Document:

EX-10.38

Exhibit 10.38

Russ Berrie and Company, Inc.

111 Bauer Drive, Oakland, NJ 07436

(201) 337-9000 (800) 631-8465

March 12, 2008

Michael Levin

Kids Line, LLC

2601 Sequoia Drive

South Gate, CA 90280

Dear Michael:

     I am pleased to extend your current employment as President and Chief Executive Officer of
Kids Line, LLC (the “Company”) pursuant to the terms set forth herein.

     Your employment with the Company will include the following:

     1. COMPENSATION. (a) Your base salary will be at an annual rate of $400,000;
provided, that, at the discretion of the Compensation Committee of the Board of Directors (the
“Committee”) of Russ Berrie and Company, Inc., your base salary may be increased to $475,000.

     (b) You shall be eligible to participate in the Company’s Incentive Compensation (“IC”)
program with an Applicable Percentage of 75% (and an opportunity to earn up to an Applicable
Percentage of 130%). Your participation shall be per the terms set forth on Addendum I hereto.
Amounts achieved for results in between (i) the Minimum Target and the Target and (ii) the Target
and the Maximum Target will in each case be determined by a straight line interpolation. No
amounts will be paid for achievement of results below the Minimum Target, and no additional amounts
will be paid for achievement of results in excess of the Maximum Target.

     2. TERM. The term of this agreement shall be from January 1, 2008 through December
31, 2010 (the “Term”). Either party may elect, upon at least 180 days prior written notice, to
terminate this agreement prior to the expiration of the Term, in which event, this Agreement shall
terminate upon the date specified in such notice; provided, that the Company shall be entitled to
relieve you of your duties at any time during this 180 day period, provided that Company continues
to pay you your base salary and continues your participation in the IC program and all other
benefits and perquisites for the remainder of such period. Except for the 180 day notice period,
you agree that the Company shall have no severance obligation to you, irrespective of the reason
for the termination of your employment, nor shall you have any mitigation duties or obligations.
If your employment is terminated due to death or disability, your IC Bonus will be prorated based
on the number of days that you were employed during the year based on actual performance through
the remainder of the relevant year.

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     3. BENEFITS AND PERQUISITES. You will be eligible to participate in all benefit
programs made generally available to executives of the Company, including all benefit programs in
which you currently participate, as the same may be modified from time to time with the approval of
the Committee. Further, you shall throughout the period of your employment be entitled to the same
perquisites as you presently enjoy.

     4. PROTECTIVE COVENANTS. You acknowledge and agree that (i) that the Company has long
term, near-permanent relationships with its customers and suppliers, and that those relationships
were developed at great expense and difficulty to the Company over several years of close and
continuing involvement; and (ii) that the Company’s relationships with its customers and suppliers
are and will continue to be valuable, special and unique assets of the Company.

     Accordingly, you agree that, while employed by Company and for a period of one (1) year
thereafter (the “Restricted Period”), you agree that you will not, anywhere in the United States of
America or in any other place or venue where the Company now conducts or operates, or may conduct
or operate, its business prior to the date of your termination of employment (the “Territory”),
directly or indirectly, contact, solicit or accept if offered to you, or direct any person, firm,
corporation, association or other entity to contact, solicit or accept if offered to it, any of the
Company’s customers, prospective customers, or suppliers for the purpose of providing any products
and/or services that are the same as or similar to the products and services provided by the
Company to its customers during the term hereof.

     You also agree that, during the Restricted Period, you agree that you will not, anywhere in
the Territory, solicit, directly or indirectly, on your own behalf or on behalf of any other
person, the services of any person who is then a current employee of the Company (or was an
employee of the Company during the year preceding such solicitation), nor solicit any of the
Company’s then current employees (or an individual who was employed by or engaged by the Company
during the year preceding such solicitation) to terminate employment or an engagement with the
Company for any purpose.

     You further agree that both during your employment and thereafter you will not, for any reason
whatsoever, use for yourself or disclose (except when such disclosure is made by you in your
capacity as an executive of Company) to any person (other than a person who is then employed by the
Company or who is a party to any confidentiality undertaking in favor of Company), any
“Confidential Information” of the Company acquired by you during your relationship with the
Company, both prior to and during the term of this Agreement. You further agree to use
Confidential Information solely for the purpose of performing duties with, or for, the Company and
further agree not to use Confidential Information for your own private use or commercial purposes
or in any way detrimental to the Company. You agrees that “Confidential Information” includes but
is not limited to: (i) any financial, engineering, business, planning, operations, services,
potential services, products, potential products, technical information and/or know-how,
organization charts, formulas, business plans, production, purchasing, marketing, pricing, sales,
profit, personnel, customer, broker, supplier, or other lists or information of the Company; (ii)
any papers, data, records, processes, methods, techniques, systems, models, samples, devices,
equipment, compilations, invoices, customer lists, or documents of the

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Company; (iii) any confidential information or trade secrets of any third party provided to
the Company in confidence or subject to other use or disclosure restrictions or limitations; and
(iv) any other information, written, oral, or electronic, whether existing now or at some time in
the future, whether pertaining to current or future developments, and whether previously accessed
during your tenure with the Company or to be accessed during your future employment with the
Company, which pertains to the Company’s affairs or interests or with whom or how the Company does
business. The Company acknowledges and agrees that Confidential Information does not include
(x) information properly in the public domain, or (y) information in your possession prior to the
date of your original employment with the Company, or any predecessor company, except to the extent
that such information is or has become a trade secret of the Company or is or otherwise has become
the property of the Company.

