Document:

EX-10.6

 

EXHIBIT 10.6

 

 

LOAN AGREEMENT

dated as of April 4, 2008

by and among

BANK OF AMERICA, N.A.,

MSLO EMERIL ACQUISITION SUB LLC,

as Borrower

and

MARTHA STEWART LIVING OMNIMEDIA, INC.,

as Parent Guarantor

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	1.	 	Definitions and Reference Terms	 	 	1	 
	 	 	Other Interpretive Provisions	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	2.	 	Loan	 	 	12	 
	 
	 	2.1	 	Making the Loan	 	 	12	 
	 
	 	2.2	 	Repayment Terms	 	 	13	 
	 
	 	2.3	 	Use of Proceeds	 	 	13	 
	 
	 	2.4	 	Interest Rate	 	 	13	 
	 
	 	2.5	 	Computations	 	 	13	 
	 
	 	2.6	 	Payment on Non-Business Days	 	 	13	 
	 
	 	2.7	 	Default Rate	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	3.	 	Fees	 	 	14	 
	 
	 	3.1	 	Loan Fee	 	 	14	 
	 
	 	3.2	 	Waiver Fee	 	 	14	 
	 
	 	3.3	 	Late Fee	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	4.	 	Disbursements, Payments and Costs	 	 	14	 
	 
	 	4.1	 	Disbursements and Payments	 	 	14	 
	 
	 	4.2	 	Telecopy or Electronic Mail Instructions	 	 	15	 
	 
	 	4.3	 	Direct Debit	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	5.	 	Conditions Precedent	 	 	16	 
	 
	 	5.1	 	Conditions to Making the Loan	 	 	16	 
	 
	 	5.2	 	Conditions to the Collateral Replacement Date	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	6.	 	Representations and Warranties	 	 	21	 
	 
	 	6.1	 	Organization	 	 	21	 
	 
	 	6.2	 	Authority and Consents	 	 	22	 
	 
	 	6.3	 	Binding Agreement	 	 	22	 
	 
	 	6.4	 	Litigation	 	 	22	 
	 
	 	6.5	 	No Conflicts	 	 	22	 
	 
	 	6.6	 	Information	 	 	22	 
	 
	 	6.7	 	Compliance with Laws	 	 	23	 
	 
	 	6.8	 	Permits, Franchises	 	 	23	 
	 
	 	6.9	 	Other Obligations	 	 	23	 
	 
	 	6.10	 	Taxes	 	 	23	 
	 
	 	6.11	 	Investment Company	 	 	23	 
	 
	 	6.12	 	No Default or Event of Default	 	 	23	 
	 
	 	6.13	 	No Material Adverse Change	 	 	23	 
	 
	 	6.14	 	Insurance	 	 	24	 
	 
	 	6.15	 	ERISA Plans	 	 	24	 
	 
	 	6.16	 	Solvency	 	 	24	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	7.	 	Affirmative Covenants	 	 	24	 
	 
	 	7.1	 	Use of Proceeds	 	 	24	 
	 
	 	7.2	 	Financial Information	 	 	24	 
	 
	 	7.3	 	Notices	 	 	26	 
	 
	 	7.4	 	Existence; Conduct of Business	 	 	26	 
	 
	 	7.5	 	Compliance with Laws	 	 	27	 
	 
	 	7.6	 	Maintenance of Properties	 	 	27	 
	 
	 	7.7	 	Taxes and Other Obligations	 	 	27	 
	 
	 	7.8	 	Books and Records; Inspection Rights	 	 	27	 
	 
	 	7.9	 	Cash Collateral Account	 	 	28	 
	 
	 	7.10	 	Maintenance of Insurance	 	 	28	 
	 
	 	7.11	 	ERISA	 	 	28	 
	 
	 	7.12	 	Additional Subsidiaries	 	 	28	 
	 
	 	7.13	 	Activities of the SPE	 	 	29	 
	 
	 	7.14	 	Post-Closing Covenant	 	 	29	 
	 
	 	7.15	 	Further Assurances	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	8.	 	Financial Covenants	 	 	29	 
	 
	 	8.1	 	Tangible Net Worth	 	 	29	 
	 
	 	8.2	 	Funded Debt to EBITDA Ratio	 	 	29	 
	 
	 	8.3	 	Parent Guarantor Basic Fixed Charge Coverage Ratio	 	 	29	 
	 
	 	8.4	 	Borrower Basic Fixed Charge Coverage Ratio	 	 	29	 
	 
	 	8.5	 	Quick Ratio	 	 	30	 
	 
	 	8.6	 	Total Assets	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	9.	 	Negative Covenants	 	 	30	 
	 
	 	9.1	 	Other Debts	 	 	30	 
	 
	 	9.2	 	Other Liens	 	 	32	 
	 
	 	9.3	 	Dividends and Distributions	 	 	33	 
	 
	 	9.4	 	Investments	 	 	34	 
	 
	 	9.5	 	Loans	 	 	35	 
	 
	 	9.6	 	Asset Sales	 	 	35	 
	 
	 	9.7	 	Capital Expenditures	 	 	36	 
	 
	 	9.8	 	Transactions with Affiliates	 	 	36	 
	 
	 	9.9	 	Additional Negative Covenants	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	10.	 	Default and Remedies	 	 	38	 
	 
	 	10.1	 	Failure to Pay	 	 	38	 
	 
	 	10.2	 	False Information; Representations and Warranties	 	 	38	 
	 
	 	10.3	 	Covenant Default	 	 	38	 
	 
	 	10.4	 	Covenant Default after Cure Period	 	 	38	 
	 
	 	10.5	 	Other Bank Agreements	 	 	38	 
	 
	 	10.6	 	Cross Default	 	 	38	 
	 
	 	10.7	 	Bankruptcy	 	 	39	 
	 
	 	10.8	 	Lien Property	 	 	39	 
	 
	 	10.9	 	Judgments	 	 	39	 
	 
	 	10.10	 	Material Adverse Change	 	 	39	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.11	 	Governmental Action	 	 	39	 
	 
	 	10.12	 	ERISA Plans	 	 	39	 
	 
	 	10.13	 	Loan Document Ceases to be Binding	 	 	40	 
	 
	 	10.14	 	Breach under License	 	 	40	 
	 
	 	10.15	 	Change of Control	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	11.	 	Remedies Upon Default	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	12.	 	Notices	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	13.	 	Miscellaneous	 	 	41	 
	 
	 	13.1	 	Fees and Expenses	 	 	41	 
	 
	 	13.2	 	Indemnification	 	 	42	 
	 
	 	13.3	 	Cumulative Rights and No Waiver	 	 	42	 
	 
	 	13.4	 	Applicable Law	 	 	43	 
	 
	 	13.5	 	Successors and Assigns	 	 	43	 
	 
	 	13.6	 	Amendment	 	 	43	 
	 
	 	13.7	 	Entire Agreement	 	 	43	 
	 
	 	13.8	 	Inconsistency	 	 	43	 
	 
	 	13.9	 	Headings	 	 	43	 
	 
	 	13.10	 	Severability; Waivers	 	 	43	 
	 
	 	13.11	 	Survivability	 	 	44	 
	 
	 	13.12	 	Counterparts	 	 	44	 
	 
	 	13.13	 	Dispute Resolution; Waiver of Jury Trial	 	 	44	 
	 
	 	13.14	 	Limitation on Interest and Charges	 	 	46	 
	 
	 	13.15	 	Confidentiality	 	 	46	 

	 	 	 
	Exhibit A

	 	Form of Guaranty
	Exhibit B

	 	Form of Security Agreement
	 
	 	 
	Schedule 1.1(a)

	 	Designated Consents
	Schedule 7.14

	 	Post-closing Covenant
	Schedule 9.1

	 	Existing Debt
	Schedule 9.2

	 	Existing Liens
	Schedule 9.8

	 	Certain Affiliate Transactions

iii

 

LOAN AGREEMENT

     This Loan Agreement (this “Agreement”) dated as of April 4, 2008 by and among Bank of
America, N.A. (together with its successors and assigns, the “Bank”), located at 767 Fifth
Avenue, Floor 12A, New York, New York 10153, and MSLO Emeril Acquisition Sub LLC, a Delaware
limited liability company, the principal place of business of which is located at 11 West 42nd
Street, New York, New York 10026 (the “Borrower”), and Martha Stewart Living Omnimedia,
Inc., a Delaware corporation (“Parent Guarantor”).

     WHEREAS, Parent Guarantor has entered into an Asset Purchase Agreement dated as of February
18, 2008 (the “Purchase Agreement”) among Emeril J. Lagasse, III (“Lagasse”),
Emeril’s Food of Love Productions, L.L.C., emerils.com, LLC (collectively, the “Sellers”),
Parent Guarantor and MSLO Shared IP Sub LLC, a Delaware limited liability company (“SPE”),
pursuant to which the Sellers have agreed to sell to Parent Guarantor and SPE, and Parent Guarantor
and SPE have agreed to purchase, certain assets used in connection with the Sellers’ business of
licensing, marketing, distributing and selling products and services relating to Lagasse and his
persona, identity and professional services in various form and media throughout the world
(excluding the Restaurant Business (as defined in the Purchase Agreement)) (the
“Acquisition” and, such business, the “Acquired Business”);

     WHEREAS, assets acquired under the Purchase Agreement will be owned by the Borrower, a newly
formed subsidiary of Parent Guarantor, other than the Shared Intellectual Property (as defined in
the Purchase Agreement), which will be owned by the SPE;

     WHEREAS, Parent Guarantor has requested that the Bank, and the Bank has agreed to, subject to
all of the terms and conditions hereunder, provide a $30,000,000 term loan to the Borrower to
finance a portion of the purchase price of the Acquired Business provided under the Purchase
Agreement;

     NOW THEREFORE, in consideration of the financial accommodations described below and the mutual
covenants and agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby,
the Bank, the Borrower and Parent Guarantor hereby agree as follows:

     1. Definitions and Reference Terms. In addition to any other terms defined herein,
the following terms shall have the meanings set forth with respect thereto:

     “AAA” has the meaning set forth in Section 13.13(c).

     “Accrued Amount” has the meaning set forth in Section 4.1(e).

     “Acquired Business” has the meaning set forth in the preamble to this Agreement.

 

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     “Acquisition” has the meaning set forth in the preamble to this Agreement.

     “Act” has the meaning set forth in Section 13.13(b).

     “Affiliate” of any specified Person means (i) any Person directly or indirectly owning
10% or more of the voting stock or rights or equity interests of such Person or of which such
Person directly or indirectly owns ten percent (10%) or more of such voting stock or rights or
equity interests or (ii) any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For purposes of this
Agreement, “control” (including, with correlative meanings, the terms
“controlling”, “controlled by” and “under common control with”), as used
with respect to any Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

     “Agreement” has the meaning set forth in the preamble to this Agreement.

     “Applicable Margin” means (i) 1.00% during the period from the Closing Date to and
including the Collateral Replacement Date and (ii) 2.85% thereafter.

     “Authorized Individual” has the meaning set forth in Section 4.1(b).

     “BBA LIBOR Daily Floating Rate” means the fluctuating rate of interest equal to the
rate per annum equal to the British Bankers Association LIBOR rate (“BBA LIBOR”), as
published by Reuters (or such other commercially available source providing quotations of BBA LIBOR
as selected by the Bank from time to time) as determined for each Business Day at approximately
11:00 a.m. London time two (2) Business Days prior to the date in question, for Dollar deposits
(for delivery on the first day of such interest period) with a one month term, as adjusted from
time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment
rates and other regulatory costs. If such rate is not available at such time for any reason, then
the rate for that interest period will be determined by such alternate method as reasonably
selected by the Bank.

     “Bank” has the meaning set forth in the preamble to this Agreement.

     “Billed Amount” has the meaning set forth in Section 4.1(e).

     “Borrower” has the meaning set forth in the preamble to this Agreement.

     “Borrower FCCR Initial Measurement Date” has the meaning set forth in Section 8.4.

     “Borrower FCCR Second Measurement Date” has the meaning set forth in Section 8.4.

 

3

     “Borrower FCCR Third Measurement Date” has the meaning set forth in Section 8.4.

     “Business Day” means any day (i) other than a Saturday, Sunday or other day on which
commercial banks in New York City, New York or Charlotte, North Carolina are authorized or required
by law to close, and (ii) for purposes of determining the BBA LIBOR Daily Floating Rate, that is
also a day on which dealings in Dollar deposits are carried on in London, England.

     “Capital Expenditure Limitation” has the meaning set forth in Section 9.7.

     “Capital Expenditures” means, for any period, the amount equal to all expenditures (by
the expenditure of cash or the incurrence of indebtedness) made by Parent Guarantor and its
consolidated Subsidiaries during such period in respect of the purchase or other acquisition or
improvement of any fixed or capital asset and any other amounts which would, in accordance with
GAAP, be set forth as capital expenditures on the consolidated statement of cash flows of Parent
Guarantor and its Subsidiaries for such period.

     “Cash Collateral Account” has the meaning ascribed to such term in the Pledge
Agreement or, after the Collateral Replacement Date, the Security Agreement.

     “Cash Equivalents” shall mean (a) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed or insured by the United States federal
government or any agency thereof, (b) certificates of deposit and time deposits with maturities of
one (1) year or less from the date of acquisition, bankers’ acceptances with maturities not
exceeding one (1) year and overnight bank deposits, in each case with the Bank or any commercial
bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations for
underlying securities of the types described in clauses (a) and (b) above entered into with the
Bank or any commercial bank satisfying the requirements of clause (b) of this definition, having a
term of not more than thirty (30) days with respect to securities issued or fully guaranteed or
insured by the United States federal government, (d) commercial paper of a domestic issuer rated at
least A-1 by S&P or P-1 by Moody’s, (e) securities with maturities of one (1) year or less from the
date of acquisition backed by standby letters of credit issued by the Bank or any commercial bank
satisfying the requirements of clause (b) of this definition or (f) shares of money market mutual
or similar funds having assets in excess of $500,000,000 and which invest at least ninety-five
percent (95%) of their assets in the types described in clauses (a) through (f) of this definition.

     “Change of Control” means the occurrence of any of the following: (i) if a majority of
the members of the Board of Directors of Parent Guarantor are not Continuing Directors; (ii) any
entity, “person” (within the meaning of Section 14(d) of the Exchange Act) or “group” (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than Martha Stewart, together
with any trusts, corporations, partnerships, limited liability companies or other corporate
entities “controlled” (as defined in the definition of “Affiliate” above) by Martha Stewart (it
being agreed that any

 

4

trust of which Martha Stewart is a co-trustee shall be deemed to be controlled by her for
purposes of this clause (ii) and clause (iii) below) (collectively, the “MS Entities”),
shall have acquired direct or indirect beneficial ownership (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), except that for purposes of this clause, such “person” or “group” shall be
deemed to have beneficial ownership of all securities that such person or group has the right to
acquire, whether such right is exercisable immediately or only after the passage of time, of
twenty-five percent (25%) or more on a fully diluted basis of the voting interest in Parent
Guarantor’s capital stock ordinarily entitled to vote in an election of directors; (iii) Martha
Stewart, together with any MS Entities, shall fail to have direct or indirect beneficial ownership
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than fifty percent (50%) or
more on a fully diluted basis of the voting interest in Parent Guarantor’s capital stock ordinarily
entitled to vote in an election of directors; (iv) Parent Guarantor shall fail to own and control
all of the outstanding equity interests of the Borrower; (v) the Borrower shall fail to own and
control all of the outstanding equity interests of the SPE; or (vi) the common stock of Parent
Guarantor shall cease to be listed on any of the New York Stock Exchange, the American Stock
Exchange or the NASDAQ stock market.

     “Claim” has the meaning set forth in Section 13.13(a).

     “Class Action Waiver” has the meaning set forth in Section 13.13(h).

     “Closing Date” means the date on which the Loan is made hereunder after all of the
conditions precedent set forth in Section 5.1 have been satisfied or, at the sole discretion of the
Bank, waived.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     “Collateral” means all property and interests therein (real and personal, tangible and
intangible) in which a lien is now or hereafter granted to the Collateral Agent by any Person as
security for the Obligations, including the property described in the Pledge Agreement and, after
the Collateral Replacement Date, the Security Agreement.

     “Collateral Agent” has the meaning ascribed to such term in the Pledge Agreement or,
after the Collateral Replacement Date, the Security Agreement.

     “Collateral Replacement Date” means the date, if any, on which the Security Agreement
has been delivered by Parent Guarantor and the Borrower and all of the other conditions precedent
set forth in Section 5.2 have been satisfied or, at the sole discretion of the Bank, waived.

     “Confidentiality Agreement” has the meaning set forth in Section 13.15.

     “Continuing Directors” means the directors of Parent Guarantor on the Closing Date,
and each other director, if in each case, such other directors’ nomination

 

5

for election to the board of directors of Parent Guarantor is recommended by a majority of the
then Continuing Directors in his or her election by the stockholders of Parent Guarantor.

     “Copyright Grant” means the Grant of Security Interest in Copyrights dated as of the
Collateral Replacement Date made by the Borrower in favor of the Collateral Agent, substantially in
the form of Exhibit A-1 to the Security Agreement, as the same may be amended, amended and
restated, modified or supplemented from time to time.

     “Default” has the meaning set forth in Section 5.1(o).

     “Designated Account” has the meaning set forth in Section 4.1(a).

     “Designated Consents” means written consents of each party to the contracts and
agreements described in Schedule 1.1(a) to the assignment of each such contract or agreement by
Parent Guarantor to the Borrower, each such consent to be in form and substance reasonably
satisfactory to the Bank; provided, however, that any Required Consent shall be
deemed to be a satisfactory Designated Consent if such Required Consent does not require any
further consent from the party to the applicable contract or agreement for such contract or
agreement to be assigned from Parent Guarantor to the Borrower.

     “Dollar” means the lawful money of the United States of America.

     “Domestic Subsidiary” means any Subsidiary of Parent Guarantor that is organized or
existing under the laws of the United States of America, any state thereof or the District of
Columbia.

     “Due Date” has the meaning set forth in Section 4.1(e).

     “EBITDA” means, with respect to any Person for any period, net income for such period,
less income or plus loss from discontinued operations and extraordinary items for such period, plus
income taxes for such period, plus interest expense for such period, plus depreciation, depletion
and amortization for such period determined on a consolidated basis for such Person, plus non-cash
stock-based compensation expense. EBITDA shall be calculated on a pro forma basis to give effect
to the Acquisition and any other acquisitions permitted pursuant to this Agreement consummated at
any time on or after the first day of the relevant testing period thereof as if the Acquisition or
such other acquisition had been effected on the first day of such testing period; provided
that any such adjustment may be applied solely to the extent that such adjustments are factually
supportable and (i) which would be accounted for as any adjustment pursuant to Article 11 of
Regulation S-X promulgated by the SEC or (ii) are otherwise determined pursuant to calculations in
form and substance reasonably satisfactory to the Bank; provided further,
however, that this sentence shall not apply to the calculation of the consolidated EBITDA
of the Borrower and the SPE for purposes of the proviso to Section 8.4.

