CREDIT AGREEMENT dated as of March 14, 2006 among

Exhibit 4.12

Execution Copy

CREDIT AGREEMENT

dated as of March 14, 2006

among

▇▇▇▇ ▇▇▇▇▇▇ AND COMPANY, INC.,
as the Loan Party Representative

and

▇▇▇▇ ▇▇▇▇▇▇ U.S. GIFT, INC.,
▇▇▇▇ ▇▇▇▇▇▇ & CO. (WEST), INC.,
▇▇▇▇ ▇▇▇▇▇▇ AND COMPANY PROPERTIES, INC.,
RUSSPLUS, INC., AND
▇▇▇▇ ▇▇▇▇▇▇ AND COMPANY INVESTMENTS, INC.
as the Borrowers,

THOSE FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,

LASALLE BUSINESS CREDIT, LLC,
as Administrative Agent  and Arranger,

and

LASALLE BANK NATIONAL ASSOCIATION,
as Issuing Bank

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CREDIT AGREEMENT

THIS CREDIT AGREEMENT dated as of March 14, 2006 (this “Agreement”) is entered into by and among ▇▇▇▇ ▇▇▇▇▇▇ and Company, Inc. (the “Company”), ▇▇▇▇ ▇▇▇▇▇▇ U.S. Gift, Inc., a Delaware corporation (“▇▇▇▇ Gift”), ▇▇▇▇ ▇▇▇▇▇▇ & Co. (West), Inc. (“▇▇▇▇ ▇▇▇▇”), ▇▇▇▇ ▇▇▇▇▇▇ and Company Properties, Inc. (“▇▇▇▇ Properties”), Russplus, Inc. (“Russplus”), and ▇▇▇▇ ▇▇▇▇▇▇ and Company Investments, Inc. (“▇▇▇▇ Investments”) (▇▇▇▇ Gift, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ Properties, Russplus, and ▇▇▇▇ Investments are sometimes referred to herein collectively as the “Borrowers” and individually as a “Borrower”), the financial institutions that are or may from time to time become parties hereto as “Lenders” (and each being a “Lender”), LASALLE BANK NATIONAL ASSOCIATION, in its capacity as “Issuing Bank” hereunder, LASALLE BUSINESS CREDIT, LLC (in its individual capacity, “LaSalle”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders.

The Lenders have agreed to make available to the Borrowers a revolving credit facility (which includes letters of credit) and the Issuing Bank has agreed to issue letters of credit for the Borrowers, 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 Debtor is defined in the UCC.

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 Borrower and any financial institution at which such Borrower 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.

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).

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

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 Issuing Bank nor any Lender shall be deemed an Affiliate of any Loan Party or Subsidiary.

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

Agent Fee Letter means that certain letter agreement dated as of the Closing Date among the Borrowers and the Administrative Agent regarding fees payable to the Administrative Agent pursuant hereto.

Agreement - see the Preamble.

Applicable Margin means, subject to the provisions of Section 10.1.3, for any day, the rate per annum set forth below, it being understood that the “Applicable Margin” for (i) Revolving Loans which are designated as LIBOR Loans (the “LIBOR Margin”) shall be the percentage set forth under the column “LIBOR Margin,” (ii) Revolving Loans which are designated as Base Rate Loans (the “Base Rate Margin”) shall be the percentage set forth under the column “Revolving Loan 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 Rate shall be the percentage set forth under the column “L/C Fee Rate”:

Asset Disposition means the sale, lease (including any sale/leaseback), 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

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condemnation, confiscation, requisition, seizure or taking thereof) (each, a “Disposition”), other than the sale, lease or other dispositions of Inventory in the ordinary course of business or any Disposition of Equipment sold in the ordinary course of the Loan Parties’ business and not having an aggregate book value of more than $200,000 in any Fiscal Year.

Assignment Agreement - see Section 15.6.1.

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.

Back-Stop L/C means a Letter of Credit previously requested by the Borrowers in the original face amount of $7,388,356.16 to be issued on or after the Closing Date by the Issuing Bank for the benefit of The Bank of New York in lieu of posting cash collateral for the obligations of the Company under the EDA Standby L/C Reimbursement Agreement.

