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|   | “Borrowers”                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | RC2      CorporationLearning      Curve Brands, Inc.Learning      Curve Canada LimitedRC2      Australia Pty., Ltd.RC2      Deutschland GmbHRacing      Champions International LimitedRacing      Champions Worldwide Limited                                                                               |
|   |                                                                                                                                                                                                                                                                                                         |
|   | By       /s/  Curt      Stoelting                                           |
|   |           Name  Curt Stoelting                                                                                                                                                                                                                                                 |
|   |           Title    CEO                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                         |
|   | RC2 (Asia)      Limited                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                         |
|   | By /s/  Helena      S F      Lo                                             |
|   |           Name  Helena S F Lo                                                                                                                                                                                                                                                  |
|   |           Title    Managing Director                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                         |
|   | “Guarantors”                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                         |
|   | RCE      Holdings, LLCLearning      Curve International, Inc.Learningcurveshop.com,      Inc.Learning      Curve Canada Holdco, Inc.                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                         |
|   | By /s/  Curt      Stoelting                                                 |
|   |           Name  Curt Stoelting                                                                                                                                                                                                                                                 |
|   |           Title    CEO                                                                                                                                                                                                                                               |

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|        | “Administrative      Agent”                                                                                                                                                                                                                                                 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                    |
|   | Bank      of Montreal                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                    |
|   | By /s/  Paul      R. Feaser      III                                       |
|   |            Name  Paul R. Feaser III                                                                                                                                                                                                                  |
|   |            Title    VicePresident                                                                                                                                                                                                          |

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|        | “Lenders”                                                                                                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                    |
|   | BMO      Capital Markets Financing, Inc.                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                    |
|   | By /s/  Paul      R. Feaser      III                                       |
|   |           Name  Paul R. Feaser III                                                                                                                                                                                                                        |
|   |           Title    VicePresident                                                                                                                                                                                                                |

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|        | National      City Bank                                                                                                                                                                                                                                                               |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                  |
|   | By /s/  Stephanie      Kline                                        |
|   |           Name  Stephanie Kline                                                                                                                                                                                                                         |
|   |      Title    Senior Vice      President                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                  |

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|        | U.S.      Bank National Association                              |
|--------|------------------------------------------------------------------|
|   |                                                             |
|   | By      _______________________________                          |
|   |           Name ___________________________   |
|   |      Title      ____________________________ |
|   |                                                             |
|   |                                                             |

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|        | Fifth      Third Bank (Chicago), a Michigan Banking corporation                                                                                                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                      |
|   | By /s/  Kim      Puszczewicz                                      |
|   |           Name  Kim Puszczewicz                                                                                                                                                                                                             |
|   |           Title    Vice President                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                      |

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|        | The      Northern Trust Company                                                                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                         |
|   | By /s/  Peter      J.      Hallan                                           |
|   |           Name  Peter J. Hallan                                                                                                                                                                                                                                                |
|   |           Title    Vice President                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                         |

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|        | The      PrivateBank and Trust Company                                                                                                                                                                                                                                                |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                  |
|   | By /s/  Michael      F.      Perry                                       |
|   |           Name  Michael F. Perry                                                                                                                                                                                                                        |
|   |           Title    Associate Managing Director                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                  |

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| To:  | Bank of Montreal, as      Administrative Agent under, and the Lenders party to, the Credit Agreement      described below |
|-----------|---------------------------------------------------------------------------------------------------------------------------|

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| A.     | Total      Funded Debt (Section 8.21(a)) |                                                                                                                                                                                                                                                                           |
|--------|------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                     |                                                                                                                                                                                                                                                                           |
|   | 1.                                       | Total      Funded Debt of the Company and its Subsidiaries                                                                                                                                                                                                                     | $___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 2.                                       | Net      Income of the Company and its Subsidiaries for past 4    quarters                                                                                                                                                                                                     | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 3.                                  | Interest      Expense of the Company and its Subsidiaries for past 4      quarters                                                                                                                                                                                             | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 4.                                       | Income      taxes of the Company and its Subsidiaries for past 4    quarters                                                                                                                                                                                                   | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 5.                                       | Depreciation      and amortization expense of the Company and its Subsidiaries for past 4      quarters                                                                                                                                                                        | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 6.                                       | Non-Cash      expenses related to equity awards of the Company and its Subsidiaries for      past 4 quarters                                                                                                                                                                   | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 7.                                       | Sum      of Lines A2, A3, A4, A5 and A6 (the Company’s “EBITDA”)                                                                                                                                                                                             | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 8.                                       | EBITDA      of any Person (and is subsidiaries) acquired pursuant to      Section 8.9(i) hereof for such period                                                                                                                                                           | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 9.                                       | Authorized      adjustments associated with Permitted Acquisitions during such      period                                                                                                                                                                                     | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 10.                                      | Non-recurring      costs and extraordinary expenses incurred in connection with the recall of      specific components from the Thomas and Friends product line not to exceed      $28,300,000                                                                                 | ___________ |
|   |                                     |                                                                                                                                                                                                                                                                           |   |
|   | 11.                                      | Other      fees, costs and expenses incurred (net of rebates and other      reimbursements), related to the recall of specific components from the      Thomas and Friends product line not to exceed $5,000,000 during the fiscal      year ended December 31, 2008 | ___________ |