 

6

     “ERISA” means the United States Employee Retirement Income Security Act of 1974, as
amended from time to time.

     “ERISA Affiliate” means the Borrower, any Subsidiary and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated) under common
control which, together with the Borrower or any Subsidiary, are treated as a single employer under
Section 414 of the Code. Any former ERISA controlled group member of the Borrower or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate with respect to the period such
entity was an ERISA controlled group member of the Borrower or such Subsidiary and with respect to
liabilities arising after such period for which the Borrower or such Subsidiary could be liable
under the Code or ERISA.

     “ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived by regulation); (b) with respect to a Plan, the failure to satisfy the
minimum funding standard of Section 412 of the Code and Section 302 of ERISA, whether or not
waived; (c) the failure to make by its due date a required contribution under Section 412(m) of the
Code (or Section 430(j) of the Code, as amended by the Pension Protection Act of 2006) with respect
to any Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the
filing pursuant to Section 412 of the Code of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the incurrence by any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate
any Plan or to appoint a trustee to administer any Plan, or the occurrence of any event or
condition which could reasonably be expected to constitute grounds under ERISA for the termination
of or the appointment of a trustee to administer any Plan; (g) the incurrence by any ERISA
Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; (h) the receipt by an ERISA Affiliate of any notice concerning the imposition
of withdrawal liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; (i) the “substantial
cessation of operations” within the meaning of Section 4062(e) of ERISA with respect to a Plan; (j)
the making of any amendment to any Plan which could result in the imposition of a lien or the
posting of a bond or other security, (k) the occurrence of a nonexempt prohibited transaction
(within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could result in
liability to the Borrower or any of the Subsidiaries, (l) a Plan is or becomes subject to “at risk
status” under Section 430(i) of the Code or Section 303(i) of ERISA or (m) a Plan is or becomes
subject to the limitations on accelerated distribution under Section 436(d) of the Code or Section
206(g)(3) of ERISA.

     “Event of Default” has the meaning set forth in Section 10.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.

 

7

     “Financial Officer” means, with respect to any Person, the chief financial officer,
treasurer or controller of such Person.

     “Foreign Subsidiary” means any Subsidiary of the Parent Guarantor other than a
Domestic Subsidiary.

     “Funded Debt” means all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term debt, less the non-current portion of
Subordinated Liabilities.

     “GAAP” means generally accepted accounting principles in the United States as in
effect from time to time.

     “Governmental Authority” means any nation or government, any federal, state, city,
town, municipality, county, local or other political subdivision thereof or thereto and any
department, commission, board, bureau, instrumentality, agency or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to
government.

     “Guarantors” means, collectively, Parent Guarantor, MSO IP Holdings, Inc., Martha
Stewart, Inc., Body & Soul Omnimedia, Inc., MLSO Productions, Inc., MLSO Productions — Home, Inc.,
MLSO Productions — EDF, Inc., Flour Productions, Inc. and each other Domestic Subsidiary of Parent
Guarantor that becomes party to the Guaranty in accordance with Section 7.12.

     “Guaranty” means the Continuing and Unconditional Guaranty dated as of April 4, 2008
from the Guarantors to the Bank, substantially in the form of Exhibit A hereto, as the
same may be amended, amended and restated, modified or supplemented from time to time.

     “Immaterial Foreign Subsidiary” means a Foreign Subsidiary that is designated by
Parent Guarantor in writing as an “Immaterial Foreign Subsidiary”, but only to the extent that such
Subsidiary:

     (i) (A) contributed 5.0% or less of EBITDA of Parent Guarantor and its Subsidiaries on a
consolidated basis for the period of four fiscal quarters most recently ended for which internal
financial statements are available and (B) when taken together with each other Foreign Subsidiary
that has been designated by Parent Guarantor in writing as an “Immaterial Foreign Subsidiary”,
contributed 10% or less of EBITDA of Parent Guarantor and its Subsidiaries on a consolidated basis
for the period of four fiscal quarters most recently ended for which internal financial statements
are available; and

     (ii) (A) had consolidated assets representing 5.0% or less of Total Assets determined on a
consolidated basis in accordance with GAAP as shown on the most recent internal balance sheet of
Parent Guarantor and (B) when taken together with each other Foreign Subsidiary that has been
designated by Parent Guarantor in writing as an “Immaterial Foreign Subsidiary”, had consolidated
assets representing 10% or less of

 

8

Total Assets determined on a consolidated basis in accordance with GAAP as shown on the most
recent internal balance sheet of Parent Guarantor.

     “Indemnitee” has the meaning set forth in Section 13.2.

     “Interest Rate Agreement” means any interest rate swap, cap, collar or hedging
agreement or any other similar arrangement.

     “IRS” means the United States Internal Revenue Service, and any successor thereto.

     “Lagasse” has the meaning set forth in the preamble to this Agreement.

     “Loan” has the meaning set forth in Section 2.1.

     “Loan Documents” means this Agreement, the Guaranty, the Pledge Agreement, any
Interest Rate Agreements between a Loan Party and the Bank, and, after the Collateral Replacement
Date, the Security Agreement, any Copyright Grant and any Trademark Grant, and any and all other
documents, instruments, certificates and agreements executed and/or delivered pursuant hereto or
thereto.

     “Loan Fee” has the meaning set forth in Section 3.1.

     “Loan Party” means the Borrower or any Guarantor.

     “Material Adverse Effect” means a material adverse effect on (i) the business
condition (financial or otherwise), operations, properties or prospects of the Loan Parties taken
as a whole, (ii) their ability to perform their obligations under this Agreement or any other Loan
Document or (iii) the rights and remedies of the Bank under the Loan Documents.

     “MSI” means Martha Stewart, Inc., a Connecticut corporation.

     “Multiemployer Plan” shall mean a multiemployer plan within the meaning of Section
4001(a)(3) of ERISA (i) to which any ERISA Affiliate is then making or has an obligation to make
contributions, (ii) to which any ERISA Affiliate has within the preceding six plan years made
contributions, including any Person which ceased to be an ERISA Affiliate during such six year
period, or (iii) with respect to which Parent Guarantor or any of its Subsidiaries could incur
liability.

     “Obligations” means all obligations, liabilities and indebtedness of the Borrower to
the Bank, whether now existing or hereafter created, direct or indirect, due or not, under or with
respect to the Loan Documents, including, without limitation, the principal of and interest on the
Loan (including interest accruing after the maturity of the Loan and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency or other similar
proceeding, relating to the Borrower, whether or not a claim for post-petition interest is allowed
in such proceeding) and the payment or performance of all other obligations of the Borrower to the
Bank, including in

 

9

each case, but not limited to, all fees, costs, expenses and indemnity obligations hereunder
and thereunder.

     “Payment Date” means the last day of March, June, September and December of each year.

     “PBGC” means the Pension Benefit Guaranty Corporation.

     “Permitted Investments” has the meaning set forth in Section 9.4.

     “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated organization, association, corporation, Governmental
Authority or any other entity.

     “Plan” means a pension, profit-sharing or stock bonus plan intended to qualify under
Section 401(a) of the Code, sponsored, maintained or contributed to by Parent Guarantor or any
ERISA Affiliate, including any Multiemployer Plan.

     “Pledge Agreement” means the Pledge Agreement dated as of April 4, 2008 between the
Borrower and the Collateral Agent, as the same may be amended, amended and restated, modified or
supplemented from time to time.

     “Quick Assets” means cash, short-term cash investments (including, without limitation,
Cash Equivalents), net trade receivables and marketable securities not classified as long-term
investments, including any of the foregoing held in the Cash Collateral Account.

     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA or
the regulations issued thereunder, other than events for which the thirty (30) day notice period
has been waived.

     “Required Consent” has the meaning set forth in the Purchase Agreement.

     “SEC” means the United States Securities and Exchange Commission, and any successor
thereto.

     “Security Agreement” means the Security Agreement dated the Collateral Replacement
Date between the Borrower and the Collateral Agent, substantially in form of Exhibit B
hereto, as the same may be amended, amended and restated, modified or supplemented from time to
time.

     “Sellers” has the meaning set forth in the preamble to this Agreement.

     “Shared Intellectual Property” means the intellectual property owned by the SPE,
including that assigned by the Sellers to the SPE pursuant to the Purchase Agreement and set forth
on Schedule A to the SPE LLC Agreement.

 

10

     “Solvent” means, with respect to any Person on a particular date, that on such date
(i) the fair value of the property of such Person is greater than the total amount of liabilities,
including, without limitation contingent liabilities, of such Person, (ii) the present fair salable
value of the assets of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and matured, (iii) such
Person does not intend to, and does not believe that it will, incur debts and liabilities beyond
such Person’s ability to pay as such debts and liabilities mature and (iv) such Person is not
engaged in business or a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

     “SPE” has the meaning set forth in the preamble to this Agreement.

     “SPE Borrower License Agreement” means a perpetual royalty-free license of the SPE’s
rights in and to the Shared Intellectual Property from the SPE to the Borrower, in form and
substance reasonably satisfactory to the Bank.

     “SPE LLC Agreement” means the Limited Liability Company Agreement of the SPE dated as
of February 18, 2008.

     “Subordinated Liabilities” means liabilities subordinated to Parent Guarantor’s and
the Borrower’s obligations to the Bank in a manner acceptable to the Bank in its sole discretion.

     “Subsidiary” means, with respect to any specified Person: (1) any corporation,
association or other business entity of which more than fifty percent (50%) of the total economic
interest or voting power of shares of capital stock entitled (without regard to the occurrence of
any contingency and after giving effect to any voting agreement or stockholders’ agreement that
effectively transfers voting power) to vote in the election of directors, managers or trustees of
the corporation, association or other business entity is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and (2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of
which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

     “Tangible Net Worth” means the value of total assets (including leaseholds and
leasehold improvements and reserves against assets but excluding goodwill, patents, trademarks,
trade names, organization expense, unamortized debt discount and expense, capitalized or deferred
research and development costs, deferred marketing expenses, and other like intangibles, and monies
due from affiliates, officers, directors, employees, shareholders, members or managers) less total
liabilities, including but not limited to accrued and deferred income taxes, but excluding the
non-current portion of Subordinated Liabilities.

 

11

     “Termination Date” means December 7, 2012.

     “Total Assets” means, as of any date of determination, the total amount of all assets
of Parent Guarantor and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP as shown on the balance sheet of Parent Guarantor.

     “Trademark Grant” means the Grant of Security Interest in Trademarks dated the
Collateral Replacement Date made by the Borrower in favor of the Collateral Agent, substantially in
the form of Exhibit A-2 to the Security Agreement, as the same may be amended, amended and
restated, modified or supplemented from time to time.

     “Trademark License Agreement” has the meaning ascribed to such term in the Purchase
Agreement as in effect on the date hereof.

     “Transaction Documents” means, collectively, the Purchase Agreement, the Trademark
License Agreement, the Publicity Rights License Agreement, the Employment Agreements, the Escrow
Agreement, the Registration Rights Agreement, the IP Assignments, the Bill of Sale and the
Assumption Agreement (as each such term is defined in the Purchase Agreement), and all other
agreements and documents relating thereto, as the same may be amended, restated, supplemented or
otherwise modified to the extent permitted hereunder.

     “WeddingWire” has the meaning set forth in Section 9.6(a).

     “WeddingWire Successor Assets” has the meaning set forth in Section 9.6(a).

     Other Interpretive Provisions. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:

     (a) The meanings of defined terms are equally applicable to the singular and plural forms of
the defined terms.

     (b) Whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.

     (c) (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import
when used in any Loan Document shall refer to such Loan Document as a whole and not to any
particular provision thereof.

          (ii) Section, Exhibit and Schedule references are to the Loan Document in which such reference
appears.

          (iii) The term “including” is by way of example and not limitation.

 

12

          (iv) The term “documents” includes any and all instruments, documents, agreements,
certificates, notices, reports, financial statements and other writings, however evidenced, whether
in physical or electronic form.

     (d) Unless otherwise expressly provided herein, (a) references to organizational documents,
agreements (including the Loan Documents) and other contractual instruments shall be deemed to
include all subsequent amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Loan Document; and (b) references to any law shall
include all statutory and regulatory provisions consolidating, amending, replacing, supplementing
or interpreting such law.

     (e) Except as otherwise stated in this Agreement, all financial information provided to the
Bank (other than any financial statements related to the Acquired Business provided to the Bank
prior to the Closing Date) and all financial covenants and the terms used therein will be
calculated or used in accordance with GAAP consistently applied.

     (f) For purposes of determining “pro forma compliance with the covenants set forth in Section
8” pursuant to Sections 9.3 and 9.4(e) and clause (v) of Section 9.6(a), stock purchases,
redemptions, retirements, dividends, distributions, investments, capital contributions,
acquisitions (except the Acquisition for purposes of the proviso to Section 8.4), transfers, sales,
assignments, leases and dispositions that have been made by Parent Guarantor or any of its
Subsidiaries subsequent to the applicable four-quarter reference period (or in the case of the
covenants set forth in Sections 8.1, 8.5 and 8.6, subsequent to the applicable reference date) and
on or prior to or simultaneously with the applicable date of determination shall be calculated on a
pro forma basis assuming that all such stock purchases, redemptions, retirements, dividends,
distributions, investments, capital contributions, acquisitions, transfers, sales, assignments,
leases and dispositions (and any associated change in Funded Debt or fixed charges and the change
in EBITDA resulting therefrom) had occurred on the first day of the reference period (or in the
case of the covenants set forth in Sections 8.1, 8.5 and 8.6, on the applicable reference date).

     2. Loan.

          2.1 Making the Loan. The Bank agrees, on the terms and conditions hereinafter set
forth, to make a term loan to the Borrower in a single disbursement on the Closing Date in the
principal amount of $30,000,000 (the “Loan”), by delivery of same day funds in Dollars to
the account or accounts specified by the Borrower in writing to the Bank prior to the Closing Date.
Any portion of the Loan that is repaid or prepaid may not be reborrowed.

 

13

          2.2 Repayment Terms.

               (a) The Borrower shall pay interest on each Payment Date until payment in full of any
principal outstanding under the Loan.

               (b) The Borrower shall repay principal in equal installments of $1,500,000 each on each
Payment Date beginning on June 30, 2008, with a final installment of $3,000,000 due on the
Termination Date. In any event, the Borrower will repay in full any principal, interest or other
charges outstanding on the Termination Date.

               (c) The Borrower may, upon at least three (3) Business Days’ prior written irrevocable notice
to the Bank specifying the proposed date and the principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amount of the Loan in whole or
in part, together with accrued interest to the date of such prepayment on the principal amount
prepaid, without penalty or other charges. Prior to the Collateral Replacement Date, the Borrower
may also prepay the outstanding principal amount of the Loan in accordance with Section 4(b) of the
Pledge Agreement. Any such prepayment shall be applied to the principal installments due under
Section 2.2(b) in the inverse order of their maturity.

          2.3 Use of Proceeds. The proceeds of the Loan shall be available (and the Borrower
agrees that it shall use such proceeds) to finance a portion of the purchase price of the Acquired
Business pursuant to the terms of the Purchase Agreement.

          2.4 Interest Rate. Interest will accrue on the Loan at a rate equal to the BBA LIBOR
Daily Floating Rate plus the Applicable Margin.

          2.5 Computations. All computations of interest and of fees shall be made by the Bank
on the basis of a year of 360 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest or fees are
payable. Installments of principal which are not paid when due under this Agreement shall continue
to bear interest until paid. Each determination by the Bank of the actual amount of each interest
payment hereunder shall be conclusive and binding for all purposes, absent manifest error.

          2.6 Payment on Non-Business Days. Whenever any payment hereunder or any other Loan
Document shall be stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such case be included in
the computation of payment of interest.

          2.7 Default Rate. Upon the occurrence and during the continuance of any Default or
Event of Default or after maturity or after judgment has been rendered on any obligation under this
Agreement, all amounts outstanding under this Agreement, including any interest, fees, or costs
which are not paid when due, will at

 

14

the option of the Bank bear interest at a rate which is four percent (4.0%) higher than the
rate of interest otherwise provided in this Agreement. This may result in compounding of interest.
This will not constitute a waiver of any Default or Event of Default.

     3. Fees.

          3.1 Loan Fee. The Borrower agrees to pay a fee in the amount of $300,000 (the
“Loan Fee”), which shall be fully-earned and shall be due and payable on the Collateral
Replacement Date.

          3.2 Waiver Fee. If the Bank, at its discretion, agrees to waive or amend any terms of
this Agreement or any other Loan Document, the Borrower will, upon written notice from the Bank to
the Borrower, pay the Bank a fee for each waiver or amendment in an amount advised by the Bank at
the time the Borrower requests the waiver or amendment. Nothing in this paragraph shall imply that
the Bank is obligated to agree to any waiver or amendment requested by the Borrower. The Bank may
impose additional requirements as a condition to any waiver or amendment.

          3.3 Late Fee. To the extent permitted by law, the Borrower agrees to pay a late fee
in an amount not to exceed four percent (4.0%) of any payment that is more than fifteen (15) days
late. The imposition and payment of a late fee shall not constitute a waiver of the Bank’s rights
with respect to the default.

     4. Disbursements, Payments and Costs.

          4.1 Disbursements and Payments.

               (a) Each payment by the Borrower will be made in Dollars and immediately available funds by
debit to such of the Borrower’s accounts with the Bank as the Borrower and the Bank may agree in
writing (the “Designated Account”), as described in this Agreement or otherwise authorized
by the Borrower in writing.

               (b) The Bank may honor written instructions (which for purposes of this Section 4.1(b) shall
include such instructions received via electronic mail) for advances or repayments given by any one
of the individuals authorized to sign loan agreements on behalf of the Borrower, or any other
individual designated by any one of such authorized signers (each an “Authorized
Individual”).

               (c) For any payment under this Agreement made by debit to a Designated Account, the Borrower
will maintain sufficient immediately available funds in a Designated Account to cover each debit.
If there are insufficient immediately available funds in a Designated Account on the date the Bank
enters any such debit authorized by this Agreement, the Bank may reverse the debit.

               (d) Each payment by the Borrower will be evidenced by records kept by the Bank. In addition,
the Bank may, at its discretion, require the Borrower to sign one or more promissory notes,
provided that the form of any such

 

15

promissory note shall not create any right on the part of the Bank or impose any obligation on
the part of the Borrower that is not set forth in this Agreement.

