such projections and forecasts are
subject to uncertainties and contingencies, many of which are beyond the control
of Borrowers and their Subsidiaries and no assurances can be given that such
projections or forecasts will be realized).

4.19. Indebtedness. Set forth on Schedule 4.19 is a true and complete list of
all Indebtedness of each Borrower and each Subsidiary of a Borrower outstanding
immediately prior to the Closing Date that is to remain outstanding after the
Closing Date and such Schedule accurately sets forth the aggregate principal
amount of such Indebtedness as of the Closing Date.

4.20. Matters Relating to Liens and Property Rights. The entry of the Financing
Order is effective to create in favor of Agent, for the benefit of Lenders, as
security for the Obligations, (i) a valid first priority (other than with
respect to the Retained Professionals Carveout and UST Fees) Lien on all of the
Collateral, and (ii) an allowed administrative expense in the Bankruptcy Case
having priority under Section 364(c)(1) of the Bankruptcy Code over all other
administrative expenses, subject only to the Retained Professionals Carveout and
UST Fees. Except for the Financing Order and the UK Registrations, no
authorization, approval or other action by, and no notice to or filing with, any
Governmental Authority is required for either (i) the pledge or grant by any
Borrower or any or its Subsidiaries of the Liens purported to be created in
favor of Agent pursuant to this Agreement or any of the Loan Documents or
(ii) the exercise by Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to this Agreement,
any of the Loan Documents or created or provided for by applicable law), except
as may be required, in connection with the disposition of any pledged
Collateral, by laws generally affecting the offering and sale of securities.

4.21. Budget. The Budget was prepared by Borrowers’ financial personnel and
represents the good faith belief of such Persons at such time as to the probable
course of Borrowers’ business and financial affairs, over the periods shown
therein, subject to the assumptions stated therein.

5.   AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Revolver Commitments and payment in full of the Obligations (other than Bank
Product Obligations and unasserted contingent obligations that survive the
termination of this Agreement), Borrowers shall and shall cause each of their
respective Subsidiaries to do all of the following (provided that Borrowers
shall not be required to cause Enesco France S.A. to do any of the following if
doing so would cause such Subsidiary to violate any provision of its credit
facility as such credit facility exists as of the date hereof):

5.1. Accounting System. Maintain a system of accounting that enables Borrowers
to produce financial statements in accordance with GAAP and maintain records
pertaining to the Collateral that contain information as from time to time
reasonably may be requested by Agent. Borrowers also shall keep a reporting
system that shows all additions, sales, claims, returns, and allowances with
respect to their and their Subsidiaries’ sales.

5.2. Collateral Reporting. Provide Agent (and if so requested by Agent, with
copies for each Lender) with each of the reports and documents set forth on
Schedule 5.2 at the times specified therein.

5.3. Financial Statements, Reports, Certificates. Deliver to Agent, with copies
to each Lender, each of the financial statements, reports, or other items set
forth on Schedule 5.3 at the times specified therein. In addition, Parent agrees
that no Subsidiary of Parent will have a fiscal year different from that of
Parent.

5.4. Guarantor Reports Cause each Guarantor to deliver its annual financial
statements at the time when Parent provides its audited financial statements to
Agent, but only to the extent such Guarantor’s financial statements are not
consolidated with Parent’s financial statements.

5.5. Inspection. Permit Agent, each Lender, and each of their duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees at such reasonable times
and intervals as Agent or any such Lender may designate and, so long as no
Default or Event of Default exists, with reasonable prior notice to
Administrative Borrower. Without limiting the foregoing, Agent may engage
appraisers to conduct appraisals of the Collateral from time to time.

5.6. Maintenance of Properties. Within the restrictions set forth in the Budget,
maintain and preserve all of their properties which are necessary or useful in
the proper conduct of their business in good working order and condition,
ordinary wear, tear, and casualty excepted (except where the failure to do so
could not reasonably be expected to result in a Material Adverse Change) , and
comply at all times with the provisions of all material leases to which it is a
party as lessee, so as to prevent any loss or forfeiture thereof or thereunder.

5.7. Taxes. Cause all material assessments and income, franchise, and other
material taxes with respect to periods after the Filing Date, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against Borrowers, their Subsidiaries, or any of their respective assets to be
paid in full, before delinquency or before the expiration of any extension
period (including any extension by virtue of the Bankruptcy Case), except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Borrowers will and will cause their Subsidiaries to make
timely payment or deposit of all tax payments and withholding taxes required of
them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A.,
state disability, and local, state, and federal income taxes, and will, upon
reasonable request, furnish Agent with proof reasonably satisfactory to Agent
indicating that the applicable Borrower or Subsidiary of a Borrower has made
such payments or deposits.

5.8. Insurance.

(a) At Borrowers’ expense, maintain insurance respecting their and their
Subsidiaries’ assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Borrowers also shall
maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and
with such insurance companies as are reasonably satisfactory to Agent. Borrowers
shall deliver copies of all such policies to Agent with an endorsement naming
Agent as the sole loss payee (under a satisfactory lender’s loss payable
endorsement) or additional insured, as appropriate. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to endeavor to give not
less than 30 days prior written notice to Agent in the event of cancellation of
the policy for any reason whatsoever (except 10 days prior written notice shall
be sufficient for cancellation of the policy for non-payment of premium).

(b) Administrative Borrower shall give Agent prompt notice of any loss exceeding
$100,000 covered by such insurance. So long as no Event of Default has occurred
and is continuing, Borrowers shall have the exclusive right to adjust any losses
payable under any such insurance policies which are less than $100,000.
Following the occurrence and during the continuation of an Event of Default, or
in the case of any losses payable under such insurance exceeding $100,000, Agent
shall have the exclusive right to adjust any losses payable under any such
insurance policies, without any liability to Borrowers whatsoever in respect of
such adjustments (it being agreed that this Section 5.8 does not apply to any
executive risk, director’s and officer’s liability or other similar insurance).

5.9. Location of Inventory and Equipment. Keep Borrowers’ and their
Subsidiaries’ Inventory and Equipment (other than vehicles and Equipment out for
repair) with an aggregate value in excess of $50,000 at any location ($300,000
in the case of any foreign location) only at the locations identified on
Schedule 4.5 and their chief executive offices only at the locations identified
on Schedule 4.7(b); provided, however, that Administrative Borrower may amend
Schedule 4.5 or Schedule 4.7(b) so long as such amendment occurs by written
notice to Agent prior to the date on which such Inventory or Equipment is moved
to such new location or such chief executive office is relocated (and Schedules
4.5 and 4.7(b) will automatically be deemed so amended without any further
consent of the Agent or any Lender), and so long as the applicable Borrower uses
commercially reasonable efforts to provide Agent a Collateral Access Agreement
with respect thereto.

5.10. Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.

5.11. Leases. Pay when due all rents and other amounts accruing or becoming due
after the Filing Date and payable under any material leases to which any
Borrower or any Subsidiary of a Borrower is a party or by which any Borrower’s
or any of its Subsidiaries’ properties and assets are bound with respect to
periods after the Filing Date, unless such payments are the subject of a
Permitted Protest.

5.12. Existence. At all times preserve and keep in full force and effect each
Borrower’s and each of its Subsidiaries’, valid existence and good standing in
its jurisdiction of organization and, except as could not reasonably be expected
to result in a Material Adverse Change, any rights, franchises, permits,
licenses, accreditations, authorizations, or other approvals material to their
businesses.

5.13. Environmental. (a) Keep any property either owned or operated by any
Borrower or any Subsidiary of a Borrower free of any Environmental Liens or post
bonds or other financial assurances sufficient to satisfy the obligations or
liability evidenced by such Environmental Liens, (b) comply, in all material
respects, with Environmental Laws and provide to Agent documentation of such
compliance which Agent reasonably requests, (c) promptly notify Agent of any
release of a Hazardous Material in any reportable quantity from or onto property
owned or operated by any Borrower or any Subsidiary of a Borrower and take any
Remedial Actions required to abate said release or otherwise to come into
compliance with applicable Environmental Law, and (d) promptly, but in any event
within 5 days of its receipt thereof, provide Agent with written notice of any
of the following: (i) notice that an Environmental Lien has been filed against
any of the real or personal property of any Borrower or any Subsidiary of a
Borrower, (ii) commencement of any Environmental Action or notice that an
Environmental Action will be filed against any Borrower or any Subsidiary of a
Borrower, and (iii) notice of a violation, citation, or other administrative
order which reasonably could be expected to result in a Material Adverse Change.