     You acknowledge and agree that all customer lists, supplier lists, and customer and supplier
information, including, without limitation, addresses and telephone numbers, are and shall remain
the exclusive property of the Company, regardless of whether such information was developed,
purchased, acquired, or otherwise obtained for the Company by you.

     It is agreed that any breach or anticipated or threatened breach of any of your covenants
contained in this Paragraph 4 will result in irreparable harm and continuing damages to the Company
and its business and that the Company’s remedy at law for any such breach or anticipated or
threatened breach will be inadequate and, accordingly, in addition to any and all other remedies
that may be available to the Company at law or in equity in such event, any court of competent
jurisdiction may issue a decree of specific performance or issue a temporary and permanent
injunction, without the necessity of the Company posting bond or furnishing other security and
without proving special damages or irreparable injury, enjoining and restricting the breach, or
threatened breach, of any such covenant, including, but not limited to, any injunction restraining
you from disclosing, in whole or part, any Confidential Information.

     If any provision of this Agreement shall be found invalid or unenforceable for any reason, in
whole or in part, then such provision shall be deemed modified, restricted, or reformulated to the
extent and in the manner necessary to render the same valid and enforceable, or shall be deemed
excised from this Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision had been originally
incorporated herein as so modified, restricted, or reformulated or as if such provision had not
been originally incorporated herein, as the case may be. The parties further agree to seek a
lawful substitute for any provision found to be unlawful; provided, that, if the parties are unable
to agree upon a lawful substitute, the parties desire and request that a court or other authority
called upon to decide the enforceability of this Agreement modify those restrictions in this
Agreement that, once modified, will result in an agreement that is enforceable to the maximum
extent permitted by the law in existence at the time of the requested enforcement.

     5. During the Term, the Company reserves the right to change or modify any bonus, benefit or,
subject to paragraph 3 hereof, perquisite programs, provided that such changes apply to all
participants.

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     6. This letter supersedes in full the Employment Agreement between you and Company, dated
December 15, 2004, except that you agree to comply with the covenants set forth in Section 8.2
thereof until the expiration of such covenants in accordance with their respective terms pursuant
to said Section 8.2 on the same basis as if your employment terminated on December 15, 2007.
Solely with respect to this paragraph 6, you agree that the provisions of Section 8.2 were required
by Russ Berrie and Company, Inc. as a condition to the Sale (as defined in the Employment
Agreement), with respect to which you received substantial consideration.

     Michael, if you agree with the foregoing, please sign in the space provided below.

Very truly yours,

/s/ Bruce G. Crain

Bruce G. Crain

President and CEO

Russ Berrie and Company, Inc.

ACCEPTED AND AGREED:

	 	 	 
	/s/ Michael Levin
	 	 
	 
	 	 
	 

Michael Levin

	 	 

4EX-10.39

Exhibit 10.39

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of the 2nd
day of April, 2008, by and between LaJobi, Inc. a Delaware corporation (the “Employer”), and
LAWRENCE BIVONA (the “Executive”).

RECITALS

     A. The Employer desires that the Executive provide services for the benefit of the Employer
and certain of its affiliates, and Russ Berrie and Company, Inc. (“Parent”), pursuant to the terms
and conditions set forth herein, and the Executive desires to accept such employment with the
Employer.

     B. The Employer and the Executive acknowledge that the Executive will be a member of the
senior management team and the Board of Directors of the Employer and, as such, will participate in
implementing the Employer’s business plan and the overall business plan of Parent.

     C. In the course of his employment with the Employer, the Executive will have access to
certain confidential information that relates to or will relate to the business of the Employer,
Parent and their affiliates.

     D. The Employer desires that any such information not be disclosed to other parties or
otherwise used for unauthorized purposes.

     NOW, THEREFORE, in consideration of the above premises and the following mutual covenants and
conditions, the parties agree as follows:

     1. Employment. The Employer shall employ the Executive as its President and shall
appoint, and shall cause Parent, as Employer’s sole stockholder, to appoint Executive as a member
of the Board of Directors of Employer, and the Executive hereby accepts such employment and
appointment on the following terms and conditions. The Executive understands and agrees that he is
an at-will employee, and the Executive and the Employer can, and shall have the right to, terminate
the employment relationship at any time for any or no reason, with or without cause, in accordance
with the termination provisions contained in Paragraph 6, but subject to the payment provisions
contained in Paragraph 7 of this Agreement. Nothing contained in this Agreement or any other
agreement shall alter such at-will relationship. In the event that the Executive ceases to be
employed by the Employer for any reason and conditioned upon payment to Executive of any
compensation payments required pursuant to Paragraph 7, the Executive shall tender his resignation
from all officer and director positions, if any, that he holds with the Employer, and each
affiliate of Employer, effective on the date his employment is terminated.

     2. Duties.  

          A. Subject to the provisions of the last sentence of this paragraph 2, the Executive shall
work for the Employer in a full-time capacity. Prior to the termination of

 

 

Executive’s employment
hereunder, the Executive shall have the duties, responsibilities, powers, and authority customarily associated with the position of President and a member of the board
of directors of a Delaware corporation. In the Executive’s capacity as President, the Executive
shall report to, and follow the direction of, the Chief Executive Officer of Parent. The
Executive shall diligently, competently, and faithfully perform all duties, and shall devote his
entire business time, energy, attention and skill to the performance of duties for the Employer or
its affiliates and will use his best efforts to promote the interests of the Employer, as Executive
typically devoted himself to the business of LaJobi Industries, Inc. (“LaJobi Industries”) prior to
entering into this Agreement. It shall not be considered a violation of the foregoing for the
Executive to serve on industry, civic, religious or charitable boards or committees, so long as
such service does not individually or in the aggregate significantly interfere with the performance
of the Executive’s responsibilities as an employee of the Employer in accordance with this
Agreement. In addition, Executive may, until December 31, 2008, provide services to each of L&J
Industries, Ltd. (“L&J”) and LBI Distributors, Inc. (“LBI”) relating to their respective business
operations and in connection with the sale or liquidation of the Executive’s ownership interest in
either company, if applicable, provided that such services do not unreasonably interfere
with Executive’s duties hereunder.