Bank Product Agreements means those certain cash management service agreements entered into from time to time between any Loan Party and LaSalle Bank, 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 Bank, any Lender or any of their respective Affiliates pursuant to or evidenced by the Bank Product Agreements and irrespective 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 Bank, any Lender or any of their respective Affiliates as a result of the Administrative Agent or LaSalle Bank, 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 Bank, 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 Margin - see definition of Applicable Margin.

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

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Berrie Commitment means, the letter agreement of March 13, 2006 from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to the Board of Directors of the Company regarding her agreement to fund the full amount to effect the ▇▇▇ ▇▇▇▇ Redemption in accordance with the provisions of the EDA Indenture, by no later than March 20, 2006.

BNY/Administrative Agent Commitment means that certain letter agreement dated as of the Closing Date among the Administrative Agent, The Bank of New York, the Company and the Borrowers regarding the issuance of the Back-Stop L/C and the entry into the EDA Participation Agreement.

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

Borrower and Borrowers  - see Preamble.

Borrowing Base means an amount equal to:

(A)                              the total of (a) up to 85% of the unpaid amount of all Eligible Accounts, plus (b) the lesser of (x) up to 65% of the value of all Eligible Inventory valued at the lower of cost or market, (y) up to 85% of the value of all Eligible Inventory valued at the Net Orderly Liquidation Value thereof as determined by the Administrative Agent from time to time in its commercially reasonable credit judgment after consultation with the Loan Party Representative, and (z) Fifteen Million Dollars ($15,000,000); minus

(B)                                the EDA Reserve, if any, as in effect at such time; minus

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

(D)                               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

(E)                                 such other reserves (without duplication) 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 ▇.

▇▇▇▇▇▇ of America Note - see Section 11.14.

BSA - see Section 10.4.

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.

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Canadian Agent means LaSalle Business Credit, a division of ABN AMRO Bank N.V., Canada Branch, a Canadian branch of a Netherlands bank.

Canadian Borrower means Amram’s Distributing Ltd., a corporation organized under the laws of Canada.

Canadian Guaranty means that certain Guaranty dated as of June 28, 2005 (as the same may be amended, restated, supplemented or otherwise modified from time to time), executed by the Company in favor of the Canadian Agent and guaranteeing the obligations owing by the Canadian Borrower under the Canadian Loan Documents.

Canadian Intercreditor Agreement means an intercreditor agreement between the Canadian Agent and the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent, pursuant to which the Canadian Agent shall, among other things, subordinate its rights to payments and to enforce its remedies, in each case, under the Canadian Guaranty, to those of the Lenders hereunder and under the other Loan Documents.

Canadian Lenders means the “Lenders” as defined under the Canadian Loan Agreement.

Canadian Loan Agreement means that certain Credit Agreement dated as of June 28, 2005 (as the same may be amended, restated, supplemented or otherwise modified from time to time), among the Canadian Agent, the Canadian Lenders and the Canadian Borrower and acknowledged by the Company.

Canadian Loan Documents means the “Loan Documents” as defined under the Canadian Loan Agreement.

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 the purposes of this Agreement, including the calculation of the Fixed Charge Coverage Ratio, 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.

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Cash Collateralize means to deliver cash collateral to the Administrative Agent in the amount equal to 105% of the sum of (x) the aggregate Stated Amount plus (y) the aggregate 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 ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or P-2 by ▇▇▇▇▇’▇ 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 Bank or any Lender or its respective 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) 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 Company having the right to vote for the election of members of the Board of Directors of the Company,

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

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

(d)                                 the Company ceases to own and control, directly or indirectly, 100% of the shares of the Capital Securities of each 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

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(f)                                    (i) the Company consolidates with or merges with or into another entity (other than a Loan Party that is a Domestic Wholly-Owned Subsidiary of the Company) 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 of the Company).

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

Closing Date - see Section 12.1.

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 Documents means, collectively, the Guaranty and Collateral Agreement, the Pledge Agreement, each Mortgage, each Collateral Access Agreement, each Account Control Agreement and any other agreement or instrument pursuant to which any Loan Party, the Company, 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.

Commitment means, as to any Lender, such Lender’s commitment to make Revolving Loans and/or to issue or participate in Letters of Credit, in each case, under this Agreement and “Commitments” means the sum of all such Commitments of all Lenders, in each case, as the same may, from time to time, be increased or supplemented pursuant to Section 2.7 or reduced pursuant to Section 6.1.1. The initial amount of each Lender’s Commitment to make Revolving Loans is set forth on Annex A.