5.14. Disclosure Updates. Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.

5.15. Control Agreements. Notify Agent in writing prior to opening any new
Securities Account or Deposit Account and take all steps reasonably required by
Agent in order for Agent to obtain control in accordance with Sections 8-106,
9-104, 9-105, 9-106, and 9-107 of the Code with respect to (subject to the
proviso contained in Section 6.12) all of its Securities Accounts, Deposit
Accounts, electronic chattel paper, investment property, and letter-of-credit
rights.

5.16. Formation of Subsidiaries. At the time that any Borrower or any Subsidiary
forms any direct or indirect Subsidiary or acquires any direct or indirect
Subsidiary after the Closing Date, such Borrower or such Subsidiary shall
(a) cause such new Subsidiary to provide to Agent a joinder to the Guaranty and
the Security Agreement, together with such other security documents (including
Mortgages with respect to any Real Property of such new Subsidiary), as well as
appropriate financing statements (and with respect to all property subject to a
Mortgage, fixture filings), all in form and substance reasonably satisfactory to
Agent (including being sufficient to grant Agent a first priority Lien (subject
only to Permitted Liens) in and to the assets of such newly formed or acquired
Subsidiary), (b) provide to Agent a pledge agreement and appropriate
certificates and powers or financing statements, hypothecating all of the direct
or beneficial ownership interest in such new Subsidiary, in form and substance
reasonably satisfactory to Agent, and (c) provide to Agent all other
documentation, including one or more opinions of counsel reasonably satisfactory
to Agent, which in its opinion is appropriate with respect to the execution and
delivery of the applicable documentation referred to above (including policies
of title insurance or other documentation with respect to all property subject
to a Mortgage). Any document, agreement, or instrument executed or issued
pursuant to this Section 5.16 shall be a Loan Document. Upon complying with this
Section, Administrative Borrower may amend Schedule 4.8(b) or Schedule 4.8(c) by
sending updated schedules to the Agent and such schedules shall be deemed to be
automatically amended without further consent from the Agent or any Lender.

5.17. Further Assurances. At any time upon the request of Agent, Borrowers shall
execute or deliver to Agent, and shall cause their Subsidiaries to execute or
deliver to Agent, any and all financing statements, fixture filings, security
agreements, pledges, assignments, endorsements of certificates of title,
mortgages, deeds of trust, opinions of counsel, and all other documents
(collectively, the “Additional Documents”) that Agent may reasonably request in
form and substance reasonably satisfactory to Agent, to create, perfect, and
continue perfected or to better perfect the Agent’s Liens in all of the
properties and assets of Borrowers and their Subsidiaries (whether now owned or
hereafter arising or acquired, tangible or intangible, real or personal), to
create and perfect Liens in favor of Agent in any Real Property acquired by
Borrowers or their Subsidiaries after the Closing Date, and in order to fully
consummate all of the transactions contemplated hereby and under the other Loan
Documents. To the maximum extent permitted by applicable law, Borrowers
authorize Agent to execute any such Additional Documents in Borrowers’ or their
Subsidiaries’ names, as applicable, and authorizes Agent to file such executed
Additional Documents in any appropriate filing office.

5.18. Consultants/Financial Advisor. Upon the request of Agent, retain a
consultant, or such other management consulting firm acceptable to Agent, or
such other financial advisory/investment banking firm acceptable to Agent, which
shall assist Borrowers in the management of their businesses, including
assisting Borrowers in the preparation of forecasts and projections and the
development and implementation of strategies with respect to the marketing for
sale of their businesses and properties and in connection with maximizing the
value of the Collateral. Borrowers hereby irrevocably authorize and instruct
each such Person to share with Agent and Lenders all budgets, records,
projections, financial information, reports and other information relating to
the Collateral, the financial condition, operations and the sale/marketing
process of the Borrowers’ businesses, except to the extent access to such
information would compromise the Borrowers’ attorney-client privilege. Borrowers
agree to provide each such Person, Agent and each Lender with complete access to
all of the Borrowers’ books and records, all of Borrowers’ premises and to
Borrowers’ management as and when deemed necessary by any such Person, the Agent
or such Lender. It is the understanding of the parties, that as of the Closing
Date, the Agent has no intention to require the retention of a consultant or any
other firm described above, and that the basis for doing so would likely be
limited to a concern over deteriorating collateral values or the belief that a
Default or Event of Default has or will occur.

6.   NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations (other than Bank Product
Obligations and unasserted contingent obligations that survive the termination
of this Agreement), Borrowers will not and will not permit any of their
respective Subsidiaries to do any of the following (provided that Borrowers may
permit Enesco France S.A. to do any of the following to the extent that such
Subsidiary is required to do so pursuant to any provision of its credit facility
as such credit facility exists as of the date hereof)::

6.1. Indebtedness. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:

(a) Indebtedness evidenced by this Agreement and the other Loan Documents,
together with Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit,

(b) Indebtedness set forth on Schedule 4.19 and any refinancings, renewals or
replacements thereof provided the principal amount of such Indebtedness shall
not be increased (other than by accrued interest),

(c) Permitted Purchase Money Indebtedness,

(d) endorsement of instruments or other payment items for deposit,

(e) Indebtedness permitted to be incurred in accordance with the Financing
Order, and

(f) Indebtedness consisting of Permitted Investments.

6.2. Liens. Create, incur, assume, or suffer to exist, directly or indirectly,
any Lien on or with respect to any of its assets, of any kind, whether now owned
or hereafter acquired, or any income or profits therefrom, except for Permitted
Liens. Notwithstanding anything to the contrary in this Agreement or other Loan
Documents, Borrowers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, create, assume or suffer to exist any
Lien with priority over the Liens created by the Loan Documents, except the
Permitted Liens securing the Retained Professionals Carveout and UST Fees.

6.3. Restrictions on Fundamental Changes.

(a) Enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its Stock,

(b) Except for Dormant Subsidiaries, liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution),

(c) Suspend or go out of a substantial portion of its or their business.

6.4. Disposal of Assets. Other than Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of (or enter into an agreement
(other than an agreement with Voting Participant) to convey, sell, lease,
license, assign, transfer, or otherwise dispose of) any of the assets of any
Borrowers or any Subsidiary of a Borrower.

6.5. Change Name. Change any Borrower’s or any of its Subsidiaries’ name,
organizational identification number, state of organization or organizational
identity, in each case, if applicable; provided, however, that a Borrower or a
Subsidiary of a Borrower may change its name upon at least 10 days prior written
notice by Administrative Borrower to Agent of such change and so long as, at the
time of such written notification, such Borrower or such Subsidiary provides any
financing statements necessary to perfect and continue perfected the Agent’s
Liens.

6.6. Nature of Business. Make any change in the nature of their business as
described in Schedule 6.6 or acquire any properties or assets that are not
reasonably related to the conduct of such business activities.

6.7. Prepayments and Amendments.

(a) Optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Borrower or any Subsidiary of a Borrower, other than the
Obligations in accordance with this Agreement or pursuant to the Financing Order
and other than Indebtedness of non-U.S. Subsidiaries evidenced by Hedge
Agreements which are terminated in the ordinary course of business consistent
with past practices,

(b) make any payment on account of Indebtedness that has been contractually
subordinated in right of payment if such payment is not permitted at such time
under the subordination terms and conditions, or

(c) directly or indirectly, amend, modify, alter, increase, or change any of the
terms or conditions of any agreement, instrument, document, indenture, or other
writing evidencing or concerning Indebtedness permitted under Section 6.1(b) to
be less favorable to any Borrower or any Subsidiary.

6.8. Change of Control. Cause, permit, or suffer, directly or indirectly, any
Change of Control.

6.9. Consignments. Consign Inventory or sell any of their Inventory in an
aggregate amount greater than $60,000 on bill and hold, sale or return, sale on
approval, or other conditional terms of sale.

