Document:

EX-4.21

 

Exhibit 4.21

Execution Copy

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of April 2, 2008

among

KIDS LINE, LLC

SASSY, INC.

I & J HOLDCO, INC.,

and

LAJOBI, INC.,

as the Borrowers,

TOGETHER WITH CERTAIN SUBSIDIARIES

OF THE BORROWERS,

as the Loan Parties

THOSE FINANCIAL INSTITUTIONS PARTY HERETO,

as the Lenders,

LASALLE BANK NATIONAL ASSOCIATION,

as the Administrative Agent and Fronting Bank,

SOVEREIGN BANK,

as Syndication Agent,

WACHOVIA BANK, N.A.,

as Documentation Agent

and

BANC OF AMERICA SECURITIES LLC,

as Lead Arranger

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 1

	 	DEFINITIONS
	 	 	1	 
	1.1

	 	Definitions
	 	 	1	 
	1.2

	 	Other Interpretive Provisions
	 	 	29	 
	 
	 	 	 	 	 	 
	SECTION 2

	 	COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION
AND LETTER OF CREDIT PROCEDURES
	 	 	30	 
	2.1

	 	Commitments
	 	 	30	 
	2.2

	 	Loan Procedures
	 	 	31	 
	2.3

	 	Letter of Credit Procedures
	 	 	34	 
	2.4

	 	Commitments Several
	 	 	36	 
	2.5

	 	Certain Conditions
	 	 	37	 
	2.6

	 	Loan Party Representative
	 	 	37	 
	 
	 	 	 	 	 	 
	SECTION 3

	 	EVIDENCING OF LOANS
	 	 	37	 
	3.1

	 	Notes
	 	 	37	 
	3.2

	 	Recordkeeping
	 	 	38	 
	 
	 	 	 	 	 	 
	SECTION 4

	 	INTEREST
	 	 	38	 
	4.1

	 	Interest Rates
	 	 	38	 
	4.2

	 	Interest Payment Dates
	 	 	38	 
	4.3

	 	Setting and Notice of LIBOR Rates
	 	 	38	 
	4.4

	 	Computation of Interest
	 	 	39	 
	 
	 	 	 	 	 	 
	SECTION 5

	 	FEES
	 	 	39	 
	5.1

	 	Non-Use Fee
	 	 	39	 
	5.2

	 	Letter of Credit Fees
	 	 	39	 
	5.3

	 	Administrative Agent’s Fees
	 	 	40	 
	5.4

	 	Termination Fee
	 	 	40	 
	 
	 	 	 	 	 	 
	SECTION 6

	 	REDUCTION AND TERMINATION OF THE REVOLVING
COMMITMENT LIMIT AND THE REVOLVING COMMITMENT; PREPAYMENTS
	 	 	40	 
	6.1

	 	Reduction and Termination of the Revolving Commitment
	 	 	40	 
	6.2

	 	Prepayments 	 	 	40	 
	6.3

	 	Manner of Prepayments 	 	 	42	 
	6.4

	 	Repayments 	 	 	42	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 7

	 	MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES
	 	 	 	42	 
	7.1

	 	Making of Payments
	 	 	 	42	 
	7.2

	 	Application of Certain Payments
	 	 	 	44	 
	7.3

	 	Due Date Extension
	 	 	 	44	 
	7.4

	 	Setoff
	 	 	 	44	 
	7.5

	 	Proration of Payments
	 	 	 	44	 
	7.6

	 	Taxes
	 	 	 	45	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 8

	 	INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS
	 	 	 	46	 
	8.1

	 	Increased Costs
	 	 	 	46	 
	8.2

	 	Basis for Determining Interest Rate Inadequate or Unfair
	 	 	 	47	 
	8.3

	 	Changes in Law Rendering LIBOR Loans Unlawful
	 	 	 	48	 
	8.4

	 	Funding Losses
	 	 	 	48	 
	8.5

	 	Right of Lenders to Fund through Other Offices
	 	 	 	49	 
	8.6

	 	Discretion of Lenders as to Manner of Funding
	 	 	 	49	 
	8.7

	 	Mitigation of Circumstances; Replacement of Lenders
	 	 	 	49	 
	8.8

	 	Conclusiveness of Statements; Survival of Provisions
	 	 	 	50	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 9

	 	REPRESENTATIONS AND WARRANTIES
	 	 	 	50	 
	9.1

	 	Organization
	 	 	 	50	 
	9.2

	 	Authorization; No Conflict
	 	 	 	50	 
	9.3

	 	Validity and Binding Nature
	 	 	 	51	 
	9.4

	 	Financial Condition
	 	 	 	51	 
	9.5

	 	No Material Adverse Change
	 	 	 	51	 
	9.6

	 	Litigation and Contingent Liabilities
	 	 	 	51	 
	9.7

	 	Ownership of Properties; Liens
	 	 	 	51	 
	9.8

	 	Equity Ownership; Subsidiaries
	 	 	 	51	 
	9.9

	 	Pension Plans
	 	 	 	52	 
	9.10

	 	Investment Company Act
	 	 	 	53	 
	9.11

	 	Public Utility Holding Company Act
	 	 	 	53	 	 	 	 	 
	9.12

	 	Regulation U
	 	 	 	53	 	 	 	 	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	9.13

	 	Taxes
	 	 	 	53	 
	9.14

	 	Solvency, etc
	 	 	 	53	 
	9.15

	 	Environmental Matters
	 	 	 	54	 
	9.16

	 	Insurance
	 	 	 	55	 
	9.17

	 	Real Property
	 	 	 	55	 
	9.18

	 	Information
	 	 	 	55	 
	9.19

	 	Intellectual Property
	 	 	 	56	 
	9.20

	 	Burdensome Obligations
	 	 	 	56	 
	9.21

	 	Labor Matters
	 	 	 	56	 
	9.22

	 	No Default
	 	 	 	56	 
	9.23

	 	Related Agreements, etc
	 	 	 	56	 
	9.24

	 	Subordinated Debt
	 	 	 	56	 
	9.25

	 	Eligible Accounts and Eligible Inventory
	 	 	 	57	 
	9.26

	 	Other Debt
	 	 	 	57	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 10

	 	AFFIRMATIVE COVENANTS
	 	 	 	57	 
	10.1

	 	Reports, Certificates and Other Information
	 	 	 	57	 
	10.2

	 	Books, Records and Inspections
	 	 	 	61	 
	10.3

	 	Maintenance of Property; Insurance
	 	 	 	62	 
	10.4

	 	Compliance with Laws; Payment of Taxes and Liabilities
	 	 	 	63	 
	10.5

	 	Maintenance of Existence, etc
	 	 	 	64	 
	10.6

	 	Reserved
	 	 	 	64	 
	10.7

	 	Use of Proceeds
	 	 	 	64	 
	10.8

	 	Employee Benefit Plans
	 	 	 	64	 
	10.9

	 	Environmental Matters
	 	 	 	64	 
	10.10

	 	New Subsidiaries
	 	 	 	65	 	 	 	 	 
	10.11

	 	Deposit Accounts
	 	 	 	66	 	 	 	 	 
	10.12

	 	Independent Directors
	 	 	 	67	 	 	 	 	 
	10.13

	 	Hedging Agreements
	 	 	 	67	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SECTION 11

	 	NEGATIVE COVENANTS
	 	 	 	67	 	 	 	 	 
	11.1

	 	Debt
	 	 	 	68	 	 	 	 	 

-iii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page	 	 	 	 
	 
	 	 	 	 	 	 
	11.2

	 	Liens
	 	 	 	69	 
	11.3

	 	Restricted Payments
	 	 	 	70	 
	11.4

	 	Mergers, Consolidations, Sales and Other
Transactions Outside the
Ordinary Course of Business
	 	 	 	73	 
	11.5

	 	Modification of Organizational Documents
	 	 	 	76	 
	11.6

	 	Transactions with Affiliates
	 	 	 	76	 
	11.7

	 	Unconditional Purchase Obligations
	 	 	 	76	 
	11.8

	 	Inconsistent Agreements
	 	 	 	76	 
	11.9

	 	Business Activities
	 	 	 	77	 
	11.10

	 	Investments
	 	 	 	77	 
	11.11

	 	Restriction of Amendments to Certain Documents
	 	 	 	78	 
	11.12

	 	Fiscal Year
	 	 	 	78	 
	11.13

	 	Financial Covenants
	 	 	 	78	 
	11.14

	 	Cancellation of Debt
	 	 	 	80	 
	11.15

	 	Creation of Subsidiaries
	 	 	 	80	 
	11.16

	 	Commingling of Funds
	 	 	 	80	 
	 
	 	 	 	 	 	 
	SECTION 12

	 	EFFECTIVENESS; CONDITIONS OF LENDING, ETC
	 	 	 	80	 
	12.1

	 	Initial Credit Extension
	 	 	 	80	 
	12.2

	 	Conditions
	 	 	 	83	 
	 
	 	 	 	 	 	 
	SECTION 13

	 	EVENTS OF DEFAULT AND THEIR EFFECT
	 	 	 	84	 
	13.1

	 	Events of Default
	 	 	 	84	 
	13.2

	 	Effect of Event of Default
	 	 	 	86	 
	 
	 	 	 	 	 	 
	SECTION 14

	 	THE ADMINISTRATIVE AGENT
	 	 	 	87	 
	14.1

	 	Appointment and Authorization
	 	 	 	87	 
	14.2

	 	Fronting Bank
	 	 	 	87	 
	14.3

	 	Delegation of Duties
	 	 	 	87	 
	14.4

	 	Exculpation of Administrative Agent
	 	 	 	88	 
	14.5

	 	Reliance by Administrative Agent
	 	 	 	88	 
	14.6

	 	Notice of Default
	 	 	 	88	 
	14.7

	 	Credit Decision
	 	 	 	89	 

-iv-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page	 	 	 	 
	 
	 	 	 	 	 	 
	14.8

	 	Indemnification
	 	 	 	89	 
	14.9

	 	Administrative Agent in Individual Capacity
	 	 	 	90	 
	14.10

	 	Successor Administrative Agent
	 	 	 	90	 
	14.11

	 	Collateral Matters
	 	 	 	90	 
	14.12

	 	Administrative Agent May File Proofs of Claim
	 	 	 	91	 
	14.13

	 	Other Agents; Arrangers and Managers
	 	 	 	92	 
	 
	 	 	 	 	 	 
	SECTION 15

	 	GENERAL
	 	 	 	92	 
	15.1

	 	Waiver; Amendments
	 	 	 	92	 
	15.2

	 	Confirmations
	 	 	 	93	 
	15.3

	 	Notices
	 	 	 	93	 
	15.4

	 	Computations
	 	 	 	93	 
	15.5

	 	Costs, Expenses and Taxes
	 	 	 	93	 
	15.6

	 	Assignments; Participations
	 	 	 	94	 
	15.7

	 	Register
	 	 	 	96	 
	15.8

	 	GOVERNING LAW
	 	 	 	96	 
	15.9

	 	Confidentiality
	 	 	 	96	 
	15.10

	 	Severability
	 	 	 	97	 
	15.11

	 	Nature of Remedies
	 	 	 	97	 
	15.12

	 	Entire Agreement
	 	 	 	97	 
	15.13

	 	Counterparts
	 	 	 	97	 
	15.14

	 	Successors and Assigns
	 	 	 	97	 
	15.15

	 	Captions
	 	 	 	97	 
	15.16

	 	Patriot Act Notice
	 	 	 	98	 
	15.17

	 	Indemnification by the Loan Parties
	 	 	 	98	 
	15.18

	 	Nonliability of Lenders
	 	 	 	98	 
	15.19

	 	FORUM SELECTION AND CONSENT TO JURISDICTION
	 	 	 	99	 
	15.20

	 	WAIVER OF JURY TRIAL
	 	 	 	99	 
	15.21

	 	Other Waivers
	 	 	 	100	 
	15.22

	 	Joint and Several Liability
	 	 	 	100	 
	15.23

	 	Revival and Reinstatement of Obligations
	 	 	 	101	 

-v-

 

	 	 	 
	ANNEXES

	 
	 	 
	ANNEX A

	 	Lenders and Pro Rata Shares
	ANNEX B

	 	Addresses for Notices
	ANNEX C

	 	Schedule of Sources and Uses
	 
	 	 
	SCHEDULES

	 
	 	 
	SCHEDULE 1.1

	 	Existing Letters of Credit
	SCHEDULE 9.6

	 	Litigation and Contingent Liabilities
	SCHEDULE 9.8

	 	Subsidiaries
	SCHEDULE 9.9

	 	Pension Plans
	SCHEDULE 9.15

	 	Environmental Matters
	SCHEDULE 9.16

	 	Insurance
	SCHEDULE 9.17

	 	Real Property
	SCHEDULE 9.19

	 	Intellectual Property
	SCHEDULE 9.21

	 	Labor Matters
	SCHEDULE 9.26

	 	Other Debt
	SCHEDULE 10.11

	 	Specified Exempted Bank Accounts
	SCHEDULE 11.2

	 	Existing Liens
	SCHEDULE 11.10

	 	Investments
	SCHEDULE 12.1

	 	Debt to be Repaid
	SCHEDULE 12.1.1

	 	 List of Closing Documents
	SCHEDULE 12.1.17

	 	 Independent Director Provisions
	 
	 	 
	EXHIBITS

	 
	 	 
	EXHIBIT A-1

	 	Form of Amended and Restated Revolving Loan Note (Section 3.1)
	EXHIBIT A-2

	 	Form of Amended and Restated Term Loan Note (Section 3.1)
	EXHIBIT B

	 	Form of Compliance Certificate (Section 1.1)
	EXHIBIT C

	 	Form of Borrowing Base Certificate (Section 1.1)
	EXHIBIT D

	 	Form of Assignment Agreement (Section 15.6.1)
	EXHIBIT E

	 	Form of Notice of Borrowing (Section 2.2.2)
	EXHIBIT F

	 	Form of Notice of Conversion/Continuation (Section 2.2.3)
	EXHIBIT G

	 	Form of Joinder Agreement (Section 10.10)
	EXHIBIT H

	 	Form of Intercompany Note (Section 11.1)
	EXHIBIT I

	 	Form of Administrative Questionnaire

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 2, 2008 (this
“Agreement”) is entered into by and among KIDS LINE, LLC, a Delaware limited liability
company (“Kids Line”), SASSY, INC., an Illinois corporation (“Sassy”), LAJOBI,
INC., a Delaware corporation (“LaJobi”), I & J HOLDCO, INC., a Delaware corporation (“I &
J”), those other Domestic Wholly-Owned Subsidiaries (as defined below) that, in accordance with
Section 10.10 of this Agreement, may hereafter become parties hereto as “Borrowers”,
including without limitation, immediately upon the closing of the CoCaLo Acquisition (as defined
herein), COCALO, INC., a California corporation (“CoCaLo”) (Kids Line, Sassy, LaJobi, I &
J, following the CoCaLo Acquisition, CoCaLo, and such other Domestic Wholly-Owned Subsidiaries are
sometimes referred to herein collectively as the “Borrowers” and individually as a
“Borrower”), those Domestic Subsidiaries that are or, in accordance with Section
10.10 of this Agreement, may hereafter become parties hereto as Guarantors (such Domestic
Subsidiaries are sometimes referred to herein collectively as the “Guarantors” and
individually as a “Guarantor”), the financial institutions that are or may from time to
time become parties hereto (together with their respective successors and assigns, the
“Lenders”), LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, together with
its successors and assigns, “LaSalle”), as administrative agent (in such capacity, together
with its successors and assigns, the “Administrative Agent”) for the Lenders, SOVEREIGN
BANK, as Syndication Agent, WACHOVIA BANK, N.A., as Documentation Agent, and BANC OF AMERICA
SECURITIES LLC, as lead arranger (in such capacity, the “Lead Arranger”).

     Kids Line, Sassy, the Administrative Agent, certain Lenders and certain other parties entered
into that certain Credit Agreement dated as of March 14, 2006 (as amended prior to the date hereof,
the “Existing Credit Agreement”) pursuant to which the “Lenders” party thereto agreed to
make certain credit facilities available to the “Borrowers” party thereto. Pursuant to the request
of such Borrowers, the parties hereto have agreed to amend and restate the Existing Credit
Agreement in its entirety to add additional Borrowers, increase the amount of the term loan
facility and revolving credit facility (which includes letters of credit) available to the
Borrowers, permit the Target Acquisitions and make certain other amendments thereto, in each case,
upon the terms and conditions set forth herein.

     In consideration of the mutual agreements herein contained, the parties hereto agree as
follows:

SECTION 1 DEFINITIONS.

     1.1 Definitions. When used herein the following terms shall have the following
meanings:

     Account or Accounts is defined in the UCC.

     Account Control Agreement means a bank agency or other similar agreement with the
Administrative Agent, the applicable Loan Party and any financial institution at which such Loan
Party maintains a depositary or other account, in form and substance reasonably satisfactory to
the Administrative Agent, in order to give the Administrative Agent “control” (as defined in
the

 

 

UCC) of such account. “Account Control Agreement” shall also include any such agreement
executed and delivered pursuant to the Existing Credit Agreement.

     Account Debtor is defined in the UCC.

     Acquired Debt means mortgage Debt or Debt with respect to Capital Leases of a Person
existing at the time such Person became a Subsidiary or assumed by any Borrower or a Domestic
Wholly-Owned Subsidiary of a Borrower pursuant to a Permitted Acquisition (and not created or
incurred in connection with or in anticipation of such Permitted Acquisition) which would be
permitted pursuant to Section 11.4(d).

     Acquisition means any transaction or series of related transactions for the purpose of
or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the
assets of a Person, or of all or substantially all of any business or division of a Person, (b) the
acquisition of all of the outstanding Capital Securities (including the acquisition or termination
of any rights, warrants or options to acquire the Capital Securities) of any Person, or otherwise
causing any Person to become a Wholly-Owned Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is already a Wholly-Owned
Subsidiary).

     Acquisition Agreement means each of the LaJobi Acquisition Agreement and the CoCaLo
Acquisition Agreement and “Acquisition Agreements” means both such agreements.

     Acquisition Closing Date means, with respect to the CoCaLo Acquisition, the CoCaLo
Closing Date and with respect to the LaJobi Acquisition, the LaJobi Closing Date, as applicable.

     Acquisition Documents means the LaJobi Acquisition Documents and the CoCaLo
Acquisition Documents.

     Administrative Agent means LaSalle in its capacity as administrative agent for the
Lenders and the Fronting Bank hereunder and any successor thereto in such capacity.

     Administrative Questionnaire means an Administrative Questionnaire in substantially
the form of Exhibit I or any other form approved by the Administrative Agent.

     Affected Loan — see Section 8.3.

     Affiliate of any Person means (a) any other Person which, directly or indirectly,
controls or is controlled by or is under common control with such Person, (b) any officer or
director of such Person and (c) with respect to any Lender, any entity administered or managed by
such Lender or an Affiliate or investment advisor thereof and which is engaged in making,
purchasing, holding or otherwise investing in commercial loans. A Person shall be deemed to be
“controlled by” any other Person if such Person possesses, directly or indirectly, power to vote
10% or more of the securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managers or power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise. Unless expressly stated otherwise
herein, neither the Administrative Agent, the Fronting Bank nor any Lender shall be deemed an
Affiliate of any Loan Party or Subsidiary.

2

 

     Affiliated Account Debtors means, with respect to any Account Debtor, any other
Account Debtor who, to the best of the Chief Financial Officer’s knowledge (including after written
notice thereof from the Administrative Agent), controls, is controlled by, or is under common
control with, such Account Debtor. For purposes of this definition, the meaning of “control”
(including, with correlative meanings, “controlled by” and “under common control with”) is limited
to the direct or indirect legal or beneficial ownership of more than fifty percent (50%) of the
voting control or equity interests of an Account Debtor or an Affiliated Account Debtor.

     Agent Account means the account of the Administrative Agent into which funds of the
Loan Parties are to be remitted following an Event of Default pursuant to and in accordance with
the terms of the Account Control Agreements.

     Agent Fee Letter means the Amended and Restated Fee Letter dated as of the date hereof
among the Borrowers and the Administrative Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time).

     Agreement — see the Preamble.

     Applicable Margin means, for any day, the rate per annum set forth below opposite the
level (the “Level”) then in effect, it being understood that the Applicable Margin for (i)
LIBOR Loans shall be the percentage set forth under the column “LIBOR Margin,” (ii) Base Rate Loans
shall be the percentage set forth under the column “Base Rate Margin,” (iii) the Non-Use Fee Rate
shall be the percentage set forth under the column “Non-Use Fee Rate” and (iv) the L/C Fee shall be
the percentage set forth under the column “L/C Fee Rate”:

	 	 	 	 	 	 	 	 	 	 	 
	Level	 	Total Debt	 	LIBOR	 	Base Rate	 	Non-Use	 	L/C Fee
	Status	 	to EBITDA Ratio	 	Margin	 	Margin	 	Fee Rate	 	Rate
	I	 	Greater than or
	 	3.00%	 	1.50%	 	0.60%	 	3.00%
	 	 	equal to 3.00:1
	 	 	 	 	 	 	 	 
	II	 	Greater than or
	 	2.75%	 	1.25%	 	0.55%	 	2.75%
	 	 	equal to 2.50:1 but
less than 3.00:1
	 	 	 	 	 	 	 	 
	III	 	Greater than or
	 	2.50%	 	1.00%	 	0.50%	 	2.50%
	 	 	equal to 2.00:1 but
less than 2.50:1
	 	 	 	 	 	 	 	 
	IV	 	Greater than or
	 	2.25%	 	0.75%	 	0.45%	 	2.25%
	 	 	equal to 1.50:1 but
less than 2.00:1
	 	 	 	 	 	 	 	 
	V	 	Less than 1.50:1
	 	2.00%	 	0.50%	 	0.40%	 	2.00%

     The LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C Fee Rate shall be
determined and adjusted, to the extent applicable, on the first (1st) Business Day after the Loan
Party Representative provides the Administrative Agent the annual and quarterly financial
statements and other information pursuant to Sections 10.1.1 or 10.1.2(a), as
applicable, and the related Compliance Certificate, pursuant to Section 10.1.3.
Notwithstanding anything
contained in this paragraph to the contrary, (a) if the Loan Party Representative fails to
deliver such financial statements and Compliance Certificate in accordance with the provisions of
Sections 10.1.1, 10.1.2(a) and 10.1.3, the LIBOR Margin, the Base Rate
Margin, the Non-Use Fee Rate and the L/C Fee Rate shall be based upon one Level higher than the
Level then

3

 

currently in effect (i.e., a higher Level reflects a higher rate) beginning on the date
such financial statements and Compliance Certificate were required to be delivered until the first
(1st) Business Day after such financial statements and Compliance Certificate are actually
delivered, whereupon the Applicable Margin shall be determined by the then applicable Level; and
(b) no reduction to any Applicable Margin shall become effective at any time when an Event of
Default or Unmatured Event of Default has occurred and is continuing. Notwithstanding the
foregoing, the Applicable Margin to be in effect on the Closing Date and thereafter, until delivery
of the financial statements and Compliance Certificate required to be delivered with respect to the
Borrowers and their Subsidiaries for the Fiscal Quarter ending June 30, 2008, shall be based on
Level II.

     Approved Fund means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.

     Asset Disposition means the sale, lease, assignment or other transfer for value by any
Loan Party to any Person (other than a Loan Party) of any asset or right of such Loan Party
(including, the loss, destruction or damage of any thereof or any actual condemnation,
confiscation, requisition, seizure or taking thereof) (each, a “Disposition”), other than
(a) the Disposition of any asset which is to be replaced, and is in fact replaced, within 180 days
with another asset performing the same or a similar function, (b) the sale or lease of inventory in
the ordinary course of business and (c) other Dispositions in any Fiscal Year the Net Cash Proceeds
of which do not in the aggregate exceed $250,000.

     Assignee — see Section 15.6.1.

     Assignee Group — means two or more Assignees that are Affiliates of one another or
two or more Approved Funds managed by the same investment advisor.

     Assignment and Assumption means an assignment and assumption entered into by a Lender
and an Assignee (with the consent of any party whose consent is required by Section
15.6.1), and accepted by the Administrative Agent, in substantially the form of Exhibit
D or any other form approved by the Administrative.

     Attorney Costs means, with respect to any Person, all reasonable fees and charges of
any counsel to such Person, the reasonable allocable cost of internal legal services of such
Person, all reasonable disbursements of such internal counsel and all court costs and similar legal
expenses, in each case, without duplication.

     Bank of America means Bank of America, N.A. and its successors.

     Bank Product Agreements means those certain cash management service agreements entered
into from time to time between any Loan Party and LaSalle, any Lender or any of their respective
Affiliates in connection with any of the Bank Products.

     Bank Product Obligations means all obligations, liabilities, contingent reimbursement
obligations, fees, and expenses owing by the Loan Parties to LaSalle, any Lender or its respective
Affiliates pursuant to or evidenced by the Bank Product Agreements and irrespective

4

 

of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that a Loan Party is obligated to
reimburse to the Administrative Agent or LaSalle, any Lender or any of their respective Affiliates
as a result of the Administrative Agent or LaSalle any Lender or any of their respective Affiliates
purchasing participations or executing indemnities or reimbursement obligations with respect to the
Bank Products provided to the Loan Parties pursuant to the Bank Product Agreements.

     Bank Products means any service or facility extended to any Loan Party by LaSalle, any
Lender or any of their respective Affiliates including: (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, or (f) cash
management, including controlled disbursement, accounts or services.

     Bankruptcy Code means the United States Bankruptcy Code, Title 11 of United States
Code (11 U.S.C. § 101, et seq.), together with the rules promulgated thereunder, in each case, as
amended.

     Base Rate means at any time the greater of (a) the Federal Funds Rate plus 0.5% and
(b) the Prime Rate.

     Base Rate Loan means any Loan which bears interest at or by reference to the Base
Rate.

     Base Rate Margin — see the definition of Applicable Margin.

     Board of Directors means, with respect to the Parent, the board of directors of the
Parent or any committee thereof duly authorized to act on behalf of the board of directors.

     Borrower and Borrowers  — see the Preamble.

     Borrowing Base means an amount equal to:

     (A) means an amount equal to the total of (a) up to 85% of the unpaid amount of all Eligible
Accounts plus (b) the lesser of (1) $25,000,000 and (2) up to 55% of the value of all
Eligible Inventory valued at the lower of cost or market; and minus

     (B) the Rent Reserve, if any, in effect at such time; and minus

     (C) the estimated aggregate amount of the Specified Hedging Obligations as determined in good
faith as between the Administrative Agent, the Loan Party Representative and the counterparty on
such Specified Hedging Agreements; and minus

     (D) such other reserves as the Administrative Agent elects, in its commercially reasonable
credit judgment after consultation with the Loan Party Representative, to establish from time to
time.

     Borrowing Base Certificate means a certificate substantially in the form of
Exhibit C.

     BSA — see Section 10.4.

5

 

     Business Day means any day on which commercial banks are open for commercial banking
business in Chicago, Illinois and New York, New York and, in the case of a Business Day which
relates to a LIBOR Loan, on which dealings are carried on in the London interbank eurodollar
market.

     Capital Expenditures means with respect to any Person all expenditures which, in
accordance with GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of such Person, including expenditures in respect of Capital Leases; provided, that for
purposes of this Agreement, the Fixed Charge Coverage Ratio or compliance with Section
11.13.3, the reinvestment of sale or insurance proceeds arising from a sale (permitted
hereunder) or casualty loss of a capital asset in replacement capital assets having the same or
substantially similar use as the affected capital asset shall not be included as a Capital
Expenditure hereunder to the extent of such reinvestment.

     Capital Lease means, with respect to any Person, any lease of (or other agreement
conveying the right to use) any real, personal or mixed property by such Person that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of such Person.

     Capital Securities means, with respect to any Person, all shares, interests,
participations or other equivalents (however designated, whether voting or non-voting) of such
Person’s capital, whether now outstanding or issued or acquired after the Closing Date, including
common shares, preferred shares, membership interests in a limited liability company, limited or
general partnership interests in a partnership, interests in a trust, interests in other
unincorporated organizations or any other equivalent of such ownership interest.

     Cash Collateralize means to deliver cash collateral to the Administrative Agent in the
amount equal to 105% of the sum of (x) the Stated Amount plus (y) the amount of unpaid letter of
credit fees then accrued and thereafter scheduled to accrue for the duration of the outstanding
Letters of Credit pursuant to Section 5.2(a) and (b), to be held as cash collateral
for outstanding Letters of Credit pursuant to documentation reasonably satisfactory to the
Administrative Agent. Derivatives of such term have corresponding meanings.

     Cash Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not
more than one year after such time, issued or guaranteed by the United States Government or any
agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or
corporate demand notes, in each case (unless issued by a Lender, its Affiliate or its holding
company) rated at least A-2 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. or P-2 by Moody’s Investors Service, Inc., (c) any certificate of deposit, time
deposit or banker’s acceptance, maturing not more than one year after such time, or
any overnight Federal Funds transaction that is issued or sold by LaSalle or any Lender or its
holding company (or by a commercial banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not less than $250,000,000),
(d) any repurchase agreement entered into with any Lender (or commercial banking institution of the
nature referred to in clause (c)) which (i) is secured by a fully perfected security
interest in any obligation of the type described in any of clauses (a) through (c)
above and (ii) has a market value at the time such repurchase agreement is entered into of not less
than 100% of the repurchase obligation of such Lender (or other commercial banking institution)

6

 

thereunder and (e) money market accounts or mutual funds in which 90% or more of the assets
invested satisfy the foregoing requirements, and (f) other short term liquid investments approved
in writing by the Administrative Agent.

     Change of Control means each occurrence of any of the following:

     (a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange
Act), other than Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of 50.1% or more of the Capital Securities of the Parent
having the right to vote for the election of members of the Board of Directors,

     (b) a majority of the members of the Board of Directors do not constitute Continuing
Directors,

     (c) the common stock of the Parent ceases to be listed and traded on a national stock
exchange;

     (d) the Parent ceases to own and control, directly or indirectly, 100% of the shares of the
Capital Securities of the Borrowers, unless otherwise permitted hereunder,

     (e) any Borrower ceases to own and control, directly or indirectly, 100% of the shares of the
Capital Securities of any Loan Party which is its Subsidiary, unless otherwise permitted hereunder,
or

     (f) (i) the Parent consolidates with or merges with or into another entity (other than a Loan
Party that is a Domestic Wholly-Owned Subsidiary) and is not the surviving entity or (ii) conveys,
transfers or leases all or substantially all of its property and assets to any Person (other than a
Loan Party that is a Domestic Wholly-Owned Subsidiary).

     Chief Financial Officer means the chief financial officer of the Parent.

     Closing Date — see Section 12.1.

     CoCaLo see the Preamble.

     CoCaLo Acquisition means the purchase by I & J of all of the issued and outstanding
Capital Securities of CoCaLo, Inc. on the CoCaLo Closing Date pursuant to and in accordance with
the CoCaLo Acquisition Agreement and the other CoCaLo Acquisition Documents.

     CoCaLo Acquisition Agreement means that certain Stock Purchase Agreement dated as of
April 1, 2008, among I & J, as Buyer, and the CoCaLo Sellers, pursuant to which I & J will purchase
all of the issued and outstanding Capital Securities of CoCaLo upon the terms and conditions set
forth therein (as such agreement is in effect on the Closing Date and without giving effect to any
amendment or other modification thereof after such date, except to the extent permitted by
Section 11.11 hereof).

     CoCaLo Acquisition Documents means the CoCaLo Acquisition Agreement and all other
agreements or instruments executed in connection with the CoCaLo Acquisition (in each case, as

7

 

in
effect on the Closing Date and without giving effect to any amendment or other modification thereof
after such date, except to the extent permitted by Section 11.11 hereof), including without
limitation, the CoCaLo Note and the Kids Line/CoCaLo Guaranty.

     CoCaLo Closing Date means the date on which the CoCaLo Acquisition is consummated in
accordance with the terms of the CoCaLo Acquisition Documents.

     CoCaLo Note means that certain promissory note issued by I & J in favor of the CoCaLo
Sellers dated as of the CoCaLo Closing Date and issued pursuant to Section 2.5(b) of the
CoCaLo Acquisition Agreement (as in effect on the Closing Date and without giving effect to any
amendment or other modification thereof after such date, except to the extent permitted by
Section 11.11 hereof).

     CoCaLo Sellers means Renee Pepys Lowe and Stanley Lowe.

     Code means the Internal Revenue Code of 1986.

     Collateral has the meaning set forth in the Guaranty and Collateral Agreement.

     Collateral Access Agreement means an agreement in form and substance reasonably
satisfactory to the Administrative Agent pursuant to which a mortgagee or lessor of real property
on which Collateral is stored or otherwise located, or a warehouseman, processor or other bailee of
Inventory or other property owned by any Loan Party, acknowledges the Liens of the Administrative
Agent and waives or, in the reasonable discretion of the Administrative Agent, subordinates on
terms reasonably acceptable to the Administrative Agent, any Liens held by such Person on such
property, and, in the case of any such agreement with a mortgagee or lessor, permits the
Administrative Agent reasonable access to and use of such real property following the occurrence
and during the continuance of an Event of Default to assemble, complete and sell any Collateral
stored or otherwise located thereon. “Collateral Access Agreement” shall also include any such
agreement executed and delivered pursuant to the Existing Credit Agreement.

     Collateral Documents means, collectively, the Guaranty and Collateral Agreement, the
Pledge Agreement, the Equitable Mortgage (Australia), the Equitable Mortgage (UK), each Mortgage,
each Collateral Access Agreement, each Account Control Agreement and any other agreement or
instrument pursuant to which any Loan Party, any Subsidiary or any other Person grants or purports
to grant Collateral to the Administrative Agent for the benefit of the Lenders or otherwise relates
to such Collateral, in each case, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

     Commitment means, as to any Lender, such Lender’s commitment to make Revolving Loans,
a Term Loan and/or to issue or participate in Letters of Credit, in each case as applicable under
this Agreement and “Commitments” means the Revolving Commitments and the Term Loan Commitments of
all Lenders. The initial amount of each Lender’s Commitment to make Loans is set forth on
Annex A.

     Compliance Certificate means a Compliance Certificate in substantially the form of
Exhibit B.

8

 

     Computation Period means each period of four consecutive Fiscal Quarters ending on the
last day of a Fiscal Quarter.

     Consolidated Net Income means, with respect to the Borrowers and their consolidated
Subsidiaries, on a consolidated basis, for any period, the net income (or loss) of the Borrowers
and their consolidated Subsidiaries for such period, in each case, determined in accordance with
GAAP, but excluding any extraordinary after-tax gains and losses, any non-recurring gains or
losses, or any non-cash gains or losses from Asset Dispositions, any non-cash restructuring
charges, any tax refunds, net operating losses or other net tax benefits and any after-tax gains
and losses from discontinued operations.

     Contingent Liability means, with respect to any Person, each obligation and liability
of such Person and all such obligations and liabilities of such Person incurred pursuant to any
agreement, undertaking or arrangement by which such Person: (a) guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise,
to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise
to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any
other Person in any manner (other than by endorsement of instruments in the course of collection),
including any indebtedness, dividend or other obligation which may be issued or incurred at some
future time; (b) guarantees the payment of dividends or other distributions upon the Capital
Securities of any other Person; (c) undertakes or agrees (whether contingently or otherwise): (i)
to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any
other Person or any property or assets constituting security therefor, (ii) to advance or provide
funds for the payment or discharge of any indebtedness, obligation or liability of any other Person
(whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or
to maintain solvency, assets, level of income, working capital or other financial condition of any
other Person, or (iii) to make payment to any other Person other than for value received; (d)
agrees to lease property or to purchase securities, property or services from such other Person
with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability
of such other Person to make payment of the indebtedness or obligation; (e) to induce the issuance
of, or in connection with the issuance of, any letter of credit for the benefit of such other
Person; or (f) undertakes or agrees otherwise to assure a creditor against loss. The amount of any
Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the
outstanding principal amount (or maximum permitted principal amount, if larger) of the
indebtedness, obligation or other liability guaranteed or supported thereby. The term “Contingent
Liability” shall exclude endorsements of instruments for deposit or collection
in the ordinary course of business and product warranties extended in the ordinary course of
business.

     Continuing Director means (a) any member of the Board of Directors who was a director
of the Parent on the Closing Date, and (b) any individual who becomes a member of the Board of
Directors after the Closing Date if such individual was appointed or nominated for election to the
Board of Directors by a majority of the Continuing Directors.

     Contractual Redemption means a redemption or repurchase required pursuant to a
contractual requirement to make such redemption or repurchase which is either in effect as of the

9

 

Closing Date or which is entered into thereafter in accordance with the ordinary course of the
Parent’s business.

     Controlled Group means all members of a controlled group of corporations, all members
of a controlled group of trades or businesses (whether or not incorporated) under common control
and all members of an affiliated service group which, together with the Parent or any of its
Subsidiaries, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.

     Debt — of any Person means, without duplication, (a) all indebtedness of such Person,
(b) all borrowed money of such Person, whether or not evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person as lessee under Capital Leases which have
been or should be recorded as liabilities on a balance sheet of such Person in accordance with
GAAP, (d) all obligations of such Person to pay the deferred purchase price of property or services
(excluding trade accounts payable or other accounts payable incurred in the ordinary course of such
Person’s business), (e) all indebtedness secured by a Lien on the property of such Person, whether
or not such indebtedness shall have been assumed by such Person; provided that if such
Person has not assumed or otherwise become liable for such indebtedness, such indebtedness shall be
measured at the fair market value of such property securing such indebtedness at the time of
determination, (f) all obligations, contingent or otherwise, with respect to the face amount of all
letters of credit (whether or not drawn), bankers’ acceptances and similar obligations issued for
the account of such Person (including the Letters of Credit), (g) all Hedging Obligations of such
Person, (h) all Contingent Liabilities of such Person, (i) all Debt of any partnership of which
such Person is a general partner, (j) all monetary obligations of such Person under (i) so called
synthetic, off-balance sheet or tax retention leases (solely for purposes of calculating compliance
with the financial covenants set forth in Section 11.13 or the Total Debt to EBITDA Ratio
for purposes of determining the Applicable Margin, discounted to present value at a reasonable
capitalization rate fixed reasonably acceptable to the Administrative Agent), or (ii) an agreement
for the use or possession of property creating obligations that do not appear on the balance sheet
of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized
as the indebtedness of such Person (without regard to accounting treatment), (k) any Capital
Securities or other equity instrument, whether or not mandatorily redeemable, that under GAAP is
characterized as debt, whether pursuant to Financial Accounting Standards Board Issuance No. 150 or
otherwise, (l) the Subordinated Debt, if any, and (m) the CoCaLo Note; it being acknowledged and
agreed that the Earnout Consideration shall not be deemed to constitute “Debt” for purposes of this
Agreement.

     Debt to be Repaid means Debt listed on Schedule 12.1.

     Debtor Relief Laws means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or
other applicable jurisdictions from time to time in effect and affecting the rights of creditors
generally.

     Defaulting Lender — see Section 2.1.1(b).

10

 

     Designated Proceeds — see Section 6.2.2(a).

     Disposition — see the definition of “Asset Disposition.”

     Disproportionate Advance — see Section 2.2.2(i).

     Dollar and the sign “$” mean lawful money of the United States of America.

     Domestic Wholly-Owned Subsidiary means any wholly-owned direct or indirect Subsidiary
of a Loan Party which is organized under the laws of any state in the United States of America.
Unless the context otherwise requires, each reference to a Domestic Wholly-Owned Subsidiary herein
shall be a reference to a Domestic Wholly-Owned Subsidiary of a Borrower.

     Earnout Consideration means (i) the “Additional Earnout Payment” as defined in the
CoCaLo Acquisition Agreement and (ii) the “Earnout Consideration” as defined in the LaJobi
Acquisition Agreement. As used herein, the term “Earnout Consideration” shall also include any
payments in respect of any guaranty of the Earnout Consideration, including, without limitation,
pursuant to the Kids Line/CoCaLo Guaranty. “Earnout Consideration” shall not include any amounts
owing under the CoCaLo Note.

     Earnout Consideration Conditions Precedent means, with respect to any proposed payment
of any Earnout Consideration (including, without limitation, under or pursuant to any guaranty
thereof), that both before and immediately after giving effect to any such payment, (i) no Event of
Default or Unmatured Event of Default then exists or would result therefrom, (ii) Excess Revolving
Loan Availability will equal or exceed $9,000,000 and (iii) no violation of the financial covenants
set forth in Sections 11.13.1, 11.13.2 or 11.13.3 would then exist or
would, on a pro forma basis result therefrom, as such are certified in writing by the Chief
Financial Officer delivered to the Administrative Agent setting forth the calculations of pro forma
Excess Revolving Loan Availability and the pro forma calculations of such financial covenants
(after giving effect to such payments) in detail reasonably acceptable to the Administrative Agent
and which calculations are confirmed and approved by the Administrative Agent.

     Earnout Default —  see Section 13.1.14.

     Earnout Payees means, collectively, the CoCaLo Sellers and LaJobi Industries.
“Earnout Payee” means any of the foregoing.

     EBITDA means, for any period, with respect to the Borrowers and their consolidated
Subsidiaries on a consolidated basis, Consolidated Net Income for such period plus (minus), to the
extent deducted (added) in determining such Consolidated Net Income, (i) Interest Expense, (ii)
income tax expense, (iii) depreciation, (iv) amortization, (v) other non-cash charges (gains), (vi)
if expensed, reasonable costs, expenses and fees incurred in connection with the negotiation,
execution and delivery of the Loan Documents and the financings contemplated thereby, (vii) if
expensed, reasonable costs, expenses and fees incurred in connection with the negotiation,
execution and delivery of the Acquisition Documents and the transactions contemplated thereby, but
not to exceed $5,000,000, in aggregate, (viii) if expensed, the reasonable fees and expenses paid
to any Independent Director and incremental auditor’s fees and expenses relating to the preparation
of separate audited financial statements of the Borrowers (distinct from those of the

11

 

Parent) as
required pursuant to Section 10.1.1(a) and (ix) non-cash transaction losses (gains) due
solely to fluctuations in currency values, in each case, during such period. It being agreed
however that for purposes of calculating the Total Debt to EBITDA Ratios for Section
11.13.2 for Fiscal Quarters ending June 30, 2008 through and including December 31, 2008, (1)
EBITDA for the Computation Period ending June 30, 2008 shall be deemed to equal EBITDA for the
Fiscal Quarter ended June 30, 2008 multiplied by 4, (2) EBITDA for the Computation Period ending
September 30, 2008 shall be deemed to equal EBITDA for the six (6) month period ending September
30, 2008 multiplied by 2, and (3) EBITDA for the Computation Period ending December 31, 2008 shall
be deemed to equal EBITDA for the nine (9) month period ending December 31, 2008 multiplied by
1.33.

     Equitable Mortgage (Australia) means that certain Equitable Mortgage of Shares dated
as of the Closing Date (as the same may be amended, restated, supplemented or otherwise modified
from time to time) executed and delivered by Kids Line, as mortgagor, in favor of Administrative
Agent for the benefit of the Lenders, as mortgagee, with respect to its interest in Kids Line
Australia Pty. LTD, a corporation organized under the laws of Australia.

     Equitable Mortgage (UK) means that certain Equitable Mortgage of Shares dated as of
the Closing Date (as the same may be amended, restated, supplemented or otherwise modified from
time to time) executed and delivered by Kids Line, as mortgagor, in favor of Administrative Agent
for the benefit of the Lenders, as mortgagee, with respect to its interest in Kids Line UK LTD, a
corporation organized under the laws of England.

