Exhibit 10.1

Execution copy

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”)
is entered into as of March 10, 2008, by and among the Borrowers party hereto,
the Loan Guarantors party hereto (and together with the Borrowers, the “Loan
Parties”), the Required Lenders party hereto, and THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent and Collateral Agent for the Lenders under the
Credit Agreement described below (the “Administrative Agent”).

WHEREAS, The Parent Company, a Colorado corporation (“Parent”), BabyUniverse,
Inc., a Colorado corporation (“BabyUniverse”), eToys Direct, Inc., a Colorado
corporation (“eToys Direct”), PoshTots, Inc, a Colorado corporation
(“PoshTots”), Dreamtime Baby, Inc., a Colorado corporation (“Dreamtime”), My
Twinn, Inc., a Colorado corporation (“My Twinn”, and collectively with Parent,
BabyUniverse, eToys Direct, PoshTots and Dreamtime, the “Borrowers”), the other
Loan Parties from time to time party thereto, the Lenders from time to time
party thereto and the Administrative Agent have entered into that certain
Amended and Restated Credit Agreement dated as of October 12, 2007, as modified
by that certain letter agreement dated as of December 14, 2007, as amended by
that certain First Amendment to Amended and Restated Credit Agreement and
Consent dated as of January 8, 2008, and as amended by that certain Second
Amendment to Amended and Restated Credit Agreement dated as of February 1, 2008
(as so modified and amended, and as the same may be further amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
pursuant to which the Lenders have made, and, subject to the terms and
conditions set forth therein, have agreed to continue to make, Loans (as defined
in the Credit Agreement) to the Borrowers and certain other financial
accommodations available to the Loan Parties;

WHEREAS, the Loan Parties, the Administrative Agent and the Lenders desire to
amend certain provisions of the Credit Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the agreements contained
herein, the parties agree that the Credit Agreement is hereby amended as
follows:

1. Capitalized Terms. Capitalized terms used but not defined herein shall have
the meanings set forth in the Credit Agreement.

2. Amendments to Credit Agreement. Subject to the satisfaction of the conditions
precedent set forth in Section 5 hereof, and in reliance on the representations,
warranties and covenants of the Borrowers set forth herein, the Credit Agreement
is hereby amended as follows:

(a) Amendment to Section 1.01 of the Credit Agreement.

(i) Effective as of February 1, 2008, Section 1.01 of the Credit Agreement is
hereby amended by deleting the definition of “Maximum Capital Expenditure
Amount” in its entirety and substituting the following therefor:

“Maximum Capital Expenditure Amount” means, for the Loan Parties’ 2007 Fiscal
Year, $2,600,000, and, for each Fiscal Year thereafter, $1,500,000; provided
that, so long as (a) no Default has then occurred and is continuing and (b) the
Administrative Agent has received the projections and other information required
to be provided by the Borrowers pursuant to Section 5.01(f) with respect to such
Fiscal Year and has notified the Borrowers in writing that it is satisfied with
such projections and other information, the Maximum Capital Expenditure Amount
for (i) the Loan Parties’ 2008 Fiscal Year shall be $1,750,000 and (ii) the Loan
Parties’ 2009 Fiscal Year and each Fiscal Year thereafter shall be $2,000,000;
provided, further, that, in the event that the conditions set forth in the
preceding clauses (a) and (b) are not met in respect of any Fiscal Year, the
Maximum Capital Expenditure Amount for such Fiscal Year shall be $1,500,000.

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(ii) Section 1.01 of the Credit Agreement is hereby further amended by inserting
the following new definitions therein in appropriate alphabetical order:

“Third Amendment” means the Third Amendment to Amended and Restated Credit
Agreement dated as of the Third Amendment Date, among the Borrowers, the Loan
Guarantors party thereto, the Lenders party thereto, and the Administrative
Agent.

“Third Amendment Date” means March 10, 2008.

3. No Default; Representations and Warranties, Etc. The Loan Parties hereby
represent, warrant, confirm and covenant that (a) after giving effect to this
Amendment, the representations and warranties of the Loan Parties contained in
Article III of the Credit Agreement are true and correct in all material
respects on and as of the date hereof except (i) to the extent that any such
representation or warranty specifically refers to an earlier date, in which case
they shall be true and correct in all material respects as of such earlier date,
and (ii) that any representation and warranty that is qualified as to
“materiality” or “Material Adverse Effect” shall be true and correct in all
respects, subject to the materiality qualification contained therein; and
(b) after giving effect to this Amendment, the Loan Parties are in compliance
with all of the terms and provisions set forth in the Credit Agreement and the
other Loan Documents to be observed or performed thereunder and no Default or
Event of Default has occurred and is continuing.