               (e) Prior to the date each payment of principal and interest and any fees from the Borrower
becomes due (the “Due Date”), the Bank will deliver to the Borrower a written statement of
the amounts that will be due on that Due Date (the “Billed Amount”). The calculations in
the bill will be made on the assumption that no payments will be made between the date of the
billing statement and the Due Date, and that there will be no changes in the applicable interest
rate. If the Billed Amount differs from the actual amount due on the Due Date (the “Accrued
Amount”), the discrepancy will be treated as follows:

                    (i) If the Billed Amount is less than the Accrued Amount, the Billed Amount
for the following Due Date will be increased by the amount of the discrepancy. The
Borrower will not be in default by reason of any such discrepancy.

                    (ii) If the Billed Amount is more than the Accrued Amount, the Billed Amount
for the following Due Date will be decreased by the amount of the discrepancy.

Regardless of any such discrepancy, interest will continue to accrue based on the actual amount of
principal outstanding without compounding. The Bank will not pay the Borrower interest on any
overpayment.

          4.2 Telecopy or Electronic Mail Instructions.

               (a) The Bank may honor telecopy instructions for advances or repayments given, or purported to
be given, by any one of the Authorized Individuals.

               (b) Advances will be deposited in and repayments will be withdrawn from the Designated
Account, or such other of the Borrower’s accounts with the Bank as the Bank and the Borrower may
agree in writing.

               (c) The Borrower will indemnify and hold the Bank harmless from all liability, loss, and costs
in connection with any act resulting from instructions the Bank reasonably believes are made by any
Authorized Individual by telecopy or electronic mail. This paragraph will survive this Agreement’s
termination, and will benefit the Bank and its officers, employees, and agents.

          4.3 Direct Debit. The Borrower agrees that on each Due Date the Bank will debit the
Billed Amount from the Designated Account.

 

16

     5. Conditions Precedent.

          5.1 Conditions to Making the Loan. The obligation of the Bank to make the Loan
hereunder is subject to the fulfillment of the following conditions precedent to the satisfaction
of the Bank and its counsel:

               (a) the Bank shall have received counterparts of this Agreement, duly executed by the Borrower
and Parent Guarantor;

               (b) the Bank shall have received the Guaranty, duly executed by each Guarantor;

               (c) the Bank shall have received the Pledge Agreement, duly executed by the Borrower, together
with the following:

                    (i) the results of Lien searches as of a recent date conducted by a search
service reasonably satisfactory to the Bank, and the Bank shall be satisfied that
no Liens are outstanding on the assets of Parent Guarantor and its Subsidiaries
(other than Immaterial Foreign Subsidiaries), including the Collateral or the
Shared Intellectual Property, other than any Permitted Liens (as defined in the
form of Security Agreement);

                    (ii) the results of copyright and trademark searches with respect to such of
the Collateral and the Shared Intellectual Property as the Bank may elect, and the
results of such searches shall be reasonably satisfactory to the Bank;

                    (iii) to the extent reasonably requested by the Bank, copies of proper Uniform
Commercial Code financing statements, duly filed or ready for filing in all
jurisdictions that the Bank may deem necessary in order to perfect the security
interests created by the Pledge Agreement;

                    (iv) evidence reasonably satisfactory to the Bank that the Borrower shall have
deposited or shall concurrently deposit by wire transfer of immediately available
funds $30,000,000 in the Cash Collateral Account (as defined in the Pledge
Agreement); and

                    (v) evidence that all other actions necessary or, in the good faith opinion of
the Bank, desirable to perfect and protect the security interests created by the
Pledge Agreement have been taken, in form and substance reasonably satisfactory to
the Bank;

               (d) the Bank shall have received evidence satisfactory to it that the Borrower shall
concurrently pay the fees and expenses of Paul, Weiss, Rifkind, Wharton & Garrison LLP as of the
Closing Date required to be paid under this Agreement;

 

17

               (e) the Bank shall have received a certificate of good standing with respect to the each Loan
Party, certified as of a recent date by the appropriate office in such Loan Party’s jurisdiction of
organization and, except with respect to the jurisdictions, if any, set forth on Schedule 7.14 for
such Loan Party, from any other jurisdiction in which such Loan Party is required to qualify in
order to conduct its business;

               (f) the Bank shall have received a certificate of the Secretary or Assistant Secretary of each
Loan Party, dated the Closing Date and certifying (i) that such Loan Party’s certificate of
incorporation or certificate of formation has not been amended since the date of the last amendment
thereto shown in the certified copy thereof (certified as of a recent date) attached to such
certificate, (ii) except in the case of MSI, that attached thereto is a true and complete copy of
such Loan Party’s bylaws or limited liability company operating agreement, together with all
amendments and other modifications thereto, as in effect on the date of such certificate, (iii)
that attached thereto is a true and complete copy of resolutions adopted by the directors or other
appropriate persons of such Loan Party authorizing the execution, delivery and performance of each
Loan Document and Transaction Document to which it is a party and that such resolutions have not
been modified, rescinded or amended and are in full force and effect and (iv) as to the incumbency
and specimen signature of each of such Loan Party’s officers executing this Agreement or any other
Loan Document delivered in connection herewith;

               (g) the Bank shall have received a certificate of the Borrower, dated the Closing Date and
certifying (i) that the certificate of formation of the SPE has not been amended since the date of
the last amendment thereto shown in the certified copy thereof (certified as of a recent date)
attached to such certificate, (ii) that attached thereto is a true and complete copy of the SPE’s
limited liability company operating agreement, together with all amendments and other modifications
thereto, as in effect on the date of such certificate, (iii) as to the matters described in clauses
(m), (n) and (o) below, (iv) that attached thereto are true and complete copies of each Transaction
Document and (v) that attached thereto is a true and complete copy of the SPE Borrower License
Agreement.

               (h) the Bank shall have received an opinion of Orrick, Herrington & Sutcliffe LLP, counsel to
the Loan Parties, as to such matters as the Bank may reasonably request (provided that such opinion
shall not be required to address the matters set forth in Schedule 7.14 with respect to MSI);

               (i) the Bank shall have received a copy of a consent executed by Lagasse, in form and
substance reasonably satisfactory to the Bank, by which Lagasse consents to the pledge of the
Publicity Rights License Agreement to the Collateral Agent and the subsequent assignment thereof in
connection with an exercise of the Bank’s or the Collateral Agent’s rights and remedies under the
Loan Documents (which arise after the occurrence of the Collateral Replacement Date);

 

18

               (j) the Bank shall have received evidence that prior to or simultaneously with the making the
Loan hereunder, (i) the Acquisition shall be consummated in accordance with the terms of the
Purchase Agreement, without any amendment or other modification thereof, or waiver of any condition
thereto, that has not been consented to by the Bank in writing (such consent not to be unreasonably
conditioned, withheld or delayed), (ii) the Sellers shall have delivered to Parent Guarantor (and
the Bank shall have received copies of) all Required Consents, except for those the receipt of
which has been waived by Parent Guarantor and the Bank in writing (such consent not to be
unreasonably conditioned, withheld or delayed), (iii) the other Transaction Documents shall have
been executed and delivered in substantially the forms thereof attached as exhibits to the Purchase
Agreement, without any amendment or other modification thereof that has not been consented to by
the Bank in writing (such consent not to be unreasonably conditioned, withheld or delayed), (iv)
the assets acquired under the Purchase Agreement (other than the Shared Intellectual Property)
shall be transferred and assigned to Parent Guarantor, in each case pursuant to documentation
reasonably satisfactory to the Bank and (v) the Shared Intellectual Property shall be transferred
and assigned to the SPE pursuant to documentation reasonably satisfactory to the Bank;

               (k) the Bank shall have received evidence of insurance required to be maintained by Section
7.10;

               (l) the Bank shall have received a written undertaking from the SPE, in form and substance
satisfactory to it, that the SPE will comply with the provisions of the SPE LLC Agreement,
including the limitations on indebtedness and liens provided therein;

               (m) the representations and warranties contained in Section 6 hereof and in the Pledge
Agreement shall be true and correct in all material respects on and as of such date;
provided that any representation and warranty that is qualified as to “materiality,”
“Material Adverse Effect” or any similar language shall be true and correct in all respects on such
date;

               (n) there shall not have occurred since December 31, 2007 a material adverse change in the
business condition (financial or otherwise), operations, properties or prospects of the Loan
Parties taken as a whole or their ability to perform their obligations under this Agreement or any
other Loan Document;

               (o) no event shall have occurred and be continuing which, before or after giving effect to the
Closing Date, the making of the Loan hereunder and the consummation of the Acquisition, constitutes
an Event of Default under this Agreement or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both (any such event being a “Default”);

               (p) the corporate and capital structure of the Borrower and the SPE and their respective
organizational documents shall be reasonably satisfactory to the Bank; and

 

19

               (q) the Bank shall have received such other certificates, documents and information with
respect to the Borrower or the Guarantors as the Bank may reasonably request.

          5.2 Conditions to the Collateral Replacement Date. The occurrence of the Collateral
Replacement Date shall be subject to the fulfillment of the following conditions precedent to the
satisfaction of the Bank and its counsel:

               (a) the Bank shall have received the Security Agreement, duly executed by the Borrower and
Parent Guarantor, together with:

                    (i) the results of Lien searches as of a recent date updating the lien
searches provided pursuant to Section 5.1(c)(i) conducted by a search service
reasonably satisfactory to the Bank, and the Bank shall be satisfied that no Liens
are outstanding on the assets of Parent Guarantor and its Subsidiaries (other than
Immaterial Foreign Subsidiaries), including the Collateral or the Shared
Intellectual Property, other than any Permitted Liens (as defined in the Security
Agreement);

                    (ii) the results of copyright and trademark searches updating the searches
conducted pursuant to Section 5.1(c)(ii) with respect to such of the Collateral and
the Shared Intellectual Property as the Bank may elect, and the results of such
searches shall be reasonably satisfactory to the Bank;

                    (iii) to the extent reasonably requested by the Bank, copies of proper Uniform
Commercial Code financing statements, duly filed or ready for filing in all
jurisdictions that the Bank may deem necessary in order to perfect the security
interests created by the Security Agreement;

                    (iv) each of the Copyright Grant and the Trademark Grant, duly executed by the
Borrower;

                    (v) confirmation that the Collateral Agent has received assignments of the
Copyrights and Trademarks included in the Collateral, in the form attached to the
Security Agreement as Exhibits B-1 and B-2, duly executed by the Borrower and in
proper form for filing in the United States Copyright Office and the United Stated
Patent and Trademark Office;

                    (vi) confirmation that the Collateral Agent has received certificates
representing the outstanding equity interests in the Borrower accompanied by
appropriate powers executed in blank; and

                    (vii) evidence that all other actions necessary or, in the good faith opinion
of the Bank, desirable to perfect and protect the

 

20

security interests created by the Security Agreement have been taken, in form
and substance reasonably satisfactory to the Bank;

               (b) the Bank shall have received evidence satisfactory to it that the Borrower shall
concurrently pay to the Bank the Loan Fee and the accrued and unpaid fees and expenses of Paul,
Weiss, Rifkind, Wharton & Garrison LLP as of the Collateral Replacement Date required to be paid
under this Agreement;

               (c) the Bank shall have received a certificate of good standing with respect to each of Parent
Guarantor and the Borrower, certified as of a recent date by the appropriate office in such Loan
Party’s jurisdiction of organization;

               (d) the Bank shall have received a certificate of the Secretary or Assistant Secretary of each
of Parent Guarantor, the Borrower and the SPE, dated the Collateral Replacement Date and certifying
(i) that such Person’s certificate of incorporation or certificate of formation has not been
amended since the date of the last amendment thereto shown in the certified copy thereof (certified
as of a recent date) attached to such certificate (or has not been modified since the Closing
Date), (ii) that attached thereto is a true and complete copy of such Person’s bylaws or limited
liability company operating agreement, together with all amendments and other modifications
thereto, as in effect on the date of such certificate (or that the same have not been modified
since the Closing Date), (iii) in the case of Parent Guarantor and the Borrower, that attached
thereto is a true and complete copy of resolutions adopted by the directors or other appropriate
persons of such Person authorizing the execution, delivery and performance of each Loan Document
and Transaction Document to which it is a party and that such resolutions have not been modified,
rescinded or amended and are in full force and effect (or that the resolutions attached to the
certificate delivered pursuant to Section 5.1(f) with respect to such Person have not been
modified, rescinded or superseded as to the subject matter thereof and are in full force and
effect) and (iv) in the case of Parent Guarantor and the Borrower, as to the incumbency and
specimen signature of each of such Loan Party’s officers executing the Security Agreement or any
other Loan Document delivered in connection therewith;

               (e) the Bank shall have received an opinion of Orrick, Herrington & Sutcliffe LLP, counsel to
the Loan Parties, as to such matters as the Bank may reasonably request;

               (f) the Bank shall have received a certificate of Parent Guarantor certifying that (i) the
consent of Lagasse delivered to the Bank pursuant to Section 5.1(i) on the Closing Date has not
been modified since the Closing Date and remains in full force and effect, (ii) since the Closing
Date, Parent Guarantor has complied in all material respects with the covenants set forth in
Section 3.02(h) and 5.03 of the form of Security Agreement as if such covenants were effective and
binding on Parent Guarantor with respect to the relevant agreements and intellectual property
rights included in the Acquired Business from and after the Closing Date and (iii) as to the
matters described in clauses (i), (j) and (k) below;

 

21

               (g) the Bank shall have received evidence that prior to the Collateral Replacement Date, (i)
Parent Guarantor shall have obtained (and the Bank shall have received copies of) all Designated
Consents and such Designated Consents shall be in full force and effect, (ii) the assets comprising
the Acquired Business (other than (A) the Shared Intellectual Property and (B) any contract or
agreement that is not set forth on Schedule 1.1(a) and that requires the consent of any party to
the assignment of such contract or agreement) shall be transferred and assigned by Parent Guarantor
to the Borrower pursuant to documentation reasonably satisfactory to the Bank and (iii) the Shared
Intellectual Property shall be transferred and assigned to the SPE pursuant to documentation
reasonably satisfactory to the Bank;

               (h) the Bank shall have received evidence of insurance required to be maintained by Section
7.10;

               (i) the representations and warranties contained in Section 6 hereof and in the Security
Agreement shall be true and correct in all material respects on and as of such date as if made on
such date (except to the extent that such representations and warranties relate to a particular
date in which case such representations and warranties shall be true and correct in all material
respects on and as of such date);

               (j) there shall not have occurred since December 31, 2007 a material adverse change in the
business condition (financial or otherwise), operations, properties or prospects of the Loan
Parties taken as a whole or their ability to perform their obligations under this Agreement or any
other Loan Document;

               (k) no event shall have occurred and be continuing which, before or after giving effect to the
Collateral Replacement Date, constitutes a Default or an Event of Default; and

               (l) the Bank shall have received such other certificates, documents and information with
respect to the Borrower or the Guarantors as the Bank may reasonably request.

     6. Representations and Warranties. In order to induce the Bank to enter into this
Agreement and make the Loan provided for herein, each of Parent Guarantor and the Borrower hereby
represents and warrants to the Bank as follows:

          6.1 Organization. Each of Parent Guarantor and each of its Subsidiaries (other than
any Immaterial Foreign Subsidiary) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has the corporate or other requisite legal power
to own its assets and to transact the business in which it is presently engaged and is properly
licensed, in good standing, and, where required, in compliance with fictitious name statutes, in
each state in which it does business (except with respect to the jurisdictions, if any, set forth
on Schedule 7.14 for such Loan Party), in each case, except where the failure to so qualify or to
be so licensed,

 

22

individually or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

          6.2 Authority and Consents. Each Loan Party has the requisite power and authority to
execute and deliver each of each Loan Document to which it is a party (including, without
limitation, this Agreement) and to incur and perform the obligations provided for herein and
therein. No consent or approval of or notice to or filing with any Governmental Authority or other
third party is or will be required as a condition to such Loan Party’s execution, delivery and
performance of this Agreement or any other Loan Document to which such Loan Party is a party, or
the validity or enforceability thereof, or the taking by such Loan Party of any other action
contemplated hereby or thereby, other than such consents which have been obtained, are in full
force and effect, and copies thereof have been delivered to the Bank.

          6.3 Binding Agreement. Each of this Agreement and the other Loan Documents to which a
Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes its
valid and legally binding obligation, enforceable against the such Loan Party in accordance with
its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws, or by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).

          6.4 Litigation. There is no litigation, investigation or proceeding involving any
Parent Guarantor or any of its Subsidiaries pending or, to the knowledge of Parent Guarantor or the
Borrower, threatened by or before any court or Governmental Authority or arbitration authority,
which could reasonably be expected to have a Material Adverse Effect, except as set forth on the
Parent Guarantor’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed
with the SEC prior to the date hereof.

          6.5 No Conflicts. The execution, delivery and performance by each Loan Party of this
Agreement and any other Loan Document to which it is a party, and the taking by such Loan Party of
all other actions contemplated hereby and thereby, do not contravene the organizational documents
of such Loan Party or any law, statute, rule, regulation, order, writ, judgment, injunction or
decree applicable to such Loan Party or any of its property, and do not constitute a default under
any existing agreement, mortgage, indenture or contract binding on such Loan Party or affecting
such Loan Party’s property.

          6.6 Information. All financial information (other than forecasts, projections and
other forward-looking data and statements) that has been or will be furnished by any Loan Party to
the Bank in connection with the transactions contemplated by the Loan Documents is or will be
accurate and complete in all material respects on the date as of which such information is
furnished to the Bank and not incomplete by the omission of any fact necessary to make such
information not misleading.

 

23

          6.7 Compliance with Laws. Each of Parent Guarantor and each of its Subsidiaries
(other than any Immaterial Foreign Subsidiary) is in compliance in all material respects with all
applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all
Governmental Authorities in respect of the conduct of its business and the ownership of its
property. The proceeds of the Loan will be used solely as provided in Section 2.3. Neither the
making of the Loan, nor the use of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System and no
part of the proceeds of the Loan will used to purchase or carry any margin stock or to extend
credit for any such purpose.

          6.8 Permits, Franchises. Each of Parent Guarantor and each of its Subsidiaries (other
than any Immaterial Foreign Subsidiary) possesses all material permits, memberships, franchises,
contracts and licenses required and all material trademark rights, trade name rights, patent
rights, copyrights, and fictitious name rights reasonably necessary to enable it to conduct the
business in which it is now engaged.

          6.9 Other Obligations. Neither Parent Guarantor nor any of its Subsidiaries (other
than any Immaterial Foreign Subsidiary) is in default on any obligation for borrowed money, any
purchase money obligation or any other material lease, commitment, contract, instrument or
obligation, except as have been disclosed in writing to the Bank.