6.10. Distributions. Make any distribution or declare or pay any dividends (in
cash or other property, other than common Stock) on, or purchase, acquire,
redeem, or retire any of Parent’s Stock, of any class, whether now or hereafter
outstanding.

6.11. Accounting Methods. Modify or change their fiscal year or their method of
accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Borrowers’ or their Subsidiaries’ accounting records
without said accounting firm or service bureau agreeing to provide Agent
information regarding Borrowers’ and their Subsidiaries’ financial condition.

6.12. Investments. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment.

6.13. Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any transaction with any Affiliate of any Borrower or any Subsidiary of
a Borrower except for:

(a) transactions solely among Borrowers or their Subsidiaries or any combination
of the foregoing in the ordinary course of business and consistent with the
Budget and past practices;

(b) transactions (other the payment of management, consulting, monitoring, or
advisory fees) between Borrowers or their Subsidiaries, on the one hand, and any
Affiliate of Borrowers or their Subsidiaries, on the other hand, so long as such
transactions (i) are upon fair and reasonable terms, (ii) are fully disclosed to
Agent if they involve one or more payments by any Borrower or any of Subsidiary
of a Borrower in excess of $25,000 for any single transaction or series of
transactions, and (iii) are no less favorable to Borrowers or their
Subsidiaries, as applicable, than would be obtained in an arm’s length
transaction with a non-Affiliate; and

(c) the payment of reasonable fees, compensation, severance (to the extent
included in the Budget) or employee benefit arrangements to, and any indemnity
provided for the benefit of, officers and directors of Parent in the ordinary
course of business and consistent with past practice.

6.14. Use of Proceeds. Use the proceeds of the Advances for any purpose other
than (a) on the Closing Date, (i) to satisfy and extinguish the outstanding
principal, accrued interest, and accrued fees and expenses and any other
indebtedness owing to Existing Lender, and (ii) to pay transactional fees,
costs, and expenses incurred in connection with this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby, and
(b) thereafter, consistent with the terms and conditions hereof, for its lawful
and permitted purposes as permitted by, and consistent in all respects with, the
Budget and the Financing Order.

6.15. Inventory and Equipment with Bailees. Store the Inventory or Equipment of
Borrowers or their Subsidiaries with an aggregate value in excess of $100,000 at
any time now or hereafter with a bailee, warehouseman, or similar party unless
the applicable Borrower or Subsidiary shall have used commercially reasonable
efforts to have the applicable bailee, warehouseman, or similar party execute
and deliver to Agent a Collateral Access Agreement.

6.16. Budget. (a) As of any Friday after the Closing Date, have total cash
receipts of less than 90% of the “Total Cash Receipts” set forth in the Budget,
measured cumulatively, for the week(s) ended on such Friday, or (b) have made,
as of any week set forth in the Budget, cash disbursements for post-petition
payables in an amount that exceeds 110% of the applicable budgeted amount of
“Post-Petition Cash Disbursements” set forth in the Budget, measured
cumulatively for such week(s), as set forth in the Budget, or (c) have made, as
of any week set forth in the Budget, cash disbursements for pre-petition
payables in an amount that exceeds 110% of the applicable budgeted amount of
“Pre-Petition Cash Disbursements” set forth in the Budget, measured cumulatively
for such week(s), as set forth in the Budget, or (d) as of any Friday after the
Closing Date, have net cash flow (defined as total cash receipts less total cash
disbursements for post-petition payables) set forth in the Budget, measured
cumulatively, of less than 90% of the “Net Cash Flow” set forth in the Budget
for the week(s) ended on such Friday.

6.17. Financing Order; Administrative Expense Priority; Lien Priority; Payments.

(i) Seek, consent to or suffer to exist at any time any modification, stay,
vacation or amendment of the Financing Order, except for modifications and
amendments joined in or agreed to in writing by Agent.

(ii) Suffer to exist at any time a priority for any administrative expense or
unsecured claim against any Borrower (now existing or hereafter arising of any
kind or nature whatsoever, including, without limitation, any administrative
expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy
Code) equal or superior to the priority of the Lender Group in respect of the
Obligations, except for the Retained Professionals Carveout and UST Fees having
a priority over the Obligations to the extent set forth in the definition of
Agreed Administrative Expense Priorities.

(iii) Suffer to exist at any time any Lien on any properties, assets or rights
(including, without limitation, Accounts, Inventory and all other Collateral)
except for Permitted Liens.

(iv) Prior to the date on which the Obligations have been paid in full in cash,
all Letters of Credit have been cash collateralized or returned for cancellation
pursuant to this Agreement, and this Agreement has been terminated, pay any
administrative expenses, except administrative expenses incurred in the ordinary
course of the business of Borrowers, in each case subject to the extent and
having the order of priority set forth in the definition of Agreed
Administrative Expense Priorities.

(v) Notwithstanding the foregoing, the Borrowers shall be permitted to pay as
the same may become due and payable (i) administrative expenses of the kind
specified in Section 503(b) of the Bankruptcy Code incurred in the ordinary
course of business and to the extent otherwise authorized under the Financing
Order and this Agreement and (ii) compensation and reimbursement of expenses to
professionals allowed and payable under Sections 330 and 331 of the Bankruptcy
Code to the extent permitted by the Financing Order.

7.   EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an "Event of Default”) under this Agreement:

7.1. If Borrowers fail to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations consisting of interest, fees,
or charges due the Lender Group, reimbursement of Lender Group Expenses, or
other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and
such failure continues for a period of 3 Business Days, or (b) all or any
portion of the principal of the Obligations;

7.2. If Borrowers or any Subsidiary of any Borrower

(a) fails to perform or observe any covenant or other agreement contained in any
of Sections 2.7, 5.5, 5.8, 5.12, 5.14, 5.16, 5.17, 5.18, and any provision of
Section 6 of this Agreement;

(b) fails to perform or observe any covenant or other agreement contained in any
of Sections 5.2, 5.3, and 5.4 of this Agreement and such failure continues for a
period of 5 days after the earlier of (i) the date on which such failure shall
first become known to any Responsible Officer of any Borrower and (ii) written
notice thereof is given to Administrative Borrower by Agent;

(c) fails to perform or observe any covenant or other agreement contained in any
of Sections 5.6, 5.7, 5.9, 5.10, 5.11 and 5.15 of this Agreement and such
failure continues for a period of 10 days after the earlier of (i) the date on
which such failure shall first become known to any Responsible Officer of any
Borrower and (ii) written notice thereof is given to Administrative Borrower by
Agent;

(d) fails to perform or observe any covenant or other agreement contained in
this Agreement, or in any of the other Loan Documents, in each case, other than
any such covenant or agreement that is the subject of another provision of this
Section 7 (in which event such other provision of this Section 7 shall govern),
and such failure continues for a period of 20 days after the earlier of (i) the
date on which such failure shall first become known to any Responsible Officer
of any Borrower and (ii) written notice thereof is given to Administrative
Borrower by Agent;

7.3. If any material portion of any Borrower’s or any of its Subsidiaries’
assets is attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes into the possession of any third Person and the same is
not discharged before the earlier of 30 days after the date it first arises or
5 days prior to the date on which such property or asset is subject to
forfeiture by such Borrower or the applicable Subsidiary;

7.4. If any Borrower or any Subsidiary of a Borrower is enjoined, restrained, or
in any way prevented by court order from continuing to conduct all or any
material part (a part involving more than 10% of its revenue-producing
activities) of its business affairs;

7.5. If, after the Filing Date, one or more judgments, orders, or awards
involving an aggregate amount of $100,000, or more (except to the extent fully
covered by insurance pursuant to which the insurer has accepted liability
therefor in writing) shall be entered or filed against any Borrower or any
Subsidiary of any Borrower or with respect to any of their respective assets,
and the same is not released, discharged, bonded against, or stayed pending
appeal before the earlier of 30 days after the date it first arises or 5 days
prior to the date on which such asset is subject to being forfeited by the
applicable Borrower or the applicable Subsidiary;