4. Ratification and Confirmation. The Loan Parties hereby ratify and confirm all
of the terms and provisions of the Credit Agreement and the other Loan Documents
and agree that, except as expressly amended hereby, all of such terms and
provisions remain in full force and effect.

5. Conditions to this Amendment. The effectiveness of this Amendment shall be
subject to the satisfaction of the following conditions precedent:

(a) Counterparts of Amendment. The Administrative Agent shall have received from
each party hereto either (a) a counterpart of this Amendment signed on behalf of
such party or (b) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Amendment) that such party has signed a counterpart of this Amendment.

(b) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent or its special counsel shall have
reasonably requested.

6. Fees and Expenses. The Borrowers agree to pay all fees and other amounts due
and payable to the Administrative Agent and Edwards Angell Palmer & Dodge LLP,
special counsel to the Administrative Agent, incurred in connection with any of
the Loan Documents, including this Amendment, and the transactions contemplated
thereby including without limitation, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by the
Borrowers hereunder.

7. Miscellaneous.

(a) Except as otherwise expressly set forth herein, nothing herein shall be
deemed to constitute an amendment, modification or waiver of any of the
provisions of the Credit Agreement or the other Loan Documents, all of which
remain in full force and effect as of the date hereof and are hereby ratified
and confirmed. The Loan Parties acknowledge and agree that nothing contained
herein shall be

 

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deemed to entitle the Loan Parties to a consent to, or a waiver, amendment or
modification of, any of the terms, conditions, obligations, covenants or
agreements contained in the Loan Documents in similar or different
circumstances. This Amendment shall be deemed to be a Loan Document.

(b) This Amendment may be executed in any number of counterparts, each of which,
when executed and delivered, shall be an original, but all counterparts shall
together constitute one instrument.

(c) Whenever the terms or sections amended hereby shall be referred to in the
Credit Agreement, Loan Documents or such other documents (whether directly or by
incorporation into other defined terms), such defined terms shall be deemed to
refer to those terms or sections as amended by this Amendment.

(d) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS, AND SHALL BE BINDING
UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS.

[Signature pages to follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

BORROWERS: THE PARENT COMPANY By:   /s/ Michael J. Wagner   Name:  Michel J.
Wagner   Title:    Chief Executive Officer

 

BABYUNIVERSE, INC. By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner  
Title:    Chief Executive Officer

 

eTOYS DIRECT, INC. By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner  
Title:    Chief Executive Officer

 

POSHTOTS, INC. By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner   Title:
   Chief Executive Officer

 

DREAMTIME BABY, INC. By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner  
Title:    Chief Executive Officer

 

MY TWINN, INC. By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner   Title:
   Chief Executive Officer

[Signature page to Third Amendment to Amended and Restated Credit Agreement]

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LOAN GUARANTORS: eTOYS DIRECT 1, LLC By:  

eTOYS DIRECT, INC.,

Its Managing Member

By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner   Title:    Chief
Executive Officer

 

eTOYS DIRECT 2, LLC By:  

eTOYS DIRECT, INC.,

Its Managing Member

By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner   Title:    Chief
Executive Officer

 

eTOYS DIRECT 3, LLC By:  

eTOYS DIRECT, INC.,

Its Managing Member

By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner   Title:    Chief
Executive Officer

 

GIFT ACQUISITION, L.L.C. By:  

eTOYS DIRECT, INC.,

Its Managing Member

By:   /s/ Michael J. Wagner   Name:  Michel J. Wagner   Title:    Chief
Executive Officer

[Signature page to Third Amendment to Amended and Restated Credit Agreement]

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ADMINISTRATIVE AGENT AND REQUIRED LENDER: THE CIT GROUP/BUSINESS CREDIT, INC.,
individually, as Administrative Agent, Collateral Agent and Lender By:   /s/
Mike Richman   Name:  Mike Richman   Title:    Vice President

[Signature page to Third Amendment to Amended and Restated Credit Agreement]