          6.10 Taxes. Each of Parent Guarantor and each of its Subsidiaries (other than any
Immaterial Foreign Subsidiary) has filed all tax returns required to be filed by it and has paid
all taxes and assessments payable by it which have become due, other than those not yet delinquent
and except for those being contested in good faith by appropriate proceedings and adequately
disclosed and fully provided for in the financial statements of Parent Guarantor in accordance with
GAAP. There is no action, suit, proceeding, investigation, audit or claim now pending or, to the
knowledge of the Borrower or Parent Guarantor, threatened by any Governmental Authority with
respect to any taxes relating to any Loan Party, except that Parent Guarantor and its Subsidiaries
are currently subject to an ongoing audit by the IRS related to fiscal years 2001 through 2004.

          6.11 Investment Company. No Loan Party is required to be registered an “investment
company” or is a company “controlled” by a Person required to be registered as an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as amended.

          6.12 No Default or Event of Default. No event has occurred and is continuing which,
before or after giving effect to the Closing Date, constitutes a Default or an Event of Default.

          6.13 No Material Adverse Change. Since December 31, 2007 there has occurred no
material adverse change in the business condition (financial or otherwise), operations, properties
or prospects of the Loan Parties taken as a whole or

 

24

their ability to perform their obligations under this Agreement or any other Loan Document.

          6.14 Insurance. The Loan Parties have obtained, and maintained in effect, the
insurance coverage required in Section 7.10.

          6.15 ERISA Plans.

               (a) Each Plan (other than a Multiemployer Plan) is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law. Each Plan has
received a favorable determination letter from the IRS and to the best knowledge of Parent
Guarantor, nothing has occurred which would cause the loss of such qualification. Parent Guarantor
has fulfilled its obligations, if any, under the minimum funding standards of ERISA and the Code
with respect to each Plan, and has not incurred any material liability with respect to any Plan
under Title IV of ERISA.

               (b) There are no claims, lawsuits or actions (including by any Governmental Authority), and
there has been no prohibited transaction or violation of the fiduciary responsibility rules, with
respect to any Plan which has resulted or could reasonably be expected to result in a Material
Adverse Effect.

               (c) With respect to any Plan subject to Title IV of ERISA, no ERISA Event has occurred, or is
reasonably expected to occur, that could reasonably be expected to result in a Material Adverse
Effect.

          6.16 Solvency. On and as of the Closing Date, on a pro forma basis after giving
effect to the borrowing of the Loan hereunder and the consummation of the Acquisition, the Loan
Parties, on a consolidated basis, are Solvent.

     7. Affirmative Covenants. Until full payment and performance of all Obligations, each
of Parent Guarantor and the Borrower agrees:

          7.1 Use of Proceeds. To use the proceeds of the Loan only as specified in Section
2.3. The proceeds of the credit extended under this Loan Agreement may not be used directly or
indirectly to purchase or carry any “margin stock” as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties
for the purpose of purchasing or carrying any such “margin stock,” or to reduce or retire any
indebtedness incurred for such purpose.

          7.2 Financial Information. To provide the following financial information and
statements in form and content reasonably acceptable to the Bank, and such additional information
as reasonably requested by the Bank from time to time:

               (a) As soon as available, but in any event within 120 days following the end of the Parent
Guarantor’s fiscal year, audited consolidated

 

25

financial statements for Parent Guarantor and its Subsidiaries for such fiscal year, including
a consolidated balance sheet and related statements of operations, shareholders’ equity and cash
flows as of the end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by Ernst & Young LLP, or other independent
public accountants of recognized national standing and reasonably acceptable to the Bank (without a
“going concern” or like qualification or exception or exception as to the scope of such audit) to
the effect that such consolidated financial statements present fairly, in all material respects,
the financial condition and results of operations of Parent Guarantor and its Subsidiaries on a
consolidated basis in accordance with GAAP;

               (b) As soon as available, but in any event with sixty (60) days following the end of each of
the first three fiscal quarters of each fiscal year of Parent Guarantor, unaudited consolidated
financial statements for Parent Guarantor and its Subsidiaries for such fiscal quarter, including a
consolidated balance sheet and related statements of operations, shareholders’ equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding period or periods
for (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by a Financial Officer of Parent Guarantor as presenting fairly the financial condition
and results of operations of Parent Guarantor and its Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end adjustments and the absence of footnotes;

               (c) As soon as available, but in any event with sixty (60) days following the end of each
fiscal quarter of the Borrower, submit to the Bank unaudited consolidated financial statements for
the Borrower and the SPE for such fiscal quarter, including a consolidated balance sheet and
related statements of operations, shareholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods for (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer of
the Borrower as presenting fairly the financial condition and results of operations of the Borrower
and the SPE on a consolidated basis in accordance with GAAP, subject, in the case of financial
statements delivered for the first three fiscal quarters of each fiscal year, to normal year-end
adjustments and the absence of footnotes;

               (d) Concurrently with any delivery of financial statements under clause (a) or (b) above, a
certificate (a “Compliance Certificate”) of a Financial Officer of Parent Guarantor
certifying (i) that no Event of Default or Default has occurred or, if an Event of Default or
Default has occurred, specifying the details thereof and any action taken or proposed to be taken
with respect thereto and setting forth computations in reasonable detail satisfactory to the Bank
demonstrating whether or not Parent Guarantor is in compliance with the covenants set forth in
Section 8 for the applicable period and (ii) that except as set forth on a schedule thereto, since
the date of the last Compliance Certificate (or the Closing Date, in the case of the first
Compliance Certificate delivered hereunder) (A) no Loan Party has changed its legal name or form or

 

26

jurisdiction of organization or acquired or formed a new Subsidiary and (B) neither the
Borrower nor the SPE has acquired or filed a registration or application for registration for any
Copyright, Patent or Trademark (as such terms are defined in the Security Agreement);

               (e) Promptly upon sending or receipt, copies of any management letters sent or received by
Parent Guarantor to or from its auditors; and

               (f) Promptly, such other information concerning the business, operations, properties and
condition of Parent Guarantor and its Subsidiaries as the Bank may from time to time reasonably
request.

     Documents required to be delivered pursuant to Section 7.2(a) or (b) may be delivered
electronically and, if so delivered, shall be deemed to have been delivered on the date on which
Parent Guarantor posts such documents, or provides a link thereto, on Parent Guarantor’s website on
the Internet at its website address provided to the Bank; provided that Parent Guarantor
shall notify the Bank by telecopy or electronic mail of the posting of any such documents and
provide, if requested, to the Bank by electronic mail electronic versions of such documents;
provided, further, however, that Parent Guarantor’s failure to so notify
the Bank shall not give rise to a Default or Event of Default.

          7.3 Notices. To furnish the Bank prompt written notice of any of the following:

               (a) the occurrence of any Default or Event of Default;

               (b) the filing or commencement of, or any written threat or notice of intention of any person
to file or commence, any action, suit or proceeding, whether at law or in equity or by or before
any Governmental Authority or in arbitration, against Parent Guarantor or any of its Subsidiaries
which, if adversely determined, could reasonably be expected to have a Material Adverse Effect; or

               (c) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.

          7.4 Existence; Conduct of Business. That it shall, and shall cause each of its
Subsidiaries (other than any Immaterial Foreign Subsidiary) to, do or cause to be done all things
reasonably necessary to preserve, renew and keep in full force and effect its legal existence and
the rights, qualifications, licenses, permits, franchises, governmental authorizations and
intellectual property rights (except as such would otherwise reasonably expire, be abandoned or
permitted to lapse in the ordinary course of business), necessary in the normal conduct of its
business, and maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted; provided, however, that (i) Parent Guarantor from
time to time may cause any one or more of the Loan Parties (other than the Borrower or Parent
Guarantor) to be merged into another Loan Party, (ii) Parent Guarantor may cause any Subsidiary
that is not a Loan

 

27

Party to be merged into another Subsidiary that is not a Loan Party and (iii) in the event
from time to time that any Subsidiary (other than the Borrower) has no material assets, Parent
Guarantor may cause such Subsidiary to be dissolved. Parent Guarantor shall give Bank not less
than ten (10) days’ prior written notice of the occurrence of any event referenced in clauses (i),
(ii) or (iii) of the immediately preceding sentence that involves a Loan Party.

          7.5 Compliance with Laws. That it shall, and shall cause each of its Subsidiaries
(other than any Immaterial Foreign Subsidiary) to, comply, in all material respects with all laws,
rules, regulations, orders and requirements of any Governmental Authority applicable to it or any
of its property, including without limitation, the Collateral.

          7.6 Maintenance of Properties. That it shall, and shall cause each of its
Subsidiaries (other than any Immaterial Foreign Subsidiary) to, (i) at all times maintain and
preserve all material property necessary to the normal conduct of its business in good repair,
working order and condition, ordinary wear and tear excepted and casualty or condemnation excepted
and (ii) make, or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto as reasonably necessary in accordance with prudent industry
practice in order that the business carried on in connection therewith, if any, may be properly
conducted at all times.

          7.7 Taxes and Other Obligations. That it shall, and shall cause each of its
Subsidiaries (other than any Immaterial Foreign Subsidiary) to, pay all of such Person’s taxes and
other obligations as the same become due and payable, except to the extent the same are being
contested in good faith by appropriate proceedings in a diligent manner and such Person has set
aside on its books adequate reserves with respect thereto in accordance with GAAP.

          7.8 Books and Records; Inspection Rights. (i) That it shall, and shall cause each of
its Subsidiaries to, keep proper books of record and account and (ii) that it shall, and shall
cause each Loan Party to, permit any representatives designated by the Bank (including employees of
the Bank or any consultants, accountants, attorneys and appraisers retained by the Bank), upon
reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its
books and records, and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times during normal business hours and as often as
reasonably requested; provided that such Person may require that any such representative
who is not an employee of the Bank first agree in writing to the provisions set forth in Section
13.15 or confidentiality restrictions that are substantially similar. If any property, books and
records of any Loan Party are in the possession of a third party, Parent Guarantor and the Borrower
hereby authorize, or agree to cause such other Loan Party to authorize, such third party to permit
the Bank or its representatives to have access to perform inspections or audits and to respond to
the Bank’s requests for information concerning such property, books and records.

 

28

          7.9 Cash Collateral Account. After the occurrence of the Collateral Replacement Date,
to cause all payments with respect to, or any proceeds of insurance claims related to, the
Collateral to be made directly to the Cash Collateral Account.

          7.10 Maintenance of Insurance. To maintain insurance reasonably satisfactory to the
Bank as to amount, nature and carrier covering property damage (including loss of use and
occupancy) to each Loan Party’s and the SPE’s properties, business interruption insurance, public
liability insurance including coverage for contractual liability, product liability and workers’
compensation, and any other insurance which is usual for the business of Parent Guarantor or any of
its Subsidiaries (other than any Immaterial Foreign Subsidiary). On and after the Collateral
Replacement Date, each policy with respect to the Parent Guarantor and the Borrower and its
properties shall list the Collateral Agent as a loss payee on property and casualty policies with
respect to the Collateral and as additional insured with respect to general liability policies and
shall provide for at least thirty (30) days prior notice to the Collateral Agent of any
cancellation thereof. Any key man life insurance policy insuring the life of Lagasse that is
procured by Parent Guarantor or any of its Subsidiaries shall provide that the Borrower is the
beneficiary thereof and list the Collateral Agent as loss payee. The Bank acknowledges and agrees
that the insurance maintained by the Loan Parties on the date hereof is acceptable to the Bank as
of the date hereof.

          7.11 ERISA. Promptly during each year, to pay, and cause its Subsidiaries to pay,
contributions adequate to meet at least the minimum funding standards under ERISA with respect to
each and every Plan that is subject to Section 412 of the Code; file each annual report required to
be filed pursuant to Section 103 of ERISA in connection with each Plan for each year; and notify
the Bank within ten (10) days of the occurrence of any ERISA Event which could reasonably be
expected to result (alone or in connection with any other event) in aggregate liability to the
Borrower equal to or greater than $2,500,000 and to comply in all material respects with the
applicable provisions of ERISA and the Code with respect to each Plan and (y) upon request by the
Bank to provide copies of (i) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by the Borrower or any ERISA Affiliate with the IRS with respect to each Plan;
(ii) the most recent actuarial valuation report for each Plan; (iii) all notices received by the
Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor or any governmental agency
concerning an ERISA Event; and (iv) such other documents or governmental reports or filings
relating to any Plan) as the Bank shall reasonably request.

          7.12 Additional Subsidiaries. If any Loan Party forms or acquires an additional
Domestic Subsidiary, to cause such additional Domestic Subsidiary to (i) become a Guarantor as
promptly thereafter as reasonably practicable, but in any event within twenty (20) days, by
executing and delivering to the Bank such amendments or supplements to the Guaranty as the Bank
reasonably deems necessary or advisable to cause such Subsidiary to become a party to the Guaranty
and (ii) make such deliveries or take such actions of the type required for Guarantors as of the
Closing Date

 

29

by Sections 5.1(b), (e), (f) and (h) with respect to such new Guarantor, in form and substance
reasonably satisfactory to the Bank.

          7.13 Activities of the SPE. To cause the SPE (i) to comply with the provisions of the
SPE LLC Agreement and (ii) distribute to the Borrower on not less than a monthly basis all
revenues, if any, net of ordinary course expenses of the SPE, if any, held by the SPE.

          7.14 Post-Closing Covenant. To, and to cause each Loan Party to, take all necessary
actions to satisfy the requirements set forth on Schedule 7.14 within the time frames specified on
Schedule 7.14 unless waived or extended by the Bank in its sole discretion.

          7.15 Further Assurances. To, and to cause each other Loan Party to, take any action
reasonably requested by the Bank to carry out the intent of this Agreement.

     8. Financial Covenants. Commencing with the last day of Parent Guarantor’s second
fiscal quarter in 2008 (except as provided in Section 8.4) and until full payment and performance
of all Obligations:

          8.1 Tangible Net Worth. Parent Guarantor shall maintain, as of the last day of each
fiscal quarter of Parent Guarantor, on a consolidated basis Tangible Net Worth equal to at least
$40,000,000.

          8.2 Funded Debt to EBITDA Ratio. Parent Guarantor shall not permit, as of the last
day of each fiscal quarter of Parent Guarantor, the ratio of (i) Funded Debt for the four (4)
quarter period ending on such day to (ii) consolidated EBITDA for Parent Guarantor and its
Subsidiaries for the four (4) quarter period ending on such day, to be greater than 2.0 to 1.0.

          8.3 Parent Guarantor Basic Fixed Charge Coverage Ratio. Parent Guarantor shall not
permit, as of the last day of any fiscal quarter of Parent Guarantor, the ratio of (i) consolidated
EBITDA for Parent Guarantor and its Subsidiaries for the four (4) quarter period ending on such day
to (ii) the sum of (A) interest expense and (B) the current portion of long term debt, in each
case, on a consolidated basis for Parent Guarantor and its Subsidiaries for the four (4) quarter
period ending on such day, to be less than (x) 2.50 to 1.0 as of the last day of the second and
third fiscal quarters of 2008 and (y) 2.75 to 1.0 thereafter.

          8.4 Borrower Basic Fixed Charge Coverage Ratio. Commencing with the last day of the
of the first full fiscal quarter of the Borrower after the Collateral Replacement Date (such date,
the “Borrower FCCR Initial Measurement Date”), the Borrower shall not permit, as of the
last day of any fiscal quarter of the Borrower, the ratio of (i) consolidated EBITDA for the
Borrower and the SPE for the four (4) quarter period ending on such day to (ii) the sum of (A)
interest expense and (B) the current portion of long term debt, in each case, on a consolidated
basis for the

 

30

Borrower and the SPE for the four (4) quarter period ending on such day, to be less than 1.0
to 1.0; provided, however, that for purposes of the foregoing, the amount of
consolidated EBITDA for the Borrower and the SPE for: (A) the four (4) consecutive fiscal quarter
period ending on the Borrower FCCR Initial Measurement Date shall be deemed to be the amount of
consolidated EBITDA for the Borrower and the SPE for the fiscal quarter of the Borrower ending on
the Borrower FCCR Initial Measurement Date multiplied by four, (B) the four (4) consecutive fiscal
quarter period ending on the last day of the fiscal quarter of the Borrower immediately following
the Borrower FCCR Initial Measurement Date (such day, the “Borrower FCCR Second Measurement
Date”) shall be deemed to be the amount of consolidated EBITDA for the Borrower and the SPE for
the two (2) consecutive fiscal quarters of the Borrower ending on the Borrower FCCR Second
Measurement Date multiplied by two and (C) the four (4) consecutive fiscal quarter period ending on
the last day of the fiscal quarter of the Borrower immediately following the Borrower FCCR Second
Measurement Date (such day, the “Borrower FCCR Third Measurement Date”) shall be deemed to
be the amount of consolidated EBITDA for the Borrower and the SPE for the three (3) consecutive
fiscal quarters of the Borrower ending on the Borrower FCCR Third Measurement Date multiplied by
4/3.

          8.5 Quick Ratio. Parent Guarantor shall maintain, as of the last day of any fiscal
quarter of Parent Guarantor, on a consolidated basis with its Subsidiaries, a ratio of (i) Quick
Assets as of such day to (ii) current liabilities as of such day of at least 1.0 to 1.0.

          8.6 Total Assets. Parent Guarantor shall maintain, as of the last day of any fiscal
quarter of Parent Guarantor, at least 75% of Total Assets in Parent Guarantor and its Domestic
Subsidiaries.