Company - see Preamble.

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

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

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

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 Company and its Subsidiaries, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

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Debt means, with respect to 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, 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, and (l) the Restricted Debt.

Debt to be Repaid means Debt listed on Schedule 12.1.

Defaulting Lender – see Section 2.1.1(c).

Designated Proceeds - see Section 6.2.2.

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 (other than any Inactive Subsidiary) 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 the “Earnout Consideration” as defined in the Kids Line Purchase Agreement as in effect on the date hereof (without giving effect to any amendment or other modification thereof after the Closing Date, except to the extent expressly permitted

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hereunder). As used herein, the term “Earnout Consideration” shall also include any payments in respect of any guaranty of the Earnout Consideration.

Earnout Security Documents means, collectively, that certain Guaranty, dated as of December 15, 2004, executed by the Company and each of its subsidiaries party thereto in favor of the Earnout Sellers Agent (as amended as of the Closing Date to, among other things, partially release the Company and fully-release each of the Borrowers therefrom), that certain Subordinated Security Agreement, dated as of December 15, 2004 (as amended as of the Closing Date to, among other things, release the Company and each of the Borrowers therefrom), executed by the Company and certain of its subsidiaries in favor of the Earnout Sellers Agent for the benefit of the Earnout Sellers as security for such Person’s obligations with respect to payment (or guaranty of payment) of the Earnout Consideration, that certain Subordinated Mortgage by and from Sassy to the Earnout Sellers Agent, dated as of January 28, 2005, and any other agreement, instrument, and other document executed and delivered pursuant thereto or related to such security interests, in each case as in effect on the date hereof (without giving effect to any amendment or other modification thereof after the Closing Date except to the extent expressly permitted hereunder).

Earnout Sellers means, collectively, the “Deferred Payout Sellers” as defined in the Kids Line Purchase Agreement as in effect on the date hereof (without giving effect to any amendment or other modification thereof after the Closing Date, except to the extent expressly permitted hereunder).

Earnout Sellers Agent means California KL Holdings, Inc., a California corporation, as agent for the Earnout Sellers.

Earnout Subordination Agreement means that certain Subordination Agreement dated as of the Closing Date (as amended, restated, supplemented or otherwise defined from time to time in accordance with the terms hereof) among LaSalle Bank National Association, in its capacity as administrative agent, the Earnout Sellers and the Earnout Seller’s Agent.

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, the Canadian Loan Documents, and the financings contemplated thereby and by the Spin-Off and (vii) non-cash transaction losses (gains) due solely to fluctuations in currency values, in each case, during such period.

EDA means the New Jersey Economic Development Authority, a public body corporate and politic constituting an instrumentality of the State of New Jersey.

EDA Bondholders means, collectively, the holders of ▇▇▇ ▇▇▇▇▇.

▇▇▇ ▇▇▇▇ Indenture means that certain Indenture of Trust dated as of December 1, 1983 by the EDA and the ▇▇▇ ▇▇▇▇ Trustee with respect to the ▇▇▇ ▇▇▇▇▇.

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▇▇▇ ▇▇▇▇ Redemption means the redemption or repayment in full, in cash (unfinanced by the Company or any of its Subsidiaries), and cancellation, of all ▇▇▇ ▇▇▇▇▇ (including the payment of all accrued interest and fees) in accordance with the terms of the ▇▇▇ ▇▇▇▇ Indenture, the satisfaction and termination, in full and in cash, of all obligations of the Company under the EDA Standby L/C Reimbursement Agreement and the EDA Guaranty, and the termination and release of all Liens securing the ▇▇▇ ▇▇▇▇▇, the EDA Guaranty, the EDA Loan Agreement and the EDA Standby L/C Reimbursement Agreement.

▇▇▇ ▇▇▇▇▇ means, collectively, the Variable/Fixed Rate Economic Development Bonds (▇▇▇▇▇▇▇ ▇▇▇▇▇▇ – 1983 Project) issued pursuant to the ▇▇▇ ▇▇▇▇ Indenture.

▇▇▇ ▇▇▇▇ Trustee means Deutsche Bank Trust Company Americas, as successor trustee to Bankers Trust Company under the ▇▇▇ ▇▇▇▇ Indenture, or any successor trustee.

EDA Borrower means the Estate of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or its distributee, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.