          B. It is understood that the Executive shall not be expected by the Employer to travel on
behalf of the Employer, in the aggregate, for a number of days that is materially higher than the
Executive traveled in 2007 on behalf of LaJobi Industries and L&J (“Excessive Travel”), and that
the Executive’s refusal to travel on behalf of the Employer for a materially higher number of days
shall not permit the Employer to either provide written notice as contemplated under Paragraphs
6C(ii) or 6C(iii) or to terminate the Executive’s employment based on any such refusal.

     3. Executive Loyalty. Without limiting the generality of the provisions in Paragraph
8 hereof, it is agreed that the Employer shall be entitled to all benefits and profits arising from
or incident to any and all work or services performed for, and advice provided to, the Employer by
Executive pursuant to this Agreement and in accordance with the terms and conditions contained
herein.

     4. Compensation.

          A. The Employer shall pay the Executive an annual base salary of THREE HUNDRED THOUSAND
DOLLARS AND NO/100 ($300,000) (the “Base Salary”), payable in substantially equal installments in
accordance with the Employer’s payroll policy from time to time in effect. The Base Salary shall
be subject to any payroll or other deductions as may be required to be made pursuant to law,
government order or by agreement with, or consent of, the Executive. Increases to the Base Salary,
as adjusted, may be made following an annual salary review, the first of which shall take place on
or around January 1, 2009, and all subsequent reviews shall occur in or around January 1st of each
year thereafter.

          B. Commencing on the effective date of this Agreement, the Executive shall participate in the
Parent’s Incentive Compensation Program, as amended from time to time by the Compensation Committee
of the Board of Directors of Parent (the “IC Program”), on the

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terms and conditions set forth
therein. Capitalized terms used but undefined in this Paragraph shall have
the meanings ascribed to them in the IC Program. The Executive will have an Applicable
Percentage of 50%. Executive’s participation shall be per the terms set forth on Addendum
I hereto. Amounts achieved for results in between (i) the Minimum Target and the Target, and
(ii) the Target and the Maximum Target, will in each case be determined by a straight line
interpolation. No amounts will be paid for achievement of results below the Minimum Target, and no
additional amounts will be paid for achievement of results in excess of the Maximum Target.

          C. In connection with the execution and delivery of this Agreement, the Parent will (i) grant
the Executive 28,000 stock options under the Parent’s 2004 Stock Option, Restricted and
Non-Restricted Stock Plan (the “Plan”) and (ii) issue to the Executive 4,300 restricted shares of
Parent, in each case of the foregoing clauses (i) and (ii) of this Paragraph
4C, at the closing market price on the second business day immediately following the effective
date of this Agreement. In addition, the Employer shall grant the Executive, during each of 2009
and 2010 (provided that the Executive is then a full-time employee of the Employer or any other
subsidiary of Parent), additional stock options under the Plan and/or restricted shares of Parent,
in each case, priced at the closing market price on the date of grant, which the Compensation
Committee of Parent values the aggregate value of such stock options and/or restricted shares
granted on such date of grant, in accordance with its regularly utilized methodology, at $50,000;
provided, that such stock options and/or restricted shares granted pursuant to this
sentence shall neither preclude nor be in lieu of additional stock options and/or restricted stock
that the Board of Directors of Parent might consider granting to the Executive on an annual basis.
Any and all stock options granted under this Paragraph 4(C) shall be evidenced by stock option
agreements in the form of Exhibit A hereto.

          D. The Employer shall:

               (i) include the Executive in any life insurance, disability insurance, medical, dental or
health insurance, savings, pension and retirement plans and other similar benefit plans or programs
(including, if applicable, any excess benefit or supplemental executive retirement plans)
maintained by the Parent for the benefit of its key executives;

               (ii) provide to Executive any other perquisites generally provided to all other senior
executives of the Parent, on terms no less favorable than those provided by the Parent, to any
other such executive;

               (iii) provide the Executive with four (4) weeks paid vacation per annum and holiday leave per
the terms of Employer’s employee policies manual in effect from time to time;

               (iv) reimburse the Executive for the cost of leasing and operating an automobile selected by
the Executive, and also bear or reimburse the Executive for the cost of insurance and maintenance
for that automobile, subject to a maximum reimbursement (and/or incurred cost) of $1,000 per month;

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               (v) while the Executive is employed by the Employer, to include Executive under any director’s
and officer’s liability insurance policy maintained by Employer or Parent on terms and conditions
(including scope, deductibles, etc.) no less favorable to the Executive than those applicable to
any person who is solely an officer and/or director of a subsidiary of Parent. The Executive
shall also be entitled to prompt indemnification, and prompt advancement of expenses, with respect
to any claim that arises out of, or relates to, his employment by (or services as an employee or
officer on behalf of) Employer or Parent, or their respective affiliates, in each case to the
fullest extent permissible under applicable law; and