     9. Negative Covenants. Until full payment and performance of all Obligations:

          9.1 Other Debts. Parent Guarantor shall not, and shall not permit any of its
Subsidiaries (other than any Immaterial Foreign Subsidiary) to, have outstanding or incur any
direct or contingent liabilities or lease obligations (other than those to the Bank), or become
liable for the liabilities of others, without the Bank’s written consent. This does not prohibit:

               (a) acquiring goods, supplies, merchandise or services on normal trade credit;

               (b) endorsing negotiable instruments received in the usual course of business;

               (c) obtaining surety bonds in the usual course of business;

 

31

               (d) debt or other liabilities of (i) a Loan Party owed to another Loan Party or (ii) of a
Subsidiary that is not a Loan Party (other than the SPE) to another Subsidiary that is not a Loan
Party (other than the SPE);

               (e) liabilities for taxes not yet due;

               (f) liabilities arising under the Transaction Documents;

               (g) lease obligations as lessee arising in the ordinary course of business;

               (h) hedging arrangements entered into for purposes of mitigating interest rate, commodity
pricing, currency exchange rate or other similar risks in the ordinary course of business (so long
as such arrangements are not entered into primarily for speculative purposes)

               (i) debt in respect of capital lease obligations or incurred to provide all or a portion of
the purchase price or cost of acquiring equipment or fixtures in the ordinary course of business
within the limitations set forth in clause (a)(xi) of Section 9.2; provided that the
aggregate principal amount of debt outstanding under this Section 9.1(i) shall not exceed
$5,000,000 at any time;

               (j) existing debt, lines of credit or letter of credit facilities described in Schedule 9.1
and refinancings thereof or amendments or modifications thereof which do not have the effect of
increasing the principal amount thereof or changing the amortization thereof (other than to extend
the same) and which are otherwise on terms and conditions no less favorable to such Person or the
Bank, as determined by the Bank in its reasonable discretion, than the terms of the debt being
refinanced, amended or modified;

               (k) payroll and other liabilities in respect of employees arising in the ordinary course of
business;

               (l) debt that is assumed in connection with or incurred to finance an investment, capital
contribution, transfer, purchase or acquisition permitted pursuant to Section 9.4(e) in an
aggregate amount not to exceed $15,000,000 at any time outstanding, and refinancings thereof which
do not have the effect of increasing the principal amount thereof; provided that such debt
may not (i) exceed the amount of such investment or capital contribution or the purchase price of
the assets acquired or (ii) be assumed or incurred by the Borrower or the SPE;

               (m) earn-out obligations incurred in connection with acquisitions permitted by clause (ii) of
Section 9.4(e) in an aggregate amount not to exceed $15,000,000 at any time outstanding (with the
amount of such earn-out obligations for purposes of this subsection (m) to be the maximum
reasonably anticipated liability in respect thereof as determined by Parent Guarantor from time to
time); provided that such earn-out obligations may not be incurred by the Borrower or the
SPE;

 

32

               (n) incurrence of liabilities, other than in respect of debt (including, without limitation,
debt for borrowed money or in respect of hedging arrangements or letters of credit), incurred in
the ordinary course of a Loan Party’s business; provided that such liabilities,
individually or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; and

               (o) guarantees of any of the foregoing; provided, that (i) a Loan Party may not
guaranty the debt or other obligations of a Subsidiary that is not a Loan Party and (ii) neither
the Borrower nor the SPE may guaranty the debt or other obligations of any other Person, except
that the Borrower may provide guarantees in favor of the Bank or the Collateral Agent.

          9.2 Other Liens.

               (a) Parent Guarantor and its Subsidiaries (other than any Immaterial Foreign Subsidiary) shall
not create, assume or allow any security interest or lien on any of its property, whether now or
hereafter acquired, except:

                    (i) liens and security interests in favor of the Bank or the Collateral Agent;

                    (ii) liens for taxes not yet due;

                    (iii) existing liens disclosed in writing to the Bank prior to the date
hereof;

                    (iv) liens of landlords and banks and rights of set-off, liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen, and other similar
liens imposed by law, in each case incurred in the ordinary course of business for
amounts not yet overdue;

                    (v) liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, performance bonds and other similar
obligations (other than obligations for the payment of borrowed money), so long as
no foreclosure, sale or similar proceedings have been commenced with respect to any
portion of the Collateral on account thereof;

                    (vi) leases or subleases granted to third parties in the ordinary course of
business and not interfering in any material respect with the business of Parent
Guarantor or any of its Subsidiaries;

                    (vii) easements, rights-of-way, restrictions, encroachments, and other defects
or irregularities in title, in each case which do not interfere in any material
respect with the ordinary conduct of the business of Parent Guarantor or any of its
Subsidiaries;

 

33

                    (viii) licenses of intellectual property rights granted in the ordinary course
of business; provided, that prior to the Collateral Replacement Date, any
such license of intellectual property rights included in the Acquired Business (A)
would otherwise be permitted under the Security Agreement if the Security Agreement
were then effective and such intellectual property rights constituted Collateral
and (B) shall not prohibit or restrict Parent Guarantor from assigning such license
to the Borrower;

                    (ix) liens on property or assets acquired pursuant to Section 9.4(e) on the
property or assets so acquired, to secure debt permitted by Section 9.1(l);
provided that such liens attach only to the property or assets being
financed pursuant to such debt and do not encumber any Collateral or any other
property of Parent Guarantor or any of its Subsidiaries (other than any Immaterial
Foreign Subsidiary);

                    (x) liens in existence on the date hereof and summarized in Schedule 9.2; and

                    (xi) liens securing debt permitted under Section 9.1(i); provided that
such liens attach only to the investments or assets the acquisition of which is
financed with such debt and such lien and debt are incurred within ninety (90) days
following such purchase.

               (b) The Borrower and the SPE shall not create, assume or allow any security interest or lien
(including judicial liens) on any of its property, whether now or hereafter acquired, except:

                    (i) liens and security interests in favor of the Bank or the Collateral Agent;

                    (ii) liens for taxes not yet due;

                    (iii) licenses of intellectual property rights permitted under the Security
Agreement (or prior to the Collateral Replacement Date, would be permitted under
the Security Agreement if the Security Agreement were then effective and such
intellectual property rights constituted Intellectual Property (as defined in the
form of Security Agreement));

                    (iv) the Trademark License Agreement; and

                    (v) the SPE Borrower License Agreement.

          9.3 Dividends and Distributions. Neither Parent Guarantor nor the Borrower shall
declare or pay any dividends (except dividends paid in capital stock) or distributions on, or pay
any amount account of the purchase, redemption or retirement of, its equity interests, or any
warrants, options or other rights to purchase or subscribe

 

34

for its equity interests, whether or not presently convertible, exchangeable or exercisable;
provided, that so long as (A) no Default or Event of Default then exists or would result
from such payment and (B) after giving effect to such payment, Parent Guarantor and the Borrower
would be in pro forma compliance with the covenants set forth in Section 8 based on Parent
Guarantor’s most recently ended four (4) full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such payment is to be made, (i)
Parent Guarantor may purchase, redeem or retire its equity interests, and pay dividends or
distributions in respect of its equity interests, in an aggregate amount of consideration,
dividends and distributions paid under this clause (i) not to exceed $30,000,000 over the term of
this Agreement and (ii) the Borrower may declare and pay dividends and distributions in respect of
its equity interests. This Section 9.3 shall not prohibit Parent Guarantor from (i) in connection
with any tax withholding obligations that may arise in connection with the vesting of restricted
stock of Parent Guarantor held by the grantee thereof or the exercise of any option to acquire
shares of Parent Guarantor’s stock, withholding certain shares of such stock from the grantee or
optionee in satisfaction of such tax withholding obligations and (ii) permitting the holder of any
options or warrants to acquire shares of Parent Guarantor’s stock and delivering the exercise price
of such option or warrant, in whole or in part, by use of any “cashless exercise” feature set forth
(including by reference to any related plan) in the applicable option agreement or warrant.

          9.4 Investments. Parent Guarantor shall not, and shall not permit any of its
Subsidiaries (other than any Immaterial Foreign Subsidiary) to, have any existing, or make any new
investments in, any Person, or make any capital contributions or other similar transfer of assets
to any Person, or acquire or purchase all or substantially all of the assets any Persons, or of all
or substantially all of the assets that comprise any business unit of any such Person, except for
(collectively, the “Permitted Investments”):

               (a) existing investments disclosed in writing to the Bank prior to the date hereof;

               (b) investments made by (i) Loan Parties in other Loan Parties that are Subsidiaries of such
Loan Parties; (ii) the Borrower in the SPE pursuant to the Purchase Agreement; and (iii)
Subsidiaries that are not Loan Parties (other than the SPE) in other Subsidiaries that are not Loan
Parties (other than the SPE);

               (c) investments in Cash Equivalents;

               (d) investments in securities acquired in exchange for accounts receivable in connection with
a bankruptcy or workout with respect to a trade creditor; and

               (e) (i) investments, transfers, capital contributions, acquisitions and purchases not
described in clause (ii) below; provided that (A) no Default or Event of Default then
exists or would result from such investment and (B) after giving effect to such investment, Parent
Guarantor and the Borrower would be in pro forma compliance with the covenants set forth in Section
8 based on Parent

 

35

Guarantor’s most recently ended four (4) full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such investment is to be made, and
(ii) acquisitions or purchases of all or substantially all of the assets or all of the stock of one
or more Persons, or of all or substantially all of the assets, or that comprise any business unit,
of any Person, so long as (A) Parent Guarantor shall have provided the Bank with not less than ten
(10) days’ prior written notice describing such transaction in reasonable detail and a certificate
of a Financial Officer to the effect that after giving effect to such acquisition, Parent Guarantor
and the Borrower would be in pro forma compliance with the covenants set forth in Section 8 based
on Parent Guarantor’s most recently ended four (4) full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such acquisition is to
be made, setting forth such pro forma calculations in reasonable detail, (B) no Default or Event of
Default then exists or would result from such acquisition and (C) the Person or business unit
acquired shall be in business of the same general type as conducted on the Closing Date by Parent
Guarantor and its Subsidiaries;

provided, that notwithstanding anything herein to the contrary, after the date hereof,
neither the Borrower nor the SPE shall create or acquire any new Subsidiary and the Borrower shall
not make any additional investments in the SPE.

          9.5 Loans. Parent Guarantor shall not, and shall not permit any of its Subsidiaries
(other than any Immaterial Foreign Subsidiary) to, make any loans, advances or other extensions of
credit to any Person, except for:

               (a) existing extensions of credit disclosed to the Bank in writing prior to the date hereof;

               (b) extensions of credit made (i) by Loan Parties (other than the Borrower) to other Loan
Parties; and (ii) Subsidiaries that are not Loan Parties (other than the SPE) to other Subsidiaries
that are not Loan Parties (other than the SPE);

               (c) advances paid to employees and directors in the ordinary course of business; and

               (d) extensions of credit in the nature of accounts receivable or notes receivable arising from
the sale or lease of goods and services or the license of intellectual property in the ordinary
course of business.

          9.6 Asset Sales. Parent Guarantor shall not, and shall not permit any of its
Subsidiaries (other than an Immaterial Foreign Subsidiary) to:

               (a) sell, assign, lease, transfer or otherwise dispose of any part of its business or any of
its assets or enter into any agreement to do so, except (i) excluding the Borrower and the SPE, in
the ordinary course of business (including sales of surplus, damaged, worn or obsolete assets, and
sales of Cash Equivalents) for not less than fair market value, (ii) sales of inventory and Cash
Equivalents by the Borrower in the ordinary course of business for not less than fair market value
(iii) licenses of

 

36

intellectual property rights permitted by Section 9.2, (iv) sales, assignments, leases,
transfers or other dispositions of assets (A) from Loan Parties (other than the Borrower) to other
Loan Parties, including, without limitation, the transfer of the Acquired Business from Parent
Guarantor to the Borrower contemplated in connection with the Collateral Replacement Date and (B)
from Subsidiaries that are not Loan Parties (other than SPE) to other Subsidiaries that are not
Loan Parties (other than the SPE), (v) excluding the Borrower and the SPE, other sales of assets on
arms-length terms, at least 75% of the consideration for which shall be in the form of cash and the
aggregate fair market value of which, in the aggregate for all such sales permitted under this
clause (v) from and after the Closing Date, does not exceed 10% of Parent Guarantor’s consolidated
shareholders’ equity as of the end of the fiscal quarter most recently ended prior to the date of
the proposed sale so long as, in the case of this clause (v), (A) no Default or Event of Default
then exists or would result from such sale and (B) after giving effect to such sale, Parent
Guarantor and the Borrower would be in pro forma compliance with the covenants set forth in Section
8 based on Parent Guarantor’s most recently ended four (4) full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such sale is to be made
and (vi) the sale of Parent Guarantor’s investment in WeddingWire, Inc. (“WeddingWire”),
the conversion or exchange of such investment into or for any other asset or assets (including,
without limitation, shares of any Person into which WeddingWire may be merged, the “WeddingWire
Successor Assets”) and the sale of any WeddingWire Successor Assets; provided, that
Parent Guarantor may not sell, assign, lease, transfer or otherwise dispose of assets comprising
the Acquired Business pursuant to clause (iv) or (v) above other than to the Borrower;

               (b) enter into any sale and leaseback agreement with respect to any of its fixed assets, other
than transactions in which the value of the disposed of assets does not exceed $2,000,000 in the
aggregate in any fiscal year;

provided, that notwithstanding anything in the foregoing to the contrary, neither the
Borrower nor the SPE shall be permitted to sell, assign, lease, transfer or otherwise dispose of
any of its assets, other than licenses of intellectual property rights permitted by Section 9.2.

          9.7 Capital Expenditures. Parent Guarantor and its Subsidiaries (other than any
Immaterial Foreign Subsidiary) shall not make Capital Expenditures which in the aggregate (i)
exceed $15,000,000 during the 2008 fiscal year, or (ii) exceed $7,500,000 during any fiscal year
thereafter (each such limitation hereafter referred to as the “Capital Expenditure
Limitation”); provided, that to the extent that Parent Guarantor its Subsidiaries do
not utilize the full Capital Expenditure Limit during the applicable fiscal year, then Parent
Guarantor and its Subsidiaries may carry over to any subsequent fiscal year the unused portion of
such Capital Expenditure Limit so long as no Event of Default exists or would result therefrom;
provided, further that in no event shall Parent Guarantor and its Subsidiaries make
Capital Expenditures which in the aggregate exceed $15,000,000 in any fiscal year.

          9.8 Transactions with Affiliates. Parent Guarantor shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly purchase, acquire or

 

37

lease any property from, or sell, transfer or lease any property to, pay any management fees
to or otherwise deal with, in the ordinary course of business or otherwise, any Affiliate other
than transactions with Affiliates in the ordinary course of business and pursuant to the reasonable
requirements of Parent Guarantor’s or such Subsidiary’s business and upon fair and reasonable terms
that are no less favorable to Parent Guarantor or such Subsidiary than it would obtain in a
comparable arm’s length transaction with a Person that is not its Affiliate, other than (i)
transactions between any Loan Party and an Affiliate thereof pursuant to the terms of any
agreements described on the exhibit list to Parent Guarantor’s Annual Report on Form 10-K for the
year ended December 31, 2007 or any agreements set forth on Schedule 9.8, (ii) any amendment or
modification of, or any substitute or replacement arrangement (at any time during the term of this
Agreement) with the same Affiliate or Affiliates for, any agreement described in clause (i) above,
(iii) the SPE Borrower License Agreement and (iv) transactions among Loan Parties (other than the
Borrower).

          9.9 Additional Negative Covenants. Parent Guarantor shall not, and shall not permit
any of its Subsidiaries (other than any Immaterial Foreign Subsidiary, in the case of subsections
(a), (c), (d) and (e) below) to, without the Bank’s written consent:

               (a) enter into any consolidation, merger or other combination, or, except for Permitted
Investments, become a partner in a partnership, a member of a joint venture or a member of a
limited liability company, and except that (i) any Loan Party (other than the Borrower and Parent
Guarantor) may merge into any other Loan Party (other than the Borrower) and (ii) any Subsidiary
that is not a Loan Party (other than the SPE) may merge into any other Subsidiary that is not a
Loan Party (other than the SPE).

               (b) engage in any business activities substantially different from that engaged in by Parent
Guarantor and its Subsidiaries on the date hereof;

               (c) wind up, liquidate or dissolve its affairs, or sell or otherwise dispose of all or
substantially all of its assets, or agree to do any of the foregoing at any future time; provided
that a Subsidiary (other than the Borrower ) with no material assets may be dissolved upon not less
than ten (10) days’ prior written notice to the Bank;

               (d) amend or otherwise modify the SPE LLC Agreement, the organizational documents of the
Borrower, the SPE Borrower License Agreement or any of the Transaction Documents, each as in effect
on the date hereof; or

               (e) change its fiscal year or its accounting methods except for changes in accounting policies
required under GAAP.

 

38

     10. Default and Remedies.

     The occurrence of any of the following events (each an “Event of Default”) shall
constitute a default under this Agreement and under each of the other Loan Documents:

          10.1 Failure to Pay. The Borrower fails to make a payment of principal under this
Agreement when due, or fails to make a payment of interest, any fee or other sum under this
agreement within three (3) days after the date when due; or

          10.2 False Information; Representations and Warranties. The Borrower or any other
Loan Party has given the Bank materially false or misleading information. Any representation or
warranty made by the Borrower or the Guarantor under or in connection with any Loan Document shall
prove to have been incorrect in any material respect at the time when made; or

          10.3 Covenant Default. Any Loan Party shall fail to perform or observe any agreement,
covenant or obligation set forth in Section 2.3, 7.1, 7.2, 7.3, 7.8, 7.12, 7.14, 8 or 9 of this
Agreement, Section 4(b) of the Pledge Agreement or, after the Collateral Replacement Date, Section
3.02(a) of the Security Agreement; or

          10.4 Covenant Default after Cure Period. Any Loan Party shall fail to timely and
properly observe, keep or perform any term, covenant or agreement contained in any Loan Document to
which it is a party (other than those described in Sections 10.1 to 10.3 above), if such default
shall continue unremedied for a period of fifteen (15) days; or

          10.5 Other Bank Agreements. Parent Guarantor or any or its Subsidiaries shall be in
default of or fail to perform any other agreement, obligation, liability or indebtedness of Parent
Guarantor or such Subsidiary to the Bank or to any affiliate of Bank with respect to a monetary
obligation in excess of $10,000, and such default or failure continues past any cure period
provided therein; or

          10.6 Cross Default. (i) Parent Guarantor or any of its Subsidiaries (other than any
Immaterial Foreign Subsidiary) shall default in any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect to any other
indebtedness (other than the Loan or indebtedness described in Section 10.5) in an aggregate
outstanding principal amount in excess of $2,500,000 beyond the period of grace (not to exceed
thirty (30) days), if any, provided in the instrument or agreement under which such indebtedness
was created; or (ii) any breach, default or event of default shall occur and be continuing, or any
other condition shall exist under any instrument or agreement pertaining to any such indebtedness,
if the effect thereof is to cause an acceleration of such indebtedness, or during the continuance
of such breach, default or event of default, permit the holders of such indebtedness to accelerate
the maturity of any such indebtedness or require a redemption or other repurchase of such
indebtedness; or

 

39

          10.7 Bankruptcy. Parent Guarantor or any of its Subsidiaries (other than any
Immaterial Foreign Subsidiary) shall (i) make a general assignment for the benefit of creditors;
(ii) admit in writing its inability to pay or fails to pay its debts generally as they become due;
(iii) file a petition for relief under any chapter of the Federal Bankruptcy Code or any other
bankruptcy or debtor relief law, domestic or foreign, as now or hereafter in effect, or seeking the
appointment of a trustee, receiver, custodian, liquidator or similar official for it or any
Collateral or any of its other property; or any such action is commenced against it and it admits,
acquiesces in or does not contest diligently the material allegations thereof, or the action
results in entry of an order for relief against it, or it does not obtain permanent dismissal and
discharge thereof before the earlier of trial thereon or sixty (60) days after commencement of the
action; or (iv) make a transfer or incur an obligation which is fraudulent under any applicable law
as to any creditor; or

          10.8 Lien Property. The Collateral Agent fails to have an enforceable first lien
(except for Permitted Liens) on or security interest in any Collateral to the extent provided in
the Loan Documents (other than as a result of any action or inaction on the part of the Collateral
Agent that is not in respect of any obligations of the Loan Parties under the Loan Documents); or

          10.9 Judgments. Any judgment or order for the payment of money in excess of
$2,500,000 (to the extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage) shall be rendered against Parent Guarantor or any of its Subsidiaries
(other than any Immaterial Foreign Subsidiary) and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall be any period of
thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or

          10.10 Material Adverse Change. A material adverse change occurs, or is reasonably
likely to occur, in (i) the business condition (financial or otherwise), operations, properties or
prospects of the Loan Parties taken as whole, (ii) the ability of the Loan Parties to repay the
Obligations, (iii) the value of the Collateral or the Bank determines that it is insecure for any
other reason; or

          10.11 Governmental Action. Any Governmental Authority takes action that the Bank
reasonably believes materially adversely affects the Borrower’s and the other Loan Parties’
financial condition or ability to repay the Obligations, taken as a whole; or

          10.12 ERISA Plans. Any one or more of the following events occurs with respect to a
Plan of Parent Guarantor or any of the other Loan Parties or ERISA Affiliates subject to Title IV
of ERISA, provided such event or events could reasonably be expected, in the judgment of the Bank,
to subject Parent Guarantor or any of its Subsidiaries to any tax, penalty or liability (or any
combination of the foregoing) which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect:

 

40

               (a) a Reportable Event shall occur under Section 4043(c) of ERISA with respect to a Plan;

               (b) any Plan termination (or commencement of proceedings to terminate a Plan) or the full or
partial withdrawal from a Plan by Parent Guarantor, such other Loan Party or any ERISA Affiliate;
or

               (c) any other ERISA Event.