EDA Documents means, collectively, the EDA Loan Guarantee, the EDA Standby L/C Reimbursement Agreement, the EDA Standby L/C, the ▇▇▇ ▇▇▇▇ Indenture, the EDA Loan Agreement, the EDA Financing Statements, the EDA Standby L/C Reimbursement Agreement Modification Letter, the Berrie Commitment, the Back-Stop L/C, and the BNY/Administrative Agent Commitment.

EDA Financing Statements means, in each case as amended or continued from time to time, (i) that certain financing statement naming the Company as debtor and EDA Standby L/C Issuer as secured party, filed on February 17, 2000 in the UCC Section, Department of Treasury of the State of New Jersey under file number 1957259 (including any continuations thereof), and (ii) that certain financing statement (or continuation thereof) naming the Company as debtor and ▇▇▇ ▇▇▇▇ Trustee as secured party, filed on December 10, 2004 in the UCC Section, Department of Treasury of the State of New Jersey under file number 22713766.

EDA Loan Agreement means that certain Loan Agreement dated as of December 1, 1983 (as amended from time to time through the Closing Date) between EDA and EDA Borrower.

▇▇▇ ▇▇▇▇ means the security interest granted by the Company in favor of the ▇▇▇ ▇▇▇▇ Trustee and the EDA Standby L/C Issuer on accounts receivable and inventory of the Company (and to the extent applicable, ▇▇▇▇ Gift, as assignee thereof) to secure its obligations under the EDA Loan Guarantee and the EDA Standby L/C Reimbursement Agreement.

EDA Loan Guarantee means that certain Guarantee dated as of December 1, 1983 (as amended from time to time through the Closing Date), by the Company in favor of the EDA, the ▇▇▇ ▇▇▇▇ Trustee and EDA Bondholders, purporting to guaranty the obligations of EDA Borrower under the EDA Loan Agreement or any substitute guaranty therefor executed by the Company on substantially the same terms (for purposes of clarity, changes to material terms thereof shall not be deemed substantially the same terms), or otherwise in form and substance reasonably satisfactory to the Administrative Agent (in each case, without giving effect to any amendment or other modification thereof after the Closing Date, except to the extent expressly permitted hereunder).

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EDA Participation Agreement means a participation agreement to be entered into among the Administrative Agent, the Lenders and the EDA Standby L/C Issuer pursuant to the BNY/Administrative Agent Commitment, pursuant to which, among other things, the Agent and the Lenders would be granted a one hundred percent (100%) participation interest in the EDA Standby L/C Issuer’s interest under the EDA Standby L/C Reimbursement Agreement and all collateral documents relating thereto upon a draw on the Back-Stop L/C.

EDA Release Date means the date upon which the ▇▇▇ ▇▇▇▇ Redemption shall have occurred.

EDA Reserve means, (1) prior to the EDA Release Date, an amount (but not less than zero) equal to the maximum aggregate amount of the Company’s obligations (including contingent obligations) under the EDA Loan Guaranty and the EDA Standby L/C Reimbursement Agreement (or such lesser portion thereof above which (and for so long as) the EDA Standby L/C Issuer has agreed not to require Liens, cash collateral or other collateral therefor, including the Back-Stop L/C), less the amount of (x) the drawn and undrawn amount of the Back-Stop L/C and (y) any unfinanced cash collateral provided by the Company to (and which is then on deposit with) the EDA Standby L/C Issuer solely for applications to such obligations (it being agreed that funds on deposit with the ▇▇▇ ▇▇▇▇ Trustee (or any remarketing agent for the ▇▇▇ ▇▇▇▇▇) to fund the ▇▇▇ ▇▇▇▇ Redemption shall not be deemed to be cash collateral for purposes hereof) and (2) from and after the EDA Release Date, zero; provided that notwithstanding clause (1) above, until such time as the Back-Stop L/C is issued (or the Issuing Bank’s commitment to issue such Letter of Credit has terminated prior to such issuance), clause (1) shall be deemed to be an amount equal to $7,388,356.16.

EDA Standby L/C Issuer means The Bank of New York or any successor thereto as the issuer of the EDA Standby L/C.