     Eligible Account means an Account (other than any portion of which is owing in respect
of sales, excise or similar taxes) owing to a Borrower which is acceptable for lending purposes to
the Administrative Agent in its commercially reasonable credit judgment. Without limiting the
Administrative Agent’s aforementioned credit judgment, the Administrative Agent shall, in general,
consider an Account to be an Eligible Account if it meets, and so long as if continues to meet, the
following requirements:

     (a) it arises from the final, bona fide sale or lease of goods or the rendering of services
which have been fully performed by such Borrower; and if it arises from the sale or lease of goods,
(i) such goods comply with the relevant Account Debtor’s specifications (if any) and have been
delivered to such Account Debtor and (ii) such Borrower has possession of delivery receipts
evidencing such delivery;

     (b) it (i) is owned by such Borrower, (ii) is subject to a perfected, first priority Lien in
favor of the Administrative Agent and (iii) is not subject to any other assignment, claim or Lien;
provided that, if subject to any such other assignment, claim or Lien, such Account shall be deemed
ineligible pursuant to this clause (b) only to the extent of the amount of such assignment,
claim or Lien;

     (c) it (i) is a valid, legally and enforceable obligation of the Account Debtor with respect
thereto, (ii) is not subject to (x) the fulfillment of any condition whatsoever or any
counterclaim, offset, credit, allowance, discount, rebate, or adjustment by the Account Debtor with
respect thereto, or (y) any claim by such Account Debtor denying liability thereunder in whole or
in part; provided that only such portion of such Account subject to such counterclaim,

12

 

offset,
credit, allowance, discount, rebate, adjustment or liability shall be deemed ineligible pursuant to
this clause (c)(ii), and (iii) the Account Debtor has not refused to accept and/or has not
returned or offered to return any of the goods or services which are the subject of such Account;

     (d) there is no bankruptcy, insolvency or liquidation proceeding pending by or against the
Account Debtor or any Affiliated Account Debtor with respect thereto;

     (e) the Account Debtor with respect thereto is a resident or citizen of, and is located
within, the United States (including Puerto Rico, the U.S. Virgin Islands and Guam) or Canada
(excluding Newfoundland, the Northwest Territories or Nunavut), unless the sale of goods or
rendering of services giving rise to such Account is on letter of credit, bankers’ acceptance or
other credit support terms reasonably acceptable to the Administrative Agent (any such Account in
respect of which the Account Debtor thereon is a resident of Canada, being a “Canadian
Account”), and such Account is denominated in United States dollars, or in the case of a
Canadian Account, Canadian dollars;

     (f) it is not (i) an Account arising from a “sale on approval,” “sale or return,”
“consignment” or “bill and hold” or subject to any other repurchase or return agreement, or (ii)
subject to a reserve or contra-account established by such Borrower for potential returns or
refunds (without duplication of any other reserve or deductions regarding such returns or refunds);
provided that only such portion of such Account in the amount of such reserve or contra-account
shall be deemed ineligible pursuant to this clause (f)(ii);

     (g) it is not an Account with respect to which possession and/or control of the goods sold
giving rise thereto is held, maintained or retained by such Borrower (or by any agent or custodian
of such Borrower) for the account of or subject to further and/or future direction from the Account
Debtor with respect thereto;

     (h) it arises in the ordinary course of business of such Borrower;

     (i) if the Account Debtor is the United States or any state or local government, or any
department, agency or instrumentality thereof, such Borrower has assigned its right to payment of
such Account to the Administrative Agent pursuant to the Assignment of Claims Act of 1940 or any
comparable state or local law, as applicable, and evidence (reasonably satisfactory to the
Administrative Agent) of such assignment has been delivered to the Administrative Agent;

     (j) if such Borrower maintains a credit limit for an Account Debtor, the aggregate dollar
amount of Accounts due from such Account Debtor and its Affiliated Account Debtors, including such
Account, does not exceed such credit limit; provided that only such portion of such Account that
exceeds such credit limit shall be deemed ineligible pursuant to this clause (j);

     (k) it is not an Account evidenced by chattel paper or an instrument;

     (l) such Account is evidenced by an invoice delivered to the related Account Debtor and is not
more than (i) 60 days past the due date thereof or (ii) 90 days past the original invoice date
thereof, in each case according to the original terms of sale; provided that up to $5,000,000 of
Accounts evidenced by invoices not more than (x) 60 days past the due date thereof or (y) 180

13

 

days
past the original invoice date thereof but which otherwise meet all other eligibility criteria
hereunder shall not be deemed ineligible pursuant to this clause (l);

     (m) it is not owing by an Account Debtor in respect of which 35% or more of the aggregate
dollar amount of all Accounts owing by such Account Debtor and its Affiliated Account Debtors are
ineligible pursuant to clause (l) immediately above;

     (n) it is not an Account with respect to an Account Debtor that is located in any jurisdiction
which has adopted a statute or other requirement with respect to which any Person that obtains
business from within such jurisdiction must file a notice of business activities report or make any
other required filings in a timely manner in order to enforce its claims in such jurisdiction’s
courts unless (i) such notice of business activities report has been duly and timely filed or such
Borrower is exempt from filing such report and has provided the Administrative Agent with
reasonably satisfactory evidence of such exemption or (ii) the failure to make such filings may be
cured retroactively by such Borrower for a nominal fee;

     (o) the Account Debtor or Affiliated Account Debtor with respect thereto is not (i) a Loan
Party or an Affiliate of a Loan Party or (ii) a director, officer, employee or agent of a Loan
Party or an Affiliate of a Loan Party;

     (p) if the aggregate amount of all Accounts owed by the Account Debtor and its Affiliated
Account Debtors thereon exceeds 25% of the aggregate amount of all Eligible Accounts at such time,
then all Accounts owed by such Account Debtor or Affiliated Account Debtors in excess of such
amount shall be deemed ineligible; provided, however that (i) with respect to Toys
‘R’ Us and Babies ‘R’ Us, collectively, if the aggregate amount of all Accounts owed by the such
entities (including those owned by its Affiliated Account Debtors) thereon exceeds, collectively,
55% of the aggregate amount of all Eligible Accounts at such time, or (ii) with respect to any
other Account Debtor and its Affiliated Account Debtors that have a long-term unsecured debt rating
of BBB or better by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc. or the equivalent rating from Moody’s Investor Services, Inc., if the aggregate amount of all
Accounts owed by such entity (including those owned by its Affiliated Account Debtors) thereon
exceeds, collectively, 35% of the aggregate amount of all Eligible Accounts at such time, then, in
any such case, all Accounts owed by the applicable Account Debtor(s) and its Affiliated Account
Debtors in excess of the amounts determined above shall be deemed ineligible;

     (q) it is not an Account (i) with respect to which any representation or warranty contained in
this Agreement or any other Loan Document is untrue in any material respect (or, if such
representation or warranty is qualified by materiality or Material Adverse Effect, in any respect),
(ii) which violates any of the covenants contained in this Agreement, any other Loan Document or
the agreement or contract under which it arises in any material respect (or, if such covenant is
qualified by materiality or Material Adverse Effect, in any respect), or (iii) which arises out of
a contract or order which fails in any material respect to comply with the requirements of
applicable law;

     (r) it is not an Account for which such Borrower has received any prepayment or a deposit in
respect of such Account; provided, that the amount of such Account in excess of the

14

 

amount of any
such prepayment and/or deposit shall not be deemed ineligible pursuant to this clause (r);
and

     (s) it does not arise from the sale of goods covered under any license agreement, distribution
agreement or other similar agreement that prohibits the granting of Liens in the proceeds of such
goods in favor of the Administrative Agent to secure the Obligations (and such prohibition has not
been waived).

An Account which is at any time an Eligible Account, but which subsequently fails to meet any of
the foregoing requirements shall forthwith cease to be an Eligible Account. Further, with respect
to any Account, if the Administrative Agent or the Required Lenders at any time hereafter determine
in its or their reasonable credit judgment that the prospect of payment or performance by the
Account Debtor with respect thereto is materially impaired for any reason whatsoever, such Account
shall cease to be an Eligible Account after consultation with, and notice of such determination is
given to, the Loan Party Representative.

     Eligible Assignee means (i) a Lender, (ii) an Approved Fund or (iii) an Affiliate of a
Lender or an Approved Fund.

     Eligible Inventory means Inventory of a Borrower which is acceptable for lending
purposes to the Administrative Agent in its commercially reasonable credit judgment. Without
limiting the Administrative Agent’s aforesaid credit judgment, the Administrative Agent shall, in
general, consider Inventory to be Eligible Inventory if it meets, and for so long as it continues
to meet, each of the following requirements:

     (a) it (i) is owned by such Borrower, (ii) is subject to a perfected, first priority Lien in
favor of the Administrative Agent and (iii) is not subject to any other assignment, claim or Lien;
provided that, if subject to any such other assignment, claim or lien, such Inventory shall be
deemed ineligible pursuant to this clause (a) only to the extent of the amount of such
assignment, claim or Lien;

     (b) it is salable and not slow-moving, obsolete or discontinued;

     (c) it is in the possession and control of a Loan Party and it is stored and held in
facilities owned by a Loan Party (and not subject to a mortgage other than a mortgage in favor of
the Administrative Agent) or, if such facilities are not so owned, the Administrative Agent is in
possession of a Collateral Access Agreement from any lessor or mortgagee thereof with respect
thereto or a Rent Reserve is then in effect with respect to such location;

     (d) it is not Inventory produced in violation of the Fair Labor Standards Act and subject to
the “hot goods” provisions contained in Title 29 U.S.C. §215;

     (e) it is not subject to any agreement or license which would restrict the Administrative
Agent’s ability to sell or otherwise dispose of such Inventory or which contains any prohibition on
the Administrative Agent’s Lien therein to secure the Obligations (unless such prohibition shall
have been waived);

15

 

     (f) it is located at one of the owned or leased locations of such Borrower identified on
Schedule 4 of the Guaranty and Collateral Agreement or otherwise identified to the
Administrative Agent pursuant to Section 5.3 thereof in the United States or in any
territory or possession of the United States that has adopted Article 9 of the Uniform Commercial
Code;

     (g) it is not “in transit” to such Borrower or held by such Borrower on consignment;
provided that up to $5,000,000 of Inventory which is “in transit” (the
“In-Transit Inventory”) shall be deemed eligible hereunder so long as such In-Transit
Inventory (i) otherwise meets all other criteria for eligibility hereunder, (ii) the In-Transit
Inventory is subject to bills of lading, air bills or other similar documentation (collectively,
the “Shipping Documents”) which are adequate as determined by the Administrative Agent in
its commercially reasonable credit judgment; (iii) the In-Transit Inventory is fully-insured under
an insurance policy naming the Administrative Agent as loss payee, (iv) the applicable Borrower has
title to such an In-Transit Inventory, (v) such In-Transit Inventory shall be listed as such on the
report required pursuant to Section 10.1.6 for the months in which such In-Transit
Inventory is in transit, and (vi) the Borrowers have, if and to the extent requested by the
Administrative Agent at any time during the continuation of an Unmatured Event of Default or Event
of Default, delivered such Shipping Documents to the Administrative Agent, appropriately endorsed,
together with a power of attorney to allow the Administrative Agent to list itself as “consignee”
thereunder;

     (h) it is finished goods and is not work-in-progress, display inventory, supply items,
packaging, tooling, samples or literature;

     (i) it is not identified to any purchase order or contract to the extent progress or advance
payments are received with respect to such Inventory; and

     (j) it does not breach any of the representations, warranties or covenants pertaining to
Inventory set forth in the Loan Documents in any material respect (or, if such representation or
warranty is qualified by materiality or Material Adverse Effect, in any respect).

Inventory which is at any time Eligible Inventory but which subsequently fails to meet any of the
foregoing requirements shall forthwith cease to be Eligible Inventory.

     Environmental Claims means all claims, however asserted, by any governmental,
regulatory or judicial authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the environment.

     Environmental Indemnity means the Environmental Indemnity Agreement dated as of the
Closing Date (as the same may be amended, restated, supplemented or otherwise modified from time to
time) executed and delivered by the Borrowers in favor of Administrative Agent and the other
indemnified parties.

     Environmental Laws means all present or future federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all administrative or
judicial orders, consent agreements, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authority, in each case relating to any matter
arising out of or relating to public health and safety, or pollution or protection of the
environment or workplace, including any of the foregoing relating to the presence, use, production,

16

 

generation, handling, transport, treatment, storage, disposal, distribution, discharge, emission,
release, threatened release, control or cleanup of any Hazardous Substance.

     ERISA means the Employee Retirement Income Security Act of 1974.

     Event of Default means any of the events described in Section 13.1.

     Excess Revolving Loan Availability means at any time the difference between Revolving
Loan Availability and the Revolving Outstandings at such time.

     Exchange Act means the Securities Exchange Act of 1934, as amended.

     Excluded Taxes means taxes (i) based upon, or measured by, the Lender’s or
Administrative Agent’s (or a branch of the Lender’s or Administrative Agent’s) overall net income,
overall net receipts, or overall net profits (including franchise taxes imposed in lieu of such
taxes), but only to the extent such taxes are imposed by a taxing authority (a) in the United
States or a jurisdiction (or political subdivision thereof) under the laws of which such Lender or
Administrative Agent is organized, (b) in a jurisdiction which the Lender’s or Administrative
Agent’s principal office is located, or (c) in a jurisdiction in which such Lender or
Administrative Agent maintains a lending office (or branch), including the lending office in
respect of which payments under this Agreement are made is located, or in which such Lender or
Administrative Agent is a resident for income tax purposes and (ii) branch profits taxes.

     Existing Credit Agreement  — see the Preamble.

     Existing Letters of Credit means those Letters of Credit issued under the Existing
Credit Agreement and outstanding as of the Closing Date, as such Existing Letters of Credit are
listed on Schedule 1.1.

     Existing Term Loans — see the definition of “Term Loans.

     Extraordinary Receipts means any cash received by or paid to or for the account of any
Person not in the ordinary course of business (and not otherwise in connection with a transaction
of the type included in the definition of Asset Disposition), including (i) tax refunds (but only
to the extent exceeding $1,000,000, in aggregate in any Fiscal Year), (ii) proceeds of insurance
(including business interruption insurance), (iii) indemnity payments (but only to the extent
exceeding $1,000,000, in aggregate in any Fiscal Year) and (iv) any purchase price
adjustments; provided, however, that an Extraordinary Receipt shall not include
cash receipts to the extent that such proceeds, awards or payments that are received by any Person
in respect of any third party claim against such Person and applied to pay (or to reimburse such
Person for its prior payment of) such claim and the costs and expenses of such Person with respect
thereto.

     Federal Funds Rate means, for any day, a fluctuating interest rate equal for each day
during such period to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for such day on such transactions received by the

17

 

Administrative
Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent.
The Administrative Agent’s determination of such rate shall be binding and conclusive absent
manifest error.

     First-Tier Foreign Subsidiary means, any direct Foreign Subsidiary of a Loan Party or
Subsidiary organized under the laws of the United States of America.

     Fiscal Quarter means a fiscal quarter of a Fiscal Year.

     Fiscal Year means the fiscal year of the Borrowers and their consolidated
Subsidiaries, which period shall be the 12-month period ending on December 31st of each calendar
year. References to a Fiscal Year with a number corresponding to any calendar year (e.g.,
“Fiscal Year 2007”) refer to the Fiscal Year ending on December 31st of such calendar year.

      Fixed Charge Coverage Ratio means, with respect to the Borrowers and their
consolidated Subsidiaries on a consolidated basis as of the last day of any Fiscal Quarter for the
Computation Period (or such shorter period as set forth below) then ending, the ratio of (a) EBITDA
for such period minus the sum of (i) all unfinanced Capital Expenditures of such Persons incurred
during such period and (ii) all cash dividends or distributions paid during such period to any
Person which is not a Wholly-Owned Subsidiary (including all cash dividends or distributions to the
Parent by the Borrowers during such period for the sole purpose of permitting the Parent to pay
income taxes as permitted pursuant to Section 11.3(iii)), to (b) the sum for such period
for the Borrowers and their consolidated Subsidiaries on a consolidated basis of all scheduled
interest and principal payments of Debt, including the principal component of any Capital Lease (in
each case, whether or not in fact paid during such period), paid (or which should have been paid)
in cash. It being agreed however that with respect to Fiscal Quarters ending on or prior to
December 31, 2008, the Fixed Charge Coverage Ratio shall be calculated using a Computation Period
commencing as of April 2, 2008 and running through and including the last day of such Fiscal
Quarter then ending.

     Foreign Subsidiary means a Subsidiary organized in a jurisdiction outside of the
United States of America.

     Fraudulent Conveyance — see Section 15.22.2.

     FRB means the Board of Governors of the Federal Reserve System or any successor
thereto.

     Fronting Bank means LaSalle, in its capacity as the issuer of Letters of Credit, or
any Affiliate of LaSalle that may from time to time issue Letters of Credit, and in each case, any
successor and assign thereof acting in such capacity.

     Fund means any Person (other than a natural person) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its activities

     GAAP means generally accepted accounting principles set forth from time to time in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of

18

 

Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the date of
determination.

     Group — see Section 2.2.1.

     Guarantor — see the Preamble. A Guarantor is a Person that is both a
“Grantor” and a “Guarantor” under and as defined in the Guaranty and Collateral
Agreement.

     Guaranty and Collateral Agreement means the Amended and Restated Guaranty and
Collateral Agreement dated as of the date hereof executed and delivered by the Loan Parties, and
such other parties as may from time to time become parties thereto in accordance with the terms
hereof and/or thereof, and any other guaranty and collateral agreement executed by a Loan Party, in
each case in form and substance reasonably satisfactory to the Administrative Agent, in each case,
as the same may be amended, restated, supplemented or otherwise modified from time to time.

     Hazardous Substances means (a) any petroleum or petroleum products, radioactive
materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation,
dielectric fluid containing levels of polychlorinated biphenyls, radon gas and mold; (b) any
chemicals, materials, pollutant or substances defined as or included in the definition of
“hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous substances”,
“restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, “pollutants”
or words of similar import, under any applicable Environmental Law; and (c) any other chemical,
material or substance, the exposure to, or release of which is prohibited, limited or regulated by
any governmental authority or for which any duty or standard of care is imposed pursuant to, any
Environmental Law.

     Hedging Agreement means any interest rate, currency or commodity swap agreement, cap
agreement or collar agreement, and any other agreement or arrangement designed to protect a Person
against fluctuations in interest rates, currency exchange rates or commodity prices.

     Hedging Obligation means, with respect to any Person, the amount of the obligations of
such Person under any Hedging Agreement calculated by reference to the marked-to-market termination
value of such Hedging Agreement.

     I & J — see Preamble.

     Indemnified Liabilities — see Section 15.17.

     Independent Director — means, any person who (i) is not a stockholder (whether direct,
indirect or beneficial), customer or supplier of the Parent, any Loan Party or any of the
foregoing’s Affiliates; (ii) other than in their capacity as an Independent Director, is not a
director, officer, employee, Affiliate or associate (as such term is defined in Rule 14a-1(a)
promulgated under the Exchange Act) of the Parent, any Loan Party or any of the foregoing’s
Affiliates; (iii) is not a trustee, conservator or receiver for the Parent, any Loan Party or any
of the foregoing’s Affiliates and (iv) is not a person related to any person referred to in clauses
(i),

19

 

(ii) or (iii); and (v) has at least three years of prior experience as an independent director
for a corporation or other business entity whose charter documents require an independent
director’s consent to certain actions, including, without limitation, the institution of bankruptcy
or insolvency proceedings against it; provided that a person may be an Independent Director
of more than one Borrower.

     Interest Expense means for any period the consolidated interest expense of the
Borrowers and their consolidated Subsidiaries, on a consolidated basis, for such period (including
all imputed interest on Capital Leases).

     Interest Period means, as to any LIBOR Loan, the period commencing on the date such
Loan is borrowed or continued as, or converted into, a LIBOR Loan and ending on the date one, two,
three or six months thereafter as selected by the Loan Party Representative pursuant to Section
2.2.2 or 2.2.3, as the case may be; provided that:

     (a) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day;

     (b) any Interest Period that begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period shall end
on the last Business Day of the calendar month at the end of such Interest Period;

     (c) the Loan Party Representative may not select any Interest Period which
would extend beyond the Scheduled Termination Date, in the case of any Interest
Period relating to any Revolving Loan or the Term Loan; and

     (d) there may be no more than six (6) Interest Periods outstanding at any time.

     Inventory is defined in the Guaranty and Collateral Agreement.

     Investment means, with respect to any Person, any investment in another Person,
whether by acquisition of any debt or Capital Security, by making any loan or advance, by assuming,
becoming obligated with respect to a liability, Debt or Contingent Liability in respect of
obligations of such other Person (other than travel, relocation and similar advances to employees
in the ordinary course of business).

     IRS — see Section 7.6(d)(i).

     Kids Line — see the Preamble.

     Kids Line/CoCaLo Guaranty means that certain unsecured Guaranty dated as of April 2,
2008 executed by Kids Line in favor of the CoCaLo Sellers guaranteeing the performance by I & J
under and pursuant to the CoCaLo Acquisition Agreement and the CoCaLo Note, as such

20

 

guaranty is in
effect as of the Closing Date, and without giving any effect to any amendment or modification
thereof after such date, except to the extent permitted by Section 11.11 hereof.

     LaJobi — see the Preamble.

     LaJobi Acquisition means the purchase by LaJobi of substantially all of the assets of
LaJobi Industries, on the LaJobi Closing Date pursuant to and in accordance with the LaJobi
Acquisition Agreement and the other LaJobi Acquisition Documents.

     LaJobi Acquisition Agreement means that certain Asset Purchase Agreement dated as of
April 1, 2008 among LaJobi, as buyer, LaJobi Industries, as seller, and Lawrence and Joseph
Bivona, as shareholders, pursuant to which LaJobi will purchase substantially all of the assets of
the LaJobi Industries upon the terms and conditions set forth therein (as such agreement is in
effect on the Closing Date and without giving effect to any amendment or other modification thereof
after such date, except to the extent permitted by Section 11.11 hereof).

     LaJobi Acquisition Documents means the LaJobi Acquisition Agreement and all other
agreements or instruments executed in connection with the LaJobi Acquisition (in each case, as in
effect on the Closing Date and without giving effect to any amendment or other modification thereof
after such date, except to the extent permitted by Section 11.11 hereof).

     LaJobi Closing Date means the date on which the LaJobi Acquisition is consummated in
accordance with the terms of the LaJobi Acquisition Documents.

     LaJobi Industries — means LaJobi Industries, Inc., a New Jersey corporation.

     LaSalle — see the Preamble.

     L/C Application means, with respect to any request for the issuance of a Letter of
Credit, a letter of credit application in the form being used by the Fronting Bank at the time of
such request for the type of letter of credit requested.

     L/C Fee Rate — see the definition of Applicable Margin.

     Lender — see the Preamble. In addition (a) Lender shall include the Fronting
Bank and the Administrative Agent to the extent it makes any loans or advances any financial
accommodations under this Agreement or any other Loan Document and (b) for the purpose of
identifying a Person entitled to share in the Collateral and the proceeds thereof under, and in
accordance with the provisions of, this Agreement and the Collateral Documents and the Person
entitled to indemnification and exculpation as a Lender or a Lender party under this Agreement or
any other Loan Document, the term Lender and Lender Party shall include Affiliates of a Lender
providing a Bank Product or any Specified Hedging Agreements pursuant to this Agreement or any
other Loan Document and the transactions contemplated hereby or thereby.

     Lenders means, collectively, each and every Lender.

     Lender Party — see Section 15.17 and the definition of Lender above.

21

 

     Letter of Credit — see Section 2.1.3. In addition, Letter of Credit shall
include any Existing Letters of Credit.

     LIBOR Loan means any Loan which bears interest at a rate determined by reference to
the LIBOR Rate.

     LIBOR Margin — see the definition of Applicable Margin.

     LIBOR Office means with respect to any Lender the office or offices of such Lender
which shall be making or maintaining the LIBOR Loans of such Lender hereunder. A LIBOR Office of
any Lender may be, at the option of such Lender, either a domestic or foreign office.

     LIBOR Rate means a rate of interest equal to (a) the per annum rate of interest at
which United States dollar deposits in an amount comparable to the amount of the relevant LIBOR
Loan and for a period equal to the relevant Interest Period are offered in the London Interbank
Eurodollar market at 11:00 A.M. (London time) two (2) Business Days prior to the commencement of
such Interest Period (or three (3) Business Days prior to the commencement of such Interest Period
if banks in London, England were not open and dealing in offshore United States dollars on such
second preceding Business Day), as displayed in the Bloomberg Financial Markets system (or other
authoritative source selected by the Administrative Agent in its sole discretion) or, if the
Bloomberg Financial Markets system or another authoritative source is not available, as the LIBOR
Rate is otherwise determined by the Administrative Agent in its sole and absolute discretion,
divided by (b) a number determined by subtracting from 1.00 the then stated maximum reserve
percentage for determining reserves to be maintained by member banks of the Federal Reserve System
for Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D), such rate to remain fixed for such Interest Period. The
Administrative Agent’s determination of the LIBOR Rate shall be conclusive, absent manifest error.

     Lien means, with respect to any Person, any interest granted by such Person in any
real or personal property, asset or other right owned or being purchased or acquired by such Person
(including an interest in respect of a Capital Lease) which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, title retention lien, charge or other
security interest of any kind, whether arising by contract, as a matter of law, by judicial process
or otherwise.

     Loan Documents means this Agreement, the Notes, the Letters of Credit, the Master
Letter of Credit Agreement, the L/C Applications, the Agent Fee Letter, the Perfection Certificate,
the Collateral Documents, the Environmental Indemnity, the Post-Closing Letter, the subordination
agreements, if any, relating to any Subordinated Debt and all other documents, instruments and
agreements delivered in connection with the foregoing, in each case, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

     Loan Party means, collectively, each Borrower and each Guarantor, and Loan
Parties means all such Persons, collectively.

     Loan Party Representative means the Parent in its capacity as Loan Party
Representative pursuant to the provisions of Section 2.6.

22

 

     Loans means, collectively, the Revolving Loans and, the Term Loan and Loan means any
of the foregoing.

     Mandatory Prepayment Event — see Section 6.2.2(a).

     Margin Stock means any “margin stock” as defined in Regulation U.

     Master Letter of Credit Agreement means, at any time, with respect to the issuance of
Letters of Credit, a master letter of credit agreement or reimbursement agreement in the form, if
any, being used by the Fronting Bank at such time, together with any amendments, restatements,
supplements or modifications thereto.

     Material Adverse Effect means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, assets, properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Loan Parties taken as a whole, (b) a material impairment
of rights and remedies, taken as a whole, of any of the Administrative Agent, the Fronting Bank or
any Lender under any Loan Document, (c) a material impairment of the ability of any Loan Party to
perform, in any material respect, its obligations under any Loan Document to which it is a party
and (d) a material adverse effect upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document to which it is a party.

     Maximum Revolving Commitment means, the lesser of (x) $75,000,000, as such amount may
be decreased from time to time in accordance with Sections 6.1.1 or 6.1.2 (the
“Revolving Commitment Limit”) and (y) the sum of the Revolving Commitments of all Lenders
as in effect at such time.

     Mortgage means a mortgage, deed of trust, leasehold mortgage or similar instrument
granting the Administrative Agent a Lien on real property of any Loan Party, in each case, as the
same may be amended, restated, supplemented or otherwise modified from time to time.

     Multiemployer Pension Plan means a multiemployer plan, as defined in Section 3(37)(A)
of ERISA, to which any Loan Party or any other member of the Controlled Group maintains,
contributes to, or has an obligation to contribute to (or, within the immediately preceding six (6)
years, maintained, contributed to or had an obligation to contribute to) on behalf of participants
who were employed by any of them.

     Net Cash Proceeds means:

     (a) with respect to any Asset Disposition relating to any property of any Loan Party, or any
Extraordinary Receipt received or paid to the account of any Loan Party, the aggregate cash
proceeds (including cash proceeds received pursuant to policies of insurance or by way of deferred
payment of principal pursuant to a note, installment receivable or otherwise, but only as and when
received) received by any Loan Party in connection with such transaction, net of (i) the direct
reasonable costs, expenses and fees relating to such transaction (including reasonable and
customary sales commissions and reasonable legal, accounting, investment banking and other
professional and transactional fees), (ii) taxes paid or reasonably estimated by such Loan
Party to be payable as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (iii) amounts required to be applied to the repayment
of any

23

 

Debt secured by a Permitted Lien having priority over the Liens of the Administrative Agent
under the Loan Documents on the asset subject to such transaction (other than the Loans), and (iv)
amounts reserved in accordance with GAAP for any indemnification obligations associated with such
sale so long as such reserves are required to be maintained; it being agreed that the amount of
such reserves shall be deemed Net Cash Proceeds of such transaction received by such Loan Party
upon (and in the amount of) the release or reduction of any such reserve;

     (b) with respect to any issuance of Capital Securities, the aggregate cash proceeds received
by any Loan Party pursuant to such issuance, net of the direct reasonable and customary costs,
expenses and fees (including legal, accounting and other professional fees, costs and expenses)
relating to such issuance (including reasonable and customary sales and underwriters’ commissions);
and

     (c) with respect to any issuance of Debt, the aggregate cash proceeds received by any Loan
Party pursuant to such issuance, net of the direct reasonable and customary costs, expenses and
fees (including legal, accounting and other professional fees, costs and expenses) relating to such
issuance (including reasonable and customary up-front, underwriters’ and placement fees).

     Non-U.S. Participant — see Section 7.6(d)(i).

     Non-Use Fee Rate — see the definition of Applicable Margin.

     Notes means, collectively, the Revolving Loan Notes and, the Term Loan Notes.

     Notice of Borrowing — see Section 2.2.2.

     Notice of Control — see Section 10.11.

     Notice of Conversion/Continuation — see Section 2.2.3.

     Obligations means all obligations, liabilities and indebtedness (monetary or
otherwise, including post-petition and default interest, allowed or not) of any Loan Party under
this Agreement and any other Loan Document owing to any Lender, the Administrative Agent, the
Fronting Bank, any Lender Party or any other party to or beneficiary of this Agreement or any other
Loan Document (and any successor or assign of any of the foregoing), including, without limitation,
for principal, interest (including post-petition interest, allowed or not), fees, costs, expenses,
indemnification, Attorney Costs, any reimbursement obligations of each Loan Party in respect of
Letters of Credit and surety bonds, all Specified Hedging Obligations permitted hereunder and
incurred in connection herewith which are owed to the Administrative Agent, LaSalle or any Lender
and each of their respective Affiliates, and all Bank Products Obligations permitted hereunder and
incurred in connection herewith which are owed to the Administrative Agent, LaSalle or any Lender
and each of their respective Affiliates, in each case, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become
due; provided, that the Specified Hedging Obligations shall not be deemed an outstanding Obligation
for purposes of entitling the holder thereof to grant or
withhold consents or to approve or disapprove any amendment or waiver hereunder or under the
other Loan Documents.

24

 

     OFAC — see Section 10.4.

     PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any
or all of its functions under ERISA.

     Parent means Russ Berrie and Company, Inc., a New Jersey corporation.

     Participant — see Section 15.6.2.

     Perfection Certificate means that certain Perfection Certificate dated as of the date
hereof executed by the Loan Parties and delivered to the Administrative Agent.

     Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of ERISA,
which is subject to Title IV of ERISA or the minimum funding standards of ERISA (other than a
Multiemployer Pension Plan), which any Loan Party or any member of the Controlled Group maintains,
contributes to, or has an obligation to contribute to (or, within the immediately preceding six (6)
years, maintained, contributed to or had an obligation to contribute to) on behalf of participants
who were employed by any of them. The term Pension Plan shall also include any other plan
providing retirement income that is not governed by the laws of the United States.

     Permitted Acquisition — see Section 11.4.

     Permitted Holder means (i) Angelica Berrie; (ii) any lineal descendant of Russell
Berrie; (iii) the Estate of Russell Berrie; (iv) The Russell Berrie 2002A Trust; (v) The Russell
Berrie Foundation, a New Jersey Nonprofit Corporation; (vi) any trust created pursuant to the terms
of the instruments governing or creating any of the Persons referred to in clause (iii), (iv), or
(v); (vii) any fiduciary of any of the Persons referred to in clause (iii) (iv), (v) or (vi);
(viii) Prentice Capital Management; (ix) DE Shaw & Co., L.P. or (x) (1) any institutional Person or
entity described in Rule 13d-1(b)(1)(ii) under the Exchange Act, (2) any “qualified institutional
buyer” as defined in Rule 144(a)(1) promulgated under the Securities Act of 1933, as amended (the
“Act”), (3) any institutional Person or entity described in clauses (1), (2), (3), (7) or,
to the extent comprised of institutional Persons or entities described in clauses (1), (2), (3)
and/or (7), clause (8) of the definition of “accredited investor” as defined in Rule 501(a)
promulgated under the Act, or (4) any similar institutional equity investor.

     Permitted Lien means a Lien expressly permitted hereunder pursuant to Section
11.2.

     Person means any natural person, corporation, partnership, trust, limited liability
company, association, governmental authority or unit, or any other entity, whether acting in an
individual, fiduciary or other capacity.

     Pledge Agreement means the Amended and Restated Pledge Agreement dated as of the
Closing Date (as the same may be amended, restated, supplemented or otherwise modified from
time to time) executed and delivered by the Parent in favor of Administrative Agent for the
benefit of the Lenders.

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     Post-Closing Letter means that certain letter agreement dated as of the date hereof
from the Administrative Agent to the Borrowers with respect to the deliveries to be made by or on
behalf of the Borrowers after the date hereof.

     Prime Rate means for any day a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day
as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate”
is a rate set by Bank of America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate. Any change in
such rate announced by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.

     Pro Rata Share means:

     (a) with respect to a Lender’s obligation to make Revolving Loans, participate in Letters of
Credit, reimburse the Fronting Bank, and/or receive payments of principal, interest, fees, costs,
and expenses with respect thereto, (x) prior to the Revolving Commitment being terminated or
reduced to zero, the percentage obtained by dividing (i) such Lender’s Revolving Commitment at such
time, by (ii) the aggregate Revolving Commitment of all Lenders at such time and (y) from and after
the time the Revolving Commitment has been terminated or reduced to zero, the percentage obtained
by dividing (i) the aggregate unpaid principal amount of such Lender’s Revolving Outstandings at
such time by (ii) the aggregate unpaid principal amount of all Revolving Outstandings at such time;

     (b) with respect to a Lender’s obligation to make a Term Loan and receive payments of
interest, fees, and principal with respect thereto, (x) prior to the making of such Term Loan, the
percentage obtained by dividing (i) such Lender’s Term Loan Commitment at such time, by (ii) the
aggregate amount of all Lenders’ Term Loan Commitments at such time, and (y) from and after the
making of any Term Loan, the percentage obtained by dividing (i) the unpaid principal amount of
such Lender’s Term Loan by (ii) the unpaid aggregate principal amount of each Term Loan of all
Lenders; and

     (c) with respect to all other matters as to any Lender, in aggregate, the percentage obtained
by dividing (i) the aggregate amount of all such Lender’s Commitments hereunder by (ii) the
aggregate amount of the Commitments of all Lenders at such time; provided that in the event any
such Commitments have been terminated or reduced to zero, Pro Rata Share in such case shall be the
percentage obtained by dividing (A) the principal amount of such Lender’s outstanding Loans at such
time by (B) the aggregate principal amount of all Loans owing to all Lenders at such time.

     Regulation D means Regulation D of the FRB.

     Regulation U means Regulation U of the FRB.

     Rent Reserve means a dollar amount equal to three times the monthly lease or mortgage
payments of each leased or owned and mortgaged facility of the Borrowers where any Inventory
intended to be classified as Eligible Inventory is maintained and in respect of which the

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Administrative Agent has not received a Collateral Access Agreement with respect to such facility.

     Replacement Lender — see Section 8.7(b).

     Reportable Event means a reportable event as defined in Section 4043 of ERISA and the
regulations issued thereunder as to which the PBGC has not waived the notification requirement of
Section 4043(a), or the failure of a Pension Plan to meet the minimum funding standards of Section
412 of the Code (without regard to whether the Pension Plan is a plan described in Section
4021(a)(2) of ERISA) or under Section 302 of ERISA.

     Required Lenders means, at any time, those Lenders whose Pro Rata Shares (as
determined in accordance with clause (c) of the definition thereof) exceed 50.1%.

     Revolving Commitment means with respect to each Lender, such Lender’s Revolving
Commitment set forth on Annex A hereto or in the most recent Assignment Agreement relating
hereto to which such Lender is a party, and Revolving Commitments means the sum of all such
Commitments of all such Lenders, in each case, as the same may be reduced from time to time
pursuant to Sections 6.1.1 and 6.1.2.

     Revolving Commitment Limit — see the definition of Maximum Revolving Commitment.

     Revolving Loan — see Section 2.1.1(a). In addition, Revolving Loans shall
include any Revolving Loans made under the Existing Credit Agreement and outstanding as of the
Closing Date, all of which shall be deemed to be outstanding hereunder.

     Revolving Loan Availability means, at any time, the lesser of (i) the Maximum
Revolving Commitment in effect at such time and (ii) the Borrowing Base at such time.

     Revolving Loan Notes — see Section 3.1.

     Revolving Outstandings means, at any time, the sum of (a) the aggregate principal
amount of all outstanding Revolving Loans, plus (b) the Stated Amount of all Letters of Credit.

     Russ Berrie B Entities means, collectively, Russ Berrie U.S. Gift, Inc., a Delaware
corporation and wholly-owned Subsidiary of the Parent, Russ Berrie & Co. (West), Inc., a California
corporation, Russ Berrie and Company Properties, Inc., a New Jersey corporation, Russplus, Inc., a
New Jersey corporation, and Russ Berrie and Company Investments, Inc., a New Jersey corporation.

     Sassy — see the Preamble.

     Scheduled Termination Date means April 1, 2013.

     SEC means the Securities and Exchange Commission or any other governmental authority
succeeding to any of the principal functions thereof.

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     Second-Tier Foreign Subsidiary means any direct or indirect Foreign Subsidiary of any
First-Tier Foreign Subsidiary.

     Senior Officer means, with respect to any Loan Party, any of the chief executive
officer, the chief financial officer, the chief operating officer or the treasurer or controller or
vice president of finance, of such Loan Party.

     Settlement Date — see Section 7.1.3.

     Specified Hedging Agreement means any Hedging Agreement (a) entered into by (i) a
Borrower and (ii) any Lender (as determined as of the date such Hedging Agreement is entered into)
or any affiliate thereof, as counterparty and (b)(i) the covered transactions thereunder are the
Loans or Obligations hereunder or (ii) that has otherwise been designated by the Administrative
Agent, such Lender or such affiliate, as the case may be, and the Loan Party Representative, on
behalf of such Borrower, by notice to the Administrative Agent, as a Specified Hedging Agreement.
The designation of any Hedging Agreement as a Specified Hedging Agreement shall not create in favor
of the Administrative Agent, any Lender or affiliate thereof that is a party thereto any rights in
connection with the management or release of any Collateral or of the obligations of any guarantor
under this Agreement or the Loan Documents.

     Specified Hedging Obligation means any Hedging Obligations of any of the Borrowers
under any Specified Hedging Agreement and Specified Hedging Obligations means all such
obligations and liabilities collectively.

     Stated Amount means, with respect to any Letter of Credit at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder under any and all
circumstances plus (b) the aggregate amount of all unreimbursed payments and disbursements under
such Letter of Credit which have not been converted to Revolving Loans pursuant to Section
2.3.2.

     Subject Accounts — see Section 10.11.

     Subordinated Debt means any Debt of any Loan Party or any Subsidiary that is unsecured
and is expressly subordinated to the prior payment in full, in cash, of the Obligations pursuant to
an agreement in form and substance reasonably satisfactory to the Administrative Agent.

     Subsidiary means, with respect to any Person, a corporation, partnership, limited
liability company or other entity of which such Person owns, directly or indirectly, such number of
outstanding Capital Securities as have more than 50% of the ordinary voting power for the election
of directors or other managers of such corporation, partnership, limited liability company or other
entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a
reference to Subsidiaries of a Borrower.

     Target means each of CoCaLo and LaJobi Industries, and “Targets” shall mean
both of the foregoing.

     Target Acquisitions means each of the CoCaLo Acquisition and the LaJobi Acquisition.

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     Taxes means any and all present and future taxes, duties, levies, imposts, deductions,
assessments, charges or withholdings imposed by the United States, any state or locality or any
political subdivision thereof, and any and all liabilities (including interest and penalties and
other additions to taxes) with respect to the foregoing, but excluding Excluded Taxes.

     Termination Date means the earliest to occur of (i) the Scheduled Termination Date,
(ii) the termination of the Revolving Commitment (either automatically or at the Required Lenders’
election) pursuant to Section 13.2, and (iii) the termination or reduction to zero of the
Revolving Commitment Limit by the Borrowers pursuant to Section 6.1.1.

     Term Loan — see Section 2.1.2. In addition, Term Loans shall include the Term
Loans made under the Existing Credit Agreement and outstanding as of the Closing Date, all of which
shall be deemed outstanding hereunder (the “Existing Term Loan”).

     Term Loan Commitment means, with respect to each Lender, that amount set forth
opposite such Lender’s name on Annex A or in the most recent Assignment Agreement, if any,
to which such Lender is a party, and with respect to all Lenders, $100,000,000. The Term Loan
Commitment of each Lender shall be deemed satisfied upon the making of the Term Loan to the
Borrowers on the Closing Date in the amount of such Lender’s Term Loan Commitment (inclusive of its
reallocated portion of the Existing Term Loans).

     Term Loan Notes — see Section 3.1.

     Termination Event means, with respect to a Pension Plan, (a) a Reportable Event, (b)
the withdrawal of any member of the Controlled Group from such Pension Plan during a plan year in
which any member of the Controlled Group was a “substantial employer” as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such
Pension Plan, the filing of a notice of intent to terminate the Pension Plan or the treatment of an
amendment of such Pension Plan as a termination under Section 4041 of ERISA, (d) the institution by
the PBGC of proceedings to terminate such Pension Plan or (e) any event or condition that might
constitute grounds under Section 4042 of ERISA for the termination of, or appointment of a trustee
to administer, such Pension Plan.

     Total Debt means the outstanding principal amount of all Debt (including Debt of
Capital Leases plus undrawn face amount of all Letters of Credit) of the Borrowers and their
consolidated Subsidiaries on a consolidated basis.

     Total Debt to EBITDA Ratio means, as of the last day of any Fiscal Quarter, the ratio
of (a) Total Debt as of such day to (b) EBITDA for the Computation Period ending on such day
(calculated, where applicable, using the EBITDA values determined in accordance with the definition
thereof); provided that for purposes of this calculation, if EBITDA for any such Computation Period
is equal to or less than zero, EBITDA shall be deemed to be $0.001.

     type — see Section 2.2.1.

     UCC is defined in the Guaranty and Collateral Agreement.

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     Unfunded Liability means the amount (if any) by which the present value of all vested
and unvested accrued benefits under all Pension Plans of the Loan Parties and each other member of
the Controlled Group exceeds the fair market value of all assets allocable to those benefits, all
determined as of the then most recent valuation date for each Pension Plan, using the actuarial
assumptions used by the Pension Plans for purposes of determining the minimum funding contributions
under Section 412 of the Code to the extent applicable.

     Unmatured Event of Default means any event that, if it continues uncured, will, with
lapse of time, giving of notice or both, constitute an Event of Default.

     Voidable Transfer — see Section 15.23.

     Wholly-Owned Subsidiary means, as to any Person, a Subsidiary all of the Capital
Securities of which (except directors’ qualifying Capital Securities) are at the time directly or
indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person. Unless the
context otherwise requires, each reference to a Wholly-Owned Subsidiary herein shall be a reference
to a Wholly-Owned Subsidiary of a Borrower.

     Withholding Certificate — see Section 7.6(d)(i).

     1.2 Other Interpretive Provisions.

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

          (b) Section, Annex, Schedule and Exhibit references are to
this Agreement unless otherwise specified.

          (c) The term “including” is not limiting and means “including without limitation.”

          (d) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”,
and the word “through” means “to and including.”

          (e) Unless otherwise expressly provided herein, (i) references to agreements (including this
Agreement and the other Loan Documents) and other contractual instruments shall be deemed to
include all subsequent amendments, restatements, supplements and other modifications thereto, but
only to the extent such amendments, restatements, supplements and other modifications are not
prohibited by the terms of any Loan Documents, and (ii) references to any statute or regulation
shall be construed as including all statutory and regulatory provisions amending, replacing,
supplementing or interpreting such statute or regulation and the regulations promulgated
thereunder.

          (f) This Agreement and the other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and each shall be performed in accordance with its terms. In the event
of any inconsistency between the terms of the Master Letter of Credit Agreement

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and the terms of this Agreement, the terms of this Agreement shall control for the purposes of
calculating compliance with any condition or covenant, and the occurrence of any Event of Default
or Unmatured Event of Default, under the terms of this Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the occurrence of a default, Unmatured Event of Default or
Event of Default under, and as defined in the Master Letter of Credit Agreement shall not result in
a default, Unmatured Event of Default or Event of Default under this Agreement if the event that
created such default, Unmatured Event of Default or Event of Default would not, if the Master
Letter of Credit Agreement was not a Loan Document, have independently created a default, Unmatured
Event of Default or Event of Default under this Agreement.

          (g) This Agreement and the other Loan Documents are the result of negotiations among and have
been reviewed by counsel to the Administrative Agent, the Loan Parties, the Lenders and the other
parties hereto and thereto and are the products of all parties. Accordingly, they shall not be
construed against the Administrative Agent or the Lenders merely because of the Administrative
Agent’s or the Lenders’ involvement in their preparation.

SECTION 2 COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.

     2.1 Commitments. On and subject to the terms and conditions of this Agreement, each
of the Lenders, in the case of Sections 2.1.1, 2.1.2 and 2.1.3, severally
and for itself alone, agrees to make loans to, and to issue or participate in letters of credit for
the account of, the Borrowers as follows:

          2.1.1 Revolving Loan Commitment.

     (a) Revolving Loans. Subject to the terms and conditions of this Agreement, each Lender with
a Revolving Commitment agrees to make loans on a revolving basis (“Revolving Loans”) from
time to time until the Termination Date in such Lender’s Pro Rata Share (as determined pursuant to
clause (a) of the definition thereof) of such aggregate amounts as the Loan Party Representative
may request from the Administrative Agent in accordance with Section 2.2.2;
provided that the Revolving Outstandings will not at any time exceed Revolving Loan
Availability. In addition, the Borrowers acknowledge that the Lenders (or their predecessors) have
advanced certain Revolving Loans to Kids Line and Sassy pursuant to the Existing Credit Agreement
that are outstanding as of the date hereof, which Revolving Loans (x) shall be deemed assigned and
reallocated among the Lenders in accordance with their respective Pro Rata Shares and (y) shall be
deemed to be made and outstanding under and pursuant to this Agreement.

     (b) Defaulting Lender. If and to the extent that a Lender does not settle with the
Administrative Agent as required under this Agreement (a “Defaulting Lender”), the
Borrowers and such Defaulting Lender severally agree to repay to the Administrative Agent forthwith
on demand such amount required to be paid by such Defaulting Lender to the Administrative Agent,
together with interest thereon, for each day from the date such amount is made available to the
Borrowers until the date such amount is repaid to the Administrative Agent (x) in the case of a
Defaulting Lender at the Federal Funds Rate, and (y) in the case of the Borrowers, at the interest

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rate applicable at such time for such Loans; provided, that the Borrowers’ obligation to repay
such advance to the Administrative Agent shall not relieve such Defaulting Lender of its liability
to the Administrative Agent for failure to settle as provided in this Agreement.