          10.13 Loan Document Ceases to be Binding. Any Loan Document after delivery thereof
pursuant to Section 4 shall for any reason not caused by the Bank or any successor thereof cease to
be valid and binding on any Loan Party that is a party to such Loan Document.

          10.14 Breach under License. (i) The Borrower or any of its Affiliates shall breach
any provision of the Trademark License Agreement and shall have failed to cure such breach within
thirty (30) days, (ii) the Shared Intellectual Property shall be otherwise required to be assigned
to the licensees under the Trademark License Agreement pursuant to Section 5.03 of the Trademark
License Agreement or otherwise or (iii) any of the Sellers shall obtain injunctive relief that
adversely affects the SPE’s right to use the Shared Intellectual Property.

          10.15 Change of Control. A Change of Control shall occur.

     11. Remedies Upon Default. If an Event of Default shall occur,

          11.1 At the Bank’s option, the Loan, all interest accrued thereon and all other amounts
payable by the Borrower to the Bank under any of the Loan Documents shall become immediately due
and payable without presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that in the event of an Event of
Default specified under Section 10.7 above, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower; and

          11.2 The Bank shall have all rights, powers and remedies available under each of the Loan
Documents, or afforded by law, including, without limitation, the right to resort to any or all of
the Collateral and to exercise any or all of the rights of a secured party pursuant to applicable
law. All rights, powers and remedies of the Bank in connection with each of the Loan Documents may
be exercised at any time by the Bank and from time to time after the occurrence and during the
continuance of any Event of Default, are cumulative and not exclusive, and shall be in addition to
any other rights, powers or remedies provided by law or equity.

     12. Notices. Unless otherwise provided in this Agreement or in another agreement
between the Bank and the Borrower, all notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, or by

 

41

overnight courier, to the following addresses, or sent by facsimile to the fax numbers listed
below, or to such other addresses as the Bank and the Borrower may specify from time to time in
writing:

	 	 	 	 	 
	 

	 	Any Loan Party:
	 	Martha Stewart Living Omnimedia, Inc.
	 

	 	 	 	11 West 42nd Street
	 

	 	 	 	New York, NY 10036
	 

	 	 	 	Attention: Chief Financial Officer
	 

	 	 	 	Telecopy: 212-827-8551
	 
	 	 	 	 
	 

	 	with copies to:
	 	Orrick Herrington & Sutcliffe LLP
	 

	 	 	 	The Orrick Building
	 

	 	 	 	405 Howard Street
	 

	 	 	 	San Francisco, CA 94105-2669
	 

	 	 	 	Attention: Dolph Hellman
	 

	 	 	 	Telecopy: 415-773-5759
	 
	 	 	 	 
	 

	 	Bank:
	 	Bank of America, N.A.
	 

	 	 	 	767 Fifth Avenue, Floor 12A
	 

	 	 	 	New York, New York 10153
	 

	 	 	 	Attention: Jane R. Heller
	 

	 	 	 	Telecopy: 212-407-5402
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	 

	 	 	 	1285 Avenue of the Americas
	 

	 	 	 	New York, New York 10019-6064
	 

	 	 	 	Attention: Stephen K. Koo
	 

	 	 	 	Telecopy: 212-757-3990

Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or
five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied,
when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram,
lettergram or mailgram), when delivered.

     13. Miscellaneous. The Borrower and the Bank further covenant and agree as follows,
without limiting any requirement of any other Loan Document:

          13.1 Fees and Expenses. The Borrower shall reimburse the Bank for any reasonable and
documented costs and attorneys’ fees incurred by the Bank in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other Loan Documents, including
without limitation, any due diligence conducted with respect to Parent Guarantor and its
Subsidiaries and the Transaction, the enforcement or preservation of any rights or remedies under
this Agreement and any other Loan Documents, and in connection with any amendment, waiver,
“workout” or restructuring under this Agreement. The Borrower agrees to reimburse the Bank for the
reasonable and documented costs of periodic field examinations of the Borrower’s books, records and
Collateral, and appraisals of the Collateral, at such intervals as the Bank may

 

42

reasonably require, which may be performed by employees of the Bank or by independent
appraisers. In the event of a lawsuit or arbitration proceeding, the prevailing party is entitled
to recover costs and reasonable attorneys’ fees incurred in connection with the lawsuit or
arbitration proceeding, as determined by the court or arbitrator. In the event that any case is
commenced by or against the Borrower under the Bankruptcy Code (Title 11, United States Code) or
any similar or successor statute, the Bank is entitled to recover costs and reasonable attorneys’
fees incurred by the Bank related to the preservation, protection, or enforcement of any rights of
the Bank in such a case. As used in this paragraph, “attorneys’ fees” includes the allocated costs
of a party’s in-house counsel. In addition, the Borrower agrees to, upon reasonable notice from
the Bank, pay any and all stamp and other taxes or fees payable or determined to be payable in
connection with the execution and delivery of the Loan Documents and the other documents to be
delivered hereunder, and agrees to save the Bank harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such taxes or fees.

          13.2 Indemnification. The Borrower shall indemnify and hold the Bank, its parent,
Subsidiaries and all of their directors, officers, employees, agents, successors, attorneys, and
assigns (collectively, the “Indemnitees”) harmless from any loss, liability, damages,
judgments, and costs of any kind relating to or arising directly or indirectly out of (a) this
Agreement or any other Loan Document, (b) any credit extended or committed by the Bank to the
Borrower hereunder, and (c) any litigation or proceeding related to or arising out of this
Agreement, any such document, or any such credit, in each case other than arising as a result of
any such Indemnitee’s gross negligence or willful misconduct.. This indemnity includes but is not
limited to reasonable attorneys’ fees (including the allocated cost of in-house counsel). This
indemnity shall survive repayment of the Borrower’s obligations to the Bank. All sums due to the
Bank hereunder shall be obligations of the Borrower, due and payable immediately without demand.
Under no circumstances shall any Indemnitee have any liability for any special, punitive, indirect
or consequential damages relating to this Agreement or any other Loan Document or arising out of
its activities in connection herewith or therewith (whether before or after the Closing Date).

          13.3 Cumulative Rights and No Waiver. Each and every right granted to the Bank under
any Loan Document, or allowed it by law or equity shall be cumulative of each other and may be
exercised in addition to any and all other rights of the Bank, and no delay in exercising any right
shall operate as a waiver thereof, nor shall any single or partial exercise by the Bank of any
right preclude any other or future exercise thereof or the exercise of any other right. The
Borrower expressly waives any presentment, demand, protest or other notice of any kind, including
but not limited to notice of intent to accelerate and notice of acceleration, except in the event
and to the extent that any such notice is expressly required by the terms of any Loan Document. No
notice to or demand on the Borrower in any case shall, of itself, entitle the Borrower to any other
or future notice or demand in similar or other circumstances.

 

43

          13.4 Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. To the extent that the Bank has greater rights or remedies
under federal law, whether as a national bank or otherwise, this paragraph shall not be deemed to
deprive the Bank of such rights and remedies as may be available under federal law.

          13.5 Successors and Assigns. This Agreement is binding on and inures to the benefit
of the Borrower’s and the Bank’s successors and assignees. Each of Parent Guarantor and the
Borrower agrees that it may not assign this Agreement without the Bank’s prior written consent (and
any purported assignment in violation of this Section 13.5 shall be null and void). The Bank may
sell participations in or assign the Loan, and may exchange information about the Borrower
(including, without limitation, any information regarding any hazardous substances) with actual or
potential participants or assignees; provided that such Person shall agree in writing to the
provisions set forth in Section 13.15 or confidentiality restrictions that are substantially
similar. If a participation is sold or the Loan is assigned, the purchaser shall have the right of
set-off against the Borrower.

          13.6 Amendment. No modification, consent, amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Borrower therefrom, shall be effective unless
the same shall be in writing and signed by an Assistant Vice President or higher level officer of
the Bank and by the Borrower, and then shall be effective only in the specific instance and for the
purpose for which given. There is no third party beneficiary of this Agreement.

          13.7 Entire Agreement. This Agreement and any other Loan Document, collectively: (a)
represent the sum of the understandings and agreements between the Bank and the Loan Parties
concerning this credit;

               (b) replace any prior oral or written agreements between the Bank and the Loan Parties
concerning this credit; and

               (c) are intended by the Bank and the Loan Parties as the final, complete and exclusive
statement of the terms agreed to by them.

          13.8 Inconsistency. In the event of any conflict between this Agreement and any other
agreements required by this Agreement, this Agreement will prevail. Any reference in any related
document to a “promissory note” or a “note” executed by the Borrower and dated as of the date of
this Agreement shall be deemed to refer to this Agreement, as now in effect or as hereafter
amended, renewed, or restated.

          13.9 Headings. Section and paragraph headings are for reference only and shall not
affect the interpretation or meaning of any provisions of this Agreement.

          13.10 Severability; Waivers. If any part of this Agreement is not enforceable, the
rest of the Agreement may be enforced. The Bank retains all rights, even

 

44

if it makes a loan after
default. If the Bank waives a default, it may enforce a later default. Any consent or waiver
under this Agreement must be in writing.

          13.11 Survivability. All covenants, agreements, representations and warranties made
by Parent Guarantor or the Borrower herein or in the other Loan Documents to which Parent Guarantor
or the Borrower is a party shall survive the making of the Loan and shall continue in full force
and effect so long as the Obligations, or any portion thereof, are outstanding. In addition, the
covenants and agreements, made by the Bank (i) in Section 13.13 shall continue in full force and
effect so long as the Obligations, or any portion thereof, are outstanding and (ii) in Section
13.15 shall continue until the second anniversary of the date on which the Obligations shall have
been paid in full.

          13.12 Counterparts. This Agreement may be executed in as many counterparts as
necessary or convenient, and by the different parties on separate counterparts each of which, when
so executed, shall be deemed an original but all such counterparts shall constitute but one and the
same agreement. Signatures may be delivered via telecopy of in PDF format via electronic mail and
signatures delivered by such means shall be deemed originals for all purposes.

          13.13 Dispute Resolution; Waiver of Jury Trial. This paragraph, including the
subparagraphs below, is referred to as the “Dispute Resolution Provision.” This Dispute Resolution
Provision is a material inducement for the parties entering into this Agreement.

               (a) This Dispute Resolution Provision concerns the resolution of any controversies or claims
among the parties, whether arising in contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this Agreement (including any renewals,
extensions or modifications); or (ii) any other Loan Document (collectively a “Claim”).
For the purposes of this Dispute Resolution Provision only, the term “parties” shall include any
parent corporation, subsidiary or affiliate of Bank involved in the servicing, management or
administration of any obligation described or evidenced by this Agreement.

               (b) At the request of any party to this Agreement, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the
“Act”). The Act will apply even though this Agreement provides that it is governed by the
law of a specified state.

               (c) Arbitration proceedings will be determined in accordance with the Act, the then-current
rules and procedures for the arbitration of financial services disputes of the American Arbitration
Association or any successor thereof (“AAA”), and the terms of this Dispute Resolution
Provision. In the event of any inconsistency, the terms of this Dispute Resolution Provision shall
control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce
any provision
of this arbitration clause, the Bank may designate another arbitration organization with
similar procedures to serve as the provider of arbitration.

 

45

               (d) The arbitration shall be administered by AAA and conducted, unless otherwise required by
law, in any U.S. state where real or tangible personal property collateral for this credit is
located or if there is no such collateral, in the state specified in the governing law section of
this Agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed Five
Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three
arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for
arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s)
shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s),
upon a showing of good cause, may extend the commencement of the hearing for up to an additional
sixty (60) days. The arbitrator(s) shall provide a concise written statement of reasons for the
award. The arbitration award may be submitted to any court having jurisdiction to be confirmed and
have judgment entered and enforced.

               (e) The arbitrator(s) will give effect to statutes of limitation in determining any Claim and
may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application
of any statutes of limitation, the service on AAA under applicable AAA rules of a notice of Claim
is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or
whether a Claim is arbitrable shall be determined by the arbitrator(s), except as set forth at
subparagraph (h) of this Dispute Resolution Provision. The arbitrator(s) shall have the power to
award legal fees pursuant to the terms of this Agreement.

               (f) This paragraph does not limit the right of any party to: (i) exercise self-help remedies,
such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any
real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv)
act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief,
writ of possession or appointment of a receiver, or additional or supplementary remedies.

               (g) The filing of a court action is not intended to constitute a waiver of the right of any
party, including the suing party, thereafter to require submittal of the Claim to arbitration.

               (h) Any arbitration or trial by a judge of any Claim will take place on an individual basis
without resort to any form of class or representative action (the “Class Action Waiver”).
Regardless of anything else in this Dispute Resolution Provision, the validity and effect of the
Class Action Waiver may be determined only by a court and not by an arbitrator. The parties to
this Agreement acknowledge that the Class Action Waiver is material and essential to the
arbitration of any disputes between the parties and is nonseverable from the agreement to arbitrate
Claims. If the Class Action Waiver is limited, voided or found unenforceable, then the parties’
agreement to arbitrate shall be null and void with respect to such proceeding,
subject to the right to appeal the limitation or invalidation of the Class Action Waiver. The
parties acknowledge and agree that under no circumstances will a class action be arbitrated.

 

46

     By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any right
they may have to a trial by jury in respect of any Claim. Furthermore, without intending in any
way to limit this Agreement to arbitrate, to the extent any Claim is not arbitrated, the parties
irrevocably and voluntarily waive any right they may have to a trial by jury in respect of such
Claim. This waiver of jury trial shall remain in effect even if the Class Action Waiver is
limited, voided or found unenforceable. WHETHER THE CLAIM IS DECIDED BY ARBITRATION OR BY TRIAL BY
A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING
UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.

          13.14 Limitation on Interest and Charges. If, at any time, the rate of interest,
together with all amounts which constitute interest and which are reserved, charged or taken by the
Bank as compensation for fees, services or expenses incidental to the making, negotiating or
collection of the loan evidenced hereby, shall be deemed by any competent court of law,
governmental agency or tribunal to exceed the maximum rate of interest permitted to be charged by
the Bank to the Borrower under applicable law, then, during such time as such rate of interest
would be deemed excessive, that portion of each sum paid attributable to that portion of such
interest rate that exceeds the maximum rate of interest so permitted shall be deemed a voluntary
prepayment of principal. As used herein, the term “applicable law” shall mean the law in effect as
of the date hereof; provided, however, that in the event there is a change in the
law which results in a higher permissible rate of interest, then this Agreement shall be governed
by such new law as of its effective date.

          13.15 Confidentiality. The Bank and Parent Guarantor are parties to a certain
confidentiality agreement dated as of January 10, 2008 (the “Confidentiality Agreement”). The
parties agree that the terms of the Confidentiality Agreement, excluding the last paragraph on the
third page of the Confidentiality Agreement and subject to Section 13.11, shall apply with respect
to all Confidential Information (as defined in the Confidentiality Agreement) that may be disclosed
to the Bank pursuant to this Agreement; and in connection with information disclosed pursuant to
this Agreement, each Loan Party shall be considered one of the “Covered Parties” as such term is
defined in the Confidentiality Agreement.

[This space left intentionally blank.]

 

 

     THIS AGREEMENT is executed as of the date stated at the top of the first page.

	 	 	 	 	 	 	 	 	 	 	 
	BANK:	 	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BANK OF AMERICA, N.A.	 	 	 	MSLO EMERIL ACQUISITION SUB LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Jane R. Heller	 	 	 	By:	 	/s/ Howard Hochhauser	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Name: Jane R. Heller	 	 	 	 	 	Name: Howard Hochhauser	 	 
	 
	 	Title: Senior Vice President	 	 	 	 	 	Title: Vice President	 	 

	 	 	 	 	 
	 	PARENT GUARANTOR:

MARTHA STEWART LIVING OMNIMEDIA,

INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	CFO 	 
	 

USA Patriot Act Notice. Federal law requires all financial institutions to obtain, verify
and record information that identifies each Person who opens an account or obtains a loan. The
Bank will ask for the Borrower’s legal name, address, tax ID number or social security number and
other identifying information. The Bank may also ask for additional information or documentation
or take other actions reasonably necessary to verify the identity of the Borrower, the Guarantors
or other related Persons.

[Signature page to Loan Agreement]EX-10.7

 

EXHIBIT 10.7

PLEDGE AGREEMENT

     PLEDGE AGREEMENT dated as of April 4, 2008 between MSLO Emeril Acquisition Sub LLC, a Delaware
limited liability company (“Pledgor”), and Bank of America, N.A., as collateral agent (in
such capacity, together with any successor collateral agent, the “Collateral Agent”) for
the Secured Parties (as defined below).