EDA Standby L/C means that certain Letter of Credit dated March 25, 1994, as amended as of the Closing Date issued by the EDA Standby L/C Issuer for the account of the Company in a maximum amount available to be drawn thereunder of $7,388,356.16 or any other letter of credit issued for the account of the Company upon or following the expiration of the aforementioned Letter of Credit to secure the payment of the ▇▇▇ ▇▇▇▇▇ in an amount not to exceed $7,388,356.16 and having substantially the same terms as the aforementioned Letter of Credit (other than the maturity date thereof) (in each case, without giving effect to any amendment or other modification thereof after the Closing Date, except to the extent expressly permitted hereunder).

EDA Standby L/C Reimbursement Agreement means that certain Amended and Restated Letter of Credit and Reimbursement Agreement dated as of the Closing Date, between the EDA Standby L/C Issuer and the Company or any replacement agreement therefor executed by the Company in connection with any replacement EDA Standby L/C, on substantially the same terms (for purposes of clarity, changes to material terms thereof shall not be deemed substantially the same terms), or otherwise in form and substance reasonably satisfactory to the Administrative Agent (in each case, without giving effect to any amendment or other modification thereof after the Closing Date, except to the extent expressly permitted hereunder).

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EDA Standby L/C Reimbursement Agreement Modification Letter means that certain letter agreement dated on or prior to the Closing Date from the EDA Standby L/C Issuer to the Company and the Borrowers regarding limitations on the EDA Standby L/C Issuer’s ability to require additional cash collateral for the Company’s reimbursement obligations under the EDA Standby L/C Reimbursement Agreement.

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 (other than the ▇▇▇ ▇▇▇▇ to the extent the full amount thereof is covered by the EDA Reserve); provided that, if subject to any such other assignment, claim or Lien (other than the ▇▇▇ ▇▇▇▇, as aforesaid), 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, 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;

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(f)                                    it is not (i) an Account arising from a “sale on approval,” “sale or return,” “consignment” or “▇▇▇▇ 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 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;

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(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 15% 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 with respect to any 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 ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or the equivalent rating from ▇▇▇▇▇’▇ Investors Services, Inc. (each such Account Debtor, a “Specified Account Debtor”), if the aggregate amount of all Accounts owed by such Specified Account Debtor (including those owed by its Affiliated Account Debtors) thereon exceeds 35% of the aggregate amount of all Eligible Accounts at such time, then all Accounts owed by such Specified Account Debtor and its Affiliated Account Debtors in excess of such amount 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 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) commercial banks organized under the laws of the United States, or any State thereof, and having combined capital and surplus of at least $500,000,000; (ii) commercial banks organized under the laws of any other country that is a member of the

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OECD or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to borrow, or a political subdivision of any such country, and having combined capital and surplus of at least $500,000,000, so long as any such bank is acting through a branch or agency located in the United States; (iii) finance companies, insurance companies or other financial institutions or funds (whether corporations, partnerships, trusts or other entities) that are regularly engaged in the United States in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having combined capital and surplus of at least $500,000,000 or with respect to any funds with total assets under its management in excess of $250,000,000; and (iv) any other Person other than an Affiliate of a Loan Party approved by the Administrative Agent and the Loan Party Representative, such approval not to be unreasonably withheld or delayed.

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, other than the ▇▇▇ ▇▇▇▇, to the extent the full amount thereof is covered by the EDA Reserve; provided that, if subject to any such other assignment, claim or Lien (other than the ▇▇▇ ▇▇▇▇, as aforesaid), 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);

(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 $3,000,000 of Inventory which is “in transit” (the “In-Transit Inventory”)

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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 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, 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.

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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.

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 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 (other than an Inactive 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 2006”) refers to the Fiscal Year ending on December 31st of such calendar year.

Fixed Charge Coverage Ratio means, as of the last day of any Fiscal Quarter for the Computation Period ending on such date for the Borrowers and their consolidated Subsidiaries on a consolidated basis, the ratio of (a) the total for such period of EBITDA for the Computation Period ending on such date (calculated, where applicable, using the EBITDA values set forth in the definition thereof) minus the sum of (i) income taxes paid (or which should have been paid) in cash by such Persons during such Computation Period, (ii) all unfinanced Capital Expenditures of such Persons incurred during such Computation Period, and (iii) all cash dividends or distributions paid during such Computation Period to (b) the sum for such Computation 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).

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

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Fraudulent Conveyance – see Section 15.22.2.

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

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 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 means 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 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.