               (vi) pay the Executive an additional amount (the “Gross Up Payment”) if any action of the
Employer (or the terms or provisions of any plan or program of the Employer or Parent in which the
Executive is a participant) causes any payment made to the Executive pursuant hereto or pursuant to
any plan or program of Parent or the Employer in which the Executive is a participant to be subject
to the excess tax provided for in Section 409A of the Code (a “409A Violation”). The Gross Up
Payment shall equal an amount such that after the Executive’s payment of all taxes, interest, and
penalties imposed on the Gross Up Payment, the Executive retains an amount of the Gross Up Payment
equal to the sum of (A) the interest under Section 409A(a)(1)(B)(i)(I) of the Code resulting from
the 409A Violation; (B) the additional tax under Section 409A(a)(1)(B)(i)(II) of the Code resulting
from such 409A Violation; (C) any penalties resulting from such 409A Violation; and (D) if the
Executive recognizes income prior to the taxable year that the income would have been included in
the Executive’s gross income in the absence of such 409A Violation, the amount of the taxes on the
income recognized other than the additional tax under subclause (B). The Employer shall pay the
Gross Up Payment within thirty (30) days after the Executive remits any amount under clauses (A),
(B), (C), or (D) to the tax authorities. The Employer shall also indemnify the Executive for all
costs, expenses, and reasonable attorney’s and paralegal’s fees incurred by the Executive as a
result of any audit by any tax authorities to the extent the same relates to the tax consequences
of such 409A Violation (the “Indemnified Amount”). The Employer shall pay the Indemnified Amount
within thirty (30) days after the Executive incurs the Indemnified Amount.

     5. Expenses. The Employer shall promptly reimburse the Executive for all reasonable
and approved business expenses, provided the Executive submits paid receipts or other documentation
acceptable to the Employer and as required by the Internal Revenue Service to qualify as ordinary
and necessary business expenses under the Internal Revenue Code of 1986, as amended.

     6. Termination. The Executive’s employment hereunder shall terminate upon the first
to occur of the following events:

          A. Upon the Executive’s date of death.

          B. Upon a reasonable determination by Employer that Executive is disabled. For purposes of
this Agreement, the Executive shall be deemed to be disabled if the Executive, as a result of
illness or incapacity, shall be unable to perform substantially his required duties for a period of
four (4) consecutive months or for any aggregate period of six (6) months in any twelve (12) month
period. A termination of the Executive’s employment by the Employer for

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disability
shall be communicated to the Executive by written notice and shall be effective on the tenth
(10th) business day after receipt of such notice by the Executive, unless the Executive returns to
full-time performance of his duties before such tenth (10th) business day.

          C. On the date the Employer provides the Executive with written notice that he is being
terminated for “cause.” For purposes of this Agreement, and as reasonably determined by the
Employer, the Executive shall be deemed terminated for cause if the Employer terminates the
Executive after the Executive:

               (i) shall have committed any felony or any other act involving fraud, theft or embezzlement;

               (ii) shall have committed intentional acts that materially impair the goodwill or business of
the Employer or cause material damage to its property, goodwill, or business, provided,
however, that Executive shall have twenty (20) days from the date that written notice of
such action is given by Employer to the Executive to cure such conduct (to the extent cure is
reasonably possible); or

               (iii) shall have refused to, or willfully failed to, perform his material duties hereunder,
provided, however, that Employer shall, prior to terminating the Executive pursuant
to this Paragraph 6C(iii), with respect to the first instance of each refusal or willful failure to
perform a specific material duty, have provided the Executive written notice that any repeated
failure or refusal to perform such specific duty shall constitute a basis for immediate termination
without additional warning or notice.

Any determination by Employer that “cause” exists shall be subject to de novo review in any
arbitration pursuant to Paragraph 17B below.

          D. On the date the Employer terminates the Executive’s employment for any reason, other than a
reason otherwise set forth in Paragraph 6A, 6B or 6C, provided that the Employer shall give the
Executive thirty (30) days written notice (or continued payment of Base Salary in lieu thereof)
prior to such date of its intention to terminate such employment.

          E. On the date the Executive provides the Employer with written notice that he is terminating
his employment for “good reason.” For purposes of this Agreement, the Executive shall be deemed to
have terminated his employment for “good reason” if any of the following events is effected by the
Employer or the Parent, or any of their respective affiliates, without the consent of the
Executive: (i) a material detrimental change in the Executive’s job title or position with the
Employer; (ii) a material diminution or reduction in the Executive’s authority or responsibility;
provided, however, that Parent’s future consolidation and/or centralization of the
Specified Employer Functions (as defined hereinafer) with itself or its other subsidiaries shall
not be deemed to be “a material diminution or reduction” in the Executive’s authority or
responsibility even if none of such functions report to Executive; (iii) a reduction in the
Executive’s Base Salary; (iv) a relocation of the Executive’s principal place of employment by more
than fifty (50) miles from 21 Sentry Court, Basking Ridge, New Jersey; (v) Executive is required to
perform Excessive Travel; provided, that “good reason” under this clause (v) shall
arise only upon the Employer’s insistence that the Executive continue to undertake Excessive

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Travel after the Executive has delivered to the Employer a written objection to such Excessive
Travel; or (vi) any material breach of this Agreement by the Employer not cured (to the extent cure
is reasonably possible) within twenty (20) days after written notice of such breach is given by
Executive to Employer. For purposes of clause (ii) above, “Specified Employer Functions” means the
Employer’s accounts receivable / accounts payable, information technology, finance / treasury,
human resources, facility management, and warehousing functions.

          F. On the date the Executive terminates his employment for any reason, other than a reason
otherwise set forth in Paragraph 6E.