          2.1.2 Term Loan Commitment. The Borrowers acknowledge that the Lenders (or their
predecessors) have advanced the Existing Term Loans to Kids Line and Sassy, which Term Loans (x)
shall be deemed assigned and reallocated among the Lenders on the Closing Date in accordance with
such Lender’s respective Pro Rata Shares and (y) shall be deemed to have been made and be
outstanding under and pursuant to this Agreement. In addition, subject to the terms and conditions
of this Agreement, each Lender with a Term Loan Commitment agrees to make a loan to the Borrowers
(each such loan, a “Term Loan”) on the Closing Date in the amount of such Lender’s Term
Loan Commitment (inclusive of its reallocated portion of the Existing Term Loan). The Commitments
of the Lenders to make the Term Loan shall be satisfied fully upon the making of the Term Loan as
aforesaid on the Closing Date. Amounts repaid with respect to any Term Loan may not be reborrowed.

          2.1.3 L/C Commitment. The Borrowers acknowledge that the Fronting Bank has issued
letters of credit to Kids Line and Sassy, all of which shall be deemed issued under and pursuant to
this Agreement. In addition, subject to Section 2.3.1 and the other terms and conditions
of this Agreement, the Fronting Bank agrees to issue letters of credit, in each case containing
such terms and conditions as are permitted by this Agreement and are reasonably satisfactory to the
Fronting Bank (each, a “Letter of Credit”), at the request of the Loan Party Representative
and for the account of the Borrowers from time to time before the Termination Date and, as more
fully set forth in Section 2.3.2, each Lender agrees to purchase a participation in each
such Letter of Credit; provided that (a) the aggregate Stated Amount of all Letters of
Credit (after giving effect to the Stated Amount of any Letter of Credit so requested and any
Existing Letters of Credit) shall not at any time exceed $5,000,000, and (b) the Revolving
Outstandings (after giving effect to the Stated Amount of any Letter of Credit so requested) shall
not at any time exceed Revolving Loan Availability.

     2.2 Loan Procedures.

          2.2.1 Various Types of Loans. Each Revolving Loan and Term Loan shall be divided into
tranches which are, either a Base Rate Loan or a LIBOR Loan (each a “type” of Loan), as the Loan
Party Representative shall specify in the related notice of borrowing or conversion pursuant to
Section 2.2.2 or 2.2.3. LIBOR Loans having the same Interest Period which expire
on the same day are sometimes called a “Group” or collectively “Groups”. Base Rate
Loans and LIBOR Loans may be outstanding at the same time, provided that not more than
eight (8) different Groups of LIBOR Loans, in aggregate, shall be outstanding at any one time. All
borrowings, conversions and repayments of Revolving Loans shall be effected so that each Lender
will have a ratable share (according to its Pro Rata Share as determined in accordance with clause
(a) of the definition thereof) of all types and Groups of Revolving Loans.

          2.2.2 Borrowing Procedures. The Loan Party Representative shall give written notice
(each such written notice, a “Notice of Borrowing”) substantially in the form of
Exhibit E or telephonic notice (followed immediately by a Notice of Borrowing) to the

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Administrative Agent of each proposed borrowing not later than (a) in the case of a Base Rate
borrowing, 11:00 A.M., Chicago time, on the proposed date of such borrowing, and (b) in the case of
a LIBOR borrowing, 11:00 A.M., Chicago time, at least three (3) Business Days prior to the proposed
date of such borrowing. Each such notice shall be effective upon receipt by the Administrative
Agent, shall be irrevocable, and shall specify the date, amount and type of borrowing and, in the
case of a LIBOR borrowing, the initial Interest Period therefor. Upon its receipt of any such
notice, the Administrative Agent, at its option and in its sole discretion, shall do either of the
following:

          (i) advance the amount of the proposed Revolving Loan to the Loan Party Representative
on behalf of the applicable Borrower disproportionately (a “Disproportionate
Advance”) out of the Administrative Agent’s own funds on behalf of the Lenders, which
advance shall be made (x) in the case of a Base Rate Loan, on the same day as the Loan Party
Representative’s request therefor if the Loan Party Representative notifies the
Administrative Agent of such request by 11:00 A.M. (Chicago time) on such day or (y) in the
case of a LIBOR Rate Loan, on the third Business Day following such request therefor if the
Loan Party Representative notifies the Administrative Agent of such request by 11:00 A.M.
(Chicago time) on such third Business Day preceding such day, and, in either case,
thereafter request settlement such that upon such settlement each Lender’s share of the
outstanding Revolving Loans (including, without limitation, the amount of any
Disproportionate Advance) equals its Pro Rata Share (as determined in accordance with clause
(a) of the definition thereof); it being agreed that (A) until such time as any such Lender
makes such settlement of its share of any Disproportionate Advance made by the
Administrative Agent on its behalf or such Disproportionate Advance is otherwise settled in
accordance with Section 7.1.3, (1) such Lender shall be deemed to have purchased a
participation interest from the Administrative Agent in the amount of any such
Disproportionate Advance made for its account and shall be obligated at the Administrative
Agent’s request (which obligation shall be unconditional notwithstanding (I) any setoff,
counterclaim, recoupment, defense or other right that such Lender may have against the
Administrative Agent, any Loan Party, the Parent or any other Person for any reason
whatsoever; (II) the occurrence or continuance of any Unmatured Event of Default or Event of
Default; (III) any inability of the Borrowers to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time or (IV) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing) to make and remit to
the Administrative Agent a Revolving Loan for the account of the Borrowers in the amount of
and in satisfaction of such participation interest and (2) such Lender’s Revolving Loan
Commitment shall be deemed utilized to the extent of such Disproportionate Advance and the
Administrative Agent shall be entitled to collect interest for its own account thereon and
(B) if and to the extent any Lender shall not have made such amount available to the
Administrative Agent by 2:00 P.M., Chicago time on the Business Day on which such Lender
receives the request therefor from the Administrative Agent for such payment or disbursement
as set forth above (it being understood that any such notice received after noon, Chicago
time, on any Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to the Administrative
Agent, for its own account, forthwith on demand, for each
day from the date such amount was to have been delivered to the Administrative Agent to

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the date such amount is paid, at a rate per annum equal to (1) for the first three days
after demand, the Federal Funds Rate from time to time in effect and (2) thereafter, the
Base Rate from time to time in effect; or

          (ii) Notify each Lender by telecopy, electronic mail or other similar form of
teletransmission of the proposed advance on the same day the Administrative Agent is
notified or deemed notified by the Loan Party Representative of the Loan Party
Representative’s request for an advance pursuant to this Section 2.2.2. Each Lender
shall remit, to the demand deposit account designated by the Loan Party Representative (x)
with respect to Base Rate Loans, at or prior to 1:00 P.M., Chicago time, on the date of the
proposed borrowing, if such notification is made before 11:00 A.M., Chicago time, or (y)
with respect to LIBOR Rate Loans, at or prior to 10:30 A.M., Chicago time, on the date such
LIBOR Rate Loans are to be advanced, immediately available funds in an amount equal to such
Lender’s Pro Rata Share of such proposed advance.

Each borrowing shall be on a Business Day. Each Base Rate borrowing shall be in an aggregate
amount of at least $100,000 and integral multiples of $100,000 in excess thereof, and each LIBOR
borrowing shall be in an aggregate amount of at least $500,000 and integral multiples of at least
$100,000 in excess thereof. Delivery of any Notice of Borrowing, any request for a Letter of
Credit, and the acceptance of any Loan or any Letter of Credit, shall be deemed a representation
and warranty by the Loan Parties that all conditions precedent to the making of any Loans or other
financial accommodations set forth in Sections 12.1 (in the case of the initial Loans to be
made or Letter of Credit to be issued hereunder) and 12.2 have been satisfied as of the
date of such request, notice or borrowing hereunder.

          2.2.3 Conversion and Continuation Procedures.

          (a) Subject to Section 2.2.1, the Borrowers may, upon irrevocable written notice to
the Administrative Agent in accordance with clause (b) below:

          (i) elect, as of any Business Day, to convert any Loans of one type or any part thereof
into Loans of the other type (provided, in the case of any conversion to a LIBOR Loan, such
part thereof is in an aggregate amount not less than $500,000 or a higher integral multiple
of $100,000); or

          (ii) elect, as of the last day of the applicable Interest Period thereof, to continue
any LIBOR Loans having Interest Periods expiring on such day (or any part thereof in an
aggregate amount not less than $500,000 or a higher integral multiple of $100,000) for a new
Interest Period or convert such LIBOR Loans to Base Rate Loans;

provided that after giving effect to any conversion or continuation, the aggregate
principal amount of each Group of LIBOR Loans shall be at least $500,000 and an integral multiple
of $100,000 in excess thereof.

     (b) The Loan Party Representative shall give written notice (each such written notice, a
“Notice of Conversion/Continuation”) substantially in the form of Exhibit F or
telephonic notice (followed immediately by a Notice of Conversion/Continuation) to the
Administrative Agent of each proposed conversion or continuation not later than (i) in the case

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of
conversion into Base Rate Loans, 11:00 A.M., Chicago time, on the proposed date of such conversion
and (ii) in the case of conversion into or continuation of LIBOR Loans, 11:00 A.M., Chicago time,
at least three Business Days prior to the proposed date of such conversion or continuation,
specifying in each case:

          (i) the proposed date of conversion or continuation;

          (ii) the aggregate amount of Loans to be converted or continued;

          (iii) the type of Loans resulting from the proposed conversion or continuation; and

          (iv) in the case of conversion into, or continuation of, LIBOR Loans, the duration of
the requested Interest Period therefor.

          (c) If upon the expiration of any Interest Period applicable to LIBOR Loans, the Loan Party
Representative has failed to select timely a new Interest Period to be applicable to such LIBOR
Loans, the Loan Party Representative shall be deemed to have elected to convert such LIBOR Loans
into Base Rate Loans effective on the last day of such Interest Period.

          (d) The Administrative Agent will promptly notify each Lender of its receipt of a notice of
conversion or continuation pursuant to this Section 2.2.3 or, if no timely notice is
provided by the Loan Party Representative, of the details of any automatic conversion.

          (e) Any conversion of a LIBOR Loan on a day other than the last day of an Interest Period
therefor shall be subject to Section 8.4.

          2.2.4 Borrowing Representations and Warranties. Each and every request or deemed
request by the Borrowers (through the Loan Party Representative) for, and acceptance by the
Borrowers of, a Revolving Loan shall, in each case, constitute the Borrowers’ representation and
warranty that (and the Administrative Agents’ and the Lenders’ obligation to make any such
Revolving Loan shall be subject to the conditions precedent that), both on the date of such request
for such Revolving Loan and on the date any such Revolving Loan is made, (i) no Unmatured Event of
Default or Event of Default has occurred and is continuing, and (ii) the Borrowers’ representations
and warranties set forth in this Agreement, as supplemented from time to time, are true and correct
in all material respects (or, if such representations and warranties are qualified by materiality
or Material Adverse Effect, in all respects) except to the extent any such representation and
warranty expressly speaks to an earlier date.

     2.3 Letter of Credit Procedures.

          2.3.1 L/C Applications. The Borrowers shall execute and deliver to the Fronting Bank
the Master Letter of Credit Agreement on the Closing Date. The Loan Party Representative shall give
notice to the Administrative Agent and the Fronting Bank of the requested issuance of each Letter
of Credit on a Business Day which is at least three Business Days (or such lesser number of days as
the Administrative Agent and the Fronting Bank shall
agree in any particular instance in their sole discretion) prior to the proposed date of
issuance of such Letter of Credit. Each such notice shall be accompanied by an L/C Application,
duly

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executed by the Loan Party Representative and in all respects satisfactory to the
Administrative Agent and the Fronting Bank, together with such other documentation as the
Administrative Agent or the Fronting Bank may reasonably request in support thereof, it being
understood that each L/C Application shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, the expiration date of such Letter of Credit (which
shall not be later than thirty (30) days prior to the Scheduled Termination Date (unless such
Letter of Credit is Cash Collateralized) and shall in no event exceed more than one year from the
date of issuance, provided such Letter of Credit may provide for annual renewals subject to
Fronting Bank consent thereto) and whether such Letter of Credit is to be transferable in whole or
in part. Any Letter of Credit outstanding after the scheduled Termination Date which is Cash
Collateralized for the benefit of the Fronting Bank shall be the sole responsibility of the
Fronting Bank and the Fronting Bank shall be solely entitled to the benefits of such Cash
Collateral. The Fronting Bank shall promptly advise the Administrative Agent of the issuance of
each Letter of Credit and of any amendment thereto, extension thereof or event or circumstance
changing the amount available for drawing thereunder. In the event of any inconsistency between
the terms of the Master Letter of Credit Agreement, any L/C Application and the terms of this
Agreement, the terms of this Agreement shall control.

          2.3.2 Participations in Letters of Credit. Concurrently with the issuance of each
Letter of Credit, the Fronting Bank shall be deemed to have sold and transferred to each Lender
(which term shall not, for purposes of this Section 2.3.2, include the Fronting Bank) with
a Revolving Commitment, and each such Lender shall be deemed irrevocably and unconditionally to
have purchased and received from the Fronting Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender’s Pro Rata Share, in such Letter of Credit
and the Borrowers’ reimbursement obligations with respect thereto. If the Borrowers do not pay any
reimbursement obligation when due under any Letter of Credit, the Borrowers shall be deemed to have
immediately requested that the Lenders make a Revolving Loan which is a Base Rate Loan in a
principal amount equal to such reimbursement obligations. The Administrative Agent shall promptly
notify such Lenders of such deemed request and, without the necessity of compliance with the
requirements of Section 2.2.2, Section 12.2 or otherwise such Lender shall make
available to the Administrative Agent its Pro Rata Share of such Loan. The proceeds of such Loan
shall be paid over by the Administrative Agent to the Fronting Bank for the account of the
Borrowers in satisfaction of such reimbursement obligations. For the purposes of this Agreement,
the unparticipated portion of each Letter of Credit shall be deemed to be the Fronting Bank’s
“participation” therein. The Fronting Bank hereby agrees, upon request of the Administrative Agent,
to deliver to the Administrative Agent or Lender a list of all outstanding Letters of Credit issued
by the Fronting Bank, together with such information related thereto as the Administrative Agent or
any Lender may reasonably request.

          2.3.3 Reimbursement Obligations.

          (a) Each of the Borrowers hereby jointly and severally unconditionally and irrevocably agrees
to reimburse the Fronting Bank for each payment or disbursement made by the Fronting Bank under any
Letter of Credit honoring any demand for payment made by the
beneficiary thereunder, in each case on the date that such payment or disbursement is made.
Any amount not reimbursed on the date of such payment or disbursement shall bear interest from the

36

 

date of such payment or disbursement to the date that the Fronting Bank is reimbursed by any
Borrower therefor, payable on demand, at a rate per annum equal to the Base Rate from time to time
in effect plus the Base Rate Margin from time to time in effect plus, beginning on the third
Business Day after receipt of notice from the Fronting Bank of such payment or disbursement, 2%.
The Fronting Bank shall notify the Loan Party Representative and the Administrative Agent whenever
any demand for payment is made under any Letter of Credit by the beneficiary thereunder; provided
that the failure of the Fronting Bank to so notify the Loan Party Representative or the
Administrative Agent shall not affect the rights of the Fronting Bank or the Lenders in any manner
whatsoever.

          (b) The Borrowers’ reimbursement obligations hereunder shall be absolute, unconditional and
irrevocable and under all circumstances, including (a) any lack of validity or enforceability of
any Letter of Credit, this Agreement or any other Loan Document, (b) the existence of any claim,
set-off, defense or other right which any Loan Party may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Administrative Agent, the Fronting Bank, any Lender or any
other Person, whether in connection with any Letter of Credit, this Agreement, any other Loan
Document, the transactions contemplated herein or any unrelated transactions (including any
underlying transaction between any Loan Party and the beneficiary named in any Letter of Credit),
(c) any payment by the Fronting Bank under such Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of Credit (other than any
such payment that is determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of the Fronting Bank); or
any payment made by the Fronting Bank under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any transferee of such
Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief
Law (other than any such payment that is determined by a court of competent jurisdiction by a final
and nonappealable judgment to have resulted from the gross negligence or willful misconduct of the
Fronting Bank); or (d) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Loan Party (other than any such circumstance or happening that
is determined by a court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of the Fronting Bank). The Borrowers
shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered
to it and, in the event of any claim of noncompliance with the Borrowers’ instructions or other
irregularity, the Borrowers will promptly notify the Fronting Bank. The Borrowers shall be
conclusively deemed to have waived any such claim against the Fronting Bank and its correspondents
unless such notice is given as aforesaid. Without limiting the foregoing, no action or omission
whatsoever by the Administrative Agent or any Lender (excluding any Lender in its capacity as the
Fronting Bank) under or in connection with any Letter of Credit or any related matters shall result
in any liability of the Administrative Agent or any Lender to any Loan Party, or relieve any Loan
Party of any of its obligations hereunder except to the extent that such liability is determined by
a court
of competent jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of the Administrative Agent or such Lender.

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          2.3.4 Funding by the Lenders to Fronting Bank. If the Fronting Bank makes any payment
or disbursement under any Letter of Credit and (a) the Borrowers have not reimbursed the Fronting
Bank in full for such payment or disbursement by 11:00 A.M., Chicago time on the date of such
payment or disbursement, (b) a Revolving Loan may not be made in accordance with Section
2.3.2 or (c) any reimbursement received by the Fronting Bank from the Borrowers is or must be
returned or rescinded upon or during any bankruptcy or reorganization of any Loan Party, such other
Person or otherwise, each other Lender with a Revolving Commitment shall be obligated to pay to the
Administrative Agent for the account of the Fronting Bank, in full or partial payment of the
purchase price of its participation in such Letter of Credit, its Pro Rata Share of such payment or
disbursement (but no such payment shall diminish the obligations of the Borrowers under Section
2.3.3), and, upon notice from the Fronting Bank, the Administrative Agent shall promptly notify
each Lender thereof. Each Lender irrevocably and unconditionally agrees to so pay to the
Administrative Agent in immediately available funds for the Fronting Bank ‘s account the amount of
such Lender’s Pro Rata Share of such payment or disbursement. If and to the extent any Lender
shall not have made such amount available to the Administrative Agent by 2:00 P.M., Chicago time,
on the Business Day on which such Lender receives notice from the Administrative Agent of such
payment or disbursement (it being understood that any such notice received after noon, Chicago
time, on any Business Day shall be deemed to have been received on the next following Business
Day), such Lender agrees to pay interest on such amount to the Administrative Agent for the
Fronting Bank ‘s account forthwith on demand, for each day from the date such amount was to have
been delivered to the Administrative Agent to the date such amount is paid, at a rate per annum
equal to (a) for the first three days after demand, the Federal Funds Rate from time to time in
effect and (b) thereafter, the Base Rate from time to time in effect. Any Lender’s failure to make
available to the Administrative Agent its Pro Rata Share of any such payment or disbursement shall
not relieve the Borrowers or any other Lender of its obligation hereunder to make available to the
Administrative Agent, the Borrowers’ or such other Lender’s Pro Rata Share of such payment, but no
Lender shall be responsible for the failure of any other Lender to make available to the
Administrative Agent such other Lender’s Pro Rata Share of any such payment or disbursement.

     2.4 Commitments Several. The failure of any Lender to make a requested Loan on any
date shall not relieve any other Lender of its obligation (if any) to make a Loan on such date, but
no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by
such other Lender.

     2.5 Certain Conditions. Except with respect to the making of Loans in Sections
2.3.2 and 2.3.4 of this Agreement, no Lender shall have an obligation to make any Loan,
or to permit the continuation of or any conversion into any LIBOR Loan, and the Fronting Bank shall
not have any obligation to issue any Letter of Credit, if an Event of Default or Unmatured Event of
Default exists or would result therefrom.

     2.6 Loan Party Representative. Each Loan Party hereby designates the Parent as its
representative, agent and attorney-in-fact, to act on its behalf (in such capacity, the “Loan Party Representative”)
as specified herein. Each Loan Party hereby authorizes the Loan
Party Representative to take such actions on its behalf under the terms of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties hereunder and thereunder

38

 

as are specified in such agreements or are reasonably incidental thereto, including issuing Notices
of Borrowing and Notices of Conversion/Continuation, acceptance of amounts borrowed hereunder,
giving instructions with respect to the disbursement of the proceeds of the Loans, selecting
interest rate options, requesting Letters of Credit, giving and receiving all other notices and
consents hereunder or under any of the other Loan Documents and taking all other actions (including
in respect of compliance with covenants), in each case, on behalf of the Borrowers and the Loan
Parties under the Loan Documents. The Loan Party Representative hereby accepts such appointment.
The Administrative Agent and the Lenders shall be entitled to rely on all notices, requests,
consents, certifications and/or authorizations or other similar acts delivered or taken by the Loan
Party Representative for or on behalf of any Loan Party pursuant hereto or the other Loan Documents
without inquiry and as if such notices, requests, consents, certifications and/or authorizations or
other similar acts were delivered by such Loan Party. Each warranty, covenant, agreement and
undertaking made on its behalf by the Loan Party Representative shall be deemed for all purposes to
have been made by all Borrowers and Loan Parties (or any of the them, as applicable) and shall be
binding upon and enforceable against such Borrower or Loan Party to the same extent as it if the
same had been made directly by such Borrower or Loan Party. The Parent shall not be permitted to
resign as the Loan Party Representative and the Borrowers shall not be permitted to remove the
Parent as Loan Party Representative without the consent of the Administrative Agent; provided that
if the Parent notifies the Administrative Agent in writing that it (or any successor Loan Party
Representative) shall no longer be able to act as Loan Party Representative in accordance with the
terms hereof, the Administrative Agent and the Borrowers shall appoint a successor to act as Loan
Party Representative, which successor shall be a Borrower designated by the Administrative Agent
therefor (and the Borrowers hereby agree that such Person thereafter shall be vested with all
rights, powers, privileges and authority of the Loan Party Representative hereunder).

SECTION 3 EVIDENCING OF LOANS.

     3.1 Notes. The Loans of each Lender shall be evidenced by a Note in the form set
forth as Exhibit A-1, in the case of the Notes evidencing the Revolving Loans (the
“Revolving Loan Notes”) and in the form set forth as Exhibit A-2, in the case of
the Notes evidencing the Term Loan (the “Term Loan Notes”). Each such Note shall have
appropriate insertions and shall be payable to the order of such Lender in a face principal amount
equal to such Lender’s Revolving Commitment or Term Loan Commitment, as applicable. However, if
such Loans are not so evidenced, such Loans may be evidenced solely by entries upon the books and
records maintained by the Administrative Agent, which books and records shall be conclusively
presumed correct absent manifest error.

     3.2 Recordkeeping. The Administrative Agent, on behalf of each Lender, shall record
in its records, the date and amount of each Loan made by each Lender, each repayment or conversion
thereof and, in the case of each LIBOR Loan, the dates on which each Interest Period for such Loan
shall begin and end. The aggregate unpaid principal amount so recorded shall be rebuttably
presumptive evidence of the principal amount of the Loans owing and unpaid. The failure to so
record any such amount or any error in so recording any such amount shall not,
however, limit or otherwise affect the Obligations of the Borrowers hereunder or under any
Note to repay the principal amount of the Loans hereunder, together with all interest accruing
thereon.

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SECTION 4 INTEREST.

     4.1 Interest Rates. The Borrowers hereby jointly and severally promise to pay
interest on the unpaid principal amount of each Loan for the period commencing on the date of such
Loan until such Loan is paid in full as follows:

          (a) at all times while such Loan is a Base Rate Loan, at a rate per annum equal to the sum of
the Base Rate from time to time in effect plus the Base Rate Margin from time to time in effect;
and

          (b) at all times while such Loan is a LIBOR Loan, at a rate per annum equal to the sum of the
LIBOR Rate applicable to each Interest Period for such Loan plus the LIBOR Margin from time to time
in effect;

provided that any time an Event of Default exists, at the Required Lenders’
election, the interest rate applicable to each such Loan shall be increased by 2%; and
provided, further, that any such increase may thereafter be rescinded by the
Required Lenders, in the case of the Revolving Loans and Term Loan, notwithstanding the
restrictions set forth in Section 15.1. Notwithstanding the foregoing, upon the occurrence
of an Event of Default under Sections 13.1.1 or 13.1.4, such increase shall occur
automatically.

     4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan shall be payable
in arrears on the last day of each calendar month and at maturity. Accrued interest on each LIBOR
Loan shall be payable on the last day of each Interest Period relating to such Loan, upon a
prepayment of such Loan (and, in the case of a LIBOR Loan with an Interest Period in excess of
three (3) months, on the three-month anniversary of the first day of such Interest Period), and at
maturity. After maturity, and at any time an Event of Default exists, accrued interest on all
Loans shall be payable on demand.

     4.3 Setting and Notice of LIBOR Rates. The applicable LIBOR Rate for each Interest
Period shall be determined by the Administrative Agent, and notice thereof shall be given by the
Administrative Agent promptly to the Loan Party Representative and each applicable Lender. Each
determination of the applicable LIBOR Rate by the Administrative Agent shall be conclusive and
binding upon the parties hereto, in the absence of demonstrable error. The Administrative Agent
shall, upon written request of the Loan Party Representative or any Lender, promptly deliver to the
Loan Party Representative or such Lender a statement showing the computations used by the
Administrative Agent in determining any applicable LIBOR Rate hereunder.

     4.4 Computation of Interest. Interest (other than interest calculated based upon the
Base Rate) shall be computed for the actual number of days elapsed on the basis of a year of 360
days. Interest computations based upon the Base Rate shall be computed for the actual number of
days elapsed on the basis of a year of 365/366 days. The applicable interest rate for each Base
Rate Loan shall change simultaneously with each change in the Base Rate.

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SECTION 5 FEES.

     5.1 Non-Use Fee. The Borrowers hereby jointly and severally agree to pay to the
Administrative Agent, for the account of each Lender with a Revolving Commitment, a non-use fee,
for the period from the Closing Date to the Termination Date, at the Non-Use Fee Rate in effect
from time to time of such Lender’s Pro Rata Share (as adjusted from time to time) of the daily
average of the unused amount of the Maximum Revolving Commitment. For purposes of calculating
usage under this Section, the Maximum Revolving Commitment shall be deemed used to the extent of
Revolving Outstandings. Such non-use fee shall be payable in arrears on the last day of each
Fiscal Quarter ending after the Closing Date and on the Termination Date for any period then ending
for which such non-use fee shall not have previously been paid. The non-use fee shall be computed
for the actual number of days elapsed on the basis of a year of 360 days.

     5.2 Letter of Credit Fees.

          (a) The Borrowers hereby jointly and severally agree to pay to the Administrative Agent, for
the account of each Lender with a Revolving Commitment, a letter of credit fee for each Letter of
Credit equal to the L/C Fee Rate in effect from time to time of such Lender’s Pro Rata Share (as
adjusted from time to time) of the undrawn amount of such Letter of Credit (computed for the actual
number of days elapsed on the basis of a year of 360 days); provided that, upon the occurrence and
during the continuation of an Event of Default, upon the election of the Required Lenders (or
automatically upon the occurrence of an Event of Default under Section 13.1.1 or
13.1.4), the rate applicable to each Letter of Credit shall be increased by 2%. Such
letter of credit fee shall be payable in arrears on the last day of each Fiscal Quarter ending
after the Closing Date and on the Termination Date (or such later date on which such Letter of
Credit expires or is terminated) for the period from the date of the issuance of each Letter of
Credit (or the last day on which the letter of credit fee was paid with respect thereto) to the
date such payment is due or, if earlier, the date on which such Letter of Credit expired or was
terminated.

          (b) In addition, with respect to each Letter of Credit, the Borrowers hereby jointly and
severally agree to pay to the Fronting Bank, for its own account, (i) such fees and expenses as the
Fronting Bank customarily requires in connection with the issuance, negotiation, processing and/or
administration of letters of credit in similar situations, and (ii) letter of credit fronting fee
in the amount and at the time set forth in the Agent Fee Letter, which fee shall be calculated on
the basis of a 360-day year and the actual number of days elapsed.

     5.3 Administrative Agent’s Fees. The Borrowers hereby jointly and severally agree to
pay to the Administrative Agent such agent’s fees as are set forth in the Agent Fee Letter.

SECTION 6 REDUCTION AND TERMINATION OF THE REVOLVING COMMITMENT LIMIT AND
THE REVOLVING COMMITMENT; PREPAYMENTS.

     6.1 Reduction and Termination of the Revolving Commitment.

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          6.1.1 Voluntary Reduction or Termination of the Revolving Commitment Limit. The Loan
Party Representative may from time to time on at least three Business Days’ prior written notice
received by the Administrative Agent (which shall promptly advise each Lender thereof) permanently
reduce the Revolving Commitment Limit to an amount not less than the Revolving Outstandings. Any
such reduction shall be in an amount not less than $1,000,000 or a higher integral multiple of
$1,000,000 and such reduction shall be applied Pro Rata as a reduction to each Lender’s Revolving
Commitment such that the sum of such Revolving Commitments equal the Revolving Commitment Limit.
Concurrently with any reduction of the Revolving Commitment Limit to zero, the Termination Date
shall be deemed to have occurred, and the Borrowers shall be required to repay all Obligations and
shall terminate or Cash Collateralize in full all outstanding Letters of Credit.

          6.1.2 All Reductions of the Revolving Commitment. All reductions of the Revolving
Commitment shall reduce the Revolving Commitment Limit and shall reduce the Revolving Commitments
ratably among the Lenders with a Revolving Commitment according to their respective Pro Rata Shares
(as defined under clause (a) thereof).

     6.2 Prepayments.

          6.2.1 Voluntary Prepayments. The Borrowers may from time to time prepay the Loans in
whole or in part without premium or penalty (but subject to payment of costs associated with
breakfunding on LIBOR loans pursuant to Section 8.4). The Loan Party Representative shall
give the Administrative Agent (which shall promptly advise each Lender) notice thereof not later
than 11:00 A.M., Chicago time, on the day (which shall be a Business Day) of such prepayment
specifying the Loans to be prepaid and the date and amount of prepayment. Any such voluntary
partial prepayment shall be in a principal amount equal to $1,000,000 or a higher integral multiple
of $100,000, and, with respect to prepayments of the Term Loan, shall also be accompanied by
payment of all accrued but unpaid interest on the amount Term Loan being prepaid and any
breakfunding costs, if any, pursuant to Section 8.4. Revolving Loans may be prepaid at any
time and from time to time and, subject to the terms hereof, reborrowed. Term Loans that are
prepaid may not be reborrowed.

          6.2.2 Mandatory Prepayments.

          (a) The Borrowers shall make a prepayment of the Loans until paid in full upon the occurrence
of any of the following (each a “Mandatory Prepayment Event”) at the following times and in
the following amounts (such applicable amounts being referred to as “Designated Proceeds”)
which amount shall be applied in accordance with this Section 6.2.2(a), Section 6.3
and Section 7.2 as follows:

          (i) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any
Asset Disposition, in an amount equal to 100% of such Net Cash Proceeds.

          (ii) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any
issuance of Capital Securities of any Loan Party (excluding any

42

 

issuance of Capital Securities by any Loan Party to any Loan Party) in an amount equal
to 100% of such Net Cash Proceeds.

          (iii) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any
issuance of any Debt of any Loan Party (excluding Debt permitted by clauses (a) — (m) of
Section 11.1), in an amount equal to 100% of such Net Cash Proceeds.

          (iv) Concurrently with the receipt by any Loan Party of any contribution by the Parent
funded from the Net Cash Proceeds of any issuance of Capital Securities by such Loan Party
to the Parent, in an amount equal to 100% of such contribution.

          (v) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any
Extraordinary Receipts not otherwise included in any of the foregoing clauses, in an amount
equal to 100% of such Net Cash Proceeds.

Nothing in this Section 6.2.2(a) shall be deemed to authorize any Asset Disposition or the
sale or issuance of any Capital Securities or Debt not otherwise permitted hereunder.

The prepayments required under Section 6.2.2(a)(i)-(iv) shall be applied first, to
the Term Loan in accordance with Section 6.3 and (B) second, to the Revolving Loans
(such prepayments of the Revolving Loans may, subject to the terms hereof, be reborrowed) and the
prepayments required under Section 6.6.2(a)(v) shall be applied to the Revolving Loans
(such prepayments of the Revolving Loans may, subject to the terms hereof, be reborrowed).

          (b) In addition to the payments required pursuant to clause (a) immediately above, from and
after the giving of any Notice of Control directing collections of Accounts to the Agent Account
(unless and until such Notice of Control is rescinded in accordance with the provisions of
Section 10.11), the outstanding principal balance of the Revolving Loans shall be repaid
daily from available funds in the Agent Account as determined in accordance with Section
7.1.1 and Section 10.11 hereof.

          (c) Without limiting any of the other rights and remedies of the Administrative Agent and the
Lenders in respect thereof, if on any day the Revolving Outstandings exceeds the Revolving Loan
Availability on such day, the Borrowers shall immediately prepay the Revolving Loans and/or Cash
Collateralize the outstanding Letters of Credit, or do a combination of the foregoing, in an amount
sufficient to eliminate such excess.

          (d) Nothing in this Section 6.2.2 shall be deemed to authorize the taking of any
action by any Loan Party which is not otherwise permitted hereunder.

     6.3 Manner of Prepayments. Any partial prepayment of a Group of LIBOR Loans shall be
subject to the proviso to Section 2.2.3(a). Any prepayment of a LIBOR Loan on a day other
than the last day of an Interest Period therefor shall include interest on the principal amount
being repaid and shall be subject to Section 8.4. Except as otherwise provided by this
Agreement, all principal payments in respect of the Loans shall be applied first, to repay
outstanding Base Rate Loans, if any, and then to repay outstanding LIBOR Rate Loans in direct

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order of Interest Period maturities. Notwithstanding the foregoing sentence, all prepayments
of the Term Loans pursuant to Section 6.2.1 or 6.2.2 shall be applied pro rata
among the Term Loans according to principal amounts thereof and, as to each Term Loan, pro rata to
all remaining installments of principal. Term Loans that are prepaid may not be reborrowed.

     6.4 Repayments.

          6.4.1 All Obligations. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, (I)
ALL OBLIGATIONS (OTHER THAN UNASSERTED CONTINGENT AND INDEMNIFICATION OBLIGATIONS AND SPECIFIED
HEDGING OBLIGATIONS NOT OTHERWISE DUE OR REQUIRED TO BE PAID) SHALL BE AND BECOME IMMEDIATELY DUE
AND PAYABLE AND (II) ALL LETTERS OF CREDIT SHALL IMMEDIATELY BE REQUIRED TO BE TERMINATED OR CASH
COLLATERALIZED UPON THE OCCURRENCE OF THE TERMINATION DATE FOR ANY REASON WHATSOEVER.

          6.4.2 Revolving Loans. The Revolving Loans of each Lender shall be paid in full and
the Revolving Commitment shall terminate on the Termination Date.

          6.4.3 Term Loan. The principal amount of the Term Loan shall be repaid in quarterly
installments equal to $3,600,000 on the last day of each Fiscal Quarter beginning with the Fiscal
Quarter ended June 30, 2008 and the final installment in the aggregate amount of the unpaid
principal balance of the Term Loan shall be repaid on the Scheduled Termination Date. Unless
sooner paid in full, the outstanding principal balance of the Term Loan shall be paid in full on
the Scheduled Termination Date.

SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

     7.1 Making of Payments.

          7.1.1 Manner of Payment; Application of Payment. All payments of principal or
interest on the Notes, and of all fees, shall be made by the Borrowers to the Administrative Agent
in immediately available funds at the office specified by the Administrative Agent not later than
1:00 p.m., Chicago time, on the due date therefor; and funds received after such time shall be
deemed to have been received by the Administrative Agent on the following Business Day. The
Administrative Agent shall remit to each Lender its share of all such payments received in
collected funds by the Administrative Agent for the account of such Lender entitled thereto in the
manner and at the times set forth in Section 7.1.3 below. All payments shall be made by
the Borrowers directly to the Administrative Agent without setoff, counterclaim, deduction,
withholding or other defense.

          7.1.2 Payment Authorization. The Borrowers hereby authorize the Administrative Agent,
in its sole discretion, to charge any of the Borrowers’ accounts or advance Revolving Loans to make
any payments of principal, interest, fees, costs or expenses required to be made under this
Agreement or the other Loan Documents.

          7.1.3 Settlement. Within one Business Day of Administrative Agent’s receipt of
payments hereunder (a “Settlement Date”), the Administrative Agent shall

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immediately distribute to each Lender (except with respect to Letters of Credit, certain of
which statements of activity and payments shall be made by the Fronting Bank) its ratable shares
(taking into account any Disproportionate Advances, which the Administrative Agent shall be
entitled to settle out of any payment so received), if any, of the amount of principal, interest,
and facility and other fees received by Administrative Agent for the account of such Lender.
Payments received by Agent in Dollars shall be delivered to the Lenders in Dollars in immediately
available funds. Each Lender shall record any principal, interest or other payment, the principal
amounts of Base Rate Loans, LIBOR Loans, Letters of Credit, all prepayments and the applicable
dates, including Interest Periods, with respect to the Loans made, and payments received by such
Lender, by such method as such Lender may generally employ; provided, however, that failure to make
any such entry shall in no way detract from the obligations of Borrowers under this Agreement or
any of the Notes. The aggregate unpaid amount of Loans, types of Loans, Interest Periods and
similar information with respect to the Loans and Letters of Credit set forth on the records of
Administrative Agent shall be rebuttably presumptive evidence with respect to such information,
including the amounts of principal, interest and fees owing to each Lender. Notwithstanding the
foregoing, the Administrative Agent shall not be obligated to transfer to any Defaulting Lender any
payment made by any Borrower to the Administrative Agent, nor shall such Defaulting Lender be
entitled to share any interest, fees or other payment hereunder, until payment is made by such
Defaulting Lender to the Administrative Agent as required in this Agreement.

     7.2 Application of Certain Payments. So long as no Event of Default has occurred and
is continuing, (a) payments matching specific scheduled payments then due shall be applied to those
scheduled payments and (b) voluntary and mandatory prepayments shall be applied as set forth in
Sections 6.2 and 6.3. After the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Administrative Agent or any Lender as proceeds
from the sale of, or other realization upon, all or any part of the Collateral shall be applied as
the Administrative Agent shall determine in its reasonable discretion or, in the absence of a
specific determination by the Administrative Agent, as set forth in the Guaranty and Collateral
Agreement. Concurrently with each remittance to any Lender of its share of any such payment, the
Administrative Agent shall advise such Lender as to the application of such payment.

     7.3 Due Date Extension. If any payment of principal or interest with respect to any
of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date
shall be extended to the immediately following Business Day (unless, in the case of a LIBOR Loan,
such immediately following Business Day is the first Business Day of a calendar month, in which
case such due date shall be the immediately preceding Business Day) and, in the case of principal,
additional interest shall accrue and be payable for the period of any such extension.

     7.4 Setoff. The Borrowers and the other Loan Parties each agree that the
Administrative Agent and each Lender have all rights of set-off and bankers’ lien provided by
applicable law, and in addition thereto, the Borrowers and each other Loan Party agree that at any
time any Event of Default exists and is continuing, the Administrative Agent and each Lender may
apply to the payment of any Obligations of the Borrowers and each other Loan Party
hereunder, whether or not then due, any and all balances, credits, deposits, accounts or
moneys

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of the Borrowers and each other Loan Party then or thereafter with the Administrative Agent
or such Lender.

     7.5 Proration of Payments. If any Lender shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of offset or otherwise, on account of (a) principal
of or interest on any Loan (but excluding (i) any payment pursuant to Sections 8.7 or
15.5 and (ii) payments of interest on any Affected Loan) or (b) its participation in any
Letter of Credit) in excess of its applicable Pro Rata Share of those payments and other recoveries
obtained by all other applicable Lenders on account of principal of and interest on the respective
Loans (or such participation) then held by them, then such Lender shall purchase from the other
applicable Lenders such participations in the respective affected Loans (or sub-participations in
Letters of Credit) held by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided that if all or any portion of
the excess payment or other recovery is thereafter recovered from such purchasing Lender, the
purchase shall be rescinded and the purchase price restored to the extent of such recovery.

     7.6 Taxes.

          (a) Except as expressly otherwise provided in this Section 7.6, all payments made by
each Loan Party hereunder or under any Loan Documents (including any payment of principal,
interest, or fees) to, or for the benefit, of any Person (i) shall be made without setoff,
counterclaim, or other defense and (ii) shall be made by each Loan Party free and clear of and
without deduction or withholding for, or account of, any Taxes now or hereinafter imposed by any
taxing authority.

          (b) If any Borrower makes any payment hereunder or under any Loan Document in respect of which
it is required by applicable law to deduct or withhold any Taxes, such Loan Party shall increase
the payment hereunder or under any such Loan Document such that after the reduction for the amount
of Taxes withheld (and any Taxes withheld or imposed with respect to the additional payments
required under this Section 7.6(b)), the amount paid to the Lenders or the Administrative
Agent equals the amount that was payable hereunder or under any such Loan Document without regard
to this Section 7.6(b). To the extent any Loan Party withholds any Taxes on payments
hereunder or under any Loan Document, such Loan Party shall pay the full amount deducted to the
relevant taxing authority within the time allowed for payment under applicable law and shall
deliver to the Administrative Agent within 30 days after it has made payment to such authority a
receipt issued by such authority (or other evidence satisfactory to the Administrative Agent)
evidencing the payment of all amounts so required to be deducted or withheld from such payment.

          (c) If any Lender or the Administrative Agent is required by law to make any payments of any
Taxes on or in relation to any amounts received or receivable hereunder or under any other Loan
Document, or any Tax is assessed against a Lender or the Administrative Agent with respect to
amounts received or receivable hereunder or under any other Loan Document, each Borrower hereby
jointly and severally agrees to indemnify such Person against (i) such Tax (and any reasonable
counsel fees and expenses associated with such Tax) and (ii)
any Taxes imposed as a result of the receipt of the payment under this Section 7.6(c).
A

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certificate prepared in good faith as to the amount of such payment by such Lender or the
Administrative Agent shall, absent manifest error, be final, conclusive, and binding on all
parties.

          (d) (i) Each Lender that is not a United States Person within the meaning of Code Section
7701(a)(30) (a “Non-U.S. Participant”) shall deliver to the Loan Party Representative and
the Administrative Agent on or prior to the Closing Date (or in the case of a change in the funding
office or a Lender that is an Assignee, on the date of such change in funding office or assignment
to such Lender) two accurate and complete original signed copies of Internal Revenue Service
(“IRS”) Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable form
prescribed by the IRS) certifying to such Lender’s entitlement to a complete exemption from United
States withholding tax on interest payments to be made hereunder or any Loan. If a Lender that is
a Non-U.S. Participant is claiming a complete exemption from withholding on interest pursuant to
Code Sections 871(h) or 881(c), such Lender shall deliver (along with two accurate and complete
original signed copies of IRS Form W-8BEN) a certificate in form and substance reasonably
acceptable to Administrative Agent (any such certificate, a “Withholding Certificate”). In
addition, each Lender that is a Non-U.S. Participant agrees that, from time to time after the
Closing Date (or in the case of a Lender that is an Assignee, after the date of the assignment to
such Lender), when a lapse in time (or change in circumstances or in any applicable law, rule or
regulation by any governmental authority, or compliance by any Lender with any request or directive
(whether or not having force of law) of any such authority occurs) renders the prior certificates
hereunder obsolete or inaccurate in any material respect, such Lender shall promptly, to the extent
permitted under applicable law, deliver to the Loan Party Representative and the Administrative
Agent two new and accurate and complete original signed copies of an IRS Form W-8BEN, W-8ECI, or
W-8IMY (or any successor or other applicable forms prescribed by the IRS) and, if applicable, a new
Withholding Certificate, to confirm or establish the entitlement of such Lender or the
Administrative Agent to an exemption from, or reduction in, United States withholding tax on
interest payments to be made hereunder or any Loan.

          (ii) Each Lender that is not a Non-U.S. Participant (other than any such Lender which
is taxed as a corporation for U.S. Federal income tax purposes) shall provide two properly
completed and duly executed copies of IRS Form W-9 (or any successor or other applicable
form) to the Loan Party Representative and the Administrative Agent certifying that such
Lender is exempt from United States backup withholding tax. Thereafter, from time to time,
to the extent that a form provided pursuant to this Section 7.6(d)(ii) is rendered
obsolete or inaccurate in any material respects as result of change in circumstances with
respect to the status of a Lender, such Lender shall promptly deliver to the Loan Party
Representative and the Administrative Agent revised forms necessary to confirm or establish
the entitlement to such Lender’s or Administrative Agent’s exemption from United States
backup withholding tax.

          (iii) No Borrower shall be required to pay additional amounts to a Lender (or under
Section 7.6(b)), or indemnify any Lender, under this Section 7.6 to the
extent that such obligations would not have arisen but for the failure of such Lender to
comply with Section 7.6(d).

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          (e) Each Lender agrees to indemnify the Administrative Agent and hold the Administrative Agent
harmless for the full amount of any and all present or future Taxes and related liabilities
(including penalties, interest, additions to tax and expenses, and any Taxes imposed by any
jurisdiction on amounts payable to the Administrative Agent under this Section 7.6) which
are imposed on or with respect to principal, interest or fees payable to such Lender hereunder and
which are not paid by the Borrower pursuant to this Section 7.6, whether or not such Taxes
or related liabilities were correctly or legally asserted. Amounts due pursuant to this
indemnification shall be paid to the Administrative Agent within 30 days from the date the
Administrative Agent makes written demand therefor.

SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.