     Reference is made to the Loan Agreement dated as of April 4, 2008 (as amended, supplemented or
otherwise modified from time to time, the “Loan Agreement”), between the Borrower and Bank
of America, N.A. (together with any successor or assigns, the “Lender”). The Lender has
agreed to extend credit to the Borrower subject to the terms and conditions set forth in the Loan
Agreement. The obligations of the Lender to extend such credit are conditioned upon, among other
things, the execution and delivery of this Agreement. Accordingly, the parties hereto agree as
follows:

     1. Definitions.

          (a) Loan Agreement. Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings specified in the Loan Agreement. All terms defined in the New
York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein;
the term “instrument” shall have the meaning specified in Article 9 of the New York UCC. “UCC”
means the New York UCC; provided that, if perfection or the effect of perfection or
non-perfection or the priority of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC”
means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority. The rules of construction specified in Article I of the Loan Agreement
also apply to this Agreement.

          (b) Other Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

     “Accounts” has the meaning set forth in Section 2.

     “Aggregate Collateral Value” has the meaning set forth in Section 4.

     “Agreement” means this Pledge Agreement, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time.

     “Bank” has the meaning set forth in Section 2.

     “Cash Collateral Account” has the meaning set forth in Section 2.

     “Collateral” has the meaning set forth in Section 2.

 

2

     “Collateral Agent” has the meaning set forth in the preamble to this Agreement.

     “Collateral Table” has the meaning set forth in Section 4.

     “Collateral Value”, with respect to (i) a money market fund, shall be determined at
any given time by multiplying (A) the most recent per share net asset value of such money market
fund obtained from the Wall Street Journal, or such other reputable reporting service as the
Collateral Agent may reasonably select, times (B) the number of shares of such money market fund
held in the Cash Collateral Account as collateral. In the event that such net asset value is not
available in the Wall Street Journal, or such other reputable reporting service as the Collateral
Agent may reasonably select, the Collateral Value shall be the value quoted to the Collateral Agent
by a reputable brokerage firm selected by the Collateral Agent and (ii) with respect to cash, shall
be the amount of such cash.

     “Eligible Collateral” has the meaning set forth in Section 4.

     “Guaranty” means the Continuing and Unconditional Guaranty dated as of April 4, 2008
made by each Guarantor in favor of the Collateral Agent, as the same may be, amended, amended and
restated, modified or supplemented from time to time.

     “Indemnitees” has the meaning set forth in Section 14(b).

     “Lender” has the meaning set forth in the preamble to this Agreement.

     “Loan Agreement” has the meaning set forth in the preamble to this Agreement.

     “Outstanding Balance” means the outstanding principal balance of the Loan from time to
time.

     “Pledgor” has the meaning set forth in the preamble to this Agreement.

     “Secured Obligations” means, collectively, (i) the “Obligations” as defined in the
Loan Agreement, (ii) the “Guaranteed Obligations” as defined in the Guaranty and (iii) all
obligations and liabilities of Pledgor hereunder.

     “Secured Parties” means, collectively, the Bank, the Collateral Agent and all other
Guarantied Parties (as defined in the Guaranty).

     “Securities Intermediary” has the meaning set forth in Section 13.

     “Security Interest” has the meaning set forth in Section 2.

     2. Grant of Security Interest. As security for the payment or performance, as the
case may be, in full of the Secured Obligations, including without limitation, obligations under
the Guaranty, Pledgor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, a security interest (the
“Security Interest”) and right of set-off against, all right, title and interest in or to
all of the following assets

 

3

and properties now owned or at any time hereafter acquired by Pledgor or in which Pledgor now
has or at any time in the future may acquire any right, title or interest (collectively, the
“Collateral”):

          (a) (i) Account number ending in 1406537 held by Bank of America, N.A. (the “Bank”) as
agent or custodian for Pledgor under an agreement for custody, safekeeping, investment management,
investment advisory or similar services between Pledgor and Bank (the “Cash Collateral
Account”);

               (ii) All successor and replacement accounts, regardless of the numbers of such accounts or the
offices at which such accounts are maintained; and

               (iii) Any linked or related accounts or subaccounts held by any affiliate of Bank of America
Corporation or any entity acting as clearing broker for any of the accounts (the accounts described
in clauses (i), (ii) and (iii), collectively, the “Accounts”);

          (b) All rights of Pledgor in connection with the Accounts, including any rights against any
securities intermediary, any affiliate of Bank of America Corporation or any clearing broker in
connection with the Accounts;

          (c) All investment property, security entitlements, financial assets, certificated securities,
uncertificated securities, money, deposit accounts, instruments, certificates of deposit, general
intangibles, and all other investments or property of any sort now or hereafter held, maintained or
administered in, or credited to, the Accounts; but excluding collective investment funds managed by
Bank of America, N.A., including without limitation any interest in variable amount notes, commonly
known as “master notes”; and

          (d) All present and future income, proceeds, earnings, increases, and substitutions from or
for the Collateral of every kind and nature, including without limitation all payments, interest,
profits, distributions, benefits, rights, options, warrants, dividends, stock dividends, stock
splits, stock rights, regulatory dividends, subscriptions, monies, claims for money due and to
become due, proceeds of any insurance on the Collateral, shares of stock of different par value or
no par value issued in substitution or exchange for shares included in the Collateral, and all
other property Pledgor is entitled to receive on account of such Collateral, including accounts,
documents, instruments, chattel paper, and general intangibles.

     3. Maintaining the Cash Collateral Account. Notwithstanding any other term or
condition to the contrary in any other agreement relating to the Cash Collateral Account or any
other Account, Pledgor (a) hereby grants “control” (within the meaning of Sections 9-106 and 8-106
of the UCC) of the Cash Collateral Account, the other Accounts and the other Collateral to the
Collateral Agent and authorizes the Bank to accept instructions and entitlement orders from the
Collateral Agent with respect to the Collateral without the further consent of Pledgor, (b) agrees
that so long as this Agreement is in effect, Pledgor shall not be entitled to give instructions or
entitlement orders to the Bank or any other Person with respect to the Collateral (except that
Pledgor may request the Collateral Agent to give instructions to the Bank with respect to the
Collateral in accordance with the terms of this Agreement) and Pledgor shall not grant “control”
(within the meaning of Sections 9-106 and 8-106 of the UCC) of the Collateral

 

4

Account and the other Collateral to any other Person and (c) except as provided by the
provisions of Sections 4(c) and 17(k), no asset or amount in the Accounts shall be paid or released
to or for the account of Pledgor.

     4. Collateral Maintenance.

          (a) On the date hereof, Pledgor has deposited in the Cash Collateral Account $30,000,000 in
cash. If requested by Pledgor, the Collateral Agent may direct the Bank to invest amounts on
deposit in the Cash Collateral Account in one or more money market funds that the Collateral Agent
may approve in its sole discretion; provided, however, that any such money market
fund investments are permitted pursuant to Parent Guarantor’s board approved investment policy as
previously provided by Parent Guarantor to the Collateral Agent. At all times during the term of
this Agreement, Pledgor agrees to maintain in the Cash Collateral Account, as security for the
Secured Obligations, Collateral of a type described on the table set forth below this paragraph
(collectively, the “Collateral Table”) and otherwise acceptable to the Collateral Agent
(“Eligible Collateral”) with an Aggregate Collateral Value at least equal to the
Outstanding Balance. “Aggregate Collateral Value” means, as of any date of determination,
an amount equal to the product obtained by multiplying (i) the Collateral Value as of such date by
(ii) the Margin Call Percentage shown on the following table (the “Collateral Table”) for
the applicable type of Eligible Collateral:

	 	 	 	 	 
	Eligible Collateral Type	 	Margin Call Percentage
	Money Market
	 	 	100	%
	Cash
	 	 	100	%

     The Collateral Agent shall have no obligation to give any Collateral Value to any Collateral
of a type not shown on the Collateral Table.

          (b) If the Outstanding Balance exceeds at any time the Aggregate Collateral Value, then
Pledgor shall have two (2) Business Days from the date notification (whether oral or written) of
such noncompliance is delivered to Pledgor, to either deposit cash into the Cash Collateral
Account, or prepay the principal of the Loan such that, after giving effect thereto, the
Outstanding Balance is less than or equal to the Aggregate Collateral Value as of the date on which
such action is taken. Any such prepayment of the Loan shall be applied to the principal
installments due under Section 2.2(b) of the Loan Agreement in the inverse order of their maturity.

          (c) Subject to the other provisions of this Section 4 and any written agreement to the
contrary with the Collateral Agent, if no Default or Event of Default has occurred and is
continuing or would result from such action, upon any repayment or prepayment of the outstanding
principal amount of the Loan, upon the request of Pledgor, the Collateral Agent shall release
Collateral from the Cash Collateral Account having Collateral Value up to the lesser of (i) the
principal amount of the Loan so repaid or prepaid and (ii) the amount by which the Aggregate
Collateral Value exceeds the Outstanding Balance at the date of request (and direct the sale or
trade of investments in the Cash Collateral Account to the extent necessary to do so);

 

5

provided that, after giving effect to any such release of Collateral, the Outstanding
Balance is less than or equal to the Aggregate Collateral Value.

     5. Pledgor’s Covenants, Representations and Warranties. Pledgor covenants, represents
and warrants that unless compliance is waived by the Collateral Agent in writing:

          (a) Pledgor is the legal and beneficial owner of all the Collateral free and clear of any and
all liens, encumbrances, or interests of any third parties other than the security interest of
Collateral Agent, for the benefit of the Secured Parties, and will keep the Collateral free of all
liens, claims, security interests and encumbrances of any kind or nature, whether voluntary or
involuntary, except the security interest of Collateral Agent, for the benefit of the Secured
Parties.

          (b) Pledgor shall, at Pledgor’s expense, take all actions necessary or advisable from time to
time to maintain the first priority and perfection of the security interest of the Collateral Agent
in the Collateral and shall not take any actions that would alter, impair or eliminate said
priority or perfection.

          (c) Pledgor agrees to pay prior to delinquency all taxes, charges, liens and assessments
against the Collateral, and upon the failure of Pledgor to do so, the Collateral Agent at its
option may pay any of them and shall be the sole judge of the legality or validity thereof and the
amount necessary to discharge the same.

          (d) If any of the Collateral is margin stock as defined in Regulation U promulgated by the
Board of Governors of the Federal Reserve System of the United States, Pledgor will provide
Collateral Agent a properly executed Form U-1 Purpose Statement. Pledgor will comply with the
requirements and restrictions imposed by Regulation U.

          (e) Pledgor’s exact legal name is correctly set forth on the signature page hereof. Pledgor
will notify the Collateral Agent in writing at least twenty (20) days prior to any change in
Pledgor’s name or identity.

          (f) Pledgor’s chief executive office is, and has been for the entire period of the existence
of Pledgor, located, in the State of New York. Pledgor is organized under the laws of the State of
Delaware. Pledgor shall give the Collateral Agent at least twenty (20) days’ prior written notice
before changing the location of its chief executive office, type of organization, business
structure or state of organization.

          (g) Pledgor’s organizational identification number assigned by the State of Delaware is
correctly set forth on the signature page hereof. Pledgor shall promptly notify the Collateral
Agent of any change of its organizational identification number.

     6. Collateral Agent Appointed Attorney-in-Fact. Pledgor hereby appoints the
Collateral Agent the attorney-in-fact of Pledgor for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof at any time after an Event of Default
has occurred and is continuing, which appointment is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, the Collateral Agent shall have the

 

6

right, upon the occurrence and during the continuance of an Event of Default (except in the
case of clauses (b), (g) and (j), which right may be exercised at any time), with full power of
substitution either in the Collateral Agent’s name or in the name of Pledgor (but subject to any
applicable terms of this Agreement): (a) to endorse, receive, accept and collect all checks,
drafts, other payment orders and instruments representing or included in the Collateral or
representing any payment, dividend or distribution relating to any Collateral or to take any other
action to enforce, collect or compromise any of the Collateral and to transfer any Collateral
(including converting physical certificates to book-entry holdings) into the name of the Collateral
Agent or its nominee or any broker-dealer (which may be an affiliate of the Collateral Agent); (b)
to execute any control agreement covering any Collateral on Pledgor’s behalf and as
attorney-in-fact for Pledgor in order to perfect the Collateral Agent’s first priority and
continuing security interest in the Collateral and in order to provide the Collateral Agent with
control of the Collateral, and Pledgor’s signature on this Agreement or other authentication of
this Agreement shall constitute an irrevocable direction by Pledgor to any bank, custodian, broker
dealer, any other securities intermediary or commodity intermediary holding any Collateral or any
issuer of any letters of credit to comply with any instructions or entitlement orders of the
Collateral Agent with respect to the Collateral without further consent of Pledgor; (c) to
participate in any recapitalization, reclassification, reorganization, consolidation, redemption,
stock split, merger or liquidation of any issuer of securities which constitute Collateral, and in
connection therewith Collateral Agent may deposit or surrender control of the Collateral, accept
money or other property in exchange for the Collateral, and take such action as it deems proper in
connection therewith, and any money or property received on account of or in exchange for the
Collateral shall be applied to the Indebtedness or held by the Collateral Agent thereafter as
Collateral pursuant to the provisions hereof; (d) to exercise any right, privilege or option
pertaining to any Collateral, but the Collateral Agent has no obligation to do so; (e) to file any
claims, take any actions or institute any proceedings which Collateral Agent determines to be
necessary or appropriate to collect or preserve the Collateral or to enforce the Collateral Agent’s
rights with respect to the Collateral; (f) to execute in the name or otherwise authenticate on
behalf of Pledgor any record reasonably believed necessary or appropriate by the Collateral Agent
for compliance with laws, rules or regulations applicable to any Collateral, or in connection with
exercising the Collateral Agent’s rights under this Agreement; (g) to file any financing statement
relating to this Agreement electronically, and Collateral Agent’s transmission of Pledgor’s
signature on and authentication of the financing statement shall constitute Pledgor’s signature on
and authentication of the financing statement; (h) to make any compromise or settlement it deems
desirable or proper with reference to the Collateral; (i) to do and take any and all actions with
respect to the Collateral and to perform any of Pledgor’s obligations under this Agreement; and (j)
to execute any documentation reasonably believed necessary by the Collateral Agent for compliance
with Rule 144 or any other restrictions, laws, rules or regulations applicable to any Collateral
hereunder that constitutes restricted or control securities under the securities laws. The
foregoing appointments are irrevocable and coupled with an interest and shall not be revoked
without the Collateral Agent’s prior written consent. To the extent permitted by law, Pledgor
hereby ratifies all said attorney-in-fact shall lawfully do by virtue hereof.

     7. Voting Rights.

          (a) So long as no Event of Default shall have occurred and is continuing, Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining to

 

7

the Collateral or any part thereof for any purpose not inconsistent with the terms of this
Agreement or any document or agreement executed in connection herewith.

          (b) Upon the occurrence and during the continuance of an Event of Default, all rights of
Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to
exercise pursuant to subsection (a) above shall cease, and the Collateral Agent shall thereupon
have the sole right to exercise such voting and other consensual rights.

     8. Remedies. If an Event of Default shall occur and be continuing, the Collateral
Agent may do any one or more of the following, to the extent permitted by law:

          (a) Exercise as to any or all of the Collateral all the rights, powers and remedies of an
owner.

          (b) Enforce the security interest given hereunder pursuant to the UCC and any other applicable
law.

          (c) Sell all or any part of the Collateral at any public or private sale in accordance with
the UCC, without advertisement, in such manner and order as Collateral Agent may elect. Collateral
Agent may purchase the Collateral for its own account at any such sale. The Collateral Agent shall
give Pledgor such notice of any public or private sale as may be required by the UCC, provided that
to the extent notice of any such sale is required by the UCC or other applicable law, Pledgor
agrees that at least 10 (ten) days notice to Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable notification and
provided further that, if the Collateral Agent fails to comply with this sentence in any respect,
its liability for such failure shall be limited to the liability (if any) imposed on it as a matter
of law under the UCC or other applicable law. Pledgor acknowledges that Collateral may be sold at
a loss to Pledgor, and that, in such event, the Collateral Agent shall have no liability or
responsibility to Pledgor for such loss. Pledgor further acknowledges that a private sale may
result in prices and other terms less favorable to the seller than if such sale were a public sale
and, notwithstanding such circumstances, agrees that no such private sale shall, to the extent
permitted by applicable law, be deemed not to be “commercially reasonable” solely as a result of
such prices and other sale terms. Upon any such sale, the Collateral Agent shall have the right to
deliver, assign and transfer to the buyer thereof the Collateral so sold. Each buyer at any such
sale shall hold the Collateral so sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of Pledgor that may be waived or any other right
or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal that Pledgor has or may have under any law now existing or
hereafter adopted. Without limiting any other rights and remedies available to the Collateral
Agent, Pledgor expressly acknowledges and agrees that with respect to Collateral consisting of
notes, bonds or other securities which are not sold on a recognized market, the Collateral Agent
shall be deemed to have conducted a commercially reasonable sale of such Collateral if (i) such
sale is conducted by any nationally recognized broker-dealer (including any affiliate of the
Collateral Agent), investment banker or any other method common in the securities industry, and
(ii) if the purchaser is the Collateral Agent or any Secured Party, the sale price received by such
Person in connection with such sale is reasonably supported by

 

8

quotations received from one or more other nationally recognized broker-dealers, investment
bankers or other financial institutions.

          (d) Enforce the security interest of Collateral Agent in any deposit account which is part of
the Collateral by applying such account to the Secured Obligations.

          (e) Exercise any other remedy provided under this Agreement or by any applicable law.

          (f) Comply with any applicable state or federal law requirements in connection with a
disposition of the Collateral and such compliance will not be considered to affect adversely the
commercial reasonableness of any sale or other disposition of the Collateral.

          (g) Sell the Collateral without giving any warranties as to the Collateral. Collateral Agent
may specifically disclaim any warranties of title or the like. This procedure will not be
considered to affect adversely the commercial reasonableness of any sale or other disposition of
the Collateral.

     Pledgor agrees that the Collateral may be sold as provided for in this Pledge Agreement and
expressly waives any rights of notice of sale, advertisement procedures, or related provisions
granted under applicable law, including the New York Lien Law. All cash proceeds received by or on
behalf of the Collateral Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, following the payment of the fees and expenses of the
Collateral Agent, be held by the Collateral Agent as collateral for, and/or then or at any time
thereafter applied in whole or in part by the Collateral Agent to, the Secured Obligations in such
order as the Collateral Agent may elect in accordance with the provisions of the Loan Documents.
Any surplus of such cash or cash proceeds held by or on behalf of the Collateral Agent and
remaining after payment in full of all the Secured Obligations shall be paid to Pledgor. If the
proceeds of sale, collection or other realization of or upon the Collateral pursuant to this
Section 8 are insufficient to cover the costs and expenses of such realization and the payment in
full of all Secured Obligations, Pledgor and the Guarantors shall remain liable for any deficiency
to the extent Pledgor and such Guarantors are obligated therefor under the other documents executed
in connection with the Secured Obligations and this Agreement, as well as the fees and expenses of
any Person employed by the Collateral Agent or any other Secured Party to collect such deficiency
in accordance with Section 14.