     7. Compensation Upon Termination.

          A. If the Executive’s employment is terminated pursuant to Paragraph 6A, 6B, 6C or 6F, the
Executive shall be entitled to his salary through his final day of active employment, any
unreimbursed expenses and any accrued but unused vacation pay. The Executive also shall be
entitled to any benefits mandated under the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA) or required under the terms of any death, insurance or retirement plan, program or
agreement provided by the Employer and to which the Executive is a party or in which the Executive
is a participant, including, but not limited to, any short-term or long-term disability plan or
program, if applicable.

          B. Except as otherwise provided in this Paragraph 7B, if the Executive’s employment is
terminated pursuant to Paragraph 6D or 6E, the Executive shall be entitled to: (i) his salary
through his final date of active employment, any unreimbursed expenses and any accrued but unused
vacation pay; and (ii) as severance, twelve (12) months of (a) Base Salary continuation, payable at
the regular payroll periods of Employer and (b) continuation of those benefits provided in
Paragraph 4D(i). As a condition to receiving such severance amount, the Executive must execute a
release in the form attached hereto as Exhibit B within twenty-one (21) days after the
date of termination. The Executive will not have the obligation to mitigate damages by using
diligent efforts to seek comparable or other employment in the event of such termination and, in
the event the Executive does obtain comparable or other employment, such employment shall not
affect or alter the payment of any amounts payable to the Executive pursuant to this Paragraph 7(B)
or the Executive’s right thereto. Additionally, the Executive shall be entitled to any benefits
mandated under COBRA or required under the terms of any death, insurance or retirement plan,
program, or agreement provided by the Employer and to which the Executive is a party or in which
the Executive is a participant.

          C. Payments and benefits under this Paragraph 7 shall be paid or provided only at the time of
a termination of Executive’s employment that constitutes a “separation from service” within the
meaning of Section 409A of the Code and the regulations and guidance promulgated thereunder.
Further, if the Executive is a “specified employee” as such term is defined under Section 409A of
the Code and the regulations and guidance promulgated thereunder, any payments described in
Paragraph 7B shall be delayed for a period of six (6) months following the Executive’s separation
of employment to the extent and up to an amount
necessary to ensure such payments are not subject to the penalties and interest under Section
409A of the Code.

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     8. Protective Covenants. The Executive acknowledges and agrees that solely by virtue
of his employment by, and relationship with, the Employer, he has acquired and will acquire
“Confidential Information”, as hereinafter defined, as well as special knowledge of the Employer’s
relationships with its customers and suppliers, and that, but for his association with the
Employer, the Executive would not or will not have had access to said Confidential Information or
knowledge of said relationships. The Executive further acknowledges and agrees (i) that the
Employer has long term, near-permanent relationships with its customers and suppliers, and that
those relationships were developed at great expense and difficulty to the Employer over several
years of close and continuing involvement; (ii) that the Employer’s relationships with its
customers and suppliers are and will continue to be valuable, special and unique assets of the
Employer and that the identity, business needs and methods of conducting business of, or relating
to, each of its customers and suppliers is kept under tight security with the Employer and cannot
be readily ascertained from publicly available materials or from materials available to the
Employer’s competitors; and (iii) that the Employer has the following protectible interests that
are critical to its competitive advantage in the industry and would be of demonstrable value in the
hands of a competitor: pricing information and strategy, cost data, product specifications,
product development and obsolescence policies and time table. In return for the consideration
described in this Agreement, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and as a condition precedent to the Employer entering into this
Agreement, and as an inducement to the Employer to do so, the Executive hereby represents,
warrants, and covenants as follows:

          A. The Executive has executed and delivered this Agreement as his free and voluntary act,
after having determined that the provisions contained herein are of a material benefit to him, and
that the duties and obligations imposed on him hereunder are fair and reasonable and will not
prevent him from earning a comparable livelihood following the termination of his employment with
the Employer.

          B. The Executive has read and fully understands the terms and conditions set forth herein, has
had time to reflect on and consider the benefits and consequences of entering into this Agreement,
and has had the opportunity to review the terms hereof with an attorney or other representative, if
he so chooses.

          C. The execution and delivery of this Agreement by the Executive does not conflict with, or
result in a breach of or constitute a default under, any agreement or contract, whether oral or
written, to which the Executive is a party or by which the Executive may be bound. In addition,
the Executive has informed the Employer of, and provided the Employer with copies of, any
non-competition, confidentiality, work-for-hire or similar agreements to which the Executive is
subject or bound.

          D. The Executive agrees that, during the Executive’s employment by Employer hereunder and for
a period of one (1) year after the termination thereof, for any reason whatsoever or for no reason
and whether such termination was voluntary or involuntary by
Executive, the Executive will not (except on behalf of LBI and L&J until December 31, 2008, in
accordance with Paragraph 2) anywhere in the United States of America:

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               (i) directly or indirectly, contact, solicit or accept if offered to the Executive, or direct
any person, firm, corporation, association or other entity to contact, solicit or accept if offered
to it, any of the Employer’s customers, prospective customers, or suppliers (as hereinafter
defined) for the purpose of providing any products and/or services that are the same as or similar
to the products and services provided by the Employer to its customers while Executive was an
employee of Employer hereunder;

               (ii) solicit or accept if offered to him, with or without solicitation, on his own behalf or
on behalf of any other person, the services of any person who is a then current employee of the
Employer (or was an employee of the Employer during the year preceding such solicitation), nor
solicit (excluding Joseph Bivona) any of the Employer’s then current employees (or an individual
who was employed by or engaged by the Employer during the year preceding such solicitation) to
terminate employment or an engagement with the Employer, nor agree to hire (excluding Joseph
Bivona) any then current employee (or an individual who was an employee of the Employer during the
year preceding such hire) of the Employer into employment with himself or any company, individual
or other entity;