7.6. If, after the Filing Date, a default occurs with respect to one or more
agreements to which any Borrower or any Subsidiary of a Borrower is a party with
one or more third Persons relative to Indebtedness of any Borrower or any
Subsidiary of any Borrower involving an aggregate amount of $100,000 or more,
and such default (i) occurs at the final maturity of the obligations thereunder,
or (ii) results in a right by such third Person(s), irrespective of whether
exercised, to accelerate the maturity of the applicable Borrower’s or
Subsidiary’s obligations thereunder, other than: any default arising (x) prior
to Borrowers’ filing of the Bankruptcy Case; (y) due to Borrowers’ filing of the
Bankruptcy Case; or (z) due to restrictions on payment arising thereby;

7.7. If any warranty, representation, statement, or Record made herein or in any
other Loan Document or delivered to Agent or any Lender in connection with this
Agreement or any other Loan Document proves to be untrue in any material respect
(except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) as of the date of issuance or making or deemed
making thereof;

7.8. If the obligation of any Guarantor under any Guaranty is materially limited
or terminated by operation of law or by such Guarantor, or any such Guarantor
becomes the subject of an Insolvency Proceeding;

7.9. If the Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and,
except to the extent permitted by the terms hereof or thereof, perfected and
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement;

7.10. Any material provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Borrower or any Subsidiary of a Borrower, or a
proceeding shall be commenced by any Borrower or any Subsidiary of a Borrower,
or by any Governmental Authority having jurisdiction over any Borrower or any
Subsidiary of a Borrower, seeking to establish the invalidity or
unenforceability thereof, or any Borrower or any Subsidiary of a Borrower shall
deny that it has any liability or obligation purported to be created under any
Loan Document;

7.11. If Borrower or any Subsidiary makes any payment on account of any
Indebtedness existing as of the Filing Date or described in Section 6.1(b),
except for any payments expressly authorized by the Financing Order or this
Agreement;

7.12. If the Financing Order is stayed, revised, revoked, remanded, rescinded,
amended, reversed, vacated, or modified in any manner not acceptable to the
Agent;

7.13. If an order with respect to the Bankruptcy Case shall be entered by the
Bankruptcy Court appointing (i) a trustee under Section 1104, or (ii) an
examiner with enlarged powers (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code;

7.14. If any Person other than Borrowers shall assert any claim in the
Bankruptcy Case arising under Section 506(c) of the Bankruptcy Code against
Agent, any Lender or the Collateral, and either (a) the same shall remain
unopposed by the Borrowers for more than 5 Business Days, or (b) in any event,
any such claim shall not be dismissed or withdrawn, with prejudice, within
60 days after the assertion thereof;

7.15. If (a) any Person other than the Borrowers shall commence any action in
any Bankruptcy Case which challenges or objects to the existence, extent,
validity or priority of any portion of the Obligations, the Liens therefor or
any rights and remedies of the Lender Group under the Loan Documents, the
Financing Order or any other order of the Bankruptcy Court and (b) either
(i) the same shall remain unopposed by the Borrowers for more than 5 Business
Days, or (ii) in any event, any such claim shall not be dismissed or withdrawn,
with prejudice, within 60 days after the assertion thereof;

7.16. If (a) any Borrowers or any of their Subsidiaries shall attempt to
invalidate, reduce or otherwise impair the Liens or security interests of Agent
and the Lenders, claims or rights against any Borrower or any of their
Subsidiaries or to subject any Collateral to assessment pursuant to Section
506(c) of the Bankruptcy Code, (b) any Lien or security interest created by this
Agreement or the Financing Order shall, for any reason, ceases to be valid or
(c) any action is commenced by any Borrower or any of their Subsidiaries which
contests the validity, perfection or enforceability of any of the Liens and
security interests of Agent and the Lenders created by this Agreement or the
Financing Order;

7.17. If an order with respect to the Bankruptcy Case shall be entered by the
Bankruptcy Court converting the Bankruptcy Case (or any case comprising part of
the Bankruptcy Case) to a case under chapter 7 of the Bankruptcy Code;

7.18. If an order shall be entered by the Bankruptcy Court confirming a
reorganization plan in the Bankruptcy Case which does not (a) contain a
provision for termination of this Agreement, the cash collateralization in
accordance with the provisions of Section 3.4 or return for cancellation of all
Letters of Credit and the indefeasible payment in full in cash of all
Obligations in a manner satisfactory to the Agent on or before the effective
date, or substantial consummation, of such plan and (b) provide for the
continuation of the Liens and security interests granted to Agent and priorities
until such plan effective date;

7.19. If an order shall be entered by the Bankruptcy Court dismissing the
Bankruptcy Case which does not contain a provision for termination of this
Agreement, the cash collateralization in accordance with the provisions of
Section 3.4 or return for cancellation of all Letters of Credit and the
indefeasible and final payment in full in cash of all Obligations in a manner
satisfactory to Agent upon such dismissal;

7.20. If an order with respect to the Bankruptcy Case shall be entered without
the express prior written consent of Agent, (i) to revoke, vacate, reverse,
stay, modify, supplement or amend this Agreement and the transactions
contemplated hereby, any Loan Document or the Financing Order, or (ii) to permit
any administrative expense or any claim (now existing or hereafter arising, of
any kind or nature whatsoever) to have administrative priority as to Borrowers
equal or superior to the priority of the Lender Group in respect of the
Obligations, except for the Retained Professionals Carveout and UST Fees having
a priority over the Obligations to the extent set forth in the definition of
Agreed Administrative Expense Priorities;

7.21. If an order shall be entered by the Bankruptcy Court granting relief from
the automatic stay to any creditor(s) of any Borrower or any Subsidiary of any
Borrower with respect to any claim in an amount equal to or exceeding $50,000 in
the aggregate; provided, however, that it shall not be an Event of Default if
relief from the automatic stay is granted (i) solely for the purpose of allowing
such creditor to determine the liquidated amount of its claim against any such
Person or (ii) to permit the commencement of or prosecution of a proceeding to
collect solely against an insurance company;

7.22. If an order shall be entered in any Bankruptcy Case that (a) permits any
Borrower or any Subsidiary of any Borrower to incur Indebtedness secured by any
claim under Bankruptcy Code Section 364(c)(1) or by a Lien pari passu with or
superior to the Lien granted to the Agent under the Loan Documents and
Bankruptcy Code Sections 364(c)(2) or (d), unless (i) all of the Obligations
have been indefeasibly and finally paid in cash at the time of the entry of any
such order, or (ii) such debt is used immediately to indefeasibly and finally
pay all of the Obligations in cash, or (b) permits any Borrower or any
Subsidiary of any Borrower the right to use Collateral other than in accordance
with the terms of the Financing Order, unless all of the Obligations shall have
been indefeasibly and finally in paid in cash;

7.23. If an application for any of the orders described in Sections 7.14 and
7.16 or 7.21 herein shall be made by Borrower or any Subsidiary of any Borrower
or any other Person and such application (if made by any Person other than a
Borrower or any Subsidiary of a Borrower) is not contested by the Borrowers in
good faith or the relief requested is granted in an order that is not stayed
pending appeal;

7.24. If the Board of Directors of any Borrower or any Subsidiary of any
Borrower authorizes the liquidation of all or substantially all of any such
Person’s assets pursuant to sales to be conducted under Section 363 of the
Bankruptcy Code or otherwise, other than as consented to by Agent or as allowed
to pursuant to Section 6.4 herein;

7.25. If the Bankruptcy Court shall approve the termination of a Material
License under Section 365 of the Bankruptcy Code or if any licensee shall
suspend or fail to renew any Material License;

7.26. Any Dormant Subsidiary existing as of the Closing Date conducts any
business or owns any assets, other than assets having an aggregate value not to
exceed the applicable amount set forth in the definition of the term “Dormant
Subsidiary”.

8.   THE LENDER GROUP’S RIGHTS AND REMEDIES.

8.1. Rights and Remedies. Notwithstanding the provisions of Section 362 of the
Bankruptcy Code, upon the occurrence, and during the continuation, of an Event
of Default, the Required Lenders (at their election but without notice of their
election and without demand) may authorize and instruct Agent to do any one or
more of the following on behalf of the Lender Group (and Agent, acting upon the
instructions of the Required Lenders, shall do the same on behalf of the Lender
Group), all of which are authorized by Borrowers:

(a) Declare all or any portion of the Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;

(b) Cease advancing money or extending credit to or for the benefit of Borrowers
under this Agreement, under any of the Loan Documents, or under any other
agreement between Borrowers and the Lender Group;

(c) Subject to the applicable terms, if any, of the Financing Order, terminate
this Agreement and any of the other Loan Documents as to any future liability or
obligation of the Lender Group, but without affecting any of the Agent’s Liens
in the Collateral and without affecting the Obligations; and

(d) Subject to the applicable terms, if any, of the Financing Order, the Lender
Group shall have all other rights and remedies available at law or in equity or
pursuant to any other Loan Document.