     8.1 Increased Costs.

          (a) If, after the date hereof, the adoption of, or any change in, any applicable law, rule or
regulation, or any change in the interpretation or administration of any applicable law, rule or
regulation by any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any request or directive
(whether or not having the force of law) of any such authority, central bank or comparable agency:
(i) shall impose, modify or deem applicable any reserve (including any reserve imposed by the FRB,
but excluding any reserve included in the determination of the LIBOR Rate pursuant to the
definition thereof or Section 4), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by any Lender; or (ii) shall impose on any
Lender any other condition affecting its LIBOR Loans, its Notes or its obligation to make LIBOR
Loans; and the result of anything described in clauses (i) and (ii) above is to
increase the cost to (or to impose a cost on) such Lender (or any LIBOR Office of such Lender) of
making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable by
such Lender (or its LIBOR Office) under this Agreement or under its Notes with respect thereto
(other than any such increased cost or reduction on account of taxes of any kind, including
Excluded Taxes and Taxes, as to which Section 7.6 shall govern), then upon demand by such
Lender (which demand shall be accompanied by a statement setting forth the basis for such demand
and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to
the Administrative Agent), the Borrowers hereby jointly and severally agree to pay directly to such
Lender such additional amount as will compensate such Lender for such increased cost or such
reduction, so long as such amounts have accrued on or after the day which is 180 days prior to the
date on which such Lender first made demand therefor.

          (b) If any Lender shall reasonably determine that any change in, or the adoption or phase-in
of, any applicable law, rule or regulation regarding capital adequacy, or any change in the
interpretation or administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or the compliance by any Lender
or any Person controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such Lender’s or such controlling
Person’s capital as a consequence of such Person’s obligations hereunder or under any Letter of
Credit to a level below that which such Lender or such

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controlling Person could have achieved but for such change, adoption, phase-in or compliance
(taking into consideration such Lender’s or such controlling Person’s policies with respect to
capital adequacy) by an amount deemed by such Lender or such controlling Person to be material,
then from time to time, upon demand by such Lender (which demand shall be accompanied by a
statement setting forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished to the Administrative Agent), the Borrowers
hereby jointly and severally agree to pay to such Lender such additional amount as will compensate
such Lender or such controlling Person for such reduction so long as such amounts have accrued on
or after the day which is 180 days prior to the date on which such Lender first made demand
therefor.

     8.2 Basis for Determining Interest Rate Inadequate or Unfair. If:

          (a) the Administrative Agent reasonably determines (which determination shall be binding and
conclusive on each Borrower) absent manifest error that by reason of circumstances affecting the
interbank LIBOR market, adequate and reasonable means do not exist for ascertaining the applicable
LIBOR Rate; or

          (b) the Required Lenders advise the Administrative Agent that the LIBOR Rate as determined by
the Administrative Agent will not adequately and fairly reflect the cost to such Lenders of
maintaining or funding LIBOR Loans for the relevant Interest Period (taking into account any amount
to which such Lenders may be entitled under Section 8.1) or that the making or funding of
LIBOR Loans has become impracticable as a result of an event occurring after the date of this
Agreement which in the opinion of such Lenders materially affects such Loans; then the
Administrative Agent shall promptly notify the other parties thereof and, so long as such
circumstances shall continue, (i) in the case of the Lenders, no such Lender shall be under any
obligation to make or convert any Base Rate Loans into LIBOR Loans and (ii) on the last day of the
current Interest Period for each LIBOR Loan, such Loan shall, unless then repaid in full, in the
case of the Revolving Loans and Term Loan, automatically convert to a Base Rate Loan.

     8.3 Changes in Law Rendering LIBOR Loans Unlawful. If any change in, or the adoption
of any new, law or regulation, or any change in the interpretation of any applicable law or
regulation by any governmental or other regulatory body charged with the administration thereof,
should make it (or in the good faith judgment of any Lender cause a substantial question as to
whether it is) unlawful for any Lender to make, maintain or fund LIBOR Loans, then such Lender
shall promptly notify each of the other parties hereto and, so long as such circumstances shall
continue, (a) in the case of the Lenders, no such Lender shall have any obligation to make or
convert any Base Rate Loan into a LIBOR Loan (but shall make Base Rate Loans concurrently with the
making of or conversion of Base Rate Loans into LIBOR Loans by such Lenders which are not so
affected, in each case in an amount equal to the amount of LIBOR Loans which would be made or
converted into by such Lender at such time in the absence of such circumstances) and (b) on the
last day of the current Interest Period for each LIBOR Loan of such Lender (or, in any event, on
such earlier date as may be required by the relevant law, regulation or interpretation), such LIBOR
Loan shall, automatically convert to a Base Rate Loan. Each Base Rate Loan made by a Lender
which, but for the circumstances described in the foregoing sentence, would be a LIBOR Loan (an
“Affected Loan”) shall remain outstanding for

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the period corresponding to the Group of LIBOR Loans of which such Affected Loan would be a
part absent such circumstances.

     8.4 Funding Losses. The Borrowers hereby jointly and severally agree that upon
written demand by any Lender (which demand shall be accompanied by a statement setting forth in
reasonable detail the basis for the amount being claimed, a copy of which shall be furnished to the
Administrative Agent), each Borrower will indemnify such Lender against any net loss or expense
which such Lender may sustain or incur (including any net loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain
any LIBOR Loan), as reasonably determined by such Lender, as a result of (a) any payment,
prepayment or conversion of any LIBOR Loan of such Lender on a date other than the last day of an
Interest Period for such Loan (including any conversion pursuant to Section 8.3 or the
replacement of any Lender pursuant to Section 8.7) or (b) any failure of any Borrower to
borrow, convert or continue any Loan on a date specified therefor in a notice of borrowing,
conversion or continuation pursuant to this Agreement. For this purpose, all such notices to the
Administrative Agent pursuant to this Agreement shall be deemed irrevocable.

     8.5 Right of Lenders to Fund through Other Offices. Each Lender may, if it so elects,
fulfill its commitment as to any LIBOR Loan by causing a foreign branch or Affiliate of such Lender
to make such Loan; provided that in such event for the purposes of this Agreement such Loan shall
be deemed to have been made by such Lender and the obligation of the Borrowers to repay such Loan
shall nevertheless be to such Lender and shall be deemed held by it, to the extent of such Loan,
for the account of such branch or Affiliate.

     8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any provision of
this Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of
all or any part of its Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if such Lender had
actually funded and maintained each LIBOR Loan during each Interest Period for such Loan through
the purchase of deposits having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the LIBOR Rate for such Interest Period.

     8.7 Mitigation of Circumstances; Replacement of Lenders.

          (a) Each Lender shall promptly notify the Loan Party Representative and the Administrative
Agent of any event of which it has knowledge which will or is likely to result in, and will use
reasonable commercial efforts available to it (other than the taking of any such action which, in
such Lender’s sole judgment, imposes any expense upon or is otherwise disadvantageous to such
Lender) to mitigate or avoid, (i) any obligation by the Borrowers to pay any amount pursuant to
Section 7.6 or 8.1 or (ii) the occurrence of any circumstances described in
Section 8.2 or 8.3 (and, if any Lender has given notice of any such event described
in clause (i) or (ii) above and thereafter such event ceases to exist, such Lender shall promptly
so notify the Loan Party Representative and the Administrative Agent); provided that the failure by
any Lender to provide prospective notice of any such possible event shall not reduce or diminish
such Lender’s remedies or the Loan Parties’ obligations hereunder. Without limiting the foregoing,
each Lender will designate a different funding office if such designation will avoid (or reduce the
cost to the Borrowers of) any event described in clause (i) or (ii) above and such

50

 

designation will not, in such Lender’s sole judgment, impose aggregate expenses in excess of
$1,000 on such Lender or be otherwise disadvantageous to such Lender.

          (b) If any Borrower becomes obligated to pay additional amounts to any Lender pursuant to
Section 7.6 or 8.1, any Lender gives notice of the occurrence of any circumstances
described in Section 8.2 or 8.3, or any Defaulting Lender pursuant to Section
2.1.1(b) does not make payment to the Administrative Agent of such amounts giving rise to its
becoming a Defaulting Lender within 15 days of the date such payment is required under this
Agreement, the Loan Party Representative may designate another bank which is acceptable to the
Administrative Agent and the Fronting Bank in their reasonable discretion (such other bank being
called a “Replacement Lender”) to purchase the Loans of such Lender and such Lender’s
rights hereunder, without recourse to or warranty by, or expense to, such Lender, for a purchase
price equal to the outstanding principal amount of the Loans payable to such Lender plus any
accrued but unpaid interest on such Loans and all accrued but unpaid fees owed to such Lender
(including pursuant to Section 8.4 hereof) and any other amounts payable to such Lender
under this Agreement, and to assume all the obligations of such Lender hereunder, and, upon such
purchase and assumption (pursuant to an Assignment Agreement), such Lender shall no longer be a
party hereto or have any rights hereunder (other than rights with respect to indemnities and
similar rights applicable to such Lender prior to the date of such purchase and assumption) and
shall be relieved from all obligations to the Borrowers hereunder, and the Replacement Lender shall
succeed to the rights and obligations of such Lender hereunder.

     8.8 Conclusiveness of Statements; Survival of Provisions. Determinations and
statements of any Lender pursuant to Section 7.6, 8.1, 8.2, 8.3 or
8.4 shall be conclusive absent demonstrable error. Lenders may use reasonable averaging
and attribution methods in determining compensation under Sections 7.6, 8.1 and
8.4, and the provisions of such Sections shall survive repayment of the Obligations (other
than unasserted contingent indemnification obligations), cancellation of any Notes, expiration or
termination of the Letters of Credit and termination of this Agreement.

SECTION 9 REPRESENTATIONS AND WARRANTIES.

     To induce the Administrative Agent and the Lenders to enter into this Agreement and to induce
the Lenders to make Loans and issue and participate in Letters of Credit hereunder, the Loan
Parties hereby jointly and severally represent and warrant to the Administrative Agent and the
Lenders that:

     9.1 Organization. The Parent and each Loan Party is validly existing and in good
standing under the laws of its jurisdiction of organization and each is duly qualified to do
business in each jurisdiction where, because of the nature of its activities or properties, such
qualification is required, except for such jurisdictions where the failure to so qualify would not
have or could not reasonably be expected to have a Material Adverse Effect.

     9.2 Authorization; No Conflict. The Parent and each Loan Party is duly authorized to
execute and deliver each Loan Document to which it is a party, each Borrower is duly authorized to
borrow monies hereunder and the Parent and each Loan Party is duly authorized to perform its
obligations under each Loan Document to which it is a party. The

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execution, delivery and performance by the Parent and each Loan Party of each Loan Document to
which it is a party, and the borrowings by each Borrower hereunder, do not and will not (a) require
any consent or approval of any governmental agency or authority (other than any consent or approval
which has been obtained and is in full force and effect, except such as would not have and
reasonably could not be expected to have a Material Adverse Effect), (b) conflict with (i) any
provision of law, (ii) the charter, by-laws or other organizational documents of the Parent or any
Loan Party or (iii) any material agreement, indenture, instrument or other material document, or
any judgment, order or decree, which is binding upon the Parent, any Loan Party or any of their
respective properties or (c) require, or result in, the creation or imposition of any Lien on any
asset of any Loan Party (other than Permitted Liens and Liens in favor of the Administrative Agent
created pursuant to the Collateral Documents).

     9.3 Validity and Binding Nature. Each of this Agreement and each other Loan Document
to which the Parent or any Loan Party is a party is the legal, valid and binding obligation of such
Person, enforceable against such Person in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting the enforceability of creditors’ rights generally and to
general principles of equity regardless of whether considered in a proceeding in equity or law.

     9.4 Financial Condition. (i) The (x) reports of independent registered public
accounting firm of the Parent and its Subsidiaries (excluding CoCaLo, LaJobi, LaJobi Industries and
I & J) for Fiscal Years 2004, 2005 and 2006, including audited consolidated balance sheets,
statements of operations and statements of cash flows of the Parent and its Subsidiaries (excluding
CoCaLo, LaJobi, LaJobi Industries and I & J) for such periods (together with the unqualified
certification of such accountants relating thereto), together with the unaudited consolidating
balance sheets and statements of operations of the Parent and its Subsidiaries (excluding CoCaLo,
LaJobi, LaJobi Industries and I & J), as certified by the Chief Financial Officer and accompanied
by agreed upon procedures letter from the aforementioned accounting firm, in each case, for such
Fiscal Years and (y) with respect to the fiscal months and Fiscal Quarters ended after Fiscal Year
2006 through September 30, 2007, unaudited consolidated and consolidating balance sheets and
statements of earnings and cash flows of the Borrowers and their Subsidiaries (excluding CoCaLo,
LaJobi, LaJobi Industries and I & J), as certified by the Chief Financial Officer and (ii) the
financial statements of the Targets described in Section 12.1.12 hereof, copies of each of
which have been delivered to the Administrative Agent, were prepared in accordance with GAAP
(subject to the absence of footnotes and to normal year-end adjustments, solely with respect to
unaudited financial statements) and present fairly in all material respects the consolidated
financial condition of the Borrowers and their Subsidiaries, the Parent and its Subsidiaries, and
each of the Targets and their respective Subsidiaries, as applicable, as at such dates and the
results of their operations for the periods then ended.

     9.5 No Material Adverse Change.

          (a) Between September 30, 2007 and the Closing Date, solely with respect to Kids Line, Sassy,
I & J and LaJobi, no event or circumstance existed and/or has occurred that has had or could
reasonably be expected to have, either alone or in conjunction with any other circumstances, events
or occurrences, a Material Adverse Effect.

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          (b) Between December 31, 2006 and the Closing Date, solely with respect to the LaJobi
Industries, CoCaLo and their Subsidiaries, no event or circumstance existed and/or has occurred
that has had or could reasonably be expected to have, either alone or in conjunction with any other
circumstances, events or occurrences, a Material Adverse Effect on such entities, taken as a whole.

          (c) Since September 30, 2007, no event or circumstance exists and/or has occurred that has had
or could reasonably be expected to have, either alone or in conjunction with any other
circumstances, events or occurrences, a Material Adverse Effect.

     9.6 Litigation and Contingent Liabilities. No litigation (including derivative
actions), arbitration proceeding or governmental investigation or proceeding is pending or, to such
Loan Party’s knowledge, threatened against, the Parent, any other Loan Party or any of the
foregoing’s Subsidiaries which has had, or could reasonably be expected to have, a Material Adverse
Effect. Other than any liability incident to such litigation or proceedings, no Loan Party has any
material Contingent Liabilities not listed on Schedule 9.6 or permitted by Section
11.1.

     9.7 Ownership of Properties; Liens. Each Loan Party owns good and, in the case of
real property, marketable title to all of its properties and assets, real and personal, tangible
and intangible, of any nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights) material to its business free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks, copyrights and the like)
other than Permitted Liens. (i) The Parent owns good title to the Capital Securities of Kids Line,
Sassy and I & J, (ii) I & J owns good title to the Capital Securities of LaJobi and (iii) following
the consummation of the CoCaLo Acquisition, I & J will own good title to the Capital Securities of
CoCaLo, in each case, free and clear of all Liens (other than Liens permitted pursuant to
Section 11.2(h)), charges and claims other than Liens in favor of the Administrative Agent
pursuant to the Pledge Agreement and the Guaranty and Collateral Agreement.

     9.8 Equity Ownership; Subsidiaries. All issued and outstanding Capital Securities of
each Loan Party and each Subsidiary are duly authorized and validly issued, fully paid,
non-assessable, and free and clear of all Liens other than Permitted Liens, and such securities
were issued in compliance with all applicable state and federal laws concerning the issuance of
securities. Schedule 9.8 sets forth the authorized Capital Securities of each Loan Party
and each Subsidiary as of the Closing Date. All of the issued and outstanding Capital Securities
of each Loan Party and each Subsidiary are owned as set forth on Schedule 9.8 as of the
Closing Date, and all of the issued and outstanding Capital Securities of each Wholly-Owned
Subsidiary is, directly or indirectly, owned by such Loan Party. As of the Closing Date, except as
set forth on Schedule 9.8, there are no pre-emptive or other outstanding rights, options,
warrants, conversion rights or other similar agreements or understandings for the purchase or
acquisition of any Capital Securities of any Loan Party or any Subsidiary.

     9.9 Pension Plans.

          (a) There is no Unfunded Liability which would have or could reasonably be expected to have a
Material Adverse Effect. Each Pension Plan complies in all material respects with its terms and
all applicable requirements of law and regulations. No contribution failure

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under Section 412 of the Code, Section 302 of ERISA, any other applicable law or the terms of
any Pension Plan has occurred with respect to any Pension Plan, sufficient to give rise to a Lien
under Section 302(f) of ERISA, or otherwise would have or could reasonably be expected to have a
Material Adverse Effect. There are no pending or, to the knowledge of any Loan Party, threatened,
claims, actions, investigations or lawsuits against any Pension Plan, any fiduciary of any Pension
Plan, or Loan Party or any other member of the Controlled Group with respect to a Pension Plan or a
Multiemployer Pension Plan which would have or could reasonably be expected to have a Material
Adverse Effect. No Loan Party nor any other member of the Controlled Group has engaged in any
prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in
connection with any Pension Plan or any Multiemployer Pension Plan which would subject any Loan
Party or any other member of the Controlled Group to any material liability. Within the past five
years, no Loan Party nor any other member of the Controlled Group has engaged in a transaction
which resulted in a Pension Plan with an Unfunded Liability being transferred out of the Controlled
Group which would have or could reasonably be expected to have a Material Adverse Effect. No
Termination Event has occurred or is reasonably expected to occur with respect to any Pension Plan
which would have or could reasonably be expected to have a Material Adverse Effect.

          (b) All contributions (if any) have been made to any Multiemployer Pension Plan that are
required to be made by the Loan Parties or any other member of the Controlled Group under the terms
of the plan or of any collective bargaining agreement or by applicable law; no Loan Party nor any
other member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any material withdrawal liability with respect to any such plan or received
notice of any claim or demand for withdrawal liability or partial withdrawal liability from any
such plan, and no condition has occurred which, if continued, could result in a withdrawal or
partial withdrawal from any such plan; and no Loan Party nor any other member of the Controlled
Group has received any notice that any Multiemployer Pension Plan is in reorganization, that
increased contributions may be required to avoid a reduction in plan benefits or the imposition of
any excise tax, that any such plan is or has been funded at a rate less than that required under
Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or
may become insolvent.

          (c) All Other Plans. All other “pension plans,” as such term is defined in Section 3(2) of
ERISA, maintained by any Loan Party or any member of the Controlled Group that are not Pension
Plans and all other non-qualified deferred compensation plans comply in all respects with their
terms and with all applicable requirements of law and regulations, except to the extent that any
failure to comply could not be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect.

          (d) Disclosure. Except as set forth on Schedule 9.9 (as the same may be updated from
time to time to reflect changes occurring after the Closing Date), no Loan Party maintains or
contributes to a Pension Plan that is a defined benefit plan or Multiemployer Pension Plan that is
governed by United States law.

     9.10 Investment Company Act. No Loan Party, Subsidiary of a Loan Party or, to the
best knowledge of such Loan Party, the Parent, is an “investment company” or a company

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“controlled” by an “investment company” or a “subsidiary” of an “investment company,” within
the meaning of the Investment Company Act of 1940.

     9.11 [Reserved.]

     9.12 Regulation U. No Loan Party or Subsidiary is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.

     9.13 Taxes. The Parent, each Loan Party and each Subsidiary of each of the foregoing
has timely filed all federal and state income and all other material tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental charges due and
payable with respect to such return, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books and in respect of which no Lien has been filed
against the assets of the Parent, any Loan Party or any of the foregoing’s Subsidiaries. The
Parent has, for all periods, and commencing with the financial statements of the Loan Parties for
the Fiscal Quarter ending March 31, 2006 and continuing thereafter, the Loan Parties and each
Subsidiary of each of the foregoing have, in each case, made adequate reserves on their books and
records in accordance with GAAP for all federal and state income and all other material taxes that
have accrued but which are not yet due and payable. Neither the Parent nor any Loan Party or any
of the foregoing’s Subsidiaries has participated in any transaction that relates to a year of the
taxpayer (which is still open under the applicable statute of limitations) which is a “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2) (irrespective of the
date when the transaction was entered into).

     9.14 Solvency, etc. (a) On (i) the Closing Date, (ii) the CoCaLo Closing Date (both
immediately before and after giving effect to the CoCaLo Acquisition) and (iii) the LaJobi Closing
Date (both immediately before and after giving effect to the LaJobi Acquisition), the fair value of
the assets of the Parent and its Subsidiaries on a consolidated basis, at a fair valuation on a
going concern basis, will exceed the debts and liabilities, as determined in accordance with GAAP,
of the Parent and its Subsidiaries on a consolidated basis; the present fair saleable value of the
assets of the Parent and its Subsidiaries on a consolidated basis, determined on a going concern
basis, will be greater than the amount that will be required to pay the probable liability of the
Parent and its Subsidiaries on a consolidated basis on their debts and other liabilities, as
determined in accordance with GAAP, as such debts and other liabilities become absolute and
matured; the Parent and its Subsidiaries on a consolidated basis will be able to pay their debts
and liabilities, as determined in accordance with GAAP, as such debts and liabilities become
absolute and matured; and the Parent and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date hereof.

     (b) On (i) the Closing Date, (ii) the CoCaLo Closing Date (both immediately before and after
giving effect to the CoCaLo Acquisition) and (iii) the LaJobi Closing Date (both immediately before
and after giving effect to the LaJobi Acquisition) and, in each case, thereafter immediately prior
to and after giving effect to the issuance of each Letter of Credit and each borrowing hereunder
and the use of the proceeds thereof, the fair value of the assets of the Loan

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Parties and their Subsidiaries on a consolidated basis, at a fair valuation on a going concern
basis, will exceed the debts and liabilities, as determined in accordance with GAAP, of the Loan
Parties and their Subsidiaries on a consolidated basis; the present fair saleable value of the
assets of the Loan Parties and their Subsidiaries on a consolidated basis, determined on a going
concern basis, will be greater than the amount that will be required to pay the probable liability
of the Loan Parties and their Subsidiaries on a consolidated basis on their debts and other
liabilities, as determined in accordance with GAAP, as such debts and other liabilities become
absolute and matured; the Loan Parties and their Subsidiaries on a consolidated basis will be able
to pay their debts and liabilities, as determined in accordance with GAAP, as such debts and
liabilities become absolute and matured; and the Loan Parties and their Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are proposed to be conducted after
the date hereof.

     9.15 Environmental Matters. The on-going operations of each Loan Party and each
Subsidiary comply in all respects with all Environmental Laws, except such non-compliance which has
not had, and could not (if enforced in accordance with applicable law) reasonably be expected to
result in, either individually or in the aggregate, a Material Adverse Effect. Each Loan Party and
each Subsidiary has obtained, and maintained in good standing, all licenses, permits,
authorizations, registrations and other approvals required under any Environmental Law for their
respective ordinary course operations, and for their reasonably anticipated future operations, and
each Loan Party and each Subsidiary is in compliance with all terms and conditions thereof, except
where the failure to do so has not had and could not reasonably be expected to result in material
liability to any Loan Party or Subsidiary and has not had, and could not reasonably be expected to
result in, either individually or in the aggregate, a Material Adverse Effect. Except as set forth
on Schedule 9.15, no Loan Party or any Subsidiary or any of their properties or operations
is subject to, or reasonably anticipates the issuance of, any written order from or agreement with
any Federal, state or local governmental authority, nor subject to any judicial or docketed
administrative or other proceeding, respecting any Environmental Law, Environmental Claim or
Hazardous Substance any of which has had, or could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect. There are no Hazardous Substances or
other conditions or circumstances existing with respect to any property, arising from operations
prior to the Closing Date, or relating to any waste disposal, of any Loan Party or any Subsidiary
that has had, or could reasonably be expected to result in, either individually or in the
aggregate, a Material Adverse Effect. No Loan Party or Subsidiary has any underground storage
tanks that are not properly registered or permitted under applicable Environmental Laws or that at
any time have released, leaked, disposed of or otherwise discharged Hazardous Substances any of
which has had, or could reasonably be expected to result in, individually or in the aggregate, a
Material Adverse Effect.

     9.16 Insurance. Set forth on Schedule 9.16 is a complete and accurate summary
of the property and casualty insurance program of the Loan Parties as of the Closing Date
(including the names of all insurers, policy numbers, expiration dates, amounts and types of
coverage, annual premiums, exclusions, deductibles, self-insured retention, and a description in
reasonable detail of any self-insurance program, retrospective rating plan, fronting arrangement or
other risk assumption arrangement involving any Loan Party or Subsidiary). Each Loan Party and
each Subsidiary and their respective properties are insured with financially sound and

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reputable insurance companies which are not Affiliates of the Loan Parties, in such amounts,
with such deductibles and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where any such Loan Party and/or
Subsidiary operates.

     9.17 Real Property. Set forth on Schedule 9.17 is a complete and accurate
list, as of the Closing Date, of the address of all real property owned or leased by any Loan
Party, together with, in the case of leased property, the name and mailing address of the lessor of
such property.

     9.18 Information. None of the representations or warranties made by the Parent or any
Loan Party in the Loan Documents as of the date such representations and warranties are made or
deemed made, and none of the statements or information contained in each exhibit, report, statement
or certificate furnished by or on behalf of the Parent or any Loan Party in connection with the
Loan Documents (including the offering and disclosure materials, if any, delivered by the Parent or
such Loan Party to the Administrative Agent prior to the Closing Date), contains any untrue
statement of a material fact or omits any material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered. It being recognized by the Administrative Agent
and the Lenders that any projections and forecasts provided by the Borrowers, any other Loan Party
or the Parent (relating to the Borrowers or the Loan Parties) are subject to uncertainties and
contingencies, are based on good faith estimates and assumptions believed by the Borrowers and the
other Loan Parties or the Parent to be reasonable as of the date of the applicable projections or
forecasts and upon the best information then reasonably available to the Borrowers and the other
Loan Parties or the Parent and that actual results during the period or periods covered by any such
projections and forecasts may differ materially from projected or forecasted results;
provided however that if, during the period or periods covered by any such
projections and forecasts, management of the Borrowers, any other Loan Party or the Parent
(relating to the Borrowers or the Loan Parties) determines that the projections and forecasts no
longer accurately reflect in any material respect the projected financial results for such period
or periods, as the case may be the Chief Financial Officer shall, as soon as is reasonably
practicable, provide to the Administrative Agent revised projections and forecasts for such period
or periods).

     9.19 Intellectual Property. Each Loan Party and each Subsidiary owns and possesses or
has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service mark rights and copyrights as are necessary for
the conduct of the businesses of such Loan Party or Subsidiary as currently conducted except for
the failure to so own or license which would not have or could not reasonably be expected to have a
Material Adverse Effect, as applicable, without any infringement upon rights of others which would
have or could reasonably be expected to have a Material Adverse Effect. Except as set forth on
Schedule 9.19, or with respect to any such licensing or distribution agreements entered
into after the date hereof, as otherwise disclosed to the Administrative Agent promptly after its
written request (including by way of updating and replacing such Schedule), no Loan Party is party
to any licensing agreement or distribution agreement relating to any Inventory which contains any
restrictions or prohibitions on the Administrative Agent (or its agents) from selling or disposing
such Inventory on substantially the

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same terms as the Loan Party to such license agreement or distribution agreement or which
contains a right in favor of the licensor or distributor to repurchase such Inventory (other than
for non-payment of invoices related to the purchase by the Loan Party thereof).

     9.20 Burdensome Obligations. No Loan Party or Subsidiary is a party to or bound by
any agreement or contract or subject to any restriction contained in its organizational documents
which could reasonably be expected to have a Material Adverse Effect.

     9.21 Labor Matters. Except as set forth on Schedule 9.21, no Loan Party or
Subsidiary is subject to any labor or collective bargaining agreement. Except as set forth on
Schedule 9.21, there are no existing or, to the knowledge of any Loan Party or Subsidiary,
threatened strikes, lockouts or other labor disputes involving any Loan Party or Subsidiary. Hours
worked by and payment made to employees of the Loan Parties or the Subsidiaries are not in
violation in any material respect of the Fair Labor Standards Act or any other applicable law, rule
or regulation dealing with such matters, except such violations which would not have, and which
could not reasonably be expected to have, a Material Adverse Effect.

     9.22 No Default. No Event of Default or Unmatured Event of Default has occurred and
is continuing or would result from the execution, delivery or performance hereof or of any other
Loan Documents, including as a result of the Target Acquisitions and/or the incurrence by the
Parent, any Loan Party or any Subsidiary of any Debt hereunder, or under any Acquisition Document,
or under any other Loan Document.

     9.23 Acquisition Documents. (a) The Loan Parties have furnished (or, if the
Acquisition Closing Dates have not yet occurred, shall furnish) the Administrative Agent a true and
correct copy of each of the CoCaLo Acquisition Documents on or prior to the CoCaLo Closing Date and
each of the LaJobi Acquisition Documents on or prior to the LaJobi Closing Date.

     (b) Each Loan Party and, to each such Loan Party’s knowledge, each other party to the
Acquisition Documents, has, prior to the applicable Acquisition Closing Date, duly taken all
necessary corporate, partnership or other organizational action to authorize the execution,
delivery and performance of the applicable Acquisition Documents and the consummation of
transactions contemplated thereby.

     (c) All conditions to I & J’s obligations to close the Target Acquisitions as set forth in the
respective Acquisition Documents shall have been satisfied in all material respects, or waived with
the consent of the Administrative Agent, on or prior to the Acquisition Closing Date. Without
limiting the foregoing sentence, the Acquisition Documents comply in all material respects with all
applicable legal requirements, and all necessary and material governmental, regulatory, creditor,
shareholder, partner and other consents, approvals and exemptions required to be obtained by the
Loan Parties and, to each Loan Party’s knowledge, each other party to the Acquisition Documents in
connection with the Target Acquisitions will be, prior to consummation of the Target Acquisitions,
duly obtained and will be in full force and effect. As of the applicable Acquisition Closing Date
for each of the Target Acquisitions, all applicable waiting periods with respect to such Target
Acquisition will have expired without any

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action being taken by any competent governmental authority which restrains, prevents or
imposes material adverse conditions upon the consummation of such Target Acquisition.

     (d) The execution and delivery of the Acquisition Documents did not, and the consummation of
the Target Acquisitions and the performance by the Loan Parties of their obligations under the
Acquisition Documents will not, violate in any material manner any statute or regulation of the
United States (including any securities law) or of any state or other applicable jurisdiction, or
any order, judgment or decree of any court or governmental body binding on any Loan Party or, to
each such Loan Party’s knowledge, any other party to the Acquisition Documents, or result in a
breach of, or constitute a default under, any material agreement, indenture, instrument or other
document, or any material judgment, order or decree, to which any Loan Party is a party or by which
any Loan Party is bound or, to each such Loan Party’s knowledge, to which any other party to the
Acquisition Documents is a party or by which any such party is bound.

     (e) Each of the representations and warranties made by the Loan Parties and, to each such Loan
Party’s knowledge, any other Person, in the Acquisition Documents is, in each case, true and
correct in all material respects as of the applicable Acquisition Closing Date.

     9.24 Subordinated Debt. All Obligations shall constitute senior Debt entitled to the
priority and benefits of the subordination provisions contained in any subordination agreement
relating to any Subordinated Debt.

     9.25 Eligible Accounts and Eligible Inventory. All Accounts and Inventory represented
by the Borrowers or the Loan Party Representative at any time as being eligible for lending
purposes hereunder including, upon each borrowing hereunder, constitute Eligible Accounts and
Eligible Inventory, respectively.

     9.26 Other Debt. Except as otherwise set forth on Schedule 9.26 or permitted
pursuant to Section 11.1, no Loan Party is now obligated for any Debt other than the
Obligations.

SECTION 10 AFFIRMATIVE COVENANTS.

          Until the expiration or termination of the Commitments and thereafter until all Obligations
(other than unasserted contingent and indemnification obligations) hereunder and under the other
Loan Documents are paid in full in cash and all Letters of Credit have been terminated (or Cash
Collateralized), each of the Loan Parties agree that, unless at any time the Required Lenders shall
otherwise expressly consent in writing, it will:

     10.1 Reports, Certificates and Other Information. Deliver to the Administrative Agent
(whereupon, in the cases of Sections 10.1.1, 10.1.2, 10.1.3,
10.1.5(a), 10.1.6, 10.1.8 and 10.1.9, the Administrative Agent
shall deliver copies thereof to the Lenders):

          10.1.1 Annual Report. Promptly when available, and in any event within 90 days after
the close of each Fiscal Year (or such earlier or later date as Form 10-K of the Parent is
required to be filed by with the SEC taking into account any extension granted by the SEC, provided
the Loan Party Representative gives the Administrative Agent prompt written notice of such
extension), (a) a copy of the Report of Independent Registered Public Accounting Firm

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on the annual audit of the consolidated financial statements of the Parent and its
Subsidiaries for such Fiscal Year, including therein consolidated balance sheets and statements of
operations and cash flows of the Parent and its Subsidiaries as at the end of such Fiscal Year,
certified without adverse reference to going concern value and without qualification by independent
auditors of recognized standing selected by the Parent and reasonably acceptable to the
Administrative Agent, together with a comparison with the previous Fiscal Year; and (b)
consolidating balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal Year
and consolidating statements of operations and cash flows for the Parent and its Subsidiaries for
such Fiscal Year, in each case, prepared in accordance with GAAP (other than with respect to the
absence of footnotes); provided, that the Parent ‘s obligation with respect to consolidating
statements of cash flows will be restricted to using its best efforts to provide such information
(it being agreed however that if such consolidating statements of cash flows can not be provided,
the Borrowers shall deliver a consolidated statement of cash flows for the Borrowers for such
period certified as set forth in clause (i) below), (i) certified by the Chief Financial Officer as
fairly and accurately presenting in all material respects the financial condition and results of
operations of such entities as of the date and for the period covered and (ii) accompanied by (x)
an agreed upon procedures letter, in accordance with relevant U.S. auditing standards, signed by
independent auditors of recognized standing selected by the Parent and reasonably acceptable to
the Administrative Agent, which shall state the procedures performed by such accountants (such
procedures to be agreed upon with the Parent and the Administrative Agent), and the results of
such procedures, to agree the amounts in the general ledgers of the Borrowers to the inclusion of
such amounts in the consolidating balance sheet and consolidating statements of operations of the
Parent , the totals of which are agreed, in all material respects to the audited consolidated
balance sheet and consolidated statements of operations for the respective year delivered by the
Parent pursuant to Section 10.1.1(a), (y) a comparison to the Budget for such Fiscal Year
and (z) a comparison with the previous Fiscal Year. With respect to the foregoing, to the extent
the Parent ‘s annual report on Form 10-K shall satisfy the requirements of Section
10.1.1(a), the Administrative Agent will accept such Form 10-K in lieu of such item.

          10.1.2 Interim Reports. (a) Promptly when available and in any event within 45 days
after the end of each of the first three Fiscal Quarters of each Fiscal Year (or such earlier or
later date as Form 10-Qs of the Parent are required to be filed by the SEC taking into account any
extension granted by the SEC, provided the Loan Party Representative gives the Administrative Agent
prompt written notice of such extension), unaudited consolidated financial statements of the
Borrowers and their Subsidiaries for such Fiscal Quarter, including therein consolidated balance
sheets and statements of operations and cash flows as of the end of such Fiscal Quarter and for the
period beginning with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, in each case, prepared in accordance with GAAP, consistently applied and certified by the
Chief Financial Officer as fairly presenting in all material respects the financial condition of
the Borrowers and their Subsidiaries as at the date thereof, together with (i) a comparison with
the corresponding period of the previous Fiscal Year and a comparison with the budget for such
period of the current Fiscal Year and (ii) a consolidating balance sheet of the Borrowers and their
Subsidiaries as of the end of such Fiscal Quarter and consolidating statement of earnings and cash
flows for the Borrowers and their Subsidiaries for such Fiscal Quarter, in each case, prepared in
accordance with GAAP (other
than with respect to the absence of footnotes and normal year end audit adjustments) certified

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by the Chief Financial Officer as fairly presenting in all material respects the financial
condition of such entities as at the date and for the period covered; and (b) promptly when
available and in any event within 30 days after the end of each fiscal month of the Borrowers
(other than the end of a fiscal month which is also a Fiscal Quarter or Fiscal Year end), unaudited
consolidated financial statements of the Borrowers and their Subsidiaries for such fiscal month,
including therein consolidated balance sheets and statements of earnings and cash flows as of the
end of such fiscal month and for the period beginning with the first day of such Fiscal Year and
ending on the last day of such fiscal month, in each case, prepared in accordance with GAAP,
consistently applied and certified by the Chief Financial Officer as fairly presenting in all
material respects the financial condition of the Borrowers and their Subsidiaries as at the date
thereof, together with (i) a comparison with the corresponding period of the previous Fiscal Year
and a comparison with the budget for such period of the current Fiscal Year and (ii) a
consolidating balance sheet of the Borrowers and their Subsidiaries as of the end of such month and
consolidating statement of earnings and cash flows for the Borrowers and their Subsidiaries for
such month, in each case, prepared in accordance with GAAP (other than with respect to the absence
of footnotes and normal year-end audit adjustments) certified by the Chief Financial Officer as
fairly presenting in all material respects the financial condition of such entities as at the date
and for the period covered; provided that with respect to the foregoing relating to any Fiscal
Quarter ending prior to the Closing Date, to the extent the Parent’s quarterly report on Form 10-Q
for such quarter shall satisfy the requirements of Section 10.1.2, the Administrative Agent
will accept such Form 10-Q in lieu of such item.

          10.1.3 Compliance Certificates. Contemporaneously with the furnishing of a copy of
each annual audit report pursuant to Section 10.1.1 and each set of quarterly statements
pursuant to Section 10.1.2(a), a duly completed compliance certificate in the form of
Exhibit B, with appropriate insertions, dated the date of such annual report or such
quarterly statements and signed by a Senior Officer of the Loan Party Representative, containing
(i) if required pursuant to the terms hereof, a computation of each of the financial ratios and
restrictions set forth in Section 11.13 and to the effect that such officer has not become
aware of any Event of Default or Unmatured Event of Default that has occurred and is continuing or,
if there is any such event, describing it and the steps, if any, taken or being taken to cure it
and (ii) a written statement of the Borrowers’ management setting forth a discussion of the
financial condition of the Borrowers and their Subsidiaries and any material changes in their
financial condition and/or results of operations.

          10.1.4 Reports to the SEC and to Shareholders. Promptly upon the filing or sending
thereof, without duplication, copies of all regular, periodic or special reports, if any, of the
Parent or any Loan Party filed with the SEC; copies of all registration statements of the Parent or
any Loan Party or Subsidiary filed with the SEC (other than on Form S-8), if any; and copies of all
proxy statements or other communications made to security holders generally. The Loan Parties’
obligations under this Section 10.1.4 shall be deemed satisfied if the Loan Party
Representative provides written notice to the Administrative Agent of the filing and availability
on EDGAR of any specific report; provided that such report is available on EDGAR.

          10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly upon becoming aware
of any of the following, written notice describing the same and the steps being taken by the Loan
Party or Subsidiary affected thereby with respect thereto:

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          (a) the occurrence of an Event of Default or an Unmatured Event of Default;

          (b) any litigation, arbitration or governmental investigation or proceeding not previously
disclosed by any Loan Party or Subsidiary to the Administrative Agent which has been instituted or,
to the knowledge of any Loan Party or Subsidiary, is threatened against the Parent, any Loan Party,
any Subsidiary of any of the foregoing or to which any of the properties of any thereof is subject
which would have or could reasonably be expected to have a Material Adverse Effect;

          (c) the institution of any steps by any member of the Controlled Group or any other Person to
terminate any Pension Plan, or the failure of any member of the Controlled Group to make a required
contribution to any Pension Plan (if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of any action with
respect to a Pension Plan which could result in the requirement that the any Loan Party or any
other member of the Controlled Group furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan or Multiemployer Pension Plan
which could result in the incurrence by any member of the Controlled Group of any material
liability, fine or penalty (including any claim or demand for withdrawal liability or partial
withdrawal from any Multiemployer Pension Plan), or any material increase in the contingent
liability of any Loan Party or any other member of the Controlled Group with respect to any
post-retirement welfare benefit plan or other employee benefit plan of any Loan Party or any other
member of the Controlled Group which would have or could reasonably be expected to have a Material
Adverse Effect, or any notice that any Multiemployer Pension Plan is in reorganization, that
increased contributions may be required to avoid a reduction in plan benefits or the imposition of
an excise tax, that any such plan is or has been funded at a rate less than that required under
Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or
may become insolvent;

          (d) any other event (including (i) any violation of any Environmental Law or the assertion of
any Environmental Claim or (ii) the enactment or effectiveness of any law, rule or regulation)
which would have or could reasonably be expected to have a Material Adverse Effect;

          (e) any Asset Disposition; or

          (f) any cancellation, any material change or any increase (which increase is as a result of
deterioration in the risk profile of any Loan Party or Subsidiary) in the deductible in any
insurance policy or coverage maintained by any Loan Party or Subsidiary.

          10.1.6 Borrowing Base Certificates. By the thirteenth Business Day of each fiscal
month for the immediately preceding month, a Borrowing Base Certificate executed by a Senior
Officer of the Loan Party Representative on behalf of the Borrowers (provided that (i) the Loan
Party Representative may deliver a Borrowing Base Certificate more frequently if it
chooses, and (ii) after the occurrence and during the continuance of an Event of Default, the
Administrative Agent may require the Loan Party Representative to deliver Borrowing Base
Certificates more frequently upon its request). Upon the request by the Administrative Agent, the
Loan Parties (at their sole expense) shall provide the Administrative Agent with full access

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to
copies of the Borrowers’ sales journals, cash receipts journals and credit memo journals for the
relevant period and shall provide the Administrative Agent with such other additional information
concerning Accounts and Inventory as may be reasonably requested by the Administrative Agent from
time to time. Each Borrowing Base Certificate shall reflect the actual, aggregate Account balance
and book Inventory balance as of such date.

          10.1.7 Management Reports. Promptly upon receipt thereof, copies of all detailed
financial and management reports submitted to any Loan Party by its independent auditors in
connection with each annual or interim audit made by such auditors of the books of the Borrowers
and their Subsidiaries.

          10.1.8 Projections. As soon as practicable, and in any event not later than 45 days
after the commencement of each Fiscal Year (commencing with Fiscal Year 2009), financial
projections for the Borrowers and their Subsidiaries for such Fiscal Year (including monthly
operating and cash flow budgets) prepared in a manner consistent with the projections delivered by
the Borrowers to the Administrative Agent prior to the Closing Date or otherwise in a manner
reasonably satisfactory to the Administrative Agent, accompanied by a certificate of the Chief
Financial Officer on behalf of the Borrowers and their Subsidiaries to the effect that (a) such
projections were prepared by the Borrowers and their Subsidiaries in good faith, (b) the Borrowers
and their Subsidiaries had a reasonable basis for the assumptions contained in such projections and
(c) such projections have been prepared in accordance with such assumptions (it being recognized
that any projections provided hereunder by the Parent, the Borrowers or any other Loan Party are
subject to uncertainties and contingencies, are based on good faith estimates and assumptions
believed by the Parent, the Borrowers or such Loan Party to be reasonable as of the date of the
applicable projections and upon the best information then reasonably available to the Parent, the
Borrowers and the other Loan Parties and that actual results during the period or periods covered
by any such projections may differ materially from projected results; provided
however that if, during the period or periods covered by any such projections, management
of the Borrowers or any other Loan Party determines that the projections no longer accurately
reflect in any material respect the projected financial results for such period or periods, as the
case may be, the Chief Financial Officer shall, as soon as practicable, provide to the
Administrative Agent revised projections for such period or periods).

          10.1.9 Material Notices. Promptly following receipt, copies of any notices of
default, termination or acceleration or any other material notices received from any holder or
trustee of, under or with respect to any Subordinated Debt, the Earnout Consideration, the
Acquisition Documents or any other material agreement.

          10.1.10 Other Information. Promptly from time to time, such other information
concerning the Loan Parties (or any of them), any Subsidiary or, to the extent obtainable by the
Loan Parties, the Parent and its Subsidiaries (other than the Loan Parties and their Subsidiaries)
as any Lender or the Administrative Agent may reasonably request.

     10.2 Books, Records and Inspections. Keep, and cause each other Loan Party and
Subsidiary to keep, its books and records in accordance with sound business practices sufficient to
allow the preparation of financial statements in accordance with GAAP; permit, and cause each other
Loan Party and Subsidiary to permit, the Administrative Agent, any Lender or any

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representative
thereof to inspect the properties and operations of the Loan Parties and the Subsidiaries during
regular business hours and with reasonable prior notice (or any time without notice if an Event of
Default exists); provided that any Lender’s inspection must be coordinated with an inspection by
the Administrative Agent or one of its representatives; and permit, and cause each other Loan Party
and Subsidiary to permit, during regular business hours and with reasonable prior notice (or at any
time without notice if an Event of Default exists), the Administrative Agent or any representative
thereof to visit any or all of its offices, to discuss its financial matters with its officers and
its independent auditors (and the Loan Parties each hereby authorizes such independent auditors to
discuss such financial matters with any Lender or the Administrative Agent or any representative
thereof), and to examine (and, at the expense of the Loan Parties) photocopy extracts from any of
its books or other records; and permit, and cause each other Loan Party to permit, during regular
business hours and with reasonable prior notice (or at any time without notice if an Event of
Default exists), the Administrative Agent and its representatives to inspect the Collateral and
other tangible assets of the Loan Parties, to perform appraisals of the Collateral and real
property of the Loan Parties, and to inspect, audit, check and make copies of and extracts from the
books, records, computer data, computer programs, journals, orders, receipts, correspondence and
other data relating to Inventory, Accounts and any other Collateral. The Loan Parties shall be
jointly and severally liable for all reasonable expenses of the Administrative Agent incurred in
connection with such inspections or audits, including the reasonable fees and expenses of its
representatives and/or agents (it being agreed that any Lender may accompany the Administrative
Agent at its own expense); provided, however, that other than with respect to audits, inspections
and appraisals conducted at any time that an Event of Default exists, the Loan Parties shall not be
required to reimburse the Administrative Agent for more than two inspections and/or audits and more
than two appraisals in any Fiscal Year; it being acknowledged that a single inspection, audit
and/or appraisal may entail visits to the multiple locations of books, records and assets of the
Loan Parties; and it being further agreed that the costs for each inspection/audit shall not exceed
$35,000, in aggregate, and the costs for each appraisal shall not exceed $20,000, in aggregate, in
each case, plus reasonable out of pocket expenses and disbursements.