               (iii) directly or indirectly, for his own account or on behalf of others, engage in any
business activity that manufactures, distributes or sells any products and/or services that are the
same as or similar to the products and services provided by the Employer to its customers during
the term hereof, or seek to purchase products, goods or services from any person, firm or other
business enterprise providing such products, goods or services to the Employer during the term
hereof, or seek to cause any such supplier of products, goods and/or services to Employer to
refrain from providing such products, goods, or services to the Employer. Executive agrees that
during the Executive’s employment by Employer hereunder, Executive will not (except on behalf of
LBI and L&J until December 31, 2008, in accordance with Paragraph 2):

(a) directly or indirectly, whether as an investor (excluding
investments representing less than five percent (5%) of the common
stock of a public company), lender, owner, stockholder, officer,
director, consultant, employee, agent, salesperson or in any other
capacity, whether part-time or full-time, become associated with any
business involved in the design, manufacture, marketing, or servicing
of products then constituting ten percent (10%) or more of the annual
revenues of the Employer or its affiliates; or

(b) act as a consultant, advisor, officer, manager, agent, director,
partner, independent contractor, owner, or employee for or on behalf
of any of the Employer’s or its affiliates’ customers, prospective
customers, or suppliers (as hereinafter defined), with respect to or
in any way with regard to any aspect of the Employer’s or its
affiliates’ business and/or any other business
activities in which the Employer or its affiliates’ engages during
the term hereof.

8

 

          E. The Executive acknowledges and agrees that the scope described in this Paragraph 8 is
necessary and reasonable in order to protect the Employer in the conduct of its business and that,
if the Executive becomes employed by another employer, he shall be required to disclose the
existence of this Paragraph 8 to such employer.

          F. For purposes of this Paragraph 8, “customer” shall be defined as any person, firm,
corporation, association, or entity that purchased any type of product and/or service from the
Employer or is or was doing business with the Employer within the twelve (12) month period
immediately preceding termination of the Executive’s employment by Employer hereunder. For purposes
of this Paragraph 8, “prospective customer” shall be defined as any person, firm, corporation,
association, or entity to whom a proposal was made on behalf of Employer or which was contacted or
solicited by Employer within the twelve (12) month period immediately preceding termination of the
Executive’s employment for the purpose of having such persons, firms, corporations, associations,
or entities become a customer of the Employer. For purposes of this Paragraph 8, “supplier” shall
be defined as any person, firm, corporation, association, or entity who is or was doing business
with the Employer or who was contacted or solicited by the Employer (whether directly or
indirectly) or who contacted or solicited the Employer (whether directly or indirectly) within the
twelve (12) month period immediately preceding termination of the Executive’s employment hereunder.

          G. The Executive agrees that both during his employment and thereafter the Executive will not,
for any reason (other than for the benefit of the Employer), use for himself or disclose to any
person not employed by the Employer any “Confidential Information” of the Employer acquired by the
Executive during his employment by the Employer. The Executive further agrees to use Confidential
Information solely for the purpose of performing duties with, or for, the Employer and further
agrees not to use Confidential Information for his own private use or commercial purposes or in any
way materially detrimental to the Employer. The Executive agrees that “Confidential Information”
includes but is not limited to: (i) any confidential or proprietary information regarding or any
financial, engineering, business, planning, operations, services, potential services, products,
potential products, technical information and/or know-how, organization charts, formulas, business
plans, production, purchasing, marketing, pricing, sales, profit, personnel, customer, broker,
supplier, or other lists or information of the Employer; (ii) any confidential or proprietary
papers, data, records, processes, methods, techniques, systems, models, samples, devices,
equipment, compilations, invoices, customer lists, or documents of the Employer or of any customer
of the Employer which Executive knows or has reason to believe is intended by the customer to be
kept confidential ; and (iii) any other information, written, oral, or electronic, whether existing
now or at some time in the future, whether pertaining to current or future developments, and
whether previously accessed during the Executive’s employment with the Employer or to be accessed
during his future employment with the Employer, which pertains to the Employer’s affairs or
interests or with whom or how the Employer does business. The Employer acknowledges and agrees
that Confidential Information does not include (a) information properly in the public domain, (b)
information in the Executive’s possession prior to the date of his original employment with the
Employer, (c) information subsequently made
available to Executive by an independent third party provided such third party has a lawful
right to make such disclosure, (d) information independently developed or acquired by the
Executive without violating any

9

 

obligations under this Agreement, or (e) information required by
law or judicial decree to be disclosed.

          H. During and after Executive’s employment hereunder, the Executive will not remove from the
Employer’s premises any documents, records, files, notebooks, correspondence, reports, video or
audio recordings, computer printouts, computer programs, computer software, price lists, microfilm,
drawings or other similar documents containing Confidential Information, including copies thereof,
whether prepared by him or others, except in accordance with the performance of this Agreement or
his duties as an employee of Employer, and in such cases, will promptly return such items to the
Employer. Upon termination of his employment with the Employer, all such items including summaries
or copies thereof, then in the Executive’s possession, shall be returned to the Employer
immediately.