8.2. Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.

9.   TAXES AND EXPENSES.

If, with respect to any period after the Filing Date, any Borrower fails to pay
any monies (whether taxes, assessments, insurance premiums, or, in the case of
leased properties or assets, rents or other amounts payable under such leases)
due to third Persons, or fails to make any deposits or furnish any required
proof of payment or deposit, all as required under the terms of this Agreement,
then, Agent, in its sole discretion and without prior notice to any Borrower,
may do any or all of the following: (a) make payment of the same or any part
thereof, (b) set up such reserves against the Maximum Revolver Amount as Agent
deems necessary to protect the Lender Group from the exposure created by such
failure, or (c) in the case of the failure to comply with Section 5.8 hereof,
obtain and maintain insurance policies of the type described in Section 5.8 and
take any action with respect to such policies as Agent deems prudent. Any such
amounts paid by Agent shall constitute Lender Group Expenses and any such
payments shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement. Agent need not inquire as to, or contest the validity of,
any such expense, tax, or Lien and the receipt of the usual official notice for
the payment thereof shall be conclusive evidence that the same was validly due
and owing.

10.   WAIVERS; INDEMNIFICATION.

10.1. Demand; Protest; etc. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any such Borrower may in any way be liable.

10.2. The Lender Group’s Liability for Borrower Collateral. Each Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers.

10.3. Indemnification. Each Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Voting Participant
(each, an "Indemnified Person”) harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys, experts, or consultants
and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Borrowers’ and their
Subsidiaries’ compliance with the terms of the Loan Documents, (b) with respect
to any investigation, litigation, or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto, and (c) in
connection with or arising out of any presence or release of Hazardous Materials
at, on, under, to or from any assets or properties owned, leased or operated by
Parent or any of its Subsidiaries or any Environmental Actions, Environmental
Liabilities and Costs or Remedial Actions related in any way to any such assets
or properties of Parent or any of its Subsidiaries (each and all of the
foregoing, the "Indemnified Liabilities”). Any provision of any Loan Document to
the contrary notwithstanding, Borrowers shall have no obligation to any
Indemnified Person under this Section 10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person. This provision shall survive the termination of this Agreement and the
repayment of the Obligations. If any Indemnified Person makes any payment to any
other Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT (BUT NOT GROSSLY NEGLIGENT) ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

11.   NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by Borrowers
or Agent to the other relating to this Agreement or any other Loan Document
shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid,
return receipt requested), overnight courier, electronic mail (at such email
addresses as Administrative Borrower or Agent, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrowers in care of
Administrative Borrower or to Agent, as the case may be, at its address set
forth below:

         
 
  ENESCO GROUP, INC.

 
  225 Windsor Drive
 
  Itasca, Illinois 60143

If to Administrative
  Attn: Treasurer

Borrower:
  Fax No.: (630) 875-5692

with copies to:
  VEDDER, PRICE, KAUFMAN & KAMMHOLZ,

 
  P .C.  
 
  222 North LaSalle Street
 
  Chicago, Illinois 60601

 
  Attn: John T. McEnroe

 
  Fax No.: (312) 609-5005

If to Agent:
  WELLS FARGO FOOTHILL, INC.

 
  One Boston Place

 
  Suite 1800

 
  Boston, Massachusetts 02108

 
  Attn: Enesco-Account Manager

 
  Fax No.: (617) 722-9485

with copies to:
  GOLDBERG, KOHN, BELL, BLACK,

 
  ROSENBLOOM AND MORITZ, LTD.

 
  55 East Monroe Street
 
  Chicago, Illinois 60603

 
  Attn: Randall L. Klein

 
  Fax No.: (312) 332-2196

Agent and Borrowers may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 11, other
than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.

12.   CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE

(b) IF THE BANKRUPTCY COURT ABSTAINS FROM HEARING OR REFUSES TO EXERCISE
JURISDICTION OVER ANY OF THE FOLLOWING, THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF COOK, STATE
OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS AND EACH MEMBER OF THE
LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

(c) BORROWERS AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND EACH MEMBER OF THE LENDER GROUP
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

13.   ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1. Assignments and Participations.

(a) Any Lender may assign and delegate to one or more assignees (each an
“Assignee”) that are Eligible Transferees all or any portion, of the
Obligations, the Revolver Commitments and the other rights and obligations of
such Lender hereunder and under the other Loan Documents, in a minimum amount
(unless waived by the Agent) of $7,500,000 (except such minimum amount shall not
apply to (x) an assignment or delegation by any Lender to any other Lender or an
Affiliate of any Lender or (y) a group of new Lenders, each of whom is an
Affiliate of each other or a fund or account managed by any such new Lender or
an Affiliate of such new Lender to the extent that the aggregate amount to be
assigned to all such new Lenders is at least $7,500,000); provided, however,
that Borrowers and Agent may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee until
(i) written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Administrative Borrower and Agent by such Lender and the Assignee,
(ii) except in the case of an assignment to EGI Acquisition, LLC or any
Affiliate thereof (other than individuals), such Lender and its Assignee have
delivered to Administrative Borrower and Agent an Assignment and Acceptance and
Agent has notified the assigning Lender of its receipt thereof in accordance
with Section 13.1(b), and (iii) unless waived by the Agent, the assigning Lender
or Assignee has paid to Agent for Agent’s separate account a processing fee in
the amount of $3,500. Anything contained herein to the contrary notwithstanding,
the payment of any fees shall not be required and the Assignee need not be an
Eligible Transferee if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of the assigning Lender.

(b) From and after the date that Agent notifies the assigning Lender (with a
copy to Administrative Borrower) that it has received an executed Assignment and
Acceptance (or in the case of an assignment to EGI Acquisition, LLC or any
Affiliate thereof (other than individuals) written notice of such assignment)
and, if applicable, payment of the required processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance (or otherwise), shall have the rights and obligations of a Lender
under this Agreement and the other Loan Documents, and (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance (or otherwise), relinquish its rights (except with respect to
Section 10.3 hereof) and be released from any future obligations under this
Agreement (and in the case of an Assignment and Acceptance or other document
covering all or the remaining portion of an assigning Lender’s rights and
obligations under this Agreement and the other Loan Documents, such Lender shall
cease to be a party hereto and thereto), and such assignment shall effect a
novation among Borrowers, the assigning Lender, and the Assignee; provided,
however, that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Section 15 and Section 16.7(a) of this
Agreement.

(c) By executing and delivering an Assignment and Acceptance (or a comparable
document in the case of EGI Acquisition, LLC or any Affiliate thereof (other
than individuals)), the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance or other document,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document furnished pursuant hereto, (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of Borrowers or the performance or observance by
Borrowers of any of their obligations under this Agreement or any other Loan
Document furnished pursuant hereto, (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance or other document,
(iv) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement, (v) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (vi) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.

(d) Immediately upon Agent’s receipt of the required processing fee, if
applicable, and delivery of notice to the assigning Lender pursuant to
Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Revolver Commitments arising therefrom. The Revolver
Commitment allocated to each Assignee shall reduce such Revolver Commitments of
the assigning Lender pro tanto.

(e) Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons (a “Participant”) participating interests in all
or any portion of its Obligations, its Revolver Commitment, and the other rights
and interests of that Lender (the "Originating Lender”) hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Lender shall
remain a “Lender” for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the
Obligations, the Revolver Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, and (iv) all
amounts payable by Borrowers hereunder shall be determined as if such Lender had
not sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. No Participant shall have the right to participate directly in
the making of decisions by the Lenders among themselves or shall have any voting
rights other than any Voting Participant.

(f) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may, subject to the provisions of
Section 16.7, disclose all documents and information which it now or hereafter
may have relating to Borrowers and their Subsidiaries and their respective
businesses.

(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR § 203.24, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.