     10.3 Maintenance of Property; Insurance.

          10.3.1 Obligation to Maintain Properties. Keep, and cause each other Loan Party and
Subsidiary to keep, all Collateral and all other property useful and necessary in the business of
the Loan Parties and Subsidiaries in good working order and condition, ordinary wear and tear
excepted and shall make all necessary replacements of, and repairs to, the equipment so that the
operating efficiency and the value thereof shall at all times be preserved and maintained.

          10.3.2 Obligation to Maintain Insurance. Maintain, and cause each other Loan Party
and Subsidiary to maintain, with responsible insurance companies, such insurance coverage as may be
required by any law or governmental regulation or court decree or order applicable to it and such
other insurance, to such extent and against such hazards and liabilities,
as is customarily maintained by companies similarly situated, but which shall insure against
all risks and liabilities of the type identified on Schedule 9.16; and, upon request of the
Administrative Agent or any Lender, furnish to the Administrative Agent a certificate setting forth
in reasonable detail the nature and extent of all insurance maintained by the Loan Parties

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and
Subsidiaries. The Loan Party Representative shall cause each issuer of an insurance policy to
provide the Administrative Agent with an endorsement (i) showing the Administrative Agent as loss
payee with respect to each policy of property or casualty insurance and naming the Administrative
Agent as an additional insured with respect to each policy of liability insurance, (ii) providing
that 30 days’ notice will be given to the Administrative Agent prior to any cancellation of (or 10
days’ notice in the event of non-payment of premiums), material reduction or change in coverage
provided by or other material modification to such policy and (iii) reasonably acceptable in all
other respects to the Administrative Agent. The Loan Parties shall execute and deliver to the
Administrative Agent a collateral assignment, in form and substance reasonably satisfactory to the
Administrative Agent, of the proceeds of each business interruption insurance policy maintained by
the Loan Parties.

          10.3.3 Forced Place Coverage. UNLESS THE LOAN PARTIES PROVIDE THE ADMINISTRATIVE
AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT AND AFTER THE
ADMINISTRATIVE AGENT’S WRITTEN DEMAND THEREFOR, THE ADMINISTRATIVE AGENT MAY (BUT SHALL HAVE NO
OBLIGATION TO) PURCHASE SUCH INSURANCE AT THE BORROWERS’ EXPENSE TO PROTECT THE ADMINISTRATIVE
AGENT’S AND THE LENDERS’ INTERESTS UNDER THE LOAN DOCUMENTS. THIS INSURANCE MAY, BUT NEED NOT,
PROTECT ANY LOAN PARTY’S INTERESTS. THE COVERAGE THAT THE ADMINISTRATIVE AGENT PURCHASES MAY NOT
PAY ANY CLAIM THAT IS MADE AGAINST ANY LOAN PARTY IN CONNECTION WITH THE COLLATERAL. THE LOAN
PARTIES MAY LATER CANCEL ANY INSURANCE PURCHASED BY THE ADMINISTRATIVE AGENT, BUT ONLY AFTER
PROVIDING THE ADMINISTRATIVE AGENT WITH EVIDENCE THAT THE BORROWERS HAVE OBTAINED INSURANCE AS
REQUIRED BY THIS AGREEMENT. IF THE ADMINISTRATIVE AGENT PURCHASES ANY SUCH INSURANCE, THE
BORROWERS WILL BE JOINTLY AND SEVERALLY RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING
INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY
BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF THE INSURANCE MAY BE
MORE THAN THE COST OF THE INSURANCE THE LOAN PARTIES MAY BE ABLE TO OBTAIN ON THEIR OWN.

     10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply, and cause
the Parent and each other Loan Party and Subsidiary to comply, in all material respects with all
applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where
failure to comply would not have or could not reasonably be expected to have a Material Adverse
Effect; (b) without limiting clause (a) above, ensure, and cause the Parent and each other
Loan Party and Subsidiary to ensure, that no person who owns a controlling interest in or otherwise
controls the Parent, a Loan Party or Subsidiary is or shall be (i) listed on the Specially
Designated Nationals and Blocked Person List maintained by the Office of Foreign
Assets Control (“OFAC”), Department of the Treasury, and/or any other similar lists
maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (ii) a
person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001),
any related enabling legislation or any other similar Executive Orders; (c) without limiting clause

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(a) above, comply, and cause each other Loan Party and Subsidiary to comply in all material
respects, with all applicable Bank Secrecy Act (“BSA”) and anti-money laundering laws and
regulations and (d) pay, and cause the Parent and each other Loan Party to pay, prior to
delinquency, all federal and state income taxes and all other material taxes and other governmental
charges against it or any Collateral, as well as claims of any kind which, if unpaid, could become
a Lien (other than a Permitted Lien) on any of its property; provided that the foregoing clause (d)
shall not require the Parent, any Loan Party or Subsidiary to pay any such tax or charge so long as
it shall contest the validity thereof in good faith by appropriate proceedings and shall set aside
on its books adequate reserves with respect thereto in accordance with GAAP and, in the case of a
claim which could become a Lien on any Collateral, such contest proceedings shall stay the
foreclosure of such Lien or the sale of any portion of the Collateral to satisfy such claim.

     10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject to
Section 11.4) cause the Parent, each other Loan Party and Subsidiary to maintain and
preserve, (a) its existence and good standing in the jurisdiction of its organization and (b) its
qualification to do business and good standing in each jurisdiction where the nature of its
business makes such qualification necessary (other than such jurisdictions in which the failure to
be qualified or in good standing would not have or could not reasonably be expected to have a
Material Adverse Effect).

     10.6 Reserved.

     10.7 Use of Proceeds. In the case of Revolving Loans and the Term Loan, use the
proceeds of such Loans, and the Letters of Credit, solely to fund the Target Acquisitions, to
refinance or repay the Debt to be Repaid, for working capital purposes, for capital expenditures,
for payment of the Earnout Consideration and the CoCaLo Note due and owing and permitted to be paid
by the applicable Loan Parties pursuant to Section 11.3 and for other general business
purposes. In no event shall any of the Loans or the Letters of Credit be used, either directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying”
any Margin Stock.

     10.8 Employee Benefit Plans. Maintain, and cause each other member of the Controlled
Group to maintain, each Pension Plan in substantial compliance with all applicable requirements of
law and regulations.

     (a) Make, and cause each other member of the Controlled Group to make, on a timely basis, all
required contributions to any Multiemployer Pension Plan.

     (b) Not, and not permit any other member of the Controlled Group to (i) seek a waiver of the
minimum funding standards of ERISA, (ii) terminate or withdraw from any Pension Plan or
Multiemployer Pension Plan or (iii) take any other action with respect to any Pension Plan that
would, or could reasonably be expected to, entitle the PBGC to terminate,
impose liability in respect of, or cause a trustee to be appointed to administer, any Pension
Plan, unless the actions or events described in clauses (i), (ii) and (iii)
above individually or in the aggregate would not have or could not reasonably be expected to have a
Material Adverse Effect.

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     10.9 Environmental Matters. (a) If any release or threatened release or other
disposal of Hazardous Substances shall occur or shall have occurred on any real property or any
other assets of any Loan Party or Subsidiary, each Loan Party and Subsidiary shall, or shall cause
the applicable Loan Party or Subsidiary to, cause the prompt containment and removal of such
Hazardous Substances and the remediation of such real property or other assets as necessary to
comply with all Environmental Laws and to preserve the material value of such real property or
other assets. Without limiting the generality of the foregoing, each Loan Party shall, and shall
cause each other Loan Party and Subsidiary to, comply with any Federal or state judicial or
administrative order requiring the performance at any real property of any Loan Party of activities
in response to the release or threatened release of a Hazardous Substance. To the extent that the
transportation of Hazardous Substances is permitted by this Agreement, each Loan Party shall, and
shall cause each of its Subsidiaries to, dispose of such Hazardous Substances, or of any other
wastes, only at licensed disposal facilities operating to its knowledge in compliance with
Environmental Laws.

     (b) The Loan Parties shall promptly notify the Administrative Agent in writing upon learning
there is or are, in each case, which are reasonably likely to result in material liability to a
Loan Party under any applicable Environmental Law (i) any Hazardous Substances other than those
used by the Loan Parties or tenants under leases at any real property of any Loan Party or
Subsidiary in the ordinary course of their businesses and in compliance with all Environmental
Laws, present on such real property; (ii) any Release of Hazardous Substances in, on, under, from
or migrating towards such real property; (iii) any material non-compliance with Environmental Laws
related in any way to such real property; (iv) any actual or reasonably likely liens and other
encumbrances imposed pursuant to any Environmental Law; (v) any investigation or action or claim,
whether threatened or pending, by any governmental agency or third party pertaining to the release
of Hazardous Substances in, on, under, from, or migrating towards such real property; and (vi) any
installation of wells, piping, or other equipment at such real property to investigate, remediate
or otherwise address any release of Hazardous Substances at, on, in or in the vicinity of such real
property.

     10.10 New Subsidiaries.

          10.10.1 Immediately upon the closing of the CoCaLo Acquisition on the CoCaLo Closing Date, the
Loan Parties shall, (x) cause CoCaLo to become a Borrower hereunder and under the Notes and the
other Loan Documents and become a Grantor under the Guaranty and Collateral Agreement by executing
and delivering to the Administrative Agent (1) a Joinder Agreement in the form of Exhibit G
hereto, in the capacity of a Borrower and (2) any further documents, instruments or agreements as
the Administrative Agent may reasonably require in order to grant the Administrative Agent a
perfected first priority security interest (subject only to Permitted Liens) in substantially all
of the assets of CoCaLo in accordance with and subject to the terms of the Guaranty and Collateral
Agreement and the other Loan Documents and (y) cause to be delivered to the Administrative Agent an
opinion of counsel in form and substance reasonably satisfactory to the Administrative Agent
covering, among other
things, with regard to CoCaLo, certain corporate matters, due authorization, execution and
enforceability of the Loan Documents to which it is bound, the absence of conflicts related
thereto, and attachment and perfection of the security interests of the Administrative Agent in the
assets of CoCaLo.

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          10.10.2 If, after the Closing Date, any Loan Party creates or acquires, either directly or
indirectly, any Subsidiary (other than CoCaLo) in accordance with Section 11.4 or
11.15, it will upon such creation or acquisition thereof:

          (a) if such Subsidiary is organized in the United States of America (x) cause such Subsidiary
to become either a Borrower or a Guarantor; provided, that such Subsidiary may become a Borrower
hereunder only if such Subsidiary is a Domestic Wholly-Owned Subsidiary and the Administrative
Agent has provided its prior written approval of such Subsidiary becoming a Borrower (upon its
review of such Subsidiary including, without limitation, its review of such field examinations,
audits, appraisals and other due diligence as the Administrative Agent shall reasonably require)
and, if such Subsidiary is not a Domestic Wholly-Owned Subsidiary or in the event such approval as
a Borrower is not granted, such Subsidiary shall become a Guarantor, and (y) cause such Subsidiary
to execute and deliver to the Administrative Agent (1) a Joinder Agreement in the form of Exhibit G
hereto, in its capacity as a Borrower or a Guarantor, as applicable, and (2) any further documents,
instruments or agreements as the Administrative Agent may reasonably require in order to grant the
Administrative Agent a perfected first priority security interest (subject only to Permitted Liens)
in substantially all of the assets of such Subsidiary; and

          (b) if such Subsidiary is organized in the United States of America or is a First-Tier Foreign
Subsidiary, cause to be pledged to the Administrative Agent (pursuant to the Guaranty and
Collateral Agreement) a security interest in the Capital Securities of such Subsidiary owned by
such Loan Party (provided, that with respect to any such First-Tier Foreign Subsidiary, such Loan
Party shall only be required to grant to the Administrative Agent a first-priority security
interest in the Capital Securities thereof to the extent owned by any such Loan Party and not
exceeding sixty-five percent (65%), in the aggregate, of the issued and outstanding Capital
Securities of such Subsidiary); and

          (c) in either of the cases in (a) or (b) above, (i) deliver to the Administrative Agent (1)
revised schedules to the Loan Documents reflecting such Loan Party’s ownership interest in such
Subsidiary and (2) the certificates, if any, representing the Capital Securities of such Subsidiary
required to be pledged hereunder, together with undated stock powers and an irrevocable proxy (or
equivalent instruments, as applicable), or if such interest is uncertificated, evidence of the
registration of the Administrative Agent’s lien on and security interest in such interest on the
books and records of such entity and (ii) execute and deliver all such other instruments, documents
and agreements and take such other actions, and cause all Subsidiaries to execute and deliver all
such other instruments, documents and agreements and to take such other actions, as in either case,
the Administrative Agent may reasonably request or require to fully evidence and consummate the
transactions contemplated in clauses (a) and (b) above and to ensure the
enforceability, perfection and first-priority (subject only to Permitted Liens) of the interests
and undertakings thereunder, including, without limitation, (i) the execution and delivery of
guaranties, security agreements, pledge agreements, mortgages, deeds of trust,
financing statements and other documents, and the filing or recording of any of the foregoing,
(ii) the delivery of certificated securities and other Collateral with respect to which perfection
is obtained by possession and (iii) legal opinions in form and substance and from such counsel
reasonably satisfactory to the Administrative Agent to be addressed to (or permit reliance upon by)
the Administrative Agent and the Lenders.

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     Without limiting the foregoing, the Loan Parties shall have no obligations pursuant to this
Section 10.10 with respect to any Second-Tier Foreign Subsidiary.

     10.11 Deposit Accounts. With regard to all lock-boxes, collection accounts, deposit
accounts, securities accounts, operating accounts, checking accounts, disbursement accounts and
other accounts (other than payroll accounts and accounts maintained by the Loan Parties for the
sole benefit of their employees as listed on Schedule 10.11 attached hereto) (collectively,
the “Subject Accounts”), each Loan Party hereby authorizes the financial institutions at
which any such Subject Accounts are maintained to provide the Administrative Agent with a copy of
such financial institution’s regular statements and such other more frequent statements or advices
as the Administrative Agent may reasonably request, in each case, covering the remittances,
deposits, and withdrawals from and balances of such account, and each Loan Party hereby consents to
such information being provided to the Administrative Agent. Each Loan Party shall cause each
financial institution at which such Loan Party maintains a Subject Account (other than LaSalle) to
enter into an Account Control Agreement in order to give the Administrative Agent “control” thereof
(as defined in the UCC) for perfection purposes; provided that (i) with respect to any such account
existing on the Closing Date, a fully-executed Account Control Agreement must be delivered to the
Administrative Agent on or prior to the Closing Date, (ii) with respect to any Subject Account
opened after the Closing Date, such Loan Party must provide the Administrative Agent with 10 days’
prior written notice of its intention to open such account and must deliver to the Administrative
Agent a fully-executed Account Control Agreement with respect to such account, and (iii) it is
hereby acknowledged and agreed that the Borrowers may (and shall only be permitted to) maintain and
operate Subject Accounts (other than any such Subject Account to which Accounts are deposited or
remitted) to the extent not having at any time deposits in excess of $2,000,000, in aggregate among
all such Subject Accounts, in respect of which no Account Control Agreements are in effect.
Notwithstanding anything contained herein or in any other Loan Document to the contrary, the Loan
Parties hereby acknowledge and agree that, with respect to any Subject Accounts, upon the
occurrence and continuance of an Event of Default, the Administrative Agent may instruct any or all
of the financial institutions at which any such accounts are maintained (A) to cease honoring the
Loan Parties’ directions as to the handling, disposition and disbursement of funds or remittance to
or on deposit in any such accounts and (B) to remit or apply all amounts on deposit in or
remittances to such accounts in accordance with the direction of the Administrative Agent (in each
case of clause (A) or (B) above, a “Notice of Control”). The Administrative Agent agrees
that it shall not give a Notice of Control to any financial institution unless and until an Event
of Default has occurred and is continuing. Upon the written request of the Loan Party
Representative delivered to the Administrative Agent, at any time (1) after the waiver, if any, of
any existing Events of Default (other than an Event of Default described in clause (2) immediately
below) or (2) six months after the waiver, if any, of any existing Event of Default under
Section 13.1.1 or resulting from the violation of any of the financial covenants in
Section 11.13, and provided that no other Event of Default has occurred and is continuing,
the
Administrative Agent shall promptly notify all financial institutions to which it has
previously delivered a Notice of Control that such notice is rescinded and that such financial
institution is again entitled to rely on the instruction and direction of the applicable Loan Party
with respect such accounts until a new Notice of Control is given by the Administrative Agent (a
“Notice of Rescission”). The Administrative Agent shall copy the Loan Party Representative
on any Notice of Control and Notice of Rescission given to a financial institution but the failure
to do so shall

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in no event effect the validity of any such Notice of Control, nor subject the
Administrative Agent to any liability.

     10.12 Independent Directors. Each Borrower agrees that, at all times, at least one of
its directors will be an Independent Director who will serve such Borrower in accordance with the
terms of such Borrower’s organizational documents, and no Borrower shall take, authorize, consent
or acquiesce to or permit any of its Subsidiaries to take, authorize, consent or acquiesce to, any
of the following without the affirmative vote of such Independent Director: (i) the commencement by
or against or the consent or acquiescence to, any proceeding of a type described in Section
13.1.4 involving any Borrower or (ii) the amendment of any provision of this Section
10.12 or such Borrower’s Bylaws or Operating Agreement, as applicable, altering any provision
effecting the rights, duties or responsibilities of any Independent Director.

     10.13 Hedging Agreements. The Borrowers shall obtain within 90 days of the Closing
Date, and thereafter maintain in effect until the Scheduled Termination Date, a Hedge Agreement or
Hedge Agreements reasonably acceptable to the Administrative Agent that protect against
fluctuations in interest rates with respect to at least 50% of the aggregate outstanding principal
amount of the Term Loan.

     10.14 Preparation of Environmental Reports. If at any time during the term of this
Agreement the Lenders have a reasonable basis for believing that a discharge of Hazardous
Substances has occurred or a material violation of Environmental Laws exists at any real property
owned or leased by any of the Loan Parties, the Loan Parties shall, and shall cause their
Subsidiaries to, at the request of the Required Lenders, subject to any reasonable limitations
imposed by the owner of any such leased real property, provide to the Lenders within 90 days after
such request, at the expense of the Loan Parties, an environmental site assessment report for such
real property, prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous Materials and the estimated
cost of any compliance, removal or remedial action in connection with any Hazardous Materials on
such properties; without limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such report will not be provided within
the time referred to above, the Administrative Agent may retain an environmental consulting firm to
prepare such report at the expense of the Loan Parties, and the Loan Parties each hereby grants and
agrees to cause any Subsidiary that owns any property described in such request to grant at the
time of such request to the Administrative Agent, the Lenders, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to the rights of tenants, to
enter onto their respective properties to undertake such an assessment.

     10.15 Further Assurances. The Loan Parties shall, and shall cause their Subsidiaries
to, promptly upon the reasonable request of the Administrative Agent, or any Lender through the
Administrative Agent, (a) correct any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and
all such further acts, deeds, certificates, assurances and other instruments as the Administrative
Agent, or any Lender through the Administrative Agent, may reasonably request from time to time in
order to (i) carry out the purposes of the Loan Documents, (ii) to the fullest extent

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permitted by
applicable law and in accordance with the terms of the Collateral Documents, subject any Loan
Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents and (iii) maintain the validity
and effectiveness of the Collateral Documents and perfect and maintain the validity, effectiveness
and priority of the Liens intended to be created thereunder.

     10.16 Acquisition Documents; Material Contracts.

          (a) The Loan Parties shall, and shall cause their Subsidiaries to, perform and observe all the
terms and provisions of each of the Acquisition Documents required to be performed or observed by
it, maintain each such Acquisition Document in full force and effect, enforce each such Acquisition
Document in accordance with its terms, and make to each other party to each such Acquisition
Document such demands and requests for information and reports or for action as any Loan Party or
any of its Subsidiaries is entitled to make under such Acquisition Document, except where the
failure to do so would not be and could not reasonably be expected to be adverse to the
Administrative Agent or the Lenders in any material respect; provided, however,
that notwithstanding the foregoing, upon the request of the Administrative Agent to do so after the
occurrence and during the continuation of an Event of Default, the Loan Parties shall take any of
the foregoing actions.

          (b) The Loan Parties shall, and shall cause their Subsidiaries to, perform and observe all
the terms and provisions of each instrument, document or agreement material to the business of the
Loan Parties and the Subsidiaries, taken as a whole (a “Material Contract”), required to be
performed or observed by it, maintain each such Material Contract in full force and effect, enforce
each such Material Contract in accordance with its terms and make to each other party to each such
Material Contract such demands and requests for information and reports or for action as any Loan
Party or any of its Subsidiaries is entitled to make under such Material Contract, except where the
failure to do so, either individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect; provided, however, that upon the request of
the Administrative Agent to do so after the occurrence and during the continuation of an Event of
Default, the Loan Parties shall take any of the foregoing actions.

     10.17 Designation as Senior Debt. Designate all Obligations as constituting senior
indebtedness under and for purposes of any Subordinated Debt.

SECTION 11 NEGATIVE COVENANTS.

     Until the expiration or termination of the Commitments and thereafter until all Obligations
(other than unasserted contingent and indemnification obligations) hereunder and under the other
Loan Documents are paid in full in cash and all Letters of Credit have been
terminated, each Loan Party agrees that, unless at any time the Required Lenders shall
otherwise expressly consent in writing, it will:

     11.1 Debt. Not, and not permit any other Loan Party to, create, incur, assume or
suffer to exist any Debt, except:

          (a) Obligations under this Agreement and the other Loan Documents;

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          (b) Debt secured by Liens permitted by Section 11.2(d); provided that the aggregate
amount of all such Debt at any time outstanding shall not exceed $2,000,000;

          (c) (i) unsecured Debt owing by any Borrower to any other Loan Party, (ii) unsecured Debt
owing by any Loan Party (other than a Borrower) which is a Wholly-Owned Subsidiary to any other
Loan Party (other than a Borrower), (iii) unsecured Debt owing by any Loan Party (other than a
Borrower or a Wholly-Owned Subsidiary) to any other Loan Party, in an aggregate amount at any time
outstanding not to exceed $3,000,000 among all Loan Parties, and (iv) unsecured Debt owing by any
Loan Party to a First-Tier Foreign Subsidiary of any Loan Party, in an aggregate amount at any time
outstanding not to exceed $3,000,000 among all Loan Parties; provided that in each of the cases of
(i), (ii) and (iii) above, any such Debt shall be evidenced by a demand note in the form of
Exhibit H attached hereto and pledged and delivered to the Administrative Agent pursuant to
the Collateral Documents as additional collateral security for the Obligations; provided, further
that in each of the cases of clause (i), (ii) and (iii) any such Debt shall be subordinated to the
Obligations of the Loan Parties hereunder in a manner reasonably satisfactory to the Administrative
Agent (it being agreed that the subordination provisions set forth in the demand note referred to
above shall be deemed to be reasonably satisfactory to the Administrative Agent);

          (d) unsecured Subordinated Debt (other than Debt described in clause (c) above) in an amount
at any time outstanding not to exceed $7,500,000; provided that such Debt remains subject to
subordination agreements reasonably acceptable to the Administrative Agent;

          (e) unsecured Hedging Obligations for bona fide hedging purposes and not for speculation and
the Hedging Agreement required by Section 10.13 hereof,;

          (f) Debt existing on the date hereof described on Schedule 9.26 and any extension,
renewal or refinancing thereof so long as neither the principal amount thereof is increased, the
weighted average life to maturity decreased or, if secured, any additional collateral is granted as
security therefor;

          (g) the Debt to be Repaid (so long as such Debt is repaid on the Closing Date with the
proceeds of the initial Loans hereunder);

          (h) unsecured Contingent Liabilities arising with respect to customary indemnification
obligations in favor of sellers in connection with Permitted Acquisitions and purchasers in
connection with dispositions permitted under Section 11.4;

          (i) up to $2,500,000 at any time outstanding of Acquired Debt assumed in Permitted
Acquisitions which, if secured, the Liens thereunder would be of a type permitted pursuant to
Section 11.2(d);

          (j) unsecured Debt in respect of bid, performance or surety, appeal or similar bonds issued
for the account of and completion guarantees provided by the Loan Parties in the ordinary course of
business;

          (k) Debt arising from the honoring by a bank or other financial institution of a check, draft
or similar instrument inadvertently drawn against insufficient funds in the ordinary

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course of
business; provided, however, that such Debt is extinguished within five Business Days of
incurrence;

          (l) unsecured Debt under and in respect of the CoCaLo Note (including the guaranty thereof
pursuant to the Kids Line/CoCaLo Guaranty) incurred pursuant to and in accordance with the CoCaLo
Acquisition Documents; and

          (m) Debt arising in connection with endorsement of instruments for deposit in the ordinary
course of business.

     11.2 Liens. Not, and not permit any other Loan Party, to create or permit to exist
any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether
now owned or hereafter acquired), except:

          (a) Liens for taxes or other governmental charges not at the time delinquent or thereafter
payable without penalty or being contested in good faith by appropriate proceedings and, in each
case, for which it maintains adequate reserves;

          (b) Liens arising in the ordinary course of business (such as (i) Liens of carriers,
warehousemen, mechanics and materialmen and other similar Liens imposed by law and (ii) Liens in
the form of deposits or pledges incurred in connection with worker’s compensation, unemployment
compensation and other types of social security (excluding Liens arising under ERISA) or in
connection with surety bonds, bids, performance bonds and similar obligations) for sums not overdue
or being contested in good faith by appropriate proceedings and not involving any advances or
borrowed money or the deferred purchase price of property or services and, in each case, for which
it maintains adequate reserves;

          (c) Liens described on Schedule 11.2 existing as of the Closing Date;

          (d) subject to the dollar limitation set forth in Section 11.1(b) and Section
11.1(i), (i) Liens (including Liens having priority over the Liens pursuant to the Loan
Documents) arising in connection with Capital Leases (and attaching only to the property being
leased), (ii) Liens (including Liens having priority over the Liens pursuant to the Loan Documents)
of the type described in subclauses (i) and (iii) of this clause (d) existing on property at the
time of the acquisition thereof by any Loan Party (and not created in contemplation of such
acquisition) pursuant to any Permitted Acquisition and (iii) Liens (including Liens having priority
over the Liens pursuant to the Loan Documents) that constitute purchase money security interests on
any capital asset securing debt incurred for the purpose of financing all or any part of
the cost of acquiring such capital asset, provided that any such Lien attaches solely to the
capital asset so acquired and secures no more than the purchase price (or portion) thereof financed
thereby;

          (e) easements, rights of way, restrictions, minor defects or irregularities in title and other
similar Liens not interfering in any material respect with the ordinary conduct of the business of
any Loan Party;

          (f) Liens in favor of the Administrative Agent under the Loan Documents, including those
securing the Hedge Agreement issued pursuant to Section 10.13 hereof;

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          (g) Liens on deposit accounts granted or arising in the ordinary course of business in favor
of depositary banks maintaining such deposit accounts solely to secure customary account fees and
charges payable in respect of such deposit accounts and overdrafts;

          (h) Liens in favor of custom brokers for taxes, assessments and governmental charges the
payment of which is not required under Section 10.4 payable in connection with the
importation of Inventory in the ordinary course of business of the Borrowers or any other Loan
Party;

          (i) leases or subleases granted to other Persons (as lessee thereof) not materially
interfering with the conduct of the business of any Borrower or any other Loan Party;

          (j) precautionary UCC financing statement filings regarding operating leases;

          (k) Liens arising out of the existence of judgment or awards not giving rise to an Event of
Default; provided that the Loan Parties shall promptly seek the stay of, or otherwise satisfy any
such Lien not being contested in good faith;

          (l) inchoate statutory and common law landlords’ liens under leases to which any Borrower or
any other Loan Party is a party;

          (m) the replacement, extension or renewal of any Lien permitted by clauses (c) or (d) above
upon or in the same property subject thereto arising out of the extension, renewal or replacement
of the Debt secured thereby (without increase in the amount or priority thereof or the security or
collateral therefor or decrease in the weighted average life to maturity thereof); and

          (n) any other Liens in an aggregate amount not exceeding $100,000 at any time.

     11.3 Restricted Payments. Except as permitted pursuant to the following sentence,
not, and not permit any other Loan Party or Subsidiary to (a) make any distribution to any holders
of its Capital Securities, (b) purchase or redeem any of its Capital Securities, (c) pay any
management fees or similar fees to any of its direct or indirect equityholders or any Affiliate
thereof, (d) pay, redeem, prepay, defease, purchase, repurchase or make any other payment on or in
respect of any Subordinated Debt or the CoCaLo Note, including under any guaranty thereof, or (e)
set aside funds for any of the foregoing. Notwithstanding the foregoing:

          (i) any Subsidiary may pay dividends or make other distributions in cash or other
property in respect of its Capital Securities to the Borrowers or, if a wholly-owned
Subsidiary, to its parent company (other than the Parent), including, without limitation, to
enable the recipient to pay taxes;

          (ii) (1) so long as no Event of Default or Unmatured Event of Default exists or would
result therefrom, the Loan Parties may make regularly scheduled payments of interest in
respect of Subordinated Debt (other than Subordinated Debt owing to any Affiliate) to the
extent permitted under the subordination provisions thereof, and (2) the Loan Parties shall
be permitted to accrue all non-cash interest (i.e., PIK

74

 

interest) on its Subordinated Debt
and non-cash dividends on its Capital Securities consisting of preferred stock;

          (iii) the Borrowers may pay dividends or make other distributions, out of legally
available funds, to the Parent for the sole purpose of permitting the Parent to (and upon
receipt by the Parent of such funds the Parent shall promptly use such funds to) pay income
tax liabilities allocable to the Borrowers’ and their Subsidiaries’ operations, to the
extent any such taxes are due and owing by the Parent and its Subsidiaries on a consolidated
basis; provided, that the proportion (as between the Borrowers and their
Subsidiaries on the one hand, and the Russ Berrie B Entities, on the other hand) of the tax
liability of the Parent that the Borrowers shall be permitted to fund pursuant to this
clause (iii) may be increased to the extent and in the amount of taxes which would
previously have been owed by the Parent based solely on the operations of the Borrowers’ and
their Subsidiaries’, but were offset from and after March 14, 2006 by losses, credits or
deductions relating to the Russ Berrie B Entities’ operations;

          (iv) any Loan Party or Subsidiary thereof may pay dividends or make other distributions
of its in its non-redeemable, non-preferential and non-convertible common stock payable
ratably to all of the holders of its common stock;

          (v) so long as all of the Earnout Consideration Conditions Precedent have been fully
satisfied and no Earnout Default has occurred and is continuing or would result therefrom,
the Loan Parties may pay the Earnout Consideration (or any portion thereof that may be paid
at such time in accordance with this clause (v)) as and when due and payable in accordance
with the terms of the Acquisition Documents;

          (vi) so long as (x) the Earnout Consideration has been paid in full, and (y) both
before and immediately after giving effect to the payments described in this clause (vi),
(1) no Event of Default or Unmatured Event of Default exists or would result therefrom, (2)
Excess Revolving Loan Availability will equal or exceed $4,000,000 and (3) no violation of
the financial covenants set forth in Sections 11.13.1, 11.13.2 or
11.13.3 would then exist or would, on a pro forma basis result therefrom, upon no
less than 10 days’ prior written notice to the Administrative Agent, accompanied by a
certificate of the Chief Financial Officer delivered to the Administrative Agent setting
forth the calculations of pro forma Excess Revolving Loan Availability and the pro forma
calculations of such financial covenants (after giving effect to such payments) in detail
reasonably acceptable to the Administrative Agent, the Borrowers may pay dividends or
make other distributions to the Parent, out of legally available funds, for the sole
purpose of permitting the Parent to (and upon receipt by the Parent of such funds the Parent
shall promptly use such funds to) pay a regular quarterly dividend payment payable out of
legally available funds on the outstanding common stock of the Parent;

          (vii) so long as (x) the Earnout Consideration has been paid in full, (y) both before
and immediately after giving effect to the payments described in this clause (vii), (1) no
Event of Default or Unmatured Event of Default exists or would result therefrom and (2)
Excess Revolving Loan Availability will equal or exceed $5,000,000 and (z) no violation of
the financial covenants set forth in Sections 11.13.1, 11.13.2 or

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11.13.3 would then exist or would, on a pro forma basis result therefrom, upon no
less than 10 days’ prior written notice to the Administrative Agent, accompanied by a
certificate of the Chief Financial Officer delivered to the Administrative Agent setting
forth the calculations of pro forma Excess Revolving Loan Availability and the pro forma
calculations of such financial covenants (after giving effect to such payments) in detail
reasonably acceptable to the Administrative Agent, the Borrowers may pay dividends or make
other distributions, out of legally available funds, to the Parent for the sole purpose of
permitting the Parent to (and upon receipt by the Parent of such funds the Parent shall
promptly use such funds to): (A) repurchase or redeem Capital Securities of the Parent held
by employees, officers and directors in the ordinary course of business and consistent with
past practice and (B) make repurchases or redemptions of Capital Securities from employees,
officers and directors that die, retire or otherwise terminate their employment;
provided, that notwithstanding the prior repayment of the Earnout Consideration (but
subject to the other conditions set forth in this clause (vii)), the Borrowers may pay such
dividends and other distributions to finance, and the Parent may use those proceeds to make,
Contractual Redemptions as and when required to be made in accordance with the agreements
relating thereto, in an amount not to exceed $500,000, in aggregate, per Fiscal Year;

          (viii) so long as both before and after giving effect to the payments described in this
clause (viii), (x) no Event of Default exists or would result therefrom and (y) Excess
Revolving Loan Availability will equal or exceed $5,000,000 (compliance with such conditions
to be demonstrated by a certificate of the Chief Financial Officer to be delivered to the
Administrative Agent by the 10th Business Day of the month following the month in
which any such dividend or distributions is made, in each case, setting forth the
calculations of pro forma Excess Revolving Loan Availability (after giving effect to such
payments) in detail reasonably acceptable to the Administrative Agent), the Borrowers may
pay dividends or make other distributions, out of legally available funds, to the Parent for
the sole purpose of permitting the Parent to pay corporate overhead expenses incurred in the
ordinary course of business; provided, that the aggregate amount of dividends or
distributions received by the Parent from the Borrowers for the payment of such corporate
overhead expenses shall not exceed $3,500,000 in any Fiscal Year (it being agreed that this
provision shall not be deemed to limit the ability of any Loan Party to reimburse the Parent
or any Subsidiary thereof for the payment by the Parent or such Subsidiary of business
expenses incurred by the Parent or such Subsidiary for and on behalf of the Loan Parties,
which business expenses (1) are of a type typically incurred by the Loan Party on its own
behalf in the ordinary course of
its business operations and (2) when reimbursed by the Loan Parties are included as
expenses on the books and records of the Loan Parties); and

          (ix) so long as no Event of Default or Unmatured Event of Default exists or would
result therefrom, the Loan Parties may pay regularly scheduled principal and interest
payments (but not prepayments) on the CoCaLo Note, including under any guaranty thereof.

     11.4 Mergers, Consolidations, Sales and Other Transactions Outside the Ordinary Course of
Business. Not, and not permit any other Loan Party to:

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          (a) sell, transfer, convey or lease any of its assets or Capital Securities except for (i)
sales of Inventory in the ordinary course of business, (ii) subject to the application of the Net
Cash Proceeds thereof in accordance with Section 6.2.2(a), sales of obsolete and unusable
Equipment in the ordinary course of business, (iii) subject to the application of the Net Cash
Proceeds thereof in accordance with Section 6.2.2(a), sales or other dispositions of assets
(other than Inventory (other than as covered in clause (i) above), Capital Securities of
Subsidiaries and Accounts and/or receivables of any Loan Party) for at least fair market value (as
determined by the board of directors of such Loan Party) so long as the Net Cash Proceeds of all
assets sold or otherwise disposed of in any Fiscal Year does not exceed $1,000,000, and (iv) in the
case of its Capital Securities, as permitted pursuant to clause (d) of this Section;

          (b) enter into any transaction whereby such Loan Party leases any property previously owned
and sold by any other Loan Party or any Subsidiary;

          (c) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment in violation of any subordination terms of, any Debt
(other than the Obligations), except in connection with any permitted refinancing thereof;

          (d) be a party to any merger or consolidation or, except as otherwise permitted pursuant to
this Section 11.4, Section 11.10(a), or Section 11.10(f), purchase or
otherwise acquire the assets or the Capital Securities of any class of any other Person; except for
(1) (A) the merger or consolidation of any Borrower into any other Borrower or the sale, assignment
or conveyances of any, all or substantially all of the assets of one Borrower to another Borrower,
(B) the merger or consolidation of any Loan Party (other than a Borrower) which is a Wholly-Owned
Subsidiary into any other Loan Party (other than a Borrower) which is a Wholly-Owned Subsidiary or
the sale, assignment or conveyances of any, all or substantially all of the assets of one Loan
Party (other than a Borrower) to another Loan Party (other than a Borrower or a Loan Party which is
not a Wholly-Owned Subsidiary) and (C) the Target Acquisitions, so long as such acquisitions are
consummated in accordance with the terms of the applicable Acquisition Documents or (2) any
Acquisition by a Borrower or any other Loan Party (other than a Loan Party which is not a
Wholly-Owned Subsidiary) in respect of which the requirements of Section 10.10 have then
been satisfied, where:

          (i) the business, divisions or operating units acquired are for use in the businesses
engaged in by the Loan Parties on the Closing Date, or business reasonably related or
complementary to such businesses;

          (ii) immediately before and after giving effect to such Acquisition, no Event of
Default or Unmatured Event of Default on an actual or pro forma basis shall exist or would
result therefrom;

          (iii) the aggregate consideration to be paid by the Loan Parties (including any Debt
assumed or issued in connection therewith, the amount thereof to be calculated in accordance
with GAAP and the fair market value of any non-cash consideration) in connection with (1)
such Acquisition (or any series of related Acquisitions) is less than $15,000,000 in any
given transaction (or series of related

77

 

transactions) or $20,000,000 in any given Fiscal
Year and (2) all Acquisitions after the Closing Date is less than $50,000,000 in the
aggregate;

          (iv) immediately after giving effect to such Acquisition, the Borrowers and their
Subsidiaries are in pro forma compliance with all the financial ratios and restrictions set
forth in Section 11.13; provided however that immediately after giving effect to
such Acquisition, Excess Revolving Loan Availability shall not be less than $7,500,000;

          (v) in the case of the Acquisition of any Person, the governing body of such Person has
approved such Acquisition;

          (vi) reasonably prior to such Acquisition, the Administrative Agent shall have received
complete executed or conformed copies of each material document, instrument and agreement to
be executed in connection with such Acquisition together with all lien search reports and
lien release letters and other documents as the Administrative Agent may reasonably require
to evidence the termination of Liens (other than the Permitted Liens) on the assets or
business to be acquired;

          (vii) reasonably prior to such Acquisition, the Administrative Agent shall have
received (A) an acquisition summary with respect to the Person and/or business or division
to be acquired, such summary to include a reasonably detailed description thereof (including
financial information) and operating results (including financial statements for the most
recent 12 month period for which they are available and as otherwise available), the terms
and conditions, including economic terms, of the proposed Acquisition, and the Borrowers’
calculation of pro forma compliance with the financial ratios and restrictions set forth in
Section 11.13 relating thereto including, without limitation, the Borrowers’
calculation of EBITDA, (B) due diligence materials with respect to the business, legal, tax
and environmental aspects of the Person and/or business or division to be acquired and the
Administrative Agent shall be satisfied with results of its due diligence and (C) unless the
Administrative Agent otherwise consents, in the case of the Acquisition of any Person
and/or business or division, evidence that the EBITDA of such Person and/or business or
division for the most recent 12 month period for which financial statements are available,
as adjusted by such add-backs with respect
to cash expenses not related to operations which are acceptable to the Administrative
Agent or which are permitted under Article 11 of Regulation S-X promulgated under the
Securities Act of 1933, as amended, is not less than zero;

          (viii) the Administrative Agent shall have approved (which approval shall not
unreasonably be withheld) the Borrowers’ computation of pro forma compliance with the
financial ratios and restrictions set forth in Section 11.13 including, without
limitation, the Borrowers’ calculation of pro forma EBITDA, and the Borrowers’ calculation
of Excess Revolving Loan Availability as set forth in clause (iv) above;

          (ix) consents have been obtained in favor of the Administrative Agent and the Lenders
to the granting of a security interest and/or the collateral assignment of rights and
indemnities under the related acquisition documents and opinions of counsel

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for the Loan
Parties and/or relevant Subsidiaries and (if delivered to the Loan Party or any such
Subsidiary) the selling party allowing reliance thereon by the Administrative Agent and the
Lenders have been delivered and the applicable Loan Party shall have executed an agreement
providing for the granting of a security interest in, and the collateral assignment to the
Administrative Agent of, such Loan Parties’ rights and indemnities under the related
acquisition documents;

          (x) unless the Administrative Agent otherwise consents, if such Acquisition is
structured as an acquisition of Capital Securities, such Acquisition is of more than fifty
percent of the Capital Securities of such Person (and in respect of which the provisions of
Section 10.10 will be complied with), or is made through a Domestic Wholly-Owned
Subsidiary formed in compliance with Section 11.15, and the provisions of
Section 10.10 have been satisfied with respect to all such Persons and its
Subsidiaries or such newly-formed Subsidiaries concurrently with or prior to such
Acquisition;

          (xi) if such Acquisition is structured as an asset acquisition, (A) and if such assets
are intended to be included in the Borrowing Base, the Administrative Agent must provide its
prior written approval, upon its review of such assets including, without limitation, its
review of such field examinations, audits, appraisals and other due diligence as the
Administrative Agent shall reasonably require; it being acknowledged and agreed that (1) the
Administrative Agent may require that the acquired assets be held in a separate Domestic
Wholly-Owned Subsidiary which shall be deemed a Guarantor and (2) such additional assets, if
any, included in the Borrowing Base may be subject to different advance rates or may require
the imposition of additional reserves with respect thereto and (B) such Loan Party shall not
assume any obligations or liabilities of the seller other than Acquired Debt to the extent
permitted pursuant to Section 11.1(i); and

          (xii) if the Acquisition is structured as a merger, a Loan Party is the surviving
entity; provided that no Borrower may enter into a merger unless the Administrative Agent
has provided its prior written consent to such merger and such Borrower shall be the
surviving entity.

(any such Acquisition described in this clause (2), being a “Permitted
Acquisition”).

     11.5 Modification of Organizational Documents. Not permit the charter, by-laws or
other organizational documents of any Loan Party or Subsidiary to be amended or modified in any way
which could reasonably be expected to materially adversely affect the interests of the Lenders.
Not change, or allow any other Loan Party to change, its state of formation or its organizational
form unless it gives the Administrative Agent at least 30 days (or such lesser amount of time as
consented to by the Administrative Agent) prior written notice thereof and takes all actions
reasonably requested by Agent to maintain the perfection or priority of any Lien or security
interest granted hereunder.

     11.6 Transactions with Affiliates. Not, and not permit any other Loan Party to, enter
into, or cause, suffer or permit to exist any transaction, arrangement or contract with any of its
other Affiliates (including any Subsidiary or joint venture of the Loan Parties) which is on terms,
which are less favorable than are obtainable from any Person which is not one of its

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Affiliates, other than (i) customary and reasonable employment arrangements with employees (including without
limitation, incentive compensation arrangements) and benefit programs and entered into in the
ordinary course of business and pursuant to the reasonable requirements of such Loan Party’s
business and, in the case of any senior officers or directors of any Loan Party, approved by the
board of directors and permissible under law, (ii) customary indemnification agreements and
insurance arrangements entered into for the benefit of any Loan Party’s directors or officers
entered into in the ordinary course of business consistent with past practices and pursuant to the
reasonable requirements of such Loan Party’s business, (iii) as permitted pursuant to clauses
(a), (g) and (j) of Section 11.10, (iv) transactions with officers or
directors of a Borrower or its Subsidiaries providing for the payment of customary and reasonable
fees, and indemnification and reimbursement of expenses, upon customary and reasonable terms, (v)
entering into perpetual, royalty-free, irrevocable licenses of intellectual property with other
Loan Parties and their Subsidiaries and (vi) to the extent otherwise expressly permitted hereunder,
transactions among Loan Parties, among Loan Parties and their Subsidiaries and/or other
Subsidiaries of the Parent.

     11.7 Unconditional Purchase Obligations. Not, and not permit any other Loan Party to,
enter into, guaranty or be a party to any material contract for the purchase of materials, supplies
or other property or services if such contract requires that payment be made by it regardless of
whether delivery is ever made of such materials, supplies or other property or services.