          I. The Executive recognizes and agrees that all inventions, conceptions, patents, copyrights,
copyright designs, trade secrets, trademarks, processes, discoveries, improvements, enhancements,
software, source code, catalogues, prints, business applications and other developments or
improvements and all other intellectual property and proprietary rights and any derivative work
based thereon (the “Inventions”) made, conceived or completed by the Executive, alone or with
others, during the term of his employment, whether or not during working hours, that are within the
scope of the Employer’s business operations or that relate to any of the Employer’s work or
projects are the sole and exclusive property of the Employer. The Executive further agrees that
(i) he will promptly disclose all Inventions (which pursuant to this Paragraph 8J are the sole and
exclusive property of the Employer) to the Employer and hereby assigns to the Employer all present
and future rights he has or may have in those Inventions, including without limitation those
relating to patent, copyright, trademark or trade secrets; and (ii) all Inventions (which pursuant
to this Paragraph 8J are the sole and exclusive property of the Employer) eligible under the
copyright laws are “work made for hire.” At the request of the Employer and at Employer’s sole
cost and expense, the Executive will do all things deemed by the Employer to be reasonably
necessary to perfect title to the Inventions (which pursuant to this Paragraph 8J are the sole and
exclusive property of the Employer) in the Employer and to assist in obtaining for the Employer
such patents, copyrights or other protection as may be provided under law and desired by the
Employer, including but not limited to executing and signing any and all relevant applications,
assignments or other instruments. Notwithstanding the foregoing, the Employer hereby notifies the
Executive that the provisions of this Paragraph 8 shall not apply to any Inventions for which no
equipment, supplies, facility or trade secret information of the Employer was used and which were
developed entirely on the Executive’s own time, unless (a) the Invention relates (I) to the
business of the Employer, or (II) to actual or demonstrably anticipated research or development of
the Employer, or (b) the Invention results from any work performed by the Executive for the
Employer.

          J. The Executive acknowledges and agrees that all customer lists, supplier lists, and customer
and supplier information, including, without limitation, addresses and telephone numbers, are and
shall remain the exclusive property of the Employer, regardless of whether such information was
developed, purchased, acquired, or otherwise obtained by the
Employer or the Executive. The Executive agrees to furnish to the Employer on demand at any
time during the term of this Agreement, and upon termination of this Agreement, a complete list

10

 

of
the correct names and places of business and telephone numbers of all of its customers served by
him. The Executive further agrees, on demand, to immediately notify the Employer of the name and
address of any new customer, and report all changes of a location of old customers, so that upon
the termination of this Agreement, the Employer will have a complete list of the correct names and
addresses of all of its customers with which the Executive has had dealings. The Executive also
agrees to furnish to the Employer on demand at any time during the term of this Agreement, and upon
the termination of this Agreement, copies of any other records, notes, computer printouts, computer
programs, computer software, price lists, microfilm, or any other documents related to the
Employer’s business. The Executive recognizes and agrees that he has no expectation of privacy
with respect to the Employer’s telecommunications, networking or information processing systems
(including, without limitation, stored computer files, email messages and voice messages) and that
the Executive’s activity and any files or messages on or using any of those systems may be
monitored at any time without notice.

          K. The Executive acknowledges that he may become aware of “material” nonpublic information
relating to customers whose stock is publicly traded. The Executive acknowledges that he is
prohibited by law as well as by Employer policy from trading in the shares of such customers while
in possession of such information or directly or indirectly disclosing such information to any
other persons so that they may trade in these shares. For purposes of this Paragraph 8.K,
“material” information may include any information, positive or negative, which might be of
significance to an investor in determining whether to purchase, sell or hold the stock of publicly
traded customers. Information may be significant for this purpose even if it would not alone
determine the investor’s decision. Examples include a potential business acquisition, internal
financial information that departs in any way from what the market would expect, the acquisition or
loss of a major contract, or an important financing transaction.

          L. The Employer does not wish to incorporate any unlicensed or unauthorized material into its
products or services or those of its subsidiaries. Therefore, the Executive agrees that he will
not knowingly disclose to the Employer, use in the Employer’s business, or cause the Employer to
use, any information or material which is confidential or proprietary to any third party including,
but not limited to, any former employer, competitor or client, unless the Employer has a right to
receive and use such information. The Executive will not incorporate into his work any material
which is subject to the copyrights of any third party unless the Employer has a written agreement
with such third party or otherwise has the right to receive and use such information.

          M. It is agreed that any breach or anticipated or threatened breach of any of the Executive’s
covenants contained in this Paragraph 8 will result in irreparable harm and continuing damages to
the Employer and its business and that the Employer’s remedy at law for any such breach or
anticipated or threatened breach will be inadequate and, accordingly, in addition to any and all
other remedies that may be available to the Employer at law or in equity in such event, any court
of competent jurisdiction may issue a decree of specific performance or issue a temporary and
permanent injunction, without the necessity of the Employer posting bond or furnishing other
security and without proving special damages or irreparable injury, enjoining
and restricting the breach, or threatened breach, of any such covenant, including, but not
limited to, any injunction restraining the Executive from disclosing, in whole or part, any
Confidential Information. The Executive acknowledges the truthfulness of all factual statements in
this

11

 

Agreement and agrees that he is estopped from and will not make any factual statement in any
proceeding that is contrary to this Agreement or any part thereof.

          N. Notwithstanding anything to the contrary contained herein, nothing in this Paragraph 8
shall be deemed to prohibit, restrict or otherwise limit (i) the Executive’s provision of services
to LBI and L&J until December 31, 2008 in accordance with Paragraph 2, or (ii) the operations or
business of L&J or LBI Distributors by any person other than Executive, including, without
limitation, Joseph Bivona.