13.2. Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may not assign this
Agreement and the other Loan Documents and its rights and duties hereunder and
thereunder except pursuant to Section 13.1 hereof and, except as expressly
required pursuant to Section 13.1 hereof, no consent or approval by any Borrower
is required in connection with any such assignment.

14.   AMENDMENTS; WAIVERS.

14.1. Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document (other than Bank Product Agreements or the
Fee Letter), and no consent with respect to any departure by Borrowers
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by Agent at the written request of the Required
Lenders) and Administrative Borrower (on behalf of all Borrowers) and then any
such waiver or consent shall be effective, but only in the specific instance and
for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all of the
Lenders directly affected thereby and Administrative Borrower (on behalf of all
Borrowers), do any of the following:

(a) increase or extend any Revolver Commitment of any Lender,

(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

(c) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,

(d) change the Pro Rata Share that is required to take any action hereunder,

(e) amend or modify this Section or any provision of this Agreement providing
for consent or other action by all Lenders,

(f) other than as permitted by Section 15.12, release Agent’s Lien in and to any
of the Collateral,

(g) change the definition of “Required Lenders” or “Pro Rata Share”,

(h) contractually subordinate any of the Agent’s Liens,

(i) other than in connection with a merger, liquidation, dissolution or sale of
such Person expressly permitted by the terms hereof or the other Loan Documents,
release any Borrower or any Guarantor from any obligation for the payment of
money,

(j) amend any of the provisions of Section 2.4(b)(i) or (ii),

(k) change the definition of Maximum Revolver Amount or change Section 2.1(b),
or

(l) amend any of the provisions of Section 15.

and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent or Issuing Lender, as applicable, affect
the rights or duties of Agent or Issuing Lender, as applicable, under this
Agreement or any other Loan Document. The foregoing notwithstanding, any
amendment, modification, waiver, consent, termination, or release of, or with
respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves (and shall
not include voting rights), and that does not affect the rights or obligations
of Borrowers, shall not require consent by or the agreement of Borrowers.

14.2. Replacement of Holdout Lender.

(a) If any action to be taken by the Lender Group or Agent hereunder requires
the unanimous consent, authorization, or agreement of all Lenders, and a Lender
(“Holdout Lender”) fails to give its consent, authorization, or agreement, then
Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout
Lender, may permanently replace the Holdout Lender with one or more substitute
Lenders (each, a “Replacement Lender”), and the Holdout Lender shall have no
right to refuse to be replaced hereunder. Such notice to replace the Holdout
Lender shall specify an effective date for such replacement, which date shall
not be later than 15 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender and each
Replacement Lender shall execute and deliver an Assignment and Acceptance,
subject only to the Holdout Lender being repaid its share of the outstanding
Obligations (including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever.
If the Holdout Lender shall refuse or fail to execute and deliver any such
Assignment and Acceptance prior to the effective date of such replacement, the
Holdout Lender shall be deemed to have executed and delivered such Assignment
and Acceptance. The replacement of any Holdout Lender shall be made in
accordance with the terms of Section 13.1. Until such time as the Replacement
Lenders shall have acquired all of the Obligations, the Revolver Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender’s Pro Rata Share of Advances and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.

14.3. No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent’s and each
Lender’s rights thereafter to require strict performance by Borrowers of any
provision of this Agreement. Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.

15.   AGENT; THE LENDER GROUP.

15.1. Appointment and Authorization of Agent. Each Lender hereby designates and
appoints WFF as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this Section 15. The
provisions of this Section 15 (other than Section 15.11) are solely for the
benefit of Agent, and the Lenders, and Borrowers and their Subsidiaries shall
have no rights as a third party beneficiary of any of the provisions contained
herein. Any provision to the contrary contained elsewhere in this Agreement or
in any other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
“Agent” is for convenience only, that WFF is merely the representative of the
Lenders, and only has the contractual duties set forth herein. Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, and related matters, (b) execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the Collections of Borrowers and their Subsidiaries as provided in the Loan
Documents, (e) open and maintain such bank accounts and cash management
arrangements as Agent deems necessary and appropriate in accordance with the
Loan Documents for the foregoing purposes with respect to the Collateral and the
Collections of Borrowers and their Subsidiaries, (f) perform, exercise, and
enforce any and all other rights and remedies of the Lender Group with respect
to Borrowers, the Obligations, the Collateral, the Collections of Borrowers and
their Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.

15.2. Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.

15.3. Liability of Agent. None of the Agent Related Persons shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the books and records or properties of Borrowers or the
books or records or properties of any of Borrowers’ Subsidiaries or Affiliates.

15.4. Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the requisite Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.

15.5. Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “notice of default.” Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 8; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.

15.6. Credit Decision. Each Lender acknowledges that none of the Agent Related
Persons has made any representation or warranty to it, and that no act by Agent
hereinafter taken, including any review of the affairs of Borrowers and their
Subsidiaries or Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Borrowers and any other Person party to a Loan Document, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrowers.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrowers and any other Person party
to a Loan Document. Except for notices, reports, and other documents expressly
herein required to be furnished to the Lenders by Agent, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrowers and any other Person party
to a Loan Document that may come into the possession of any of the Agent Related
Persons.

15.7. Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the
performance and fulfillment of its functions, powers, and obligations pursuant
to the Loan Documents, including court costs, attorneys fees and expenses, fees
and expenses of financial accountants, advisors, consultants, and appraisers,
costs of collection by outside collection agencies, auctioneer fees and
expenses, and costs of security guards or insurance premiums paid to maintain
the Collateral, whether or not Borrowers are obligated to reimburse Agent or
Lenders for such expenses pursuant to this Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from the
Collections of Borrowers and their Subsidiaries received by Agent to reimburse
Agent for such out-of-pocket costs and expenses prior to the distribution of any
amounts to Lenders. In the event Agent is not reimbursed for such costs and
expenses by Borrowers or their Subsidiaries, each Lender hereby agrees that it
is and shall be obligated to pay to Agent such Lender’s Pro Rata Share thereof.
Whether or not the transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrowers and without limiting the obligation of
Borrowers to do so), according to their Pro Rata Shares, from and against any
and all Indemnified Liabilities; provided, however, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person’s gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make an Advance or other extension of credit
hereunder. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for such Lender’s Pro Rata Share of any costs or out of pocket
expenses (including attorneys, accountants, advisors, and consultants fees and
expenses) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.

15.8. Agent in Individual Capacity. WFF and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory, underwriting, or other business with Borrowers and their Subsidiaries
and Affiliates and any other Person party to any Loan Documents as though WFF
were not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, WFF or its Affiliates may receive
information regarding Borrowers or their Affiliates and any other Person party
to any Loan Documents that is subject to confidentiality obligations in favor of
Borrowers or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms “Lender” and “Lenders” include WFF in its individual capacity.

15.9. Successor Agent. Agent may resign as Agent upon 45 days notice to the
Lenders (unless such notice is waived by the Required Lenders). If Agent resigns
under this Agreement, the Required Lenders shall appoint a successor Agent for
the Lenders. If no successor Agent is appointed prior to the effective date of
the resignation of Agent, Agent may appoint, after consulting with the Lenders,
a successor Agent. If Agent has materially breached or failed to perform any
material provision of this Agreement or of applicable law, the Required Lenders
may agree in writing to remove and replace Agent with a successor Agent from
among the Lenders. In any such event, upon the acceptance of its appointment as
successor Agent hereunder, such successor Agent shall succeed to all the rights,
powers, and duties of the retiring Agent and the term “Agent” shall mean such
successor Agent and the retiring Agent’s appointment, powers, and duties as
Agent shall be terminated. After any retiring Agent’s resignation hereunder as
Agent, the provisions of this Section 15 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor Agent has accepted appointment as Agent by the date
which is 45 days following a retiring Agent’s notice of resignation, the
retiring Agent’s resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of Agent hereunder until such time,
if any, as the Lenders appoint a successor Agent as provided for above.

15.10. Lender in Individual Capacity. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with Borrowers and
their Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though such Lender were not a Lender hereunder without notice to or
consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding Borrowers or their
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrowers or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.