     11.8 Inconsistent Agreements. Not, and not permit any other Loan Party to, enter into
any agreement containing any provision which would (a) be violated or breached by any borrowing by
the Borrowers hereunder or by the performance by any Loan Party or Subsidiary of any of its
Obligations hereunder or under any other Loan Document, (b) prohibit any Loan Party from granting
to the Administrative Agent and the Lenders, a Lien on any of its assets (other than distribution
agreements or license agreements, provided that with respect to any such distribution agreements or
license agreement that prohibit any Loan Party from granting to the Administrative Agent Liens on
the right to receive payments and other proceeds from the sale of products licensed or distributed
under such agreements, the Borrowers shall use their commercially reasonable efforts (it being
agreed that this shall not include the payment of any monies) to obtain the consent of the
counterparties thereto to permit the Liens of the Administrative Agent under the Loan Documents and
the Borrowers further agree to, and to
cause the other Loan Parties to, disclose and schedule such agreements in accordance with the
terms of the Guaranty and Security Agreement) or (c) create or permit to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to (i) pay dividends or make other
distributions to any Loan Party or any Subsidiary, or pay any Debt owed to any Loan Party or any
Subsidiary, (ii) make loans or advances to any Loan Party or (iii) transfer any of its assets or
properties to any Loan Party, other than (A) in the case of clause (b) and (c), customary
restrictions and conditions contained in agreements relating to the sale of all or a substantial
part of the assets of any Subsidiary pending such sale, provided that such restrictions and
conditions apply only to the Subsidiary to be sold and such sale is permitted hereunder, (B) in the
case of clauses (b) and (c)(iii), restrictions or conditions imposed by any agreement relating to
purchase money Debt, Capital Leases and other secured Debt permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such Debt, (C) in the case
of clause (b) and (c), customary provisions in leases and other contracts restricting the

80

 

assignment or other transfer thereof, (D) in the case of clause (c), customary provisions in
organizational documents of any Foreign Subsidiary that restrict the transfer of Capital Securities
of such Subsidiaries, or (E) in the case of clauses (b) and (c) any applicable law, rule or
regulation (including, without limitation, applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain circumstances).

     11.9 Business Activities. Not, and not permit any other Loan Party, to engage in any
line of business other than the businesses of the Borrowers engaged in on the date hereof and
businesses reasonably related, incidental or complementary thereto.

     11.10 Investments. Not, and not permit any other Loan Party to, make or permit to
exist any Investment in any other Person, except the following; it being agreed that to be
permitted hereunder, any such Investment, if evidenced by Capital Securities of the Person being
invested in, that the provisions of Section 10.10 shall have been complied with and, if
evidenced by Debt, the provision of Section 11.1(c) relating to evidencing and pledging as
Collateral of such Debt from a Loan Party and, where appropriate, subordination thereof to the
Obligations shall have been complied with:

          (a) contributions by the Loan Parties to the capital of any other Loan Party, so long as the
recipient of any such capital contribution has guaranteed the Obligations and such guaranty is
secured by a pledge of all of its Capital Securities and substantially all of its real and personal
property, in each case in accordance with Section 10.10; provided that the aggregate amount
of all contributions to a Loan Party which is not a Wholly-Owned Subsidiary shall not exceed
$10,000,000 at any time outstanding;

          (b) Investments constituting Debt permitted by Section 11.1(c);

          (c) Contingent Liabilities constituting Debt permitted by Section 11.1 or Liens
permitted by Section 11.2;

          (d) Cash Equivalent Investments;

          (e) bank deposits in the ordinary course of business, provided that the Loan Parties shall at
no time have deposits or investments of more than $2,000,000, in aggregate, on deposit in Subject
Accounts which are not subject to Account Control Agreements;

          (f) Investments in securities of Account Debtors received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;

          (g) loans or advances to employees, officers or directors of the Loan Parties or any
Subsidiary incurred in the ordinary course of business (including for travel, entertainment and
relocation expenses), in an aggregate amount not to exceed $200,000 at any one time outstanding;

          (h) subject to the limitations in Section 11.4, Investments constituting Permitted
Acquisitions;

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          (i) Investments listed on Schedule 11.10 existing as of the Closing Date;

          (j) loans and advances permitted pursuant to Section 11.1(c);

          (k) loans by a Loan Party to any First-Tier Foreign Subsidiary in an aggregate amount not to
exceed $3,000,000 at any time outstanding;

          (l) subject to the limitations in Section 11.6, customary security deposits paid to
landlords of real property leased by the Loan Parties in the ordinary course of business and in
accordance with the lease to which such Loan Party is a party;

          (m) other Investments in an aggregate amount not to exceed $100,000 at any time; and

          (n) the Target Acquisitions, so long as such acquisitions are consummated in accordance with
the terms of the Acquisition Documents, with such variances therefrom which would not and could not
reasonably be expected to be adverse to the Administrative Agent or the Lenders in any material
respect;

     provided that (x) any Investment which when made complies with the requirements of the
definition of the term “Cash Equivalent Investment” may continue to be held for its term
(without giving effect to any renewals or extensions) notwithstanding that such Investment ceases
to meet such requirements and; (y) no Investment otherwise permitted by clause (b) or
(c) shall be permitted to be made if, immediately before or after giving effect thereto,
any Event of Default or Unmatured Event of Default exists or would result therefrom.

     11.11 Restriction of Amendments to Certain Documents. Not amend or otherwise modify,
or waive any rights or obligations under the Acquisition Documents and any other agreement,
document or instrument evidencing any Subordinated Debt, except where such amendment, modification
or waiver would not be and could not reasonably be expected to be adverse to the Administrative
Agent or the Lenders in any material respect.

     11.12 Accounting Changes; Fiscal Year. Not make any change in (a) accounting policies
or reporting practices, except as required by GAAP, or (b) its current fiscal year.

     11.13 Financial Covenants.

          11.13.1 Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio as
calculated as of the last day of each Fiscal Quarter set forth below with respect to the
Computation Period ending on such date to be less than the ratio set forth below opposite such
date:

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	Fiscal Quarter Ending	 	Fixed Charge Coverage Ratio
	 
	 	 
	Each Fiscal Quarter ending on after June 30,
2008 through and including March 31, 2010

	 	1.25 : 1.00
	 
	 	 
	Each Fiscal Quarter ending on or after June 

30, 2010

	 	1.35 : 1.00

          11.13.2 Total Debt to EBITDA Ratio. Not permit the Total Debt to EBITDA Ratio as
calculated as of the last day of each Fiscal Quarter set forth below with respect to the
Computation Period ending on such date to be greater than the ratio set forth below opposite such
date:

	 	 	 
	Fiscal Quarter Ending	 	Total Debt to EBITDA Ratio
	 
	 	 
	Each Fiscal Quarter ending on or after June
30, 2008 through and including March 31, 2009

	 	3.25 : 1.00
	 
	 	 
	Each Fiscal Quarter ending on and including
June 30, 2009 through and including September
30, 2010

	 	3.00 : 1.00
	 
	 	 
	Each Fiscal Quarter ending on and after
December 31, 2010

	 	2.75 : 1.00

          11.13.3 Capital Expenditures. Not permit the aggregate amount of all Capital
Expenditures made by the Loan Parties in any Fiscal Year to exceed $5,000,000 (the “Capital
Expenditure Limitation”). If the Loan Parties do not utilize the entire amount of the Capital
Expenditure Limitation permitted in any Fiscal Year, the Loan Parties may carry forward, to the
immediately succeeding Fiscal Year only, up to one hundred percent (100%) of such unutilized
amount. All Capital Expenditures in any Fiscal Year shall first be applied to reduce the
applicable Capital Expenditure Limitation for such Fiscal Year and then to reduce the carry-forward
from the previous Fiscal Year, if any.

     11.14 Cancellation of Debt. Not, and not permit any other Loan Party to, cancel any
claim or Debt owing to it, other than (i) in connection with trade discounts or allowances granted
in the ordinary course of its business consistent with past practices, and (ii) so long as no Event
of Default or Unmatured Event of Default is then outstanding the cancellation of Debts or claims
not to exceed $500,000 in any Fiscal Year, in the aggregate, in connection with the resolution of
good faith disputes relating thereto.

     11.15 Creation of Subsidiaries. Not, and not permit any other Loan Party or Domestic
Subsidiary to, create any Subsidiary or enter into any joint venture, other than so long

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as no Event of Default or Unmatured Event of Default then exist or would result therefrom,
Subsidiaries in respect of which the provisions of Sections 10.10 shall have been
satisfied.

     11.16 Commingling of Funds. Not, and not permit the Parent or any other Loan Party
to, commingle any of such Person’s cash or cash equivalents with the cash or cash equivalents of
any of the Russ Berrie B Entities.

     11.17 Change in Principal Place of Business. So long as Lawrence Bivona is employed
by LaJobi, not permit LaJobi’s principal place of business to change to a location more than 50
miles from its current location at 21 Sentry Court, Basking Ridge, NJ.

SECTION 12 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

     The obligation of each Lender to make its Loans and of the Fronting Bank to issue Letters of
Credit is subject to the following conditions precedent:

     12.1 Initial Credit Extension. The obligation of the Lenders to make the initial
Loans and the obligation of the Fronting Bank to issue its initial Letter of Credit (whichever
first occurs) is, in addition to the conditions precedent specified in Section 12.2,
subject to the conditions precedent that (a) all Debt to be Repaid has been (or concurrently with
the initial borrowing will be) paid in full, and that all agreements and instruments governing the
Debt to be Repaid and that all Liens securing such Debt to be Repaid have been (or concurrently
with the initial borrowing will be) terminated and (b) the Administrative Agent shall have received
or determined the satisfaction of all of the following, which, in the case of any delivery, shall
be duly and fully executed and dated the Closing Date (or such earlier date as shall be
satisfactory to the Administrative Agent), and shall be in form and substance reasonably
satisfactory to the Administrative Agent (and the date on which all such conditions precedent have
been satisfied or waived in writing by the Administrative Agent and the Lenders is called the
“Closing Date”):

          12.1.1 List of Closing Documents. All instruments, documents, certificates agreements
and opinions of counsel, set forth on the List of Closing Documents attached hereto as Schedule
12.1.1 and the Administrative Agent shall be reasonably satisfied (i) as to the legality,
validity, binding effect and enforceability thereof and (ii) that the Collateral Documents create
valid, enforceable and perfected Liens and security interests in the Collateral purported to be
covered thereby.

          12.1.2 Consents, etc. Evidence, reasonably satisfactory to the Administrative Agent,
that the Loan Parties have received all governmental and third party approvals necessary for the
continuing operations of the Loan Parties and such approvals shall be on terms reasonably
satisfactory to the Administrative Agent and shall be in full force and effect, except for such
approvals the failure to obtain which, individually or in the aggregate, would not have or could
not reasonably be expected to have a Material Adverse Effect.

          12.1.3 Payment of Fees and Expenses. Receipt by the Administrative Agent of payment
by the Loan Parties of all accrued and unpaid fees and expenses to the extent then due and payable
to the Administrative Agent and/or the Lenders on the Closing Date (including, without limitation,
pursuant to the Agent Fee Letter), together with all Attorney Costs of the Administrative Agent to the extent invoiced prior to the Closing Date, plus such additional

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amounts of Attorney Costs as shall constitute the Administrative Agent’s reasonable estimate of
Attorney Costs incurred or to be incurred by the Administrative Agent through the closing
proceedings (provided, that such estimate shall not thereafter preclude final settling of accounts
between the Borrowers and the Administrative Agent). Without limiting the foregoing, receipt by
the Administrative Agent of any amounts due under Section 8.4 of the Existing Credit
Agreement in respect of any prepayment or reallocations of the Obligations outstanding thereunder
effected pursuant to this Agreement.

          12.1.4 Maximum Total Debt to EBITDA Ratio. The proforma Total Debt to EBITDA Ratio
for the Computation Period ending as of December 31, 2007 for Borrowers and their Subsidiaries
(inclusive of the Targets and after giving effect to the consummation of the Target Acquisitions)
shall not be greater than 3.00:1.00.

          12.1.5 Minimum EBITDA. Immediately prior to the Closing Date, pro forma EBITDA for
the Computation Period ending as of December 31, 2007 for Borrowers and their Subsidiaries
(inclusive of the Targets and after giving effect to the consummation of the Target Acquisitions)
shall not be less than $46,000,000.

          12.1.6 [Reserved].

          12.1.7 Material Adverse Effect.

          (a) Since September 30, 2007, no event shall have occurred which has had or could reasonably
be expected to result in (1) a material adverse change in, or have a material adverse effect on,
the operations, business, assets, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Loan Parties and their Subsidiaries (exclusive of
CoCaLo and LaJobi Industries), taken as a whole; (2) a material impairment of the rights and
remedies, taken as a whole, of the Administrative Agent or the Lenders under the Loan Documents, or
of the ability of such Loan Parties, taken as a whole, to perform, in any material respect, their
obligations under any loan documentation to which they are or become parties; or (3) a material
adverse effect upon the legality, validity, binding effect or enforceability against any such Loan
Party of any of the Loan Documents to which they are or become a party.

          (b) Between December 31, 2006 and the Closing Date, (1) no event shall have occurred which
has had or could reasonably be expected to result in a material adverse change in, or have a
material adverse effect on, the operations, business, assets, properties, liabilities (actual or
contingent), condition (financial or otherwise) or prospects of CoCaLo or LaJobi Industries and
their Subsidiaries, taken as a whole; (2) no event shall have occurred which could reasonably be
expected to result in a material impairment of the rights and remedies, taken as a whole, of the
Administrative Agent or the Lenders under the Loan Documents, or of the ability of CoCaLo or LaJobi
Industries and their Subsidiaries, taken as a whole, to perform, in any material respect, their
obligations under any loan documentation to which they are or become parties; or (3) no event shall
have occurred which could reasonably be expected to result in a material adverse effect upon the
legality, validity, binding effect or enforceability against any of CoCaLo or LaJobi Industries of any of the Loan Documents to which they are or become parties.

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          12.1.8 Due Diligence. The Administrative Agent shall have completed its legal and
business due diligence (including, where applicable, with respect to environmental matters) with
respect to each Loan Party and the results thereof shall be acceptable to the Administrative Agent,
in its reasonable discretion.

          12.1.9 Capitalization and Structure. The capitalization and structure of the
Borrowers and their Subsidiaries after giving effect to the transaction contemplated hereunder and
under the Acquisition Documents shall be reasonably satisfactory to the Administrative Agent.

          12.1.10 Litigation. The Administrative Agent shall have received evidence,
satisfactory to the Administrative Agent, that no litigation (including derivative actions),
arbitration proceeding or governmental investigation or proceeding is pending or, to the knowledge
of any Loan Party, threatened challenging the validity, permissibility or legality of the
transactions contemplated by the Loan Documents or the Acquisition Documents or which would
otherwise have or could reasonably be expected to have a Material Adverse Effect.

          12.1.11 Projections. The Administrative Agent shall have received consolidating
projected income statements, balance sheets and statements of cash flow of the Borrowers and their
Subsidiaries on a consolidating basis after giving effect to the making of the initial Loans and
the issuance of the initial Letters of Credit on a monthly basis for Fiscal Year 2008 and on an
annual basis for Fiscal Year 2009, 2010, 2011 and 2012.

          12.1.12 Financial Statements. The Administrative Agent shall have received (i)
consolidated and consolidating financial statements (including balance sheets, statements of
earnings and cash flows) of the Borrowers and their Subsidiaries (other than the Targets) for the
2004, 2005 and 2006 Fiscal Years and (ii) unaudited interim consolidated and consolidating
financial statements (including balance sheets, statements of earnings and cash flows) of the
Borrowers and their Subsidiaries for each fiscal month and quarter ended after the latest period
for which financial statements have been delivered in accordance with the immediately preceding
clause (i). The Administrative Agent shall have received (i) financial statements
(including balance sheets, statements of earnings and cash flows) for each of the Targets for the
2005 and 2006 Fiscal Years and (ii) unaudited interim consolidated and consolidating financial
statements (including balance sheets, statements of earnings and cash flows) of each of the Targets
for each fiscal month and quarter ended after the latest period for which financial statements have
been delivered in accordance with the immediately preceding clause (i).

          12.1.13 Filings, Registrations and Recordings. The Administrative Agent shall have
received (i) the results of recent tax, judgment and UCC lien searches in each relevant
jurisdiction with respect to each Loan Party and the Targets and (ii) each document (including
Uniform Commercial Code financing statements) required by the Collateral Documents or under law or
reasonably requested by the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on
the collateral described therein, prior to any other Liens (other than prior Liens permitted pursuant to Section 11.2), in proper form for filing,
registration or recording, including without limitation, UCC financing statements, mortgages, deeds
of trust, account control agreements, title policies.

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          12.1.14 Insurance. The Administrative Agent shall be reasonably satisfied with the
insurance program to be maintained by the Loan Parties and shall have received, if requested by the
Administrative Agent, copies of Borrowers’ and the other Loan Parties’ insurance policies.

          12.1.15 Consummation of the Target Acquisitions. The Administrative Agent shall have
received certified, fully executed copies of the Acquisition Agreements and final and complete
copies of each of the other Acquisition Documents, each of which shall be in full force and effect
in form and substance reasonably satisfactory to Administrative Agent. All conditions to the
closing of each of the Target Acquisitions shall be satisfied in all material respects or waived
with the consent of the Administrative Agent; and other than payment of the purchase prices
therefor (which shall occur concurrently with the closing of this Agreement), the Target
Acquisitions shall have been consummated in accordance with and on the terms set forth in the
Acquisition Agreements and the other Acquisition Documents with such variances therefrom which
would not and could not reasonably be expected to be adverse to the Administrative Agent or the
Lenders in any material respect.

          12.1.16 Sources and Uses of Funds. The sources and uses of cash for the transactions
contemplated under this Agreement shall be consistent in all material respects with the schedule of
sources and uses of cash attached hereto as Annex C.

          12.1.17 Amendments to Articles of Incorporation. The Administrative Agent shall have
received file copies of the amendments to each of I & J, CoCaLo and LaJobi’s Articles/Certificates
of Incorporation or by-laws, in each case, in form and substance reasonably satisfactory to the
Administrative Agent incorporating the provisions therein that are set forth in Schedule
12.1.17, and each Borrower shall have duly appointed Independent Directors who shall be
qualified and acting in such capacity as of the Closing Date.

          12.1.18 Earnings Reports. The Administrative Agent shall have received and be
reasonably satisfied with quality of earnings reports conducted by an independent third party with
respect to each of the Targets.

          12.1.19 Other. Such other documents, instruments or agreements as the Administrative
Agent or any Lender may reasonably request.

     12.2 Conditions. The obligation (a) of each Lender to make each Loan and/or (b) of
the Fronting Bank to issue or extend any Letter of Credit is subject to the following further
conditions precedent that:

          12.2.1 Compliance with Warranties, No Default, etc. Both before and after giving
effect to the making, continuation or conversion any Loan or the issuance or extension of any
Letter of Credit, the following statements shall be true and correct:

          (a) the representations and warranties of each Loan Party set forth in this Agreement and the
other Loan Documents shall be true and correct in all material respects with the same effect as if
then made (or, if such representations and warranties are qualified by materiality or Material
Adverse Effect, in all respects) except to the extent stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct

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in all material respects as of such earlier date (or, if such representations and warranties are qualified by
materiality or Material Adverse Effect, in all respects));

          (b) no Event of Default or Unmatured Event of Default shall have then occurred and be
continuing; and

          (c) Revolving Outstandings shall not exceed Revolving Loan Availability.

          12.2.2 Confirmatory Certificate. If requested by the Administrative Agent or any
Lender, the Administrative Agent shall have received (in sufficient counterparts to provide one to
each Lender) a certificate dated the date of such requested Loan or Letter of Credit and signed by
a duly authorized representative of each of the Loan Parties as to the matters set out in
Section 12.2.1 (it being understood that each request by the Borrowers for the making of a
Loan or the issuance of a Letter of Credit shall be deemed to constitute a representation and
warranty by the Loan Parties that the conditions precedent set forth in Section 12.2.1 will
be satisfied at the time of the making of such Loan or the issuance of such Letter of Credit).

SECTION 13 EVENTS OF DEFAULT AND THEIR EFFECT.

     13.1 Events of Default. Each of the following shall constitute an Event of Default
under this Agreement:

          13.1.1 Non-Payment of the Loans, etc. Default in the payment when due of the
principal of any Loan; or default, and continuance thereof for five days, in the payment when due
of any interest, fee, reimbursement obligation with respect to any Letter of Credit or other amount
payable by any Loan Party hereunder or under any other Loan Document.

          13.1.2 Non-Payment of Other Debt. Any default shall occur under the terms applicable
to any Debt of any Loan Party in an aggregate amount exceeding $1,000,000 among all of the Loan
Parties and such default shall (a) consist of the failure to pay such Debt when due, whether by
acceleration or otherwise, and including any such failure as a result of any prohibition under
Section 11.3, or (b) accelerate the maturity of such Debt, or permit the holder or holders
thereof, or any trustee or agent for such holder or holders, to cause such Debt to become due and
payable (or to require any Loan Party to purchase or redeem such Debt or post cash collateral in
respect thereof) prior to its expressed maturity.

          13.1.3 Pledge Agreement. Any “Event of Default” occurs and is continuing under (and
as defined in) the Pledge Agreement.

          13.1.4 Bankruptcy, Insolvency, etc. The Parent or any Loan Party becomes insolvent or
generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become
due; or the Parent or any Loan Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for the Parent or such Loan Party or any
property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for
the Parent or any Loan Party or for a substantial part of the property of any thereof and is not
discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case

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or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is
commenced in respect of the Parent or any Loan Party, and if such case or proceeding is not
commenced by the Parent or such Loan Party, it is consented to or acquiesced in by the Parent or
such Loan Party, or remains for 60 days undismissed; or the Parent or any Loan Party takes any
action to authorize, or in furtherance of, any of the foregoing.

          13.1.5 Non-Compliance with Loan Documents. (a) Failure by any Loan Party to comply
with or to perform any covenant set forth in Sections 10.1.5(a), 10.1.5(d),
10.3.2, 10.3.3, 10.5, 10.11, or 10.12 or Section 11
of this Agreement or Section 5.2 of the Guaranty and Collateral Agreement; provided that the mere
failure to deliver insurance certificates or proof of insurance (as distinguished from the failure
to maintain any such insurance in effect) as required pursuant to Section 10.3.2 will not
cause an Event of Default to immediately occur pursuant to this clause (a), (b) failure by
any Loan Party to comply with or to perform any covenant set forth in Sections 10.1.1,
10.1.2, 10.1.3, 10.1.5 (other than clauses (a) or (d)
thereof), 10.1.6, 10.1.8 or to deliver insurance certificates or proof of insurance
(as distinguished from the failure to maintain any such insurance in effect) as required pursuant
to Section 10.3.2, and continuance of such failure described in this clause (b) for
20 days, or (c) failure by the Parent or any Loan Party to comply with or to perform any other
provision of this Agreement or any other Loan Document (and not constituting an Event of Default
under any other provision of this Section 13) and continuance of such failure described in
this clause (c) for 30 days.

          13.1.6 Representations; Warranties. Any representation or warranty made by the Parent
or any Loan Party herein or any other Loan Document is breached or is false or misleading in any
material respect when made or deemed to have been made, or any schedule, certificate, financial
statement, report, notice or other writing furnished by the Parent or any Loan Party to the
Administrative Agent or any Lender in connection herewith or in any other Loan Document is false or
misleading in any material respect on the date as of which the facts therein set forth are stated
or certified.

          13.1.7 Pension Plans. (a) A Termination Event occurs which has or could reasonably be
expected to result in liability to any of the Loan Parties or any other member of the Controlled
Group in excess of $1,000,000 in the aggregate; (b) there arises or exists an Unfunded Liability
which would or could reasonably be expected to have a Material Adverse Effect or (c) there shall
occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan which would or could
reasonably be expected to result in a liability to any Loan Party or other member of the Controlled
Group in excess of $1,000,000 in the aggregate.

          13.1.8 Judgments. Final judgments which (i) in the case of monetary judgments, exceed
$5,000,000, in aggregate, for all such judgments, in excess of any applicable insurance with
respect to which the insurer has not denied liability or coverage or (ii) in the case of
non-monetary judgments, would have or could reasonably be expected to have a Material Adverse Effect, shall in either case be rendered against the Parent and/or any Loan Party and,
in each of the cases of clause (i) and (ii) above, shall not have been paid, discharged or vacated
or had execution thereof stayed pending appeal within 30 days after entry or filing of such
judgments.

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          13.1.9 Loss of Collateral. Any loss, theft, damage or destruction of any material
portion of the Collateral to the extent not fully covered (subject to such deductibles and
self-insurance retentions as the Administrative Agent shall have permitted) by insurance or if and
to the extent the insurance company has denied or asserted a denial of coverage therefor.

          13.1.10 Levy, Seizure or Attachment. The making by any Person of a levy, seizure or
attachment upon any material portion of the Collateral, except to the extent that such proceedings
are being diligently contested in good faith by appropriate proceedings and the enforcement thereof
is stayed (and the terms of such stay do not adversely affect in any material respect the
Administrative Agent’s Liens or other rights on such Collateral or its ability to accept and retain
payment hereunder).

          13.1.11 Invalidity of Loan Documents, etc. Any Loan Document shall cease to be in
full force and effect (other than in accordance with its terms) or any Loan Party (or any Person
by, through or on behalf of the Parent or any Loan Party) shall contest in any manner the validity,
binding nature or enforceability of any Loan Document or the Liens purported to be granted therein
or any court or any governmental authority shall issue a judgment, order, decree or ruling to the
effect that any of the obligations of any party to any Loan Document are illegal, invalid or
unenforceable.

          13.1.12 Invalidity of Subordination Provisions, etc. Any subordination provision in
any document or instrument governing any Subordinated Debt, or any subordination provision in any
guaranty by any Loan Party of any Subordinated Debt shall, in any such case, cease to be in full
force and effect; or any Loan Party, any subordinating party or any governmental authority having
jurisdiction over any of them or over the Administrative Agent and/or the Lenders shall contest in
any judicial or administrative proceeding the validity, binding nature or enforceability of any
such provision or agreement.

          13.1.13 Change of Control. A Change of Control shall occur.

          13.1.14 Earnout Default. (i) The Loan Parties fail to deliver to the Administrative
Agent the certifications and information required pursuant to the Earnout Consideration Conditions
Precedent within three (3) Business Days prior (but no earlier than ten (10) Business Days prior)
to the date that any Earnout Consideration is to be paid, including pursuant to any guaranty
thereof (the “Earnout Payment Date”), (ii) the Administrative Agent reasonably determines
that, any of the Earnout Consideration Conditions Precedent will not be satisfied as of the Earnout
Payment Date, (iii) any of the material information set forth in the certificates and information
described in clause (i) above shall be incorrect in any material respect when made (and such
inaccuracies are not remedied prior to the payment of any Earnout Consideration which is the basis
of such certificate) or (iv) any Earnout Consideration is paid at any time that the Earnout
Consideration Conditions Precedent are not satisfied (any of the foregoing being an “Earnout
Default”).

     13.2 Effect of Event of Default. If any Event of Default described in Section
13.1.4 shall occur in respect of any Loan Party, the Commitments shall immediately terminate
and the Loans and all other Obligations (other than any outstanding Specified Hedging Obligations
which would not pursuant to their terms be, become or be declared to be then due

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and payable) hereunder shall become immediately due and payable and the Loan Parties shall become immediately
obligated to Cash Collateralize all Letters of Credit, all without presentment, demand, protest or
notice of any kind; and, if any other Event of Default shall occur and be continuing, the
Administrative Agent may (and, upon the written request of the Required Lenders shall), declare the
respective Commitments to be terminated in whole or in part and/or declare all or any part of the
Loans and all other Obligations (other than any outstanding Specified Hedging Obligations which
would not pursuant to their terms be, become or be declared to be then due and payable) hereunder
to be due and payable and/or demand that the Loan Parties immediately Cash Collateralize all or any
Letters of Credit, whereupon the Commitments shall immediately terminate (or be reduced, as
applicable) and/or the Loans and other Obligations (other than any outstanding Specified Hedging
Obligations which would not pursuant to their terms be, become or be declared to be then due and
payable) hereunder shall become immediately due and payable (in whole or in part, as applicable)
and/or the Loan Parties shall immediately become obligated to Cash Collateralize the Letters of
Credit (all or any, as applicable), all without presentment, demand, protest or notice of any kind.
The Administrative Agent shall promptly advise the Loan Party Representative of any such
declaration, but failure to do so shall not impair the effect of such declaration. Any cash
collateral delivered hereunder shall be held by the Administrative Agent (without liability for
interest thereon) and applied to the Obligations arising in connection with any drawing under a
Letter of Credit. After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Administrative Agent to any remaining Obligations hereunder and
any excess shall be delivered to the Loan Party Representative, on behalf of the Loan Parties, or
as a court of competent jurisdiction may elect.

SECTION 14 THE ADMINISTRATIVE AGENT.

     14.1 Appointment and Authorization. Each Lender hereby irrevocably (subject to
Section 14.10) appoints, designates and authorizes the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in
any other Loan Document, the Administrative Agent shall not have any duty or responsibility except
those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality
of the foregoing sentence, the use of the term “agent” herein and in other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law. Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.

     14.2 Fronting Bank. The Fronting Bank shall act on behalf of the Lenders (according
to their Pro Rata Shares relating to the Revolving Loans) with respect to any Letters of Credit
issued by it and the documents associated therewith. The Fronting Bank shall have all of the
benefits and immunities (a) provided to the Administrative Agent in this Section 14 with

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respect to any acts taken or omissions suffered by the Fronting Bank in connection with Letters of
Credit issued by it or proposed to be issued by it and the applications and agreements for letters
of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent”, as
used in this Section 14, included the Fronting Bank with respect to such acts or omissions
and (b) as additionally provided in this Agreement with respect to the Fronting Bank.

     14.3 Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees or attorneys in
fact and shall be entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects in the absence of gross
negligence or willful misconduct.

     14.4 Exculpation of Administrative Agent. None of the Administrative Agent nor any of
its directors, officers, employees or agents shall (a) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except to the extent resulting from its own gross negligence
or willful misconduct in connection with its duties expressly set forth herein as determined by a
final, nonappealable judgment by a court of competent jurisdiction), or (b) be responsible in any
manner to any Lender or participant for any recital, statement, representation or warranty made by
any Loan Party or Affiliate of any Loan Party or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement or other document referred
to or provided for in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document (or the creation, perfection or
priority of any Lien or security interest therein), or for any failure of any Loan Party or any
other party to any Loan Document to perform its Obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan
Party or its Affiliates.

     14.5 Reliance by Administrative Agent. The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, electronic mail message, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the
Loan Parties), independent accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders, as it deems appropriate and, if it so requests, confirmation from the Lenders
(or any of them) of their obligation to indemnify the Administrative Agent against any and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders, and such request and

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any action taken or failure to act pursuant thereto shall be binding upon each Lender. For purposes of determining
compliance with the conditions specified in Section 12, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received written notice from
such Lender prior to the proposed Closing Date specifying its objection thereto.

     14.6 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default except
with respect to defaults in the payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have
received written notice from a Lender or the Loan Party Representative referring to this Agreement,
describing such Event of Default or Unmatured Event of Default and stating that such notice is a
“notice of default”. The Administrative Agent will notify the Lenders of its receipt of any such
notice. The Administrative Agent shall take such action with respect to such Event of Default or
Unmatured Event of Default as may be requested by the Required Lenders in accordance with
Section 13.2; provided that unless and until the Administrative Agent has received any such
request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Event of Default or Unmatured Event of Default as it
shall deem advisable or in the best interest of the Lenders.

     14.7 Credit Decision. Each Lender acknowledges that the Administrative Agent has not
made any representation or warranty to it, and that no act by the Administrative Agent hereafter
taken, including any consent and acceptance of any assignment or review of the affairs of the Loan
Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent
to any Lender as to any matter, including whether the Administrative Agent has disclosed material
information in its possession. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent and based on such documents and
information as it has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and creditworthiness of
the Loan Parties, and made its own decision to enter into this Agreement and to extend credit to
the Borrowers hereunder. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan Parties. Except for
notices, reports and other documents expressly herein required to be furnished to the Lenders by
the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the Loan Parties which may come into the possession of the
Administrative Agent.

     14.8 Indemnification. Whether or not the transactions contemplated hereby are
consummated, each Lender shall indemnify upon demand the Administrative Agent and its

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directors,officers, employees and agents (to the extent not reimbursed by or on behalf of the Loan Parties
and without limiting the obligation of the Loan Parties to do so), according to its applicable Pro
Rata Share, from and against any and all Indemnified Liabilities (as hereinafter defined); provided
that no Lender shall be liable for any payment to any such Person of any portion of the Indemnified
Liabilities to the extent such Indemnified Liabilities resulted from such Person’s own gross
negligence or willful misconduct as determined by a final, nonappealable judgment by a court of
competent jurisdiction. No action taken in accordance with the directions of the Required Lenders
shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon
demand for its ratable share of any costs or out of pocket expenses (including Attorney Costs and
Taxes) incurred by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the
Loan Parties. The undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, expiration or termination of the Letters of Credit, any foreclosure under, or
modification, release or discharge of, any or all of the Collateral Documents, termination of this
Agreement and the resignation or replacement of the Administrative Agent.

     14.9 Administrative Agent in Individual Capacity. LaSalle and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Loan Parties and Affiliates as though LaSalle were not the
Administrative Agent hereunder and without notice to or consent of any Lender. Each Lender
acknowledges that, pursuant to such activities, LaSalle or its Affiliates may receive information
regarding the Loan Parties or their Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to them. With
respect to their Loans (if any), LaSalle and its Affiliates shall have the same rights and powers
under this Agreement as any other Lender and may exercise the same as though LaSalle were not the
Administrative Agent, and the terms “Lender” and “Lenders” include LaSalle and its Affiliates, to
the extent applicable, in their individual capacities.

     14.10 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders and the Loan Party Representative. If the
Administrative Agent resigns under this Agreement, the Required Lenders shall, with (so long as no
Event of Default exists) the consent of the Loan Party Representative (which shall not be
unreasonably withheld or delayed), appoint from among the Lenders a successor agent for the
Lenders. If no successor agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Loan Party Representative, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Administrative Agent and the term “Administrative
Agent” shall mean such successor agent, and the retiring Administrative Agent’s appointment, powers
and duties as Administrative Agent shall be terminated. After any retiring

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Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section 14 and
Sections 15.5 and 15.17 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor
agent has accepted appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.

     14.11 Collateral Matters. The Lenders irrevocably authorize the Administrative Agent,
at its option and in its discretion, (a) to release any Lien granted to or held by the
Administrative Agent under any Collateral Document (i) upon termination of the Commitments and
payment in full of all Loans and all other obligations of the Loan Parties hereunder and the
expiration or termination of all Letters of Credit; (ii) constituting property sold or to be sold
or disposed of as part of or in connection with any disposition permitted hereunder; or (iii)
subject to Section 15.1, if approved, authorized or ratified in writing by the Required
Lenders; or (b) to subordinate its interest in any Collateral to any holder of a Lien on such
Collateral which is permitted by Section 11.2(d)(i) or (d)(iii) (it being
understood that the Administrative Agent may conclusively rely on a certificate from the Loan Party
Representative, on behalf of the Loan Parties, in determining whether the Debt secured by any such
Lien is permitted by Section 11.1(b)). Upon request by the Administrative Agent at any
time, the Lenders will confirm in writing the Administrative Agent’s authority to release, or
subordinate its interest in, particular types or items of Collateral pursuant to this Section
14.11. Each Lender hereby authorizes the Administrative Agent to give blockage notices in
connection with any Subordinated Debt at the direction of the Required Lenders, and agrees that it
will not act unilaterally to deliver such notices.

     14.12 Administrative Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall
have made any demand on the Loan Party Representative, on behalf of the Loan Parties) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

          (a) to file and prove one or more claims for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, and all other Obligations that are owing and unpaid and
to file such other documents as may be necessary or advisable in order to have the claims of the
Lenders and the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 5, 15.5 and 15.17) allowed in such
judicial proceedings; and

          (b) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same;

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Sections 5,
15.5 and 15.17.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

     14.13 Other Agents; Arrangers and Managers. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a “syndication agent,”
“documentation agent,” “co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or
“co-arranger”, if any, shall have any right, power, obligation, liability, responsibility or duty
under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as
such. Without limiting the foregoing, none of the Lenders or other Persons so identified shall
have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges
that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in
deciding to enter into this Agreement or in taking or not taking action hereunder.

SECTION 15 GENERAL.

     15.1 Waiver; Amendments. No amendment or waiver of any provision of this Agreement or
any other Loan Document, and no consent to any departure by any Borrower or any other Loan Party
therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrowers or
the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

          (a) waive any condition set forth in Section 12.2, without the written consent of each
Lender;

          (b) change Section 7.2 or 7.5 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each Lender;

          (c) change any provision of this Section 15.1 or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant
any consent hereunder without the written consent of each Lender;

          (d) release all or substantially all of the Collateral in any transaction or series of related
transactions, without the written consent of each Lender except in connection with a refinancing of
the Obligations;

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          (e) release all or substantially all of the value of the guaranties of the any of the Loan
Parties’ obligations made by the Guarantors, without the written consent of each Lender;

          (f) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 13.2) without the written consent of such Lender;

          (g) postpone any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under
such other Loan Document without the written consent of each Lender entitled to such payment;

          (h) reduce the principal of, or the rate of interest specified herein on, any Loan or
borrowing under a Letter of Credit, or any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender entitled to such amount;
provided, however, that only the consent of the Required Lenders shall be necessary
to waive any obligation of the Borrower to pay interest or fees at the default rate;

and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Fronting Bank in addition to the Lenders required above, affect the
rights or duties of the Fronting Bank under this Agreement or any Loan Document relating to any
Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Administrative Agent under this Agreement or any other Loan Document;
and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender or other Person having no Commitment hereunder and the sole Obligations owed to
whom hereunder consists of Specified Hedging Obligations and/or other Bank Products Obligations
shall, in either case, have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of a Defaulting Lender may not be increased or extended
without the consent of such Lender.

     15.2 Confirmations. The Loan Party Representative and each holder of a Note agree
from time to time, upon written request received by it from the other, to confirm to the other in
writing (with a copy of each such confirmation to the Administrative Agent) the aggregate unpaid
principal amount of the Loans then outstanding under such Note.

     15.3 Notices. Except as otherwise provided in Sections 2.2.2 and
2.2.3, all notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Annex B or at such other address as
such party may, by written notice received by the other parties, have designated as its address for
such purpose.Notices sent by facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the date when sent by
registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received. For purposes of Sections
2.2.2 and 2.2.3, the Administrative Agent shall be entitled to rely on telephonic
instructions from any person that the Administrative Agent in good faith believes is an authorized
officer or

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employee of the Loan Party Representative, and the Loan Party Representative and each
Loan Party shall hold the Administrative Agent and each other Lender harmless from any loss, cost
or expense resulting from any such reliance.

     15.4 Computations. Where the character or amount of any asset or liability or item of
income or expense is required to be determined, or any consolidation or other accounting
computation is required to be made, for the purpose of this Agreement, such determination or
calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be
made in accordance with GAAP, consistently applied; provided that if the Loan Party
Representative notifies the Administrative Agent that the Loan Parties wish to amend any covenant
in Section 11.13 (or any related definition) to eliminate or to take into account the
effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent
notifies the Loan Party Representative that the Required Lenders wish to amend Section
11.13 (or any related definition) for such purpose), then the Loan Parties’ compliance with
such covenant shall be determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such covenant (or related
definition) is amended in a manner satisfactory to the Loan Parties and the Required Lenders.

     15.5 Costs, Expenses and Taxes. Without duplication of any other provision of this
Agreement, the Borrowers each hereby jointly and severally agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including Attorney Costs, all field
examination and appraisal costs (subject to the limitations set forth in Section 10.2), and
any Taxes in connection with the preparation, execution, syndication, delivery and administration
(including perfection and protection of any Collateral and the costs of Intralinks (or other
similar service), if applicable) of this Agreement, the other Loan Documents (including any
amendment, supplement or waiver to any Loan Document), whether or not the transactions contemplated
hereby or thereby shall be consummated, and all reasonable out-of-pocket costs and expenses
(including Attorney Costs (including the fees and disbursements) of not more than one counsel for
the Administrative Agent and the Lenders) with any local counsel reasonably required to realize or
exercise their rights in and upon Collateral in various locations, all field examination and
appraisal costs and any Taxes incurred by the Administrative Agent and each Lender after an Event
of Default in connection with the collection of the Obligations or the enforcement of this
Agreement, the other Loan Documents or any such other documents or during any workout,
restructuring or negotiations in respect thereof. In addition, each of the Loan Parties hereby
jointly and severally agrees to pay, and to save the Administrative Agent and the Lenders harmless
from all liability for, any fees of the Loan Parties’ auditors in connection with any reasonable
exercise by the Administrative Agent and the Lenders of their rights pursuant to Section
10.2. All Obligations provided for in this Section 15.5 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of Credit and
termination of this Agreement.

     15.6 Assignments; Participations.

          15.6.1 Assignments By Lenders. Any Lender may at any time assign to one or more
assignees (an “Assignee”) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment(s) and Loans (including for purposes

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of this Section 15.6.1, participations in Letters of Credit) at the time owing to it);
provided that any such assignment shall be subject to the following conditions:

     (i) Minimum Amounts.

     (A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and Loans, or in the case of an assignment to an Eligible Assignee, no
minimum amount need be assigned; and

     (B) in any case not described in subsection (i)(A) of this Section, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or,
if the Commitment is not then in effect, the principal outstanding balance of the Loans of
the assigning Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 in the case of any assignment in respect of the
Revolving Commitment, or $1,000,000, in the case of any assignment in respect of the Term
Commitment, unless each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Loan Party Representative otherwise consents (each such
consent not to be unreasonably withheld or delayed); provided, however, that
no consent of the Loan Party Representative shall be required for any such assignment to any
Eligible Assignee; and provided, further, that concurrent assignments to
members of an Assignee Group and concurrent assignments from members of an Assignee Group to
a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group)
will be treated as a single assignment for purposes of determining whether such minimum
amount has been met;

     (ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned, except that this clause (ii) shall not prohibit
any Lender from assigning all or a portion of its Revolving Loan Commitment and Term Loan
Commitment on a non-pro rata basis;

     (iii) Required Consents. No consent shall be required for any assignment except to
the extent required by subsection (i)(B) of this Section and, in addition:

     (A) the consent of the Borrowers (such consent not to be unreasonably withheld or
delayed) shall be required for each assignment unless (1) an Event of Default has occurred
and is continuing at the time of such assignment or (2) such assignment is to an Eligible
Assignee;

     (B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of (1) any Revolving Commitment or Revolving Loan or unfunded Term Commitment if such assignment
is to a Person that is not a Lender with an existing Revolving Commitment or Term
Commitment, respectively, an Affiliate of such Lender or an Approved Fund with

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respect to such Lender or (2) any Term Loan to a Person that is not a Lender, an Affiliate of a Lender
or an Approved Fund; and

     (C) the consent of the Fronting Bank (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment in respect of any Revolving Commitment or
Revolving Loan.

     (iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee in the amount of $3,500; provided, however, that the Administrative
Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case
of any assignment. The Assignee, if it is not a currently a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

     (v) No Assignment to Loan Parties. No such assignment shall be made to any Loan
Party.

     (vi) No Assignment to Natural Persons. No such assignment shall be made to a natural
person.

     Subject to acceptance and recording thereof by the Administrative Agent pursuant to
Section 15.7, from and after the effective date specified in each Assignment and
Assumption, the Assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 7.6 and 8 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Upon request, the
Borrowers (at their expense) shall execute and deliver a Note to the Assignee. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 15.6.2.

     Any Lender may at any time pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or Assignee for such Lender as a party hereto.

          15.6.2 Participations. Any Lender may at any time sell to one or more Persons
participating interests in its Loans, Commitments or other interests hereunder (any such Person, a “Participant”). In the event of a sale by a Lender of a participating
interest to a Participant, (a) such Lender’s obligations hereunder shall remain unchanged for all
purposes, (b) the Loan Parties, the Loan Party Representative and the Administrative Agent shall
continue to

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deal solely and directly with such Lender in connection with such Lender’s rights and
obligations hereunder and (c) all amounts payable by the Loan Parties shall be determined as if
such Lender had not sold such participation and shall be paid directly to such Lender. No
Participant shall have any direct or indirect voting rights hereunder except with respect to any
event described in Section 15.1 expressly requiring the unanimous vote of all Lenders or,
as applicable, all affected Lenders. Each Lender agrees to incorporate the requirements of the
preceding sentence into each participation agreement which such Lender enters into with any
Participant. The Loan Parties each hereby agrees that if amounts outstanding under this Agreement
are due and payable (as a result of acceleration or otherwise), each Participant, shall be deemed
to have the right of set-off in respect of its participating interest in amounts owing under this
Agreement and with respect to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this Agreement; provided
that such right of set-off shall be further subject to the obligation of each Participant to share
with the Lenders, and the Lenders agree to share with each Participant, as provided in Section
7.5. The Loan Parties also each hereby agrees that each Participant shall be entitled to the
benefits (and subject to the requirements) of Section 7.6 or 8 as if it were a
Lender (provided that on the date of the participation no Participant shall be entitled to any
greater compensation pursuant to Section 7.6 or 8 than would have been paid to the
participating Lender on such date if no participation had been sold and provided that such
Participant shall not be entitled to the benefits of Section 7.6 unless such Participant
has complied and will comply with Section 7.6(d) as if it were Lender).