Inactive Subsidiary means any domestically organized Subsidiary of the Company or a Loan Party designated as an “Inactive Subsidiary” in writing by the Loan Party Representative to the Administrative Agent and which satisfies all requirements of an “Inactive Subsidiary” set forth in Section 11.16, and shall include as of the Closing Date, (and thereafter for so long as such Persons shall continue to meet such requirements) RBCACQ, Inc., a California corporation,

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Fluf N’ Stuf, a Pennsylvania corporation, RBTACQ, Inc., an Ohio corporation, P/F Done, Inc., a Pennsylvania corporation and BOA Done, Inc., a West Virginia corporation, and Inactive Subsidiaries means all such subsidiaries.

Indemnified Liabilities - see Section 15.17.

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 Revolving 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; and

(d)                                 there may be no more than five (5) Interest Periods outstanding at any time.

Interim Advance - see Section 2.1.1(b).

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).

Issuing Bank means LaSalle Bank, in its capacity as the issuer of Letters of Credit hereunder, 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.

Kids Line means Kids Line, LLC, a Delaware limited liability company.

Kids Line Credit Agreement means that certain Credit Agreement dated as of the date hereof by and among Kids Line and Sassy, each as borrowers, and LaSalle Bank National Association, as the administrative agent, and the other lenders designated therein.

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Kids Line Purchase Agreement means that certain Membership Interest Purchase Agreement, dated as of December 15, 2004, among Kids Line, the Company and the various seller parties thereto, as the same has been modified by that certain letter agreement dated on or about the date hereof among the Company, Kids Line, Sassy, the Earnout Sellers (through their authorized representative) and the Earnout Sellers Agent to release the Loan Parties from their obligations thereunder.

LaSalle - see the Preamble.

LaSalle Bank – means LaSalle Bank National Association.

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 Issuing 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 and Lenders - see Preamble. In addition, (i) the term “Lender” shall include the Administrative Agent to the extent it makes any loans or advances any financial accommodations hereunder or under any other Loan Documents, (ii) for the purpose of identifying the Persons 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 Persons entitled to indemnification and exculpation as a Lender or a Lender Party hereunder or under any of the other Loan Documents, the term “Lender” and “Lender Party” shall include the Issuing Bank, and (iii) the term Lender shall include any Affiliate of a Lender providing a Bank Product pursuant to this Agreement or any other Loan Document and the transactions contemplated hereby or thereby.

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

Letter of Credit - see Section 2.1.3 and such definition shall include the Back-Stop L/C.

LIBOR Loan means any Revolving 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

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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 Collateral Documents, the BNY/Administrative Agent Commitment, 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. In no event shall the Guaranty by Russ Gift of the Canadian Borrower’s obligations under the Canadian Loan Documents be deemed to be a Loan Document.

Loan Party means, collectively, the Borrowers and each Guarantor, and Loan Parties means all such Persons, collectively. For the avoidance of doubt, the Company shall not be a Loan Party under this Agreement for any purpose.

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

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 Issuing 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 condition (financial or otherwise), operations, assets, liabilities, business, or properties of the Loan Parties taken as a whole, (b) a material impairment of the ability of the Loan Parties taken as a whole to perform their obligations under the Loan Documents or (c) a material adverse effect upon any material portion of the Collateral or the validity, perfection or priority of any Lien in favor of the Administrative Agent for the benefit of the Lenders under the

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Collateral Documents against any material portion of the Collateral or upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document, or the rights and remedies, taken as a whole, of the Administrative Agent or the Lenders under any Loan Document.

Maximum Revolving Commitment means, the lesser of (x) $25,000,000, as such amount may be decreased from time to time in accordance with Section 6.1.1 (the “Revolving Commitment Limit”) and (y) the sum of the 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, 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 pursuant to such Asset Disposition, net of (i) the direct reasonable costs, expenses and fees relating to such Asset Disposition (including reasonable and customary sales commissions and reasonable legal, accounting and 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 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

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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).

Net Orderly Liquidation Value means, when used in respect of the Borrowing Base as it relates to the Borrowers’ Eligible Inventory (and without limiting the Administrative Agent’s ability to assign any lower value thereto or apply reserves in accordance with the definition of Borrowing Base), the orderly liquidation value thereof, net of costs, fees and expenses arising in connection with such orderly liquidation thereof, determined in accordance with the methodologies and conclusions set forth in the appraisal of such Inventory prepared for the Administrative Agent by Hilco Appraisal Services, LLC on or about May 25, 2005 or, if elected by the Administrative Agent, any subsequent field audit or appraisal of such assets conducted for the Administrative Agent in accordance with the terms hereof.