15.11. Withholding Taxes.

(a) All payments made by any Borrower hereunder or under any note or other Loan
Document will be made without setoff, counterclaim, or other defense. In
addition, except as otherwise provided in this Section 15.11, all such payments
will be made free and clear of, and without deduction or withholding for, any
present or future Taxes, and in the event any deduction or withholding of Taxes
is required, each Borrower shall comply with the penultimate sentence of this
Section 15.11(a). If any Taxes are so levied or imposed, each Borrower agrees to
pay the full amount of such Taxes and, if such Taxes are Indemnified Taxes, such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement, any note, or Loan Document, including any amount paid
pursuant to this Section 15.11(a) after withholding or deduction for or on
account of any Indemnified Taxes, will not be less than the amount provided for
herein; provided, however, that no Borrower shall be required to pay any such
additional amounts if such additional amounts payable result from Agent’s or
such Lender’s own willful misconduct or gross negligence (as finally determined
by a court of competent jurisdiction). Each Borrower will furnish to Agent as
promptly as possible after the date the payment of any Tax is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by such
Borrower or such other evidence of payment as is reasonably acceptable to Agent.

(b) If Agent or a Lender claims an exemption from or reduction of United States
withholding Tax, such Person agrees with and in favor of Agent and each
Borrower, to deliver to Agent and each Borrower, and Agent agrees to deliver to
each Borrower:

(i) if such Person claims an exemption from United States withholding Tax
pursuant to the portfolio interest exception, (A) a statement of such Person,
signed under penalty of perjury, that it is not a (I) a “bank” as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within
the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign
corporation related to any Borrower within the meaning of Section 864(d)(4) of
the IRC, and (B) a properly completed and executed IRS Form W-8BEN, before
receiving its first payment under this Agreement, any note or any other Loan
Document, and at any other time reasonably requested by Agent or any Borrower,
as applicable;

(ii) if such Person claims an exemption from, or a reduction of, withholding Tax
under a United States tax treaty, a properly completed and executed IRS Form
W-8BEN before receiving its first payment under this Agreement, any note or any
other Loan Document, and at any other time reasonably requested by Agent or any
Borrower, as applicable;

(iii) if such Person claims that interest or any other amount paid under this
Agreement, any note or any other Loan Document is exempt from United States
withholding Tax because it is effectively connected with a United States trade
or business of such Person, two properly completed and executed copies of IRS
Form W-8ECI before receiving its first payment under this Agreement, any note or
any other Loan Document, and at any other time reasonably requested by Agent or
any Borrower, as applicable; or

(iv) such other form or forms, including IRS Form W-9 and IRS Form W-8 IMY
(including supporting documentation), as may be required under the IRC or other
laws of the United States as a condition to exemption from, or reduction of,
United States withholding or backup withholding Tax before receiving its first
payment under this Agreement, as applicable, any note or any other Loan
Document, as applicable and at any other time reasonably requested by Agent or
any Borrower, as applicable.

Each Lender agrees promptly to notify Agent and Administrative Borrower of any
change in its circumstances which would modify or render invalid any claimed
exemption or reduction form.

(c) If Agent or a Lender claims an exemption from or reduction of withholding
Tax in a jurisdiction other than the United States, such Lender agrees with and
in favor of Agent and Borrowers, to deliver to Agent and each Borrower, and
Agent agrees to deliver to each Borrower, any such form or forms, as may be
required under the laws of such jurisdiction as a condition to exemption from,
or reduction of, foreign withholding or backup withholding Tax before receiving
its first payment under this Agreement, any note or any other Loan Document and
at any other time reasonably requested in writing by Agent or any Borrower as
applicable.

Each Lender agrees promptly to notify Agent and Administrative Borrower of any
change in its circumstances which would modify or render invalid any claimed
exemption or reduction form.

(d) If any Lender claims exemption from, or reduction of, withholding Tax and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Borrowers to such Lender, such Lender shall
promptly notify Agent and Administrative Borrower of the percentage amount as to
which it is no longer the beneficial owner of Obligations of Borrowers to such
Lender. To the extent of such percentage amount, Agent and Borrowers will treat
such Lender’s documentation provided pursuant to Sections 15.11(b) or 15.11(c)
as no longer valid. With respect to such percentage amount, Lender shall provide
new documentation, pursuant to Sections 15.11(b) or 15.11(c), as applicable.

(e) If Agent or any Lender is entitled to a reduction in the applicable
withholding Tax, and has timely delivered to Agent and each Borrower the form or
forms required pursuant to Section 15.11(b), 15.11(c) or 15.11(d), as
applicable, Agent or the relevant Borrower may withhold from any interest or
other payment to such Person an amount equal to the applicable withholding Tax
after taking into account such reduction. If the forms or other documentation
required by Section 15.11(b), 15.11(c) or 15.11(d), as applicable, are not
delivered or timely delivered to Agent or such Borrower, then Agent or such
Borrower may withhold from any interest or other payment to such Person not
providing such forms or other documentation an amount equal to the applicable
withholding Tax required by applicable law as the result of not providing such
form or documentation and Agent or such Lender, as applicable, shall not be
entitled to receive any additional amount on account of such withholding Tax
from any Borrower pursuant to the penultimate sentence of Section 15.11(a). The
preceding sentence shall not apply to any additional amounts required to be paid
pursuant to the penultimate sentence of Section 15.11(a) on account of
withholding Taxes that would have been imposed regardless of the failure to
deliver (or timely deliver) the applicable form or documentation.

(f) If the IRS or any other Governmental Authority of the United States or any
other jurisdiction asserts a claim that Agent or any Borrower did not properly
withhold Tax from amounts paid to or for the account of any Lender due to a
failure on the part of the Lender (because the appropriate form was not timely
delivered, was not properly completed or executed, or because such Lender failed
to notify Agent or such Borrower of a change in circumstances which rendered the
exemption from, or reduction of, withholding Tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent or such Borrower harmless for
all amounts paid, directly or indirectly, by Agent or such Borrower, as Tax or
otherwise, including penalties and interest, and including any Taxes imposed by
any jurisdiction on the amounts payable to Agent under this Section 15.11,
together with all costs and expenses (including attorneys fees and expenses).
The obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation or replacement of Agent.

(g) So long as no Default or Event of Default is continuing, if Agent or any
Lender shall become aware that it is entitled to receive a refund in respect of
Indemnified Taxes as to which it has received additional amounts from any
Borrower pursuant to the penultimate sentence of Section 15.11(a), it shall
promptly notify such Borrower of the availability of such refund and shall,
within 30 days after receipt of a request by such Borrower, apply for such
refund at such Borrower’s sole cost and expense. If Agent or any Lender receives
a refund in respect of any Indemnified Taxes as to which it has received
additional amounts from any Borrower pursuant to the penultimate sentence of
Section 15.11(a), it shall promptly notify such Borrower of its receipt of such
refund and shall, within 30 days after receipt of a request by such Borrower (or
promptly upon receipt of the refund, if such Borrower has requested application
for such refund pursuant hereto), pay the amount of such refund to such
Borrower, net of Agent’s or such Lender’s, as applicable, costs and expenses,
and without interest thereon; provided, however, that such Borrower, upon
request by Agent or such Lender, shall return such refund to Agent or such
Lender, as applicable, in the event that Agent or such Lender is required to
repay such refund to the relevant Governmental Authority. Nothing contained in
this Section 15.11(g) shall require Agent or any Lender to (i) make available to
any Borrower any of such Person’s tax returns or any other information relating
to its taxes that it deems to be confidential; (ii) pursue any claim for refund
without adequate assurance and indemnity from Borrower that the Lender’s or
Agent’s costs and expenses for pursuing such refund will be paid by Borrower or
(iii) pursue any claim for refund that would subject Lender to additional Taxes
or penalties.

15.12. Collateral Matters.

(a) The Lenders hereby irrevocably authorize Agent, at its option and in its
sole discretion, to release any Lien on any Collateral (i) upon the termination
of the Revolver Commitments and payment and satisfaction in full by Borrowers of
all Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Administrative
Borrower certifies to Agent that the sale or disposition is permitted under
Section 6.4 of this Agreement or the other Loan Documents (and Agent may rely
conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Borrower or its Subsidiaries owned any
interest at the time the Agent’s Lien was granted nor at any time thereafter, or
(iv) constituting property leased to a Borrower or its Subsidiaries under a
lease that has expired or is terminated in a transaction permitted under this
Agreement. Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Administrative Borrower at any time, the Lenders will confirm in writing Agent’s
authority to release any such Liens on particular types or items of Collateral
pursuant to this Section 15.12; provided, however, that (1) Agent shall not be
required to execute any document necessary to evidence such release on terms
that, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrowers in respect of)
all interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.