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|   | 12.                                                     | Non-recurring      costs in connection with the settlement of claims with HIT Entertainment      in an aggregate amount not to exceed $15,000,000                                                                  | ___________     |
|--------|---------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 13.                                                     | Losses      on the sale, transfer or disposition of Property of the Company and its      Subsidiaries during the past 4 fiscal quarters                                                                            | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 14.                                                     | Non-recurring      costs in connection with the termination of Publications acquisition not      to exceed $2,000,000 in the aggregate                                                                             | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 15.                                                     | Non-cash      charges related to the write-down of the Company’s investment in Meteor      the Monster Truck, Inc. not to exceed $2,100,000 in the      aggregate                                            | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 16.                                                     | Non-cash,      non-recurring impairment charge relating to goodwill and certain      intangible assets incurred during the fiscal quarter ended December 31,      2008 not to exceed $265,000,000 in the aggregate | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 17.                                                     | Severance      and other related costs in connection with the workforce reduction that      occurred during the quarter ended December 31, 2008 not to      exceed $1,350,000 in the aggregate           | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 18.                                                     | Sum      of Lines A7, A8, A9, A10, A11, A12, A13, A14, A15, A16 and    A17                                                                                                                                         | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 19.                                                     | Gains      on the Sale or transfer of Property of the Company and its Subsidiaries      during the past 4 quarters                                                                                                 | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 20.                                                     | EBITDA      of any Person and its subsidiaries sold, transferred or otherwise disposed      of during such period                                                                                                  | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 21.                                                     | Sum      of lines A19 and A20                                                                                                                                                                                      | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 22.                                                     | Line      A18 minus A21 (“Adjusted      EBITDA”)                                                                                                                                                       | ___________     |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 23.                                                     | Ratio      of Line A1 to Line A22                                                                                                                                                                                  | ____      : 1.0 |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 24.                                                     | Line      A23 ratio must not exceed                                                                                                                                                                                | 2.50      : 1.0 |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 25.                                                | The      Company is in compliance (circle yes or no)                                                                                                                                                               | yes/no          |
|   |                                                    |                                                                                                                                                                                                               |            |
| B.     | Fixed Charge Coverage Ratio      (Section 8.21(b)) |
|   |                                                    |
|   | 1.                                                      | Adjusted      EBITDA (Line A22)                                                                                                                                                                                    | $___________    |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 2.                                                      | Capital      Expenditures of the Company and its Subsidiaries during past 4      quarters                                                                                                                          | $___________    |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 3.                                                      | Line      B1 minus Line B2                                                                                                                                                                                         | $___________    |
|   |                                                    |                                                                                                                                                                                                               |            |
|   | 4.                                                      | Scheduled      payments of principal of the Company and its Subsidiaries for past 4      quarters                                                                                                                  | $___________    |

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|     | 5.                                           | Cash      Interest Expense of the Company and its Subsidiaries for past 4      quarters                                                                   | $___________    |
|----------|----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|
|     |                                         |                                                                                                                                                      |            |
|     | 6.                                           | Income      taxes of the Company and its Subsidiaries for past 4    quarters.                                                                             | $___________    |
|     |                                         |                                                                                                                                                      |            |
|     | 7.                                           | Restricted      Payments permitted by Section 8.12(iii) for past 4quarters                                                                                | $___________    |
|     |                                         |                                                                                                                                                      |            |
|     | 8.                                           | Sum      of Lines B4, B5, B6 and B7                                                                                                                       | $___________    |
|     |                                         |                                                                                                                                                      |            |
|     | 9.                                      | Ratio      of Line B3 to Line B8                                                                                                                          | ____      : 1.0 |
|     |                                         |                                                                                                                                                      |            |
|     | 10.                                          | Line      B9 ratio must not be less than                                                                                                                  | 1.25      : 1.0 |
|     |                                         |                                                                                                                                                      |            |
|     | 11.                                          | The      Company is in compliance (circle yes or no)                                                                                                      | yes/no          |
|     |                                         |                                                                                                                                                      |            |
|  C. | Operating Leases      (Section 8.21(c)) |                                                                                                                                                      |
|     |                                         |                                                                                                                                                      |
|     | 1.                                           | Aggregate      amount of fixed rentals and other consideration payable by the Company and      its Subsidiaries under all leases and similar arrangements | $___________    |
|     |                                         |                                                                                                                                                      |            |
|     | 2.                                           | Maximum      permitted amount                                                                                                                             | $10,000,000     |
|     |                                         |                                                                                                                                                      |            |
|     | 3.                                           | The      Company is in compliance (circle yes or no)                                                                                                      | yes/no          |

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|   | To      / (From)                                                                                                             | Learning      Curve Brands, Inc. | RC2      Corporation |
|--------|------------------------------------------------------------------------------------------------------------------------------|----------------------------------|----------------------|
| 1      | Investments      by the Company in the common stock or paid-in-capital of any Foreign      Subsidiary after the Closing Date | $                                | $                    |
| 2      | $53,000,000      minus Line 1                                                                                                | $                                | $                    |
| 3      | Learning      Curve Canada Limited                                                                                           | $                                | $                    |
| 4      | RC2      Hong Kong                                                                                                           | $                                | $                    |
| 5      | Racing      Champions Worldwide Limited                                                                                      | $                                | $                    |
| 6      | RC2      Deutschland GmbH                                                                                                    | $                                | $                    |
| 7      | RC2      (Asia) Limited                                                                                                      | $                                | $                    |
| 8      | RC2      Australia Pty., Ltd.                                                                                                | $                                | $                    |
| 9      | Sum      of Lines 3 through 8 Above                                                                                          | $                                |                 |
| 10     | Is      Line 2 greater than Line 9 (Circle yes or no)                                                                        | Yes      / No                    |

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