     9. Notices. Any and all notices required in connection with this Agreement shall be
deemed adequately given only if in writing and (a) personally delivered, or sent by first class,
registered or certified mail, postage prepaid, return receipt requested, or by recognized overnight
courier, (b) sent by facsimile (if a facsimile number is furnished), provided a hard copy is mailed
on that date to the party for whom such notices are intended, or (c) sent by other means at least
as fast and reliable as first class mail. A written notice shall be deemed to have been given to
the recipient party on the earlier of (a) the date it shall be delivered to the address required by
this Agreement; (b) the date delivery shall have been refused at the address required by this
Agreement; (c) with respect to notices sent by mail or overnight courier, the date as of which the
Postal Service or overnight courier, as the case may be, shall have indicated such notice to be
undeliverable at the address required by this Agreement; or (d) with respect to a facsimile, the
date on which the facsimile is sent and receipt of which is confirmed. Any and all notices
referred to in this Agreement, or which either party desires to give to the other, shall be
addressed to his residence in the case of the Executive, or to its principal office in the case of
the Employer.

     10. Waiver of Breach. A waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver or estoppel of any
subsequent breach by such party. No waiver shall be valid unless in writing and signed by an
officer of the Employer expressly authorized by Employer’s Board of Directors or by the Executive,
as applicable.

     11. Assignment. The Executive acknowledges that the services to be rendered by him
are unique and personal. Accordingly, the Executive may not assign any of his rights or delegate
any of his duties or obligations under this Agreement. The rights and obligations of the Employer
under this Agreement shall inure to the benefit of and shall be binding upon the successors and
assigns of the Employer.

     12. Entire Agreement. This Agreement sets forth the entire and final agreement and
understanding of the parties and contains all of the agreements made between the parties with
respect to the subject matter hereof. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto, with respect to the subject matter hereof.
No change or modification of this Agreement shall be valid unless in writing and signed by the
Employer and the Executive.

     13. Severability. If any provision of this Agreement shall be found invalid or
unenforceable for any reason, in whole or in part, then such provision shall be deemed modified,
restricted, or reformulated to the extent and in the manner necessary to render the same valid and
enforceable, or shall be deemed excised from this Agreement, as the case may require, and this

12

 

Agreement shall be construed and enforced to the maximum extent permitted by law, as if such
provision had been originally incorporated herein as so modified, restricted, or reformulated or as
if such provision had not been originally incorporated herein, as the case may be. The parties
further agree to seek a lawful substitute for any provision found to be unlawful; provided, that,
if the parties are unable to agree upon a lawful substitute, the parties desire and request that a
court or other authority called upon to decide the enforceability of this Agreement modify those
restrictions in this Agreement that, once modified, will result in an agreement that is enforceable
to the maximum extent permitted by the law in existence at the time of the requested enforcement.

     14. Headings. The headings in this Agreement are inserted for convenience only and
are not to be considered a construction of the provisions hereof.

     15. Execution of Agreement. This Agreement may be executed in several counterparts,
each of which shall be considered an original, but which when taken together, shall constitute one
agreement.

     16. Recitals. The recitals to this Agreement are incorporated herein as an integral
part hereof and shall be considered as substantive and not precatory language.

     17. Governing Law; Jurisdiction.

          A. This Agreement shall be governed by, and construed and interpreted in accordance with its
express terms, and otherwise in accordance with the laws of the State of New Jersey, without regard
to conflicts of laws principles.

          B. Any claim or dispute arising out of or relating to this Agreement, or the breach,
termination or validity of this Agreement, or the Executive’s employment with the Employer or the
termination thereof (a “Dispute”) shall be submitted for de novo review in arbitration in
accordance with the procedures set forth in this Paragraph 17B. A party that wishes to initiate
the arbitration of a Dispute (the “Initiating Party”) shall give notice of its demand for
arbitration to the other party; that notice must include a description of the Dispute in reasonable
detail and a specific description of the relief sought by the Initiating Party, including a
proposed form of award by the arbitrator. Within fifteen (15) business days after that notice is
given, the other party or parties (each, a “Responding Party”) shall give notice to the Initiating
Party including a statement as to whether it wishes to submit to the arbitration a Dispute that
varies from, or is in addition to, the Dispute described in the Initiating Party’s notice and a
specific description of the relief sought by the Responding Party, including a proposed form of
award by the arbitrator. If a Responding Party’s notice describes a Dispute that varies from, or
is in addition to, the Dispute described in the Initiating Party’s notice, the Initiating Party
may, by notice to the Responding Party within ten (10) business days after the Responding Party’s
notice is given, modify the description of its requested relief, including the proposed form of
award by the arbitrator, to take account of the Dispute as described in the Responding Party’s
notice. The
arbitration shall be conducted in Newark, New Jersey before a single arbitrator in accordance
with the rules of the American Arbitration Association, provided that Employer shall pay all
filing, hearing and arbitrator(s) fees and the other charges imposed by the American Arbitration
Association. The arbitrator shall have the authority to award attorneys fees and costs to a party

13

 

if the arbitrator determines that the positions asserted by the party against whom such attorneys
fees and costs are awarded, lacked a reasonable basis.

     IN WITNESS WHEREOF, the parties have set their signatures on the date first written above.

	 	 	 	 	 
	EMPLOYER:

LaJobi, Inc.

 	 
	By:  	/s/ Charles Ginn
 	 
	 	Name:  	Charles Ginn 	 
	 	Title:  	CFO and Secretary 	 
	 

	 	 	 	 	 
	EXECUTIVE:

 	 
	/s/ Lawrence Bivona
 	 
	Lawrence Bivona 	 
	 	 
	 

14

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