(b) Agent shall have no obligation whatsoever to any of the Lenders to assure
that the Collateral exists or is owned by Borrowers or is cared for, protected,
or insured or has been encumbered, or that the Agent’s Liens have been properly
or sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent pursuant to any of the Loan Documents, it being understood and agreed that
in respect of the Collateral, or any act, omission, or event related thereto,
subject to the terms and conditions contained herein, Agent may act in any
manner it may deem appropriate, in its sole discretion given Agent’s own
interest in the Collateral in its capacity as one of the Lenders and that Agent
shall have no other duty or liability whatsoever to any Lender as to any of the
foregoing, except as otherwise provided herein.

15.13. Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders agrees that it shall not, without the express written
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the written request of Agent, set off against the Obligations, any
amounts owing by such Lender to Borrowers or any deposit accounts of Borrowers
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so in writing by Agent,
take or cause to be taken any action, including, the commencement of any legal
or equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.

(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

15.14. Agency for Perfection. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent’s Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent’s request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent’s instructions.

15.15. Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to Agent. Concurrently with each such payment, Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations.

15.16. Concerning the Collateral and Related Loan Documents. Each member of the
Lender Group authorizes and directs Agent to enter into this Agreement and the
other Loan Documents. Each member of the Lender Group agrees that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.

15.17. Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement,
each Lender:

(a) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field audit or examination report (each a
“Report” and collectively, “Reports”) prepared by or at the request of Agent,
and Agent shall so furnish each Lender with such Reports,

(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or other party performing any audit or
examination will inspect only specific information regarding Borrowers and will
rely significantly upon Borrowers’ and their Subsidiaries’ books and records, as
well as on representations of Borrowers’ personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding Borrowers and their Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner in accordance
with Section 16.7, and

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any such other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers; and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.

In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrowers, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender’s notice to Agent, whereupon Agent promptly shall request of
Administrative Borrower the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from Administrative
Borrower, Agent promptly shall provide a copy of same to such Lender, and
(z) any time that Agent renders to Administrative Borrower a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.

15.18. Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Revolver Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Revolver Commitments. Nothing contained herein shall confer upon any Lender any
interest in, or subject any Lender to any liability for, or in respect of, the
business, assets, profits, losses, or liabilities of any other Lender. Each
Lender shall be solely responsible for notifying its Participants of any matters
relating to the Loan Documents to the extent any such notice may be required,
and no Lender shall have any obligation, duty, or liability to any Participant
of any other Lender. Except as provided in Section 15.7, no member of the Lender
Group shall have any liability for the acts of any other member of the Lender
Group. No Lender shall be responsible to any Borrower or any other Person for
any failure by any other Lender to fulfill its obligations to make credit
available hereunder, nor to advance for it or on its behalf in connection with
its Revolver Commitment, nor to take any other action on its behalf hereunder or
in connection with the financing contemplated herein.

15.19. Bank Product Providers. Each Bank Product Provider shall be deemed a
party hereto for purposes of any reference in a Loan Document to the parties for
whom Agent is acting; it being understood and agreed that the rights and
benefits of such Bank Product Provider under the Loan Documents consist
exclusively of such Bank Product Provider’s right to share in payments and
collections out of the Collateral as more fully set forth herein. In connection
with any such distribution of payments and collections, Agent shall be entitled
to assume no amounts are due to any Bank Product Provider unless such Bank
Product Provider has notified Agent in writing of the amount of any such
liability owed to it prior to such distribution.

16.   GENERAL PROVISIONS.

16.1. Effectiveness. This Agreement shall be binding and deemed effective when
executed by Borrowers, Agent, and each Lender whose signature is provided for on
the signature pages hereof.

16.2. Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.

16.3. Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or Borrowers, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

16.4. Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

16.5. Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.

16.6. Revival and Reinstatement of Obligations. If the incurrence or payment of
the Obligations by any Borrower or Guarantor or the transfer to the Lender Group
of any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors’ rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (each, a “Voidable Transfer”), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees
of the Lender Group related thereto, the liability of Borrowers or Guarantor, if
any, automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.

16.7. Confidentiality.

(a) Agent and Lenders each individually (and not jointly or jointly and
severally) agree that information regarding Borrowers and their Subsidiaries,
their operations, assets, and existing and contemplated business plans shall be
treated by Agent and the Lenders in a confidential manner, and shall not be
disclosed by Agent and the Lenders to Persons who are not parties to this
Agreement, except: (i) to attorneys for and other advisors, accountants,
auditors, and consultants to any member of the Lender Group, (ii) to
Subsidiaries and Affiliates of any member of the Lender Group (including the
Bank Product Providers), provided that any such Subsidiary or Affiliate shall
have agreed to receive such information hereunder subject to the terms of this
Section 16.7, (iii) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation, (iv) as may be agreed to in advance
by Administrative Borrower or its Subsidiaries or as requested or required by
any Governmental Authority pursuant to any subpoena or other legal process,
(v) as to any such information that is or becomes generally available to the
public (other than as a result of prohibited disclosure by Agent or the
Lenders), (vi) in connection with any assignment, participation or pledge of any
Lender’s interest under this Agreement, provided that any such assignee,
participant, or pledgee shall have agreed in writing to receive such information
hereunder subject to the terms of this Section, and (vii) in connection with any
litigation or other adversary proceeding involving parties hereto which such
litigation or adversary proceeding involves claims related to the rights or
duties of such parties under this Agreement or the other Loan Documents. The
provisions of this Section 16.7(a) shall survive for 2 years after the payment
in full of the Obligations.

(b) Anything in this Agreement to the contrary notwithstanding, Agent may
provide information concerning the terms and conditions of this Agreement and
the other Loan Documents to loan syndication and pricing reporting services.

16.8. Lender Group Expenses. Borrowers agree to pay any and all Lender Group
Expenses within 5 days after demand therefor by Agent. If Borrowers do not
object to any Lender Group Expenses within 5 days of the date so demanded, then
the demanded Lender Group Expenses shall be conclusive (this sentence shall not
limit any Borrower’s obligations to pay any Lender Group Expenses pursuant to
the terms of this Agreement or any other Loan Document). Borrowers agree that
their obligations contained in this Section 16.8 shall survive payment or
satisfaction in full of all other Obligations.

16.9. Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

16.10. Parent as Agent for Borrowers. Each Borrower hereby irrevocably appoints
Parent as the borrowing agent and attorney-in-fact for all Borrowers (the
“Administrative Borrower”) which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group’s relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this Section 16.10 with respect to any liability that has been finally
determined by a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of such Agent-Related Person or
Lender-Related Person, as the case may be.

16.11. USA Patriot Act Each Lender that is subject to the requirements of the
USA Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”) hereby notifies Borrowers that pursuant to the requirements of the
Act, it is required to obtain, verify and record information that identifies
Borrowers, which information includes the name and address of Borrowers and
other information that will allow such Lender to identify Borrowers in
accordance with the Act.

[Signature pages to follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 
 
ENESCO GROUP, INC.,
an Illinois corporation, as debtor and debtor-in-possession
By: /s/ Marie Meisenbach Graul
Title: Chief Financial Officer / Executive Vice President

  ENESCO INTERNATIONAL LTD., a Delaware corporation, as debtor and
debtor-in-possession By: /s/ Charles E. Sanders Title: Treasurer

  GREGG MANUFACTURING, INC., a California corporation, as debtor and
debtor-in-possession By: /s/ Charles E. Sanders Title: Chief Financial Officer,
Treasurer, and Secretary

  WELLS FARGO FOOTHILL, INC., a California corporation, as Agent and as a Lender
By: /s/ Katherine McDonald Title: Vice President, Underwriter WELLS FARGO
FOOTHILL, INC., a California corporation, as Agent and as a Lender By: /s/
Katherine McDonald Title: Vice President, Underwriter

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