     15.7 Register. The Administrative Agent, acting solely for this purpose as an agent
of the Borrowers, shall maintain at its office in the United States a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans and Letter of Credit
obligations owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive, and the Loan Parties, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the Loan
Parties and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

     15.8 GOVERNING LAW. THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

     15.9 Confidentiality. As required by federal law and the Administrative Agent’s
policies and practices, the Administrative Agent may need to obtain, verify, and record certain
customer identification information and documentation in connection with opening or maintaining
accounts, or establishing or continuing to provide services. The Administrative Agent and each Lender agree to use commercially reasonable efforts (equivalent to the efforts
the Administrative Agent or such Lender applies to maintain the confidentiality of its own
confidential information) to maintain as confidential all non-public information provided to them

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by any Loan Party (and which at the time is not, and does not thereafter become, publicly
available), except that the Administrative Agent and each Lender may disclose such information (a)
to Persons employed or engaged by the Administrative Agent or such Lender in evaluating, approving,
structuring or administering the Loans and the Commitments; (b) to any Assignee or participant or
potential Assignee or participant that has agreed in writing to comply with the covenant contained
in this Section 15.9 (and any such Assignee or participant or potential Assignee or
participant may disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any federal or state regulatory authority or
examiner, or any insurance industry association, or as reasonably believed by the Administrative
Agent or such Lender to be compelled by any court decree, subpoena or legal or administrative order
or process; (d) as, on the advice of the Administrative Agent’s or such Lender’s counsel, is
required by law; (e) in connection with the exercise of any right or remedy under the Loan
Documents or in connection with any litigation to which the Administrative Agent or such Lender is
a party; (f) to any nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with ratings issued with respect to such Lender; (g) to
any Affiliate of the Administrative Agent, the Fronting Bank or any other Lender who may provide
Bank Products to the Loan Parties; or (h) that ceases to be confidential through no fault of the
Administrative Agent or any Lender. Notwithstanding the foregoing, the Loan Parties consent to the
publication by the Administrative Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement; provided that such
tombstone or announcement has been approved by the Loan Party Representative, which approval shall
not be unreasonably withheld or delayed, and the Administrative Agent reserves the right to provide
to industry trade organizations information necessary and customary for inclusion in league table
measurements.

     15.10 Severability. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement. All obligations of the Loan Parties
and rights of the Administrative Agent and the Lenders expressed herein or in any other Loan
Document shall be in addition to and not in limitation of those provided by applicable law.

     15.11 Nature of Remedies. All Obligations of the Loan Parties and rights of the
Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in
addition to and not in limitation of those provided by applicable law. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.

     15.12 Entire Agreement. This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the parties hereto and supersedes all prior
or contemporaneous agreements and understandings of such Persons,
verbal or written (including the Existing Credit Agreement), relating to the subject matter hereof and thereof
(except as relates to the fees described in Section 5.3) and any prior arrangements made
with respect to the payment by the Loan Parties of (or any indemnification for) any fees, costs or

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expenses payable to or incurred (or to be incurred) by or on behalf of the Administrative Agent or
the Lenders. Notwithstanding anything to the contrary contained herein, this Agreement is not
intended to, and does not serve to affect, a novation of the Obligations. Instead, it is the
express intention of the parties hereto to reaffirm the indebtedness created and outstanding under
the Existing Credit Agreement, which continues to be secured by the Collateral.

     15.13 Counterparts. This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts and each such counterpart shall be deemed
to be an original, but all such counterparts shall together constitute but one and the same
Agreement. Receipt of an executed signature page to this Agreement by facsimile or other
electronic transmission shall constitute effective delivery thereof. Electronic records of
executed Loan Documents maintained by the Administrative Agent and the Lenders shall deemed to be
originals.

     15.14 Successors and Assigns. This Agreement shall be binding upon the Loan Parties,
the Lenders and the Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of the Loan Parties, the Lenders and the Administrative Agent and the
successors and assigns of the Lenders and the Administrative Agent. No other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents. No Loan Party may assign or
transfer any of its rights or Obligations under this Agreement without the prior written consent of
the Administrative Agent and each Lender.

     15.15 Captions. Section captions used in this Agreement are for convenience only and
shall not affect the construction of this Agreement.

     15.16 Patriot Act Notice. Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies
the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies each Loan Party, which information includes the name and
address of each Loan Party and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify each Loan Party in accordance with the Act. The Loan Parties
shall, promptly following a request by the Administrative Agent or any Lender, provide all
documentation and other information that the Administrative Agent or such Lender reasonably
requests in order to comply with its ongoing obligations under applicable “know your customer” an
anti-money laundering rules and regulations, including the Act.

     15.17 Indemnification by the Loan Parties. In consideration of the execution and
delivery of this Agreement by the Administrative Agent and the Lenders and the agreement to extend
the Commitments provided hereunder and other financial accommodations, each Loan Party hereby
agrees to jointly and severally indemnify and hold the Administrative Agent, each Lender and each
of the officers, directors, employees, affiliates and agents of the Administrative Agent and each
Lender (each a “Lender Party”) free and harmless from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses, including
Attorney Costs (collectively, the “Indemnified Liabilities”), incurred by the Lender
Parties or any of them as a result of, or arising out of, or relating to (a) any tender offer,
merger, purchase of capital

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securities, purchase of assets or other similar transaction financed or
proposed to be financed in whole or in part, directly or indirectly, with the proceeds of any of
the Loans, (b) the past, present or future presence, use, handling, release or threat of release,
emission, discharge, transportation, storage, treatment or disposal of any Hazardous Substance at
or affecting any property owned or leased by any Loan Party, (c) any violation of any Environmental
Laws with respect to conditions at any property owned or leased by any Loan Party or the operations
conducted thereon, (d) the investigation, cleanup or remediation of offsite locations at which any
Loan Party or their respective predecessors are alleged to have directly or indirectly disposed of
Hazardous Substances or (e) the execution, delivery, performance or enforcement of this Agreement
or any other Loan Document by any of the Lender Parties, except to the extent that such Indemnified
Liabilities are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of any of the Lender
Parties. If and to the extent that the foregoing undertaking may be unenforceable for any reason,
each Loan Party hereby agrees to make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law. All obligations
provided for in this Section 15.17 shall survive repayment of the Loans, cancellation of
the Notes, expiration or termination of the Letters of Credit, any foreclosure under, or any
modification, release or discharge of, any or all of the Collateral Documents and termination of
this Agreement.

     15.18 Nonliability of Lenders. The relationship between the Loan Parties on the one
hand and the Lenders and the Administrative Agent on the other hand shall be solely that of
borrower and lender, respectively. Neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Loan Party arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between the Loan Parties , on
the one hand, and the Administrative Agent and the Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor, respectively. Neither the
Administrative Agent nor any Lender undertakes any responsibility to any Loan Party to review or
inform any Loan Party of any matter in connection with any phase of any Loan Party’s business or
operations. Each Loan Party agrees, on behalf of itself and each other Loan Party, that neither
the Administrative Agent nor any Lender shall have liability to any Loan Party (whether sounding in
tort, contract or otherwise) for losses suffered by any Loan Party in connection with, arising out
of, or in any way related to the transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection therewith, except to the
extent that liabilities are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of the
party from which recovery is sought. NO LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM
THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER
SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY LENDER
PARTY HAVE ANY LIABILITY WITH RESPECT TO, AND EACH LOAN PARTY ON BEHALF OF ITSELF AND EACH OTHER
LOAN PARTY, HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, 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). Each Loan Party acknowledges that it has
been advised by

104

 

counsel in the negotiation, execution and delivery of this Agreement and the other
Loan Documents to which it is a party. No joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders
or among the Loan Parties and the Lenders.

     15.19 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL
BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH LOAN
PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID,
OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH LOAN PARTY HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. With
respect to any action by the Administrative Agent to enforce the rights and remedies of the Lender
Parties hereunder or under the other Loan Documents, each Lender Party hereby consents to the
jurisdiction of the court in which such action is maintained.

     15.20 WAIVER OF JURY TRIAL. EACH OF THE LOAN PARTIES, THE ADMINISTRATIVE AGENT, THE
FRONTING BANK AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT
AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.

     15.21 Other Waivers. The Administrative Agent’s and/or the Lenders’ failure, at any
time or times hereafter, to require strict performance by the Loan Parties of any provision of this
Agreement or any of the other Loan Documents shall not waive, affect or diminish any right of the
Administrative Agent or any Lender thereafter to demand strict compliance and performance therewith. Any suspension or waiver by the Administrative Agent or any Lender of an Event of
Default under this Agreement or any default under any of the other Loan Documents shall not
suspend, waive or affect any other Event of Default under this Agreement or any other default

105

 

under any of the other Loan Documents, whether the same is prior or subsequent thereto and whether of the
same or of a different kind or character. No delay on the part of the Administrative Agent or any
Lender in the exercise of any right or remedy under this Agreement or any other Loan Documents
shall preclude other or further exercise thereof or the exercise of any right or remedy. None of
the undertakings, agreements, warranties, covenants and representations of any Loan Party contained
in this Agreement or any of the other Loan Documents and no Event of Default under this Agreement
or default under any of the other Loan Documents shall be deemed to have been suspended or waived
by the Administrative Agent and/or the Lenders unless such suspension or waiver is in writing,
signed by a duly authorized officer of the Administrative Agent, the Required Lenders and/or all of
the Lenders, as required herein (with respect to all Lenders, only to the extent expressly required
by Section 15.1), and directed to such Loan Party specifying such suspension or waiver.

     15.22 Joint and Several Liability.

          15.22.1 Nature of Obligations. Notwithstanding anything to the contrary contained
herein, all Obligations of each Loan Party hereunder and under the other Loan Documents shall be
joint and several obligations of the Loan Parties.

          15.22.2 No Fraudulent Conveyances.

          (a) Notwithstanding any provisions of this Agreement to the contrary, it is intended that the
joint and several nature of the Obligations of the Loan Parties and the liens and security
interests granted by the Loan Parties to secure the Obligations, not constitute a “Fraudulent
Conveyance” (as defined below). Consequently, the Administrative Agent, the Lenders and Loan
Parties agree that if the Obligations of a Loan Party, or any liens or security interests granted
by such Loan Party securing the Obligations would (after giving effect to any rights of
contribution, subrogation, indemnity or reimbursement such Loan Party would have against all other
Loan Parties), but for the application of this Section, constitute a Fraudulent Conveyance, the
Obligations of such Loan Party and the liens and security interests securing such Obligations shall
be valid and enforceable only to the maximum extent that would not cause such Obligations or such
lien or security interest to constitute a Fraudulent Conveyance, and the Obligations of such Loan
Party and this Agreement shall automatically be deemed to have been amended accordingly. For
purposes hereof, “Fraudulent Conveyance” means a fraudulent conveyance under Section 548 of
the Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under the applicable
provisions of any fraudulent conveyance or fraudulent transfer law or similar law of any state,
nation or other governmental unit, as in effect from time to time.

          (b) To the extent that any Loan Party shall make a payment (each such payment, a
“Payment”) of the Obligations which, taking into account all other Payments then previously
or concurrently made by any of the other Loan Parties, exceeds the amount which such Loan Party
would otherwise have paid if each Loan Party had paid the aggregate Obligations satisfied by such
Payment in the same proportion as such Loan Party’s “Allocable Amount” (as defined below) thereof
in effect immediately prior to such Payment bore to the aggregate Allocable Amounts of all of the Loan Parties in effect immediately prior to the
making of such Payment, then such Loan Party shall be entitled (subject to the restrictions set
forth herein) to contribution and indemnification from, and be reimbursed by, each of the other
Loan

106

 

Parties for the amount of such excess, pro rata based upon their respective Allocable Amounts
in effect immediately prior to such Payment. As used herein, the “Allocable Amount” of any
Loan Party shall be equal to the maximum amount which could then be claimed by the Administrative
Agent, the Lenders and/or the Issuing Bank for such Loan Party’s Obligations without rendering such
claim voidable or avoidable as a Fraudulent Conveyance.

          (c) Each Loan Party assumes responsibility for keeping itself informed of the financial
condition of each other Loan Party, and any and all endorsers and/or guarantors of any instrument
or document evidencing all or any part of such other Loan Party’s Obligations and of all other
circumstances bearing upon the risk of nonpayment by such other Loan Party of their Obligations and
each Loan Party agrees that neither the Administrative Agent nor any Lender shall have any duty to
advise such Loan Party of information known to the Administrative Agent or any Lender regarding
such condition or any such circumstances or to undertake any investigation not a part of its
regular business routine. If the Administrative Agent or any Lender, in its sole discretion,
undertakes at any time or from time to time to provide any such information to a Loan Party,
neither the Administrative Agent nor any Lender shall be under any obligation to update any such
information or to provide any such information to any other Loan Party or to such Loan Party on any
subsequent occasion.

          (d) Each Borrower agrees that the joint and several liability of the Borrowers provided for in
this Agreement shall not be impaired or affected by any modification, supplement, extension or
amendment hereto, any of the other Loan Documents or any other contract or agreement to which the
other Borrowers may hereafter agree (other than an agreement signed by the Administrative Agent and
the Lenders specifically releasing such liability), nor by any delay, extension of time, renewal or
compromise by the Administrative Agent or any Lender with respect to any of the Obligations, nor by
any other agreements or arrangements whatsoever with the other Borrowers or with any other Person,
each Borrower hereby waiving all notice of such delay, extension, release, substitution, renewal or
compromise.

          (e) Each Loan Party hereby agrees that, except as hereinafter provided, its obligations
hereunder shall be unconditional, irrespective of (i) the absence of any attempt to collect any of
the Obligations from any other Loan Party or any Guarantor or other action to enforce the same;
(ii) the waiver or consent by the Administrative Agent or any Lender with respect to any provision
of any instrument evidencing any other Loan Party’s Obligations, or any part thereof, or any other
agreement heretofore, now or hereafter executed by any other Loan Party and delivered to the
Administrative Agent or any Lender; (iii) failure by the Administrative Agent or any Lender to take
any steps to perfect and maintain its security interest in, or to preserve its rights to, any
security or Collateral for any Loan Party’s Obligations; (iv) the institution of any proceeding
under the Bankruptcy Code, the Insolvency Act of 1986 or any similar proceeding, by or against any
Loan Party or the Administrative Agent’s or any Lender’s election in any such proceeding of the
application of Section 1111(b)(2) of the Bankruptcy Code (or any similar provision of the
Insolvency Act of 1986); (v) any borrowing or grant of a security interest by any Loan Party as
debtor-in-possession, under Section 364 of the Bankruptcy Code (or under any similar provision of
the Insolvency Act of 1986); (vi) the disallowance, under Section 502 of the Bankruptcy Code (or under any similar provision of the Insolvency Act of
1986, of all or any portion of the Administrative Agent’s or any Lender’s claim(s) for repayment

107

 

of any of the Loan Parties’ Obligations; or (vii) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.

          (f) No Loan Party shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against any Loan Party or any collateral security or guarantee
or right of offset held by the Administrative Agent or any Lender for the payment of the
Obligations, nor shall any Loan Party seek or be entitled to seek any contribution or reimbursement
from any Loan Party in respect of payments made by such Loan Party under this Agreement or any
other Loan Documents, in each case, until the Commitments have been terminated, no Letter of Credit
remains outstanding (unless Cash Collateralized in accordance with the terms hereof) and all
Obligations have been paid in full in cash. If any amount shall be paid to any Loan Party on
account of such subrogation, contribution or reimbursement rights prior to such time, such amount
shall be held by such Loan Party in trust for the Administrative Agent and the Lenders, segregated
from other funds of such Loan Party, and shall, forthwith upon receipt by such Loan Party, be
turned over to the Administrative Agent in the exact form received by such Loan Party (duly
indorsed by such Loan Party to the Administrative Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

     15.23 Revival and Reinstatement of Obligations. If the incurrence or payment of the
Obligations by any Loan Party or the transfer to the Administrative Agent or any Lender of any
property should for any reason subsequently be declared to be void or voidable under any state or
federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to
Fraudulent Conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a “Voidable Transfer”), and if the Administrative
Agent or any Lender is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such
Voidable Transfer, or the amount thereof that the Administrative Agent or any Lender, as
applicable, is required or elects to repay or restore, and as to all reasonable costs and expenses
of the Administrative Agent and/or the Lenders, the Obligations shall automatically shall be
revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been
made, and if full and final satisfaction of this Agreement and the other Loan Documents had
previously occurred, then this Agreement and the Loan Documents (solely with respect to the
obligations of the Loan Parties and the remedies of the Administrative Agent and the Lenders
thereunder, but not with respect to any Commitments of the Lenders or the Administrative Agent
thereunder) and all Liens granted hereunder and thereunder shall, in each case, be immediately
reinstated until full and final payment of the Obligations, in cash, shall have been received by
the Administrative Agent.

     15.24 Amendment and Restatement. The parties hereto acknowledge and agree that (i)
this Agreement, any Notes executed and delivered in connection herewith and the other Loan
Documents executed and delivered in connection herewith do not constitute a novation, payment and
reborrowing, or termination of the “Obligations” (as defined in the Existing Credit Agreement)
under the Existing Credit Agreement and (ii) such “Obligations” are in all respects continuing with
the terms thereof being modified solely to the extent provided in this Agreement.

108

 

     The parties hereto have caused this Agreement to be duly executed and delivered by their duly
authorized officers as of the date first set forth above.

	 	 	 	 	 
	 	BORROWERS:

KIDS LINE, LLC, a Delaware limited liability 

company

 	 
	 	By:  	/s/ CHARLES GINN
 	 
	 	 	Name:  	Charles Ginn 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	SASSY, INC., an Illinois corporation

 	 
	 	By:  	/s/ MARC S. GOLDFARB
 	 
	 	 	Name:  	Marc S. Goldfarb 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	LAJOBI, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ CHARLES GINN
 	 
	 	 	Name:  	Charles Ginn 	 
	 	 	Title:  	Chief Financial Officer and Secretary 	 
	 
	 	I & J HOLDCO, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ CHARLES GINN
 	 
	 	 	Name:  	Charles Ginn 	 
	 	 	Title:  	Chief Financial Officer and Secretary 	 
	 

Signature Page to Credit Agreement

 

 

The undersigned hereby accepts its appointment as the Loan Party Representative
pursuant to Section 2.6 of this Agreement and agrees to exercise its powers and
perform its duties in its capacity as the Loan Party Representative in
accordance with the terms and provisions of this Agreement and the other Loan
Documents

	 	 	 	 	 
	RUSS BERRIE AND COMPANY, INC., a 

New Jersey corporation

 	 	 
	By:  	/s/ MARC S. GOLDFARB
 	 	 
	 	Name:  	Marc S. Goldfarb 	 	 
	 	Title:  	Senior Vice President and General

Counsel 	 	 
	 

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	ADMINISTRATIVE AGENT:     	LASALLE BANK NATIONAL

ASSOCIATION, as Administrative Agent

 	 
	 	By:  	/s/ TRAVIS J. BURNS
 	 
	 	 	Name:  	Travis J. Burns 	 
	 	 	Title:  	Senior Vice President 	 
	 
	LENDERS / FRONTING BANK/

SYNDICATION AGENT/
 DOCUMENTATION AGENT: 	LASALLE BANK NATIONAL 

ASSOCIATION, as a Lender and as Fronting

Bank

 	 
	 	By:  	/s/ TRAVIS J. BURNS
 	 
	 	 	Name:  	Travis J. Burns 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	SOVEREIGN BANK, as a Lender and as 

Syndication Agent

 	 
	 	By:  	/s/ CHRISTINE GERULA
 	 
	 	 	Name:  	Christine Gerula 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	WACHOVIA BANK, N.A., as a Lender and as

Documentation Agent

 	 
	 	By:  	/s/ JAMES PETRONCHAK
 	 
	 	 	Name:  	James Petronchak 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	JP MORGAN CHASE BANK, N.A., as a 

Lender

 	 
	 	By:  	/s/ SUSAN M. GRAHAM
 	 
	 	 	Name:  	Susan M. Graham 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page to Credit Agreement

 

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 
	 	TD BANKNORTH, N.A.,

as a Lender

 	 
	 	By:  	/s/ JEFFREY R. WESTLING
 	 
	 	 	Name:  	Jeffrey R. Westling 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	HSBC BANK USA, N.A.,

as a Lender

 	 
	 	By:  	/s/ THOMAS J. SWEENEY
 	 
	 	 	Name:  	Susan M. Graham 	 
	 	 	Title:  	Vice President 	 
	 
	 	CITIZENS BANK OF PENNSYLVANIA

as a Lender

 	 
	 	By:  	/s/ FRANK J. KELLY
 	 
	 	 	Name:  	Frank J. Kelly 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	BANK OF THE WEST,

as a Lender

 	 
	 	By:  	/s/ SYLVIA L. PONCE
 	 
	 	 	Name:  	Sylvia L. Ponce 	 
	 	 	Title:  	Assistant Vice President 	 
	 

Signature Page to Credit AgreementEX-4.22

 

Exhibit 4.22

Execution Copy

 

 

AMENDED AND RESTATED

GUARANTY AND COLLATERAL AGREEMENT

dated as of April 2, 2008

among

KIDS LINE, LLC,

SASSY, INC.,

LAJOBI, INC.,

I & J HOLDCO, INC.

and

THE OTHER PARTIES HERETO

as Grantors,

and

LASALLE BANK NATIONAL ASSOCIATION,

as the Administrative Agent

 

 

 

 

AMENDED AND RESTATED

GUARANTY AND COLLATERAL AGREEMENT

     This Amended and Restated Guaranty and Collateral Agreement dated as of April 2, 2008 (this
“Agreement”) is entered into among KIDS LINE, LLC, a Delaware limited liability company
(“Kids Line”), SASSY, INC., an Illinois corporation (“Sassy”), LAJOBI, INC., a
Delaware corporation (“LaJobi”), I & J HOLDCO, INC., a Delaware corporation
(“I&J”), those Subsidiaries that are or, in accordance with Section 10.10 of the
Credit Agreement, may hereafter become parties to the Credit Agreement (as defined herein) as
“Borrowers” (Kids Line, Sassy, LaJobi, I & J and such Subsidiaries are sometimes referred to herein
collectively as the “Borrowers”) and those Subsidiaries that are or, in accordance with
Section 10.10 of the Credit Agreement, may hereafter become parties hereto and to the
Credit Agreement as “Guarantors” (collectively, the “Guarantors”) (the Borrowers and the
Guarantors being collectively referred to herein as the “Grantors”, and each a
“Grantor”) and any other person that becomes a party hereto as provided herein being,
collectively, the “Grantors”, in favor of LASALLE BANK NATIONAL ASSOCIATION, as the
“Administrative Agent” for itself and the Lenders (as defined in the Credit Agreement).

     Kids Line, Sassy, the Administrative Agent and certain Lenders previously entered into the
Existing Credit Agreement (as defined in the Credit Agreement) pursuant to which the “Lenders”
party thereto agreed to make certain credit facilities available to Kids Line, Sassy and any other
“Borrowers” (as defined in the Existing Credit Agreement) party thereto. In connection with such
extension of credit, such Borrowers and certain other parties executed that certain Guaranty and
Collateral Agreement dated as of March 14, 2006 (as amended prior to the date hereof, the
“Existing Guaranty and Collateral Agreement”) pursuant to which the “Grantors” party
thereto (i) provided certain guarantees in favor of the Administrative Agent on behalf of itself
and such Lenders and (ii) granted to the Administrative Agent on behalf of itself and such Lenders
a security interest in the “Collateral” as defined therein.

     As of the date hereof, the Existing Credit Agreement is being amended and restated at the
request of the Borrowers party thereto and the parties hereto are entering into an Amended and
Restated Credit Agreement of even date herewith among the Borrowers, the other Grantors from time
to time party thereto, the Lenders, and the Administrative Agent (as amended, supplemented,
restated or otherwise modified from time to time, the “Credit Agreement”) pursuant to which
the Administrative Agent and the Lenders have severally agreed to add additional Borrowers,
increase the amount of the term loan facility and revolving credit facility (which includes letters
of credit) available to the Borrowers, permit the Target Acquisitions and make certain other
amendments thereto, in each case, upon the terms and conditions set forth therein. In connection
therewith, the parties hereto desire to amend and restate the Existing Guaranty and Collateral
Agreement in its entirety.

     The Administrative Agent and Lenders have severally agreed to extend credit and provide other
financial accommodations to the Borrowers pursuant to the Credit Agreement. The Borrowers are
affiliated with each other Grantor. The Borrowers and the other Grantors are engaged in
interrelated businesses, and each Grantor will derive substantial direct and indirect benefit from
extensions of credit under the Credit Agreement. It is a condition precedent to the Administrative
Agent’s and each Lender’s obligation to extend credit under the Credit

 

 

Agreement that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent for the benefit of itself and all the Lenders.

     In consideration of the premises and to induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Administrative Agent and the Lenders to extend
credit and provide other financial accommodations thereunder, each Grantor hereby agrees with the
Administrative Agent, for the benefit of itself and the Lenders, as follows:

SECTION 1 DEFINITIONS.

          1.1 Unless otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement, and the following terms are used
herein as defined in the UCC: Accounts, Account Debtor, Certificated Security, Commercial Tort
Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Goods, Instruments,
Inventory, Leases, Letter-of-Credit Rights, Money, Payment Intangibles, Supporting Obligations,
Tangible Chattel Paper.

          1.2 When used herein the following terms shall have the following meanings:

     Assigned Agreements means (i) the Acquisition Documents, together with all security
agreements, and all liens, security interest and other encumbrances granted thereunder, (ii) any
agreement executed from time to time in favor of any Grantor by their customers securing the
purchase price of goods purchased by such customers from such Grantor (or any of them), and (iii)
each material document, instrument and agreement to be executed in connection with each Permitted
Acquisition.

     Agreement has the meaning set forth in the preamble hereto.

     Borrower Obligations means all Obligations of the Borrowers.

     Chattel Paper means all “chattel paper” as such term is defined in Section
9-102(a)(11) of the UCC and, in any event, including with respect to any Grantor, all Electronic
Chattel Paper and Tangible Chattel Paper.

     Collateral means (a) all of the personal property now owned or at any time hereafter
acquired by any Grantor or in which any Grantor now has or at any time in the future may acquire
any right, title or interest, including all of each Grantor’s Accounts, Chattel Paper, Commercial
Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods,
Instruments, Intellectual Property, Inventory, Investment Property, Leases, Letter-of-Credit
Rights, Money, Supporting Obligations, and Identified Claims, (b) all of the real property
mortgaged by any Grantor to the Administrative Agent, (c) all books and records pertaining to any
of the foregoing and to each Grantor’s business, (d) any other property of any Grantor now or
hereafter in the possession, custody or control of the Administrative Agent, or any Lender or any
participant with any Lender in the Loans, for any purpose (whether for safekeeping, deposit,
collection, custody, pledge, transmission or otherwise), (e) all additions and accessions to,
substitutions for, and replacements, products and Proceeds of any of the foregoing, including
without limitation, proceeds of all insurance policies insuring the foregoing property, and (f) all
collateral security and guaranties given by any Person with respect to any of the

-2-

 

foregoing. Where the context requires, terms relating to the Collateral or any part thereof,
when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part
thereof. Notwithstanding the foregoing, in no event shall any equity interest of any Second-Tier
Foreign Subsidiary or more than 65% of the total outstanding equity interests of any First-Tier
Foreign Subsidiary of any Grantor be deemed at any time to be “Collateral” hereunder. Anything
contained in this Agreement to the contrary notwithstanding, the term “Collateral” shall not
include any rights or interests in any real property lease or any contract, permit, license,
charter or other agreement covering personal property that are now or hereafter held by any Grantor
in the event that as a result of an assignment thereof or grant of a security interest therein,
such Grantor’s rights in or with respect to such real property lease, contract, permit, license,
charter, or other agreement would be forfeited or such Grantor would be deemed to have breached or
defaulted under such real property lease, contract, permit, license, charter or other agreement
pursuant to restrictions contained in such real property lease, contract, permit, license, charter,
or other agreement (but only to the extent such prohibition is enforceable at law) (such real
estate leases, contracts, permits, licenses, charters and other agreements in existence as of the
date hereof are set forth on Schedule 1.1A attached hereto, as the same may be updated in
accordance with Section 5.10(f)(y); all such real estate leases, contracts, permits,
licenses, charters and other agreements being the “Restricted Agreements”);
provided that the security interest granted herein and the term “Collateral” shall include
the right to receive payments and other Proceeds with respect to such Restricted Agreements and the
Goods produced under such Restricted Agreements and the Proceeds thereof (except for the Restricted
Agreements set forth on Schedule 1.1B attached hereto as the same may be updated monthly to
reflect any additions or changes thereto); and provided further that the applicable
Grantor shall, after the Administrative Agent’s request, have used its reasonable efforts to
provide notice to the Administrative Agent of such restrictions contained in any Restricted
Agreement to an assignment thereof or a grant of a security interest therein. In addition, the
term “Collateral” shall not include Equipment which is subject to a Permitted Lien described in
Section 11.2(d) of the Credit Agreement, which pursuant to and for so long as the terms of
any lease or financing agreement with respect thereto prohibits the granting of a security interest
in such Equipment (so long as such restriction is limited to the particular Equipment financed or
leased thereunder).

     Contract Rights means all of the Grantors’ rights and remedies with respect to the
Assigned Agreements.

     Copyrights means all copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished, including those listed on Schedule 5 hereto, all registrations
and recordings thereof, and all applications in connection therewith, including all registrations,
recordings and applications in the United States Copyright Office, and the right to obtain all
renewals of any of the foregoing.

     Copyright Licenses means all written agreements naming any Grantor as licensor or
licensee, including those listed on Schedule 5 hereto, granting any right under any
Copyright, including the grant of rights to manufacture, distribute, exploit and sell materials
derived from any Copyright.

     Credit Agreement has the meaning set forth in the recitals hereto.

-3-

 

     Existing Guaranty and Collateral Agreement has the meaning set forth in the preamble
hereto.

     Fixtures means all of the following, whether now owned or hereafter acquired by a
Grantor: plant fixtures; business fixtures and other fixtures, wherever located; and all additions
and accessories thereto and replacements therefor.

     General Intangibles means all “general intangibles” as such term is defined in Section
9-102(a)(42) of the UCC and, in any event, shall include with respect to any Grantor, all Payment
Intangibles, all contracts and Contract Rights (including all Assigned Agreements and Seller
Undertakings), agreements, instruments and indentures in any form, and portions thereof, to which
such Grantor is a party or under which such Grantor has any right, title or interest or to which
such Grantor or any property of such Grantor is subject, as the same from time to time may be
amended, supplemented or otherwise modified, including, without limitation, (a) all rights of such
Grantor to receive monies due and to become due to it thereunder or in connection therewith, (b)
all rights of such Grantor to damages arising thereunder and (c) all rights of such Grantor to
perform and to exercise all remedies thereunder; provided, that the foregoing limitation
shall not affect, limit, restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other amounts due or to become due
under any such Payment Intangible, contract, agreement, instrument or indenture.

     Grantor means the collective reference to the Borrowers and each other Person that
becomes a party to this Agreement in accordance with Section 8.16.

     Guarantor Obligations means, collectively, with respect to each Guarantor, all
Obligations of such Guarantor.

     Guarantors means the collective reference to each Grantor other than the Borrowers.

     Identified Claims means the Commercial Tort Claims described on Schedule 7 as
such schedule shall be supplemented from time to time.

     Intellectual Property means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

     Intercompany Note means any promissory note evidencing loans made by any Grantor to
any other Grantor.

     Investment Property means the collective reference to (a) all “investment property” as
such term is defined in Section 9-102(a)(49) of the UCC (other than the equity interest of any
Foreign Subsidiary excluded from the definition of Pledged Equity), (b) all “financial assets” as
such term is defined in Section 8-102(a)(9) of the UCC, and (c) whether or not constituting
“investment property” as so defined, all Pledged Notes and all Pledged Equity.

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     Issuers means the collective reference to each issuer of any Investment Property.

     LaJobi Sellers means LaJobi Industries, Lawrence Bivonia and Joseph Bivonia.

     Paid in Full means (a) the payment in full in cash and performance of all Secured
Obligations (other than unasserted contingent and indemnification obligations), (b) the termination
of all Commitments and (c) either (i) the cancellation and return to the Administrative Agent of
all Letters of Credit or (ii) the cash collateralization of all Letters of Credit in accordance
with the Credit Agreement.

     Patents means (a) all letters patent of the United States, any other country or any
political subdivision thereof, all reissues and extensions thereof and all goodwill associated
therewith, including any of the foregoing referred to in Schedule 5, (b) all applications
for letters patent of the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including any of the foregoing referred to in Schedule 5,
and (c) all rights to obtain any reissues or extensions of the foregoing.

     Patent Licenses means all agreements, whether written or oral, providing for the grant
by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in
part by a Patent, including any of the foregoing referred to in Schedule 5.

     Pledged Equity means the equity interests listed on Schedule 1, together with
any other equity interests, certificates, options or rights of any nature whatsoever in respect of
the equity interests of any Person that may be issued or granted to, or held by, any Grantor while
this Agreement is in effect; provided that in no event shall more than 65% of the total
outstanding equity interests of any First-Tier Foreign Subsidiary be required to be directly or
indirectly pledged hereunder; and provided, further that in no event shall any of the
equity interests of any Second-Tier Foreign Subsidiary be required to be directly or indirectly
pledged hereunder.

     Pledged Notes means all promissory notes listed on Schedule 1, all
Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or
held by any Grantor (other than (a) promissory notes issued in connection with extensions of trade
credit by any Grantor in the ordinary course of business and (b) any individual promissory note
which is less than $250,000 in principal amount, up to an aggregate of $500,000 for all such
promissory notes excluded under this clause (b)).

     Proceeds means all “proceeds” as such term is defined in Section 9-102(a)(64) of the
UCC and, in any event, shall include all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.

     Receivable means any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or
not it has been earned by performance (including any Accounts).

     Restricted Agreements has the meaning set forth in the definition of “Collateral.”

     Secured Obligations means, collectively, the Borrower Obligations and Guarantor
Obligations.

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     Securities Act means the Securities Act of 1933, as amended.

     Seller Undertakings means, collectively, all representations, warranties, covenants
and agreements in favor of any Grantor, and all indemnifications for the benefit of any Grantor
relating thereto, pursuant to the Assigned Agreements.

     Sellers means, collectively, (i) the CoCaLo Sellers and the LaJobi Sellers, (ii)
customers of any Grantor that have executed an agreement in favor of such Grantor securing the
purchase price of goods purchased from such Grantor and (iii) any party obligated to a Grantor
under any material document, instrument or agreement executed in connection with a Permitted
Acquisition.

     Trademarks means (a) all trademarks, trade names, corporate names, the Grantors’
names, business names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country or any political subdivision
thereof, or otherwise, and all common-law rights related thereto, including any of the foregoing
referred to in Schedule 5, and (b) the right to obtain all renewals thereof.

     Trademark Licenses means, collectively, each agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark, including any of
the foregoing referred to in Schedule 5.

     UCC means the Uniform Commercial Code as in effect on the date hereof and from
time to time in the State of New York, provided that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection of the security interests in
any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial
Code as in effect on or after the date hereof in any other jurisdiction, “UCC” means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or availability of such
remedy.

SECTION 2 GUARANTY.

          2.1 Guaranty. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, as a primary obligor and not only a surety, guaranties to the
Administrative Agent, for the benefit of itself and of the Lenders, and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment and performance by
the Borrowers when due (whether at the stated maturity, by acceleration or otherwise) of the
Borrower Obligations.

          (b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum
liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed
the amount which can be guarantied by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors (after giving effect to the right of contribution established
in Section 2.2).

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          (c) Each Guarantor agrees that the Secured Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder without impairing the guaranty
contained in this Section 2 or affecting the rights and remedies of the Administrative
Agent or any Lender hereunder.

          (d) The guaranty contained in this Section 2 shall remain in full force and effect
until all of the Secured Obligations shall have been Paid in Full.

          (e) No payment made by the Borrowers, any of the Guarantors, any other guarantor or any other
Person or received or collected by the Administrative Agent or any Lender from the Borrowers, any
of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time in reduction of or in
payment of the Secured Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Secured Obligations or any payment received or
collected from such Guarantor in respect of the Secured Obligations), remain liable for the Secured
Obligations up to the maximum liability of such Guarantor hereunder until the Secured Obligations
are Paid in Full.

          2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that a
Guarantor shall have paid more than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of
contribution shall be subject to the terms and conditions of Section 2.3. The provisions
of this Section 2.2 shall in no respect limit the obligations and liabilities of any
Guarantor to the Administrative Agent and the Lenders, and each Guarantor shall remain liable to
the Administrative Agent and the Lenders for the full amount guarantied by such Guarantor
hereunder.

          2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or
any set-off or application of funds of any Guarantor by the Administrative Agent or any Lender, no
Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or
any Lender against the Borrowers or any other Guarantor or any collateral security or guaranty or
right of offset held by the Administrative Agent or any Lender for the payment of the Secured
Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement
from the Borrowers or any other Guarantor in respect of payments made by such Guarantor hereunder,
until all of the Secured Obligations are Paid in Full. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the Secured Obligations
shall not have been Paid in Full, such amount shall be held by such Guarantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact
form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Secured Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.

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          2.4 Amendments, etc. with respect to the Secured Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any
of the Secured Obligations made by the Administrative Agent or any Lender may be rescinded by the
Administrative Agent or such Lender and any of the Secured Obligations continued, and the Secured
Obligations, or the liability of any other Person upon or for any part thereof, or any collateral
security or guaranty therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders or all the Lenders, as the case may be) and, to the extent required
thereunder, the other parties thereto may deem advisable from time to time. Neither the
Administrative Agent nor any Lender shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Secured Obligations or for the guaranty
contained in this Section 2 or any property subject thereto.

          The Administrative Agent or any Lender may, from time to time, at its sole discretion and
without notice to any Guarantor (or any of them), take any or all of the following actions: (a)
retain or obtain a security interest in any property to secure any of the Secured Obligations or
any obligation hereunder, (b) retain or obtain the primary or secondary obligation of any obligor
or obligors, in addition to the undersigned, with respect to any of the Secured Obligations, (c)
extend or renew any of the Secured Obligations for one or more periods (whether or not longer than
the original period), alter or exchange any of the Secured Obligations, or release or compromise
any obligation of any of the undersigned hereunder or any obligation of any nature of any other
obligor with respect to any of the Secured Obligations, (d) release any guaranty or right of offset
or its security interest in, or surrender, release or permit any substitution or exchange for, all
or any part of any property securing any of the Secured Obligations or any obligation hereunder, or
extend or renew for one or more periods (whether or not longer than the original period) or
release, compromise, alter or exchange any obligations of any nature of any obligor with respect to
any such property, and (e) resort to the undersigned (or any of them) for payment of any of the
Secured Obligations when due, whether or not the Administrative Agent or such Lender shall have
resorted to any property securing any of the Secured Obligations or any obligation hereunder or
shall have proceeded against any other of the undersigned or any other obligor primarily or
secondarily obligated with respect to any of the Secured Obligations.

          2.5 Waivers. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Secured Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guaranty contained in this Section 2 or
acceptance of the guaranty contained in this Section 2; the Secured Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guaranty contained in this Section 2, and
all dealings between the Borrowers and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to
have been had or consummated in reliance upon the guaranty contained in this Section 2.
Each Guarantor

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waives (a) diligence, presentment, protest, demand for payment and notice of default, dishonor
or nonpayment and all other notices whatsoever to or upon the Borrowers or any of the Guarantors
with respect to the Secured Obligations, (b) notice of the existence or creation or non-payment of
all or any of the Secured Obligations and (c) all diligence in collection or protection of or
realization upon any Secured Obligations or any security for or guaranty of any Secured
Obligations.

          2.6 Payments. Each Guarantor hereby guaranties that payments by such Guarantor
hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at
the office of the Administrative Agent specified in the Credit Agreement.

SECTION 3 GRANT OF SECURITY INTEREST.

          3.1 Grant. Each Grantor hereby collaterally assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the benefit of itself and
the Lenders, a continuing security interest in all of its Collateral, as collateral security for
the prompt and complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations or the Guarantor Obligations, as the case
may be.

          3.2 Collateral Assignment of Rights under the Assigned Agreements. Each Grantor
hereby irrevocably authorizes and empowers the Administrative Agent or its agents, in their sole
discretion, to assert, either directly or on behalf of any Grantor, at any time that an Event of
Default has occurred and is continuing, any claims any Grantor may from time to time have against
the Sellers or any of their affiliates with respect to any and all of the Contract Rights to the
extent permitted by the applicable Assigned Agreement or with respect to any and all payments or
other obligations due from the Sellers or any of their affiliates to any Grantor under or pursuant
to the Assigned Agreements (“Payments”), and to receive and collect any damages, awards and
other monies resulting therefrom and to apply the same on account of the Secured Obligations.
After the occurrence of any Event of Default, the Administrative Agent may provide notice to the
Sellers or any of their affiliates that all Payments shall be made to or at the direction of the
Administrative Agent for so long as such Event of Default shall be continuing. Following the
delivery of any such notice, the Administrative Agent shall promptly notify the Sellers upon the
termination or waiver of any such Event of Default. Each Grantor hereby irrevocably makes,
constitutes and appoints the Administrative Agent (and all officers, employees, or agents
designated by the Administrative Agent) as such Grantor’s true and lawful attorney (and
agent-in-fact) for the purpose of enabling the Administrative Agent or its agents to, during the
occurrence and continuance of an Event of Default, assert and collect such claims and to apply such
monies in the manner set forth hereinabove.

SECTION 4 REPRESENTATIONS AND WARRANTIES.

          To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each
Grantor jointly and severally hereby represents and warrants to the Administrative Agent and each
Lender that:

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          4.1 Title; No Other Liens. Except for Permitted Liens, the Grantors own each item of
the Collateral free and clear of any and all Liens. No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in any public office,
except filings evidencing Permitted Liens and filings for which termination statements have been
delivered to the Administrative Agent.

          4.2 Perfected First Priority Liens. The security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified on Schedule 2
(exclusive of any filings or other actions required to perfect a security interest in the Pledged
Equity of any Foreign Subsidiary in any jurisdiction outside of the United States) (which, in the
case of all filings and other documents referred to on Schedule 2, have been delivered to
the Administrative Agent in completed and duly executed form) and payment of all necessary filing
fees will constitute valid perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the benefit of itself and the Lenders as collateral security for each
Grantor’s Obligations, enforceable in accordance with the terms hereof (subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing) against all creditors of each Grantor and any Persons purporting to purchase any
Collateral from each Grantor and (b) are prior to all other Liens on the Collateral in existence on
the date hereof except for Permitted Liens for which priority is accorded under applicable law.
Subject to the payment of all necessary filing fees, the filings and other actions specified on
Schedule 2 (exclusive of any filings or other actions required to perfect a security
interest in the Pledged Equity of any Foreign Subsidiary in any jurisdiction outside of the United
States) constitute all of the filings and other actions necessary to perfect all security interests
granted hereunder; provided, that notwithstanding anything contained in this Agreement to
the contrary, in no event shall any Grantor be required to file, register, record or otherwise
perfect any lien or security interest in any jurisdiction outside of the United States with respect
to the Pledged Equity of any Person (other than any of the foregoing required in connection with
the Pledged Equity of Kids Line UK LTD and Kids Line Australia Pty. LTD) until such time as such
Person has revenue in excess of $500,000.

          4.3 Grantor Information. On the date hereof, Schedule 3 sets forth (a) each
Grantor’s jurisdiction of organization, (b) the location of each Grantor’s chief executive office,
(c) each Grantor’s exact legal name as it appears on its organizational documents and (d) each
Grantor’s organizational identification number (to the extent a Grantor is organized in a
jurisdiction which assigns such numbers) and federal employer identification number.

          4.4 Collateral Locations. On the date hereof, Schedule 4 sets forth (a) each
place of business of each Grantor (including its chief executive office), (b) all locations where
all Inventory and the Equipment owned by each Grantor is kept, except with respect to locations at
which Inventory and Equipment with a fair market value of less than $10,000 in the aggregate for
each location (up to an aggregate of $200,000 for all locations) and excluding Inventory with
respect to “bill and hold” or consignment arrangements with fair market value of less than $10,000
in the aggregate for each location (up to an aggregate of $200,000 for all locations) which may be
located at other locations and (c) whether each such Collateral location and place of business
(including each Grantor’s chief executive office) is owned or leased (and if leased,

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specifies the complete name and notice address of each lessor). No Collateral is located
outside the United States (excluding In-Transit Inventory) or in the possession of any lessor,
bailee, warehouseman or consignee, except as indicated on Schedule 4 or except for
Collateral with a fair market value of less than $10,000 in the aggregate for each location and
$200,000 in the aggregate for all locations of the Grantors.

          4.5 Certain Property. None of the Collateral constitutes, or is the Proceeds of, (a)
Farm Products, (b) Health Care Insurance Receivables or (c) vessels, aircraft or any other property
subject to any certificate of title or other registration statute of the United States, any State
or other jurisdiction, except for vehicles owned by the Grantors and used by employees of the
Grantors in the ordinary course of business with an aggregate fair market value of less than
$200,000 (in the aggregate for all Grantors).

          4.6 Investment Property. (a) The Pledged Equity pledged by each Grantor hereunder
constitute all the issued and outstanding equity interests of each Issuer owned by such Grantor
and, in the case of any First-Tier Foreign Subsidiary, 65% of all issued and outstanding equity
interests of such First-Tier Foreign Subsidiary.

          (b) All of the Pledged Equity has been duly and validly issued and is fully paid and
nonassessable.

          (c) Each of the Intercompany Notes and, to the applicable Grantor’s knowledge, each of the
other Pledged Notes in favor of such Grantor constitutes the legal, valid and binding obligation of
the obligor with respect thereto, enforceable in accordance with its terms (subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing).

          (d) Subject to quarterly updates to reflect any additions or changes thereto, Schedule
1 lists all Investment Property owned by each Grantor having a fair market value or remaining
principal balance, as applicable, in excess of $250,000 each, or $500,000, in aggregate among all
Grantors. Each Grantor is the record and beneficial owner of, and has good and marketable title
to, the Investment Property pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other Person, except Permitted Liens.