     9. Right to Cure; Limitation on Collateral Agent’s Duties. If Pledgor fails to
perform any agreement contained herein, the Collateral Agent may perform or cause performance of
such agreement and the expenses of the Collateral Agent incurred in connection therewith shall be
payable by Pledgor under Section 14. Any powers conferred on the Collateral Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for reasonable care in the custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment

 

9

substantially equal to that which the Collateral Agent accords its own property, it being
understood that the Collateral Agent shall not have any responsibility for (a) ascertaining,
exercising or taking other action or giving Pledgor notice with respect to subscription rights,
calls, conversions, exchanges, maturities, lenders or other matters relative to any Collateral,
whether or not the Collateral Agent has or is deemed to have knowledge of such matters, or (b)
taking any necessary steps to preserve rights against any parties with respect to any Collateral.
the Collateral Agent shall not be liable for any loss to the Collateral resulting from acts of God,
war, civil commotion, fire, earthquake, or other disaster or for any other loss or damage to the
Collateral except to the extent such loss is determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the Collateral Agent’s gross negligence or
willful misconduct.

     10. Waivers. The Collateral Agent shall be under no duty or obligation whatsoever and
Pledgor waives any right to require the Collateral Agent to (a) make or give any presentment,
demands for performances, notices of nonperformance, protests, notices of protest or notices of
dishonor in connection with any obligations or evidences of indebtedness held by the Collateral
Agent as Collateral, or in connection with any obligation or evidences of indebtedness which
constitute in whole or in part the Secured Obligations, (b) proceed against any Person, (c) proceed
against or exhaust any collateral, or (d) pursue any other remedy in the Collateral Agent’s power;
and Pledgor waives any defense arising by reason of any disability or other defense of any Loan
Party or any other Person, or by reason of the cessation from any cause whatsoever of the liability
of any Loan Party or any other Person. Until the Secured Obligations are paid in full, Pledgor
waives any right of subrogation, reimbursement, indemnification, and contribution (contractual,
statutory or otherwise), including without limitation any claim or right of subrogation under the
Bankruptcy Code (Title 11 of the U.S. Code) or any successor statute, arising from the existence or
performance of this Agreement, and Pledgor waives any right to enforce any remedy which the
Collateral Agent or any Secured Party now has or may hereafter have against any Loan Party or
against any other Person and waives any benefit of and any right to participate in any Collateral
or security whatsoever now or hereafter held by the Collateral Agent or any Secured Party.
Pledgor agrees that it is solely responsible for keeping itself informed as to all circumstances
which bear upon the risk of nonpayment or the risk of a margin call or liquidation of the
Collateral.

     11. Transfer, Delivery and Return of Collateral.

          (a) Pledgor shall immediately deliver or cause to be delivered to the Collateral Agent (or the
Securities Intermediary, if any) (i) any certificates or instruments now or hereafter representing
or evidencing Collateral and such certificates and instruments shall be in suitable form for
transfer without restriction or stop order by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank in form and substance reasonably satisfactory to the
Collateral Agent, and (ii) after an Event of Default has occurred and is continuing, in the same
form as received (with any necessary endorsement), all dividends and other distributions paid or
payable in cash in respect of any Collateral and any such amounts, if received by Pledgor, shall be
received in trust for the benefit of the Collateral Agent, for the benefit of the Secured Parties,
and be segregated from the other property or funds of Pledgor.

 

10

          (b) The Collateral Agent may at any time deliver the Collateral or any part thereof to Pledgor
and the receipt by Pledgor shall be a complete and full acquittance for the Collateral so
delivered, and the Collateral Agent shall thereafter be discharged from any liability or
responsibility therefor.

     12. Continuing Agreement and Powers.

          (a) This is a continuing Agreement and all the rights, powers and remedies hereunder shall,
unless otherwise limited herein, apply to all past, present and future Secured Obligations,
including that arising under successive transactions which shall either continue the Secured
Obligations, increase or decrease it, and notwithstanding the cessation of business, dissolution or
bankruptcy of any Loan Party, or any other event or proceeding affecting any Loan Party.

          (b) Until all Secured Obligations shall have been paid in full, the power of sale and all
other rights, powers and remedies granted to the Collateral Agent hereunder shall continue to exist
and may be exercised by the Collateral Agent at the time specified hereunder irrespective of the
fact that the Secured Obligations or any part thereof may have become barred by any statute of
limitations. Pledgor waives the benefit of any statute of limitations as applied to this
Agreement.

     13. Securities Intermediary. If permitted by the Collateral Agent, some or all of the
Collateral may be held at a broker or other securities intermediary (the “Securities
Intermediary”). Pledgor shall pay to the Securities Intermediary any charges or costs imposed
by the Securities Intermediary. Pledgor at no time shall request that the Securities Intermediary
release any Collateral to Pledgor, except as expressly permitted by the Collateral Agent. The
Collateral Agent may require that Pledgor obtain a control agreement, signed by the Securities
Intermediary, in form and substance reasonably acceptable to the Collateral Agent. The Collateral
Agent may, at any time but in accordance with the terms of this Agreement and any control
agreement, require the Securities Intermediary to do any or all of the following: (a) disburse any
or all of the Collateral to the Collateral Agent; (b) allow the Collateral Agent (and not Pledgor)
to exercise any rights relating to the Collateral; (c) sell some or all of the Collateral and remit
the sales proceeds (less the Securities Intermediary’s normal sales charge) to the Collateral
Agent; and (d) buy and sell Collateral only upon the instructions of the Collateral Agent (and not
Pledgor). If the Collateral Agent assigns or transfers its rights under this Agreement and the
Collateral Agent is the Securities Intermediary for any or all of the Collateral, Pledgor agrees
that the Collateral Agent, in such capacity, is irrevocably directed by Pledgor to comply with
instructions or entitlement orders with respect to such Collateral originated by any assignee or
transferee of this Agreement without further consent of Pledgor.

     14. Costs; Indemnification.

          (a) Pledgor agrees to pay or reimburse (i) all costs and reasonable attorney’s fees incurred
by the Collateral Agent and the Secured Parties in connection with the enforcement, collection or
protection of its rights in connection with this Agreement and the other Loan Documents to which
Pledgor is party, including its rights under this Section and (ii) all reasonable costs and
expenses incurred by the Collateral Agent in the administration of

 

11

this Agreement and the other Loan Documents to which Pledgor is a party. As used in this
paragraph, “attorneys’ fees” includes the allocated costs of in-house counsel. In addition,
Pledgor agrees to, upon reasonable notice from the Collateral Agent, pay any and all stamp and
other taxes or fees payable or determined to be payable in connection with the execution and
delivery of this Agreement and the other documents to be delivered hereunder, and agrees to save
the Collateral Agent harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.

          (b) Pledgor agrees to indemnify and hold the Collateral Agent and the other Secured Parties
and their parent entities, Subsidiaries and all of their directors, officers, employees, agents,
successors, attorneys, and assigns (collectively, the “Indemnitees”), harmless from any
loss, liability, damages, judgments, and costs of any kind relating to or arising directly or
indirectly out of (i) this Agreement or any other Loan Document, the Security Interest or the
Collateral and (ii) any litigation or proceeding related to or arising out of this Agreement, any
such document, the Security Interest or the Collateral, in each case other than arising as a result
of any such Indemnitee’s gross negligence or willful misconduct. This indemnity includes but is
not limited to reasonable attorneys’ fees (including the allocated cost of in-house counsel).
Under no circumstances shall any of the Indemnitees have any liability for any special, punitive,
indirect or consequential damages relating to this Agreement or any other Loan Document or arising
out of its activities in connection herewith or therewith.

          (c) Any such amounts payable as provided hereunder shall be additional Secured Obligations
secured hereby. The provisions of this Section 14 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan Document, the consummation
of the transactions contemplated hereby, the repayment of any of the Secured Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 14 shall be payable upon demand.

     15. Notices. All notices and other communications hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in Section 12 of the Loan
Agreement, and (a) if given to Pledgor shall be sent to the address or fax number listed in Section
12 of the Loan Agreement, or to such other addresses or fax numbers as Pledgor may specify from
time to time in writing and (b) if given to the Collateral Agent, shall be sent to the following
address, or sent by facsimile to the fax number listed below, or to such other addresses as the
Collateral Agent may specify from time to time in writing:

	 	 	 
	          Collateral Agent:

	 	Bank of America, N.A.
	 

	 	767 Fifth Avenue, Floor 12A
	 

	 	New York, New York 10153
	 

	 	Attention: Jane R. Heller
	 

	 	Telecopy: 212-407-5402

 

12

	 	 	 
	          with a copy to:

	 	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	 

	 	1285 Avenue of the Americas
	 

	 	New York, New York 10019-6064
	 

	 	Attention: Stephen K. Koo
	 

	 	Telecopy: 212-757-3990

     16. Dispute Resolution Provision. The Dispute Resolution Provision as set forth in
Section 13.13 of the Loan Agreement shall apply. By agreeing to binding arbitration, the parties
irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any
Claim. Furthermore, without intending in any way to limit this Agreement to arbitrate, to the
extent any Claim is not arbitrated, the parties irrevocably and voluntarily waive any right they
may have to a trial by jury in respect of such Claim. This waiver of jury trial shall remain in
effect even if the Class Action Waiver is limited, voided or found unenforceable. WHETHER THE
CLAIM IS DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE
EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT
PERMITTED BY LAW.

     17. Miscellaneous.

          (a) Cumulative Rights and No Waiver. Each and every right granted to the Collateral
Agent and the Secured Parties under any Loan Document, or allowed it by law or equity shall be
cumulative of each other and may be exercised in addition to any and all other rights of the
Collateral Agent or the Secured Parties, and no delay in exercising any right shall operate as a
waiver thereof, nor shall any single or partial exercise by the Collateral Agent or the Secured
Parties of any right preclude any other or future exercise thereof or the exercise of any other
right. Pledgor expressly waives any presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate and notice of acceleration, except in
the event and to the extent that any such notice is expressly required by the terms of any Loan
Document. No notice to or demand on Pledgor in any case shall, of itself, entitle Pledgor to any
other or future notice or demand in similar or other circumstances.

          (b) Applicable Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. To the extent that the Collateral Agent or any Secured Party
has greater rights or remedies under federal law, whether as a national bank or otherwise, this
paragraph shall not be deemed to deprive such Person of such rights and remedies as may be
available under federal law.

          (c) Successor and Assigns. This Agreement is binding on Pledgor and its successors and
assignees and shall inure to the benefit of the Collateral Agent and each other Secured Party and
their successors and assigns; provided that Pledgor may not assign any of its rights or
obligations under this Agreement without the Collateral Agent’s prior written consent (and any
purported assignment in violation of this Section 16(c) shall be null and void).

          (d) Amendment. No modification, consent, amendment or waiver of any provision of this
Agreement, nor consent to any departure by Pledgor therefrom, shall be effective unless the same
shall be in writing and signed by the Collateral Agent and Pledgor.

 

13

          (e) Headings. Section and paragraph headings are for reference only and shall not affect
the interpretation or meaning of any provisions of this Agreement.

          (f) Severability. If any part of this Agreement is not enforceable, the rest of the
Agreement may be enforced.

          (g) Survivability. All covenants, agreements, representations and warranties made by
Pledgor herein or in the other Loan Documents to which Pledgor is a party shall survive the making
of the Loan and shall continue in full force and effect so long as the Secured Obligations, or any
portion thereof, are outstanding.

          (h) Counterparts. This Agreement may be executed in as many counterparts as necessary or
convenient, and by the different parties on separate counterparts each of which, when so executed,
shall be deemed an original but all such counterparts shall constitute but one and the same
agreement. Signatures may be delivered via telecopy or in PDF format via electronic mail and
signature delivered by such means shall be deemed originals for all purposes.

          (i) Right of Set-Off. In addition to any rights and remedies of the Secured Parties
provided by applicable law, upon the occurrence and during the continuance of any Event of Default,
each Secured Party is authorized at any time and from time to time, without prior notice to
Pledgor, any such notice being waived by Pledgor to the fullest extent permitted by applicable law,
to set off and apply any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing by, such Secured Party to or
for the credit or the account of the respective Loan Parties and their Subsidiaries against any and
all Secured Obligations owing to such Secured Party hereunder or under any other Loan Document, now
or hereafter existing, irrespective of whether or not such Secured Party or Affiliate shall have
made demand under this Agreement or any other Loan Document and although such obligations may be
contingent or unmatured or denominated in a currency different from that of the applicable deposit
or indebtedness. Each Secured Party agrees promptly to notify Pledgor and the Collateral Agent in
writing after any such set off and application made by such Secured Party; provided that
the failure to give such notice shall not affect the validity of such setoff and application. The
rights of the Collateral Agent and each Secured Party under this Section 17(i) are in addition to
other rights and remedies (including other rights of setoff) that the Collateral Agent and such
Secured Party may have.

          (j) Security Interest Absolute. All rights of the Collateral Agent hereunder, the
Security Interest and all obligations of Pledgor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Loan Agreement, any other Loan
Document, any agreement with respect to any of the Secured Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any increase in, or any change in the time, manner
or place of payment of, or in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the Loan Agreement, any other
Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of
any lien on other collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d)
subject to the terms of Section 17(k), any other circumstance that

 

14

might otherwise constitute a defense available to, or a discharge of, Pledgor in respect of
the Secured Obligations or this Agreement.

          (k) Termination or Release. (i) This Agreement and the Security Interest shall terminate
with respect to the Collateral on the earlier to occur of (A) the Collateral Delivery Date and (B)
the date on which all the outstanding Secured Obligations have been indefeasibly paid in full and
the Secured Parties have no further commitment under the Loan Agreement or other agreements
evidencing the Secured Obligations.

               (ii) If any funds are released from the Cash Collateral Account pursuant to Section 4(c), the
security interest in such funds shall be automatically released.

               (iii) In connection with any termination or release pursuant to paragraph (i) above, the
Collateral Agent shall execute and deliver to Pledgor, at Pledgor’s expense, all documents that
Pledgor shall reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 17(k) shall be without recourse to or warranty by
the Collateral Agent.

     (l) General Authority of the Collateral Agent. By acceptance of the benefits of this
Agreement and any other Loan Documents, each Secured Party (whether or not a signatory hereto)
shall be deemed irrevocably (a) to consent to the appointment of the Collateral Agent as its agent
hereunder and under such other Loan Documents, (b) to confirm that the Collateral Agent shall have
the authority to act as the exclusive agent of such Secured Party for the enforcement of any
provisions of this Agreement and such other Loan Documents against Pledgor, the exercise of
remedies hereunder or thereunder and the giving or withholding of any consent or approval hereunder
or thereunder relating to any Collateral or Pledgor’s obligations with respect thereto, (c) to
agree that it shall not take any action to enforce any provisions of this Agreement or any other
Loan Document against Pledgor, to exercise any remedy hereunder or thereunder or to give any
consents or approvals hereunder or thereunder except as expressly provided in this Agreement or any
other Loan Document and (d) to agree to be bound by the terms of this Agreement and any other Loan
Documents. The Collateral Agent may resign at any time by giving written notice thereof to the
Secured Parties and Pledgor. Upon any such resignation, the Lender shall appoint a successor
Collateral Agent who shall be willing to accept, and accepts, such appointment within thirty (30)
days after the retiring Collateral Agent shall have given notice of resignation (such appointment
to be subject to the prior written approval of Pledgor, which approval may not be unreasonably
withheld or delayed and shall not be required upon the occurrence and during the continuance of an
Event of Default). Upon the acceptance of such appointment by the successor Collateral Agent, such
successor Collateral Agent shall succeed to and become vested with all the rights, powers and
privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be
discharged from its duties and obligations under this Agreement and the other Loan Documents (but
shall continue to have the benefit of Sections 14, 16 and 17(i) hereof).

     (m) Financing Statements. Pledgor hereby irrevocably authorizes the Collateral Agent
to file one or more financing statements describing all or part of the Collateral, and continuation
statements, or amendments thereto, relative to all or part of the Collateral as authorized by
applicable law. Such financing statements, continuation statements and

 

15

amendments will contain any other information required by the UCC for the sufficiency or
filing office acceptance of any financing statement, continuation statement or amendment, including
the type of organization Pledgor is and any organizational identification number issued to Pledgor.
Pledgor agrees to furnish any such information to the Collateral Agent promptly upon request.
Pledgor also ratifies its authorization for the Collateral Agent to have filed any initial
financing statement or amendments thereto filed prior to the date hereof.

     (n) Further Assurances. From time to time, Pledgor shall, at the request of the
Collateral Agent, execute such other agreements, documents or instruments or take any other actions
in connection with this Agreement as the Collateral Agent may reasonably deem necessary to evidence
or perfect the security interests granted herein, to maintain the first priority of the security
interests, or to effectuate the rights granted to the Collateral Agent herein, but their failure to
do so shall not limit or affect any security interest or any other rights of the Collateral Agent
in and to the Collateral. Pledgor will execute and deliver to the Collateral Agent any stock
powers, instructions to any securities intermediary, issuer or transfer agent, proxies, or any
other documents of transfer that the Collateral Agent requests in order to perfect, obtain control
or otherwise protect the Collateral Agent’s security interest in the Collateral or to effect the
Collateral Agent’s rights under this Agreement. Such powers or documents may be executed in blank
or completed prior to execution, as reasonably requested by the Collateral Agent.

[This space left intentionally blank.]

 

 

	 	 	 
	Pledgor’s Chief Executive Office:

	 	PLEDGOR:
	 
	 	 
	11 West 42nd Street

	 	MSLO EMERIL ACQUISITION SUB LLC
	New York, NY 10036
	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                    /s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	Vice President 	 
	 

Pledgor’s organizational identification number

assigned by the State of Delaware:

4523889

	 	 	 	 	 
	COLLATERAL AGENT:

BANK OF AMERICA, N.A., as Collateral Agent

 	 	 
	By:  	/s/ Jane R. Heller
 	 	 
	 	Name:  	Jane R. Heller 	 	 
	 	Title:  	Senior Vice President 	 	 
	 

Acknowledged and Agreed

this 4th day of April, 2008:

	 	 	 	 	 
	BANK OF AMERICA, N.A.

 	 	 
	By:  	/s/ Jane R. Heller
 	 	 
	 	Name:  	Jane R. Heller 	 	 
	 	Title:  	Senior Vice President 	 	 
	 

[Signature page to pledge Agreement]

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