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

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

Notes - see Section 3.1.

Notice of Borrowing - see Section 2.2.2.

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 Issuing 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 Bank 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 Bank 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 (i) obligations of any Loan Party under any Specified Hedging Agreement shall be secured and guaranteed pursuant to the provisions of this Agreement and the Loan Documents only to the extent that, and for so long as, the other Obligations are so secured and guaranteed and (ii) any release of Collateral or guarantors effected in the manner permitted by this Agreement shall not require the consent of any counterparty on any Specified Hedging Agreement or the holder of any Specified Hedging Obligations. In no event shall the obligations of ▇▇▇▇ Gift under the Canadian Guaranty made in favor of the Canadian Lenders and Canadian Agent be deemed to be Obligations hereunder.

OFAC - see Section 10.4.

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

Participant - see Section 15.6.2.

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 Holder means (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; (ii) any lineal descendant of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; (iii) the Estate of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; (iv) The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2002A Trust; (v) The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 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); or (viii) (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, (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 Securities 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 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 Company in favor of the Administrative Agent for the benefit of the Lenders.

Pre-Settlement Determination Date – see Section 7.1.3.

Prime Rate means, for any day, the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its prime rate (whether or not such rate is actually charged by the Administrative Agent), which is not intended to be the Administrative Agent’s lowest or most favorable rate of interest at any one time. Any change in the Prime Rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change; provided that the Administrative Agent shall not be obligated to give notice of any change in the Prime Rate.

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Pro Rata Share means with respect to a Lender’s obligation to make Revolving Loans, participate in Letters of Credit, reimburse the Issuing Bank, and/or receive payments of principal, interest, fees, costs, and expenses with respect thereto, (x) prior to the Commitments being terminated or reduced to zero, the percentage obtained by dividing (i) such Lender’s Commitment at such time, by (ii) the aggregate Commitments of Lenders at such time and (y) from and after the time the Commitments have 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.

Regulation D means Regulation D of the FRB.

Regulation U means Regulation U of the FRB.

Related Agreements means, collectively, that certain Assignment and Assumption Agreement and ▇▇▇▇ of Sale, that certain Omnibus Amendment of Intellectual Property and the related individual assignments of specified intellectual property, in each case, dated on or prior to the date hereof between the Company and ▇▇▇▇ Gift, the incorporation documents for ▇▇▇▇ Gift, together with any other instruments, documents and agreements entered into in connection therewith, in each case, as the same may be amended, restated, supplemented or otherwise modified in accordance with Section 11.11.

Related Transactions means the Spin-Off and the other transactions contemplated by the Related Agreements.

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 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 exceed 50.1%; provided that if there are two or fewer Lenders, then the term “Required Lenders” shall mean all of the Lenders.

Restricted Debt means (a) the obligations of the Company and any other Loan Party with respect to the EDA Standby L/C Reimbursement Agreement and the EDA Loan Guarantee and (b) any other Subordinated Debt.

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Restricted Debt Agreements means, collectively, the Kids Line Purchase Agreement, the Earnout Security Documents, the Earnout Subordination Agreement and any other security agreement, pledge agreement, collateral assignments, account control agreements, if any, or other security documents, and employment agreements entered into in connection therewith, in each case, as the same may be amended, restated, supplemented or otherwise modified in accordance with Section 11.11.

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

Revolving Loan and Revolving Loans - see Section 2.1.1(a).

Revolving Loan Availability means the difference between (a) (i) before an increase in Commitments pursuant to Section 2.7, the Borrowing Base or (ii) at all times after an increase in Commitments pursuant to Section 2.7, the lesser of (x) the Maximum Revolving Commitment in effect at such time and (y) the Borrowing Base at such time, minus (b) the sum of the aggregate principal amount of all “Loans,” all “Specified Hedging Obligations” and the “Stated Amount” of all “Letters of Credit” outstanding or requested but not yet funded under (and, in each case, as such terms are defined in) the Canadian Loan Agreement.

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.

Sassy means Sassy, Inc., an Illinois corporation.

Scheduled Termination Date means March 14, 2011.

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

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

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

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.