          4.7 Receivables. (a) No amount in excess of $200,000 payable to any such Grantor (or
$250,000 in aggregate among all Grantors) under or in connection with any Receivable is evidenced
by any Instrument or Chattel Paper which has not been delivered to the Administrative Agent.

          (b) The amounts represented by such Grantor to the Lenders from time to time as owing to such
Grantor in respect of the Receivables (to the extent such representations are required by any of
the Loan Documents) will at all such times be accurate in all material respects; provided however
that such amounts included in any Borrowing Base Certificate shall be accurate in all respects on
the date represented in such Borrowing Base Certificate.

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          4.8 Intellectual Property. (a) Subject to quarterly updates to reflect any additions
or changes thereto, Schedule 5 lists all material registered or applied for Intellectual
Property owned by such Grantor in its own name on the date hereof.

          (b) On the date hereof, all material Intellectual Property owned or licensed by any Grantor is
valid, subsisting, unexpired and enforceable and has not been abandoned.

          (c) Subject to quarterly updates to reflect any additions or changes thereto, except as set
forth in Schedule 5, none of the material Intellectual Property is the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

          (d) Each Grantor owns and possesses or has a license or other right to use all Intellectual
Property as is necessary for the conduct of the businesses of such Grantor, without any
infringement upon rights of others which could reasonably be expected to have a Material Adverse
Effect.

          4.9 Depositary and Other Accounts. All depositary and other accounts maintained by
each Grantor are described on Schedule 6 hereto (subject to quarterly updates to reflect
any additions or changes thereto), which description includes for each such account the name of the
Grantor maintaining such account, the name, address, telephone and fax numbers of the financial
institution at which such account is maintained and the account number of such account.

          4.10 Eligible Accounts. Each Account which the Grantors shall request the
Administrative Agent to classify as an Eligible Account shall, as of the time when such request is
made or deemed made, meet all requirements of and constitute an “Eligible Account” for purposes of
the Credit Agreement at such time.

SECTION 5 COVENANTS.

          Each Grantor covenants and agrees with the Administrative Agent and the Lenders that, from and
after the date of this Agreement until the Secured Obligations shall have been Paid in Full:

          5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If any amount
payable under or in connection with any of the Collateral in excess of $250,000 (in the aggregate
for all Grantors) shall be or become evidenced by any Instrument, Certificated Security or Chattel
Paper, such Instrument, Certificated Security or Chattel Paper shall be delivered to the
Administrative Agent within five (5) Business Days of the applicable Grantor’s receipt thereof,
duly indorsed in a manner reasonably satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement. Notwithstanding the foregoing, in the event that an Event
of Default shall have occurred and be continuing, upon the written request of the Administrative
Agent, any Instrument, Certificated Security or Chattel Paper not theretofore delivered to the
Administrative Agent and at such time being held by any Grantor shall be promptly delivered to the
Administrative Agent, duly indorsed in a manner reasonably satisfactory to the Administrative
Agent, to be held as Collateral pursuant to this Agreement.

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          5.2 Maintenance of Perfected Security Interest; Further Documentation. (a) Except
with respect to actions affirmatively taken by the Administrative Agent with respect to its Liens
or any failure by the Administrative Agent to continue any such Lien prior to the lapse thereof due
to the passage of time, such Grantor shall maintain such security interest as a perfected security
interest having at least the priority described in Section 4.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever.

          (b) Such Grantor will furnish to the Administrative Agent and the Lenders from time to time
statements and schedules further identifying and describing the assets and property of such Grantor
and such other reports in connection therewith as the Administrative Agent may reasonably request,
all in reasonable detail.

          (c) At any time and from time to time, upon the written request of the Administrative Agent,
and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver,
and have recorded, such further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, including, but not limited
to, (i) filing any financing or continuation statements under the UCC (or other similar laws) in
effect in any jurisdiction with respect to the security interests created hereby and, (ii) subject
to Section 4.6(a) hereof in the case of Investment Property and any other relevant
Collateral, taking any actions necessary or reasonably advisable to enable the Administrative Agent
to obtain “control” (within the meaning of the applicable UCC) with respect thereto, including
obtaining Account Control Agreements.

          (d) Such Grantor shall not permit any of the Collateral with a fair market value in excess of
$250,000, in aggregate for all Grantors, to become a Fixture to any real property unless such real
property is subject to a mortgage by such Grantor in favor of Administrative Agent.

          5.3 Changes in Locations, Name, etc. Such Grantor shall not, except upon twenty (20)
days’ prior written notice to the Administrative Agent and delivery to the Administrative Agent of
(a) all additional financing statements and other documents reasonably requested by the
Administrative Agent as to the validity, perfection and priority of the security interests provided
for herein and (b) if applicable, a written supplement to Schedule 4 showing any additional
location at which Inventory or Equipment shall be kept (other than locations at which Inventory or
Equipment shall be kept with a fair market value not to exceed $10,000 in the aggregate for each
location and $200,000 in the aggregate for all locations for all Grantors):

     (i) permit any of the Inventory or Equipment (other than In-Transit Inventory or
Inventory related to any “bill and hold” or consignment arrangement, with a fair market
value not to exceed $10,000 in the aggregate for each location and $200,000 in the aggregate
for all locations for all Grantors) to be kept at a location other than those listed on
Schedule 4;

     (ii) change its jurisdiction of organization or the location of its chief executive
office from that specified on Schedule 3 or in any subsequent notice delivered
pursuant to this Section 5.3; or

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     (iii) change its name, identity or corporate structure.

          5.4 Notices. Such Grantor will advise the Administrative Agent promptly, in
reasonable detail, of:

          (a) any Lien (other than Permitted Liens) on any of the Collateral which would adversely
affect the ability of the Administrative Agent to exercise any of its remedies hereunder; and

          (b) the occurrence of any other event which could reasonably be expected to have a material
adverse effect on the aggregate value of the Collateral or on the Liens created hereby.

          5.5 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any certificate, option or rights in respect of the equity interests (other than the
equity interests not required to be pledged hereunder) of any Issuer of Pledged Equity, whether in
addition to, in substitution of, as a conversion of, or in exchange for, any of the Pledged Equity,
or otherwise in respect thereof, such Grantor shall accept the same as the agent of the
Administrative Agent and the Lenders, hold the same in trust for the Administrative Agent and the
Lenders and, if certificated, deliver the same forthwith to the Administrative Agent in the exact
form received, duly indorsed by such Grantor to the Administrative Agent, if required, together
with an undated instrument of transfer covering such certificate duly executed in blank by such
Grantor, to be held by the Administrative Agent, subject to the terms hereof, as additional
Collateral for the Secured Obligations (and if uncertificated, shall promptly notify the
Administrative Agent of its receipt thereof and take such actions as the Administrative Agent shall
reasonably request to note the Administrative Agent’s Lien on such interest, right or option and to
enable the Administrative Agent to exercise its rights with respect thereto (including the transfer
thereof) upon the occurrence and during the continuance of an Event of Default without any action
on the part of the Grantor). Upon the occurrence and during the continuance of an Event of
Default, (i) any sums paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional Collateral for the Secured Obligations, and (ii) in case any distribution of capital
shall be made on or in respect of the Investment Property or any property shall be distributed upon
or with respect to the Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected Lien in favor of the Administrative Agent, be
delivered to the Administrative Agent to be held by it hereunder as additional Collateral for the
Secured Obligations. Upon the occurrence and during the continuance of an Event of Default, if any
sums of money or property so paid or distributed in respect of the Investment Property shall be
received by such Grantor, such Grantor shall, until such money or property is paid or delivered to
the Administrative Agent, hold such money or property in trust for the Lenders, segregated from
other funds of such Grantor, as additional Collateral for the Secured Obligations.

          (b) Without the prior written consent of the Administrative Agent, such Grantor will not (i)
vote to enable, or take any other action to permit, any Issuer of Pledged Equity to issue any
equity interests of any nature or to issue any other securities or interests

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convertible into or granting the right to purchase or exchange for any equity interests of any
nature of any Issuer of Pledged Equity, except, in each case, as permitted by the Credit Agreement,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Investment Property or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Credit Agreement) other than, with respect to Investment Property not constituting
Pledged Equity or Pledged Notes, any such action which is not prohibited by the Credit Agreement,
(iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person
other than such Grantor with respect to, any of the Investment Property or Proceeds thereof, or any
interest therein, except for Permitted Liens, or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof, except, with respect to such
Investment Property, shareholders’ agreements entered into by such Grantor with respect to Persons
in which such Grantor maintains an ownership interest of 50% or less.

          (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be
bound by the terms of this Agreement relating to the Investment Property issued by it and will
comply with such terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events described in
Section 5.5(a) with respect to the Investment Property issued by it and (iii) the terms of
Sections 6.3(c) and 6.7 shall apply to such Grantor with respect to all actions
that may be required of it pursuant to Section 6.3(c) or 6.7 regarding the
Investment Property issued by it.

          5.6 Receivables. (a) Other than in the ordinary course of business consistent with
the past practices of the Grantors and/or the Company and in amounts which are not material to such
Grantor and as permitted by Section 11.14 of the Credit Agreement, such Grantor will not
(i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any manner that could reasonably be
expected to materially and adversely affect the value thereof; provided, however, that no
Grantor shall take any such action at any time that an Event of Default then exists or would result
therefrom; provided further that no Grantor shall take any action described in clause (v)
above at any time that an Event of Default or an Unmatured Event of Default then exists or would
result therefrom.

          (b) Such Grantor will deliver to the Administrative Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the validity or enforceability
of more than 5% of the aggregate amount of the then outstanding Receivables for all Grantors.

          5.7 Intellectual Property. (a) Unless such Grantor, in its commercially reasonable
business judgment determines that doing otherwise would be in its best commercial interest, such
Grantor (either itself or through licensees) will (i) continue to use each Trademark material to
its business in order to maintain such Trademark in full force free from any claim of abandonment
for non-use, (ii) maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration and all other
notices and legends required by applicable law, (iv) not adopt or use any mark which is

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confusingly similar or a colorable imitation of such Trademark unless the Administrative
Agent, for the benefit of itself and the Lenders, shall obtain a perfected security interest in
such mark pursuant to this Agreement, and (v) not (and not knowingly permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark may
become invalidated or impaired in any way.

          (b) Unless such Grantor, in its commercially reasonable business judgment determines doing so
would be in its best commercial interest, such Grantor (either itself or through licensees) will
not do any act, or omit to do any act, whereby any Patent material to its business may become
forfeited, abandoned or dedicated to the public.

          (c) Unless such Grantor, in its commercially reasonable business judgment determines that
doing otherwise would be in its best commercial interest, such Grantor (either itself or through
licensees) (i) will employ each Copyright material to its business and (ii) will not (and will not
knowingly permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of such Copyrights may become invalidated or otherwise impaired. Such
Grantor will not (either itself or through licensees) do any act whereby any material portion of
such Copyrights may fall into the public domain.

          (d) Such Grantor (either itself or through licensees) will not do any act that knowingly uses
any Intellectual Property material to its business to infringe the intellectual property rights of
any other Person.

          (e) Such Grantor will notify the Administrative Agent and the Lenders promptly if it knows, or
has reason to know, that any application or registration relating to any material Intellectual
Property may become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding, such Grantor’s ownership of,
or the validity of, any material Intellectual Property or such Grantor’s right to register the same
or to own and maintain the same.

          (f) Whenever such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual Property with the
United States Patent and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent by the later of 30 days thereafter or concurrently with the next
delivery of financial statements of the Borrowers pursuant to Section 10.1 of the Credit
Agreement. Upon the request of the Administrative Agent, such Grantor shall execute and deliver,
and have recorded, any and all agreements, instruments, documents, and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent’s and the Lenders’ security
interest in any Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.

          (g) Unless such Grantor, in its commercially reasonable business judgment determines doing so
would be in its best commercial interest, such Grantor will take all reasonable and necessary steps
to maintain and pursue each application (and to obtain the

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relevant registration) and to maintain each registration of all material Intellectual Property
owned by it.

          (h) In the event that any material Intellectual Property is infringed upon or misappropriated
or diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall
reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii)
if such Grantor in its commercially reasonable business judgment determines that such Intellectual
Property is of material economic value, promptly notify the Administrative Agent after it learns
thereof and, to the extent, in its commercially reasonable business judgment, such Grantor
determines it appropriate under the circumstances, sue for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.

          5.8 Seller Undertakings.

          (a) Each Grantor shall keep the Administrative Agent informed of all circumstances bearing
upon any potential claim under or with respect to the Assigned Agreements and the Seller
Undertakings that could have a materially adverse effect on the Administrative Agent and the
Lenders and such Grantor shall not, without the prior written consent of the Administrative Agent,
(i) waive any of its rights or remedies under any Assigned Agreement with respect to any of the
Seller Undertakings in excess of $25,000, (ii) settle, compromise or offset any amount payable by
the Sellers to such Grantor under any Assigned Agreement in excess of $25,000 or (iii) amend or
otherwise modify any Assigned Agreement in any manner which is materially adverse to the interests
of the Administrative Agent or the Lenders.

          (b) Each Grantor shall perform and observe all of the material terms and conditions of each
Assigned Agreement to be performed by it, maintain each Assigned Agreement in full force and effect
(except such Assigned Agreement which, by its terms, has expired or terminated), enforce the
material provisions of each Assigned Agreement in accordance with its terms as it deems appropriate
in its reasonable business judgment and, after the occurrence and during the continuance of an
Event of Default, take all such action to such end as may from time to time be reasonably requested
by the Administrative Agent.

          (c) Anything herein to the contrary notwithstanding, (i) each applicable Grantor shall remain
liable under each Assigned Agreement to the extent set forth therein to perform all of its material
duties and obligations thereunder to the same extent as if this Agreement had not been executed,
(ii) the exercise by the Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under any Assigned Agreement and (iii) neither the
Administrative Agent nor any other Lender shall have any obligation or liability under any Assigned
Agreement by reason of this Agreement, nor shall the Administrative Agent or any other Lender be
obligated to perform any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.

          5.9 Collection of Accounts. Administrative Agent may, at any time after the
occurrence and during the continuance of an Event of Default, whether before or after

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notification to any Account Debtor and whether before or after the maturity of any of the
Secured Obligations, (i) enforce collection of any of each Grantor’s Accounts or other amounts owed
to a Grantor by suit or otherwise; (ii) exercise all of such Grantor’s rights and remedies with
respect to proceedings brought to collect any Accounts or other amounts owed to such Grantor; (iii)
surrender, release or exchange all or any part of any Accounts or other amounts owed to such
Grantor, or compromise or extend or renew for any period (whether or not longer than the original
period) any indebtedness thereunder; (iv) sell or assign any Account of such Grantor or other
amount owed to such Grantor upon such terms, for such amount and at such time or times as the
Administrative Agent deems advisable; (v) prepare, file and sign such Grantor’s name on any proof
of claim in bankruptcy or other similar document against any Account Debtor or other Person
obligated to such Grantor; and (vi) do all other acts and things which are necessary or reasonably
advisable, in the Administrative Agent’s commercially reasonable discretion, to fulfill such
Grantor’s obligations under this Agreement and the Loan Documents and to allow Administrative Agent
to collect the Accounts or other amounts owed to such Grantor. In addition to any other provision
hereof, Administrative Agent may at any time, after the occurrence and during the continuance of an
Event of Default, at Grantors’ expense, notify any parties obligated on any of the Accounts to make
payment directly to Administrative Agent of any amounts due or to become due thereunder.

          5.10 Other Matters.

          (a) Grantors shall each use commercially reasonable efforts to cause to be delivered to the
Administrative Agent a Collateral Access Agreement with respect to each landlord which leases real
property (and the accompanying facilities) to any of the Grantors at which such Grantor keeps
Inventory or other assets with a fair market value in excess of $250,000. Such requirement may be
waived at the option of the Administrative Agent or may, in the discretion of the Administrative
Agent after consultation with the Loan Party Representative, be substituted with a requirement to
maintain a Rent Reserve as set forth in the Credit Agreement.

          (b) Each Grantor authorizes the Administrative Agent to, at any time and from time to time,
file financing statements, continuation statements, and amendments thereto that describe the
Collateral as set forth herein or describe the collateral covered thereby as “all assets” of each
Grantor, or words of similar effect, and which contain any other information required pursuant to
the UCC for the sufficiency of filing office acceptance of any financing statement, continuation
statement, or amendment, and each Grantor agrees to furnish any such information to the
Administrative Agent promptly upon request. Any such financing statement, continuation statement,
or amendment may be signed and/or filed by the Administrative Agent on behalf of any Grantor and
may be filed at any time in any jurisdiction.

          (c) Each Grantor shall, at any time and from time and to time, as reasonably requested by the
Administrative Agent (i) use commercially reasonable efforts to obtain an acknowledgement, in form
and substance reasonably satisfactory to the Administrative Agent, of any bailee having possession
of any of the Collateral having a value in excess of $250,000, stating that the bailee holds such
Collateral for the Administrative Agent, (ii) take such steps as are reasonably necessary to
provide the Administrative Agent “control” of any letter-of-credit rights, or electronic chattel
paper having a value in excess of $250,000 (as such terms are defined

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by the UCC with corresponding provisions thereof defining what constitutes “control” for such
items of Collateral), with any agreements establishing control to be in form and substance
reasonably satisfactory to the Administrative Agent, and (iii) take such steps as are reasonably
necessary to otherwise insure the continued perfection and priority of the Administrative Agent’s
security interest in any of the Collateral and of the preservation of its rights therein. If any
Grantor shall at any time, acquire a “commercial tort claim” (as such term is defined in the UCC)
in excess of $250,000, such Grantor shall promptly notify the Administrative Agent thereof in
writing and supplement Schedule 7, therein providing a reasonable description and summary
thereof, and upon delivery thereof to the Administrative Agent, such Grantor shall be deemed to
thereby grant to the Administrative Agent (and such Grantor hereby grants to the Administrative
Agent) a security interest and lien in and to such commercial tort claim and all proceeds thereof,
all upon the terms of and governed by this Agreement.

          (d) Without limiting the generality of the foregoing, if any Grantor at any time holds or
acquires an interest in any electronic chattel paper or any “transferable record”, as that term is
defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or
in §16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction having
a value greater than $250,000, such Grantor shall promptly notify the Administrative Agent thereof
and, at the request of the Administrative Agent, shall take such action as the Administrative Agent
may reasonably request to vest in the Administrative Agent “control” under Section 9-105 of the UCC
of such electronic chattel paper or control under Section 201 of the federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable record.

          (e) Subject to Section 10.2 of the Credit Agreement, each Grantor shall permit during
regular business hours and with reasonable prior notice (or at any time without notice if an Event
of Default has occurred and is continuing) the Administrative Agent and the Lenders to examine any
of the Collateral and wherever the Collateral may be located. Each Grantor shall, at the request of
the Administrative Agent, indicate on its records concerning the Collateral a notation, in form
reasonably satisfactory to the Administrative Agent, of the security interest of the Administrative
Agent hereunder.

          (f) Each Grantor shall (x) use its commercially reasonable efforts to obtain the consent to
the assignment thereof or the granting of a security interest by such Grantor to the Administrative
Agent of the applicable parties to any Restricted Agreement entered into after the date of this
Agreement which contains a restriction or prohibition on the assignment of, or grant of a security
interest in the right to receive payments and other Proceeds with respect to, or the Goods produced
under, such Restricted Agreement (provided however that such Grantor’s commercially reasonable
efforts shall not include the requirement that such Grantor pay any fees to any other party of a
Restricted Agreement to obtain a consent to the assignment thereof or a grant of a security
interest therein), and (y) shall provide the Administrative Agent with monthly updates to
Schedules 1.1A and 1.1B to reflect any additions to or changes in such schedules.

SECTION 6 REMEDIAL PROVISIONS.

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          6.1 Certain Matters Relating to Receivables. (a) At any time after the occurrence
and during the continuance of an Event of Default, the Administrative Agent (through its officers,
employees or agents) shall have the right to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and each Grantor shall
furnish all such assistance and information as the Administrative Agent may reasonably require in
connection with such test verifications. At any time after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent’s request and at the expense of
the relevant Grantor, such Grantor shall cause independent public accountants or others reasonably
satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, agings and test verifications of, and trial balances for, the Receivables.

          (b) The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, and the Administrative Agent may curtail or terminate such authority at any time after
the occurrence and during the continuance of an Event of Default. If required by the
Administrative Agent at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and,
in any event, within one (1) Business Day) deposited by such Grantor in the exact form received,
duly indorsed by such Grantor to the Administrative Agent if required, in a collateral account
maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal
by the Administrative Agent for the account of the Lenders only as provided in Section 6.5,
and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent
and the Lenders, segregated from other funds of such Grantor. If required by the Administrative
Agent at any time after the occurrence and during the continuance of an Event of Default, each such
deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable
detail the nature and source of the payments included in the deposit.

          (c) At any time after the occurrence and during the continuance of an Event of Default, at the
Administrative Agent’s request, each Grantor shall deliver to the Administrative Agent all original
and other documents evidencing, and relating to, the agreements and transactions which gave rise to
the Receivables, including all original orders, invoices and shipping receipts in such Grantor’s
possession.

          (d) Each Grantor hereby irrevocably authorizes and empowers the Administrative Agent, in the
Administrative Agent’s sole discretion, at any time after the occurrence and during the continuance
of an Event of Default, to assert, either directly or on behalf of such Grantor, any claim such
Grantor may from time to time have against the Sellers under or with respect to the Assigned
Agreements and to receive and collect any and all damages, awards and other monies resulting
therefrom and to apply the same to the Secured Obligations. Each Grantor hereby irrevocably makes,
constitutes and appoints the Administrative Agent as its true and lawful attorney in fact for the
purpose of enabling the Administrative Agent to, after the occurrence and during the continuance of
an Event of Default, assert and collect such claims and to apply such monies in the manner set
forth above, which appointment, being coupled with an interest, is irrevocable.

          6.2 Communications with Obligors; Grantors Remain Liable. (a) The Administrative
Agent in its own name or in the name of others may at any time after the

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occurrence and during the continuance of an Event of Default, communicate with obligors under
the Receivables to verify with them to the Administrative Agent’s satisfaction the existence,
amount and terms of any Receivables.

          (b) Anything herein to the contrary notwithstanding, each Grantor shall remain liable in
respect of each of the Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any agreement giving
rise thereto. Neither the Administrative Agent nor any Lender shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out
of this Agreement or the receipt by the Administrative Agent or any Lender of any payment relating
thereto, nor shall the Administrative Agent or any Lender be obligated in any manner to perform any
of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled at any time or
times.

          (c) For the purpose of enabling the Administrative Agent to exercise rights and remedies under
this Agreement, each Grantor hereby grants to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to such Grantor) to, during the continuance of an Event of
Default, use, license or sublicense for such purpose any Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located, and including in such
license access to all media in which any of the licensed items may be recorded or stored and, to
the extent permitted by terms of the applicable underlying agreement, all computer software and
programs used for the compilation or printout thereof.

          6.3 Investment Property. (a) Unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given written notice to the relevant Grantor of
the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section
6.3(b), each Grantor shall be permitted to receive all cash dividends and distributions paid in
respect of the Pledged Equity and all payments made in respect of the Pledged Notes, to the extent
permitted in the Credit Agreement, and to exercise all voting and other rights with respect to the
Investment Property; provided, that no vote shall be cast or other right exercised or
action taken which would or would reasonably be likely to impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.

          (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall
give written notice of its intent to exercise such rights to the relevant Grantor(s), (i) the
Administrative Agent shall have the right to receive any and all cash dividends and distributions,
payments or other Proceeds paid in respect of the Investment Property and make application thereof
to the Secured Obligations in accordance with Section 6.5 hereof, and (ii) any or all of
the Investment Property shall be registered in the name of the Administrative Agent or its nominee,
and the Administrative Agent or its nominee may thereafter exercise (x) all voting and other rights
pertaining to such Investment Property at any meeting of holders of the

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equity interests of the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or options pertaining to
such Investment Property as if it were the absolute owner thereof (including the right to exchange
at its discretion any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or other structure of
any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege
or option pertaining to such Investment Property, and in connection therewith, the right to deposit
and deliver any and all of the Investment Property with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the Administrative Agent may
determine), all without liability except for the Administrative Agent’s gross negligence or willful
misconduct (as determined by a final, nonappealable judgment by a court of competent jurisdiction)
and except to account for property actually received by it, but the Administrative Agent shall have
no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible
for any failure to do so or delay in so doing.

          (c) Each Grantor hereby authorizes and instructs each Issuer under the control of such Grantor
of any Investment Property pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states that an Event of Default
has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying and (ii) unless otherwise expressly permitted by
this Agreement or other Loan Documents, pay any dividends, distributions or other payments with
respect to the Investment Property directly to the Administrative Agent.

          6.4 Proceeds to be Turned Over to Administrative Agent. In addition to the rights of
the Administrative Agent and the Lenders specified in Section 6.1 with respect to payments
of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other cash equivalent items shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, segregated from other funds of such Grantor,
and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in
the exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent,
if required). All such Proceeds received by the Administrative Agent under this Section
6.4 shall be held by the Administrative Agent in a collateral account maintained under its sole
dominion and control. All such Proceeds, while held by the Administrative Agent in any collateral
account (or by such Grantor in trust for the Administrative Agent and the Lenders) established
pursuant hereto, shall continue to be held as collateral security for the Secured Obligations and
shall not constitute payment thereof until applied as provided in Section 6.5.

          6.5 Application of Proceeds. At such intervals as may be elected by the
Administrative Agent upon its receipt of any payments or Net Cash Proceeds in respect of the
Secured Obligations, the Administrative Agent may or, if an Event of Default shall have occurred
and be continuing, upon its receipt of any payments or Net Cash Proceeds in respect of the Secured
Obligations, the Administrative Agent shall apply all or any part of Net Cash Proceeds from the
sale of, or other realization upon, all or any part of the Collateral in payment of the Secured
Obligations as set forth below (subject to the terms of the Credit Agreement).

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Any part of such funds which the Administrative Agent elects not so to apply and deems not
required as collateral security for the Secured Obligations shall be paid over from time to time by
the Administrative Agent to the applicable Grantor or to whomsoever may be lawfully entitled to
receive the same. Any balance of such Net Cash Proceeds remaining after the Secured Obligations
shall have been Paid in Full shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive the same. In the absence of a specific determination by the
Administrative Agent, and at all times during the continuation of an Event of Default, the Net Cash
Proceeds from the sale of, or other realization upon, all or any part of the Collateral in payment
of the Secured Obligations shall be applied in the following order:

     FIRST, TO THE PAYMENT OF ALL FEES, REASONABLE COSTS, REASONABLE EXPENSES AND
INDEMNITIES OF THE ADMINISTRATIVE AGENT (IN ITS CAPACITY AS SUCH), INCLUDING ATTORNEY COSTS,
AND ANY OTHER SECURED OBLIGATIONS THEN DUE AND PAYABLE TO THE ADMINISTRATIVE AGENT IN
RESPECT OF SUMS ADVANCED BY THE ADMINISTRATIVE AGENT TO PRESERVE THE COLLATERAL OR TO
PRESERVE ITS SECURITY INTEREST IN THE COLLATERAL, UNTIL PAID IN FULL;

     SECOND, TO THE PAYMENT OF ALL FEES, REASONABLE COSTS, REASONABLE EXPENSES AND
INDEMNITIES OF THE LENDERS, PRO-RATA, UNTIL PAID IN FULL;

     THIRD, TO THE PAYMENT OF ALL OF THE SECURED OBLIGATIONS CONSISTING OF ACCRUED AND
UNPAID INTEREST THEN DUE AND PAYABLE TO THE LENDERS, PRO-RATA, UNTIL PAID IN FULL;

     FOURTH, TO THE PAYMENT OF ALL SECURED OBLIGATIONS CONSISTING OF PRINCIPAL THEN DUE AND
PAYABLE TO THE LENDERS, PRO-RATA, UNTIL PAID IN FULL;

     FIFTH, TO THE PAYMENT OF THE ADMINISTRATIVE AGENT AN AMOUNT EQUAL TO ALL SECURED
OBLIGATIONS IN RESPECT OF ALL OUTSTANDING LETTERS OF CREDIT, IF ANY, TO BE HELD AS CASH
COLLATERAL IN RESPECT OF SUCH OBLIGATIONS;

     SIXTH, TO THE PAYMENT OF ALL BANK PRODUCTS OBLIGATIONS AND SPECIFIED HEDGING
OBLIGATIONS THEN DUE AND PAYABLE TO ANY LENDER OR ITS AFFILIATES, PRO-RATA, UNTIL PAID IN
FULL;

     SEVENTH, TO THE PAYMENT OF ALL OTHER SECURED OBLIGATIONS THEN DUE AND PAYABLE TO EACH
LENDER, PRO-RATA, UNTIL PAID IN FULL; AND

     EIGHTH, THE REMAINING PROCEEDS, IF ANY, TO THE GRANTORS OR TO WHOMEVER MAY BE LAWFULLY
ENTITLED TO RECEIVE SUCH AMOUNTS.

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          6.6 Code and Other Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted to them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under
the UCC or any other applicable law. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate,
realize upon and take possession of the Collateral, or any part thereof (in addition to Collateral
of which it already has possession), wherever it may be found, and for that purpose may pursue the
same wherever it may be found, and may enter onto any of Grantor’s premises where any of the
Collateral may be, and search for, take possession of, remove, keep and store any of the Collateral
until the same shall be sold or otherwise disposed of, and the Administrative Agent shall have the
right to store the same at any of Grantor’s premises without cost to the Administrative Agent or
any Lender in each case, subject to the terms of the applicable lease agreement and Collateral
Access Agreements with respect to premises leased by Grantor. The Administrative Agent may
forthwith sell, lease, assign, give options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of the Administrative
Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at
such prices as it may deem best, for cash or on credit or for future delivery with assumption of
any credit risk. The Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption
in any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees,
at the Administrative Agent’s request and at each Grantor’s expense, to assemble the Collateral and
make it available to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor’s premises or elsewhere. The Administrative Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders hereunder, including Attorney
Costs, as provided in Section 6.5. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands it may acquire against the Administrative Agent or any
Lender arising out of the exercise by them of any rights hereunder, except claims, damages and
demands related to Administrative Agent or any Lender’s gross negligence, willful misconduct or bad
faith as determined by a final, nonappealable judgment by a court of competent jurisdiction. If
any notice of a proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

          6.7 Registration Rights. (a) If the Administrative Agent shall determine to exercise
its right to sell any or all of the Pledged Equity in any Domestic Wholly-Owned Subsidiary (as
defined in the Credit Agreement) pursuant to Section 6.6, and if in the opinion of the
Administrative Agent it is necessary or reasonably advisable to have the Pledged Equity in

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any Subsidiary, or that portion thereof to be sold, registered under the provisions of the
Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and
cause the directors and officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of
the Administrative Agent or its counsel, necessary or advisable to register the Pledged Equity, or
that portion thereof to be sold, under the provisions of the Securities Act, (ii) use commercially
reasonable efforts to cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public offering of the Pledged
Equity, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the reasonable opinion of the Administrative Agent or its counsel, are
necessary or reasonably advisable, all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause such Issuer to comply with the provisions of the securities or “Blue Sky”
laws of any and all jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

          (b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public
sale of any or all the Pledged Equity, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to
one or more private sales thereof to a restricted group of purchasers which will be obliged to
agree, among other things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Equity for the period of time necessary
to permit the Issuer thereof to register such securities or other interests for public sale under
the Securities Act, or under applicable state securities laws, even if such Issuer would agree to
do so.

          (c) Each Grantor agrees to use commercially reasonable efforts to do or cause to be done all
such other acts as may be reasonably necessary to make such sale or sales of all or any portion of
the Pledged Equity pursuant to this Section 6.7 valid and binding and in compliance with
applicable law. Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Administrative Agent and the Lenders,
that the Administrative Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this Section 6.7
shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees
not to assert any defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred under the Credit Agreement.

          (d) Each of the Grantors hereby acknowledges and consents to the rights and remedies of the
Administrative Agent in connection with the enforcement of its security interests in the Pledged
Equity in accordance with the terms of this Agreement (including the rights to foreclose upon and
transfer such Pledged Equity in accordance with the terms of this Agreement,

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the UCC and other applicable law) and this Section 6.7(d) shall, to the fullest extent
permitted by the applicable document or agreement and by law, serve as the consent necessary under
any such document or agreement (including under any organizational document of or equityholders
agreement relating to any such Pledged Equity) for the Administrative Agent to effect such remedies
and/or to effect the transfer of the full rights and benefits (including full membership or
partnership rights and entitlements as opposed to merely the economic rights and benefits) of such
Pledged Equity to any transferee thereof (including the Administrative Agent and/or any Lender to
the extent applicable) in accordance with the terms of this Agreement, the UCC, applicable law and
the terms of any applicable document or agreement. Following the occurrence and during the
continuance of an Event of Default and the Administrative Agent’s delivery of notice in accordance
with the terms of this Agreement, each such Grantor hereby agrees to take such actions and execute
any such agreements or documents as shall be reasonably requested by the Administrative Agent to
authorize and effect the entitlement of any such transferee to all rights and benefits (including
full membership or partnership rights and entitlements) of such Pledged Equity. In connection with
the foregoing, each Grantor hereby irrevocably appoints the Administrative Agent as its
attorney-in-fact, to take any such actions and execute any such agreements, in each case, in the
name of and for and on behalf of such Grantor, to effect any of the foregoing following the
occurrence and during the continuance of an Event of Default and the Administrative Agent’s
delivery of notice in accordance with the terms of this Agreement. This power being coupled with
an interest is irrevocable.

          6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or
privileges which it may acquire under Section 9-626 of the UCC. Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the Collateral are
insufficient to pay the Secured Obligations in full and the reasonable fees and disbursements of
any attorneys employed by the Administrative Agent or any Lender to collect such deficiency.

SECTION 7 THE ADMINISTRATIVE AGENT.

          7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor
hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and instruments which may be
reasonably necessary or desirable to accomplish the purposes of this Agreement, and, without
limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the
power and right, on behalf of and at the expense of such Grantor, without notice to or assent by
such Grantor, to do any or all of the following:

     (i) in the name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any checks, drafts, notes, acceptances or other instruments for the
payment of monies due under any Receivable or with respect to any other Collateral and file
any claim or take any other action or proceeding in any court of law or equity or otherwise
deemed reasonably appropriate by the Administrative Agent for the purpose of collecting any
and all such monies due under any Receivable or with respect to any other Collateral
whenever payable;

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     (ii) in the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent’s security interest in such
Intellectual Property and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby;

     (iii) discharge Liens levied or placed on or threatened against the Collateral (other
than Permitted Liens), and effect any repairs or insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs thereof;

     (iv) execute, in connection with any sale provided for in Section 6.6 or 6.7,
any indorsements, assignments or other instruments of conveyance or transfer with respect to
the Collateral; and

     (v) (1) direct any party liable for any payment under any of the Collateral to make
payment of any and all monies due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all monies, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3) sign and indorse
any invoices, freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem reasonably appropriate; (7) assign any Copyright, Patent or
Trademark, in each case, that is subject to the Lien of the Administrative Agent granted
pursuant to any Loan Document, throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its reasonable
discretion determine; (8) vote any right or interest with respect to any Investment
Property; (9) order good standing certificates and conduct lien searches in respect of such
jurisdictions or offices as the Administrative Agent may deem reasonably appropriate; and
(10) generally sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the Administrative Agent
were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts and things
which the Administrative Agent deems reasonably necessary to protect, preserve or realize
upon the Collateral and the Administrative Agent’s security interests therein and to effect
the intent of this Agreement, all as fully and effectively as such Grantor might do.

     Anything in this Section 7.1(a) or any other Loan Document to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.

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          (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may, after written notice
to such Grantor, perform or comply, or otherwise cause performance or compliance, with such
agreement.

          (c) Each Grantor hereby ratifies all that such attorneys in fact shall lawfully do or cause to
be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated and the Secured
Obligations are Paid in Full.

          7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its possession shall be
to deal with it in the same manner as the Administrative Agent deals with similar property for its
own account. Neither the Administrative Agent or any Lender nor any of their respective officers,
directors, employees or agents shall be liable for any failure to demand, collect or realize upon
any of the Collateral or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to protect the
Administrative Agent’s and the Lenders’ interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Lender to exercise any such powers. The Administrative Agent
and the Lenders shall be accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither the Administrative Agent, nor any Lender nor any of their
respective officers, directors, employees or agents shall be responsible to any Grantor for any act
(except for the Administrative Agent’s or any Lender’s gross negligence or willful misconduct as
determined by a final, nonappealable judgment by a court of competent jurisdiction, in so acting)
or failure to act hereunder.

          7.3 Authority of Administrative Agent. Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect to any action taken
by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for herein or resulting
or arising out of this Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.

SECTION 8 MISCELLANEOUS.

          8.1 Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with Section 15.1
of the Credit Agreement.

          8.2 Notices. All notices, requests and demands to or upon the Administrative Agent or
any Grantor hereunder shall be addressed to the Administrative Agent or Loan Party

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Representative, respectively, and effected in the manner provided for in Section 15.3
of the Credit Agreement and each Grantor hereby appoints the Loan Party Representative as its agent
to give and receive notices hereunder and the Administrative Agent shall be fully protected and
held harmless by the Grantors hereunder for relying on any such notice reasonably believed by it to
have been delivered by the Loan Party Representative.

          8.3 Indemnification by Grantors. THE GRANTORS, JOINTLY AND SEVERALLY, HEREBY AGREE TO
INDEMNIFY AND HOLD EACH LENDER PARTY FREE AND HARMLESS FROM AND AGAINST ANY AND ALL INDEMNIFIED
LIABILITIES, INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR
RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF EQUITY INTERESTS, PURCHASE OF ASSETS
(INCLUDING THE CLOSING DATE ACQUISITIONS) OR OTHER SIMILAR TRANSACTION FINANCED OR PROPOSED TO BE
FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B)
THE PAST, PRESENT OR FUTURE PRESENCE, USE, HANDLING, RELEASE OR THREAT OF RELEASE, EMISSION,
DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT OR
AFFECTING ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS
WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR OR THE OPERATIONS
CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY
GRANTOR OR ITS RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF
HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED
LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION.
IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH
GRANTOR HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF
THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED
FOR IN THIS SECTION 8.3 SHALL SURVIVE REPAYMENT OF ALL (AND SHALL BE) SECURED OBLIGATIONS
AND TERMINATION OF ALL COMMITMENTS UNDER THE CREDIT AGREEMENT, ANY FORECLOSURE UNDER, OR ANY
MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF
THIS AGREEMENT.

          8.4 Enforcement Expenses. (a) Each Grantor agrees, on a joint and several basis, to
pay or reimburse within three (3) Business Days of demand, each Lender and the Administrative Agent
for all reasonable out-of-pocket costs and expenses (subject to the limitations on the number of
counsel set forth in Section 15.5 of the Credit Agreement, including, without duplication of any
provision of this Agreement, Attorney Costs) incurred in collecting against any Guarantor under the
guaranty contained in Section 2 or otherwise enforcing or preserving any rights under this
Agreement and the other Loan Documents.

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          (b) Each Grantor agrees to pay, and to save the Administrative Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay caused by any Grantor in
paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.

          (c) The agreements in this Section 8.4 shall survive (i) the repayment in full of all
(and shall be) Secured Obligations, (ii) the termination of all Commitments under the Credit
Agreement, (iii) any foreclosure under, or any modification, release or discharge of, any or all of
the Collateral Documents and (iv) termination of this Agreement.

          8.5 Captions. Section captions used in this Agreement are for convenience only and
shall not affect the construction of this Agreement.

          8.6 Nature of Remedies. All Secured Obligations of each Grantor and rights of the
Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in
addition to and not in limitation of those provided by applicable law. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.

          8.7 Counterparts. This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts and each such counterpart shall be deemed to
be an original, but all such counterparts shall together constitute but one and the same Agreement.
Receipt by telecopy of any executed signature page to this Agreement or any other Loan Document
shall constitute effective delivery of such signature page.

          8.8 Severability. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any way affect or impair
the legality or enforceability of the remaining provisions of this Agreement or any instrument or
agreement required hereunder.

          8.9 Entire Agreement. This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the parties hereto and supersedes all prior
or contemporaneous agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof and any prior arrangements made with respect to the payment
by any Grantor of (or any indemnification for) any fees, costs or expenses payable to or incurred
(or to be incurred) by or on behalf of the Administrative Agent or the Lenders.

          8.10 Successors; Assigns. This Agreement shall be binding upon Grantors, the Lenders
and the Administrative Agent and their respective successors and assigns, and shall inure to the
benefit of Grantors, Lenders and the Administrative Agent and the successors and assigns of the
Lenders and the Administrative Agent. No other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in connection

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with, this Agreement or any of the other Loan Documents. No Grantor may assign or transfer
any of its rights or Obligations under this Agreement without the prior written consent of the
Administrative Agent.

          8.11 Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

          8.12 Forum Selection; Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION IN WHICH COLLATERAL IS LOCATED. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. EACH GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH
GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT
IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

          8.13 Waiver of Jury Trial. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

          8.14 Set-off. Each Grantor agrees that the Administrative Agent and each Lender have
all rights of set-off and banker’s lien provided by applicable law, and in addition thereto, each
Grantor agrees that at any time any Event of Default occurs and is continuing, the Administrative
Agent and each Lender may apply to the payment of any Secured Obligations, whether or not then due,
any and all balances, credits, deposits, accounts or monies of such Grantor then or thereafter with
the Administrative Agent or such Lender.

          8.15 Acknowledgements. Each Grantor hereby acknowledges that:

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     (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;

     (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with
or duty to any Grantor arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Grantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and

     (c) no joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or among the
Grantors and the Lenders.

          8.16 Additional Grantors. Each Loan Party that is required to become a party to this
Agreement pursuant to Section 10.10 of the Credit Agreement shall become a Grantor for all purposes
of this Agreement upon execution and delivery by such Loan Party of a joinder agreement in the form
of Exhibit G to the Credit Agreement.

          8.17 Releases. (a) At such time as the Secured Obligations have been Paid in Full,
the Collateral shall be automatically released from the Liens created hereby, and this Agreement
and all obligations (other than those expressly stated to survive such termination) of the
Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the Collateral shall revert to
the Grantors. At the request and sole expense of any Grantor concurrently with any such
termination, the Administrative Agent shall deliver to the Grantors any Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence such termination.

          (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any
Grantor in a transaction permitted by the Credit Agreement, then the Administrative Agent, at the
request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or
other documents reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrowers, a Grantor shall be released
from its obligations hereunder in the event that all the equity interests of such Grantor shall be
sold, transferred or otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrowers shall have delivered to the Administrative Agent, with
reasonable notice prior to the date of the proposed release, a written request for release
identifying the relevant Grantor and the terms of the sale or other disposition in reasonable
detail, including the price thereof and any expenses in connection therewith, together with a
certification by the Borrowers stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.

          8.18 Obligations and Liens Absolute and Unconditional. Each Grantor understands and
agrees that the obligations of each Grantor under this Agreement shall be construed as continuing,
absolute and unconditional without regard to (a) the validity or enforceability of any Loan
Document, any of the Secured Obligations or any other collateral security therefor or guaranty or
right of offset with respect thereto at any time or from time to

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time held by the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be available to or be
asserted by any Grantor or any other Person against the Administrative Agent or any Lender, or (c)
any other circumstance whatsoever (with or without notice to or knowledge of any Grantor) which
constitutes, or might be construed to constitute, an equitable or legal discharge of any Grantor
for the Secured Obligations, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any Grantor, the
Administrative Agent or any Lender may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies as it may have against any other Grantor or any
other Person or against any collateral security or guaranty for the Secured Obligations or any
right of offset with respect thereto, and any failure by the Administrative Agent or any Lender to
make any such demand, to pursue such other rights or remedies or to collect any payments from any
other Grantor or any other Person or to realize upon any such collateral security or guaranty or to
exercise any such right of offset, or any release of any other Grantor or any other Person or any
such collateral security, guaranty or right of offset, shall not relieve any Grantor of any
obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or any Lender against
any Grantor. For the purposes hereof “demand” shall include the commencement and continuance of
any legal proceedings.

          8.19 Reinstatement. This Agreement shall remain in full force and effect and continue
to be effective should any petition be filed by or against any Grantor or any Issuer for
liquidation or reorganization, should any Grantor or any Issuer become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of such Grantor’s or such Issuer’s assets, and shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of the Secured
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount,
or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a
“voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only
by such amount paid and not so rescinded, reduced, restored or returned.

[Signature pages follow]

-33-

 

          Each of the undersigned has caused this Guaranty and Collateral Agreement to be duly executed
and delivered as of the date first above written.

GRANTORS:

	 	 	 	 	 
	 	KIDS LINE, LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ CHARLES GINN
 	 
	 	 	Name:  	Charles Ginn 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	SASSY, INC., an Illinois corporation

 	 
	 	By:  	/s/ MARC S. GOLDFARB
 	 
	 	 	Name:  	Marc S. Goldfarb 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	LAJOBI, INC., a Delaware corporation

 	 
	 	By:  	/s/ CHARLES GINN
 	 
	 	 	Name:  	Charles Ginn 	 
	 	 	Title:  	Chief Financial Officer and Secretary 	 
	 
	 	I & J HOLDCO, INC., a Delaware Corporation

 	 
	 	By:  	/s/ CHARLES GINN
 	 
	 	 	Name:  	Charles Ginn 	 
	 	 	Title:  	Chief Financial Officer and Secretary 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	LASALLE NATIONAL BANK ASSOCIATION, as Administrative Agent

 	 
	 	By:  	/s/ TRAVIS J. BURNS
 	 
	 	 	Name:  	Travis J. Burns 	 
	 	 	Title:  	Senior Vice President

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